Poverty Situation In Sea

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ResearchPaperNo. 1

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Poverty Situation in Southeast Asia and NGOResponses FernandoAldoba and hla,Josefa petilla with pauline Rebucasana nnama Ziiueta

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C,athoiic!nstitute fer lnternaiioria!Reiaiiei:-i, gdi.Ji;ria;f .Es;j €ss€er.li snd Adv6t4.! lJ*it in partnershiD with

the AteneoCenter poficyandpublicAffairs andtho lor lociat rounoation for Sustainable Society,Inc.

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PovertySitu.tion in SoutheartAsiaend NGOResponles

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t. The Rationaleand Objectivesof the Study grew at respectable Asia's economies ratesduringthe pasttwo decades. Most of Southesst Economicdevelopment, however,remainedunequalwithin andacrosscountfies.As a r€sult, persisted parts of SoutheastAsia. Income ine4uality has plaguedmost has in many loverty count.iesand wide regionaldisparitiesin terms of living standardshave existedwithin countries,suchas the Philippines,Thailandand Indonesia.Laos, Cambodia,Burma,and Vietnam havelaggedbehindthe other countriesin the region in terms ofper capita incomes govemments andaccess to basicsocialservices. The resp€ctive ofthree ofthesecountries,in partnership with multilatenl and bilateral donors, have formulated poverty reduction stlategiesand programmes'-However, some sectorsof civil society groups have criticised paradigm,and that theseprogrammes in termsof a neoliberaland nafiow growth-focused slrch a.re new mechanismsto mandate elements of structural adjustment programmes. MalaluanandGuttal,2002) The Catholic Institute for IntemationalRelatiofls,a flK basedNGO active in the pursuit of sustainedhumand€velopmentand socialjustice in the variousregionsof the world, has undertakenan independentstudy ofthe cunent poverty situation in the region. At the same timg it hasassessed the strategies governments adoptedby respective andNGOSin orderto assistcivil societygroups,particularlyNGOSin their advocacywork and programmesin promotingbroadbasedeconomicdevelopment andrcducepovertyinoidenc€.

A, Major Objectivesof the Study Thestudyhasthefollowingobjectives: 1. To provideandoverviewofthe cunentpovertysituationin the region,specificallyin the followingcountries- Cambodia,Laos,Burma,Vietnam,Indonesia,Philippines, ThailandandEastTimor; 2. To assess existingpovertyreductionstrategies adoptedby gov€lnments andNGOSin the .egioq and 3. To recommend specificareasfor policy advocacyand programmedevelopment for civil soaietygroups,especially NGOs,in theirbattleagainstpoverty.

B. hlethodology and Approdch The study reviewed existing literature on the poverty situation and government responses in theregion,relyingmostlyon the availabledataofresearchinstitutes,govenment agencies andmultilateraybilateral institutionsaccessible throughlibra.iesandthe intemet.It also looked at cu.rent civil society responsesand perspectiveson poverty reduction in the region, found in studies and various NGo publications. Given time and resource I The World Bank and

tlle IMF havejoinlly introducedthis lornulation ofPRSPsin Cambodlat,Ino pDR a d Viernrm.

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Situationin Southeasi 4sia and NGOReponses

constramts,the researchdid not conduct.actual field investigationsand intervlews in the

u_discusionpaper,"rrl;;';;; ih"';es'ejrcr wouldbe :::i1"_r-.:1'"e.""d.,_{ol*":, orssemmated among NGOS andotherkeystakeholders forcoi.rm"nts to ."f,nilnujo,finaings

ll. The Contextof the Study:Today,sGlobalisation and SoutheastAsia Globalisationtodaycanact.ralrybc viewedftom dlreeinterreratedtrendsandevenrs: A Thecontinuedincreasein international tradebecauseofthe decreasing protection

broughtabourby theGATT_WTO andotte, ,"gi"n"l-b;Lilil." a""C, el'r{ NAFTA5 etc.Totalworldmerchandjse tradesuig"Jt"rn of nominal world,grossdomestic product in-1960to p".*"i"i""iiix i"' tlg'gr.thi, *", brought aboutby adecreas€ "t*t:l or'u,ouiaio_s'"/" in effeclive p.ot."tion ' une,wwl andbya rapiddecrease of transponation and "";;;i*il;;;.

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,T1 qi"* of informationandcommunication .0"velop_ment rechnologies ,.distance that " 3: havegreatly.educed costs,,

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PovertySituationin Southeastlsia and NEOResponses

hav€ _remainedrelatively closed economies,such as Burma2,Lao pD\ and Vietnam and fledglingdemocracies, suchas CambodiaandEast Tinor, fluu" U""n porting high poverty incidenceand low humandevelopmenr indicators.poveny t;"il;;;; ;; ,;;L countnesis over357oofthe wholepopulation(pleaseseesectionIV beiow)

lll. A Frameworkfor povertyAnalysisand Responses A. Definingpoverty Poverty qs SocialExclusion Thepovertyissuesta.tswith its variousinterpretation anddefinition.Researchers andpolicy that a?prop.iateresponses jtre: poverry to the situation are conungeot or how 11!:tj p€rceiveand people poverty. Thus,thi definitionbecome"an rmponant understand prerequisite for craftingstrategies to eradicate poverty. Whilethe "economic" definitionof poverty,i.e.a situation in whichpeoplehaveincomes andexpenditures belowa pre_determined.rhreshotd hetdr*"y fo.;;;i;;;;, the emerging consensus nowadays is that it is a multi_dimensional in"f,if*"Ll-p-henomenon. A generalview is that it is ,,pronounced deprivation i"""a *"li t.i"JiW"fid Bank, 2OOO). Deprivarion. may be economi-c, poliricaland socio_cultural. Thus-iiis;;t only maredal deprivation butalsoinctudes sociaiandpoliticale*cl;;; ;i;.g;iiria ,J"to^ orro"i"ty. All these_forms of deprivation severely-restrict whatNoU"fprire'*i"n"iaranya Sencalls "thecapabilities thata personhas,i.e.-thesubstantive fiJ"* ilG;;; bad thekind of life Vhe values,'(WorldBank,2001). rn oth". ;;;";;--s;'i#i't"o'tlese as one,s entitlements or the lack of them. Suchentitlements' ditermin" ro consume v goodsand servicesVhe desiresor her/his """tiUili to engag; in Ji# ,"rf_ntnlting "apaOiffy recenttiterature, the concept of socialex"cft]sion has-ieenvrewedas 13II1:,_1_l"l: unoerpmntng povertyin manyregions oftheworld. Socialexclusionrefersto the norms-societalprocessesand institutionalarrangements that exclud-e certaingroupsfiom tutt panicipation in the.;;rJ, and political life of socieriesi it the.household,- """i",ri",'i,lffrrar . theseoperate nliilnur r"u"rr, una encompass everything fiom differential ""r;;ty,-;;i allocation offood andJucationio discrlminatlon ln thecommunities bas€don socialstarus, differential ;; L;;;;;;; etc.( Racetis, Guevana et al.,2001). ""."r. Absoluteand Relativepoverty be distingu_ished betwe€nabsoluteandrelative. Theeconomicdefinition, l:"::P whereai:t."*" section society(in ruttr-i"ro* u .of .termsof individualsor househords) mcomeor expenditure threshold3, .efersto absolutepov".ty. n ""nuin p"r"ny, on the other "iuil* l Officiauy calted Myarunnd by ASEAN - some rese'rcheB calt rhesethe povery Unes

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PovertySituationin Southea!!Aria and NGORe3ponres

hand,looks at incomeinequalitiesacrossthesesectionsof society. In economics,this is measured by thegini indexor coemcient,whichrangesfrom 0 to 1, where0 signifiesperfect equalityand I p€rf€ctinequality.

TheConceptof Vutnerability A new additionto povertydefinitionsis rulnerabilityor the probabilitythat a personwill be exposedto uncertaintyand risks .elated to income,health,education(drop-outs)and to disastersand man-madeconflicts (e.g. violence and other peaceand oder problems)_poor peopledo not havethe ability to reduceor mitigate suchrisks or uncertainty. Low levels of physical,naturalandfinancialassetsmakepoorpeoplewlnerableto negativeshocks-- those with more assetsbecofle more resilient and can hurdle such risks as long as they are temporary(WorldBank,2001). Informal and formalm€chanisms that tendto reducethese dsksincludethe extendedfamily and communitynetworks,creditassociations, microcr€dit and miqofinance institutions,unemploymentinsuranceand other safetynets. The ability of thepoorto weathersuchriskshasbeenrefered to asresiliency(RacelisandGuevana,2001) andis specifiedby variouscopingstrategies (e.g.sellingofassets,relyingon transfers, etc.). The Conceptol the ChronicPoor The defining feature of "chronic poverty'' is its extendedduration. (Hulme et al, ZOOZ). Chronicpovertyis juxtaposedwith the te.m "transient,temporaryor transitorypoverty,'. Hulmeet al. notes,it is hypothesised that dulation,multi-dimensionality, and severitybuild on eachotherandthatthe "cluonicallypooi' axelikelyto be experiencing severeard multidimensionalpoverty. Also, they think that the chonically poor are usually inter, generationallytransmitted. Therefore,researchshouldbe focusedon: . r

Peopl€who arcckonically poor in termsofboth durationandseverityi.e. whose averageincomesare well below the poverty line for an extendedperiod Peoplewhose incomes(or capabiliriesor multipl€ dimensionjof deprivation) havebeenbelowa "povertyline" overanextended periodof time

The Poor based on Geography Ofien times,the rural poor aredifferentiatedfrom the urbanpoor. An analysisofsurvey data period,IFAD assembled, for the 1980-1998 revealsthatin 94%of I l5 "povertyline studies,, rural poverty was recorded at higher levels than urban pove.ty (Bird, 2002). In many developing countries, the rural poor dominate, though increasingly, urban poverty has becom€a big problemfor aountrieswith mega-cities, such as the philippines(Manila), Indonesia(Jakarta),andThailand(Bangkok) It is alsopossiblethat peopleare poor because thet locationis a remoteregion,where govemmentservicesare unavailableand where marketsare non-existent.

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B. A SimpleFrameworkfor Poverty Analysisand Responses The following frameworkspellsout the multi-dimensional (e.g. economigpolitical and socio-cultural)causesand outcomesofpoverty. While the matrix neatly setsout the various reasonsfor poverty, more often than not, theseoverlap with eachother. Dependingon the country,regionor seatorofthe populatior! one causemay be more importantthan the others. Thematrixalsodividesthe causesandoutcomesbetweenthe macroandthe micro,although in reality this is probably superlicial. However, upon closer scrutiny, the macro Actors are more relatedto nationalpolicies or existing social mechaaismsand systemswhile the miclo factorsare concemedmore on the individualand householdleve1. The list of causesand outcomesin the matrix is by no means exhaustive. Additional factoN may be written depending on the specificaountrybeinganalysed. Mrcm (Natiodal)

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Ca|rles

Economici . PoorPolicies(fiscal& monelary) . BiasedStrategi€s (regionaland sectoiaD . Inadequate policieson maiasement DoDulation Politi.al: . Elitist andcent'alizedgles of gover nce . Rent-s4ekng/conuption Socio-cultu rall . Patronage System . Breakdown of families,rd socialnetworks . Inad€quacy of social welfare./investrnenls in education andhealth Micm (IDdividual andgousehold)

Caus€! Economic: . Lack ofincome lo attainbasic n@essl!es . VulrErability from adverse shockq inability to copewith suchvulnerabilities . Lack of financial ard ecorcmic asse$

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Political . Sense olpowerlessness in the institutionsof stateandsociety

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Sociocullural: ' Lack of dignity ad rcspect . Inadeqllacyof the farDily and networkof relativesas sxpport systerL/socialinsura&e

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O comat Economici . Ilnsustainable groirlhand higherunemplolment . Indeasedpovertyincidenc€ . R€gionaldisparilies . Increased incomein€qualities Politic{l: . Maliuctioningdemocracy . Unresponsive stateinslitutions . Politicallyexcludeds.ouDs Socio-cultural: . Dep€ndency on politicalelites . Peaceandorclerproblems . Socialexclusionofvarious seclorsof soci€ty

Outcomes Economic: . Inseqrrejobsandirregular rncomes . Under-consumptionand undemourislwent of individuals aaalhouseholds . Poorhealth/inadequate housinS facilities Political: . Hopelessness andproneto criminality . Dis€!.fi'anchisement, sellingof Sociccultural: . Marginalisation . SocialExclusion . Fatalisrn

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The typical responsestrategiescorrespondto whether the causeis economic, political or socio.iultural. they may also be shoft-termor long-te.m, wherein the former are concerned basically with poverty alleviatiofl strategiesand the latter with poverty eradication The long-termstrat,giesrespondto the root causesof poverty, suchas flawed economicpolicies, system,etcthepatronage distributionofpower andresources, inequitable nse Economic Macro

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Micro

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Lone-Term Strategies

Short-TermStrategies

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Job-genoratiotr:microfi nance,public infi"astructur€, food for worl! €tc. Job facilitation Food Stamps,Soup Kitchens, Children's shelter Communitygroupprograrns o midofinance o coopeGtiv€s

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Growth-orientedpolicies Asset & Equity Reform Labor Int€nsivepolicies PromotioDand supportofSMEs Managing.isksand lulnerability tlrough social and unemploymentinsurance

lrcal developm€nt oounoils meohanisms in Participatory policymakingandproject implementation

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StrengtheninggovefiEnce institutions paltioipationof Mainsbeaming povertygroupsitr decisionmakineDrocasSes and Empowerment sustainability of conmunityand DeoDle's orsanizations

Politicd Macro

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CommunityandSectoral organlzmg

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Macro

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Foodfor SchoolProgrammes

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Micro

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Conmudty healthclirics, skillstainins Drosramm€s

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Micro Sociocultural

Strengthedhghstitutions promotinghuman& social caoital familyand Strengthening coirmum!es

lV. The EightSouthEastAsianCountriesin the Study A. Geographyand Demogrdphy Ofth€ eight countdes,Indonesiais th€ largestisland,with a tota.llarld areaof 1.8 million km2. S€condto Indonesiais Burma,with a total land areaof657,740 km' . The third is Vrr?. Next to EastTimor is Thailand,with 513,115km2. EastTimoris thetiniestat 14,8'14 Cambodia,with 181,040km'?. The Philippinesand Vietnam are similar both in size and population.Theyhavea totallandareaof aboul300,000km' anda totalpopulationof close

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to 80 million @leasesee table 3 on the nexl page). Almost all the countrieshave mountainousand ruggedterrain and are often visited by stormsandtyphoons. Exceptfor EastTimor, all the countri€s'total populationare in the millions,rangingfiom 5 to 210million Indonesiaregistercthe mostnumberofinhabitants,with a totalpopulationof 2074 million. It is followedby Vietnamand the philippinesat closeto 80 miliion. East Timorhastheleast,with lessthan900,000,followedby Lao pDR, with 5.22million. Exceptfor Indonesia,which is also manufactudng,and the philippines,which is also industrial,all the countriesare primarily agricultural.But for the phiiippines,whosemain exponis electronics, the countries'majorexportsrangefrom wood produdsto loodstuffsto precrous stonesto apparel. able 3. Co||nlly

cambodin

Totd in ktrr l8l,040

Populalion

Cryitrl

12.4 9M (2001)

f,evnomy Ae.ioultuml

trirportt Rubber,

Lrngurge! Khmer,

Religioi

Buddhism

English

last Timor

14,814

t,826,440

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Diri

20'7.4 M

Jokarrt

(r99e)

l"aoPDR

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Burma

657,740

Philippines

300,000

Thailand

513,115 329.560

ASrioultural

Coffee and

Christianity Portuguesc,

As.iculturol/ Rubb€r, Mrnufacluring

5.22M (2000)

Timber,

79.9M Haroi (2000)

Foodsirfs,

AgriculturaY Indrl5t'ial

Buddhis!:r, Clristianty, Islam

Filipino hslish

Agdcdtural

Rice

Agncultwal

Rrc€

hlarn Christianity Tlera\,ada Buddhrsm

rin

4 2 M RaEgoon (200D

7 8 5 Msdla million (200t) 6 2 . 1 M Bangkok (2000)

Bahasa

Frenoh, ChDese, Khmq, Enslish

Christianity Buddhism, Clfistianiq,, Islam Buddhisq Hoa,Hao, Islam, Hidurm. Christianity,

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Ofthe eightcountries,five (e.g.,Cambodia,Lao PDR,Burma,Thailand,andVietnam)have Buddhismasmajorreligion.Two (PhilippinesandEastTimor) hasChristianityas the major religion. Only IndonesiahasIslam as its majorreligio4 althoughthe religionhasrelatively large followings in Burma, Thailand,and the Philippines. All the countrieshave their respectivemajor nativelanguages.However,someof them (Cambodia,Philippines,East Timor, Lao PDR, Thailandand Vietnam) considerforeign languages,such as English, French,andPortuguese, astheir secondlanguage.

B, Poverty Situdtion and Humdn Development Poverty incidencesin the regionrangefrom l6Yoto 556/o.Ofthe eight countries,East Timor haspostedthe highestpovertyincidenceat 55yo,followedby the Philippinesat 400lo.The third highestis Lao PDR at 38.6,closelyfollowed by Vietnamat 37oloand Cambodiaat hasthe second 36.1%. Thailandhaspostedthelowestpovertyincidenceat 15.970. Indonesia (Please lowestat l8.2yo. Thcthird lowestis Burmaat 22.9yo seetable4 on therext pag€). The countries'HDI .anksrangeliom 66 to 131. Ofthe eightcountries,Thailandhasposted the highestHDI rankat 66h while Cambodiahaspostedth€ lowestat 13Id. The HDI ranks of the other countriesare as follows: Philippines,70s; Lao PDR, 101"; Vietnam, 102nd; Burma,I l8o; andIndonesia, 121$.There'sno availabledatafor EastTimor. Thefollowingarethe facesofpoveny in the differcntcountdesin capsuleform (Full details ofthe povenysituationin the eightcountriesare discussed in the individualcountrypapers, volume2 ofthis repon).

Burma Burmais amongthe world's poorest,with an estimatedGDP ofUS$ 14.2billion. It ranks 125uout of 174countdes.In Burma,povertyincidencein urbanareasis greaterthanin rural areas.Povertyincidencein urbanareasis 23.9%while in ruralareas,22.4yo. U$an povertyrate is high due to the higher cost of food, a more skeweddistributionof income,andthe lack ofaccessto subsistence farming. Ruralpoverty,on the otherhand,is mainlydueto low agriculturaloutput,sincethe ruralpoorhaveeitherno landor plots. Adult literacyis high. Whilep mary schoolenrolmentis high,completion.ate is low dueto cost of textbooks,uniforms,school supplies,and the like. There is high incidenceof HMAIDS in the country. A lot of people,especiallythe poor, sufferfrom malnut.ition, malaria,leprosy,denguefever,andtuberculosis.Costlypublicfacilitiesareofpoor quality. The country facestrade and foreign exchangeconst.aintsbecauseof sanctionsimposedby certaincountries,suchasthe United States. The US bannedall Americaninvesrmenrs rn Burma due to negativ€perceptionsabouthumanrights. Othercountries,suchas Canadaand Australia, had also passedlegislatior\ enabling local govemmentsto restict trade with Burma.

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Cambodia Cambodiais a very poor country,with GDp per capitaestimatedat US $2g0.Thirtv-six percent(36010) of the total populationlive below the pove.ty line. Most of the pooi are concentntedin the rural areas,especiallythose vr'hosepdmary sourceof iniome is agriculture. Statisticsshow a correlationbetweenpoverty and illiteracy _ majority of the poor are illiterates. Around 35,000squatterfamiliesor approximatjy tZO,dOO individuaislive in PhnomPenh. PhnomPenhhashigherliteracyratesfor peopleofboth sexes,with g23yo fot males,and 78.670for females,than in any otherparts;f tie country On rhe otherhand, morepeople(61%)in the rural areasarenot ableto completeprimaryeducation compa.edto 39.5olo in urbanareas.More peoplefromurbanareas,agid 7-i4, atte;dschool Only 15% of employedCambodians are in wageempioyment.The monthlysalaryof wage earnersis US $43. About 46yoof lhe populationconsid€rthemselvesas unpaid family wor\e1s, percentage of women,zo.3yoin phnom penh a\d 6i.2yo in ruraj areas,are { unpaidfamily vr'orkers.A greatmajorityofthe populatjonusekerosene assourceoffuel for cookingwhile lessthan5002sourcetheirdrinkinqwaterfrom wells.

EastTimor EastTimor is considered asoneofthe poorestareasin Southeast Asia. Lateststatisticsshow that its GDP is estimaredat US $344million while its GDp per capitais estimatedat US $344. About 55 percentof the East Timoresefall below rhe povertyline. The poor are identifiedmostly as subsistence farmers,producingnontradedgoodsin rural areas. The GINI coeffcienctis 0.31. The wealthiest20 percenihouseholds-irave cashincomesthat are only thr€etimeshigherthanthe poorest20 percent. Life expectancy is around50 yearsfor womenand 49 yearsfor men.Infant mortalityrate (per 1000)is 149 Thereare around15 medicaldoctorsper 100,000people, and the illiteracy.rate is 50 percent(in someruraldistrictsthe illiteracyiate is alove i0 percent).An estimated 25 percentofthe populationhaveaccessto electriciiyandrunningwater.

Indonesia Indonesiahad achievedremarkableeconomicdevelopmentover the past decade and had been,until recently,consideredto be amongthe bestperformingEast Asian economies. Overthe period1985to 1997,the Indonesian economygiew at an-annual rateof nearlyg%, oneofthe fastestandmosteverachievedamongdevelopingcountries. However,the Asianfinancialcrisisthat hit Indonesjain the middleof 1997brought about setbackin economicperformance. GDp grofih droppeddramaticailyandhigh inflationrate w^erefew of thoseadverseimpactsof the crisis thl long droughiand for"estfires during 1997,followedby politicalinstabilityin the transitionalpeiriodcirtributed to Ine worsetung of socio-economic conditions.Sucheconomicrelatedfaitors as skyrocketing p ces,decline

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AsiaandNGOResponres PovertySituationin Southeast in agriculturalproductiorgshrinkageofthe formal sector,and a huge pressureon the overall labor marketare cited as causinga negativesocialimpact,especiallyon the population's mostwlnerablegroups. With massivelayoffsandhigh inflationafterthecrisis,the incidenceofpove.ty in Indonesia significantly increased. Forty percent(4lyd) of the people are living below poverty line, level is around comparedto l1% p.ior to the crisis. lncidenceof poverty at the aggregate 2402.Povertyworsenedin urbanareasfasterthanin rural areas.U6an povertyinqeasedby 103percentwhile rural poverty increasedby 78 perceIrt.

Lao PDR The country is amongthe wodd's least developed,with per capita of $284. Poverty incidencein the countryis 38.6%,with 26 9oloin theurbanareasand41oZin th€ ruralareas. An estimated70 percentof populationareilliterat€,and life expectancy at birth is 55 years. population Only 18% of the haveaccess to adequate level of sanitation,and only 32o/ohate accessto safedrinking water. On the educationaliiont, Lao children undergoan averageof lessthantkee yearsofschoolingandqualityofeducationis modest. In the last five years,the Lao PDR hasachievedaverageeconomicgrowth of about6 percent per annumandreducedthe incidenceofpoverty ftom 45 Io 39yo.The incidenceof poverty varies significantlyacrossregionsas well as betweenurban and rural areas.Poverty incidenceis highestin the northemregion and lowest in VientianeMunicipality.While economicgrowthhashelpedreducepoverty,therich havebenefitedmorethanthepoor.

Philippines -- morethantwo-thirdsof Povertyin thePhilippineshasalwaysbeena ruralphenomenon poorhouseholds live in ruml areas.Povertyincidence increased by 3.2 percentfrom 36.8in 1997to 40.0in 2000. High interregionaland intra-regionaldi{Ierences in poverty incidenceexist The level of incomeinequalityhaspersistedat high levelsduringthe past30 years.Evenwith reductions ln the povertyincidencesduringthe 1985-2000period,the Gini indicesin the Philippines havehardlychang€dat 0.451. PhilippineHDI hasimprovedoverthe pastfofiy years. However,largedispadtiesexist in the IIDI in differ€nt areasofthe country. Poverlt self-rating surveysindicate that a large majorityofthe populationconsiderthemselves poor. Life exp€ctancyis 69 yea$. Adult literacy mtes and effollment ratios are high. However, overone-quarter ofFilipinos l0 yearsandabovearefunctionallyilliterate Malnutritionremainsan importanthealthproblemin the countryas it contributesto child mortality and morbidity. Infant mortality has not improved in recent years although the leadingcausesofdeath -- respiratory diseases, diarrhea,measles arepreventable-

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PovertySituationin SoutheastAsiaand NGOResponses

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Thaildnd Povertyand inequalitycontinueto be a characteristic of Thai society.While the impressive gror4thratesofthe eaxly1990st€ndedto reduceor transcand concemsaboutinequality,the crisisof 1997underlineddeep,regional,socialandurban/rural divides. Thailandhad one ofthe highestGDP gron'th ratesin the world in the pastfew decades, 7.6 percentper annumfrom 1977to 1996.Between1988and 1996,Thailand's averuEing povertyincidencedroppedfrom about 33 percentof the populationto about 11 percent, tpnslatingto morethanI million peoplebeinglifted outofpovertyeachyear. The country'seconomicprosperitycameto a suddenhalt when the economiccrisis struck Thailandin 1997.The incidenceof pove.tydeclinedsteadilyin the two decades up to 1997. Sincethe c.isis,therehasbeena reversalofthis trend. The latestfigurcsshowthat 15.9olo of the populationare living below a definedpovertyline of 886 Baht per personper month. The crisis has causedmany economicand socialproblems,includingincreasedrates in unemployment andinflationaswell asin povertyandinequality. Poverty remainsacute in some areas. Recent studiessuggestthat 92 percentof poveny in Thailendis rural, with the northeasthavingthe highestincidenceof povertyat 19.4percent in 1996.This figure roseto 24.0 percentand 30.8 percentin 1998and 1999respectively. Whilethe increasein povertyincidencein thenortheast dueto the crisiswasquitesevere,the situationwasrelativelywors€in the centralandsouthernregions.

Vietnam With a GIM cosfficientof .35, the counrryranks I 106out of 174 countries.Its GNP per capitais US $370.On the otherhand,its cDP per capitais US$400. Thirty-sevenpercent (37 %) of its peoplelive belowthe povertyline. Ninety percent(90%) ofthe poor live in ruralareasandarepredominantly farmers.Majorityofthesepeoplebelongto ethnicgroups. Some52% ofchildrcnaremalnourished, l47oofwhom sufer ftom severemalnutrition.Life js about67 yearsfor malesand 72 yearsfor females.Around 1.5million young expectancy peopleare addedto the labourforceper year.25 million people,acaountingfor 600Zofthe labourforce, areunemployedor underemployed.

V. Major Causesof Povertyin the Region Major causesof poverty in the region can be categorizedinto the following. economic, political,sociocultural, andnaturaldisasters (Pleaseseetable5 below). Underthe economic causesare biasedpoliciesagainstthe poor or towardsurbandevelopment, uneveneconomlc growth, unequaldistributionof wealth, underinvestrnent in agriaulture,Asian economic crisis,etc. Politicalcausesinclude:repressive or highlymilitarizedgovemments, civil war or strife, armedconllict bgtweennativesaird colonial poweq andthe like. Socio-culturalcauses are lack of accessto basic social services,lack of food security,p.evalenceof highly

PovertySituation in Southeart AsiaandNGOResponses

1

infectiousdiseases, amongothers-Under naturalcausesare calamities,such as typhoons, floods,andforestfires. Of the major causesof poverty, the Asian financial crisis that hit the region in 1997 has effectedthe biggestimpacton the countries'economies, especiallyon thosethat had posted high economic $owth prior to the crisis (Indonesia and Thailand). It set back the considerable economicgains these govemmentshad achieved.Political repressionand violenaealso accountfor the stuntingof economicgrowth in countries,such as Burma, East Timor, and Cambodia.The govemments'misprioritisation or misappropriation of public funds causespoor deliveryof quality basicsocialserviaes,suchas education,health,and infrastruclure, worsening the already depressing condition of the poor and ultrapoor (Philippines, Lao PDR,Cambodia, andVietnam). The following ar€ brief accountson the major causesof poveny in the eight ASEAN countdes:

Burma

F F F I

Themainreasons for Burma'spervasive povertysituationerethe andseemingly hopeless flawedpoliciesandpoliticalrepression thegovernment continues to implement andexercise, Therehasteen large-scale displacement of ethnicgroups,forcedlabourfor militarycamp worlgandhumanrightsviolations. Foodscarcity is another problemhoundirgBurma.It existsin bothcivil war andnon-civil war arca,makingall communitymembers, particularly womenandchildren,sufferfrom hungelmalnutrition, illnesses, andotherhardships. Foodscarcity bringsabourextonronas wellastnfiickingofgirlsandwomen.

Cambodia Causesof povertyin Cambodiainclude:uneveneconomicgrowth,lack of accessto basic services,lack of accessto livelihood,high dependenca ratio, Iandmineqnaturaldisasters, politicalinsrability, andtheAsianeconomic crisis.

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Peopleliving in rural areashavelessaccessto basicservicessuchas educationand healttl capitayincome,and techlology. They have less accessto employmentor livelihood opportunitiesand are largely in debt. With a high dependence ratio, more and more people, including landmine victims, are becomingeconomicallyunproductiveand depindint. Ha.vestsd€pendon weatherconditions,and thus, the occurrenceoffloods and droughtshave an adverse effect on food security. Tha Asian economic crisis and renewed political instabilitysetbackthe modesteconomicgainsthe countryhadobtainedin 1990,s.f; owins decades ofcivil war.

PovertySituation in SoutheistAsiiand NGoResponses

EaEtTimor Centuriesof armedconflict and unresl under colonial rule or invading power and the violenceof 1999have b€en mainly the underlyingreasonsfor;";;;," East Timor. Colonialor invadingpowerdid not sincerelyworked-towards the O"u"topr"nt t,t merelysucceeded in exploitingandbleedingttrecountryandits pe;fdry. "olntry.J The countrywas r€nderedtotally inutileaffer the 1999violence. The territory,ssocialand economicdestruclionhas.promptedthe intemalionalcommunity ;; i"i;;;r. and provide emergency assistance to the East Timorese. Massivereconstru&ionu"iiuiil"*, pa.tLufa.ii infrastructure,havebeenundertakenand stateinsJirutiom,;";i;;;;';;;;;. govemment, ' theUN Transitional AdministrationEastTimor,havebeensetup.

Indonesia crisis,.long&ought.and forestfires, fo owed by political IT^.1::.1,I111 ::onomicperiod thetransitional haveput to a haltlndonesia,s decades of unintemrpted 11s::lllll gromh. l" economrc Theeconomic crisisthat hit Indonesia in the middteof feeZ broigiri aboutsetbackin economicperformarce, more specificallyin irnproverients in human development (e.g.,education ind health.; andremarkable reduction inG iluerty in"iOen"".

p",""ntperunnurn ueioriirr"e'crisis perioa to 9?j.n:y!l:*:l lramltic{I1 fr939v..: a negauve economrc grovtlh of -13.2o/o in 1998..

Thisiggregateincomeslift significantly refle€ted theimpactof currencv devaluation, whichcreajldilonorni" uii.uu"r, f"uaingto highinflationrate(Said,2001).

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Thelongdroughtandforestfiresin 1997,followedby political instabilityin thetransitional periodhaveworsened the socioeconomic conditions.' su"h fircto.sas prices,dectinein.agricuttuml "";;;;i;'r;ed production, ,f,rt"t"e";i-;" r"r."l sector anda :|.I":fliq nugepressur€ on theoveralllabourmarkethavecaused adversisociafi.puct, especially on themostwlnemblegroupsofthepopulation.

Lao PDR The most.commonlycitedcausesof porr'erty include: land problems,no cashinvestmentto pay for rice whiie improvements ari being made,Ii""rt"& oir""r",-""ii."ul o,rurt"r, uno degradation.tack of water for potentialagricuitu.aipioauctton, !:*::.,:nv'lonTentat and drrtrcuttaccess to ruralcredit fth:l cause_s of pove.ty are: lack of arable land; too many children; poor health and insuflicienthearthservices;rack of governmentassistance; rack of technical/comm€rcial

prevatence of ,hint"g rl* pric"sfo, .accessibitiry: *:]::rg;-:ulj'r .and agflcurtur.rl products: ";iri*rio;, opiumaddiclion. LXO contamination, andtheft

Se^rious weakn€sses or gapsin basiceducationand healthservices,and by very poor rural infrastructure includinginigation, ma.ketaccessroads,and electricitf ,nike'rurur oo.,rertu

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worse.The country'smountainous terrain,remotesettl€ments, and low populationdensity serveasbar.iersto access to andcost-€fficient delivervofoublic services.

Philippines The following are identified as the main causesof poverty in the countryj slow grolth and lackofemploymentopponunities; inequalityin incomesandassets;high populationgro*th; biasedpoliciesand underinvestment in agriculture;inadequateand unequalprovision of social services;inadequatetargeting;and lack of participationof the poor in decisionmaKlng. There is failure io the long-term, to restructurethe economyto make it extemally more competitive andallow broadpeopl€participation. Thehighlyunequaldistributionofincomes hascontributedto th€ sluggishness of povertyincidencefor the past30 to 40 years. High incomeinequalityreflectsthe highlevelofassetinequality. High populationgroMh affectspoor households througha smallerdistributionof incomes amongthem. Biased policiestovr'ardscapital-intensive, import-substituting sectorshave resultedin theincreaseofineflicient protectedindustries. Undirinvestment inihe agricultural sectorhassloweddowncropproduction. The quality of social serviceshas beenquite poor, and the rate of improvementof these serviceshasbeenslow.The poor lack accessto healthservicesbecaus;of inad€quate and unequalspreadof public health facilities.Lack of potablewater supply sy$em merely worsensthe conditionofthe poor. The industrialsectorandacademiiieihnocratslargely influence economicpolicymaking.Thus, poJiciesmerely benefit vested interestsani underulilise rhepoor'sresource,labour

Thailand ThefinancialcrisisthatattackedAsiancountriesin 1997is considered to be a majorcauseof povedyin the region.The economiccrisis hascausedgreatdamagein the socioeconomic conditionsof millionsofpeople,in this case,in Thailand. Exports,which had beenthe main vehiclebehindrecovery,were hit by an increasein the cost of importsdue to the rise in oil prices and a depreciationof the baht. Agriculture suffereddueto an increasein the costof importedseediand fenilizers,while international pricesof agdculturalproductsfell.

Vietnam A numberof factors causepoverty in Vietnam. Theseinclude: unevendistribulionof economicgrowth,minimal governmentbudgetfor basicsocial services,large familiesin rural areaswith few gainfullyemployedmembers,unfavourable climaticconditions,1960,s Vietnamwar, economictransition,andAsianeconomiccrisis.

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Growth is mainly concentratedin urban areas,making Poverty a largely rural phenomenon betweenrural andurbanareas Public in living standards Thereis alsoa big discrepancy in 1997 Poor spendingon basicserviceswasa mere8.57ooftotal governmentexpenditures gainfully employed a few but with in rural areashavelargenumberof childrer households members.Few,or noneat all, non-farmemploym€ntareavailable The poor havelittle or no land. They lack savingsand acaessto credit,technology,basic health and eduaation services, material resourceq and other physical and social infrastructures, such as information and markets. Gender ine4uality, severe natural calamities,long-termeffectsofwar also contributeto the worseningpoverty situation Vietnam'stransitionAom a commandeconomyto a marketeoonomyis also seenas one of the causesof poverty. With the tnnsition, statesubsidiesfor public welfate have been reduced. The Asian crisis has causedunemploymentand underemployment.Nominal and foreignmarketshave incomesof householdandthe purchasingof domesticconsumers decreased,andagricultural productshavestagflated. Table5. Cornarv

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Cambodia

Iltdon€sia

Lao PDR

Philippines

Thailand

CausesofPovertvin the Eisht CourL tn€S Politicrl EcotroDio Lackof entrepreneursMilitary Relativelyclosed dictatorchip Forcedrelocation economy of people High miliwy sDendins CorruDuon Rebuildingof Lack of hunDn Political caprt,ll lnstitutionsaffer Uneveneconomic grcw|n longcon{lict Existence of lanalmines Fledgling Politjcal Lackof economic activities,jobsfor dle institutions p€oPl€ Dcstroyedkey inftastructure FiDancialcrisis of 9?- Politicalinstabiliry Cornrption 98 Cmnvism Lack of infi'astructure Relatively closed economy Relianceon ODA Boom and bustcycles due to flawed polici€s Financial crisis ol 9798 Finarcial crisis of 9798

Natural SocioCdtuml En!1ronmental l,ack of access to basicsoclals€rt,ices degradation Lackoffood security Natumlandmanmade disasters High iuitemcyrate Lackofaccess1o basicsocials€Nic€s HIV-AIDS based Ethnic/religion conllict

Ethnic/religion based Drought ForesiFires conllicls Lack of accessto basic servic€s

Environmeal d€gadation Lackofarableland

Peaceand Order Political inslability Corruption

High population gror{n

Volcamc cnrptiod Storms

Political Inslability CoruDtion

HIV-AIDS Problem

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PovertySituationin SoutheastAsiaand NGORes9onses

vietnao

Tra$ition ftom command to market

Lack ofaccessto social servic€s High population oenslly Exclusionof

Lackof inf.astuctur€

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vt. A.

