| 2. Regional Poverty Analysis |
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2.1 SADC's poverty reduction programme: some pointers from Unctad
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Just as SADC, in the wake of its Blantyre summit, begins to develop an ambitious,
long term, anti-poverty strategy, a new Unctad report has starkly demarcated the
multiple policy challenges that SADC will face in developing a sustainable strategy
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The Unctad report (entitled Economic Development in Africa: performance, prospects
and policy issues) notes that declining aid and terms of trade, mounting debt and
ineffective adjustment policies have left sub-Saharan Africa (SSA) poorer than two
decades ago. It notes:
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That per capita income in sub-Saharan Africa was 10% below the level reached
in 1980 and that two decades of sub-standard growth hit the poorest 20% the hardest,
“their incomes dropping by 2% a year”;
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That if terms of trade had stayed at 1980 levels, Africa's share of world exports
would be double today's figure and that Africa's growth per annum would have been
1.4% higher, raising per capita income to a level 50% higher than the current figure;
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That for each dollar of net capital inflow from the rest of the world, a dollar and
six cents has flowed out: 51 cents through terms-of-trade losses, 25 cents through
debt servicing and profit remittances and 30 cents through leakages into reserves
build-up and capital outflows. “These figures point to a net transfer of real resources
from SSA to the rest of the world”;
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That rapid trade liberalisation in Africa has not been reciprocated in terms of better
access to markets for African producers. In short, “These trends have occurred even as
African policy makers have made great efforts to play by globalisation rules”;
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That considerable external financing will be needed to close the resource gap if Africa
is to attain a higher growth rate: it estimates that an additional $10 billion a year in
capital inflows will be needed if aid dependency is to be reduced and for making poverty
reduction targets “more than empty promises”; and
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That with a projected growth rate of just over 3% for the next decade, “Africa's
fortunes are unlikely to improve”.
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Significantly, SADC notes that given the "significant development discrepancies" among
SADC states, the draft RISDP will "have to recognise the need for a flexible approach
towards deeper integration " and that it will have to consider a "multi-speed approach".
Dr Ramsamy has also said that SADC's regional poverty reduction strategy will include
time-bound targets and place "some emphasis on the provision of pro-poor assets such as
land, finance, food security, human resources development, technology and health facilities".
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Against this background the Unctad report notes various policy issues which SADC will have
to grapple with in its poverty reduction strategy.
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For example, on the issue of the appropriate role for the state and the market in stimulating
economic activity, Unctad suggests that the "pendulum seems to have swung too far" against
the role of the state and that it is "important to redress the balance between the role of
government and that of markets". Telling it notes that "there is a certain degree of
inconsistency in the argument often advanced that governments in Africa are not capable of
effective intervention while at the same time burdening them with a daunting array of
measures under adjustment programmes". (This issue is returned to in other articles in this
newsletter).
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Unctad also argues that quick results in poverty reduction are expected by a redirection of
public spending towards health and education sectors: "while useful, such an approach may
not have a lasting impact on poverty as long as policies in such areas as agriculture, trade,
finance, public enterprise, deregulation and privatisation do not succeed in raising growth
and bettering income distribution".
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The draft RISDP is expected to be completed early next year. SADC have already scheduled a
series of key sectoral conferences as a means of developing inputs into the development of
the RISDP. Within the next three weeks, the land and health sectors will meet. SADC
ministers of finance and foreign affairs have also recently met to discuss SADC's priorities
for an unfolding NAI portfolio of projects.
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Linking up: The Unctad report is entitled "Economic Development in Africa: performance,
prospects and policy issues". It can be accessed at http://www.unctad.org
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The SADC site (
http://www.sadc.int) should be consulted for Dr Ramsamy's remarks at the official
opening of the Blantyre summit.
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2.2 How will Southern Africa respond to the IMF and World Bank review of PRSP processes?
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In an important new development with implications for poverty reduction in Southern Africa,
the IMF and the World Bank are poised to undertake a thorough review of poverty reduction
strategy paper (PRSP) processes. The review is expected to be finalised by March next year
and could propose modifications "in the guidelines and modalities of implementation
experience based on their early experience".
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Although it will focus primarily on completed processes, the Bretton Woods institutions have
said they will also examine interim PRSP case studies. This means that the review will need
to cover dynamics and experiences in Zambia, Angola, Malawi, Mozambique, Lesotho and
Swaziland. Even within this small group of Southern African countries, very different and
uneven experiences of compiling a poverty reduction strategy paper have been observed. None
of these countries have finalised their PRSP; Uganda is the only country in Africa to have
completed its PRSP.
