Poverty and Hunger Reduction –
a new mix of growth and social protection
   policies is needed to achieve MDG1

          ...
Overview


             1. Progress towards MDG 1

             2. Pro-poor growth, poverty and hunger

             3. So...
Urbanization of poverty? …very slowly

                          Urban and rural share of the poor (%)
          1993     ...
Mixed evidence: Poverty at $1 (PPP)
                                 as % of total population

                           ...
Looking beneath the dollar-a-day line
          Subjacent poor                         Medial poor                        ...
The share of the poorest in SSA is growing
                         Change in the share of poor living below .50$/day 1990...
Progress on MDG 1…mixed evidence

                                          Prevalence of poverty                         ...
Hunger: Regional and country progress
                                    2.0


                                          ...
Global hunger

                                                                                35
                        ...
What Hunger?
                Global food and nutrition challenges
       Type                              Causes         ...
Limitations of MDG 1

      The MDGs help to focus, but lack…
      • Vision
      • Realism
      • Adequate policy instr...
Overview


             1. Progress towards MDG 1

             2. Pro-poor growth, poverty and hunger

             3. So...
Framework of challenges for poverty reduction
                    The Critical Square


            Governance &          ...
What type growth?
                      Comparison of Poverty-Growth Elasticity
                                         A...
Continent-wide Ag GDP and GDP Growth rates have been steady
                         and growing since 1992
              ...
But: Mixed picture
                                    of agricultural growth in Africa




Joachim von Braun, IFPRI, Octo...
Progress against CAADP’s 6% goal (2005)

     Zimbabw e
        Malaw i
        Burundi
        Zambia
   Cote d'Ivoire
  ...
Africa: Required effort is enormous
        Required Annual Agricultural Growth Rates
        To achieve MDG1 (%)
        ...
Required annual Ag Growth Rate (%)




                                                                                   ...
Growth matters: hunger - income linkage
        Hunger and GDP/ capita in developing countries
        Undernourishme
    ...
Performance in hunger index and income –
                                              selected big countries
            ...
Performance in hunger index and income –
                                                      Africa

                   ...
Government effectiveness




                                         Green: Best quartile (over 75th percentile),
       ...
Decentralization and growth

      Statistically significant correlations
        between decentralization and growth
    ...
Hunger, growth and governance
  Proportion of undern. progress indicator




                                             ...
Hunger Index and Income, War, HIV/AIDS
           Global Hunger Index
                                                  Su...
Poverty comes down too slowly in the
              general growth process
      •         Growth remains key in Africa but...
Overview


             1. Progress towards MDG 1

             2. Pro-poor growth, poverty and hunger

             3. So...
To be kept in mind: The dynamic nature of
                                     poverty

                                  ...
New Overlaps: More Shocks to
                           Social Safety of the Poor

        • Increased food price inflatio...
Types of social protection

      • Health insurance
      • Social security (e.g. pension for old-age)
      • Safety net...
Social protection and MDG1

      Targeted social protection makes four contributions to
          the achievement of MDG1...
Impact of social protection programs (1)

      • Ethiopia (PSNP):
           Increased fertilizer use by 11% points (66% ...
Impact of social protection programs (2)

      • South Africa (Old-age pension program):
           Pensions received by ...
The need for nutrition interventions early

                                                Weight for age by region
     ...
Guatemala: Improving early childhood nutrition has large
 impacts on adult education and economic productivity

    Grade ...
Findings
      • Slow progress in
        reducing poverty and
        hunger
      • Mixed success in
        reaching th...
Overview


             1. Progress towards MDG 1

             2. Pro-poor growth, poverty and hunger

             3. So...
Interventions for the poorest to move out
                of poverty and end hunger
1. Improved access to factor markets a...
Action and Research
                       on designing safety nets needed
      1. Transactions costs: administrative cap...
Can it be paid for?
        Spending on social protection by rich and poor
      • Health (% of GDP)
        - Germany, Fr...
Hunger, poverty and growth: Conclusions

      1. Growth has been key for poverty reduction …
         but less so for hun...
IFPRI 2020 Conference Oct 2007 Beijing on “Taking
          action for the worlds poor and hungry people”




           h...
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Poverty and Hunger Reduction – a new mix of growth and social protection policies is needed to achieve MDG1

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Session “MDG 1: Halving Income Poverty and Hunger”; Department for International Development, workshop,
London, October 3, 2007

