Agenda Item 9

STRATEGIES ADOPTED TO TACKLE POVERTY IN DIFFERENT REGIONS - ECO

( Tehran, 21-23 July, 2003 )

ECO Secretariat Background Paper

8^th Consultative Meeting of 

Executive Heads of Sub-Regional Organizations

Introduction:

Poverty is a multidimensional phenomenon and accordingly it affects the lives of people in a wide variety of ways.

Conventionally poverty has been defined in terms of income or expenditure based on the assumption that a person’s material standard of living largely determines their well-being. In other word, the poverty is pronounced deprivation in well-being. But what is the deprivation? The voices of poor people bear eloquent testimony to its meaning. The poor are identified as those with a material standard of living below a certain level – the so called poverty line. To be poor is to be hungry, to lack shelter and clothing, to be sick and not cared for, to be illiterate and not schooled. But for poor people, living in poverty is more than this. 

Poor people also face extreme vulnerability to ill health, economic dislocation, and natural disasters. And they are often exposed to ill treatment by institutions of the state and society and are powerless to influence key decisions affecting their lives. One poor says “Every day, I am afraid of the next.” Another says “For a poor everything is terrible- illness, humiliation, shame. These are all dimensions of poverty.

Poverty needs to be considered at various levels ranging from households and communities to nations and groups of nations. Poverty impairs human growth, constrains human development and prevents human capital required to achieve household well-being. The damage caused by poverty and hunger is both longer lasting and far-reaching than the individuals and facilities involved. Society as a whole suffers when children cannot learn, when poor health restricts productivity, and when malnourished mother gives birth to a new generation that lacks enough food. Therefore, combating poverty is not only a moral imperative, but it represents an investment in the future. Investments in poverty alleviation are investments from which whole world will benefit; investments that will prevent scars from forming on the bodies and in the minds of tomorrow’s children. In other word, poverty alleviation and sustainable development are similar and overlapping concepts.

Causes of poverty 

Lack of income and assets to attain basic necessities including food, shelter, clothing and an acceptable level of health and education is one of the most essential causes of the poverty. Many elements can affect the lack of income and assets, i.e. economic changes. In general, with economic growth, income poverty falls and with economic contraction, income poverty rises.

While economic growth is systematically associated with poverty reduction, the rate at which growth translate into poverty reduction depends on the initial level of inequality in the distribution of income and how that distribution changes over time. Growth and its effectiveness on poverty reduction also depend on sound and stable governance. So confronting socioeconomic inequalities and building sound institutions can be important both for providing a socially sustainable basis for overall growth and for ensuring that poor people gain substantially from that growth.

Access to income and assets may also be affected by implicit or explicit discrimination on the basis of gender ethnicity, race, or social status. Both access to assets and returns to assets are affected by the public policy and state interventions, which are shaped by political will of different groups.

Voicelessness and powerlessness is the institutional basis of poverty and another cause of poverty. Those materially deprived feel actually their lack of voice, power, and independence. In some regions of the world, absence of the rule of law, lack of protection against violence, extortion and intimidation, and lack of civility and predictability in interactions with public officials place a burden on poor people. Social norms and barriers can also contribute to voicelessness and powerlessness. Discrimination based on ethnicity, religious belief, social status, and race has similar effects.

Vulnerability is constant companion of material and human deprivation, given the circumstances of the poor and near poor. The risks that poor people faces as a result of their circumstances, are the cause of their vulnerability. But the deeper cause is the inability to reduce or mitigate risk or cope with the shocks- a cause that both draws from and feeds into the other causes of the poverty.

Another underlying cause of vulnerability is the inability of state or community to develop mechanisms to reduce or mitigate the risk that the poor people face. Irrigation, infrastructure, public health interventions, honest police and a fare legal system, public work schemes in the time of stress, micro-credit to the tied people through the aftermath of an adverse shock, social networks of support and insurance, famine relief in extreme circumstances, all reduce the vulnerability for poor people.

Poor people also are exposed to risks beyond their community, those affecting economy, the environment, and the society in which they live. Migration, civil conflict and wars, economic crisis, and natural disasters affect not only their current living standards but also their ability to escape poverty.

Poverty in ECO Region

Economic Cooperation Organization (ECO) is an intergovernmental organization of ten member states with developing and in transition economies. Although ECO countries collectively have abundance of resources with diversified nature of production, there are great variations among and within them in terms of natural endowment and development as well as the ratio of poor people in total population.

Poverty in the ECO region has different roots and reasons which differ from country to country. Considering the causes of poverty in the ECO Member Countries, these countries can be categorized in three groups; 

Central Asian and Caucasian countries as transitional economies of ECO region have experienced massive economic and social shocks during the past decade following the dissolution of the former Soviet Union. These countries are under the process of a complete overhaul at their economic, political and social systems, and are experiencing difficulties in the transition period, given the limited institutional capacity of the implementation of the structural reforms. In these countries the transition process has caused sharp decrease in GDP and income, deteriorated the economic situation, social infrastructures and delayed the introduction of structural reforms. War and civil conflict in some countries i.e. Azerbaijan and Tajikistan together with transitional situation weakened the official as well as informal mechanisms of social protection, which contributed to rising poverty and deprivation. All these, also led to a massive release of labor and intellectuals. A high rate of inflation during the transition period (specially 1990s) reduced real incomes, contributed to growing inequality and undermined social security and welfare. The most vulnerable groups in society are children, the elderly and the sick or disabled people. Also due to the lack of public resources, access to education, including basic education, for the poor declined.

The developing member countries of the region, while showing a considerable economic growth rate, still have serious problem in enhancing the human development and poverty alleviation process. Inequality in distribution of economic benefits and access to the income and assets, high range of unemployment, migration and rapid urbanization, voicelessness and powerlessness of poor people and civil society institutions, high rate of inflation and economic risks are among the important causes of poverty in these countries. 

