Global Poverty Reduction and Development Forum 2007-Taking Actions for the World's Poor and Hungry People
On October 17, 2007, in commemoration of the 15th International Poverty Eradication Day, Chinese State Council Leading Group Office of Poverty Alleviation (LGOP) and the International Food Policy Research Institute (IFPRI) organized the first International Poverty Reduction and Development Forum in Beijing, China. Co-hosted by International Poverty Reduction Center in China (IPRCC), IFPRI and Chinese Academy of Agricultural Sciences, the Forum was themed “Taking Actions for the World’s Poor and Hungry People”.
H.E. Mr. Hui Liangyu, Vice Premier of State Council and Director of LGOP, Mr. Fan Xiaojian, Deputy Director of LGOP and office director, Joachim von Brown, Director of IFPRI, and Lennart Bage, UN IFAD President attended the opening ceremony and delivered speeches. UN Secretary-General Ban Ki-moon sent a congratulatory message to the Forum. A total of 28 ministerial-level officials attended the Forum (including 10 international, and 18 Chinese). About 400 government officials, international organization and NGO representatives, academic and foreign guests from more than 40 countries in Asia, Africa, the Americas, Europe and Oceania convened to discuss the global issues in the field of poverty reduction.
The Forum stressed the following issues:
· How to establish safety net for the poor: social security, food security, land protection, etc.
· Africa, Asia, Latin America’s achievements in poverty alleviation and poverty reduction, as well as the experience and the problems
· Discussion on poverty reduction mechanism such as NGO cooperation, microfinance
Fan Xiaojian, Director and Deputy Group Leader of the State Council Leading Group Office of Poverty Alleviation and Development, “Review and Outlook of Poverty Alleviation and Development in China” |
Since the foundation of P.R.C., especially since reform and opening-up, China has made great achievements in eradication of poverty thanks to sustainable economic growth, special government-led poverty relief programs and relevant social equality policies. The most fundamental experience is that Chinese government has formulated and adopted a series of anti-poverty strategies and policies that are suitable for the country’s circumstances in different development stages.
Major anti-poverty achievements include substantively reducing rural poverty, development of infrastructure and social undertakings, advancement of political stability, social equality and ethnic solidarity, all of which contribute significantly to world-wide poverty reduction.
China has adapted its policies according to different development stages. The first stage was poverty alleviation in a broad-sense in the planned economic system, featured by large-scale infrastructure construction and acceleration of education and healthcare. The second stage was large-scale poverty mitigation driven by market system reform and encouragement of urban-rural migration. The third stage was development-oriented poverty alleviation targeting specific areas. At that time, rural anti-poverty strategies were developed to implement planned, organized and large-scale anti-poverty and development programs. The fourth stage is poverty alleviation in the process of building a well-off society in an all-round way, i.e. “Xiaokang” society.
Currently, China is facing challenges such as a large number of people living in poverty and imbalanced development. Therefore, efforts in implementing the development-oriented poverty reduction programs in order to achieve the Xiaokang society are needed. China will further improve macro-economic environment, promote development and anti-poverty undertakings and actively participate in the global anti-poverty process.
Martin Ravallion, Director of the Development Research Group of World Bank, “Economic Growth is Not an Anti-poverty Policy” |
Ÿ Countries with low level of inequality can expect to have more effective policies to fight poverty.
Ÿ Countries with serious level of inequality can easily have poverty reduction traps, featuring severe poverty and policies with limited impact.
There are currently two poverty reduction paradigms. The first paradigm says growth is sufficient for poverty reduction. In other words, growth is the only thing that really matters in terms of alleviating poverty. The second paradigm is the “Growth Plus” approach, which advocates that rapid poverty reduction requires a combination of economic growth with pro-poor social policies. But what exactly is the effectiveness of the two approaches?
Growth without taking equity into account is ineffective in terms of poverty reduction. Stylized facts have shown that poverty rate will be reduced as economy grows, and economic growth rate is unrelated to the level of inequality. However, such facts have certain empirical caveats. First, there are actually some signs of a positive (but not very robust) correlation between economic growth and inequality since the early 1990s. Second, the stylized facts fail to reveal that there are gainers and losers at all levels of living. Third, while the stylized facts appear robust, one cannot rule out the possibility of measurement errors. Fourth, there exists conceptual confusion regarding the difference between relative and absolute inequality.
Depending on the extent to which growth is pro-poor, a 2% economic growth can lead to 1% to 7% poverty reduction. Change of inequality and initial inequality levels of various countries are the main reason behind the differences in anti-poverty effects of economic growth.
In countries with falling inequality, average annual poverty reduction level is 10%, while in countries with rising inequality, this figure is only 1%. In addition, even if inequality level remains unchanged during development process, the higher the initial inequality level is, the slower anti-poverty process is.
According to the theory, high inequality would undermine efficiency and development. In terms of capital, inequality of wealth distribution causes inequality of investment opportunities and the poor would face low-level of investment development due to serious fund shortage. As for politics, high inequality would hinder political and economic reforms that promote increase in efficiency. In other words, economic inequality is a reflection of political inequality.
Good inequalities can reflect and reinforce market-based incentives that are needed to foster innovative growth. However, bad inequalities, such as regional poverty traps, social exclusion, imbalanced human capital, corruption and rent-seeking, not only generate inequality in development opportunities but also impede poverty reduction. In fact, bad inequalities are often rooted in market failures, coordination failures and government failures.
China is often being regarded as a typical example of the “Growth is sufficient” paradigm and indeed, the level of inequality has been increasing along with its economic growth. However, China’s story does not actually vindicate the paradigm. In fact, there is no sign of a poverty-inequality trade off, given the time periods of falling inequality saw more rapid growth and the provinces with more rapid growth did not see a more rapid rise in inequality. Therefore, China's poverty reduction achievement should not be simply attributed to the “growth is sufficient” approach, but it is also the result of pro-equity economic growth policies: highlighting that agricultural and rural development is far more effective in poverty reduction than the development of the industrial and service sector; conducting price reforms through household contract responsibility system, and lowering taxes and eliminating agriculture tax to dramatically decrease poor rural populations.
On the other hand, Brazil utilized the “Growth PLUS” policy and put a lot of emphasis on its service sector. This model promotes faster economic growth but is in itself not a very good pro-poor growth policy. In order to effectively reduce poverty rate, Brazilian government has adopted a series of redistributive social policies as complementary measures. But the truth is, despite its rapid growth, its efforts in poverty alleviation has not paid off that much and its policies have not worked out as expected.
Implementation of national poverty reduction policies appears to be more effective in countries with low level of inequality, where high level of poverty will generate a demand for sound policies to fight poverty. On the other hand, countries with serious level of inequality can easily have poverty reduction traps, featuring severe poverty and policies with limited impact. In fact, high poverty and inequality can be self-perpetuating by impeding pro-poor policies.
Akhter Ahmed, Senior Research Fellow of Poverty, Health and Nutrition Division, International Food Policy Research Institute (IFPRI), “The World’s Most Deprived: Characteristics and Causes of Extreme Poverty and Hunger” |
By 2004, populations living on less than $1 a day had decreased from 28.6% (1990) to 18.0% (2004) worldwide. Reductions in global poverty have been largely driven by East Asia and the Pacific. Now only a small part of the 969 million poor people in the world are considered ultra poor. However, this form of extreme poverty is very concentrated in Sub-Saharan Africa which is still home to 75% of extremely impoverished populations in the world (below $0.5 a day), and the number increased by 29 million between 1990 and 2004. Hunger and undernourishment, especially when it comes to children, are not advancing at a satisfactory pace.
Those suffering from extreme poverty and hunger often live in remote rural areas distant from roads, schools, health services and markets. They often face exclusion due to ethnicity, gender or disability and are lack of access to education and credit. These conditions create vicious poverty traps, which explain why those in extreme poverty stay poor.
''Business as usual'' is not sufficient to improve welfare of world's most deprived. New and different actions are required to help those living in extreme poverty and hunger. Possible measures include improving access to markets and basic services, particularly in remote rural areas, providing insurance against health shocks and investing in education for those with few assets.
Huang Jikun, Director of Center for Chinese Agricultural Policy (CCAP), Chinese Academy of Science, “Determinants of Rural Poverty Reduction and Pro-poor Economic Growth in China” |
Ÿ China has made remarkable progress in its fight against poverty since the launching of economic reform in the late 1970s.
Ÿ Economic growth is essential and necessary for massive reduction of rural poverty, particularly in the early stage of development.
Ÿ However, economic growth itself is not sufficient for long term poverty reduction. The nature of growth and the balanced rural-urban growth are also important.
Since the reform of the 1970s, China has made enormous achievements in poverty reduction. After empirical studies of determinants of rural China's large-scale poverty reduction programs, research concludes that economic growth is a major driver of large-scale poverty reduction in rural China, but not a sufficient condition. At the early stage of development, economic growth is the key determinant of poverty alleviation. However, after poverty rate is reduced to a certain degree, its impact of poverty reduction will decline. The nature and quality of growth (whether it is pro-poor or not) is very important to poverty reduction because it will lead to different poverty reduction results, even given similar growth rates.
Since income of poor populations mostly comes from the agricultural sector, agricultural development can be more effective in terms of promoting poverty reduction. In the meantime, agricultural growth can facilitate industrial growth and transfer rural labor to non-agricultural sectors and effectively reduce poverty.
