ECONOMIC AND SOCIAL COMMISSION FOR ASIA AND THE PACIFIC
EMERGING ISSUES AND DEVELOPMENTS AT THE REGIONAL LEVEL:
SOCIO-ECONOMIC MEASURES TO ALLEVIATE POVERTY IN RURAL AND URBAN AREAS
(Item 7 (c) of the provisional agenda)
THE EMPOWERMENT OF THE RURAL POOR THROUGH DECENTRALIZATION IN POVERTY ALLEVIATION ACTIONS
Note by the secretariat
1. Rural poverty alleviation through economic and social development was high on the state agenda in almost all countries of the Asian and Pacific region during the second half of the twentieth century. To achieve that goal, several development models were experimented with. These ranged from state-driven import substitution to market-driven export promotion models, from agriculture focused to infrastructure focused models and from the trickle-down approach to directly focused programmes. Several other policies, such as effective land reform, development of irrigation and drainage systems, subsidized inputs and credit facilities, human resources development and primary education and health care services were also pursued to achieve economic and social development. As a result, the incidence of poverty declined during the 1980s and 1990s, but with sharp variations across the region.
2. Even in the rapidly growing economies of East and South-East Asia, the social foundation of the urban miracle and the rural transformation were far less durable than initially expected. This weakness became more apparent with the onset of the economic crisis in 1997. During the high growth period, the reduction of absolute poverty and increased levels of social development (education, health, family planning and social mobility) were notable. The rapid expansion of the urban middle class was another achievement. These changes occurred across the region, despite the decline in public investment funds for social development. The onset of the economic crisis, however, triggered job loss, an increase in school dropouts among low-income and poor families, and cuts in basic health care and social services. Some attributed this to the fact that neither had the social development pattern been broad based during the high growth days, nor had the distribution of the social cost been widely shared during the crisis.
3. In many countries decentralization was the principal institutional development strategy for reaching the local level. In the enactment of decentralization policies, various strategies and structures of local development were adopted. Yet development was uneven across subregions, even within a country. In the high growth economies, similarly, opportunities were created by opening markets at the local level. The traditional cropping and labour demand patterns were replaced by market-driven high-valued commodities and demand for skilled labourers. This happened in Karnataka, India and central Thailand, where paddy lands and mangrove areas were converted to high-valued export-earning prawn cultivation.(1)
4. A fresh attempt is being made by many governments to transform institutional tools and enable people to be participants in and beneficiaries of developmental governance. It is increasingly acknowledged that institutionalization of developmental governance at the local level could increase participation of the people in the mobilization and allocation of resources for development in their respective areas. It is hoped that by devolving more authority and channelling more resources to the local bodies, a balanced and equitable distribution of development across the region can be achieved.
5. At a number of United Nations forums committment was given to the need to empower the poor to eradicate poverty (see annex). The Commission has also emphasized the need for good governance as a prerequisite to successful rural poverty alleviation policy. Further, it has directed the secretariat to review regularly national experience in rural poverty alleviation through decentralization. In this regard the Commission has directed the secretariat to assist in people-centred development and to study and examine ways to raise the capability of governments. The Committee on Socio-economic Measures to Alleviate Poverty in Rural and Urban Areas stressed the need to accelerate the pace of decentralization of public administration in all countries of the region.(2) While this is a significant development, there is no automatic guarantee that the people will get a better deal than in the past from this latest intervention. The effectiveness of local governance will be judged by its relevance and its capacity to deliver development that benefits the rural population of a country.
6. Legislation alone cannot empower people. People need to be enabled through, for example, education, motivation, empathy and support from political and professional communities that work on their behalf. The formal structures of local governance therefore need the support of people-based community organizations to make decentralization work for the people. Organizing the poor is not a stand-alone activity to be implemented by non-governmental organizations (NGOs) outside the decentralized local governance process. Decentralized development should be linked to the poor and marginal households through a participatory mechanism so that the poor can take part in the development process.
