Remarks to the Briefing Seminar for the High-level Panel of Eminent Persons on the Post- 2015 Development Agenda
By Otaviano Canuto
Vice President, Poverty Reduction and Economic Management
The World Bank
Distinguished Members of the High Level Panel, UN Colleagues:
Some of you might have been come here today in one of New York City’s famous yellow cabs. And there, you might have found a card, asking for your input to the following question: “What Will It Take?” … “What Will It Take to End Poverty?” … I am glad to have an opportunity to engage you directly on this today. Defining a new development framework, post-2015, will require a dialogue to identify barriers and solutions to eradicate poverty. This is the sense of my intervention now.
First, where do we stand on the poverty reduction goals we had set for ourselves by 2015?
For the first time since poverty trends began to be monitored, the number of people living in extreme poverty (with less than $1.25 a day) and poverty rates have fallen in every developing region — including sub-Saharan Africa, where the rates are highest. Extreme poverty is down to 22 percent globally, from 52 percent 30 years ago. Despite a 35 percent increase in population, there are less people living in extreme poverty today than there were 30 years ago.
MDG #1, the global poverty reduction target, was estimated to be achieved as of 2010, 5 years ahead of the 2015 deadline. Poverty surveys indicate that by 2010, the global poverty rate was less than half its 1990 level. However, in Sub-Saharan Africa, 61% of that target only was reached, and in fragile and conflict-affected states, the achievement is only at 53%.
So if we have some good news, clearly much more needs to be done.
The challenge ahead: most people living in developing countries have experienced improvements in well-being. But improvement has been highly uneven. Many have not prospered and have been left behind. Inequality has risen in many countries and 1.3 billion people remain in abject poverty. The challenge is therefore to ensure that growth is more inclusive and prosperity is shared more broadly.
Thus, poverty reduction will increasingly depend on expanding opportunities available to the bottom fifth of the world’s population. And we have to do it in a comprehensive way, as progress in one area contributes to progress in others. This means increasing access to adequate nutrition, sanitation, clean water, quality education, health services, safety nets, a resilient environment, domestic and export markets, roads, electricity, infrastructure, fair laws and justice. This means better targeting public goods and services to the extreme poor. This means fighting gender inequality so that women can have the same opportunities men do. And all of this will require effective governments and public policies that are able to expand opportunities to the poor in a cost-effective manner.
So, our job is far from done. Developing countries and their development partners will have to work harder and smarter to create opportunities for the one fifth of the world’s population still living in abject destitution. We will have to rely less and less on growth, and more and more on smart policies — policies that are well targeted and cost-effective. Policies that are based more on evidence and less on ideology or politics.
Effective policies require more effective governments. And more effective governments are those that set goals and frequently monitor indicators to check how close they are to achieving those goals. Effective governments design policies that are based on new knowledge and solid empirical evidence, which in turn require more frequent quality data. Effective governments learn by trial and error in a systematic way. Effective governments are not averse to learning from past mistakes. Effective governments are accountable, transparent and welcome the scrutiny of civil society. They not only welcome but promote open debate, especially debate which is supported more by hard evidence.
And perhaps here is where countries and their development partners should focus. By 2010, about half of developing countries were lacking sufficient data to measure poverty trends. The problem is particularly acute in three regions in the world, in East Asia (where growth rates have been higher than the global average and the poverty focus less of a priority for governments), in MENA (where the recent political turmoil has actually made the data gathering task more complicated), and in SSA (which despite significant progress and technical assistance, needs to continue to upgrade national statistical systems in several countries).
In Brazil, for instance, 30 years of annual household survey and analysis by an independent academic community has changed the culture in the policy debate in favor of more targeted efforts to fight poverty.
Establishing solid monitoring and evaluation frameworks matters for transparency and accountability. But more importantly M&E generates knowledge and induces learning by doing. Effective M&E allows for timely feedback loop, which in turn is required to be able to adjust actions and meet established goals.
New technologies (particularly in ICT) allow more cost-effective survey methodologies where access can be a problem. The World Bank has had recent successes in South Sudan for instance. These pilots could be scaled up to address more countries with significant statistical gaps.
In sum, growth has done most of the poverty reduction work so far. Growth will continue to be crucial, especially since developing countries will have to rely more and more on their own fiscal resources to fight poverty.
But the effect of growth alone on poverty reduction is likely to dwindle in the years ahead. And while still necessary and extremely important, growth will not be sufficient. Smarter policies targeting the poor and more effective governments will be key. And helping governments become more effective, especially where state institutions are fragile, and design better policies is where we, the development community, should excel. The new development framework post-2015 should be an ambitious one that targets remaining pockets of poverty while giving adequate emphasis to local knowledge generation and policy implementation. This will be crucial to reach the goals we are setting up for ourselves.