Magazine

Issue No. 90

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Activities in Hanoi

Three important events were held in Hanoi during 31st August to 2nd September 2005 on the occasion of the 60th anniversary of the August Revolution and establishment of the Socialist Republic of Vietnam.

The first event was the international seminar on "Alleviating poverty in Asia, Africa and Latin America: Experiences and Visions" It was convened on 31st August 2006 in Hanoi, capital of Vietnam.

The seminar was organized by AAPSO and the Vietnamese Committee for Africa, Asia and Latin America Solidarity.

Numerous delegations participated from Asia:  India, China, Japan, Uzbekistan, Mongolia, Nepal, Laos, Cambodia, Philippines, Iraq and Sri Lanka.  From Africa: Angola and Tanzania.  From Latin America: Cuba, Mexico and Brazil.  From Europe: France, Italy, Russian Federation, Belo Russia, Greece, Czech  Republic, Hungary, Poland, Austria, Belgium and Spain.  From USA and Australia as well as many federations, local and international organizations and parties.

The opening session was inaugurated by Mr. Pham Van Chung, head of the Vietnamese Committee for Africa, Asia and Latin America Solidarity.

The inaugural speech was delivered by Mme. Nguyen Thi Binh, former Vice President of the Socialist Republic of Vietnam, Vice President of AAPSO and head of the Vietnam  Peace and Development Foundation during which she observed:

"Your presence is also lively expression of the consistent support and solidarity of people in Asia, Africa and Latin America, of the Afro-Asian Peoples' Solidarity Organization (AAPSO), the Organization for Solidarity with peoples of Asia, Africa and Latin America (OSPAAL) and the World Peace Council(WPC) extended to Vietnamese people in the past and at the present."

"In Vietnam, efforts made by the government, people's organizations and people in the cause of poverty reduction have brought about optimistic results: in the past over 10 years (1993-2004), poverty rate dropped by more than a half. However, it is still high accounting for 25% of the total population, and poverty reduction speed is slowing down. The fear is that the rate in the countryside, especially in ethnic minority areas, mountainous areas, remains twice or 3 times as high as in cities, the poverty gap in the society is far from narrowing down, but widening."

This was followed by a session in which research papers were presented by:  Dr Syed Husin Ali (Malaysia, Member of AAPSO delegation), Mr. Padlo George (Angola, former Minister of Foreign Affairs and Member of the Political Bureau of the MPLA Party) and Mr. Francois Houtart (Belgium, Director of Tricontinental Organization).

Interventions and comments took place and were as vigorous and deep as the research papers.  A number of researchers and experts from diverse parts of the world participated especially from Vietnam with significant studies supported by data and field studies.

The second event was held on the second day "Day of solidarity and cooperation with Vietnam".  This was inaugurated by Mr. Fusun Hong, head of the Vietnam Federation for Friendship Organizations and Secretary-General of the Vietnam Institution for Peace and Development.

Speeches were delivered in praise of Vietnam as an example to be drawn from and as an inspiration to boost peoples' encouragement and self-confidence. Among those mentioned were:

"Nothing can defeat a people who struggle for their freedom"

"Vietnam fought for the world and it is incumbent upon the world today to fight for Vietnam"

"Socialist Vietnam constitutes a symbol for courage"

The day ended with a message directed from the participants to the Vietnamese people:

'We came from all countries in the world to participate in the meeting on solidarity and friendship with Vietnam... Achievements of the Vietnamese people an ascertain the importance of socialist ideas and its compatibility with life and implementation... We underscore our commitment to extend more support to friendship and cooperation with you in your ongoing endeavors for national and socialist independence."

"We wish the Vietnamese people all the success in building an independent-socialist Vietnam, a strong country whose people enjoy prosperity in a just, democratic and progressive society"

The third day witnessed the celebration of the 60th anniversary of the establishment of the Socialist Republic of Vietnam.  A parade took place in Padena Square and all delegations were present.  H.E. President of the Republic, Mr. Tran Duc Long delivered a speech in which he said:

" The August Revolution and National Day on 2 September were the decisive events that augured a new era in the history of the Vietnamese nation.   On 2nd September 1945 President Ho Chi Minh declared independence in Padena Square and the birth of the Democratic Republic of Vietnam that is now the Socialist Republic of Vietnam."

He concluded by hailing Socialist Vietnam and President Ho Chi Minh.

These three events are interlinked: combating poverty and its alleviation, as well as international concerted action in this regard.  Moreover, a political vision governed by political will, truly hostile against poverty that deems combating it within a framework of economic, social, cultural programmes is an historic task.

The slogan spelling out the alleviation of poverty is not enough.  It is true political governance that will change the slogan into reality, to a battle in which its components are mobilized.  Such a struggle does not only convey empty words but is part and parcel of a class conflict required to achieve the just distribution of wealth.

******

Mme. Nguyen Thi Binh*

OPENING SPEECH

Distinguished guests,

Friends,

I would like to extend my warmest greeting and sincere thanks to all of you for your presence at this international seminar in Hanoi on "Poverty Reduction in Asia, Africa and Latin America - Experiences and Perspectives",

Your presence here is a vivid reflection of solidarity and cooperation of people of Asia, Africa and Latin America in the common struggle for freedom, national independence and social progress.

Your presence is also lively expression of the consistent support and solidarity of people in Asia, Africa and Latin America, of the Afro-Asian Peoples' Solidarity Organization (AAPSO), the Organization for Solidarity with peoples of Asia, Africa and Latin America (OSPAAL) and the World Peace Council(WPC) extended to Vietnamese people in the past and at the present.

That support and solidarity represnted by your company here is more significance as the Vietnamese people are jubilantly celebrating the 60th anniversary of the August Revolution and the founding of the Socialist Republic of Vietnam.

 Ladies And Gentlemen, Friends,

Hunger eradication and poverty reduction were defined by the United Nations as one of the millennium development goals.

Poverty reduction and sustainable development constitute a cause of strategic importance with basic, long-term and immediate characteristics to people around the world, especially those in Asia, Africa, and Latin America.

Over the past years, poverty reduction in our countries has gained practical results at various levels. However, in general assessment, those results are still limited, far from satisfactory and failure to meet objective requirements and aspirations of the people of our countries.

One reason is the internal difficulties and challenges inside each country, the other and the main reason is that people in our countries are faced with enormous challenges and negative impacts of globalization and neo-liberalism in tandem with imposition and interference of the world's financial, monetary and commercial institutions, transnational corporations. Naturally there are opportunities, yet it is not so easy for developing and underdeveloped countries to take advantage of those opportunities.

In Vietnam, efforts made by the government, people's organizations and people in the cause of poverty reduction have brought about optimistic results: in the past over 10 years (1993-2004), poverty rate dropped by more than a half. However, it is still high accounting for 25% of the total population, and poverty reduction speed is slowing down. The fear is that the rate in the countryside, especially in ethnic minority areas, mountainous areas, remains twice or 3 times as high as in cities, the poverty gap in the society is far from narrowing down, but widening. 

Ladies And Gentlemen, Friends,

After decades of arduous struggles full of sacrifices against old and neo- colonialisms, people of Asia, Africa, Latin America were able to win back national independence and the right to self-determination of their own destinies. However, as President Ho Chi Minh stated "independence without enough food, clothing and happiness for the people would have no meaning." Therefore, in this period of time, people in our countries should strive for the goal of national sustainable development to bring about a well-being and happiness for the people. The war on poverty is our basic and urgent task. In our meaningful seminar today, may I propose that we exchange ideas and evaluations on the following: 

First, on the present status: give analysis of reasons for successes and failure in poverty reduction from both objective and subjective perspectives.

Second, on experiences and solutions to promote and increase effectiveness of poverty reduction, including ways and methods in each country, as well as directions and measures to enhance solidarity and cooperation between countries in Asia, Africa and Latin America in poverty reduction.

In that spirit, I am fully confident that our seminar will surely be a great success.

Thank you for your attention.


* Mme. Nguyen Thi Binh: Former Vice President of Vietnam, Vice-President of Afro-Asian Peoples' Solidarity Organization (AAPSO) and President of Vietnam Peace and Development Foundation.

******

Dr. Fakhry Labib* 

POVERTY AND POLITICAL WILL

 In fact, poverty and hunger are the greatest challenge to mankind. The fact is that one fifth of the population of the world, i.e.1, 2 billion, suffers from poverty. Also, three quarters of the world's poor live in rural areas and on less than one dollar a day(1). Furthermore, half of the world's population lives on less than two dollars a day(2), while eighty percent suffers from malnutrition and hunger(3).

Worse still, the gap between the rich and the poor is widening. This is manifest in the fact that twenty per cent of the world's population possesses 82% of the world's wealth, while the poorest twenty percent possesses 4, 1%, a percentage that was 2, 4% thirty years ago(4). It is an outrageous fact that 358 persons in the world control 62 billion dollars, every one of them having an income equal to that of entire nations(4).

Poverty is defined as the inability to access essential resources and services such as healthcare, housing, training, sources of modern energy, food, potable water and sanitation (1).