7. Earlier development strategies assumed that rural communities could respond to the market economy with only minimal efficiency and productivity. Since their capability was perceived to be minimal, governments assumed the role of providing services at national and local levels. This led the government to believe that development was simply managed change. It therefore required a management structure capable of changing the attitudes and behaviour of the rural people so that they could upgrade their production and consumption patterns. Public institutions were expanded and a bureaucratic system designed to accommodate development needs. This approach placed great emphasis on projects requiring specialized technical skills and expertise, while it ignored the diverse rural conditions and the capacity of the rural poor.
8. Several Asian countries initiated community focused programmes during the 1950s and 1960s. These programmes, popularly known as community development programmes, regarded rural people as beneficiaries but not participants in the development process. Their centrally designed training and extension packages were implemented by extension agents using a top-down mode of decision-making that took no note of local conditions and training needs. Consequently, owing to traditional power structures, legal barriers, lack of access to resources and gender imbalances, the bulk of the inputs to the villages were absorbed by the better-off sections of the rural communities.(3) Some development strategies in the 1970s and 1980s, such as integrated rural development programmes (IRDPs), the basic needs approach and rural infrastructure development promoted popular participation in the mobilization and use of local resources. These strategies regarded the underutilized "free labour" of the people as an important input for sharing the process and cost of development activities, which in turn, also ensured the "ownership" of the projects by the people.
9. Not only did the centralized rural development programmes fail to address area-specific problems and potentials but they also aggravated the chronic problems of poverty, such as seasonal out-migration and the depletion of social capital and natural resources. These programmes diluted the traditional initiative of the people to develop land and irrigation systems. In the past, for example, the rural people had carved farming lands out of the rugged hills of Nepal, and had taken measures to survive without outside help in such difficult environments as the coastal areas of Bangladesh. In such instances, centralized rural development policies and administration had manifested their limited ability to meet the needs of the rural poor. In this regard, a recent study of Thailand has drawn the following conclusions:
10. In the 1980s and 1990s, several self-help groups and NGOs worked in various countries to develop awareness and motivation among the rural poor in order to empower them to fight against the scourge of poverty. The poor households and associated rural communities were sensitized to their dignity, self-respect and rights as bona fide members of society. These groups developed a link that was often missing in rural development, i.e. people-centred development, to achieve poverty eradication and social change. The Swabalamban (self-reliance) programme of Nepal, Grameen Bank and Bangladesh Rural Advancement Committee (BRAC) of Bangladesh, Sarvodaya Movement and Federation of Thrifts and Credit Cooperatives Union (SANESA) of Sri Lanka and Self Employed Women's Association (SEWA) of India are examples of some successful groups that demonstrated techniques for reaching the poorest sections of the society and cultivating in them a sense of self-reliance and self-confidence. By providing cost-effective social services, and by engineering basic economic and social reforms, they have helped to develop a moral and professional sensitivity among the development agents who work with the poor and for the poor.
11. A recent study of the role of NGOs in poverty alleviation in Bangladesh has shown that NGOs are becoming more efficient and cost-effective in service delivery to and the empowerment of the rural poor. For example, BRAC has been providing effective health and population programmes to its target groups; 73 per cent of those registered in their programme regularly use its facilities as compared with 15-20 per cent who make use of government health facilities. Similarly, the drop-out rate in the BRAC primary education programme is as low as 2 per cent compared with 60 per cent in the government primary school. The superior performance of BRAC schools is attributed to their flexibility in adjusting to the circumstances of their student body, who are mostly from the rural poor community. More recently, the Government of Bangladesh has been collaborating with BRAC in an expanded programme of immunization to generate demand through awareness, education and training.(5) In Thailand, NGOs have been effective in protesting the destruction of mangrove forests and inland shrimp culture owing to the impact on the environment and human health.(6)
12. Several lessons can be learned from these successful NGOs. The poorest sections of the society need to be organized into viable groups under a fearless and dedicated community leader. Community participation, self-reliance and self-help are essential pillars for success; and women are bankable and eager to assume the broad responsibilities of community development. As NGO initiatives have managed to reach the poor in a more cost-effective manner, even governments are implementing selective activities in conjunction with them.(7) Successful NGOs have a vision that is clear and actions that are transparent. They empower their poor beneficiaries during the project implementation period, enabling them to sustain the process after the completion of development activities.
