Andrew Shepherd - Overseas Development Institute
Tony Addison - University of Manchester
Ruth Vargas Hill - International Food Policy Research Institute
Duncan Green - Oxfam International
Ian Jones - International Fund for Agricultural Development Philippe Remy - International Fund for Agricultural Development
Martin Prowse - Overseas Development Institute
Santosh Mehrotra - the Planning Commission, the Government of India
Margaret Kakande - Ministry of Finance, Government of Uganda
Andrew Steer - Department for International Development
Caroline Harper - Associate Director, Chronic Poverty Research Centre
Do five recently published and forthcoming international reports provide a coherent analysis of the policies and approaches which are required to reduce and then eliminate poverty?
The event will bring together research institutions, development agencies, representatives from developing country governments and members of the public to hear presentations on five recently published and forthcoming international reports on poverty:
- ‘The Chronic Poverty Report 2008-09: Escaping Poverty Traps’ by the Chronic Poverty Research Centre, due for publication in July 2008;
- ‘The World’s Most Deprived: Characteristics and Causes of Extreme Poverty and Hunger’ by the International Food Policy Research Institute, published in October 2007;
- ‘From Poverty to Power: How Active Citizens and Effective States can Change the World’ by Oxfam International, published in June 2008;
- ‘Promotion of rural employment for poverty reduction’ by the International Labour Office, published in June 2008; and
- A preview of the rural poverty report by the International Fund for Agricultural Development, due for publication in 2009.
Following the presentations will be reflections on the reports by a panel of policymakers, including representatives from DFID, the Indian Planning Commission and the Ugandan Ministry of Finance, who will provide a perspective from countries heavily engaged in the fight against poverty.
The day will conclude with a group discussion and an attempt to compare, contrast and synthesise the five reports presented.
Andrew Shepherd asked participants to reflect on the international poverty reports and consider whether they share a common picture or set of recommendations.
Presentation 1: “The World’s Most Deprived: Characteristics and Causes of Extreme Poverty and Hunger” by the International Food Policy Research Institute.
This report attempts to identify the location of those living in extreme poverty and hunger and asks why hunger persists - i.e. is business as usual sufficient to secure their escape?
Ruth Vargas Hill first disaggregated the global poor into three groups:
- The ‘subjacent poor’ (living on between 75 cents and $1 a day);
- The ‘medial poor’ (living on between 50 and 75 cents a day); and
- The ‘ultra poor’ (living on less than 50 cents a day).
She said that of the 969 million global poor, one sixth (162 million) are ultra poor and that three-quarters of this group are to be found in Sub-Saharan Saharan Africa.
She then gave an overview of regional trends:
- Since 1990, East Asia and the Pacific experienced a substantial reduction in both the proportion and number of people living in all three poverty groups;
- South Asia similarly experienced a reduction in the number of medial and ultra poor, in addition to an increase in the number of subjacent poor;
- In Sub-Saharan Africa the number of poor has increased, in each group, and particularly so in the ultra poor group.
For IFPRI, the severity of poverty and limited progress in reducing it suggests that the poorest in Sub-Saharan Africa are trapped in poverty. To test this hypothesis IFPRI compared actual numbers in ultra poverty with those that would be expected if all incomes grew equally. Although growth was found to provide similar benefits to all groups in South Asia, East Asia and the Pacific, the ultra poor in Sub-Saharan Africa seem to be trapped.
IFPRI used two analytic tools; their Global Hunger Index (GHI) and household surveys from 15 countries. The GHI is composed of three equally weighted indicators: the proportion of people who are energy deficient, the prevalence of underweight infants, and infant mortality. On this index, South Asia, despite having a lower poverty rate, scores similarly to Sub-Saharan Africa. However, in terms of ultra hunger (consuming less than 1600 calories a day), Sub-Saharan Africa fares much worse – as shown by IFPRI’s household surveys.
Having provided a regional breakdown of hunger and poverty, Ruth Vargas Hill directed participants’ attention to rural poverty. Research from 20 countries was said to show that:
- The poorest live in remote areas;
- Rural poverty rates are two/ three times higher than urban ones;
- Rural ultra poverty rates are over four times higher than urban ones;
- Landlessness is correlated with ultra poverty in South Asia but not in Sub-Saharan Africa;
- Minority groups, in every country, make up a significant proportion of the ultra poor.
