DS St. John's University Dodoma

POVERTY AND POVERTY ALLEVIATION STRATEGIES IN DEVELOPMENT PREPARED BY MR. NYONI, C. H INSTITUTE OF DEVELOPMENT STUDIES SAINT JOHN'S UNIVERSITY OF TANZANIA Introduction The purpose of this unit is to describe the concept of poverty, identify types of poverty, determine causes of poverty in Tanzania, determine the indicators of poverty, measure poverty and finally review of poverty reduction strategies with special attention given on Millennium Development Goals (MDGs), Tanzania Development Vision 2025, National Strategy for Growth and Reduction of Poverty (MKUKUTA) and The Property and Business Formalization Program (MKURABITA) Some concepts in poverty Poverty line: Is income or expenditure level needed to support an adult person at the subsistence level of food, shelter, clothing and other necessities per year (Rowntree, 1901 cited by Blackwood and Lynch, 1994) Poverty incidence: Is the percentage of people (individuals or households) whose income or expenditure is below the poverty line divided by all the people in the population multiplied by 100, and is called the head count ratio if we do not multiply it by 100 Poverty gap (Poverty depth or Income shortfall): Is the extent to which incomes or expenditures of the poor are below a poverty line; it is expressed as the difference between the poverty line and income or expenditure of the poor divided by the poverty line and multiplied by 100 Poverty reduction: Is alleviating, easing, relieving or lessening indigence Poverty eradication: Is an ambitious terminology meaning to wipe out, annihilate, exterminate, or obliterate poverty. It is possible to eradicate absolute poverty in a geographical area by helping the absolutely poor people of the area help themselves to attain the minimum standard of living. However, it is very difficult to eradicate absolute poverty all over a country. This is evidenced by the fact that although we have had an objective to eradicate absolute poverty in Tanzania since 1961 after gaining political independence, poverty still lingers. While it is possible to eradicate absolute poverty, it is hardly possible to eradicate relative poverty since there will be no day when all the people of a society or country will have exactly the same levels of well being. The United Socialist Soviet of Russia tried to eliminate relative poverty by dreaming of forming a communist society, but the dream was not realized until socialism collapsed in 1989 before developing into communism. Accordingly, most interventions to reduce poverty in poor countries where a sizeable proportion of people is poor adopt the absolute poverty definition, and consider strategies to help the absolutely poor attain the minimum standard of living thereby eradicating absolute poverty. But in rich countries the relative poverty approach is more frequently used to increase equity since enough resources like income and safety nets are there; fair distribution of the resources is more important and most people are above national poverty lines. Absolute (abject or hard-core) poverty: Is the inability to obtain a specified minimum standard of living, based on one or a number of specific indicators. Relative poverty: is the condition of having fewer resources or less income than others within a society or country, or compared to worldwide averages OR is the level of well being that is judged to be poor or well off based on comparing people belonging to the same society or community, be it poor or rich. When the concept is applied to determining poverty in a rich population, those that have less wealth than others are said to be relatively poor, and when it is adopted to determine poverty in a poor population, the ones that are better off than others are said to be relatively rich. Participatory Poverty Assessment (PPA): is an exercise done by experts in collaboration with members of a community to identify indicators of poverty in the community and classify members/households of the community into various categories of poverty and well being based on the indicators. Poverty There is no universally accepted definition of poverty. Different people conceptualize it differently. Because there are many different ways of thinking about poverty it is useful to have some agreed definitions for discussion and making plans. Attempt to define poverty from various Scholars Nkonoki (1999) defined poverty as a state of having an income that is inadequate to meet basic human needs such as food, shelter and clothing, either poverty is characterized by poor access to health and educational services; and landlessness or near landlessness According to United Republic of Tanzania (URT) (1999), poverty may be defined as a state of deprivation and prohibitive of decent life that result from many mutually reinforcing factors including lack of productive resources to generate material wealth, illiteracy, prevalence of diseases, discriminative socio- economic and political system, natural calamities such as drought, flood, HIV/AIDS and wars. Human condition characterized by sustained or chronic deprivation of resources, capabilities, choices, security and power necessary for enjoyment of an adequate standard of living and other cultural, economic, political and social rights (Committee on Economic, Social and Cultural Rights, 2001) Types of poverty There are mainly two types of poverty, namely as absolute (abject or hard-core) and relative poverty. Absolute poverty is the inability to obtain a specified minimum standard of living based on nutrition and other non-food basic necessities. Relative poverty is a comparative term applied to an entire population focusing on well being of all people. If all the people are poor, those who are less poor are said to be relatively non-poor. If all of them are rich those who are less well-off are said to be relatively poor. Therefore, relative poverty cannot be eradicated since there will be no day when all people will be at the same level of well-being. Accordingly, most poverty studies adopt the absolute poverty definition with a view to find policy implications on which strategies to help the absolutely poor help themselves to attain minimum needs for survival as human beings can be based, thereby eradicating absolute poverty. CAUSES OF POVERTY According to the National