The Myth of Poverty Alleviation – Part 1

Poverty in the ‘Third World’ is not a 20th Century phenomenon. It is an age old socio-economic and political issue which has its roots in colonialism, slavery and dependent capitalism which, by its very nature, creates social inequalities and a situation of social injustice, marginalizing particular social groups and social classes. Oft times, poverty, defined here as social disparities, social exclusion, material deprivation and the skewed distribution of political power, is understood as a consequence of ‘underdevelopment’.

For us, the basis of this ‘underdevelopment’ is seen to be the inability or unwillingness of governments to transform political independence into economic and social independence, and, in keeping with this, the reluctance to transfigure the structures and institutions which create and perpetuate both ‘relative’ and ‘absolute’ poverty. While this may be so, the popular or dominant thinking in many quarters is that ‘underdevelopment’ is understood as the absence of ‘development’ which is understood as an economic phenomenon.

This ‘development’, they define in terms of economic growth through trade, international aid, foreign direct investment, local private sector growth, and technological advance, all in the context of the advance of industrialised societies. Their solution then to (‘underdevelopment’) and the issue of poverty rests on the economic pillars in societies which have, over the years, introduced and implemented poverty alleviation/ reduction/eradication progammes intended to confront poverty in its various expressions.

However, the view that growth, trade, aid and investment can alleviate, reduce or eradicate poverty, is undermined by the fact that there is historical evidence to show that in instances where ‘development’ or growth has occurred, poverty has worsened. This is so because the development model being hotly pursued by most countries of the South is a ‘top-down’ one which is incapable of dealing with major social problems, and so produces in the process, growing poverty, discontent and disillusionment among the majority classes which, themselves, are distanced or isolated from the centres of power.

This is so because the benefits of this model of development instead of trickling down to those most in need, settles at the level of the local (or international) elites and their coordinates. We note then that those countries which have uncritically accepted the capitalist path of development on independence and coupled with their integration into the globalisation process, have allowed us to ‘develop’ into poverty and are now desperately seeking to ‘develop’ out of it through poverty alleviation/reduction and even eradication programmes.

In this essay, we discuss, not so much the issues of development and underdevelopment, as we do the issue of poverty and the effectiveness or success of poverty alleviation/reduction programmes in the countries of the South. This we do with specific reference to the Caribbean and Latin America. However, in so doing, we recognise that poverty, as a social, economic, political, and even a psychological state, has its own context and frame of reference.

Since the 1990s, the prevalence of poverty, its causes, and solutions, caught the attention, not just of national governments, but also of international players which/who have expressed concern about this tenacious social ill. For example, the supranational United Nations discovered in 1995 that ‘Third World’ poverty, which has been with us for centuries, was really a significant social ill. The 1995 UN Summit on Social Development aimed to reduce the proportion of people living in extreme poverty by half by 2015. And, the United Nations Development Programme (UNDP) has at the core of its mission, the elimination of poverty and meeting the goal of the Social Summit.

This UN organisation, in its contribution to the elimination of poverty monitors this social scourge through its Human Development Reports (which are themselves flawed in terms of method, methodology and mechanisms which generate poverty). But, it submits that the solution to poverty lies in the “right combination” of global and national policies and “sustained political will”, equitable growth accompanied by policies and strategies to meet the health and education needs of the poor.

Vague though this solution may be, The UNDP nonetheless, in its eager moments, assists the World Bank in crafting Poverty Reduction Strategy Papers to accompany international debt measures, debts which were created, in the first place and in part, by the Bank itself. Nonetheless, the World Bank, for its part, has tied international lending to solving the issue of poverty. In what should be seen as a paradoxical move, the Bank in September 1999, supported poverty reduction strategies in countries of the ‘developing’ world. In this regard, they took the decision that locally-owned participatory poverty reduction strategies should form the basis for all their concession lending and debt relief. Such strategies, they argue, should be country-driven and participatory, (including the private sector) partnership-oriented (with bilateral and multilateral aid donors), result-oriented and exhibit a comprehensive understanding of the different dimensions of poverty within the context of a long-term agenda for poverty reduction.

In fact, as the World Bank, which ironically funds all poverty alleviation/reduction programmes, jumps on the “poverty ” wagon, Amin points out that this lender agency, despite its rhetoric on poverty reduction, has no other function but to operate as a kind of “ministry of propaganda” for Washington with its treatises on “democracy”, “good governance” and “reduction of poverty”. But, be that as it may, the issue of poverty seems to be taking centre stage in the policies of the Bank as they relate to the borrowing requirements for ‘underdeveloped’ countries.