Hunger itself as well as serious illness and access to credit were said to prevent escape from poverty and hunger.
For Ruth Vargas Hill, these traps mean that the ultra poor need to be targeted, as ‘business as usual isn’t going to cut it’. She suggested four areas of action:
- Addressing remoteness;
- Investing in the education and assets of the poorest;
- Social protection; and
- Addressing disadvantaged groups.
In response, Zulfiqar Ali queried IFPRI’s finding that extreme poverty had decreased in South Asia. He suggested that the discrepancy could be due to Bangladesh’s national extreme poverty line being 25 cents a day (unlike Ire’s 50 cents a day).
Zulfiqar Ali suggested that IFPRI should also include other indicators, to reflect the multi-dimensional nature of poverty and then explore:
- The implementation of policies targeting the ultra poor;
- The social obstacles to some people’s participation in labour markets;
- The benefits of investing in human capabilities.
Points that were raised in discussion included:
- Requests for information on movements in and out of poverty
- Do the authors think that ill-health is a cause of poverty?
- Addressing remoteness is partly political
- What do the authors think of migration as a response to poverty?
- Will we meet the MDGs?
- Should policy-makers prioritise growth or more direct measures to reduce poverty, such as education?
Ruth Vargas Hill responded that:
- To ascertain poverty dynamics the same households need to be revisited. This was not done, but IPRI is doing this, in Bangladesh and Ethiopia, for a separate project;
- Yes, health is important;
- Yes, addressing remoteness has a political aspect;
- It is difficult to generalise but it is not the absolute poorest who migrate, however, they may derive an indirect benefit from remittances, through cash inflows to their village;
- Globally, we will meet the MDGs, but ‘the progress will be very uneven’;
- IFPRI’s report is accompanied by 40 policy briefs, which explore the options for different contexts.
Presentation 2: “From Poverty to Power: How Active Citizens and Effective States can Change the World” by Oxfam International.
Having outlined that inequality is rising (both globally and within most countries), Duncan Green suggested a redistribution of power, opportunities and assets. He argued that progress in these areas has been made through active citizens and effective states.
Guided by these two core ideas, the book’s four sections explore:
- Rights and dignity (the book’s ultimate policy objective);
- Markets (looking at pro-poor growth, as well as the environment and unpaid work);
- Risk and vulnerability (anxiety was said to be central to the experience of poverty); and
- The international system.
Charles Lwanga-Ntale asked:
- To what extent has the development industry resumed its previous interest in empowerment as an approach?
- Is the growth agenda compatible with other agendas, if not, which one is to be prioritised?
- How important is democratisation for growth and development?
- What kind of social protection is most beneficial?
Points that were raised in discussion included:
- Why does Oxfam support the simultaneous promotion of active citizens and effective states, even though history has been yet shown them to work at the same time?
- What effect do multinational companies have on poverty?
- If the book focuses on exclusion not GDP, what about the North?
- Effective states are embedded in the international system – what change is needed at that level?
- The poorest are both perpetrators and victims of corruption.
Duncan Green responded that:
- Sweden and Finland provide historic examples of active citizens and effective states working together to secure democracy and decent levels of growth;
- The benefits of FDI depend on government management; what sectors are supported, what taxation regimes and whether technology is transferred into local industries;
- The book mainly focuses on the South, social exclusion in the North is not explored;
- There needs to be more attention to the management of global public goods (such as knowledge flows, migration, climate change and the arms trade), and the international system should be more supportive of national development and democratisation processes;
- We need to distinguish between corruption for need and for greed – the former can be addressed by paying people, such as teachers, properly.
Presentation 3: “Promotion of Rural Employment for Poverty Reduction” by the International labour Office.
Andrew Shepherd introduced the report as the first major focus on rural employment in twenty years.
He said that the ILO report argues that to reduce (persistent) rural poverty, agriculture needs:
- An enabling policy environment;
- Adequate institutions;
- Sufficient and well-targeted public and private investment; and
- To be environmentally sustainable.
For the ILO, functioning labour markets produce efficient and fair outcomes, where workers are protected against risk of income loss. But the report noted severe problems in rural employment, from a decent work perspective, such as:
- Weak representation of labourers;
- Weak bargaining power;
- Limited access to social protection;
- Poor recognition of rights;
- Gender inequalities;
- Discrimination against migrants;
- Poor infrastructure;
- Increasing reliance on casual labour;
- Continued low pay;
- Poor security;
- Child labour.
