Poverty reduction is one of the key global development policy priorities. It is the overarching objective of the Millenium Development Goals [MDGs]. In most countries this objective is articulated through various forms of poverty reduction strategies and policies. In developing countries rural poverty remains pervasive. At the moment rural poverty accounts for nearly 63 percent of poverty worldwide, reaching 90 percent in some countries like Bangladesh and between 65 and 90 percent in Sub-Saharan Africa.

Though there is considerable knowledge of the role that the transport sector plays in economic growth at the sub-national, national, regional and global levels, more effective strategies are needed to harness the sector’s contribution to poverty reduction. Every policy intervention has an impact on both equity and efficiency. But many governments create transport programmes that intervene in only the efficiency function. Good transport policy should contribute to poverty reduction by enhancing both equity and efficiency outcomes.

It should be emphasised that the relationship between transport and poverty reduction is neither straightforward nor automatic. It is hard to trace and measure the ultimate impact of transport interventions on the welfare of poor households. However it is apparent that improvements in transport have the greatest impact on poor people when other sectoral interventions – relevant for the development of poor people - are also adequately in place, and that without good transport, many sectoral interventions may be ineffective. Well-staffed health clinics, for example, are of little benefit to poor people who cannot get to them.

At a conceptual level transport’s contribution to poverty reduction can occur in a variety of ways:

1. Through support to overall economic growth. This is the traditional perspective of a trickle down process. Improved transportation infrastructure and services undoubtedly contribute to reduced costs of transport, market expansion, improved productivity and competitiveness. These are necessary conditions for economic growth but certainly insufficient for poverty reduction. The transport sector itself cannot guarantee that the benefits of macro-economic growth will trickle down to the poor. That is a process which relies upon governance, institutional structures and policy mechanisms over which the transport sector has no immediate influence.

2. Still within the economic function of transport, the sector contributes to pro-poor growth patterns by targeting transport interventions to support the development of markets and businesses that serve and employ the poor. The sector can also directly input into poverty reduction by providing employment for the poor through the operation of transport services and by appropriate use of labour based techniques in the delivery of certain types of transport infrastructure. However it should be noted that the transport sector by itself cannot induce and sustain pro-poor growth. Other incentives for example in land reforms, micro finance, small enterprise and development are needed.

3. Transport is important for building the human capital of the poor by facilitating access to social services such as health, education, clean water and basic administrative services. However, optimal social benefits cannot be achieved from the sector without satisfactory delivery levels in the locations where the services are sought. For example, in the case of health, there must be affordable and adequate drug supplies and relevant healthcare personnel at healthcare facilities.

4. There are many aspects of gender equality that need transport and mobility inputs. These include access to reproductive health services, reduction of the drudgery of head loading, and access to education for young girls. The extent to which transport can contribute to this depends upon the overall context of gender consciousness and empowerment within a country or region.

The flipside of transport is that it can exacerbate inequalities and deepen poverty if its negative externalities are not appropriately managed. For example poor people are more likely to suffer from traffic accidents, from HIV/AIDS prevalence along transport corridors and at hubs, and in the displacement of homes and livelihoods during the construction of infrastructure. It is vital that the transport sector pursues a socially responsible path that safeguards the rights of the poor and mitigates their vulnerability. It is important to recognise that transport by itself cannot have a decisive impact on poverty. This suggests the need for the transport sector to strengthen its policy, planning and implementation linkages with other key development sectors such as health, education, and water and sanitation, in order to deliver more effectively towards the poverty reduction agenda.

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