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CIAO DATE: 03/02
Volume 6, Number 3, September 2001
Preface
The percentage of the world's population living in poverty has declined sharply over the last several decades. Still, as total global population has climbed, the absolute number of poor has remained unchanged at nearly 1,200 million, despite numerous bilateral and multilateral anti-poverty initiatives. The issue facing policy-makers is how to provide development assistance in a way that is both cost effective and directly benefits the poor.
A common theme to the articles presented in this journal, "Addressing Global Poverty," is that external assistance will help alleviate poverty only in the context of sound policies — market-oriented mechanisms that encourage private investment, good governance, liberalized trade, and investment in human capital — in the countries receiving aid. Ultimately, the authors argue, poverty reduction must be driven by rising productivity, income gains, and increased economic growth.
The countries most successful in reducing poverty, writes U.S. Secretary of the Treasury Paul O'Neill, are those that have adopted sound economic management, encouraged private investment and open trade, and promoted good governance and rule of law. O'Neill urges more focused and increased grant lending by the international financial institutions — a theme also addressed by Carnegie Mellon University Professor Adam Lerrick, who contends that a shift to additional grants would not deplete World Bank resources as some critics of the idea have charged.
Food security and alleviating hunger hinge, among other things, on defining property rights for small-scale farmers, on technology, and on providing social safety nets to those most vulnerable to economic reforms, says U.S. Secretary of Agriculture Ann Veneman. Cato Institute economist Ian Vásquez also highlights the property rights issue, as well as the correlation of economic freedom with poverty reduction.
Developing country participation in a new global round of trade negotiations that reduces barriers in both industrial and emerging economies has tremendous potential to reduce living costs in developing countries, discourage corruption, and lead to a better quality of life for the poor, writes U.S. Under Secretary of State Alan Larson. IMF Managing Director Horst Köhler also sees trade as key to poverty reduction and urges increased and better-coordinated technical assistance by the IMF, the World Bank, and other donors to support poverty reduction strategies in Africa.
Andrew Natsios, administrator of the U.S. Agency for International Development, outlines his agency's poverty reduction priorities for the future: agricultural development, support for microenterprise, education of women and girls, and research and treatment of AIDS and other diseases.
The journal also includes contributions from John Sullivan, executive director of the Center for International Private Enterprise, on the importance of good governance and transparency in promoting development; David Satterthwaite of the International Institute for Environment and Development on why it is important to understand the differences between rural and urban poverty; and Georgetown University Professor Susan Martin on how workers' remittances are having a positive impact on developing country economies.
The journal concludes with listings of poverty indicators and workers' remittances in selected countries, additional readings on poverty, and key contacts and Internet sites, and a chart showing where and in which sectors development aid is spent.
We hope the expert viewpoints represented in this issue of Economic Perspectives will help stimulate further discussion on global poverty reduction strategies.