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Transcript of Poverty and Hunger Reduction – a new mix of growth and social protection policies is needed to...
Poverty and Hunger Reduction –
a new mix of growth and social protection
policies is needed to achieve MDG1
Joachim von Braun
Director General
International Food Policy Research Institute
Session “MDG 1: Halving Income
Poverty and Hunger”; Department for
International Development, workshop,
London, October 3, 2007
Joachim von Braun, IFPRI, October 2007
Overview
1. Progress towards MDG 1
2. Pro-poor growth, poverty and hunger
3. Social protection for poverty
reduction and growth
4. The way forward
Joachim von Braun, IFPRI, October 2007
Urbanization of poverty? …very slowly
199318.88
81.13
2002
24.67
75.33
urban share of the poor (%)
rural share of the poor (%)
Source: Ravallion et al., 2007
Note: Poverty line is set at $1.08/day
Urban and rural share of the poor (%)
Joachim von Braun, IFPRI, October 2007
Mixed evidence: Poverty at $1 (PPP)
as % of total population
0
10
20
30
40
50
1981 1984 1987 1990 1993 1996 1999 2002 2004
East Asia & Pacific Europe & Central Asia
Lat. America & Caribb. Middle East & N. Africa
South Asia Sub-Saharan Africa
Source: WDI 2007
Joachim von Braun, IFPRI, October 2007
Looking beneath the dollar-a-day line
Subjacent poor
($0.75 and <$1):
485 mln in 2004
Ultra poor
(<$0.50):
162 mln in 2004
Medial poor
($0.50 and <$0.75):
323 mln in 2004
ECA 1.1 mlnMENA
0.9 mlnLAC
16.6 mln
EAP
51 mlnSSA
90.2 mln
SA
162.9 mln
MENA
0.2 mlnECA 0.4 mln
LAC
11.5 mln
EAP
8.8 mln
SA
19.7 mln
SSA
121 mln
LAC
19 mln
ECA
3 mlnMENA
3.3 mln
EAP
109.3 mln
SSA
87.0 mln
SA
263.6 mln
Source: Ahmed et al. IFPRI, 2007
Joachim von Braun, IFPRI, October 2007
The share of the poorest in SSA is growing
-1.4
-0.9
-0.7
0.060.14
-2
-1.5
-1
-0.5
0
0.5
Developing World
East Asia & Pacific
South Asia
L America & Caribb.
Sub-Saharan Africa
% p
oin
t c
ha
ng
e
Source: Ahmed et al. 2007
Change in the share of poor living below .50$/day 1990-2004
Joachim von Braun, IFPRI, October 2007
Progress on MDG 1…mixed evidence
0.0
0.5
1.0
1.5
AP ECA LAC MENA SSA
Hu
ng
er
rati
o:
[2002-0
4/1
990-9
2]
0.0
0.5
1.0
1.5
2.0
2.5
EAP ECA LAC MENA SA SSA
Po
verty
rati
o:
[2002-0
4/1
990-9
2]
MDG Target
MDG Target
Based on data from FA0 2006; World Bank 2007
Prevalence of poverty Prevalence of undernourishment
Joachim von Braun, IFPRI, October 2007
Hunger: Regional and country progress
East Africa
Central America
Ghana
Kenya
Tanzania
Central Africa
South Asia
CaribbeanW. Africa
SE Asia
Middle East
S. America
Mexico
N. AfricaChina
India
Nigeria
Uganda
Southern Africa
EthiopiaMozambique
0.0
0.5
1.0
1.5
2.0
0 10 20 30 40 50 60
Prevalence of undernourishment 2002-04 (%)
Hu
ng
er
rati
o:
[2002-0
4/1
990-9
2]
Reg
ress
Pro
gre
ss
MDG Target
Based on data from FA0 2006
Joachim von Braun, IFPRI, October 2007
Global hunger
227
23
52
37
300
213
0
5
10
15
20
25
30
35
-4 -3 -2 -1 0 1 2
Annual change in prevalence of undernourishment 1992-2004 (%)
Pre
va
len
ce
of
un
de
rno
uri
sh
me
nt
20
04
(%
)
L America &
Caribb
E Asia &
Pacific
S Asia
Sub-S Africa
M East &
N AfricaEurope &
C Asia
Source: FAO 2006, World Bank 2007
Joachim von Braun, IFPRI, October 2007
What Hunger?