The Report was said to attribute such problems to weak governance of rural labour markets and call for social partners to work with governments to improve implementation of labour codes, through voluntary inspections. However, such calls were apparently watered down in the subsequent Report of the Committee on Rural Employment. (Andrew Shepherd thus the flagged up the importance of understanding the politics of labour market inspections).
He then highlighted four key messages from the report, namely:
- Ensure that rural workers are covered under national laws and regulations as well as in practice;
- Guarantee access to social assistance for poor and unemployed rural people in active age groups;
- Staff and resource labour inspection institutions;
- Build the capacities of rural organisations;
- Promote the decent work agenda.
Presentation 4: “Harvesting Solutions: How Poor Rural People Overcome Poverty” by the International Fund for Agricultural Development.
Philippe Remy introduced the (yet to be published) report as an attempt to focus on the diverse means by which poor rural people overcome poverty.
He identified five challenges facing the rural poor:
- Access to and participation in governance processes;
- Access to and capacity to take advantage of agricultural services;
- Management of natural resources;
- Access to and capacity to take advantage of rural non-farm employment and enterprise development;
- Access to and capacity to take advantage of transparent markets.
These long-standing challenges were said to be evolving with the onset of recent changes (such as climate change, environmental hazards, competition over scarce resources, rising fuel and food costs, new biotechnology, increasing private sector involvement in development and agriculture, new governance structures, and emerging economies). These changes bring new challenges, such as:
- How to secure access to natural resources given increasing competition?; and
- How to meet high quality standards in integrated markets?
Philippe Remy added that 15% of the report is to be written by representatives of CSOs.
Points that were raised in discussion included:
- Is there now a focus away from growth to poor rural people?
- Poor people in East Africa tend to be own account workers – does the ILO report address them?
- We need to make the connection between supporting people in rural areas and agricultural production.
- Social protection is unfeasible.
- To what extent is local government support required for IFAD projects?
- What is IFAD saying about rural workers?
- Philippe Remy noted that there is increasing willingness, amongst donor agencies, to work with small-holders, and that the food crisis could provide an opportunity to do more on this front;
- Andrew Shepherd commented that although the poor tend to be self-employed, the ultra poor usually depend on employment, and that the ILO would say its decent work agenda applies to all;
- Andrew Shepherd maintained that social protection is feasible, and referred to recent ILO research;
- Philippe Remy added that the report includes sections on the rural work, both non- and on-farm.
Ian Jones remarked that the underlying question behind each of these diverse examples and aspects is how best to institutionalise the representation of poor people and their interests. When asked how one might ‘transplant’ a successful institution, he responded that it was more to do with ‘collaborative dialogue’.
Finally, when asked about the current stage of the IFAD report, Philippe Remy explained that they were currently organising regional consultations, with CSOs, persons involved in IFAD related projects and governments.
Presentation 5: the “Chronic Poverty Report 2008-09: Escaping Poverty Traps” by the Chronic Poverty Research Centre.
Having introduced the Chronic Poverty Research Centre, Martin Prowse stressed the pivotal importance of focusing on chronic poverty. He outlined that:
- Poverty traps and climate change mean that current inaction will entrench chronic poverty yet further;
- There is a prevailing demographic window of opportunity;
- Justice dictates that the chronic poor cannot be ignored.
He then identified five traps which entrench chronic poverty:
- Insecurity and poor health;
- Limited citizenship;
- Social discrimination;
- Poor work opportunities; and
- Spatial disadvantages.
Noting the limits to which growth can tackle chronic poverty, he then offered five core policy responses:
- Social protection:
- Public services for the hard to reach;
- Building individual and collective assets;
- Anti-discrimination legislation and gender empowerment; and
- Strategic urbanisation and migration.
These policies were said to be capable of creating a ‘social compact’ between a state and its citizens.
Additionally, he suggested that:
- The third generation of PRSPs be more embedded in developing countries;
- The MDGs be extended beyond 2015, to include targets to eliminate extreme poverty by 2025 and ensure basic social protection for poor and vulnerable people by 2020; and
- A Global Social Protection Strategy be institutionalised by 2010.
