Prelude to the Chronic Poverty Report 2008: Escaping poverty traps

Poverty reduction goals – the Millennium Development Goals – are not easy to achieve. Things might get harder, with food price increases, and more extreme weather events dragging people back into poverty and closing the escape routes for others. On the other hand, if economic growth in China and India continues, they may continue to pull others along with them, whilst high food prices are, at least, good news for the poor who happen to be food producers with crops to sell. It’s hard to call.

What is clear, however, is that many of today’s poor will simply stay poor, even if economic growth is sustained. Some 400 million or more people are stuck in chronic poverty. They are caught in one or more of five poverty traps: insecurity of life or livelihood; weak citizenship status; living in a deprived area; experiencing social discrimination; or held back by poor quality work.

The second international Chronic Poverty Report, launched next week, shows that the poorest can be included in progress.

It won’t be easy. Many of the chronically poor are in poorly governed low-income countries, where upward social mobility is patchy, at best. In Kenya, for example, even five years after regime change, social mobility remains low for the poor majority, and the country’s recent high profile electoral problems suggest that progress will be slow. The world does not yet have a good backup system for the populations of a country like Kenya. Neither is there an international welfare system that can substitute for states; nor (yet) a strong enough set of international incentives to mould pro-poor social contracts. And, though lots of international attention is given to solving some persistent conflicts, there are others that have been allowed to fester, sometimes for decades.

The new Chronic Poverty Report asserts that better social contracts can be moulded. It stresses that economic growth is critical. Growth lifts people out of poverty, and provide the revenues to invest in human development, including such services as health, education, water and sanitation that are critical to interrupting inter-generational poverty, and enable the poorest  to participate more effectively in the global economy. Such revenues enable states to invest in social protection – critical to address the livelihood insecurity trap, but also to address discrimination, as Mexico’s Progresa (now ‘Opportunidades’) scheme has shown. Supporting the world’s most fragile states to develop better social contracts is at least as worthy a focus for the international community as climate change.

It’s not just about human development and social protection, of course. It’s also about convincing the less poor and the wealthy that they want to pay tax to produce a safer, healthier, better educated, more entrepreneurial population. This is where aid comes in – as a stop gap while tax systems are made more efficient, and while the politicians play their slow, educative, convincing role on tax issues and building the social contract..

Within human development there are some urgent, but neglected priorities. Universal access to reproductive health services has now been declared an MDG target – long overdue, as it was frozen out of the original MDGs. And, although many countries have made dramatic progress towards universal access to primary education, access to post-primary education – a well known booster of economic growth – has been constrained.  Both of these are worthy targets for additional public expenditure from both tax and aid.

And economic growth – what can a poverty research centre say about that? Well, two things stand out as important for us and overlooked by policy-makers. One is the pattern of urbanisation – using infrastructure and other policies to spread the benefits of urban centres to the poorest populations, and managing the process of urbanisation so that rural poverty is not simply transferred into an urban setting. And the second is the need for the urban middle classes to recognise that migrants to cities need an easier time than they are currently getting.

The new website for the Chronic Poverty Research Centre, launched today, includes a whole raft of new resources on this issue and is a launch pad for the Chronic Poverty Report. Anything that focuses attention on this issue is welcome, as it is no exaggeration to say that chronic poverty is the cutting edge, ‘make or break’ issue for the achievement of the MDGs.