Global food and nutrition challenges
Source: Based on data from FAO 2006, Micronutrient Initiative and UNICEF 2005, UNICEF 2006, WHO 2006
Type Causes People affected
Hunger Deficiency of calories
and protein
0.9 billion
Children
underweight
Inadequate intake of
food
and frequent disease
146 million
Micro-nutrient
deficiency
Deficiency of vitamins
and minerals
More than
2 billion
…and their mortality effects (ca. 50 % of <5 mortality)
Joachim von Braun, IFPRI, October 2007
Limitations of MDG 1
The MDGs help to focus, but lack…
• Vision
• Realism
• Adequate policy instruments
• Reliable monitoring process
• Accountability
Joachim von Braun, IFPRI, October 2007
Overview
1. Progress towards MDG 1
2. Pro-poor growth, poverty and hunger
3. Social protection for poverty
reduction and growth
4. The way forward
Joachim von Braun, IFPRI, October 2007
Framework of challenges for poverty reduction
The Critical Square
Innovation
& Capacity
Economic
GrowthGovernance &
Conflicts
Productivity (e.g.
in agriculture)
Joachim von Braun, IFPRI, October 2007
What type growth?
Comparison of Poverty-Growth Elasticity
Agriculture-
led growth
scenario
Non-agr.-led
growth
scenario
Staple-led
growth
scenario
Ag-export-
led growth
scenario
Ethiopia
(2003-15)-1.7 -0.7 -1.8 -1.4
Ghana
(2003-15)-1.8 -1.3 -2.1 -1.1
Rwanda
(2003-15)-1.4 -0.8 - -
Uganda
(1999-2015)-1.6 -1.1 -1.4 -1.4
Zambia
(2001-15)-0.6 -0.4 -0.6 -0.5
Sources: Simulation results from economy-wide multi-market models for Ethiopia, Ghana, Rwanda
and CGE models for Uganda and Zambia (Diao and Thurlows, IFPRI 2005)
Joachim von Braun, IFPRI, October 2007
Continent-wide Ag GDP and GDP Growth rates have been steady
and growing since 1992
-3
0
3
6
9
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
Perc
en
t (%
)
Agriculture, value added (annual % grow th)
GDP grow th (annual %)
Fan, draft, IFPRI, 2007
Joachim von Braun, IFPRI, October 2007
But: Mixed picture
of agricultural growth in Africa
Source: IFPRI/CAADP using UNSD Database
Joachim von Braun, IFPRI, October 2007
Progress against CAADP’s 6% goal (2005)
-12 -6 0 6 12 18
Angola Ethiopia Eritrea Nigeria
Mauritania Mali
Senegal Kenya Chad
Guinea-DRC
Rw anda Tanzania
Uganda Gambia
Benin Cameroon
Ghana Togo
Burkina FasoGabon
Namibia Botsw ana
Guinea Congo, Rep.
C Af Rep. Madagascar Mozambique
Lesotho Sw aziland
Cote d'Ivoire Zambia Burundi Malaw i
Zimbabw e
annual percent growth (%)
Joachim von Braun, IFPRI, October 2007
Required Annual Agricultural Growth Rates
To achieve MDG1 (%)
2003 – 2015 6.20%
2005 – 2015 7.50%
Required Annual Growth in Agricultural Spending
To achieve MDG1 (%)
Past, 1992 - 2004 6.1%
Required, 2005 - 2015 21.0%
Required Annualized Spending (Billion Dollar, 2000
Price)
2005 – 2015 $32.5
Africa: Required effort is enormous
Source: Fan et al. IFPRI (work in progress)
Joachim von Braun, IFPRI, October 2007
… and this varies by country Required annual agricultural growth rates to meet MDG1
0
3
6
9
12
15
18Z
imbabw
e
Buru
ndi
Guin
ea-
Ma
dagascar
Kenya
Nig
er
Lesoth
o
To
go
Cote
d'Ivoire
Centr
al
Chad
Nam
ibia
Za
mbia
Benin
Guin
ea
Gam
bia
Ma
law
i
Senegal
Sw
aziland
Nig
eria
Ma
li
Burk
ina
Ta
nzania
Ma
urita
nia
Eth
iopia
Cam
ero
on
Uganda
Ghana
Mo
zam
biq
ue
Req
uir
ed
an
nu
al
Ag
Gro
wth
Rate
(%
)
Source: Fan et al., IFPRI (work in progress)
Joachim von Braun, IFPRI, October 2007
Growth matters: hunger - income linkageHunger and GDP/ capita in developing countries
Source: von Braun, regressions based on data from World Bank (2005) and FAO (2005)
0
10
20
30
40
50
0 1000 2000 3000 4000 5000 6000
GDP per Capita (in constant 2000 US$)
Undernourishme
nt (% of pop)Log. (1990-1992)
Log. (2001-03)
Log. (1995-1997)
Joachim von Braun, IFPRI, October 2007
