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After the war: what form of government for Iraq?
The small arms problem cannot be solved in isolation
Pro-poor growth to reduce poverty
Foreign investment: democracies preferred?
[ Conference at the Hamburg Institute of International Economics ]
Pro-poor growth to reduce poverty
In the developing countries in the 1970s and 1980s, the per capita income of the poor grew as strongly as that of the rest of the population. But since the beginning of the 1990s, from when globalisation picked up speed, the poor have dropped back. John Page, of the World Bank, drew attention to that at a conference titled 'Attacking Poverty: What makes growth pro-poor?' held at the Welt-Wirtschafts-Archiv in Hamburg (Hamburg Institute of International Economics, HWWA), May 7-9. The conference focused on the question of how to make economic growth benefit not only the better-off, but also contribute to reducing poverty.
In the discussion on measures aimed at this goal, a distinction was made between two categories. On the one hand, an attempt must be made to generate growth in the sectors and regions in which the poor account for a large proportion of the population. On the other hand, growth must be redistributed by means of social policy measures. However, there was consensus that priority must be given to enabling the poor to increase their income by their own efforts. For this purpose, said Stephan Klasen, of the University of Munich, a (national) development strategy was necessary which started from the two production factors the poor had if at all to offer: labour and land. In other words, pro-poor growth could best be achieved in rural regions, and there by the promotion of labour-intensive agricultural production.
Uganda had banked on this strategy in the 1990s and achieved impressive successes in reducing poverty, said Robert Kappel, of the University of Leipzig. In the case of coffee, its most important agricultural export, the country had focused on niche products and luxury articles. But Uganda was at the same time an example of the risks of this strategy. The fall in coffee prices on world markets since 1998 threatened to nullify the successes. So the conference also agreed that diversifying and modernising production both within and outside agriculture were indispensable for a long-term, stable reduction of poverty.
What input can development cooperation make to promoting pro-poor growth? Carsten Hefeker, of the HWWA, said the poor must be supported in effectively representing their interests and concerns in the political process. German Development Ministry (BMZ) directorate-general head Michael Hofmann pointed to the need for reform in the rich countries and called for greater coherence in policy on the developing countries. There was consensus that poverty-oriented development policy must be linked with conditionality. But with which? Elliott Harris, of the International Monetary Fund, cited as a yardstick the strategy papers the developing countries have to draw up for poverty reduction (PRSPs). However, whether they are suitable is doubtful. In Hamburg, some of the PRSPs tabled to date were criticised for having assumed over-optimistic growth rates and not offering any concept on how growth could be used for poverty reduction. (ell)