Eradicating rural poverty
Eradicating rural povertyBy Editor
Thursday January 31, 2008 [03:00]
NO one can disagree with World Bank country manager for Zambia, Kapil Kapoo, when he says that the key challenge for our country is to reduce poverty. We also share his view that there should be an agenda to include the rural population in economic activities to reduce rural poverty. The existence of large numbers of poor people in our country constitutes an affront to all of us.
A stable, permanent solution must be found for this serious problem. Poverty is unacceptable as part of the human condition. The co-existence of pervasive poverty, with the affluence of a much smaller segment of the population, is ethically unacceptable, economically inefficient and politically unsustainable.
The commitments we are hearing today from the World Bank and others to alleviate poverty are not new, they have been there now close to four decades now, if not more. However, in the possibly more humane world of today, we need to do something to address the issue of poverty in a more permanent way.
Unless the focus of the poverty discourse moves towards mainstreaming the issue of poverty through rethinking the design of development policy, poverty is likely to be perpetuated in this century as it was in the previous one.
Mainstreaming poverty at the policy level demands that the tired debate over the prioritisation of growth as the route to poverty eradication should be put to rest. The relevant issue is to enhance the capacities of the poor to contribute to the process of growth by empowering them to participate on more equitable terms.
The eradication of poverty should remain central to the design of macro-policy reform rather than an afterthought. This demands a macro-policy agenda which is designed to enhance the capacity of the poor as producers, consumers and above all, owners of wealth.
The need for macro-policy designed to eliminate poverty is premised on the argument that poverty originates in the structural features of society which can only be addressed at the macro-level. Policy intervention, designed to redesign the structural sources of poverty, bring into consideration issues of social, political as well as economic reform.
A decade ago, the World Bank was arguing that rapid growth was the best solution for eradicating poverty. A commitment to growth sustaining policy reforms, inspired by the Washington Consensus, backed by temporary safety nets for those who were possible victims of such growth, was expected to reduce the proportion of those living in poverty. A decade later, the World Bank had come to terms with the proposition that policy reforms were not enough to alleviate let alone eradicate poverty.
Structural concerns, of a rather more basic nature than the structural adjustments demanded by the Washington Consensus, were recognised as central to the design of policy reforms. In the last few years, a variety of new words such as ‘empowerment’, ‘inclusion’ and ‘ownership’, have found their way into the development vocabulary.
Again, we without retreating into cynicism, would prefer to view this discovery of structural concerns by such agencies as the World Bank, as a recognition that poverty had if anything increased, was not likely to be eradicated in the near future without addressing structural issues and that its perpetuation was now threatening the very foundations of our societies.
There is always need to address structural issues. We need to focus on issues such as access to assets, markets and institutions as the sources of rural poverty.
The assumptions underlying this structuralist perspective on poverty recognises that neither targeting of development resources to the poor, nor the promotion of growth, are likely to resolve the problems of poverty.
The poor are embedded in certain inherited structural arrangements such as insufficient access to productive assets as well as human resources, unequal capacity to participate in both domestic and global markets and undemocratic access to political power.
These structural features of poverty reinforce each other to effectively exclude the poor, from participating in the benefits from development or the opportunities provided by more open markets. In such a system, even targeted programmes of poverty alleviation, carry transaction costs due to institutional structures which mediate the delivery of resources to the poor.
It is, however, not enough to recognise the salience of structural issues in the poverty discourse without addressing the political economy which underlies the structural features of a society.
Poverty originates in the unequal command over both economic and political resources within the society and the unjust nature of a social order which perpetuates these inequities. We may term these inequalities as structural injustice.
Such injustice remains pervasive in most societies exposed to endemic poverty. We may address these inequities in relation to access to productive assets, markets, human development and governance.
Inequitable access to wealth and knowledge disempower the poor from participating competitively in the marketplace.
The marketplace itself, as it operates in the real world rather than in text books, is designed to compromise the opportunities on offer to the poor.
In most poor societies, with a substantial proportion of the population living in poverty, the poor have insufficient access to land, water and water bodies. Where they have access to such resources, they do so under exploitative arrangements.
Such inequities in title and access to agrarian assets do not derive from the competitive play of the market but from the injustices of history and therefore lack moral as well as social legitimacy.
Such inequitable access to productive assets in the rural economy also tend to be inefficient because small farmers have proven to be both more productive as well as likely to spend most of their income derived from their meager assets, in stimulating secondary activity in the rural economy.
