PHA-Exchange> Poverty reduction at the World Bank

[Claudio]

WORLD BANK PROPOSES ACTIVE POVERTY REDUCTION.OR MORE DOUBLE TALK? (*) 

 

According to a recent WB report (**), in the past 20 years, Latin America has made very little progress in the fight against poverty. In that part of the world, the share of poor people who live on less than two dollars a day fell from almost 60% in the 1950s to 20% by 1980. It has stagnated since at this level. In contrast, in China, the WB maintains, the per capita income rose by 8.5% a year from 1981 to the year 2000 --and poverty declined by 42%. 

 

So much for the facts. So what does this WB report, among other, conclude?

a)     That economic growth was too low to reduce poverty.

b)    That the gulf between the rich and the poor has hindered stronger economic growth.

c)     That improving macro-economic conditions and hoping for more growth is not enough.

d)    That governments should rather directly support the poor for them to both improve their personal situation and contribute to economic development (whatever this means).

e)     That we should promote 'pro-growth poverty reduction rather than 'pro-poor growth" (whatever this means).

 

The report goes on to confirm some other truths, namely, that Latin America provides no evidence that the gap between poor and rich countries is closed in the long-term by the invisible hand of the market; that someone who is born into a poor family is likely to remain poor for the rest of her/his life; and that it is the well-off who benefit most from government subsidies such as those on pensions, higher education and fuel.

 

The report also recommends making payments to the poor (whatever this means), on condition of them taking advantage of educational programs or health services. (!?) Furthermore, it says that the poor should be enabled to insure themselves better (!!??) against risks such as unemployment or illness (this beats me).

 

.And as a golden broche, it says: "Converting the state into an agent that promotes equality of opportunities and practices efficient redistribution is, perhaps (.only perhaps), the most critical challenge Latin America faces in implementing better policies that simultaneously stimulate growth and reduce inequality and poverty". (emphasis added).

Now, if this all is not double talk, I would not know what is.

 

Claudio Schuftan, Ho Chi Minh City

claudio at hcmc.netnam.vn 

 

(*):   D+C, Vol.33, No.4, April 2006.

(**): Perry, G.E. et al, Poverty Reduction and Growth: Virtuous and Vicious Circles. World Bank Latin American and Caribbean Studies, 2006
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