StrategiesAgainstPoverty Governments'Responsesto poverty

The governments'rcsponsestowards poverty alleviation.ange from the promotion of economicgroMh, implementation of assetrelbrm to provisionand improvementof basic socialservices,moreparticularlyto sectorsor communiliesin remotearias seldomreached by suchservices;from employmentgenerationand provisionof livelihoodopportunities to capacitybuildingto construction ofinfrastructur€(e.g.,communication, farmtomarket road, ir.igation,watersupplysystem,etc.). (Please seetable6 below). Som€govemmentsalso cornmittedthemselves to good govemance,promotingprinciples, such as_transparency,accountability,efficient and effective public service, decisive leadership,and the like. Others promote key concepts, such as participarion, decentralisation, and massorganisations in implementingprogrammes. Recognisingthe valuable_roleNGOs piay in poverty alleviation,govemmenti,which formerly postured unfhvorable attitudestowardsthe former,havestartedcollaborating with NGOS.Someeven providefundingsupport. The foliowing discussionpresentsthe individualgovernment,s responses towardspoverty reduction:

Burma The government's povertyreductionpoliciescentreon rural and agriculturaldevelopment. The.governmenthas adoptedmethodsto boost agriculturalproduction,including water supplyandfarm mechanisation, andadvanced technological knowledge.Also, it hasdrafted and implementedappropriatepoliciesto improvethe country,ssocialindicarors,suchas healthandeducation.It hasopenedmoreschools,hospjtals,and h€aithcentresin the rural areas.

Cambodia G.ovemment strategies againstpovertyinclude:formulationofmacro_policyiiameworkand platform,improvement ofheaithandeducationservices, revisionofgreateiaccess to naturar resources, employmentand collaboration with NGOs, civil societyand donors. Also, the government hasimplemented programsandprojects,suchasinf.astructure rehabilitation and

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PovertySituationin Solthelst Asiaand NGOResponses

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development,rura.l development,triangle strategl (building peacq stability, and security), andmicro finance.

East Timor As a responsetowards €conomicrccovery, the govemmentestablisheda policy framework lor macroeconomic stability.The frameworkunderlinesa numberofprinciplesto strengthen govemance,namely:transparenctaccountability,emcient and effeotivepublic servicg integrity,customer-focused wor\ decisiveleadership, andresponsive to localbuslnesses. Tru$ funds for th€ countrywere establishedfor the country'sreconstructionactivities. ThesetrustfundsincludeTINTAETTrustFund,administered by the transitionalgovemment, and Trust Fund for East Timof (TFET), managedby World Bank in close cooperationwith ADB. UNTAET trust fund financesprojectsin the ar€asof civil serviceandjudiciary capacity building; and covers the cost of all recurrent expendituresof the East Timorese administration. Inoluded in the projects are thc rehabilitationand re-equipmentof police,andjudiciarybuildings,andfor thetrailing ofcivil servants. administrative, On thc otherhand,programmes andprojectsunderTFET include:communityempowerment aad local govemance;Dili communityemploymentgeneration;emergencyinfrastructure rehabilitation;small enterprise;health sector r€habilitationand development;agriculture fehabilitationand development; emergencyschoolreadiness; water supply and sanitation rehabilitation; microfinance; andeconomiccapacitybuilding

Indonesia Duringthe crisis,the Government oflndonesiastrengthened socialsafetynetsto respondto theneedsofthe traditionallypoorandthe newlypoor.Measures wereadoptedto increase the accessof the poor to food and essentialhealth and educationservices.The policy of decentralization, in major part, aimed at addressingregional economicdisparitiesand improving poverty targeting. ln additionto the decentralisation scheme,the govemmentestablished a seriesof new and expandedprograms.Theseprogramswere widely known as the social safetyrlet or JPS (Jaring PengamanSosial) programs.These programsincludedt l. food security; 2 progmmo. labor-intensive employmentgeneration projects;3. socialprolection(education, health,family planning,ald socialservices); and4. SMEspromotion.Emphasis wasgivento implementthese programson a decentralised and transparertbasis, involving districl govemments;municipalitiesand village communitieswere expeatedto contributeto the govemment's poverty. eforts to eradicate

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PoverwSituationln SouthealtAsiaand NGOResponses

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Lao PDR The Lao PDR's strategic approach is to reduce poverty through human and rural development,and people'sparticipatioq focusing on: L agricultureand forestry; 2 education; 3. health;and4 roadinftastructure. arekey conceptsin the govemment's Panicipation, decentralisation, and massorganisations govemment has carried out participatory systemof plandng for poverty alleviation. The planningexercisesin differentprovincesin order to empowerprovincesand districtsto processand to ensurepeople'scloseinvolvementin identifythe dynamicsof development policy increasinglyguides the nationel poverty alleviationplans. The decentralisation planningcontextas capacitybuilds up. The govemmentis giving its full attentionto the prcvinces,asthey are now becomingstrategicunits unde(the decentralisationpolicies. The national planning for poverty alleviation,both in its participatoryplanning and implementationdimensions,is supportedall over the country by an extensivenexwork of carryingout most of the participatoryactivitiesat gras$ootslevel, "massorganisations", eilorts at workingcloselywith the population,and structudngand mobilisingdevelopment in sfiategies, identified this study, mass organisations and support the local lev€I. Several povertyreductionstmtegy.All of theseare serveas essentialelementsto the govemment's goalof in the success ofthe govemment's in the development ofthe country and very crucial poverty. eradicating

Philippines ofthe governmenttowardspovertyreductionliom 1986to presentinclude The responses povertyaileviationprogrammes, and comprehensive assetreforms,targetedinterventions, AgrarianReformProgram(CARP) underassetreformsarethe Comprehensive Programmes poveny andIotegratedShelterFinancingAct (CISFA). Comprehensive andComprehensive alleviation programmesinclude the Social Reform Agenda, National Anti-Poverty Commission Q.{APC),andKapit-BisigsaKahirapan(KALAHI). Targetedinterv€ntionsincluded employmentgenemtionprogrammes,livelihood, food subsidyschemes. CARP strategiesincludedthe just and speedyredistributionof agriculturalland, and the provisionof nec€ssarysupportservic€s. CIFA aimed to improve securityof tenurein advancement housing.SRA workedtowa.dsthe promotionofefficiencyin the marketplace, ofsocialequityin termsofassetrefolms,just sharingofthe benefitsofgrowth, andeffective groupsinto the politicalandeconomicmainstream. NAPC was integationofdisadvantaged anchored orl agricultural modemisation and low cost mass housing. KAIAHI aims at namely:asset in targetedpoor communities, redistributive reformthroughfive corc strategies reforrq provisionof humandevelopmentseryices,employmentgenerationand livelihood, participation in govemance and institution building, provision of social protection and securityliom violence.

Thalland TheGovernment ofThailandprovidedthoseaffectedby the Asiancrisis,the mostwlnerable sector,with varioussocialwelfareprogrammes. Theseprogrammes include:l. healthcard systemfor low incomegrcups;2. educationschemesthrougheducationloan programmes and governmentscholarshipsfor drop-out students;afld 3. social pensionfor elderly. However,studiesshow that thg programmesw€re rrot ableto reachthe target beneficiariesas muchastheyshould.

Vietnam Amongthegovernment's responses towardspovertyreductionaretth€ implementation ofthe Doi Moi (ReformationandRenoyation) polioiesand a policy to createo;portunitiesfor the poor; creation of a GO-Dono.-NGO poverty Working Group; implementationof programmes,such as the National Target programmefor Hunger Eradication and poverty povertyReductionStrategy(CPRS),Socialprotection Reduction(HEPR),Comprehensive Programmes,National EmploymentGenerationprogamme;and the establishmentof mic.ofinalcinginstitutions.

Table6.

Towards

Country Burma

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Cafibodia

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Indonesia

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Reducrion

Gorernment Policies forruralandagrcrr@ fbrei consewatioo. reforestation. provisionofpower.corrununicationinfiastruqure Emplq.rnenlgenqation. Progrurunes to improvehealthandeducationPolicies promoling:nucroeconomy,privarc sector& infrastntcturedeveloDment. expansion of gfety netsand clearance of landmines, deccntralisation. improvins rccessto educalio[ water,a.Ddsanilatio[ bencrgovemance. cnabtingenvironmeni for NGOS,greateraccessto natumlresources, col[borativeparrncrship-s wirh NGOs, civil society,anddonors. Programm€s:n4iogl progunune to rehabilitateand develop Cambodia, 1,. socioeconomic developmentalplan 1996-00,..lrianglcsaategy(p€ace,stability. security)",andmicrofinancing. Policy for rnacroeconomy Timor SeaAgeemcnt Trust FundsC|FET, L}{TAET) projects: - communityempo*ermentalrd lmal govemance - emplolm€nt - infra rehab - small enlerpdse - healftrchab ad devt - agri rehaband dev't - emergencyschoolreadiness ' water supplyand sanitationrehab - microfinanc€ - economiccaoacitvblds Decenlr-alisationscheme Socialsafe0 setprognmmel(foods€curiry.emplo).rnenr. soctalproleflrorlsrnallard medlum enterpnses)

povertySltuationin lutheast lsia anaXCOTespons-

Decentralisation Massorganisations: women,yout\ etlEic/religious,worken

Suppodprogrammes.t'XO demntamination dilg control, ullqPrygE4llq-I3qgDal pop n and de\ 'r Doticv-sender

Corpr"h*a"ffi (-ore

fiaffo?olicies_lob€cneraung and equiry;na;ing

Instrtudonatisation of soci"iir",rrand-J.ir.i1 n",.

i:fj*frff:l;Pi6;d;il;4 e",ffiE;mil :+rorrgeaappro@, rcoucuotrot poor's \r.dnemblliD lo unforeseenevents

Pq€rryRearcrion Snareey icpns)

Sgme.rely,nsiv.e Po\,er9 WorkingGroLrp rmultisectoral)

B. NGOResponses to poverty Reduction intemational andlocal,run-and. implemenr variousprogmmmes I3::T:l andprojecrsin rne respectrve countries thevoperate to alleviate poveny.Theirrespinses canbecategorised

rntothefollowing: advocacy, orsanisins, d"tirJt ;i'b"si;;o"LTiffiill,""o ,,u"rtooa

progammes(pleaseseetable7 below)

themarginalised secto$, atthenationat, ilff';oo'",:ffi,1',:ili,*if:JTg-r,"fentins communities and.

sectoral groupsto facilirare ,,npt*un,"iioioirt'.-i;;"g#;Jf:it:^ mote particularlv in delivering basicsocial services andprovidin;tiliffi;;-ooirl"lli,i',,t:ts' The following djscussionfearuresthe localNGos imptementin thecountriestil$r:;t".:i:.*t*t"t

and projectsintemationaiand

Burma through prolects aimed at,ncreasine I::T"r"frl1,,i"T"rTli,:i['-d;:J:'":TI 1r]11ia1ion

l,i:fl."".."ffj'"J,".J1;.ji,,h*,.'"T"arsoinv "*"c,r,""r";ii"";il;i;#il:Jft

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Localorganisations. on rheotherhand.dealwith issueson healtlL educalion, andcommunity developmenrSomeorganlsations aresocjeriesa lhar *i,i g"*,#int a"pu.,r"nt. andregional people ".opo"" in theexecution ofrurald"""lop'n;ni;;;;;;;"?""'#ffiii,,

' Most wereorgarjzedby themilitrry.

povertysituationin Souiiriast AsiaanJ Ncoiesponses Nevertieless, the.concept of NGo in Burma is new and not yet much understood. No legislationatsoexistsregardingthem. The.elationship it exiJts) beJeen 1if NGOSandthe Myanmargovernmentis srill unclear. AdvocacyNGbs which focus on humanrights and democratization operateoutsidethe country becauseof po.rlUt"-in#""ra,an from the militaryregime.

Cambodia The st.ategiesof NGOs and othe. sectors against poverty include: infrastructure rehabilitation, provisionof reliefassistance, large_scale seivicejetiveryusrngmultilateral andbilateralfunding,servicederiverv^in coop"raion*itr, gou"rnrn"niJ,i.,"iur"., communrty deveiopment, andthedevelopment of tooali.lCOsanaliv"i" o,f,erstrategies includestrengthening of localcapacity,encouraging ".g."i*i.^' rocarrritijires, anJ creaitandsavings VDCsalso in rural-dev€lopment. Theyserveaslinksbetween thegovemment _aid andlocal rnter€sts. NGOS regardVDCsasa mechanism by whichcivil soclety liieract eff""tiu"ty andplayanactivepartin decision-nraking "a-i to*"rj, a"u"tprn"nt.

EastTimor progErnmes and projectsinternational and locatNGOsimptementin the T_.Ojf:"] counlryarein education andtraininq,health,.water supplyandsunitation, agriculture and devetopment, andlaw,c$acity building,;;i;; sov€mance Education ;;;;;. and are maintyin the form of teacherandvoca-rionat rraining, *l1,lg'li"gr"T-": including rmprovement ofcuniculum;scholarships for secondary andterti",l il;"dq upgrading and expanding_ technical education; specialinterestcours€s for poorchildren;construction of schoolbuildings; andprirnary education or earlychilddeveiopment.

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Healthprogrammes and D.oiectsinclude:community_based healthactivitiescapacity buildingin managing diseaies. technical assistancq -"fiilnd;';oiis, inrormation, education, andcommunication campaigns, ,uppl"rn"nt"ry fJ"aing;;ut i1;n, puori"utlon of materials onhealth,construction ofiealthcenters andacquisitioriofmedi"ailqu,pmen. Watersupplyandsanitation projects include:buildingwatersupplyandsaritationfacilities, strengtheningof water manaaementagencies, *"irr,-'i"pui, or *ut". "o-ort-"tion'ii ac. Soml agricultureandrulal devetopment prog.ammes or p.ojects lj:Ill:,..:l:ll.*r. rncruoe vetennary services, regional planningassistance, andecono-Laiu"foorn"n,. Govemanceand law programmes or projectsinclude:the establishment -rno-niori"g 'oiof a legal aid organisation capacitybuildingln prouiaingtegutar.i"ran"e. l,rrnu" ;g1,,, vrolattons. development of humanriehrstrainingandeducation cours-es lor communjty groupsandorganisers. andestablishme'nt ofan indJpendent media. Capacitybuildingfocuses on imorovingthe performance of institutions andorgamsations, includiry developinghumanresourcesrhroughrraining;;";;;;";";;"tudng work

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PovertySituationih SoutheaitAsleahd NGOResponse3

units and changinglines of communicationand management.Among the livelihood projects implementedare livestockraising,micro-financeor micro-credit,animalhusbandry,cattle larming.haberdashery, andhandicrans.

lndonesia NGOs,bothlocalandinternational, work throughthegovemmentsystemandcooperate with village-basedor community-based organizations towardspoverty reduction.International NGOs have mountedsupportprograms,particularlyin food relief operations,fundedby bilateraldonors. On the other hand, local NGOs are involved in poverty alleviation though projectsaimed at increasilg food production,improving health and education,and providing livelihood opportunities.They areinvolvedin strengthening the capacity(capabilitybuilding)of other localorganisations. In the area of social protection, severalNGOS have initiated activities, direct€d towards helping the poor. Activities include assistingstreetchildrenand assistingworkers frnd altemativeemployment.In additionto govemmentschemes, NGOSrun hundredsof small micro-credit schemesthrcughoutthe country.

Philippines NGO responses in the Philippinescanbe categorized by majorareas:advocacy,organising, deliveryof socialservices,livelihoodprogrammes andskillstraining. Many NGOs are into advocacywork followed by educationand training, capacitybuilding and organizing. Advocacycan further be subdividedinto economic(e.g. foreign debt, maqo-policy) or political issues(humanrights,governance and aonuption)and relativelymost NGOs are involvedin the latterthanthe fo.mer. Trainingsdeliveredby NGOSarevery muchdiverse. Organisingwork hasdefinitelygonedownin the lastdecade.A mo.edetaileddescription of therespooses aregivenbelowin table 15.

Thailand NGOs' roles in the countryare well recognisedand incorporatedin the nameof people,s participation. Approximately10,000localNGOSand30 intemational NGOsare involvedin a wide variety of concemsand activitiesin the country.Many of them are engagedin developmentprogrammes, promotingself-helpand community-st.engthened programmes. SeveralNGOsparticipaled andtook grealresponsibility in draftingthe curent economicand socialdevelopment planofthe countrybasedon the slogan"people-centered development.,'

Vietnam Civil societyin Vietnamis madeup of organisations, suchasintemationalresourceagenci€s or donor organizations and local and internationalNGOs and massorganisations. It is involvedin a wide rangeof communitydevelopment eforts eitherwith the govemmentor

independertof it.In some instances, govemmentinstitutionssuppo.tthe work of NGOS rrrougn rne nrobrlrsatlonand tapping of its own personneland material resourceslbr oevetopment lntltatlves someprojectscivil societyimplementsin variouspartsofthe country are informal social protectron. schemes(microfinancing). Farmers,othet interest groups, oa even whole up these financingschem€s. this scheme,membersmake regutar :::1li1,l:: 11 canexpect get ,In conrnDulons and to insurance benefitsin timesofemergencies andold ati.

Summary latrix of NGOResponses to poverty in the Region NGo responsesin the variouscountriesmay fall into the different categories defined

in the

ofNGO hrfluencingPolicy-economii analoirlioa; participationin polioyprocesses andothcr

mecharisms;promotinggood govemanceand campargnhgagainstcorruption:awarencssraising

Influoncinglooalpotioi;"; parri;ifiioffi loc"l counorls; awarencss raisingin thc comfiunitv l.rfluencing specrfi c sectoral issues tike[rarian urbal poor housing,coconutlew, etc

d Conmum4,Organzini

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r

b) SectoralOrganAing

Establishirg communiry based groups;s,slrg lhemrnstrengtlcninq theirorcanizations Helpingorgarizelaborunloncfa.rn"rs organrzatiotrs, urbanpoorqrouDs. etc. Implemen dnghealrhprogrrrnm@; mary nealticare.rmmunization dnves.Hiv-Aids Conducling literacycoursesEiseiilii

lmplementing programm67 p@iiiEilEii childJen._the elderly.battercdwomen.orgarzrnts at lncone-generatingt'roVt ts b) Micro-f nancePrcj ects

'

AssistandfinancosmajlprojocEfo, groups "ornmuoitv andirdividuals Cive creditandloansto feasrbhprojectsatrd smalibusincsses individuallyor collecdveh

Tfus mamx nas laketrfiom rhe philipphe casestudy. The diversityofPhilippineNcOs provideth€vanous t)?csof N@ responses !o potenl ,edr.uon

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povertySituationin Sor.rtneast lsiilna NCOnesponses

.t Orgarusng Cooperunves

5, SkillsandValucsTraini

Assist communitiesand s*tot i, "statlis.hi"g coooelaltves

Pro\,idespecrficskllls 6. Reliefand Rehabilitatio;

Prolrderalue-oncnted *ort shopsanaseminars

Pro*de si^ rc6sr,-ii asGm-f,iE[, ,cmergcncy sbeltgr,foodrations.etc.afterdisasters or

conflicts; Communityorganizationfor rehabilitation

Vll. Assessments of GovernmentResponses: L Most governmentsstill focus on the role of maoroeconomic growth in poveny

this hasbeenchangingrn recenryearsastbe quality groMh of has [*i,:.:]!yqi oeenacceptedas the more crucialfactor (e.g.groMh that genoate,joU.:oi fo"ur"d rural More recentmacroeconomicgiomh p",f"fi;;;;;;;"i'has :lhampered T:asl: be"n by the crisesthat havehit the region,the financialrn"ftaorvn in iiyz una thepostSeptembe. I 1 terroristattacks. 2. havealreadyformularednationatplansto combatpoveny, Y.ll9,Tll8:-.renrs several cntlquesemerge: t In the.planningstage,key stakeholders may have beenmissedor excluded (especiallylor specificpovenyreduction proiram)" . 5 rhe probremin th€ imprementation stagi rs reratedto the rackof resources, tnter-agency coordination,collaborationwith p vate a""ro. una groups.capacrtyofgovernmentagencies "iult'.o","ry ro deliver services 5 Kesource andfinancialconstraints for povertyprogrammes areexacerbated by cornrptionandweakgovemance povenycampaigns 5 Suslatned are limited.as changes in regimescarrywith ir anan-ges ln programmes and implementation as in the caseof the philipprnes andIndonesia g D€centralised (i.e via localgovernments) responses lbr povertyreductionare still Iimited f Donor conditionalitiesaffect the strategiesundertaken as in the pRSp countries(Ma.laluan andGuttal.20Ol.l 5 Difficulty of govemmentto establi;h.effectivemonitoring and evaluation systems to funherrefinepovenyslrategies r rne quesrronot equrty and assetreforms as key policy thrust towardspoveny

bytheexisting j*:lil-i:.".X,1r nampere.d political

*i"rJ ui ,nr.."r, groupsresrstretbrmsthatwiil tendto redistribute ecoo'o.y assets andiniomesio the"o poor1e.g. agrarianreformor evenplain subsidies to th" po;;;;il; m-argrnatiseo groups.).

;H:ffi?1#i,*"n

I

rhoushhasirnproved in thelasrdecade in manvcountries jblvfor except poss

Poverty Situation in SoutheastAsia and NGOResponses

8

4. Difficulty of governmentsto maximise ODA for poverty reduction. Absorptive capacityis low becauseagainof resourceconstraints, weak institutionalcapability and the difficulty in coordinating various donors in terms of their thrusts and priorities. 5 . Dilficulty in targetingultra-poor and very poor groups as statisticsare scant, resources arelimitedandthe possibilitiesofpatronagestrong(i.e.povertyalleviation funds are diverted to groups supportiveof the regime). When a regtme ls consolidatingpower (e.g Indonesiaor Philippinesor holding on to power like CambodiaandBurma),\ulnerabilityfor misallocating resources will behigher. The informal sectoris oft€n times neglected.Many poor peopleare found in the informal sector also particularly in countdeswith mega-citieslike Thailand, PhilippinesandIndonesia.. Budget allocationskewedtowardsmilitary spendingrelativ€to social servic€sin severalcountriesbecauseof political reasons- stability and peace and order problems;allocationto agricultureand rural areasarc low as policiesare typiaally biasedfor the urban (usuallyareassunoundingthe capitaland other key cities), formal and manufacturingsectorsevenwith the rhetoricfor rural development.

Vlll. Civil SocietyResponses: Summaryand Assessment t . Most NGOSand civil societygroupswork at the communitylevel --. organising sectors, communities,and associations(especiallyin countries with relative democraticspace), and delivering social services,such as health, training, microfinance, andlivelihoodprogrammes (almostall countries).They usuallycover small parts of the country, and many do not coordinate or collaborate with govemmentexceptfor those in socialistsettings. Most have iimited resources, althoughfew managehuge programmesparallelto govemmentservicedelivery acxluues. 2 . Very few NGOs work at the national and macro-levels. Usually, theseare networks or federations ofpeople'sorganisations, doingadvocacywork for their sector.Most of theseNGOs clamorfor greaterparticipationin the politicalprocesses.A very limited numberof NGOs are capableof doing economicadvocacyin the senseof debatinggov€mmelt and the private sector in rnonetary,trade, industrial and fiscal policies. IntemationalNGOSare very much engagedin global advocacyat the WTO, IMF and the WB. There is a needto forge linkageswith academeand other r€searah institutions to enhance economicadvocacy ofNGOs. 3 . Intemational developmentNGOs play crucial roles, especiallyin countries where democraticspacesremain nanow. They becomeconduits of official development assistance. Theyarealsoableto inqeasecapacityoflocal NGOsandhelpthemattain govemment recognition. However, in the long ruq the relationship between implementingintemalionalNGOs and tocal NGOs musrbe clearlv def,nedas the lattertakeson sreaterroles.

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PovertySitu.tion in SoutheastAsiaand NGOResponsee

4. Very few NGOs work with the private sector for pove.ty reduation programmes. This is an areaof cooperationthat has remaineduntapped. Thjs is becauseof di{ferences in perspectives'. However,the privatesector'srole shouldnot only be Iimited to job creation.They also have expertisein resourcemobilizationand promotion. entrcpreneurship 5 . Good govemanceand accountabilityof many NGOSare now being demandedby govemment, communities, donorsandotherstakeholders_ Cronyismandrent-seeking areaheadybeingusedagainstcertainNGOS. Corruptionin localNGOSis alsonow beingdiscussed.At the sametime donorsare alsoaskingwhat the impactof NGOS areafteralmosttwentyyearsofpoverty work in theregionespecially in countrieslike Indonesia, Philippines ard Thailand. Thereis a needfor greatercollaborationamongNGOs (internationaland looal), govemment(includingmulti-laterals),and the private sector . Multi-stakeholder collaborationis key towards poverty reduotionefforts. NGOS as irtermediary organizsations mayplay activerolesin promotingthis t]?e ofcooperationespecially at locallev€ls.

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lX. Proposed ActionAgendafor NGOsin the Battle AgainstPoverty The followingis a rnenuofpossibleactionsby NGOSto assistin the battleagainstpovenyin the region. Whil€ someofthese are alreadybeingdone,we still mentionthemto highlighr theircontinuedimportance.Thosein bold lettersarea-reas that NGOSneedto enhancetheir activitiesandresponses.

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Networkwith otherNGOsdoing similarwork to maximiseimpact.This is especially importantfor groupsdeliveringbasic socialservic€s to communitiesor for those doingadvocacy work. 2. Expandnetworkingwith other sectorrlike academeand th€ private sector. For the former to help NGOs in their economicand other advocacyrdork and in somecommunitydevelopmentelTortg,tror the latter, to assistNGOSrn resource mobilisationand in running livelihoodand job facilitationprogrammes. 3, Broadcn relation$hipwith national and local goyernment8especiallyfor NGOS delivering social services - greater collaboration \yill prevent wastage of resourcesand duplicationofwork. NGOSmay push government10specifyroles to be played by key stakeholdersin pover8 reduction programmes. For example,NGOs can elfectivety a$sist in locating ultra-poor groups and in assessingneeds of such groups for the design and implementatiotr of piogrammes. 4 Enhance capabilities for the experimentation and implementation of programmes for risk and uncertainty mitigation like social insurance,

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NGOStpicatly misfusf profit-orientedorganisations " A caveathereis whengoveru[ent is seenby NGOSas i egitifiate suchas a dictatorship.

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PovertySitu.tion in southealtA5iaand NGO

community funds, workfare programmes; etc. Disseminategood practices to other NGOs and civil societygro[ps. 5 . Promotemicrofinance andcreditasthesearemechanisms forjob generationandrisk mitigationfor communities andhouseholds. 6, Build appropriaternechanismsto evaluateand monitor impact of NGO efforts toward poverty reductionat regular.intervalsin a sostainedmanner. Improve transparencyand accountability of NGOS to key constituents. NGO qedibility is key towardsgleater resourcemobilizationand better effectivity in progmmm€implementation. 8 . AdvocacyNGOS(wherethe situationpermitse)mustfocuson thefollowing agenda: Political: a) Participation in policy-makingprocesses panicularlyin thoseissuesaffecting pov€rty reduction. b) Pushingfor policies to strengthenthe role of people,sand community organisationsin pov€rty programmeimplementation c) Ensuring tnnsparency and accountabilityof key agenciesimplem€nting poverty reductionstrategiesto stamp out corruption d) Continuefightingfor therightsofmarginalisedgroupsandsectors Eco omic: Pushingfor a comprehensive and integratedpovertyreduationstntegiesthat are formulated though participatory processesthat include maior stakeholders. b. Ensuring macroeconomicpolicies affect poverty situation in a positive te[se. Pushingfor economicpoliciesthat favor agricultureand rurai develoDment. andlhosethatcreate morejobs. Advocatingpoliciesthat mitigaterhe negativeeffectsof opentrade policies andmaximisinggainsfor the majo ty. e , Pushingfor equityandassetreformsto promote€quitabledistributionofany gainsto gowth. Pushingfor adequatesocialitrsuranceschemesatrd other safetvnetsthat minimiseeconomic vuherabilityof pov€rtygroups. Advocating the donor community to attune their poverty r€duction elTorts based on national strategy and plans devised through participatoryprocesses that includedkey slakeholder3

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30

' In tlle cas€ofBunm for example,advocacyNGOSinetrtably focus on an antidictatorship agenalaandare outsidclhe countryi only the servicedeli\)eryNGOS(usually internaGonal)operateinsidethe counny

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Socio-cullaral: a) Pushingfor more responsiveinstitutionsthat promote social and human capital. b) Enhancing the family's role in protecting thc householdfor economic risks and vulnerabilitythrough awaren€ssand family-basedprogrammes c) Working with the church and other concernedsocialinstitutions towards the imbibing of human valles (e.g., fairness' honesty' and integrity) through iltensive and massivevalues educatio.rprogrammeswith the people,especiallythe young,in order to createand sustaina societythat and politic&lstatus,and doesnot discriminateir terms of socioeconomic usei resourcesresponsiblyfor the well beilg of all' including future generations. d) (For couttries with population managementand EIV-AIDS concerns e.g., Philippines' Indonesia, vietnam, Cambodi& and Thailand) Conducting intensilied and massive family planning atrd responsibl€ parenthood campaignsand sex educltion campaigoswith the most vulnerablc groups,especiallythe out of schoolyouth; at the same time providing th8m options(e,g,,paid or voluntary communitywork' regular employment,Itack to school' vocational traitring, etc.) towards a more meaningfuland productivelife.

SelectedBibliography ^'"'

AsianDeveropment outrook 2001.oxrorduniversity press,

"fJ#?ff1f;f

ottun Banr."socral Ercrusion ?:l:':lT.j, or rn.r,,"i^-. ^ Asta and EuroDe,, nr^^.

l"l'la**fl;ft f;1,",y,"xff f''"'H:;n,H*lli'fl i{j:*1;

Baviera.A and C. Militanrefed

s:;f t;Hflefi;1d1]:l xfl1rJ;iy;:ff iffi""t,;,il:;fl; #

Bird. K , D. fiulme. K. Moore :

mw:*:*jiuilti[:i:T",#{,",;:i,T:ib nr:*Hfl

Chavez_Malaluan, J andS. Guftal

"*.,.il";#;;:,11",.i;t:,i;l*H,:ff i,?jh{"flilj:1.,f:"d;;i:i

DeotaljsT;-A ,-l Brjuanres. R cal

j :';li:s'ryy ilf ",,"Iir::tj:1*"t'":1:"1ryf"" *ux*L:ifu "#itrit3nl#dff

:,*a i'#"*,"x,*#"f '""*,f|i;"iii1l,1!1ifl,""L11, ;"6,::fl ilililili,,;:i;,1",,: *'""'lIJ;o#o:*f ".,,,","._

j:n:tk*i1fu1;",""#:hffi" ff*i#p:i:, i"-?::y

Warr. P".Poverty Reduction ,n.t F-

I I I I

**t

i".','.""T!":tlmtm:m":;:#Hl;J::i.;:\:f "#l;,*"fi:::

f,"TTf,i;#lLl!rt;-

ft 2oo0ko0ltAttackins pove"ty, o,ford

T ! !

CountryReports

EastTimor

PoVERTY IN BURMA JOI{ANM ZIJLUETA I.

Introduction

This paper is parl of a studv of povertv reduction rnitiatires b1 govenrrnentand NCOS in eighl phitippines. ASEANcountnes-

namct\ indonesra. Cambodia_ Vli"lrn--sr*";. Li,r*. TlUr_a, The study aims to presenta comprohensive view of poverty slruatlonand the 19 F! J-rcsponses to povertyby differ€ntsectorsin the eight countrics. etso, it ai.s tlo come up wrtn .ccornmendations to dev€lopment NGos regardingireas of intewentiooso; *tt tlr"l. respeqryegovcmments towardspovertyreduction.Th€ sfurlymainly usedsecondary "olliuoiutron data (\lTitten documents, books.addintemet) focuseson Burma.-It is divjded into six parts. The first pan presentsthe II fqg ntroduction. The secondpart describes the demograpllcpronteoianaloi,lny ,,tu"t,on in Burma. Thethird discusses the maincausesofpoveny. fle fourthfeatuiesthe responses to povertyby thegovernment, intemational andlocalNGrOs,ir"lJ"g i"d-"ti"""I donors,and the.church. by some instituttns and analystson the _The fifth presentsan assessment multisectoral, responses. particutarlythegovemment,s, to p*;y. il; ,il ;;n presents the summaryandconclusion

2.

Profile

2.1 ceography and Demography

"hy:"fr,1i:",*n;i"ff |;il:{;X'"[ii,H'"""T d"'':'"f i"?:i3"fi:;J,;],,""ii; steep, russed hishiards. rtstotal

;iT:Xla*Pr

areaisord,soo f,nt-*i r tlotar randareaat

l:""1I ;'JTlffi ff "'"'q*T;:::;3:."J,:i#,'#,lli;iji',"#l,illii#:'ffiT '"';"THfi "iu:!,i"fl#;iq;:ff

;xl""ff

1: ";*"1*,J:l"lrrutl,,,:n'r"",f ;;

ff*'"T*lfff:""ifr T:'"ii; i*l"l?ffii:,1"i;,ffi ;," l?lf"ilm;f,f# t9:"l"jry is mainlyagriculrural, withtheag culturesectoraccounting for morethan40% of GDP lrsmainexponsarefoodstuffs

orthepopuration s.,ilrl::'fi:1"*Ti %ffi:liil::ffi ,,Hl:Hr(:?#] "i. r,"i","a]":#if,|ffi;Xt

Themajo'languase is Burmeseo,rt".

"rl"i"

gt rpr,i"."ver, havetheir

Table Population Capital

(2001) 4t ,9%,6',t8

!99qo,ny

Agricultural

Mail expo4s Major Languages MajorReligion

Rangoon Foodstuffs, woodproducts,precrous ston-i

Bumcse TheravadaBuddhism

2.2 PovertySituation despiteirs 5.8%cDp go1'v1h in fiscalyear lT1n1^i1_alngng theyvo d's poorestcountries, (FY) 1998/99,99 a cDP growthof 10%by Fy 1999/2000. Majorir/(nearty 75yo)of the ' muntry'spopulation live in rural areas,where|l,yo of thepoorieside.povertyls mainly poncentrated amongthe non-ethnicBamars,in regionsthat aie rural,sparselypopulated, and areas.poverryutnongrnounr-uin p"optes is high;;;;;;ed to peoples in l::l_"d T l,Flt""d

ornerpfis ol the country.

RealGDP groMh in Burmahad declinedbetweenFy tgg5/96 andFy r997l98. This was Iargely.due to theimpactofbad weatheron agfiaultural produdion.Another -foreign wasthe shortage -and of agriculturalinputs, such as fenilizers pesticides,causedUy e*ctrar,le constraints.Still anotherfactorwas the Asian crisis of 1997,which had likewise affected trade,the maxket,andtourism. The country, however,was abie to recover,whenit posted a growh of 5.8%in GDp in Fy 1998/99,anda growthoi nearlyrct%Ay fV isSStZOoo.

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The countryhasa substantial amountofnatural resourc€s, whichcancontributeto economic growth. It, however,facestradeand foreignexchange consrralnts.thls is rnainlydueto the sanctionsimposedby certaincountries,suchas thJ United States. In April 1997,the US bannedall Americaninvestments in Burma dueto negativeperceptions ab'outtumun rights. Thesesanctionswerefurtherrenewedin 1999. The iS, u, ,"tf i, otf,.r-"ouotries, suchas Canada andAustrali4hadpassedlegislatioqenablinglocalgovernments to iestncttradewifh 6Urma. l]llit

il,

the.othTdeveloping Asian countries,whe.ethe incidenceof povertyin rural areas

area\^in Burmatheopposite istrue.Latest statistlcs showthatpoverty i:]Ig:t^lY ll i*""areasis 21 9% rncroence In urban philippines). while in rural areas,22 4% (NSCB,

urban povertyrate is high due to the higher cost of food, a more skewed distributionof income,and lackof accessto subsistence iarming. This rnuy t" J"" ,o ,f,efact thatrhe country'ssocialistpoliciesareorientedtowardsbasicneedsand "fro is biasedtowardsru.ai areas, everthougheconomicgrowthis not high. The urban poor belong to householdsthat tend to be smaller and have slightly younger household heads.Also,theytendto be in areasrot closeto available jobs aJgooo services. Rural poverty,on the other hand,is mainly due to low agriculturatoutput,.in""-tt ..A poo. haveeitherno landor plots. Thelimitedavailabilityof;ff_farn work is " alsoanotherfactor.

CountryReports:Povertyin Burma Adult literacy is high at 90%. Primary school enrolmentis also at 90%. However, not all enrolledin primaryschoolare ableto finish schooling-- the completionrate in the primary levelis only 34%. Thegrossenrolmentratioat middleschoollevelis lowerthan40%. Low elementarycompletion may be due to the fact that, despite free pdmary schooling, parentsstill face the burden of paying for textbooks, uniforms, school supplies, and other contributionsneeded,suchas parent-teachefsassociation(PTA). Rural net effolment rate for primaryschoolis 787owhile urbanrateis 870lo. The country'suniversitieshave been closedfor a long time due to the December1996 political demonstrations.Many young peoplemigated to other countries,resultingin a "brain drain", which is detrimentalto the courtry's future development. The country's expenditureon health is lessthar a fifth ofthe averageaggregateamountspent elsewherein East Asia. Thus, the coun1ry'shealth indicatorshave fared lower than that of otherdeveloping countriesin rheregion. According to the Joint United Nations Program on HIV/AIDS (JNAIDS), almost half a million peoplehaveHry/AIDS. HMAIDS infections,followingthe wake of the country's drug explosion, have reachedendemic proportions and may be a threat to the country's economicand social stability. Other health concemsinclude malnutritior\ malariq leprosy, denguefever, andtuberculosis. Despite the above health concems,infant mortality rates have improved and immunisation rates have increased. Burma has twice as mary privat€ as there are public medical professionals and facilities. However,useof privatefacilitiesis low due to high price and inaccessibility. On the other,publicfaciliti$ areofpoor qualityandofhigh costsaswell. arebefteroffin termsof access to basicneedsandservicesthantheir rural Urbanhouseholds counterparts. Peoplein urban areashave greateraccessto sanitation(65%) than rural areas (39%). A satisfactory numberof the country'spopulation(666/o) haveaccessto safewater. However, only 17% of people in urban areasand a measly2P/oin rural areashave accessto piped drinking water. Also, Myanmar hasone of the lowest personto telephon€ratio in the world, with 5 phonesper 1,000people. Thesemay be dueto the govemment'slow spending on basicinfrastructu.e,which could contdbuteto improvedliving standards.

t t

CountryReports:Povertyin Burma Table2. Socioeconomic Indicators GDP

I

GDP per capita Humande\,elopment tndex(HDl) Povertyincidence Rural U$an Annual groqlh rute Lifc cxpectancyat birth Male Female Adult literacy rate Male Female lnfantmortalityrate{per l,000live binhs} Unemplolirnentrate

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3.