Poverty Eradication Strategy (NPES) (URT, 1998) and based on the Participatory Poverty Assessment that was conducted in Tanzania in 1995 and 1997, causes of poverty in Tanzania are grouped into internal and external factors. Internal causes of poverty in Tanzania: • Inefficient fiscal and monetary policies which do not promote economic growth; • Insufficient support to the leading economic sectors. • Use of low level technology, which encumbers high production; • Poor industrialization, which limits production and employment; • Poor gender division of labour at the household level, especially in rural areas, where women do most of the activities while men rest more time, resulting into low production; • Poor work output at the individual, household and community levels; • Diseases, including HIV/AIDS and others, which have already been eradicated and those that are easily controlled and prevented in developed countries; and • Having big families hence more dependants than other family members who can work. However, it is not automatic that once a household is big it is poorer than smaller households. It depends on whether members of big households rely on only a few members or every one works. It also depends on the types of income-generating activities (IGAs) they are doing. External causes of poverty in Tanzania: • National debt, which causes sizeable proportions of the national income to be paid as external debt instead of being spent on social services and economic development; • Unequal exchange in international trade thereby limiting the ability of developing countries to break out of the poverty cycle; and • The burden of refugees, which increases pressure on natural resources and social services. The National Strategy for Growth and Reduction of Poverty (NSGRP) (URT, 2005) also documents some other causes of poverty in Tanzania, which were identified during the 2002/2003 Tanzania Participatory Poverty Assessment (TzPPA). Although the causes outlined in both the NPES and NSGRP were identified with reference to Tanzania, they are applicable to some other poor countries. However, identification of impoverishing factors at different levels may come up with some factors that may be, to some extent, different from the ones listed in Table below: Table 1: Major categories of impoverishing factors Category Description Environment Shocks from weather extremes (e.g. flooding, drought), stress from gradual degradation of forests, soils, fisheries and pastures; health effects and loss of confidence in future well being. Macroeconomic conditions National economic decisions such as privatisation, elimination of subsidies on inputs, cost sharing in health and education, reduced spending on agricultural services (including retrenchment of extension officers), employment, rural livelihoods, costs and access to social services, etc. Governance Shocks related to coercion, extortion, corruption, unsatisfactory taxation (multiple taxation, coercive tax collection methods), political exclusion Ill-health Malnutrition, injury, diseases, HIV/AIDS, other physical and psychological disabilities undermine people’s material, bodily and social well-being Life-linked conditions Ill-health, risks and social marginalisation resulting from one’s age, with the old, youths and children being particularly vulnerable to special problems Cultural beliefs and practices Impoverishment resulting from some cultural norms and traditional beliefs diminish the freedom of choice and action, e. g. those discriminating women and children, but favour men. Source: URT (2004); URT (2005) Causes of poverty as given by Maxwell School, Syracuse University Colonial Histories: One of the most important barriers to development in poor countries is lack of uniform, basic infrastructure, such as roads and means of communication. Some development scholars have identified colonial history as an important contributor to the current situation. In most countries with a history of colonization, the colonizers developed local economies to facilitate the expropriation of resources for their own economic growth and development. Centralization of Power: In many developing countries, political power is disproportionately centralized. Instead of having a network of political representatives distributed equally (UNEQUAL DISTRIBUTION POLITICAL REPRESENTATIVES) throughout society, in centralized systems of governance one major party, politician, or region is responsible for decision-making throughout the country. This often causes development problems. For example, in these situations politicians make decisions about places that they are unfamiliar with, lacking sufficient knowledge about the context to design effective and appropriate policies and programs. Corruption: Corruption often accompanies centralization of power, when leaders are not accountable to those they serve. Most directly, corruption inhibits development when leaders help themselves to money that would otherwise be used for development projects. In other cases, leaders reward political support by providing services to their followers. Warfare/ war: Warfare contributes to more entrenched poverty by diverting scarce resources from fighting poverty to maintaining a military. Take, for example, the cases of Ethiopia and Eritrea. The most recent conflict over borders between the two countries erupted into war during 1999 and 2000, a period when both countries faced severe food shortages due to drought. Another example is Sudan and South Sudan Environmental degradation: Awareness and concern about environmental degradation have grown around the world over the last few decades, and are currently shared by people of different nations, cultures, religions, and social classes. However, the negative impacts of environmental degradation are disproportionately felt by the poor. Throughout the developing world, the poor often rely on natural resources to meet their basic needs through agricultural production and gathering resources essential for household maintenance, such as water, firewood, and wild plants for consumption and medicine. Thus, the depletion and contamination of water sources directly threaten the livelihoods of those who depend on them. Social Inequality: One of the more entrenched sources of poverty throughout the world is social inequality