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The IMF and World Bank require highly indebted poor countries (HIPC) countries to complete a
PRSP in order to qualify for conditional financial assistance. The timing of the review is
important since a growing body of review experiences is being generated by civil society
groups active in PRSP processes, national and international research agencies (see below,
for example), international donor agencies and international NGOs. Government agencies have,
predictably perhaps, been more circumspect in expressing public views on the PRSP process.
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The review will cover both the content and process of PRSPs. The IMF and World Bank press
release notes that the following key questions will guide the review process:
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To what extent have low-income country governments been leading the process of
articulating their own long-term development visions and poverty reduction strategies
as a basis for guiding their own policies and external assistance? Have poverty
reduction strategies been adequately integrated with the countries' core processes for
policy-making, including medium term expenditure frameworks?
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To what extent have government implemented participatory processes intended to improve
the design of, and to build understanding and broad-based ownership for, a national
strategy? How have those processes influenced the content and implementation of poverty
reduction strategies?
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To what extent have external development partners contributed to the PRSP process within
countries and begun to align their assistance behind the PRSPs? Has the PRSP process
approach led to improved partnerships?
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Has the PRSP approach improved co-ordination between aid donors and recipients, as well
as between finance ministries and line ministries? Have countries prioritized and costed
their reforms and policy actions? Has the push for speed in the HIPC process affected
the quality of PRSPs?
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Are these terms of reference forward-looking enough? Given that not many countries have
finalised their full PRSPs, it could well be argued that a review of context and process,
will allow for modifications to the process in countries not as far advanced along the PRSP
path. But they seem to pay little attention to the next major challenges of the PRSP process
— that of monitoring the implementation of the PRSP and the potential clashes between the
notion of country-ownership and the conditionality of access to finance from the IMF and
the World Bank for PRSP funding.
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Monitoring the success or failure of implementation raises a whole host of issues which have
clearly not been thought through enough in national plans. Some of these are highlighted in
the summary of the ODI report (discussed below) but another can be noted: the demands that
generating annual progress reports will place on the already over-stretched civil service
structures in many African countries.
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The IMF and World Bank say that primary attention in the review process will be given to the
views expressed by governments and other stakeholders (presumably a reference to civil
society agencies active in PRSPs).
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While governments in the SADC region have the capacity to respond quickly to this review,
civil society agencies need also to make their concerns and experiences heard. Many have
already shown a capacity to critique their national experiences (for example in Malawi and
Zambia) but others clearly have less capacity to influence their national processes. SARPN's
previous newsletter noted some interesting developments on this point from the Zambian PRSP
process.
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Civil society agencies need also to consider the utility of submitting a joint, regional
document, given the growing linkages and debates between civil society agencies on poverty
reduction strategies. International NGOs active in the SADC region should also consider
submitting their views on the process.
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In the same vein, SADC also needs to consider formulating a response to the IMF and the
World Bank, given that it has elevated poverty reduction to a core strategic regional
priority. The drivers of the New Africa Initiative also need to consider formulating a
response, through the proposed PRSP learning group of the Economic Commission for Africa.
Again, the African Economic Research Consortium would be well placed to submit a document
which overcomes the limited perspectives of national experiences.
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The NAI is poised to release its first set of concrete proposals for project development
in Africa, following a recent meeting in Ethiopia, facilitated by the Economic Commission
for Africa.
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Linking up: Submissions should be submitted to Bank or Fund representatives in PRSP
countries or via e-mail to
prsp@imf.org or to
prsp@worldbank.orgThe full text of
the press release and the terms of reference for the review can be accessed at the
following address: http://www.worldbank.org/poverty/strategies/review/index.htm
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Readers might also like to access the programme of the Second African Forum on Poverty
Reduction Strategies, just completed in Dakar, Senegal. The forum, sponsored by international
agencies including the World Bank and the UNDP, addressed a wide range of issues relevant
to compiling a poverty reduction strategy.
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The programme can be accessed at:
http://www.worldbank.org/wbi/attackingpoverty/activities/dakarforum.html
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2.3 Some sectoral issues affecting poverty reduction strategies
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2.3.1 Indicators and PRSP Monitoring
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On the issue of monitoring the implementation of PRSPs, the influential London-based
Overseas Development Institute (ODI) has just released the results of some on-going studies
of African PRSP experiences. The reports provide a very useful set of pointers to the IMF
and World Bank review; civil society, governments and development agencies in the SADC
region could fruitfully use some of their insights in formulating a response to the IMF and
World Bank.
