How to make anti-poverty programmes successful?
FACILITATOR: T. WESTERMANN
The group noted that many anti-poverty programmes have had limited success and identified the following problems.
· There is a need for a thorough analysis and evaluation of past anti-poverty programmes to determine what Has worked, as well as to identify constraints, limitations and problems.
· There has been a general lack of participation of the poor at various levels of anti-poverty programmes, e.g. in the formulation and implementation of programmes, as well as in monitoring and evaluation of programme approaches.
· Anti-poverty programmes often fail to define the target group of the poor properly.
· Using wrong statistical data or methods to project income distribution has led to wrong assumptions at the very start of programmes intended to fight or alleviate poverty.
The group strongly recommended more participatory research (bottom-up) as a prerequisite for the development of strategies for successful anti-poverty programmes. This would assure the meaningful involvement of the poor in programmes which directly affect their lives. The group also recommended improvement in the legal framework, especially to protect ethnic minorities, women, the landless, etc., from discrimination and exclusion from opportunities.
In reviewing the development priorities of both developed and developing countries, the group suggested that governments cut down on spending for arms and divert these financial resources to the implementation of anti-poverty programmes.
The rich of the developed countries, but also the rich in developing countries, have the obligation to contribute to the goal of poverty eradication. Taxation of the rich is considered one of the proper ways to accumulate the needed financial resources.
Long-term investments, e.g. in infrastructure, education and health services, are urgently needed to ensure economic growth and better living conditions for all people and, thus, sustainable poverty eradication.
Short-term interventions (such as food aid) are also necessary, particularly to offset the negative impact of droughts, floods and other natural or man-made calamities. However, it is extremely important not to create dependencies on external aid as has happened in some cases in the past.
Access to land and other natural resources, as well as to credit and employment opportunities, are mandatory for achieving poverty eradication.
Poverty eradication programmes have to be designed for specifically-targeted disadvantaged groups, such as ethnic minorities, the landless, urban poor, the unemployed and women.
The implementation of anti-poverty programmes has to be improved significantly in order to make proper use of programme resources, permit genuine participation of the poor and to enable the targeted population to benefit from them in a sustainable manner.
Linkages between rural and urban poverty
FACILITATOR: J. V. ZEVALLOS
The group identified some aspects of urban and rural poverty in Latin America that can also be applied to other regions.
· The incidence of poverty (measured by income) is greater in rural areas than in urban areas. This includes both those with income below the poverty level and those who live in situations of extreme or critical poverty (indigent).
· Social indicators in rural areas are generally inferior to those in urban areas.
· The quality of public services (particularly educational and health services) in rural areas tends to be lower than in urban areas.
· The differences in social development between rural and urban sectors were caused by macroeconomic policies with a bias against agriculture and by patterns of allocation of public expenditure that favour urban areas.
The group identified some links between urban and rural poverty.
· Urban poverty is a consequence, at least to some degree, of rural poverty. Migration from the countryside creates urban poverty because cities cannot employ all the newcomers, nor expand infrastructure and services fast enough to cover their needs. Also, the skills of rural people usually are irrelevant in the cities.
· Rural communities suffer from emigration because when young men and women leave, community vitality diminishes.
· Among the factors that force people to migrate are (a) the introduction of labour saving technology and the replacement of labour intensive crops with pastures (for cattle) in medium and large farms; and (b) lack of economic viability of small agricultural units that can result from a number of factors, such as insufficient land size or the lack of profitability of specific agricultural subsectors.
· Temporary migration can bring about positive changes. For example, rural migrants can develop certain skills in the cities that can be relevant for the management of their farms. Also, remittances may serve to maintain or capitalize family farms.
· Cheap food policy (common from the 1960s to the mid-1980s) alleviated urban poverty, but hurt farmers. On the other hand, current policy changes that allow food prices to increase create an additional burden for the urban poor.
In order to prevent forced migration, the group made several recommendations.
Policies to improve the access of the rural poor to land
In most countries, especially where land is concentrated, redistribution is a precondition to alleviate poverty within a reasonable period of time. Although improvement in the distribution of land is always desirable, it is not always politically viable. The group did not agree on what to do if the political conditions of a country make it impossible to carry out land redistribution. Some members expressed the view that alternative courses of action to improve distribution of land should be pursued, for example, credit schemes to enable the landless or near-landless to buy land, tax incentives to sell land when it reaches a certain size or land titling programs aimed at activating land markets. Other members pointed out that it would be wrong to start from the premise that agrarian reform is not politically feasible. This can become a self-fulfilling prophecy. The admission that land reform is impossible may become a justification for not even attempting to form the necessary political coalitions in favour of reform.
