October 24, 2021

Growth in Djibouti in the past decade not inclusive – Working Paper

2 min read

By Alpha Bedoh Kamara

Working Paper ‘Growth Inclusiveness in Djibouti’  by Alexei P Kireyev, concludes that growth in Djibouti in the past decade has not been inclusive and should be treated as indicative the richest groups of the population have benefitted from growth more than the poorest.

An estimated 42 percent live in extreme poverty (World Bank, 2009)

According to the Paper, published on Thursday 13th, 2017, “as a result, inequality increased. The negative impact of the distributional component on poverty reduction has largely offset the benefits of economic growth for the poor. If the distributional aspect of growth had been taken into account, poverty reduction in the past decade, particularly for extreme poverty, would have been faster and deeper. Public policies, in particular, fiscal and structural, may play a significant role in making growth more inclusive.”

The paper examines the poverty-reducing and distributional characteristics of Djibouti’s economic growth and discusses policies that might help make growth more inclusive.

It covers the period between 2002 and 2013, for which comparable household surveys are available. The main findings are that while in the past decade the overall level of poverty in Djibouti declined, there have been no clear signs of improvements in either equality or growth inclusiveness. Growth has not been inclusive and benefitted mainly those in the upper part of the income distribution, adding that these conclusions should be treated as indicative.

Progress in poverty reduction and inclusiveness would require not only sustained high growth but also the creation of opportunities in sectors with high earning potential for the poor. Better targeted social policies and more attention to the regional distribution of spending would also help reduce poverty and improve inclusiveness.

Read the Report: Growth Inclusiveness in Djibouti

DISCLAIMER: This Working Paper does not represent the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate.

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