Income distribution allows poor people to gain from the process of economic growth, and is closely related to poverty reduction. Increasing inequality between rural and urban areas as well as within those areas undermines the poverty reduction efforts.
Development of township enterprises provides rural laborers with opportunities to work in non-agricultural sector, which in turn promotes poverty reduction. Trade liberalization facilitates the adjustment of agricultural production structure to become labor-intensive to the farmers' benefit. Meanwhile, non-agricultural employment via trade liberalization also alleviates poverty to a certain degree.
In the future, China will implement overall pro-poor economic growth policies and foster poverty alleviation programs that are tailored to secure income of the poor population. Education in poor rural areas must be emphasized in order to facilitate equal growth. Also, the country needs to narrow down its urban-rural gap and make sure that poor people benefit from government policies.
Ehtisham Ahmad, Fiscal Affairs Department of International Monetary Fund (IMF), “Fiscal Policy Instruments and Political Economy of Designing Programs to Reach the Poorest” |
The problems in development policy design are that donors lack information needed to identify poor populations and local governments lack incentives to implement central policies. To solve these issues, the following policy design models have been created: local provision, central provision and a hybrid model.
Local provision: China's “Five Guarantees” System (food, clothing, medical care, housing and burial expenses) is led by local governments and targeted at poor populations without family support. This system is based on local identification and support, which enables it to effectively reach the poorest people. But after reform and opening-up, there are huge variances in level of local support.
Central provision: Rogresa/Opportunidades Project of Mexico is directly managed by the federal government. It is a very successful central anti-poverty project. The key to the success of central operations is how the central level of government effectively uses local information and makes localities carry out central policies.
Hybrid: National minimum social security policy of China is funded by the central government but formulated by local governments. Local governments can choose who to help in line with their conditions. Local governments in rich regions pay for their minimum social security while central government pays for the total expenses of poor regions like Tibet.
Besides the three above-mentioned ways, when devising transfer payment policies, competition mechanism can be introduced to make it more effective. Credible contract is also an alternative.
Harold Alderman, Social Protection Adviser of the Africa Region, World Bank, “Growth Promoting Social Safety Nets” |
Social safety nets or social protection programs are ubiquitous in developed countries and are becoming common in developing countries. Safety nets are designed to foster social equality and help the poorest. Moreover, social protection programs have a role in promoting economic growth:
First, creation of public/private assets: Conditional transfers can encourage schooling and health and help poor households make small savings and investments. Well-designed civil projects can effectively improve infrastructure.
Second, protection of private assets in shocks: Shocks can directly destroy assets. Shocks may also lead to asset sales when livelihoods no longer support minimum consumption. Faced with income shocks households invest less in schooling or health. The consequences for the next generation can be irreversible.
Third, improvement of household resource allocation: Poor households often adopt low risk livelihood strategies and are reluctant to adopt new technology. Similarly, a household may not take up credit even when it is available due to a fear that they may be unable to repay. This leads to a low rate of return. Social safety nets not only can improve their capability of resisting risks but also encourage them to adopt appropriate risk response strategies and optimize resource allocation.
Fourth, advancement of economic and social reform: Economic reforms that promote growth often incur costs of adjustment for some individuals. Safety nets can promote political acceptance of new policies by offsetting some of these costs.
Fifth, reduction of inequality: A range of targeting approaches based on economic situation assist in getting transfers to the poor. This reduces inequality and promotes overall economic growth by enhancing social cohesion.
John Hoddinot, IFPRI “Conditional Cash Transfer Programs” |
John Hoddinott, Executive Director, Uganda Agriculture Committee & Senior Consultant to President Museveniof
Conditional Cash Transfer (CCT) programs are now found in more than 20 developing countries. These programs have several characteristics, aiming at reducing short-term poverty and increasing human capital and thereby reducing inter-generational transmission of poverty. Experience of putting CCT programs into practice has proved their effectiveness but questions remain whether the conditionality is necessary. The debate runs along two lines: the conditionality is a must because it provides necessary incentives, and the conditionality is harmful because it is costly and may exclude the most in need. Besides, social protection should be universal. There is very limited evidence on the impact of conditionality. Therefore, to conclude, Conditional Cash Transfer Programs have to be adjusted according to circumstances. Four major issues have to be considered when designing functional programs: 1. What are current levels of specific human capital outcomes? Do these differ by region or by gender? 2. Why are specific human capital outcomes too low? 3. Is there high-level political support for a CCT program? 4. What administrative resources are available?
Fezile Makiwane, Chief Executive Officer of South African Social Security Agency “How Can Social Security Schemes be Designed for Low-income Countries to Effectively Provide for the Poorest” |
Social security aims to protect the poor and vulnerable by establishing minimum living standards, ensuring consumption smoothing, reducing risks, and spreading income over a life cycle. Globally, over two billion people are not covered by any social security arrangements, and about 50 million people in low-income countries are not covered against basic social risks. In addition, social insurance is mostly restricted to those in formal employment and is very low.
Examples of social security programs include Brazil’s Bolsa Familia (conditional household cash transfer), Mexico’s Oportunidades (monetary grants for education, health, pension and energy), South Africa’s SOAP (pension/old age grant).
Different countries have different kinds of social security systems and programmes of which the main difference is the transfer payment model. In low-income countries, devising social security programs should rely on the following elements: integrated approach that have objectives relating to alleviation of both short-term and long-term poverty, development of human capacity, administrative efficiency, good governance and multi-actor responsibility.
Jacques van der Gaag, Distinguished Visiting Fellow, Global Health Financing Initiative, Global Economy and Development, The Brookings Institution, “Health Care for the World’s Poorest: Is voluntary (private) health insurance an option?” |
The poor population needs to have their share of opportunities to receive medical treatments. In order to increase such opportunities, the followings need to be done: keep the private resources in system; voluntary health insurance is being developed that takes the poor into account; health insurance is being suitably subsidized; public and private insurance entities are involved; performance contracts are written with both public and private providers. Also, the governments and donors should stop insisting on one “public sector model” that is assumed to fit all.
Stefan Dercon, Professor of Development Economics, Wolfson College, Oxford University “Insurance For The Poor?” |
Poor people are often exposed to high risks and bear high risk losses. In the short run, they face consumption and nutrition insufficiency, while in the long run they face continuous development bottlenecks. In the crisis, loss and damage of materials, health condition and manpower have made high risk a trigger of persistent poverty. Therefore, we put forward the following six solutions:
Ÿ Firstly, utilizing existing social groups to establish insurance system. This can help realize collective fight against disaster risks, decrease reverse options and reduce management and info-net building cost. Meanwhile, mutual insurance model is better than direct insurance to members.
Ÿ Secondly, innovating product design to avoid risks according to the specific problems of various kinds of insurances.
Ÿ Thirdly, making insurance design more consistent with demand, e.g., simplify product design.
Ÿ Fourth, avoiding insurance crowding-out credit.
Ÿ Fifth, re-evaluating the role of micro-credit in poverty eradication which is now over emphasized.
Ÿ Sixth, combining micro-insurance, savings, micro-credit and social security net and allowing people to have long-term security and programs in the context of restrained resources. Consideration of complementarily of different factors is the most cost-efficient solution.
Michael Wales, Principal Adviser, Investment Center, Food and Agriculture Organization (FAO) “Investments to Support Hunger Reduction” |
Eradication of hunger caused by poverty needs stakeholders' unanimous commitment to increase rural productivity and develop poverty reduction programs.
FAO’s Anti-Hunger Program aims to improve agricultural productivity of small farmers and end hunger through capacity building. It also has an environmental dimension conserving natural resources to enable sustainability, and a commercial dimension aiming at improving rural infrastructure and market access. This program invests $24 billion per year and get benefits of $120 billion per year. It is implemented in cooperation with governments in creating a sound institutional environment and helping 15 countries gain access to safe and reliable supply of food.
Anti-poverty and anti-hunger need large investments into agriculture. In this respect, public investment should leave room for private investment and provide institutional environment to ensure its quality. In terms of private investment, small farmers are the biggest investors, but individually speaking, they lack investment capacity. Since traders of agricultural products also face uncertainties, they also need the support of the government.
Fan Shenggen, Director, Development Strategy and Governance Division, International Food Policy Research Institute (IFPRI) “Investments to Support Poverty Reduction” |
Pubic investments are sourced from domestic funds (including savings, taxes and non-tax revenues) and foreign funds (FDI, loans, debt relief and ODA). Internally, the most effective way to boost resource mobilization capacity and promote poverty reduction is to improve the tax system and make it simple, transparent, direct and in line with social and economic conditions. Externally, recipient countries need to consolidate loose program aid and form a budget fund that can serve long-term capacity development.
In the aspect of public investment allocation, different investments have different poverty reduction yields. Agricultural research, education and rural infrastructure construction are the three most effective investments to reduce poverty and develop agriculture. Meanwhile, low-cost infrastructure construction can lead to maximized growth and poverty reduction effect with relatively small cost.
In general, in order to promote poverty alleviation, countries should:
Ÿ Optimize support model: simple, direct and transparent tax system can effectively reduce poverty, facilitate equality and reduce dependence of developing nations on international aid; Considering that local governments have more complete and accurate information at hand, power should be decentralized to generate more benefits.
