Achieving Poverty Reduction Goals in LDCs: The Convergence Agenda

1. The Convergence AgendaMeeting the Challenge of Accelerating Progress toward the Poverty Reduction MDG among LDCs OUSMANE BADIANE Director for Africa International Food Policy Research Institute

2. REDIFINING THE CHALLENGE TRACKING OF POVERTY IMPACT OF GROWTH 1 2 REFINING POVERTY REDUCTION STRATEGIES AMONG LDCs CONCLUSIONS 3 4 The Convergence Agenda:Meeting the Challenge of Accelerating Progress toward the Poverty Reduction MDG among LDCs

3. REDIFINING THE CHALLENGE TRACKING OF POVERTY IMPACT OF GROWTH 1 2 REFINING POVERTY REDUCTION STRATEGIES AMONG LDCs CONCLUSIONS 3 4 The Convergence Agenda:Meeting the Challenge of Accelerating Progress toward the Poverty Reduction MDG among LDCs

4. LIMITED RESOURCES AND TIGHT BUDGET CONSTRAINTS SIGNIFICANT SOCIAL NEEDS 1 2 LOW GROWTH WITH SIGNIFICANT POTENTIAL LARGE POCKETS OF LOW PRODUCTIVITY POOR AND VULNERABLE 3 4 THE GROWTH-POVERTY CONVERGENCE AGENDA HOW TO ACCELERATE PROGRESS TOWARDS MDG1 UNDER

5. A DOUBLE CHALLENGE RAISING GROWTH AND ITS IMPACT ON POVERTY Source: Badiane and Ulimwengu (2009)

6. A DOUBLE CHALLENGE RAISING GROWTH AND ITS IMPACT ON POVERTY Swaziland South Africa Source: Badiane and Ulimwengu (2009)

7. GROWTH POVERTY PATHWAYS Search for optimal policy options AP 2015 AP0 GDP Growth Growth Poverty Path1 U R HERE Growth Poverty Path 2 0 1/P0 Inverse of headcount ratio Path 1: Growth without poverty reduction; Path 2: Poverty reduction without growth Path 3 and 4 are similar but starting, respectively, from high level of growth and a low level of poverty, and are thus less problematic. Source: Badiane /IFPRI

8. REDIFINING THE CHALLENGE BETTER TRACKING OF POVERTY IMPACT OF GROWTH 1 2 REFINING POVERTY REDUCTION STRATEGIES AMONG LDCs CONCLUSIONS 3 4 The Convergence Agenda:Meeting the Challenge of Accelerating Progress toward the Poverty Reduction MDG among LDCs

9. REINFORCING THE LINKS BETWEEN GROWTH AND POVERTY REDUCTION The Search for optimal policy options R Convergence Path 1 Convergence Path 2 R0 GDP Growth Growth Poverty Path1 Growth Poverty Path 2 0 p Inverse of headcount ratio Source: Badiane and Ulimwengu (2009)

10. TWO SIMPLE INDICATORS POVERTY OVERHANG: The Extent to Which Current Growth has Failed to Reduce Poverty to the Maximum Possible GROWTH-POVERTY EFFICIENCY GAP GROWTH DEFICIT: The Extent to Which Future Growth May Fail to Sustain the Current Pace of Poverty Reduction GROWTH-POVERTY EFFICIENCY GAP

11. Poverty Overhang Estimates (1990 - 2005) ALTERNATIVE Poverty Outcomes Under Convergence (1990 - 2005) Source: Badiane and Ulimwengu (2010)

12. Growth Deficit Estimates (1990 - 2005) ALTERNATIVE Growth Outcomes Under convergence (1990 - 2005) Source: Badiane and Ulimwengu (2010)

13. Poverty overhang: Additional poverty reduction that could have been achievedgiven actual growth performance (1990 - 2005) Source: Badiane /IFPRI

14. Source: Badiane /IFPRI

15. REDIFINING THE CHALLENGE BETTER TRACKING OF POVERTY IMPACT OF GROWTH 1 2 REFINING POVERTY REDUCTION STRATEGIES AMONG LDCs CONCLUSIONS 3 4 The Convergence Agenda:Meeting the Challenge of Accelerating Progress toward the Poverty Reduction MDG among LDCs

