Global Action against Poverty?

A first conclusion could be that Porto Alegre and Davos are getting closer to each other. This is the secret or explicit wish of many NGOs who want evidence of the success of the other-globalist movement. They pretend that it was the first time that poverty was on the agenda in Davos. They are wrong. Poverty is on the international political agenda since 1990, thanks to the World Bank. Its first important report on poverty was a call to make poverty reduction the priority of development cooperation. In the 90’s a global consensus emerged around the issue. The G7 has discussed various poverty reports. Poverty and social cohesion were repeatedly on the agenda at the WEF in Davos. Today, it looks more as if the NGOs were following the international organisations. NGOs are certainly not convincing international organisations of the need to change their agenda. And if there are closer contacts between Porto Alegre and Davos, it is Porto Alegre running after Davos, and not vice versa.

A second conclusion could be that poverty is now high on the agenda and will soon be eradicated. Again, this is far from true. Quite understandably, many NGOs are very sensitive to the poverty issue, but they forget that for the international organisations ‘poverty’ means something quite different than what the NGOs think it does. The poverty reduction policies of the World Bank are part of its neoliberal policies. They want to give neoliberal globalisation a ‘human face’, more than lifting people out of poverty. World Bank policies are at the root of much poverty, more than they can ever reduce it. Supporting these poverty policies means that one keeps neoliberalism in place. The World Bank shows positive statistics on poverty reduction, but this is only possible thanks to China and India, two countries that do not follow Washington Consensus policies. In Latin America, poverty numbers are stagnating. Wages have not completely recovered from the crisis of the 80’s. In Africa, poverty continues to grow.

The global call of the NGOs is not very clear. Some of them say that it is aimed at reaching the millennium goals, 8 social targets approved by the UN in September 2000. In 2005 a first conference on ‘MDG + 5’ will be organised in New York. The first millennium goal is the halving of extreme poverty between 1990 and 2015. But others pretend the call has nothing to do with the MDGs. They talk of writing off the external debt of poor countries, or of fair trade. And still others mention control of financial markets. Apparently, the Global Call for Action against Poverty says what their signatories want it to say.

It may be useful to analyze the ‘poverty reduction policies’ and the ‘MDGs’. According to the most traditional estimates, almost half of the world population lives in poverty, whereas about one billion lives in luxury. For the World Bank, ‘poverty’ means an income of less than 2 $ a day. ‘Extreme poverty’ is having an income of less than 1 $ a day. I do not want to discuss the (limited) relevance of these poverty lines, but I propose to take a look at the meaning of the so-called anti-poverty strategies. I also want to offer an alternative.




Poverty reduction against development

As has already been stated, it was the World Bank that published a first poverty report in 1990 and put poverty back on the international political agenda. The UNDP also published its first report on human development in 1990. In 1995 the UN organised its first and last world summit on social development. It was there, in Copenhagen, that a global consensus on the priority for poverty reduction was reached. In 1996 the UN launched its first ‘Decade’ for the eradication of poverty. In 2001 the G7 discussed its first poverty report. So yes, it is certainly true that there is a huge international mobilisation for poverty reduction policies.

But what do the international organisations mean by ‘poverty’? The ideological framework was created beginning of the 90’s, mostly at the World Bank. For the Bank, poverty is a problem of individuals that have no access to markets. Social structures can be responsible for it, for instance by discriminating women. But the main culprits are national governments that restrict free markets. Social security, minimum wages and labour market regulations restrict the access and hinder the participation of poor people, according to the Bank. Poor people are to be helped with a ‘sound’ macro-economic policy, open borders for goods, services and capital, and a deregulated internal market. Public companies do not reach poor people, and so it is better to privatize them. In short, the Washington Consensus remains valid but is introduced with and anti-poverty label. It is now because of ‘poverty reduction’, in order to help ‘poor people’ that neoliberal reforms are said to be inevitable.