Ÿ Adopt differentiated anti-poverty strategy: different regions are at different development stages and the focus of each region’s corresponding anti-poverty strategy should be determined accordingly. There is no panacea strategy. At initial stage of development, investments should be made to promote overall economic growth that benefits the entire rural China, and then, attention should be paid to backward regions in order to reduce distribution inequality.
Ÿ Reforming governance and institutions: reforms in institutions and governance related to public spending are urgently needed. Greater transparency in decision-making and effective monitoring system can prevent corruption. A decentralized, participatory, and evidence-driven governance structure is necessary for efficient and pro-poor government spending.
Xu Hui, Director, Department of Planning and Finance, The State Council Leading Group Office of Poverty Alleviation and Development (LGOP) “Design and Improvement of Poverty Targeting in Rural China” |
Flexible and participatory poverty targeting policies are part of China's poverty reduction work. It is important to examine China’s poverty targeting policies and the challenges that implementation of such policies faces. Recommendations on the improvement of the existing institution will also be provided.
Understanding of rural poverty has evolved from absolute poverty (insufficient income to sustain livelihood) to relative poverty (determined by relative income standard). Generally speaking, rural poverty targeting aims to improve basic productivity and quality of life. From 1981 to 2000, with rising purchasing power of rural residents and currency appreciation, poverty line rose to annual income of RMB 625 in 2000 from RMB 50 in 1981.
Starting from 1980s, China’s poverty targeting policy first focused on poor areas and ethnic minority areas, along with other low-income areas. The policy then shifted its focus towards some specific regions or even some particular communities, followed by policies that focus on certain individuals. At the same time, there has been collection of real-time data from the lower classes of the society and geographical adjustments regarding the implementation of poverty reduction policies are made based on the collected data. At the moment, the focus has started to be centered on the humane need of the target groups, with more precise targeting. Village- and community-oriented development concepts based on labor transfer and mechanization of the agricultural sector have also been introduced.
There are two major features of poverty targeting policies:
1. Close association with the specific characteristics of the areas. There are in general three levels of poverty-stricken areas. The first level: poor area that spans across multiple administrative regions that have both low economic growth and income levels. The second level: single administrative region that is poor-stricken. The third level: Counties and rural, poor areas with similar socioeconomic characteristics.
2. Emphasis on the notion that “the more accurate the targeting, the higher the efficiency”. As a result, representative villages are being selected, with strong efforts being put in to increase per-capita assets and income. Both qualitative and quantitative analyses are being introduced and supports are being lent to target groups for the implementation of participatory poverty reduction.
Overall, there are two challenges facing poverty targeting policies. First, target a bigger population of poor, which requires a suitable standard in order to do so. Second, identify appropriate response to changes in the socioeconomic characteristics of the target groups.
The following innovations of the existing institutions are recommended:
1. Dynamic targeting. Establish the "introduce and exclude" mechanism, replacing original targets with more appropriate ones in a cycle of 3 to 5 years.
2. Targeting at different poverty groups in accordance with socioeconomic characteristics of every target places.
3. Mobilizing large-scale participation of community.
4. Allowing targets of support to participate in and supervise poverty reduction work.
5. Delivering poverty relief resources to targets of support. Poverty reduction agencies should be streamlined in order to ensure funding efficiency.
Li Xiaoyun, Dean, College of Humanities and Development, China Agricultural University, “Impact of Participatory Village Development Planning (PVDP) on Targeting of Poverty Alleviation Program in China” |
Participatory Village-level Development Program (PVDP) is executed in the following steps: identify poor villages, devise PVDP and integrate PVDP at the county-level. In this process, poor villages are identified through weighted participatory poverty index (PPI). The three poverty dimensions used are livelihood poverty, infrastructure poverty and human resources poverty. Formulation steps of development plans are as followed: First, village leaders analyze the socioeconomic situation of the village, and then conduct participatory information collection and participatory discussions, and finally form village-level poverty reduction plan.
PVDP increases efficiency of poverty targeting: Since the development of PVDP, counties involved in PVDP and coverage of poor people increased by 46.9% and 30% respectively. Average effectiveness of poor village targeting is as high as 90%. Resource allocation is effectively tilted towards key poverty-stricken villages. Average poverty reduction fund gained by poor household increased by RMB695, and acquirement rate increased from 6.5% to 9.6%.
PVDP promotes village democracy: it enables more poor people to participate, especially in the formulation process, and to know poverty reduction programs better. PVDP promotes shift of rural development pattern from singular attention on infrastructure building to overall inclusive sustainable development of the society, economy, environment and human resources.
Kirit S. Parikh, Planning Commission, Government of India, “Infrastructure and the Poorest” |
Poverty has the following dimensions: lack of food, i.e. hunger; lack of other resources, i.e. consumption/income poverty; lack of cultural and health resources that are required to obtain development opportunities, i.e. human resource poverty; lack of public services/goods, i.e. capacity poverty; lack of capacity to deal with social and natural risks, i.e. security poverty; lack of investment capacity, i.e. bleak prospect; lack of freedom, rights and social tolerance, i.e. dignity poverty.
In India, although overall health and education indexes have obviously improved, disparities across races and regions exist. Human resources condition of the poorest populations, child malnutrition and overall illiteracy are still not optimistic. Meanwhile, extensive use of dirty fuels in households puts a heavy strain on the health of residents.
In order to fight multi-dimensional poverty, the Indian government will promote education for all; focus on drinking water issues, improve rural health situation, and expand human capital growth; strengthen infrastructure construction that is essential for development; offer employment opportunities by promoting growth of the agricultural sector, and link poor populations with markets to improve their opportunities in fighting poverty.
Wang Sangui, Professor, School of Agricultural Economics and Rural Development, Renmin University of China, “How should government make and implement specific poverty reduction program to effectively transfer resources to the poor?” |
China's poverty reduction program constitutes of the following three parts:
Ÿ Development-oriented poverty reduction program, featuring village-wide poverty reduction through vocational trainings that prepares one to work in new areas and industries, industrialized farming, relocation and migration based on resource availability
Ÿ Rural minimum social security program;
Ÿ Urban minimum social security program.
Different plans have different targeting and resource delivery patterns. Development-oriented poverty reduction program in rural areas mainly aims at regions and encourages agency participation in resource delivery. Urban-rural minimum social security system mainly targets at household or individual. In this system, resources are directly delivered by the government.
When looking at the effectiveness of poverty targeting and resource delivery, rural development-oriented poverty reduction program can pass most resources to the target regions. Over two thirds of urban minimum security funds are delivered to low-income households with per capita income below the minimum social security line. But the rural social security program has only started, making it difficult to appraise its targeting accuracy.
Main challenge is internal allocation of resources to poor populations within the poor regions/communities. The challenge exists because of inequalities in the communities. There are issues with the implementation of poverty reduction program and lack of effective monitoring and evaluation.
Patricia Kameri-Mbote, Program Director, African Division, International Environmental Law Research Centre, “Property Rights to Strengthen the Assets of the Poor” |
Property rights over land and other resources are the basis of livelihoods for the majority of the world's poor. They provide for food security as a source of food and income and reduce vulnerability by providing a buffer against shocks.
The meaning of land ownership is very complicated. First, it does not just concern private land, but also common properties, such as water. Second, ownership is not only the right of the head of the household. It is also the right of women, young people and the whole community. Third, in addition to laws, customs and religious norms matter too when it comes to discussions regarding ownership. Also, at times, ownership can yield benefits only when other resources are available. As a result, women and other marginal groups quite often fail to realize their shares of income due to the lack of such resources.
In conclusion, ownership alone cannot secure poor people's land rights and interests nor promote poverty reduction. Legal reform should extend beyond household titling: rights of communities and women should be guaranteed. The reforms should be accompanied by legal literacy, with discussions on accessible implementation structures, and mechanism for dispute resolution. Reforms should also build on customary arrangements that match local conditions. Moreover, the reforms should acknowledge multiple values of land and look for provisions to empower marginal groups.
Mark W. Rosegrant, Director, Environment Production and Technology Division, International Food Policy Research Institute (IFPRI), “Climate Change: Pro-poor Adaptation, Risk Management and Mitigation” |
Rich countries emit the majority of greenhouse gases (GHG), but poor countries are more negatively impacted due to geographical and social factors. Mitigation and adaptation are both necessary. However, it becomes more costly and less effective as the magnitude of climate change grows. Therefore, the greater the amount of mitigation that can be achieved at affordable cost, the smaller the burdens placed on adaptation and the smaller the suffering. Effective mitigation policy is pro-poor, capable of encouraging rural economic growth and strengthening rural adaptation capacity. This policy will also incentivize global GHG emission trade, and optimize market, contract design and social management investment.
Although Clean Development mechanism (CDM) has good social and environmental benefits and can enable economic activities to have a better input-output ratio, its development is constrained by the following issues: trade, measurement, leakage prevention, carbon sequestration and cost-effectiveness. Also, carbon sequestration from soil carbon and avoided deforestation are excluded from CDM. And CDM-eligible assets from afforestation and reforestation are excluded from European Union Emissions Trading Scheme.
