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SEPTEMBER 29 , 2000 VOL. 26 NO. 38 | SEARCH ASIAWEEK

Letting the Poor Speak
That's the best strategy against world poverty

ALSO:
Miscarriage of Justice:
Expensive oil threatens the region's best-recovering economy

"Poverty is humiliation, the sense of being dependent, of being forced to accept rudeness, insults and indifference when we seek help." The Latvian woman speaking is one of more than 60,000 poor people from 60 countries. Their torrent of anguish, rage and despair has been distilled into the latest World Development Report, an annual tome put out by the Washington-based World Bank, and the WDR's accompanying three-volume study, Voices of the Poor. The mammoth reports, which can be downloaded from the worldbank.org site, are part of the background reading for delegates to the annual meetings of the World Bank and its sister multilateral institution, the International Monetary Fund, in Prague Sept. 19-28.

Not a few seasoned Bank watchers may jadedly remark that the uncharacteristic humanity and even poignancy in its latest reports are part of an all-out campaign to portray itself as a caring lender amid mounting criticism of its activities and those of the Fund. Maybe so, but the sadness, desperation and anger palpable in the WDR and Voices are real and deserve attention, sympathy and urgent action. Take another of the indigents' laments. The poor, says a Bangladesh slumdweller, suffer "the failure to protect their young daughters from hooligans as well as protect themselves both from the harassment of outsider hoodlums and the police." PR or no PR, the World Bank should be commended for bringing these voices to the dispensers of global money and power .

The question, of course, is: Will they listen? And, more important, do what's right by the World Bank's lights? No and yes. The global lender's new anti-poverty mantra — "opportunity, empowerment, security" — encompasses past strategies: infrastructure development in the 1950s and 1960s, health and education projects in the 1970s, market reforms and sound economic management in the 1980s, and better governance and environmentally sustainable development in the 1990s. The three words also cover new thrusts, including social safety nets in the event of natural calamities and economic crises, and more political participation for the poor.

The revised strategy draws lessons from events and trends in the past dozen years, from which it is clear that economic growth alone is not enough to make a dent in poverty. While East Asia achieved a steep fall in numbers of indigent people between 1987 and 1998, South Asia and other regions saw increases, despite years of growth. Even economic liberalization and restructuring can be pernicious. Too often, most of their costs are imposed on the poor in the form of job losses, falling commodity prices and shrinking real incomes — witness the Asian Crisis and its aftermath. By contrast, big business interests, local and foreign, use their clout to get themselves bailed out, even though they are usually the main cause and beneficiary of excesses that lead to economic debacles. So the Bank's prescription: the poor need more power to uplift themselves, manage life's risks and assert their interests.

Unlike wealth, however, political power cannot be increased for one group without diminishing it for another (unless the two decide to join up and work for the same interests — not likely with the haves and the have-nots). Hence, while the rich and powerful have been happy to heed World Bank calls for robust expansion, don't expect them to blithely cede more clout to the poor and weak, whether on the international, regional, national, local or household level. Empowerment is a struggle even within families. As one Bangladeshi wife recalls: "At first I was afraid of everyone and everything — my husband, the village sarpanch [leader], the police."

Moreover, the WDR takes issue with the policy paradigm propagated by the IMF and the United States, which has stressed rapid economic liberalization and ruthless industrial restructuring. The report warns against opening merchandise and money markets too quickly, with disruptive impact on employment and national finances — not the sort of cautionary message laissez-faire advocates in Washington and New York care to hear. But it deserves to be said. In the 1990s, breakneck capital market opening eventually led to the Asian financial debacle, and the ex-Soviet bloc saw its poor population grow 20-fold under crash liberalization programs — both urged by the IMF. By contrast, China's measured pace of reform, often criticized as too slow, lifted 200 million of its people out of poverty and helped it escape the Crisis.

However the WDR is received, there are, happily, powerful forces helping liberate the poor. Despite the pain it brings, especially when implemented too rapidly, economic reform has been loosening the grip of bureaucracy and big business on resources and opportunities. And democracy has been giving the masses a say in who rules them and how. The Bank would like to see more economic freedom and political participation, stressing that these and other anti-poverty strategies should be pursued in tandem. In liberalizing economies, for instance, the poor need more clout to press for a more humane pace of reform and a more equitable sharing of its costs.

The World Bank sets out other strategies like spreading the benefits of technology, as it calls for the elimination of absolute poverty by 2015. But the most crucial tack is the one illustrated by the way its seminal reports were made: letting the poor speak and responding to their cries. More and more of them will hopefully echo the Bangladeshi wife's words after her struggle bore fruit: "Today I fear no one. I have my own bank account. I am leader of my village's savings group."

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