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Poverty and Hunger Reduction – a new mix of growth and social protection policies is needed to achieve MDG1

  1. 1. Poverty and Hunger Reduction – a new mix of growth and social protection policies is needed to achieve MDG1 Joachim von Braun Director General International Food Policy Research Institute Session “MDG 1: Halving Income Poverty and Hunger”; Department for International Development, workshop, London, October 3, 2007
  2. 2. Overview 1. Progress towards MDG 1 2. Pro-poor growth, poverty and hunger 3. Social protection for poverty reduction and growth 4. The way forward Joachim von Braun, IFPRI, October 2007
  3. 3. Urbanization of poverty? …very slowly Urban and rural share of the poor (%) 1993 2002 18.88 24.67 75.33 81.13 urban share of the poor (%) rural share of the poor (%) Source: Ravallion et al., 2007 Note: Poverty line is set at $1.08/day Joachim von Braun, IFPRI, October 2007
  4. 4. Mixed evidence: Poverty at $1 (PPP) as % of total population 50 40 30 20 10 0 1981 1984 1987 1990 1993 1996 1999 2002 2004 East Asia & Pacific Europe & Central Asia Lat. Am erica & Caribb. Middle East & N. Africa South Asia Sub-Saharan Africa Joachim von Braun, IFPRI, October 2007 Source: WDI 2007
  5. 5. Looking beneath the dollar-a-day line Subjacent poor Medial poor Ultra poor ($0.75 and <$1): ($0.50 and <$0.75): (<$0.50): 485 mln in 2004 323 mln in 2004 162 mln in 2004 LAC MENA ECA MENA ECA 0.4 mln 3 mln ECA 1.1 mln 11.5 mln 0.2 mln LAC MENA LAC 0.9 mln EAP 19 mln 3.3 mln 16.6 mln 8.8 mln SSA 87.0 mln EAP SSA EAP 51 mln SA 109.3 mln 90.2 mln 19.7 mln SSA SA 121 mln SA 162.9 mln 263.6 mln Source: Ahmed et al. IFPRI, 2007 Joachim von Braun, IFPRI, October 2007
  6. 6. The share of the poorest in SSA is growing Change in the share of poor living below .50$/day 1990-2004 0.5 0.06 0.14 0 % point change -0.5 Developing World -0.7 -1 East Asia & Pacific -0.9 South Asia -1.5 -1.4 L America & Caribb. Sub-Saharan Africa -2 Source: Ahmed et al. 2007 Joachim von Braun, IFPRI, October 2007
  7. 7. Progress on MDG 1…mixed evidence Prevalence of poverty Prevalence of undernourishment 2.5 1.5 Hunger ratio: [2002-04/1990-92] Poverty ratio: [2002-04/1990-92] MDG Target 2.0 1.0 1.5 MDG Target 1.0 0.5 0.5 0.0 0.0 EAP ECA LAC MENA SA SSA AP ECA LAC MENA SSA Joachim von Braun, IFPRI, October 2007 Based on data from FA0 2006; World Bank 2007
  8. 8. Hunger: Regional and country progress 2.0 Central Africa Hunger ratio: [2002-04/1990-92] Regress 1.5 Middle East Tanzania Mexico Central America 1.0 India N. Africa South Asia East Africa China Kenya Nigeria Caribbean Southern Africa Ethiopia Progress W. Africa S. America Mozambique 0.5 SE Asia Uganda Ghana MDG Target 0.0 0 10 20 30 40 50 60 Prevalence of undernourishment 2002-04 (%) Joachim von Braun, IFPRI, October 2007 Based on data from FA0 2006
  9. 9. Global hunger 35 Sub-S Africa undernourishment 2004 (%) 30 213 S Asia 25 Prevalence of 300 E Asia & 20 Pacific 15 227 M East & Europe & 52 10 N Africa C Asia 23 37 L America & 5 Caribb 0 -4 -3 -2 -1 0 1 2 Annual change in prevalence of undernourishment 1992-2004 (%) Joachim von Braun, IFPRI, October 2007 Source: FAO 2006, World Bank 2007
  10. 10. What Hunger? Global food and nutrition challenges Type Causes People affected Hunger Deficiency of calories 0.9 billion and protein Children Inadequate intake of 146 million underweight food and frequent disease Micro-nutrient Deficiency of vitamins More than deficiency and minerals 2 billion …and their mortality effects (ca. 50 % of <5 mortality) Source: Based on data from FAO 2006, Micronutrient Initiative and UNICEF 2005, UNICEF 2006, WHO 2006 Joachim von Braun, IFPRI, October 2007
  11. 11. Limitations of MDG 1 The MDGs help to focus, but lack… • Vision • Realism • Adequate policy instruments • Reliable monitoring process • Accountability Joachim von Braun, IFPRI, October 2007
