Poverty according to the World Bank



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Although poverty is a complex, variable, and persistent phenomenon, the World Bank has appropriated the issue, seeking to place it under social control. Under the pretext of alleviating the poverty of nations, it has expanded its ability to influence national governments. Thus, for the Bank, the existence of poverty becomes more valuable than its eradication. The mission to “fight poverty” confers prestige on the institution and acts as a symbol of its power.
Poverty according to the World Bank
Francisco Adjacy Farias e Mônica Dias Martins1

The concept of poverty as developed and disseminated by the World Bank has long served as the model by which governments, NGOs, and academic institutions analyze socio-economic realities. In this work, we examine some of the World Bank’s principal documents on the subject of poverty, an issue that has become synonymous with the institution’s work with nation states over the course of the last three decades. While on the one hand, this multilateral organization has at its disposal a vast supply of experts and data to mold anti-poverty discourse; on the other, it skillfully assimilates objections made by former directors, intellectuals, and activists. This study reveals that the World Bank’s concept of poverty guides not only the policies of national governments, but also the debate regarding development in the international community.



What the World Bank Says
In Nairobi (1973), Robert McNamara christened the idea that poverty is a threat to development and global security.2 Since then, the World Bank has adopted the role of “articulator” of policies to fight poverty, alongside the governments of countries dependent on its aid. By stimulating research and publishing a huge catalogue of writings on poverty, the World Bank exerts influence on a global scale. It is common to encounter citations from these studies in academic, governmental and journalistic publications. In Brazil, for example, the National Council for Scientific and Technological Development (CNPq), the country’s foremost institution for advancing research, was assisted by the World Bank in the years of the military dictatorship.3

The publication in 1990 of the World Development Report, which takes poverty as its central theme, was a milestone in development literature. Filled with economic and social data on a wide range of countries, the report claims to measure poverty in qualitative and quantitative terms. The document acts as a balance sheet for the global economic situation, with information on GNP (Gross National Product), interest rates, public deficits and surpluses, internal and external debt, as well as revealing the regions with the highest levels of absolute poverty (individuals surviving on less than a dollar a day). In general, it measures poverty with predominantly economic indicators, such as per capita income. For the Bank, the 1990s were seen as “a new and uniquely promising era in the history of the world” (Ibid, 1990:7). It is worth noting the historical context of this statement. In the 1980s, the conflict between the socialist and capitalist blocs was still going on. But in the decade that followed, the end of the Cold War strengthened many economists’ belief that capitalism would prove the universal remedy for all socio-economic ills.

In this report, the World Bank’s plan to reduce poverty in a “rapid and politically sustainable” way focuses on two strategies: promoting employment and social services. However, as the Bank argues, the success of this strategy depends on “client” countries faithfully following its directives, and the “aid” they receive from international organizations depends on this faithful compliance.
External assistance should be more tightly linked to an assessment of the efforts that would-be recipients are making to reduce poverty… This reflects the conviction that aid works well only when it complements a sound development strategy (World Bank, 1990:4).
Confident that it has the ultimate recipe for reducing poverty, the World Bank maintains that “the principal elements of an effective strategy are well understood and that the external resources needed to support it could be made available at little cost to industrial countries” (Ibid:6). Although the offer of international “aid” to fight poverty seems convincing in theory, in practice its execution makes “assisted” countries dependent, financially or technically, on resources destined for a “well-defined clientele”. In other words, by prescribing how and where these resources are employed, the institution imposes on its poor “clients” predetermined employment and welfare policies, the key elements of its scheme to fight poverty in the 1990s.

In the preface to the World Development Report of 2000/2001, the World Bank admits that it did not meet its poverty reduction goals for the previous decade. On the contrary, the number of people living in poverty rose in Latin America, South Asia, and Sub-Saharan Africa, as well in the countries of Europe and Central Asia which made the transition to market economies. The Bank acknowledges the difficulties of the fight against poverty and the complexity of the problem. In an attempt to shed more light on the issue, the World Bank presents a brief retrospective of the distinct development strategies adopted by various countries, under its guidance, over the course of the past few decades:


In the 1950s and 1960s many viewed large investments in physical capital and infrastructure as the primary means of development. In the 1970s awareness grew that physical capital was not enough, and that at least as important were health and education… The 1980s saw another shift of emphasis following the debt crisis and global recession and the contrasting experiences [of East Asia and Latin America, South Asia, and Sub-Saharan Africa]. Emphasis was placed on improving economic management and allowing greater play for market forces… In the 1990s governance and institutions moved toward center stage—as did issues of vulnerability at the local and national levels (World Bank, 2002:6).
Its strategy of poverty reduction, once based on offering employment and social services, has changed fundamentally. Now, it deals instead with “promoting opportunity, facilitating empowerment, and enhancing security” (Ibid). Thus is the concept of poverty broadened to encompass more and more areas of public policy. Or, in the words of the 2000/2001 report: “The strategy in this report recognizes that poverty is more than inadequate income or human development—it is also vulnerability and a lack of voice, power, and representation” (Ibid:12).