13. The key ingredients for empowerment are summed up below:
14. Good governance is increasingly cited as a key component in any successful strategy to reduce poverty. Decentralization of authority and responsibility is a key factor in good governance. Good governance is concerned with institutionalizing democracy in such a way that the structure produces the expected functions.(8) A recent study has argued that the persistence of poverty in most countries has its origins in problems of governance rather than in an inadequacy of resources. The basic argument about the role of governance in development holds that weak governance is the result of failure of the state to do the following:
15. The absence of a vision originating from within the country and projected through its political leadership leads to the loss of ownership over the country's developmental agenda, usually to aid donors. A more serious hazard is that different areas of policy-making are appropriated by special interest groups pursuing sectional concerns at the expense of a set of national goals.(9)
16. Decentralization policy is generally regarded as critical for efficiency, equity and participation. With regard to efficiency, decentralization contributes to identifying local priorities, potentialities and resources for the appropriate preparation, implementation and sustainable management of projects. With regard to equity, local governments are often in a good position to administer services that have important redistributive implications, such as primary health care, education, child care, housing and public transportation. With regard to participation, the identification and mobilization of all available resources and their deployment in accordance with popular needs requires direct participation. Local self-governments can make a contribution to the health of a nation's democracy by offering opportunities for greater participation in the business of governance and by creating a democratic climate of opinion.(10) Through a local electoral process, the political parties aggregate the demands of the dispersed population, represent political interests, ensure electoral competition and form governments, thereby facilitating the participation of people in governance.
17. The role of local bodies in the development effort has been gradually increasing over the years, irrespective of the stage of economic growth in the country. In Nepal, the recent promulgation of the Local-Self Governance Act 1999 was a landmark event for decentralization and participatory development. In Thailand, the recent economic and social crisis led to the realization of the importance of self-reliant and sustainable development at the community level. Accordingly, the new constitution of 1997 envisioned a more decentralized and participatory structure in which government institutions at all levels would operate in a more transparent, accountable and responsive fashion.(11) At the local level, a holistic rural development concept is being conceptualized with the increasing realization that a rural development paradigm guided by the notion of economic growth alone fails to enable rural communities to achieve self-reliant and sustainable development.(12) In Indonesia, new laws were enacted in May 1999 which dealt with administrative decentralization consistent with the devolution of responsibilities.(13)
18. The experiences of several countries of the Asian and Pacific region, however, show that decentralization policies, though enacted in several forms, suffer from drawbacks such as the following:
19. There has been a constant debate on the methods and sequence of enabling people to participate in the development process. Earlier development strategies treated people as "objects" or "target groups" to whom development was to be delivered by outsiders. Those concepts perceived the rural poor as passive recipients who wait for outsiders to come to their assistance. Such an approach might work in a relief operation but certainly not in the empowerment of the rural poor. That concept is currently undergoing change. The participation of the rural poor is both encouraged and supported.
20. The openness in economic policies resulting from liberalization and privatization has been followed up by changes in local governance through decentralization in many Asian developing countries. The Human Development Report 1999 shows that the benefits of competitive markets can be preserved and can meet the needs of human development only with strong governance, local, national, regional and global, with a clear framework of rules, institutions and established practices that sets limits and gives incentives to individuals, organizations and firms.(16)
21. The experience of the participation of the rural poor in governance has been mixed. In recent years, with more countries installing an open and democratic system of governance, political participation through elections has expanded at both national and subnational levels. Still, the majority of the rural poor have not been active partners in governance, rendering the systems of governance less responsive and relevant to the needs and concerns of the rural poor.
22. National governments have increasingly been sharing responsibilities and revenues at subnational levels, which are closer to the people. In India, for example, in recent years legal and financial provisions have been decentralized substantially. But institutional capabilities and human resources have not been enhanced commensurate with the decentralized responsibilities. As a result, many local bodies remain incapable of discharging the functions that have been devolved to them. In Indonesia, for example, there is a fear that the weak capacity of local governments and the lack of structure and direction in the use of fiscal transfer could blur the link between spending and accountability and create problems in service delivery.(17)
23. Furthermore, the majority of the rural people are disorganized and have little or no training. They are, therefore, unable to access the opportunities and resources that are available through the decentralized mechanism. This is made more difficult by complicated rules and regulations. A few NGOs are taking a lead in this regard and are working in the areas of social mobilization, awareness-raising, environmental protection and income generation. However, the absence of proper mechanisms for coordination with different tiers of government structure is a hindrance. NGOs and representatives of civil society need to complement each other and avoid overlaps, so that the outcomes of the macro-level policy liberalization reach the rural household level. This could result in cost-effective implementation of rural projects and contribute to the prosperity of the rural poor.
