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Poverty Monitoring in Asia

A publication of selected papers from the Regional Conference onPoverty Monitoring in Asia, March 2004

Edited by

Hans GsängerMyriam Fernando

Poverty Monitoring in Asia

The Regional Conference on Poverty Monitoring in Asia

Organised byCentre for Poverty Analysis (CEPA)

Sponsored byAsian Development Bank (ADB)German Federal Ministry for Economic Cooperation and Development (BMZ)German Technical Cooperation (GTZ)

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National Library of Sri Lanka-Cataloguing in Publication Data

Concept & Printing:Karunaratne & Sons Ltd., 67, UDA Industrial Estate, Katuwana, HomagamaTel: +94 11 2855520, 2857649 Fax: +94 11 4440313

Poverty Monitoring in Asia/ Edited by Hans Gsänger andMyriam Fernando.- Colombo: Centre for Poverty Analysis, 2004488p. ; 23.5 c.m. .-(Edited Volumes Series)

ISBN: 955-1040-97-4 Price:i. 362. 5 DDC 22 ii. Gsänger, Hans ed.iii. Fernando, Myriam ed.

1. Poverty 2. Social Problems

ISBN: 955-1040-97-4ISSN: 1800-0150

© Copyright CEPA 2004

All rights reserved. No part of this book may be reproduced in any form or by any electronic ormechanical means including information storage and retrieval systems without permission inwriting from the publisher.

This volume contains a selection of papers presented at the Regional Conference onPoverty Monitoring in Asia held in March 2004. The findings, interpretations andconclusions expressed in the papers are those of the individual authors and do notnecessarily reflect the views of their institutions or the conference organisers andsponsors.

All papers presented at the conference as well as other details on the conference,can be viewed at the conference website, www.rcpm.net. This website will run until2006.

All inquiries relating to the conference and this publication should be directed to,

Centre for Poverty Analysis29 Gregory’s Road, Colombo 7Sri LankaTel : +94 11 2676 955-8, 2667967-8Fax: +94 11 2676 959E-mail:[email protected] : www.cepa.lk

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Acknowledgements

Acknowledgements are due to a number of people who made the RegionalConference and this publication a successful reality.

Sincere thanks are due to the participants of the conference who added a richdiversity of experiences to the event, the chairpersons of the various panels for theirrole in keeping the sessions on track, and the presenters for enriching theconference with their valuable contributions.

Grateful thanks are due to the members of the Steering Committee that guided theconceptualisation of the conference during its 16 month planning phase and also steppedin as rapporteurs during the conference.

Special thanks go to the ADB for their role as conference host in Manila. Particularappreciation is due to Dax Maligalig and her team for their vital role in bringing the event‘onto stage’. On the side of the BMZ, thanks are due to Frank Schwarzbeck for guidingthe process from BMZ and for Christoph Feyen, GTZ Sri Lanka for his steady handthroughout. The major role played by Hans Gsänger, lead consultant to theconference is acknowledged with much appreciation. His input in conceptualisingand organising the conference was invaluable to its success.

For her committed and untiring efforts as Conference Coordinator, we gratefullyacknowledge the role of Myriam Fernando, CEPA, without whom the journey toManila would have been a lot bumpier.

Centre for Poverty Analysis

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Contents

IntroductionMariam Fernando, Christoph Feyen

Regional Conference on Poverty Monitoring in Asia:Summary of the Main OutcomesHans Gsänger

I. Relevance and Political Dimensions of PovertyMonitoring

The Political Context of Poverty Monitoring: The MillenniumDevelopment Goals, National Poverty Reduction Strategies and theGerman Development ConceptKlemens van de Sand

Why Monitor Poverty?Nimal Sanderatne

II. Experiences from China

Development Oriented Poverty Alleviation and Monitoring in ChinaWang Pingping, Ren Tiemin

Monitoring Towards the Achievement of Project Goals: ThePractical Experience of the Southwestern Poverty ReductionProject in ChinaXiugen Mo

Impact Monitoring of Renewable Energy Projects in Rural AreasHansjorg Müller

Towards Comprehensive and Participatory Poverty Monitoringand Impact Evaluation in Jiangxi Province, ChinaSolveig Buhl, Qian Wei, Wang Xuexiong

III. Experiences from Indonesia

Experiences in Developing a Poverty Reduction StrategyDjoharis Lubis

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Developing a Local Specific Approach to Poverty Monitoring inRural East Indonesia: Who are the Poor in East Sumba?Friedhelm Betke, Hamonangan Ritonga

The Utilisation of Social Accounting Matrix (SAM) for PovertyMonitoring and for Investigating the Implications of a PovertyAlleviation StrategyLuthfi Fatah

IV. Experiences from Nepal

Poverty Monitoring and Analysis System (PMAS) FrameworkDocumentShankar Prasad Sharma

Inventory of Poverty and Impact Monitoring (PIM) Approachesin NepalDurga P. Ojha

Procedures for Participatory Impact Monitoring Tested in NepalVerena von Hatzfeldt

V. Experiences from The Philippines

Poverty Reduction Strategy and Poverty Monitoring:Philippine Case StudyCelia M. Reyes, Lani E. Valencia

CBMS as a Tool for Decentralised Poverty MonitoringCelia M. Reyes, Lani E. Valencia

Small Area Estimation of Sub-national Poverty IncidenceZita Villa Juan-Albacea

The SWS Survey Time Series on Philippine Poverty and Hunger,1983-2003Mahar Mangahas

VI. Experiences from Sri Lanka

Poverty Reduction Strategy and Poverty Monitoring in Sri LankaSeneka Abeyratne

Application of Sustainable Livelihood Framework in PovertyImpact MonitoringAnura Herath

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Quantitative and Qualitative Approaches to Measuring Poverty:Issues and Challenges in the Context of Sri LankaDileni Gunewardena

VII. Experiences from Vietnam

Vietnam: Monitoring & Evaluation of the ComprehensivePoverty Reduction and Growth Strategy (C-PRGS) and theNational Target Programme on Poverty Reduction andEmployment (HEPR: Programme 143)Nguyen Hai Huu

Local-level Poverty Observation Station (POS): The VietnamExperienceNgo Huy Liem

Annexes

Guest Country Papers

ICT Tools papers

Organisers and Sponsors

Contributors

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Introduction

Introduction

Myriam Fernando

Christoph Feyen

In keeping with the Millennium Development Goals (MDGs) and Poverty ReductionStrategies (PRS), many Asian countries are striving to improve their poverty monitoringand evaluation methodologies and streamline poverty reduction strategies, policies andprogrammes.

A special characteristic of these efforts is the trend that, along with governmentorganisations - such as central banks, ministries or departments of statistics, social welfareor poverty reduction - there is an increasing number of academic and research institutionsas well as professional organisations working in the field of poverty monitoring.

Not surprisingly, the diversification of actors has also led to a greater variety of approachesand methodologies towards poverty monitoring, with qualitative methods and impactmonitoring gaining increasing importance. However, there still seems to be a distinct lackof sharing of experiences of various initiatives, a lack of uniform procedures and aninsufficient mutual learning across organisational and country borders.

It is against this backdrop that the German Agency for Technical Cooperation (GTZ) actingon behalf of the German Federal Ministry for Economic Cooperation (BMZ) initiated apartnership with the Asian Development Bank (ADB) and requested the Centre forPoverty Analysis (CEPA) in Colombo, Sri Lanka to coordinate the preparation andconducting of a Regional Conference on Poverty Monitoring in Asia.

The conference, held in Manila on 24-26 March 2004, was initiated with the objective ofproviding a platform for the dissemination of country specific experiences on povertymeasurement and monitoring practices in Asia. Importantly, the conference was notlimited to a meeting of monitoring experts. By inviting policy and decision makers tojointly discuss the issues of poverty reduction and poverty monitoring with specialists, theconference made this exchange politically relevant. The conference communicated thepolitical importance of poverty monitoring and the possibility of it being an importantelement for promoting democratic participation.

By providing a forum for professional and policy dialogue among policy makers,researchers and practitioners, the conference was to contribute to the following outcomes:

• Improved policies in poverty monitoring for more efficient and effectivepoverty reduction

• Improvement of procedures and techniques in poverty monitoring

• Promotion of creative new methodologies and replication of best practices

More than 90 delegates from Bangladesh, China, India, Indonesia, Nepal, the Philippines,

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Sri Lanka, Vietnam as well as guests from Kenya, the United States and Germany attendedthe three-day conference. The delegations comprised government officials, academics andresearchers, NGO representatives as well as professionals working for bi- and multi-lateraldonor agencies.

