Upward trends in inequality and hunger call into question conventional approaches to poverty reduction. Rather than depending on deregulated markets to encourage growth, governments should take a central role in promoting sustainable economic development, argues Jomo Kwame Sundaram.
19th January 2010 - Published by Project Syndicate
Last year, the United Nations Food and Agriculture Organization announced that the number of hungry people in the world increased over the last decade.
In 2008, the World Bank announced a significant decline in the number of poor people up to the year 2005. But if poverty is defined principally in terms of the money income needed to avoid hunger, how can announcements such as these be reconciled?
According to the World Bank’s much cited “dollar-a-day” international poverty line, which was revised in 2008 to $1.25 a day in 2005 prices, there are still 1.4 billion people living in poverty, down from 1.9 billion in 1981. However, as China has accounted for most of this decline, there were at least 100 million more people living in poverty outside China in 2005 than in 1981.
In Sub-Saharan Africa and parts of Asia, poverty and hunger remain stubbornly high. International agencies estimate that more than 100 million people fell into poverty as a result of higher food prices during 2007-2008, and that the global financial and economic crisis of 2008-2009 accounted for an increase of another 200 million. Delayed job recovery from the global downturn remains a major challenge for poverty reduction in the coming years.
Meanwhile, measurement controversies continue to cast doubt on actual progress. With the 1995 Social Summit adopting a wider definition of poverty that includes deprivation, social exclusion, and lack of participation, the situation today may be even worse than suggested by a money-income poverty line.
Inequality appears to have been on the rise in recent decades at the international level and in most countries. More than 80% of the world’s population live in countries where income differentials are widening. The poorest 40% of the world’s population account for only 5% of world income, while the richest 20% account for 75%.
The mixed record of poverty reduction calls into question the efficacy of conventional approaches. Countries were advised to abandon their national development strategies in favor of globalization, market liberalization, and privatization. Instead of producing sustained rapid growth and economic stability, such policies made countries more vulnerable to the power of the rich and the vagaries of international finance and global instability, which has become more frequent and severe due to deregulation.
The most important lesson is the need for sustained rapid growth and structural economic transformation. Governments need to play a developmental role, with implementation of integrated policies designed to support inclusive output and employment growth, as well as to reduce inequality and promote social justice.
Such an approach needs to be complemented by appropriate industrial investment and technology policies, and by inclusive financial facilities designed to support them. In addition, new and potentially viable production capacities need to be fostered through complementary developmental policies.
By contrast, the insistence on minimal government and reliance on the market led to precipitous declines in public infrastructure investment, particularly in agriculture. This not only impaired long- term growth, but also increased food insecurity.
Advocates of economic liberalization policies cited the success of the rapidly industrializing East Asian economies. But none of these economies had pursued wholesale economic liberalization. Instead, governments played a developmental role by supporting industrialization, higher value-added agriculture and services, and improvement of technological and human capabilities.
Structural transformations should promote full and productive employment as well as decent work, while governments should have enough policy and fiscal space to enable them to play a proactive role and to provide adequate universal social protection.
The last three decades also saw the divorce of social policies from overall development strategies as a consequence of the drive for smaller government. National economic development strategies were replaced with donor-favored poverty-reduction programs, such as land- titling, micro-credit, and “bottom of the pyramid” marketing to the poor.
Such fads have not succeeded in significantly reducing poverty. This is not to deny some positive consequences. For example, micro-credit has empowered millions of women, while important lessons have been learned from such schemes’ design and implementation.
Meanwhile, universal social programs have improved human welfare much more than targeted and conditional programs. However, conditional cash- transfer programs have been quite successful in improving various human-development indicators.
Unfortunately, poverty remains endemic, with more than a billion people going hungry every day. Urgent action is needed, as the recent financial and economic crisis, following hard on the heels of the food- price crisis, is believed to have set back progress on poverty reduction even further. There are also growing fears that climate change will more adversely threaten the lives of the poor.
The United Nations’ biennial 'Report on the World Social Situation' (RWSS 2010), entitled 'Rethinking Poverty', makes a compelling case for rethinking poverty-measurement and poverty- reduction efforts. For the world’s poor, “business as usual” has never been an acceptable option. Nor have the popular trends of recent decades proven to be much better. There will be no real poverty eradication without equitable and sustainable economic development, which deregulated markets have proved unable to deliver on their own.
Jomo Kwame Sundaram is United Nations Assistant-Secretary-General for Economic Development.
Hey brother BLM what would you suggest for Laos to do to end the poverty in only few decades like south Korea and north Korea have done it and beyond the imagination from the third world countries to the first. where should Laos start ? If the Singaporean and south Korea could have done it . Is possible that Lao people to do the same as Singaporean and south Korean?
