Building a world without extreme poverty within one generation: Day 2
During the first day of the International Seminar “A World without Poverty”, the panellists attempted to provide a definition of poverty, introducing key concepts such as the income based poverty line, well-being and multidimensional poverty. After setting the poverty stage, they introduced the Brazilian endeavour to overcome extreme poverty and its experience in implementing the Brazil Without Extreme Poverty Plan (Brasil Sem Miséria).
The second round of discussions provided an opportunity to broaden the debate beyond the Brazilian experience and ask whether a world without poverty is indeed possible.
Brasília, November 25th 2014 – Moderator of the morning session, Tiago Falcão (Brazilian Ministry of Social Development and Fight Against Hunger), explained how the First International Seminar WWP comes at a crucial moment, with the United Nations defining the post-2015 Sustainable Development Goals and the World Bank establishing two new goals – ending poverty and promoting shared prosperity.
In answering the question “Is a World Without Poverty possible?”, Kaushik Basu (Senior Vice-President and Chief Economist of the World Bank) answered with a qualified “yes”: poverty can indeed be eliminated within a generation, however this depends on the definition of poverty adopted. The eradication of poverty is one of two goals the World Bank aims to reach by 2030: the first would entail less than 3% of the world population living below the $1.25/day/Purchasing Power Parity (PPP) line. The second goal consists of ensuring well-being of the bottom 40% population of each country of the globe, which would involve a shared prosperity process.
In response to the question “if economic growth currently accounts for 77% of the poverty that exits, will a “growth-as-usual” approach be enough to reach the 3% goal?”, Basu explained how incentives will have to be formulated for all players of society, not only the poor, requiring professional thinking and common sense to overcome poverty. Furthermore, inter-country connections and ensuring minimum policy coordination will be crucial. The nature of globalisation means the choices made by countries, such as corporate tax rates, can have impacts on other countries. In his conclusion, Basu explained that over one billion people worldwide are still living in poverty, a very high number that suggests the wealthier should be more aware of this issue; stating, “if poverty was a communicable disease, the concern in its regard would be much stronger”.
Magdy Martínez-Solimán (Director of the Bureau for Policy and Program Support at UNDP), also asserted it was possible to build a world without extreme poverty within one generation, as demonstrated by the Brazilian experience. What’s more, the MDG target of reducing extreme poverty by half was met five years ahead of the 2015 deadline. However, this only takes into account the aggregate poverty rate, a misleading number which conceals a grimmer reality: While China, India and Mexico reduced their share of poor, many other countries failed to do so. Global poverty rates decreased in some parts of the world, but the number of “new poor” – displaced people, refugees, victims of natural disasters or epidemics, etc. – multiplied by three. Therefore, “reaching the last mile” in overcoming poverty will only be possible through risk-informed development.
Solimán then submitted a definition of poverty: according to him, deprivation is more than a lack of income. Eradicating poverty means setting conditions in which people’s aspirations are met, as income poverty does not exist in isolation: it is linked to a series of other dimensions such as opportunities, knowledge, freedoms, security, equity, peace, environmental protection, etc. Therefore a new approach to poverty is necessary: in the framework of the MDGs Agenda, the development cooperation process is comparable to social transfers, by which the developed countries provide assistance to developing countries. Today, the entire dynamic has changed: emerging economies do not fit into the developed or developing country MDG categories. Furthermore the post-2015 agenda has to count on the participation of global actors participating as equal partners. “This has been the concern and ambition of the International Policy Centre for Inclusive Growth, thereby providing the developing world with a platform to share its good practices, as the Rio+ Centre does in the environmental field”, he said.
Solimán went on to state that while knowledge-sharing is crucial, so is financing. He referenced the on-going debate of broadening Official Development Assistance (ODA), which is currently set at 0,7% of the donors’ national income. Solimán concluded by recommending three streams of action – strengthening resilience against natural disasters and conflicts, ensuring a permanent exit strategy to poverty via comprehensive social protection programmes and fighting inequality – as well as three main tools – defining national policy pathways, establishing sources of financing and putting in place accountability frameworks.
The morning session was closed by Sergei Soares (President of the Ipea). He noted how the Brazilian government’s project to end poverty dates back to four years ago. At the time, several elements were put in place: after fierce debate, the poverty line was set at 70 Brazilian reais per a month, and the instrument chosen to fight poverty was the cash transfer programme.. Soares explained that poverty was defined in relation to hunger: according to him, “a poor person is someone who does not have enough money to afford to eat”. “When employing this definition of poverty, over one billion people in the world are considered poor according to World Bank figures”.
