Ending Poverty? A reply to Helmut Reisen
“Ending Poverty” is the title of the OECD Development Co-operation Report 2013. For the first time in history, we have the knowledge, technologies, policies and resources required to bring an end to extreme poverty. President Obama, World Bank Group President Jim Yong Kim and others have explicitly called on the world to set poverty eradication as the overarching aim of the post-2015 framework.
Overall the last decade has been the most successful period of poverty reduction in human history. And progress was not limited to the alleviation of income poverty: The fact that polio is close to global eradication and that child mortality has declined rapidly are striking examples of recent successes. All these developments show that there are indeed reasons for optimism.
Yet Helmut Reisen deems the end-of-poverty declarations euphoric and argues that the idea it might be possible to end extreme poverty by 2030 may be based on wrong premises. He has raised some important points and I thank him for having done so. It is true that the last decade’s progress in poverty reduction has to be considered with caution. For instance, economic growth in China alone has been responsible for a large share of global poverty reduction. Progress certainly has been unevenly distributed across the globe. Some fragile states are falling behind and development assistance to some of the poorest countries is decreasing. Future successes in poverty reduction will by no means be easy to achieve. For example, targeting the ultra-poor and poor minorities will be more difficult than what has been accomplished so far. But eventually this is a matter of political will and good pro-poor policies.
This is why the Development Co-operation Report 2013 comprises contributions from China and other successful countries sharing experiences and lessons others could learn. Yet outstanding developments such as China’s economic rise should not hide the fact that there has also been a lot of progress in Latin America, in Turkey and Indonesia as well as in the entire South East Asia region. If absolute progress of countries in achieving Millennium Development Goals is measured, even low-income countries in Africa reach the top ten places. Rwanda, Burundi, Ethiopia, Liberia, Sierra Leone, Mozambique have made quite significant progress, as outlined in the OECD’s Keeping the multiple dimensions of poverty at the heart of development, OECD and Post-2015 Reflections. OECD analyses of the past and projections for the future support such positive thinking.
Poverty eradication is possible if economic growth continue and there is no further deterioration in economic inequalities. The OECD’s Ending-Poverty message is not, as Helmut Reisen holds, based on the projections by Moss and Leo (2011) or Kharas and Rogerson (2012). Instead we refer to the projections by Peter Edward and Andy Sumner (2013) as well as by Martin Ravallion (2013) who conclude that it is “feasible to come close to ending extreme poverty by around 2030 or so – but only under certain conditions. (see: Sumner, A. (2013). What Will it Take to End Poverty? Development Co-operation Report 2013, OECD, Paris)
To be sure, our report (especially Sabina Alkire’s and Andrew Shepherd’s contributions) explicitly presents the serious challenges linked to achieving global development objectives. Based on such assessments the different chapters of the report also present possible policy strategies for poverty reduction. OECD has core competences on a range of issues relevant for poverty reduction – a multidimensional and complex challenge. OECD work on policy areas such as development cooperation, tax, financing, investment, statistics, environment, and education are extremely relevant and directly linked to future poverty reduction policies. For instance, our research – and experience with countries such as South Korea, China, and Vietnam – suggests that there is an enormous potential for greater tax revenue generation in developing countries – e.g. from better collection systems, from big companies paying a fair share, from addressing illicit financial flows. Especially in middle-income countries, where more than 70% of the global poor live, domestic resource mobilization is both crucial and promising.
The fact that OECD countries, too, face challenges regarding increasing poverty and inequalities does not deprive the Organisation of its competence regarding these issues. On the contrary, these developments worry the OECD and have shifted our focus on these challenges. Our work in this area provides important knowledge that helps both OECD and developing countries to tackle poverty and inequalities more effectively. After all, poverty and inequalities must be considered universal challenges. New ways of working together and learning from each other on a global scale, e.g. through global partnerships, can thus help to achieve this global goal.
For all this political will is needed. This conviction is the main reason why the OECD is calling for “Ending Poverty”. It is a political message intended to mobilise all intellectual, political and financial resources to make progress and – hopefully – end poverty. The development community has far too often tried to mobilise by calling the world a horrible place. Yet positive messages and clear goals are much more likely to mobilise people and politics. Poverty will only be ended if politicians make poverty reduction the top priority among their many different and competing priorities.
Can we really end poverty? Brian Keeley’s report from a debate in London in December 2013 to launch the Development Cooperation Report