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One report examines issues around the development of PRSP indicators and monitoring systems.
In general the authors (David Booth and Henry Lucas) conclude that PRSPs have given very
little attention to this issue probably explained by the "strongly instrumental purpose" of
PRSPs as a way to secure debt relief. The document suggests a variety of ways in which
indicators and monitoring systems could be developed and incorporated into PRSPs.
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The authors note that it is important not to "slip into a naпve vision of the conditions
under which the changes promoted by the PRSP iniatives are likely to occur". It notes that
a realistic view of the policy process should not allow the assumption that formal
commitment to a set of objectives on the part of senior government officials implies an
ability, or even a willingness, to deliver all of the consequent actions by all actors
relevant to a PRSP. Rather it is "typically more realistic to view the implementation
process as where the most important decisions are made".
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Thus:
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Commitments should only be believed when they are carried through to basic decisions
about resource allocation in the national budget;
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More important than this initial earmarking is whether the resources reach their
intended destination and whether they are used effectively in terms of stated objectives;
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Information feedback from the 'implementation' process is a critical ingredient to a
capacity to improve policy processes by learning from experience; but such information
is a highly 'political' commodity and implementers do not necessarily have an interest
in providing accurate information; and
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Incentives to use information for policy improvement are stronger where programmes have a
learning-process design than when they reflect a 'blueprint' approach.
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On the latter points, Booth and Lucas note:
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"Information is power. PRSPs are explicitly intended to empower a range of actors, within
and outside government, to engage in constructive debate about why poverty reduction has
proven so difficult in a given country, and what can be done about this. It is at least
arguable that this is the main thing that monitoring systems for PRSPs should be designed
to do: to provide relevant information to the places where it will have this sort of effect.
This is not an easy thing to achieve. Even taking the first steps must be regarded as a big
challenge.
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"Governments throughout the world are secretive and even in highly institutionalised
democracies the incumbent authorities share information with their political rivals only
when they are compelled to do so by law or convention. In all countries, non-governmental
actors often lack the necessary expertise to make intelligent use of official statistics.
In the sub-Saharan countries we are concerned with, political and civil society is at
present poorly equipped to assume the role assigned to it in the PRSP concept".
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And: "Policy is likely to improve, and/or become more outcome oriented, only if new
incentives come into play. That will happen only to the extent that enhanced accountability
of public servants to each other and to other stakeholders, comes into the picture. Stronger
accountability can be enhanced, and depends on, greater production of and access to relevant
and timely information. But information will work in this way only if it is demanded and
capable of being used by stakeholders with some clout, so that those responsible for policy
are held to account in a new way".
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These sobering comments can provide the impetus for civil society agencies, in particular,
to examine ways in which they can hold governments accountable to PRSP implementation and of
securing more visible niches in the PRSP policy process.
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A second ODI document, The PRSP institutionalisation study, examines progress in developing
PRSPs in selected African countries. The report also contains pertinent insights on issues
ranging from "process overload" in the policy process, the links between PRSPs and medium
term expenditure frameworks and the lack of involvement by African parliaments in PRSPs.
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Linking up: The first report can be accessed from
http://www.odi.org.uk/pppg/monitoring_report.pdf The second report can be accessed from
http://www.odi.org.uk/pppg/progress_report3.pdf The ODI's website contains a number of other
relevant publications on poverty which can be accessed at
http://www.odi.org.uk/publications.html
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2.3.2 Aids, poverty and debt relief in PRSPs
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Another review of PRSP progress, this time by UNAIDS, notes (again predictably perhaps) that
PRSPs have failed to grapple with the links between Aids and poverty. UNAIDS remarks, after
analysing 19 African PRSPs, that although several countries have succeeded in putting their
agenda for HIV/AIDS control into the PRSPs — "many are yet to do so". "These findings point
to the need for more rigorous preparation of PRSPs regarding AIDS. They also signal a need
to improve the technical capacity of national teams and partner agencies in the substantive
areas".
