The fight against poverty

Part - 1

Neither development experience nor the effects of social programmes are uniform across the world. There are specific social forces, state structures and individual behaviours that pave way for a development policy to be successful.

Defining and measuring development in economic terms only, while ignoring social inequalities, can lead to serious miscalculation and evaluation of risks associated with social issues like poverty and inequality. A marked difference in the speed and span of the effects of social policies and programs in Asian and Latin American countries confirm this argument. Let us explore why similar social programmes prove to be effective is some countries but fail to achieve the same goals in others.

Social structures lead to social forces which are critical for developing institutions and policies. The success of Asian countries such as South Korea is a result of these formal and positive social forces. Weak, informal and fragmented social institutions in the Latin American countries, for instance Chile and Mexico, have resulted in less efficient social policy results.

Inequality is a result of uneven distribution of power and resources between social groups formed on the basis of these social forces. South Korea already had low levels of inequality and effectively reduced poverty to move from the list of aid recipients to aid donors based on its rapid industrialisation. Chile is still facing serious inequality despite reducing its poverty levels, whereas Mexico is unsuccessful in dealing with both high levels of poverty and inequality.

South Korea was one of the world’s poorest countries after the Korean War with per capita income of $65. The economic transition of the country started in the 1960s and led it to a very high rank of 12 out of 187 countries on the Human Development Index in 2012.This development experience drew strength from the strong state structure and significant amount of foreign aid which helped in economic and political development. Social movement at the grassroots level helped empower the less privileged population. The policy of land reforms reduced income disparity by distribution of land.

Labour-intensive export-oriented industrialisation sectors were encouraged to develop and grow. This added countless jobs to the market with a significantly positive impact on the overall economic condition of the country. Development and implementation of effective and targeted policies was the result of an efficient bureaucracy. Korea experienced an economic miracle during 1960s and 1970s based on these effective policies that transformed the nation from poverty to wealth.

Due to a weak central government, the development experiences of Chile and Mexico have been quite poor. Both internal and external elements have restricted the development pace of these countries. A mobilised working class and the influence of political pressures on policies and social programmes made the objectives vague.

A lack of external economic and political support for these countries put them at a disadvantage to introduce social development programmes. And lack of political will and capital reduced funding for these programmes.

There was a strong opposition in Chile to land reforms which seriously affected development of rural areas and households. Similarly, the benefits of the social programmes in Mexico were not widespread due to strong labour unions, which limited the effects to certain groups. The selective and unequal nature of social programmes in these countries resulted in increasing inequality.

Latin American countries have focused more on Conditional Cash Transfers which have shown limited impact questioning the market-oriented approach of the policy towards reducing poverty as compared to need for a multidimensional approach.

One of the major issues with development policymaking is a general tendency to ignore micro approach towards the issues on hand. On the contrary most of the efforts are directed towards looking at the causes in a macro perspective. The same is true for poverty and its effects. Generally the resources are spent with an objective to deal with the bigger causes of poverty, whereas its practical effects like poor health, and violation of basic rights are ignored.

Pakistan is facing a great challenge in the worsening poverty and inequality situation in the country. More than a half million of the population is facing multidimensional poverty, exposing them to the harmful effects of poor health, lack of education, inadequate living standards, low income, poor working conditions and violence threats. No doubt there have been efforts made both by the public and private sectors but nothing significant has been achieved yet. Comparing Pakistan’s poverty situation with the experiences of countries like South Korea, Chile and Mexico, it can be very conveniently said that the country lacks a strategic approach towards designing and implementing focused social programmes to deal with this critical issue.

There is a need to answer the question: why are similar social programmes effective in some countries but fail in others? The concerned policymakers in Pakistan have a lot to learn from the contrasting experiences of the Asian and Latin American countries as discussed.

To be continued

The writer is a public policy graduate from Carnegie Mellon University.

Email: tahir.cheema@fulbrightmail.org