One major indicator in this respect is daily per capita income. The percentages of people living on less than one dollar a day is as follows:

(The mentioned countries are those with percent more than 25%)

Senegal 26,2% (1995), the Democratic and Popular Republic of Lao 26,3%, Kenya 26,5% (1994), Mauritania 28,6% (1995), Bangladesh 29,1% (1996), Bolivia 29,4% (1997), Pakistan 31% (1996), Ethiopia 31,3% (1995), Rwanda 25,7% (1983-1985), Zimbabwe 36% (1990-1991), Mozambique 37,9% (1996), Ghana 28,8% (1998), Haiti 40,5%(1996), Honduras 40,5% (1996), Lesotho 43,1% (1993), India 44,2% (1997), Gambia 53,7% (1992), Sierra Leone 61,4% (1989), Burkina Faso 57% (1994), Niger 61,4% (1995), Madagascar 62,4% (1997), Zambia 63,7% (1998), Central Africa 66,6% (1993), Nigeria 70,2% (1997), Mali 72,8% (1994) (2).

Another criterion is that of literacy rates. Following is a 1999 statistic on the literacy rates of males and females over 14 years of age.

(The countries are those with an illiteracy rate over fifty percent)

Illiteracy Of Males
Afghanistan 50%, Chad (50%), Mali (53%), Senegal (54%), Ethiopia (57%), Burkina Faso (67%), Niger (77%) (2). 

Illiteracy Among Females: 

Democratic Congo (51%), Malawi (55%), Sudan (55%), India (56%), Togo (60%), Eritrea (61%), Liberia (63%), Ivory Coast (63%), Central Africa (63%), Mali (67%), Chad (68%), Ethiopia (68%), Democratic and Popular Republic of Lao (68%), Mauritania (69%), Pakistan (70%), Bangladesh (71%), Mozambique (72%), Gambia (72%), Senegal (73%), Yemen (76%), Benin  (76%), Nepal (77%), Cambodia (79%), Afghanistan (80%), Guinea Bissau (82%), Burkina Faso (87%), Niger (92%) (2).

A third criterion is that of mortality rates of infants born on 1999.

(The following countries are those with mortality rates of 100 deaths for every one thousand newborns)

Cambodia (100), Chad (104), Burundi (105), Burkina Faso (105), Djibouti (109), Ivory Coast (111), Liberia (113), Niger (116), Mali (120), Somalia (121), Rwanda (123), Guinea Bissau (127), Angola (127), Mozambique (131), Malawi (132), Afghanistan (147), Sierra Leone (167) (2).

The above statistics show that all criteria of poverty apply to southern countries exclusively and that the African sub-Sahara countries have the lion's share in this respect, followed by Latin America. On the other hand, poverty is on the rise in the United States of America where millions are jobless, the wages of less skilled labor decrease and social spending has shrunk greatly (4).

The most dangerous aspect in the poverty phenomenon is that it is not lessening. It rather spreads, and those living in great poverty in many countries, mostly women and children, are the most disadvantaged group, especially in least developed countries.

The UN Secretary - General held on 30 January 2004, at the Geneva UN quarters a press conference with each of French President Jacque Chirac, Brazilian President Lula da Silva and Chilean President Ricardo, on the issue of fighting poverty. Silva said, at the conference, that the world agenda disproportionately focuses on security issues like terrorism and weapons of mass destruction, while a safer world would be that which is more equitable and just. Poverty is a weapon of mass destruction that kills 24000 persons daily and eleven children every minute (3). For his part, Chirac said that poverty has had its impact on both the rich and the poor countries on all continents .The impact has been that of the spread of slavery: the buying and selling of humans (3).

The poverty we are witnessing today is not a new phenomenon or a new arrival.  It is a historical inheritance that has accumulated as a result of dark ages of regressive, feudal and colonialist regimes addicted to plunder. When the colonized countries got their freedom, many of their people fell victim to new despots worse than the previous colonialists. These peoples entered into a new stage of local plunderers and insatiable, parasitical capitalism. Many of the rulers of the south sent their countries back into the age of dependence, and their people suffered times worse than those of the past. They found themselves squeezed between internal and external pressures. Countries became poorer than before.

The corruption that has mushroomed strongly, due to its dependence on dictatorial and repressive regimes, has sucked up all local riches and resources. It has stolen the funds in banks and individuals’ money. And it is the economic policies pursued that mainly serve the interests of certain groups that have stolen the gains of liberation movements, turning them into private booty for themselves alone, pushing the majority of people into abject poverty.

These regimes have also liquidated and privatized national economies, throwing thousands of workers into joblessness, putting more constrains on labor and other oppressive regulations, and straitjacketing labor and popular struggles. As a result, poverty and oppression went hand in hand.

The sieges that were imposed by superpowers on the peoples have contributed to lots of impoverishing factors. These superpowers put severe obstacles in the way of economic and social growth. Also, internal struggles, especially those armed, play a dangerous role in displacing people, rendering them homeless and impoverishing them. The trade liberalization process and the World Trade Organization's rules have also played their role in limiting the countries' role in the control of their own resources, replacing it with the market hegemony that cannot resolve the problems of joblessness and social inequality. It is a development that will take people to extreme poverty.

The so-called structural reform decisions, and the suspension by states of aid to people, contribute together with the World Bank's instructions to lessened spending on services like health, education, transport and training. All that has worsened the poor people's burden, rendering them poorer.

The explosive joblessness phenomenon has become an essential contributor to worsening poverty and weakening the conditions of many of the world's populations. Joblessness in some countries has risen tenfold worse than it was a quarter of a century ago. Joblessness has grown prevalent among the youth, and is victimizing a great majority of those educated (5). This means wasting away countries' future. The fact is that 30% of the world's workforce, which is 2, 8 billion strong, is now unemployed, according to the International Labor Organization (4).

An unemployed person is deep in poverty. He loses his independence and dignity as he depends increasingly on his family that may also be poor. Which exposes these families and unemployed brackets to a terrible fate. Joblessness pushes the unemployed into uncalculated and unsafe emigration. The emigrants are exposed, if they reach their destinations safe without drowning in the sea or meeting their fate on land, to what resembles slavery in some countries. Their emigration might be to richer, but yet more regressive and extreme countries that inculcate in the immigrants visions that the immigrants, whether out of subservience, hypocrisy or conviction, will carry back to their own countries to propagate ignorance, extremism and backwardness.

Some may even commit suicide out of despair of a non-existent future. Joblessness and poverty are a fertile breeding ground for forces of terrorism. Poverty leads to an inferior social status. It provides that climate that is very suitable for the spread of ignorance, due to lack of access to education and the spread of diseases due to lack of access to medical care, which results in a lesser ability of adults to work. Another grave consequence is the spread of catastrophic social ailments like prostitution and other criminal offences.

Poverty sends the moral of its victims to its bottom, rendering them in a pitiable state. It makes them lose faith in their own countries, weakens their sense of belonging. When coupled with a bad government that does not care for citizens, the poor among them in particular, it breeds frustration, despair and indifference. It leads to every dangerous prospect.

As poverty is really a grave challenge to humanity in its entirety, the United Nations has declared, in December 1995, its first decade for the extermination of poverty, from 1997 to 2006 (6).

The Earth Summit, held in Rio in 1992, prepared the 21st century's agenda to limit poverty and lessen the number of those marginalized in line with internationally accepted criteria for living expenses (1).

On the occasion of the New Millennium Summit, the United Nations also issued in September 2000 its declaration that state and government heads ratified, committing themselves to ending abject poverty, an objective that they considered an absolute necessity. They committed themselves to cutting by half, by the year 2015, the percentage of those whose daily income is less than one dollar (5).

The same has been agreed on regarding this issue during the International Conference for Development that was held at Monterey in Mexico from 18 to 22 March 2002, and during the World Summit for Sustainable Development that took place in Johannesburg in South Africa from 26 August to 4 September 2002 (6).

The United Nations has set forth its vision in this respect in the form of resolutions (6). It has also presented relevant proposals by its Secretary -General, or by state leaders and presidents, during conferences held for the purpose of confronting and reducing poverty. The resolutions include the following:

-Poverty should be treated in an integrated and comprehensive manner.

-Poverty is a global phenomenon that should be treated through global methods, besides local treatment.

-Spreading the best practices to limit poverty in all its dimensions, while taking into account that these practices should be made to suit every individual country's social, economic, cultural and historical conditions.

-Adopting sound economic policies that respond to peoples’ needs, while providing them with work opportunities, internal security and stability and respect for human rights, together with a commitment to spreading equitable and democratic communities.

-Every country should shoulder the main responsibility for the achievement of sustainable growth, extermination of poverty, while stressing the role of national development strategies, with particular emphasis on rural development.

-Actual contribution by developing countries to the internationally important decision making process.

-Finding a comprehensive solution to the foreign debt problem.

-Peaceful resolution of internal and external conflicts

-Confronting the smuggling of funds across countries.

-Combating corruption, a phenomenon that constitutes an obstacle to the mobilization and the efficient distribution of resources.

-Unrestricted opening up of Europe's markets to all developing countries' products.

-Eliminating all forms of support and intervention that expose developing countries' producers to unequal competition.

-Facilitating access to technologies and information at terms convenient to developing countries.

-Backing the World Health Organization's plan for the treatment of three million people afflicted with AIDS, and combating infectious diseases like malaria and tuberculosis, in view of their destructive effect on human development efforts, economic growth and food security, and containing the impacts of poverty.

-Providing safe drinking water and reducing by half, by the year 2015, the number of those who cannot access it.

-Providing elementary education and training and spreading by 2015, primary education everywhere.

