the oxfam poverty report

8/7/2019 The Oxfam Poverty Report

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OXFAMPOVERTYREPORT

Kevin Watkins

OxfamUK & Ireland


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The Oxfam Poverty Report

Oxfam (UK and Ireland) 1995A catalogue record for this book is available from the British Library.ISBN 0 85598 318 3All rights reserved. Reproduction, copy, transmission or translation of any part of thispublication m ay only be m ade u nd er the following conditions: with the prio r written permission of the publisher with a licence from the Copyright Licensing Agency Limited, 90 To ttenham Co urt Road,London W1P9HE.UK for quotation in a review of the work un de r the terms set out below.This publication is copyright, but may be reproduced by any method without fee for teachingpurposes but not for resale. Because Oxfam wants to know how widely its materials aredissem inated, formal permission is required for all such uses, but will be gran ted imm ediately.For copy ing in any other circumstances or for re-use in othe r pub lications, or for translation oradaptation, prior written permission must be obtained from the publisher, and a fee may bepayable.Available in Ireland from Oxfam in Ireland , 19 Clanwilliam T erra ce, Dublin 2.Tel: 01 661 8544.Published by Oxfam (UK and Ireland), 274 Banbury Road, Oxford OX2 7DZ, UK.in association with Oxfam America, Oxfam Canada, and Oxfam New Zealand (for contactaddresses, see p.250).Designed by Oxfam Design Department OX1834/PK/95Printed by Oxfam Print UnitOxfam is a registered charity no. 202918.

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IntroductionAcknowledgements vIntroduction 11 Poverty 122 A world at war 423 Structural adjustment 714 International trade 1095 Ecological footprints 1516 Aid, debt, and development finance 1717 An agenda for change 216Notes 227Index 243

Information on the international Oxfam group 250


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Figures and tables0.1 C hanges in the perc entag e of the population living in poverty 41.1 Child ren aged 6-11 out-of-school 1980-2015 261.2 Com parative spend ing on primary and secondary education 402.1 Global refugee statistics 1988-1993 442.2 W eapon sales to develop ing countries by pe rm anen t mem bers of the UN Security Council

593.1 Real expe nd itur e pe r pup il in prim ary school, Zimbabwe 803.2 He alth and education sector spen ding , Zambia 1981-93 823.3 M aternal deaths and Ministry of Health recu rrent expen diture per capita, Zimbabwe 844.1 S ub-S aharan Africa's share in world expo rts 1971-1991 1164.2 Percen tage grow th rate of the economy of developing cou ntries according to type of

exports 1174.3 GATT winners and losers 1294.4 Price fluctuations for coffee and cocoa 1315.1 Cu rren t annu al carbon dioxide release per person 1566.1 Global aid and private investment flows, and develop ing coun tries'share of the private

investment 1736.2 IMF transfers to SILICs 1980-94 1756.3 Latin Am erican and Caribbean debt 1980-94 1776.4 SILICs deb t stock and arre ars 1980-94 1806.5 D istribution of debt by creditor category 1836.6 Official aid from dono r cou ntrie s, showing percen tage for social prior ity areas 194


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AcknowledgementsThis report is a co-operative effort which has drawn heavily upon contributions fromOxfam's staff and partners. Chapter 5 was written by Caroline Lequesne. A number ofcase studies were prepa red by Siddo Deva, who also contributed to Chapter 1. Chapter2 draws on the work of Ed Cairns and Guy Vassall-Adams. Substantial parts of Chapter6 were written by Tricia Feeney and Chris Roche. Dianna Melrose contributed to thewriting of sections of the report, and was responsible for overall co-ordination of theproject.We are especially grateful to Rosemary Thorp of St Antony's College, Oxford, andQueen Elizabeth House, Oxford, for acting as chairperson for a small group of Oxfamtrustees who made an important contribution to the development of the report. Theother members of this group were Chaloka Beyani of Wolfson College, Oxford, BruceColes QC, and Jeremy Swift of the Institute for Development Studies, Sussex, whosecomments were particularly challenging and thoughtful.Several other external readers made time to comment on various drafts. MichaelHolman of the Financial Times and Professor Sir Hans Singer of the Institute forDevelopment Studies, offered constructive criticism and perceptive observationthro ughout, despite being presen ted with virtually impossible deadlines. Gavin Williamsof St Peter's College, Oxford, provided particularly helpful comments on Chapter 3.Guy Mhone of the Southern African Regional Institute for Policy Studies, and NikiJazdowska of the Training and Research Support Centre (TARSC) offered valuableinsights and criticisms of various parts of the report. We hope they will feel that theircombined efforts have brought about improvements in our analysis, although any errorsremain th e responsibility of Oxfam alone.

