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Neoliberalism and poverty

Neoliberalism and poverty

Poverty has been vaguely defined in development literature as an undesirable state of living with no indepth analysis of its real nature. If you read any social policy journal, an article on social development or a treatise on political economy, you will learn that poverty is multidimensional.

The multidimensionality of poverty is a major theoretical impediment in understanding how it functions in the real world. The ambiguity of our development policy is primarily linked to our shallow and frivolous intellectual treatment of poverty as an untamable evil. We end up feeling pity for the poor when our strategy to address this multidimensionality of poverty fails. As long as we treat poverty as a complex and elusive notion, we will never be able to devise a pragmatic and workable development strategy.

What is the real nature of poverty then? In a multidimensional approach, poverty is economic, social, cultural, intellectual, cognitive and even spiritual. What does all this mean? Can we devise a strategy to address all these dimensions of poverty? If we lump together all material and non-material dimensions of poverty, we surrender to its magnanimity and hence lose the confidence in the transformative potential of human agency. For policymakers and development practitioners, the multidimensionality of poverty can seldom provide any practical instrument to devise a workable, smart and time-bound strategy that could assuage the sufferings of the poor in the real world.

The poverty alleviation policy in our contemporary development programmes is treated as a black box, which doesn’t provide any significant insight into the real workings of the system. However, there are few evaluators, policymakers and practitioners who have shown at least some interest in recent years to go beyond the opaque policy discourse and consider an in-depth analysis of the inner workings of the context of poverty and underdevelopment. Multi-sectoral poverty alleviation programmes have had varying impacts depending upon the level of the endeavours that have gone into unpacking the functional components of the policy and programmatic black box.

Development practitioners and programme evaluators must ask questions about the variability in programme impacts and the mechanisms through which these initiatives have their effects in different contexts. One may ask a simple question like: what goes on inside the ‘black box’ of a programme, service or policy? In reality, however, programme strategies and evaluations are rarely designed to rigorously examine such questions.

For effective outcomes and impact, we must unpack the black box to understand the inner workings like its various components, their interconnectedness and their functional relationship to material and non-material poverty. This will help devise a more cogent strategic and policy framework to address the nuances and contextual variations of development challenges. It will also help generate an informed discourse about the integration of key components of impact as well as the scalability and transferability of the programme to a different context. A well-thought-out and thoroughly analysed approach will also help improve target services and make programmes more efficient and effective.

In Pakistan, poverty reduction strategy papers (PRSP) and structural adjustment programmes (SAP) have failed to generate an informed policy debate on the real workings of poverty. These approaches fall under the category of black-box poverty alleviation policies. From the 1980s to the present day, there have been a variety of strategies that run parallel to PRSPs and SAPs, with tangible impacts on poverty alleviation. But their scale and outreach was much more limited and, hence, they failed to offer development solutions at scale.

There has been a patchwork of impressive development initiatives carried out by varies rural support programmes and development wholesalers like the Pakistan Poverty Alleviation Fund (PPAF). But this work needs recognition from policymakers. In order to realise the impact at scale of these integrated and participatory development programmes, the government must commit an uninterrupted flow of resources on an annual basis and rigorously monitor progress through specialised monitoring and evaluation entities. Without consistent long-term financial and technical investments and policy support, it won’t be possible for poverty alleviation organisations like the PPAF to take forward the grassroots movement of transformation in a sustainable manner.

In the larger context of globalisation, poverty and underdevelopment are not the only outcomes of the failure of certain national policies. They are also linked to disparities of exchange in international trade, unilateralism of economic policy in a neoliberal global order, and the increasing vulnerability of farmers and workers of the developing countries to incessant cycles of slump.

Trade imbalances, increasing economic deficits and the exclusion of the Global South from the policymaking in the international economic system has created economic uncertainty and political unrest in the developing world. Over the last two decades, there is a marked increase in comparative poverty within nation-states despite the remarkable rise in the volumes of GDP of many developing countries.

In countries like India and Brazil, there are increased economic disparities between the rich and poor, with plummeting economic returns for the poor in the world of the free market. The political implications of neoliberal economic policies are visible in India, with the rise of centrifugal political movements. During the last decade, India has seen the rise of Maoist movements, farmers’ agitations, communal riots, Muslim separatist movements and the rise of Hindutva as a counter-narrative to these movements of separatism. The neoliberal pledges of economic integration to create a secular democratic and politically stable India have faded away in favour of a fascist and coercive regime.

In Pakistan, the rise of religious extremism in the era of economic growth during the dictatorial regime of Pervez Musharraf, despite all his secular overtures, hints at the failure of the neoliberal economic growth model in curbing excruciating disparities and relative poverty. When national governments adopt economic policies without a consultative democratic process, they are doomed to fail in addressing the poverty and underdevelopment.

It wouldn’t be fair, however, to establish a mechanical and absolute relationship between poverty and national policy failure without considering the debilitating impact of globalisation on poverty and underdevelopment. The international trade regime of WTO is skewed towards the developed economies of the world in that the poor countries are treated only as labour and product markets. The local industry and all other means of indigenous economic growth have become vulnerable to international trade rules, which are so strict that small national industries are rapidly losing their market share.

These industries are not only losing their international market but they are also being outpaced in their share of national markets. The opening up of economies like Pakistan entails allowing monopoly capitalism to dislodge the national industries and, thereby, making the entire value chain of the local economy dependent on the fluctuations of the international market.

If it becomes inevitable to adopt neoliberal economic policies to survive in a global economic system, the government must create and support local development organisations to help the poor access economic opportunities.

Pakistan has a well-established network of RSPs and institutions like the PPAF, which can play a pivotal role to close the gap of development through investment in human development at the grassroots level. Top-down economic growth models create disparity, uneven development, poverty and political unrest. Therefore, it becomes vital to invest in meso-level institutions to bridge the gap between the government and its people.

By: Amir Hussain
Source: https://www.thenews.com.pk

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