Stiglitz Bites Bullet: Poverty Increasing

S Pawlett epawlett at
Tue Apr 27 10:24:18 PDT 1999

Reuters ran a story today summarizing the findings of a recent World Bank Study. (the annual development report?):

Stiglitz:" We must be more cautious of programs that promote growth in ways that are not sustainable or which save the economy, or at least the exchange rate, but at the cost of increased poverty, interrupting education or declining life expectancy."

Comment: This may be the closest the WB will come to admitting that its and IMF's programs cause poverty.

" Despite the significant gains in development, the gap between the rich and the poor is widening and if you look at many countries income distribution is worsening, increasing the social pain of economic failure. Nowhere are these problems more evident than in the former states of the Soviet Union"

Comment: What does he mean by "development"? If poverty is increasing in all of the areas studied, what does that say for develpment? or the meaning of the term "development" that the bank works with?

Reuters: " The report estimates that 1.5 billion people are living at below $1 a day, the measure for poverty in the world's poorest countries, compared with 1.3 billion in 1993. The bank survey attributes the shrinking opportunity to improve human living conditions to a rapid spread of AIDS in Africa, the lingering effects of the Asian financial crisis and chaos in the former East Bloc nations. In Eastern Europe and the former Soviet Union, the bank calculated the number of people living under the poverty line of $4 a day has grown to 147 million from 14 million in 1989."

Comment:!!!!! There are no attempts to link these causes of increasing poverty. The bank sees no connection between "chaos" in fSU and "Asian financial crisis" or AIDS. What are the causes of this "chaos" and this "financial crisis"?

" In 10 Sub-Saharan countries, life expectancy has deterioted by 10 years in the past decades as HIV and AIDS have infected 10% of the adult population. In Indonesia, one of the countries affected by the Asian financial crisis that started in Thailand in July 1997, before spreading throughout the region , up to 20% of the population is living is poverty compared to just 7% two years ago, Stiglitz said"

Stiglitz isn't stupid. It should be pretty clear by now who benefits from SAP's and why they are implemented. If the bank really wants to ameliorate poverty, it will have to radically alter its philosophy and its program. Deep down, I think Stiglitz knows this.

Sam Pawlett

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