US $ 14.2billion (1999)

us $ 3000999) (2000) t25- outof I74 counmes

22.9%(1997) 22A% 23.9% 0 .60/0(2001)

years (2001) 55.16 53.73 56.68 83.6%(tee?t 89% 78.8%

73.7r (200t\ 7.r% (1991 /98\

Determinantsand Causesof Poverty

The main reasonsfor Buma's pervasiveand seeminglyhopelesspovertysituationare the flawedpoliciesandpoliticalrepression the governmentcontinuesto implementandexercise. Therehasbeenlarge-scale displacement of ethnicgroups,forcedlabourfor military camp wor( andhumanrightsviolations_Accordingto World Bank's recentsocialand economic assessment, the countryis "trappedin abjectpovertydespiteits rich resources base.Although therehas beennotablemodente grofih in the economy,the trickle-downeffect of this groMh did not reachthe poor. The country's povertyand developmentindicatorshave iaggedbehindthoseofits neighbours".

I

3.1 Political Repression and HumanRightsViolations

t

The continuingviolationof the humanrights of its citizensis a major issue,worseningthe country's situation.The government'spolicieslegilimiseforcedlabourin military _p-overty campsandforcedr€locationofpeopleto areas,wherefoodis difficult to grow

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Repression of political and civil rights and the lack of dialoguebetweengovemmentand oppositiongroupsdenythe very essence of demoanticgovemance in the aountry.policieson the displacement of certainethnic groupsas well as arbitraryarrestsand killings furrher aggravate thepove.tysituation. Also, military spendingis high. Budgaary allocationsto basicservices.suchas healthand education, axediminishing.Yearsofmilirarism havestunredthe country.sandthe people,s growlh.

3.2 Food Scorcity Food scarcityis anotherproblemhoundingBurma. It existsin both civil war and non-civil war area, makilg all community members,particularly women and children, suffer from hunger,malnutritioqillnesses, andotherhardships. Thefollowingarethe causes offood scarcity: l Destruation ofstaplecrops 2. Uncompensated conscption ofpeopleto work on stateprojects,whichgivesthem no time to work on theirfieldsandgrow food 3. Forcedrelocationofpeopleto areaswherericeis difficultto srow 4. Quotasystemon the amountof rice to be suppliedto goveiment, belowmarket price, which must be suppliedwhetheror not the harvestwas adequate_ this leavesthe peoplein debtandwithoutanyice to eat. Food scarcitybringsaboutextortion(alsoa causeof food scarcity).For soldiers,extorting food, crops,cash,and otherservices,is the solutionto their own iack of food suDDlies.For the people,this extortionleadsto food insecurity,and eveflually to food scariity. The trallickingofgirls andwomenis alsooneseriousoutcomeoffood scarcjtv.

4.

Responses TowardsPovertyReduction

4.1 GovernmentResponses

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The gov.emment's povertyreductionpoliciescentreon rural and agriculturaldevelopment. SuchpotrclesIncludeplansto boosrthe productionof rice and othet crops.The countryis adopting methodsto boost agriculturalproduction,inaluding water iupply and farm mechanization, and advancedtechnological knowledge. Also, th€ govemm€nthas drafted and_implementedappropriatepoliciesto improvethe country'ssoiial indicarors,sucn as healthand eduaation.It hasopenedmoreschools,hospitals,andhealthcentresin the rural areas. Othergovemmentprogrammes areasfollows: 1 Forestconservation andafforestation throughtre€planting. 2. Provisionof powerfor streetlighting and governmentand religiousbuildingsin bordertownsthrcughelectricitysuppliedby smallgenerato$. 3. Imp.ovementof communicationthrough telephoneand teleg.aphsand postal systemproJects. 4. Creationofjobs and incometkough the constructionof departmentstorcsandthe teachingof traditionalarts, such as weavingand gold and silver embroidery. Coope.ativeshopshave beenbuilt to providean outlet for th€ sale of localiy producedgoods.

The govemment, in cooperationwith NGOS, the informal s€ctor, ard other groups ar€ carryingout the aboveventures. Financialand technicalassistance from foreiln gioups, especiallyASEAN member-countries, help in this endeavour.

4.2 RoIeof NGOs and Other Sectorsin poverty Alleviation The conceptof NGO in Burma is new and not yet much underutood. No legislation exists regardingthem. 'Therelationship(if it existsat all) betweenNGOs and the government ls unclear. Nevertheless,NGOS,both local and intemational, work tbrough th-egovemment systemandcooperate with village-based or community_based organisations 4.2. 1 lnternational NGOS Only a few intemationalNGOs havebeenoperatingin Burm4 and theseemergedonly in the 1990s.Most of theseNGOswork on health,especiallyconceiningHIV/AIDS] development, disastermanagement, andwomen,sissues.Otherswork on naturalresources. IntemationalNGOs, suchas Savethe Children,Marie StopesIntemational,The Red Cross, and tN afliliated organisations, are involved poveny in alleviation tluough l_d^y-"irlarmedat.rncreasing food productionand improvinghealthand education. Theie lI:Jeqs arso rnvotved in strengtheningthe capacity (capability building) of local lly:: ir," olgansatlons. An NOO/Trust Foundatio4 GrameenTrusl of the GrameenFoundation, USA stafted a microcreditprogrilmmein Burma in Augustof 1997 The programmeis cunentty sewing 18,715women. The programme started_in the DeltaZoneof the-country,one ofthe pooresi rcgions,wherewomenconstitute49ploof its population,and 45% of its adult workforce. The UN Office for Project Services supports this programme. The programme orgaruses borrowersinto groupsof five, trainsiirem on the'req-uirements oi!.Jrp ?l*oer.r,ipr, anO givesthemcollateral-fiee loansrepayable in weeklyinstalments.

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4.2.2 Local organimtions Local organisations are many,but aremostlyaftiliatedto religiousgroups.Linked with the thes€iocal organisations.deal with issueson health,education,and community 9-"lTill1 development.Also, localNGOs include_ differentt]?es of cooperativesocieties,working with govemmentd€partmentsand regionalpeople in the executionof rural development and povertyeedication. It shouldbe noted,however,-that not all local organisatrons qualify as NGOs in a strict sense. Other NGOs jrarticularly those advocatiig human nghts and democntisationoperateoutsideBurmaas they are considered as subveriivesby the military reglme.

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5.

Critique/Assessment of GovernmentStrategies

Taking on flom what UN SecretaryGeneralKofi Annan said, "Development cannot thrive without humanrights", it seemsthat Burma hasa long way to go before real socio-economic developmentard poverty alleviation take root in the country. The governmentand its socalled"flawed' policieshavebeenvery much critiqued.Despitethe administration's claims of variouspoverty reductionprogrammesas well as a comprehensive plan to implement development, thegoalofpovertyrcductionis seenby somesectorsto be far behind. Thesesectorshaveqiticisedthe govemment'sadoptionof military solutionsto solvevarious problems,especiallywith oppositiongroups. AsianHumanfughts Commissionstates,the policiesthat the Burmesegovemmentcontinuesto implement,"continuesto generatea pattemofgross andsystematic humanrightsviolations".Unlessthe govemmcnlveersa.way from its current policies,groeth and developmentwould remainstunted. The World Bank also mentionsthat in order for Burma to receive support from overseas,it shouldshowa commitment policythatwouldnot only address to a broad-based the country's socio-economic conditions,but also the other concernsof the internationalcommunity,in particular,the UN resolutions on politicalandcivil rights.Only the Associationof Southeast AsianNations(ASEAN) seemto showcommitmentto zupportthe cunent regimesthrusts towarddevelopmeni.

6.

SummaryandConclusion

6,1 Summary Burma, capital Rangoon, borders the Andaman Sea and the Bay of Bengal, between Bangladesh and Thailand. It has a total land uea,of 657,'140km'?. Mainly composedof cenfiallowlandssunoundedby steep,ruggedhighlands,it has a total populationof 41.9 million. An agriculturaleconomy,the country's main expons include foodstuff,wood products,and p.ecious stones. In the past years,the ag cultulal sector accountedfor more than40% ofthe country'sCDP. The country'spopulationg.owth rateis lessthanonepercent,with birth rateof20 13 and a d€athrute of 12.3per 1,000population.Majority (68%) of the peopleare Burmese.Other ethnicgoups includeShar\Karen,4% Rakhine,Chinese,Mon andIndian. Majority (89%) of the populationare TheravadaBuddhists. The rest are Christians,Muslims, and other religiousgroups. The majorlanguageis Burmese.Otherethnicgroups,however,havetheir own languages. Burma is amongthe world's poorestcountries.Majority of its peoplelive in rural areas. Poverty amongmountainpeoplesis high comparedto peoplesin other parts of the country. In Burma, poverty incidencein urbanareasis greaterthan in rural areas_

CountryReports:Povertyin Burma Urban poverty rate is high due to the higher cost of food, a more skewed distribution of income,and the lack of accessto subsistencefarming. Rural poverty, on the other hand, is mainly due to low agriculturaloutput, sincethe ruftI poor haveeither no land or plots.

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Adult literacyis high. Whiieprimaryschoolemolmentis high, completionrateis low dueto cost of textbooks,uniforms,school supplies,and the like. There is high incidenceof HIV/AIDS in the country. A lot of peopl€,especialiythe poor, sufer fiom malnutrition, malari4leprosy,denguefever,andtuberculosis.Costlypublicfacilitiesareofpoor quality. The country faaestrade and foreign exchangeconstraintsbecauseof sanctionsimposedby certaincountries,suchas the United States. The US bannedall Americaninvestmentsin Burrnadue to negativeperceptionsabout humanrights. Other countries,suchas Canadaand Australia,hadalsopassed legislation,enablinglocalgovemments to restricttradewith Burma. Themainreasons for thecountry'spervasiveandseemingly hopeless povedysituationarethe flawedpoliciesandpoliticalrepression govemment the continuesto implementandexercise. Therehas beenlarge-scale displacement of ethnicgroups,forcedlabour for military camp work,andhumanrightsviolations.Foodscarcityis alsoa majorpovertyissuein the country. The government'spovertyreductionpoliciescentreon rural and agriculturaidevelopment. Thegovernm€nt hasadoptedmethodsto boostagricultural production,includingwatersupply and farm mechanisatiorl and advancedtechnologicalknowledge. Also, it has drafted and implemented appropriatepoliciesto improvethe country'ssocialindicators,suchas health andeduaation.It hasopenedmoreschools,hospitals, andhealthcentresin the ruralareas. IntemationalNGOs are involvedin povenyalleviationthroughprojectsaimedat increasing food productionand improvinghealthand education. TheseNGOs are also involved in strengtheningthe capacityoflocal organisationsandmicro-creditprojects. Localorganisations, on the otherhand,dealwith issuesort health,education,andcommunity development. Someorganisationsare societiesthat cooperatewith govemmentdepartmerts andregionalpeoplein the executiolof ruraldevelopment andpovertyeradication. The govemmentand its so-called"flawed'policieshavebeenvery much critiqued. Despite theadminisfiation's claimsofvariouspovertyreductionprognmmesandcomprehensive plan to implementdevelopment, goal the ofpovertyreductionis still far behind.

6.2 Conclusion ,

Abjeatpove.tystill existsin Burma. Thoughthe countrypostedeconomicgro\a{h, pove.tycontinues to b€ an impodantissueiq thecountry'sdevelopment

d Despite Burma's potential for broad-basedeconomicgrowth due to its substantial natural resources,it has a long way to go beforeit reachesits goal of full economtc growth and development and poverty eradication. This is mainly due to the

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govemment'spolicies,stuntingthe country'sgrowth ard development.Countless humanrights violations also ag$avatethe povefty situatiofl.

a

The Burmesegovemmenttdes to addressthe aboveissues:it has comeup with plans and policies for developmentand poverty alleviation. One of this is rural development,the main tkust of which is agdcultural giowth. Other policies, meanwhile,focuson improvingsocialindicators,suchas healthand education,job creation,and accessto power andcommunications.

,

While NGOs are a new entity in Burm4 a number of local and a few intamational NGOs have been coop€ratingwith the govemmentto addressthe country's poverty situation. The relationship,however,betweengovemmentandNGOs, is still unclear'

,

Burma has a long way to go beforc it reaches its goal of high groMh, real and zero-levelpoverty. Also, it shouldgive utmostpriority to human development rightsviolationsandits ongoingconflictwith oppositiongroups.

,

policy that would not The govemmentshouldshowa commitmentto a broad-based conditionsbut also the international only addressthe country's socio-economic on politicalandcivil rights in community'sconcems,particularlythe t]N resolutions orderto rec€iveoverseassupport.

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CountryReports:Povertyin Burma

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Sources

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BurmaiTheCountryis fuddledwith Abjectpoverty. http://www.ahrchk.net/solidarity/200005/vt 05_13.htm

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FoodScarcityin Myanmar http://ww\T.ea.tkights.org/womer/CHR00.doc Grameen B.ingsNew Hopeto Myanma.Women,in GrameenConnections, official newsletteiofthe GrameenFoundation, USA. http://www.gfu sa.org/newsletter/spring00/myanmar.html Myanmar:Challenges in HumanResource Development. http://www.escap-hrd.orglnews/profi les/myanmar. htm plan Myanmar2001-2003:Country Assistance http://www.adb.org/Documents/CApsMyA,/default.asp MyanmarNGOs.http;//www.intemationalngos.org/burma(myanmar).htm NGOSin theGMS: InvolvementRelatedto povertyAlleviationandWatershed Management - Myanmaqby GunillaRiska.http://www.mekonginfo.orglmrc_en/doclib.nsf Policies_and Strategies of Myanmarfor Rural DevelopmentandpovertyAlleviation,by Ne Win, 1998. Povenyin theHinduKush-Himalayas. http://www.icimod.org.sg,4rkl/poverty.htm Pove(yRatioin Myanmar. httpi//www.nscb. gov.ph/events/asean/papers/country,Myanmar.pdf TheWorldFactbook- Myanmar,in the CentralIntelligenceAgencywebsite. http://www.cia.gov I.INICEFMyanmarwebsite.http://www.unicef orglmyanmar

Cambodia

Povertyin Cambodia JaHANMZULUETA

1.

lntroduction

This paperis pa.rtofa study of poverty reductioninitiatrves by govemmentard NGOg in eight ASEAN countdes,namelyr Philippines, Indonesia,Cambodia,Vietnam, Burma, Lao, Thailand, and East Timor The study aims to pr€senta cornprehensiveview of poverty situation and the responsesto povgrty by diff€rent sectorsin the eight countries. Also, it aims to come up with recomm€ndationsto development NGOs regarding ar€as of interv€ntionsor collaboration rviti their respectivegovemments towards povertyrcduction- The studymainly usedsecondarydata (writlen documents,bookN,and intomet). This paper focuseson Cambodia.It is divided into five pafs. The fiIst part is the introduction. The secondpart presentsthe demographicprofile and poverty situationin Cambodia. The third part discussesthe main causesofpoverty. The fourth part featuresthe responsesto poverty by the govemment, intemational and local NGOq including intemationa.l donors, and the church.

Thefiffh presents anassessment by someinstitutionsandanalystson themultisectoral responses, panicularly thegovemment's, to poverty.Thesixthpartpresents thesummary andconclusion.

2.

Profile of Cambodia

2.1 Geographyand Demogrdphy The Kingdom of Cambodi4capitalPhnomPenh,is locatedin Southeast Asia" borderingthe Gulf of Thailand,betweenThailand,Metnam,and Laos. Its total areais 181,040kmr, with its landareaat 176,520km". Cambodiais mostlycomposedof low, flat plains,with mountainous areasfound in the southwesternandnorthernregions. Recentestimates(2001)peg the populationof Cambodiaat 12,491,501.Cambodia'sethnic composition is primalily homogenous, with 90% of its inhabitants Khmer. Minoity groupslive in the uplandand forestedareas. The Vietnamesecomprise50loof the populationwhile the Chinesecomprise1olo. Cambodia hasa very youngpopulation, where45% ofthe populationarebelow 15. This could be att.ibutedro a "babyboom",followingthe fall of the KhmerRougein the 1980's. With the baby boom came an increase in the labour force. However, with lack of employment opportunities,this translatedinto an increasein the number of dependentand unproductive members in a household. Majodty(95%)ofcambodiansbelongto the Theravada Buddhistsect.This sectwassuppressed by the KhmerRougein the past,but hasbeenrevivedunderthe cuffentregime. The count.y,s national languageis Khmer. Other spokenIanguagesare French and English. Russianand Vietrameseare also taughtin the urbanareas,including the capital.

Trhle I- Demo Total ladd area Popdation Capital Economv Mah €xports Maior Laneuase Maior Relicion

116-520km' (2001) 12.491.501 PhnomPenh Agricuttural Rubber,tirnber, resin. maizc- lobacco. rice. sovbeans.and qaaments. Khmer TheravadaBuddhist

2.2 Poverty Situation Carnbodiais a very poor country. Pove.ty is concentsted in rural areasand tural households, especiallythosewhoseprimary sourceof incomeis agriculture in 1997,36vr of the total populationwe.epoot,mostofwhom werefatmers. In 1998,the country'sGDP per capitawas estimatedat US $280 In 2000, around35,000 squatterfamilies or approximately1?0,000individualslived in Phnom Penh Of the total individuals,50% were children.Most of thesefamilies,roughly31 5% of the population,were miglants.Majority of migrantswere ftom within Cambodia,particularlyAom provincesand rural areas. Only about 670camefrom outside the country. Capital and urban centrc Phnom Penhhadthe mostnumberof migantsat 733,745. showa correlstionbetweenpovertyandilliteracy- majorityofthe poor areilliterates Statistics In 1999,PhnomP€nhhad higherliteracyratesfor peopleof both sexes,with 92.3%for males, ard78.6/o for females,thanin any otherpartsofthe country. Higherliteracyrateswerealso seenlor thoseliving in urbanareasand amongthoseaged 15-24. Majority (both male and female)reachedprimarylevel. On the otherhand,morepeople(61%)in the rural areaswerenot thanthose(39.5%)in urbanareas.More peoplefrom Phnom abl€to completeprimaryeducation Penhwere able to reachsecondarylevels. (i e. in the fomal sector), werein wageemployment In 1999,only l5% ofemployedCambodians thoughthe sharewas as high as 537oin PhnomPenhand as low as l lyo in runl areas.(IPRSP, 2OO0). The monthly salaryof wage earnerswas US $43. About 46Yoof the population of womeq 20 3% in Phnom as unpaidfamily workers. A percentage consideredthemselves Penhand68.2%in ruralareas,wereunpaidfamily workers. Majority (40.3%) of the population sourced their drinkirg water from dug wells. The rest drinking water from springs,rivers, and streams. In PhnomPenh,44'7o/oof the accessed in the samecity boughttheirwater populationreliedon pipedwaterasthek source,and34.80/o (Please seetable6 at the annexfor details).

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Majoilty (79.9%) of the population relied on keroseneas source of light. In Phnom Penh, however, a good majority (75j%) relied on the city's power source. Ninety percent (90%) of the peoplein Cambodiausedfirewoodfor cooking(Pleaseseetablesat the annexfor detailed oaral

cosntry Reports:Povertyin Cambodia Indicators Table2: Socio€conomic US$3biilion(1999)

GDP GDP Der caDita

us $280(1998)

GNP per capita

us $ 300(1996) us $ 260(r999)

GINI coeficient HumandeYelopmentindex (IIDI) Povertyincidence Rural Urban Annualgrowth rate Life expectancyat bi.th Male Female

.3'1(1997) (2000) I36'out ofl74 countries (1997) 36.1o/" 40.lyo Penh- I l.l7o) 29.9YoGxrludins.Phnom (2001\ 2.250/. 56.82yea$(2001) 54.62yearc 59.12yean

Adultliteruayrate Male Female

83% (1999) 6t% (1999)

Infantmortalityrute(per 1,000live births) rate Labourforceparticipation N{ale Female

rate Unemployment Male Female

3.

65.41(2001] 55.5%(1998)

s6.5% 54.6yo

5.3%(1998) 4.7% 5.9%

Determinantsand Causesof Poverty

3.1 UnevenEconomicGrowth to be pervasivein Cambodia.Oneofthese Therearea numberofreasonswhy povertycontinues is the uneveneconomicgroMh postedby th€ countryin thepast years. This gro*th is mainly in urbanareas,especiallyin PhnomPenh. Hence,peopleliving in rural areashave concentrated lessaccessto basicservicessuchas educationand healt[ capitaVincome,aodtechnology. They havelessaccess to employment oppodunities andarelargelyin debt.

3.2

Lackof Accessto BasicServices(Health and Education)

A small percentageof rural folk have accessto formal education. Few primary and secondary schoolsexist in the rural areas. Childrenhaveto walk long distances to get to school. Other problemsincludethe costofeducationandthe availabilityofteachers. Due to the lack ofaccessto education, a high perc€ntage ofpeople are still illiterate,especially womenWith this comes lack of employment opponunities. andhence,lack of income. among

corrotryRepor:s:Povertyin Cambodia

Qrality health servicesare inaccessiblein th€ rural areas. The rural folk have to walk long healthservicesare to rcceivemedicaltreatmentor services.Asidefrom inaccessibility, db-tances existsto exemptthepoorftom suchexorbitantfees. erpensive.No mechanism

3.3 Ldckof Accessto Livelihood Denyingfisher folk and forest dwellersaccessto the sourceof their livelihoodleadsto low jncomegeneration, low agriculturalproductivity,andlackofpurchasingpower. Thesefactorsin rumleadto foodinsecuriryandmalnulrition.

3.4 HighDependencyRatio per economically ratio (or the higherproportionofdependents hashighdependenay Ttrecor,rntry population, (1995)ofthe young with 45% person has in the household.Cambodia avery ac,rive totalpopulationaged0-14. The incrcasein the youngpopulationwas mainly due to the high birthratefollowingthe fall ofthe Khm€rRougeregimein the 80's.

3.5 Landmines disabilities. Mostofthe poorpeoplearevictimsof landmines.Theysufferfrom landmine-related Landmines acaountfor the disabilityof I l% ofthe disabledpeopleliving in Cambodia(IPRSP). Theyhavelosttheiroppomrnityto work aswell astheirproductive.

3,6 NaturalDisasters Naturaldisasters are also causesof poverty. Harvestsdependon weatherconditions,and thus, offloods anddroughtshavean adverseeffecton food security. theoccurrence

3.7

Political lnstability and AsianEconomicCrisis

stadedto rebuildits economyin the early 1990s,followingmorethantwo decadesof Cambodia war. Tradeand investmentflows roseto recordlevels, supportingan annualaveragegro\,,vthof 6% (WorldBank).This recoveryandreconstruction, however,wassetbackby renewedpolitical of officeof a new govemmentin instabilityandthe Asianeconomiccrisis. With the assumption 1998andthe endofthe KhmerRougein 1999,i1is believedthat economicgroMh andrecovery wouldagainresume.

!9!!!ry Reports:Pove'tyin dmbodia

4.

Responses Towardspovertv

4.1 Government Thegovemment's primaryresponse to addressthe povertyissueis economicgrowth,hence, the govemmentmotto: .?overry_reduction though high economicgro*th over - -- the foog t".. ty ensunngenvironmental sustainability andsociil equlty1FRSp,20"00).,, 4.1. 1 lAocro-policyFrameworkl Thefollowingis thegovemment.s policyresponse: |. rromoteoppoftunities throughmacroeconomic growth,p.ivatesectordevelopment, andinfrastructuedevelopmeru 2. createsecuritythough tie expansion ofsafetynetsandthecrearance oflandmines

3. strengthen capabirities bystren$hening tr,",i" ortr,"gou"-ilii, a"""nt.uti.ution, andby improving

people's access ro eoucatron, water,andsanitation . uenerare {. empowerment throughbgttergovernance andthefostering ofan enabling envronment for NGOs 4.1.2 Platformfor poverfy Reduction Thefollowiagis theCambodian government platformfor 1998-2003:

l. Consolidation of peace,stability, andorderbyupholding humanrightsandpromoting democracy.

2. Investment promotion throughthe mobilisation of foreignaid andthe attractionof foreigndirectinvestment (FdI). 3. Domesticresourcemobilisation graduallycutting defenceand security -by expenditures, avoidingdomesticfinancing of "brdgd'1"""r;;r"rg" uuag", surplus anddomestic savines. "uirr"n t9,"1,,"tj*:o renr_prioitysectors andimproving agriculture 1 f

good rkoush sovemance I6. &Jlii:il1-:iA"*t-T:ffi'J#;1"ff;;i#enint IntegrationofCambodianeconomvinto.the Asianregionandtheworid by expanding

;;;;;;'i'"iiiig"io'p*"'iu" :..',?#x;*"i ila,";::ffe -/. !"ru:l'}i]'**:Jlff tluman resourcedeveloDment 8. Consolidation ofpartn;ship with the donorcommunityandcivil

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CountryReports:Povertyin Cambodia 4.1.3 lmprovement of Health and Education to povertyalleviationis to improvehealthand educationtlrough OneofCambodia'sresponses includesfemale education,safe water and sanitatio4 child immunisation,and the provision of social safety nets. The govemmenthas also committedto increasingspendingon health atld education as well as improving sector perfomance and reducing parental contribution to duringthe nextfiv€ years. education ftom 50%(curent level)to 189/o 4.1,4 Provisionof greoter accessto Natural Resources,employment ond colloborotlon with NGOs,civil society ond donors The govemment has provided greater accessto natural .esources(forest and fisheries), land policyandlanddistribution,andmicro-creditfor the poor (microfinance).It hasalsoincreased partnerships with NGOS,civil society, to c{eatemorejobs,andengagedin collaborative spending anddonots.

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4.1.5 ProgramsI Projects implemented to address the poverty the Cambodiangovernment Thefollowingarethe strategies problem: 4.1.5.1NationalProgranmeto Rehabilitateand DevelopCambodia- aimed towards economicstabilisationand structuralreforms, capacitybuilding, rehabilitationand construction of physicalinfrastructures ard facilities,the integrationofthe Cambodian .egion economy into the and the world, rural developmentand environmental management, andoptimizingthe useofnaturaltesources. 4.1.5.2Filst Social-Economic DevelopmentPlan for 1996-2000- emphasised rural development aswell astheneedto balanceruralandurbandevelopment. 4.1.5.3 "Tdangle Stratesv"(DeveloDe4-iL!99E) - formulatedto materialisethe government's1998long-termvision of economicprosperityand freedomfrom poverty. This includedthreeparts:buildingpeace,restoringstability,andmaintainingthe security of persons;Cambodia'sintegrationinto the Asian region; and th€ promotion of development.

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4.1.5.4Miqo finance- a credit schememainly implementedin the nrral areas,where very few, o. noneat all, commercialbanksexist.

4.2

NGOS and Other Sectors

The historyof NGOsin Cambodiacanbe tracedbackto the period1954-1970.At the time, a f€w NGOSexisted,most of which were engagedin religiousactivities. In the 1970s,NGOS focusedon development assistance by providingaid andrelief to war victims. In the late 70s until the early 80s, NGOs' works became diverse, ftom infrastructure rehabilitation to responding to andprovidingfor emergency needs.

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CountryReports:Povertyin Cambodia

Sincetheq NGOs have expandedgeographicallyas well as expandedtheir activities in reconstruction effons. A numberofthese activitiesinclude:large-sialeservicedeliveryusing muitilateraland bilateralfunding,servicedeliveryin coope.ationwith govemmentstructures, communitydevelopment, andthe development of localNGOs and civic organisationsNGOs havealsofocusedon strengthening localcapacityandencouraging localinitiatives. ThenumberofintemationalNGOS in Cambodiahasremainedat around200 overthe pastfew years,up from 25 in the early 1980's. The numberof localNGOs and associations, however, continuesto increase. Today, about 800 organisations ate registeredwith the Cambodian government.Over 50 NGO s€ctoraland issueworkinggroups,both formaland informal,come togetheron issuesof commoninterestin suppo.tof Cambodia,sdevelopment.InformalNGO networksalsoexistin almosteveryprovince. Figure lt NumberofNGOs in Cambodra 400 300 200 100 0 1Sg2

1SS6

2000

2001

C International NGOsE Cambodian NGOS Source:Gercral NGO Inforrnatio( NcO Stal€mentto llrc 2001 Consultalivecroup M€eting on Cambodia.

About90 NCOsengagein creditandsavingsoperations mainlyfor small-scale loansin the rural area.With growingdemandfor rural credit,there is a needto expandNGO activitjesin the medium term. While a number of NGOs are expectedto becomelicensedmicrofinance institutions(MFIS) to expandtheir credit activitiesand depositbases,other smallerNGOs requireassistance in strengthening their technicalcapabilityfor soundfinancialmanagement and (GlobalDevelopment operations Research Centre). Recently, village developmentcommittees(\lDCs) have been created to aid in rural development. TheseVDCs serveaslinks betweenthegovemmentandlocalinterests.i/DCs are organised planningandvillage-wideactivities,to mobilisevillageresources, to coordinate andto lint to outsideagencies.NGOsregard\DCs asa mechanism by whichcivil societycaninteract effectivelyandplay an activepartin decision-making towardsdevelopment.

CountryReports:povertyin Carnboaia

5, - Critique/Assessment (Basedon the Assessment on the 2000t-PRsP) of increasing.economic growth,keepinginJlationlow, and constrairing 9j*:lt:.."_:!f"l*s exl€malcuffent accountdeficit while strengthening debt m;agement, are key elementsii promotinga stablemarket-basede"nnolny. Hence,ihe potcy ofite go;emrnenrto strengthen themacroeconomic environment is app.opriate fo. Carnb;dia,;cir"urnJtun"".. However.rhe InterimpovertyReductionStmtegypaper(2000) needsto havea more detailed drscussion ofthe sectoralsourcesof gro*h exp-e"cted"to trppoti trr",n"ai.,o-termobJectives of the paper. A_more comprehensive assessment of the links tar""n it" labour ma.ket ard "'povertywouldhelpstrenghenthe full pRSp. The.go_v,emment's presentstrategyis centredon a substantialreduction -.!.u,"es. of military size and actmrnrstmtive reform, directedat improving the efrciency of puiiic -;o flur, tte governmenthas shown its abilitv to^ reallo_cate its budget ;d.;r 'ry pnodty sectors.

:fi:,"1;y,

thiswasconstrairedc",uJ";, ilil;iid;;dd

Thereis alsoa needto tacklepovertlacrosfmultiple frorts,not

andlow revenue

limited

solelyto the social th"':1y." ofpublic prsi;aro spending. rrr. i"i"g"ts", ::.j:::,1i-d una ffioo. gou"_un". comrptron areobstacles to cambodia's p-overty reduction emori's.e Govirnance Actlonplan identifies comprehensiv€ setof actions to for,". gou"_"*" piir.ily thffiluaiciat, legal,and

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administrativ.e reformHowever, *rernsr aoei-noi'g;;#il;#ffiiii

govemmenthastaken in this area.

to're actions the

.:nat genderequalityptaysa big role in rhe promotion llll -.-"::qr::: of sustainable lvhile rhe report menrions atrategies pro"iO" thl oppoiuniiJ, 1:::,op3"*, for promoring the economrc andsocialpaniciparion of women, ii should ieporti" ii_" a"i"ii ,r,"keymeasures required for these. ThePRSPadequatery describes .lhese a numberof_areas, criticalto rurardevelopment. inciude landissues,rural infrastructure, andruralcredtt f";"*., i1;"d, tiitJffi"on *," pori"i", una institutional reformsneeded Finally,the problemof HIV/AIDSis a big onein Cambodia.The countryhasthe highest prevalence of HIV in theAsianresion,*;ti +X infected. Thus,rhe PRSPshouldinclude.ir" "rti.ut"J "f,i" "jJ'0,;pr"ion actions on Hry/AIDS and its links to poverty reduction.In this regard.the effective"on"*1" implementation .i rf," N",i""a i'i#gc etan on AIDS prevention, tkough publiceducation andout eachto,urut ar"as,;;;il;;;;;,

! ! ! ! ! ! !

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CountryReports:Povertyin Cambodia

9

6. Summary andConclusion 6.1 Summary TheKingdom of Cambodia,capitalPhnomPenh,is locatedin Southeast Asia, bordedngthe Gulf of Thailand,betweenThailand,Vietnam,andLaos. With a total land areaof 176,520km2, thecourtryhasa totalpopulationofcloseto 12.5million,45 o%ofwhom arebelow 15yearsold. Cambodia is a very poor couotry,with GDP per capitaestimated at US $280.Thirty-sixpercent (36%0) ofthe total populationlive belowthe povertyline. Most ofthe poor are concentrated in theruralareas,especially thosewhoseprimarysourceofincomeis agriculture. Statistics showa corelationbetweenpovertyandilliteracy* majorityofthe poorareillite.ates. Around 35,000squatterfamiliesor approximately170,000individualslive in Phnom penh. PhnomPenhhashigherfiteracyratesfo. peopleofboth sexes,with 92.3yofor males,and't8.6o/o for females, than in anyotherpartsof the country. On the otherhand,morepeople(61%)in the ruralareasare not ableto completeprimaryeducationcompared to 39.570in urbanareas.More peoplefrom urbanareas,aged7-14,attendschool. Only l5Yo of employedCambodiansare in wage employment.The monthly salaryof wage earners is US $43. About46% ofthe populationconsiderthemseives asunpaidfamily workers A percentage of women,20.3% in PhnomPenh and 68.2Voin rural areas,are unpaidfamily \rorkers. A greatmajodtyof the populationusekerosene as sourceof fuel for cookingwhile lessthan507osourcetheirdrinkingwaterfrom wells. Causesof poverty in Cambodiainclude:uneveneconomicgroMh, lack of accessto basic services,Iack of accessto iivelihood, high dependence ratio, landmines,naturaldisasters, political instability, andtheAsianeconomjc crisis Governmentstrategiesagainstpoverty include: formulationof macro-policyframeworkand platform,improvem€ntof healthand educationservices,revisionof greateraccessto natural resources, employmentand collaborationwith NGOs, civil societyand donors. Also, the govemmenthas implementedprogramsand projects,suchas infiastructurerchabilitationand development, rural development, trianglestrategy(buitdingpeace,stability,and security),and microfinance. Thestrategies of NGOs and othersecto$againstpovertyinclude:infiastructurerehabilitation, provisionof relief assistance,large-scaleservice delivery using multilateraland bilateral funding, service delivery in cooperationwith govemmentstructureq community development, and the developmentof local NGOs and civic organisations. Other strategiesinclude strengthening oflocal capacity,encouraging localinitiatives,andcreditandsavingsoperations. \DCs also aid in mral development.They serveas li.lks betwe€nthe governmentand local interests.NGOSregardVDCSasa mechanism by whichcivil soci€tycaninteractefectivelyand playan activepartin decision-making towardsdevelopment.

CountryReporg: povertyin Cambodi,

6.2 Conclusion Povertyis still peNasivein Carnbodiadespltereportedeconomicgowth the pasr years.

v

v

r* as,uneveneconomic. growti andrcsourcedistributionespeciallym :1.ilrl, rne.ruratareastlack of opportunitiesand acc€ssto basicservices suchas - health andeducation, andlandmines, exace.bate Cambodia,s povertysit""il;. andexisting.srrategies focuson economicgrowth as we 9".:lTl ,.,::q:"::s as equrtaDle drstnbutiorL especiallyin ruralareas.Thegovemmenialsolists rural ano,agncutturatdevelopment. as well as increased accessto basiceducationand nealrnserytces,asamongrtsagendato reachthe country,sgoal ofintegrationinto theAsianregionandtheworld economy. NGOsandothersecrorsofsociety play an importantrole in the reconstruction of rne LamDodtan economyand society. At present,a lot of NGOS,both local and rmernaflonat,are active in Cambodia.They undertake activities, such as commuruty development andsmall_scale creditfinancingsohemes fo.ah";;;;

v

nlr still a.long,wayto go to achievecompletepovertyreduction ano F_ll!-"oll ruu economrcgroMh. Howev€r.this shouldnot be impossible if the counlry

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countryReports:Povertyin cambodia

Sources Assessment ofthe InterimPovertyReductionStrategypaper(2000). PRSPCambodia. http://poverty.woridbank. org/prsp/index.php Cambodia; NGOsin Transition,by Eva L. Mysliwiec,in the UnitedNationsResearch Institute for SocialDevelopment website.http://www_unrisd.org CountryStudies- Cambodia, in theLibraryofCongresswebsite.http:/,lcweb2.loc.gov InterimPovertyReductionStrategypapef(October2000). PRSPCambodia. http://poverty worldbank.orglprsp/index.php - Cambodia, Microfinance in the GlobalDevelopment Research Centrewebsite. http://www. gdrc.orglicm/country/asia-cambodia.html NationalInstituteof Statistics, Cambodia.http://www.nis.gov.kh NGO-Government Partnership in Rural Development,CambodiaDevelopmentReview,vol.3, issue4, December1999.httpr//www.cdri.org.kh./cdr.htm NGO Statement to the2001Consuttative GroupMeetingon Cambodia hrtp://www.bigpond.com.kh/users/ngoforun/cg200 l PovertyAssessment Summaries (2000).httpt//wwr.v.worldbank.org PovenyReductionin Cambodia, SomeReflections,CambodiaDevelopmentReview,vol.5, issue2. April-June2000.http://wwwcdri.orgkvcdr htm TheDemographic Imperative,CambodiaDevelopm€rfReview,vol.2, issue3, September199g. http://www. cdri.org.kh/cdrhtm TheWorldFactbook- Cambodi4in the CentralIntelligenceAgencywebsite. http://wwwcia.gov UNDPin Cambodia. http://www.un.org.kh/undp/index.html

countryRcporti povenyin cimbodia

Annex: Tables Tables3. Inte.impovertyReduction StrategyPaper(IPRSP)policy Majjx 2000-2002

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\ , . , , , , r ,, . , . t . i . i . r r l i , r f , r f , , : r f J , n r . r L r ! , ! r , i , , , 1 l r u , ,! | , r | l , \ , . 1 ! | l

I

l l , . I i : : r ; ! : , . r r f , , : r j \ : r :. r l t . : : . ! r , , , t , i ri'!i r,'l ILr:i!'r. .. Ir,,l..ll. ]\;,l,

Lit'l'\j

]ll|.