Performance in hunger index and income –
selected big countries
0
5
10
15
20
25
30
35
40
45
0 2,000 4,000 6,000 8,000 10,000 12,000
Gross National Income per capita
Glo
bal H
unge
r Ind
ex
India
Bangladesh
China
Vietnam
Trends in the Global Hunger Index and Gross National Income per capita
(1981, 1992, 1997, 2003)
Brazil
Source: Wiesmann, IFPRI, 2007
Joachim von Braun, IFPRI, October 2007
Performance in hunger index and income –
Africa
Sub-Saharan Africa, Trends 1981-2003
0
5
10
15
20
25
30
35
40
45
50
0 500 1,000 1,500 2,000 2,500
Gross National Income per capita
Glo
ba
l H
un
ge
r In
de
x
Ghana
Mozambique
Ethiopia
Malawi
Zambia
SenegalUganda
Kenya
Source: Wiesmann, IFPRI, 2007
Joachim von Braun, IFPRI, October 2007
Government effectiveness
Green: Best quartile (over 75th percentile),
with top 10th colored in darker green
Yellow: second best quartile (over 50th)
Orange: third quartile (over 25th)
Red: fourth quartile, with bottom 10th in darker red
Source: Kaufmann et al. 2005
Joachim von Braun, IFPRI, October 2007
Decentralization and growth
Statistically significant correlations
between decentralization and growth
Administrative:
Responsibility for civil servants: 0.50
Fiscal:
Reliability of fiscal transfers from center to
local government: 0.45
Source: Birner 2007
Joachim von Braun, IFPRI, October 2007
Hunger, growth and governance
-3.0
-2.5
-2.0
-1.5
-1.0
-0.5
0.0
0.5
1.0
-10 -5 0 5 10
Low gov effectiveness Higher gov effectiveness
Annual growth rate in GNI per capita, 1990-2004 (in %)
Pro
po
rtio
n o
f u
nd
ern
. p
rog
res
s i
nd
ica
tor
Congo, DR
Ethiopia
IndiaChina
Brazil
Ghana
Kenya
Nigeria
Tanzania
Uganda
Source: Wiesmann 2007
Low gov. effectiveness is assigned to countries in the lowest
quartile of Worldwide Governance Indicators
Joachim von Braun, IFPRI, October 2007 Source: Wiesmann, IFPRI, 2006
Hunger Index and Income, War, HIV/AIDSG
lob
al
Hu
ng
er
Ind
ex
Sub-Saharan Africa
Gross National Income per capita
Joachim von Braun, IFPRI, October 2007
• Growth remains key in Africa but the
kind of growth needs re-visiting
• Role of rural and agriculture growth in
Asia underestimated
• Discrimination and exclusion
underestimated
• The need for higher social protection
undervalued
Poverty comes down too slowly in the
general growth process
Joachim von Braun, IFPRI, October 2007
Overview
1. Progress towards MDG 1
2. Pro-poor growth, poverty and hunger
3. Social protection for poverty
reduction and growth
4. The way forward
Joachim von Braun, IFPRI, October 2007
To be kept in mind: The dynamic nature of
poverty
Study Period
% escaped
poverty
% fell into
poverty
Bangladesh Sen (2003) 1987-00 26 18
EgyptHaddad & Ahmed
(2003) 1997-99 6 14
India, Rajasthan Krishna (2004) 1976-01 11 8
Kenya, WesternKrishna et al
(2004) 1978-03 18 19
South AfricaCarter & May
(2001) 1993-98 10 25
UgandaDeininger & Okidi
(2003) 1992-00 29 12
Source: Krishna 2007
Joachim von Braun, IFPRI, October 2007
New Overlaps: More Shocks to
Social Safety of the Poor
• Increased food price inflation
• Health risks: multiple threats (avian flu, HIV/AIDS, TB, Malaria,…)
• Climate change risks
The need for social protection is rising
Joachim von Braun, IFPRI, October 2007
Types of social protection
• Health insurance
• Social security (e.g. pension for old-age)
• Safety nets (productive)
Nutrition support
Conditional/unconditional transfers
Employment guarantees
Microcredit / Microinsurance
Crop insurance
Joachim von Braun, IFPRI, October 2007
Social protection and MDG1
Targeted social protection makes four contributions to
the achievement of MDG1:
1. By transferring resources to poor households, it
has a direct effect on reducing poverty and hunger.
