Poverty Alleviation: Challenges Ahead

“(A)ny government which imperilled the financial position of India in the interests of prodigal philanthropy would be open to serious criticism; but any government which by indiscriminate alms-giving weakened the fibre and demoralized the self-reliance of the population, would be guilty of a public crime.”

Thus spoke Lord Curzon, British Viceroy as he stoically stood watching over one of the worst mass famines which resulted in the death of millions of people in Bengal in the late 19th century. More than a century later the philosophical dilemma remains the same. Under what circumstances is State intervention a cause of “weakening the fibre and demoralizing the population” and when is it a political duty and humanitarian necessity? The prize for the answer to this question will go to the one who designs a mode of State intervention which both helps the poor and does not damage his moral fibre for self-reliance.

A contemporary response has been the adoption of poverty reduction or alleviation programmes. These have become an integral part of the objectives of the Ministers of Finance of most developing nations and that ever since the World Bank adopted the concept as part of its developmental philosophy in the late 1990s adding this as an additional benign role of the State in addition to its roles as guarantor of the right to property and in the maintenance of law and order. Although the phrase poverty alleviation or reduction seems at first approach a fairly straightforward statement as far as its ultimate end is concerned, it is unfortunately far more complex when it comes to its actual translation into effective policies for achieving this end.

It is a little known fact that Mauritius may actually have been among the first freshly independent developing nations where the concept was tested on the grounds. Some form of poverty alleviation approach has been adopted for decades (much before it became the favourite catchword which it has become presently) and can be traced back to the first Five Year Plans which were rolled out in the 1970s in the face of critical levels of unemployment. A close look at the then heavily criticized schemes dubbed as “Quatre Jours à Paris” would show that it was nothing less than a more or less direct remission of funds into the hands of thousands of heads of households who would otherwise have been completely destitute — a state of affairs which could have resulted in serious social upheavals and agitations leading to grave consequences for the social fabric in Mauritius.

Later the World Bank-sponsored Rural Development Programme, under the then Ministry of Economic Planning and Development, witnessed the first serious efforts of bringing infrastructure (roads, electricity and water) to the rural regions. A factor which would later explain the easy spread of “industrialization” to those regions. These programmes were so successful that Robert McNamara, as head of the World Bank, took time to visit some of the achievements which were hailed as models for the rest of Africa.

Of course these schemes were not devoid of criticism. At an ideological level, for a generation of fledgling leftist politicians, these were mere palliatives which left the “system” unscathed and served to preserve the unjust and unfair status quo. Building of infrastructure to facilitate access to what were still isolated parts of the island was seen as mere conduits for facilitating the penetration of the international capitalist system into hitherto remote areas. On a more practical level some of the inefficiencies in implementation leading to waste were also the subject of criticisms by the then opposition.

Be that as it may, the point is that the tradition of State activism in poverty alleviation alongside a fairly successful Welfare State was well established in Mauritius even before it became the flavour of the month for international financial institutions and Ministers of Finance.

The second wave of Poverty Alleviation Programmes, spearheaded by the World Bank, were introduced in a totally different global and regional context. The Millennium Development Goals (MDGs), declared by the United Nations in 2000 and fully backed by New Partnership for Africa’s Development (NEPAD), were the ultimate demonstration of a poverty alleviation approach at a continental level. International financial institutions and western governments committed to contribute financially to the funding of the MDGs for achieving specified goals in different sectors such as access to water and basic health facilities and reduction of deaths among new-born and young children. Mauritius also adopted the concept and a number of funds for poverty alleviation were set up in successive budgets.

Poverty alleviation as a concept was inevitably caught up in the frenzy of globalisation and liberalisation which swept over the international economy during the late twentieth century. Economic growth through integration in the global economy via the free play of market forces — liberalization of trade and Foreign Direct Investments — became the new mantra imposed on developing nations through such agencies as the WTO. Although not often explicitly stated, the presumption of “trickle down effects” which would positively impact the standard of living of the population at large became the order of the day again as was the case with the classical development economics paradigm. Poverty alleviation programmes continued to form part of government plans but were embedded in this dominant logic of market liberalization. This is what, for example, has led to the institution of Corporate Social Responsibility (CSR) as part of the larger corporate governance issues and the subsequent almost total surrender of its management to the private sector in Mauritius.

That adoption of liberal policies may under certain circumstances lead to sustained growth which eventually contributes to poverty reduction is not questionable, although arguably at the cost of higher inequality in most cases. The real issue is that poverty alleviation schemes are much more effective when they are disconnected from the logics of further market liberalization and less active states. The principal reason for this is that the causes of poverty generally reside in conditions which exist prior to liberalization and opening up of the economy. These reforms not only fail to counteract the initial debilitating effects but more often than not actually contribute to exacerbate those exclusionary factors and increase the sentiment of a two-speed development process often leading to an increase in anti-social behaviour.

Taking cognizance of this state of affairs and developing the kind of programmes which target the initial root causes of exclusion and poverty is therefore an essential condition for success. In this context the setting up of a Ministry of Social Integration and Economic Empowerment since the last general elections is a major step towards such a disconnect. It is still a fledgling institution and will probably have to develop an even deeper sense of its real mission and the appropriate strategy.

 


* Published in print edition on 7 March 2014

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