Friday July 13 2018

World Bank wrong on using growth as major driver of poverty reduction

Richard Wemesa

Richard Wemesa 

By Richard Wemesa

In order for the World Bank Group to achieve its twin goals of ending extreme poverty and boosting shared prosperity, it hopes that the twin goals will help the development community to build a bridge between the unfinished MDG agenda and the forthcoming Sustainable Development Goals, whose deadline for achievement will also likely be 2030. According to the WBG’s twin goals are motivated by the experience of the past two decades in making progress towards the MDGs. In 2011, a billion people 70 per cent of which are women, remained in extreme poverty. The success of reaching MDG 1 of halving extreme poverty in 2010, five years ahead of the schedule, motivated the WBG to set a more ambitious goal of virtually eliminating extreme poverty during the next 15 years, that is, get to 3 per cent by 2030.Well, this is achievable only if the WBG group diverts special efforts towards.
According to WBG , Global poverty reduction has been mostly due to progress in rapidly growing economies of East Asia and to a lesser extent South Asia. Sub-Saharan Africa and South Asia account for about 80 per cent of the global poor. Still according to WBG, growth was the major driver in halving extreme poverty between 1990 and 2010.
However, the same WBG acknowledges the fact that growth alone is not enough at 9 per cent, to propel the world in halving extreme poverty, which is true. This means that WBG must shift its focus on what can drive more growth in order to halve extreme poverty by 2030.
The WBG is very wrong in making the world believe that growth is a major driver of poverty reduction. I find it strange that the WBG cannot differentiate between a driver and what is not. It is high time for economists to rethink certain economic concepts. Concepts that were applicable in the past may not be applicable today. A driver is different from an accelerator. “A driver is a trigger of a force while an accelerator is a trigger of a movement …a movement may either be fast or slow”. “A driver is a trigger of a force that accelerates/impacts or influences a given situation/poverty in society”.
Therefore, growth is not a driver. It can’t be. Growth is not, therefore, driver of poverty reduction. It is instead an accelerator of poverty reduction. For the WBG to eliminate extreme poverty during the next 15 years, that is, get to 3 per cent by 2030, it must rethink what the core drivers of poverty reduction are? In which it must recognise that women are. Women in society today are still being marginalised, considered a weaker sex, discriminated against on the basis of tribe and religion, and denied access to school. The burden of social, political and economic evil lies entirely on women. I wonder why the world can’t see this. They have the potential to deliver significant results. For the WBG to achieve this target, special efforts towards women must come in play to dominate the two halfs of the poverty game. WBG must trade-off some of its policies for policies geared towards women empowerment. The road map to a 3 per cent target starts with women.
According to my approach, the WBG must devote special effort towards women in society. I don’t care whether someone out there believes me or not. I firmly believe that it is women who can deliver all the long awaited social, economic and political change that can shape the road map of global poverty reduction. In this case, I find women as the core drivers of poverty reduction and not growth as the WBG asserts. Growth is a function of women.
Women in society are the triggers of a force called growth that can significantly accelerates/influences/impacts on poverty reduction. To create an atmosphere free of extreme poverty and shared prosperity, calls for special effort towards women in society, they must go to school and acquire good jobs thereafter, acquire practical entrepreneurial skills that can aid them in starting a business of their own.
Reaching the goals of ending extreme poverty and boosting shared prosperity in the world and ensuring that future generations share in broader prosperity cannot be engineered by only international aid and financial instruments from the World Bank. It can be done by first recognising the fact that women are the core drivers of growth/change in society. Secondly, by recognising the fact that women and children are the most affected victims of extreme poverty. Lastly, by directing special efforts towards empowering women and their inclusiveness in the political, social and economic process of their respective countries. The East African countries though have a unique past and a seemingly similar present with women still being marginalised, considered a weaker sex, and discriminated against.

Mr Wemesa is an economist/PhD student.
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