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What next? Moving on from the World Development Report (WDR)

Date
Time (GMT +00) 13:00 14:30

Speaker:
Steen Jorgensen
, The World Bank
Chair:
Caroline Moser, ODI

At the start of his presentation Steen Jorgensen provided two 'warnings'. Firstly, he intended to give a personal view that might not necessarily reflect the view of the Bank. Secondly, he cautioned that although he has spent more than 10 years at the Bank he has only spent 8 weeks in the Social Development Department--and consequently was still in the process of understanding the issues.

Jorgensen started by comparing the WDR of 1990 to this year's report. The 1990 WDR also had poverty at the centre of the debate. It was based on the adjustment failures of the 80s and had a very macro-economic focus; whereas the 2000 edition, based on experiences of the 90s, has a different approach to poverty. The 1990 WDR focused on labour-intensive economic growth, broad provision of social services, and -to a certain extent- safety nets. The WDR 2000, however, emphasises opportunity, empowerment and security as crucial to fighting poverty. There is no ranking in the relationship between the three; they are important in their own right and each is intended to mutually reinforce the other two. They are all interrelated elements of an integrated poverty reduction strategy.

Experiences from the 1990s show that institutions do matter for successful reforms; growth alone is not enough; and asset inequality and other inequalities (e.g. between genders and ethnic groups) also affect both growth and poverty reduction. These lessons have been taken on board in the new WDR. The elements included in each of the three pillars/planks of opportunity, empowerment and security clearly show this:
- Opportunity: Implementing market reforms for growth; making markets work for poor people; expanding poor people's assets and tackling structural inequalities.
- Security: Helping poor people manage risk; preventing economic crises and natural disaster and protecting poor people when they occur.
- Empowerment: Making institutions work for poor people; building social capital and removing social barriers.

In terms of risk management, Jorgensen did not think that the World Bank had got it completely right in the WDR; there is a need to shift the main focus to mitigating and preventing risks, rather than coping, and this will require a different approach. In terms of empowerment, Jorgensen emphasised that we are talking about participation at policy and programme level, not merely on project level. Good local governance is the critical issue in this respect.

In order to promote the three planks/pillars, the World Bank suggests a set of global actions. These actions include the opening of markets by developed countries; promotion of global financial stability; financing on international public goods; participation of the poor in global forums; and increased aid and debt relief targeted at poverty reduction. This focus on global actions is a new addition to the WDR. However, it is important to realise that the WDR is not an operational report; it is meant to stimulate debate and one can not expect the Bank to go out and implement the WDR. In terms of country strategies, the WDR's mission is to set the stage for a comprehensive way of thinking about poverty reduction, and to provide a sense of direction in terms of policies. Priorities and concrete actions will have to be worked out in each country, but should build on the three pillars of opportunity, empowerment and security.

How can a social development approach be incorporated into the WDR follow up?
- In terms of opportunity, better analysis and monitoring of economic reform programs to address the impacts on the poor is needed. Also needed is greater transparency, in both budgeting and spending, as well as targeted interventions to reduce asset inequality .
- Looking at security, it is crucial to move away from safety nets (passive) to springboards (active) and to shift focus from coping to risk mitigation and reduction. We also need to look beyond income (e.g. from pensions to age well-being); encourage community involvement and include the informal sector.
- In terms of empowerment, mainstreaming of participation is crucial. The Poverty Reduction Strategy process (PRSP) needs transparency and participation, otherwise its objectives will have failed. Participation is required not only in planning, but also in the implementation of projects, ensuring local ownership and management. Social analysis should be seen as integral to program design and monitoring; and a wider range of civil society should be engaged. Finally, there should be a move from cultural property to inclusion and diversity.