-Supplying suitable housing.

-Establishing the poverty-combating fund proposed by Silva, Brazil's President (3).

This fund can be financed by:

-Imposing taxes on activities like the traffic in arms. The world's military budget amounts to $900 billion a year, half of it being spent by the United States (3).

-Imposing a tax on global financial transactions. About a trillion US dollars cross international borders every 24 hours in international speculative operations.

If a tax worth 0.5% is imposed on foreign currency exchanges, it will be possible to gather $150 billion a year (4).

-Raising the official development aid by $50 billion every year, which means raising it from the currently allotted $60 billion to $110 billion a year (3).

-Instituting financial sectors that are available to all, with the purpose of facilitating access by the needy, especially women, to small credit and financing facilities, which will enable them to undertake small projects that create work opportunities and empower them personally and enhance their ability to raise their incomes (7).

-On 15 December 1998, the UN General Assembly has declared that the year 2005 will be an international year for small credit. It called on governments, the UN organizations, related non-governmental organizations, the private sector, and other effective bodies to enhance the knowledge of small credit's role in exterminating poverty, contributing to social development, and improving the life of the poor (7).

-It is noted that these credits improve incomes, provide work and living expenses, and enhance the human resources in terms of education, health and housing.

-Studies, however, have shown that these credits are not curative of poverty. They succeed in certain cases, and with certain types of clients. They are more effective with those with economic opportunities that they can make use of and with those equipped with some experience in trade. They are unsuccessful with regard to the very poor who need social programs (8).

* The important declaration on the new Asian-African strategic partnership, issued by the Asian-African Partnership Summit to revive the spirit of Bandung in its 50th anniversary, which was held in April 2005 in Jakarta, Indonesia included:

- Reaffirming continued determination to eradicate racism and all forms of discrimination.

- Meeting the internationally agreed targets and goals aimed at poverty eradication, development and growth, and underline the necessity for all parties to honor their commitments in this regard, and emphasizing the importance of enhancing cooperation with all regions.

- Stressing that poverty and under-development, gender mainstreaming, communicable diseases, environmental degradation, natural disasters, drought and desertification, inequitable market access, and foreign debt remain as issues of common concern which call for closer cooperation and collective action.

- Addressing issues of common concern such as armed conflicts, weapons of mass destruction and terrorism. Preventing conflicts and resolve disputes by peaceful means and post conflict peace building.

- Promoting human resource development, enhancing capacity building and technical cooperation in order to create an enabling environment for the betterment of the regions.

All this indicates that this is a very complicated issue, and it worsens the matter that we are in a merciless world. Illiterate, jobless, hungry and very poor communities find no place for them in today's world.

The war against poverty should take place in an atmosphere of solidarity and human brotherhood. It is not a war that evokes pity or compassion, but a war that needs scientific and well-studied action against exploitation, oppression, corruption, plunder, mismanagement, misadministration, and unstudied economic policies. It is a war against social injustice, inequality, and the increasingly widening gap between the rich and the poor, against the rising costs of living and unemployment. The war against poverty is one against a heritage that has been renewed across countless ages.  It is time now to change it.

Hence, a very important factor must be mentioned when talking about combating poverty, which is the political will, the will to change.

Poverty is not just a social or economic phenomenon. It is in the main a political dimension. If the political will is there, and is equipped with a political vision, it will then be possible to talk about effective measures to bring about change, to combat poverty and realize actual achievements in this battle. 

References:

1- Hamsa Genidy: Globalization, Poverty and Change: Agriculture - The Strategic Option for Poverty Eradication.

(Development and Socio - Economic Progress, January - April 2004, No. 87; AAPSO Publications).

(Paper presented to Gender and Poverty Summit 9-11 Nov. 2003 New Delhi, India).

2- Confronting Poverty in the World. E-journal issued by State Department - Poverty Indicators. Source: International Bank: International development indicators 2001, also International Bank, Micro Data Book 2001.

3- Transcript of Joint Press Conference by Secretary-General and Presidents of France, Brazil and Chile at Palais des Nations, Geneva, 30 January, 2004.

(Development and Socio - Economic Progress Magazin, January - April 2004, No. 87)

4- Mr. E.A. Vidyasekera: The Copenhagen Message, Challenge before Twenty-First Century. World Summit of Social Development and the NGO Forum in Copenhagen, Denmarks, March 3-12, 1995. (Development and Socio-Economic Progress Magazine, April - June 1995,No 62).

5- E. E. El Naggar: Unemployment. El-Ahaly newspaper 13/8/2005.

6- United Nations - General Assembly, (fifth ninth session - Resolution 59/247): Implementation of the First UN Decade for the Eradication of Poverty (1997-2006).

7- United Nations - General Assembly, (fifty ninth session - Resolution 59/246): Rule of Micro-Credit and Micro-Finance in the Eradication of Poverty.

8- United Nations - General Assembly, (fifty ninth session - Report of the Secretary-General): Implementation of the First UN Decade for the Eradication of Poverty (1997-2006) and Preparations for the International Year of Micro-Credit 2005. 

 * Dr. Fakhry Labib: Head of information Section, Afro-Asian Peoples' Solidarity Organization (AAPSO) 

******

 Dr. Syed Husin Ali*

 POVERTY IN ASIA: SOCIAL AND POLITICAL DIMENSION.

Poverty still remains a serious and challenging problem in Asia today. There are about 1.3 billion people in the world currently living under poverty, and about two-thirds are in Asia. The poor live in the rural or agricultural and in the urban or industrial sectors. Overall rural poverty is more serious and extensive than urban poverty. It exists not only in big and highly populated countries like China and India, but also in many of the small and less populated ones.

In East Asia, including China, efforts to eradicate poverty have borne some significant results. From 1990 to 1997 national surveys indicate that poverty there was reduced from 26.7% to 15.3%. Comparatively, the achievement was slower in South Asia, from 42.4% to 40%, during the same period. But, at the same time, in most countries, including China and India, the socio-economic gap between the rich and poor have also been increasing.

Even in Vietnam, where increasing wealth is clearly evident, especially in the cities, a third of the 80 million population still live in poverty. A report citing a survey from the General Statistics Office, quoted by the Vietnam News Agency (Reuters January 14, 2003), showed that between 1999 to 2001, the rich earned 12.5 times more than the worst off, which represented a 1.9-fold increase.

The situation is worse in Malaysia. Here, per-capita incomes have increased many folds during the last 50 years, and the incidence of poverty has been reduced from over 40% around 1960 to less than 10% at the turn of the millennium. But, the gap of socio-economic inequity almost continues to be on the increase, until the income of the rich is easily about 50 times of the poor.

Poverty Defined
Many studies on poverty emphasise on the economic aspect, essentially based on income for consumption, which is relatively easier to measure and analyse. Actually poverty is not merely an economic problem, but also a political, social and human one as well. Therefore, in any effort to understand the root of poverty, to overcome the problem and to promote development, it is important to take cognizance of the economic and non-economic factors.

Poverty is hard to define. Some people view it as a state of mind. This is subjective and tends to deny the objective condition in society, where wealth often exists side by side with poverty. Nevertheless, the perception of the poor on poverty is important to understand for the purpose of eradicating it.

The view that poverty is the state of insufficiency seems to be closer to the objective economic condition. What is referred to is the insufficiency of   basic needs - food, clothing and shelter, and also social facilities like health, education, water, electricity, transport etc. Even if the basic necessities are available, poverty may still exist when people do not have or cannot afford to have the social facilities available around them.

Objectively, income determines the degree of sufficiency or otherwise. Income is related to ownership and occupation. Ownership means the possession of land and/or capital. There are different levels and patterns of ownership as well as different relations to land and capital. These give rise to different occupations and levels of incomes.

Ownership, occupation and income are interrelated economic factors. Differences in these factors influence the formation of a stratified social system within which exist social classes with unequal distribution of wealth, power and status. Poverty is largely linked with the class structure and socio-economic inequality.

From the above, it may be concluded that poverty is the state among the people where:

1- There exists insufficiency of or inaccessibility to basic needs - food housing and clothing, as well as social facilities like hospitals, schools, roads, water, electricity etc;

2- Economically, the condition arises because of the absence or lack of income, property or occupation;

3- socially, the groups that are considered poor usually occupy the lowest strata within the social stratification system.

 

Absolute poverty exists when there is insufficiency that forces people to live under the poverty line, which may vary in various societies or countries according to their levels of economic development. The United Nations has quite arbitrarily used the income level of $1 per person per day as the cut off point. It is according to this measure that Asia is found to have the majority of the global poor.

In contrast, there is also what is known as relative poverty. In this case, poverty is situated within the context of socio-economic inequity that may exist in any country.  In the situation where there exists wide gap of inequity, the groups at the lowest levels of the income or class hierarchy may be considered to be poor, even if they live above the UN- or any nationally-determined poverty line. 

Roots Of Poverty
Different views and theories have been expounded on the roots of poverty in Asia and globally. Let us deal with at least five types, which are not exclusive but actually linked with one another. They vary in importance according to different countries. They are as follows:

i. Personality And Cultural Traits: 

This view contends that poverty is caused by values and traits found among individuals and their culture, that tend to create contentment and discourage the motivation or desire to achieve personal wealth and social progress. Among them are resignation to fate, laziness and wastefulness.  Admittedly these values and traits exist in many societies, but they are not just the monopoly of the poor. The rich sometimes believe more in fate, are lazier and more wasteful than the poor. In many societies in Asia, some of the most wealthy are those who need to do the least work.