During the one-year process of preparation for the conference, country papers andthematic papers were invited from six countries across the Asian region. Country papersfocussed on poverty policies and poverty reduction strategies (PRS) in Asia, while thematicpapers discussed Asian examples and experiences in the following four pre-definedthemes:

• Practices in Poverty Impact Monitoring (PIM),

• Institutional Arrangements and Micro-Macro Linkages in Poverty Monitoring,

• Methodology and Techniques for Poverty Monitoring,

• Information and Communication Technology (ICT) Tools for PovertyMonitoring.

The thematic areas of the conference were chosen to reflect the major issues at theforefront of the poverty monitoring discourse in the region as they are being discussed bydecision makers, planners and academics who are concerned with setting up cost-efficientpoverty monitoring systems. All papers presented were based on analyses of povertyreduction policies, applied academic research or consultancies commissioned by nationaland local governments and donor agencies.

This volume consolidates the discussion of the conference and a selection of paperspresented. The summary provides an overview of major outcomes of the discussion asthey were developed along the four themes mentioned above. The relevance of the topicof poverty monitoring in Asia as well as its political dimension is addressed by two papersthat were presented at the conference as the key-note addresses.

While the conference was structured along the thematic lines, in order to optimisediscussion this publication follows a country-based structure. Each country section startswith the lead paper on macro level poverty monitoring and PRS. This is then followed bya selection of academic papers and case studies presented at the conference.

Not all papers presented at the conference could be included in this publication. This isespecially unfortunate with regards to the papers on recent trends in Information andCommunication Technology (ICT) tools for poverty monitoring. However, due to theirrather technical nature and substantial volume CEPA is presently considering publishingthese papers in a separate volume.

Finally, the organisers also ensured that all papers prepared for and/or presented at theconference are accessible on the website www.rcpm.net that will remain operational andupdated into 2006.

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Summary of the Main Outcomes

Regional Conference on Poverty Monitoring in Asia:Summary of the Main Outcomes

Hans Gsänger

This summary of the three-day Regional Conference on Poverty Monitoring inAsia intends to provide the reader with an insight to the main outcomes ofdiscussion during thematic and plenary sessions. It also is a useful insight intoconcerns, priorities and views of the policymakers, researchers and practitionersthat attended the conference.

1. Poverty Policies and Poverty Reduction Strategies (PRS) in Asia

The country-specific experiences in poverty reduction of China, Indonesia, India,Nepal, Philippines, Sri Lanka and Vietnam presented to the conference reveal anumber of critical determinants of success. There is a consensus that regionalexamples of success in poverty reduction are due to the improved access of the poorto productive resources and assets. This has the effect of broad basing economicgrowth and bringing about an inclusive social development. Despite significantheadway, however, regional and interpersonal income disparities are growing evenwithin the most successful countries. This is particularly evident in countries whererural development lags behind urban industrial growth. At the same time it can beobserved that extreme poverty in some parts of Asia seem to be ‘policy-resistant’ aslong as basic social and political reforms are not implemented.

On the monitoring side, governments increasingly recognise the importance ofpoverty monitoring as a prerequisite and means for evidence-based policy-makingand planning. As the country papers show, poverty monitoring faces a number ofchallenges that need to be taken up by the concerned governmental and non-governmental actors:

• Countries are still struggling to solve basic problems of measuring thedifferent dimensions of poverty. A bias towards income/consumptionpoverty measurements is often systemic, while other poverty dimensions areneglected.

• The definition of poverty lines may be subject to political reasoning ratherthan scientific clarity. In a number of Asian countries nationally definedpoverty lines deviate widely from the international poverty line of US$1 PPPper person/day. Administrative poverty assessments may be politically andfiscally motivated. They are often not supported by household income/expenditure or living standard surveys, which remains the more reliable sourcefor poverty incidence measurements.

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• Lack of coordination among different poverty monitoring agencies, inparticular between statistical offices and government agencies responsible fortargeted poverty programmes, may lead to inconsistent data and duplicationof survey work.

• There is a lack of systematic policy impact assessments in most Asiancountries. Evaluations of poverty reduction policies and programmes are oftencarried out on a case-by-case basis; no regular and systematic reporting ofoutcomes and impacts is being done.

• The MDG/PRSP process has led to the formulation of targets that need to bemonitored at various levels of interventions. This has stimulated efforts tobroaden and deepen poverty monitoring.

• In some countries however, the MDGs have led to excessively large indicatorsystems that require pruning and streamlining, as the available databases areneither qualitatively nor quantitatively sufficient.

• Supply orientation still dominates poverty monitoring. It is the availability ofstatistics and administrative records that determine the shape of the systemrather than the expressed demand by users such as planners, policy- anddecision-makers.

• Poverty indicators often cannot be disaggregated to the local levels in order toprovide relevant information on poverty and social change because the samplesizes of national surveys do not allow it.

• Poverty statistics are often not disaggregated by sex, ethnic groups, region andother relevant criteria.

• Community-based poverty monitoring efforts need to be intensified in orderto understand poverty reduction processes and to measure the effect oftargeted and other programmes.

• Micro impacts of macro policies are often not systematically observedalthough they may directly or indirectly impede or even hinder local-levelpoverty reduction efforts.

• Participatory Poverty Assessments (PPAs) are useful to understand povertyand to design poverty reduction programmes, which are tailored to meet theneeds of the local poor; however they are costly. In addition, attention needsto be paid to data consistency problems. The data created may be inconsistentacross location and time if PPAs are carried out without methodologicaltransparency and rigour.

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• The role of civil society in poverty monitoring needs to be clarified, includingthe contributions of the research community. Should government policies andprogrammes be monitored by independent agencies? Should the results ofpoverty monitoring be published?

• A number of methodological and technical issues are still observed in anumber of Asian countries:

- Data quality problems, in particular with respect to administrativerecords;

- Sample sizes of Household Income/Expenditure Surveys do not allowbreak down to local levels;

- Survey data are made available with a rather lengthy time lapse.Information may come too late for quick and corrective policy actions;

- Statistical data are often analysed without proper contextualisation;

- Statistical gaps regarding socio-cultural and political dimensions ofpoverty, and related issues are still frequent;

- Lack of fiscal transparency often does not allow expenditure tracking.

2. Thematic Discussions

2.1 Practices in Poverty Impact Monitoring

Experiences in poverty impact monitoring were presented from four countries. Theyincluded, Vietnam’s ‘Local-level Poverty Observation Stations’; the application of the‘Sustainable Livelihood Framework for Poverty Impact Monitoring’ in Sri Lanka; a casestudy on ‘Procedures for Participatory Impact Monitoring’ from Nepal; and ‘ParticipatoryImpact Monitoring by means of Citizen Report Cards – A Cross-Regional Example’ fromKenya.

The main learning points from this session revolved around the need to more clearlydefine the meaning of and methodological issues in impact monitoring, to clarify thedemand side, for instance, ‘poverty impact monitoring for whom?’ and the importance ofexchanging experiences and building capacities for poverty impact monitoring. Finally, theneed to bear in mind the costs, benefits and sustainability of the various approaches usedfor poverty impact monitoring was emphasised.

Depending on the viewpoint of stakeholders or their vantage point in the cause/effectchain, a poverty monitoring system may actually measure ‘outcomes’ or ‘impacts’. Since alengthy theoretical debate might not lead to definite clarity, it might be more helpful tocome up with a working definition of ‘impact monitoring’. As it is the lasting positive

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change that counts for poor people, the elements of significance and sustainability ofobserved change may help to distinguish outcomes and impacts. The monitoring of suchchange or impacts should include not only positive change but also negative change, as thisis essential to making adjustments in policies and plans.

Expectations and interests of stakeholders must be clarified and the potential uses of thefindings need to be identified in order to build an effective poverty impact monitoringsystem. It is useful that at least some indicators are to be determined by the poorthemselves. The producers of impact data need to prepare and present the findings in auser-friendly way. The results should be disseminated in a targeted manner.

On the subject of monitoring, monitoring policy impacts could serve as a powerfulgovernance tool if it is embedded in a multi-stakeholder process that works towardsmutual accountability with clearly defined commitments.

The choice of monitoring method also matters as it has a bearing on the type and qualityof data. It is not advisable to use an overly complex toolbox approach. Instead methodsshould be used selectively, keeping in mind demand and user aspects and methodologicalrequirements. The power of numbers favours quantitative techniques although in order tocapture the dynamics and to explain the processes, qualitative techniques help tosupplement them. Experience shows that PIM builds best on existing data sets andmethods, and should balance quantitative and qualitative techniques (triangulation).