Points that were raised in discussion included:
- The CPR presentation makes passing reference to pro-poor growth. Are demands for pro-poor growth simply demands for equal opportunities?
- Do remittances impact on chronic poverty?
- What prevents descent into poverty?
- Does the CPR consider disabled people?
- How do we finance these policies?
Martin Prowse, Caroline Harper and Tony Addison, representatives of the Chronic Poverty Report editorial team, responded that:
- Whatever growth strategy a developing country government decides upon, the CPRC calls for the funding of these pro-poor programmes;
- The effect of remittances is complex and varies according to context;
- The CPR’s five core policies are designed to prevent both new groups from falling into poverty (such as those threatened by climate change) and also recent escapees from falling back into poverty;
- Yes, the CPR considers disabled people;
- We need to ensure G8 members meet their aid commitments, the international community finances global public goods and that developing country governments improve their collection of domestic revenue.
He added that CPRC had found that closed political systems (such as China and Vietnam) are more effective in tackling chronic poverty and that donors should therefore be more realistic in their dealings with poor countries.
- International partnerships, like CPRC, are good because they build the capacities of Southern researchers and provide more reliable and usable findings to Southern governments;
- The CPRC needs to go further in domesticating its Report;
- Southern policy-makers read policy briefs not lengthy books;
- Uganda wants to know in which sectors it should invest; what policy choices are both feasible and sustainable?
- If closed political systems can be effective in reducing chronic poverty, why are governance issues used as conditionalities for aid?
- What is meant by the rhetoric of ‘supporting poor farmers’? Supporting them for what?
- With respect to the CPR’s call for a modification of PRSPs, Uganda has moved on from PRSPs and its National Development Plan focuses on ‘wealth creation’, through growth and employment. In a few years, PRSPs will cease to exist.
- The CPR is useful because it reveals the numbers below the poverty line – whereas policy-makers tend to focus on the proportion of people below the poverty line;
- The process of developing PRSPs tends to be dominated by bilaterals and multilaterals, not developing country governments;
- Social protection is beneficial and feasible – it would cost 0.4% of GDP for India to protect all of its informal workers;
- The rural chronic poor lack access to credit;
- Marginal farmers have difficulties marketing their produce;
- Improved watershed management is crucial for farmers otherwise limited to single cropping;
- Should the public or private sector supply farm inputs, such as seeds?
- How can we work together to get these ideas into practice, not just in our own projects but globally?
- Effective states and active citizens tend to be the remit of aid agencies and NGOs, respectively. But joint partnerships would be better and the opportunity for such revision may be provided by Climate change;
- What we need is effective states, active citizens and efficient and fair markets;
- DFID would support the CPR’s five core policies;
- ‘The day of social protection is coming now’ and the food crisis puts more pressure on its opponents but we need more evidence on its benefits;
- DFID is going to launch a research programme on social protection;
- DFID now conducts an annual review of programmes to check gender is mainstreamed;
- National development strategies need to recognise the politics of implementing policies;
- We are all going to take rural development more seriously;
- Growth is important but it must be managed by the state.
Points that were raised in discussion included:
- What issues are developing country governments facing with regards to taxation?
- Economics is given an elite status at DFID. How do we adapt our organisations to this new focus on social, rather than just economic, issues?
- Have the reports got it right about politics and social contracts?
- Andrew Steer maintained that DFID is made up of equal numbers of specialists in governance, social development and economics;
- Santosh Mehrotra explained that in India, increasing tax revenues have enabled it to increase its allocations to the social sectors;
- Margaret Kakande said that the challenges for taxation in Uganda were a narrow tax base, a weak institutional system for policing tax and investors changing their names to benefit from exemptions.
Summary and Synthesis
Andrew Shepherd identified five features common to the reports:
- A nuanced picture of poverty; which is now recognised as multi-dimensional, disaggregated and considered diachronically, so as to understand dynamics;
- A promotion of a general set of solutions alongside a recognition of diversity of contexts;
- A concern with politics, social movements and the idea of a social compact; and
- An interest in taxation – willingness to be taxed and willingness to tax are part of the social compact and what enables social protection.
As for what to do now, he suggested that, we need more evidence on the kinds of benefits that social protection can secure, but that, drawing on the pyramid of available evidence, policy briefs should be created to support national debates in developing countries.
He added that there are plans in India to create a chronic poverty report.