Quite often such values and traits are no more than stereotypes, perceptions or prejudices on colonised people that were perpetrated under colonialism. They were continued even by the ruling elites on their own people during the post-colonial period. It appeared as if they wanted to heap the blame of poverty on the poor people, in order to divert attention from the failures of their own policies to abolish poverty and promote development.

Several countries in Asia and elsewhere, have tried to change the 'old values and outdated cultures' by promoting literacy programmes, education and modernization generally. These are positive efforts that have borne fruits. But all is not negative and anachronistic in traditional values and ways of life. There are also progressive elements within them, such as equality and cooperation, which can be and have been used or transformed for the purpose of fighting poverty and promoting development.  

ii. Population Density And Increase:  

According to this view poverty is inevitable in areas that lack economic resources and opportunities, be they land and capital or employment. When population increase is faster than the rate of development, then the standard of living falls and poverty worsens. The neo-Malthusian theory implies that population explosion must be controlled through family planning. But it may also be argued that poverty exists even in countries well endowed with rich natural resources and where population is small. In fact, there is poverty even in the richest country in the world.

While granting that family planning needs to be encouraged in overpopulated countries and large poor families for economic and health reasons, it does not guarantee the reduction and what more the eradication of poverty, especially when there is uncontrolled inflation, for instance. Further, it does not really help to improve the condition of socio-economic inequality. Ultimately, it is seen as an attempt to shift the burden of responsibility to overcome poverty and promote development from the government to the family and individual.

There is also now widespread labour migration at intra- and inter-country levels, most of the time done voluntarily. Migration across national borders quite often occurs illegally, despite all kinds of risks and challenges involved. But in many countries, the policy of internal migration is now encouraged to solve the problem of poverty of people in certain underdeveloped areas. For instance, China practices this policy. A couple of years ago, China announced a massive plan to move more than seven million people out of the country's most poverty stricken region. Under this plan about half a million people will be moved over the next 10 to 20 years. 

iii. Lack Of Capital And Technology:   

The lack of capital and technology can result in low productivity, which is often regarded as one of the causes of poverty. Peasants in Asia and almost everywhere else usually do not adopt new methods, fertilizers and machinery to improve their productivity simply because they cannot afford the capital to do so. Therefore, it is not fully true to assert that poor peasants reject modernization mainly because they are strongly entrenched in their old traditions. Lack of capital can be a great obstruction for the poor to improve themselves.

New and efficient technology requires money, which can be saved only if peasants have incomes in excess of their daily needs. Those who can save and adopt new technology form only a small proportion of the agricultural society. The smaller the incomes of the peasants the more difficult it is for them to take advantage of new knowledge and technology to overcome poverty, irrespective of whether they are motivated or not.

In some countries, within the framework of their reform or development programmes, capital and technology are provided to some members of the rural population. In India, for instance, extension services, technological aid and fertilizers were offered to those referred to as "progressive farmers", namely those who are open to and ready to accept change. In most cases they also happen to be the comparatively more wealthy within the community. As a result, although incomes are raised, there is also the tendency for inequality to increase.

iv.  Bad Governance, Waste And Corruption:

Most countries have the wealth and resources, which if used wisely and fairly, can help to alleviate poverty. Unfortunately, quite often this does not happen. In many countries, fiscal and monetary measures are usually not deliberately and consciously focused to help uplift the socio-economic condition of the poor and needy.

There is often wastage in public spending that concentrates on expensive prestige projects, which can generate big kickbacks from contracts usually, awarded to cronies, and high salaries for officials. Viable economic and social projects under health, education and housing for the underdeveloped areas and the disadvantaged groups, which can improve the welfare of the people on the whole, particularly the poor, do not seem to be given the high priority they deserve.

At the same time there is also rampant corruption, with people holding public office from the highest to the lowest levels being apparently on the take. Corruption together with waste are commonly associated with the growth of crony capitalism in a number of the new developing countries. Crony capitalism creates a small coterie of very wealthy people close to the powers that be and also causes a big number of common people to remain in absolute poverty or increasing relative poverty.  

v. Economic And Social Inequality:

Socio-economic inequality is widespread, both at international and national levels. Within the international context, the gap of inequality is very wide between the few rich powerful countries and the poor weak many, and growing wider. In 1997, the five richest countries - USA, Japan, Germany, France and UK - together had 60% share of the global GNP. According to the 1999 Human Development Report, in 1960 the 20% of the world's people in the richest countries had 30 times the income of the poorest - in 1997 it was 74 times as much.

A year later, the Human Development Report 2000 stated that, "The combined wealth of the world's 200 richest people hit $1 trillion in 1999; the combined incomes of the 582 million people living in the 43 least developed countries is $146 billion." The concentration of wealth and power among a handful of countries and their exploitation and appropriation of the poor countries exacerbate poverty among the latter.

The process of globalization does not help either. According to the UN-sponsored report of the World Commission on the Social Dimension of Globalisation , There is a deep-seated and persistent imbalances in the current workings of the world economy, which are ethically unacceptable and politically unsustainable. The report said that only a dozen countries have benefited from the increasing integration of the world economy. It stressed that those who have lost out include the poor, the asset-less, illiterate and unskilled workers, and indigenous peoples.

At the national level there is also increasing polarization between wealth concentrated among a small minority and poverty widespread among the big majority. The development of new economic activities based on planting, mining commerce and industries give rise to a new class of rich capitalists, who operate either on their own or as junior partners of the big foreign monopoly capitalists, for big profits.

At the same time traditional economic activities continue extensively, from slash and burn to subsistence and commercial agriculture, including fishing. The poor, especially in the rural areas, have to bear the brunt of exploitation and appropriation by three groups at three different levels; at the village level from landlords, middlemen and money-lenders; at the national level from big capitalist and feudal groups; and at the international level from monopoly-capitalists. The peasants suffer the most from exploitation, and this appears to be one of, if not the most important roots of their poverty. 

Poverty Reduction And Development:

 An Alternative Perspective

There have been many approaches to the strategy for poverty reduction in Asia and the world. At one stage the strategy was confined mainly to the economic arena and concentrated more on growth. Now it is multi-dimensional, to include the political and social aspects, and emphasises on growth with equitable distribution.  Indeed, the anti-poverty strategy should not be taken on its own but need to be placed within the wider development strategy.

It is interesting to note the Asian Development Bank's Poverty Reduction Strategy stresses on three key elements, namely:

1- robust, sustained pro-poor economic growth;

2- social development, including human development and improvement in the status of women;

3- better governance.

 

These elements cover the economic, social and political aspects. In other words it correctly sees the problem of poverty more than just an economic one.  It is noteworthy that in the economic aspect, it is not just economic growth, but pro-poor economic growth that is stressed.

It is necessary for Asian countries to at least study closely the ADB strategy for implementation, although it is better if they can go slightly beyond it.  Many of them still view development in terms of economic growth, which is measured according to the rate of increase in per-capita income. Political, social and environmental consequences are sometimes considered, but most of the time economic growth is of prime consideration.

Growth must always be linked with fair and equitable distribution, but the latter is seldom emphasized as much as the former. Little concern is shown when increase in per-capita income does not reduce absolute poverty or when economic growth leads to widening gap between the rich and the poor that result in greater relative poverty.

Economic growth is achieved through increase, among others, of output and prices of primary commodities, industrial and manufacturing activities, and capital investment in construction and housing developments. The fruits of development do trickle down, but not enough, and as usual those who enjoy the greatest profits are only a few individuals and companies controlling the commanding heights of the economy.

A large number of the most successful businessmen and companies are often closely linked with the powerful leaders of the country; in fact, many of them cronies who act as agents and nominees of the leaders.  As wealth concentrates among this small number of elites, poverty tends to be perpetrated among the masses.

Political and economic changes in many Asian countries have given rise to the emergence of a strong system of oligarchy. This means that (a) government is controlled and dominated by only a handful of political leaders, and (b) the small group that dominates politics also controls the economy, media and various types of organizations and institutions, and resorts to undemocratic legislations. A strong oligarchic system erodes democracy, violates human rights, spreads money politics and corruption, undermines press freedom, subverts people's culture and pollutes environment.

Whenever the power of the oligarchy increases, the candle of democracy grows dimmer. Nowadays, influential political leaders, at national and  local levels, together with their cronies control large sectors of the economy. With plenty of money they can easily indulge in money politics to win elections and attain powerful positions. With these powerful positions, they can further control companies, manipulate share markets and undertake huge, but not necessarily economic, projects that provide immense kickbacks. These ultimately cause rampant corruption.

But corrupt practices can seldom be exposed, because the ruling elites also control or at least influence the media. The big corruptors are often protected. It is inevitably counterproductive to take legal action against them because more often than not courts are not independent. Corruption undermines the economy and politics of the country. It can also deny justice to the people, especially the weak and the poor, and therefore their human rights. Human rights do not imply only individual freedom or civil and political liberties, but also economic opportunities, social justice and freedom from poverty.

Nowadays, economic growth has provided wide control, if not monopoly, for a few people to accumulate profits and wealth. When extreme accumulation takes place, full of greed and corruption, injustices and sufferings follow, especially for the poor and weak. When there is exploitation and poverty among a large number of people, then true democracy cannot be said to exist. The poor people always find it more difficult to get good health care, education and housing for themselves and their families.