A particular value of monitoring lies in the process of interaction of governments andstakeholders. Poverty impact monitoring invites a new kind of dialogue betweengovernment agents and targeted beneficiaries and increases political impact of policymonitoring.

A widely noted constraint relates to capacities for PIM, which are deemed to be in shortsupply. The improvement of technical skills and infrastructure for poverty impactmonitoring at all levels is necessary but not sufficient to guarantee effective monitoring.Attention should also go into building another set of skills that deal with advocacy,negotiation, coalition building and fostering public debate. This latter set of skills wouldensure a higher utilisation and transparency of the results of monitoring and enhancepublic accountability.

Insufficient funding remains a constraint for developing effective and efficient povertyimpact monitoring systems and procedures. Since PIM makes poverty reduction moreeffective and faster, the costs of PIM should be viewed as investment into povertyreduction itself, and not as purely consumptive outlay. In a similar manner, participatorymonitoring should be understood as part of the implementation process and not asoverheads. At the same time, the costs of poverty impact monitoring require to bemonitored, so that they do not become unsustainable and counterproductive to the task athand.

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2.2 Institutional Arrangements and Micro - Macro Linkages in PovertyMonitoring

Decentralisation, macro-policy impacts, participation and their implications for buildingeffective monitoring systems were the key issues discussed during the presentation of fourpapers from the Philippines, Bangladesh, India and China.

The Philippine experience in ‘Community Based Monitoring System (CBMS) as a Tool forDecentralised Poverty Monitoring’ shows that decentralisation creates new informationdemands that may be best satisfied by community-based monitoring systems. India’spresentation on monitoring its poverty alleviation strategies, shows that decentralisationhas given a greater role to district, block and village level elected bodies, thereby changingmonitoring requirements to fit localised administrative contexts.

Top-down monitoring systems have hitherto served mainly administrative and controllingpurposes and are being supplemented by participatory monitoring and civil societyinvolvement in impact assessment. Representatives of Bangladesh’s research and NGOcommunity advocate for a poverty monitoring system that reflects the macro-policyimpacts on a micro-level as macro-policies affect the lives of the poor (directly andindirectly) via employment, prices, access to good and services, assets, transfer paymentsand taxes. Many useful analytical tools have been successfully tested in Bangladesh, but aunified system is yet to be developed. China is working towards a comprehensive andparticipatory poverty monitoring and evaluation system and stresses the need for bettercoordination between statistical offices and agencies responsible for poverty reductionprogrammes in poverty monitoring. In addition, the importance of participatory povertymonitoring is emphasised as it creates transparency and supports an efficient and effectiveuse of poverty alleviation funds.

Experience shows that uniform standards are not appropriate for defining institutionalarrangements and information flows. These need to be country-specific to take intoaccount their given administrative framework. Effective vertical and horizontalcoordination requires information and data sharing as well as transparent division oflabour among the responsible agencies. Partnership is the key to achieving these goals. Inaddition, close cooperation of poverty monitoring units with statistical offices may helpto solve data quality problems if statistical offices set quality standards regarding datacollection, data processing and data analysis. To that end statistical offices need to help inlocal capacity building.

The role of civil society in poverty (policy) monitoring can be twofold: while some NGOsand the research community might become constituent elements of the monitoringsystem because of their capacity to collect information independent of governmentagencies, other civil society groups could act as ‘guardians’ or ‘watchdogs’. Social WeatherStations, Citizen Report Cards and similar tools can provide the necessary insight intosatisfaction with government policies and programmes by the poor. The annual Human

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Development Report published by the Indian government is one example that hascreated a basis for advocacy and has stimulated NGOs to introduce independentmonitoring.

As government institutions, in particular at local level, are often not in a position tohandle scientifically complex monitoring surveys and provide independent analysis,governments may outsource certain monitoring tasks to research or consultinginstitutions.

A number of key messages are synthesised from the discussion on linking micro,meso and macro level poverty monitoring:

• Poverty (impact) monitoring is required at micro (local level poverty reductionprojects and programme implementation), meso (implementation strategies,programme management), as well as macro levels (policies) to provide acomprehensive picture of processes and changes.

• There should be room for local-level monitoring in its own right in order tomake local-level planning and implementation more efficient and effective.

• Micro-level monitoring needs to be location-specific and is most effective whenparticipatory elements are incorporated.

• Programme and policy monitoring are interlinked and cannot be monitored inisolation.

• There are limitations to participatory monitoring approaches as it maycontribute to inconsistent data across locations and time.

• For improved targeting and a better understanding of poverty reductionprocesses, disaggregated data is essential. Such disaggregation should includesex, age, ethnic group, and region.

2.3 Methodology and Techniques for Poverty Monitoring

Measuring poverty and deciding upon the right set of methodologies and techniques forpoverty monitoring is crucial in poverty monitoring and evaluation. Methodological issuesare subject to academic discourse as well as debate among practitioners. Three questionstop the debate: (a) how can we adequately measure the different dimensions of povertybeyond income and/or consumption measures that have dominated the discourse for along time? (b) is a quantitative approach to poverty monitoring indispensable? (c) how canit be supplemented by a qualitative approach?

A diverse set of research papers and case studies reflecting these issues were presented anddiscussed, including a review of “Quantitative and Qualitative Approaches to Measuring

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Poverty” (Sri Lanka); a time series analysis of “The Social Weather Station Povertyand Hunger Surveys” (Philippines); “Small Area Estimations of Sub-nationalPoverty Incidence” (Philippines); “Developing a Local Specific Approach to PovertyMonitoring” (Indonesia); “The Utilisation of Social Accounting Matrix for PovertyMonitoring” (Indonesia); “Participatory Poverty Assessment and the Voice of thePoor” (India); and “Broadening Qualitative and Quantitative Traditions byReferring to Ethnographies and Research Techniques from Physical Sciences”(Philippines).

There was consensus that the traditional income/expenditure measures of povertyare inadequate as increased consumption does not necessarily equal increased well-being. People’s view of their own poverty may not be consistent with calorie-basedmeasures. To capture the social, cultural, protective and political dimensions ofpoverty other measures need to supplement the monetary measure of income andconsumption. Self-assessed poverty surveys such as the Social Weather Stations canbe useful to produce timely and low-cost poverty indicators. It is obvious that thesocio-cultural differences within larger countries need to be reflected in location-specific approaches of measuring poverty, otherwise poverty incidence figures mightbe corrupted as the Indonesian case of East Sumba illustrates.

While there is the general belief that only rigorous quantitative methods producereliable and correct data, experience shows that qualitative methods are needed tocapture some aspects of poverty, in particular social exclusion. Another way to refinequantitative measures is to introduce participatory methods. However, theopportunity costs of the respondents should be recognised in acquiring qualitativedata.

Some of the geographic limitations of large-scale surveys can be overcome bymodelling techniques, for instance, through the use of poverty mapping and smallarea estimation. Nevertheless, in order to understand ‘poverty’ and its root causes,quantitative measures need to be contextualised. Experience shows that theapplication of accepted units of analysis such as the ‘household’ are subject toquestion in many a social setting.

There was wide agreement that while quantitative approaches have much to offer,they need to be supplemented with qualitative measures. In other words:quantitative methods provide the ‘skeleton’ but qualitative methods add the ‘flesh’.The view that qualitative methods are less rigorous than quantitative methods wascontested as being a superficial perception of social science methods. If applied in ascientific manner, qualitative methods render valid and consistent data, equal toquantitative data. No one method is correct and the intended use will determine theapproach.

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In light of the clear acceptance of and necessity for both approaches, there is a needto strengthen the planning and analytical know-how in quantitative and qualitativeapproaches. The importance of communicating results of surveys and qualitativeassessments back to the poor themselves in a way that is accessible and useful wasonce again underscored.

2.4 Information and Communication Technology (ICT) Tools forPoverty Monitoring

Poverty monitoring requires versatile data management systems for meeting the differentrequirements of planners, project managers, policy-makers, and researchers. This sessionconcentrated on various new approaches to ICT tools in poverty monitoring.

Evidenced-based planning and decision-making is critical in the implementation of povertyreduction strategies and optimising the use of limited resources. ICT tools offer efficientand innovative opportunities to this end, by creating:

• Functional databases that could store and disseminate indicators at variousstages of poverty monitoring (inputs, outputs, outcomes, and impacts);

• Software applications to validate and estimate these indicators as well assupport analysis.

The session shared experiences on some new approaches using ICT tools for povertymonitoring. These included SimSIP (Simulations for Social Indicators and Poverty) andPropensity Score Matching (World Bank), Decentralised Impact Monitoring through VisualData Mining (Nepal), the CBMS-NRDB and its uses in Poverty Monitoring (Philippines),and Poverty and Development Indicators Data-base (ADB).

