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May 9, 2004
REVIEW: All the poverty talk
YET another glossy publication of yet another symposium/conference on poverty at yet another five star hotel. A spacious hall, glittering chandeliers, sumptuous six course meals post the event, while during the sessions the speakers, all people who matter, suited and booted, wax eloquent on the plight of the wretched of the earth.
This schizophrenic scenario notwithstanding, the theme this time was (you guessed it!) pro-poor growth. A definitional aside is called for. Poverty reduction has now been identified as the central goal of development efforts. Aiming for pro-poor growth is, a fortiori, the most significant policy measure to achieve this goal. While it is well understood that pro-poor growth refers to growth that leads to significant reduction of poverty, there is much less clarity on the precise definition of pro-poor growth, let alone a consensus on the policies that would deliver such growth.
The speakers at the symposium, all in search of the Holy Grail, were essentially from the UNDP and Pakistan Institute of Development Economics (PIDE) as well as a sprinkling of other eminent economists. As iterated in the executive summary, it was felt that a sustainable poverty reduction strategy requires: sustained rapid economic growth and macro economic stability, investment in human capital particularly education and female education, training and providing skills to labour. Also included is a focus on labour intensive employment generation to provide employment to the very poor near their places of residence with special focus on rural development strategy to prevent rural urban migration. In addition, ensuring micro credit to the rural poor to start self-employment, particularly for women, ensures the protection of social safety nets to the very poor.
A four-pronged policy initiative was suggested:
• A national campaign to rehabilitate Pakistan’s irrigation system to increase its irrigation efficiency to provide more water at the farm level. This would involve building more dams, the desilting and lining of canals wherever possible and building pucca khaalas. The intent would be to provide more water to the farmers and increase employment;
• Initiating infrastructure projects such as farm to market roads, national highways and ports, upgrading the railway system and increased production of cheaper energy through domestically available coal rather than furnace oil. Such projects, with high employment elasticity, would hopefully generate both employment and aggregate demand;
• Facilitate the increased production and export of milk, marine fisheries and high value added agricultural products, and
• Accelerate the growth of small-scale industries through the establishment of industrial support centres in the context of public/private partnership.
The credit for this policy initiative goes essentially to Dr Akmal Hussain of Sayyed Engineers.
But the one glaring omission in all this talk about the poverty issue is that no one seems to get at the root causes of the malaise. There is no point in treating merely the symptoms of the disease — a thorough diagnosis is required without which all policy measures are but mere sops and palliatives.
The trouble is that the answers cannot be found in the neoclassical theory which is where we seem to err. Although the possibility exists that the neoclassical theory can provide a satisfactory explanation of poverty, no such explanation exists at present, particularly for Pakistan. The question arises that if neoclassical theory attributes poverty to market failure, is this an adequate explanation? Probably not. Therefore it is highly doubtful that remedies derived from this theory will be effective or sufficient. Market reforms in reality make things worse. The theory does not in any sense explain how economic growth can be made to “trickle down”. Most of the policies formulated by the powers-that-be do not remove poverty. They only help make it more bearable. And this applies to rural work programmes and social safety nets, policies amongst others, which were emphasized upon at the symposium. Schemes such as these will be absolutely necessary for a long while, even in the event that economic growth accelerates and incomes “trickle down”. But at the cost of sounding repetitive, they are palliatives and not cures by any means.
An equally serious and important problem is that of implementation. Take irrigation efficiency for instance. Pakistan has been attempting to improve this for the last at least three decades with little success despite an abundance of programmes. Building more dams may be needed for the longer term but in the short to medium term, water management is the more economic option. The question that arises is how to go about it? Why has it not responded to government/private effort so far? The importance of implementation for any of the policy initiatives cannot be underestimated.
The fact of the matter is that poverty has remained more widespread in most developing countries than would have been expected from their economic growth and this demands an explanation. Contrary to what economists such as Amartya Sen believe, radical redistribution seems to be the one way out and is apparently more effective than participatory or pro-poor growth or any such term currently in vogue. The going will hardly be easy and the conditions for success of such a path will be rigorous indeed. A strong government with the political will is a must. If other societies have succeeded despite their consequent “failures” but for reasons other than redistribution, why not Pakistan?
Towards Pro-Poor Growth Policies in Pakistan: Proceedings of the Pro-Poor Growth Policies Symposium, (March 17, 2003, Islamabad)
UNDP, 10th Floor, Saudi Pak Tower, 61-A, Jinnah Avenue, Islamabad.
Email: c.inayatullah@undp.org
Website: www.un.org.pk/undp and Pakistan Institute of Development Economics (PIDE), Quaid-e-Azam University Campus, Islamabad
Email: pide@apollo.net.pk
104pp. Price not listed
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