2. By protecting assets, it prevents households from
falling into poverty
3. By building community assets that are associated
with income growth
4. By making it possible for households to undertake
investments that lead to sustainable income
growth and reductions in poverty and hunger
Joachim von Braun, IFPRI, October 2007
Impact of social protection programs (1)
• Ethiopia (PSNP):Increased fertilizer use by 11% points (66% increase compared to control group) and use of improved seeds by 4.8% points (Gilligan et al. in prep.)
• India (NREGA):Provided employment = to 1 bn person-days/year(Drèze and Oldiges 2007)
• Bangladesh (FSVGD):Reduced extreme poverty by 30% points and increased per capita calorie intake by > 10% (Ahmed et al. 2007)
Joachim von Braun, IFPRI, October 2007
• South Africa (Old-age pension program):Pensions received by women improved health and nutrition of girls (weight-for-height) by 1.2 std. dev. (Duflo 2003)
• Mexico (Progresa / Opportunidades):CCTs reduced severity of poverty by 46% (Skoufias 2005)
• Guatemala (Childhood nutrition intervention):- Increased male wages by 46% in adulthood- Increased female grade attainment by 28%(Hoddinott et al. forthcoming)
Impact of social protection programs (2)
Joachim von Braun, IFPRI, October 2007
The need for nutrition interventions early
Shrimpton et al. 2001
Weight for age by region
NCHS
Reference
-2
-1.75
-1.5
-1.25
-1
-0.75
-0.5
-0.25
0
0.25
0.5
0 3 6 9 12 15 18 21 24 27 30 33 36 39 42 45 48 51 54 57 60
Age (months)
Z-s
core
(N
CH
S)
Africa Latin America and Caribbean Asia
Joachim von Braun, IFPRI, October 2007
Guatemala: Improving early childhood nutrition has large
impacts on adult education and economic productivity
Source: Hoddinott et al. Lancet (in revision)
20%
17%
8%
27%
0% 5% 10% 15% 20% 25% 30%
Income earned per
hour worked
(men)
Reading
comprehension
Cognitive ability
Grade attainment
(women)
Nutritional intervention
among Guatemalan children
0-7 years old (’69-’77)
Follow-up in adults 25-42
years old (’02-04)
Investments in early
childhood nutrition have a
long-term economic
growth effect
Joachim von Braun, IFPRI, October 2007
Findings
• Slow progress in reducing poverty and hunger
• Mixed success in reaching the poorest with growth ( the where, how matters)
• “business as usual” is not good enough to reach MDG1 and move beyond it
• What in addition and what next ?
Joachim von Braun, IFPRI, October 2007
Overview
1. Progress towards MDG 1
2. Pro-poor growth, poverty and hunger
3. Social protection for poverty
reduction and growth
4. The way forward
Joachim von Braun, IFPRI, October 2007
Interventions for the poorest to move out
of poverty and end hunger
1. Improved access to factor markets and basic services (employment; information)
2. Prevention of food price inflation (agric. growth)
3. Insurance against health shocks (innovative)
4. Preventing child malnutrition (comprehensive coverage)
Joachim von Braun, IFPRI, October 2007
Action and Research
on designing safety nets needed
1. Transactions costs: administrative capacity,
information, decentralization; PPP
2. Switching systems or adding components
(CCTs; employment guarantee)
3. Political sustainability: commitment,
structure of institutions
4. Innovation & optimization: learning by doing;
impact studies & experimental designs;
finding optimal mixes of social protection
policies
Joachim von Braun, IFPRI, October 2007
Can it be paid for?
Spending on social protection by rich and poor
• Health (% of GDP)
- Germany, France, Sweden: 7-8%
- India, Somalia, Georgia: < 1%
• Pensions (% of GDP)
- Austria, Greece, Poland: 11-13%
- Nigeria, Bangladesh, Mozambique: < 1%
• Social assistance (% of GDP)
- Pakistan, Peru, Colombia: < 1% Source: Dethier 2007
Mainly from domestic funding … not only a matter of more development aid
Joachim von Braun, IFPRI, October 2007
Hunger, poverty and growth: Conclusions
1. Growth has been key for poverty reduction …
but less so for hunger reduction
2. Re-balancing investment for growth and
social protection needed now
3. …and phasing in social protection earlier in
the growth process
– also in Africa
Joachim von Braun, IFPRI, October 2007
IFPRI 2020 Conference Oct 2007 Beijing on “Taking
action for the worlds poor and hungry people”
http://www.ifpri.org/2020chinaconference/index.htm