24. Several types of rural credit, inputs, extension and services are available at the local level through government, development banks and NGOs. Self-help groups organized under several agencies have collected a considerable amount of savings through their regular saving scheme. A large number of micro-finance agencies are also working at the local level to provide small credit to the rural poor. However, the demand side has not been activated through more productive and upgraded technologies for using the available resources, which could yield higher returns. Consequently, there is a real risk that the poor farmers could become debt-trapped by easily available credit, unless an increase in marginal returns enables them to repay loans.
25. A proper linkage is lacking between the rural poor and the market mechanism. The competitive market is dominated by large producers who supply products in bulk, with uniform quality, at one collection point. They have greater propensity to bargain for price and the terms of trade. But that is not the case with the poor farmers. They usually have diverse products with varied quality and these are scattered in small farms. The poor farmers need immediate cash and thus have very little power to bargain for the price and the terms of trade. The real issue then is how to organize such diverse groups to maximize the benefits for the poor. As in the process of liberalization of the economic regime, large producers and merchants obtain concrete support through credit, subsidies and technologies, while the small and landless farmers, who constitute the majority in many developing countries, remain marginalized from the market mechanism.
26. The attempts made by selected Asian developing countries to decentralize authority and responsibilities in order to improve governance and enable the poor to improve their condition are broadly summed up below:
27. The above issues have been submitted to the Commission for consideration. The Commission may wish to provide guidance on future actions in this regard.
At present $83 billion is spent annually on basic education, $8 billion on water and sanitation, and an additional $10 billion on reproductive health and family planning. Together with nutrition and primary health care, approximately $136 billion is currently spent on the provision of basic social services. An additional $70-80 billion a year would guarantee universal access to all these services.
At the 1995 World Summit for Social Development, 117 heads of State and Government and the representatives of 186 countries maintained that eradicating extreme poverty in the world, through decisive national actions and international cooperation was an ethical, social, political and economic imperative of humankind. These sentiments were further elaborated at the Fourth World Conference on Women whose Platform for Action called upon governments, development agencies and civil society organizations to take concrete action to eradicate the persistent and increasing burden of poverty on women.
The Economic and Social Council in its agreed conclusions 1996/1 focused on the coordination of United Nations support for poverty eradication. The 1999 high-level segment of the Council examined the relationship between employment, poverty eradication and gender and noted the unique role of the Council in promoting an integrated and coherent view of cross-cutting policy issues. In the 1999 high-level operational segment, the themes of poverty eradication and capacity-building were examined and the Council in resolution 1999/5 explicitly asked the United Nations system to "support, in a coherent and coordinated manner, national efforts to empower people living in poverty, in particular women." It further requested that such support utilize "mechanisms such as the common country assessment and the United Nations Development Assistance Framework... in order to provide an integrated, coordinated and collaborative response by the United Nations system to national priorities for poverty eradication."
The Administrative Committee on Coordination (ACC) Statement of Commitment for Action to Eradicate Poverty, adopted by ACC in May 1998, emphasized that "poverty is a denial of choices and opportunity, a violation of human dignity." The statement supported the catalytic role of the United Nations in mobilizing the "energies and resources of all development actors in the campaign against poverty."
2 Report of the Economic and Social Commission for Asia and the Pacific on its fifty-fourth session (Official Records of the Economic and Social Council, 1998, Supplement No. 20) (E/1998/40 - E/ESCAP/1117), paras. 97 and 201; "Report of the Committee on Socio-economic Measures to Alleviate Poverty in Rural and Urban Areas on its second session" (E/ESCAP/1169), para 8.
13 Asian Development Bank, "Good governance and anti-corruption: the road forward for Indonesia", paper presented at the eighth meeting of the consultative group on Indonesia. Paris, 27 and 28 July 1999, p. 7.