It is evident that different types/characteristics of databases are required for various levelsof poverty monitoring. At the local level, the database may contain only a limited numberof indicators, while at the national level, where more results from censuses and surveys aswell as data from administrative records are available, a more sophisticated database systemis required. The current available technology could support these different databaserequirements.

While volumes of data are usually collected, most of these are not properly analysed.Perhaps, this is because they are not adequately organised for analytical purposes or they arenot systematically stored to facilitate comparisons. ICT tools could be used to harmonisedata and present them in an organised and simple manner that is easily understood evenby laymen to promote the analysis and use of these data at the local government level.

By decentralising data analysis, local-level users would be able to make better use of datacollected in their areas. Intensifying the awareness of users on the analytical results of theirdata would promote evidence-based decision making at the local level. ICT Tools that are

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developed for local-level use should be simple and user-friendly to promote theiruse by non-technical users. Two good examples are InfoZoom and CBMS-NRDB.Moreover, these tools should be affordable and installable in computers that areavailable at the local level. Training on its use should also be provided. It is notedthat CBMS-NRDB is distributed for free while InfoZoom is available at affordablecost.

In addition to the efficiency and user-friendly ICT tools, the quality of the inputsand data sources should be maintained at a satisfactory level as far as possible. Datashould be validated and if reliability measures are available, they should also bedisseminated. Local-level users should be aware of these reliability measures andshould also be taught how to validate data. ICT Tools can also be used in validatingor assessing data quality. One good example is the CBMS-NRDB where the databaseis disseminated across the community and validated by them.

Analytical software is also needed to enrich poverty analysis and monitoring atvarious levels. Simple maps and statistical tables could support decision-making andproject evaluation at the local levels while more sophisticated software to simulatevarious aspects of poverty and growth and evaluate poverty impact, such as theSimSip, could be used at higher levels. There is also statistical analysis software thatis quite flexible and user-friendly to satisfy these requirements.

3. General Conclusions and Follow-up of the Regional Conference

The Regional Conference on Poverty Monitoring in Asia came up with a number ofgeneral conclusions and recommendations, which are summarised as follows:

• Poverty (impact) monitoring shall make polices more pro-poor andpoverty programmes more effective and efficient;

• Participatory monitoring needs to be strengthened in order to mobilisethe self-help potentials of the poor and to stimulate the dialoguebetween governments and the people;

• Poverty monitoring is a highly sensitive and political process. Itcontributes to more participation, transparency, and accountability;

• The political nature of poverty monitoring makes it necessary to create ahigher level of transparency through the active involvement of the civilsociety;

• Poverty monitoring must lead to timely corrective policy actions bygovernment agencies;

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• Poverty monitoring needs to become more user-defined and user-friendlyto support quick and timely action by stakeholders;

• More information exchange and communication among stakeholders isneeded to avoid wasteful use of scarce resources;

• Further investment in poverty impact monitoring is required if thecurrent systems are to fulfil their ascribed tasks;

• Local government units should be empowered in terms of localmonitoring and data management;

• A more prominent role should be given to statistical offices in povertymonitoring as they can ensure data quality and act independently of linedepartments;

• A balance between quantitative and qualitative measures in povertymonitoring needs to be sought;

• There is a need for increased dialogue between quantitative and qualitativemonitoring specialists.

These general conclusions were also echoed in the conference evaluation of individualcountry delegations. Delegates pointed to the importance of the conference in improvingtheir existing understanding of poverty impact monitoring and participatory monitoringapproaches as well as the implications of decentralisation on poverty monitoring. They alsostated that they needed to continue with capacity-building, work for better vertical andhorizontal coordination. A greater role for qualitative methods is called for, as quantitativemeasurements are not sufficient to capture the complexity of poverty. The need for amethodological and institutional framework for assessing the micro impact of macropolicies was another lesson learned that was highlighted by a number of delegations.

The country delegations agreed to initiate follow-up actions and requested the support ofsponsors and organisers for finances and logistics. In order to support the exchange ofknowledge and networking at the regional level, the Centre for Poverty Analysis wasrequested to maintain the RCPM website for a specified time with the eventual aim ofdeveloping it into a web-based resource centre on poverty measurement and monitoring.

I. Relevance and Political Dimensions of

Poverty Monitoring

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Relevance and Political Dimensions of Poverty Monitoring

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The Political Context of Poverty Monitoring

The Political Context of Poverty Monitoring: The MillenniumDevelopment Goals, National Poverty Reduction Strategies andthe German Development ConceptKlemens van de Sand

Commissioner for the Millennium Development Goals,Federal Ministry for Economic Cooperation and Development, Germany (BMZ)

(Excerpt from the key note address at the conference opening)

1. The Millennium Development Goals (MDGs)

At the turn of the new millennium, 189 member states of the United Nations (UN) –almost all of them represented by their heads of state or government – made acommitment to ‘spare no effort to free our fellow men, women and children from theabject and dehumanising conditions of extreme poverty, to which more than a billion ofthem are currently subjected’.

The United Nations Millennium Declaration was adopted in September 2000 at the largestsummit meeting ever held. It summarizes the challenges facing the internationalcommunity at the beginning of the new millennium and breaks them down into fourprogrammatic areas for action: 1) peace, security and disarmament; 2) development andpoverty eradication; 3) protecting our common environment; and 4) human rights,democracy and good governance.

In the year that followed, a task force comprising of United Nations, World Bank andOECD representatives developed a ‘compass’ for the development chapter and theenvironment chapter of the Millennium Declaration termed ‘road map’, which UNSecretary-General Kofi Annan submitted to the UN General Assembly in September 2001.It contains a list – quantifiable in terms of timing and substance – of importantdevelopment goals contained in the Declaration based on the major UN conferences of the1990s and on the 1996 OECD/DAC resolution ‘Shaping the 21st Century’. The eight goalscontained in that list came to be known as the Millennium Development Goals, or MDGs.These goals have been broken down into 18 specific targets and can be measured on thebasis of 48 indicators.

Achieving the goals would mean that during the lifespan of this generation, we would:1) halve the proportion of people suffering from extreme poverty and hunger; 2)guarantee that all children complete primary school; 3) ensure that girls have the sameopportunities as boys; 4) reduce by two thirds a child’s risk of dying before age five; 5)reduce by three quarters a mother’s risk of dying from pregnancy-related causes; 6) stopand reverse the spread of HIV, malaria & TB; 7) protect the world’s ecosystems andbiodiversity; 8) ensure that rich countries grant steeper debt relief, more foreign aid andfairer opportunities to trade.

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The MDGs are the result of a multi-year process of building an internationalconsensus in the development policy arena. That process has created anunprecedented basis for, and commitment to, partnership between developed anddeveloping countries. The Millennium Declaration can be interpreted as aninternationally agreed political programme of good global governance, with theMDGs serving as the relevant set of development goals.

The ‘sustainable reduction of extreme human poverty as a shared overarchingobjective’ is translated into concrete terms in the MDGs. The commitment of theinternational community to jointly work for globally sustainable development andfor the eradication of poverty provides fundamental guidance for theimplementation of the Millennium Declaration as a whole and, thus, also fordevelopment cooperation. ‘Sustainable’ means a lasting improvement in the livingconditions of current and future generations. The MDGs define major outcomes inthe fields of development and poverty reduction as well as protection of theenvironment. However, they cannot be achieved in isolation from the goals laiddown in the other areas for action covered by the Millennium Declaration. All fourprogrammatic areas for action in the Millennium Declaration contain goals in theirown right. These goals, however, are closely interlinked and usually mutuallysupportive. Without peace and security, without democracy and good governance,without gender equality, without reliable equal rights for all with a view to politicalparticipation and access to resources, infrastructure and public services, it will not bepossible to achieve development that facilitates decent living conditions.

The Millennium Declaration recognises the interrelationship between economicgrowth and the institutional framework. This relationship, in other words theinterdependence of political and economic rights, has been captured in the conceptof ‘empowerment’. Empowerment implies that poor people organise themselves,thus creating social capacity and political space to influence institutions that arerelevant for their livelihood. Socio-political empowerment of the poor is intrinsicallylinked to economic empowerment and its sustainability. Poverty reduction andhuman rights are not two separate agendas but two mutually reinforcing approachesto the same goal, because there is congruence between the concerns and interests ofthe poor and key features of human rights. With its principles of non-discrimination and equity, the normative framework of international human rightsis particularly preoccupied with individuals and groups, who are vulnerable,marginalised and disadvantaged, which characterises the situation of mostindigenous people and other ethnic minorities.

