The Convergence Agenda Meeting the Challenge of Accelerating Progress toward the Poverty Reduction MDG among LDCs OUSMANE BADIANE Director for Africa International

The Convergence AgendaMeeting the Challenge of Accelerating Progress

toward the Poverty Reduction MDG among LDCs

OUSMANE BADIANE

Director for Africa

International Food Policy Research Institute

1 REDIFINING THE CHALLENGE

3 REFINING POVERTY REDUCTION STRATEGIES AMONG LDCs

2 TRACKING OF POVERTY IMPACT OF GROWTH

4 CONCLUSIONS

The Convergence Agenda:Meeting the Challenge of Accelerating Progress




2 TRACKING OF POVERTY IMPACT OF GROWTH

4 CONCLUSIONS



HOW TO ACCELERATE PROGRESS TOWARDS MDG1 UNDER

1 LIMITED RESOURCES AND TIGHT BUDGET CONSTRAINTS

3 LOW GROWTH WITH SIGNIFICANT POTENTIAL

2 SIGNIFICANT SOCIAL NEEDS

4 LARGE POCKETS OF LOW PRODUCTIVITY POOR AND VULNERABLE

THE GROWTH-POVERTY CONVERGENCE AGENDA

Congo (2001)

Chad (2001)

Chad (1990)

Angola (1990)

Angola (2001)Cent. Afr. Republic (2001)

Cent. Afr. Republic (1990)

Congo (1990)

Burundi (2001)

Burkina Faso (1990)

Côte d'Ivoire (2001)

Burkina Faso (2001)

Burundi (1990)

Botswana (1990)

Cameroon (1990)

Benin (1990)

Botswana (2001)

Cameroon (2001)

Benin (2001)

Côte d'Ivoire (1990)

5% growth rate

20

% p

ove

rty

rate

-.0

50

.05

.1E

con

om

ic g

row

th

0 .02 .04 .06 .08 .1Inverse of poverty rate (% of pop below $1)

Source: Country PRSP and 2007 WDI.

Search for optimal policy convergenceThe African Dilemma: Growth or Poverty?

A DOUBLE CHALLENGERAISING GROWTH AND ITS IMPACT ON POVERTY

Source: Badiane and Ulimwengu (2009)

Sierra Leone (2001)

Niger (2001)

Sierra Leone (1990)Mauritania (1990)

Senegal (1990)

Mozambique (1990)

Rwanda (2001)

Rwanda (1990)

Mozambique (2001)

Niger (1990)

Namibia (2001)Namibia (1990)

Mauritania (2001)Senegal (2001)

Swaziland (1990)

South Africa (2001)Swaziland (2001)

South Africa (1990)

5% growth rate

20

% p

overt

y ra

te

-.0

50

.05

.1.1

5.2

Eco

nom

ic g

row

th

.02 .04 .06 .08 .1 .12Inverse of poverty rate (% of pop below $1)

Source: Country PRSP and 2007 WDI.

Search for optimal policy convergenceThe African Dilemma: Growth or Poverty? (Cont'd)

Swaziland

South Africa

A DOUBLE CHALLENGERAISING GROWTH AND ITS IMPACT ON POVERTY


APG

DP

Gro

wth

Inverse of headcount ratio1/P0

AP0

Growth Poverty Path 2

Gro

wth

Pov

erty

Pa

th1

0

Path 1: Growth without poverty reduction; Path 2: Poverty reduction without growthPath 3 and 4 are similar but starting, respectively, from high level of growth and a low level of poverty, and are thus less problematic.

GROWTH POVERTY PATHWAYSSearch for optimal policy options

U R HERE

2015

Source: Badiane /IFPRI



2 BETTER TRACKING OF POVERTY IMPACT OF GROWTH

4 CONCLUSIONS



R

GD

P G

row

th

Inverse of headcount ratio

p

R0

Convergence Path 1

Growth Poverty Path 2

Gro

wth

Pov

erty

Pa

th1

0

REINFORCING THE LINKS BETWEEN GROWTH AND POVERTY REDUCTIONThe Search for optimal policy options

Convergence Path 2


TWO SIMPLE INDICATORS

POVERTY OVERHANG:

The Extent to Which Current Growth has Failed to Reduce Poverty to the Maximum Possible