There is insufficient space to acknowledge all of the Oxfam staff who have contributeddirectly or indirectly to the report. However, special thanks are due to Michael Bailey,Cowan Coventry, Justin Forsyth, Pushpanath Krishnamurthy, Ruth Mayne, LucyMuyoyeta, Ben Rogaly, Mogha Smith, Simon Ticehurst, Helen Walsh, and IanWoodmansey, for their input; and also to Paul Kendall, for designing the graphics.Kevin W atkins, Oxfam Policy DepartmentOxford, May 1995


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IntroductionThe battle for peace has to be fought on two fronts. The irst is the security front, where victory spells

freedom from fear. The second is the economic and social front, where victory spells freedom fromwant. US SECRETARY OF STATE, CORDELL HUL L, 1945Our common humanity transcends the oceans and all national boundaries ... Let it never be askedof any of us what did we do when we knew another was oppressed?

NELSON MANDELA, PRESIDENT OF SOU TH AFRICA, 1992

Were all human ity a single nation-state, the present North-South divide wou ld make it anunviable, semi-feudal entity, split by internal conflicts ...a world so divided should be regarded asinherently unstable. TH E SOUTH COMMISSION, 1992

The vision that fadedHalf-a-century ago, the United Nations emergedas a beacon of hope out of the darkness of theSecond World War and the years of economicdepression, social dislocation, and internationaltension which preceded it. The institutions ofglobal governance which emerged alongsidethe UN in the post-war period were partly aresponse to the failures of the 1930s, and partlythe product of an inspired vision for the future.The resolve which under-pinned that visionwas rooted in the two simple words 'neveragain'. Never again should violence and conflictbe allowed to destroy the lives of the world'speople. Never again should poverty and massunemployment be tolerated. And never againshould governments relinquish responsibility

for protecting the most basic social andeconomic rights of their citizens.The UN Charter and the Universal Declara-tion of Human Rights provided the moralframework for a new system of rights andobligations upon which the new order was to bebuilt. Far from being empty rhetorical flour-ishes, these documents were statements of in-tent. As President Roosevelt wrote: 'this is novision ofa distant millenium. It is a definite basisfor a world attainable in our own time andgeneration."The five decades which have elapsed since theUN was founded have witnessed someremarkable changes. Global economic wealthhas increased sevenfold and average incomeshave tripled. The record of advancement inhuman welfare, measured by increased life

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The Oxfam Poverty Reportexpectancy, falling infant mortality, improvednutrition, and increased educational attain-ment, has been unprecedented. Yet in themidst of this progress, the basic rights en-shrined in the UN Charter are being violatedon a massive scale. For the millions of women,men, and children whose lives are beingdestroyed by armed conflict, the Charter'spledge to 'save succeeding generations from thescourge of war' offers a cruel parody of reality.As we near the beginning of the twenty-firstcentury, genocide, systematic attacks uponcivilian populations, and mass rape, are claim-ing unprecedented numbers of victims.

But no combination of war or natural disasterinflicts suffering or destroys human potentialon the scale of the 'silent em ergency' of poverty.Today, one-in-four of the world's people live ina state of absolute want, unable to meet theirbasic needs. Millions more live close to thisperilous condition on the very margins of sur-vival. In a world where technological frontiersare being pushed back at a breathtaking rate,35,000 children die every day from diseaseswhich could be prevented through access toadequate nutrition and the most basic healthprovision.2 Meanwhile, one half of the world'spopulation is systematically discriminatedagainst and denied opportunity, for the 'crime'of having a female chromosome.Even stated in coldfigures, he scale of globaldeprivation retains the power to shock. Butfacts and words alone can never capture thesuffering inflicted by poverty. They cannot, forexample, convey the tragedy of the one-in-sixAfrican children who will not live to see theirfifth birthday; or of the half-a-million womenwho die each year from causes related to preg -nancy and inadequate health care. Nor can theyhope to capture the vast wastage of potentialrepresented by the 130 million children who donot attend primary school.Through its international programme, Oxfamwitnesses on a daily basis the destructive power ofpoverty in the poorest villages and slums of thedeveloping world. It also witnesses the quietheroism of ordinary women and men seeking toprotect their comm unities and rebuild their lives