-- Edited by Dark Angel on Tuesday 26th of January 2010 04:34:17 PM
-- Edited by Dark Angel on Tuesday 26th of January 2010 04:35:17 PM
we are different from all of them geographically : thai, myanmar, cambodia, singapore, malaysia, indo, vietnam china, all these countries have access to the sea, of course we have many mines but it make incomes for only a handfull of people. if we want to end the poverty we should upgrade our standard of education, create more vocational training centers, create more skilled teachers but it come to the start : we need much money to do it.
we are different from all of them geographically : thai, myanmar, cambodia, singapore, malaysia, indo, vietnam china, all these countries have access to the sea, of course we have many mines but it make incomes for only a handfull of people. if we want to end the poverty we should upgrade our standard of education, create more vocational training centers, create more skilled teachers but it come to the start : we need much money to do it.
Big problem land lock that is the excuse for many decades in the modern time and the government excuse that is why Laos is the poorest and the least developed country. There are many countries also land lock but that is not the issue that slow and pull back the progress of developing and the economy growth. Any way the government could resolve the land lock problem so this problem is no longer the excuse that Laos will not be isolated .
-- Edited by Dark Angel on Wednesday 27th of January 2010 11:56:48 AM
Poverty's coming in many phases, some happen because of mother natural, war or some just being lazy. Laos however is different story. I think that poverty in Laos happen by designed. You see under the true communism everything belong to the state and no one is to be richer or poorer every one is the same and because of that the govenment is going to do its best to keep the so call "wants to be richer" undercontrol. What else can it be? Laotians are not poor... they just want to have more. Majority of laotians especially those who live in the village are self supported family they grow their own rice, vegetable pigs, chickens etc..... Those people are not poor o.k!, their houses might not be fancy but it's pay for. Now! can you say the samething if you happen to live in America? Oh!! loose your job?.. kiss that new car, house or maybe the wife too goodbye.
-- Edited by typutthana on Thursday 28th of January 2010 05:26:13 AM
Poverty's coming in many phases, some happen because of mother natural, war or some just being lazy. Laos however is different story. I think that poverty in Laos happen by designed. You see under the true communism everything belong to the state and no one is to be richer or poorer every one is the same and because of that the government is going to do its best to keep the so call "wants to be richer" under control. What else can it be? Laotians are not poor... they just want to have more. Majority of Laotians especially those who live in the village are self supported family they grow their own rice, vegetable pigs, chickens etc..... Those people are not poor o.k!, their houses might not be fancy but it's pay for. Now! can you say the same thing if you happen to live in America? Oh!! loose your job?.. kiss that new car, house or maybe the wife too goodbye.
-- Edited by typutthana on Thursday 28th of January 2010 05:26:13 AM
Very well, Laotian are the poor but not starved and the least developed country. There are no 100% communist countries as Lenin's philosophy That every body are equal and have the same opportunity but some super rich and powerful with a little bit of middle class and huge of the poor in the communist country. Well , the Berlin wall was torn down and the Soviet Union were collapsed so there are only 5 countries that are still remaining communist country. China is mixed between communist and capitalism about 30 years ago. Otherwise you would still see the the Chinese all wear the army uniform in the billboard and Mao Zi tong picture every where and the people will riding bicycle and hard seeing the modern airport and build and the Chinese people are still starving to debt like north Korea and Cuba or former Soviet Union. their lives are still Misery and suffering.
-- Edited by Dark Angel on Thursday 28th of January 2010 02:23:20 PM
Laos now is like china in 1978. china spent more than 30 years and chinese people became better. but there are lots of people are living in poverty. Laos will spend less than 30 years to make country better and get out of poverty.
Laos now is like china in 1978. china spent more than 30 years and chinese people became better. but there are lots of people are living in poverty. Laos will spend less than 30 years to make country better and get out of poverty.
China had Deng Xiaoping to lead them and Hong Kong/Taiwan to show them how to invest and develop. And a contradictory slogan "To be rich is to be glorious" while keeping the communist governing system.
Laos now is like china in 1978. china spent more than 30 years and chinese people became better. but there are lots of people are living in poverty. Laos will spend less than 30 years to make country better and get out of poverty.
China had Deng Xiaoping to lead them and Hong Kong/Taiwan to show them how to invest and develop. And a contradictory slogan "To be rich is to be glorious" while keeping the communist governing system.
Also commerce is in their blood.
Laos has Hujintao , Wenjiabao and vietnam to help.. therefore those investors from china and vietnam invest in Laos. China will build the university and china town in vientiane, China will build dam in Mekong river in salakham zone and uncountable for investing in industry and mining throughout the country. if Lao PDR is smart enough and know how to earn $$ foreign investment, i think we ll get out of world's poorest before 2016.
as for vietnamese investors, i think most of you guys might know there are investments from vietnamese campanies in Laos. and now the big golf course which will impact on Over 250 families.
