Global Policy Forum

WHEN Jesus of Nazareth remarked that "the poor always you have with you", he was describing an inescapable reality. Living on the margin between life and death was the fate of the bulk of humankind. Yet now it is possible to envisage the disappearance of this age-old scourge of mass destitution.

Indeed, this is already happening. Back in 1820, suggests this year's world development report, three quarters of the world's people lived on less than $1 a day, in today's common global prices. Now, despite a six-fold increase in population, that proportion is down to a fifth. This is a heartening transformation. Even so, about 1,2billion people are still that poor more than the population of today's high-income countries.

Mass destitution and the extreme vulnerability to adverse events accompanying it can and must be eliminated. This is a morally compelling goal. It is also the raison d'etre of the World Bank. For this reason alone, this year's intriguing report is of more than usual interest. So what in it is new? And, if new, is it also true?

In 1990 the bank's global development report, also concerning poverty, recommended a twopronged strategy: rapid, labour-intensive growth, and broad provision of social services, particularly health, education and a safety net. This year's recommendation is three-pronged: opportunity, empowerment and security. Of these, the first and third are recognisably descended from the strategy of 10 years ago; the second is new.

Rightly, the report begins with economic opportunity. The priority of growth is properly stressed. If growth matters more than anything else, how is it to be achieved? It depends, above all, on sound economic policies, "such as openness to international trade, sound monetary and fiscal policies reflected in moderate budget deficits and the absence of high inflation a well-developed financial system and a moderately sized government. Aid can boost growth if such policies are in place but not if they are absent." This is old wisdom, but valid for all that.

Newer is our better understanding of the many obstacles in the way of market-oriented growth. "At times," says the report, "reform programmes have failed to deliver as much as expected and at times have failed entirely." Sometimes, these disastrous outcomes have been caused by adverse events. Often, they have been home-grown. The experience of countries in transition from socialism has shown how even the most idealistic reformers can fail.

The report's discussion of opportunity puts useful flesh on the bones of pre-existing knowledge. Equally valuable is its analysis of risk. Poor people are vulnerable to natural and man-made risks. Ways of managing and mitigating these can and must be found.

Yet the most significant part of this report is its discussion of empowerment significant because it is a new departure. Empowerment embraces two objectives: making the state more responsive to the demands of poor people and eliminating discrimination "on the basis of gender, ethnicity, race, religion, or social status", all of which "can lead to social exclusion and lock people in longterm poverty traps".

The bank is apparently calling for the restructuring of the political and social order of its developing country members. The justification given for this departure is that "voicelessness and powerlessness" are a part of poverty. If one accepts this broad notion of poverty, then the bank is duty-bound to address it.

However, the definition is unnecessary, foolish and naí¯ve, in equal measure. It is unnecessary because it comes close to destroying the word's natural meaning; it is foolish because the bank has neither the means nor the legitimacy to remake its members. It is naive because the political and social arrangements of countries are entrenched realities.

Yet for all that, the report is absolutely right to analyse political and social realities. The fact is the vast bulk of the world's desperately poor are imprisoned in countries, or regions in them, teetering on the brink of the dysfunctional. At the worst, the political and social order has completely collapsed. That is an almost insuperable obstacle to the elimination of mass poverty. Yet this is not a question of empowerment. The term suggests the presence of a benefactor prepared to dole out power to the deserving. Yet no such benefactor exists.

Consequently, the bank can work only through and with the elites that are as often the cause of the ills it seeks to heal as their cure. This is the point the report largely evades understandably so, since such an analysis would be explosive. Yet without it, the political and social addendum to the conventional economic analysis is far too narrow to be useful. We now have a fairly good idea of the policies and institutions that generate pro-poor growth. We also know how to help the poor manage and lessen the risks they face.

We even know what sort of aid the outside world should provide: targeting aid and debt relief on countries with good performance; reducing risk of financial crises; liberalising barriers to developingcountry exports; funding and disseminating research into tropical diseases and agriculture. What we do not know is how to ensure this knowledge is put to work where it really matters in those countries where the bulk of the world's poorest people live. The bank is, ultimately, only as effective as its members allow it to be. For this ailment even the magic word "empowerment" can provide no cure.

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