]l\t

Source: IPRSP2000.Worldbanlwebsite

Table4: Educational Attainmentin Cambodiaby Urban&uralResidence, 1998Figures

Ufuan Educalional Level

Rural

Both

Eoth

Sexes Males Females

Sexes Males Females

Total None

100 1.5

PrinaryNot Completed Pdmary LorverS:econdary Secondary andAbove

39.5 27.6

r8.2 t3.2

r00 1.3 3t . l 29.2 20.7

100 1.5 47.8 24.2 16.3

r7.'1

to.2

Source:Nalionallnsrituteof Sutisric5.Cambodia

100

100

61.0 24.0 10.I 2.7

53.4 28.6 12.2 3.6

100 2.3 70.5 18.2 7.6 1.4

:

--------r3l

@

T&ble5: EducationalAttainmentin Cambodiaby Age Groups,1998Figures

Total of25+ 25-34 3W

Eduetional Levet Total None

PrimeryNo1 Completed

Primary

Low€rSecondary

Secondary and Above

100

100

100

Both Sexes Mal€s

2.1

1.1

1.8

2.0

1.0

r.6

Females

2.2

1.2

2.0

50.4

45-54 5t-64 100 100 2.3 4.8

65+ 100 9.2

63.7

1.9 2.7 57.5

4.1 8.1 6.5 13.8 59.0 65.5 55.0 64.3 69.3 70.1 2t.9 16.3

Both Sexes Males

49.O

40.6

56.4

49.3

Females

66.1

61.4

7t.5

Both Sexes Males

24.'l

29.9

19.6

6'7.7 23.0

28.7

34.4

24.O

Females

tg.7

25.0

15.0

Both Sexes Males

ll.8

12.5

lt.2

13,9

L5.4

remales

ot

Both Sexes Mdes Females

27.8 t7.o

25.2 18.1 t3.6 8.8 11.1 7.4

13.0

14.5

12.2

7.9

9.1

qi

4.8

6.1

3.7

9.8 4.8

8.3 3.2

5.6 1. 6

6.4

8.6

5.0

6.5

3.5

1.6

2.8

3.3

2.2

2.8

Source:Natio@lInstituteof Statistics. Cambodia

I

I I

I I

Co{rfiy Reports:e;ncrty tnGmUoaia Table6: Main SourceofDrinking Water, 1998FiAures Cde

II

Prouine Cambodia

0l

T

14.9

l.l

tL.4

40.3

2.5

44.O

10.3

39.I

6.7 9.8

64.5

13.9

6.0

t7.4 17.2

2.2

52.9 33.5

24.3

1 .1

3.5

43.9

3.4

1.4

0.2

77.5

t6.2

05

5.I 12.s

2.7

Kandal

2.t 4.5

43.0

43.5

6.0

0.3

KaohKong Kracheh

2.0

19.3

1_3

0.3

2.7

03

37.8

4.4

04 05

9.0

KampongChhnang KampongSpueu

0.8 r.8

06

KampongThum Kampot

1.7

l0 1l t2

River, Bought other Streametc. 8.3

7.8

08 09

gqring,

28.2

4.t

07

I I

5.8

BanteayMeanChey Bat Dambang KampongCham

02

t

Piped Tube/ppe Dug water Welt Well

MondolKiri PhnomPenh

tt.2

|.4

5.9 36.3

33.1

17.6

57.2 30.5

1.2

12.5

0.4

0.5 0.4

,44

65.9

44.7

6.0

5.9

2.1

9.6 34.4

34.8

0.2

0.6

16.3

i .3

t4

PreahVihear Prey Veaeng

15.8

4.8 31.6

2.0

t5

51.8

Pousat

275

15.4

2.9

0.7

3.5

2.6

29.0

1.8

5.9

1.8

5.4

32.2

6l.l

0.6

1.9

18

RotanakKiri SiemReab KrongPreahSihanouk

53.3

12.2

69.7

10.9

8 .1

0.6

t9

3.2

1. 2 6.0

StuengTraeng

65.8

5.1

5.5

16.5

1.3

20

10.3

Svayfueng

t2.3

68.4

0.9

3.4

47.0

0.I

rAKAev

47.3

t.4

0.5

0.3

10.4

3.1

35.8

50.2

0.3

2.0

2.2

1.1

23.l

2.5

0.1

9.7

52.5

34.6

0.8

02

2.4

N 0.5

4t 8

44.6

9.9

0.5

l3

T6 t7

zt

22 23 24

OtdarMear Chey Krong Kaeb Krongpaitin

Souce: National Instituteof Statistics. Cambodia

I I I I I I

21

CountryReports:Povertyin Cambodia TableT:MainSource ofLight. ls98 figures

Cde

Provine

Cambodia

cW Gunu-t* Power

Cily Power and

Kerasene Baltety Other

Generator

12.5

1.0

1.6

79.9

3.5

1.5

BanteayMean Chey 02 Bat Dambang

8.2

1.1

2.7

84.6

2.9

0.5

10.0

t.4

2.5

03 KampongCham

9.2

1.0

t)

83.2 82.7

2.7 5.3

0.2 0.3

t

04

Kampong Chhnang

4.6

0.7

0.7

89.9

3.9

0.2

05

KampongSpueu 2 . 6

0.7

0.1

I I I I I I

KampongThum

5.3

94.9 89.4

1.0

06

0.7 0.5

1.4

2.4

07

Kampot

4.9

0.8

Ll

0.7

N

94

1.0

,4

92.5 78.1

8.9

0.2

4.5 t.7

7.8

s9.1

0.8

t.2

4.1

L6

2.1

80.8 47.9

r.5

42.0

r7.5

42.1

0.8 50.I 0.1 0.3 42.7 0.1

t I I I I t

0t

08 Kandal 09 KaohKong 1 0 Kracheh MondolKiri

26.6 2.8 75.5

1.0

r.7

1.9 t.2

Prey Veaeng

3.0

0.4

I5

Pousat

8.0

0.8

l6

RotanakKiri

0.8

t7

SiemReab

12.8 '1.6

3.'1 2.8 0.8 0.5 0.8 1.3

0.8

l.l

88.8

1.5 0.4 6.2 2.0 0.3 1.6

l8

Krong Preah Sihanouk

3"t.3

1.8

5',1.3

0.5

0.7

19

StuengTraeng

t1.'t

1.5

0.9

60.5

1.7

23.7

20

SvayRieng

3.5

0.5

0.7

9 13

3.8

0.2

2l

Takaev

3.4

0.5

o.'7

92.7

2.7

N

,, -'

OtdarMean Chey

1.8

0.6

0.2

96.2

1.0

0.2

23

Krong Kaeb

4.9

1.9

89.7

Ll

N

24

Krong Pailin

u.1

8.2

69.8

2.4

t2

PhnomPenh Preai Vihear

Sourc€:National Iistitute of Slatistics.Caftbodra

3.8

45.8 89.8 88.I

CountryReports:Povertyin Cambodia

22

Table8: Main SourceofCookingFuel,1998Figures

Lrquefied Code

Province

Firewood Charcoal Kerosene Petroleum Aas (LPG)

Cambodia

90.0

1.8

1.7

1,2

1.0

0.5

0.3

01 BanteayMeanChey 02 Bat Dambang

90.6

'7.6

92.4

4.4

1.6

0.6

1.0

03 KampongCham 04 KampongChhnang

96.'l 95.8

1.0

1.6

0.6

0.1

1.9

0.4

0.1

05 KampongSpueu 06 KampongThum

96.7

l.l

1.8 I.8

0.1

95.6

1.7

0.3 0.3

07 Kampot 08 Kandal

93.5 96.5

4.0

09 KaohKong I0 Kracheh 1l

N

0.3

0.3

t.7

t.9 1.0

0.7

71.8

24.2

t.4

2.3

0.t 0.3

95.3

3.I

1.2

0.4

N

97.6

0.5

0.2

0.2

43.l

34.4

1.5 5.0

16.3

13 PreahVihear 14 PreyVeaeng

98.4

1.0

0.3

0.2

r.2 0.r

92.0

1.2

0.4

5.3

15 Pousat

94.9

1.9

l l 2.5

0.6

0.1

l6

RotanakKiri 17 S;emReab

96.2 96.I

L6

0.9

0.3

L0

t.4

2.1

0.4

N

l8

68.'t

27.3

1."7

2.1

0.2

19 StuengTraeng

94.1

4.4

0.3

0.5

0.2

20

SvayRieng

89.4

0.6

0.5

8.1

2l

Takaev

96.2

1.0

t.4 ").7

0.7

MondolKiri 12 PhnomPenh

Krong PreahSihanouk

OtdarMeanChey 23 KrongKaeb

91.4

1.6

0.8

o.4 0.2

96.3

1.4

2.0

0.3

N

24 Kroog Pailin

40.5

56.5

1.6

1.3

0.1

22

Source:National Institutc of Statistics.Cambodia

N

-t

IF I II I

T T

I I I I I

II II I I

EastTimor

+ t *

EasrTmon:A CouNrnv rNTnaHsmoN A CASE STUDY

t t

t t

F h h

*la. Josefa Petilla

1.

Introduction

This paperis partofa studyofpoverty reductioninitiativesby government andNGOSin eight ASEAN countries,namely:Philippines,Indonesia,Cambodia,Vietnam,Burma, Lao PDR,Thailand,andEastTimor. The studyaimsto presenta comprehensive view of poverty situationand the responsesto poverty by different sectorsin the eiqht counrnes. Also, it aimsto comeup with recommendarions to development NGOsregaidingareasof interventionsor collaborationwith their respectivegovemmentstJwards'poveny reduction. The study mainly used secondarydata (writtan documents,books, and lnternet.). This paper focuseson East Timor. It is divided into six pans. The first part is the introduction. part presents profile andpovertysituationin the demographic _The.second EastTimor. Thethird part discusses the main causeJofpoveny.Thefourthfeaturesthe responsesto poveny by. the gov€rnment,intemationaland local NGOs, inctuding intemationaldonors, and the church. The fifth presentsan assessment by some institrxtions andanalystson the multi-sectora.l responsel, particularlythegovernment,s, to poverty.Thesixthpart presents the summaryandconcluiion.

2,

Profileof EastTimor

2.1 Geographyand Demography East.Timoris an island,lying in the southwestem pacific Ocear,belongingto the Small SondaIslandsgroup. Occupyinga total landueaof 14.87 4 fun2,EastTlmor is extremely mountainous, primarily an agricultural soil erosion, and prone is to d.ought. .exhibits economy,theisland'smainexpo.tsarecoIleeandmarble. Recentstatisticsshowthat the countryhasa total populationof 884,000,g5% of whom live in the ruralareas.Ageat majority(7g%)ofthi populationarenativesto the placeor EastTimorese. About20!o are Indonesians, arld26/oareChinese.The country,i major religion isr Christianity while Tetum, portuguese and Indonesianare its thrce malor ' languages

' Slatisticson East Timor are scarceand limited. Thoseavailabl€arc varying. Mosr of the stat6trcal informationgiren in the studywastaten from ABD, WB ana ntr countryiepons. :rhe ransruonal govenrnedofEastTimorhasaskedtechnicalassislance ftom ADB for anuld-ated economic repon.

F

The agriculture sector providesmost of the employmentin East Timor. However, with the tra$itional administntion, about E000 fi.rll time jobs have been areatedto provlde employment to the people. A1so, several programs have been providing temporary employment,includingthosefinancedthroughthe Trust Fund for EastTimor (TFET). Moreover, a large numberoftemporary positions have beencreatedby constructionand transportcompa es, aswell asby restaurantsandhotels(Nest,2000). lable l.

Tota.lland area

14,874sqkm

lqzulation

884000(1998)

Capital Economy

Mainexpons !Qj91languages ![4iqr Religion

BBCCounEyProfile

Dili Agdculturqi Cofee and marble Tetum,Portuguese,andIndonesian

Christianity

2.2 Poverty Situation EastTimor is considered asoneof the poorestareasin Southeast Asia. Thecountryhad an estimated cDP of$344 million anda cDp per capitaofUS $344in 1997(ADB). Povertyincidencein EastTimor is extremelyhigh. In early1999,about55 percentofthe E"tTiTgt::"_ poverryline. povertyline estimates variedfrom Rp 53,000 Pll-P"low the to Rp 91,235' The poor are identified mostly as subsistence farmers,pioducing nontraded in rural areas.povenyis foundto be highlycorrelated with fimily sizi ^goods andlack ofeducation(IMF). While.povertyincidenceis high, incomeinequalityappearsto be low. In 1988,the Gini coeffcienctwas 0.31, In early2OOO, the wealthiest20 percenthouseholds had cash incomesthat were only threetimes higherthan the poorest2-0percent(IMF).

I

Most welfare indiaatorsfor East Timor are extremelylow. Recent statisticsshow that tife e1g11a1c1 aroynd50 yearsfor women and 49 yearsfor men.Infant mortality rare ! (per 1000)is 149. Thereare around15 medicaldoctorsper 100,000peoplq and the illiteracyrateis 50 percent(in somerural districtsthe illitericy rateis aboveb0 percent). An estimated25 percentofthe populationhaveaccessto elect.icity andrunningwater

-

T

r| T T

The health situationin East Timor is poor. Ratesof infectiousdiseases and chronic malnutrition hig!. The country has little health education,poorly equippedand Ie stockedhealthfacilities,limited accessto healthproviders,limited demandfor health services,poorly motivatedhealthproviders,few trainedirdigenous providers,and a high incidgnceoftrauma.

' Indonesian rupiaft lr"s stil usedduring lhe study.Today the currencyuseis the US dollar.

CountryReportsiEastTimor:A Countryin Transition Table2. Socioeconomic Indicators GDP Approx.US$344million(1997) per GDP capita Approx.US$395(1997) Gini Coefficient 0 . 3 1( 1 9 8 8 ) AverageAnnual lncome

us$320(1999)

Monetarvunit PovertyIncidence

I US dollar= 100cents 55% of total populationbelow poverty line (2000) 50 yearsfor female,49 yearsfor male(2000) 149per 1000population(2000) 15 per 100,000people(2000)

Liie expectancy Infant mortality Medicaldoctors Illiteracyrate With access to electricity

3.

50%(urban) 60%(rural)(2000) 257ooftotal population(2000)

Causesof Poverty

AJmedcotrflictandunrestundercolonialmle or invadingpowerandtheviojenceof 1999 havebeenmainlytheunderlyingreasonsfor povertyin EastTimor.

3.1 Centuriesof drmed conflict between East Timor and colonidll invading power EastTimor hasa long historyofunrest and conflictdatingbackto the mid-l7rhcentury whenPortugalbeganto coloniseTimor, which at thattime had not yet beenpartitioned into East and West. Suchcolonisationhad receivedintenseoppositionfrom Timor,s ruling kings. ConflictsbetweenPortugaland Timor had beenviolent and bloody for centuries. In late 18thcentury,wh€nthe night ofthe Portuguese empirewas waning,Timor was partitionedinto eastandwest. The westemhalf, exceptthe enclaveof Oecusse, wentto dreDutch,who at this time hadalreadydominatedmostoflndonesia. The eastemhal( on the otherhand,hadremainedunderPortuguese ruleuntii 1975 EastTimor's struggle lor self-determination andliberationhadcontinuedaswell. In 1975,Indonesiainvadedand annexedEast Timor and consideredthe latter its 276 province. With Indonesia'sinvasion,EastTimor intensifiedits fight for independence. Guerilla-likeforcesfoughtin themountainsandjungles(Nest,2000) The pathto independence startedwhen an overwhelmingmajorityofthe EastTimorese vot€dto separate from Indonesiaon the 30 August1999L}J-supervised consultation. In response,pro-govemmentmilitias wreakedhavoc on the populace,embarkingon a campaign ofarson-looting. andriolence.

CountryReports:EastTimoriA Countryih Transition

E

4

3.2 Socio-economic destructionfollowing the 1999violence EastTimor was renderedtotally inutile afterthe 1999violence.The violencedisplaced two-thirds ofthe population, destroyed70oZof all infrastructure,ard cost the lives of hundredsof thousandsof East Timor€se. It disruptedthe agriculturalcycle and destroyedlocal inventoriesand paymentsystems. Therewas acutesupplyshortageof goods,leadingto spkalingprice increases. An ad hoc price survey manufactured indicateda risein the consumerpriceindexfor poorhouseholds in Dili ofmore than200 percentbetweenAugustandOctober1999(ADB). With the destruction of all payment publicandprivateentitieshadoo meansto pay for salaries, systems, goodsand services (World Bank). The violence also led to serious deterioration of health services. Governmentdoctorsand oth€r healthworkers fled andcommunityhealthcentersreduced operations.Remaininghealthworkerswere unwillingto makehomevisits,and people wereafraidto travelto healthfacilities(Nest,2000). The territory's social and economic destructionhas prcmpted the intemational community,panicularlythe Australianled multinationalforce(INTERFET),to intervene and provide emergencyassistaneeto the East Timorese.Massive rgconstruction activities, panicularly infrastruclure, have been undertaken and state institutions, includingan interimgovernment, the llN TransitionalAdministrationEastTimor, have oeenserup. On 30 August2001,trro yearsafter the popularconsultation, the peopleof EastTimor went backto the pollsto electa ConstituentAssembly.The Assemblyhasbeentasked with writing andadoptinga new Constitution-and establishing the frameworkfor future electionsanda transitionto full independence.'

F

The ConstituentAssemblyand a new EastTimoreseGovemment,ontirelycomposedof locals^ the SecondTransitionalGovernment ard its Councilof Ministers- is aunently goveming East Timor. It will remain its govemmentuntil East Timor oDtalns independence asa democratic andsovereignstate,sometimein the first halfof2002

;

h I

I t

4.

Responses towardsPoverty

4.1 Government 4.1.1 Poticy Frameworkfor MacroeconomicStobility

t

Majority of the UNTA€T cabinethaveendorsedpolicies,establishing a fiameworkfor macroeconomicsfability. Adhering to prudent fiscal management,the gove.nmenthas instituted measu.esto increaserevenuesuchas fair taxationand reductionofthe inflated civil service. The U. S. dollar hasbeenadoptedasthe omcial currercy for the transition pedod(Horta).

;

I The New ConstittrtionbasbeetrrccendyapFoved.

t

i countryReports:EartTimor:A countryin franiilion The govemmenthascommittedto do the follorving to strengthengovemance: 1. Maintaintramparency,accountability, and an emcient and ellective public servlce; 2. Continuea processof reforrn,which oallsfor high standards of conductand integdty among leadersof govemment,and provides strengthto institutions thatupholdthepublicinterest; 3. Reformthe budgetprocessto strengthen the link betweenpolicy and action and to demonstratemore decisiveleadership,commitmentto action and acaountability; 4. Develop a customer-focusedwork force, which supports a management philosophy,basedon communication andresponsiveness to needs;and 5. Respondto local businesses to ensurethat they receivethe supportand feedbackthey needin dealingwith government. 4.1,2 Timor SeaAgreement East Timor's tra$itional govemmentsignedon 5 July 2001 an agreementwith the Austruliangovemmentregardingthe exploitationofthe Timor Sea. Revenues from the Timor Sea,.when properlymanaged,will help East Timor in sustainingthe economic gainsalreadyobtainedfollowingthe 1999violenceand in reducingpovertyamongthe people(World Bank), The govemmentindicatedat the CanbenaDonor,smeetingofits plan to developa medium-termexpenditurefiamework to ensuresustainablJfiscal management both beforeandafterthe comingon streamof Timor Searev€nu€sat mid_ decade.

4.1.3TrustFunds Trustfundsfor EastTimorwereestablished following theDecember 17,1999Donors,

Meetingin Tokyo. Co-chairedby UNTAET andWorld Bank underthe ausDices ofthe govemment,the m€etingwas panicipatedin by representatives, Japanese from over 50 counhiesand intemationalagencies,includingEast Timor's XananaGusmao. Th€ pledge amountedto a total of US$520million for the entire East Timor program throughout thetransitionperiod. Of thetotal amount,US$215million wasdesignated for the World Bank trustfirqdandthe LNTAET trustfund.About US$150million was also pledgedfor the humanitarian assistance programme usedfor immediaterelief until June 30.2000.

4.'l.3.1UNTAET TrustFund TheUNTAETtrustfund(US$32million),administered by th€ UNTAET,finances

a I

r

p.ojects in the areasof civil serviceandjudiciary capacitybuilding; and covercthe cost of all recurent expendituresof the East Timorese administration. Included in the projects arc the rehabilitation and re-equipmentof adrninistrative,police, and judiciary buildings,andfor thetrainingofcivil servanrs.

I I I I

t T I

t I I I I

I I

I I I I !

3rT-t !:lgEiElt

Timor:A -ount-ry in Transition

4.1.3.2 TrustFundfor EastTimor Ihe lrust.Fund for EastTirnor(TFET) is guidedby threeprinciples: 1. MaximizeEast fimoreseleade.shipandparticipation; 2. Encourageeffectivedorior*o.jinut,on; unC:. Getth€rightbalancebetweentimelinesandquality Ihe.WorldBanl<manages the TFET in closecooperation with the ADB. The ADU takes :he lead^inrehabilitatingroads,ports,transportatlon, water, telecommunications, and power On the other hand,the World Bank preparesprojects in the aieasof health, rJucalron. agriculture. irrigation. supponto smallandmediumenterprise, andeconomrc rapaclrvDurtdtng.tsothlhe World Bank and rhe ADB work rogeiher on communilJ 3evelopment projectsa \leanwhile, an East TimoreseerouD .takes. chargeof establishingprioflty programs linancedby TFET in close coisultar,on with ITNTAET and the Wortd Bank. East Timoresecounterparts fbr internationalexpertshave 0""" *orti"g iogai"i on wo.fO Bankdesignmissions.

,o theTFETprovide giverechnical assistance onprojecr

design and !"":l:!:jlt ln1:lgl panrcrpate projectsupervision. For instance,portugalprovidestechnicalassrstance in programming for the educationandhealthseciors,;nr*"i*au.", -o-r,nu ina *"aru. enterprise support;Australia,in communitydevelopm""t, ;n ;,i.,r"rur", uno socialsectoriJapan,in agricuhu.e;andthe'fu.op"- Union,ln "gr;;.il;;, t"uf,f, unJlii.ulr."ru." Thefoilowingarethe programmes/projects undertheTFET(WB. 2000): 2 Community Empowerment and Local Govemance proj€ct _ builds accountable. and .participatorylocal inslitutionsrhJoughwhich J..r,,r,,." work to rehabilitate basic infrastructureand restart economicactivities "un It includessp€ciaiwindows for local--civilsoci€tyg.oups, cuituraf-ie.itag"ano wtnerablegroupssuchaswidows(USD2l.s ,iiiioi o""ri. y"urr;.----i 2| Dili.Communify EmploymentGen€rationproject _ useslaborintensivepublic worksto-generate jobs for the poor in the city in partne.sfrii\l?irf,fnOO (USD 499,000over5 monrhs) "apitai 7 Emergency Infrastructure Rehabilitation.project provides emergency repairs^tokey infrastructure(roads,po.ts, and power)\vittin u y"a. uno a f,at sectorframework(usD 29 8 miilion over t.s years, wittruso zoh .niriionin tt e secondgrant agreement)

T*"trffi:: :il5ffir#:Ttr*:,ffi1 :iii+T"H1TiLflfe".iifl* H:;i*:X3g{ lralaitionalgovernmefl of Ea$Timorwh e

assisranceis lirrutcd ro providing technicalass

,oeworldBar* sroreis r,*,* ,o u*,'-o".,;il1i#rft€

r CountryReports:EastTimor:A Countryin Transition 7 SmallEnterpriseProject- providesloansto EastTimoreseente.p.ises to revive the localeconomyandcreatejobs(USD 10 million over2 years,USD4.8 million in first grcnt ageement). 7 Hezlth S€ctor Rehabilitation and l)eveaopmentProgramm€ - provldes for the rehabilitationand re-equipmentof healthfacilities (USD 38 assistance miilion over3 years). 7 Agriculture Rehabilitation and Developmcnt Project - rcstores priority productiv€assets,suchas livestock,irrigation,and rural inliastructure(USD 28 million over3 years). Z EmergencySchoolReadinessProject - providesfundingfor the renovationof damagedschoolsand for the building of new ones(The initial grant agreement amountsto USD 13.9million,to increaseovera 2-3 yearperiod). z Water Supply and Sanitation RehabilitationProject - providessustainable to restore water suppliesand sanitationservices,by (i) providingassistance damagedand inadequatewater supply and sanitationinfrastructure;(2) reestablishinghumanand institutionalcapacityto manage,operateand maintain (USD 4.5million over2 years). watersupplyandsanitaryinfrastructure programme, at z Microfinance- aimsto rehabilitate, throughADB's microfinance and setup a least20 ofthe 24 creditunionsthat existedprior to the r€fer€ndum; microfinancebank with six strategicbmnchesnationwideto provide financial to low incomehouseholds services CJSD4 million irl the first grantagreem€nt). Z EconomicCapacityBuilding - providesskillstrainingto EastTimoreseso that aggregates. In doing so, theycancompute,analyseand maintainmacro€conomic it is able to addressthe scarcityof neededskilis in EastTimor constrainingthe operationof key economicand financialinstitutions- in pa.ticularthe Central FiscalAuthority,the CentralPaymentO{Iice,andthe Censusand StatisticsUnit

rusD5oo,o00).

4.2 Internationaland Local NGOs andprojectsofintemationalandlocal The followingaccounton thevariousprogtammes poverty is largely culled from a paperpreparedby NGOs in East Timor to address to East ofDevelopmentAssistance MichaelNestentitled"An Overviewand Assessment papef, provides Nest a comprehensive ass€ssment of development Timor". In his EastTimor,up in EastTimorfrom 1975,whenIndonesiainvadedandannexed assistance recovery after the 1999 violence. He and economic aciivities until the reconstruction the amountof development discusses the sourcesand tlpes of developmentassistance, period, pouredinto the countryover a 25-year runninginto millions,and the assistance variousNGOsworkingin theterritory,includingtheirprogamsandprojects.

Co.rttry Reports:EastTimor: A -o-n{in

Transition

Ard to East Timor had increasedsubsta.ntiallythroughout the 1990s. However, the country remainedextremelylow in per capitaterms,pa.ticularlywhen compared to colntnes with similarlevelsof developmentor that haveexperienced similar levelsof \iolence Development assistance over the past decadecumuiativelytJis SSt rnittion, i:rcreasing from $l million in 1989to morethan$12million in 1999. Developmentassistance in East Timor has bgen largelydeterminedby the territory,s poliricalhisto.yand developmentattributes,especialiyduring Indonesian rule. Miny organisations in EastTimorhavelinks to the Catholicihurctr ihei.."iigi*, or,"ntut,on has.allowedthem to negotiateaccess. with the lndonesiangou".rrn"niunO -o.g_irution, implement projectsvia local Catholicorganisations.Most of the pio;""t, it "r" supply on.agriculture and rural devetopment,water and lT!1:l-T, lu:"..fo"u.*. sanrraltor\_ educatron and training,and health. Ag aultureand developmenrano water s-rpplyandsanitation havereceivedthe largestportionof funding 4. 2. 1 I nternational Organisations The govemmentdonorsinvoived in.East Timor include:USAID, AusAID, CIDA, NZODd andNORAD. USAID hasth€ Iongestinvolvementin fasi iimor, p.ouiOtng assrstance stnae1977. USAID and AusAID, which beganfundingin 1989,are the two lar€estdonors. SignificantNGO donorsinclude:ttre CjtristianCf,itarent iuna (CCf), Misereor(Gemany)andMissio(Germany) AusAID is by far the largestagencyin lerms of projects,although coDtractors manage andimplementirsprojecls.TheNGOSwilh the longesiexpedencelrnpie."nting prol.is li lLI_TiTof are Misereor,Missio, the CatholicFund fo. Ou;;;;; D"u",oprn"n (CAIOD, cB), the Catholictnstitute lor Intemationaln"tations_tif- anJtn" Carita. networ&especialycaritasNorwayandSwedenandtheirpartner caritasEastrimo.. vost. of. these agencie.swork very crosely with East Timorese catholic church orgarusaltons, anclcontrnueto be major implementersof development and welfare activities.Duringthe 1990,sCARE Canada(andits partner,CARE Indonesia;,Christian Children'sFund(CCF), NationalCooperative Businessasio"latiorrqVCAf, USA), and World VisionCanadahavealsobeensignificantin termsofvolu;" oi-n,nar?irUur."ao. the numberandscaleofprojectsimpl€menred. Orher intemationa.l NGOs and donors have focusedon the East Timor branches of Il{"-":l* organisations, such as the National Commission for Human ffrghts

HAM),BinaSwadaya pekerja TimorTimur,andSerikat i"tuiri rnaon"iru

lf_o^Yfts (SPSI, Indonesian WorkersUnion). 4.2.2 LocalNGO|

Eas Timoreseorganisations havealsotreeniovolvedin implementing projects.While it is difTicultto ascertain the numberand capacitiesof localNCOs, th-econsensus rs that

is veryweak.Some agencies haveresponded to ::.,:11 rrmrreoii9lg"lllll"sritutionat,capacity rocarcapacrtyby estabrishing

an East Timor branch,suchas caritasEastrimor aro rayasan lrmor Ard. CatholicNGOs have also implementedprojects with the CatholicChurch.Theselocal churchorganisations (usuallyorganised'ariunaoio""r"r)

CrroyGEin.."

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4.3.3 Differeft programs and proje,cts of lnternational and LocalNGO: llre dirTer""r^-^^--

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4.3.3.1Education e Training

T'#J,1fll.'j,:i.:.rormorteacherandvo ix#i;.f""*ijff ti.fi:f,':fi

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Cootry Reports:EastTimor:A Countryin Transition

Scholanhios \ZODA hasfunded34 tertiarylevel studentssince1991to attenduniversitiesin New Zealand.AusAID has provided11 scholarships since 1994 for graduateeducationin Australi4 but emphasises that while more funds are available,few undergraduates are ableto meetacademicentry requirements. CaritasNo.way, working with CaritasEast fimor, administersthe BishopBelo Fundthat providesscholarships for 641 university rdents.NORAD is the major donor to this fund. Woddview fughts (No.way), in cooperation with Timo. Aid, alsocoordinates programfor secondary a scholarship school students to attendundergraduate institutions. Construstion of SchoolBuilding CaritasSwedenprovidesfinancialassistance for the constructionof a girls, school supported by the SalesianMissionof Laga (Baucau).Th€ Diocesesof Dili and Baucau arekeypartnersin this pfoject.

AucationalMaterials \{MIETS, sponsoredby the Sistersof St Josephof Australia, is developingTetum Ianguagematerialsfor primary schoolswith East Timoresewriters and Australian iinguists(121 schoolshave beeninvolvedin the progam as of 1999).The programme focuseson revitalisingand strengthening Tetumas a larguagemedium,facilitatingthe Church'swork in Tetum,andincreasing access to Tetum,language educationmate als.It production includesthe of children'sbooksandteachers'manuals,aswell as providing in-servicetrainingfor teachersto teachthe materials.Also invoivedin this D.oiectis AustralianPeoplefor HealthEducationandDevelopment Abroad(APIIEDA). PrimarvEducation Other agenciesfocus on primary education.CCF initiated the establishment of fifty preschoolscatedng to 1,850 children, as pan of its Early ChildhoolJEducation dnd DerelopmentProgramue. It also suppodsmore than 8,500 school age children in primaryeducation.Oxfam GB also emphasizes primary education,and is considering what interventions would be appropriate at this level.Timor Aid and its EastTimorese affiliate YayasanTimor Aid also implementsmaller-scale educationprojectsthough Timoresepartnerorganisations. 4 . 3 . 3 . 2H e a t t h Diff€rentprcgrammes and projectson healthinclude:communitv-based healthactivities capacitybuildingin managingdiseases, technicalassistance. trainingofhealth workers, information, education,and communicationcampaigns,supplementaryfeeding or nut.ition, publication of materialson health, constructionof health centers ard acquisitionof medicalequipment.

F F F F F t

l

Someofthe healthprogammesimplemented arethefollowing: LimorMalafiaControlProiectin EastandWestTimor.firndedby USAID &om l9E0_87, focusedon building long-termdiseasemanagement capabilities, and includedhouse_to_ houseapplicationofDDT, drainageimprovements, applicationof larviaidesto standins water ard th€ introduction oflarvivorous fish.

t

sulportedtry AusAID, O)(FAM GB, CAIOD, CaritasNorway, CaritasEasflimor and Dioceseof Dili The differentdonorsprovidefundingandtechnicalassistance ro support the Indonesiangovernment'sprogram in East Tiior and Flores.Activities lnclude training healthworkers.producingand disseminating public informatio4 commurity outreachandoperationalresearchin tuberculosisdrugiesearch,aommunity_based health careacrivities. informationprograms,and supponfor supplemeniary feeding in ,nutrition areasot speciat need.CarirasNorwayhasidentifiedHIV/AIDS preventionai an areafor luture asslstance.

I

in EastNulllblgga{e-e&LEcsllllqgr - fo"us", onl.orotingiiit"tion

T

I

uo""r, ,o

potatlerraier, improving infant nutrition, and inqeasing u;derstanding of maternal

health.Thisprojectinvolvescroseliaisonbetween uNICE-FandIocalcoirmuruties and govemment agencles.

prevenrion prograrrune - implemented Aeu!€Respiratgrv by ccF with a localNGo. Herdnakr,-lncludes production ofhealtheduaation materials in Tetum"ARI workshops for healthcadres andprojectstafi provision ofmedicalsupplies in 13healthcenters. programme Health.Management - startedin 1999by CaritasAustralia- includes supporting a coordinated catholichealthsyster!achieving healthservicein -ofsustainable ruralclinics,establishing consistent minimumstandards healthcarein att cattroric *d supporting the development of a community basedhealthcaresystemin :ltli::: pautsnes. 4.3.3.3WaterSupply& Sanitation Programmes include building water supplyand sanitationfaoilities,sfengtheningof wareJmanagement agencies, construction ofwells,repairofwaterdistribution nerworKs, etc.Thefollowingaresomeoftheprojects underwateisupplyandsanitation: *. srqied - jointly managedby Coffee MpW fty Ltd P. frlphgla+ro. (Australia) andCMpS&FEnvironmental (Austr;!a) andfundedby eusAn, focusedon strengthenlng water.management agencies, andrehabilitating or buildingwatersupply andsanitation facilitiesin ruralandurbanareas. EnYironme4lg!-Hgabh atd Sanitation Proiect(1999-2004),buildsorl the wo.k ofthe fiIst proj€ct,andfocuseson the leastadyantaged communities in five districts. Liqqiq4 ?nd_Etmera Water Proiect. implementedby CCF, provides accessto potable water for 3,500peoplein two villagesin Liquica and one in Er-e.a. It is

tundedby

I I I I I I I I I I I I I I

I

T

f, F F

CountryRepo*s:Ea3tTimor:A Countryin Transition AusAID, CCF and in-kind contdbutionsfrom local communities.Although nearing it is suspended asofmid-1999. compietion, Otheractivitiesincludesmalldrinkingwatersupplyprojects,publichealtbprogramwith a safe water component,focusing on constructingsimple wells, r€paidng water distribution networks,andprcviding water to isolatedhamlets.

& RuratDevetopment 4.3.3.4Agricutture Someprogrammesin agricultureand rural developmentarethe following: East€mIslandsVeterinary Servic€sProiect - focusgdon strengtheningextensionservices with a focus on poorer farmersand village women, and providing supportfor the Indonesiangovemment'sbruoellosisprogramme.This projectwas impi€mentgdfrom ofAgriculture(Australia). 1989-1998 andmanaged by theNew Southwales Department Agricultureand RegionalPlanningAssistanceProgramme- soughtto improve the capacityof agriculture-relatedagenciesto plan and implement sustainableprojects and programmes for communitydevelopment.This projectwasmanagedby Acil Australia Pty Ltd. - prepares BobonaroRuralDevelopment Project(1998-2002) a longertenn (12-15year) rural developmentproject based on investigationand assessments of development participatory potential, institutional capabilitiesand piloting of community-based planningprocesses. This project,also managedby Acil AustraliaPty Ltd., is currently suspended. EconomicDevelopmentProjest(1995-1999)- providedsupponto 17,000families,or approximately100,000people.The projecthad two key components: 1. Increasingthe (mostly incomesofsmallholderfarmersby establishing cooperatives for cofee, but also vanillaand livestock);and 2. Improvingthe efliciencyof procurement and processing, promoting and exports,of coffee.Implementedby the NationalCooperative Business Association,the secondcomponentalso included agdcultureextensionactivities, planting shadetrees, increasingproductivity, as well as a health componentfor agricultureworkers. Rural DevelopmentProgramme- involves training in panicipatory techniquesfor staff and the introductionof sustainable agriculturetechniquesfor participants(from three hamletsin the Comorovalley). This project getsfunding from CaritasAuskalia SeveralEast Timoreseorganisations have also implementedsmallerprojects.These includeYayasanBina SwadayaTimor Timur (whichhasreceivedfundsfor organisations agricultureprojectsfrom the New Zealandgovernmant), the BobonaroCatholicparish, andETADEP. 4.3.3.5Govemance& Law Progtarnmesand projectsunder govemanceand law include the establishmetrtof a legal aid organisatioqcapaaitybuilding in providinglegal assistance, monitoringof human

I I I

t

Ir I

t

F F F

F I F

rishts violations.developmentof human dghts training and educationcoumesfor media'Among of an ind€pendent and establishment cJrmunity groupsard oiganisers, the organisaiionsinvolved in theseprogrammesare YayasabHAK, The Asia Foundation for PeaceandJustice (TAK USA), andCommission 4.3.3.6CapacityEuitding Capacitybuilding ptogrammesand projectsfocus on improvingthe performanceof iosiitutions and organiiations, including developing human resourcesthrough training prograrnmes,rest;during work units and changinglines of communicationand or bl]ilding-of local NGOs includes Capacitybuitdingor strengthening rn"n-ug"rn"nt. and managementskills general organisational propo'salwriting skilis and improving towardsmore eflicient. gffectiveand sustainableprogrammes. A project under capacitybuildiflg was the establishmentof ETADEP, a local NGO, in rural branches tstf, fundeCby USAID. TheETADEPhasbeeninvolvedin establishing smallerlocal with for its credit union, drilling wells for drinking water and workng NGOSto prcvide hands-ontraining in micro-enterprisg credit systems,-watercatchment an institutionaland humanresources and family healthsysiems.It hasalso established oflocal NGOS. to the institutionaldevelopm€nt centrein bili to teachskillsessential Another prcject was the creation of an NGO forur4 funded by AusAID, under the Bobonaro Rural DevelopmentProject This forum facilitates mutual cooperation and coordinationamong locll NGos, govemmentand donors.A componentof CARE Cantda's Cqpacit! Buiwing and Community Sef-MqnagementProjecl fonded by CIDA- strengthins the institutional capacity of local NGOs to deliver development targeted by the project. servicesto households OtherNGOs who havebeenrecipientsof funding for capacitybuilding fiom various donorsarePikul andPosko.

