Abstract
There seems to be a consensus that economic growth is a fundamental component of sustained and substantial poverty reduction. Despite some political rhetoric claiming otherwise, there is a significant amount of evidence showing what does and what does not promote the economic growth, which is essential to reduce poverty. History teaches us that the private sector ownership of the factors of production with a strong state creating a fair, but not overly intrusive, regulatory system, as well as a high level of international economic integration, helps produce conditions needed for sustained and substantial poverty reduction. Tourism has a role to play in creating economic growth, but it is more likely to help grow an economy while complementing and not replacing other industries. Macroeconomic environments in most countries fall far short of ideal conditions due to political concerns, attempts by entrenched elites to maintain the status quo and hold on to power, and other special interest pressures. But despite the less-than-perfect conditions, we have also seen significant economic growth leading to poverty reduction and wealth creation, driven by the value-creating activities of innovative private sector firms while operating in challenging political environments, especially in Asia, in recent years. While the role of economic freedom in economic growth is well established, the role of political freedom through engaging in democratic processes is less clear; therefore, the promotion of democracy might be more effective if it is decoupled from the debates over economic prosperity.
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Hipsher, S. (2017). Economic Development. In: Poverty Reduction, the Private Sector, and Tourism in Mainland Southeast Asia. Palgrave Macmillan, Singapore. https://doi.org/10.1007/978-981-10-5948-3_2
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