16. TARGET PRODUCTIVITY OF POOR AND VULNERABLE RAISE INVESTMENT IN SECTORS EMPLOYMENT POOR AND VULNERABLE 1 2 RAISE SOCIAL INVESTMENTS TO MEET SHORT TERM NEEDS ALIGN SOCIAL INVESTMENTS TO MAXIMIZE GROWTH IMPACT 3 4 STRATEGIC QUESTION: HOW TO RAISE GROWTH-POVERTY EFFECTIVENESS AND SUSTAINABILITY? PUBLIC EXPENDITURE OPTIMIZATION QUESTION ! CONVERGENCE AGENDA

17. STRATEGIC GOAL NO. 1 BRIDGING THE GROWTH GAP TO MEET THE POVERTY MDG TARGET Actual Poverty Rate in 1990 Source: Badiane and Ulimwengu (2009)

18. STRATEGIC GOAL NO. 2 BRIDGING THE EXPENDITURE GAP TO MEET THE POVERTY MDG TARGET Actual Poverty Rate in 1990 Source: Badiane and Ulimwengu (2009)

19. STRATEGIC GOAL NO. 3 OPTIMIZE PUBLIC EXPENDITURE S TO RAISE PRODUCTIVITY OF RURAL POOR Source: Badiane and Ulimwengu (2009)

20. EFFECT OF 10% INCREASE IN SERVICES EXPENDITURE ON SOCIAL OUTCOMES, AGRICULTURAL EFFICIENCY, AND POVERTY HEALTH SERVICES EDUCATION SERVICES Source: Badiane and Ulimwengu (2010)

21. REDIFINING THE CHALLENGE BETTER TRACKING OF POVERTY IMPACT OF GROWTH 1 2 REFINING POVERTY REDUCTION STRATEGIES AMONG LDCs CONCLUSIONS 3 4 The Convergence Agenda:Meeting the Challenge of Accelerating Progress toward the Poverty Reduction MDG among LDCs

22. HOW TO MAXIMIZE LONG TERM GROWTH WHILE MEETING SHORT TERM SOCIAL NEEDS 1 CONVERGENCEBETWEEN SOCIAL AND PRODUCTIVITY INVESTMENTS BASIC STRATEGIC QUESTIONS HOW TO MAXIMIZE SYNERGY BETWEEN SOCIAL SERVICES AND PRODUCTIVITY ENHANCING INVESTMENTS 2 HOW TO EXPLOIT GROWTH EXTERNALITIES OF SOCIAL SERVICES 3 HOW TO IMPROVE CONSIDERATION OF GROWTH SYNERGIES IN BUDGET PLANNING AND NEGOTIATIONS 4

23. CONVERGENCEBETWEEN SOCIAL AND PRODUCTIVITY INVESTMENTS FROM BUDGET COMPETION TO COOPERATION • NEGOTIATION OF EXPENDITURE COMPOSITION vs LEVELS • BUDGET ADDITIONALITY vs ZERO SUM GAME • BROADER BUY-IN INTO AGRICULTURAL AGENDA • ACCESS TO LARGER RESOURCES FOR AGRICULTURAL SECTOR • HIGHER RETURNS TO AGRICULTURAL SECTOR INVESTMENTS • HIGHER RETURNS TO PUBLIC SECTOR INVESTMENTS • LONG TERM SUSTAINABILITY OF SOCIAL SERVICES

24. CONVERGENCE RELEVANCE WHICH COUNTRIES NEED CONVERGENCE? COUNTRIES WITH “LITTLE MONEY AND LITTLE TIME” • VERY TIGHT MEDIUM TO LONG TERM BUDGET CONSTRAINTS • LARGE SHARE OF POPULATION LIVING IN POVERTY • LARGE SHARE OF LOW-SKILL UNDEREMPLOYED RURAL POOR • LOW DEGREE OF DECENTRALIZATION OF SERVICES • URBAN-CENTERED SERVICES DELIVERY (SITE AND CONTENT)