Laos now is like china in 1978. china spent more than 30 years and chinese people became better. but there are lots of people are living in poverty. Laos will spend less than 30 years to make country better and get out of poverty.
China had Deng Xiaoping to lead them and Hong Kong/Taiwan to show them how to invest and develop. And a contradictory slogan "To be rich is to be glorious" while keeping the communist governing system.
Also commerce is in their blood.
Laos has Hu Jintao , Wen Jiabao and vietnam to help.. therefore those investors from china and vietnam invest in Laos. China will build the university and china town in vientiane, China will build dam in Mekong river in salakham zone and uncountable for investing in industry and mining throughout the country. if Lao PDR is smart enough and know how to earn $$ foreign investment, i think we ll get out of world's poorest before 2016.
as for vietnamese investors, i think most of you guys might know there are investments from vietnamese companies in Laos. and now the big golf course which will impact on Over 250 families.
That is good but to build the dams on the Mekong river just be very careful of destroying fish and environment. Vietnam herself are poor country and also in the progress of developing country also,they invest in Laos nothing but good profit so do china. Lao government must also stand up and protect the local Lao people by creating jobs not to let the China to bring their own workers and not hire and train the Laotian for jobs.
Upward trends in inequality and hunger call into question conventional approaches to poverty reduction. Rather than depending on deregulated markets to encourage growth, governments should take a central role in promoting sustainable economic development, argues Jomo Kwame Sundaram.
19th January 2010 - Published by Project Syndicate
Last year, the United Nations Food and Agriculture Organization announced that the number of hungry people in the world increased over the last decade.
In 2008, the World Bank announced a significant decline in the number of poor people up to the year 2005. But if poverty is defined principally in terms of the money income needed to avoid hunger, how can announcements such as these be reconciled?
According to the World Bank’s much cited “dollar-a-day” international poverty line, which was revised in 2008 to $1.25 a day in 2005 prices, there are still 1.4 billion people living in poverty, down from 1.9 billion in 1981. However, as China has accounted for most of this decline, there were at least 100 million more people living in poverty outside China in 2005 than in 1981.
In Sub-Saharan Africa and parts of Asia, poverty and hunger remain stubbornly high. International agencies estimate that more than 100 million people fell into poverty as a result of higher food prices during 2007-2008, and that the global financial and economic crisis of 2008-2009 accounted for an increase of another 200 million. Delayed job recovery from the global downturn remains a major challenge for poverty reduction in the coming years.
Meanwhile, measurement controversies continue to cast doubt on actual progress. With the 1995 Social Summit adopting a wider definition of poverty that includes deprivation, social exclusion, and lack of participation, the situation today may be even worse than suggested by a money-income poverty line.
Inequality appears to have been on the rise in recent decades at the international level and in most countries. More than 80% of the world’s population live in countries where income differentials are widening. The poorest 40% of the world’s population account for only 5% of world income, while the richest 20% account for 75%.
The mixed record of poverty reduction calls into question the efficacy of conventional approaches. Countries were advised to abandon their national development strategies in favor of globalization, market liberalization, and privatization. Instead of producing sustained rapid growth and economic stability, such policies made countries more vulnerable to the power of the rich and the vagaries of international finance and global instability, which has become more frequent and severe due to deregulation.
The most important lesson is the need for sustained rapid growth and structural economic transformation. Governments need to play a developmental role, with implementation of integrated policies designed to support inclusive output and employment growth, as well as to reduce inequality and promote social justice.
Such an approach needs to be complemented by appropriate industrial investment and technology policies, and by inclusive financial facilities designed to support them. In addition, new and potentially viable production capacities need to be fostered through complementary developmental policies.
By contrast, the insistence on minimal government and reliance on the market led to precipitous declines in public infrastructure investment, particularly in agriculture. This not only impaired long- term growth, but also increased food insecurity.
Advocates of economic liberalization policies cited the success of the rapidly industrializing East Asian economies. But none of these economies had pursued wholesale economic liberalization. Instead, governments played a developmental role by supporting industrialization, higher value-added agriculture and services, and improvement of technological and human capabilities.
Structural transformations should promote full and productive employment as well as decent work, while governments should have enough policy and fiscal space to enable them to play a proactive role and to provide adequate universal social protection.
The last three decades also saw the divorce of social policies from overall development strategies as a consequence of the drive for smaller government. National economic development strategies were replaced with donor-favored poverty-reduction programs, such as land- titling, micro-credit, and “bottom of the pyramid” marketing to the poor.