Given the history of the Bank, perhaps, one could say that this attention to poverty is less out of conscience and more out of a move to increase their profits and influence on ‘Third World’ governments and to appear altruistic in the face of their anti-social conditionalities on borrowing countries in the tradition of its twin, the International Monetary Fund (which we discuss later).

In the case of Sudan, for example, World Bank structural adjustment programmes, introduced in 1981, have negatively affected all areas of social life of the Sudanese people from education to small farming in a country where agriculture continues to be the most important economic sector. It is a sector which employs 80 percent of the workforce. As a matter of fact, the impoverishment of the Sudanese people has been attributed, in part, to the World Bank’s social and economic policies of adjustment. Other factors include millitarisation of the economy and long-standing conflicts.

For these thinkers, poverty is first and foremost an economic issue, and must be addressed in economic terms. For them, poverty results from ‘underdevelopment’ occasioned by mismanagement of the economy, bad governance, lack of economic growth, poor distribution of resources, poor or a lack of social services, lack of foreign investment and the absence of international aid from rich donor countries of the North.

This view, for example, coincides well with that of Director of the Earth Institute, Colombia University noted economist, Jeffrey Sachs. Sachs who directed the UN Millennium Project 2002-2006, also understands ‘development’ and ‘underdevelopment’ in the context of economic liberalism offers his own prescription. Poverty, he states, can be eliminated by 2025, if clear targets are set to meet peoples’ basic needs in the social services: health, education, sanitation, food production, water and other areas critical to one’s existence. In addition, he contends that if international donors are generous enough to provide development assistance to the tune of 0.7 per cent of their Gross National Product, then the financial gaps which plague countries of the South would be bridged and poverty would see its last days in countries where large numbers of people have been historically poor and disadvantaged.

No wonder then that since the 1980s, the issue of poverty has been preoccupying governments from the Caribbean and Latin America to Africa and Asia. In Nepal, Cambodia, Kenya, South Africa, Ghana, India, Pakistan, Barbados, St. Vincent and the Grenadines, Guyana, Jamaica, Argentina and Peru for example, the issue is the same: combating poverty and achieving prosperity for the poor, particularly the “extreme poor”. As a result, there is an ongoing discourse on poverty and the need to alleviate/reduce it and, if possible, eradicate it. Both state and non-state actors, political and civil society are involved in the discourse.

At the level of non-state actors and civil society, non-governmental organisations (NGOs) feel that poverty can be alleviated or reduced through income-generating projects. With aid from international donors such as Oxfam, Christian Aid, HIVOS, they have implemented isolated income-generating projects to ease the burden on the poor in particular communities with varying success. Such projects do not actually attack the roots of poverty because of their localised nature and their superficial understanding of the causes and roots of poverty. In a number of cases, certainly in the Caribbean, such projects have basically frittered away. In fact, in the Caribbean, the developmental NGO sector is now virtually non-existent.

At the level of political society, governments have introduced programmes of poverty alleviation/reduction, based mainly on the establishment of income-generating projects, to address the plight of the poor. In most cases, these are one-off projects which do not always have the desired results. For example, in Pakistan, despite the implementation of a poverty alleviation programme, poverty rose from 20 per cent to 33 per cent in 2002-2003.

In the case of Barbados, where there is a Ministry of Social Transformation and a government “poverty eradication consultant”, the government, circa the late 1990s, allocated BDS$1m. to an underprivileged community to alleviate poverty.

Today, the community is still poor, still marginalised and socially stigmatised, and still underprivileged. Further, in a television interview on June 20, 2007, Deputy Prime Minister of St. Lucia, Stephen King, expressed grave concern that the country’s economic growth of 4.5 percent was not being transformed into ‘development’. For, in spite of the country’s positive growth over the years, poverty had “worsened”. Note that in St. Lucia, there is also a World Bank-funded poverty eradication programme in place.

In the case of India, one of the world’s fastest growing economies, little can be said about its efforts at poverty alleviation. And, in March of 2007, Guyana’s president opened the summit of Latin American leaders with an appeal to reverse the “abysmal” record on poverty and social inequality in the region.

Caption: Canada’s Governor General Michaelle, speaking to leaders and beneficiaries of the Appui aux populations sinistrées project who gathered for this meeting. One of the components of the Appui aux populations sinistrées project is the distribution of bean and banana seeds.

Judith Soares, PhD, is head of the University of the West Indies’ Women and Development Unit.