In order to expand pro-poor low-carbon policy and reduce transaction cost, countries should: establish international advisory services to provide traders and policy makers with professional intellectual support; innovate institutions, create transaction products targeted at the poor, and mediate between investors and local people through local intermediary organizations and reduce transaction costs within the same community; simplify execution standards of small-scale projects.
In conclusion, climate change policy can create new pro-poor investments and increase benefits of sustainable environmental development. Implementation of this policy calls for enhanced global financial facilities and governance and increased capital flows in developing nations.
Lu Mai, Director General, China Reform and Development Foundation, “Nourishment of Children in Poor Areas of China” |
In China, undernourished children mainly live in rural areas of the country’s western regions. Notwithstanding reduced subsistence poverty of children, incidence rate in those regions is still higher than that of overall rural subsistence poverty. Some have estimated that if malnutrition of children remains the same, China will suffer tremendous economic losses due to lower productivity. Malnutrition cannot be solved by market mechanisms. Therefore, the government should take the initiative and intervene. Intervention to address malnutrition is the key to accelerated poverty reduction, since it is cost-effective and can be quickly implemented.
Erastus Mwencha, Secretary General, Common Market for Eastern and Southern Africa (COMESA), “Challenges and Opportunities in Poverty/Hunger Reduction in Eastern And Southern Africa” |
Agriculture is the key to poverty reduction in Eastern and Southern Africa. Currently Eastern and Southern Africa are facing low productivity, policy, market and technology constraints and problems brought about by climate change, among other challenges. Specific agricultural-side constraints include lack of capacity to manage land and water resources, high-cost of doing business, gender disparities, and weak capacity to disseminate technologies, macroeconomic challenges and inconsistencies in trade and investment policies.
Key factors to overcoming poverty in Eastern and Southern Africa are: 1. Comprehensive African Agriculture Development Program (CAADP): comprehensive sector approach to address supply/demand side challenges; 2. Regional integration and harmonization; 3. Markets, subsidies and biofuels brought about by trade liberalization and globalization; 4. Good partnerships in program implementation.
Patrus Ananias de Sousa, Minister of Social Development and Fight Against Hunger, “Citizenship and Social Inclusion: Compromise to reduce social inequalities, poverty and hunger in Brazil” |
Ministry of Social Development and Fight Against Hunger (MDS) has adopted Unified Social Assistance System (SUAS) to consolidate social assistance while establishing national Zero Hunger strategy in order to eradicate hunger of poor Brazilians. MDS has also set the National System of Food and Nutrition Security (SISAN) in the law so as to provide poor households with adequate food and safe drinking water and promote agricultural development. It has provided transfer payment through Continuous Cash Benefit Program (BPC) to the elderly and the disabled.
The array of measures ensured adequacy and diversity of food, increased family purchasing power, sharpened competitive edge of labor market, raised income and reduced inequalities. Pro-poor economic growth has basically been realized. But number of population in poverty is still high, and inequalities in income and opportunities remain serious.
Domingo F. Panganiban, National Anti-Poverty Commission of Philippines, “Lessons from the Republic of the Philippines: reaching the poorest of the poor at the community level” |
Data show that it is highly possible for the Philippines to achieve the MDGs. Relevant anti-poverty programs have been implemented in the context of Philippines Midterm Development Plan: accelerated asset reform; improved access to human development services; provision of better employment opportunities; security from violence and social protection for vulnerable sectors; and participation of the poor in governance.
Anti-poverty programs have been developed by National Anti-poverty Commission, and then distributed to every villages and communities by local governments, and finally implemented at the village-level by communities. Community-Based Monitoring System (CBMS), an organized process of data collection and processing at the community level, has been established that will facilitate the integration of data for local planning, program implementation and evaluation and encourage communities to participate in the data gathering process. Local governments are thus enabled to get first-hand information of the communities and develop evidence-based solutions.
Philippines need to focus on two aspects in order to address hunger. On the supply side: increase food supply and strengthen logistics service. On the demand side: increase nutrition, manage populations, and generate income for the poor. In the process of implementation, stable policy environment and infrastructure building as well as information communication among different levels of territories are very essential.
Assefa Admassie, Director, Ethiopian Economic Policy Research Institute (EEPR), “Improving Market Access to the Poor in Africa” |
Connecting farmers to the markets is an effective strategy for Sub-Saharan Africa to achieve MDGs. Well functioning markets help in: modernizing agricultural production, creating economic opportunities, improving food security, motivating farmers to increase inputs, encouraging farmers to specialize in productions where they have competitive advantage and assuring effective vertical integration and coordination in "input supply, credit and output marketing".
Nevertheless, many farmers in Africa only produce for their own subsistence. Here are the obstacles:
Ÿ High costs due to poor logistics system, vulnerable and volatile production, very small and thin markets and weak regulatory policies.
Ÿ High production risks. Producing for markets might require intensive and costly input use, diversified products face more uncertainties. Costs of technologies input are high yet difficult to control the effectiveness.
Ÿ High marketing risks due to limited purchasing power, high price volatility, limited access to market information and weak bargaining power.
The government should intervene to reduce market participation risks and improve farmers' participation in the market: provide subsidies and credit market; improve government regulation and institutional setups and optimize market environment; support technological development and link it with market approach.
Ernest Aryeetey, Director, Institute of Statistical, Social & Economic Research, University of Ghana, “Investing in Infrastructure for pro-poor growth and poverty reduction” |
Infrastructure improves the productivity of the poor, creates employment opportunities and offers social protection. But infrastructure in Sub-Saharan Africa is yet to be further improved. Introduction of private capital is not necessarily the solution for all in terms of improving infrastructure investment. In the area of transportation, Build-Operate-Transfer (BOT) arrangements are made to use labor intensive methods for road construction. In this way, technologies are improved and human resources utilized. In the area of telecommunications, new technologies have opened opportunities for private sector participation in rural telecommunications, improved the national monopoly situation and ensured more and better services. However, for rural water supply and sanitation, private investments face the dilemma of conflicting rights and responsibilities. In terms of energy, national monopoly of utilities and low pricing discourage private participation, which lead to insufficient energy services for the poor.
There are hardly any direct studies of the effect of infrastructure on poverty reduction. However, good examples that showcase the positive influence of infrastructure exist. In Ghana, with large-scale development of infrastructure, poverty rates in all social sectors have declined.
Fan Yunliu & Zhang Chunyi, Chinese Academy of Agricultural Sciences, “Biofortification: A Powerful Tool Fighting Against Poverty” |
Deficiency of micronutrients of Chinese population is serious, causing huge social and economic losses. Biofortification of crops can solve this problem in a cost-effective way: screen for biofortified crops from existing germplasms, and develop and disseminate stable micronutrient dense crops. For example, "HarvestPlus -China" (HPC) has improved micronutrients content and intake through breeding and nutrition studies. Currently, target crops in HPC are rice, maize, wheat and sweet potato and the target micronutrients include Iron (Fe), Zinc (Zn) and Vitamin A (VA). Target areas cover Beijing and Hangzhou.
Biofortification is needed to support anti-poverty programs, people's health and human resources, social and economic stability and sustainable development. But it needs strong financial support from the government.
S. Mahendra Dev, Director, Center for Economic and Social Studies (CESS), India, “Undernourishment and Child Malnutrition in Asia” |
Asian children are severely malnourished. Low-income is a major reason, but the percentage point decline in malnutrition is less than half the rate at which GNP per capita grows, which means economic growth alone cannot address malnutrition completely. However, studies have shown that malnutrition exists even after removal of poverty. Thus, reduction in malnutrition is going to be a bigger challenge than reduction of income poverty.
Intervention in malnutrition needs the following policies: pro-poor inclusive growth, agricultural and rural transformation, agricultural diversification and promotion of rural non-farm employment, urbanization, specific nutrition programs, improvement of women's nutrition and education.
Ashok Gulati & Thomas Reardon, Co-directors of IFPRI/MSU joint program on “Markets in Asia”, “Linking Small Farmers to High-value Markets” |
Small farmers will still exist in Asia for the next 15-20 years. The main task is to change this type of fragmented agriculture into high value agriculture, rapidly transform and scale up wholesale markets and organized retailers. This is a great opportunity to connect small farmers to external markets. Share of Asian farm products in international trade remains very small. Bigger change of this situation has to be driven by urbanization and domestic factors.
Although staples are important from food security point of view, future sources of growth and prosperity in agriculture will increasingly come from high value products, driven by domestic demand, production and markets. But being perishable in nature, such products need speedy construction of infrastructure and institutions that can compress the value chains and reduce risk. Currently, primary trade markets of farm produce are changing trade model from trucks to scaling up. Growing technologies and markets are constantly promoting processing industry, and organized retailing in food is also developing in emerging markets. We should act in line with the standard of Competitiveness, Inclusiveness, Sustainability and Scalability (CISS) and link small farmers to markets.
Tahlim Sudaryanto, Director, Indonesian Center for Agriculture, Socioeconomic and Policy Studies (ICASEPS), “Alleviating Poor and Hungry People through Generating Employment” |
World Bank points out in 2006 that two ways out of poverty are: First, shift from subsistence to commercial farming; second, shift from non-farm informal enterprises to formal and more profitable business. To create new employment opportunities, new economic activities must be developed.