Poverty is also considered to be a ‘global problem’. Poverty is at the centre of a whole series of ‘interdependent’ problems like migrations, degradation of the environment, delinquency and terrorism, diseases, etc. It means that it is in our common interest to fight poverty. It is not the rights of poor people that prevail. Moreover, defending our common interest cannot be left in the hands of poor countries, because ‘we know’ that they have no ‘good governance’. Consequently, it is the World Bank and the IMF that are responsible for reducing poverty and thus acquire complete control of all policies of poor countries. All public expenses are now monitored in order to see whether they are necessary and useful for poverty reduction, according to the view of the Bretton Woods institutions.

Poverty is also closely associated with women, especially female heads of households. Here, it is mainly the UN and UNDP who play a major role. Although both institutions admit that they know absolutely nothing on the income poverty of women. They only have statistics on the world wide discrimination of women. Poverty is measured at the level of households, and we know nothing on the intra-domestic distribution of incomes. But associating poverty with women allows for focusing on all non-monetary dimensions of poverty. ‘Poor people rarely talk of money’, according to the World Bank in its participatory poverty assessment. But reading the answers, one can see that poor people do mention their (lack of) income, but that the researchers of the World Bank consistently interpret these answers differently. Poverty,  then, becomes a matter of discrimination. And with the ‘feminization of poverty’ a group of ‘deserving poor’ can be created, poor people the World Bank loves to help, assiduous, apolitical and non rebellious.

In short, this poverty perfectly fits into the neoliberal framework. No need to think of incomes or the redistribution of incomes. Offering an access to the labour market is largely sufficient. All discriminations have to disappear. And poverty reduction is mainly a matter of ‘good governance’: macro-economic stability, free trade and all other dimensions of the ‘Washington Consensus’.

In this discourse on poverty all traditional demands of poor countries are omitted. Development, in fact, disappears. However critical one may have been towards old development policies, in the past development was meant to be a comprehensive national process of change and emancipation. Economic development was meant to modernize productive capacities and to develop and internal market. Social development would have put an end to dual societies with lots of poor people and a few rich people. Political development would soon democratize the different institutions. These parallel processes were to be made possible thanks to a common effort of poor and rich countries in order to reach a fair distribution of trade and production and a redistribution of incomes and/or growth.

Today, national development programs have sunk into oblivion, as well as development economy. One does not find any definition of economic development in the recent documents of the international organisations. There is only ‘human development’ or ‘poverty reduction’. The economy has become a part of nature, with laws that have to be respected but that we cannot change. All we can do is to try to have these laws function properly in order to help the poor.


Poverty reduction strategies

The meaning of the poverty discourse became very clear at the end of the 90’s. Nevertheless, most NGOs reacted enthusiastically when the IMF changed its ‘enhanced structural adjustment facility’ into a ‘poverty reduction and growth facility’. Only the name was changed, together with the conditionality. From now on, poor countries that want a restructuring or a reduction of their external debt as well as a concessional loan, have to introduce a ‘PRSP’, a ‘poverty reduction strategy paper’. Poor countries should ‘own’ their PRSP’s, although the World Bank and the IMF closely watch the whole drafting process and ultimately have to approve the PRSP. They do require a broad participatory process with all governmental authorities, civil society and donors.

It is now five years since these PRSPs were introduced and their analysis is revealing. In all cases, neoliberal policies are confirmed. Privatisations continue as before, allthough they are now essentially aimed at the service sector. There is no focus anywhere on social policies, with the exception of education and health care (‘human capital’!), that do not necessarily have to be provided by public authorities. Social security or social-economic rights are completely absent.

The NGOs still believe in the potential of the participatory approach. Though it is still far from satisfactory, they believe it can be a lever for changing policies. It could create a new dynamic approach to poverty reduction that really helps poor people. Maybe they are right. But trade unions currently are rarely invited to take part in the PRSP-process. In many countries, because they disagree with the official government PRSP, social movements have written a parallel PRSP.


