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What is equitable wealth creation?

In recent years there has been a concern to focus on 'wealth creation' rather than poverty reduction or poverty elimination. This promotes a more positive and constructive vision for development processes, removing them from charitable to a rights-based approach.

However, in the process, the poverty focus of 'pro-poor development' and 'pro-poor growth' can easily be sidelined.

The term 'equitable wealth creation' therefore clarifies that the aim is not wealth creation per se, but wealth creation whereby the majority of the benefits go to those who are currently most disadvantaged.


A New Poverty Agenda ?

At the beginning of the new millenium most major development agencies appeared to endorse a new Poverty Agenda:

  • In 2000 the UN General Assembly signed up to Millenium Development Goals with poverty reduction as the key unifying goal.
  • UNDP's Human Development Reports continued to focus on different dimensions of poverty building on the 1997 HDR.
  • World Development Report 2000/2001 'Attacking Poverty' represented a new direction for the World Bank through laying out a strategy for reducing poverty based on Participatory Poverty Assessments.
  • From 1999 an increasing number of countries produced Poverty Reduction Strategy Papers (PRSPs)
  • In 2001 the OECD Development Advisory Committee produced the DAC Poverty Guidelines
  • Major donors agreed to work together with Governments on Sector Wide Approaches (SWAPs)

Underlying this agenda are a number of common understandings:

1) Poverty elimination involves more than increases in income. Pro-poor development means not only sustainable growth. Human rights and social inclusion must be at the heart of all development policies.

2) The elimination of poverty, and hence also sustainable growth, can only be achieved through the engagement of poor people in the development processes which affect their lives.

3) The challenge of poverty eradication also requires profound changes in macro-level structures and policies as well as poverty-targeted interventions.

4) It requires coherent collaboration between a diversity of actors: development agencies, the private sector and civil society organizations.

OECD DAC Poverty Guidelines 2001

Adopt a capabilities approach to understanding poverty, incorporating ideas about influence, freedom, status and dignity, as well as income and assets; cover similar poverty areas including growth, empowerment, social sefvices and social protection.

For OECD poverty website Click here

UNDP Human Development Reports

Launched in 1990. The 1990 HDR introduced the multidimensional model of poverty in its framework for 'human development'. It also talked about the need for greater participation and greater equity and emphasised the importance of social subsidies. The 1997 HDR dealt specifically with poverty, called for greater accountability in government and urged that globalisation be managed to protect and benefit the poor.

For UNDP Human Development Reports Click Here

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Millenium Development Goals

Signed in 2000 this pledged that by the year 2015 all 191 UN member States would:

  1. Eradicate extreme poverty and hunger: reduce by half both the number of people living on less than a dollar a day and the proportion of people suffering from hunger.

  2. Achieve universal primary education: ensure that all boys and girls complete a full course of primary schooling.

  3. Promote gender equality and empower women: eliminate gender disparity in primary and secondary education preferably by 2005 and at all levels by 2015.

  4. Reduce child mortality: reduce by two thirds the mortality rate among children under five.

  5. Improve maternal health: reduce by three quarters the maternal mortality ratio.

  6. Combat HIV/AIDS, malaria and other diseases: halve and begin to reverse the spread of these diseases.

  7. Ensure environmental sustainability: integrate the principles of sustainable development into country policies and programmes, reverse loss of environmental resources; reduce by half the proportion of people without sustainable access to safe drinking water; achieve significant improvement in lives of at least 100 million slum dwellers by 2020.

  8. Develop a global partnership for development:
    • develop further an open trading and financial system that is rule-based, predictable and non-discriminatory.
    • address the least developed countries' special needs.
    • Address the special needs of land-locked and small island developing States
    • Deal comprehensively with developing countries' debt problems.
    • Develop decent and productive work for youth
    • Provide access to affordable essential drugs in developing countries through partnerships with pharmaceutical companies
    • Make available the benefits of new technologies-especially information and communications technologies in cooperation with the private sector.

They represent the culmination of international development targets agreed at UN conferences since the early 1990s and codified in 1996 by the Development Assistance Committee of the OECD.

Full text and discussion on MDGs Click here

For Millenium Development Project Reports on progress towards MDGs Click here

For gender implications Click here

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World Bank's Poverty Reduction Strategy

The World Development Report 2000/2001 'Attacking Poverty' laid out a strategy for reducing poverty based on three key pillars:

  • Opportunity provided by economic growth
  • Empowerment and voice in decision-making processes
  • Security and freedom from vulnerability to shocks.

The analysis was based on a series of participatory poverty assessments in 60 countries to consult 'Voices of the Poor'.

For more see:
World Bank PovertyNet
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Sector Wide Approaches (SWAPs)

Donors are encouraged to work together under Government leadership so that all significant funding for a single sector policy and expenditure adopts a common approach across a sector. Ultimately fund disbursal and accounting should all be done by Government.

Various donor resources on SWAPs can be found through a web search on Sectorwide Approaches.

Poverty Reduction Strategy Papers

Introduced by World Bank and IMF in 1999 to provide the operational basis for the Highly Indebted Poor Countries initiative. The poverty strategy is based on five principles:

  • country-driven, promoting national ownership of strategies through broad-based participation of civil society;
  • result-oriented and focused on outcomes that will benefit the poor;
  • comprehensive in recognizing the multidimensional nature of poverty;
  • partnership-oriented , involving coordinated participation of development partners (government, domestic stakeholders, and external donors); and
  • based on a long-term perspective for poverty reduction.

In order to qualify for relief under the HIPC Initiative, countries must have at least an interim PRSP. Full relief is dependent on having at least a full PRSP. By mid 2002, there were 59 countries involved in the PRSP process.

For more see:
World Bank PRSP Reports
IMF PRSP Reports

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framework for equitable wealth creation

GOALS
• wealth creation
• increased wellbeing
• equality of opportunity
• human rights and equity of outcomes
• environmental sustainability

POLICY LEVELS
• policies targeting the poor
• policies targeting those who are not poor but can promote the above goals
• an enabling environment which ensures that a) policies are mainstreamed and the benefits of b) policies go disproportionately to the poor.

UNDERLYING PRINCIPLES
• participation
• inclusion
• equity
• transparency
• accountability

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