that stems from cultural ideas about the relative worth of different genders, races, ethnic groups, and social classes. Ascribed/attribute inequality works by placing individuals in different social categories at birth, often based on religious, ethnic, or 'racial' characteristics. In South African history, apartheid laws defined a binary caste system that assigned different rights (or lack thereof) and social spaces to Whites and Blacks, using skin color to automatically determine the opportunities available to individuals in each group. INDICATORS FOR MEASURING POVERTY Participatory Poverty Assessment (PPA) was conducted in Tanzania in 1998 to develop poverty and welfare monitoring indicators came up with the 14 items that are listed Table--- from the most to the least important: (Income/monetary and non-income/ non monetary indicators) Table 2: A list of poverty and welfare indicators in Tanzania Item Indicators 1. Food security • % of population who are unable to get two meals a day and three meals a day for children • % of households with food insecurity • Food security at the district level • % of villages/wards/district with food shortages • Average acreage of cultivated land per household • % of agricultural households using (i)hand hoe, (ii) Oxen drawn implements (iii)Tractor 2. Income and production • % of population with access to financial facilities for savings and credits (by gender) • % of population below absolute poverty lines • % of population below the poverty line of US $ 1a day • Rate of inflation • % of households spending 50% or more income on food by urban and rural 3. Education • % of illiterate and literate population by gender • Primary school gross enrolment rate (GER) gender • Primary school dropout rates by cause and gender • Secondary school gross enrollment ratio (GER) gender • Vocational training school gross enrolment ratio by type and gender • Mean years of schooling by gender • Mean age enrolment for primary school by gender • Pupil/teacher ratio (primary school) • Pupil/teacher ratio (secondary school) • % of household consumption expenditure for education 4. Health status • Infant mortality rate (IMR) • Under 5 mortality rate (U5MR) by gender • % of deaths by causes by gender of (i)all age groups (ii)children under 5 • Incidence of HIV/AIDS • Maternal mortality rates (MMR) • Life expectancy by gender • Crude birth rates (CBR) • Crude death rates (CDR) • % of disabled people by type, gender and district 5. Water and sanitation • % of households with access to an adequate amount of safe drinking water within 400 metres • % of households with access to adequate amount of water within 400 meters • % of urban people with (i) toilet facility (ii) access to toilet facility • % of urban households with access to disposal facility • % of urban households with access to (i) sewage system (ii) cesspool emptying • % of population contributing to water services 6. Health services • % of population with access to health services • Population per (i) dispensary (ii) health centre (iii) doctor (iv)hospital beds • % of deliveries attended by trained attendants or other health personnel • % of population with access to reproductive health services by gender • % of children under 1 year fully immunized by gender • % of pregnant women immunized against tetanus • % of household consumption expenditure for health services 7. Nutritional status • % of under five children with malnutrition by gender and Weight-for-Age (WFA): (i) severe (ii) moderate • % of infants with low birth weights (LBW) 8. Transport and communication • % of villages accessible by roads, railway or boat throughout the year • % of population with access to transport: (i) bicycle (ii) Ox-driven carts (iii) motor cycle (iv) car by gender • Number of people owning a radio per 1,000 population, by gender • Number of newspaper circulation by 1,000 population • Number of post offices per 100,000 population • Number of telephones per 1,000 population 9. Housing • % of households living in temporary houses, by male and female household headship • % of urban population living squatter areas, by gender • Average number of persons per sleeping room 10. Environment • Deforestation rates • Number of reported incidence of illegal fishing practices, including dynamite fishing in coastal regions Number of livestock per square km (stocking rate) in pastoral regions 11. Household and family relations • Economic dependency: number of household members depending on one working member by gender • Average household size, by gender in male and female headed households • Ratio of working hours between men and women • % of female and male headed households • % of population 15+ years drinking alcohol, by gender • Number of children in child labour • Number of children in difficult circumstances, by type, e.g. orphans and street children 12. Energy • % of households using (i) firewood (ii) charcoal (iii) kerosene (iv) gas (v) electricity 13. Empowerment and participation • % of women participating in decision making at the household level • % of men and women participating in decision making organs at village level • Participation of villages in decision making at local and central government • Participation of women in decision making positions and professional economic activities • % of men and women not participating in any social and economic groups 14. Traditions and norms • The extent to which traditional beliefs influence food use, land utilization, time use, investment, gender discrimination at different levels e.g. 1 is none, 2 is partly, 3 is average, 4 is yes and 5 is to large extent. Source: United Republic of Tanzania (1999) NOTE: Determination of nutritional status of an individual is based on Body Mass Index (BMI) is given by: BMI=W/H2 Where by W=Weight in kilograms H=Height in meters If BMI is: Below 16- represent severe chronic malnutrition 16-17.5 – Chronic malnutrition with wasting 17.5-18.5- Chronic malnutrition, underweight 18.5-25- Normal 25-30- Overweight Over 30- Obese MEASURING OF POVERTY Measuring poverty using non-monetary indicators (basic and social needs) Non-monetary indicators of poverty and well being are identified. Either people with some of the indicators or those with low levels of certain indicators are said to be poor vis-à-vis other people. Such