in the face of forces over which they have littlecontrol. Few of these people have heard of theUN Charter, yet through their actions they arestriving to achieve a world which reflects itsprinciples. In the slums of Peru and Zambia,Oxfam's partners are working with communitieswho are attempting to maintain the most basiclevels of health, education, and nutrition despitedevastating economic pressures. In the free-trade zones of Mexico and the DominicanRepublic, they are supporting the efforts offemale workers to establish basic employmentrights , non-discriminatory labour practices, anda living wage. In ecologically degraded drought-prone areas in southern Africa, vulnerablecommunities are developing water conservationand cropping systems aimed at enhancing theirsecurity. And in Brazil and Colombia, localgroups are working with Indian communitiesand black farmers to protect the land rights uponwhich their survival depends from encroach-ment by commercial interests.Working together for changeLocal initiatives of this type provide a powerfulforce for change. So, too, do the growing num -ber of community groups and non-govern-mental organisations (NGOs) which haveemerged in response to the deepening develop-ment crisis. New alliances for change areemerging. In Brazil, a mass campaign againsthunger has brought together churches, tradeunions, NGOs, the private sector, and localgovernment, involving millions of people inpractical local-level action to raise awareness ofthe causes of extreme poverty. This is apowerful example of co-operation betweendifferent layers of civil society in response to anerosion of social and economic rights.

Alliances are also emerging on the inter-national stage. Many of Oxfam's partners wereamong the thousands of NGOs which lobbiedthe Earth Summit in 1992 and the WorldSummit for Social Development in 1995. Thecommunique's agreed at those Summits bearthe imprint of their influence. Some NGOs arenow working to encourage the public pressu re


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Introduction

for change which will be needed to translate theagreed principles into practice. Others areworking together in regional and internationalnetworks to address human development prob-lems associated with conflict, trade, and finance,in an attempt to force the interests of the pooron to the agendas of the world's governments.The new global alliances which are emergingreflect a growing recognition of the challengescreated by the globalisation of the worldeconomy. Foreign investment and inter-national trade flows are creating a world ofincreasingly porous borders, in which govern-ments are being superseded by formidablypowerful transnational companies (TNCs). Thederegulation of markets and the growingpower of international financial institutionshave contributed to this trend. Yet there havebeen no countervailing measures to protectglobal citizenship rights in the manner envis-aged by the UN. In a small way, the inter-national alliances of citzens' groups which arenow emerging are starting to fill this gap,building bridges between local action and inter-national policy debates. Once again, this is apositive contribution towards the creation ofthe type of world envisaged by the UnitedNationsRich and poor: the w idening gapBut while local communities and citizens'groups have emerged as a powerful force forpositive change, the same cannot be said forgovernments. If poverty were an infectiousdisease, which could be caught by the rich aswell as the poor, it would have been eradicatedlong ago. Political will and financial resourceswould have been found in abundance, just asthey were to develop instruments of mass des-truction during the Cold War. Yet govern-ments, North and South, have been willing totolerate and acquiesce in the steady marginal-isation of the poor.

Fifty years ago, the post-war settlementsought to establish a framework for sharedprosperity. Markets were to play a central role

in expanding that prosperity. But the extremesof poverty, inequality, and instability associatedwith uncontrolled markets were to be avoidedthrough state regulation, in the public interest,at both national and global level. Today, how-ever, most governments and the internationalfinancial institutions created at Bretton Woodsto oversee the new order, place far too muchfaith in laissez-faire economic policies. Povertyredution is supposed to emerge principally as aby-product of market deregulation, with thebenefits of growth gradually trickling down tothe lowest stratas of societies. In reality, thedivergence in living standards between rich andpoor is assuming ever more signigicant propor-tions.

Economic growth is imperative if poverty is tobe reduced. But the distribution of wealth is asimportant as its creation. At an internationallevel there is a gross maldistribution, with thestructures of world trade and finance support-ing an increasing concentration of wealth in theindustrialised world. In 1960, the richestfifthofthe world's population living in the industriallyadvanced countries, had average incomes 30times greater than the poorestfifth, iving in thedeveloping world. By 1990, they were receiving60 times more.5 Calculating real purchasingpower differences, as the InternationalMonetary Fund now does, reduces the disparitybut it is still greater than 50:1.4 While it is truethat the Third World is not a homogeneousbloc, and that some countries, notably in EastAsia, have increased their share of worldincome, the poorest countries are fallingfurther behind. The poorest 50 countries, most-ly in Africa, have seen their incomes decline tothe point where they now account for less than2 per cent of global income.5 These countriesare hom e to one-fifth of the world's people.