GROWTH-POVERTY EFFICIENCY GAP

GROWTH DEFICIT:

The Extent to Which Future Growth May Fail to Sustainthe Current Pace of Poverty Reduction

GROWTH-POVERTY EFFICIENCY GAP

POVERTY OVERHANG ESTIMATES (1990 - 2005)

ALTERNATIVE POVERTY OUTCOMES UNDER CONVERGENCE (1990 - 2005)


GROWTH DEFICIT ESTIMATES (1990 - 2005)

ALTERNATIVE GROWTH OUTCOMES UNDER CONVERGENCE (1990 - 2005)


POVERTY OVERHANG: ADDITIONAL POVERTY REDUCTION THAT COULD HAVE BEEN ACHIEVEDGIVEN ACTUAL GROWTH PERFORMANCE (1990 - 2005)






4 CONCLUSIONS



PUBLIC EXPENDITURE OPTIMIZATION QUESTION !

1 TARGET PRODUCTIVITY OF POOR AND VULNERABLE

3 RAISE SOCIAL INVESTMENTS TO MEET SHORT TERM NEEDS

2 RAISE INVESTMENT IN SECTORS EMPLOYMENT POOR AND VULNERABLE

4 ALIGN SOCIAL INVESTMENTS TO MAXIMIZE GROWTH IMPACT

STRATEGIC QUESTION: HOW TO RAISEGROWTH-POVERTY EFFECTIVENESS AND SUSTAINABILITY?

CONVERGENCE AGENDA

Actual Poverty Rate in 1990

STRATEGIC GOAL NO. 1

BRIDGING THE GROWTH GAP TO MEET THE POVERTY MDG TARGET



BRIDGING THE EXPENDITURE GAP TO MEET THE POVERTY MDG TARGET

Actual Poverty Rate in 1990



OPTIMIZE PUBLIC EXPENDITURE S TO RAISE PRODUCTIVITY OF RURAL POOR


HEALTH SERVICES EDUCATION SERVICES

EFFECT OF 10% INCREASE IN SERVICES EXPENDITURE ON SOCIAL OUTCOMES, AGRICULTURAL EFFICIENCY, AND POVERTY





4 CONCLUSIONS



BASIC STRATEGIC QUESTIONS

2HOW TO MAXIMIZE SYNERGY BETWEEN SOCIAL SERVICES AND PRODUCTIVITY ENHANCING INVESTMENTS

CONVERGENCEBETWEEN SOCIAL AND PRODUCTIVITY INVESTMENTS

3 HOW TO EXPLOIT GROWTH EXTERNALITIES OF SOCIAL SERVICES

4HOW TO IMPROVE CONSIDERATION OF GROWTH SYNERGIES IN BUDGET PLANNING AND NEGOTIATIONS

• NEGOTIATION OF EXPENDITURE COMPOSITION vs LEVELS

• BUDGET ADDITIONALITY vs ZERO SUM GAME

– BROADER BUY-IN INTO AGRICULTURAL AGENDA

– ACCESS TO LARGER RESOURCES FOR AGRICULTURAL SECTOR

– HIGHER RETURNS TO AGRICULTURAL SECTOR INVESTMENTS

– HIGHER RETURNS TO PUBLIC SECTOR INVESTMENTS

– LONG TERM SUSTAINABILITY OF SOCIAL SERVICES

FROM BUDGET COMPETION TO COOPERATION

CONVERGENCEBETWEEN SOCIAL AND PRODUCTIVITY INVESTMENTS

COUNTRIES WITH “LITTLE MONEY AND LITTLE TIME”

– VERY TIGHT MEDIUM TO LONG TERM BUDGET CONSTRAINTS

– LARGE SHARE OF POPULATION LIVING IN POVERTY

– LARGE SHARE OF LOW-SKILL UNDEREMPLOYED RURAL POOR

– LOW DEGREE OF DECENTRALIZATION OF SERVICES

– URBAN-CENTERED SERVICES DELIVERY (SITE AND CONTENT)

WHICH COUNTRIES NEED CONVERGENCE?

CONVERGENCE RELEVANCE

Documents

The Convergence Agenda Meeting the Challenge of Accelerating Progress toward the Poverty Reduction MDG among LDCs OUSMANE BADIANE Director for Africa International