indicators may include vulnerability to certain undesirable factors like floods, social exclusion, etc. With respect to basic and social needs, members of a population who are unable to meet specified minimum amounts of certain needs are called poor. Participatory Poverty Assessment (PPA) is an example of measuring poverty without using poverty lines. Its simplified procedure is as follows: • Members representing a community in terms of gender categories, age groups, education levels, main occupations, ethnic groups, agro-ecological zones, levels of well being, and social positions are identified and convened in a meeting. • They are then asked to brainstorm, state, and agree on important indicators of being rich and poor in their community. • Most of the same indicators e.g. income indicate both poverty and wealth. For example low income indicates poverty while high income indicates wealth. • The participants are asked to determine the number of groups into which members of the community can be grouped, on the basis of their well being situation, e.g. Rich, neither rich nor poor, poor, and very poor. • For each of the groups, attributes of members are described pertinent to the indicators identified. • Then the numbers and percentages of people or households falling in each of the groups of well being are computed, e.g. if the sample comprised 200 households, Table 03 would be an ideal way of presenting the results of a hypothetical PPA Exercise. Table 03: An example of presenting results of a PPA Exercise Indicator* Non-poor Moderately Poor Very poor Level No. % Level No. % Level No. % Acreage > 10 acres 24 12 2-9 acres 96 48 < 2 acres< 80 40 Maize production >100 bags 30 15 20-99 bags 106 53 < 20 bags 64 32 House quality Iron sheets roof with cement block bricks 20 10 Iron sheets roof with mud walls 50 25 House thatched with grass or leaves 130 65 Clothing All ready made clothes 28 14 More second hand clothes 72 36 All second hand clothes 100 50 Health services Treated in private hospitals 40 20 Treated in governmental hospital 80 40 Treated by traditional healers 80 40 Children’s education Attending secondary school 40 20 Completing primary school 140 70 Not completing primary school 20 10 TOTAL - 182 91 - 544 272 - 474 237 AVERAGE - 30 15 - 91 45 - 79 40 *Assume all the indicators and the three groups were mentioned by local people Conclusion: In the hypothetical community, the non-poor are 15%; the moderately poor are 45%; and the very poor are 40%. Measuring poverty using monetary indicators Using monetary indicators of poverty, poverty is determined in absolute or relative terms. In the former case, poverty lines are used but in the latter case poverty lines are not used. Poverty comparisons across the globe are based on a poverty line /reference line set by World Bank as $ 1.25 and $ 2 per day for developing countries (2005 Purchasing power parity terms). The, “lower lines” denote basic food needs, based on specific assumptions about eating habits, nutritional requirements and cost and “upper lines” cover, in addition to such food requirements, other essential needs, such as clothing, housing, water, health and others. For the case of developed or industrialised countries a poverty line of about US $ 15 per capita per day is used to measure poverty. Nb: Poverty lines do vary depending on social, political, economic and cultural differences Advantages of using poverty line • Changes in the well-being positions of the poor can be traced and the extent of poverty reduction can be measured • The poor, the ones that actually suffer, are easily identified and categorized so that they can be helped to help themselves to reduce their poverty. Disadvantages of using poverty lines • Some essential social poverty indicators, such as access to education and health care may not be reflected in the poverty lines • Poverty lines, if not well-determined and adjusted to local situations, may not reflect the actual standard of living The following methods are commonly used to measure absolute poverty in monetarily terms. These include (a) The Head Count Index (H) and (b) Poverty gap or depth index (Income shortfall) (I) HEAD COUNT RATIO OR INDEX (H) The index measures the incidence of poverty, which is the percentage of people whose income or expenditure is below the poverty line. The head count ratio is expressed as a percentage giving the incidence of poverty. It is expressed mathematically as: H=q/n *100 Where: H = the head count ratio, that is the percentage of population getting income which is lower than the poverty line q = the number of individuals or households whose income is below the poverty line n = the total number of people in the sample or population Advantages of head count index • It is the simplest and most convenient measure of poverty incidence • It is useful in testing the effectiveness of poverty alleviation programmes by finding and comparing the number and percentages of people or households below the poverty line before and after sometime of implementation of such programmes Disadvantages of head count index • The measure treats equally people with incomes just below the poverty line and those with incomes far below the line • It does not indicate income distribution among the poor, that is, it does not consider inequality among the people to whom it is applied Example: Based on imaginary figures given in Table 04 and a poverty line is TSh 1,500 per adult equivalent per year, the incidence of poverty would be calculated as seen just after the table Table 04: Imaginary consumption expenditures per adult equivalent per year in 10 households Household Serial Numbers 1 2 3 4 5 6 7 8 9 10 Consumption expenditure per adult equivalent per year 1,500 1,499 750 5,000 1,101 1,500 2,000 3,000 1,400 1,600 Since those with income expenditure below TSh 1,500 in are 4, i.e. those with Serial Numbers 2, 3, 5, and 9, the head count ratio is 4/10 x 100 = 40%. Therefore, the non-poor (i.e. those whose consumption expenditures are equal to and greater than the poverty line) are 6/10 x 100 = 60%. (II) POVERTY GAP OR DEPTH INDEX (INCOME SHORTFALL) (I) It determines the depth of poverty using a poverty gap index, which is the amount of income by which the poor fall short of the poverty lines. It is expressed as a percentage of the poverty line (World Bank, 