Where there is a dichotomy between the owners of land and the actual tiller of the land, this serves as a disincentive to both investment of capital, as well as more productive effort on the other land.
Within the prevailing property structures of society, the rural poor, in particular, remain disconnected from the more dynamic sectors of the market, particularly where there is scope for benefiting from the opportunities provided by globalisation.
The fast growing sectors of economic activity tend to be located within the urban economy, where the principal agents of production tend to be the urban elite, who own the corporate assets which underwrite the faster growing sectors of the economy.
The rural poor, therefore, interface with the dynamic sectors of the economy only as producers and wage earners, at the lowest end of the production and marketing chain, where they sell their produce and labour under severely adverse conditions.
This leaves our rural poor with little opportunity for sharing in the opportunities provided by the market economy for value addition to their labours.
Low productivity remains an important source of income poverty.
Higher income and ownership of wealth remains closely correlated to higher levels of education. Low productivity, thus originates in insufficient access to education and technology.
However, a more serious problem facing the rural poor lies in the growing disparity in the quality of education which divides the rural and urban areas.
Today the principal inequity in our education sector is manifested in the growing divide between a better educated elite with access to private as well as foreign education and the poor who remain condemned to remain captives within an insufficiently funded and poorly governed public education system.
In an increasingly knowledge-based global economy, which had driven the IT revolution, inequitable access to quality education, relevant to the dynamics of the market, could emerge as the principal deprivation of the rural poor.
Insufficient and inequitable access to healthcare is also compounding the inequities in education. This growing disparity between the health status of the elite and the poor is inherently unjust because it denies all citizens equal chances of living healthy lives and even to compete in the marketplace.
This inequitable and unjust social and economic universe is compounded by a system of unjust governance which discriminates against the poor and effectively disenfranchises them from the political benefits of a democratic process.
The poor remain underserved by available public services. Where such services are at all accessible to the poor, they pay high transaction costs for these services.
The agencies of law enforcement insufficiently protect the poor and frequently oppress them for personal gain as well as on behalf of the elite. Our judicial system denies the poor elementary justice both on grounds of poverty as well as social bias.
In such a social universe, the poor remain tyrannised by state as well as money power and have to seek the protection of their oppressors within a system of patron-client relationships, which perpetuate the prevailing hierarchies of power. The poor are denied adequate access to representation in our system of governance from the local to the national level.
Our representative institutions tend to be monopolised by the affluent and socially powerful who then use their electoral office to enhance their wealth and thereby perpetuate their hold on power.
In such an inequitable and political unjust environment, the benefits of democracy remain the privilege of the elite supported by small collectives of sectional power.
Therefore, if we are to make serious strides in eradicating poverty, we have to address the issues of expanding the ownership and control of the poor over productive assets, enhancing their access to a knowledge-based society, strengthening the capacity of the poor to compete in the marketplace, redesigning budgetary policy to reach public resources to the poor, restructuring monetary policy to deliver credit and provide savings instruments to the poor, designing institutions for the poor and empowering the poor.
Labels: POVERTY, World Bank
posted by MrK @ 5:57 AM
2 Comments:
I would like to outline the following course of action:
Objectives
The objective should be to arrive at a position, where the majority of the population is middle class. With that I mean, that everyone owns a home, a business, a piece of land, a car or has a (semi-) skilled job.
Means
1) Programs
There should be employment programs, created by the government. These would be of two kinds:
- Infrastructure building
If the government instituted well managed programs to revive the nation's infrastructure, it would be both an investment in the future of the economy and society, and it could create employment on a large scale. Road infrastructure projects to upgrade the country's roads, but especially irrigation and agricultural infrastructure to prevent annual flooding, provide permanent access to water for much more than the present 3% of agriculture that isn't rainfed. The resulting farms themselves would create employment, and could generate rural agriculturally based businesses (dairy production, production of pipes for irrigation, forestry projects, etc.).
- Worker oriented commercial companies. There is a huge opportunity for the creation of a commercial vehicle that is profit oriented, but that pays most of the profits out as salaries. The best projects would create valuable products, whose value comes from it's labour intensive nature. Example would be Saffron production. This is a very low cost enterprise, but one that is very labour intensive. Because of that, Saffron sells at $3100 per kilo. One hectare yields 5 kilos or $15,500. (Compare that to a hectare of maize, which yields $400 per crop if the yield is 2 tonnes, and $200,- per tonne.) The worker would earn the company about $7,38 per hour. If most of that was paid out as wages, it would turn around the lives of those workers. Similar projects, but requiring specialized knowledge would be vanilla production, or growing and harvesting hardwoods, which could be a longer term village enterprise. A 15-year old teak log sells for $20,000 today, possibly more than enough to put a village child through college. If one was planted every time a child was born, it could act as a trustfund, ensuring his or her future education.
