THE goal of poverty alleviation has gained such widespread popular usage that every other domestic and/or international economic programme is now couched in the language of poverty reduction.

And, every other international conference vows to prioritize the above goal even if poverty alleviation is only remotely connected to the subject being contemplated. Also, trade liberalization under the WTO is now being promoted as poverty alleviating even though the terms of agreements are tilted more in favour of the more developed trading partners.

The issue of poverty is being trifled with to the extent that even the caption of certain structural adjustment programmes must incorporate the term poverty. For example, the Poverty Reduction and Growth Facility (PRGF) now being provided to us by the IMF for balance of payments support through structural adjustment.

The PRGF is more likely to impoverish the lower-income segments than to provide relief required so vitally to raise their levels of living. The IMF-prescribed route attempts to set the market structures right. While this sub-goal requires a host of economic and non-economic factors as prerequisites, the existing public structures are dismantled causing unemployment to rise in an economy that has yet to begin generating employment in a big way. As the number of unemployed soar, other measures aiming at “setting prices right” add to the financial burdens of low-income segments. While many in a developing country are then pushed below the poverty line thus swelling the numbers of the poor, developed countries’ surplus capital is attracted to the prices “set right” for them.

So, whenever someone talks poverty, it is important to determine whether substantive measures are being proposed to attack poverty directly or whether hidden motives are being pushed behind the garb of poverty alleviation or whether one is just going through the motions aimlessly.

The third meeting of the finance and planning ministers of SAARC countries held on April 9-10, 2002 in Islamabad resolved to fight poverty. However, the domestic measures emphasized for the purpose are the ones already known to many national governments in developing countries. These include fighting corruption, improving governance, ensuring transparant use of public funds, improving official procurement process, and improving the police and judicial systems. While all aspects of public policy, public administration, and economic strategy obviously have a bearing on the socio-economic health of a people and thereby on poverty; to lump all of the above measures as poverty alleviating is to make light of the issue of poverty itself. For, if a conference convenes with the specific purpose of determining poverty alleviating measures, then this is what it should be focusing on instead of choosing a policy portfolio from a basket of policies already agreed upon to ameliorate the lot of these underdeveloped countries. There was, therefore, little value addition from the SAARC meeting. To spend resources to meet and repeat what is already common knowledge is not a very good use of public funds that the SAARC representatives resolved to guard against after wasting some more public resources in the process.

A novel recommendation from the above SAARC meeting was perhaps to request the more developed countries (MDCs) to disallow entry of capital fleeing from here. This is too far-fetched as this capital serves to lubricate their economies. SAARC ministers might have done well by brainstorming measures that would serve to retain capital in home countries. This would, however, require a whole gamut of interlinked sectoral development policies that are nowhere on the cards. Instead, the sectors have been prematurely thrown open to the market forces with the state even less responsible now for the economic outcomes than was the case in the past. The very policies that are viewed to be poverty alleviating such as structural adjustment (ala PRGF) are the ones that feed into the variables that impact poverty adversely. The country’s socio-economic climate is thus rendered even less conducive for capital retention, the recent inflight after the September 11, 2001 episode notwithstanding.

The March 2002 Monterrey meeting on financing for development resolved to boost official development assistance (ODA) which has declined before approaching the target level of 0.7 per cent of developed countries’ GDP. If development aid is a solution to developing countries’ poverty issues, then why were these not addressed when ODA levels were higher? A reason is the low absorptive capacity in developing countries which failed to turn aid over into tangible results. Rather, the poor became poorer as, despite the development assistance programmes, the rich became richer.

Consequently, there was a reaction even in those donor countries which gave aid for political and geo-strategic reasons more than for economic reasons. People in donor countries became increasingly averse to the idea of transferring resources from the low- and middle-income taxpayers in the first world countries to the wealthy in the third world countries some of whom were wealthier than many wealthy in the developing countries. Inter alia, as the aid-givers experienced battle fatigue with no perceptible improvements on the ground, aid inflow shrunk.

There is now a desire to have them revived when neither has the absorptive capacity of the recipient countries improved nor do many of them have indigenous development strategies on the anvil that would lift the poor above the poverty line through development assistance that should be temporary and not permanent.

There is also an attempt to have the debt burden reduced on the same lines as that attempted for the Highly Indebted Poor Countries (HIPCs). While the HIPCs’ debt relief programme is facing problems, debt relief packages also come with strings attached. While there may be a reduction in the debt burden, there may not necessarily be a reduction in poverty which remains a function of policies designed specifically for the purpose and the broader development policies that would keep them from slipping back into the poverty trap.

Another factor contemplated for poverty reduction is greater market access to boost trade. This measure would help increase exports and distribution in favour of the owners of the means of production in export industries. It would further help boost rates of economic growth which may not necessarily alleviate poverty meaningfully as policy makers tend to equate poverty reduction with employment generation. Employment generation in capital-intensive industry is labour-saving / displacing. It is, therefore, not able to generate employment at a rate at which the labour force is growing. So, even though exports may increase and may contribute to output growth, the problem of employment would remain if the labour force growth rate remains higher than the rate of employment generation in capital-intensive industry.

Solutions are, therefore, proposed for sectors where population is concentrated. That is, the rural / agricultural sector. However, while this solution is being well-received amongst the policy elite, it is only the form rather than the substance that is gaining acceptance. Our proposed solutions aim at redistribution of assets/land-before-growth with a view to integrating the rural population. While focus on agricultural sector is accepted by the policy elite as a solution to poverty alleviation, they are seeking to enhance production and productivity through capital-intensive farming. These goals are planned to be achieved with the help of foreign investment that will also be mechanical technology-intensive requiring consolidation of farms for achieving economies of scale. It is important to mention that this route will be labour-saving / displacing and will add to rural unemployment, rural-urban migration, and the problems of the urban informal sector thus adding further to urban unemployment, squalor, misery, and poverty in both the rural and urban areas.

While the NGOs help the poor adjust to the maldistribution of assets and incomes, our proposed solutions focus on assets’ distribution-before-growth in the agricultural sector. The idea is to engage the rural peasants in such a manner in agriculture that they not only have a sense of ownership but should have actual ownership of the means of production so that they become productive members of the society. It is possible to still increase output through scale-neutral chemical and biological technologies by providing strong support systems to help the peasants graduate to commercial farming. It will be only then that the root cause of poverty will be addressed. Otherwise, the solution in the minds of policy elite to encourage large-scale capital— and technology-intensive (mechanical) farming will not only compound the problems of distribution in the country but will make it more difficult to distribute land at a later date.

The cures suggested thus far also include some symptomatic cures such as arresting the population growth rate when population growth while being a cause is also an effect of poverty. Poor families tend to have many children so as to increase the number of earning members, other socio-economic determinants of their large family sizes notwithstanding. Also, poverty does not emanate merely from maladaptive individual behaviour as the vicious circle can only be broken through the right government intervention that takes a jab at the causes and not merely at the symptoms of poverty. As for those who think that mere provision of health and educational facilities will be able to do the needful are also mistaken as we do not have an economy growing big enough to absorb all those we wish to educate.

Attacking poverty directly at its roots through appropriate land reforms and intense follow-up action to make the peasants stand on their feet will also set the wheel of the economy in motion by generating demand for industrial goods. The upshot will be that industry and service will then grow in sync with each other and not at each other’s expense. We will then eventually reach a point when the growing labour force will find many options to move in. The more this crucial decision is delayed, the further away will we move from an opportunity to turn the corner of the economy. Poverty alleviation will then remain only on the lips and in the captions of programmes designed to achieve goals other than direct poverty alleviation.