1993a). Mathematically, the poverty gap index is expressed as: I = (z-μ)/z x 100 for one person, where: I = poverty gap z = poverty line and μ = income or expenditure of the poor per adult equivalent per year z – μ = the amount of money that would be needed per year to eradicate poverty, if perfect targeting were possible (World Bank, 1993a). Nb: For more than one person the average of (z-μ) in the above formula has to be taken. Example: Using the figures presented in Table 04, the poverty gap among the 10 households is found using consumption expenditures of only the poor households. Differences between the consumption expenditures of the four poor households are determined, then their average is found, and it is expressed as a percentage of the poverty line, as illustrated in Table 04. The smaller the poverty gap, the less poor people are, and vice versa, e.g. the individual poverty gaps for households with Serial Numbers 3 and 5 are 50.0% and 26.6%, respectively, implying that Household Serial Number 5 is better off than Household Serial Number 3, albeit both are poor, based on the headcount measure. The differences between the poverty line and the consumption expenditure values are the amounts of money that would be needed to eradicate absolute poverty, in this case TSh 312.5/= times 4, in the sample, if perfect targeting were possible, if the poor could sustain the income over years, and if no household among the non-poor would fall back into poverty. Advantage of the poverty depth method i. It indicates the extent of poverty, unlike the head count ratio. Hence, it helps identify the poorest of the poor with whom to give priority in poverty alleviations interventions. Disadvantages of the poverty depth method i. It does not show the severity of poverty. ii. It does not show the distribution of income among the poor, i.e. it does not show inequality. Table 05: An example of how to calculate poverty gap using Table 04 data Household Serial Numbers Differences between the poverty line and the consumption expenditures of the poor households 2 1 3 750 5 399 9 100 Sum 1,250 Mean 1,250/4 = 312.50 Poverty gap 312.5/1,500 x 100 = 20.8% Nb: To construct poverty profile three major decisions have to be taken. First, one has to choose a criterion to rank households. Second, one has to choose a poverty line (Poverty line is defined as the income or expenditure necessary to support a person at the subsistence level of food, shelter, clothing and other necessities per year). Finally, one has to select a poverty index to measure poverty POVERTY REDUCTION STRATEGIES IN THE GLOBE History of Poverty Alleviation at the Global Level Research on poverty started in 1889 when Seebohm Rowntree did a research on poverty in England and reported in 1901 that he had found that 10% of the population of the English city of York was living below the minimum needed expenditures. Despite research on poverty having started so early, not until during the 1950s did the United Nations (UN) make the promotion of economic development of poor countries an essential goal. Poverty alleviation was the main theme of the World Development Reports 2000/2001, 1990 and 1980. World Bank (1990) asserts that countries which have succeeded in combating poverty promoted efficient use of the labour of the poor along with policies which harnessed market incentives, social and political institutions, infrastructure, technology, and provided basic social services to the poor. The services included nutrition, family planning, primary health care and education. Baulch (1996) argues that the promotion of the above strategy was widely accepted after the World Bank released a 1991 policy paper entitled "Assistance Strategies to Reduce Poverty", proclaiming the strategy. Globally, strategies for poverty reduction, which started just after the Second World War, have been developing concomitantly with global social, economic and political developments. The developments in poverty alleviation strategies are outlined in the following paragraphs. In the 1950s and 1960s: Views on poverty reduction were economic growth, large investments in physical capital and infrastructure, and growth in income. The notion that development benefits would automatically trickle-down to the poor and women without deliberate efforts to empower them dominated development planning in the decade. In the 1970s: It was found that trickle-down effects were ambiguous. In some places the rich became richer and the poor became poorer. Therefore, redistribution with growth and then provision of social services, were given more importance. In the 1980s: • Health and education received more attention for development. The argument was that improvements in them would promote growth in the incomes of poor people. • Following the debt crisis in the 1980s and global recession, there was an emphasis on improving economic management and allowing greater play for market liberalization. • In the 1980s the emphasis for poverty reduction among various regions, e.g. Latin America and SSA shifted to structural adjustment programmes (SAPs). By 1989, most SSA countries had already adopted SAPs, which advocated reducing expenditure on imports, increasing exports, cuts in government expenditure (including retrenchment of Government employees), reduction in budget deficits, repayment of international debts, control over money supply, reducing subsidies and cut in real wages. In the 1990s: • World Development proclaimed a two-part strategy for poverty reduction, which included: a) Promoting labour-intensive growth through economic openness, and b) Investment in infrastructure and providing basic and social services to poor people in health and education. • Governance, institutional and vulnerability issues at the local and national levels were put forward as issues worth addressing for effective poverty alleviation. • World Bank (1990) urged industrial countries to respond with increased assistance to developing countries' commitments to reducing poverty. • In 1997 UNDP Assembly declared the decade 1997-2006 to be UN's Decade for poverty alleviation and every October 17 to be commemorated as an International Day for Poverty Eradication. • In 1996, the Breton Woods Institutions (i.e. World Bank and the International Monetary Fund) designed the Highly (or