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Similar comments are included in the technical paper presented by UNAIDS to a recent
conference on African Ministers of Finance held in Algiers. The paper noted that: "The main
lines of action in the national AIDS plan and the key performance indicators need to be
viewed as central poverty-fighting strategies and indicators for each country, to be
inserted prominently in the PRSP. Similarly, the HIPC debt relief agreements in countries
seriously affected by HIV/AIDS should contain important milestones in the implementation of
the national HIV/AIDS program, as well as commitments to allocate part of the debt relief
savings to overall AIDS program costs. In most ministries, making HIV/AIDS a prominent part
of PRSPs and HIPC will depend on leadership from the ministry of finance with strong input
from the national AIDS council or similar body".
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Linking up: UNAIDS has begun a monthly newsletter on the issue of Aids, poverty and debt
relief. Persons or institutions may subscribe by sending an e-mail to
poverty-debtrelief@unaids.org. The full text of the technical paper can be accessed at
http://www.unaids.org/debt/index.html
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2.3.3 Sustainable livelihoods and PRSPs
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The ODI has also just published a report on the potential of using sustainable livelihoods
approaches in poverty reduction processes. The report, written by Andy Norton and Mick
Foster, notes that a sustainable livelihoods approach may be helpful in structuring
participatory processes in PRSPs and in stimulating debate on poverty diagnosis and the
causes of poverty. Key messages of such an approach would include:
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Disaggregating the poor and seeking to understand how they make a living
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That livelihoods are more than income
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That policy should address key sources of vulnerability
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Policy processes need to be able to cope with diverse local realities
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That work needs to be undertaken on asset distribution and not just income issues
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That public policy for poverty reduction is not just "social" expenditure — access to
financial services, infrastructure, markets, natural assets and justice systems matters,
and
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That links need to be drawn between the insights of participatory poverty assessment and
the more quantitative frameworks more commonly used for assessing policy and programme
interventions.
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It concludes by noting that the assets/livelihoods framework is important in re-balancing
the debate on policy for poverty reduction which the authors believe has been excessively
dominated by health and education expenditures. The debate needs to give more attention to
poor people's access to productive assets, infrastructure and financial services. "A further
dimension which is needed in the debate would address the key dimension of the freedoms and
opportunities which are available to people to make use of their assets in political,
economic and social arenas. This takes the debate into issues of accessible justice,
political voice and human rights".
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Linking up: The next SARPN newsletter will carry a thorough review of this report since it
links with an intended focus of SARPN's activities. Readers who want the full report may
access it (Working paper number 148) at
http://www.odi.org.uk/publications.html
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2.4 Malaria keeps people poor, but so does government.
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(SADC ministers of health met recently to discuss issues around malaria control in the
region. Richard Tren, director of Africa Fighting Malaria, presented a paper to the meeting.
He contributed the following article to the SARPN newsletter)
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Malaria is arguably the most devastating disease in the history of mankind. Annually around
300 million cases of malaria occur and the disease accounts for over 1 million deaths each
year, mostly children under the age of 5. More than 90% of cases occur in Africa, the world's
poorest continent.
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While malaria is associated with some of the world's poorest nations in tropical regions,
this was not always the case. Malaria was wide spread throughout southern Europe, the
southern states of the US and cases of malaria were even recorded in the Arctic Circle.
These countries and regions all managed to eradicate malaria after the Second World War by
using DDT. The insecticide, which is so reviled by environmentalists, is enormously effective
in killing the malaria vector, the Anopheles mosquito.
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Economic growth in those countries that eradicated malaria was significantly higher once
they were rid of the disease. Greece, Italy and Spain all managed to achieve growth rates
of between 1.3% and 4.0% higher than the rest of western Europe once the burden of malaria
was removed 1(Gallup & Sachs).
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In a study into the economic burden of malaria, Gallup and Sachs estimate that those
countries with intensive malaria grew by 1.3% less per person per year between 1965 and
1990, compared with those countries without the disease. A 10% reduction in malaria is
associated with a 0.3% higher economic growth. In South Africa, which has comparatively few
malaria cases, the disease imposed a cost of approximately R270m (approximately US$32m) for
the year 2000 (Tren, 2001). This conservative estimate is made up of the direct costs of
treating and controlling the disease and the indirect costs of lost productivity.
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Malaria ensures that patients are unable to work in factories or in agricultural fields.
The disease has serious impacts on the cognitive development of children, so that not only
are they kept out of school during bouts of malaria, but their entire education could be
compromised, seriously affecting their chances of gainful employment in the future. Perhaps
the most dramatic economic cost (and the hardest to estimate) is the opportunity cost of
investment and tourism that is driven away due to perceptions of the risks that the disease
imposes.
