Agenda Item 9
Proposals for Poverty Alleviation in the ECO Region
( Tehran, 21-23 July, 2003 )
ECO Secretariat Background Paper
8th Consultative Meeting of
Executive Heads of Sub-Regional Organizations
“O love, O pure deep love, be here, be now.”
Molana Jelaluddin Rumi
“Everyday, I am afraid of the next.”
From Russia, Voices of the poor
“Your hunger in never satiated
Your thirst is never quenched
You can never sleep
Until you are no longer tired”
From Senegal
ECO Secretariat through various projects have contributed to poverty alleviation efforts in its member countries. But, the Secretariat did not have so far a direct poverty reduction programme for the region. In fact, at present ECO Secretariat lacks financial resources for ambitious poverty reduction programmes. Therefore, for the time being, it may be advisable to have joint projects with international organizations and donor institutions for poverty alleviation programmes and projects in the ECO region.
Furthermore, ECO has several high level meetings such as Summits (with the participation of Heads of States) and Council of Ministers Meetings to ensure political will of its members in combating poverty and possibly mobilize national resources for that purpose. ECO believes that the cooperation for poverty alleviation should also concentrate on the mobilization of national potentials and implementation of successful policies at national level to have a real nationwide effect.
International organizations can contribute to and play a catalyst role in the process. In that context, ECO can act as a policy dialogue and exchange of views platform for poverty alleviation. ECO, as a sub region of various international organizations is ready to cooperate with all relevant international organizations on this very important matter.
Within that context, a number of proposals and policy advices for poverty alleviation at national, regional and global levels are given below to serve as basic ideas and areas of policy dialogue for the ECO countries. Some of these proposals are new and some of them have already been implemented in some countries. Successful practices can be extended to other parts of the region.
1. Regular monitoring of people especially in high poverty incidence regions to determine the needy people. Real monitoring at district level.
2. Data banks can be established at national level which will contain the list of poor and needy people together with the type of assistance needed, actions taken so far, progress and rate of success in each particular case.
3. More dedicated and integrated national campaigns, with time framed targets and adequate -if possible self financing- resources. The campaigns should be designed and implemented together with all relevant government departments, NGO’s, universities, private sector etc.
“The struggle should be put on top of the national agendas”. Within that context, more efficient national coordination and follow-up, possibly under the chairmanship of a high ranking person like prime minister should be realized.
4. Launching macro economic policies inducive for economic growth.
Some studies and practical experience show that economic growth has in general a positive impact on poverty alleviation as it may lead to more job opportunities, better payment, access to better facilities etc.
Within that context, improving Investment Climate, Special Incentives for high employment generating businesses, Promoting SME’s, FDI Flows, Liberalization of Trade can be considered.
Regarding macro economic policies, high rates of inflation is also a major cause of poverty and income deterioration in some ECO countries. Therefore, anti-inflationary policies are essential.
5. Sound policies to reduce income inequality should be launched.
Policies for economic growth should be complemented with policies geared to reduce income inequality. Otherwise, possible positive effects of growth may become very limited. Policies for reducing income inequality may also have a very positive impact on social peace and motivation.
Within that context, further decreasing the direct or indirect tax burden of the poor may be considered.
6. Social Security System and Poverty Reduction
Social Security Systems can help the reduction of poverty. But in some countries, on the contrary, it may absorb a huge number of budget and may harm poverty reduction efforts. In fact, there are actuarial balance problems in some social security institutions due to a number of factors as increasing number of retired persons and inefficient use of capital in the establishment phase of the institution.
Social security systems can be redesigned to fully contribute to poverty reduction. Various retirement schemes may be introduced. A portion of taxes collected from low-medium waged employees can be transferred to social security schemes. With good management, income generation activities for security systems can be encouraged.
“Safety-nets encompasses various transfer programs designed to play both a redistributive and risk reduction role in poverty alleviation. Safety nets are programs that protect a person or household against the adverse outcomes of chronic incapacity to work (chronic poverty) and a decline in this capacity from a marginal situation that provides minimal means of survival with few reserves (transient poverty). These programmes can include, among others:
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food subsidies | |
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feeding programs | |
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public works and other employment programs | |
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credit-based self-employment programs | |
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social funds and related interventions | |
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and child allowances. |
Most societies have informal community-based arrangements that help mitigate against deprivation and temporary income shortfalls which may be called as private safety nets. For example, in the Gambia and Pakistan, transfers to the needy are provided within the Islamic context of "zakat" (an earmarked tax on the wealthy Muslims to be used for the sustanance of poor people).” *1
With this definition which covers some most important aspects of poverty reduction, safety nets can vastly contribute to poverty alleviation efforts in the ECO region.