The following are the principles of poverty reduction: acknowledge the capacity and social capital of the poor; involve the poor in decision-making process; and develop transparent procedures. In the long term, the government should assist the poor in getting access to land; build more infrastructure and encourage agricultural development; comprehensively promote rural development through micro-finance, and promote self-employment of the poor and get higher pay through skill training, guarantee poor people's rights and interests and raise their voice in political and economic areas; inspire the poor to enter formal labor markets; provide macroeconomic stability and state funding, encourage farmers to follow market demand and optimize input-output.
Meanwhile, we should target at the poorest of the poor and promote community participation programs with capacity building being the basic element. In the short term, the government can fund specific programs to help the poor get employed quickly, for example, invest in infrastructure rebuilding to offer people in chronic poverty employment opportunities. At the same time, we need to pay attention to the supply side of labor, ie. education, health, nutrition, and skill training.
Qazi Kholiquzzaman Ahmad, Chairman of Bangladesh Unnayan Parishad (BUP), President of Bangladesh Economic Association (BEA), “South Asia: Tackling Social Exclusion” |
Social exclusion is rooted in systematic injustice. It will cause inequalities, poverty and deprivation of rights and it will also make the deprived ones even more constrained. It exists in multiple segments of the society, leaving socially excluded exposed to the forefront of natural disasters, HIV/AIDS risk attacks. Social exclusion might happen domestically and internationally, further exacerbated by liberalization and globalization.
Social exclusion in South Africa manifests in strong conflicts between human and land. 83% of the populations suffer from human dignity deficits of varying degrees. Women are severely excluded from education and decision-making. Illiteracy rate is as high as 40% while public health services, education resources and nutrition are in serious shortage. Natural disasters cause the socially excluded to be further pauperized or become destitute. Confrontational national politics and imbalanced regional anti-poverty and development policies make the situation even worse.
In order to tackle social exclusion, reforms have to be reinforced under a new framework: The goal may be construed as "well-being of all on an equitable basis". Give citizens freedom and empowerment, let them share the fruits of economic development, cherish social diversity and create a democracy that is participated by all citizens.
Liu Fuhe, Director of Department of Policy and Regulation/Director of Policy and Legal Department, State Council Leading Group Office of Poverty Alleviation and Development (LGOP), “MDGs: China's Progress” |
China has made positive progress in achieving MDGs:
Eradication of extreme poverty and hunger: The 1994 Ba-Qi (8-7) Poverty Alleviation Plan and The Outline for Development-oriented Poverty Reduction for China's Rural Areas have been promulgated. The government has earmarked more anti-poverty funds, identified key targets of assistance and adopted an array of pro-poor social and economic policies. Objectives have been achieved ahead of schedule.
Popularization of primary education: Implement "compulsory education project in poor areas"; establish specific fund to facilitate improvement of primary education schools in rural areas; initiate "‘two basics’ program in western region" (basically popularize primary education and basically solve illiteracy among young and middle-aged populations) to exempt rural students in the compulsory education stage from paying tuitions and miscellaneous fees. All these objectives have been achieved ahead of schedule.
Gender equality and women’s empowerment: Promote nine-year compulsory education among all populations; execute relevant programs to help vulnerable groups gaining access to education, and establish supervision system to ensure effective implementation of relevant laws, regulations and policies; ensure gender equality in labor law, guarantee women's political, social and cultural rights. Gender inequalities in primary education are expected to be tackled.
Reduction of child mortality: implement disease control program targeting children; earmark special fund for planned immunization of children, and maternal and infant healthcare; implement new rural cooperative medical care system. Progress of achieving these objectives has been satisfactory.
Improvement of maternal healthcare: initiate "maternal security" program; carry out program of "reducing maternal mortality and eradicating tetanus among newborns"; implement the program "health express of mothers". All related programs are going well.
Prevention and treatment of HIV/AIDS and tuberculosis (TB): build an institutional system of State Council AIDS Working Committee Office-Regional AIDS Prevention and Treatment Leading Groups; issue Notice of Enhancing AIDS Prevention and Treatment, formulate "China Medium and Long Term Plan for HIV/AIDS Prevention and Control (1998-2010) and China Plan of Action for Containment and Control of HIV/AIDS (2001- 2005); crack down on illegal blood transfusion activities and carry our "Four ‘Free’ and One ‘Care’" policy: free ARV drugs, free prevention of mother-to-child transmission, free voluntary counseling and testing, free schooling for children orphaned by AIDS, and offer care to people with HIV/AIDS; promote DOTS strategy in half of the populations, and provides TB patient with free diagnosis and treatment. A lot of works remain and achievement of the targets requires our close attention.
Environmental sustainability: The government has devised and implemented national and local environmental protection strategies in line with Agenda 21, highlighted environmental protection in the newly-formulated China Western Development Strategy and become a contracting party of international environmental treaties; The state has increased financial input in environmental protection agencies, enhanced protection of sources of drinking water, ensured water supply in counties that previously suffer shortage of water and compiled the national urban-rural drinking water safety guarantee plan. Work in this area is progressing at a fast pace.
Global cooperation and development: The government set up the International Poverty Reduction Center in China (IPRCC). The center disseminates China's anti-poverty experiences to other countries and manages part of China's poverty reduction, foreign-aid projects. The state attaches great importance to the development of telecommunications industry and implements leapfrog development strategy of "actively advancing the integration of informatization and industrialization". China put this goal high on its agenda and has made enormous achievements.
Arabiyani Abubakar, Director, Indonesia Women Empowerment and Child Protection Unit, “Eradicating Gender Inequalities” |
Eradicating gender inequalities should start from education and gradually realize equalization in terms of starting businesses, freedom, rights and participation in social affairs. In terms of employment, gender trend of occupations should be overcome and gender discrimination when it comes to making career choices also have to be eradicated. In agricultural production, knowledge and information should be spread to both male and female laborers without discrimination. For governance and social undertakings, women should be allowed to participate more in public affairs and market operation, which helps to improve the effectiveness of policy implementation. In addition, community problems should be resolved and skills of the community members cultivated through developing women’s self-help organizations, in order to realize sustainable governance.
Javier Escobal Senior Researcher, Group for the Analysis of Development (GRADE) of Peru, “Trade Liberalization and Children” |
Long-term effect of trade liberalization brings positive impact to economic growth. However, it is also expected that the effects of trade liberalization will not be equal for all sectors. Trade liberalization will have an impact on domestic prices, tax revenues and public services and may affect children's access to public services. Meanwhile, industrial development and change of opportunity cost caused by liberalization might make children give up education and engage in child labor, thereby impacting their long-term development.
Young Lives Program offers an opportunity to analyze "the impact of trade liberalization on child poverty". According to studies, trade liberalization in Peru has made more mothers participate in wage labour, while children have to take care of the family, which reduces their schooling time. In the meantime, when the promised benefits of liberalization are not realized, government remedy policies cannot benefit the rural areas, leaving rural children more likely to drop out of school. In Vietnam, trade liberalization has made children more susceptible to child labour and more vulnerable to education and health shocks. Girls, ethnic minority group households, single parent households, and households with low levels of maternal education are the most vulnerable.
Government should pay attention to populations whose benefits are damaged due to trade liberalization, especially children who are negatively influenced. Possible mitigation policies include offering cash transfers in order to help vulnerable households, setting up separate contingency funds in order to be allocated whenever a negative event occurs, improving capacity of the poor to cope with risks, for example establish child care centers to help women take care of the family and thereby reduce child dropout rate.
Maximo Torero, Director, Markets, Trade and Institutions Division, International Food Policy Research Institute (IFPRI) “ Strategies to Alleviate Poverty in Andean Countries” |
Over the last two decades, Latin American countries have adopted a series of policies to protect the vulnerable groups and conducted control and management of the risks during growth and income increase process to improve citizens' wellbeing. Despite rising income inequalities, non-income dimensions of well-being have been improved:
Conditional Cash Transfer Program (CCT) is cost-effective, and overall consensus shows that this program has been mostly successful in achieving its core objectives. But this program exclusively focuses on human capital accumulation, crowding out formulation of productivity. And it only focuses on children of school age, so it is therefore limited in scope and coverage.
Micro-credit mainly targets micro-enterprises rather than the core poverty-stricken groups.
Vocational training programs for the markets have increased employment rate and labor income.
Regions are imbalanced in terms of access to public services. The government should provide a transparent and orderly business environment in order to ensure stable provision of relevant services. For roads, most success stories are in urban areas. Poverty maps effectively lock the targets in the Andean region, but community-level targeting is still needed. Demand-oriented poverty reduction programs should be implemented.
The optimal poverty relief policy could be an optimal mix of programs that address different needs. There is no “one-size-fits-all” policy and it is, therefore, very important to take into account the local institutions and policy environment while devising appropriate policies.
Alberto Valdés, Associate Professor, The Catholic University of Chile “Growth and Poverty Reduction: Latin American Experience with Economy-wide Policies” |
Economic reforms in Latin America began in the 1980s. Central banks introduced stable currency policies and promoted unilateral trade liberalization, privatization and deregulation against the backdrop of major macroeconomic imbalance and fiscal policy failures at that time. The previous import-substitution industrial policy was abandoned. Meanwhile, governments reduced cost of business operation and encouraged economic growth through various means: removing price controls, lowering tariffs and non-tariff barriers, simplifying state agencies, ,removing other obstacles to business and trade, and lessening state control of infrastructure.