Generation 4.3.3.7lncome Among the livelihood projectsimplementedare livestockraising,micro-financeor micro-iredit, animal husbandry,cattle farming, haberdashery,and handicrafts These Brcthers(Baucau) by localorganizatioN,suchasthe Salesian projectsare implemented -d th" BobonaroCalholic Parisl! or local NGOs (e.g, ETADEP (Dili)' Sadep Foundation (Suai), YayasanBina SejahteraLestari (Ermer4 Lospalos), and Yayasan Bina Swadaya).

5.

I|

I

of GovernmentStrategies Critique/Assessment

Analysts state that East Timor can be expectedto be reliant on outside help for many years given the destructionfollowing the 1999 violence and it is drought-prone However, they are optimistic about the future of East Timor - it has geat potential to from its o{fshoreoil This oil-richcountrycanget neededrevenues recovereconomically. (BBC) Earningsfrom from 2004 a.ndgasfields in the Timor Gap dueto be exploited

I l

CountryReports:EastTihor: A Countryin Taansition cthersuccessful oil andgasexplontionand the resultingconcessions as well as expons cfmarbleandotherhardrock mineralscansupplement incomefrom gasexpo.ts. .{DB reportsthat EastTimor hasbeenjudiciousin its allocationof Timor Gao receiDts. for example,an erdowmentfund. "Such a fund could act as a stabilisingfoice, safeguarding incomefrom resourcesalesthat rightly belongsnot only to EastTirnorese citizensof today but also to their childrenand grandchildren.', Also importan ncome suppiementfor the govemmentare remittancesfrom the 20,000East Timoreselivins overseas. IMF notesthatpositivedevelopments in EastTimor duringthetransitionperiodhaveput the countryback on t.ack. Thesepositivedevelopments includethe rise in domeitic saving, establishmentof basic economic and institutional frameworh and the establishment of fiscal control and foundationsfor the developmentof the financial sector. Despitesuch positivedevelopments, however,IMF cautionsthat the sustainabilityof suchdevelopments ovgrtime remainsto be seen.It explainsthat favorabledevelopments in output gro[th consumerprices,trade and bank depositflows have not addressed crucialissugs,suchassizableunemployment, wagedistortions, anda lackoflonger rerm investment from the private.Also,thereis growingpoiiticaluncertaintyasindep;ndence approaches, and there is a need to developas soon as possiblecommeriiai legal framework,land andpropertylaws,a foreigninvestmentlaw, a labor code,bankruptcy proceedings, anda mecharismfor djsputeresolution.Moreover,to ensuresustainability of projecrs.it is criticalfor East Timor to build ils capacityin macroeconomic management_ lt is in dire needofcontinuedcomprehensive technicalassistance as well asintensivetrainingandskillsdevelopment. World Bank lists down six main lessonsfrom the expe.ienceof internatronal organisations, bilate.aldonors,and othersin assistingEast Timor. The lessonsare quotedherein fuiil z It is helpful to coordiiateassistance effons from the outset,becausethis facilitatesthe assessment andp.ioritisationofneeds,andreducesdemandsby foreignexpertson thetime ofa limitednumberoflocal counterparts. Z Early adoption of a basic and easily enforceablelegal and regulatory Iiameworkhelpsto reduceuncertainty.The frameworkmustbe simplebut sufficiently comprehensiveto minimise the scope for discretionln lts applicability. 2 Clearlinesof authority,responsibilities, and obligationswithin and between decision-making and consultativebodies expeditethe implementationof policy.

I I I I I I I I I

CountryReporB:EastTimor:A Countryin Transitioh Z Establishment of k€y institutionsmust receivepriority. and thesemust b e allocated sullicientfiJndsto ensureadequate sralfingand rhe formationof localmanagerial capacity. Z A basicmacroeconomic frameworkdoesnot needto be complexto facilitate sound decision-making. Resourceallocationjn the economy should be efficientlyguided by the market.and. to rhar end, paymentand banking facilities must be restored quickly, with due regard to emcrency and competition;a basicand sustainable liscal framewo.kmust also be adooted andenlorced al lheoutset. Z EastTimoresenationals'ownershipanddi.ectresponsibilityfor implementing lne reconstruchonstrategy and for establishingsound macroeconomic management are essentialfor successand can be achievedonlv with their participation at all levelsofgovemmenr

6.

Summaryand Conclusion

6.1 Summary pacific Ocean.lt hasa total land areaof 14,874 EastTimor liesin the southwestern km, with closeto 900,000population. primarily an agriculturaleconomy,the agriculture sectorprovidesmostofthe employmentin the country. A greatmajorityof the populationare EastTimorese.The country'smajor religionis Christianitywhile Tetum,Portuguese and Indonesian areits threemajor languages. The agriculturesectorprovidesmostofthe employment in EastTimor. EastTimor is considered as one ofthe poorestareasin Southeast Asia. Latesr$aus cs showtharirs GDP is estimatedat US $344millionwhiie irs cDp per capitais esumated at US $344. About55 percentofthe EastTimores€fallbelow the povertyline.The poor are identifiedmostlyas subsistence farmers,producingnontradedgood; in rural areas. The GINI coeffcienctis 0 31 The wealthiest20 percenthouseholdihavecashrncomes thatareonlythreetimeshigherthanthe poorest20 percent(IMF). Life expectancy is around50 yearsfor womenand49 yearsfor men.Infant mortalityrate (pe. 1000)is 149. Thereare around15 medicaldodorsper 100,000people, ano rne illiteracyrateis 50 percent(in somerural districtsthe illiteracyrat" i" abon"Lo p"r"ent;. An estimated 25 percentofthe populationhaveaccess to electricityandrunningwarer. Centuriesof armedconflict and un_rest undercolonialrule or invadingpower and the violenceof 1999havebeenmainly the underlyingreasonsfo. poverti in East Timor. EastTimor_ wasrendered totaliy inutileafterthe 1999violence.Tie teritory,s socialand economicdestruction haspromptedthe inte.national communityto inteNe; andprovide eme.gencyasslstanceto the East Timorese. Massive reconstructionactivities, panicularlyinfrastructure,have been undertakenand state institutions,including an

3untry Reports:EastTimor: A Countryin Transition

:n!e m government, the IIN TransitionalAdministrationEast Timor, have beenset up. A! present,EastTimor is beinggovemedby a SecondTransitionalGove.nmentand its Council of Ministers, entirely composedof locals, leading its people towards full rrdependence in 2002 As a respoosetowardseconomicrecovery,the govemmenthas establisheda policy iiameworkfor macroeconomic stability.It has underlineda numberof principlesto sir-engthen govemance. Among these pdnciples are transparency,accountability, ellicieat and effective public service, integrity, customer-iocused work, decisive readership, andrespohsive to localbusrnesses. Bilateralassistance hascontinu€dto pour into EastTimor. Trust fundsfor tne countrv have been establishedfor the country'sreconstructionactivities. Thesetrust funds inciudeUNTAET Trust Fund,to be administeredby the transitionalgovernment,and TrustFundfor EastTimor (TFET) to be managedby World Bank in c-iosecooperation with ADB. UNTAET trustfund financesprojectsin the areasofoivil serviceandjudiciarycapacity building; and covers the cost of all recurrentexpendituresof the East Timorese administration.lncluded in the p.ojects are the rehabilitationand re-equipmentof administrative, police,andjudiciarybuildings.andfor thetrainingofcivil servanrs. On the other hand, programmesand prcjects under TFET include: communitv empowerment andlocaigovernance; Dili community generation; employment emergency -heaith infrastructurerehabilitation; small enterprise; sectoi rehabilitatron and development; agriculturerehabilitationand development; emergencyschoolreadiness; watersupplyandsanitationrehabilitation; microfinance; andeconomiicapacitybuilding International organisations havealsoimplemented a numberofprogrammesanoproJecN in EastTimor. lnternationalorganisations normallycontracttocaiNCos to implement therrlrogrammesor pro;ects. The governmentdonorsinvolvedin East Timor include LISAID,AusAtD, CIDA NZODA andNORAD. SignificantNGO donorsinclude the ChristianChildren'sFund(CCF),Misereor(Germany)andMissio(Germany). Local NG_OS or EastTimoreseorganisations havealso beeninvolvedin implementing projects.TheseNGOSincludethe NationalCommissionfor Humanf.igtrts lfOWeS pekeda SeluruhIidoneisa (SpSI, Swadaya Timor Timur, and Serikat l4MI .Biii lndonesian WorkersUnion).Thereare alsolocalbranches of intemationalorgantsatrons, such as CaritasEast Timor and yayasan Timor Aid. CatholicNGOS have also implemented projectswith the CatholicChurch. The differentprogrammes andprojectsare in the areasof educationandtraining,health, watersupplyandsaritatio4 agricultufeand development, govemance and lau, capacrty building,andincomegeneration. Educationandf;ining p-rogrammes are mainlyin the form of teacher and vocational training, including i.piou"ment of curriculum; scholarships for secondaryand tertiary students,upgradingand expandingtechnical education;specialinterestcou$esfor poor children;constructionof schooibuirdings; andprimaryeducationor earlychild development.

coeryRepo% DiFerenrprogrammes and proiect

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"

6.2 Conclusion Z For centuries. EastTimor

ha

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z The socioeconomic destucti

country totally;,;;-'",i,ll,'iil,,'::.-1:T

the violence renth€ ^reee

n#"Jd;':iH;:ii, i::""TS:*''o"*itv' T;Ti':l':,"":frr'lj --

I I I I I I I I I

C!!!ggE!!:€esf.

ninor:A Country in Transition

7 EastTimor is expected to be relianton outsidehelpfor manyyears,especially ln the a.ea of capacity building. Human resourcedevelopmentand macloeconomtc management arehigh on the list for skillstrainingamongthe people,particularlyin govemment. ,

The transitionalgovernmenthas establishedand adoptedpolitical and socroeconomjc lrameworkslo guide the country towards genuine developmenr. especially onceir hasobtained full independence or statehood. However,a lot remainsto be done,especiallyin polishingsuchfiameworks, strictly enforcing such frameworks, and in encouragmgprivate sector tnvolvement

z

A numberof programmes or projectsin education,health,agriculture,water suppiy and. sanirarion,govemance.and income generar-ionhave been rmpremented by the GO and NGOSto addresspoveny However,thereis a needfor th€seprogrammes or projectsto be coordinireduna t" o-n.J unJ panlcrpatedrn by lhe peoplelhemselvesin order to maximise resourcesas well asensuresuccess.

v

East.Timor is a.smallcountrywith a smallpopulation.The assistance it has recerveo.espectallyatter the 1999 violence. has been tremendous. Its absorption. capacitymight not be able to matchlhe Lremendous amount;i assrsrance lt hasbeenreceiving Carefulstudyshouldbe doneasreqardsEast Irmors capacity ro absorb vjs-d_vis rheassistance ir needs andshou'id receive andaccept.

CountryReports:EastTimor:A Countryin Transition

Sources andhighlights. AsianDevelopmentOutlook2001:publications orgt/Documents/BookVADB/2001/Highlights http://www.adb.

Plan.btpt/huaaa{.gD.glg. ADBCount.yAssistance 12l contcapitolHill/Senate/71 A ShortHistoryofEast Timor.htto://www.geocities bbcco uk. BBC CountryProfiles:EastTimor.http://news org. Plans:EastTimor. http://www.adb CountryAssistance EastTimor Country Brief. The world Bank andEast Timor. h[p!4s iryJgddbalkllg East Timor LINTAET, justice and refug€es one year after the ballot http://www.\tebamnestyorglai.nsflindex/AsA570042000 EastTimot.

Be Managedin Horta,RamosJoseandEmilia Pires.2001.How Will theMacroeconomy Development and View. Finance EastTimor?An EastTimorese an Indep€ndent A quarterlymagazinofthe IMF. Vol. 38, No. 1. htto://wwwimf ore NCOs in EastTimor.http://www.etan.orq International NationalNGOSin East Timor. htt0/l aMryjt@-erg http:/hvww.imforg/exter of DevelopmentAssistanceto East Timor Nest,Michael. Overviewand Assessment http://www.aic.n)'u.edu/zubgliualTilqqPlillh@! NGOFomm. http://www.geocities.contetngoforum. Pereira, Agio. East Timor - Govemment, NGOs, and Civil http://www.aidwatch.org.au/news/20/05/htm

society

Tenenbaum,Linda. 1999. The UN in East Timor: All the Trappingsof a Colonial Protectorate.!ftpfl:Uuryj{ly$plg. The UNTAET httpJ/www.un.org,iDeplv at DonorMeetings.http/la|.^{jrqlgrg Vaidivieso,Luis. 2001. IMF Staffstatements

C.""t.V R"p"rtt' E"

I

Valdivieso,Luis, et al. 2000. East Timor: Establishingthe FoundatiorN of Sound Macroeconomic Managenent.

f,ttpyl*wwi,nf.orei?*;ailiiij;?

WorldBankAdministered TrustFundfor

EastTimor.httplwww.worldbank.org.

WorldBank- Civil SocietyCollaboration. progessReportfor Fiscalyears 2000- 20Ol

T ! I

I T ! I

Indonesia

PoVERTYIN INDONESIA PAULINEREBUCAS

1.

lntroduction

andNGOSin eight Thispaperis part ofa studyof povertyreductioninitiativesby gov€mment Vietnam,Myanmar,Lao, ASEAN countries,namely:Philippines,lndonesia,Cambodia, view of povertysituation Tlailand.andEastTimor. Thestudyaimsto presenta comprehensive Also, it aimsto comcup poverty in thc eight countries. rosponses to by aLffercnt sectoa andthe areas of inteNentions or collaboration NGOS regarding Nith recommendations to developmcDt poverty The study mainly usedsecondary govcmments reduction. towards with their respectrve books,andmtemet). data(writtendocuments, It is divided into six parts. The first part presentsthe Ihis paperfocuseson Indonesia. profileofand povertysituarion the demographic introduction.The secondpartdescribes the main causesof poverty. The fourth featuresthe in Indonesia.The third discusses government, internationaland local NGOs, including responses to poveiy by the internationaldonors, and the church. The fifth presentsan assessmentby somQ panicularlythe govemment's,to responses, institutionsandanalystson the muitisectoral poverty.The sixthpfi presents the summaryandconclusion.

2.

Profile

2.1 Geographyand Demography Asia, constitutirgmost of the Republicof Indonesiais an islandrepublicof Southeast MalayArchipelago.Locatedsoutheast of mainlandAsiaand northwestof Australia,the km'] (705,192sq mi). About half of republichas a total land areaof 1,826,440 nearly 13,700islandsare inhabited;all are locatedin the lndian and Pacific Indonesia's it is aonsidered asthe oceans. with a total populationof207.4 million (1999statistics), world'sfourth most populouscountryafter China India and United States.More than capitalandlargestcity, is located. halfthepeoplelive in Java,whereJakada,Indonesia's An agriculturaland manufacturingeconomy,the country'smain expotts are rubber, tobacco,andsugar. Althoughthe islaodsare hometo morethan100ethnicgroups,most areBahasa lndonesians areof mixedMalayoriginsandpracticeIslam- Major languages Indonesia andJavanese.

Cqffy

Reports:eoveny in tnaonesia-

T$te 1. T@l land area Pcpula!on

207 4 million (1999

\lain

Rubbel tobacco.su Bahasalndonesia. Javanise

\{ai r Reli

2-.2. Socioeconomic Situationprior to l gg7 AsidnEconomic Crisis Indonesia had enjoyedtremendous economicgro\a,thin the

1980sand l99os, partly due :oitsabundanr narural resources andin..*..i;n *l rn.nriu.i"i"g;io'.;,,... ,"o"rr. {s a result,many lndonesians hadenrered themiddleclass

TheGDP groMh during l9g0-90was 6.I percent per annum;it went up to 7.6 percent per annumduring 1990-95and 7.8 percent in 1996.This l",iri"""iiv i'ig;g.o*n.u, associated with impressivediversification of tf," anj'rt._g'tp#_un"" ortl" manufacturins sectorwhichsrewatarateof i0 ""onornv ;;r;;;;";;;;'ti.i*..i',,rr_s,

accounted fora quarter ofthenation's.cDp rnaon"riun ""a Joiriri"iii" *ia" ,ung" of manufacturers, ircluding "'"poJ,ani'p"iioii"rn,"urr. textiles andapparel, *ooa prolucts, rf," gowth of merchandise exportsavera!

ii,",."at",. inird;;e;iil.,f,ffiT

I I II I I I I

l"#l"li,o***

durins 1e86-e3, butdeclined

Indonesia's grossinvestmentmte \rr'entup from 24 percent ofthe GDp in l9g0 to 32 pe.centin 1996.Domesticsavinqsarso.grew, and Indonesiacontinuedto financeabout 90 percentof its investm€ntdo;esti 1996'the domestic

savingsratewas 31 percent ofthecDp (wo.ra rrru,lf ils$ "unra t:lg ytjh consistently maintaining high economrcgrowth,rndonesia arso made substantial progress in socialdevelooire.nt andpovertyer;dication. The number ofpoor il r".9"-".j1.qopped

f,",!]" mrllronin

liornzomilioniniezojooi" p"p"r"r.O. r, "ili"'i","r bvtheGinicoenicient

1996(ltyo). Also, income

dropped rrom 03riinrtril

:;;l;#?H:l}ff

ffi;*"

On the employmentfront, however.th

not"atr,at'auiinf ios;;il;il';Tfif;,;ffiH:;,lJ,ilTT::';';rti::""q,T]

-"rp[inn"n, annumcompared ro a labourforceorowh ofJ_l p.rl"t r"a""a gro"dl dedined_from 2 8 p..".nt p"r.u-urn-drrrngls85_90ro I g percent during. | 990_95 The rateo-ropenunemprovment jumpedfiom 32 percenr in lgrd ;" t.a;iJd,l; 1995. The proorem ot unemployment wasmore.serious in the urbanu.au,iincr""."a n.ornO.f percentrn t990 to 10.9percentin 1995) andurn."g th";;".u; (i"".""r"i ti., e.t pe.centin leeo to l t.5 percent in lee5 for th;;;;:r;-;";;;; ei"i",L,li ^"_,u " ' Dalagesented in thispamgraph arefrom worrdBank,Asiar D€velopment Bark andILo.

l

I

Counkt' Reports:Povertyin Indonesia

ihird ofthe total wo*ers suffer from underemployment(measuredas working less than 15 hours per week). Nearly two+hirds of total employmentis still accountedfo. by the irlormal sector.

2.3 PovertySituationofter the Asian Crisis With massivelayofls and high inflation following the Asian crisis, the incidenceof povertyin Indoncsiasignificantlyincreased.1998statistics(Cent.alBureauofstatistics) showthal the numberofpeople living belowpovertyline had reached80 million, i.e. 40oloofthe population(comparcdto l l% prior to the crisis). Incidenceofpoverty at the a€gregate leyelwas around24o/o.In urbanareas,the numberofpoor incr€ased by 10.I millio4 compared to 16.l million in rural areas. In 1999,povertyincidencereached24.2 percent,llom17.6percentin 1996.The crisis: inducedsurgein poverty plungedan additional15 million personsinto poverty.The numberof.poorincreaseddramaticallyandthe conditionofthe poor worsened.poverty worsenedin urban areas faster than in rural areas. Urban poverty increasedby lOi percentwt le ruI:a1 poverty inffeasedby 78 percent. Irbfe 2: SocioeconomicIndicators

GDP

US$142.5 biuion(1999)

us$ 760(2000)

GDP GNP

a

GIM coeflicient

0.308(1999)

Humandevelopment index

Poverty incidence Rural Urban AnnualsroMh rate Life expectancyat birth Male Female Adult illiteracy.ate Male Female Infantmortalityrate(per 1,000live births)

3.

Causesof Poverty

3.1

1997AsianEconomicCrisis

l8.2Yo

64 years 68 years

7% 170/o

43 (1998)

Indonesiaexperienc€dan economic shock after around a decadeof unintemrptedhigh economicgrouth. The economiccrisisthat hit Indonesiain the middleof 1997broueht aboutsetbackin economicperformance, more specificallyin improvements in humin development(e.g., education and health) and remarkable reduction in the poverty

F F T I I l|

t I

t

CountryReports:poverty in lnaonesia

droppeddramaticallyflom over 7 percentper annum before the li:l*l::lperiod 9?P e.wth cfjsrs 10a negarive economic arowthof_lj.2oo in lSog. fhi, aggregare income shiftsignificanrly reflecred rheimpaciorcurrency devaruarion. \.\hichcreared economic upheaval,leadingto high inflation;ate(Said,200i). After aboutone year_ofcisis period,the Indonesian economyseem€dstill far from recovery.Thiswasreflectedin an economicgrowthrate ofonly 03% jn lggtg

3.2 Drought, politicat Instability dnd Etnic_Religious Confticts The long drought and forest fues in 1997, followed by political instabilrtyir the transitionalperiodhaveworsenedthe socloeconomic conditions.Sucheconomlcrelated factorsasskyrocketing prices,declinein agriculturalproduction,-"uu',J shrinkageofthe formal sector.and a.hugepressureon the ove-ralllabour marketf,"u'" uj""rr" .o"ru, rmpact,especialrv on the most wlnerabreg.oupsofthe popuiation.loiitiJJ ,n"tuu i y ensuedas the dictarorship of Suhartorelt ana t'iretr"nrittn p.*".. - rr"t"uiri y continuedas the new presidentWahidwas rcmoved only after two "oi"iii"-' y"u... ff," fufl of sohartoalsocataiyzedvariousethnicand religious ;;;y,;;. of lndonesia (e.9.EastTimor,Westpapua,Aceh) """fli;i;

4.

Responses Towardspoverty Reduction

4.1 Government While pov€rtyreductionhadneverbee

objective durins1970to r994,for thefirst,t.n.iff1T.'il1i*:tified as,adevelopment *t"cit

*a

iotui"ri.i;;,;;; ;;;#;rH in?liil;ljrfj "i"ntuur

tarsets rorreduction

Even beforethe 1997crisis. the Covemment of Indonesiahad alreadyattempredto respoDdto the needsof the poor thr(

berow) rhese program; rildffi;#_?:*:;;fJ":",,"#,11-

prosfams (seetabre 3

Table e J. 3. P rover$ AII AllevtatronPromrmhFc ;h r..j^ Progr{mmc -bjeclt"e Dcrcriptions L P+K r Incorne-gcneiEi ru nErease lncomes of small Joint pro1ect Eiieeiproject for Iandtess farmcrs) fanners drough setf-help groups

fiJ

Mi stry of Agriadture and BRI ano 10 orga zc lhem to gain Banlt begiming in 1979; acccssto crcdit .l Has incr€ased average mcome of participating tarmersup to 40yo; 'l Coverst3 provinccs witl finding from ADB and I

2. mT gnpresDesa-@gd)

IFAD

1 ru acu.leraE ploverty reductjon Started in t9gt. Cdsists of; in less developedvillages across tund Rp 20 million per village. Attempts to pro\ide assistance direcdy to the village commllnitv

Co.ffry Reports: Poverty in Indonesia

obie{rir€ 3,TAKESRA./KUKESRA

Ire!criDliotrr

Ievel to undefiake gmss-roots poverty alleviatior activitjes. To intensify poverty alleviation Assists poor familics to start efforts savings by providiq them with i tial depositsup to Rp 2,000 p€r family. Administeredby the State Ministrl' for Population GKKBN)

4. 1.1 SoundMocroeconomicPolicies Soundpoliciesand initially favorableconditionswere identifiedas the main factors, cont.ibutingto Indonesia's successirl poverty alleviation.Householdexpenditureand incomedistributioflwererelativelyequalat the startofthe New Orderin 1970,as most Indonesians were poor at that time' and this allowed fleibility in proglafl targeting. Furthermorc,urban-ruralmigrationwas relativelylow in the 1970s,while rural-urban incomedisparities remainedrelativelysmall.Variouspoliciesandprograms, instrumental in bringingdownpovertylevels,reinforcedthesesmallrural-urbandisparities. Otherreoentinterventions to help the poor includeminimumwage polioiestargetedto urbanareas,acrossall provinces,and specialeffods in the areasof water supplyand sanitation. Elfortsto alleviatepovenybecamediflicult between1990and 199?.Setiawan (2000)notes,two reasons underlaythis difficulty,namely:L Targetgrcupswere harder to identifythanbefore;and2. Government's concemwith povertyalleviationbecameless thanbefore,sincethe budgetfor alleviatingthe causeswas morerestrictedandthe costs ofsuchprogramswerebecomingmoreexpensive. 4.1.2 StrengtheningSocialSafety Nets The govemmentstrengthened socialsafetynetsto respold to the needsofthe poor. It adoptedmeasures to incr€ase the poor'saccess to food andessential healthandeducation services.Althoughthe programmes were not immuneto allegationsof corruption,they seemto havegenerallymettheirgoals.Overthe mediumterm,however,thereis a need 1oshiftthe focusofpubiic policyto address structuralpov€rty,while maintaininga much smaller but better targeted safety net p.ogramme to protect the most vulnerable Indonesiahasa numberof povertyreductionprogrammes, few ofwhich appearto have workedwell. A majordrawbackofthe earlierprogramrnes appearsto be their top-down approach, insistence on subsidies, andlack of accountability_ Theseneedto be carefully reviewedandrestructuredto reducepov€rtymo.e effectively. 4. 1.3 Decentrolisotion Scheme The policy of decenralisation is in major part aimedat addressing regionaleconomic disparitiesand improvingpoverty taryeting.The policy enablesthese issuesto be addressed much more directly and sensilively,especiallywith functioningdemocntic institutions.Enhancedare the possibilitiesto empowerthe poor, mobilisetheir crcative energies,and initiatea genuinepartnershipbetwesngoveanment, civil society,and the

totttry n"po.c, Povertyin Indonesia

:cor to eradicatepoverty. Good govemancealso supportspoverty reduction by to the poor' :rcressingcomrptionandinefliciencyin deliveringpublicservices r.1.4 Social Safety Net Progrommes programmes widely known as a seriesof new andexpanded :he governmentestablished 'Social -,he Safety Net' ot JPSprogtammeq an acronym of its Indonesiannilrne Jari'E et. al (1999)state,the progarnmeswere intendedto help PengamanSosiil. Suryahadi proi""t th" traditionallypoor and newly poor sufferiag-flom the crisis in.three areas, nameiy: LEnsuring the availabilityof food at affordableprices for the poor; 2 creation; throughernployment purchasingpoweramongpoor households Supplementing and health as services, such poor social to critical .nd':. Pt"r"*ing ucc"sJof the educatlon. Ihe plan to introducesocialsafetyn€t programmeswas first m€ntionedin the revised govemmentbudget,draftedin lateJune1998 Basedon the budgetplan,around7 4ol"of 6Dl, or np Z0.itrillion wereallocatedfor socialsafetynetprogrammesOut ofthe total or Rp 58.8trillion wasallocatedfor varioustypes Rp 70.5trillion budget,around83.50lo oi subsidyprogta.*es. The remainder(16.5%) of the total budget(a'ound Rp 11 7 programmes, supportfot educationin the form trillion)was foi employmentgeneration services' for health-related andotherexpenditures ofblock grantsandscholarships, that a nationannounced ln September1998,the NationalPlanningBoard (Bappenas) programme consistedof wideiociat safetynet programmewas being developedThis projects;3 or labor-intensive four schemes:L food security,2. employmentgeneration 4 SMEs and social servicest planning, and health,family socialprotection(education, 17 trillion wastargetedat aroundRp pro.oiion. The total budgetfor theseprogrammes (6.5%ofthe totalbudget).

r I I

4.1.4I Food Securitv- aimsto helpthe poor -- includingthe newly poor becauseof ihJ crisis -. to fulfilt their needsfor food, which may havebeenhinderedby both falling real incomeand food price escalation.This schemeis implementedthrough for the poor' cashfor food production food assistance four activitiesrfood reserves, The governmenthastried to achieve and agticulturalinput subsidies. intensification, one of which is the Operasi variousprogrammes, theseobjectivesby establishing oneofthe largestandmostcrucial I'asatKhusus(OPK).UndertheOPK programme, 20 kg of underfood security,eacheligiblehouseholdis allowedto purchase schemes price of Rp l,000/kg.'This is comparedto the riceper monthat a highlysubsidised marketpricefor mediumqualityrice in Octoberto November1998periodof around Rp. 2,5b0&g. Originally, only householdsunder the lowest categoryof o{Ilcial classificationwere eligible to participatein the programme.' But coveragewas duringthe courseofthe year. expanded

' The progrdmmestrtted with l0 kg. I The ofiaial classificationis olated by thc NatronalFamih' Plaining Or$nization (BKKBN)

i Co{rntryReportsrPovertyin Indonesia 4.1.4.2EmplorrmentGenerationfPadatKarya) - is in .esponseto the threat of burgeoningunemployment beaause of economiccontraction,forcing firms to either lay off part of their workersor shutdowncompletely. Padatkarya is a massivelaborintensiveeffort initiated in variousareasin Indonesia.Its two main objectivesare; 1. Provideincomesupportto the unemployedand the poor; and 2. Createproduction benefitsin the form of Iastingsocialcapital,includingpeople'sskills and enterprise. Since1998,PadatKarya hasgrown to include13 sub-programmes, involvingeight executingagencies,and reachingmore than 300 districts. Theseschemesare funded primarily through re-allocatedfunds from donor agencies'ongoing loans, other redirectedresouaes,andfiom other newly designedinitiatives. 4.1.4.3SocialProtection- helpsensurethe supplyof importantpublic healthand educationservices,particularly for women and children, to protect against further deteriorationin circumstancefor the future seneration. 4. 1.5 EducotionProgramme With the assistance of extemalaid agencies, e.9.,ADB andthe World Banl, Indonesia rapidly designedand implementeda scholarships and grantsprogrammecalled SGp (Pl€aseseebox 2 at the annex).Though SGP,secondaryenrollmentrat€sincreas€d betweenschool yearc 1997/98and.1999/2000,and primary enrollment stay€drelatively constafi. 4.1.6 Health Programme The government, with helpfrom donoragencies, established the JPSprogam in health. The four activitiesunderthis schemeare: 1. provisionand maintenance of basichealth servicesin Puskesmas(health centers);2. midwife's servicesfor poor families; 3. nuldtional improvement;and 4. healthguaratte€schemeat the district level.

4.1.7 Smallandlledium Enterprises (SlvlEs) Schemes Thisprogramme is administered by theMinistryof Cooperativ€s andaimsto helpthe SMESin the form of credit. To datq th€ govemmenthas allocatedRp 20 trillion in supportof SMES,but the allocation of this programmeis not reflectedin the budget for SSNprogramme. Underthis scheme,SMEsare providedwith technicalassisrance ano acaess to creditto furtherdeveloptheirbusiness andemployment activities. 4. 1.8 FinancialSupport

I

I I I

The funding to expandthesevarious social safety n€t programmescom6smostly ;n the form of loansprovidedby the World Bank, ADB, and bilateraldono.s,eitherdirectly though prcject supportor indirectly through programloansthat providebudgel suppon.

CountryReports: Povertyin Indonesia

E

1.2 lnternational and Local NGOS NGOs,religiousorganisations, andcommunitygroupshaveinitiateda numberofpoverty alleviationprogrammes to complementthe govemment'sefforts.lntemationalNGOS, suchas CARE, CRS, World Vision, and ICRC, have mountedsupponprcgrammes, particularlyin food relief operations.Theseactivitieshave receivedfinanoialsuppo.t from bilateraldonors(e.9.AusAID, USAID, andCIDA). In addition,a new initiativein creating civil societyJed mechanismaimed at strengtheningthe capacitiesof the poor, calledCRP(CommunityRecoveryProgramme), hasbeenformed. 4.2.1 Relief assistanceand food security An NGO, ParamitaSocial Welfare Foundation(YKSP), initiated a food secu.ity programme, distributingfood aid to needyhouseholds. Formedin 1995by a group of religiousleadersand Buddhistentrepreneu$, it deliv€redin Septembe.-October 1998 parcels (consisting approximatefy 10,000food of l0 kg rice, I kg sugaralrd,% kg of mung beans)to poor communitiesin Nonh takana, Central Jav4 and East Java. Ahhoughinitiatedby a Buddhistcommunity,thc pfogammedid not discriminate against religiousaffiliation,ethnicity,race,or gendcr. 4.2.2 SocialDrotection ln the areaof socialprotection,severalNGOSand CBOShave also initiatedactivities directedtowardhelpingthe poor,Activitiesincludeassistingstreetchildrenandassisting work€$ find altemativeemployment. 4,2.3 lAicro-credit schemes NGOs run hundredsof small miaro-creditschemesthroughoutthe country. One promisingschemelinks provisionof microfinancewith the building of poor people,s capacityto helpthemselves. NGOSare forming strategiclinkageswith BRI and Bank Indonesiafor thispurpose.

5.

Critique/Assessment of GovernmentStrategies

l

E E E

t t

The challengeoverthe mediumto long term for the Indonesiangovemmentis to realise thepotentialdecentralisation holdsto reducepoverty.The first steptowardsthis endis to developa workablestrategyquickly and initiateits implementation, beginningwith the worst pocketsofpoverty (ADB, 2000). poteotialof decentralisation The pov€rty-reducing would only be realisedif the poor could make their voices heard. The ADB reiteratesthat in order lor this to happen,two measuresare necessary:decertralizationand mobilisation.Decentmlisationmust be deepened by graduallytakinglocalgovemance to thevillagelevel.The cunentproposals for decentralisation to the district level are a major stepin the right direction,but the

Cd.l1?y Reports:Povertyin Indonesia

rrocesswould needto movefirrfher.The districtis still inaccessible for the majorityof :herural poor Civil societyo.ganisations, suchasNGOs,havean importantrole to play :r rhis regard.Until recently,the political climateprevailingin Indonesiahad not been .onduciveto NGO activities

I I I I I I I I I

The SSN^programme wasa key elementin the government,s rcsponse towardspro@cung :hepoor from the worst effectsofthe crisis But the programhad had mixedsuocess rn ieaching.and supp-orting the poor. Other coping strategies_ including relianceon .ommunity and religiousorganisations -- had been more importantthai government trogrammesto the poor. The issue of mistargetedand misusedfunds was highly conspicuousin newspaper coverage;.the such shortcomings. €ovemmentacknowledged Bappenas,for example, admitredthataboutRp. 8.6trillion our of the total Rp. 17.9;llion ;i SSNfundsin fiical \.ear 1998/1999,were misbudgeted, and used to fund ',supplementary,, programmes rSetiawan, 2000). In addition,Setiawannotes,anecdotal_ evidenceindicatesthat, unfortunately,in many casesthe progftrnmeslargely missedthe target groups.It should be emphasised, however,that effectiveness.of the programmes variedaciossprcgrammesand regions. )ome programmeshad high coverageamongthe poor and showedsom€reasonable while someprogrammesin somedistrictsshowedlow coverage 11"*i: :f]irg"lng. and lrttle or no targeting In spiteof its weaknesses, the SSN.programmes hadhelpedpeoplein dealingwirh rhe crisisto a certainextent.The subsldrsed rice scheme(OPK) was one of rhe effective lifelines. Launchedin 1998,the programmehad reachedl0 million households bv January1999. The schoiarshipprogrammewas relativelvsuccessfulas well. Foundto be the most rmpressive of the SSN programmes, it displaveda positive bias towards poorer households and gave !ery tangibleassisrance ro a relatively large numbgr of Deneltclanes. The PadatKarya public works prograrnmewas a loose collectionof programmes in vaious ministries,aimingat providingemployment.In its detailedassirs,i.,ent of this programlne,AusAID (1998) identifiessix weaknesses, namely: L failu.e to reach women: 2. minimalcommunityconsultatioq3. no NGO involvement;4. no tmnsparent mechanism; 5. no long+€rmpositiveimpacts;and6. no capa"itybuildingcompon"nt. The factthatpovertyclimb€devenwhenSSNprogrammes werebeingimplemented does not_meanthat theseprogrammes were a failure.Relatjveto the oui*h"lrning pou".ry problemcausedby Indonesia's simultaneous crises,theseprogrammes werequrtesmall.

budset for sSNprogrammei jF o:'etopmenr inly l geel2000 wasRp.5.6 ::i,:i.Tll:. rflrrlon, ressthan halt a percent

of GDp. AIso, the allocationsfor some of these programmeswere not even disbursedduring the fiscal year, as administration mechanisms werestill beingput in place.