The persistence of povertyDevelopments within countries have mirroredthe trends in the international economy, withthe poorest sections of society becomingincreasingly marginalised. In most developing


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Figure i.l Changes in thepercentage of the p opulationliving in poverty 1985-2000(projected)

SOURCE: UN

countries, the poorest fifth of the populationshare between them, on average, little morethan 5 per cent of national income, while thewealthiestfifthclaim over half.Nowhere in the developing world are thecontrasts between poverty and national wealthmore striking than in Latin America and theCaribbean . While average incomes are six timesthose in Africa, some 200 million people live inpoverty. Inequalities are widening across theregion. Despite its financial crisis, Mexico hasachieved one economic distinction: it has theworld's fastest growing number of billionaires,with 13 in 1994.6 Th e combined wealth of theseindividuals is more than double the combinedwealth of the poorest 17 million Mexicans,whose share of national income is falling. Moregenerally, while the middle and u pper classes ofthe reg ion enjoy living standards comparable to

those of the industrial world, millions of families from the Altiplano of Bolivia to the slums ofPeru and Brazil are no better off than sub-Saharan Africans. Almost one million childrenin the region die each year from causes whichare largely preventible, and another sevenmillion are malnourished.7Left unchecked, poverty will continue toclaim victims on a growing scale. On presenttrends, the number of people living in povertycould rise to 1.5 billion by 2025. In South Asia,home to the world's largest population of poorpeople, the proportion of people living belowthe poverty line is falling, but the absolutenumber is rising. Sub-Saharan Africa is a specialsource of concern because poverty is increasingnot only in terms of the total numbers affectedbut also as a proportion of the population. Bythe end of the decade, the ranks of the 218


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Introduction

million Africans living in poverty will haveswelled to 300 million, with the downwardspiral in human welfare indicators likely to con-tinue into the next century . Sub-Saharan Africais now the only part of the developing world inwhich infant mortality rates a re rising and liter-acy levels falling. For Latin America, growthpatterns imposed on the region's grossly un-equal social structures offer a future ofincreased marginalisation for the poor.The tendency towards increased poverty andinequality is not confined to developing coun-tries. In the United States an additional four

million children fell into poverty during the1980s, even though the wealth generated by thecountry's economy expanded by one-fifth.8 By1992, child poverty affected 22 per cent of allchildren, and infant mortality rates for blackchildren were more than double those for whitechildren.9 In the European Union, the numberof people living in poverty grew from 38 millionto 52 million between 1975 and 1988. Severalcountries experienced a dramatic increase inpoverty and inequality.10 For example, until themid-1970s, income inequality in the UK was insteady decline as economic growth increasedgeneral prosperity. However, over the period1979-1992, the poorest quarter of thepopulation failed to benefit from economicgrowth. As a result, the proportion of the pop-ulation with less than half the average incomehas trebled since 1977. Today, 12 millionpeople live on less than half the average income,more than double the number in 1979; and thenumber of individuals living below the povertyline has increased from 5 million to almost 14million."

The 'culture of contentment'Of course , poverty in the industrialised world isnot in the same category as poverty in thedeveloping world, being measured in terms ofrelative deprivation rather than absolute want.However, the willingness of governments in theworld's richest countries to tolerate the exclu-sion of so many people from an acceptable way

of life at home, speaks volumes about a widerindifference to poverty.Writing about his own society, the Americaneconomist JK Galbraith has described a 'cultureof contentment', in which governments repres-enting a prosperous majority are willing tomaintain an economic system which disen-franchises a large 'underclass'.12 The enjoymentof prosperity for the contented majority isdisturbed only by a continuing threat of'under-class' social disorder, crime, and conflict. Therole of the state, in Galbraith's account, isbecoming similar to that of a security firm,containing social tensions within urban ghettosat minimal cost. The alternative of raising taxesto address the underlying causes of socialmarginalisation, is ruled out on the groundsthat it would alienate the prosperous majorityupon whom re-election depends. Yet it is in thistension between security and the suppression ofthe 'underclass' tha t Galbraith identifies a forcefor change. He writes: 'The age of contentm entwill come to an end only when and if the adversedevelopments that it fosters challenge the senseof comfortable well-being.'1'

Most people in the industrial world willfindaresonance between Galbraith's sobering des-cription of US political life and their own exper-ience. While the majority of people in mostindustrial countries have attained levels ofaffluence which would have been unthinkableeven 20 years ago, insecurity has also reachedrecord levels. Drug dealing, inner-city crime,family disintegration, mass unem ploym ent, a renow all aspects of everday experience. Th e mostimmediate costs are borne by the poor, butthere is a deep and pervasive sense of societybreaking down in a manner which threatenseverybody. There is also a deepening sense ofunease at the social and moral implications ofallowing poverty, homelessness, and wideninginequality to destroy the lives of vast num bers ofpeople, and at the waste of hum an potentialcaused by poverty. The ethos of the 1980s,when the pursuit of individual advancementwas presented as a form of inadvertent altruism,is now questioned both on grounds of self-I


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interest and out of moral concern. The newethos of enlightened self-interest was reflectedin one recent report on inequality in Britain,which concluded:Failure to reintegrate (the) excluded minority into themainstream of society will leave the well-to-do major-ity with a heavy price to pay in terms of increased pub-lic spending, wasted econom ic resources and socialdislocation."

