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MDG midpoint: Chronic poverty - Do people in chronic poverty gain anything from the MDGs?

Date
Time (GMT +01) 12:00 13:30

Panel:
Tony German
, Co-founder, Development Initiatives
Armando Barrientos, Research Fellow, IDS
Margaret Kakande, Poverty Monitoring and Analysis Unit, Government of Uganda
Martin Prowse, Research Officer, ODI

Chair:

Kate Bird, Research Fellow, Poverty and Public Policy Group (PPPG), ODI

1. Kate Bird, in the chair, introduced the meeting. She spoke about current debates around the MDGs at their midpoint, stating that in the development sector there tend to be:

• those who believe the MDGs are too ambitious and therefore cannot be met; and
• those who believe the necessary backing for the MDGs is absent and they therefore will not be met, opting instead to work solely towards goal one, i.e. halving the proportion of people living in extreme poverty.

2. Within the context of such debates, the speakers at this meeting will focus on analysing the relationship between the MDGs and people who live in chronic poverty, asking, ‘do people in chronic poverty gain anything from the MDGs?’


Tony German

3. Tony German stated that the MDGs provide a shared set of goals and a common platform which enables public and political attention to focus on poverty in a sustained way. Meeting the MDGs will only halve the proportion of people living in extreme poverty by 2015 however, thus leaving approximately 1 billion people remaining in both chronic and extreme poverty.

4. He stated that understanding the causes and the nature of poverty is crucial in the fight to eradicate it. He explained that chronic poverty is multi-dimensional and often intergenerational. Some of its causal or contributory factors can be:
• Difficult subsistence farming in remote rural areas;
• Membership of a group that is marginalised by society on the basis of ethnicity and/or religion;
• Being discriminated against or excluded from society because of gender, age and/or disability.

5. It is wrong to assume however that chronic poverty only affects particular excluded groups. It can also affect those who are included in society but on very adverse terms, which can lead to minimal wages and exploitation.

6. To progress from the 2015 target of halving extreme poverty to complete poverty eradication will take more than simply a doubling of current efforts. Such a strategy will need to address the political, social and economic factors that contribute to the persistence of poverty, including:
• Tackling not just social exclusion but also “adverse inclusion” in society, as explained above;
• Extending the concept of basic services to include social protection as a way to address vulnerability amongst the chronic poor;
• Increasing the right to information, participation and political representation of the chronically poor;
• A more direct and proactive strategy for investment in the poorest through asset transfer programmes based on the principles of equity and redistribution.

7. He concluded by highlighting the need for:
• global partnerships - he asserted that OECD countries could afford to do more;
• the development community to visualise a world without poverty in order to full understand what they are aiming for.


Armando Barrientos

8 . Armando Barrientos stated that the MDGs have been partly responsible for the expansion of social protection in the developing world, especially social assistance schemes. He presented some figures illustrating this:
• The Minimum Living Standards Scheme in China now reaches 26 million people;
• Brazil’s Bolsa Familia reaches 11 million people;
• India’s National Rural Employment Guarantee Scheme will soon reach 24-26 million people.

9 . Social protection can also aid in the achievement of the MDGs, and the World Bank and ILO have mapped social protection to various Goals. There are however two main concerns:
• Social protection cannot end poverty on its own - it works best when integrated with other public services and with a social policy aimed at empowering of the poorest;
• The MDG timeframe is too short for social protection schemes.

10. Barrientos concluded by highlighting the importance of the bottom-up drive for social protection. Social protection has made the most progress in Latin America, perhaps because – according to Latinobarometer - public perceptions there tend to assume that poverty is caused by unjust social structures, rather than by individual laziness. This is similar to Europe but in contrast to the USA.


Margaret Kakande

11. Margaret Kakande stated that while the general focus of the MDGs was good, there were some questions regarding chronic poverty, particularly in relation to the targets and indicators. For example, Uganda’s target on poverty was to reduce the poverty rate to 28%; but chronically poor people consist of the bottom 20%. The MDG target is therefore not ambitious enough. Governments are understandably tempted to help those living closest to or on the poverty line as this makes their achievements seem better.

12. She also outlined a number of other problems with the current MDG agenda:
• Regarding education, focusing on enrolment alone was a mistake. In Uganda, about 90% of the population enrol for primary education, but only 20% complete it. Completion would be a better indicator.
• There is a contradiction in that the MDGs call for investment in the social sectors which poor countries cannot afford themselves. There is a danger that their interventions will be unsustainable, and fail.
• Defining poverty in terms of consumption expenditure misses the point. Assets are the key factor. Somebody receiving health and education services but with no economic assets is still likely to find it hard to escape poverty.