6,rntry neport, eo"erq in tnO"neti"

1998has Basedon an IMF study,thepovertydeclineby morethanhalf sinceDecamber activitv' anda ofstability,somerecoveryin economic testoration fr;" #;i;J; lrt" oii"" of rice dueto plentifutsuppliesin the marketand not from the i*ii*'i" SSNProgrcmmes government's

6.

andConclusion SummarY

6.1 SummarY ecolomiesare confrontedwith new ln an increasinglyglobalisingworld, management ihi; it ;.ply deionstratedbv Lhefinanci"l andeconomiccrisis' facedbv a ;"ii;;;;;. ol Indonesla oneolwhichis theRepublrc countries, numbeiofAsian is localedsoutheast -area Republicof Indonesia,constitutingmostofthe Malay Archipelago,

of l'826'440km'?' ;;; ;J oonr,*.tt o"reutt.utlu it t'ut tot"t land ;;';"i;iil " tl" Yt]91: fourthmost of 207.4milliorLit is considered-as Wii-fr .iA population " china.India.andthe United States'Morethanhalfthe peoplelive ooputou, "R"r Indonesia's "ount,y capitalandlargestcity, is located Jakana. in iava, where

Althoushtheislandsarehometomorethanl00ethnicgroups,mostlndonesiansarcof origins and practicelslam. Major languagesare BahasaIndonesiaand ;i;J'Lt"l"y are l"uunar". ,C" agri-culturaland manufacturingeconomy,the country's main exports rubber,tobacco,and sugaJ.

t I I I

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Indonesiahadachievedremarkableeconomicdevelopmentoverthepastdecadeandhad to be amongthe bestperformingEastAsianeconomies U".n, until t"""ntty, considered of nearly ot"i tfr" p"rioa tgis to tgsz, the tndonesianeconomygrew at an annualrate This countries developing the fastestaod most ever achievedamong iy", than 10yo """'"f wasmainlydrivenby the manufactudng sector,whichgrewby more e*pansion p"i -""* overthe ;eriod. At the sametime, exports(particularlyfrom the non-oil and gtew around107o,alsobecam€an importantsourceofgromh other gut t."totg,-irrlicators lol-d '""onoti" performedsimilarly: the cunent account balancewas rn""ro Indonesia ."i"Li""a on averageunder3% of GDP; gross foreign reservesof Bank to increaselreaching$288 billion in June 1997;and inflation averaged802 "ontinu"a overthe period, while real capiiaincomegrew &t an annualrate ofnearly 6910 Th€Asianfinancialcrisisthathitlndonesiainthemiddleofl99Tbroughtaboutsetback GDPgrowthdroppeddramaticallyandligh inflationtatewere in economicperformance. impactsofihe crisis The long droughtandforestfir€s during1997' few of those'adverse to the worseringof iollowedby politicalin;tabilityin the transitionalperiodcontributed prices,decline ions'Suahecolomicrclatedfactorsasskyrocketing ,o.io.""o''o'1" "ona in agricultural productior\ shrinlage of the formal sector, and a huge pressureon the ou"."ulttuUot;arket are cited asiausing a negativesocial impact,especiallyon the Dooulation'smost wlnerable groups.

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After aboutoneyearofcrisis period,theIndonesian economywasstill far from.ecovery. Thiswasreflectedin an economicgroll,thrateofonly 0.3%in 1999. At its peakin eariy 1999,poverty incidencereached24.2 percett, from 17.6 pe.centin 1996.Although oficial estimates hadbeenupdatedandrefinedseveraltimessincethe crisis,and several studieshadprovidedalternativeestimates, thereis a consensus on two majorfindings-at its peakpovenyincidenceduringthe crisissurgedabout7-10percentage pointsfrom its low in 1996,and that a large segmentof the populationwas in a r,ulnerableand depletedstate.In absolutetems the adsis-inducedsu.ge in poverty had piungedan additionalI5 million perso.ns into poverty.During this time rhe pove.tygap indexaand lhe povertyseverityindex' deteriorated, indicatingthat the numberof poor inc.eased dramaticallyand the conditionof the poor worsened.pove.tyworsenedin urban areas somerrhat fasterthan in rural areas.Note that urbanpovertyincreased by 103 percent whileruralpov€rty,78 percent. Durjngthe crisis,the Govemmentoflndonesiastrengthened socialsafetynetsto respond to the needsof the traditionallypoor and the newly poor. Measureswere adoptid to increasethe accessof the poor to food andessentialhealthand educalionservices.The poliay of decentnlization,in major part, aimed at addressingregional economic disparities andimprovingpovedytargeting. In additionto the decentralisation scheme,the govemmantestablished a seriesof new programs.Theseprogramswere widely known as the socialsafetynet or i4 :Iplnd{ JPS(JaringPengamanSosial)programs.Theseprogramsincluded:1. food securitv:2. employmentgenerationprogram or labor-intensiveprojects; 3. social prote;tion (education,health, family planning,and social services);and 4. SMEs Dromotion. Emphasiswas given to implementtheseprogramson a deoentralised and iransparent basis,involving district govemments;municipalitiesand village communltleswere expected to contributeto thegovemmentts elfortsto €ladicatepov€rty. The socialsafetynet programwas a key elementin the government,s response towards protectingthe poor from the worst effectsof the crisis.But the programhad mixed success in reachingandsupporting thepoor. NGOs.havetrelpedin reducingpovertyin the country. In the areaofsocial protection, severalNGOShave initiatad activities,directedtowardshelpingthe poor Activities includeassistingstreetchildrenand assistingworkersfind aliernativeemployment.In additionto governmentschemes,NGOSrun hundredsof small micro-credirsonemes throughoutthe country.

6.2 Conclusion 7

The Governmentof Indonesiahad alreadyimpiementedpovertyalleviation programmeseven before the 1997 Asian economic crisis. Sound

' indicatesthe aveGgeamountthe incomeof re poor mustbe increasedto crossthe poverly line. ' Indicates the income distribution ofhouseholdsbelow the Dovertvlinc.

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CountryRepors:Povertyin Indonesia

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poliaiesplusfavorableconditionscontributedto the success macroeconomic of povertyalleviation. V

"fhe 199'1Asian economiccrisiswas a serioussetbackto the considerable gainsthe countryhad enjoyedin povertyreduction.However,this setback did flot deterthe gov€mmentfrom intensifyingits campaignagainstpoverty. It st.engthened social safetynetsto respondto the needsof the poor. It adoptedmeasuresto increasethe accessof the poor to food and essential healthandeducationservices.

v

SSNprogrammes havenot beenableto achieveas muchasit shouldbecause ofsome flaws in programmeimplementation. It is necessary that programme implementation be improvedto bettertargetthosein mostneed.

v

ImprovingSSN programmeimplementation can be donethroughextensive informationdissemination campaignand intensivemonitoring.Particularly on the monitoringissue,the .ole of civil societyorganisations shouldbe considered seriously;a participatory monitoringsystemwouldensurethat the SSNprogrammes reachthetargetgroupsasplanned.

v

Thereis a needfor the Govemmentof Indonesiato look beyondtheseSSN programmesand start to think about long term and broadersocialpolicy programmes. Attentionmust be focusedon the effectivedesignof a social welfarepolicy for lndonesiaas it movesftom what might bi a prolonged eaonomiccrisisto a hesitantrecovery.

v

Thegovernmenthasund€rtaken stapsto helpSMEs,suchas initiatingmajor reformsto improvethe policy environm€ntfor SMEs.Morc stepscan be takento address the constraints on SMES.Recentregulationsandrestrictions imposedby localgovernments area concernaswell aschangesin the policy environment resultingfrom decentralisation

v

NGOsandcivil societyplay a crucialrole in povertyalleviationin Indonesia. They have initiatedand implementedactivitiesto complementand support the variousgove.nm€ntprogralnmes. As manyNGOs showtheir capabilitv in planning anddelivering SSNprogramme. moresyslematic effoni should bemadeto involveNGOSin theseprogrammes.

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Co{'ltry Reports:

in lndonesia

Sources Ehtishamalld Lue Leruth; "Indonesia:ImplementingNational Policies in a -A.}|mad, Decentralizgd Context- SpecialPu.poseProgramsto Protectthe Poof'; Inte.national MofletaryFund,June2000 Bank;"AsianDevelopmentOutlook2001";2001 AsianDevelopment AsianDevelopmentBank; "CountryAssista[cePlan (2000-2002):Ifldonesia",January 2000 AsianDevelopmentBank; "Country AssistanaePlaq (2001-2003)iIndonesia",August 2000 AsianDevelopment Bank;"CountryOperatiooalStrategy:Indonesia", March2001 AsianDevelopment Bank;"Iodonesiar CountryEconomicReview",April 2000 Decomposition, Asra,Abuzar;"Povefiyandlnequalityin Indonesia- Estimates, andKey Issues";AsianDevelopment Bank Asra,Abuzar;"Urban-RuralDifferencesin Costsofliving andtheir Impacton Poverty Measures"; AsianDevelopm€nt Bar* Chaudhuri,Shubham,et. al. "AssessingHouseholdVulnerability to Poverty: A for Indonesit';World Bank,June2001 MethodologyandEstimates Tubagus;"Globalization,PovertyandEquity in Indonesia";Center Feridhanusetyawaq for Strategies andIntemationalStudies,Jakarta;November2000 Grootaert,Christiaan;"Social Capital,HouseholdWelfareand Povertyin Indonesia"; WorldBank Haryedi,Emmanuel,"Microfinanceand the Poor: SomeRealityChecksin Indonesia"; ManilaSocialForum:AsianDevelopment BankandWorldBank,November1999 Islam,Rizwanul;"Indonesia:Ecoromic Crisis,Adjustment,EmploymentandPoverty"; Intemational LabourOrganization, 1998 lslam, Rizwanul;"PovertyAlleviation,Employm€nt,and the Labor Market: Lessons fiom the AsianExperience";Asia andPacificForumon Povert],:ReformingPolicies andInstitutionsfor PovertyReduction:AsianDevelopment Bank.February2001 Pdtchett, La et. al. "Quantifying Vulnerability 10 Poverty: A Prcposed Measure Appliedro Indonesia", World Bank,undated

Co.'tEy Reports: Poverty ih Indoneria

Radelet,Steven;"Indonesia:Long Road to Recovery";DevelopmentDiscussionPaper \o. 722, HarvardInstilutefor lntemationalDevelopment, HarvardUnive.sity;June 1999 Raviez, R. Marisol, "Searchingfor SustainableMicrofinance:A Review of Five lndonesian Initiatives",Development Research EconomicsGroup,undated Robilliard,Aane-Sophie, et. al. "Crisis andIncomeDist.ibution:A Micro-MacroModel for Indonesia";WorldBank,June2001 Said,Ali, et. al."The ImpactofEconomicCrisison PovertyandInequalityin tndonesia,'; Symposium on PovertvAnalysisandData Initiative(PADD: PhilippineInstitutefor Development StudiesandTheWorldBank Institute,April-May2001 Setiawan, Balti; "The Poor at Risk: Survivingthe EconomicCrisisin Southeast Asia"; FinalReportofthe Project- SocialSafetvNet Progamsin SelectedSoutheast Asian Countries.1997-2000:Centr€ for SoutheastAsian Research,Institute of Asian Research, Universilyof BritishColumbia. poverty Sjaifudian,Hetifah; "Increasingthe Transparencyof Govemment-Sponsored Projectsin Indonesia throughCommunity-Based Information";ManilaSocialForum: AsianDevelopment BankandWorld Bank,November1999 Sumarto,Sudarnoet. al. SafetyNets and Safetv Ropes:Who Benefitedfrom Two - The "Poor" orthe "Shocked"?:WorldBank,undated Indonesian CrisisPrograms Sumarto,Sudarno,et. al. "Safety Nets and Safety Ropes:Comparingthe Dynamic Benefit Incidenceof SubsidizedRice and Public Works Programsin Indonesia,'; Third AsianDevelooment Forum:World Bank,June2001 Surbakti,Soedarti,et. al. "CountryPaper:Indonesia(PovertyDatapolicy, Management andImplementation)"; Sympoliu4on PovertvAnalvsisandDataInitiative(PADD: PhilippineInstitutefor DevelopmentStudiesand The World Bank Instjtute.ADrilMay 2001 Suryahadi, Asepet. al. "The EvolutionofPoverty duringthe C sis in Indonesia,1996to lq99-':WorldBanl,undaled Suryahadi,Asep, et. al. "Coverageand Targetingin the IndonesianSocialSafetyNet Programs";Manila Social Forum: Asian DevelopmentBank and World Bank, November1999 Warr. Peter:"Poveny Reductionand EconomicCrowlh: The Aslan Experience";A sla ard Insti

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' Coqrtay Reports: Poverty in Indonesia

World Ban( "Memorandum of the president of the International Bank for Reconstruction andDevelopment, the International Dev€lopment Associationandthe IntemationalFinanceCorporationto the Executive Diteclor on a Country Assistance Strategyofthe World BankGroupfor Indonesia',; February8. 2001

Co{htryleports:eove*y ln tnaonesG

Annex:Tables Table 4. Percentage andNumberofpopulationBelow thepoverty

Percentage oipdp-u-ii?i6iTEiifr

Ntrmberof PoputationEEi6i

lhe Poverty Line

Urba.r 1976 1978

38.8 30.8

1980

2S.0 2A.1

1981 1984

1987

20.1

1990

16.8

Rural 40.4 33.4 28.4

1993

'|996

9.7

Table5. A

the Povertw I i^a aMilti^-r

Total 40.1

ofSSNP

I I

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10.0

26.9

9.3

17.1 15.1 13.7

9.7 9.4 8.7 7.2

11.3

.

Ru.al 14.2 38 . 9 32.8 25.7

Total 54.2 47.2 42.3 40.6 35.0 30.0

17.4 17.2

25.9

15 . 3

s in Indonesia

Govemment Foodsubsidies; OPK(markcr opcnuon)

I

urban 8.3

21.2 16.1 14.3 r 3.6

yu rce,sps,statisttAtAtb;;EAid;;;-iifr

Line(1g76_tgg6)

Quasi-gov'i NGOs Incd Comties securlty Markelopemtion; CRP(communify Dapurumum; DannaWadla recoveryprograrn); l'KSM Suaralbu; Peduli/StriYKSM cmproyment Padatkarya Padatkarya; CRP;PPSW-ICA; Wanu€Koboi generation (PKPS-PU;P3DT;Ltr.YUIMS YSM;PLSP PKH;P3T; PDKMK);PDMDKE; KDP (kecamaundcv. Prognm)PPK socralFotection Schola$hips; DBO DarnaWanita CRP;UPC; J RT,RW;Bunga i(subsidyfor PPSW;cIRLll SerojaKop€rasi school PKBI I schoots); K5 grailq health I ] scnlces: I nutritional I seMces;gmntsfor hospital;PMTAS I Guonlenentary ] feedinglor school I children) SMEs KDP; CRP;PEKAPEK; KSI{/CBOs PDM.DKE YAKKTM crafr tia an, 2001: Compitect fon;;ious

sources

CountryReports:Poyertyin Indonesla

Table6. FundinsAllocation on for SSNPro TyPe

FoodSocurity 'I OPK '! Fanning subsidy t Fisheries subsidy

Agencig R€sponsible

fiscal for the 1999/2000 Donot GOI (millionRo.) (tr|illionRp.)

Dept.ofsocial AIfair Dept.of Agriculture Dept.of Agriculture

SocialProtection t Education Dept. of Education DeDt.of He3lth I Hcalth JobCreation Dept. of Udan ard 1,000,000 ReaionalDcvelooment SMEs Bapennas/D€pt.of 792,009 Intorior Total Fundins 3.996.489 So rce: Setiavan,2001

F I F I -

I

rl rl rl I I

Total (millionRp.) tt7,603

654,880 880.900

1,000,000 792,009

t.647.536

5,644.025

CountryReports:Povertyin Indonesia

Program Box 1. MainFeaturesof the Decentralization Administratlve a5Dects: Law 22 of 1999 devotves m6t functions of governrnent to lndonesias regions-- 28 tt ovincesand over 350districts andcities. The key exceptionsare national defense, internationaLretations, justice, potice, rYFnetary,devetoprnentptanning, retigjon, and finance. The dist.icts must pedorm important functions, inctuding heatth, education,environnEntaland infrastructureservices.The Provincehasonly a minor rote, rnainty in coordination, and baclstopping districts and cities that cannot yet perform their functions - which ntay be an opening for an expandedprovinciat role. The Province r\ill also continue to perJormdeconcentratedcentrat task lmplernentingregulations further spcjry the remaining roles of the central and provinciatgovernrY€nts,including settjng standards for seMce deti\r'ery.The central governtrEnt can annul regional bylaws and regutationsthat conflict with national laws and regulations,but the regionscan appeat to the SlprefiE Couri againstthe cente/s decision. The intergovemmentalregjonal autonorry advisory board with representativesfrom the center and the regions is to advise the Presidenton issuesconcerningdecentralization. increasethe Flsc.t aspects:The legatfrdrn€work(Laws22 and 25 of'1999)MLIdrasticatLy regional shate of general governhent spending. Preliminaryestimates suggestthat when decentralization is fulty impLenrented,the regionsMtl spendsonE 8 to 9 percent of gross don€stic product (GDP),or wetl over .lO percent of generalgovernltEnt sPnding, and over by the districtsand cities. doubtewhat they spendnow.The bulk of this witt be controlLed The center will share sorne of the resource revenu€s with the regions -_ for 2001 arnountingto some'1.3percentof GOP-- but this witl only benefita few regionswith For rnost regions,the generalgrant M{t be the ftlain sourceof rev€hues.This grant wilL be a minirrum of 25 percent of centrat govehn€nt revenues-- sonle 4 percent of GDPfor 2001. The generalghnt Mtl be distributed by a fonruLa that has sofi€ equatizing etefiEnts, but guaranteesa glant at least eguaLto the recurrent and developnEnt grdnts received in the p6st -" irrespective of other lncorne. The equatization forruta does not adequately consider expenditure needs for minjtnal seMce provision and thus, Poorer the centeraangrant speciatgrantsbut the Furtherrnore, reglonscoutdbe shortchanged. arnounts are smalt gi\€n the current budget eN4ronrnentand lheir attocatlon has been given tittl€ attention so far.

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Regionalgovernnpnh will al5o be allowed to borrow, but borroMng will be tinfted by a fornnrLafor total debt, by individual Ministry of Finance(l'loF) approvalfor foreiEn loans, but Mthout the guaranteeof central governrnent.The GovernrEnt can Pt|t further limits on regional bofiowing, and plans to prohiblt reglonal borrowingfor FY 2001, except from the central government.Bankand other donor lending to the re€ionsMtl for now be abte to makeuseofan existingonLendjng mechanism. and procurernentof the covernment has issuedregutatlonson financial management regions.Theseregulationswoutd atlow the regionsto largely determine their own financiat nEnagefilent, accounting, and procurement system within (broad) guidelines from the central government.This arangen€nt nsls a weak€ningof the countrys fiduciary enironment, and a fragnEntation of the rnarket for governn€nt ptodlrefiEnt, as local procurenEnt regulatlonscould favor tocal suppLiers. hasrevisedthe law 18 of 1997 To strengthenlocalown revenuesourcesthe Governrnent on regional taxes and levies, The revis€d law atlows regionsto estabtish taxes as tong as they obey certain principtes. while these principles are sound,the weak rnonitoring and enforcenEnt capacityof the center rlsls a return to the pre-1997daysin which local taxes becarnea seriousbarrierfor internaltrade. Source:World Bonk, 2001

Coont! Reports: eoverty inl nO-nesla

Box2. The Scholarships and crantsEogram (SCp) Tm.ffi:i;Jl:.Tl,"l"1"fi_..*lTjiry,!*,.thg

=ilfl

.-. particurady snrdents ry9.FJ. iunior ;;

ffi:",ijTl,.

llll:; ;*l*1s:!":E!-ry,1 i;;qd;j-;ieil;, i,#'i;#:'efi$# iJHg,?l#i:i ffi,,?,fml,l:*t::, *:,::,.j::lllj::ngg"i:,-,:-iil;, ;d;;iilft ;:ffil;?,"';i 1H'.1."frlil,"Tj i:#lT,#H'n."ly;"lf*g;-:= :::."rj##-;;#';J:11iffi il:i?ilHilt1: ffi1"*"';ff*:,'":* f r::':5'-sd :ff*tl.*:Hil." chann€led directly to ::L::r.::",:lrsi recipients ttrrougi;the ;st sFiisi-,ffi;iiT;THl,,ilTi*,:Hffij offi.", mort tnnouutiu" ,*""ur.l rect svstem rof clBnrFling resourcesto pupts ana scmob. The) SGp introdxed monitoing systernsand schoolconrnittees ro sareeuardrran.Er.h^,

R$ults: Through.theSGp,each year about 4milhon

" sclElaBhrpcand 130,m0block gran6 nave been

t*itt'noe r,inains ri ;,;t r.-,in iG,"e.ap",."nt ffiRfi':f;::"1: :'lf#";L:.'"'lf iJ".Tf'"*'Y p",11t

eo cerc.* iH;![l[:H:i;":N:ffH "im;tilil;1"#;'.,?1111i,",i:::il*j#tr

nbmronngsystemsug8ests few probtenEwirh.misdirecbonor improperuseof fu-nii ina.gr.o ,r...o ,n . targetin', Lessonslearned include the need to develop *nu. iror,""ir* i.-i""otiu"n?,-go*rnrr=n, orlamzatiomand strengthenlocal caDacv to n|anage.thrs type of project. , channeringprocedurehassince beenadaptedand exten&o uy thJbovemrieri;;;; The SGp drrect tunds ;;;#;h."f, burce: AsldnDevelopmentBo/1k,2Ao1

Lao People'sDemocraticRepublic

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PovERTy tNLAoPEopLE's DEMocMTtc RepuaLrc PAUUNEREBUCAS .t t.

Introduction

*:ydv-:l,poy""y andNcos in oisht Tq*ion initiativesby govemment *: ff'^l.-l: Plutrppjnes, Indonesia, Cambodia, Vieham, Burma, Lao,Tha aia, ::r,rfl. ano Easr"_"I11".f"":ty: I tmor. I he_study alms to present

a comprehensiveview of poverty situation and the responsesto poverty by different sectorsin the eight countries. Also, it aim; to comc up wth recommondations to developmentNGOS regardingareasof ilterventions or collaboratlon with lowads povefty red;ion. The study mainiy rrseJ.ecoooaryOat" t9':^Tents lir-l"rq*]*" {wnttendocuments, books.andintemet)

on LaoPeople,s_Democraric Republic. Ir is dividedinrosix pans. Il: rne L:-t"l-!"yr:: rrrsrpan ls the tntroduction

The secondpresents the demographic profileand povertysituationin Lao PDR. Thethird discusses tt" rnaiocau.i Ji poverty. The part.featuresthe responses to povertyby the goverffnent,im#aiiJ,iar uno tocut 3,:1h :\rn-rs.Incluolng tntemattonal donors.andthechurch.Thefifth presents an assessmenl oy somerDstltuhons and analystson the multisectotal respons€s, particuiarlythe govemment's, to poyerty.Thesixthpartpresents thesummary andconclusior,.

2.

Profileof LaopDR

2.1 Geographyand Demography l-aos, Democratic Republic(LaopDR),is an independent .ofticiallyLao People's state c€ntrallylocatedin Southeast Asia.Considiredas Sourheasi esia.sonii ianatoctea mtion,LaoPDRis bordered by Vietnamin theEast,Chinain theNorth,Mianmarrn ttre \onhwest,Thailand in rheWest,ard Cambodia in tireSor.rth. Tf," uiJ farg"rt ofLaosis Vientiane. "upiiil "iry Tlr:,colnr)'.9s rotalareaof 236,800kmz(gj,429mir). Its roralpopulation _a rs 5.22

anannuar ofabour z mirrion. srowth ruorliJ#ioinn l rza;or 3,:"^ill^oll'.1t'r:,yith .Depeoptellve In the mountainous resions;. the remainder

live alongthe Mekongfuver aodits branches.Morethan80 percenilivein ruralhamlets A lery mountainous are4 Lao hasa rich andvariednaturalresource base.It is the coreof Se economiccorridor,,connecting the subregionaleconomies.Irirna.iiy ag.icufturat, tt count y hastimber, coffee, andtin as its maln exports. " \lajor languages spokenby the popurace areLao andFrench. The rnajorrerigionin the csrnny is Theravada Buddhism

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Co{rntryReporB:Pove.tyin Lao Peopte'sDemosraticRePublic

Table 1. Demo 9l,429 sqmi

Total area Populalion Econo

Timber, coffge,andtin Ma'or MaiorReli

2.2 Poverty situation l,ateststatisticsshowthat the country'sGDP is US$ 1.4 B. Its GDP per capita,on the otherhand,is US$ 330.5.With a Gini coefficiefltof44.4 (1998),it ranksl21s out of 162 countries.Povertyincidencein the couotryis at 38.6%,with 26.9y"in the urbanareas and4loz in the ru.al areas. Life expectancy at birth is 55 yearswhile infantmortalityrate(per 1000livebirths)is 75. Male adult illiteracyis l8% while femaleadult illiteracy is 40o/o. Only 18% of the populationhaveaccessto adequate levelof sanitation,andonly 32%o ha'reaaaess to safe drinkingwater.On the educational front, Lao childrenundergoan averageof lessthan rhreeyea$ ofschoolingandqualityofeducationis modest. Table2: Socioeconomic Indicators

GDP GDP GIM coefficient

Human

index

Pove.tyincidence Urban Rural Life expectancy at birth Male Female -{duhIlliteracyrate Male Female lnfant mortali e r l 000live births

u s $ 1 . 4B ( 1 (2000 us$ 330.5 l2l"' outof 162(2000 38.60/" 26.9 41.0 55 years(2000)

18% 40yo

.ADB Country and StrategyPrcgramme2002-2004reports,the poverty incidencevaried significantlyacrossregionsand provinces,as well as betweenurbaa and rural areas Please seeTable3 for poveftyincidenceacrossregionsand provincesat the annex). The incidenceof poor and ultrapoor(thosepeopleat 80 percentor less of the food pove.tyline) is highestin the northerflprovincesand lowestin Vientianemunicipality. ln the period1992-93the incidenceofpoverty in the northwas58.4. It declinedslightly

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GountryReports:Pove.tyin Lao eeopte-ioem.raUc nepOtic

in 1997-98 The-southern regionhadthe seoondhighestproportionofpopulation ::25 rn poverty -i\'1ng with 45.9percentin 1992_93 and 38.4in 1997_9g.The centralregion iad rhethird highest,with 39.5in I9g2-93and34.9percentin 1997_98. {s theabovestatistics indicate,the reductionin povenyacrossregionsandprovrnces was rot uniform. For instance,in the Vi€ntianeMunicipality,rhe-percentage of the poor lecreaseclat an annual rate of 13.9 pe.cent,whereasin the northem region, the re.centagedeclinedat an annualrate of 2.1 percent.In the centralandsouthemr€gions, fie percentage ofthe poordiminishedat annu;lratesof2.5 and3.6percent,respecrrvely.

+ il

Icross provinces, HouaPhanhin the northwasthepoorestprovince,with 74.6percentof is population.living in povertyin 1998. Othe.pro;incesthat exceeied50 percentofthe Doverty incidencewere Special Zone Saysomboon,phongsaly,Louang Namtha, Oudomxay,and Houa phanh. (See Table i for percentage'ot ty ."g,on" uno iooi Drovinces at the annex)

t

Not only did the povenyincidencevary in the regionsand provinces, but alsobetween urbanand rurai a.eas. The urban-ruraldisproponionin termsofpoverty incidence.was large(W^orldBank, pRSp 2O0l). In tgtT_i9g8, the incidence'ofpoveny was zO.S areas,and 40.9 percentfor rural areas.Althouih .urar po\,erty, f:::ii^l:1,:r,b,1 panlcuralyrn the northemarea,is extremelyhigh, rural poverty hasbeenreducedmoie drastically. comparedto urbanpovertyduring the 1997_i99gperiod.Ho**"r, ,n"orn" 0rspropontons havewrdened. TheGini Indexestimated percapitaconsumption \rasJ5 7 percenr in thisperiod,compared to 28 6 percenr in 1992_i9qJ.

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T'herewas.clearevidenceof wide gapsin accessand quality of servicesberweenthe rlcnestand the pooresl(ADB. I999) An estimated three_lold qualitygap in social ,ervrcesprovisionexistedbetweenthe rjchesrandpoorest For education,net schoolenrolmentsfor the ricbest/poorest were ?g percent/44percent

28.percent/4 percent for secondary schoots. Onryone :::^:T lll"? T!:ots..nnd percent or Inepoorest lamtliesmadeit to thepost_secondary schools

liom rh€ poorestfamiliescompretedprimaryschootcompared ::.fl:":r: :: :!1,q1"" wirn one-natt tor tl]e nchest lamilies There was shortageof textbooks ano Detter_ qualifiedt€ach€rs in the rural areas.Studentperformance r"L, *"r" lo*a, in in" poor"rt provrnces, alongsidehigherconsumptiolralesand iower enrolmentcharge. As a result, childrenfiom poorer families had little accessto skills training ,nJ'Jrnpi.ry_"n, o. income-generation opportunities. Pahems ber\aeen lhericheslandlhepooresr lor qualiryhealthservices arequitesrmilarlo eoucaronservrcesunry E percenlof the poorestusedmodem healthcare services, comparedto 22 percentof the richest.About 90 percentof the poorest used selt__ nedicatiofl Lack of safewaterandsanitationservicesin a.a u."u, J*t ituted to high prevalence ofwater-bomediseases amonsthe Door

3. Determinantsand Causesof Poverty The following are determinantsandcausesofpoverty (Lao PDR I-PRSP,2001) ofpovedy is the degreeofdce self-suficiencyThe primary 3.1Theprimarydeterminant indicatorof wealthis livestock. 3.2The secondaryconditionsof povertyincludelack of arableland; livestockdisease; Doorhealthihirins out oflabor; lackoftechnicalklowledge,skills andaccessibility; ofshifting cultivation insufficientclothingandpoor housing;prevalence 3.3The most commonlycited causesof povertyinclude(in order of prioriry): a) land arebeingmade, to payfor rice while improvements b) no cashinvestm€nt Droblems. and degradation, andpests,e) environmental i,1liu"sto"k disea.",d) naturaldisaJters credit q lack of*ater fot potentialagricultuml productioq g) difficult accessto rural 3.4Other causosinclude: lack of village leadership,relocation,insufficient health too manychildrcn,lackofcommercialskills,lack ofgovernmentassistance, services, andtheft' low pricesfor agriculturalproducts,opiumaddiction,IIXO contamination, or gapsin basiceducationandhealthservices,andby v€ry poor 3.5Seriousweaknesses rural intastructure including inigation, market accessroads, and electricity make rufal poveny worse. and low populationdensity tenain, temotesettlements, 3.6The country'smountainous serveasbarriersto accessto andcost-efiicientdelivery ofpublic services'

4.

TowardsPovertyReduction Responses

4.1 Government 4.1.1 Macroeconomic Policy Framework their economicstalethat TheLao PDR govemmentfocuseson stabilisinganddeveloping this objeative, the interestsandbenefitsofthe Lao PDRpeople.To accomplish augments policy: the substanceand value of macroeconomic thJ govemmenthas accentuat€d maintaininga low inflation rate andpromotingdomesticand foreign investments Policiesto improveproductivityand gowth in poor regionsshouldbe directedtowards the componentsof the underdevelopmenttrap Measures that improve educational attainmentand humancapital formation shouldreceiveffst priority not only becauseof their direct effect on labor efflciericy, but also becauseofthe role they play in improving the effectivenessof inv€stments in infrastructue. The govemment emphasisesthat padicipation and inlluence of beneficiariesare necessaryto imptove the provision and oualitv ofeducation andinAa$nrcture seryices

Cor,rntryneports:pove@Gopiopte,-ioelnocratiinepuOtic 4,1.2 Socioeconomicplans Ihe gove.nmentconsiderssocioecono,mic plansand their accompanying budgetas the

$i+:iilJffi:i':TJj.:iil1'fJ'""".T*xffi::i:li:::"": il*,T:[n5 planning for povertyalleviation 4.1-2.1 participation

five-year-deveropmenl ar: rheresultof lenethy, but hishly :5"i::^ l?I! rnreracrrve p.ocesses l]11r. sincepolicy_making ofdialosueandassessments, pDR

i"ntie Lao is tundamentaly basedon coisensus tuitdi"s i; ;;;;;;;,,i""i",ii"*li"o or"r", process

in buildingenhancedinstitutionalcapacityat if," prouin"iuiuni list.ict levels, thegovemrnent car ed our an in_deDth pant"li_*".y pt""ri,ig in-u i,to, p.ouin"" (Bolikhamxay).lt is now extendi;g it "^"r;i" and Lter to to Houa phanh province other provinces. A potentinstrumentfo. rural develo

j:,T,:3:,"i"JJ[T",j:il"l,:"lll,il: ..;"*;; ft ff, 9*"1o11 ;;;":fi farms "no^n," l1 to identifythedynamics of rhedevelopment process provinces andiistri"t,

fauo., andto coherently plan adequate ,".ponses io tf," p"opl","u.piruiiori"i"""*pr"rr"aty lherrcloseinvolvement in rheplanning process. 4-1.2.2 Decentratisation

I I I

r| I I I I I

*'t":' piannins conrexr ascapacirv ffJ":ilTii'ilT,Hi:T';ffi l',Y*i9::,ln: u""o,i,,g

.t,"r"'j.',;ii; "r:U:;JJ"#ft ilii;;i.,:'#',;:,"#f fi il"il:l:X: arerequi'ed to setup

villages arethenewimplementing unil

jiljlJtJ sc.urrnrse thedevetopr"n, o,un,,n",

evaluatioi systems to

At the villageievel,thesevillaeescollect dataandobservethe iiving conditionsof each lamilyin orderto categorise rh-em intowealthy.self_sufflcient and lamrles before ioor making.orlonnulaling.apran The resuhing pr";,r,h"" jr."id; ?u"ni""r'orl" *,,r n *r,i.n " prioritiesaccordingly'the causesofpoverty, asullagesseethem,mustbe understoo:l

thisefficientiv, i' ..a".'i"ia*rv "p*"ny. ::r::il: li:":,Xffi':f;Tji:tlX"".13

Thegovemment is thusconsciouslv Dr( "uono^-up'pru*inf ;;;;;;;;i"l$:trns?n

institutionalised p'ocessto ensurethat

fsllt{.tr,"tt1"d;;;;il;;",",7#T:lil,T*.fi :,:'",hiff l5l:'ilili; r"n . ,O"cial€mphasis on pranrung, rmptementation,

bl;;lX,j""

monitoring an
+

+ I E-

T rl I I -

F t I I

t I

I I I

CountryReports:Povertyin LaoPeople,sDemocratic

tc

4.1.2.3 Mass Organisations Ihe nationalplanningfor poverty alleviation,both h its participatoryplanning and implementation dimensions, is supportedall overthe countryby an extensivenetworkof "massorganisations". Theseorganisations carryout mostofthe panicipatoryactivitiesat grassroots level, work closely with the populatiorL and structure and mobilise development eforts at the local level.(Note: it is not mentionedin the reDortwhethet theseorganisations weregovemmenr initiatedor independenr ofgovemmenlJ. The Lao PDR's massorganisations,asthe coulrtry's main participationfiamework, have a strategicresponsibilityin the achievementof the identifiedsocial goals.Institutional strengthening, the improvement ofthe individualcapacities within the organisations, and the achievementof a wider social outreachwith the view to lessenpov€rty through participatory communitydevelopment arethe mainrequirements neededto st.engthen the massorganisations, especially in therural areasandto empowering thegrassroots levelto mastertheir own socioeconomic developm€nt in view of pgrmanent povertyreduction. 4.1.2.3.1 LaoWomen's UnionoWU) The LWU concentrates on heaith and educationactivitiesat the grassrootslevel to promot€incomegeneratingactivitiesand all economicactivitiesin which women are involved,especiallyin the productivesectorssuchas livestock,fishponds,and cottage industries. The LWU ActionPlan(1998-2003) hasfour mainthemes,namely: L policyguidelines genderequity;2. capacitybuilding andhumanresourcedevelopment; and 3. lq_lvomen childrenand womenrights;and 4. povertyalleviation.A humanresourcedevilopment (HRD) prograrnmeformulatedfor the L\Vu should yield the following poverty alleviationimpact:50oZofwomen in rural areashavingcompletedbasicliteraryilassei; morethan 5070of womenin rural aJeashavingbasicprimaryhealthcare training; and 2000 wom€n having incomegeneratingactivitiesthough vocationalskills tr;ining counes, 4.1.2.32 TheLao YouthOrganization (LYO) The LYO aimedto developyouth leadershipat all levels.The immediatetargerwas ro have50 percentofthe youthcommittees at provincial,district,andvillagelevelsin place andoperational by 2001.The mainpurposewasto enhancqtkough skillsdevelopment, informatiooandparticipatoryinvolvementin all levels,the role oithe Lao youth in the shapirgofthe country'sdevelopment processandfuture Froma povertyimprov€ment perspective, in tems ofinstitutionalcapacityandimproved capabilities,the govemment's programmefor the youth included2,500 youth leaders trainedat.all levels,morethan4,000youth possessing skills to makeall kindsofliving. This would contributeto decreasing youth unemploymentand qeating wealth for the DeoDie.

Co6try Reports:Po\€rty ln LaoPeople'i DemocGticRepubliq

I I I I I I I I :

I T I I I I I I

{ I 2 3.3 The Lao F.ont for NationalReconstruction(LNFR) Thel-ao Frontenjoysin all partsofthe countrythe highestrespectfor its genuineimpact on localdevelopment, for the prestigious .ole it playsin increasingsolidaritywithin Lao PDRS multi-ethnicand pluralisticreligious societyand for its active involvementin definingandimplementing codesofethical conductin majorprofessional sectors. TheLao Frontaimsto improveits management andtechnicalcapacities to respondto the aspimtionsofthe ethnicminorities.At the sametime,througl its trainingand capacity building activities, the Lao Front contributesdecisively,especiallythrough rural development programmes, to increasingthe knowledgeandthe ability to dealwith rhe ethnicminorities,fo. foreignpartnersandnationalactorsalike. 4.L2.3.4TheLao Federation ofTradeUnions(LFTU) The aim of LFTU is to reg.oupthe trade unionsfrom the public as well as from the pnvatesector.Abouton€quarterofits members(76,000)arefrom thepdvatesector. In the Lao PDR'S planningcontext for poverty reduction,the LFTU is involved in promotinga nationallaborforcecapableof negotiatingwageand socialbenefitsissues, aadof responding to the growingneedsin mattersofmanagementandknowledgeofall rulesregulatinglaborrelations.Also"the LFTU aspiresto improveeducational levelsof laborersandemployees in all provincesin orderto increaseemploymentchances. 4. 1.3 Support Strategies Support strategiesare the strategicprogrammesand projectsthat the govemment considers essential from a povertyalleviationperspective andwhicharethe integralpans of its approachtowardsuplifting the poverty situationin the country.The following prognmmesarethe governm€nt's tacticalagenda: 4 1.3.I TheIIXO Decontamination Progamme Underthis programme, thegovernment aimsto decontaminate regionsaffectedby tXO. -A.Jler 25 yearsafter the war, the severeUXO contamination still affects15 ofthe 18 provincesin Lao PDR.Thesel5 provinces,involvedup to nou are50 percentofthe Lao lenitory. The UXO contamination hashadnegativeimpactson humandevelopment and thecountryaswell, it hasbeencausinggreathumansufreringthroughkilling at a steady rate. 4.L3.2 TheDrue ControlProgramme Becauseof the rampantpovertyin the Northemregions,opiumproductionhasbecome both a symptomald causeof povertyin the country_In this area,it is impossibleto povertywithouteffectivelyaddressing eradicate andfocusingon the problemsregardirg oprumrssues.