The challenge is to extend this enlightenedself-interest and moral concern to the inter-national stage and to developing countries.Th ere , too, a culture of contentment is much inevidence. Northern governments, whichcontrol the governance of the world economy,are contentto tolerate and maintain trade andfinancial structures which concentrate wealth inthe industrialised world, while excluding thepoorest countries and people from a share inglobal prosper ity.For their part, most Third World govern-ments have their own culture of contentment.They maintain systems of income and landdistribution which exclude poor people; theyconcentrate public investment in areas where itmaximises returns to the wealthy and mini-mises returns to the poor; and all too often theywaste vast sums on armaments, creatingmilitary machines which are as impressive astheir country's human welfare indicators aredepressing. One aim of Oxfam's campaign is tobuild a b ridge between citizens in the North andthe South who are working to challenge theforces which deprive people of their rights atlocal, national, and international levels.Shutting out the problemsUnderpinning the global culture of con-tentment is a presumption on the part ofNo rthern governments that the social problemsassociated with international deprivation can be'ring-fenced', or contained within discreteboundaries; but this is not possible. Deepeningpoverty is one of the main driving forces behindthe civil conflicts which are creating unprece-

dented numbers of refugees and displacedpeople. It is also causing the growth of sprawl-ing urban slums, which have become focalpoints for social tension, and political di-saffection. Migration to these slums is beingenforced by environmental degradation,linking town and country in a vicious circle ofsocial decline.The consequences of such trends cannot, asNorthern governments appear to imagine, becontained by border controls. Social collapseand the disintegration of states has been accom-panied by the mass migration of refugees, the

increase in international drug trafficking andorganised crime, the spread of regional ten-sions, and recourse to violence. Just as crimeand social breakdown in the industrial worldwill not respect the boundaries of affluentmiddle-class suburbs, so the forces unleashedby conflict and global poverty will not respectnational borders, however well-defended theymay be; and however restrictive the immigra-tion policies of the states which control them.The architects of the UN system, with theexperience of the Great Depression a vividmemory, recognised that real security couldnever be built upon poverty. That was theoverwhelming lesson of the 1930s which theytook with them into the San Francisco confer-ence which established the UN. Without peace,the UN Charter recognised, there could be nolasting social progress; but without socialprogress there could be no lasting peace. Thus'freedom from want' and 'freedom from fear'

became the rallying calls for a new o rder to bebuilt upon the foundations of international co-operation and shared p rosperity. Fifty years on,there is a new crisis in hum an security every bitas threatening as that which gave rise to the UN.

People are desperate for alternatives whichoffer hope , instead of a world scarred by deep -ening poverty, inequality, and insecurity. Yetthe institutions created 50 years ago to win thepeace are failing, with governments, to offeralternatives. In large measure, this can betraced to a vacuum in political leadership.Indeed , at no stage in post-war history have the


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Introduction

challenges facing humanity been so great andthe political vision of world leaders so myopic.The need for a renewed visionThe anniversary of the UN provides an oppor-tunity for governments and citizens' groups toprovide a new vision for human security andpoverty eradication into the next century. Inthe past, moments of crisis in the twentiethcentury have brought forward acts of greatpolitical courage and imagination. The NewDeal of the 1930s and the Beveridge Reportwhich founded the British welfare state are twoexamples. Writing in the 1940s, WilliamBeveridge defended his declaration of waragainst the 'five great evils' of ignorance,disease, squalor, idleness, and unemployment,by emphasing the scale of the challenge to beconfronted. 'A revolutionary moment in worldhistory,' he wrote, 'is a time for revolutions, notfor patching .' A similar sense of purpose under-pinned the UN Charter, which established inembryonic form an international charter ofcitizenship rights. The challenge today is bothto develop and to implement new socialcompacts at the national and international levelthrou gh which these rights can be realised. Thiswill require institutional change as well asreforms in economic policy. Weak institutionswhich are loosely connected to civil societycannot oversee the effective implementation ofstrategies for achieving social and economicrights, however well-intentioned governmentsmay be . That is why transparent and accountablegovernment, popular participation in decision-making, and investment in institutional reformare essential to genuine development.