It is clear that development should not be obsessed only with economic growth and the enrichment of a few powerful politicians and their wealthy cronies. Development should be multi-dimensional in approach. It should be concerned with the political, social and environmental consequences. It should be opposed to extreme concentration of wealth. It should be concerned with the plight of the majority of people, especially the poor; it should certainly take into account the healthy growth of democracy and human rights.

Finally, more important than just economic development is human development, which generates justice, freedom, equality and welfare for all human beings. The reduction, and if possible the eradication of poverty, will help to promote such economic and human development for a large number of people. The alternative development needs a new philosophy, a new approach, and perhaps a renewed people's movement. 

*Dr. Syed Husin Ali: Deputy President of people's justice party and president of Malaysian People's party

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Antonio E. Paris* 

SOCIALLY - RESPONSIVE

MACRO-ECONOMIC FUNDAMENTALS -

THE KEY TO POVERTY ALLEVIATION.

A lot of very important points dealing with national efforts at poverty alleviation have been raised by the different presentors at this session and I would not want to repeat them. I would only like to comment on the issue of the use of capitalist market mechanisms by socialist countries.

We are all aware of course of the widespread rise of poverty in those former socialist countries, which totally embraced capitalism. But here in Viet Nam, the socialist state is utilizing certain capitalist mechanisms to improve economic efficiency as a way to improving the people's living conditions and alleviating poverty.

Imperialist propagandists have tried to present the introduction of capitalist mechanisms in socialist countries as the sole or main reason for the fast rate of poverty alleviation, without regard to the fact that by itself, capitalist economic development is unable to ensure equitable social development. Here in Viet Nam, the market remains under state management in order to ensure the healthy development of the economy and to facilitate social advancement. While the introduction of certain capitalist mechanisms have led to the growth and expansion of the productive forces, it is the guiding role of the socialist state - its fundamental social orientation - which is responsible for the fast rate of poverty alleviation.

In this regard, relevant would be a comparison between the Philippines and the Socialist Republic of Viet Nam (SRVN), particularly of those neo-colonial economic policies which lead to an increase in the number of people falling below the poverty line in the Philippines, vis-à-vis the socialist economic policies which determine the success of the poverty-alleviation program of the SRVN. The Philippines is under a neo-colonial system where the government merely acts as the caretaker for imperialist interests, while the SRVN follows an independent path of socialist economic development that is focused on improving the life of the people, expanding education and health care, and assisting the poor and disadvantaged sectors.

In the field of investment, Vietnam requires foreign investors to bring in capital to selected industries, which need development. On the other hand, the Philippine government allows foreign investment in almost all business areas (including areas where foreign capital could compete with, and even overwhelm, local entrepreneurs), and at the same time allows local borrowings by foreign investors - from banks and other financial institutions, and even the local floating of stocks through public offerings. It is tragic that instead of directing foreign investments toward selected industries that need development, it is the internal savings of the Filipino people that are being harnessed by foreign capitalists for purposes determined solely by their selfish profiteering interests.

While the SRVN has certain reinvestment requirements to control profit repatriation, successive governments in the Philippines have allowed the full repatriation of profits and even capital from the local operations of transnational corporations (after just the payment of minimal taxes), without imposing any reinvestment requirement.

In the selection of business areas to be opened to foreign capital, the SRVN has certain safeguards to protect its ecology. Constantly remembering the US imperialist dumping of chemical warfare agents on its territory in the past, and the poverty and disaster such chemical warfare agents have spawned, Vietnam does not allow the transfer of ecologically harmful industries to its territory. On the other hand, the Philippine government has allowed the transfer to the Philippines of ecologically harmful industries such as the copper sintering plant, which was originally used in Japan to treat its copper ore imports from Australia. When the sintering plant's waste discharge into the sea caused the "Minamata disease", the whole plant was transferred to the Philippines with the blessing of the Philippine government.

While Vietnam is aiming at poverty alleviation and reduction through government budget allocations, in the case of the Philippines, the payment of the unpayable foreign debt has become the priority function of the government's annual budget preparation. Imperialist institutions have required the Philippine government to continue the automatic appropriation of funds for the payment of interest on the foreign debt in the annual budget of government, thus ensuring that imperialist financial institutions would be constantly able to extract their "pound of flesh" from our country.

As required by imperialist financial institutions, the foreign debt of the private sector in our country - whether controlled by local or foreign capitalists - are given "sovereign guarantees" by the government. As more private companies in our country - whether local or foreign controlled - become bankrupt, the payment of their foreign borrowings are transferred to the responsibility of the government. The government's foreign debt constantly balloons (with private sector foreign debt now accounting for around two-thirds of the government's foreign debt), and their repayment becomes the burden of the masses of the Filipino people. Total debt service payments - for both foreign and domestic debts - may soon reach almost 60% of the national budget **. This is reason why we have been calling for an audit of the country's foreign debt, and for the repudiation of all those debts, which have not really profited the country, but have only gone to line the pockets of the foreign creditors and their local agents, at the expense of our people.

In conclusion, I would just like to note that here in Ha Noi, we all see around us that the Vietnamese people, who fought so wel1, could also build so well. And it is important for us all that Vietnam's economy should progress speedily and even succeed in using capitalist market mechanisms as subsidiary tools of its socialist system. Socialist Vietnam's development and prosperity will clearly prove that socialism works and will continue to work for the interest of the working peoples, and that socialism is therefore the only way forward for mankind.

** The Philippine government's national budget for Fiscal Year 2005 is (Philippine Pesos) P 907- Billion, or approximately USD $ l6.2-Billion at P56.00 per US dollar. Of this national budget, P30l- Billion (or 33% of the budget) is earmarked for interest payments. Total Debt Service for 2005 (P30l-Billion for interest payments, plus P344-Billion for principal payments) will amount to P 645-Billion, or 52 % of the national budget. As of the end of 2004, the Philippine government's total debt stands at P3.8l- Trillion, with domestic debt at P2.0- Trillion and foreign debt at USD $ 32.2-Billion (P 1.81-Trillion). For 2005, government revenues are projected to reach only P758-Billion, and 85% of this will be eaten up by total debt payments for the same year. The Arroyo government plans to fill the budget deficit of P149-Billion from foreign and local borrowings. Under the 2005 budget, educational services will be allocated only 14.9% of the budget, while health services will be given only 1.4%. Compare this with the SRVN's allocation of about 25% of its national budget for social programs, and anyone can understand why poverty is exacerbated in the Philippines, while the SRVN is making great strides in its poverty alleviation program.

 * Antonio E. Paris: National Secretary of the Philippine Peace and Solidarity Council.

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Mr. K.P. Sharma Oli* 

POVERTY ALLEVIATION IN ASIA, AFRICA AND LATIN AMERICA:

PEOPLE'S EXPERIENCE AND PERSPECTIVES.

 The widespread of poverty in the developing countries mainly in Asia, Africa and Latin America has been considered as one of the major constraints of development and hence both the developed and underdeveloped countries have paid due attention towards poverty alleviation. The concept 'Poverty in anywhere is a threat to prosperity everywhere' is still significant in development studies. Since the decades of 1950s, the development efforts have been directly and indirectly directed to poverty alleviation. Many efforts have been made to conceptualize poverty and inequality and tried to identify the causes for these phenomenon. Because of the heterogeneous characteristics of developing countries and complexity of poverty situation, the attempts to analyze the relevant concepts and theories of development should combine the historical and contemporary experiences of Africa, Asia and Latin America.

Poverty alleviation is still a 'catchword' in development planning of these countries. The UN millennium summit in September 2000, also adopted a number of developmental goals to eradicate the poverty and rampant hunger from the world. The great challenges and development obstacles of developing countries are hunger, low level of income, illiteracy, diseases, inequality, economic stagnation, political instability, Social conflict, unequal trade relation, indebtedness, higher population growth rate terrorism.... etc. Whatsoever the problems the countries are facing there is a strong causal relationship with the poverty level. Poverty is a result of long historical process of marginalization, deprivation and exploitation of groups, communities and countries and also is a position in production system. The meaning of poverty may differ according to place, person and time. The voice of poor women reflects the grass root reality of the poverty situation.

A single mother in Guyana once said that poverty to her is hunger, loneliness, nowhere to go when the day is over deprivation, discrimination, abuse and illiteracy.

After the Second World War, the political colonialism demolished and the new form of economic colonialism emerged with the modernization and growth theories. These theories have been widely criticized for their failure to reduce the gap between rich and poor countries, though a significant economic growth was observed. The monolithism adopted in modernization was bias to the grassroots realities of the underdeveloped countries. The hegemonic neo-colonial and economic exploitation of the developed countries have created the unequal relation. This relation between the rich and the poor countries is the major cause of underdevelopment and it does not only cause the economic stagnation, but also distorts and damages the economic and political structures of the poor countries.

The globalization process has developed the Core peripheral or metropolis and satellite relation. In spite of the flow of huge amount of development aids, grants and loans from the north to the south, the latter have hardly positive attitudes to the developed countries. They have felt that the developed countries have intervened and influenced their policy strategies in the name of aids and grants and hence developed neo-colonialism.