Three principles to serve as guidance for action can be derived from the MillenniumDeclaration and from the MDGs:

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1.1 Coherence

The fact that the MDGs are rooted in the Millennium Declaration, theinterdependence among MDGs 1 through 7 and, in particular MDG 8, are allevidence of the consensus among the international community that successfuldevelopment requires concerted action by various policy fields. The industrialisedcountries need to take coherent action, in addition to the necessary increase ofOfficial Development Assistance (ODA), to put in place vital prerequisites forsustainable development in the developing countries, for instance by means ofefforts for the expansion of trade and by means of debt relief. The coherenceprinciple thus means that those departments of OECD governments that are incharge of economic policy, trade, finance, security and other issues relevant todevelopment, as well as the private sector all have a part in the endeavour to build aglobal partnership for development. Similar requirements apply to the developingcountries. In many cases, this implies a certain improvement of the standing of lineministries vis-à-vis ministries of finance and planning.

1.2 Partnership /shared responsibility

In the Millennium Declaration, the international community made a commitment toachieve goals in a joint endeavor that individual countries would not be able to reachby themselves. This means that development policy is now a shared internationaltask. The main responsibility for successfully achieving Millennium Goals 1 through7 on poverty, education, health and environment rests with the governments of thedeveloping countries. The main instrument for implementing the MDGs isconstituted by the Poverty Reduction Strategy Papers (PRSPs) drawn up by thecooperation countries and, where these do not exist, comparable nationaldevelopment strategies; for instance, the national sustainability strategies agreed inRio in 1992 and confirmed in Johannesburg in 2002.

For the industrialised countries, the partnership principle means, for one thing,fulfilling their commitments from MDG 8 – that is, increasing their ODA as amatter of special importance, granting further debt relief and reducing trade barriers.For another, however, it means that as they cooperate with partner countries on thebasis of national development strategies, they need to coordinate with each otherand with the partner governments (the most important players) in such a way thattheir contributions will be integrated and optimised with regard to the fiveMillennium Goals. This has significant implications for donor countries’development cooperation (harmonisation of procedures, joint financing exercises,progress monitoring, etc.). Coordination, cooperation and harmonisation have beenan issue ever since international development assistance started more than fourdecades ago. Hither to, however, it was more an issue of intentions and declarationsthan one of actual practice in the field. With the MDG process the issue definitelyhas received new momentum. The OECD/DAC and the multilateral development

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banks – in fact, their Chief Executives – have now made the harmonisation ofplanning, monitoring and reporting systems a primary objective for management inthe respective agencies.

1.3 Results orientation

In adopting the MDGs, the international community committed itself for the first timeto a comprehensive list of development goals that are geared towards positivedevelopment impacts. Successful development is no longer to be measured primarily interms of the resources invested (inputs) but in terms of the results achieved with theseresources (outputs) and, in particular, in terms of the outcomes reached.

The process leading to the MDGs was not least driven by the growing concern that fortyyears of development assistance have not shown the expected results. As a reflection ofthis scepticism, Overseas Development Assistance (ODA) decreased significantly since thebeginning of the 90s. A main rationale of the MDGs is to stop this trend by defining cleargoals and holding all stakeholders accountable for the progressive achievement. Thus,‘results-based management’ has become the order of the day both for donor agencies anddeveloping countries’ governments. And this, of course, again calls for efficient monitoringsystems.

The MDGs constitute binding goals - they define results of development processes, butno comprehensive guidelines for development cooperation in general nor do theydetermine sectoral areas of action. They lay down what should be achieved but make nostatement on how these goals are to be reached. It is with regard to the question of whatto do in pursuing the goals and how to do it that poverty monitoring must providefeedback and inputs.

2. The PRSP Process

The PRSP process was initially launched by the enhanced HIPC Initiative, whichoffered heavily indebted poor countries substantial debt relief granted by bilateraland multilateral donors if these countries in turn used these financial resources forpoverty reduction. The process has since come to go far beyond that. It covers alllow-income countries that receive concessional credits and grants from the WorldBank and the International Monetary Fund. The countries are expected to draftPoverty Reduction Strategy Papers, involving civil society in the drafting process,and to constantly develop these strategies further in the light of experience gained inthe process of implementation. The donors are to provide strong support to thecountries in this long-term process and to integrate their contributions fully into thestrategies of the cooperating countries. By mid-2003, 32 countries had submitted FullPRSPs and another 21, Interim PRSPs. Seven had presented their first annualimplementation report and four, their second. So far, South Asian countries that

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have entered the PRSP process are Bangladesh, Nepal, Pakistan and Sri Lanka; inEast Asia it is Cambodia, Vietnam, Laos and Mongolia; in Central Asia it isTajikistan and Kyrgyzstan; in the Caucasus it is Armenia, Azerbaijan and Georgia.The number of countries worldwide is constantly growing. If the PRSP approach ispursued in a serious manner, support for sustainable poverty reduction in thecountries concerned means that the contributions made under bilateral andmultilateral cooperation should ideally be fully integrated into the partnercountry’s strategy. In the debate leading to the production of the 2001 OECD/DACguidelines on poverty reduction, this integration was described in terms of donors’flags, which had to be ‘lowered’ in the course of this process. It was stated thatwhat mattered after all was only the flag of the PRSP country in question.

The achievement of the MDGs and of the goals laid down in national strategiesrequires a long term process. Such a process must be based on equally long-term,determined political commitment – primarily on the part of the developingcountries themselves. In many countries on all continents, elites have lived withglaring disparities in their societies for many generations, and often they havereinforced these disparities. The PRSP approach calls for serious commitment, andit does not leave that commitment to governments alone. The elaboration andimplementation of poverty reduction strategy papers is to take place in adecentralised manner with the participation of civil society, non-governmentalorganisations, and the business sector, and it must include direct representatives ofpoor population groups. Their participation does not require any particularpolitical system, just as there is no universal blueprint for sustainable development.But whichever path is chosen, the participation of the stakeholders constitutes anessential dimension. Poverty reduction must be pursued with the poor, not just forthem. And they must also be included in the monitoring of poverty reduction, in aneffort to constantly keep track of whether their living conditions are improving ornot.

3. The German Government’s Policy

With its Programme of Action 2015 adopted in 2001, the German government hasunderlined that it is taking comprehensive action to live up to its responsibility forsustainable poverty reduction. The programme is based on a broadened definition ofpoverty, according to which poverty not only means low incomes but also a lack ofopportunities and options to participate in political and economic life, increasedvulnerability to risks, violation of people’s dignity and human rights, and inadequateaccess to resources. Based on the concept of development policy as a globalstructural policy, the programme of action 2015 combines activities on the variouslevels for action into an overall set of ten priority areas for action.

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In each of them development policy efforts must always be connected to, andcoherent with, the achievement of the MDGs. In order to sustainably reducepoverty, we believe that income and employment for the poor must be increased.The productivity- and income-oriented approach to poverty reduction is reflected inthe first target for MDG 1 (‘halving the proportion of people whose income is lessthan US$1 a day’) and in the first priority area for action of the programme of action2015 (termed ‘boosting the economy and enhancing the active participation of thepoor’). In order to ensure that development progress will last, efforts to promotepeace and security, democracy and good governance and the rule of law, as well asadministrative structures and economic systems must all be designed in such a waythat the political leverage and economic options of poor and underprivileged peopleare broadened.

Simultaneously, action must be taken to protect the natural resource base.Investments in economic and social infrastructure made within the scope of countryprogrammes thus have to be linked even more closely to institution-buildingactivities, and links must be created between activities at the local level and structuralreform at the national level. In the international strategy debate, Germany will givegreater emphasis to this approach, which is based on the interdependence ofempowerment, security and pro-poor growth. In the view of the Germangovernment – and that is a view widely shared in the donor community – theMillennium Declaration and the PRSP process document a new understanding ofpartnership. Ultimately, this comes down to an end of the ‘traditional’ financial andtechnical cooperation of many decades, under which industrialised countries’contributions in developing countries were made in parallel rather than in concert;there was little coordination and partners were confronted with a multitude ofimplementation procedures.

In 2003, DAC members agreed on a reference document on ‘Harmonising DonorPractices for Effective Aid Delivery’, which constitutes a joint declaration of intent.And in the same year, my ministry drew up an action plan on how to apply theseharmonisation efforts within German development cooperation, spelling out inspecific terms how we can make headway on this endeavour.