It is expected that in open economies, trade liberalization will lead to higher growth and higher incomes, and then poverty reduction. In fact, benefits of liberalization are not trickled down equally, and are followed by exchange rate fluctuation. Modernization of government is very slow, but social policy’s shift toward poverty assistance comes on schedule.
In general, economic growth itself is pro-poor, and equality makes it more so. Focusing on the development of non-skilled, labor-intensive industries can make the development model as a whole more pro-poor. In the long run, education is a major policy for fighting poverty. Conversely, inequalities might make economic development less pro-poor. Also, severe inequalities are bound to impede economic development.
Moreover, efficiency of public spending needs to be improved. Public services in many aspects need to be enhanced but funds are limited. Meanwhile, evaluation of spending effectiveness should be strengthened; public spending should not end up being transferred as private subsidies because it would be a waste of resources.
Dante Contreras, Deputy Dean, Department of Economics, University of Chile, “Poverty, Inequality and Welfare in Chile: Evidence, Challenges and Lessons” |
Previous poverty reduction policies of Chile focused on economic growth and absolute poverty. In fact, economic growth does significantly reduce poverty but inequalities are still alarming. However, the original strategies cannot reduce inequalities at the current stage. In order to reduce vulnerability, increase social mobility and social opportunities, Chile needs to come up with new solutions.
Vulnerability: Panel data have shown that income instability and the risk of falling into poverty are significant for Chileans. In response to this finding, the government has initiated two new strategies, namely "Chile Solidario" that targets extreme poverty and "Chile Crece Contigo" that targets children. The former is a conditional cash transfer program that targets extremely poor, and the latter provides children with access to universal services. Policy intentions are good but evaluation data is lacking.
Inequality of opportunities and social mobility: In Chile, the accumulation of skills is proportional to the initial resources of the households. Income elasticity of children's incomes compared to their parents' incomes is low (ie. low social mobility). In this context, the government adopted many reforms to improve education, which proved to be effective. But educational quality still needs to be further improved.
Zhai Huqu, President, Chinese Academy of Agricultural Sciences (CAAS), “Agricultural R&D Investment and Poverty Reduction” |
Agricultural research is the foundation of agricultural economic growth, especially when we are facing shortage of arable land and labor force and increasingly limited effect of institutional innovation.
Agricultural research can alleviate poverty, in fact its return on investment is high even in less developed regions with adverse natural conditions. It can promote poverty reduction through: improving products to generate more income for farmers; creating employment opportunities to lift people out of poverty; increasing output of farm production and lowering prices; reducing living cost of the poor and giving them better nutrition and adequate food. At the same time, sharing research fruits of farm produce can contribute to world-wide efforts in poverty alleviation.
Development of agricultural research needs the heavy inputs from the government. Attention should be paid to problems like repetitive studies and poor application of research results in production. If we want to use agricultural research to reduce poverty, we should: establish long-term mechanism of using science and technology to reduce poverty and forge a strong tie between research and production application; research projects should be linked to the real production difficulties and needs of the poverty-stricken areas to become richer; trainings in agro-tech should be enhanced to improve farmers' quality as well.
Frances Stewart, Professor, Center for Research on Inequality, Human Security and Ethnicity, University of Cambridge “Addressing A Culture of Discrimination and Inequalities” |
Horizontal inequalities are multi-dimensional: political, economic, social and cultural dimensions. Inequalities are based on socially constructed identity groups which vary according to time and place. Horizontal inequalities can lead to low efficiency of economic and social development, slowed down poverty reduction process and even conflicts.
Political inequalities can be solved through federalism, decentralization and power-sharing. Economic and social discriminations can be tackled by the following ways:
Ÿ Direct policies: take "equal rights actions" and target discriminated groups directly via quotas. But one needs to consider if they entrench ethnicities, lead to inefficiency and provoke opposition.
Ÿ Indirect policies: tax and public expenditure designed to help particular deprived groups; legal policies to correct discrimination; macro-policies that favor particular activities of the disadvantageous groups.
Ÿ Integrationist policies: reduce small group consciousness, integration of ethnicities in school education and promote national identities; But one should be vigilant and see if these policies threaten cultural identities and conceal deep inequalities.
Sukhadeo Thorat, Director, Indian Institute of Dalit Studies, Jawaharlal Nehru University, “Social Exclusion and Poverty Linkages in Asian context” |
High level of poverty often concentrates in some specific regions and is related to cultural, moral and ethnic group characteristics. Social exclusion is embedded in social relations. Exclusiveness of certain groups in market and non-market environment leads to unequal opportunities facing the excluded.
The results of social exclusion depend on how exclusive social and economic organizations are. Social exclusion will reduce economic growth efficiency and hinder poverty reduction: impact role of market mechanism and efficiency of resource allocation, and deviate from optimum equilibrium; increase unemployment; lead to lack of political rights and political participation. Meanwhile, social discrimination itself will cost the poor access to income and education, rights of participation in civil affairs, foster inter-group confrontations and aggravate poverty.
Market intervention and market competition can be combined to improve policies: First, make intervention and improve inequalities: redistribute assets and implement supportive social assets policies; promote development of human capital and education. Second, set up pro-equality policy system: formulate anti-discrimination legislations, establish transparent monitoring and evaluation system and facilitate implementation of equal policies.
Charlotte McClain-Nhlapo, Disability Advisor, East Asia & Pacific Region, World Bank, “Focus on People with Disabilities” |
There are 650 million people with disabilities in the world. One in five people living on less than a $1 a day have a disability. And 1/3 of the people with disabilities live in absolute poverty.
Disability is not simply a medical condition. It is about social exclusion, that is, people suffer from social discriminations for their lack of participation in human-environment interaction. Disability and poverty form a vicious circle, where disability leads to poverty, and poverty creates the conditions that can generate more disability. At the same time, disability affects not only the person with a disability, but also their families and communities: children of the persons with disability are less likely to attend school; families with members who are significantly disabled spend more time caring for disabled family member; families with members who are disabled have fewer available labor forces and are more prone to poverty.
To achieve MDGs, disability has to be effectively responded to: The government should shift attention from pity to empowerment, reinforce formulation and execution of inclusive policies, create an inclusive social environment; encourage active participation of community households and help persons with disability gain access to information and enhance individual capacity.
Ren Wang, Director, Consultative Group on International Agricultural Research (CGIAR), “Keeping the Promise of Sustainable Growth: Today and Tomorrow” |
There are currently several developments under way in the area of food production and security:
Ÿ Currently, urbanization and population growth lead to rising food demand.
Ÿ Biofuels revolution further adds to higher prices of crops.
Ÿ Integrated food chains, so called “supermarketization”, mean both opportunities and risks for farmers.
Ÿ Crop biofortification has improved micronutrient content of basic staples.
Ÿ Emerging diseases epidemics constitute a threat to food security and livelihood.
Ÿ Intensification of agricultural production poses a challenge to environmental sustainability.
Ÿ Agricultural production, the basis of all the above-mentioned conditions, has to grapple with changing climate.
Kathy Spahn, President and Chief Executive Officer, Helen Keller International, “How to Effectively Scale up Interventions and Actions that Address Malnutrition” |
An estimated 127 million preschool-aged children are vitamin A deficient and thus are at increased risk of death. Improving vitamin A status can greatly reduce mortality. Fortifying vitamin A status plan includes:
Ÿ Fortify staple foods with vitamin A through compulsory policies;
Ÿ Provide at-risk children with high dosage vitamin A every 6 months;
Ÿ Encourage production and consumption of a diversified diet rich in vitamin A.
Our challenges in promoting the above-mentioned plan are inadequate diversification of partners, shortage of funding, lack of regulatory framework and effective execution. Support from central and local government, including strong political will, financial input, industrial technology support and ongoing information exchanges of local governments are urgently needed. At the same time, private capital participation and coordination between different programs are necessary.
Chu Liming, Deputy Director, Agricultural Division, Ministry of Finance, “Financial Policies and Financial Management to Reduce Poverty in China” |
China's fiscal poverty reduction policies are constituted by regional fiscal transfer payment system, regional development policy, public service policy and special anti-poverty fund. Special anti-poverty fund have the following features: supply-oriented; managed by various government agencies; distributed based on objective factors; economic and effective; billed and paid via separate accounts and separate bills; and monitored by various agencies at multiple levels. The Ministry endeavors to equally distribute funds according to poverty scale and level; decentralize power and give more autonomy to local governments so that they can customize relevant approaches; promote income increase and capacity building of poor areas; and gradually shift management center down to the local level and improve its mechanism.
Existing problem facing use and management of special fiscal poverty reduction fund are: lack of positive incentives for fund distribution; unclear targets of poverty relief; high level of management; and unreasonable poverty alleviation structure. In the new circumstances, effective fiscal poverty reduction requires:
Ÿ Take full advantage of the role of public finance, accelerate sustainable development and the process of equalizing access to basic public services in poor areas;
Ÿ Expand inputs in poverty reduction: inject new elements into development-oriented poverty reduction, reposition missions and objectives, identify development priorities; innovate poverty alleviation mechanism; strengthen fund management and ensure fund security and effectiveness.
He Daofeng, Executive Vice President, China Foundation for Poverty Alleviation, “NGO-Government Interactions for Poverty Reduction” |
In the post-industrial civilization of the market-based economy, society can be divided into family, work, government, and civil society/non-governmental organisations (NGOs). NGOs and government departments should build trust and increase cooperation.