:Arr?yReeo.ts:@

of opiumasa basicrequ,rement to "lo.lr," o,".atlction

intr,"l'o,iri*iiil ;#ffi ,"ri, ff li:H:itrij: 315:::r,";;'.1:,lou"nv ";."r" u*lii,"ij;ffi;;;;;;i,;,ii :"".""o*,i" :.r,1*T:rryobkined froml": "r:* the :l::,1y:T elimination oioplrm cuttivatl ion and f.om the reductionof drug abus€in the *;;:X.:,:*".::".I:l1l_l? courltry.

In 1996,the govemm€ntrevisedits drug ^controllaw (Arricle ll5 of the CriminalCode cn DrugTrafiickingor possession)_ and'for

rhen^, ii.", tii, i"" .riiiiir,pron,un"a /a,spositions of opium Thescales for penalties.h"r. u""" 1""r""*j'",i0 *^:.lt:91"':l for precursorcontrol. The :l-"j- 9_:"",introduced_ d;;;";;;;; lr"" rnu,n effiffi"altemaliv" development, community_based fi;;;;;;;#oi], ana raw 4.1.4 Other Supportprogrammes N?tignalPtpg!4!iala4=dDeveloonrent

sorvins* issues rink"d ;-"pfi;;#?"";,fl

';.,ion'r*'iii''i1##.H:

HMAIDS/STDControlprogramme er to preventrhetu.h". ;;;;i;il;';f"ilP-nasrses

theresponse to bepurin place

rii::Tll """,rp"dit#*i#iT#ft :ifiltiff Uitr".:iffi provision orbasic inrormation. .au"u,io" p,oe,".i;, ;;l;:,ifli.f;}::il,the * I t +:

ffi?ffiffiffi,11d;:sses #:*E^aq=jtla!€gy

-

major issues such eenaer asgender equalitv,

.emefisl::s.lhe tink betweensustainable dev€lopments

thoush or i:i;::T'::: H::lif"'*::i::"ient "'orosi"ui''lnus"'"n' Rregtes ot the govemment "fi are underpreparation

asofnow.

5.

Critique/Assessment of GovernmentStrategies

Pove.tyis linkedto limitedaccess to n

L"# :ff1':[: ; ffiffiff::i",H ;fr ii*#i:: fitlfi ;!;:ll':l "TTil

ff l;:u*:t' ff 1" T,"::;.:1,' i'J*lril; i{"",'t il?T !:r {f frl"i::: prioriry, * u"' siven 'i"r; "!"i*,i"",i;i

::ti:ilT"[:.iT ;:::i"ff"ff"#J*i

r humandevelopmenr hasbeenslow Despitesubstantial ,tjigl::: supportro ruman rmprovement, its key indicators aream(

:H"f:1il::fj"i,'rix,,,f ":;"i:::lil1rTj{+l:,?J.T'f ;tx#::iffi T J:"f ,",Tifi ."*i"esr'"sJrenei,,;;ffi ;:dJffiff :':l*Xl,;::1Ht*;,*f

Countryneports:povenyin LaopeopleliOemocratic Repubtic is insufficie to.payterchersand healrhworkers Targeringrhe poorest :!:^:-l-"l1lli1: areas nasnot-beensuccessfully done.thus.therehasbeenno increased enhancemenl of rneseareas.Unsustalnabie expansionof_physical assets at the expenseof adequate -be operations andmaintenance budgetsshould avoided.

i t T T t I

I

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in managingand enforcing environmentalsafeguards.Rapid 1:*:.::r_*_]^11i" popuratrongrowth and resource_based progressincreasethe need for sustatnable management of naturalresources Privateinvestmentsand economicintegrationcan help reducepoverty. The greatest

ej:nomicopponuniries hasoccurred in theMekoniriver

comdor, nfl^"::]"^:Tg:i,lq wnere tne pnvatesectorhasdeveloped dueto accessto domesticurbanand intemationai marKersrjalrrersto pnvareinvestment and economicinteg.ration must be dismantledto r€ducepovefiyandachievedevelopment goals. Thegovernment's development goal is to eradicate absolutepovertyby 2010. Threekey components of its po-venyreductionstrategyare rural development,human resource

panicipation. Mostpoverty is ruraruasdJ, ieflectio!in panro* :::,:Pf.::1,,-T1.ry9]! agflculurar productrviry poverty reduction

through the enhancemeit of rural productivity complementssustainableeconomic gro*th in Lao pDR. Improved

is a majorwayto increase rialincome., I ro"ur,urt"t, :fl?:]:i:illlSjlo*iry anolavor theemergence anddevelopment "r"ut" ofnonfarmactivitiesin thepoorprovinces.

An. improvementof labor productivityin agriculturecan also free labor tbr nonfarm activities.The expansionof nonfarmactiviti;-in rural areas if,o"fa ,"rg", p.irurify ,f," smalland micro enterprises wherethe scopetbr economiesof scareis rimited.such a development is a conditionfor the transitiontom subsistence tol ,oj"rn sectorandfor a morebalanceddevelopment. "g.i"uttu." Importantpolicy implicationsfrom the analysisinclude: L EconomicgroMh hasplayed

role in reducins poverryin LaopDR;2. n*;;;;

l,*llTl1 ;,?;ilas a morc aovantageous lmpacton poornearthepovertylinethanlhosefar belJw thepovertyline; ard 3. Theproportionalbenefitsofeconomi.g.o"tt ."""iu;J by ,i" ii"rr"i"tg."u*. ,nun thoseofthepoor. on theaverage, economic iise benefit"a tr," irriun,no."ir,'""tl," ..ur ar9as.

6.

Summaryand Conclusion

6,1 Summary TheLao PDR considered a landlocked natioq is borderedby Vietnam

in th€ east,China inihe north,Burmain thenorthwest, Thailand r" ir," *"rt, LJ C"iiolu'in',n" ,ou*,. with atotallandand\laterareaof234,800 km,, ir, "upnuriJi".!!r,-iiv*i, v,.n iun".

I CountryReports:Po\rertyin Lao

le's DemocEticReDublic

The countryhas a total populationof 5.22 million, with an annual$owth of about 2 million. Majo.ity of its peoplelive in rural hamletswherethey engagein subsistence agriculture. The rest live in the mountainousregion and along the Mekong fuver and its branches.Major languagesspoken by the populace are Lao and French. The major religionin the countryis Theravada Buddhism.

F F F F F t

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The Lao PDR has a rich and varied natural resourcebase and is also the hub of the economic cofiidor linking the subregional economies. However, the country's mountainouste.rain, remote settlements,and low population density are barriers to ac€€ss to andcost-efficient deliveryofpublic services. An estimated70 percent of population is illiterate, and life expectancyat birth is 55 years.Only 18%ofthe populationhaveaccessto adequate level of sanitation,and only 3202have accessto safedrinking water. On the educalionalfront, Lao children undergo anaverageoflessthantbreeyearsofschoolingandqualityofeducationis modest. ln the last five years, the Lao PDR has achievedaverageeconomicgrowth of about 6 percentper annumandreducedthe incidenceofpoverty Aom 45 to 39olo.The incidence of povertyvariessignificantlyacrossregionsas well as bet\y€enurbanand rural areas. Povertyincid€nceis highestin the northem region and lowest in Vientiane Municipality. WhileeconomicgroMh hashelpedreducepoverty,thedch havebenefitedmorethanthe poor. Sustainingpoverty reduction through equitable economic groMh would bc a malor challenge. The govemment's goal is to reducepovertyby half by ambitiousdevelopment 2005.Aiso, it aimsto eradicatepovertyin orderfor the La6 pDR to graduateftom the rtatusof leastdevelopedcountry by 2020. It ta.rgetsbroad-basedeconomicgrowth of 6-7 percentper annumover the n€xt five years. The strategicapproachis to reducepoverty throrgh human and rural development,and people'spanicipation,focusing on: l. agricultureandforestry;2.education;3. health;and4 roadinfrastructurc. To achieveits ambitiousobjectiveswith limited financialand humanresources, govemmenr the needs to priodtise and phasein its poverty reductionprogramme. Participation, decenkalisation, and mass organisatiossplay an important role in the govemment's systemofplanningfor povertyalleviation.Thegovemmenthascarriedout pafticipatory planningexercises in differentprovincesin orderto empowerprovincesand districtsto identirythe dynamicsof developmentprocessand to ensurepeople,sclose involvementin povertyalleviationplans.The decentralisation policy increasingly guides rhe nationalplanningcontextas capacitybuilds up. The govemmentis giving its full attention to the prcvinces, as they are now becoming strategic units under the policies decentralisation The national planning for pove.ty alleviatiorL both in its participatory planning and implemgntationdimensions,is supportedall over the countryby an extensivenetwork of "massorganisations",carrying out most ofthe participatoryactivities at grassrootslevel, working closely with the populatio4 and sfucturing ard mobilising developm€ntefforts

T

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Co{rntryReports:Povertyin Lao People,sDemocreticRepublic

at the local level. Severalmassorganisations and supportstrategies, identifiedin this study,serveas essentialelemeltstg the government,s povertyreductiol strategy.All of these are very crucial in the development of the country and in the successof the govemment's goalof €radicating poverty. It is_.noted. that in order to stengthenand expandsocialprotectioq some oapaclty_ building initiativeswill be required.This would includeinstitutionalstrengtheningby encouraging_better coordination amonggovernmentagencies, civil societyorlanisationi NGOSand donoragencies, as well as public participationin all governmenteffons to reducepoverty.

6.2 Conclusion Z Lao PDR hasa rich and varied naturalresourcebase.It hasbecomethe hub of the economiccorridor,linking the subregional economies.However.almosr halfofits prople.livebelowthe povenyline because ofa numberoffacton, foremostof which is unevendistributionof wealthbetweenrural and urban areas. Z Givenwidespread povertyand low per capitaincome,the economicgrowth should.begiven priority, but assistance from the internationalcofiurury shouldhelpachievereasonable deveropmenr. Z The_main solutionsto poleny, in order of priority. include: resolverice cultivation-related-issues, in panicularincrease theamountofproductiol land; increaselivestock.holdings; solvelivestockdisease problems; providefunding mechanismsfor increasinglivestock holdingsas well as microfinancern general,more reliable cash croppingwith appropriateenension sewices, lncruotngroadsandaccessto markets,betterschools(buildingandteachers), improvedhealth,cleanwatersupply,andelectricity. 7 The solutions to poverfy affecting women specifically include skills _ for 9eve.lopnent income generatingactiviti€sand markeiingof producrs, family planningandbinh spacing,andrice mills to reducewomen,slabor in poundingrice. 2 Participatior\ decentralisatiorland the Lao pDR's massorganisationsplay an importantrolein the government,s systemofplanningfor povertyalleviation. Z Private investmentsand economic integmtioncan help reduce povelly. Baniersto privateinvestment andeaonomicintegration muit be dismantled ro reducepovertyandachievedevelopment goals. 2 Policy and administmtivereform must be accelerated, and institutionsand humanresources mustbe developed to realisethecountry'spotential.

CosntryReports:Povertyin Lao People'sDemocruticRepublic

N T I I I I I l

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I

Sources AsianDevelopment Bank;"AsianDevelopmentOutlook2001";2001 Asian DevelopmentBank; "Country Assistanc€Plao (2000-2002):Lao People's Democratic Republic;December1999 Asian DevelopmentBank; "Country AssistancePlan (2001 - 2003): Lao People's Democratic Republic;December2000 Asian DevelopmentBank; "Country Economic Reviewt Lao People's Democratic Republic",August2001 Asian DevelopmentBank; "Country Strategl, and Program (2002-2004): Lao PDR'; August2001 Freeman, Nick J.; "The Challenges Posedby Globalizationfor EconomiaLiberalization in Two Asian TransitionalCountries:Laos and Vietnam";DiscussionPaperNo 2001/40:World Institutefor DevelopmentEconomicsResearch(WIDER), United NationsUniversity,July2001 lntemational Mon€tary Fund and the lntemational Developm€nt Association; "Assessment ofthe InterimPovertyReductionStrategyPapenLao pDR'; April 6, 2001 IntemationalMonetaryFund; "Lao People'sDemocraticRepublic:RecentEconomic Developments", January2000 Kakwad, N. et. al. "Povertyin Lao PDR"; Asia and PacificForumon povertv:Asian Development Bank,February2001 Sisouphanthong, Bounthavy;"The BasicMMAP PovertyProfileoflao pDR'; Lao MMAP Project,IDRC;August2000 poveny Data Sisouphanthong, Bountha\,y;"WBI-PIDS Workshopon Strengthening CollectionandAnalysis Vientiane,Lao PDR'; PhilippineInstitutefor Development StudiesandTheWorldBan&Institute;April-May2001 UnitedNations;"ResidentCoordinator AnnualReport1999- Lao pDR ,; January2000 World Bank; "Interim Pove.tyReductionStrategypaper- Lao pDR,, March 2001 WorldBark; "Lao PDR SocialDevelopmertAssessment andStrategy,'; August15, 1995 WorldBank; "Lao PDR:PublicExpenditureReview- ImprovingEfficiencyandEquity in Speoding Priorities",February28, 1997

13

CountryReports:Povertyin LaoPeop{e'sDemocraticRepublic

Annex:Tables Table3.

Table4.

lncidencein Lao PDR

e ofPoor

RegiodYProvincer VientianeMunicipaliw Northern R€gion OudorILxay Luangnamtba Phongsaly Huaphanl Luangphrabang Bokeo Xavabourv

CenhalRegioD BoriloaftL\ay Vienlianeprovince Savannaliet Khamnuan€ Xiengkhuang Xavsomboom-SR Soulhem Region Saravane Champasack S€kong AtlaDeu

LAOS

ionsandProvinces

1992-1993

1991-$9a

Annual rale ln d€crcNse ol

24.4

t2.2 52,5 13.2

-l-r.9

58.4 51.I 60.3 68.7 78.4 62.7 63.5 30.1 39.5 10.6 28.1 45.1 43.7 5',t.3 45.9 43.6 65.9 72.2 45.0

64.2 14.6 49.4 37.4 2t.2 34.9 25.8 31.1 4t.6 34.9 38.4 39.6 35.6 45.'1 45.3 38.6

-2.1 7.2 -1.0 -1.3 -l.0 -:t.8 -10.6 :7.0 :2,5 17.8 -2.9 -1.0 -9.9 -3,6 l.)

-4.1 -9.3 -3.1

Philippines

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r

PovrnrySrulrroNrNrHEPHtlrpprxes, 1.

lntroduction

This paperis part of a studyof povertyreductioninitiativesby governmentand NGOs in eightASEAN countdes,namely:Philippines,Indonesia,Cambodia,Vietnam,Burma, Lao, Ihailand, and East Timor. The study aims to presenta comprehensive view of poverty situationand the responses to povenyby differentsectorsin the eight countries_Also, it aims to come up with recommendations to developmentNGOS regarding areas of interventions or collaboration with their respectivegoverffnentstowardspovertyreduction. Thestudyrnainlyusedsecofldary data(writtendocuments, books,andintemet). This paperfiocuses on the Philippines.It is dividedinto six parts. The first part presentsthe rntroduction.The secondpart describes profile andthe third, the poverty the demographic situationfrom the 1980's. The fourth discusses the main causesof poverty. The fifth teaturcs the responses to povertyby th€ govemment, international andlocalNGOs.The sixth presentsan assessment by someinstitutionsand analystson the multisectoralresponses, panicularlyth€ govemment's,to poverty. The last part prcsentsthe summary and concluston.

2.

Profile of the Philippines

,7

Geographyand Demography

ThePhilippinesis an archipelago, composed ofmore than 7,100islands.lts total land and waterareais 300,000km' with a coastlineof 36, 289 km. The capitalis Manila and the threelargestislandsincludeLuzon,Visayas,andMindanao. It hasa populationof around E0million,with an annualgroMh rateof2 2 o/o.More rhana third of thepopulationis young, below l5 yearsof age. Workingpopulationis only 60% of rhe total. Aimost 54Zoofthe peoplelive in the urbanareas. With regardto ethnicgroups,the breakdownis as follows: ChristianMalay 91.5%,Muslim Malay4%, Chinese1.5%, orhers,3olo.83oZa.e Catholics. 9yoProtestant, 5% Muslirn,Buddhistandothers,3oZ. The offrciailanguageis Filipino but mostpeoplespeakandunderstatrd English. lable 1. Demo Total area Population CapiLd Economy MainElpon Major Larguages MajorRelLgion

300,000lxn' 76.5milion (2001) Manila

AgnculturaLfudNtrial ElecEonics, Garmenls Filipino, Tagalog,Visavan Romrn Caftolic

I This casestxdy dlaws hcavily liom Aldabaand Tuano(2001)

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Couitry Report5:Povelty Situationin the Philippines

2.2 Poverty Situation Povefy in thePhilippineshasalwaysbeena rural phenomenon, althoughthe contributionof urbanpoverty to total poverty is increasing.More than two-thirds ofpoor householdsin the Philippineslive in ruralareas. The Family IncomeandExpenditureSurvey(FIES)repo.ts,basedon official povertylines, povertyincidencein the countryhasdroppedIlom 49.3 perceftin 1985to 36.8 percentin 1997',a declineofa totalof 12.5percentage pointsin 12years.However,povertyilcidence increased by 3.2 percantfrom 36.8 in 1997to 40.0in 2000(Pleaseseetable4 at the annex for details). High interregionaldifferencesin poverty incidencesexist. Among the sixteenrcgional areas of the Philippines,the NationalCapitalRegion(or NCR, the administrativeregion of the Philippines,comprisingMetropolitanManila) usuallyhasthe lowest poverty incidencein variousyears.The gap betweenthe regionwith the lowestincidence(NCR) and one ofthe highest(Biaol) was 37.5 percentin 1985,41.2 p€rcentin 1991and 47.9 percentin 1997. Recentprovinciallevel data on poveny also prove the exist€nceof widening disparities; UNDP (1997) showsthat the gap betwe€nNCR (Metrc-Madla)and the poorestprovince tom 48.7percentlo72.8percent(Pl€ase seetable6 at the ar|nex). Eomblon) increased While interegional disparitiesof poverty incidenceare high, greater intra-regional differences in incomeinequalityexist.The differences arevery slightfrom the gini figuiesof the regionsin 1997andfrom the year2000 high inequalitywithin regionspersist,with the inequalityof someprovinaesevenworseningsuchasthe gini in Bicol which, from 0.4362, became0.4478(Please seetable7 at the annex). The level of incomeinequalityhaspersistedat high levelsduringthe past30 yeaxs.Even with reductionsin the povenyincidencesduringthe 1985-2000period,the Gini indicesin the Philippineshavehardlychanged.From 0.447in 1985,the l€velof inequalityhashardly changedat 0.451in 2000. PhilippineHDi hasimprovedover the pastfony years;from 0.419in 1960,the country's indexhasincreased to 0.749in 2000(Lt'lDp, 2001). Howev€r,largedisparitiesexistin ihe I-IDI in dillercnt areasofthe country. Among regionsin 1994,the NCR hadthe highestHDI (0.819),while Easten Visayashad the lowest (0.493).Among provinces,Cavite (0.840), Rizal (0.813) and Laguna(0.774)had the highestindicators,while the lowesrprovinces, including Sulu (0.3'12)Md Tawi-tawi (0.384),had lessthan half thesenumbers(CollasMonsodandMonsod,1998). Poverty self-rating surveys indicate that a la.ge majority of the population consider poo..Mangahas themselves (1993)notesthatthetrendin changesin individualsconsidering ' The NSCB publishes poverty two incidencesbasedon ecoromic tmit: a ,orserold poverty incide&e and a population (or i\diidnal) poveny incidence.Obviously,the figur€sfor thesetwo incidencesare difercnt with lh€ latter i[cidence ,s $c higherfigure as poor householdsgen€rallyhavea highernumberof members mmparedto non-poorhousehoLls.

I I I T I I I

CountryReports:PovertySituationin the PhitipPines poor mayreflectthe changesin the levelofpoverty ofFilipinos. From a high of themselves 'poor' droppedto 66 percentin who ratedthemselves 74percentin 1985,surveyrespondents '71 percentin 1991, and 68-70 percentifl 1994. Recent suweys by 1988,then to 62Vangahas(1997) show a drop to 58 percentin 1997.On the other hand, self-reported 2000. to 66 percentby September povertytrendsshowthatpovertyhadincreased is 69 years.On the otherhand,adult literacyratesand€nrollmentratiosar€ Life expectancy percent 95.1 and 82 peraent,respectively.DesPitethe high literacyrate, however, high at of Filipinos 10 yearsand aboveare functionallyilliterate.While school over one-quarter pa.ticipationratesarehigh,cohortsurvivalrates'arelow. Ofthosewho enroll for grade1, 33 percentare expectedto drop out before reachinggrade6, and 22 percentdrop out before grade4 (Monsod,1997;Wodd Ban\ 2001). Arnongthese,three-fourthscome fiom poor households.Manasanet al. (1996) notesthat th€ low survivaland completionratesprcve thatthe qualityof educationis not high. In the 1999IntemationalMathematicsand Science Iest, thePhilippinesraflked37'nout of38 countries. is the mainprovider(90 percent)of primaryeducation.In 1995-97government Govemment spendingfor publiceducationhad increasedto 15.7of total expenditurefrom 11.2percent fiom 1985-87(LNDP, 2001).However,the qualityofeducationin the publicschoolsystem is still inferiorandlagsbehindprivateinstitutions. Malnutritionremainsan importanthealthproblemin the countryas it contributesto child mortality and morbidity. Estimatesshow that reducingthe prevalenceof underweight Filipinochildrenby halfby the year2000couldresultin 20 percentfewerinfantdeaths. Indicators Table2. Socioeconomic RealGDP

million US$19210.7

GDP GNP

us$1.020.0

GINI coefliciont Huma[ dovol

(% of Population) Povertyincidence Rural Urbar Annuar lation Life expectancyat birth Male Female Functional

40.o(2000) 541% 25.0%

69years(2001) 66.63 7l

Enrollmentratio

tCohortsurvivalrale refersto the ratio of the total numberof pupilswho enrol in the first I'ear to the total numberof studentswho enrol in their last or graduatingyear.

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Cg4.y l:p9rts.I9y!4y Situationin the philippines

3.

Determinantsand Causesof poverty

Thefollowing factorsareoftenspecifiedfor the unsatisfactory performance in the reduction ol Dovealv:

3.1 Slowcrowth and Lackof EmploymentOpportunities Whilethe Philippinesgrew by an averageof five pe.centfrom the 1950sto the 1970s,the debtcrisisandthe subsequent economicdepression causeda declinein GDp in the eariy to mid 1980s.While there was some recoveryin the mid to late 1980s,this growth was insuflicientto increaseper capitaincomeshigherthanthe eady 19g0levels.Furtherboom andbustcyclesofthe economywereexperienced thereafter.Unsustained growthhasbeena majorlactorfor.theper€nniallyhighpovertyincidenceofthe country.ThJfailure ofgrowth rsclueto.the"tailue. in the long-term,to resttucture theeconomyto makeit externall!more competitiveandallow broadparticipation by the people(deDios, 1993).,,

3.2 lnequolity in lncomesdnd Assets The highly unequaldistributionof incomeshas to the sluggishness of poverty incidencefor the past30 to 40 years. The high -contributed incomeinequalityreflits the higfrievel of assetinequality.The Gini incidenceollandholdingshasircriasedfrom 0.Sl in 1960 ro 0.57 in 1990.Limited land reform programmes from the l93os to the presenthavefailed due to rnerargenumberot loopholgsandthe levelofpolitical oppositionto theseprogrammes

3.3 HighPopulationGrowth De Dios notes that high population€rowth affectspoor householdsthrough a smaller disnibutionofincomesamongthem.The countryhasrecordedoneofthe highestpopulation groMh latesin theregion,at 2.6percentfrom I960 ro 1994;rhisrareis highei thanIndonesia and.Singapore (at 2.I-percent)andThailand(at 2.3 percent).De Guzmai (1994)notes rhat crudebinh datesaredecliningsince1975,bui this dicline hasbeensioq :s.: in tS73 to 32.8in 1983.De Guzmanalsonotesthat contraceptive "i (30_40%),and prevalence is quitelow an rncreaslng proportionof femalesare gettingmarried__factorswhich may mitigaie the Philippinepopulationis projeaedto onty havea 1.99pe.aentgroMh tiom !::ti* -Iry 2000to 2005.

3.1 BiasedPoliciesand llnderinvestmentin Agriculture Totalfactorproductivity,an eoonomicmeasurefor productivity,haddeclinedin the 70,sand t, to biasedpolicies,i.e grantingefiectiveprotectionro caprtaly". 19 Il,. mport-substttuhng Tuilfr..9r.: rnrensrve, sectors)resulting in the increaseof ineflicient protected indust.ies.Crop p.oductionhasalso sloweddowr! prirnarilydueto underinvestment in the agriculturalsector By the late 1980sand.earlyli90s, the total facto. productl\4ty (TFp) .I.Fp in th: Tongmy improvedto positivenumbers.Austda (2000) reportsthat became positivein the 1986to 1996periodto 0.93percent,compared to negative2.89percentin the

Coulty Rcpo.ts: Poverty Situation in the Philippiner

1980to 1986pe.iod. However,the Philippineslaggedcomparedto its SoutheastAsian leighbo$ whose productivity gro\r1h was greate. than 1.2 to 2.2 p€rcentagepoints throughout thisperiod.

3.5 lnodequateand UnequalProvisionof SocialServices Social indicators in the country are companble to those in SoutheastAsia_ However, the qualityof socialsewiceshasbeenquilepoor, andthe rate ofimprovementofthese se.vices hasbeenslow. In termsof health inadequacy in government healthfacilitieshasbeenan issue.Twenty(20) percentof poor households havebeenforcedto go to costlyprivateh€althfacilities.Along *ith inadequacy comestheunequalspreadofgovemmenthealthfacilities.For instance,only 25 percentofall barangayshad healthstationsin 1990.Each healthcenterserved14,200 personsin the NationalCapitalRegion(NCR) but between21,000to 44,000peoplein other regions.Most governm€nthospitalsare locatedin urbanareas,and half of the physicians andtwo-thirds ofthe dentistsin the country are in M€tro Manila. In termsof water supply,only 64 pelcentof the populationare gettingtheir water from formal sourceswhile 34 percentrely on self-provisioning(e.g., welts, hand pumps,and rainwatercollectors).Metro Manila hasthe greatestaccessfrom formalsourcel,especiallv from privateproviders,while Mindanaohasthe lowest.The qualityofthe water in t-heruril areasis worsethan that of urbanareassincewater treatmentcostsare higherin the rural areas.WHO reportsthat waterfrom anywater supplysystemin the philippinesis unsuitable for drinking.

3.6 lnodequateTargeting WorldBank (1996)notesthe limitedsuccess of safetynet programmes to improvethe living standards ofthe poor. Subbarao, AhmedandTeklu (1995)statethattherearJ conceptual and designdiffrcultiesamongsocialsafetynet programmes, includingthe difficulty oftargeting rheir intendedbeneficiaries, which needto be addressed. Thus,insteadof benefitintfro; fiesepublicprogrammes, the poordevelopwaysofcopingwith theirsituation.

3.7 Lackol Participationof the poor in Decision-laking Balisacan(1994a)roles that the pooq especiallythe large but geographicallydispersed sectors(e.g.,smallfarmers,landlessrural workersandunskilledulbanworkers).havelittle influencein economicpolicy making.The interactionof industrialinterestsand academic techrocratsintrcducedpoliciesthat placedcontrolson trade and finance,benefitingthe gowth of vestedinterestsin the economyand leadingto the underutilisation of the poor's majorresourcelabor At present,the marginalisedsocial sectorsare represortedin Congessthrough the partylist svstem-- 2-3 seatseach.Whetherthis will improvethecontentofpolicy in the oomlngyears remainsto be seen.

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Responses TowardsPovertyReduction

4.1 Overviewof GovernmentPolicieson Poverty Reduction

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4.1.1 AssetReforn5 4.L 1.1Comprehensive AgrarianReformProgram(CARP) TheCARP,signedinto RA 6657or Comprehensive AgrarianReformLaw in 1988,aimedto mhanceagriculturaland rural developmentby promotingsocial stability and increasing p.oductivity.Its strategies includethejust andspeedyredistribution of agdculturalland,and provision the ofnecessarysupportservices.Supportservicesincludeprovisionofcredit and marketingassistance, agriculturalextgnsior\andrural infrastructures (e.g.,irrigation,feeder roadsandpostharvestfacilities). By the end of 1996,the CARP had dist.ibuted53o/oor 4.3 million hectaresof its orisinal rarget(Gono,1997;FRIEjJD, 1997).An additionat3 percentof the targetwasdistributidin i997 (Adriano, 1999).. This figure does not inoludethe 1.4 million heqaresunqer a leaseholdcontract,in which tenantspay a fixed leaserentalto the landowner,and 9,000 hectares distributedasa resultoftenantstockoptions.TheCARPshouldhavebeenendedby June 1998. The wholeprogramwas not completedas expecteddue to numerousdelaysi; implementation.

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L l . L2 Comprehensive andIntegatedShelterFinancingAct (CISFA) In 1995,the governmentstartedimplementingthe CISFA, aimedat improvingsecurityof renurein housingas increasingland priceswere consumingmuch of the poor's income. Underthis act,the govemmentallocatedmorethanp8 billion annuallyfor housingoverthe periodprimarilyfor urbanpoor households. 1995-1999 1. 1.2 Targeted lnteryentions The Phi|ppine govemmenthas providedtargetedprcgammesin order to suppor poor individuals and communitiesduring '.low-income periods", e.g., intervals between programmes, €riculture productharvests.Theseincludeemploymentgeneration livelihood, andfood subsidyschemes.

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Thegovernment hashadmorethantweotyyearsof experience in publicworksschemes. Its last major scheme,the CommunityEmploymentDevelopmentprog.amme(1986_88)was designed to spurimprovements in rural incomesthroughthe useofunderemployed labor,and focusedon roadandirrigationconstruction.While it wasp.ograrnmed to utilise 12.8million persondays,it wasableto employonly 8 million persondaysasdisbursements fell by halfof theP2.2billion committedfund.(CollegeofEconomicsandManagement 1995,World Bank 1996).

'

The Departuentof Agrariat Reform reportedtut an additional215.9?9hcctareswere distributed.only 54 percetrlo[ largct lor rhe]ear.

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CountryReports:PovertySituationin the Phil

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4-1.3Comprehensive PovertyAlleviationProgrammes

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{ I I I SocialReform Agenda In the history of Philippinepoverty-alleviationeffofls, the Ramos government'sSocial Reform Agenda(SRA) had beenthe only comprehensive public programmeto integrate programmes involvingsocialequity. Aimedto "bridgelhe gapbetweenthe few who arerich and the many who are poor", it worked towardsthe promotion of efrciency in the marketplace, advancement of social equity in termsof assetreforms,just sharingof the benefits. of growth,and effectiveintegrationof disadvantaged groupsinto the political and economtcmatnsueam

I I I I

Launchedin June 1994,SRA had social reform packagesor flagship programmes,each managedby aflagship championor a speclfrcgovemmentagencyresponsiblefor carrying it through. Under the SRA the governmentcommitteditself in implementingaround95 executivebranchmeasures, includingthe signingof ordersand implementingrules,more \igorous implementatiorof previouslyenactedmeasures, basic sector representation in govemmentbodies,andthe reviewand studyof morespecificbasicsectorissues.Twelve majorsocialreformbills werealsolobbiedfor passage in the legislature The governmentestablished the following to facilitatethe implementationof the flagship proglammes: 7 PovertyAlleviationFund' (PAF) - amountingto P 7 billion over the 1996to 1998 period,for scholarship potablewarer,urbandevelopment, assistance, basicchild care andothersocialservices to primaJilyassistthe5u'and6rr'classmunicipalities 7 Local Government Empowerment Fund- assistsinfrastructure development in these low-incomefacilities. 2 Comprehensive and IntegratedDeliveryof SocialServices(CIDSS) - providesfor direct delivery of basic welfare and social prog.ammes to margjnaiised communlues. Z A SocialReformCouncil- headedby the Presid€nt andwith memberscomingliom thegovernment andsocialsectors,monitorsthedevelopment ofthe SRA. .l 1.32 NationalAnti-PovertvCommission (NAPC) Duringthe Estradaadministration (1998-2000), the SocialReformCouncilwasreplacedby ihe NAPC, by virtue of a law passedin the waningdaysof the Ramosgovernment.The \APC includeda'Ten Point AationProgramm€',anchoredon'agriculturalmodernisation, and 'iow cost masshousing'.The Estradagovemmenttargeteda reductionin pove.ty incidenceliom 32 percentto 20 percent -11.3.3KapilBjsiglaban saKahiraoan(&\LAHI) In 2000, as JosephEstradawas oustedfrom the presidency,then Vice presidentGloria \facapagal-Afoyo took over his post. Renewingthe fight againstpoverty, president \lacapagal-ArroyoinstructedNAPC to formulatea new povertyreductionstfategy(pRS), 'PresidentFidelRamos, SociaiReformAgenda,Junel?, 1994.

- qn institutional evaluafionofthe CIDSS cim be found in Bautista11999).

Co{Itry Reports:PovertySituationin the Philippines

tating into consideration theweaknesses In mid 2001, andcriticismsofthe pastprogrammes. iheKapit-Bisig IAba sa Kahirpan, popularlyknown asKAIAHI, was launched. KALAHI's thrustis to placea p.iority emphasison redistributive reform throughfive core $rategiesin targetedpoorcommunities.Theseare: I 2. 3. 4 5.

4.2

Assetreform, which includesagrarian,aquaticresources, and urban land reform, togetherwith the affirmationofancestraldomains. Full provision of the requirementsof human developmentservicesespecially education, health,andflutrition,waterandshelter,andelectricity; Generation of employment andlivelihoodfor urbanandruralpoor; Participationin gov€rnance and institution-building by appointmentin key national, economic,andpoliticalpositions,andsectoralbodies,and Providing basic sectorssocial prctection and security from violence through legislationagainstdomesticviolence,securityof workplac€of the informal sector, etc.

NGOResponses

1.2.1 Sectorsand Areos of Work of NGOsin the Philippines Ihe Philippinesis known to haveone ofthe most dynamicNGO communityin the world. More than 40,000NGOSexist in the Philippines(Racelisand cuevana, 2001). They include various types of organisations,such as social developmentagencies,civic orgarisations,community based groups, church related associations, professionaland businessfederations,etc. The so-calleddevelopmentNGOS,that directly work with groups,are€stimated marginalised to be 4-5,000. Frominfluencingpublicpolicyandimplementingsocialprogrammes, PhilippineNGOs have createdsignifiaantimpact in variousareasof the political and socio-economic spheres. Nationalpoliciesrelatingto agrarianreform,environment,housingand urbanland reform, decentralisation and local governanc€!cooperatives,health reform (i.e_ generics law, HIV/AIDS),genderandwomen'srights,and indigenouspeople'sconcernsare someof the importantissueswhereNGOShave successfullymadetheir mark.PhilippineNGOS have also beenrecognisedin their networkingactivitiesat the local,nationaland intemational levels. In recentyears,afterthe peoplepower revolutionof 1986calledEDSA I7, NGOS havealso beenpioleering in forging i[ter-sectoralpartnerships in variousissues. These includethe implementation of agrarianreform, disasterpreparedness and relief operations, communitybasedprimary healthcare,HMAIDS responses, microfinanceand livelihood programmes. BeforeEDSA I, manyNGOSwe.e eitheranti-govemment or did not relateto govemmentat all. Also, quite few had collaboratioo rvith the businesssector.Howeveqas many NGOs EDSA is a najor highway itr Metso-ManilawherBmillions of peopleIlocked to dernandtlrc ousterof Marcos rn 1986. This peoplepower revolt was rcpealedin January200I toppling iurothcrconupt pEsiden! and tlus the iabels,EDSA I and II.

c9!!t.y !9p94{9f91lj

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9n tn the ftrilippines

maturedin the more democraticenvironment(post_EDSA I), they becamemore open ln relatingwith the govemmentandthe p vate sector. This wai morepronounced at the local levels,especiallyafte.thepassage ofthe l99l Local Govemment Code,mandatingthe NGO and.privatesectorparticipationin development councils.fn" nutu.eoift itippine NGOSas intermediary organisations hasgiven themcomparativeadvantagein l_"*]:; ,lld1!, :1::t promotjng un9"lTlng actlvrtres. coordinalionand even collaboration among various stakeholders. ThenatureofNGo work in thephilippinesprimarilyinvolveseducation, tlainlng andhuman resourcedevelopment, andcommunitydevelopment. OtheractivitiesNilOs are mvolvedin includesustainable developmettand'the .environment,h€althand nuidiioa livelihood development,gender and development, "n,".pr,"" "oo ,ociat ,"*l"es,- m]cro_creOit and microfinance,andcoop€rative development. of NGOSareinro education andtraimng,advocacy, nerworrcng. "":::g::t:l*livitiess,.majority communrtyorganising,and capability and institutionbuilding. Other coii competenciesinclude livelihood, project management,research, pubttcation and oocumental|on resource mobiljsation. medicaland healthservices, counsiiing,sustainable rntegrated areadevelopment, consultingservices, andlending,finaniingandgrants. Majorityof the NGOsare involvedwith women,youth,andchildren. Othersectorsthat are oerngservedarepeasants, urbanpoor,indigenouscommunities, andfisherfolk. 4.2.2 NGO Responses to the poverty Situation NGO responses againstpovertycan be categorised into majorareas:advocacy,organrsrng, deliveryofsocial services. Iivelihoodorogrammes, andskillstrainin!. ini"irn, ofuauo"""y, rhis can furtherbe subdividedinto eionomic 1e.g.foreigna"U,,rn7"--pofily; or political (e g-, humanrights,govemance, andcomrption.l.Most Nbos areinvotuJJin ti,e tuu". tr,un Trainingsdetiveredby.NCOsire very much aiverse.-Organising work tras :1ll:.lTl detrnrtetygone down in the last decade. A more detaileddescription oi the responsesis givenbelowin table3. Table 3. NGO Innuencing Potrcy
c. Seclolal nalised

Influencing specifi c se.offi i--fr iiTgzri-diffi pgornousrng, coconul iew, etc.