In our development cooperation, we give special support to reform-orientedpartners. While the PRSP process is not our sole point of reference, it is a veryimportant one. We firmly believe – as stated in MDG 8 – that developmentcooperation must be accompanied, not least, by changes in the international tradeand financial system, changes that enhance the position of the poor and poorestcountries and that do not run counter to these countries’ efforts. This is not a topicfor our present meeting, but industrialized countries’ responsibility in this regard isat least as significant as their responsibility to engage in development cooperation.

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4. The Importance of National Strategies in Asian Countries

The Asian countries represented at this conference illustrate the diversity of this hugecontinent which is home to nearly two thirds of humankind. They are marked byvastly different environments in terms of their geographical situation, the size oftheir territory, the resources they have, their demographic situation, their culture,history and political system, and their socioeconomic structures. So, their people’ssituation and prospects of sustainable poverty reduction are only partiallycomparable. On the other hand, such diversity also offers food for thought andinspiration for learning processes that might be less likely in a more homogenoussetting.

Ownership means that every country, every government has to choose its own pathand account to its people for the path taken. The World Bank, the IMF and otherdonors need to respect that. ‘Ownership’ and ‘partnership’ must not be misused asa cover for paternalism. Even in the smallest countries, poverty reduction cannot beforced from the outside or be carried out by international cooperation acting as asubstitute.

I thus particularly welcome the fact that this conference is not just a meeting ofmonitoring experts. Specialists may engage in an intensive exchange on methods ofempirical social studies, on whether poverty reduction is taking place or not. For thisexchange to become politically relevant, it must go beyond the expert level and itsfindings must be condensed and passed on to those in charge of policy planningand decision-making. They, in turn, need to view this exchange as a constantinstrument for critically reviewing and, if need be, readjusting their own work.Similarly, those who are covered by the monitoring exercise – in other words,mainly the poor and poorest sections of the population – must participate in thisconstant review and its results and must be heard when they voice suggestions forchanges.

Poverty monitoring is thus an important element for democratic participation.

I believe that the fundamental principles of the PRSP process are also relevant in thoseplaces where a country has chosen a different name for its strategy, and also in those placeswhere a higher level of development has been attained.

In conclusion, I would like to emphasise one aspect of this regional conference,which we believe is indispensable for successful poverty monitoring initiatives,namely the aspect of inter-institutional cooperation. It is far too often that we stillfind various international and national players to be acting in parallel, withinsufficient coordination and little willingness to engage in a mutual exchange andjoint learning.

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I am glad that representatives of the Kenya Participatory Impact Monitoring(KEPIM) effort are taking part in this meeting, that they will be presenting theKEPIM system and the results achieved so far, and that they will be able to enterinto a discussion and an exchange of experience with a large number of Asiancolleagues.

This conference became possible because a group of experts from GTZ-supportedprojects in various Asian countries, based on close consultation with my Ministry,took the initiative. They quickly found a natural cooperation partner in the AsianDevelopment Bank and, moreover, mobilised contributions from governmentaland civil society organisations in our partner countries and from the World Bankand the UN. A central coordinating role was played by our regional implementationpartner, the Centre for Poverty Analysis (CEPA) in Sri Lanka.

I would like to expressly thank all of you for engaging in such exemplarycooperation across the boundaries of our respective institutions.

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Why Monitor Poverty?


Nimal Sanderatne

Chairperson, Centre for Poverty Analysis (CEPA)(Excerpt from the key note at the conference opening)

It is indeed a privilege for me to address this distinguished audience. I wish to resonatethe same sentiments as Dr. Klemens van de Sand in saying that I too welcome the factthat this Conference is not just a meeting of monitoring experts and specialists engagedin an intensive exchange on methods of empirical social studies; on whether povertyreduction is taking place or not, but that it goes beyond this to become politically andsocially relevant. As Dr. van de Sand just said ‘it must go beyond the expert level and itsfindings must be condensed and passed on to those in charge of policy planning anddecision-making’.

I believe that what I have to say this morning has a degree of continuity to that theme,albeit, in a somewhat roundabout manner. I have chosen as my theme the question: WhyMonitor Poverty? Posing this question at a workshop on poverty monitoring may seemfacetious, cynical and even irrelevant. However, I think that we must address thisfundamental question and through its discussion clarify some of the pertinent issues inpoverty monitoring for poverty reduction.

Professor J.B.S. Haldane, the eminent mathematician, once said that if you can put somenumbers into the issue you are discussing, then you may know something about whatyou are talking about. Professor Haldane was in one sentence indicating the strength andweakness of numbers. Without any numbers you would be talking about an issue invague generalisations and uncertain terms. Nevertheless, numbers only tell you‘something’ not everything.

We must be particularly mindful of the difficulties of obtaining correct data andinformation on social statistics such as on income and expenditure. Therefore, I am ofthe view that analysts must view cardinal measures of poverty measurement as ordinalmeasures. To make distinctions based on the second decimal can be highly misleading.Equally important is the need to ensure the quality of quantitative data.

Every effort must be made to collect data with integrity and commitment. Often the collectors ofdata are performing a task, the significance of which they do not understand. They neitherunderstand nor care about the veracity and relevance of the information they collect. Respondentsare suspicious of the investigators and often give exaggerated or underestimated figures. Surveyschedules are often overloaded and therefore tiresome to both the investigators and therespondents. Short cuts and the phenomenon known as ‘kerbstoning’ of data are notuncommon, particularly in large surveys. (Kerbstoning is the practice of investigators sitting on akerbstone on the road and filling survey schedules).

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Therefore, it is vitally necessary to ensure the integrity of the data collection process andcheck inconsistencies and where possible refine the data. These deficiencies imply the needto know the degree of veracity of the data that is analysed, particularly in the analysis oftime series data and inter-country comparisons.

My main purpose this morning however is not to deal with these statistical issues beforean audience far more knowledgeable than myself but we must keep these limitations inmind.

There are three important dimensions of poverty that we must focus on, if we are to viewpoverty monitoring as a means of influencing poverty reduction strategies. The first isthe need to recognise and analyse poverty variations in a country. The second is to lookat several dimensions of poverty and not merely income poverty. And the third is to lookat what I term the dynamic indicators of poverty.

The papers being presented at this conference do address these issues. They go beyondnational figures to disaggregated regional figures. They also analyse not only income andexpenditure data, but also focus on a number of other indicators of poverty. There is alsosome discussion on social or human development indicators.

It is vital that we focus on regional variations in poverty, as poverty is often of seriousmagnitude in particular regions. Poverty resides in pockets, in hinterlands and in remoteregions. National figures on poverty mask these regional differences and policy-makerscould take comfort in the national indicators of poverty improving, when in fact the poorare getting poorer.

To quote a few examples of the regional variations, the incidence of poverty is especiallyhigh and unacceptable in the autonomous region of Mindanao and the Bicol region in thePhilippines, it is excessive in North East Thailand and in several districts in my owncountry, Sri Lanka. There are also wide disparities related to ethnicity and gender.

The most startling illustration of regional and ethnic disparities is in the United States ofAmerica, the richest country in the world. Amartya Sen has drawn our attention to thefact that in the United States, the average life span of an African American is less thanthat of a Costa Rican, Jamaican, Chinese, an Indian in Kerala or a Sri Lankan. Further,the life expectancy of an African American in the big cities of New York, Washingtonand St Louis is much less than in other parts of the US. This example illustrates the widedisparities that can exist between communities in one country and within a communityin different regions. It is also illustrative of the distinction between income poverty anddeprivations, as the African American enjoys a much higher income though a lowerlongevity.

Unless there are in-depth analyses of these poverty conditions and the parlous situationof the poor people of these regions is brought to the fore, the conscience of the policy-makers cannot be pricked. In my view the objective of poverty monitoring is to prick the

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conscience of the rich and the affluent. Poverty monitoring must influence policy-makersand strengthen their resolve and political will to reduce poverty.

The papers at this conference have not defined poverty narrowly as incomeinadequacy. The seminal work of Amartya Sen and the development of these ideasby Mabul Ai Haq, Sir Richard Jolly and others responsible for the UN HumanDevelopment Report have influenced them.

In several of his seminal studies on poverty, famines, hunger and equity, AmartyaSen, the 1998 Nobel Prize winner in economics, has brought out the manydimensions of poverty not necessarily covered by income poverty. In his words:

‘…poverty must be seen as the deprivation of basic capabilities rather than merelyas lowness of incomes, which is the standard criterion of identification of poverty.The perspective of capability poverty does not involve any denial of the sensibleview that low income is clearly one of the major causes of poverty, since lack ofincome can be a principal reason for a person’s capability deprivation’ (Amartya Sen,Development as Freedom).