The recent studies on development show that economic growth and poverty have cause and effect relation. The impact of growth to reduce the poverty level is demonstrated to be effective. Contradictorily it has increased inequality between the rich and poor. In 1998, world's richest 20% people have shared 86% of the world's total consumption where as poorest 20% shared only 1.3%. The ratio of richest 20% and 20% poorest was 1:30 in 1960 and it increased up to 1:60 in 1990 and 1:74 in 1998. This shows the differences in life style earning and expenses in consumption of the rich and poor people and nations. This is a great challenge in development. The growth oriented development strategies have caused polarization of resources in the hands of few people and some urban centers. Because of the polarization effects, the 'feel good factors' and 'Shining India' of Bharatiya Janata Party could not win the hearts of Indian rural people.

The poor countries have been encircled in the vicious circle of indebtedness. Instead of equilibrium in the national and global market and trade, the poor countries have been exercising the unequal trade relation. On the one hand the amount of goods and services and on the other the value or price differences of trade goods have caused the adverse effects in balance of payments. In the poor countries, because of the lack of capacity of people to invest in health, education and other social services, government should make heavy investment on such social services and administration. Due to the low level of revenue collection and higher amount of investment in such social and administrative sectors, the poor countries depend on the foreign aids and loans to meet the expenditure. This kind of situation of the developing countries is a major cause of under exploitation of resources. Lack of capital, technology and low level of income cause economic stagnation. To overcome this situation the developing countries depend on the developed countries. But the developed countries try to expand their market and make intervention in policy issues, and the poor countries are compelled to follow the directions, which may be effective for a particular situation of poor countries.

Environmental preservation and poverty alleviation programs are in reciprocal relations. It is obviously clear that the phenomenon of poverty aggravates in rural areas. Poverty is deeply rooted with the poor marginalized small farmers and landless peasants. The poor countries are mostly traditional and agricultural societies. Their agricultural practices have direct relations with the forest and pasture land areas. Therefore, for poverty alleviation, agricultural development in the rural areas is a primary condition. The poor people in the rural areas depend on the forest to fulfill the energy requirements. Similarly the manure collection, leaf litter and fodder collection activities are also related to the environmental and forest situation. The traditional agricultural practices are not sufficient for meeting the food requirements. The use of modern technology in agricultural development may meet the needs of hungry people. For this the technology transfer plays a vital role because the poor countries have no resources to invest in research and development activities. These countries are to be provided the modern and environmental friendly technologies in cheaper rate so that the environmental degradation may be the checked. The developed countries can play a significant role for such activities.

The shortages of employment opportunities have caused brain drain problem in the poor nations. In traditional societies, there remains a little room for skill manpower because of the market lag and it delimits the extra opportunities. The developed nations lured the skillful labors to their own country rather creating an environment in poor nations and the poor countries never come out from the vicious circle. These countries in the lack of industrialization, capital resources, technical know-how and processing operations, supply primary goods and import finish goods within equal price relation. They enjoy the surplus value of labor & resources.

The fifty-years long development experiences in the developing countries of Asia, Africa and Latin America have put forward some critical experiences. The macro economic stability, a pre-requisite for growth and development, comprehensive and poly-centric approaches directly addressing the needs of poor and rural people (since trickle down effects failed to address), inclusive strategies effective institutional mechanism, long-term vision for sustainable development have demanded the paradigm shift in development. Yet the problems of poor could not have been addressed. Further at present, the severe problems experienced in underdeveloped countries are: deforestation, soil erosion, flooding & drought and environmental degradation. These are the impediments to economic and social development. To address such problems, policies must be responsive to the changing resource bases.

 In the case of Nepal, the poverty alleviation strategies are still not felt effective. The living standard survey has indicated that though the poverty level in the last 10 years has gone down by about 12% but the inequality has increased significantly. It reflects double-edged challenges for poor nations in their development. Now attention has to be paid not only to economic growth but also to justifiable distribution. The Maoist insurgent movement has further deteriorated the economic situation in my country Nepal. The situation of poor countries is reflected in a poor women's experience. She said, "For a poor person everything is terrible illness, humiliation, shame. We are cripples; we are afraid of everything. We depend on everyone. No one needs us. We are like garbage that everyone wants to be get rid off". This is how the poor people feel themselves in underdeveloped countries.

* Mr. K.P. Sharma Oil: Chair of Afro - Asian Peoples'  Solidarity  Organization of  Nepal

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POVERTY REDUCTION IN VIETNAM:

POLICY AND ACHIEVEMENT*

 Introduction

Right after the establishment of the nation in 1945, poverty reduction was regarded as one of the most important tasks of Vietnam's government. A '"war" against poverty and illiteracy was launched. Due to the harsh situation then, it was unable for the country to concentrate all her strength on fighting this war.

In the late 1980s, Vietnam was plunged into a severe socio-economic crisis with over 60% of the total population living under the international poverty lines and hyper-inflation at 700%. To address the crisis, Vietnam started on the Renewal (Doi Moi) policy in 1986. Since then, Vietnam has made a lot of efforts in poverty reduction along with boosting the economic reform.

Aware of the fact that attacking poverty is a protracted war, Vietnam has embarked on numerous national-wide movements against poverty and made poverty reduction an integral part of economic growth and social development. As a result, Vietnam got out of the list of the world least developed countries. Vietnam's poverty rate was declined by more than half within a decade. This is one of the biggest successes in the economic reform process.

 Definition And Poverty Lines

1.    According to the common definition approved at the Asian - Pacific Conference on poverty reduction held by ESCAP in Thailand in 1993, poverty is a situation in which a proportion of the population does not enjoy the satisfaction of basic human needs that have been widely recognized by the society depending on the level of economic and social development and local customs and practices.

2.    Based on definitions of poverty, the World Bank and the General Statistics Office of Vietnam jointly developed two poverty lines:

The lower line is the food poverty line which is at the average of 2,100 Kcal daily intake per capita. This is the standard used by developing countries, the World Health Organization and other international organizations. In 1993 and 1998 Vietnam's food poverty rate was 25% and 15% respectively.

The total poverty line, which includes the costs of food and non-food to the minimum expenditures. Based on this line, in 1993 and 1998, the total poverty rate of Vietnam was 58% and 37.4%, respectively.

3.    Vietnam also devised a national poverty line which properly reflects the socio-economic development level and has adjusted it towards the regional and international poverty lines. Vietnam's national poverty line (set in 1998 and adjusted several times) is based on actual income and food demand of Vietnamese in specific regions.

·         The 1996 - 2000 poverty lines: rural mountainous and island areas: less than 15 kg per person per month (equivalent to 55,000 VND); rural plain and midland areas: less than 20 kg per person per month (equivalent to 70,000 VND); and urban areas: less than 25 kg per person per month (equivalent to 90,000 VND).

·         The 2001 - 2005 poverty lines: rural mountainous and island areas: 80,000 VND per person per month; rural plain and midland areas: 100,000 VND per person per month; and urban areas: 150,000 VND per person per month.

·         The 2006 - 2010 poverty lines have just approved in June 2005 for two regions: rural areas: 200,000 VND per person per month; and urban areas: 260,000 VND per person per month. 

Causes To Poverty

There are so many causes to poverty in Vietnam, some of which are:

-          Low access to important resources such as capital, land, and human resources. The poor who has little access to resources, especially those in the remote areas, are therefore, on the verge of falling into the vicious cycle of poverty. People who have just escaped from poverty or are just above poverty lines face the highest risk of falling back into poverty.

-          Low levels of education: according to statistics in 2003, about 90% of the poor had no higher than secondary education. Among those, the rate of those never going to school was 12% and the rate of those with primary education was 39%.

-          Unemployment or unstable employment prevents the poor from stable income that makes them unable to afford their education.

-          Highly vulnerable to natural disaster and other risks: annually, about 1-1.2 million Vietnamese households need emergency relief due to natural calamities.

-          Negative impact of macro-economic policies and economic reform policies: The continuously high economic growth rate has also brought about negative effects on the poor such as widening the rich - poor gap and development gap. Some economic reform policies namely State Owned Enterprises Reform, trade liberalization, enhanced competitiveness have pushed numerous enterprises into insolvency and workers into joblessness. 

Achievements

In nearly 20 year Renewal process, Vietnam's economy has obtained significant achievements and thus importantly contributed to fast poverty reduction. Annual economic growth rate in the past 10 years averages above 7%, (the rate for the 2001 - 2005 period is expected to be 7.5%). Hyperinflation was controlled and reduced to less than 10% during that period. Vietnamese people's living standard has been improved. Vietnam got out of the list of the world's least developed trading countries. The business environment in Vietnam has been improved, becoming more equal, transparent and competitive for both domestic and foreign enterprises. Vietnam has pushed ahead with her regional and international economic integration.

Achievements in economic development have helped to halve Vietnam's poverty rate within a decade. According to the national poverty lines for the 2001 - 2005 period, the poverty rate was reduced to 8.3% in 2004, well under the targeted 10% by 2005. According to the new line defined for the period 2006 -2010, based on per capita income and taking into account inflation rate, the poverty rate was 18.1 % in 2004, of which the urban poverty rate was 8.6% and the rural one was 21.2%. However, if this rate is based on expenditure, the poverty rate in 2004 was really high, about 24 - 26%. According to international poverty lines between 1993 and 2004, the poverty rate dropped from over 58% to above 24%. The food poverty rate declined from 24.9% to 7.8%, equivalent to 70% of reduction.