But what is meant by “inadequate human development”? The World Bank places the greatest responsibility for the failure of its anti-poverty strategy squarely on the shoulders of the poor nations themselves, whose leaders must be too elitist, inefficient, corrupt, weak, or otherwise unfit to implement the Bank’s policies. The following excerpts illustrate this view:


Another underlying cause of vulnerability is the inability of the state or community to develop mechanisms to reduce or mitigate the risks that poor people face (Ibid:37).
Governments are often more responsive to the concerns of elites than to the needs of poor groups… Improving governance also requires building administrative and regulatory capacity and reducing corruption. The burden of petty corruption falls disproportionately on poor people… (Ibid:39).
Elsewhere in this report, the World Bank makes reference to a document entitled Voices of the Poor, written in partnership with universities, and representing an attempt to understand the “realities of more than 60,000 poor women and men in 60 countries… The study shows that poor people are active agents in their lives, but are often powerless to influence the social and economic factors that determine their well-being” (Ibid:3). The findings justify the institution’s new position regarding poverty, redefined in a multidimensional perspective, incorporating environmental and psychological factors in its analysis. Henceforth it shall be necessary to “listen” directly to those who are trapped in conditions of penury and have demonstrated their “incapacity” to break the vicious cycle of poverty.

By examining these two reports, we can see that over the course of the past decade, the World Bank has fundamentally altered its concept of poverty, and its strategies for combating it. Even while conceding the inadequacy of its previous methods, it never wavers in its belief in the power of the market and the capitalist system as the foundation of its campaign against poverty.

The book Globalization, Growth, and Poverty (2003) was the result of a study commissioned by the World Bank. As the preface makes clear: “The focus of our research is the impact of economic integration on developing countries and especially on the poor people living in these countries” (World Bank, 2003:ix). In the book, the Bank once more attributes the failure of its campaign in large part to “incompetent economic policies, unemployment and nationalism [which] drove governments into beggar-thy-neighbor protectionism” (Ibid:4). To illustrate its image of a successful economy, it presents the United States as an example of a developed and prosperous country, “the largest and in some respects the most successful economy on earth, giving millions of poor people, many of them immigrants from developing countries, an opportunity to rise to prosperity” (Ibid:33).

By threatening so-called poor nations with the charge of “protectionism”, the World Bank is insisting once again that international “aid” is the only way these countries can progress and adapt to the new “global reality”:


The evidence shows that, when low-income countries reform and improve the investment climate and social services, private investment—both domestic and foreign—responds with a lag. It is precisely in this environment that large-scale aid can have a great impact on growth and poverty reduction. Thus, while creating a sound policy environment is primarily a national and local responsibility, the world can help societies making difficult changes with financial support (Ibid:158).
The definition of “poor” and the concept of poverty are determined by the World Bank team, under a methodology that goes undefined in any of the literature analyzed in this study. Well organized, with the characteristic diagrams, figures, and formulas of economic studies, its reports profess to identify, quantify, and characterize the poor. But by giving so much weight to the financial aspect of human relations, does this method of classification not become arbitrary and one-sided?

What one cannot help but notice, however, is the lack of any reference to the customary practices of international commerce and to the financial articulations of the market. Reading the World Bank’s publications gives one the impression that only the Bank can help the poor, and the failure of development is caused by the “inability” of the poor or the “incompetence” of governments. Only with the sound application of capitalism, as well as a belief in the system and obedience to its rules, can we create the perfect model to eradicate poverty.