  12. 12. Overview 1. Progress towards MDG 1 2. Pro-poor growth, poverty and hunger 3. Social protection for poverty reduction and growth 4. The way forward Joachim von Braun, IFPRI, October 2007
  13. 13. Framework of challenges for poverty reduction The Critical Square Governance & Economic Conflicts Growth Innovation Productivity (e.g. in agriculture) & Capacity Joachim von Braun, IFPRI, October 2007
  14. 14. What type growth? Comparison of Poverty-Growth Elasticity Agriculture- Non-agr.-led Staple-led Ag-export- led growth growth growth led growth scenario scenario scenario scenario Ethiopia -1.7 -0.7 -1.8 -1.4 (2003-15) Ghana -1.8 -1.3 -2.1 -1.1 (2003-15) Rwanda -1.4 -0.8 - - (2003-15) Uganda -1.6 -1.1 -1.4 -1.4 (1999-2015) Zambia -0.6 -0.4 -0.6 -0.5 (2001-15) Sources: Simulation results from economy-wide multi-market models for Ethiopia, Ghana, Rwanda and CGE models for Uganda and Zambia (Diao and Thurlows, IFPRI 2005) Joachim von Braun, IFPRI, October 2007
  15. 15. Continent-wide Ag GDP and GDP Growth rates have been steady and growing since 1992 Agriculture, value added (annual % grow th) GDP grow th (annual %) 9 Percent (%) 6 3 0 -3 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 Joachim von Braun, IFPRI, October 2007 Fan, draft, IFPRI, 2007
  16. 16. But: Mixed picture of agricultural growth in Africa Joachim von Braun, IFPRI, October 2007 Source: IFPRI/CAADP using UNSD Database
  17. 17. Progress against CAADP’s 6% goal (2005) Zimbabw e Malaw i Burundi Zambia Cote d'Ivoire Sw aziland Lesotho Mozambique Madagascar C Af Rep. Congo, Rep. Guinea Botsw ana Namibia Gabon Burkina Faso Togo Ghana Cameroon Benin Gambia Uganda Tanzania Rw anda DRC Guinea- Chad Kenya Senegal Mali Mauritania Nigeria Eritrea Ethiopia Angola -12 -6 0 6 12 18 annual percent grow th (%) Joachim von Braun, IFPRI, October 2007
  18. 18. Africa: Required effort is enormous Required Annual Agricultural Growth Rates To achieve MDG1 (%) 2003 – 2015 6.20% 2005 – 2015 7.50% Required Annual Growth in Agricultural Spending To achieve MDG1 (%) Past, 1992 - 2004 6.1% Required, 2005 - 2015 21.0% Required Annualized Spending (Billion Dollar, 2000 Price) Source: Fan et al. IFPRI (work in progress) 2005 – 2015 $32.5 Joachim von Braun, IFPRI, October 2007
  19. 19. Required annual Ag Growth Rate (%) 12 15 18 0 3 6 9 Zimbabwe Burundi Guinea- Madagascar Joachim von Braun, IFPRI, October 2007 Kenya Niger Lesotho Togo Cote d'Ivoire Central Source: Fan et al., IFPRI (work in progress) Chad Namibia Zambia Benin Guinea Gambia Malawi Senegal Swaziland Nigeria Mali Burkina … and this varies by country Tanzania Mauritania Ethiopia Required annual agricultural growth rates to meet MDG1 Cameroon Uganda Ghana Mozambique
  20. 20. Growth matters: hunger - income linkage Hunger and GDP/ capita in developing countries Undernourishme nt (% of pop) Log. (1990-1992) 50 Log. (2001-03) Log. (1995-1997) 40 30 20 10 0 0 1000 2000 3000 4000 5000 6000 GDP per Capita (in constant 2000 US$) Source: von Braun, regressions based on data from World Bank (2005) and FAO (2005) Joachim von Braun, IFPRI, October 2007
  21. 21. Performance in hunger index and income – selected big countries Trends in the Global Hunger Index and Gross National Income per capita 45 (1981, 1992, 1997, 2003) 40 35 30 Bangladesh Global Hunger Index India 25 20 Vietnam 15 10 China Brazil 5 0 0 2,000 4,000 6,000 8,000 10,000 12,000 Gross National Income per capita Source: Wiesmann, IFPRI, 2007 Joachim von Braun, IFPRI, October 2007
  22. 22. Performance in hunger index and income – Africa Sub-Saharan Africa, Trends 1981-2003 50 45 40 Ethiopia 35 Global Hunger Index Zambia 30 Mozambique 25 Malawi 20 Kenya Senegal Uganda 15 Ghana 10 5 0 0 500 1,000 1,500 2,000 2,500 Gross National Income per capita Source: Wiesmann, IFPRI, 2007 Joachim von Braun, IFPRI, October 2007
