Targeted policies to eradicate poverty

©WorldBank

Poverty has been halved in less than 25 years worldwide. The enormous progress over the past few decades is mainly due to rapid economic growth in the South. China’s economy grew by 10% for decades and 600 million people were consequently brought out of poverty.

Economic growth in poor nations is crucial. But it will not be possible to end extreme poverty by 2030 through economic growth alone, even if African countries grow at 10% for the next 15 years. Poverty eradication will require specific policies targeting the most vulnerable groups. The remaining poor tend to be women, minorities, indigenous peoples and the disabled. Poor people are increasingly living in the countryside and in countries in conflict.

More development finance and good policies will be required to end poverty by 2030. The latest OECD peer review of UK development policies (pdf) concludes that the UK can continue to lead a global push for more and better development assistance. The UK reached the international target of 0.7% of national income for aid last year, the first major economy to do so. If the UK can do it, others can follow. The UK Department for International Development (DFID) is also one of the best in the world at measuring success and evaluating what policies work on the ground. We need to learn from success and implement right policies on a global scale. Here are some success stories.

Brazil reduced poverty and inequality while growing the economy. Key to the success was the Bolsa Familia cash transfer program to poor families given in exchange for enrolling children in school and ensuring vaccinations. Similar conditional cash transfer schemes have worked well across Latin America. DFID has found convincing evidence that cash transfers can reduce both inequality and poverty. The challenge for governments in Africa and South Asia will be to mobilise the finances and to put in place systems and safeguards to implement such cash transfer schemes. Can we think of a Bolsa Familia Global?

The microcredit revolution has spread across the world and given millions of poor people, in particular women, the chance to start small businesses and get out of poverty. Bill Gates has made a bet that mobile banking will be the next big microfinance revolution. The UK was instrumental in setting up Kenya’s M-PESA, the most successful mobile banking company in the world. The challenge will be to identify and channel investments to other successful microfinance initiatives.

No country has reached a high state of development without industrialisation. Chinese people in the Zhejiang province are now 200 times richer than in the 1970s due to rapid development and manufacturing. Chinese companies are now moving and investing in manufacturing in Ethiopia and Rwanda, helping provide some of the 1 million new jobs required every month across Africa.  Development assistance can help mobilise more investments into manufacturing and industrial development. Development aid is also successfully used to provide skills training to minorities and other vulnerable groups. The UK supports Camfed, the Campaign for Female Education that helps girls finish school and get a job and the Employment Fund Programme in Nepal providing skills training to women and people considered low-caste.

Three-quarters of the world’s poorest depend on agriculture. Good policies can transform the sector. Vietnam went from a big rice importer to the second biggest exporter in the world by implementing property rights, building roads to markets and introducing better rice varieties. The UK has among other things funded OECD Innovation Prize winner Katalyst, an organisation providing mini-packs of high quality seeds to poor farmers. The simple innovation has benefitted over 2 million farmers in Bangladesh and increased farm incomes by almost £200 million. Africa needs a green agricultural revolution. Grow Africa is a coalition of companies, civil society, governments and aid donors coming together to improve agriculture. More such coalitions for action are needed!

Soon half of the world’s poor will live in fragile states and countries in conflict. Conflict can reverse national development by as much as 30 years. Minorities are often targeted and the poorest suffer the most in war. The international community must do more to prevent and stop conflicts. The UK has made progress in coordinating peace and conflict prevention issues across government through the National Security Council. The UK is also committed to direct 30% its aid to support fragile and conflict affected states. The Conflict, Stability and Security fund, a £1 billion venture capital fund for peace, poverty reduction, state-building and security objectives is an admirable way to support peace entrepreneurs and peace processes.

Rapid sustainable economic growth combined with targeted policies for vulnerable groups will make it possible to eradicate extreme poverty by 2030. The challenge will be to identify and implement the most effective policies. Then to mobilise the finances and political will to get the job done!

