An analysis of the impact of HIPC initiative on poverty alleviation in developing countries: evidence from Cameroon

The impact of macro-economic policies for poverty alleviation in developing countries

The purpose of this paper is to simulate the distribution and poverty impacts of key macroeconomic policies that are currently being implemented within Cameroon’s Poverty Reduction Strategy Paper (PRSP). Furthermore, this research combines local household surveys, the government macro-model projecting the main aggregates of the country and finally the PRSP in order to project poverty and inequality indicators. The Gini coefficient and the Theil index are estimated and projected as indicators for income inequality whereas the national poverty line is estimated and projected for poverty. The empirical results give a Gini Coefficient of 27% and a Theil index of 43% by 2005. The interpretation of the findings shows that:

poverty is likely to decline by 2015 with the support of the international community
however, this decline is more rapid in the urban than in the rural sector due to high projected growth in industry and services sectors
inequalities would increase with the increase of income as GDP growth does not benefit all equally

Finally, the author gives some policy recommendations in order to improve income distribution through adopting more pro-poor distributive policies including:

encouraging the participation of the poor in the efforts of construction
financing local projects for them
ameliorating the quality of human capital through education and health

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An analysis of the impact of HIPC initiative on poverty alleviation in developing countries: evidence from Cameroon