  23. 23. Government effectiveness Green: Best quartile (over 75th percentile), with top 10th colored in darker green Yellow: second best quartile (over 50th) Orange: third quartile (over 25th) Red: fourth quartile, with bottom 10th in darker red Joachim von Braun, IFPRI, October 2007 Source: Kaufmann et al. 2005
  24. 24. Decentralization and growth Statistically significant correlations between decentralization and growth Administrative: Responsibility for civil servants: 0.50 Fiscal: Reliability of fiscal transfers from center to local government: 0.45 Source: Birner 2007 Joachim von Braun, IFPRI, October 2007
  25. 25. Hunger, growth and governance Proportion of undern. progress indicator Ethiopia Ghana 1.0 Brazil Nigeria Uganda China 0.5 Kenya India 0.0 -0.5 -10 -5 0 Tanzania 5 10 -1.0 -1.5 -2.0 -2.5 Congo, DR -3.0 Annual growth rate in GNI per capita, 1990-2004 (in %) Low gov effectiveness Higher gov effectiveness Source: Wiesmann 2007 Low gov. effectiveness is assigned to countries in the lowest Joachim von Braun, IFPRI, October 2007 quartile of Worldwide Governance Indicators
  26. 26. Hunger Index and Income, War, HIV/AIDS Global Hunger Index Sub-Saharan Africa Joachim von Braun, IFPRI, October 2007 Gross National Income per capita Source: Wiesmann, IFPRI, 2006
  27. 27. Poverty comes down too slowly in the general growth process • Growth remains key in Africa but the kind of growth needs re-visiting • Role of rural and agriculture growth in Asia underestimated • Discrimination and exclusion underestimated • The need for higher social protection undervalued Joachim von Braun, IFPRI, October 2007
  28. 28. Overview 1. Progress towards MDG 1 2. Pro-poor growth, poverty and hunger 3. Social protection for poverty reduction and growth 4. The way forward Joachim von Braun, IFPRI, October 2007
  29. 29. To be kept in mind: The dynamic nature of poverty % escaped % fell into Study Period poverty poverty Bangladesh Sen (2003) 1987-00 26 18 Haddad & Ahmed Egypt (2003) 1997-99 6 14 India, Rajasthan Krishna (2004) 1976-01 11 8 Krishna et al Kenya, Western (2004) 1978-03 18 19 Carter & May South Africa (2001) 1993-98 10 25 Deininger & Okidi Uganda (2003) 1992-00 29 12 Joachim von Braun, IFPRI, October 2007 Source: Krishna 2007
  30. 30. New Overlaps: More Shocks to Social Safety of the Poor • Increased food price inflation • Health risks: multiple threats (avian flu, HIV/AIDS, TB, Malaria,…) • Climate change risks  The need for social protection is rising Joachim von Braun, IFPRI, October 2007
  31. 31. Types of social protection • Health insurance • Social security (e.g. pension for old-age) • Safety nets (productive) Nutrition support Conditional/unconditional transfers Employment guarantees Microcredit / Microinsurance Crop insurance Joachim von Braun, IFPRI, October 2007
  32. 32. Social protection and MDG1 Targeted social protection makes four contributions to the achievement of MDG1: 1. By transferring resources to poor households, it has a direct effect on reducing poverty and hunger. 2. By protecting assets, it prevents households from falling into poverty 3. By building community assets that are associated with income growth 4. By making it possible for households to undertake investments that lead to sustainable income growth and reductions in poverty and hunger Joachim von Braun, IFPRI, October 2007
  33. 33. Impact of social protection programs (1) • Ethiopia (PSNP): Increased fertilizer use by 11% points (66% increase compared to control group) and use of improved seeds by 4.8% points (Gilligan et al. in prep.) • India (NREGA): Provided employment = to 1 bn person-days/year (Drèze and Oldiges 2007) • Bangladesh (FSVGD): Reduced extreme poverty by 30% points and increased per capita calorie intake by > 10% (Ahmed et al. 2007) Joachim von Braun, IFPRI, October 2007