Much of the overall framework for trans-lating social and economic rights from principleinto practice already exists. The InternationalCovenant on Economic, Social and CulturalRights, which came into force in 1976, en-shrines most of the social and economic rightscontained in the UN C harter and the UniversalDeclaration, including the rights to adequatenutrition, basic education and health care,

shelter, and non-discrimination. Most of theworld's governments have signed thisCovenant. Unfortunately, they have done sowithout any serious intention of implementingit. This reflects a wider debasement of thecurrency of social and economic rights.In 1993, the world's governments adopted acommunique' at the Vienna Conference onHuman Rights confirming that all rights, socialand economic as well as civil and political, were'indivisible, inter-dependent and universal'.15Yet they continue to tolerate violations of socialand economic rights which, if repeated in thesphere of civil and political rights, wouldprovoke international outrage. One of theunderlying reasons for this discrepancy is aview, widespread among governments, that theextension of human rights provisions into thesocial and economic sphere is misplaced. Inparticular, many governments claim that fullsocial and economic rights are unattainable,especially in the poorest countries, because ofinadequate financial resources. This is at oncepartially true and totally irrelevant.

It goes without saying that not all countriescan immediately provide universal health care,education, and secure employment for theircitizens from their own resources. But thepurpose of the UN's social and economic rightsprovisions is to secure the progressive achieve-ment of rights through international co-operation. That is why the InternationalCovenant on Economic, Social and CulturalRights does not dem and that states immediatelyprovide for all citizenship rights. Rather, it callson them to:take steps, individually and through international as-sistance and cooperation, especially economic andtechnical, to the maximum of available resou rces, witha view to achieving progressively the full realisation ofrights recognised in the present Covenant.16

In other words, there is a collective obligationon governments to adopt policies aimed atenhancing, within the limits of the resourcesavailable, the most basic rights of the world'scitizens. Regardless of whether or not the full


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citizenship rights envisaged by the Covenantare ever realised, the moral entitlements it est-ablishes must rem ain a guide to action. Writingover 60 years ago in an appeal for greater socialequality, RH Tawney faced criticism similar tothose levelled at the International Covenant.He responded in thefollowing erms:The important thing, however, is not that it (i.e. equal-ity) should be completely attained, but that it should besincerely sought. What matters to the health of societyis the objective towards which its face is set, and to sug-gest that it is immaterial in which direction it moves,because, whatever the direction, the goal must alwayselude, is not scientific, but irrational. It is like us ingthe impossibility of absolute cleanliness as a pretext forrolling in a manure heap.'7

An end to povertyWhat is vital for the health of our global societytoday is that governm ents and citizens set theirfaces towards global poverty eradication. Inev-itably, there are limits to what governm ents cando for people. But there are no limits to whatpeople can do for themselves when they aregiven the opportunity to realise their potential.Providing that opportunity within the broadframework of human rights principles estab-lished by the UN should be a shared objectivefor governments, citizens' groups and individ-uals worldwide.

This is not an argument for the recitation ofyet more vacuous statements at the UN, more'high-level' conferences, or new layers of UNbureacuracy to monitor and oversee the non-performance of governments in protecting thesocial and economic rights of their citizens.Indeed, the focus should be firmly upon mak-ing existing UN machinery for monitoringsocial and economic rights work more effect-ively (an issue which we address in our recom-mendations). For example, the various bodieswhich monitor compliance with UN humanrights conventions should have a strengthenedrole in monitoring and reporting on the per-formance of government and international

financial institutions in relation to their obliga-tions under the Covenant on Cultural, Econ-omic and Social Rights. Similarly, the Economicand Social Council of the UN, which isbecoming increasingly marginal, should beresponsible for public debates on the impact ofmacro-economic trends and policies on socialand economic rights.What is required to translate UN principlesinto action is the adoption by governments oftangible targets for creating opportunities and,through international co-operation, for them toembark on the task of poverty eradication 'tothe maximum of available resources'. Therehave already been steps taken in the rightdirection. One of the most encouraging devel-opments in recent years has been the prepa ra-tion of national programmes of action toachieve the targets set by the 1990 WorldSummit for Children. These targets include areduction by one-third in child mortality; areduction by half in maternal mortality; theprovision of universal primary education; andthe provision of safe drink ing water for all. Oneadvantage of such targets is that they serve as abenchmark against which government policiescan be measured. Another is that they exposethe fallacy behind the argument that povertyeradication is not affordable. For exam ple, canwe really talk about the non-affordability ofsocial and economic rights when: Governments can find $800bn a year inmilitary expenditure to finance theacquisition of the means of destruction, but

claim to be unable to find the $5bn a yearwhich would provide basic education to allchildren, helping to release their creativepotential for the benefit of all. African governments spend more in repayingdebts than they do on the health andeducation of their citizens. The costs of meeting the health and educationtargets agreed at the World Summit forChildren represent around 16 per cent of whatdeveloping countries currently spend onweapons.


