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World Bank Warns Global Poverty Fight Failing, Unveils Enhanced Poverty Strategy

Press Release No:2000/059/S

Contacts:

Andrew Kircher, (202) 473-6313
Merrell Tuck, (202) 238-3153

WASHINGTON, September 30, 1999 The international community's goal of halving the number of the world's poor by the year 2015 will fail if current trends persist, the World Bank warned today, unveiling an enhanced poverty strategy based on closer work with borrowing governments and the IMF.

Early results from a new Bank study to be published this fall, Voices of the Poor, shows that most poor people in developing countries feel worse off now than in the past, and live with greater insecurity and fewer economic opportunities. The report, based on consultations with 60,000 poor people in 60 countries, reveals the human side of poverty and builds on the development community's understanding of how the poor themselves view poverty.

"These are strong voices, voices of dignity," said World Bank President James D. Wolfensohn. "They are talking about security, a better life for their children, peace, family, and freedom from anxiety and fear. These people can build their future if given opportunity and hope."

New poverty data reinforces what the Bank has learned in its discussions with the poor. Although the number of people living on less than $1 a day fell substantially worldwide in the mid-1990s, it says, the onset of the Asian financial crisis in 1997 has reversed that trend, giving way to a rise in poverty numbers. If current trends continue, the study says, the international community will not be able to achieve the International Development Goals* set out in 1997.

"Before the Asian crisis, the world was making gains in the fight against poverty but this new data suggests the numbers are now rising again," said Michael Walton, the World Bank's director of poverty reduction and economic management. "and voices of the poor gives us more than just numbers. It reveals a human tragedy on a global scale."

While releasing its new findings, the Bank also launched an enhanced poverty strategy that relies on closer partnership with the IMF and client governments. The aim is to bring the Bank, Fund and governments together to forge one document, a Poverty Reduction Strategy Paper, that will guide the programs of both institutions in a given country.

The enhanced strategy, which was presented to the Development Committee earlier this week, puts into practice many of the elements of the Comprehensive Development Framework, which aims to strike a balanced approach linking macroeconomic and financial parameters in a country with the human, structural and social aspects. The strategy will be piloted in countries that are eligible for the Heavily Indebted Poor Countries (HIPC) initiative such as Bolivia, Mozambique and Uganda. Eventually, it will be applied to all borrowing countries.

"The enhanced poverty strategy builds on what we have learned about the need to involve all actors in shaping a common development strategy," said Masood Ahmed, vice-president for the Bank's Poverty Reduction network. "It puts the borrowing country in the driver's seat. Instead of drafting papers in Washington for co-signature by governments, this new approach will involve the World Bank and IMF in supporting the client government's poverty-oriented development strategy that is formed with input from civil society."

Voices of the Poor

The new update, Poverty Trends and Voices of the Poor, consists of two parts; the global discussions with the poor, and the Bank's latest update on poverty data.

Voices of the Poor shows that poor people in 60 countries from around the world describe repeatedly and in distressing detail what has only been glimpsed before - the psychological experience and impact of poverty.

"The trends are sobering," said Deepa Narayan, principal social development specialist in the Bank's poverty reduction network. "The poor do not feel they have benefited from the massive political and economic changes and restructuring around the world. To the contrary, they often feel they have been penalized."

The World Bank carried out the new study to make sure that the voices of the world's poor would be taken into account in the Bank's annual World Development Report (WDR) 2000, which will focus on the theme of poverty.

"The poor are the true poverty experts," said Ravi Kanbur, director of the WDR 2000/2001. "Nothing could be more important than learning from poor women and men about their lives, and their dreams, hopes, and experiences."

The poor people who took part in the discussions describe four pervasive and systematic problems that affect their lives adversely almost everywhere: corruption, violence, powerlessness, and insecure livelihood.

  • Corruption - Corruption is a core poverty issue, not just a problem affecting high levels of governments and business. The study reveals how pervasive low-level corruption and lack of access to justice and protection affect poor people's lives. The problems of corruption, "connections," and violation of basic human rights with impunity were voiced repeatedly.
  • Violence, Civil Conflict and Public Safety - In many countries in both rural and urban areas, poor people reported a decline in social connectedness, along with increases in crime, lawlessness, selfishness and violence. This is reflected not only in violence and public safety issues outside the home, but in conflict and violence within the home as well.
  • Powerlessness - Participation and the peoples' voice have become part of the development lexicon. However, the interviews show that while "participation" may be happening in the context of poor people's own organizations, by and large they are excluded from participation in decision-making and in equal sharing of benefits from government and NGO programs. The poor want desperately to have their voices heard, to participate, to make decisions and not always be handed down the law from above.
  • Insecure Livelihood - The poor typically have few assets to make a living. Livelihood strategies are precarious and include a patchwork of low paying, dangerous, often backbreaking work for low returns. All over the world, even where poverty has decreased, such as in Vietnam and in Sri Lanka, the poor said that insecurity had increased.