Soares went on to question the multidimensional poverty index: “this poverty measurement approach reproduces the tricky process of establishing a threshold definition for each dimension taken into account”. In his opinion, it is easier and more efficient to draw a unidimensional monetary line as a basis so that other Ministries are able to create diverse social programmes. By employing this monetary based operational approach, the Brazilian social protection system has almost reached the 3% extreme poverty target and serves as an inspiration to other developing countries. Admittedly, the Bolsa Família program only costs 0.5% of the Brazilian GDP. Most developing countries have a much lower GDP and would not be able to afford such expenditure. On this count, Soares proposed that part of the ODA could possible support the implementation of a “global Bolsa Família” in order to fight global inequality.
Employment policies, access to basic services and economic growth
The afternoon Session, titled “A Policy Agenda Beyond Extreme Poverty”, was articulated around three main issues formulated by the moderator, Rômulo Paes (RIO+ Centre/UNDP): the relevance of a multidimensional poverty index; recommendations for Brazil’s future poverty agenda; and employment and social protection. Marcelo Neri (Minister of Strategic Affairs of Brazil) recognised the pros and cons of the MPI, noting that while it provides a more efficient measure of poverty, it also renders measuring more complex. According to him, a middle path is more appropriate: the income line should be defined before taking the other dimensions of poverty into account. As far as employment is concerned, he noted how the opportunities for the bottom 40% of the population generally grow slower than for the rest of the population. However, in Brazil, employment has also grown for the poor. The Minister then emphasized the importance of early childhood and youth programmes promoting employability and social inclusion.
Laís Abramo (Director of International Labour Organization in Brazil) stressed the necessity of considering labour as a fundamental mechanism by which the fruits of development can actually reach the poor. She demonstrated that beside pension benefits and other income sources (such as social transfers), labour remains the households’ main source of income, even for the share of the population that earns less than a quarter of the minimum wage. She then provided some figures in order to demonstrate the necessity of promoting decent work: almost 40% of the global billion poor do work, which is equivalent to 11% of the working age population worldwide. Therefore, the labour market can be seen either as a mechanism of poverty reproduction or as key instrument for achieving equity.
According to the ILO, “decent work” is multidimensional because it involves social protection expansion, job creation, social dialogue strengthening and workers’ rights promotion. The decent work agenda is present in the Brazilian agenda, which combines social and labour policies. In Abramo’s opinion, Brazil now has to focus on reducing unemployment and fostering employment formalisation, particularly to account for race and regional inequalities. Another priority on the country’s agenda should be the promotion of youth employment, considering this population group suffers high unemployment rates (12% for men and 25% for women). She concluded by stressing the importance of fighting child labour, a strong driver of poverty reproduction.
According to Francisco Menezes (IBASE/Action Aid), if granting access to food and eradicating hunger was able to be achieved in Brazil; the same should be achievable with respect to access to public services. However, the challenge with respect to public services is that they are not an isolated sector: “they have to be put in the perspective of a development approach in which economic prosperity and social progress go hand in hand”, she added. Furthermore, the public/private dichotomy also has to be overcome and the federal system has to decentralise capacity, redefining the States’ role.
The last panellist of the day was Ana Revenga (Senior Director of the Poverty Global Practice, World Bank). She began by acknowledging three main drivers of Brazil’s success: the implementation of pro-poor policies, a decade of robust growth and above all, an increase in low-skilled labour income. Moreover, Brazil also reduced the gaps between different demographic groups and brought up the bottom population thanks to redistributive policies. According to Revenga, other countries should draw lessons from Brazilian best practices.
She then went on to list two challenges for Brazil: the slowing down of economic growth and the need to boost productivity and job creation. Therefore the agenda of the country should aim at supporting the population’s employability and overcoming labour barriers through three elements: setting a macro-foundation for growth (e.g. the adoption of low investment rates), sparking private job creation and ensuring the skill development for the bottom 40% of the workforce. She then emphasised how employment is driven by innovative firms, often clustered in zones with a high graduate concentration. Therefore to the question “How to support employability and ensure adequate workers for companies?”, Revenga affirmed this could be done through integrated labour market policies and linking transfer programmes to efforts aimed at supporting employment. In her opinion, Brazil should now focus on creating opportunities of highly productive jobs in order to build a high income and more equal society.
The First International Seminar WWP concluded with final remarks by Deborah Wetzel, Jorge Chediek, Marcelo Neri and Tereza Campello. Campello asserted that the State has to lead active policies in favour of the poor because growth is not enough to overcome poverty. In order to eliminate poverty, progress has to be made in relation to employment, income, opportunities and rights. The Minister and Jorge Chediek came to the same conclusion: “far from being the problem, the poor are the solution”.
Previous WWP events posted on the IPC-IG Press Room:
Publications on Brasil Sem Miseria:
Author: Amelie Courau.
Short URL: http://pressroom.ipc-undp.org/?p=16726