Catalog

Reaching the Poorest

Reducing poverty while maintaining macroeconomic stability—can a balance be struck in poor countries?

By Omana Nair (onair@adb.org)
External Relations Specialist

Ways to accelerate poverty reduction in low-income countries in the region were the focus of the Second East Asia and Pacific Regional Conference on Poverty Reduction Strategies held in Phnom Penh, Cambodia, in October. More than 150 participants attended from six Asian countries—Cambodia, Indonesia, Lao People’s Democratic Republic (Lao PDR), Mongolia, Timor-Leste, and Viet Nam—and five observer countries—Bangladesh, Bhutan, Nepal, Papua New Guinea, and Sri Lanka.

The Asian Development Bank (ADB), International Monetary Fund (IMF), United Nations Development Programme (UNDP), and World Bank sponsored the three-day conference that started on 16 October 2003. Delegations included a mix of government and civil society representatives, parliamentarians, and academics. The first conference was held in Hanoi, Viet Nam, in 2001.

In his opening address, H.E. Samdech Hun Sen, Prime Minister of Cambodia, stated, “For the Royal Government of Cambodia, the war on poverty is not just a policy, but a passion. Poverty reduction defines and drives the substance, the content, the heart and soul, and entire strategy of our Government. Poverty reduction is not just a requirement of social justice, or an action of conscience, but also pragmatic economic management.”

The conference was a useful opportunity for partners to get together and discuss how to carry forward the poverty reduction strategy and meet the challenges of implementation. Many countries in the region have completed their first poverty reduction strategies and have achieved important gains in making policies more pro-poor and processes more participatory.

Jan P. M. van Heeswijk, Director General of ADB’s Regional and Sustainable Development Department, said in his opening remarks, “In Asia and the Pacific, optimism and hope have been intermittently clouded by heightened tensions and persistent threats of terrorism amid a slowdown in global economic growth. However, the underlying long-term problems continue to be deprivation, lack of opportunity, inadequate participation, inequity, and a sense of powerlessness.”

The conference themes—governance and promoting participation, transparency, and accountability; pro-poor growth; widening markets and trade, and the pursuit of regional integration; and the challenges in meeting the Millennium Development Goals and their linkages to poverty reduction strategies—are seen as key to assisting Asia’s fight against poverty.

East Asia, home to some 1.8 billion people with vast ethnic diversity and differences, has the most dynamic economy. However, 200 million people in the region still earn less than $1 a day. The challenges require each country in the region to strike a careful balance in its policy choices and emphasis on growth, equality, and stability.

Addressing the local media, Mr. van Heeswijk pointed out that the changing nature of the East Asian economic and financial landscape, combined with persistent governance problems in the region, has impacted negatively on the poor.

Brahm Prakash, ADB Director, Poverty Reduction and Social Development Division, told journalists that countries could learn from East Asia’s growth-led poverty reduction experience that is unique in the developing world. “In this sense, this conference is not only about building further on the experiences of the last two years but is also about showing the way forward to the developing countries that are lagging behind.”

Countries highlighted their success in reducing poverty while maintaining macroeconomic stability, which is essential for pro-poor growth. The need for realistic budget frameworks, with adequate flexibility to help meet shocks, was seen as a key element in successful implementation.

Since the majority of poor people live in rural areas, delegates stressed that investing in rural development and agricultural productivity—roads to markets, schools, health facilities, telecommunications, improved access to technology, and training—is a priority. Delegates explored other ways of taking advantage of trade opportunities. Strong calls were made for rich countries to reduce their barriers to poor countries’ exports, and to advance multilateral trade agreements.

Jacques M. Ferreira, ADB Principal Regional Cooperation Specialist, gave a presentation on regional cooperation. He discussed how regional cooperation initiatives contribute to growth and poverty reduction in the developing countries of the region. He cited as a success story the ADB-supported Greater Mekong Subregion Economic Cooperation Program that was established in 1992.

Email this to a friend