Poverty Alleviation

Poverty Alleviation Programs aims to reduce the rate of poverty in the country by providing proper access to food, monetary help, and basic essentials to the households and families belonging to the below the poverty line.

Eradicating poverty in all its forms and dimensions, including extreme poverty, is the greatest global challenge and an indispensable requirement for sustainable development.

Priority actions on poverty eradication include:

• improving access to sustainable livelihoods, entrepreneurial opportunities and productive resources;
• providing universal access to basic social services;
• progressively developing social protection systems to support those who cannot support themselves;
• empowering people living in poverty and their organizations;
• addressing the disproportionate impact of poverty on women;
• working with interested donors and recipients to allocate increased shares of ODA to poverty eradication; and
• intensifying international cooperation for poverty eradication.

Poverty alleviation strategies:

Poverty is a challenge that developing countries can overcome through, among others, good economic and social policies, innovative and efficient use of resources, investments in technological advancement, good governance, and visionary leadership with the political will to prioritize the needs of the poor. These elements are vital in enabling the provision of schools, clinics, roads, electricity, soil nutrients, and clean drinking water that are basic not only for a life of dignity and health, but also for economic productivity. In several countries measures are already being implemented to combat extreme poverty and improve the standards of living of the underprivileged communities with steady progress being realized in several cases. Policy makers can learn important lessons from these poverty reduction measures and replicate and scale them up in other regions. Some strategies that developing countries can apply to reduce both the rate of poverty and number of the poor are:

Stimulating inclusive economic growth:

Economic growth is vital in enabling underprivileged communities to utilize their resources to increase both their output and incomes and thus break the poverty trap and be able to provide for their basic needs. However, for economic growth to be effective in reducing poverty, it needs to be both inclusive and to occur at a rate that is higher than the rate of population growth. The fact that agriculture is the dominant economic sector in poorest communities implies that efforts to combat extreme poverty need to be directed towards increasing agricultural production and productivity. Some concrete ways for achieving this overall goal include promoting the adoption of high yielding crop varieties and use of complementary inputs such as fertilizers and pesticides; increasing the use of land through technological improvements such as increased use of irrigation where water is a constraint to agricultural production; and, adoption of post-harvesting measures that reduce the loss of agricultural produce. These measures are costly and are likely to be unaffordable to poor households. Their increased adoption requires the provision of cheap credit on terms that are flexible and aligned to the unique circumstances of the poor. How credit programs are designed is critical because it can have a significant impact on poverty reduction and livelihood outcomes. When well designed, these programs can stimulate economic growth and enable poor communities to access financial capital for investment in income-generating activities. If poorly designed (e.g. if the interest rates are high and the repayment periods are short), credit programs can be not only exclusionary and inequitable, but the credit can also be misapplied, the poor entrapped in debt cycles, and economic growth and poverty reduction undermined.

Public Investment for welfare of Underprivileged Communities:

Stimulating economic growth also requires public investments in infrastructure such as roads, electrical power, schools, hospitals, and water and sanitation systems. These investments are important for several reasons. Good roads reduce transportation costs and generate diverse economic benefits that include increased ease of transporting agricultural produce to markets, ease of accessing agricultural inputs, and an increase in the profitability of income-generating businesses. Providing electric power to underprivileged areas not only results in improved standards of living but also stimulates the establishment of small-scale industries that process agricultural produce and thus contribute to value addition, in addition to creating much needed jobs. Providing safe, good-quality water for drinking and domestic use is vital in reducing incidences of debilitating water-borne diseases that are expensive to treat, saving time used to fetch water and enable the time and effort saved to be employed in more productive activities. More generally, investment in infrastructure will make rural economies more productive, increase household incomes, contribute to meeting basic needs, and enable greater saving for the future thus putting the economy on a path of sustainable growth.

Financing Support:

A key challenge that developing countries face in providing the infrastructure they need is financing. On this issue several researchers advocate for increased use of foreign aid to finance public infrastructure in poor developing countries. The rationale for this policy proposal is that developing countries are too poor and lack the financial resources for providing the infrastructure that they require to break the poverty trap and enable the provision of basic needs. Critical of foreign aid and assert that it not only undermines the ability of poor communities to develop solutions to their problems but also fosters corruption in governments and results in the utilization of the aid funds on non-priority areas. Foreign aid can foster economic growth if well-targeted and used efficiently. They however point out that in most cases foreign aid is a small fraction of the overall financing that is required and that developing countries must increasingly rely on their own resources that are generated through taxes. Successful financing of critical infrastructure and social services will therefore require more efficient expenditures of public resources and the eradication of corruption in governments.

Economic and institutional reforms:

An important step in reducing poverty in developing countries is the implementation of economic and institutional reforms to create conditions that attract investment, enhance competitiveness, ensure increased efficiency in the use of resources, stimulate economic growth, and create jobs. If well designed and implemented, these reforms can be instrumental in strengthening governance and reducing endemic corruption and poor accountability that have contributed to the poor economic performance of several developing countries. Some reforms that are needed include the strengthening of land tenure systems to encourage risk-taking and investment in productive income-generating activities; improving governance to ensure greater inclusivity, transparency and accountability; reducing the misuse of public resources and unproductive expenditures; ensuring a greater focus on the needs and priorities of the poor; maintaining macroeconomic stability and addressing structural constraints to accelerating growth e.g. by reducing the high costs of doing business and excessive regulatory burdens; and involving the poor, women, and the youth in decision-making. These reforms can benefit the poor by improving their access to land and other productive resources and by ensuring that their needs and priorities are adequately considered in policy making. Developing countries also need to reform their tax systems to make them more efficient and pro-poor.

To be continued in next article for remaining part.