China's NGOs are simply positioned as organizations that "help the government to locate money" and "help veteran officials contributing and working during their retirement". Such positioning facilitated the rapid growth and the emergence of dual administration models for Chinese NGOs, hence, growing dependence on government. This is not good for development of voluntarism. At the moment, NGOs and government are not interacting with each other enough. Lack of planning and management leads to doubts regarding the credibility of the NGO sector.
Under the dual system, interaction between government and NGOs needs to be strengthened in order to reduce poverty: improve NGO positioning; intensify public supervision and weaken governmental administration; improve intellectual level and professional skills, enhance the process of credibility identification, which allows NGOs with better credibility to be identified; open governmental and public resources to NGOs, which helps to facilitate substantive interaction.
Sona Varma, Economic Advisor, ICICI Bank of India, “Scaling up Microfinance Initiatives by the Private Sector” |
In India, there is a huge gap between microfinance demand and supply. "Commercial banks -microfinance institutions (MFIs)-clients" model initiated by the private sector has more potential compared with the popular public “Self-Help group-Bank” model.
Compared to traditional financing model, ICICI Bank’s innovative model makes use of comprehensive financing channels and pays attention to comprehensive product design. The new model is client-oriented and technology-focused. ICICI gives loans to MFIs (including fund and technology), and then MFIs issue and supervise loans. In this way, risks are shared between ICICI and MFIs.
The key to reduce risks is to scale up microfinance and make it more sustainable. Commercial banks should optimize portfolios, simplify intermediary fees for the poor to acquire services, and share financial risks through partnership. Besides, they should enhance capacity building when giving wholesale loans to MFIs: screen for the right partners and conduct relevant trainings to aid them in developing tool kits and optimizing issuance procedure. They should also appropriately supervise MFIs loans issuance and make reviews.
In order to make microfinance more effective, financial institutions should also support creating an enterprise networking fund in an effort to make farmers more connected with the markets. The government should enhance the outreach to the poor through loosening interest rate control, intensifying registration system development and rural infrastructure building. Independent research institutions should conduct more studies on the effect of microfinance and avoid the battle of "temporary measures versus long-term solutions".
Anirudh Krishna, Associate Professor and School Advisor, Public Policy and Political Science, Duke University, “Why Don't "The Poor" Act Collectively?” |
Poverty is a specific and ever-changing concept. Poverty in a certain period of time is caused by combined action of the “descents” and “escapes”. The reasons causing people to fall in and out of poverty are different, which makes their demands from the state different. Hence, the poor rarely act collectively.
The poor can be divided into three subgroups: persistently poor, newly poor and recently escaped. However, national statistics do not usually collect data on these three subgroups. Major demands of the three subgroups are labor wages (46%), health services and housing (34% and 24%) and irrigation and education (28% and 25%). We can see the significant differences from these figures. Primary reasons for descent into poverty are poor health and high healthcare costs. Main reasons for poverty-escape are diversified income sources and wages from formal sectors.
In general, in order to make poverty reduction policies more effective, poverty needs to be more precisely defined and policies better supervised. To raise the poor people's voice, political participation, economic strength and organizational capacities need to be promoted.
Regina Birner, Senior Research Fellow, Development Strategy and Governance Division, International Food Policy Research Institute (IFPRI), “How to improve the ability of the poorest and hungry to demand pro-poor policies and ensure the effective delivery of services?” |
Despite the strong declared political commitment and the diversified and innovative approaches to reach the poor, hunger and poverty still persist. Virtually all policy instruments face at least one of three challenges: political feasibility, eg, political opposition and lack of political support; administrative feasibility, eg, lacking ability of the public administration to implement policy instruments effectively; fiscal feasibility, eg, lacking ability to raise financial resources for pro-poor policies on a sustainable basis.
To overcome the triple challenge, one should:
Ÿ Adjust policy design and implementation strategy: compensate the losers and increase availability and transparency of opportunities to overcome political feasibility challenge; reduce scope for corruption and work with NGOs for tackling administrative challenge; recover costs and improve targeting efficiency to respond to fiscal challenge.
Ÿ Improve underlying conditions: to tackle challenges, approaches of strengthening political voice of the poor; increasing capacity and incentives for the supply side; building capacity to gain and deliver information for the demand side; and reforming budgetary process and tax system should be pursued respectively.
Ÿ From the perspective of the poorest: improve institutional mechanisms; promote self-empowerment; and conduct social mobilization. Besides, social movements are pathways to economic and political empowerment, including labor movement, farmer movement, cooperative movement, Gandhian movement, Grameen-Bank type women's organizations and rights-based development movement.
Meanwhile, Development Community Program can promote the frame conditions for self-empowerment and people-oriented governance; encourage leadership; and offer project implementation methods that create space for empowerment.
But still, challenges remain ahead: building the "demand-side" of governance is not enough; state institutions should have the capacity and incentives to respond to the poor; financing patterns need to be optimized and equity achieved in providing basic public services.
Vijay Kumar, Chief Executive Officer, Society for the Elimination of Rural Poverty of India, “Fostering Organizations for and with the Poorest and Hungry” |
Poor people have immense desire, innate ability and strong spirit of volunteerism to come out of poverty. These constitute the natural capacity foundation of the establishment of organizations for and with the poor. Establishment of poor people's own organizations aims to mobilize them and unleash their abilities to eliminate poverty through their own efforts. Cooperation among multiple levels of government agencies is required to achieve this end:
Ÿ Government: conduct long-term social mobilization and create enabling environment; implement pro-poor policy programs; support self-empowerment of poor people's organizations; and foster dedicated institutions for nurturing poor people's organizations and scale up such organizations to the whole country.
Ÿ Organizations of the poor themselves: mobilize poor populations and promote organizational building; mobilize the poor starting with women; build trust mechanism and focus on core issues; realize reinforced interactions between collective ability and individual ability.
Ÿ Support organizations: support organizations are the key for a strong foundation of poor people's organizations and can nurture regular capacity building and facilitate group meetings; they can also guide collective actions and link organizations of the poor with key service providers.
The foundation and development of poor people's organizations can contribute to higher-level of social mobilization, pool strength of more poor populations, increase scale and incentives of collective actions, offer better solutions compared to vulnerable individual poor, improve efficacy of pro-poor public service delivery and reduce individual's dependence on external aid.
According to a case study of village federations in India, organizations of the poor can develop by leaps and bounds and form a virtuous cycle: support organizations of the poor at subnational levels; form political bargaining ability and influence formulation of pro-poor policies; and forge regular partnership with markets and financial institutions. Sorting out the relations between support organizations and organizations of the poor themselves is fundamental; work should be done to make a difference in specific areas and scale up influence nationwide.
Suresh Babu, Program Leader and Senior Research Fellow, International Service for National Agricultural Research Division, International Food Policy Research Institute (IFPRI), “Developing Capacity for Social Innovation to Reduce Poverty and Hunger” |
Social innovation and social entrepreneurship are promising pathways to poverty reduction and development. They can promote introduction of pro-poor policies, impact of intervention programs and achievement of MDGs. Innovation and entrepreneurship have been very positive in poverty reduction but are unfortunately in very short supply.
Paradigms of capacity development for social entrepreneurship include:
Ÿ Policy entrepreneurship: Scaling up local program successes to large scale national programs; influence policies of multilateral aid agencies; and guide the national systems towards developing specific strategies through innovation or adoption.
Ÿ Program entrepreneurship: Design and implement innovative poverty and hunger reduction programs; cultivate youth leaders and leaders of farm organizations.
Ÿ Business entrepreneurship: Use business principles to implement social innovations
Approaches to develop capacity for social innovation and entrepreneurship include practical ability expansion in universities, business school joint cultivation and local leadership trainings. Challenges ahead are identifying and encouraging policy entrepreneurs at national levels and scaling up of innovative interventions using social entrepreneurship.
Wang Ping, Chairman, China Social Entrepreneur Foundation (CSEF), “The Role of Social Enterprises in China's Poverty Reduction Practice” |
Social enterprises are sustainable operating entities with advancement of common good and social progress as their goal, and persistent and innovative entrepreneurship as their motive. Social enterprise's value is addressing social development issues; promoting partnerships among the state, business and the non-profit organizations; enabling public interest efforts to be more sustainable; and initiate discovery of the value of humanities themselves.
The challenges faced by social enterprises in China are inadequate legal and regulatory framework, cultural exclusion against businesses engagement in social undertakings, weak private sector due to long time planned economy and centralized society. Social enterprise's role in poverty reduction calls for more systematic and deeper exploration.
China Social Entrepreneur Foundation aims to use social enterprises as vehicles to transform social capital owned by CSEF to that of the poor by focusing on three overlapping demands. CESF will endeavor to satisfy material and spiritual needs of the poor, carry out sustainable development-oriented poverty reduction and achieve sustained development of urban-rural communities.
Chris De Neubourg, Professor, Maastricht Graduate School of Governance, Maastricht University, “Poor Children, Children in Need and Needs of Children: Child Vulnerability to Poverty” |
Children are more likely to be trapped in poverty than adults. Meanwhile, because children have fewer options for getting out of poverty on their own, all they have is the unequal distribution of resources within the households. Children are more deeply affected by poverty than adults.
