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Shaukat Reiterates Plea to Allow Debt

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By Ahmed Mukhtar

Business Recorder
September 15, 2000

Finance Minister Shaukat Aziz reiterated Chief Executive General Pervez Musharraf's plea to allow repayment of debts against government's expenditure on poverty reduction. "We are not asking for write off," but be allowed to use the amount for fighting the curse of poverty, the minister added. According to him, the proposal made by the chief executive at the millennium summit received positive response and the minister hoped for some follow-up action.


The minister was addressing a gathering of economists and donors representatives at the formal launch of the World Development Report 2000, whose theme is "Attacking Poverty". Others, who addressed the function included John Wall, chief resident, World Bank mission, Roberto Zagga and Tara Vishwanath - of the bank.

Roberto Zagga in his presentation highlighted the strategy to tackle the poverty problem, which became an overriding concern of the bank since early 90s. Two other world development reports focussed on poverty reduction, albeit unsuccessfully.

Shaukat Aziz said that the government has formulated an aggressive poverty reduction programme which could not be financed by the country alone. Therefore, the government sought donors support. He said the implementation and achievement on the ground was more important than the programme.

Referring to the government efforts to fight poverty, the minister said the government has completed interim poverty reduction strategy papers (IPRSP) and discussion with the stakeholders would continue. Consistent with the message of the Report, the IPRSP proposes a three-dimensional attack on poverty aiming at:

(a) Providing opportunities to the poor, through revival of growth mainly through the private sector and exploitation of indigenous resources. Public sector support will focus on small public works programmes;

(b) facilitating empowerment, through devolution of power, reforms in civil services, police and judiciary and adoption of credible anti-corruption measures; and

(c) enhancing the security, through the introduction of food support programme, micro-credit bank, revamping of the system of Zakat and reforms in the pension system.

In Pakistan, poverty reduction has been made the primary focus of the economic policy. Pakistan has worked very closely with the bank to develop a viable strategy to attack poverty. The final articulation of our strategy would come in the form of poverty reduction strategy papers (PRSP), a document prepared with wider consultation with the donor community, he added.

Poverty is a complex phenomena and not a single cause could explain the true condition of the poor. Income, access to education and health, environment, society and institutions of governance all have a role in explaining the state of poverty. Secondly, although the world has experienced phenomenal growth over last 50 years, the condition of the poor has worsened. To quote from the report "The average income in the richest 20 countries is 37 times the average of the poorest 20 - a gap that has doubled in the past 40 years."

"Clearly, something has gone wrong with the way the objective of growth has been pursued" he added. Thirdly, and perhaps the foremost, the strategy to reduce poverty will have three dimensions, including opportunity creation, empowerment facilitation and security enhancement. Unless the three-dimensional approach was adopted, the poverty alleviation efforts would remain partial and the problem of poverty might actually exacerbate, Shaukat said.

Shaukat said that our understanding of poverty and its dynamics has greatly enhanced over the years, and also the appreciation of its ill-effects for the peace of the civil society. That is why, development has become more people-centered as opposed to growth-centered.

But that is not sufficient to attack poverty. The role of resources remains critical and their availability or otherwise would determine how far the PRSP policies would be effective in attacking poverty.

Talking about the report, he said the report was fully conscious of this challenge and has exhorted the developed world to play its role to achieve the poverty reduction goals. It was quite unequivocal on this when it says "An increased focus on debt relief and the associated move to make development co-operation through aid more effective are part of the story."

Another message of the report was that the developed world has to give a much better deal to the developing countries, including a more willing acceptance of their existing obligations, under the next round of trade negotiations. The report estimates a loss of nearly $ 20 billion annually to the developing countries due to protection afforded by the OECD countries, he added.

The developing countries need to be give more access to the markets and the labour force. Similarly, the developing world has to gain a more effective voice on the international fora to be empowered on the global scene.

"I hope the report will be a watershed in the history of development planning. Its incisive focus on poverty will inspire both the researchers and the policy makers to pursue more vigorously the objective of poverty reduction," he added.

The balanced views of the report would promote better understanding between the developing and developed worlds. It may well form the basis for a more involved and engaging co-operation among all the stakeholders. Clearly, poverty is the single most important problem of the human race, and the one that poses serious dangers to its peace. Everyone has a stake in its resolution. While concluding, he said a clear message of the report was that if the developing world and the international community worked together to combine this insight with real resources, both the financial and those embodied in people, and institutions, the 21st century would see rapid progress in the fight to end poverty.


More Information on Debt Relief
More Information on Development Policy and Poverty Elimination
More Information on the World Bank

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FAIR USE NOTICE: This page contains copyrighted material the use of which has not been specifically authorized by the copyright owner. Global Policy Forum distributes this material without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. We believe this constitutes a fair use of any such copyrighted material as provided for in 17 U.S.C § 107. If you wish to use copyrighted material from this site for purposes of your own that go beyond fair use, you must obtain permission from the copyright owner.