More:

The 2013 Development Cooperation Report – Ending Poverty

Philanthropy, digital payments and financial inclusion

A big year for development

Towards new gloval development goals

©OECD Observer March 2015

This article originally appeared on oecdinsights.org on 9 March 2015. 




Economic data

GDP growth: +0.6% Q2 2018 year-on-year
Consumer price inflation: 2.9% Aug 2018 annual
Trade: +2.7% exp, +3.0% imp, Q4 2017
Unemployment: 5.3% Aug 2018
Last update: 10 Oct 2018

E-Newsletter

Stay up-to-date with the latest news from the OECD by signing up for our e-newsletter :

Twitter feed

Suscribe now

<b>Subscribe now!</b>

To receive your exclusive paper editions delivered to you directly


Online edition
Previous editions

Don't miss

  • Globalisation will continue and get stronger, and how to harness it is the great challenge, says OECD Secretary-General Gurría on Bloomberg TV. Watch the interview here.
  • OECD Secretary-General Angel Gurría with UN Secretary-General António Guterres at the 73rd Session of the UN General Assembly, in New York City.
  • The new OECD Observer Crossword, with Myles Mellor. Try it online!
  • Watch the webcast of the final press conference of the OECD annual ministerial meeting 2018.
  • Listen to the "Robots are coming for our jobs" episode of The Guardian's "Chips with Everything podcast", in which The Guardian’s economics editor, Larry Elliott, and Jeremy Wyatt, a professor of robotics and artificial intelligence at the University of Birmingham, and Jordan Erica Webber, freelance journalist, discuss the findings of the new OECD report "Automation, skills use and training". Listen here.
  • Do we really know the difference between right and wrong? Alison Taylor of BSR and Susan Hawley of Corruption Watch tell us why it matters to play by the rules. Watch the recording of our Facebook live interview here.
  • Has public decision-making been hijacked by a privileged few? Watch the recording of our Facebook live interview with Stav Shaffir, MK (Zionist Union) Chair of the Knesset Committee on Transparency here.
  • Can a nudge help us make more ethical decisions? Watch the recording of our Facebook live interview with Saugatto Datta, managing director at ideas42 here.
  • The fight against tax evasion is gaining further momentum as Barbados, Côte d’Ivoire, Jamaica, Malaysia, Panama and Tunisia signed the BEPS Multilateral Convention on 24 January, bringing the total number of signatories to 78. The Convention strengthens existing tax treaties and reduces opportunities for tax avoidance by multinational enterprises.
  • Rousseau
  • Do you trust your government? The OECD’s How's life 2017 report finds that only 38% of people in OECD countries trust their government. How can we improve our old "Social contract?" Read more.
  • Globalisation’s many benefits have been unequally shared, and public policy has struggled to keep up with a rapidly-shifting world. The OECD is working alongside governments and international organisations to help improve and harness the gains while tackling the root causes of inequality, and ensuring a level playing field globally. Please watch.
  • Checking out the job situation with the OECD scoreboard of labour market performances: do you want to know how your country compares with neighbours and competitors on income levels or employment?
  • Trade is an important point of focus in today’s international economy. This video presents facts and statistics from OECD’s most recent publications on this topic.
  • The OECD Gender Initiative examines existing barriers to gender equality in education, employment, and entrepreneurship. The gender portal monitors the progress made by governments to promote gender equality in both OECD and non-OECD countries and provides good practices based on analytical tools and reliable data.
  • Interested in a career in Paris at the OECD? The OECD is a major international organisation, with a mission to build better policies for better lives. With our hub based in one of the world's global cities and offices across continents, find out more at www.oecd.org/careers .
  • Visit the OECD Gender Data Portal. Selected indicators shedding light on gender inequalities in education, employment and entrepreneurship.

Most Popular Articles

OECD Insights Blog

NOTE: All signed articles in the OECD Observer express the opinions of the authors
and do not necessarily represent the official views of OECD member countries.

All rights reserved. OECD 2018