A holistic concept of poverty includes the deprivation of education, access to basicamenities of living such as pure water supplies, health facilities, and human freedoms,inter alia. Levels of literacy, life expectancy, and maternal and infant mortality rates couldmeasure such deprivations. Such deprivations are not confined to economic goods andservices.

Social exclusion is also a relevant component of poverty. This broader view of poverty isextremely pertinent not only because it encompasses very relevant constituent elements ofpoverty but these elements are also themselves causes of income poverty and reasons forthe persistence and sustaining of poverty.

Several papers to be presented at this workshop have focused on the broader indicatorsof education, health and nutrition. These in my view give even better indications of theconditions of people. The levels of literacy, school enrolment, nutritional levels are allvery significant indicators of the levels of poverty and deprivation. They indicate far moreaccurately the poverty levels or in Sen’s phraseology, the real entitlements.

Amartya Sen has pointed out that one of the foundational errors in human thinking isto confuse means and ends. Incomes are means of attaining of better livelihoods.Therefore the other indicators point to the attainments far better and broader thanincome.

But I like to take one step further. To me these indicators are especially importantas they reflect the dynamic conditions of poverty; not merely the situation ofpoverty today but what may happen to poverty in the future. The access toeducation, the state of health and nutrition and the state of economic and social

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infrastructure, determine the access to opportunities of the younger generation. It isthe improvements in physical, economic and social infrastructure that woulddetermine the inter-generational transformations of poverty. Unless the fundamentaland foundational causes of poverty are removed, the poor shall remain with usalways. It is these improvements that can address the problem of endemic andchronic poverty.

And again a word of caution: there is the danger of taking statistics as necessarilyindicative of the real condition. Quantitative measures can and often do hide thequalitative aspects of life. The levels of adult literacy may have risen but are the literacyattainments meaningful in enhancing job opportunities, productivity and incomes? Thenumber of schools may have increased and school enrolment may have leapt higher butis the quality of education at a desirable level that would enable more job opportunities?There may be more hospitals and more doctors but what is the quality of the healthservices provided to the poor? Do these hospitals have the necessary equipment anddrugs? Do people have adequate food to enable them to lead healthy lives and partake ofthe opportunities more effectively? Unless our poverty monitoring can capture thesequalitative aspects it would obscure the complexity of the dynamic issues of poverty.

These questions are of particular significance when there are vast regional differences infacilities and infrastructure. The fact is that in many countries the educational and healthfacilities available at the centre and the hinterland are vastly different. The facilities for thepoor are in stark contrast to the facilities for the rich. There are horrendous variations inthe access to facilities in urban centres and remote rural regions. Therefore, povertymonitoring would require focusing on the qualitative aspects of the services available tothe poor. It is by improvements, both quantitatively and qualitatively, that we can addressthe issues of chronic poverty.

Let me revert to the theme I struck at the beginning in a slightly different manner. I askedthe question: Why Monitor Poverty? Now I ask the question; ‘for whom are wemonitoring poverty?’ Is it for the donor community? Is it for academics like me? Or is itto satisfy our curiosity and needs? If it is for the betterment of them and only them,then the impact of poverty monitoring would indeed be slight and insignificant.

If our studies in monitoring are to be meaningful for policy formulation, we need tocondense, summarise and present our findings in a manner that is comprehensible andarresting to those who matter. Poverty monitoring must contribute towards theformulation of public policy. It must move the thrust of economic policies towardsbenefiting the poor. It must strengthen the public resolve and political will to eradicatethe misery of the poor.

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Let me conclude with a little verse that I was inspired to jot down while thinking of these issues.My apologies to Rudyard Kipling’s famous poem:

‘If ’‘If you can count the poor, but not let figures cloud your mind,If you can analyse data, and know the limitations of what you find,If you can monitor poverty in more ways than one,And use many indicators rather than just one,If you can focus on regions of poverty more acute and extreme,And convey the anguish and agony of those you count,To prick the conscience of the rich and politicians one by one,Then your poverty indicators are not figures for fun,But useful means of reducing poverty in the long run.’

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II. Experiences from China

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Experiences from China

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Development Oriented Poverty Alleviation & Monitoring

Development Oriented Poverty Alleviation and Monitoring inChina

Wang Pingping

Ren Tiemin

1 . The Evolution of Poverty Alleviation Strategies in RuralChina

In China, economic and social transitions have played a dominant role in povertyalleviation. Until 1986, no government poverty alleviation project targeted thepoor directly. The reduction of poverty incidence was mainly due to nationwidechanges, in particular the institutional transitions around 1980. After 1986, thegovernment established a special agency to fight rural poverty - the PovertyAlleviation and Development Offices (PADO) with the Leading Group of PovertyAlleviation (LGOP) and a development-orientated poverty relief programme wasimplemented in a planned and organised way. Then, the government played adominant role in poverty alleviation. Government’s inputs to poor areas increasedquickly and a national poverty reduction programme designed to target poor areasand its poor population was adopted.

1 . 1 Poverty alleviation in rural China from 1949 to 1985

After the foundation of the People’s Republic of China, the deprived and oppressedpoor were empowered. The main goal to improve national strength and to enrichthe poor was rapidly formulated. The elimination of rural poverty was certainlypart of this goal. To have equal personal income was both a means and the result ofthis policy. However, at the time there was of course no concrete povertyreduction plan that aimed specifically at some poor groups. Hence, the incidenceof poverty reduced, mainly due to the development of the national economy. Theinstitutional structure had great impact and was critical to economic growth at thetime. Poverty was basically reduced through gradual structural transition.

Based on the different institutional transitions that took place, this period could beclassified into three stages: 1949-1958; 1958-1978; and 1978-1985. Chinese farmersexperienced shifiting processes of empowerment, deprivation and re-empowermentin terms of access to natural resources.

1.1.1 Poverty alleviation in rural China from 1949 to 1958Before the socialist revolution, almost half of the agricultural land in rural China belongedto the landlords who rented it to peasants. After the foundation of the New China, thepoor played a prominent role in politics. Before 1949, the cause of

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1 Statistic Encyclopedia of Chinese Rural Economy, edited by the Planning Department of Ministry ofAgriculture: 112,127

poverty in China was seen as the result of various forms of deprivation andoppression. Therefore, a land reform was introduced all over China. The land wasconfiscated from the previous owners was allocated to the poor tenants; the mostbasic factor for agricultural production was thus provided. The land reform wascompleted by 1952. After that time, all farmers had their own land. Under thesehistorical circumstances, the structural basis of depriving farmers of their mostimportant resource - land - was eradicated.

Various cooperatives had emerged even before the completion of the land reform.Three main forms can be differentiated: The first, an ‘inter-assistance group’,consisted of 4 to 5 farm households. They shared their own farming tools, livestockand labour for production only during the busy farming season. The second was asa ‘primary cooperative commune’, which usually united 20 to 30 farm households.Basic production materials such as arable land, livestock and tools still belonged toindividual farmers, but were commonly used. The income allocation was eitherbased on their land, livestock and tools input, or based on their labor contribution.The third type of cooperative was the ‘advanced cooperative communes’. The initialscale of these cooperatives was around 30 farm households. Later it developed intolarge organisations including all households in a village. In these advancedcommunes, all the production materials were collectively owned and the incomeallocation was just entirely based on the labour contribution; in effect adopting alabor credit system. A farmer’s income mainly depended on the sum of a family’slabour credits. The average value of one credit was mainly determined by theincome of the group. The collective production was initially introduced due to thelack of essential production materials among a large number of farmers withallocated land, thus confronting them with the difficulty of farming on their own.

From the very beginning, the government acted quite carefully and gradually whenextending the cooperatives. Through the initial formation of cooperatives, the degree towhich the Chinese were organised and institutionalised, to dispersed poor farmhouseholds and improved their capacity of negotiation with the outside world. Resourceswere thus optimised.

From 1952 to 1958, the government enforced the implementation of the land reform andthe agricultural cooperatives. This phase could therefore be considered as enforcedstructural transition and essentially an enforced empowerment of the poor. As a result ofthe reform, the gross agriculture indices all tended to increase consecutively. If 1952 is takenas 100 then the index of 1958 was 127.8, a 27.8% increase. The grain possession per capitaalso grew from 576 kg in 1952 to 612 kg in 1958.1 One could conclude from the above,that on the basis of the disadvantageous conditions of the previously under-developedagricultural production technology, the structural transition increased agricultural outputand grain production. This equally and effectively alleviated overall poverty in rural China.

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2 The Status of National Poor Counties from 1977 to 1981 (1981) Agriculture Economic Series, 1st edition.