Especially during period of economic reforms including privatization, as side effects, some segments of the population may be deprived of their present opportunities. The aim of a well designed safety net is to provide aid to the vulnerable during the times of their greatest need. These aspects of safety nets make them a great potential tool for poverty reduction in the ECO region. In fact, ECO countries have long historic traditions of poverty alleviation through social solidarity.
8. Decreasing unemployment
ECO Region has very young population structure. This makes decreasing unemployment a priority task.
Within that context, SME support and promoting other income and employment generating activities should be considered. For example, companies that generates employment opportunities even for a few people can be exempted from certain taxes, given suitable financing, promoted by consultancy and other types of supportive services. This type of policies are implemented in some countries.
Unemployment insurance without impairing the motive to work.
9. Micro credits – Micro Finance
A well designed micro finance programme can improve the revenues of the poor people substantially with a very high return rate. For having a real nationwide economic effect, massive funds should be allocated especially in targeted high potential economic activities. Marketing assistance including access to export markets should also be considered.
10. A Major Emphasis on Education including vocational training
The results of 1994 Household Income Survey in Turkey show that 95 percent of the population living in absolute poverty is composed of those people whose education level is either primary school or below and illiterate people. Poverty and inability to access proper education causes each other. In order to end this vicious cycle, a major emphasis on education is needed in the member countries.
Within that context, intensive vocational training programmes in highly needed areas can also be recommended.
11. Promoting Private and Voluntary Institutions (Vakifs) and other NGOs for helping the needy people.
Governments may initially help these institutions during establishment period, extend financial assistance, consultative services, some exemptions etc.
12. In countries with strong private sector, direct linkages with poor people and private sector should be established.
• Tax exemptions and social rewards may be extended for donors and leading figures for poverty alleviation.
• “Private sector can be encouraged to invest in poor regions so to decrease unemployment and poverty.”
13. Allocating certain taxes solely for poverty reduction programmes
Among others, the taxes from luxury consumption goods can be directly transferred to poverty reduction programmes.
14. Providing basic health services for the poor. Regular health checks in needy areas through mobile facilities.
“Poor health traps the poor in poverty, and poverty keeps them in poor health.”
15. Regular distribution of food and establishing eating houses in poverty intense areas.
16. Helping the poor people in finding shelter, housing assistance
17. Marriage Assistance
18. Special care for the handicapped and elderly people.
In periods of high unemployment, unless special policies are implemented, finding a job becomes almost impossible for the handicapped people. Private sector may be encouraged to employ more handicapped people on part time or full time basis in jobs which comply with their talents and pyhsical capabilities. (For example, Daimler Benz employs people with Down’s syndrome in the production of car glasses for Mercedes.)
Apart from this, for the people totally unable to work and needy, governments can allocate a certain amount of salary, which will help them and their families for a sustainable life.
19. Alleviating underlying causes of rapid urbanization.
Rapid urbanization is a major source of urban poverty in ECO countries. Rapid urbanization causes an intensive demand for education, health, drinking water, sewerage; housing, urban transportation, which with limited budgets, cannot be responded. As the region has a high level of rural population, the trend for urbanization is expected to continue. Urbanization within tolerable limits can be the basic objective.
20. Role of Municipalities
21. “Good Governance, Anti Corruption”
Corruption is a major impediment to economic growth in some corruption and may prevent the trust in society and hamper motivation to work.
22. Special Programmes for rural poverty
Food insecurity is possibly the most important dimension of poverty. In some countries poverty is mainly concentrated in rural areas. Production of adequate and safe food, reclamation of new areas, efficient use of available land, training, irrigation systems, provisioning of seeds, establishing distribution and trade channels can be considered under food security programmes. If subject areas aren’t suffering from drought and other calamities, it is relatively easy to realize food security since even supplying these areas with free / cheap seeds and basic tools (irrigation, harvesting etc) can help to great extend for their daily sustenance.
• ECO has recently initiated a Food Security Programme with FAO.
• First ECO Ministerial Meeting on Agriculture has, among others, determined drought management, water management, trade promotion, development of post harvesting and processing industry as priority areas of cooperation along with coordinator countries. This year ECO will organize several events which will also contribute to food security in the region.
• Land reforms –where applicable- with social consensus.