The traditional monetary poverty evaluation approach estimates child poverty by the percentage of the children living in poor households. But monetary poverty does not tell a complete story. Not all the children living in poor households live in poor condition and not all children living in non-poor households are living in good condition. Availability of services and provisions and the distribution of resources within the household are both essential elements in child poverty. Poverty lines are single demarcations set to identify poor households, but not necessarily to identify children living in poor conditions.
Since child vulnerability to poverty is a multi-dimensional concept, it is best to use a multidimensional evaluation method aiming at identifying and locating children with little means to live on, with limited possibilities for development and deprived from the resources to fulfill their basic needs and to see what they are deprived from.
Abusaleh Shariff, Chief Economist and Head, Human Development Division, National Council of Applied Economic Research of India, “India: Hunger, Poverty and Vulnerability during Fast Pace of Economic Growth” |
Vulnerability during India's fast pace of economic growth mainly origins from serious and continuous regional imbalances; significant urban-rural differences; gender and households inequalities; lack of pro-poor growth policies and inclusive growth policies.
India's poverty monitoring indicators system:
Ÿ Income and consumption: number of household by income class bands; number of residents by monthly consumption classification.
Ÿ Poverty and vulnerability: incidence of poverty (national, state, populations engaging in agriculture) and malnutrition.
Ÿ Social security: proportion of population covered by issuance of ration cards, and the poor not covered by the issuance of ration card (by state).
Ÿ Education and poverty: urban-rural incidence of poverty by educational level.
Xian Zude, Director General, Rural Survey Organization, China National Bureau of Statistics, “Rural Poverty Reduction in China: Methodology of Poverty Monitoring and Main Results” |
Currently, China's poverty has the following characteristics: the extremely poor cannot escape poverty through development-oriented poverty reduction; natural disasters and diseases are the two culprits causing re-trapping; low-income rural residents lack sustained income growth mechanism; rural development lags far behind urban development both in public education and healthcare services; social inequalities are becoming more grave; poor populations either cluster or live among the better-off.
In China, the rural poverty monitoring data mainly comes from two sources: National rural household survey and national poverty monitoring survey. The former survey covers 31 provinces. Sample households are scattered in 857 sample counties and 8000 sample villages. The survey includes over 2000 indicators, capturing villages/households and individuals. The latter survey covers 592 national key counties of development-oriented poverty reduction program with 53, 000 sample households distributed in 5300 sample villages. It is more detailed in content, including information on poverty reduction fund, project participation, schooling, healthcare services and detailed labor migration, etc.
Monitoring and evaluation of poverty focuses on economic poverty and multi-dimensional poverty in 9 major categories. Poverty line is measured by income and consumption. Impact evaluation methodologies used in special surveys include: comparison between project villages and non-project villages; reflection on the welfare and changes of low-income groups of project villages; description of coverage, supporting scale and targeting efficiency of the project activities; and utilization of regression to evaluate the impact of project activities.
Dissemination of poverty statistics is done through the following channels: conferences for poverty statistics dissemination, reports on poverty monitoring in rural China, and statistics yearbooks of rural China, etc.
Celia M. Reyes, Senior Research Fellow, PIDS Network Leader, CBMS International Network, “Community-Based Measurement and Monitoring of Poverty: The Philippine CBMS Experience” |
There are arrays of macro monitoring in the Philippines, but available statistics are highly aggregated, infrequent and have long lags. These statistics can at best be used in broad geographic targeting. More effective targeting requires specific disaggregated data in order to precisely identify the scope of poverty, diagnose the cause of poverty, come up with appropriate policies, and target the right beneficiaries and evaluate effectiveness of the project. Besides, supporting mechanisms for the implementation of the decentralization policy are needed.
Community Based Monitoring System is based on the census of households and engages both the local governments and the communities. It has a core set of indicators that monitor the different dimensions of poverty. It establishes data banks at each geopolitical level and generates poverty maps. The eight general steps in implementing CBMS are: advocacy; data collection and field editing; data encoding and map digitizing; processing and mapping; data validation and community consultation; database management; plan formulation; and implementation and monitoring.
As a poverty monitoring system at the grassroots level, CBMS has changed imbalances of the original statistics system that focuses on national level while neglects the grassroots level. It can offer better tools for accounting management of resource allocation and implementation of social programs by collecting micro statistics at the local level. In the Philippines, CBMS has been applied in community poverty statistics and child nutrition statistics.
Solveig Buhl, Senior Policy Administrator, Poverty Reduction and Growth, Organization for Economic Cooperation and Development (OECD), “Implementing Policy Guidance on Pro-poor Growth” |
The Development Assistance Committee (DAC) Poverty Reduction Network (POVNET) is based on the experiences of DAC POVNET member countries. It is a policy guideline that enhances the ability of poor people to benefit from growth. Key achievements are as follows:
Donors need to be more responsive to country situations and processes; strengthen engagement between policy makers, private sector and civil society; make the poor more informed and empowered to participate in the policy making process; and better manage policy trade-offs.
In infrastructure, key policy messages to donors are: support partner-led frameworks: enhance infrastructure’s impact on poor people (target the poor): improve management of infrastructure investment to achieve sustainable outcomes: and increase infrastructure financing and use all financial resources efficiently.
Key policy messages to donors on agriculture are: recognize diversity of rural households; build household assets, reduce barriers and expand access to market; support diversified livelihoods; tackle risk and vulnerability through insurance and productive safety net.
Private sector is a major driving force for poverty reduction. The government and donors should: strengthen enabling environment; recognize contribution by informal firms and encourage their development; enhance firms' ability to deal with risks; and promote dialogues between state, private sector and civil society.
Poverty impact assessment (PIA) is a very strong backbone for policy implementation: PIA can benefit donors and beneficiaries; contribute to evidence-based decisions; maximize the pro-poor impacts of their programs and policies; and assess the distributional impacts of interventions.
POVNET will continue promoting application of policy recommendations on country level, scaling up PIA and enhancing capacity development in partner countries.
Jiang Xiaohua, Director General, Foreign Capital Project Management Center of LGOP, “Actively Conducting International Cooperation in Poverty Reduction” |
Since 1980s, China has been cooperating with UN organizations in poverty reduction. Over the years, the development aid received by China and organizations working with the Chinese government has been increasing gradually.
Development aid mainly dedicated to development-oriented poverty reduction in rural areas. International anti-poverty cooperation is mainly concentrated in following fields: comprehensive development of rural areas; provision and improvement of public services and products; infrastructure and industrial development; environmental management; institutional capacity building; poverty reduction studies. Foreign loans used in poverty alleviation totaled $8 billion.
Major accomplishments in development work in China include:
Ÿ The overall investment in poverty alleviation and development program has been increased, especially in China's western regions. To some degree, this supplements government's input, increase the income of the poor population and allow them to satisfy their basic needs.
Ÿ The poverty situation in the project areas has been eased.
Ÿ Institutional innovation in China's poverty reduction has improved. Relevant development and poverty reduction methods of international organizations have been introduced to China, tested and deployed.
Ÿ Project management has improved, especially in the field of project preparation, specific plans and targets, scientific management standards, clear and operable guidelines for selecting target groups and systematic monitoring and assessment systems.
Ÿ The foundation has been laid for sustainable development of project areas. During project preparation process, project management staff has been trained. Local human resources have been developed. The poor population has strengthened ownership awareness and enhanced the capability of self-reliant development.
Ÿ International exchanges and cooperation in poverty reduction has been promoted. While benefiting from international cooperation, China is dedicated to sharing development experiences.
Major learning experiences in international poverty reduction cooperation are:
Ÿ Specify objectives and make strong commitment and regard international cooperation as an important component of China's poverty reduction and development program.
Ÿ Uphold the principle of "actively striving for foreign capital, making effective use of it, centering on our own requirement and serving our own interests".
Ÿ Build well-structured management and service system at central, provincial and county level.
Ÿ Ensure project-sustainability through capacity building by providing training to the officials and farmers.
Ÿ Conduct cooperation to achieve win-win outcomes.
Ir Rudy Rabbinge, Chairman of the CGIAR Science Council; Dean of Wageningen Graduate School, Netherlands, “The Promise and Potential of African Agriculture to Fight Hunger and Poverty” |
Thanks to mechanization and technological advances, food production in Sub-Saharan Africa per person increased by 30% over the past five decades, despite doubling of population.
Nevertheless, this region is still facing many constraints: absence of dominating food crops; unstable climate; endemic plant and animal disease; low land/labor productivity; limited human resources that force women to take major responsibilities; lack of investment in agricultural research and academic institutions; lack of knowledge infrastructure and brain drain; ill-functioning regional markets; inappropriate land entitlement system; no stimulating political and economic environment; inadequate capacity to impact global policy formulation; and lack of good governance.
To further promote local agricultural development, the government should:
Ÿ Pay attention to technology options: Pursue a strategy of integrated sustainable intensification; reduce land degradation and replenish soil fertility.
Ÿ Build an impact-oriented research platform; facilitate dissemination of relevant research and knowledge.
Ÿ Create and retain a new generation of agricultural scientists.
Ÿ Coordinate and give play to the role of markets and policies, increase food security, and strengthen development of the poor.
Ÿ Enhance cooperation with multiple international organizations to promote development and poverty reduction.
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