Such fads have not succeeded in significantly reducing poverty. This is not to deny some positive consequences. For example, micro-credit has empowered millions of women, while important lessons have been learned from such schemes’ design and implementation.
Meanwhile, universal social programs have improved human welfare much more than targeted and conditional programs. However, conditional cash- transfer programs have been quite successful in improving various human-development indicators.
Unfortunately, poverty remains endemic, with more than a billion people going hungry every day. Urgent action is needed, as the recent financial and economic crisis, following hard on the heels of the food- price crisis, is believed to have set back progress on poverty reduction even further. There are also growing fears that climate change will more adversely threaten the lives of the poor.
The United Nations’ biennial 'Report on the World Social Situation' (RWSS 2010), entitled 'Rethinking Poverty', makes a compelling case for rethinking poverty-measurement and poverty- reduction efforts. For the world’s poor, “business as usual” has never been an acceptable option. Nor have the popular trends of recent decades proven to be much better. There will be no real poverty eradication without equitable and sustainable economic development, which deregulated markets have proved unable to deliver on their own.
Jomo Kwame Sundaram is United Nations Assistant-Secretary-General for Economic Development.
Read the Statement post it up there by a Gentleman #2010, and sound like very conservative Statement. But , that's Ok, atleast it' didn't point any finger to anybody or any Country. just General term from United Nation. and here's my personal opinion and small comment about it. In the Modern famine is either result of the deliberate political policies (Ukraine in the 1930, Sudan right now) or (China in the late 1950)to give food to the rulers of a famished country as we did in Ethiopia or to distribute the food so that the rulers benefit from distribution as they did in Somalia is simply to increas the power of the people who caused the famine. then we are puzzled that our food donations don't stem world hunger. some kindda central planing seems to be the object the most environmental activists. Giving certain races or ethnic groups special rights and privileges is no better in fact , no different than giving special right and privileges to dukes and earls.Noblemen are a minority, too. after all. reading and reacting to the a plague by holding demonstrations. by loudly announcing how upset we are that disease exists is no more efficaious than sacrificing virgins or, in the case of AIDS, than throwing drug free ,monogamous, heterosexual members of the midle class down a well. and the poor of the world cannot be made rich by redistribution of the wealth. poverty can't be eliminated by punishing people who've escaped poverty, taking their money and giving it as reward to people who have failed to escape . Economic leveling doesn't work. Whether we call it Marxism, Progressive reform, or Clintonomics, the result is the same slide into the stygian pit. The grave worries facing the world today mostly don't have solutions. That is, They don't have solutions outside ourselves. we can't vote our troubles away. or we can't mail it to somewhere either. we can't give fiftydollars to our favorite club, and sing the captain Planet theme song and set everything right. instead we have to accept the undramatic and often extremly boring duties of working hard , exercising self control, taking care of our selves, our families, and practicing as much private morality as we can stand without popping. and here's my last part of the story of a better way of '' Ending Poverty,'' The first grand requisite to the growth of prudential habits is the perfect security of property, and the next perhaps is that respectability and importance which are given to the lower classes by equal law, and the possesion of some influence in framing of them. Property rights, rule of law, Responsible government, and Universal education, That's all we need. Though no society has achieved these perfectly. Even america is notably lacking . But america is still the best country on the face of the Earth and no countries has ever come-up and challenge her yet...
That is not an excuse, it is a fact. You can't compare Lao PDR to Switzerland. Western Europe and Indochina is two different places. Western Europe is the world primary Market. From the Medieval time people ship goods to Europe. From spices to silks.
Dark Angel wrote:
chiip wrote:
we are different from all of them geographically : thai, myanmar, cambodia, singapore, malaysia, indo, vietnam china, all these countries have access to the sea, of course we have many mines but it make incomes for only a handfull of people. if we want to end the poverty we should upgrade our standard of education, create more vocational training centers, create more skilled teachers but it come to the start : we need much money to do it.
Big problem land lock that is the excuse for many decades in the modern time and the government excuse that is why Laos is the poorest and the least developed country. There are many countries also land lock but that is not the issue that slow and pull back the progress of developing and the economy growth. Any way the government could resolve the land lock problem so this problem is no longer the excuse that Laos will not be isolated .
-- Edited by Dark Angel on Wednesday 27th of January 2010 11:56:48 AM
Wow, what 's a comment brother Speak out . The United States is not a perfect country but only the land of the opportunity for every one who have a wonderful dream and would like to pursue their dream and make it come true. That is the truth that the United States still have a lot of gangs, drug dealers, discrimination and violent crimes and most of the big cities urban area are still dangerous places to live but the people from every nations on earth still love to come and live in the United States. There are hundred of thousands people from every part of the world become new US citizen in every year.