Poverty reduction at the World Bank
-----------------------------------
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 educa-
tional programs or health services. (!?) Furthermore, it says
that the poor should be enabled to insure themselves bet-
ter(!!??) 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 ef-
ficient redistribution is, perhaps (only perhaps), the most
critical challenge Latin America faces in implementing better
policies that simultaneously stimulate growth and reduce ine-
quality and poverty". (emphasis added).
Now, if this all is not double talk, I would not know what is.
Claudio Schuftan
Ho Chi Minh City, Vietnam
mailto:claudio@hcmc.netnam.vn
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(*): 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.