  34. 34. Impact of social protection programs (2) • South Africa (Old-age pension program): Pensions received by women improved health and nutrition of girls (weight-for-height) by 1.2 std. dev. (Duflo 2003) • Mexico (Progresa / Opportunidades): CCTs reduced severity of poverty by 46% (Skoufias 2005) • Guatemala (Childhood nutrition intervention): - Increased male wages by 46% in adulthood - Increased female grade attainment by 28% (Hoddinott et al. forthcoming) Joachim von Braun, IFPRI, October 2007
  35. 35. The need for nutrition interventions early Weight for age by region 0.5 0.25 NCHS 0 Reference -0.25 Z-score (NCHS) -0.5 -0.75 -1 -1.25 -1.5 -1.75 -2 0 3 6 9 12 15 18 21 24 27 30 33 36 39 42 45 48 51 54 57 60 Age (months) Africa Latin America and Caribbean Asia Shrimpton et al. 2001 Joachim von Braun, IFPRI, October 2007
  36. 36. Guatemala: Improving early childhood nutrition has large impacts on adult education and economic productivity Grade attainment Nutritional intervention 27% (women) among Guatemalan children 0-7 years old (’69-’77) Cognitive ability 8% Follow-up in adults 25-42 years old (’02-04) Reading 17% comprehension Investments in early childhood nutrition have a long-term economic growth effect Income earned per hour worked 20% (men) 0% 5% 10% 15% 20% 25% 30% Joachim von Braun, IFPRI, October 2007 Source: Hoddinott et al. Lancet (in revision)
  37. 37. Findings • Slow progress in reducing poverty and hunger • Mixed success in reaching the poorest with growth ( the where, how matters) • “business as usual” is not good enough to reach MDG1 and move beyond it • What in addition and what next ? Joachim von Braun, IFPRI, October 2007
  38. 38. Overview 1. Progress towards MDG 1 2. Pro-poor growth, poverty and hunger 3. Social protection for poverty reduction and growth 4. The way forward Joachim von Braun, IFPRI, October 2007
  39. 39. Interventions for the poorest to move out of poverty and end hunger 1. Improved access to factor markets and basic services (employment; information) 2. Prevention of food price inflation (agric. growth) 3. Insurance against health shocks (innovative) 4. Preventing child malnutrition (comprehensive coverage) Joachim von Braun, IFPRI, October 2007
  40. 40. Action and Research on designing safety nets needed 1. Transactions costs: administrative capacity, information, decentralization; PPP 2. Switching systems or adding components (CCTs; employment guarantee) 3. Political sustainability: commitment, structure of institutions 4. Innovation & optimization: learning by doing; impact studies & experimental designs; finding optimal mixes of social protection policies Joachim von Braun, IFPRI, October 2007
  41. 41. Can it be paid for? Spending on social protection by rich and poor • Health (% of GDP) - Germany, France, Sweden: 7-8% - India, Somalia, Georgia: < 1% • Pensions (% of GDP) - Austria, Greece, Poland: 11-13% - Nigeria, Bangladesh, Mozambique: < 1% • Social assistance (% of GDP) - Pakistan, Peru, Colombia: < 1% Source: Dethier 2007 Mainly from domestic funding … not only a matter of more development aid Joachim von Braun, IFPRI, October 2007
  42. 42. Hunger, poverty and growth: Conclusions 1. Growth has been key for poverty reduction … but less so for hunger reduction 2. Re-balancing investment for growth and social protection needed now 3. …and phasing in social protection earlier in the growth process – also in Africa Joachim von Braun, IFPRI, October 2007
  43. 43. IFPRI 2020 Conference Oct 2007 Beijing on “Taking action for the worlds poor and hungry people” http://www.ifpri.org/2020chinaconference/index.htm Joachim von Braun, IFPRI, October 2007

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