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Controlling or even eradicating malaria in Southern Africa and ensuring that the population
is healthy and able to work will improve the conditions for economic growth and development.
That said, controlling malaria is a necessary, but not sufficient condition for economic
development in the SADC region. Government policies that create a stable economic climate,
that protect private property, lower trade barriers and ensure the rule of law all go far
further to ensuring that economic growth will occur, than simply controlling malaria.
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The countries that eradicated malaria did not increase their economic growth and improve
the standard of living of their citizens simply by removing the disease. Post war democracy
and sensible economic policies were the engines of prosperity in the previously malarial
countries. The world's most malarial countries are not only the worlds poorest, they also
happen to be those countries with the least economic freedom 2(Economist, 2001).
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Mauritius had several catastrophic outbreaks of malaria up until 1963 when it finally
managed to eradicate it. The country's economic growth remained negative however until 1973
when the country opened its economy to international trade and focussed on increasing its
exports (Gallup & Sachs). On the flip side, the ruination of Zimbabwe's economy has had
little to do with malaria or any other disease. Government policies that drive away
investors, restrict markets and disregard private property are far more effective at
creating poverty and destroying wealth than any disease.
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Anti-Malaria Action
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Malarial countries in Southern Africa face numerous difficulties in controlling malaria.
Drug resistance is increasing and many countries will be forced to use multi-drug therapies,
as has been introduced in Kwa-Zulu Natal. Resistance has been recorded to many of the
insecticides that are used in vector control. Difficulties persist in ensuring that malaria
patients obtain medical treatment in time and that the disease is accurately diagnosed and
correctly treated.
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More can be done though. As mentioned above, one of the most effective (and cheapest) weapons
against the disease is residual spraying of DDT. Many countries however have halted DDT use
because of demands from environmentalists. Donor agencies have argued that they are unable
to support the use of DDT as it is not permitted in their home countries. Ignoring sound
scientific and medical studies, which support the use of DDT where appropriate, and
pandering to greens within their organisations and at home not only results in unnecessary
deaths and illness, but also compromises any ability to develop economically and reduce
poverty.
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Developing country governments can do more to improve the incentives of drug and insecticide
developers to invest in research and development. Protecting intellectual property rights,
easing the regulatory process and engaging in a more cooperative manner with drug companies
would assist greatly to produce new anti-malaria technologies.
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The proposed Global Fund, which aims to raise over $9 billion for the purchase of drugs and
vaccines, could also assist. While it is likely that over 80% will be directed towards
HIV/Aids, the fund could provide the much-needed funds for the purchase of anti-malarials
and perhaps a malaria vaccine if and when it is developed. The structure of the fund has
not been finalised; however it is vital that the transfer of funds goes directly to those
providing medical services on the ground. The transfer of money should avoid the
bureaucratic machinery of organs such as the UN, which could block funds and only release a
fraction of the amount needed. Direct grants to governments with dubious track records when
it comes to the disbursement of funds and corruption should also be avoided.
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Conclusion
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While malaria keeps people poor, donor agencies and governments do have it within their
capacities to reduce the burden of the disease significantly. Donor agencies can stop their
piecemeal anti malaria projects that might provide good photo opportunities for their
brochures, but do nothing for long term malaria control. If these agencies are committed to
malaria control, they should engage with the scientific community and fund activities that
will work and will save lives (such as DDT spraying) despite the protestations from the
greens in their safe malaria-free hometowns.
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Governments can introduce sensible and stable economic policies that will foster investment,
growth and trade. All they need do is note what President Mugabe is doing and then do the
complete opposite.
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References:
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Economist (2001), Pocket World in Figures, 2001, Edition, The Economist Books, London.
Gallup, J.L. & Sachs, J.D (2001), The Economic Burden of Malaria, The American Journal of Tropical Medicine and Hygiene,
Vol. 64, No. 1,2, pp. 85-96. Tren, R. (2001), DDT, Malaria and the POPs Convention,
Conference Paper, Southern Africa Malaria Conference, July 2001. Tren, R. & Bate, R (2001),
Malaria and the DDT Story, Institute of Economic Affairs, London.
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Linking up: This article was contributed by Richard Tren, director of African Fighting Malaria.
He can be contacted at
rtren@fightingmalaria.org. Readers might wish to consult the
organisation's web at:
www.fightingmalaria.org
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