Table1: Poverty rate according to International poverty lines in 1993 - 2004 (%)

Source: drafted Vietnam's Report on Implementation of MDGs

However, the poverty reduction in Vietnam is slowing down. In two years 2002 - 2004, the poverty rate by international lines fell by 2.4% on average. And according to the national lines, each year the poverty rate decreased by 3.1%. 

1. Causes Of Success:

Outcomes of economic reform and sustained economic growth since 1986. Thanks to these, the State budget for poverty reduction programmes has increased. During 1992 - 2000, the Government invested about 21 trillion VND to national programmes related to poverty reduction. It is estimated that in five years 2001 - 2005, the total fund for eight national programmes and projects related to poverty reduction* is about 60 trillion VND, twice the total implemented fund for the 1996 - 2000 period. Out of which, the fund for national programmes targeting hunger eradication, poverty reduction and job creation is about 22.5 trillion VND. The money from state coffer is projected to be one third of the total estimated budget. 

2.1 Policy Framework:

2.1 In view of sustainable poverty reduction, Vietnam considers poverty reduction as a national targeted programme and has integrated it with other socio-economic programmes and strategies. In the 2001 - 2005 period, job creation is incorporated into poverty reduction programme, which becomes the national targeted programme on hunger eradication, poverty reduction and employment.

Special attention has been paid to poverty reduction in rural and mountainous areas since 80% of total population is in rural areas and they account for 90% of total population living under the poverty line in the country. Notable examples are the Programme 135 for extremely disadvantaged communes, the afforestation of five million hectare project, the programme for riverside and seaside soil improvement, the programme for resettlement and relocation, the programme for clean water and hygienic rural environment, the population and family planning programme, the cultural development programme, the training and education programme, the programme to prevent communicable and dangerous diseases, HIV/AIDs, the credit policy for the poor, and etc… 

2.2 Programme 135 was launched in 1999, aimed at raising living standard of ethnic people throughout the country, particularly in remote areas. Currently 2,347 poor communes of which 1,919 are very poor, have been funded by this programme.

The programme has been carried out in two phases, the 1999 - 2000 and the 2001 - 2005. The first phase was to set up operation mechanism, construct fundamental infrastructure for communes, and reduce extremely poor households by 4-5% per annually. The second period is to turn the policy into a well-run mechanism, combining this programme with other programmes and projects, and cut the poverty rate in the most difficult communes to less than 25%. As of 2004, vehicle accessible roads were made to the centers of 97% of the most difficult communes, medical centers set up in 100% of total communes, and primary schools and kindergartens built in 90% of total communes, and 50% of total households in such communes had access to clean water. 

2.3 Land policy is one of the most important poverty reduction policies. It is to ensure that farmers have access to production land and to assist the poor in:

-          Financing the reclamation of production soil: allocating uncultivated land to landless households with about 50% of their reclamation work financed.

-          Financing the transfer of land-use rights to poor households, including the financial support for the transfer of production land from land rich households to poor ones. The amount of compensation is decided basing on actual land prices in each locality.

-          Financing the migration of poor families to uncultivated land for them to make use of the land and develop production. This is a voluntary migration programme in the framework of new economic zone projects.

-          Financing the intensive farming programmes.

2.4 Comprehensive Poverty Reduction and Growth Strategy (CPRGS) was approved in 2002. This is an action plan to make concrete objectives, policies and mechanisms of the 2001 - 2010 Socio-economic Development Strategy, the 2001 - 2005 Socio-economic Development Plan at the national and sectoral levels respectively. The CPRGS is to reach the final goal of sustainable economic development while addressing social issues. It makes concrete three objectives, namely: to support Vietnam's transition into a market economy; to push up equitable and sustainable economic development and; to promote good governance.

Vietnam's determination in achieving Millennium Development Goals (MDGs) was also reflected in the CPRGS with MDGs turned into Vietnam's development goals (VDGs) by the year 2010. The VDGs contain 4 groups of economic indicators and 12 groups of social and poverty reduction indicators. In terms of economic indicators, Vietnam targets to double GDP, export turnover of 2000 by 2010 and etc. The social and poverty reduction indicators cover the reduction of poor households below international poverty lines by two fifths by 2010 and the reduction of national food poverty rate by three quarters by the same year. 

2.5 International support and assistance come to Vietnam in the form of non-refundable grant and low interest credit, technical assistance, and so on. The success in poverty reduction has been one of the main criteria for international donors to decide on granting credit to Vietnam. During the period, from 1993 to 2004, international donors committed to grant Vietnam 28.87 billion USD with the annual increase averaging 3.5%. By the end of2004, the total value of signed ODA agreements was above 22 billion USD, in which 19.5 billion USD were loans provided in 355 signed agreements. The poverty reduction is also one of the main credit programmes of International Monetary Fund and the WB for Vietnam. During 2001 - 2004, the WB, through the Poverty Reduction Support Credit, lent Vietnam about 467 million USD. 

Challenges

Unstable poverty reduction: The risk of falling back into poverty remains high, especially in remote areas and areas vulnerable to natural disasters and areas with low level of economic development. Households at the threshold of poverty lines, with low education and low financial capacity face the highest risk of going into poverty cycle. They present 5 - 10% of the total population. Furthermore, Vietnam remains a poor country, which is short of financial and human resources to reduce poverty in a sustainable manner. On the other hand, although Vietnam has passed the period of quick and easy implemented poverty reduction, the adoption of new poverty lines for the 2006 - 2010 period poses a big question to Vietnam to make poverty reduction stably lasting.

Poverty disparity reduced but with slower pace: the number of the most difficult households has been decreasing from 18.5% in 1993 to 9.5% and 6.9% in 1998 and 2002 respectively. Income disparity and rich-poor polarization have been increasing. Gap ratio between 10% of the highest income population with 10% of the lowest income population rose from 10.6 times in 1996 to 13.5 times in 2003 - 2004 (see Table 2). 

Table 2: Income per capita per month 10% of the highest income population with 10% of the lowest income population (at constant price)

Source: drafted Vietnam's Report on Implementation of MDGs

 The urban-rural gap is being widened. In 2004 it was about 7 times with the urban poverty rate at 1.3% and the rural poverty rate at 8.7%. The poverty rate also remains high in many ecological areas. In four out of eight areas namely Northwest, North Central, Central Highlands, and Northeast, the poverty rate, below international poverty lines, was over 30% in 2004. Specifically, the poverty rates of these areas were 54.4%, 41.4%, 32.7%, and 31. 7%, respectively, down from 81.0%, 75.4%, 70%, and 86.1% in 1993. Only the Southeast area had the poverty rate less than 10% in 2004. The poverty rate of the area fell from 37.0% in 1993 to 6.7% in 2004 (see Table 3).  

Table 3: Poverty rate by areas according to international lines (%)

Source: drafted Vietnam's Report on Implementation of MDGs

Poverty is not evenly reduced in all ethnic groups. Ethnic minorities have the highest poverty incidence and slowest pace of poverty reduction. In ten years 1993 - 2002, the international poverty rate of 53 ethnic minorities dropped from86.4% to 69.3%. In the same period, that rate of the majority Kinh and Hoa fell from 53:9% to 23.1 %. Ethnic minorities' international food poverty rate decreased from 52% in 1993 to 41.5% in 2002 while that of Kinh and Hoa declined from 20.8% to 6.5%.

 Negative Impacts of Globalization And Vietnam's International Integration: Vietnam faces many challenges when integrating into the global economy and globalization. Currently, Vietnam has been working hard to realize its AFTA commitments by 2006 and making efforts to join the WTO by the end of 2005. Vietnam will have to carry out trade liberalization and stronger economic reform implied by the common global game. This will certainly create favourable conditions for the country's economic development. And on the other hands, it will pose threats upon the poor and poor areas dependent on agriculture and those who lack of high education and professional skills.

 Pro-poor Policies And Mechanisms have not yet been fully carried out and/or well coordinated among localities. Besides, they are insufficient, not well-integrated and inappropriate to particular conditions of each area.

 Measures To Be Taken

Vietnam will continue to carry out five groups of measures to attack poverty in a sustainable way and achieve targets of poverty reduction in accordance with the newly adopted poverty lines. They are as follows:

-          Creating favourable environment for sustainable economic development: set up a legal environment for fair and level playing field for all enterprises; continuously reform state owned enterprises; encourage the development of private sector.

-          Improving poverty reduction policies: enhance the national targeted programme on poverty reduction; assist poor localities in economic development; raise poverty reduction credits; reduce and abolish subsidy in poverty reduction.

-          Addressing the rich and poor gap, first in the most difficult communes; adjusting and identifying specific objectives of policies, mechanisms, programmes and resource distribution for poverty reduction.

-          Effectively implementing social supporting policies to reduce risks and negative effects of natural calamities, to improve social safety net, to control and prevent the falling back into the poverty cycle, to assist the poor in getting into the most necessary public services namely education and medical care.

-          Involving all stake-holders in the poverty reduction effort: develop effective poverty reduction models, integrate poverty reduction into other socio-economic development programmes; make the most of strength of the political structure at the grass-root level to implement effectively poverty reduction measures. 

* Information and figures are taken from drafted Vietnam's Report on Implementation of MDGs (June 2005), Comprehensive Poverty Reduction and Growth Strategy (2003), Vietnam's Growth and Poverty Reduction: Annual report 2002 – 2003 (2003). 