2) Education
There should be free access upto and including college and college-equivalent vocational education. This is the only way to get professionals up to scratch. It was the GI bill after WWII, that created the American middle class. There is no reason why it would not do exactly the same in Zambia.
3) Economic Restructuring
- Land Reform
From the legal side, the government should enable personal/family ownership of land, within certain limits. For instance, this should not be a cause for land speculation. Land ownership should be tied to use, and use in specific areas should be limited to for instance agriculture.
I would like to propose for debate, a model where land can be owned in individual title, with all the rights that accompany that. However, land should only be able to be bought from or sold to the local chief, for a nominal sum well below the land's market value - for instance, $1000. Only the chief's subjects would be able to buy and sell land to their chief. This would sidestep chiefs selling land to foreign owners, or corporations, above their own subjects. The nominal sum could either be paid up front, or paid from the buyer's first harvest. This would also give the chiefs an income apart from what they receive from central government, making them more indepent. At the same time, it would give them an added incentive to see as many of their subjects go onto the land and start producing. At the same time, there would be no servant or tenant relationship between the farmer and the chief. It just keeps them in the loop, and regulates land ownership in rural areas, for the benefit of the local populace.
- Agricultrural stimulation
These new farmers should have access to machinery, and a considerable amount of land, like 100 hectares. To farm 100 hectares, they would need access to at least 1 tractor and earthmoving equipment. This tractor could be shared by upto 4 neighboring farmers. A farm size of 100 hectares would offer plenty of space for crop rotation, as well as spinoff businesses, like chicken farms, piggeries, dairy businesses, cut flowers and potted plants, mushroom production, etc. for the farmer's direct relatives. This would again accumulate resources, wealth and skills within the family. Also, it is essential that the workers keep most of what they earn, both as a motivational factor, and to accumulate wealth. The farmer should have access to local, regional and international markets (in that order). The smaller the footprint, the better it is for the environment and the lower the real cost. Also, local markets should be more reliable, and supply to local markets should make the entire economy much more stable and less subject to the whims of global economic trends. The farmer should have access to a national auctioning system, that would allow him to get the maximum price for his products, and would make obsolete any kind of 'middlemen'.
- Business Ownership
We should see the creation of hundreds of thousands of SMEs, from the existing millions of marketeers. They should be empowered with financing, access to local markets, education, low taxation and a clear legal status for their businesses. The government should exempt them from taxes in the early stages, including income tax for their workers.
The major employer in most developed economies, is the SME sector. The same should be true for Zambia.
- Government Reform
There should be decentralisation and fiscal transfer from central government to local government. Services can be much better delivered, and democratic accountability better ensured, at a local level. At the same time, put into law measures that ensure democracy, accountability and transparancy in local government business. At the same time, devolve power away from the presidency, and toward parliament and the civil service. The civil service should make appointments on the basis of merit, for instance through civil service exams and panels, instead of appointment. There should be a limit on how many people are appointed in government, which should only be to the extent that the government of the day is represented.
4) Summary
To sum it all up: make sure everyone who wants to farm has access to 100 hectares of land and initial support with mechanisation/education, as well as continued support with marketing, sales, information about local and international markets, as well as having an assured way of getting their goods to market. Develop infrastructure for the multiple purpose of eradicating unemployment, securing future commercial activity, and water management. Give local businesses a sound legal status and an environment and markets for their products and servcices.
Liberalize land ownership, but withing the confines of increased land uses, as well as measures that prevent massive internal migration and dislocation of the population that could arise from greater wealth creation in one part of the country over another.
Make sure that wealth is created throughout the country, and that the majority of the population is participating in this economic boom.
That is the way forward, to a society that will be 90% middle class or more.
Some projections on teak prices:
http://tropicaltreefarms.com/projections.htm
Keyline Design permaculture and sustainable soil management through water management
http://www.keyline.com.au/ad1ans.htm
Beautiful African cattle, perfectly adapted to local circumstances, and perfect for beef production
http://www.embryoplus.com/cattle_mashona.html
http://www.embryoplus.com/cattle_nguni.html
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