PHA-Exchange> 35 In preparation of PHA2

[Claudio]

ON POVERTY (2)  

 

10. Policies that increase the incomes of the poor enhance the productive capacity of the whole economy.

 

11. A country pursuing redistributive policies could reduce poverty even if its total income did not grow. but we are hard-pressed to find real-world examples.

 

12. The poor remain poor because they cannot borrow against future earnings to invest in education, skills, new crops and entrepreneurial activities. They are cut off from economic activity because they are deprived of many collective goods (property rights, public safety, infrastructure) and lack information about income opportunities.

 

13. The debate on what is first, growth or poverty reduction is a meaningless debate that diverts attention from the questions that should be our real focus: what works, how and under what circumstances.

 

14. Although some progress is being made in poverty alleviation in some places, it has been painfully slow, as the gap between rich and poor countries continues to grow.

 

15. In most countries, poverty reduction strategies are inseparably linked to debt relief operations, to tariff reductions in the rich countries and in many cases to tax reform. Debt relief has to be linked with poverty alleviation programs WITH civil society participation in the decision-making.

 

16. To hold governments accountable, indicators of the social impact of reforms implemented and of poverty beyond income need to be tracked.

Just recently, the combination of lower Third World commodity prices and higher oil prices resulted in trade losses of 15% in half of the poorest countries. The debt service of these same countries increased on average from about 17% of exports in 1980 to a peak of about 30% of exports in 1986. In 1997 it was 15%.

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