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Introduction

Creating an enabling environmentIn this report, we outline some of the widerpolicy and institutional reforms needed tocreate an enabling environment for povertyreduction. The starting point, as we stressthroughout , must be that of involving men andwomen in the design of policies which affecttheir lives. When it comes to understandingpoverty, the real experts are the poorthemselves. Popular participation, improvedaccountability, and transparency must becentral to any project for poverty reductionwhich is to have a chance of success.

At a national level, as we argue in Chapter 1,governments in developing countries could dofar more to give the poor a stake in society ifthey were to abandon their preference fordefending vested interests. Land redistributionand wider agrarian reform, including theprotection of common property resources, islong ove rdue in Latin America, parts of Africa,and much of Asia. Th ere is also scope for widerredistributive measures, especially in LatinAmerica. According to the World Bank, raisingall the poo r in that continent above the povertyline would cost the equivalent of only 0.7 percent of GDP the approximate equivalent of a2 per cent income tax increase on the wealthiestfifth of the population.18

Public spending priorities are in urgent needof reform in much of the developing world. Atpresent, social sector spending is concentratedin areas which maximise the benefits to thewealthy, while bypassing the poor. The focusshould be firmly upon providing primaryhealth care and basic education. Resources forinvestment in these areas could be released by areduction in military spending and moreeffective regulation of state finances to preventlarge-scale corruption. Contrary to the claimthat there is a trade-off between economicgrowth and redistribution, the high-performingeconomies of South-East Asia have built theirhigh growth rates upon redistributive land andincome policies, and the provision of universalprimary hea lth care and basic education.

Armed conflict, which we discuss in Chapter2, is a major source of vulnerability and povertyin many of the countries in which Oxfam works.Increasingly, the victims of these conflicts,whether in Bosnia, Rwanda, or Afghanistan, a recivilians. The picture is this area is not entirelybleak. If the peace settlement in Angola holds,southern Africa will be free from war for the firsttime since the 1960s. Long-running conflicts inCentral America have been bro ught to an end.The durability of peace in these regions willdepend critically upon international supportfor post-conflict reconstruction. In the case ofCentral America, it will also depend upon thewillingness of governments to address the long-standing social inequalities which gave rise toarmed conflict in thefirstplace.

But while there are opportunities for peacewhich m ust be grasped, the spread of conflict isa source of mounting concern. Deep-rootedethnic tensions, separatist ambitions, wideningsocial divisions, social disintegra tion, and envir-onmental degradation are all fuelling armedconflicts. It is increasingly clear that conflictprevention must start, as the UN Charterenvisaged, with investment in human develop-ment and poverty eradication. More immed-iately, governments should establishrestrictions on arms transfers and a compre-hensive ban on the production , storage and saleof a weapon which has come to symbolise thegruesome reality of modern conflict: the landmine.

As we suggest in this report, the UN hassuffered from a surfeit of expectation and adeficit in financial reources and leadership.However, more effective forms of UN interven-tion must be developed to resolve conflictbefore large-scale violence breaks out, and toprovide more responses to the inter-relatedtasks of peace-making, peace-keeping anddelivering humanitarian relief.The Bretton Woods institutions the IMFand the World Bank were created to providethe framework for post-war global economicgovernance. Their aim was to facilitate fullemployment and shared prosperity. Today,


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both institutions publicly proclaim povetyreduction as their central priority. As we arguein Chapter 3, however, their policies haveevolved in a m ann er at variance with tha t objec-tive. Instead of prom oting full employment andthe regulation of markets in the interests ofsocial welfare, both agencies place their faith inthe type of laissez-faire prescriptions and dereg-ulated labour markets which their founders sawas directly responsible for the crisis of the 1930s.Moreover, while advocating universal primaryhealth care and basic education, the BrettonWoods agencies have encouraged governmentsto introduce user-fees for social welfare pro-vision. The result of this incursion of 'marketprinciples' has been to deny vulnerable com-munities access to health and education.

