Anti-Poverty Fight Off to a Slow Start

Vatican Seminar on Globalization Asks: What Can Be Done?

ROME, JULY 17, 2004 ( A high-level seminar in the Vatican examined the question of how to improve the lot of poor countries. The July 9 meeting, organized under the auspices of the Pontifical Council for Justice and Peace, brought together around 100 representatives from the Church, governments, nongovernmental organizations, and the financial world.

The seminar was entitled “Poverty and Globalization: Funding Development and the Millennium’s Development Objectives.” In the opening statement by the joint chairmen, Cardinal Cormac Murphy-O’Connor and Cardinal Óscar Andrés Rodríguez Maradiaga, they explained: “The goal of development is human dignity and freedom, but this will remain elusive as long as the resources needed to make concrete advances in education, health and infrastructure are not forthcoming.”

The reference point for the meeting were the benchmarks set out in the Millennium Development Goals, proposed by the United Nations in 2000. By 2015, the goals aim to achieve improvements in areas such as basic education, poverty and hunger, infant mortality and access to medical care.

At the meeting Cardinal Murphy-O’Connor noted that there are more than 300 million people living in extreme poverty. He said the total wealth of Africa, with around 700 million inhabitants, is less than that of the Netherlands, with a population of less than 20 million.

The cardinal observed that progress in meeting the goals for 2015 has been very limited. At the present rate, the halving of poverty in Africa will not take place by 2015, as hoped for, but only after 100 years.

Threat to peace

He called upon governments to increase the amount of aid they give to developing nations. As well, he stressed the importance of giving poorer countries a greater access to markets in the developed world so they can earn more through exports.

“If our consciences do not jolt us into action, then self-interest alone should do so,” Cardinal Murphy-O’Connor said. “There can be no greater threat to long-term global peace and stability than massive poverty and deprivation.”

Cardinal Renato Martino, president of the Pontifical Council for Justice and Peace, observed that the problem of how to finance development had been dealt with in the Monterrey Conference of March 2002. One of the elements agreed upon at that conference in Mexico was an undertaking by developed countries to increase the assistance they give to poorer nations. Most countries have not yet fulfilled their promises, the cardinal noted.

Cardinal Martino also commented that relations between richer and poorer nations in the field of development suffer from “bureaucratic delays, with supervisory and evaluatory conditions imposed in recipient countries by donors, who do so on the basis of their own internal policies and not to help the recipient develop their own realistic and effective procedures.”

An example of these problems was presented by Mulima Kufekisa Akapelwa, from the Catholic Center for Justice, Development and Peace, in Zambia. He spoke of the country’s experience in implementing the diverse programs proposed by financial institutions such as the World Bank and the International Monetary Fund.

These include “Poverty Reduction Strategy Papers” (PRSPs), Poverty Reduction and Growth Facility, and the Poverty Reduction and Social Credit. The policies contained in these strategies follow the economic strategy of achieving growth through reforms based on liberalization and privatization.

But he noted that sometimes the growth targets do not take sufficiently into account the negative impact of the economic reforms on the poor. Moreover, the funds and debt relief promised by international institutions have been slow in arriving, and less than originally promised.

Debt relief in the balance

The subject of debt relief was dealt with in a presentation by Carlos Fortin, deputy secretary-general of the U.N. Conference on Trade and Development. He highlighted the importance of not just talking about debt relief, but of linking it to development investment.

The key to overcoming the debt problem, he explained, is to apply resources to productive investment that will enable countries to make economic progress. This means looking further ahead to long-term development goals, instead of treating debt only in the context of overcoming short-term crises.

Fortin also insisted on the need to consider the diversity of development situations in each country. The debt question is best dealt with on a country-by-country basis, he said.

The principal means of bringing about debt relief has been the Heavily Indebted Poor Countries Initiative (HIPC). Fortin said that, by the end of June, a total of 13 countries have passed through this program, having received the full amount of debt relief possible. Another 14 countries have reached the point where they qualify for interim relief, which is conditional on economic reforms.

But he noted that progress has been slow, due to the difficulties countries have in fulfilling the conditions laid out in the HIPC. Countries are faced with the need to simultaneously deal with their debt, encourage long-term growth and reduce poverty levels. Countries that dedicate their resources to alleviating poverty are left without sufficient funding to promote economic growth, Fortin explained.

He also observed that countries will not be debt-free, even after the full implementation of the HIPC. Experience has shown that the growth goals set out in the program have been overly optimistic. Thus, countries will need more aid to deal with their debts.

Fortin further explained that the idea was that the debt relief offered by the HIPC would be in addition to the normal aid flows. However, World Bank studies show that countries receiving debt relief have seen other types of aid reduced.

The debt question was also addressed by Jack Boorman, a consultant to the managing director of the International Monetary Fund. Boorman acknowledged that various problems offered by international financial institutions have had problems, and have required changes. But he called for these processes to be strengthened, not abandoned.

Developing countries, too, need to further improve their policies, Boorman said. He cited progress in overall economic policy and in the area of trade. But institutional reforms are still needed, such as improving the rule of law, ensuring property rights and improving the functioning of the public sector. These reforms are needed to allow greater growth by the private sector, he explained.

Developed nations also have to improve their performance, Boorman added. “All too often, there are contradictions in policies, with support to development provided in one area defeated by actions in others.” One priority he insisted on was the successful completion of the current Doha Round of trade talks.

High-income countries must help their low-income counterparts by reducing agricultural protection, he urged. A World Bank study estimated that stronger growth associated with a higher level of exports by developing countries could lift 140 million people out of poverty by 2015.

In a letter written by John Paul II to Cardinal Martino regarding the Vatican seminar, the Pope expressed his concern for the poverty that afflicts so many people. “What is needed now,” he explained, “is a new ‘creativity’ in charity so that ever more effective ways may be found of achieving a more just distribution of the world’s resources.”

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