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.)