Afghanistan as the least developed member country of ECO is special case which needs deep attention by the international community. Decades of civil conflict and war destroyed economic and social infrastructure of Afghanistan. Lack of health, education, and social security along with the deteriorating food insecurity and hunger are the characteristics of Afghanistan today. But hopefully the end of war in this country and generous attention of international community could draw a prosperous future for Afghanistan. 

The poverty reduction strategies of countries in the region have been based on enhancement of investment and trade through market liberalization programmes ensuring sustained and rapid economic growth complemented by targeted programmes and the provision of social protection. During the recent years, the countries of the region have promoted the path to market liberalization and private sector-led growth in varying degrees. They also outlined specific national strategies and programme mostly of multi-sectoral nature to improve the social situation, reduce poverty and enhance the wellbeing their people.

In order to discuss the poverty situation in the ECO region, this paper considers some major indicators of poverty in the member states and the region as a whole. In this regard, it considers the food availability (nutrition), demographic characteristics including education, health etc. and economic situation (income) as the major indicators of the poverty. 

Poverty and food security

A recent projection by International Food Policy Research Institute (IFPRI) has forecasted a 33-percent increase in the demand for cereals and 21 percent increase in the demand for livestock in the Central Asian countries between 1995 and 2020. This means a net import of 0.76 million tons of cereals in 2020 as compared to the import of 0.51 million tons in 1995. Similarly, net import of livestock meat will increase to 0.38 million tons in 2020 as compared to the import of 0.16 million tons in 1995 in these countries. Improvements in crop and livestock breeding productivity will be essential to meet the increases in demand projected for the region. 

In relation to the food availability in the ECO member states, while Afghanistan is one of the most food insecure countries in the region, six member countries in the Central Asia and Caucasus region are in transition process from centrally planned to market economy and have become vulnerable for poverty in the transition phase. Iran, Pakistan and Turkey on the other hand are relatively better off in food security situation due to economic growth and satisfactory increase in production and productivity of food grains and other agricultural products during last decade. 

Although the overall rate of undernourished people in ECO region is below the rate of the developing countries, there are great variations among and within the member countries. According to the FAO statistics (1997-99) the share of undernourished population is 15.6 percent in ECO region. In Afghanistan, almost 70% of population suffers from malnutrition, which illustrates an alarmingly high level of food insecurity. Food insecurity and hunger are widely spread across the rural areas of ECO region. Women and children are more vulnerable groups to under-nourishment as well as refugees and nomadic populations, which result from civil conflicts and the use of traditional economic methods.

In order to address high level of poverty and undernourishment in the ECO region, the Secretariat started the food security initiative in 1998 in pursuance of the decision of the 8^th Meeting of Council of Ministers (COM).  Then, the matter has been taken up in the context of ECO Secretariat’s Capacity Building Project implemented jointly by UNDP.  Thus, the sub-project, Regional Cooperation on Food Security was launched at the end of the year 2000. The aim of this consultancy project mainly was to evolve a policy approach to food security based on regional cooperation among ECO countries. 

In the context of the project, a UNDP consultant and the concerned Director visited selected ECO member states, and prepared a concept paper which was circulated among the Member States. Then, the Workshop on Food Security and Agricultural Development in the ECO Region was held in cooperation with the Ministry of Agriculture and Rural Affairs of the Turkey on 29-30 May 2002 in Istanbul. 

Moreover, ECO and FAO have jointly carried out a Joint Identification Mission to selected ECO countries to assess the possibility of preparing a regional project document. In this project, the Islamic Development Bank (IDB) has generously provided financial assistance for the Secretariat’s participation. 

Also, as a follow up to the World Food Summit: five years later held on 10-13 June 2002, in Rome, where a specific Side-Event was held to discuss a regional food security strategy for ECO region and in line with the decisions of the 1^st ECO Ministerial Meeting on Agriculture held on 23-25 July, 2002 in Islamabad, a Technical Cooperation Programme (TCP) to support ECO for preparation of a Regional Programme for Food Security (RPFS) was signed by the ECO Secretary General and the FAO representative in Tehran, on April 7, 2003. The Technical Cooperation Programme will start first with upgrading in skills of the ECO Secretariat and the Member States for their direct involvement in situation analysis, formulation, appraisal, monitoring and evaluation of activities related to the Regional Programme for Food Security and its sub-programmes. 

Moreover, the TCP includes preparation of selected bankable projects for donor consideration. Such projects will be discussed in a meeting to be held in one of the financing institutes with the participation of the ECO and FAO as well as other donors. Some financial agencies have already expressed initial interest in the Regional Programme for Food Security, and requested that the necessary proposals be prepared to provide the basis for establishing agreements in providing their support. 

This programme paves the way for strengthened agricultural cooperation among the ECO Member Countries that all extend high priority to Food Security and sustainable economic development. The implementation of this programme has been started and the First Training Workshop on policy analysis is scheduled to be held in September this year in Kazakhstan with the participation of the focal points of the member states for food security.

Population and poverty 

Health and demographic indicators are also of importance in poverty analysis. The global population is projected to be about 9.3 billion in 2050, with more than 8 billion in less developed regions. To face this population adequately will require three times the basic calories consumed today, the equivalent of about 10 billion tons of grains a year. Population growth will also contribute to over-grazing, over-cutting and over-farming

Population of the ECO region is estimated to be 377.1 million in 2000, growing at an average annual rate of  2.1 percent in the period of 1995-2000. The average annual rate of population growth in the region is expected to fall to 1,6 percent by the first quarter of the next century.