Millennium Development Goals

One year after the social summit in Copenhagen, the Paris-based OECD published a document on ‘International Development Goals’. For social movements, Copenhagen did not produce a satisfactory result, essentially because neoliberalism was at its height at the time. Nevertheless, three balanced chapters were approved on poverty, employment and social integration. Neoliberal principles are scattered all over the text, but there is also a strong plea for universal social security, for full employment and for a 20/20 agreement. Rich countries could spend 20 % of their development budget on social targets, whereas poor countries could promise to spend 20 % of their national budgets on social policies. The idea must have been unbearable to the OECD officials. Probably, that is why the international development goals only speak of halving extreme poverty between 1990 and 2015, as well as of the reduction of infant and maternal mortality, achieving universal primary education, gender mainstreaming in primary education, reducing the occurrence of aids, malaria and tbc, and curbing the loss of biodiversity. Civil society had played a major role in Copenhagen, as well as at Copenhagen + 5, in Geneva, in2000. During the Conference in Geneva this new text with the ‘international development goals’ was proposed jointly by the OECD, the World Bank, the IMF and the UN, much to the consternation of NGOs.

In September 2000 the Millennium Summit of the UN adopted a Millennium Declaration. It mentions all different international goals and added a ‘global partnership for development’ with the commitments of the rich countries. It is these ‘Millennium Development Goals’ that are the centre of attention today and are presented as being an ambitious development agenda.


Ten arguments against the MDGs

Firstly, these MDGs are far from ambitious. The millennium development goals are not a real poverty eradication strategy, since they only aim at halving extreme poverty. According to the World Bank, one billion people are extremely poor, a ‘death penalty’ as Kofi Annan says. This means that half a billion people are slowly left to die at a rate of 20.000 men and women a day to be precise. Moreover, as has already been stated, poverty reduction is by no means development.

Secondly, it should be clear that in countries with a poverty rate of over 50 %, as is the case in Africa, it is impossible to reduce poverty without development. What these countries need is a comprehensive plan to develop their productive capacities and internal market, as well as programmes for social development. Poor countries should not be obliged to produce for export markets, but should be allowed to protect their markets against cheap imports form rich countries. Their external debt should be written off so they can use their revenues for their own development.

Thirdly, it is impossible to assist development or poverty reduction within the current neoliberal framework. Privatisations and deregulations have not brought more growth and less poverty. After twenty years of structural adjustments this is crystal clear. It is therefore time to break with neoliberal thought.

Fourthly, poor countries are said to lack ‘good governance’. This is self-evident since the Bretton Woods institutions have done everything they can to weaken governments and reduce their resources. Good governance is simply impossible in extremely poor countries. This points to the fact that perhaps the poverty agenda is less clear-cut than it looks.

Fifthly, this agenda has been imposed top-down on poor countries, in spite of all discourses about ‘ownership’. Poor countries have no real choice in defining their own agendas. They urgently need more policy autonomy and greater independence when defining their policies, so that they can set their own priorities.

Sixthly, these millennium development goals are not linked to the PRSPs. Both strategies were introduced almost simultaneously, but have not influenced each other. It is only now that the World Bank requires PRSPs to mention the MDGs, and suddenly they have become ‘short term’, whereas originally they were supposed to have been ‘long term’.

Seventhly, the millennium development goals totally ignore the structural causes of poverty. If all development aid were spent on poverty reduction, poverty could still continue to grow. The global and the national context in which poverty arises is not taken into account.

Eighthly, the millennium development goals ignore some essential elements for poverty reduction, such as gender mainstreaming and reproductive health care for women. This was mentioned in the OECD document but omitted in the UN version. The MDGs also totally ignore employment and social and economic rights.

Ninthly, these millennium development goals will not be met because development aid is lacking. According to Jeffrey Sachs, the UN director of the Millennium Programme, only 0.45 to 0.54 % of GNI is needed in order to meet the goals. Those funds, however, are simply not available, despite the Monterrey promises.

Tenthly, the commitments of rich countries are not quantified, contrary to those of poor countries. Again, this gives rise to some doubts about the real objectives.

These ten points are only a short summary of the main critical points in the MDGs. What becomes clear, however, is that the poverty reduction policies of the international organisations are entirely coherent. They pretend to reduce poverty, but they allow many non poor people to get very wealthy.


A coherent agenda

As was made clear in the first poverty documents of the World Bank and in the PRSP’s, the international poverty strategies do not change the ‘Washington Consensus’. 

