A person with moderate mental retardation would, in a western country, be "diagnosed" early on in life. Consequently, such a child is likely to be sent for special education. Given the high level of job requirements, such a person is unlikely to be employed in the open market later in life. Mental retardation is one of the most frequent disabilities in most studies, mental retardation is found in about three percent of the population. Persons even with mild mental retardation have very large difficulties finding employment and are for this reason often deprived of opportunities for suitable and productive income generation this is why most stay poor. But disability does not only cause poverty poverty itself causes disability. This study follows an analysis, based on a review of the Swedish programme for mental retardation during the period 1930-2000. It is concluded that in Sweden a very large proportion of mild and moderate mental retardation has been eliminated though the combination of poverty alleviation with a community-based rehabilitation programme. For these situations a pro-active programme analysing and meeting the needs of the target groups should be useful as a means to achieve poverty alleviation.