Policies to improve the access of the rural poor to credit and adequate extension services
Since the rural poor tend to engage in agricultural and non-agricultural activities, credit schemes and extension services should not focus on agriculture only. Credit to groups of producers can contribute to the sustainability of the programs.
Policies to improve the quality of educational and health services in the rural sector
These policies improve the quality of life in the rural sector and increase the chances for poor children to overcome poverty during adult life. At the same time, they diminish the incentives for families to migrate to cities.
Policies to improve rural infrastructure
Investments in infrastructure (roads, electricity, drinking water, irrigation) not only improve the quality of life in the rural sector, they can reduce transaction costs in marketing and provide an incentive for the development of agro-industry, processing plants, commerce, etc.
Settlement programmes generally are a good investment in land-abundant countries; their cost is low compared to the income that they generate.
Policies to develop non-agricultural activities in the rural sector
Tax incentives can be an effective way to induce industries to locate in rural settings.
The group also discussed the convenience of agricultural subsidies and reached the following conclusions.
· Historically, agricultural development has depended to varying degrees on state protection. This reflects the special features of agriculture (for example, the effects of climate).
· If subsidies must be eliminated, the process should be gradual.
During plenary discussions, members of other groups pointed out that the deteriorating conditions in urban life in some countries are motivating poor people to return to rural areas.
Will progress in economic development alleviate rural poverty?
FACILITATOR: C. RODRIGUEZ - RAGA
The group arrived at the five major conclusions.
1. Economic growth is necessary and important, but on its own, is not sufficient to lead to rural poverty alleviation. Other redistributive measures should be combined with growth. On its own, growth can take too long for its positive impact to be felt.
2. Economic growth sometimes has a negative impact on national economies, for example, it can lead to ecological disasters resulting in the inability of communities to sustain their livelihoods.
3. The global context in which less-developed or developing economies are inserted is unfavourable for growth to have positive impacts on poverty reduction. Sometimes national industry is destroyed although growth may be achieved.
4. Growth may be achieved but with negative results on the employment side, often because of the choice of labour-saving technologies that lead to increasing unemployment and, consequently, poverty.
5. Growth is a problematic concept. Behind growth statistics may lie very negative realities.
Towards a Global Strategy for Rural Poverty Alleviation
LINKAGES BETWEEN URBAN AND RURAL POVERTY
Historically, countries that have been able to develop their agricultural sectors and improve rural incomes have also been able to develop other economic sectors and reduce urban poverty.
In most developing countries, urban poverty is a consequence, at least partly, of rural poverty. Rural emigration, motivated by lack of economic opportunities in the countryside, creates urban poverty because cities cannot employ all the newcomers, nor expand infrastructure and services fast enough to cover their needs.
The skills of the agricultural workers are largely irrelevant in the cities. This limits their ability to find work and increases the likelihood of remaining poor. Meanwhile, as young men and women leave rural areas, the communities they leave behind are weakened as their economic and social vitality diminishes.
ECONOMIC GROWTH AND POVERTY ALLEVIATION
Economic growth is a necessary condition for the alleviation of poverty, but it is not sufficient. Growth alone cannot reduce rural poverty significantly within a reasonable amount of time. According to a 1993 study, with a 3 percent annual growth in GDP per capita it would take about 60 years to reduce current poverty levels by one half.
If rural poverty is to be reduced, sustained growth has to be accompanied by policies designed to improve the distribution of rural income, expand employment opportunities in the rural sector, increase the coverage and the quality of public services in rural areas, and improve the living conditions of the poor through direct forms of assistance.
POLICIES TO ALLEVIATE RURAL POVERTY
· Macroeconomic policies that do not discriminate against agriculture and that create a favourable environment for agricultural producers.
This includes the management of the exchange rate (overvalued currencies have a negative impact in the agricultural sector and hurt small and medium farmers who produce exports or import substitutes); policies that influence the choice of technology (incentives that favour the use of labour-saving technology can cause unemployment and greater poverty); and patterns of allocation of public spending that favour urban areas at the expense of the rural sector.
· Policies to improve the access of the rural poor to land.
In most countries, especially those where land is concentrated, redistribution is a precondition for alleviating poverty within a reasonable period of time.