1.1.2 Poverty alleviation in rural China from 1958 to 1978The success of the initial formation of cooperatives made the government adopt a moreradical attitude. The formation of agricultural cooperatives swiftly evolved into communesduring the ‘Great Leap Forward’. The average size of the communes was 5000 farmhouseholds. The income distribution was mainly based on subsistence needs and onlypartially on contributed labour. In the communes, the labour input on land for individualuse and free trade in the rural economy (permitted in former cooperative systems) wasstrictly prohibited. As a matter of fact, this deprived the farmers rights of resource use andoutput distribution. The communes caused the severe agricultural crisis from 1959 to 1961.Compared with 1958, the this period saw a decrease in the gross agricultural productionindex by 33.7%. After this crisis, the function of communes turned to management andcoordination rather than production. From 1962 onwards, the production brigade becamethe authority to deal with resource ownership, production management and the calculationof distribution. The new mechanism was actually a mixture of primary and advancedcommunes, as the income distribution was in line with labour credits which every membergained. From then on Chinese agriculture functioned in such production brigades fornearly two decades. So far, what has been the effectiveness of this institutional transition?

As seen in Table 1, we find that during 1962-1978, both the gross agricultural productionand grain production growth was quite slow. During this period, technology had a certaininfluence. The basic construction of farming infrastructure was organised in every non-farming season to improve the quality of arable land and irrigation areas which wereenlarged dramatically. Biotechnology and machinery were used more and more. In termsof biotechnology, the use of fertilizer increased from 3.105 million tons in 1962 to 43.681million tons in 1978. The annual growth rate was 16.8%. Meanwhile higher yield paddyrice and wheat varieties were gradually adopted. At the same time, the agriculturalmechanisation also accelerated in the 60s. However, when calculating the national grainpossession per capita by the end of the 70s, we see that the figures of 1976, 1977, and1978 were only 305, 298 and 317 kg respectively.

To make matters worse, these are only average numbers and do not take any loss or theratio of rural and urban population into consideration. Additionally, another paper2

presented in the Agricultural Economy Series in the early 80s pointed out that the grainconsumption of 150 million farmers in 1978 was less than 150 kg in northern China andnot more than 200 kg in the paddy rice production zone of southern China. The severityof rural poverty under the system of production brigades became quite obvious.Compared with the innovative effectiveness of the land reform and the cooperative systembefore 1962, the similarly enforced structural transition between 1962 and 1978 had a fairlynegative impact. Nevertheless, technical factors had some positive effects. However, thestructural transition greatly retarded poverty alleviation and to a large extent even causedwidespread poverty in rural China before 1978.

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3 Lin, Justin Institution, Technology, and the Chinese Agriculture Development (1995) Shanghai People’sPublishing House: 31

The empowerment of farmers, in terms of access to land resources and outputfrom 1949 to 1952 together with the voluntary cooperative movement (meaning thecooperative members had the right to withdraw), which integrated the productionmaterials and improved the possibi l i ty of dispersed farm households innegotiations, brought initial success between 1952 and 1958. The sharp fall between1959 and 1961 was mainly caused by the movement in autumn 1958 whencooperatives turned from being volunteer-based to being enforced, resulting in thedeprivation of farmers’ freedom to withdraw on own accord.3 Indeed, between1949 and 1952, this was the opposite of farmers’ empowerment in terms of accessto land resources and output. During the Cooperative Movement (1952-1958),farmers’ rights were in fact completely violated. The communes, which became themanagement agencies of a bureaucratic mechanism at the grassroots level, tookfarmers’ land rights instead of strengthening their rights to speak. It is thereforequite natural that agricultural productivity under the commune system after 1962 andthe production brigade era was lower than the level before 1952 when single farm

Source: Planning Department of the Ministry of Agriculture, P.R. China (ed.) Statistic Encyclopedia ofChinese Rural Economy (1949-1986). Agriculture Publishing House: 4,112 and 127

1962 673.0 99.9 160.01963 691.7 111.5 170.01964 705.0 126.7 187.51965 725.4 137.1 194.61966 745.2 149.0 214.01967 763.7 151.3 217.81968 785.3 147.6 209.11969 806.7 149.2 211.01970 829.9 166.4 240.01971 852.3 171.4 250.21972 871.8 169.6 240.51973 892.1 183.8 265.01974 908.6 190.1 275.31975 924.2 196.0 284.51976 937.2 195.3 286.31977 949.7 194.3 282.81978 962.6 210.2 304.8

Year

Grosspopulation(Million)

Gross agriculturalproduction index

(1952=100)

Grainproduction

(Million tons)

Table 1: Chinese agricultural production under the mechanism of production brigades

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4 Agricultural Development Report. Ministry of Agriculture, Agricultural press: 76, 184 & 195

households existed and during the period of the voluntary cooperation movementbetween 1952 and 1958. Therefore, the concept of the production brigade turned into a‘one-sided game’ without any possibility to withdraw. Thus, people could not protectthemselves from other members’ laziness by leaving the communes for example.Confronted with the difficulty of supervision in agricultural production, the farmers’rewards were not directly linked with their efforts. It is therefore not surprising thatthe production level within such a forced organisation was rather low.

1.1.3 Poverty alleviation in rural China from 1978 to 1985“Despite being bound by all forms of constraints by the production brigade, both themanager and the labourer had nonetheless made the optimal choice. The managerchose to offer a low-degree of supervision, not because he was incompetent, but becausehigh-degree supervision was too costly. The agricultural labourer chose to lay down hisjob, not because he was born naturally lazy, but because his labour input was simplynot worthwhile.” Justin Lin (1995) drew this conclusion when analysing productionoutput of brigades and work input credits. In fact, by 1978 the government hadrecognised the low productivity of the production brigade. Therefore, a timely solutionfor the management problem under this mechanism was quite urgent. However, theallocation of land to single farm households was still considered illegal and againstsocialist principles. By the end of 1978, some production brigades could not bear thepoverty any longer and started a revolt. They secretly allocated agricultural resourcessuch as land to single farm households based on a contract. This is actually the origin ofthe household contract responsibility system with remuneration linked to output. Thistransition could be categorised as an inceptive structural transition since it was firstinitiated by farmers. Only after they had achieved some effectiveness, the governmentgave its approval and replicated it nation wide.

The household responsibility system replaced the production brigades. Farmersreceived land rights and their benefits were based on their own efforts. Thus, there wasno longer a lack of incentive for agricultural production. This could be interpreted asfurther empowerment for the farmers. In addition, a series of reforms in agriculture fullyinspired the enthusiasm of farmers. The rural economy grew rapidly and farmers’income was greatly increased in just a few years. The rural GDP shot up from 203.75billion Yuan in 1978 to 634 billion in 1985, a 15.25% growth rate. The gross grainproduction in 1985 was 379.11 million tons, 24.39% more than in 1978. The ruralpopulation’s net income per capita also increased to 397.6 Yuan in 1985, compared with133.6 Yuan in 1978. The personal possession of grain, cotton, oils and meat during 1978-1985 increased by 14%, 74%, 176% and 87.8% respectively.4 All in all, this period can beconsidered as the most dramatic era of Chinese poverty reduction in the whole ofChina’s history as the rural absolute poor population decreased from 250 million in1978 to 125 million in 1985, at an annual decrease of 17.86%. The poverty incidencereduced from 30.7% to 14.8%, 9.4% per year on average.

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However, about one tenth of the rural population only benefited a little from thistransition. The Gini index among the rural population reached 0.28, 0.07 more than in1978. The gap widened even among the low-income population as income grew; most ofthose in the lowest stratification still could not solve their subsistence problems. Themajority of these were located in areas with backward infrastructure and under conditionsthat lagged behind the social and economic development of the nation as a whole.

1.2 Development orientated poverty alleviation in rural China after 1986

The structural transition during 1949-1978 took place when the whole nation wasdominated by a planned economy with equal income allocation. Under such circumstances,the transition could play a leading role in poverty relief. With further economic reform, thegap between rural and urban income gradually widened. The overall rural economic growthhad a diminishing impact on poverty reduction. Therefore, in 1986 the Chinesegovernment launched a development-orientated poverty alleviation strategy that directlytargeted the rural areas and their poor population.

From 1986 to 1993 (before the formulation of the Eight-Seven Poverty Alleviationprogramme) poverty was defined as those without sufficient capacity for a decent life, i.e.“without enough food to eat, clothes to wear and shelter to live in”. The national strategicplanning for poverty relief for specific poor areas from 197

povert monitoring in asia · headway, however, regional and interpersonal income disparities are...

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