Studies carried out by the World Bank uniformly lack any data on the poor in countries such as the USA, Germany, or France. We know, of course, that poverty can be found in these countries. Two significant events help to bring to light the plight of the poor in developed nations. In August 2005, Hurricane Katrina hit the US coastline, forcing the mainstream media to expose the hidden face of extreme poverty that resulted from so-called “market fundamentalism”.4 Barely two months later, in October 2005, huge protests broke out in France. For 11 years, poor immigrants who live crowded into ghettos, victims of mass unemployment, racism, and a lack of government assistance, organized a string of riots.5

How did the World Bank respond to these events? With apparently little interest. For the Bank, it seems, it is vital that poverty be isolated (like a disease) and restricted to its area of “influence”: those countries labeled poor and underdeveloped. It is perhaps for this reason that the poor who happen to inhabit rich countries are never discussed in the Bank’s printed documents or even on its web site.

The bank’s reports maintain a strictly technocratic and economic tenor, which limits complete understanding to individuals with a reasonable level of education. Does the World Bank intend to produce a document aimed only towards initiates? Or is it a poverty code to be deciphered by newcomers to the subject? Or, as in religious orders, is the Bank seeking a way to protect its sacred knowledge of poverty from the unholy?

After reading the World Bank’s publications on poverty, one is left with the sense of a concerted effort to create a standardized concept of a poor person, the “universal poor person”, in an attempt to appropriate the concept of poverty and legitimize it on the world stage. The poor are necessary to the survival of the World Bank: in “a world free of poverty”, its ability to influence national government policy would be compromised.



The Poverty of Nations
With the accelerated development of science and technology, knowledge increasingly proves itself an instrument of power. In societies that place a high value on specialization, economic statistics, the short-termism of results, and the computerization of data, to control areas of knowledge constitutes a mechanism of legitimation. This is the purpose behind the World Bank’s manipulation and diffusion of the concept of poverty.

Although poverty is a complex, variable, and persistent phenomenon, the World Bank has appropriated the issue, seeking to place it under social control. Under the pretext of alleviating the poverty of nations, it has expanded its ability to influence national governments. Thus, for the Bank, the existence of poverty becomes more valuable than its eradication. The mission to “fight poverty” confers prestige on the institution and acts as a symbol of its power.

The World Bank directs the formulation of public policy, interacts with diverse areas of knowledge, stimulates research, and accepts studies on poverty, even if they diverge from its own views. In this way, the Bank’s ideas spread out into academia, the halls of government, and the media, giving further authority to the institution’s concept of poverty.

Foreign loans render “assisted” countries dependent on the powers that run the World Bank. For this reason, if national policy follows the “global order”, then it makes no sense to blame poverty on local factors like the “inefficiency” of governments, “nationalism”, and “excessive corruption”. But the Bank returns again and again to arguments of this kind in order to obscure the true origins of the problem, encouraging the “naturalization” of poverty.

It is well known that the capitalist system generates wealth and poverty at a level unprecedented in human history. Either we rethink the way we produce, the way we work, the way we distribute incomes, manage nature, and coexist with the “other”, or we will become the very image of “unsustainable modernity”: “planet poverty” spinning in orbit around the “rich world” of capital, and our world will come to resemble the dystopian nightmare of Soylent Green.6

BIBLIOGRAPHY
WORLD BANK. World Development Report. Washington: World Bank, 1990.
______. World Development Report. Washington: World Bank, 2002.
______. Globalization, Growth, and Poverty. Washington: World Bank, 2003.
FARIAS, Francisco Adjacy and MARTINS, Mônica Dias. “O conceito de pobreza do Banco Mundial.” Tensões Mundiais, v.3, n.5, Jul/Dec 2007.
MARTINS, Mônica Dias. “Guerra e desenvolvimento: as inflexões do Banco Mundial.” Tensões Mundiais, v.3, n.4, Jan/Jun 2007.


1

Francisco Adjacy Farias is a sociologist and member of the research group Observatório das Nacionalidades (Nationality Watch). Mônica Dias Martins is a professor at the State University of Ceará coordinator of Observatório das Nacionalidades, and editor of the journal Tensões Mundiais (World Tensions).



2 Robert McNamara chaired the World Bank from 1968 to 1981. His ideas and his tenure as president of the Bank are analyzed in the article “Guerra e desenvolvimento: as inflexões do Banco Mundial” (Martins, 2007).

3 For more detail on the World Bank’s interference with Brazil’s science and technology policy, see the article, “O Banco Mundial e a política científica brasileira”.

4 This natural disaster, which affected the USA, particularly New Orleans, on August 29th, 2005, necessitated the evacuation of more than a million people.


, accessed April 2007.

5 , accessed March 2007.

6 This film depicts a society in social and political chaos caused by extreme inequality (Metro Goldwyn Mayer. Directed by Richard Fleischer, 1973).


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