Heavily) Indebted Poor Countries (HIPC) Initiative, which was a comprehensive approach to debt reduction for poor countries, of which the aim was to ensure that no poor country faces a debt burden that it cannot manage. Such a debt was said to be one that is greater than 150% of the value of exports in net present values (Tan et al., 2000). Central to the HIPC Initiative was the country's continued effort towards macroeconomic adjustment and structural and social policy reforms. In addition to that, the Initiative focused on ensuring additional finance for social sector programmes — primarily basic health and education. Following a comprehensive review of the HIPC Initiative, a number of modifications were approved in September 1999 to provide faster, deeper and broader debt relief and strengthen the links between debt relief, poverty reduction and social policies. Besides, governments benefiting from the debt relief were expected to articulate their plans for poverty reduction in a Poverty Reduction Strategy Paper (PRSP). In the 2000s: Global poverty reduction strategies proposed three ways of reducing poverty, viz.: • Providing opportunities by providing the poor with materials, i.e. jobs, credit, roads, electricity, markets for their produce, schools, water, sanitation and health services. • Facilitating empowerment by states and social structures being accountable to the poor people by increasing their access to market opportunities, public sector services, good governance, laws and public service delivery. • Enhancing security by reducing vulnerability to economic shocks, natural disasters, ill health and personal violence as important factors to reduce poverty. Besides the above strategies, the United National Assembly promulgated Eight Millennium Development Goals in October 2000. The goals, targets of the goals and their indicators are given in Table 03, according to Martίn-Hutardo et al. (2002). Table 06: The Millennium Development Goals and their targets and indicators Goals Targets Indicators 1. Eradicate extreme poverty and hunger 1. Halve, between 1990 and 2015, the proportion of people whose income is less than one dollar a day 1. Proportion of population below $1 per day 2. Poverty gap ratio [incidence times depth of poverty] 3. Share of poorest quintile in national consumption 2. Halve, between 1990 and 2015, the proportion of people who suffer from hunger 4. Prevalence of underweight children (under-five years of age) 5. Proportion of population below minimum level of dietary energy consumption Goals Targets Indicators 2. Achieve universal primary education 3. Ensure that, by 2015, children everywhere, boys and girls alike, will be able to complete a full course of primary schooling 6. Net enrolment ratio in primary education 7. Proportion of pupils starting grade 1 who reach grade 5 8. Literacy rate of 15-24 year olds 3. Promote gender equality and empower women 4. Eliminate gender disparity in primary and secondary education preferably by 2005 and to all levels of education no later than 2015 9. Ratio of girls to boys in primary, secondary and tertiary education 10. Ratio of literate females to males of 15-24 year olds 11. Share of women in wage employment in the non-agricultural sector 12. Proportion of seats held by women in national parliament 4. Reduce child mortality 5. Reduce by two-thirds, between 1990 and 2015, the under-five mortality rate 13. Under-five mortality rate 14. Infant mortality rate 15. Proportion of 1 year old children immunized against measles 5. Improve maternal health 6. Reduce by three quarters, between 1990 and 2015, the maternal mortality ratio 16. Maternal mortality ratio 17. Proportion of births attended by skilled health personnel 6. Combat HIV/AIDS, malaria and other diseases 7. Have halted by 2015, and begun to reverse, the spread of HIV/AIDS 18. HIV prevalence among 15-24 year old pregnant women 19. Contraceptive prevalence rate 20. Number of children orphaned by HIV/AIDS 8. Have halted by 2015, and begun to reverse, the incidence of malaria and other major diseases 21. Prevalence and death rates associated with malaria 22. Proportion of population in malaria risk areas using effective malaria prevention and treatment measures 23. Prevalence and death rates associated with tuberculosis 24. Proportion of TB cases detected and cured under DOTS (Directly Observed Treatment Short Course) 7. Ensure environmental sustainability 9 Integrate the principles of sustainable development into country policies and programmes and reverse the loss of environmental resources 25. Proportion of land area covered by forest 26. Land area protected to maintain biological diversity 27. GDP per unit of energy use (as proxy for energy efficiency) 28. Carbon dioxide emissions (per capita) [Plus two figures of global atmospheric pollution: ozone depletion and the accumulation of global warming gases] 10. Halve, by 2015, the proportion of people without sustainable access to safe drinking water 29. Proportion of population with sustainable access to an improved water source 11. By 2020, to have achieved significant improvement in the lives of at least 100 million slum dwellers 30. Proportion of people with access to improved sanitation 31. Proportion of people with access to secure tenure [Urban/rural disaggregation of several of the above indicators may be relevant for monitoring improvement in the lives of slum dwellers] 8. Develop a Global Partnership for Development 12. Address the special needs of least developed countries, landlocked countries and small island developing states 13. Develop further an open, rule-based, predictable, non-discriminatory trading and financial system 14. Deal comprehensively with developing countries’ debt 15. In cooperation with pharmaceutical companies, provide access to affordable essential drugs in developing countries 16. In cooperation with the private sector, make available benefits of new technologies, especially information and communications 32 Various indicators under the themes: • Official Development Assistance (ODA), including Proportion of ODA to basic social services (basic education, primary health care, nutrition, safe water and sanitation); • Market Access, including average tariffs and quotas on agricultural products and textiles and clothing; and • Debt Sustainability, including