13. She concluded by highlighting how the MDGs have so far been useful for raising public awareness, but have lacked focus, particularly with regard to the chronic poor.


Martin Prowse

14. Martin Prowse spoke about the second Chronic Poverty Report (CPR II), due in April 2008. He noted that it was a successor to the first Chronic Poverty Report of 2004-5 which he described as dealing with the ‘what’, ‘who’ and ‘where’ of chronic poverty. The first Report also focused on policy, with 4 key messages:
• Prioritise livelihood security;
• Ensure opportunities are accessible;
• Take empowerment seriously;
• Provide adequate resources.

15. The second Report will also focus on policy and aims to influence the 2010 World Development Report, demonstrating that poverty eradication by 2025 is feasible. Two themes will be outlined in part 1:
• Country context;
• The real politics of pro-poor reform.

16. These are then integrated into parts 2 and 3, which will cover various different policy areas, and a review of Poverty Reduction Strategies (PRS), respectively.

17. Prowse noted four key things about the Report which will make it stand out:
• A focus on the politics of pro-poor reform;
• An examination of long-term societal change;
• Analysis grounded in work on differing country contexts and development trajectories over a 20-30 year period; and
• The treatment of inequality – i.e. defining equality as ‘equality of opportunities’ and examining outcomes as well as opportunities.


Discussion

18. Issues and questions raised during the discussion included:

• What is the definition of chronic poverty?
Barrientos replied that chronic poverty is a situation in which people are poor throughout their lives. There are issues about measurement with regard to the quantification of chronic poverty, but there is already a vast amount of knowledge about the causes of chronic poverty, including lack of education, malnutrition and discrimination. He also pointed out that whilst the MDGs refer to ‘extreme poverty’ rather than ‘chronic poverty’, there are reasons to believe that the two are very similar.

• Will questions about elite capture and power be dealt with in CPR II?
German replied that these political challenges were something the Report wanted to explore, as well as what makes extreme poverty eradication strategies different from a mere extension of efforts around MDG 1. He highlighted the achievements of various 'right to information' campaigns for helping to make elites accountable, and suggested that this right should include a requirement for aid donors to publish details of their transactions and provide information about how their budgets are actually spent. Barrientos noted that many developing countries have adopted forms of social assistance that are focused on the poorest. This is very different – and arguably less elite captured - from the way European countries, for example, developed their social protection programmes. Kakande added that, although elite capture is a reality, countries like Uganda are focusing on public information, taxation and redistribution as a way to counter the problem.

• The argument for decreasing the use of indicators and targets rather than increasing them – especially because many developing countries’ statistical systems are not able to measure them.
German observed that the adoption of different methodologies may act to confuse the public. He recognised that statistical measurements can be onerous, but observed that there is a need to increase statistical capacity in order to better understand chronic poverty. He sympathised that the number of targets and indicators might make the MDGs seem unreachable, but did not agree that the MDGs should be scaled down because meeting the goals is a matter of political will and choice, rather than one related to lack of funds and/or capacity.

• Do biofuels present an opportunity for small farmers to escape poverty?
Prowse observed that biofuels can help reduce poverty as agricultural goods for biofuel production can be grown on small plots of land. However, like most non-staple crops, the processing of biofuels tends to be done on a large-scale in huge plants. The chronically poor tend to be concentrated in remote rural areas however, which are not usually conducive to the installation of large processing plants. This may limit the potential of biofuels to reduce chronic poverty.

• The importance of governance and domestic accountability in addressing chronic poverty.
German confirmed the importance of governance and domestic accountability in chronic poverty reduction. He praised accountability mechanisms implemented in Africa during the last 5 years, such as the Africa Peer Review Mechanism (APRM), as well as local and intergovernmental processes.

Description

The Millennium Development Goals (MDGs) set out an agenda for international development that is at once highly ambitious, and yet has been criticised for its modesty. The first target for goal one is to halve world poverty by 2015. Even if the target is met, there is a real danger that many, if not most of the chronically poor could miss out. This will mean that in a generation's time, poverty will still blight the lives of at least 900 million people.

A rigid interpretation of the MDGs could encourage a focus on those “easy to reach”, and away from chronic poverty. But do the MDG and chronic poverty agendas overlap anywhere? Can policies aimed at the MDGs be made consistent with action to tackle chronic poverty?

At this ODI and Chronic Poverty Research Centre (CPRC) event, a panel of speakers bridging the worlds of research and policy discussed their perspectives on how the MDG agenda relates to chronic poverty in areas such as economic growth, health and social protection.