* Hunger eradication, poverty reduction, and employment; Clean water and hygienic rural environment; Population and family planning; Programme to prevent  dangerous diseases and HIV/AIDS; Cultural development programme; Training and education programme; Programme for the social and economic development of extremely disadvantaged communes; and Five million hectare forestry project.

 ******

IRAQ: A COUNTRY WITH RICH RESOURCES, COLLAPSED ECONOMY

AND AN APPALLING DOWNTURN IN HUMAN DEVELOPMENT INDICATORS**

 During the last quarter-century, Iraq has been transferred from once a homeland of one of the most developed people in the Arab world into a people with the lowest level of economic and development indicators in the region.

Over this period, the ravages of war inflamed by the past regime and the misused resources have throttled the process of growth, progress and human development. The unfair international sanctions imposed on our country after the invasion of Kuwait greatly took their toll too on the Iraqi economy. Oil sector, which contributes with more than 60% of the GDP and 95% of hard currency resources, was badly hit and still awaiting to return to pre-war levels. It needs no less than tens of billions of dollars for reconstruction and maintenance. Non-oil sectors remained in recession-like state.

Notwithstanding the rich resources of Iraq, human development indicators in this country have become the lowest in the region.

Unemployment rate is high. Abject poverty and weakness have plagued the country due to economic breakdown which has lasted for several decades, let alone the aftermath of the last war which toppled the former regime. All, in addition to the fragile government social security systems, are overriding the minds of millions of Iraqis, in a way that threatens current trends towards entrenching security and stability, eradicating roots of administrative corruption rampant in all state-enterprises and at all levels, and reconstruction to build a new Iraq: a democratic, pluralistic, federal, and unified Iraq, free from foreign presence.

 The long-time decades of the isolation of Iraq have resulted in widening the gap between Iraq and the outside world, which was reflected in the decrepitude of the country's enterprises, administrative systems, technical know-how, technical recession, and the use of obsolete means of production. All have crippled the economy of the country in all of its aspects.

 Besides, the acts of violence, crime, sabotaging infrastructure and buildings, and terrorist operations by which the country has been plagued since late 2003, contributed largely in wasting resources and economic and human capacity, and in hindering local and foreign investments which are of vital importance to Iraq's reconstruction. Such operations also play a serious role in undermining the proper management of the public sector and various government enterprises.

 A recent survey- conducted by local and UN-affiliated bodies and by the World Bank and other international authorities- for the economic and livelihood conditions found that there is a terrible and appalling trend in the human development indicators as compared to what was the case in 1980, the year when the war was waged against the neighbour Iran. The results showed the great deterioration in the country's economy and the life style of the Iraqi family since that year. This deterioration was mirrored through:

-          The heavy debts that Iraq has to pay off, and which were estimated in 2002 by $125 billions, of which $42 billions are due to the Paris Club member states. Recently, a settlement of the debts due to the Paris Club was reached by waiving 80% of the debts according to complicated terms and obligations.

-          The huge reparations that the Security Council obliged Iraq to pay to Kuwait as a result of the invasion of the former regime to this neighbour country and which were estimated by $20 billions, in addition to other demands pending decision.

-          The exorbitant cost of the reconstruction of Iraq, also estimated by more than $100 billions.

-          The depreciation of the exchange rate of the Iraqi dinar from $3.3 for one dinar in 1980 to 2000 dinars for one dollar in 2003.

-          The unemployment rate is the highest in the region- about 30%-, which is almost twice the overall unemployment rate in the Middle East and Northern Africa. More than half of the urban youth are unemployed. In Iraq, there is also a very high rate of underemployment-more than 32%-, and the women participation in the working force doesn't exceed 19%, which is a low rate even if compared to countries of the Middle East and Northern Africa. Of the 27 million population of Iraq, there are about 16 millions in work age, and only 6.7 million of them represent the labor force. Therefore, the contribution rate of the labor force in Iraq is only 40%, given that the standard adopted by the Organization of European Cooperation is 70%. All refer to the complicated situation in the employment system and the policy to be adopted, especially if we know that some 192 state-owned enterprises employ about half million people, and the most of these enterprises and buildings were gravely plundered, stolen and demolished during the last war either by the US occupation forces or by the gangs and mafias of local and international looters. And more than 85% of the private sector enterprises are shuttered since the 1990s as a result of the wars and their aftermath, and by the unfair international sanction and its repercussions.

-          at the poverty level, latest statistics surmise that abject poverty rate in Iraq is  8-10%, and some other social brackets ranging between 12 to 15% are exposed to be knocked to a similar level. Both the financial and non - financial aspect of poverty have exacerbated seriously in the last decades.

Among the categories vulnerable to this threat are the unemployed youth, decommissioned soldiers and militia men, the maimed of the victims of the war, the internally-displaced persons, the refugees and the repatriated.

-          According to estimates made by the World Food Fund, about 16 million Iraqis (more than two- third of the population) will be entirely dependent on food aids provided by the state within the so- called " public distribution system" or the" ration card system", which provides a basket of basic food ration since it was applied in 1996, under the Oil-for-Food agreement made between Iraq and the United Nations. It costs the sate $4 million annually.

-          There are also the severe depredation and deterioration of infrastructures, and education and health care systems, as social indicators are at the low-income countries level. Basic services provided to citizens were sharply abated in the last decade. Electricity-provided families do not exceed 15%, and families provided with drinking water in a stable way are less than 20%.

 As for education, 39% of the population in rural areas is illiterate, and more than 22% of adult population has never attended schools. 47% of women are living in full or partial illiteracy.

As far as health services are concerned, it is safe to say that health system in Iraq is experiencing adverse travails. The last decade has witnessed a decline in health services as a result of war, blockade, and bad governance. There is a spate of diseases and malnutrition. The situation was even worsened as a result of the last war and its aftermath of destruction of the already debilitated infrastructures and the deteriorated food security situation. The effects of the weapons used in war, including depleted uranium and cluster bombs, have also augmented health concerns of citizens. 

If we are to make a comparison with other countries in the health services area, we tend to say that: there are 133 deaths of children under five per every 1000 births compared to 33 in Jordan and 107 in Yemen. Infant deaths have reached 107 per 1000 compared to 105 in Sub-Saharan Africa. Maternal mortality is as high as 192 per every 100.000 birth case compared to 41 in Jordan and 52 in Kuwait. 

- Considering the agricultural sector, it is a small but a vital component in Iraq's economy. The rapid increase in population in the last three decades- which is approximately twice the population growth rate of some countries such as China and India- has led gradually to increased dependence on imports to meet the local demands of food and made Iraq a major importer of agricultural products. Until 1980, Iraq imported half of its needs of food supplies, since then and till 2002, imports have been mounted to 80-100% for several foods such as wheat, rice, sugar, vegetable oil and proteins. Clearly, Iraq will remain entirely dependent on importing to cover local demand for many years to come. 

In this respect, the World Food Program estimates that Iraq will need to import 2 million tons of food in the next six months, which is the biggest amount in the history of the WFP in 40 years.

Finding A way Out Of The Current Socio-economic Collapse And Crackdown:

On the short-term, Iraq needs to achieve rapid progress in treating the all-important prerequisite for economic recovery, which is facing the rickety security situation and terrorist attacks at first, and then confronting the rampant financial and administrative corruption in the country. And when security is stabilized, there are some objectives which constitute the strategy of facing the choking livelihood conditions and meeting basic services, for a breakthrough towards reconstruction and the hereby necessity of providing job opportunities suitable for thousands of unemployed. Such strategy would include:

1-    Creating sufficient number of productive jobs;

2-    Rebuilding public facilities subject to accountability and responding to the needs of the citizens;

3-    Ensuring the accessibility of weak and poor social brackets to all vital services;

4-    Establishing of strong, official social security nets which would protect the poor and weak of the society. 

On the long-term strategic measures, it can be said that Iraq is bestowed with rich and diverse resources (the second biggest oil reserve, abundant water resources, national labor force of more than 7 millions), which is greatly outmatching resources in any of the Gulf Cooperation Council member states. The aggregate of these resources, in a decade, can allow Iraq to restore its former state as a country of middle-income bracket. However, achieving this goal will require a transformation at different levels:

-          The first task that the Iraqi economy has to face is providing new sources for the national wealth, and ridding itself from the burden of depending on rent resources, that is to say, moving from extravagant dependence on oil to a state of economic diversity. The agricultural and tourism sectors, including religious tourism in Iraq, can play an important role in this respect, as the two sectors are marked by intensity of work, and can contribute in catering many job opportunities;

-          Moving from the closed and one-sided economy overridden by the state to a multiple economy with divergent resources and balanced in its internal structure. A move which will come through boosting private, cooperative and joint sectors, as well as keeping a vital and principal role for the public sector;

-          The dismal and bitter image of the status quo of the Iraqi economy, referred to in the first part of this contribution, in addition to the wide gap between the huge resources required for Iraq's reconstruction and the scarce internal self-resources which depend mainly on the crude oil exports, one and all, make the entrance of foreign and Arab investments a dire and indispensable need as considered to be a catalyst for the development of the Iraqi economy and society, and a true course for the introduction of the relevant technology.

* Iraqi Council for Peace and Solidarity.

** Translated  by  Mr. Ahmed Abd Elsamae.