To make matters worse, the economic pol-icies associated with the structural adjustmentprogrammes of the World Bank and the IMFhave comprehensively failed to bring economicrecovery to many of the world's poorest coun-tries. Even where growth has been achieved, ithas been built upon the increased marginal-isation and exclusion of the poor. New forms ofadjustment are needed to translate any com-mitment to poverty reduction into practice.Nobody today questions the case for economicreforms aimed at reducing destabilising budgetdeficits, establishing realistic currency align-ments, and restoring balance-of-payment via-bility. The challenge is to reach these objectivesin a manner which protects the vulnerable, issocially inclusive rather than exclusive, andwhich establishes a foundation for sustainableeconomic growth.International trade is one of the main threadsof global interdependence . However, as we showin Chapter 4, the benefits of international tradehave been disproportionately concentrated inthe industrialised countries and a relatively smallgroup of developing countries. The UruguayRound agreement will do little to change thisbalance. Nor will it address two deeper problemswhich have emerged with the acceleratingmovement towards a globalised economy. First,it is now clear that the relendess expansion of

trade has placed an unbearable strain on thenatural resource base of many countries, under-mining environmental sustainability. Reconcil-ing global commerce with the higher claims ofsustainable resource management must occupy acentral place on the international trade agendaof the twenty-first century.Second, globalisation has been accompaniedby a formidable increase in the power of TNCs.Increasingly, these companies are able toexploit national differences in social and envir-onmental standards by locating their invest-ment in the sites of maximum profitability. TheGATT Uruguay Round will further strengthentheir position by limiting the right of govern-ments to regulate foreign investment. Thedanger which this creates is that of a downwardspiral in standards towards the lowest commondenomina tor. Reversing that spiral will requirea social clause in international trade rules toenforce compliance with minimum standards.

As we suggest in Chapter 5, the Earth Summitincreased public awareness of the formidablethreats posed by over-consumption and pollu-tion in the industrial world. While the world'spoorest countries account for the bulk of worldpopulation, their citizens walk more lightly onthe planet and leave a smaller ecological foot-print. The average American citizen has anenvironmental impact on the p lanet some 140times greater than the average Bangladeshi,and 250 times grea ter than the average African.These differences are rooted in the gallopingconsumerism upon which Northern prosperityhas been built. That consumerism imposes ahuge strain on the world's resources. With 16per cent of the world's population, the indust-rialised countries generate two-thirds of itsindustrial waste, over one-third of the green-house gases responsible for global warming,and they consume over one half of its fossilfuels. Were the developing world to follow thesame path to economic growth as the industrialworld it would destroy our planet's biosphere,with unthinkable consequences.Governments and citizens in the industrialworld have a responsibility to adopt life-styles


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Introduction

and energy-conservation measures more com-patible with a sustainable future for the planet.That means regulating markets in a mannerwhich ensures that prices reflect more accur-ately the environmental costs of production.And it means investing in technologies whichwill lower the pollution associated with pro-duction. Such technologies must also be trans-ferred to developing countries on affordableterms.

In Chapter 6, we argue for a major overhauloffinancialrelations between the industrial anddeveloping world. Debt repayments continueto impose a crushing burden on the world'spoorest countries. Moroever, a growing pro-portion of that debt is owed to multilateral cred-itors, which steadfastly refuse to countenancelarge-scale debt reduction. There is an u rgentcase for a comprehensive write-off of officialdebt and for new initiatives to reduce theburden of multilateral debt. In Latin America,the surge in private capitalflowssince the late1980s has ended the outflow of financialresources from that region. Despite this, theregion still suffers from acute debt problems.For the world's poorest countries, excludedfrom private capital markets, internationaldevelopment assistance will remain the major

source of externalfinance.However, the bulk ofinternational aid flows are of questionable rel-evance to the poor, since donors continue toattach a higher priority to the promotion ofcom-mercial self-interest than to povertyreduction.This report outlines our views on some of thepolicy changes which are needed to eradicatepoverty. As a non-governmental organisationworking in over 70 developing countries,Oxfam is acutely aware that there are no easyanswers when it comes to development. Muchof what we say in this repor t is highly critical ofgovernments and international financial instit-utions. But NGOs, Oxfam included, make theirshare of policy mistakes. Our perspective isinformed by what we have learned from ourinvolvement with grassroots communities andpopular organisations. In the pages whichfollow, we set out an analysis which reflects thatperspective, and which we hope will be a contri-bution to a wider debate. Ultimately, however,real progress towards poverty reduction willdepend upon local communities coming to-gether to act as a catalyst for change; and ongovernments, NGOs, and international finan-cial institutions alike listening and learningfrom them.

the oxfam poverty report

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