Improvements in the distribution of land can also be achieved by slower means, such as credit schemes that enable the landless or near-landless to buy land and progressive taxation to induce land sales when farm size reaches a certain point.
· Policies to improve the access of the rural poor to credit and extension services.
A rural development policy compatible with poverty reduction must increase the access of the poor to credit, infrastructure, extension services, productive inputs, and technology that is appropriate for small-scale production.
Since the rural poor tend to engage in agricultural and non-agricultural activities, credit schemes and extension services should be aimed at both.
Credit programmes for groups of poor people should receive special attention because they have lower cost and risk and therefore can contribute to the sustainability of the programmes and increase the access of the poor to credit.
· Policies to improve rural infrastructure
Investments in infrastructure (roads, electricity, drinking water, irrigation) not only contribute to agricultural development, they reduce transaction costs in marketing and provide an incentive for the development of agro-industry, processing plants, commerce, etc. In addition, they improve the quality of life in the rural sector.
Local organizations can help design rural infrastructure that benefits the poor and satisfies specific social needs.
· Support small and medium rural enterprises
Economic growth creates employment, but jobs do not necessarily expand at the same rate as growth. If, for example, agricultural growth were based on the introduction of labour-saving technology, the number of jobs would expand more slowly. Similarly, if agricultural growth occurs primarily in subsectors with low capacity to absorb labour, its impact on employment creation (and thus poverty reduction) would diminish.
A key strategy to promote employment creation in the rural sector is to support small and medium enterprises chat operate in rural areas (agricultural, agro-industrial and others) because they have the greatest potential to generate employment. Thus, an economic environment conducive to the development of these productive units should be a central component of an anti-poverty strategy. Such environment requires, for example, supportive macroeconomic polices and access to credit at reasonable interest rates.
Small and medium firms (in the urban and rural sectors) can be especially vulnerable during the transition towards a more open economy. They are more likely to survive the transition if it occurs in a gradual manner and if their needs are considered when formulating economic and trade policies.
· Policies to improve the quality of basic social services in the rural sector.
Improvements in rural schools and in the provision of preventive and basic health services improve the quality of life in rural areas and diminish the incentives for rural families to migrate to the cities. The access to better education also increases the chances for poor children to overcome poverty as adults.
Basic and preventive health services in rural areas have a major impact on poor people, especially women. Access to these services without cost or at a nominal cost not only improves their quality of life, it also increases their capacity to obtain income through their work.
· Direct transfers to the poor
In addition to educational and health services, resources should be transferred directly to those who cannot meet their basic needs because of their conditions (sick, old, invalid, victims of natural disasters, etc.) through specific subsidies or security nets.
· New patterns of public expenditure
Major increases in public spending in most developing countries are unlikely. Therefore, financing public services compatible with a strategy of poverty reduction will require the reallocation of resources according to different priorities. The main beneficiaries of public expenditure in agriculture should be medium and small farmers, while social services (health, education, nutrition, etc.) should target the poorest of the poor.
The simplest targeting method is the provision of public services that are only of interest to the poor (for example, programmes that demand work from the beneficiaries or programmes for malnourished children). Geographic targeting can be accomplished through instruments that are increasingly available in developing countries (for example, poverty maps) and is particularly useful for the provision of basic services where they are most needed.
· Policies to increase the economic viability of small agricultural units
Poverty not only results from being landless or unemployed, it is often associated with the ownership or possession of farms of insufficient size. Thus, policies aimed at consolidating small plots in order to form larger ones should be part of an anti-poverty strategy.
· Settlement programmes
Settlement programmes are generally a good investment in land-abundant countries. Their cost is low compared to the income that they generate.
· Institutional reform
Rural poverty alleviation requires efficient and effective public services, the precondition of which is stronger and better public institutions at the central and local levels. The agencies with the responsibility of delivering services to small farmers and the rural poor (ministries of agriculture and specialized agencies that operate in the rural sector, ministries of education and health, municipalities with increased responsibilities resulting from decentralization, etc.) must increase their technical and administrative capacities in order to meet their responsibility.
If public institutions that operate in rural areas are weak, fragmented, unstable and inefficient, as they are today in most developing countries, a significant proportion of public spending in the rural sector is likely to be wasted and the efforts to combat rural poverty will be ineffective.
A successful strategy to alleviate poverty requires decentralization and participation of the poor and the organizations that represent them.