Health, Education Lagging

The new Bank study updates the Bank's poverty data and shows that social indicators have generally been improving during the last three decades. Still, there are worrisome exceptions, such as:

  • Life expectancy - On average, the life expectancy of people living in developing countries rose from 55 years in 1970 to 65 years in 1997, but it still lagged far behind that of OECD countries, which was 78 years in 1997.
  • Infant and maternal mortality - There was progress between 1990 and 1997 in all regions, apart from Eastern Europe and Central Asia, where there was a slight deterioration in 1997. But the reductions in infant mortality in East Asia, Eastern Europe and Central Asia, South Asia, and Sub-Saharan Africa appear too slow to meet the target set in the International Development Goals for 2015.
  • HIV/AIDS - AIDS is a disease of poverty in the sense that most people with HIV/AIDS are poor because the disease struck very hard in poor countries: 90 percent of infected people are in the developing world, and a full two-thirds are in Sub-Saharan Africa. Moreover, although infection rates are declining in the developed world, they are stable or rising in most developing countries.
  • Primary enrollments - Gross primary school enrollment data show an improvement during the last 25 years. Developing countries have made enormous progress in expanding access to schooling. However, regional trends diverged markedly, with Sub-Saharan Africa experiencing no improvement in enrollment ratios between the early 1980s and now.
  • Education of girls - The International Development Goals call for equal enrollments of girls and boys in primary and secondary school by the year 2005. In 1995, girls made up only 43 percent of gross primary school enrollment in low-income countries. By 2005 they will still make up only 47 percent of all primary enrollment.
  • Water and sanitation - At the end of the 1980s-which was declared the International Drinking Water Supply and Sanitation Decade-most people in poor regions still lacked adequate sanitation. In 1997, approximately 1.5 billion million people in low and middle-income economies lacked access to safe water supplies. And in Sub-Saharan Africa, fewer than half the population has access.

Poverty Figures by Region

Population living below US$1 per day in developing and transitional economies, 1987-1998
RegionsPopulation covered by at least one survey (percent)Number of poor (millions)


19871990199319961998 (est.)
East Asia and the Pacific90.8415.1452.4431.9265.0278.3
(excluding China)
109.276.066.045.255.6
Eastern Europe and Central Asia81.71.17.118.323.824.0
Latin America and the Caribbean88.063.773.870.876.078.2
Middle East and North Africa52.525.022.021.521.320.9
South Asia97.9474.4495.1505.1504.7522.0
Sub-Saharan Africa72.9217.2242.3273.3289.0290.9

Total88.11,196.51,292.71,320.91,179.91,214.2
(excluding China)
890.6916.3955960.1991.5

The new Bank study reveals varying stages of poverty throughout the regions of the world.

  • Africa - Prospects for Africa remain worrisome. Growth picked up, but stalled again following the financial crisis. The impact of the crisis has been felt through declining prices for many commodities, slower world trade growth, and stiffer competition from countries with depreciated exchange rates. The combined effect of lower commodity prices, conflict and, in some cases, adverse weather has been to cut growth in Sub-Saharan Africa to a level insufficient to bring down the number of poor people.
  • Latin America and the Caribbean - Overall, the picture that emerges from the global numbers is one of stagnation: roughly constant share and increasing numbers. There is no clear evidence of progress in reducing poverty at the regional level. Income inequality increased between 1986 and 1989, but stabilized thereafter, at least until 1995.
  • Eastern Europe, Central Asia - Chronic poverty is emerging as a increasing concern in the region, as evidence suggests that even in countries with a robust growth record there is a growing group of the chronically poor. Growth in the region as a whole was positive in 1997, which contributed to reducing overall poverty levels. But growth in 1997 was followed by a downturn in 1998, due in large part to the Russia crisis and its effect on other countries in the region. But preliminary analysis based on country-specific poverty lines suggests that the downturn has not had a significant impact on poverty.
  • Middle East and North Africa - The region has not experienced major negative shocks over the past five years, and the share of people living in poverty remains relatively low. Poverty reduction in the region is strongly linked with economic growth: in the past, high growth has been accompanied by significant poverty reduction-and sharp downturns in GDP have been accompanied by sharp increases in poverty.
  • East Asia - There were further significant reductions of the numbers of people in poverty in East Asia prior to the crisis-from 432 million in 1993 to 267 million in 1996. The financial crisis put an end to a long period of rapid growth, and led to significant increases in poverty. But there are signs of recovery: all crisis countries have had at least one quarter of positive growth (Korea, Philippines have had two), and the transition economies have been remarkably resilient. Recovery is, however, still fragile.
  • South Asia - The picture for South Asia is mixed. Growth rates for the region have remained positive and significant - per capita GDP growth for 1998 for the region is expected to be 2.7 percent - but recent data on poverty suggest a stagnation.
International Development Goals

Poverty - Reducing by half the proportion of people in extreme poverty by 2015.

Mortality - Reducing by two-thirds the mortality rates for infants and children under 5 and by three-fourths the mortality rates for mothers by 2015.

Education - Achieving universal primary education in all countries by 2015.

Health - Providing access to reproductive health services for all individuals of appropriate age no later than 2015.

Gender - Demonstrating progress toward gender equality and the empowerment of women by eliminating gender disparities in primary and secondary education by 2005. Environment - Implementing national strategies for sustainable development by 2005 to ensure that the current loss of environmental resources is reversed globally and nationally by 2015.

Note: To learn more about the International Development Goals, visit http://www.worldbank.org/data

For more on the World Bank's work on poverty, go to the Bank's PovertyNet website at http://www.worldbank.org/poverty





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