Suddenly, after a decade when the poor of the world were effectively ignored by mainstream economics, poverty seems to be back in fashion. Not the practice of it, of course, but the analysis of it, which typically makes the analysts, at least, quite rich. So we find a plethora of new considerations of the problem even from the international organisations, some of which are actually daring to speak out in ways which would have been unimaginable over the past few years.
Even the World Bank, which embarked on a decadal survey of poverty for this year's World Development Report, has found it to be more of a hot potato than anything else. Thus, the (incidentally, Indian) development economist who headed the team that wrote the draft report, recently resigned after a flurry of criticism from within and without the Bank's headquarters. This combined with the eviction of new dissident Joseph Stiglitz, has indicated the re-imposition of the traditional fierce conservatism in the World Bank's approach to strategies for poverty alleviation.
The draft's main transgression was that it dared to question some of the World Bank's most axiomatic beliefs over the past few decades, for example that economic growth is the basic solution to the problem of poverty through the much touted "trickle-down", or that the standard neoliberal policies that the Bank propounds necessarily deliver even economic growth. The draft was hardly radical in its presentation, merely pointing out that there is some doubt about these supposed truths, and that poverty alleviation requires a more holistic approach which also incorporates macro-economic policy. But even this was found to be unacceptable to hardliners in the Bank and in the US Treasury.
Even though the World Development Report is yet to be officially published, large numbers of those concerned with the "business of development" have become acquainted with the details of how the draft was put together and what the attacks on it were, as well as from whom. But all the brouhaha surrounding this publication has meant that another report on poverty from the UN system, which is potentially far more useful especially for those in developing countries, has been effectively sidelined.
This is extremely unfortunate, because the United Nations Development Programme's publication "Overcoming Human Poverty" (UNDP, New York, Poverty Report 2000) is not just a clear and impressive document. It provides a valuable service in questioning current orthodoxy to isolate the root causes of poverty and examines how international and national macro-economic processes can intensify poverty. It also goes beyond critique to consider and cite genuine alternatives for policy makers.
The first important point that the UNDP report makes is that targeted intervention for poverty alleviation is likely to have little impact, if the macroeconomic policies are such as to directly increase the vulnerability of the poorer groups in society. Often they tend to be constructed as "safety net' responses to national breakdown, whether because of crisis or enforced adjustment, when national economic policies contain provisions that directly and negatively affect material conditions. But this typically becomes an ineffectual attempt to limit or contain the damage that the basic macro policies simultaneously continue to inflict.
The UNDP points out that this strategy of target poverty alleviation stems from an overall "two-track approach" - whereby economic growth is supposedly on one track and human development is on another. Not only do these tracks not intersect, but the strategies for economic growth which are commonly prescribed, in terms of freeing markets and hoping for foreign investment and local animal spirits to create growth, are given primacy. (The UNDP tactfully omits to mention that these policies do not even deliver growth; it focuses mainly on the effect on poverty.)
Since these strategies typically entail attacks on workers' and agriculturalists' standards of living in various ways (for example through rising food prices and falling employment opportunities), they adversely affect the poverty situation. Social sector and anti-poverty policies are then taken up, almost as a residual, to pick up the pieces when the negative social fallout needs to be limited. Obviously, as a result, their efficacy is limited and often they do no more than salve the collective conscience of policy makers.
Unlike much of the discussion on poverty that comes out of the Bretton Woods institutions, which tends to treat the persistence of poverty as a phenomenon entirely determined by over-interventionist governments, the UNDP report also highlights the crucial role played by international forces. Two aspects are given special importance : the problem of external debt which continues to imply a net drain on the resources of the poorest and least developed countries, and the issue of trade liberalisation.
Indeed, the report deserves kudos for emphasising that the trade liberalisation which most developing countries have undergone after the Uruguay Round have not been associated with commensurate opening up by the industrial countries. As a result, even as market access remains a problem for developing country exports, their own productive sectors are threatened by imports of subsidised agricultural goods or manufactures of multinational with tremendous market power. In many developing countries, this has not simply meant deindustrialisation, it has implied a more dramatic loss of employment generation potential in all sectors, with very problematic consequences.
Another very important point is stressed in this report, that of addressing not just macroeconomic policies (which are themselves too often left out of poverty discussion) but also the broader structures within which such policies are put into place. Thus it points out that poverty alleviation programmes are flawed by their "failure to squarely address the sources of inequality - such as unequal distribution of land, the most important asset of the rural poor in many low-income developing countries." (page 10)
Even about the overused workhorse of "governance" the report has some useful things to say. It points out that socially desirable governance does not simply consist in lower or absent corruption : rather, it depends upon the level of accountability of governments, even in imposing policies upon the people; and on the people's ability to influence policies to the general advantage rather than to serve the interest of large capital or a financial elite. And it emphasises that the way to ensure such governance is not through outside monitoring, but through organisations of the poor and of people themselves.
Perhaps it is a sign of our times that this report, which is full of valuable insights and corrects many misconceptions which are constantly repeated by those in power, has been virtually ignored by national and international media. The hopeful sign, of course, is that such a report can come out of the UN system, and that itself may point the way to a more promising future.