This means that poverty reduction policies can be used to impose even more neoliberal reforms on poor countries, since they are supposed to be ‘good for the poor’. They introduce a relatively uniform political and economic model in all poor countries. The World Bank and the IMF have almost total control over all policies and the whole budget of poor countries.

All countries are advised to continue their privatisations. Or, using the euphemism of Jeffrey Sachs, to make public investments. This may be linked to the different failures of public sector privatisations. It may mean that poor countries need to receive more loans in order to conclude PPPs (public private partnerships) with large multinationals. Government has to be in charge of public services, allthough the private sector will be allowed to make the profits. Money of development aid will then go directly to multinationals. The same goes for the ‘green revolution’ that is promoted in Africa. Again, European agricultural subsidies have to disappear so that multinationals can invest and produce in Africa for European markets.

Finally, there is the delicate point of ‘good governance’. Again, who could be against it? International organisations are turning ‘good governance’ into an extra conditionality. But at the World Bank and the WEF in Davos, ‘good governance’ is equal to ‘culture’. Political and social institutions are said to be responsible for poverty and the ‘development deficit’. The lack of ‘good governance’ is linked to ‘state failure’, leading ultimately to conflicts and even terrorism. More and more development cooperation in the United States and the European Union is linked to security policies. Development aid is being militarized. The nomination of Wolfowitz as chairman of the World Bank will probably accelerate this. It could mean that ‘development’ will rapidly become ‘re-colonization’. Rich people in rich countries will have to help poor people in poor countries to get rid of ‘bad governors’. Rich countries will have to protect themselves against the insecurity created by ‘failed states’.

This is what poverty reduction is all about. By introducing poverty reduction policies in a neoliberal framework we create a huge profit potential for multinationals. By turning development into poverty reduction, we automatically come closer to the ‘civilisation’ we wanted to bring to Africa in the 19th century. By linking poverty to good governance, we prepare new invasions. Nostalgic stories about Africa’s happy colonial past confirm this predicament. The poverty reduction strategies of the World Bank are nothing else than the ‘human face’ of neoliberal globalisation. But that face could soon begin to sneer sardonically.

For sustainable development

If the international poverty reduction strategies could actually begin to reduce poverty, this whole business might be easier to swallow. But even that is not the case. The poverty reduction of the millennium development goals is not aimed at giving people a decent living standard. It only tries to keep people alive. In the meantime, inequality can continue to grow. Consequently, we are not heading for a more just world.

Accepting the story of the millennium development goals is not a reasonable option. Not even if some other demands are added on to it. The ‘Millennium PLUS’ agenda of some BGOs is a step in the right direction, but it is not enough. The problem is the adoption of the whole poverty agenda. Poverty cannot be eradicated without a comprehensive development programme. Therefore, we need to go back to a development agenda for the new millennium. And this necessarily has to be sustainable economic and social development.

This is what has to be discussed. This is what the other-globalist movement should be involved in. Of course the external debt of poor countries has to be written off. Of course financial markets have to be controlled. Of course we need international taxes and an international distribution of incomes. And of course poor countries need policy autonomy in order to define their own development agenda. These are important criteria if we want to build another world.

We will need to talk about how to stop the depletion and squandering of natural resources. We will have to talk about food sovereignty. We will have to ask ourselves how to distribute production, trade and consumption. We cannot allow poor countries to produce for export and to import everything they need. We will have to talk about some kind of world governance in order to plan, regulate and redistribute. Therefore, we will need democratic institutions. But the most important thing is to break with the neoliberal capitalist rationale.

No single country, no single man or woman can ‘be developed’. Development is only possible if it emerges from within a society, if people can decide themselves which kind of modernity they want. That is why policy autonomy and democracy are so crucial.

Poverty is a consensus issue. It is impossible to be against poverty reduction. But that does not mean that we should not look critically at the discourse of international organisations in order to de-construct and oppose it. That is what the other-globalist movement has to do. Global action against poverty is useless against the backdrop of current policies. Poverty reduction never can be a progressive agenda if inequality is not tackled at the same time.

Francine Mestrum

Coordinator scientific council
Attac Vlaanderen (Belgium)
 mestrum [at]skynet.be