debt service as a percentage of exports of goods and services Other indicators (Google Millennium Development Goals) Poverty Alleviation in Tanzania Efforts to reduce poverty in Tanzania started immediately after gaining political independence on 9th December 1961. In order to fight against poverty the government of Tanzania has formulated various National Development Policy Frameworks. These frameworks define broad objectives from which specific objectives such as sectoral and other policies can be drawn. Over years, in brief, the following have happened: • In 1961: Three problems (poverty, ignorance, and disease) were proclaimed to be the major enemies of development. Therefore, various interventions were introduced, including the ones outlined below, to obliterate the problems. • In the 1960s: Three-Year Development Plans (1962-1964) and Five-year Development Plans (1965-1969) were in place, and the Policy of Socialism and Self-reliance was declared on 5th February 1967. The declaration addressed poverty by emphasizing rural development to bridge income gaps between the urban and the rural people and reducing income disparities among regions and wage earners (Mtatifikolo, 1994). • In the 1970s: Sectoral programmes including Water for All, Universal Primary education (UPE), "Siasa ni Kilimo" (that is Politics is Agriculture), and "Mtu ni Afya" (that is Human being is health). Although spectacular success in poverty reduction was attained in terms of food security, income, education, and health services in the late 1960s and early 1970s, a series of natural, internal and external events occurred since the mid-1970s to the early 1980s and undermined the efforts to eradicate poverty. The bad events included drought in 1973, 1974 and 1975, oil crisis in 1973, the break up of the East African Community in 1977 and the war between Tanzania and Uganda from October 1978 to April 1979. • In the 1980s: Efforts to reduce poverty included home-grown economic recovery programmes: the National Economic Survival Programme (NESP) (1981) and the 1983 Tanzanian Structural Adjustment Programme (SAP), prior to adoption of the international Structural Adjustment Programmes (SAPs) in 1986. • In the 1990s: Formation of the Poverty Eradication Directorate in the Vice-President's Office to coordinate poverty reduction efforts at the national level, and formulation of the National Poverty Eradication Strategy (NPES) in 1998 and the Tanzania Development Vision 2025 (TDV 2025) in 1999. • In the 2000s: Formulation of the Tanzania’s Poverty Reduction Strategy (PRS), which is documented in the Poverty Reduction Strategy Paper (PRSP) that was written in 2000 and that guided poverty alleviation efforts from 2001 to 2004). Moreover, formulation of the National Strategy for Growth and Reduction of Poverty (NSGRP/ MKUKUTA) that was written in 2005 and that guides Tanzania’s poverty reduction efforts from July 2005 to June 2010. Among them, MKURABITA was also formulated as efforts to reduce poverty. THE TANZANIA DEVELOPMENT VISION 2025 The National Development Vision 2025 lays out the long term developmental goals and perspectives, and lays out a vision of economic and social objectives to be attained by the year 2025. Indeed, it predicts Tanzania graduating from a least developed to a middle income country by 2025, with high economic growth (8% or more) and devoid of abject poverty. The vision’s objectives are clustered around the following major pillars namely • High quality livelihood • Peace, stability and Unity • Good governance • A well educated and learning society • A strong and competitive economy THE NATIONAL STRATEGY FOR GROWTH AND REDUCTION OF POVERTY (NSGRP_MKUKUTA) The NSGRP has three clusters: 1) Growth and reduction of income poverty; 2) Improvement of quality of life and social well being; and 3) Governance and accountability. The NSGRP heeds the following main issues: 1) Stimulating private investment response; 2) Infrastructure improvement; 3) Human resource development; 4) Building a competitive economy and an efficient government; 5) Deepening ownership and inclusion in policy making; 6) Paying attention to discriminatory laws, customs and practices that affect the economic and human vulnerable social groups (children, youths, girls, women, people with disabilities, the elderly, and retired people), and 7) Paying greater attention to mainstreaming crosscutting issues. It also heeds the following crosscutting issues: 1) HIV/AIDS, 2) Gender, 3) Environment, 4) Governance, 5) Employment, 6) Children, 7) Youth, 8) Elderly, 9) Disabled, and 10) Settlements THE PROPERTY AND BUSINESS FORMALIZATION PROGRAMME (PBFP) (MPANGO WA KURASIMISHA RASILIMALI NA BIASHARA TANZANIA_MKURABITA) Is a community empowering initiative that aims to facilitate transformation of property and business entities in the informal sector, into legally held and formally operated entities in the formal sector of the economy. The programme mainly targets property owners in the informal sector whose entry into the formal market economy will enhance their opportunities in using their assets to access capital and thus improve national economic growth and reduce individual household poverty Goal of the programme The overall goal of the programme is to empower the target groups and individuals, especially in the informal sector so that they can participate effectively in the modern formal market economy. Specific objectives • To build architecture of property and business rules that will bring together, standardize and modernize the prevailing local customary arrangements dispersed throughout the country so as to create one Tanzania property and business legal system that incorporates all sectors of the society • To foster national integration by enabling the government to bring the informal sector into the legal system in order to govern the nation’s market activities more effectively • To ensure that assets of the poor, which are held and exchanged outside the existing legal system , are adequately documented and standardized into universally accepted property records that can be used to create liquidity • To develop means to achieve broad-based support for change for both traditional community leaders and the poor towards a national framework that can help realize the potential of modern economy • To enable overall economic policies and supporting mechanisms such as monetary and fiscal stimuli to actually work once most people are inside the legal market economy The main phases of the programme The programme has four phases namely as Diagnosis Phase Diagnosis phase aims at to establish the size and nature of the country’s extralegal and customary sectors, and why the informal sector continues to thrive. Extra legality includes all economic activities and property rights reputed to be legal, yet strictly not, as well as practices illegal or lawless but not criminal Reform Design Phase The primary objectives of the reform design phase is to provide the government with detailed policy and institutional proposals, as well as an implementation strategy; to integrate extralegal real estates and businesses into the legal system, in order to boost economic growth, reduce poverty and eventually expand the tax base Implementation Phase Focus on proactive property and business formalization campaign; consensus building and establishment of feedback mechanisms as well as a national database and record keeping organization Capital Formation and Good Governance Phase This phase will involve formulation and implementation of recommendations for connecting the newly legalized property to larger national and international markets, and allow the property to be leveraged to create capital and generate more wealth. The process will involve • Setting of credit and mortgage system, and collection systems for credit, rates and taxes • Provision of housing and infrastructure • Provision of insurance and information services • Development of individual’s identification systems • Use of property to enhance accountability The recommendations will also facilitate good governance by providing reliable information about market behaviour, property status and the extent of the rule of law; all of which are necessary conditions for sustainable development Conclusion The unit has shown that poverty is a complex phenomenon caused by multiple of interlocking factors such as high dependency ratio within households and use of low level of technology which hinders high production (internal factors). On the other hand, the burden of refugees, national debt and unequal exchange in international trade constitute external causes of poverty. Types of poverty, indicators of poverty, and methods for measuring poverty and finally poverty reduction strategies with special attention given on Millennium Development Goals, Tanzania Development Vision 2025, National Strategy for Growth and Reduction of Poverty (NSGRP) (MKUKUTA) and The Property and Business Formalization Program (MKURABITA) have been discussed in this unit. NB: Reading assignment • Distribution of poverty in Tanzania (Read Mkukuta status report of 2006; Mkukuta annual implementation report of 2008/09) Status Report 2006: Progress Towards the Goals for Growth, Social Well-being and Governance in Tanzania The Status Report 2006 provides an overview of the latest data available for indicators of progress towards the goals and targets of MKUKUTA's desired outcomes for poverty reduction in Tanzania: Cluster I: Growth and reduction of income poverty; Cluster II: Improvement of quality of life and social well-being; and Cluster III Governance and accountability. Broadly, the areas covered in this report include: Cluster I - Economic management, growth, agriculture, food availability and accessibility, reduction of poverty, and energy Cluster II - Education, health and well-being, water and sanitation, social protection and service provision Cluster III - Governmental structures and systems, public resources, public services, and human rights As well as presenting the data available, the report comments on gaps in data and adjustments which may need to be made to the indicator set. You can access the electronic copy of the report from these two locations: www.repoa.or.tz http://www.povertymonitoring.go.tz/ If you would like to receive a printed copy please contact REPOA or the MKUKUTA Secretariat within the Ministry of Planning, Economy and Empowerment, Poverty Eradication Division. Tel.:(255) 22-2124108/9 Fax: (255) 22-2113856 / 22-2124107 E-mail: secretariat@povertymonitoring.go.tz This report is a reference document which complements the series of Tanzania Poverty and Human Development Reports. It was produced in accordance with the MKUKUTA Monitoring Master Plan and is published by the Research and Analysis Working Group, which is part of the MKUKUTA Monitoring System within the Ministry of Planning, Economy and Empowerment. Research on Poverty Alleviation REPOA P.O. Box 33223, Dar es Salaam, Tanzania 157 Mgombani Street, Regent Estate Tel: +255 (0) (22) 2700083 / 0784 555 655 Fax: 255 (0) (22) 2775738 Email: repoa@repoa.or.tz www.repoa.or.tz • Distribution of poverty in the globe (World Bank Development reports) References Demographic Training Unit, (2003). DTU, (2003. Integration of Population Variables in Development Planning Training Manual Part II. University of Dar es Salaam, Tanzania, 254pp. Nkonoki S.R, (1999). Environment, Technology, and Development. Institute of Development Studies, University of Dar- es-Salaam, Tanzania. United Republic of Tanzania, (1998). The National Poverty Eradication Strategy, Vice President Office, Dar es Salaam United Republic of Tanzania, (1999). Poverty and Welfare Indicators, Vice President Office, Dar es Salaam United Republic of Tanzania, (2004). Vulnerability and Resilience to Poverty in Tanzania: Causes, Consequences and Policy Implications. 2002/03 Tanzania Participatory Poverty Assessment (Tz PPA): Main Report. Research and Analysis Working Group (R & AWG), Mkuki na Nyota Publishers Ltd: Dar es Salaam. 166 pp. United Republic of Tanzania, (2005). National Strategy for Growth and Reduction of Poverty (NSGRP). Vice-President’s Office: Dar es Salaam. 73 pp. United Republic of Tanzania, (2008). The Property and Business Formalization Program (Mpango wa Kurasimisha Rasilimali na Biashara za Wanyonge Tanzania Mkurabita) Volume VII Work Plan, Monitoring and Evaluation Framework and Cost-Benefit Analysis, Mkurabita Program Management Unit, Dar es Salaam, 84pp. Electronic sources from United Nation Publications, Tanzania Parliament website, World Bank reports can be used as reference materials