Global Experience Is Bringing Better Antipoverty Programs

Aid agencies' focus now is more on helping the poor help themselves

Poverty remains a curse of our civilization at the close of the 20th century, affecting more than 1 billion people. While our world offers endless opportunities for success and personal growth for some, others face a journey through deprivation and degradation.

That is undeniable, but it is also true that never before in the history of mankind has so much been done to combat poverty.

It is not a matter of handouts to appease the suffering masses and ensure the peace of mind of the better-off. Most of this work around the world is being done in a way that will help the poor help themselves, with respect for their integrity and their decency.

More than 35 years ago, John F. Kennedy pronounced in his inaugural speech what could be a dictum for all development aid: "If a free society cannot help the many who are poor, it cannot save the few who are rich."

Much has happened in development efforts since then. We have a better understanding of what should be done. The goal for all poverty-reduction programs today is to empower the poor, eliminate inequities, and give the poor the opportunity to support themselves and their families and contribute to the sustainable growth of their societies.

Three basic conditions must be met for the process to lead to results: broad-based economic growth; development of human capital; and social safety nets for the most vulnerable groups.

The poor must have the necessary tools to create growth and wealth. An integrated, multifaceted approach is needed to secure success. International aid organizations have stepped in with support for economic reform along with loans and grants that help raise productivity in agriculture and improve transportation.

At the same time the agencies have increased their lending for education, family planning, health care, and nutrition. They have given extensive support to urban development and the improvement of water-supply and sanitation systems.

Over the years we have significantly improved our understanding of poverty, which has enabled us to formulate strategies that are better targeted to the poor than in the past. The poor's participation in the design and implementation of the projects, and awareness of the damage done by discrimination against women and ethnic minorities, are key to the programs' success.

When you are poor you do not have access to credit and land. The Grameen Bank in Bangladesh has given new meaning to the phrase "small is beautiful" through its mini-credit programs that are targeted primarily toward poor rural women. Economic growth can be spurred with loans as small as $100, or even less, which can lead to remarkable success. The Grameen Bank experience is repeated through similar programs to support microentrepreneurs in sub-Saharan Africa, Mediterranean Africa, and parts of Eastern Europe.

To achieve lasting results the poor's productivity must be increased. This can be done through investments in basic education, health care, agriculture, and business training. One study in rural India found that improvements in agricultural technology in some regions led to significant yield increases. As a result, the poverty rate in those regions was reduced from 56 percent to 30 percent of the population.

Furthermore, markets must be made to work for the poor both through the lifting of unnecessary regulations that particularly affect them and through investments in infrastructure, such as roads that will let poor farmers market their produce and obtain essential goods and services.

BUT all these strategies would serve no purpose if the poor cannot make a living. They can only do that if they have the health, strength, and education that will enable them to live and work productively. One of the most efficient ways to reduce poverty is to invest in the human capital of the poor.

Lending for human capital is one of the World Bank's fastest-growing activities. It has increased more than five-fold over the last decade and averaged 16 percent of the total lending of $22.3 billion per year between 1993 and 1995. Education is of special importance, with emphasis on early childhood development, primary education, and education of girls.

No investment in education has a higher rate of return than investment in educating girls. It has a powerful effect on almost every aspect of development. It lowers fertility rates, raises productivity, and helps the environment. Increasing female literacy in Africa could help lower infant mortality.

FINALLY, safety nets are needed to protect the most exposed and vulnerable groups. The social and economic transformation in the former Soviet Union shows why such measures are needed. The sick, the old, the disabled, people in the poorest regions, and those suffering from temporary economic setbacks need special care and attention.

Efforts to reduce poverty have made some inroads. There has been remarkable progress in some parts of the world, such as East Asia; the proportion of people in poverty has declined in the Middle East, North Africa, and South Asia. It has remained more or less stable in Latin America and sub-Saharan Africa but has increased in Eastern Europe and Central Asia.

The number of people living on less than $1 a day increased from 1.2 billion in 1987 to 1.3 billion in 1993. Because of continued population growth, that number is likely to keep rising with most poor people living in cities by the early part of the next century.

It is, of course, a daunting picture, but the situation is not hopeless. We know much more about the nature of poverty than in the past. We have a better idea about what works and what doesn't, and about what aid agencies, governments, and nongovernmental organizations can accomplish when they join forces.

There is no room for complacency, there are no short cuts, and no magic solutions. Poverty does not and will not disappear by itself.

The free and rich societies must show continued generosity, compassion, and commitment. And they must act for the poor's sake - and for their own. Better today than tomorrow.

*Ishrat Husain is director of the Poverty and Social Policy Department at the World Bank in Washington. This article is drawn from the department's new report: "Poverty Reduction and the World Bank: Progress and Challenges in the 1990s."