The momentous question, though, is how to put such ideas and policies into action. Will it happen in this case? Global action is definitely needed, although Jorgensen thought it unlikely that this would be driven by the World Bank itself; other actors will have to take the lead. In terms of opportunity, better growth and market reforms is required. As for security, it is quite likely in some regions, however the problem lies in the non-income aspect of security, which is difficult to implement. Mainstream participation is quite likely to happen in some sectors and countries however, this will require substantial amounts of money. Will we see a shift from community involvement to community driven programs? Scaling out (i.e. replicating successful projects in other places) seems quite likely as there is a strong internal and external lobby for it; the probability of scaling up (expanding projects to a larger scale) is much smaller and one may question whether it is at all desirable. The wider engagement of civil society is likely in some sectors/countries, however the problem is the tendency to engage only elite organisations. The move from cultural property to inclusion and diversity seems rather unlikely in the current climate.

From the World Bank's side there is dissemination and training going on, and new operational policies are being developed (e.g. poverty reduction guidance). PRSPs and poverty reduction credits are other examples of action taken from the World Bank. However, there are also important research issues to be followed up; and it is particularly important to try to understand the new global movements and their impact on development. A next step would be a WDR on sustainable development, as would be research into the issues of rights, democracy, standards and the World Bank. However, Jorgensen emphasised the importance of pressure and constant reminders from the outside on the Bank and its partners. It is also crucial that other forces within development work on operationalising especially the empowerment and security agenda; to engage in dialogue on a rights-based approach; and to work on integrating social and economic dimensions in poverty analysis, not leaving out the issue of measurement.

In the discussion that followed, a speaker commented that the WB has shown a tendency to move away from lending to productive projects; many 'participatory' projects have failed while more hierarchical projects have succeeded. For example, has the creation of jobs, which after all is vital to poor people's survival, been forgotten? Jorgensen replied that there is room for efficiency by involving local communities, which will also allow for more appropriate standards for those involved. However, decentralisation is the key for this to happen. We are seeing important impacts of more active participation, especially in the health sector; making programmes cheaper, giving quicker and better results. An approach favouring community driven initiatives will be more expensive for the Bank internally, but we should get cheaper, more effective programmes out of it.

A clarification in the use of the word 'community' was requested. A speaker emphasised the importance of bringing participation up to all levels, and wanted a clarification as to how networks will operate within the Bank, especially alongside the economic stronghold. And how far has the Bank got in its review of the Structural Adjustment Programmes? Jorgensen replied that he used the word 'community' in a loose sense as communities of interest, which sometimes can be geographical, sometimes not. He stressed the importance of participation for the success of programmes, and claimed that there are monetary indicators showing it works. The important question is how do we create good local governance? Empowered communities will start demanding better services from local authorities. In terms of the Structural Adjustment review, it is ongoing but this is one of the areas where the Bank needs to be pushed further.

One participant was particularly pleased that aspects of ageing were included in the presentation, although the WDR in itself did not treat the issue seriously. Two questions were posed in this regard: how do you shift community driven programmes over to older people, and what kind of rethinking is necessary to ensure older people are included? It was remarked that the WDR talks a lot about debt relief, but what can be done to make sure the HIPC countries (Highly Indebted Poor Countries) don't come in the same situation in the future? Could grants rather than loans be a solution? Finally, the chair asked what kind of feedback the Bank has had from governments on the WDR?

Jorgensen responded that there are lots of fascinating changes going on in terms of the involvement of local communities, that in turn have implications for their relationship with governments, and subsequently for governments' relationship with the World Bank. He agreed that it is important to include the issue of ageing, and indeed to make distinctions among 'the poor' (e.g. on basis of age, gender and ethnicity); however, this isn't something the Bank is currently doing. One could identify the ageing without family support as 'ultra poor'. In terms of debt relief, the real issue is not to let the short term get in the way of long-term goals. Hopefully there will be some Official Development Assistance following up on World Bank initiatives, but if the Bank was to give grants rather than loans, where should the money come from? The World Bank is a bank, and should be seen as an addition to taxpayer funded assistance, not as the alternative. However, this is not saying that some HIPC countries could not be in need of grants; this analysis has indeed been done after much pressure from outside. Jorgensen concluded by saying that in general, the WDR 2000 has been well accepted, although -as expected- some governments have seen the WDR as evidence of the World Bank 'going soft' whereas others do not think the Bank has gone far enough. Jorgensen would probably find himself somewhere in between these two.

Description

During this event Jorgensen started by comparing the WDR of 1990 to this year's report.