Declining size of land per person is a major cause poverty and tension in some parts of the world. For that reason, intensive farming methods and efficient use of marjinal land should also be considered.
• New job opportunities, working areas for the rural people. Agro-Industries. Non village job opportunities.
On the other hand, “Member countries may intense their efforts for building basic rural infrastructure in every part of their countries, diversify the economy and improve transportation and access to markets, market information and credit for the rural poor to support sustainable agriculture and rural development.” *
“Special Programmes may be developed for transferring basic sustainable agricultural techniques and knowledge, including natural resource management, to small and medium-scale farmers, fishers and the rural poor, including through multi-stakeholder approaches and public-private partnerships aimed at increasing agricultural production and enhancing food security.” *2
“Food availability and affordability may be increased through harvest and food technology and management as well as equitable and efficient distribution systems by promoting community-based partnerships linking urban and rural people and enterprises.” *
23. Special Assistance and replacement for high risk vulnerable areas.
Floods and other natural calamities are sources of temporary, sometimes permanent poverty and deprivation. High risk areas can be evacuated with better alternative places.
“Member countries may also mitigate the effects of drought and floods through measures such as the improved use of climate and weather information and forecasts, early warning systems, land and natural resource management, agricultural practices and ecosystem conservation.” *2
24. The link between poverty reduction and forestry.
In high forest areas, are new methods of farming possible without harming the nature? Otherwise, some people tend to destroy the forests for opening up new fields for agriculture. Or alternative farming areas can be considered.
25. Physical Security
In some parts of the world, due to wars and civil unrest poverty comes with physical insecurity. The roads become insecure, houses become insecure, lifes become insecure.
26. A higher voice, participation of the poor in economic decision making processes and national poverty alleviation programmes.
1. Organizing a Meeting of Poverty Reduction Institutions from member countries to discuss areas of cooperation and exchange of experiences and resources.
2. Considering the establishment of an ECO Poverty Alleviation Fund with contributions from members countries, international donors, private sector and individual donors from all over the world.
For ensuring a more sustainable structure, this fund may be partly invested in income generating areas.
3. Establishing an ECO Scholarship Fund for financing the education of needy students especially in priority areas like regional trade experts, organic farming. Mediation for scholarship may also be considered.
4. Liberalization of Trade Among the Members
Liberalization of trade may make more goods available for the people and reduce the costs, therefore the price. Also new job opportunities, businesses may be generated.
Preferential Trade Agreement among ECO Members (ECOTA) stipulates progressive reduction of tariffs. After the ratification of required number of member countries this agreement will be quite functional for trade liberalization in the region and adoption of further steps.
5. Establishing a Website and discussion forum for sharing of information and experiences.
1. At Global level the resources for combating poverty is insufficient. For ensuring an efficient utilization limited resources, a positive coordination and even competition is needed among donors: international agencies, national technical assistance institutions, NGOs and private people.
A Massive global aid campaign may be launched with the participation /contribution of peoples all over the world, private sector, NGOs, Governments, International Organizations, Universities and private people. The administration of the Fund should be participatory. The accounting should also be transparent. The projects should also aim mobilization and realization of existing national potentials in needy areas.
External assistance should be formulated as such to promote political will and dedication at national level and mobilization of national resources.
2. Developing countries’ access to international markets should be facilitated.
3. Relief from External Debt
There are positive signs such as Heavily Indebted Poor Countries (HIPC) Initiative. But apart from this, most developing countries allocates huge amounts of money for debt service, which migth be spent for development and poverty reduction.
In fact, total external debt of developing countries has increased from 1,867 billion dollars in 1995 to 2,189 billion dollars in 2002. Meanwhile, debt service of developing countries has increased from 231 billion dollars to 309 dollars in the same period. A heavier debt burden meant less money for social transfers.
4. A More Peaceful International Environment
Defense expenditures absorb a huge amount of budget even in very poor countries. For example, “in sub-Saharan Africa, which is considered as one of the poorest regions in the world, around US$ 8 billion were spent on arms in 1995”.
Global and regional peace initiatives should be encouraged to help countries in decreasing their defence expenditures. Within that context, huge weapons industries in developed world should be evolved to peaceful industries.
* 1 World Bank Website: http://www.worldbank.org/poverty/safety/
* 2 Adapted from the recommendations of Paper on “Combating Poverty And Food Insecurity In The Least Developed And Low-Income OIC Member Countries”, Submitted to the Thirtieth Islamic Conference of Foreign Ministers by Statistical, Economic, and Social Research and Training Center For Islamic Countries (SESRTCIC).
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