Establislingcommudtybaseagroups,asslOnethemili strengthcdng theirorsanizatiorls I In the survey,theseare refe ed 10as,,corecompelencies,,by NGOS(Tuano.200t)

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Countryneports:poverty-Situationin theFhilippines

b. S€cloralOrgadsing of SocialServices a Health b Education c. Social wclfare J. Livelibood

a lncorne-generatingl@G b lv,lcroRnarce projEE 5. Skills Trainitr

6. R€licf and Rchihirif;t;

5.

Activities

tttlpingorganiselaboiuniorqtarm=fi o@saffi poor grouDs.etc.

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rmpremcnurs heJlrrr proFffiGElriidlfficale, pre\enriorl I:V'AIDs crc,. 1r'u!!!3!q!4l:! cours€sfor sclected

1l,1t"r""u"gp-grro.t--r"*".;dprole 3Iqefll. baltercdl|omel! ard orsaniTrne ".toi*b."l-dffi
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a_ssisungana,f rnan-ingsrnaUpro6cr-sf oiconun-un\groups anductviduals Ciulngcredr@ commrl-oitiesand scctorin

skils traini pto"iae se-icess fiis ti-po"a[ stretrer,Ed "me.gcncy_ ratons,etc. alRetdigstetsor conficts;

CRtTteuE/AssEssi,rENToFpovERTyREspoNsEs

Various individuals and institutior 'ls provide the following crititque/assessments re sovemmentprogrammesr CARP A worid Bank report(1996)notesthat the progress of agrarianreform in the countryhas

i".".r,"'iili"a';";il dent inrurar iii,l'l"{1""13,#?,i"1!'r"1i1""fiiJ;1ryry'i " l*;u; ;';#'#iijT:"i#,"fi1"'.:'."'lTi?:ifl:

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w-rtnout necessarily contributing to agricuttuial .m",_"y eEsa resultof tle programme's delayed implementation,,there ". f.*il" hasU""n*ia".p."u-a unin"iui""onu".rron fro, landsinronon-agricukurat uses.M.oreover, redistriburion liil:itllll has lagged most for rargepnvateestates wherelandholding i, ,t *o^r. in l-i.uLiu r,",*,,ugur"un., .inequality " treecrops,andnont;dirional.export :o:onutand.othe. t" canp rsrtsresrriction oftenancy "r-"0;:;."#;;;;" forms.Tenancy prohibitio_ns ,fr" tr poorro moveupthe,,agricultural "1"J" tadder,, "pp"a""Lry thelandless and h; r;;lriJirJ#i,,*o.ro, "sp"ciaily UrbanLandReform tlot-l"* beenftly a]rocated to theprogramme. Forinsrance, l:!1'-: resources ""t program rb. the L ommuniry Mongage lCMp)-a scneme in vitrictrpoorho"."rr"oial ii.".,ry pr."rlur" urbanlandwiththeassistance ofa soveanment agency, have I lqqT)nores lhallessthana tenthoifunO.fo, rf,"Cwp taa Offenston"oi.targetXu.aos U"* u.,""il, ,li"u*o orr,"gir, hrsttwo yearsof implementation. Socialhousing laws.had f"i,r"il, strategy^ of govemment.s housing ".O'f*i" ,o.ifii*,,ng,heover_ail programmes rf," aiu, UrriJ"'"1 o.n.lt, naoarsobeenregressjve Llanto(1q97)po;ntsout thatgovernment tuJ p[u,O"Oer"ur".

countryReports:FovertysrtuaiionG phiGpines tG financialassistance per unit ofhou

fortheupper ;ncome seared r,ou.er'orJl andmiddle lutti;'ffi1i#f:,Ir:Tffsproolrcrffnes Education P.ima.y schoolcompletionrates I

: ffi11i;r*rr$i:##f.,r,T:jf#*:*ill;;:H# tocomefom poorfamiliesanapooii".;..i :;r;;'-;:':Tl:',.,'l'

aremuchmorelikely "ycte

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f ;ff.:?:fr:'#;",i#; Credit Govemment-owned and controlled ,'';jiii",:$t:,J::,f:"iiiil::l service,nsuranc ;,",",:f;J:;';1j,&mhi.J,,fi

*:Iii::m*l##m**:*:,:#:h,,bt";f::#f s,T.".,"i.{

;:'uri;f#F#d:':ffi ;[*4ffi;**:ii';[:tr$r:,Tii:Tn"",ff SocialServices Vonsod0997) andLlt\Dp(1997) nc

}: x;#ij***;*T{"{::iilii:1!u!ilTrji:r"#i *;#

j,iffil*fIhrruff ffsq::hrd#rif;:,"ff ,# fr flff?#:*,,H"$1flil;T:,'J;1"#i',:.$.h;;;#;,%.li,oJo'il o.ooon,on "

Public spendingon health nutrition

r p.'..nt br coF. iorfu;',i;"l"fld^tip.'lation

".

hasbeenin theransetrom0.5ro 0.7

;y;'11,,?rhidll"*,",'HJtr i:#rf:**T'fr*i,J:ff ":;^:.*:"::rj*: SRA

],hj,1'1i:l"t"Tilxil.H,?ifo-i"^':t*:-"^Try.intuse,or^rearocate nnancjar resources to

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ffi:;:lJ".,:JT:I"*"ili::#:','iJ'#: use i:J: (Reyes {"",l"gT::,'t:i,i:',8,# and del vatr", rqsst'A T",",::T:' ;"_"i";#:?ffi: ffi: i'.HTf;:fifft:ff:

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remained not. iiiiili#'l"i"f"T:1fr'll*";:l::,:':Tl"-99'::i'fr""'' done' 11'vp6' ':r;:iJ,';:*iH"fi

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I I I I I I I

:"t:;ffi::l#fi:,ifil

covernment officiars puta *.ra-"."i ufi ji:i iffi i ffi li: il :;ffi ll i.:,#ff iJt"_ff l;.v,or "o dat*'',ii"p.i"r,vJ:u"'l.1ffi1;1lffi:;ll[ """.*;, pi#:'i;!;] Monsod, ffi:fJJ:?;fr,*'"n 1998).

Public officials may ;Hilli:1;[#l ffj i;ff*:"J "ui:1'' ;?I"ffi ;'d i# tffi il3Ji'iffJ"nl".:liJTl# 'j"Tl.J:#ii::,:,,^":.*"vicu.rfr fi1,x1il,3fifl'i#f :,",yi,l:::" *l,ffi liiIn runntng p.::&' "i"i,.;Gfi

rniv", iT.J :?".,T*,1'"".".::-,:" "#';J;;,::i#;l

-;;;H'7| Lack of pubricawarenes's, """ "'' valre,rved) progammesof the sRo ,-*" *- jTl,^lio a-p{or methodof communicatngthe

j:*i"''*itT iiX',1#:','J,','i; :""*:1".:l*"'tiX' i::f;iff :1:::'*a gf or respondents isgTh"a ffi :."";;[::Hl*$g;,:i:i1:i!r? inApril

"ilH:ff "'"i;""";iil"sili;f;j$lffi;11fi:i9"*

NAPC Thefollowingarethe failuresNPC (t999) andde Dios

v

(1999)pointout re: the programmer The poveny

wrnout.any.corresponding tar.g-ets. anti-poveny a*"i"p"i"i"'ii.'sfl.i .rhose ot beinga coordinative NAPC.like bodvthe hasinsr"adcon"enrraili 1;r"'a*:lllt-"io on implementing programs financed bva speciar ;;;""r ^,i,Jij,ri,t"ffintrating)

;l,xl::l;m:;"ffi3#1

I

inI mpr emenr in!asiJ,"f#,, fir"ll"l" l.^I::yrl rrretnoootogv ",,","of meeti

While the -r,cor".iii",'"".i""r''il;;"::;:,T:il:ii'i:1.;"[,:TJ;j:i,'.1."j"]:l' rs unclearwhetherwhichcombinarions 1",',

govemment has promised, as its I

z

:l"1"Jfrffi :iTi:li Xf::#*'"f"il#'i;;";;ffi'ff;#;:T;#;:.ffi

r.tse toluJfilJits commitment,

ffi:il:iff::J: %.

representatives to theNApC.

cove.nment hasfaired to n electing

Meaowhile.BalisacarLet al (2000) sta the,govemnent s programmes rrom lhe.tbllowing inadequare havesuffered ,o."'j3 resources to achiev€ inappropriate many objectives, targeiinga""ii", i"""or$"l'i.and uon ol jnappropriate proxy indicarors:inapirop.iul 'Tlus

ihe goverrunent hadto de\elopa comnun programfor fte sRA beginning Lvv/ underthe auspicesof,rr" mfttpr" in rhe third quarterof I1lio.r,,XToorlns

I C..r|try Reports: Poverty Situation in the Philippines

I l I I l

I I I I :

I

I I I I :

I I

13

performanceindicators;na.rrowset of menusvis-ii-vis needsof poor communitiesand households; andabsence ofbeneficiaryimpactandmonitoring.

6,

Summaryand Conclusion

6,1 Summdry Ihe Philippinesis an archipelago, composed ofmore than7,100islands,with a total landand waterareaof300,000km'. Thecapitalis Manilaandthe tkee largestislandsincludeLuzon, Visayasand Mindanao. The countryhasa populationof around80 million, almost54yoof whomlive in the urbanareas.Morc thana third ofthe populationis youngwhile 607oofthe populationare in the labor force. Majority are Christiansand most speakand understand English. -- morethan two-thirdsof Povertyin the Philippineshasalwaysbeena rural phenomenon poorhouseholds live in rural areas.Povertyincidenceincreased by 3.2 percentfrom 36.8in 1997to 40.0in 2000. High intenegionaland intra-regional diflerencesin povertyincidencesexist. The level of incomeinequalityhaspersisted at high levelsduringthe past30 years.Evenwith reductions in the povertyincidencesduringthe 1985-2000 period,the cini indicesin the Philippines havehardlychanged. PhilippineHDI hasimprovedover the past forty years. However,largedisparitiesexist in fte IIDI in differentareasof th€ country. Povertyself-ratingsurveysindicatethat a large majorityof the populationconsiderthemselvespoor. Life expectancyis 69 years.Adult literacyratesandenrollm€ntratiosarehigh. However,overone-quaner ofFilipinos l0 years andabovearefunctionallyilliterate. Malnutritionremainsan importanthealthproblemin the countryas it cont.ibutesto chjld mortalityand morbidity. Infant mortalityhas not improvedin recentyearsalthoughthe leadingcausesof death - respiratory diseases, diarrhea, measles arepreventable. The followingare identifiedasthe main causesof povertyin the country:slow grora,thand lackofemploymentopportunities; inequalityin incomesandassets,highpopulationgrowrh; biasedpolicies and underinvestment in agriculture;inadequate and unequalprovision of socialservices;inadequate taryeting;andlack ofpanicipationofthe poorin decision-making The responses ofthe govemmenttowardspovertyreductionfrom 1986to pfesentinclude assetreforms,targetedinterventions, povertyalleviationprogrammes. and comprehensive Programmesunder assetreforms are the CARP and CISFA. Comprehensivcprogrammes includethe SRA NAPC, andKAIAHI On the other hand,NGO responses againstpovertycan be categorised into major areas: advocacy, organising,deliveryof socials€rvic€s,livelihoodprogrammes! skills training,and

PovertySituationinthe PhitiPpines CountryReports: .eliefandrehabilitation.In te.msof advocacy,this canfurthe.b€ subdividedinto economic andcoruption) or political(e.g.,humanrighls,govemance, {,e.g.foreigndebt,macro-policy) \{ost NGOsareinvolvedin the latterthan in the former. Trainingsdeliveredby NGOs are very muchdiversewhile organisingwork hasgonedownin the lastdecade Thefollowingarerhemainproblemsor issuescriticsandanalystsraisedre: the pove(y reductionprogrammes: govemment's ofthe 1. Problemswith mado€conomicandpoliticalstabilityin variousepisodes country'secoflomichistory. 2. Comprehensiveapprcachto poverty reductionis very recent- stadedduring the socialreformageodaofthe Ramosadministration. assetreformsasthecurent politicaleconomyis still 3. Diffrcultiesin implementing by landedinterests dominated ofpovedy problemsespecially in implementation 4. Inter-agency coordination led by theDepartmentof prognmmes.The only exceptionis the CIDSSprogramme SocialWelfareandDevelopment. especiallyin 5. Inevitabilityofpolitical influenoein designingpovertyprogrammes, programmes. allocatingbudgetfor 6. Difnculty in locatingandtargetingultn-poorgrcupsasstatisticsareinsufficientfor identificationof suchgroups. key prognmmes in povertymonitoringandimplementing 7. Resource constraints especially duringtimesoffiscal deficits.

6.2 Conclusion Povertyincidencein the Philippineshasremainedrelativelyhigh mainly because ofthe slowprogressin reducingit in the pasttwo decades.This hasbeenmainly dueto the boom and bust cycle of the Philippineeconomyand the perennially high populationgroMh rates. antion a comprehensive ThePhilippinegovernmenthasjust recentlyernbarked povertyprogramme(which startedin the Ramosregime,1992-1998)and most andpiece-meal. andprcjectshavebeendisparate often,programmes

v

the povertyproblemon a Currently,the administration hascontinuedto approach mo.e comprehensiveperspectivebut results of its thrusts cannot still be However,governmentis confronted determined astheseare still in initial stages. lack ofresources, difficultiesin agencycoordination, with the typicalconstraints: in locatingthe ultra-poor(statisticsusuallydo not capturethem), weaknesses politicalpatronage, etc. NGOs,on the other hand,have beeninvolvedin povertyreductionefforts for morethan threedecades.Their intewentionsrangefrorn pure advocacyto th€ implementationof concrete livelihood ptogrammes. However, these are

CountryReportsiPowrty Situationin the Phitippines

I

and ofteo very micro-oriented. There are relativelyfew large uncoordinated Nco-govemmentjoint programmes ofl povertyalleviation''. ,

NGOShave been tapp€dby governmentto participatein the formulationof strategiesand thrusts of gov€rnmentagainst povedy. However, in the implementatiolstage,partne(ships amongsectorsir high impactprogrammes still remainto be seen.

,

While governmenttkough the assistanceof civil sooiety has formulated comprehensive strategies againstpove.ty,what is needednext is to agreeon how specificallythe various s€ctorc and stakeholderswould contribute in the implementation of the povertythrust.

v

Thefight againstpovertyis not of govemmentalonebut with tle othersectolsof society.Noteworthyalso is the capacityof the civil societysector,particularly theNCO5andPos,to assistgovernment in id€ntiryingand locatingthe ult.a poor groups. In addition,their help in gatheringdataon the actual and marginalised needsanddesiresofth€ poor will be highlyimportant.Their inputsto the design ofspecificprojectsandprogrammes will alsobe crucial.

t I T I I T

t

In termsof advocacy,NGOSmust be activemore in the macroeconomic policy groMh debatesas theseare crucial in determiningwhether economic in the countrywill be sustainable or not. Lack ofgrowth hasbeenthe key factorfor the continuedhighpovertyratesin the countrytoday.

!

T I T T ! I

! I

15

'" Moresowilh the privatesector, excsf,tprobablythosewith the PBSPor rhe Lcagueof CorporateFo$datiors which areNGOSestablishedbv the secloritself

cDuntryReports:PovertySituationin the Philippines

16 i

SelectedBibliography Aldaba,F. andP. Tuano(2001)." Reviewofliterature on PovertyandEquityin the manuscript. Philippines, A. (1994a).Poverty,Urbanizationand DevelopmentPolicy.QuezonCity: Balisacan, Press. Universityof the Philippines

I I I I E t

F t t t

t t T T

andPolicy Balisacan, A. (1994b)."UrbanPovertyin the Philippines:Nature,Causes in l.tl4, Development Revietr12(l), pp. 117-152. Measures," Balisacan, A. (1999).CausesofPoverty: Myths' Factsand Policies.A Philippine Study. QuezonCity: Universityofthe PhilippinesPress. Avemges:Poverty, Balisacan, A. andE. Pernia.(2001)."ProbingBeneathCross-National on Poverty,GroMh, andtheRole Inequality,andGrowlh."Presented at the Conference oflnstitutions,heldat AsianDevelopmentBank. and Bautista,R. andM. Lamb€rte(1996)."The Philippines:EconomicDevelopments in ,4.riar-Paci|ic EconornicLilerqlurelO (2), pp. 16-31. Prospects," (1993).Poverty,Growth and the FiscalCrisis.Makati,MetroDe Dios andAssociates StudiesandInternational Development ManilaiPhilippineInstitutefor Development Research Center. in 1997" lnstituteon Churchand Gono,C. (1997)."The StateofCARP Implementation lssues, monograph. Social Iftal, P. (1994)."StateofPovertyin thePhilippines:An Overview,in Intal andM. C. S. Bantilan(eds.).UnderstandingPovertyand Inequity in the Philippines.Makati, AulhorityandUnitedNatrons Philippines: NationalEconomicandDevelopment Development Program. MIMAP (1995).'GoodSignsMead: PhilippireStructuralAdjustmentMeasures, 19861994,"Micrc Inpacts ofMacroecononic Adju,ttmentPoliciesProject UpdelesIl (2). Mangahas, M. (1993).'SelfRatedPovertyin thePhilippines,1981-92", in Balisacan, A., et. al.,Perspectives on PhilippinePoverty.QuezonCity, Philippines:Universityofthe PhilippinesPress. Monsod,T. (1997) "SocialReform:Do-Ablebut Not Done."Actionfor EconomicReforms, manuscript. unpublished (1997).SocialReform or SocialRegression?: NationalPeaceConference An Evaluation ofthe Governm€ntlsSocialReform Agenda.QuezonCity: GastonZ. OnigasPeace Institute.

T I I I I I I I

T

I I

I I

Country

PovertySltuationin the Phitippinet

\ational StatisticalCoodinatingBoard(1996)."PhilippinepoverryStatistics.,' NSCB, mimeograph. \ational StatisticsOffice.(2001)."PreliminaryResultsofthe 2000FamilyIncomeand ExpenditureSurvey."Manila,Philippines Reyes,C. M. et al. (1996)."UsingMinimumBasicIndicatorsfor povertyMonitoring," Micro Impactsof Macroeconomic AdjustmentPolicies(MIMAP), unpublished manuscript. LnitedNationsDevelopment Progam(1997).1997philippine Human Development Report.MakatirHumanDevelopment NetworkandUrited NationsDev€loDment Program. LrnitedNationsDevelopment Program(2001).2001Human DevelopmentReport. lVorld Bank (1993). Ihe EastAsiqnMiacle: EconomicGrorvthdnd public policy. New York.OxfordUniversity Press. WorldBank (1996).,4 Strcteg):foFight Po|e y: philippines.Washington, D. C.: EastAsia andthe PacificRegionCountryOperations Division. WorldBank(2001) Filipinolleport Cad on pro-poor Serviees. Washington, D C.iEast AsiaandPacificRegionCountryOperations Division.

@s

Annex:Tables dP Yet

lndi Depth

Inlirid at l'7.o 49.3 1985 15.0 49.5 1988 15.4 45.3 1991 t3.2 40.6 t994 a. n, 36.8 t991 n . a 40.0 2000 200r) Iource NSCBttg96, 1997.and

i985-2000 sewtU Househod 7.9 6.7 '7.O 6.0 n. a.

n.a

1985-2000 Ginilndi Table5. Grnr Yedr Gini Index 1 9 8 5 0.447 1988 0.445 0.414 t 99l 0.451 1994 0.487 199'/ 0 . 4 r5 2000 (icge, tqsg.zoot) lt.scg source:

24.+ 20.3 20.4 18.1

t6.2 16.8

CountryReports:PovertySituationin the Philippines

r ible 6. PovenyandSubsistence Incidences,

2000

Region

NarionalCaoitalRecion Ilocos CagayanValley

CentralLuzon SouthemTagaloe Bicol Region Visavas Western CentralVisayas EasterflVisayas WestemMindanao NorthemMindanao Southe.nMindanao CentralMindanao CordilleraAdministrative ReEion Autonomous Regionof Muslim Mindanao

Subsistence Incidence HousehoQ 12.7 43.5 36.3

9.7 37.2 30 . 6 t 8.6 26.0

))9

31.7 62.8 51.2 43.9 50.5 53.0

563

43.4 38 . 9 43.0 46.5 45.7

52.2 46.3

4t.2

s7.9 43.9

50.9 3 69

73_9

68.8

1.6 16.I

12."1 10.3 34.6

22.6 23.4 26.5 20.4 27.7 l/

)

38.I

SourcerNational SlatisticalCoordinalingBoard (July 2001).

Regioo NCR IIocos CagavanVallev

Table 7. Gini Inci 1997 0.4662 0.4251

CentralLuzon SouthernLuzon Bicol WestemVisayas CentralVisavas EasternVisayas WestemMindanao Northern Mindanao SouthemMindanao CentralMindanao CAR

ARMM CARAGA Source: NSO(2001)

0.4130 0.3638 0.4247 0.4362

o 4412 0.4"t 50 0.4457 0.4684 0.4944 0 4495

o 4491 0.4640 0.3406

o.4387

Resion.1997and2 )00 2000 0.451l 0 4069

0.4241 0.1594 0.4292 0.4478 0.4654 0.4696 0 4901 0.4589 0.4752

0.4573 0.4394 0.4508 0.3278 0.4t31

Changc 0.01I 0.0188 -00lll 0.0044 -0.0045 -0.0116 -0.0242 0.0054 -0.0444 0.0095 0.0192 -0.0078 0.0097 0.0132 0.0128 0.0256

Thailand

PoVERTYIN THAILAND PauuNEREBU.AS

1.

lntroduction

Thispaperis part ofa studyof pove.tyreductioninitiativesby gove.nmentandNGOs in Cambodia,vietnam,Burma,Lao eightASEANcountries,namely:Philippines,Indonesia, present Thailand, East Timor. The aims to a comprehensive view of PD& and study pove.ty situation and the responsesto poverty by different sectorsin the eight countdes. NGOsregardingareasof Also,it aimsto comeup with recommendations to development interventionsor collaborationwith their respectivegovernmentstowards poverty reduction.Thestudymainlyusedsecondary data(writtendocuments, books,andintemet). This paperfocuseson Thailand.It is divided into six parts. The first part p.esentsthe profile of and povertysituation introduction.The secondpan describes the demographic jn Thailand. The third discusses the main causesof poverty. The fourth featurcsthe responsesto poverty by the government,intemationaland local NGOs, including international donors,andthe church.The fifth presents an assessment by someinstitutions particularlythegovernment's, andanalystson the multisectoral responses, to pove.ty. The sixthpartpresents the summaryandconclusion.

2.

Profile of Thailand

2.1 Geography and Demogr aphy Thailand,formerlySiamandofficially calledKingdomofThailand,is boundedby Burma on the north and west, by Lao PDR on the northeast,by Cambodiaand the Gulf of Thailandon the southeast, by Malaysiaon the south,andby the AndamanSeaandBurma ThetotalareaofThailandis 513,1l5km'(198,1l5mi'). Bangkokisthe onthesouthwest. capitalard largestcity. The countryis predominantly mountainous with a seriesofparallel rangesin the northemandwesternregions. Lateststatisticsshowthat Thailandhasa total populationof 62.3 million, with an annual populationgrowth of 0.8%. The populationis unevenlydistributed,however,with the greatest concentration ofpeoplein thecentralregion.It is about75yorurai About 75 percentof the inhabitantsof Thailandare Thai. The largestminority group consistsofthe Chinese,who makeup about 14 percentofthe total population,ard most are Thai nationals.Other minority groupsincludethe Malay-speaking Muslims in the south,the hill tribesin the north andCambodian refugees andVi€tnamese in the east.

C!.Jntry Reports: Poverty in Thailand

I I

Trble l. Demo Totalarea PoDulatron ECOnOm

Main expo.t Malor Languages Major Religion

5 1 3 , 1 l 5L m ' , ( 1 9 8 , 1s1q5m i ) 62.3million(2000) Bangkok Ag.icultural

fuae Thai,Lao, Bumese Buddhism

2.2 Poverty Sltuatlon

I I II I I I

I

I I I

Priorto the 1997Asian crisis,Thailandhadoftenbeencitedasa countrywith impressive economicgrolth and virtually full employment.Its grossdomesticp-duc, gr"* at ao annualrate of8 percentbetwe€n1980and 1990and continuedto grow dunng 1990s. Despiteincreasinginequality,the benefirsof economicgrowthtricklei dow to the poor. Theincidenceof povertydrasticallydecreased. Thisencouraging trendtook a downturnwith the onsetofthe Asianeconomiccrisis.The TnaiBahtrapidlydepreciated, following.the.end ofthe fixed exchange rateregimeon July i997 The unemployment rateincreased substantially andth€ real iarningsofthose who *'ereemployeddeclined.Aiso,therewassignificantincr€ascin povertyanJinequality. In 199E, worsenedparticularlyin the agrioulturalandconstruction seotors.There _poverty *as declinein agriculturalcommoditypricesand massivelay-offsof construction or offrarn taborsrestimatedat 1.2million. Most ofthose affectedmigratedbackto their rural tillages. L\DP reportsthat the crisisundoubtedlynegatedthe imprcssive gain on the fight against poverty.The percentage of peopleliving underthe povirty line,ieduced ftom 32.6yoto ll 4% during 1988-1996,surgedto 15.9olo in 1999,affecting9-8 rnillion people(out of 61.5million).The abovefigureexcludesthe 3 4 million ,,almoirpoor,,,livingprecanousty on theedge. and.l996.Thailand,spovertyincidencedroppedliom about33 percentof -?etYeen,1:88 ue F,opulatlon to aboutI I percent,translatingto more than 1 million peoplebeing lifted o't ofpoverty eachyear.But with the onsetofthe financialcfisisin ld97 an aaditional 3 millionpeoplebecamepoor,with the ircidenceof poverryalimbingto 16 in 1999 t;;cent (.ADB.2001). the-incidenceof povertyfell acrossthe boardbetween1988and 1996.The l,-t l€o1 \onleast hasalways.been poorestregionofthg countrywith 19.4percentofits population In rn povertyrn 1996.This figure roseto 24.0 percentand 30.gpercentin l99g and -g 1999 respectively,as a result of the economiccrisis. While the increasein poverty icidence in the northeastdueto the crisiswas quite severe,the situationwas relatively E 5ern the centraland southemregions(pleaseseetablesat the annex).

Co.r|tayReports:Povertyin Thailand

fhe povertyincidencein Bangkokand vicinitiesand centralregiondecreased in 1999. Possibly,the crisishascausedunemployedlaborto migratebackto theirhometown.They couldnot affordto live in the capitalcity, Bangkok,aad its vicinities.Thus,the poverty rrcidencehas sharplyincreasedin other regions,especiallyin the northeast,south and ronh. Rural areashave been inhabited with the highest poverty incidence. Natenoj (undated) rotesthatvillageshadexperienced muchlargerreductions in povertyovertime,in relation rJ otheraressfrom 40.3 percentof rulal peoplein 1988to 14.9in 1996beforethe crisis .ubreak. However,this situationchangedduringthe crisisperiod.The crisiscontributed ic a sharpincreasein the incidenceof povertyboth in villagesand sanitarydistricts.In rillages,the crisis highly increasedthe povertyby 48.5 and 109.2percentin 1998 and I999.Povertyincidencein villageareasstoodashigh as21.5percentoftotal populationin :-aralareas(Pleaseseetablesat the annex). Socialindicatorsaremixed.While consumerspendingmight be up, incomeinequalityis *ill a concemfor Thailand.The 1999householdsurveyrecordedthat the top 20% of €amerspossessed 58.5olo of incomewhile the bottom20o)/o eaned.otLly3.8%of the total. Overalfinequalityappearsto haveincreasedftom 5l.lyo in 1998(measured by the Gini Coefiicient)to 53.3%in 1999,reflectinga steadyinqeasein inequalitysincethe crisis. (aso/oof laborforce)inff€asedslightlyfrom 4.2% inMay 1999to 4.4yoin Unemployment \!ay 2000. Povertyandinequalitycontinueto be a characteristic ofThai society.Whilethe impressive rates ofthe early 1990s tended to reduceor transcendconcernsaboutinequalitv. lrorth tu crisisof 1997underlineddeep,regional,socialandurban/ruraldivides. The Gini indexrevealsthat incomeinequalityin Thailandis very high The incomeshare ofthe bottom2070in 1999was3.870,muchworsethan4.27oin 1998. Today',the Thai economyis graduallyrecovering. The GDP groMh rate hadbeenrestored from -10.8%in 1998to 4.2yoir 1999and4.3/o ]n 2000. It was€xpectedto be 4-4.5yoin :Ol I Exports(in US$) haveshowna healthygrowth.The inflationrate is low and the crcbangerate hasstabilised. De+ite theseimprovements, however,the adverseimpactofth€ cdsiscontinuesto exlst. fbe p.oblemofnon-performingloanshasnot beenresolved.The high unemployment .ate .ominuesto exist.The decliningagricultureproductpricesmay causehardshipto farmers, tirti@iarly thosewith smallfarms(Natenuj,undated). I'bile expo(s andprivateconsumption growlh are slowly pulling the countryout ofthe rEc6sio.L the agriculturalsector continuesto be iII the doldrums,despiteextensive lo\€mmenl asslstance. fh slow paceof economicrecoveryis not goodfor the poor. The poor are unlikelyto Lrr€ enoughsaving or self-insurance to go through extremelylong bad times. The

(qrrfy

Reports: Poverty in Thailand

iformal safetynet existing in the rural areasis under stress.The migrantsretuning to the nE-alareasareunableto find work. Thereare hopeful signs,however.Job creation in all sectorshasbeenhigh mainly due to f€ $ccess of the export and tourism sectors. Expo.t-manufacturintindustrieshave $sorbedthejob lossesin agriculture. O!'erall,therehasbeena gradualimprovementin th€ healthof the economydriven by sron_qexportsand an accommodating fiscal policy Tourismhasatsocontinuedto be an Dportantelementin promotingeconomicrecovery,accountingfor 5% ofcDp ln 2000. Trble 2. Socioeconomic Indicators GDP GDP G\? GI\II coefficient Humaa ent index Po!€rtyincidence Rural Urban

124.4B11999

53 3 (1999

Iate

Life expectancy at birth Male Female -{dultillitemcylate Male Female

Infantmortalityrate(perl,000livebirths)

3.

68.6years(1999)

2.8% 6.1Yo

Determinantsand Causesof poverty

3.1 1997AsianEconomicCrisis The Asian FinancialCrisis that attackedAsian countriesin 1997is considered to be a najor causeofpoverty in the region.The economiccrisishascausedgreatJamagern the iccioeconomic conditionsof millionsofpeople,in this case,in Thailani. -{fter the economycontractedby over loyo in 1998,rea.lGDp grewby 4.2yo in lggg. \loreover,the prospectsfor 2001were somewhat weaker.pubriciebt was stifl at a high ievelof55% ofGDP.

CountryReporBi Povertyin Thailand

Emorts,which hadbeenthe mainvehiclebehindrecovery,were hit by an ircreasein the costof impo(s due to the rise in oil pricesand a depreciationof the Baht. Agriculture srffereddueto an inqeasein the costofimoort€d seedsandfertilizers,while intemational pricesof agdculturalproductsfell. Thesteadyd€preoiationofthe Baht throughout2000,however,ensuredthat manufactuing erportsremainedcompetitiveon the internationalmarket,while it hit poorer sectorsof societyharderasthe priceofbasicgoodsrosecomparatively. up to 1997.Sincethe crisis, Theincidenceofpoverty declinedsteadilyin the two decades populationwereliving below therehasbeena reversalofthis trefld. Ln7999,159VoofthQ -person p€rmonth. per Baht poverty national ave.age of886 line a a defin€d

4,

Responses TowardsPovertyReduction

4,1 Government Responses 4.1,1 Provisionof Socia[ Services In responseto the economiccrisis, the Govemmentof Thailand has expeditedthe to provisionof socialservicesand implementation of varioussocialwelfa.eprogrammes pension people. for elderly are main focus. Healthcare,educationand assist!,ulnerable Socialprotectionaims mainlyto assistthoseaffecledby the Asian crisisand othertarget groupswho are either poor. disadvantag€d, wlnerable or suffering from naturalor humanincluding:l. healthcard consistofsocial assistance Themain programmes madedisasters. tluougheducationloan plogrammes schemes systemfor low incomegroups;2. eduaation for drop-outstudents; and3. socialpensionfor elderly. andgovernmentscholarships 4 . 1 . 1 .HI e a l t h Ill healthis the mostFequenttriggerof slideinto deeperpoverty.Thus,basichealthcare hasbeenprovidedftee of chargethroughhealthfacilitiesavailableat the sub-distdctlevel. In additionto basichealthcare,low-incomemedicalcardhasbeenissuedfor childrenaged 0-12years,the poor agedbetween13-59yeaxs,andthe elderlyagedover60 yearsfree of cardhasbeenintroducedfor nearpoorgroupsaswell. charge.Voluntaryhealthinsurance Voluntaryhealth insurancecard costsonly 500 Baht per year for a householdwith 5 500 Baht.Whencrisishit, govemmenthasextended rnembers andgovernmentsubsidised voluntaryhealthinsurancecardfor absorbingwlnerablepeopleaffectedby the crisisby allocating1,200million bahtAom ADB loanto Ministry ofPublic Health.The extension of social securitycoveragefor laid-of workers coveredmedicalcare, and maternity, disabiiitv. and deathbenefitsfor at leastsix monthsaffer retrenchment.

_--y

{l

Reports:Povertyin Thailand

I 2 Education

h 1998,the Ministry of Education.equested supportfor scholarship for drop out students rhose parentswere affectedby the crisis.The amountof 1,000million baht from social Ecr6 programloan was allocated.However, becauseof targelirg problems and .equired f$.rsement procedure, the funddisbursed 835 millionbaht. h orderto encourage childrento attendschools,the govemmentintroduceda studentloan deme for studentsat secondaryand tetiary levels. The governmentincreasedits budget 6r $udentloansto preventdeclinein retentionandcompletiolratesAom existinglevelof htrt 9,000millionto baht 17,000million in FY 1998.Thegovernment ensu.esthat female sde s benefitequitablyftom the prcgrammeand an appropriate urban-runlbalanceis dieved. .l.l l3 ElderlvSuoport Socialpensionfor elderly has beenenhancedto supportpoor elderlyto cope with the poblemsduringcrisisperiod.The government allocatedmorefundsto the Departmentof SocialWelfareto provide300bahteachpersonper month,which incrcased from 200 baht beforethe crisis. 1.1.2 Emphasison community porticipation Foilowing the Asian crisis, the governmentstartedplacing more emphasison the imponanceof communities,social capital, and grass-rcotorganisations.This new and higherde$ee of stakehoiders, participation @roach hasled to moredecentralisation ard autonomythanin the past.

1.2 Internationdl qnd Local NGOS Beforethe 1980s,thetermNGO waspracticallyunhea.dofin Thailand.A few NGOsrhat carneto assistin welfare and developmentprcgmmmeswere mostly religiousgroups. However,peopleorganisations haveexistedin the countrysince1973.They haveevolved iom studentand professionalmov€ments.Theseorganisations include various labor r-rionsandfarmers'organisations. Theysharea similarideology- socialism. Iit 1973-1976,many organisationswere under violent threat from right-wingedand nilitary-relatedgroups. After the 1976coup,mostof theseorganisations were forcedto .ease their activiti€sand many fled iffo rhe jungle to join the Communistparty of Thailand. .{ie. the Vietram and Indochinawars, refugeesflooded into Thailand.Foreign funds and €\'eral NGOSalso floodedin, thus the beginningof the rise of NGOs in the country. \@s beganto grow in numbemandtheir objectivesbecamemorediverse.SomeNGOs *ere stili led by peopleliom previousmovements that clangon to the belief that the root -cf mostproblems esp€ciallypoverty is unequalresourceandpoliticalpower sharing.

Cdr|E!' Reports: Poverty in Thailand

Ilorerer, many NGOS put mo.e emphasison developmentprogrammeslmost of which ilo€d to promoteself-helpandcommunity-strengthened programmes. I! the 1980sand early 1990s,most NGOs were dependentsolely on funding from ifiernationalNGOS.Theywere thereforeheavilyinfluencedby agendasofthe latter.The fhai govemmentbeganto providefundingfor certainNGOSin the l99os.However.to dae. mostNGOsstill rely on foreignfunding The sovemment'sattitudestowardsNGOs had changedsubstantiallyin the pa$ two decades.In the beginning,the govemmentacceptedcharitableNGOs only ind was eEpicious of other types of NGOS. It viewed NGO9 as an obstacleto the state's d6elopmentprogrammes. Later,somegovemmental agencies triedto makeuseofNCOs' tnowledgeandfirst handexperience in workingwith localpeople. 4i pres€nt,NGOS'rol€s are well recognisedand incorporatedin the nameof people's participation.The government recognisesthe importanceof NGOs, which have parricipatedin developmentactivitiesin Thailandfor some 30 years. Approxmarely 10.000local and 30 internationalNGOs are involvedin a widg varietyof concernsand -tiriries (Racelisand Guevar4 2001), Sevenl NGOS participatedand rooK great responsibility in draffingthe currenteconomicandsocialdevelopmintplanofthe cou-ntry, based on. the slogan "people-centered development..NGOs' recognitionhas been bightenedsincethe economiccrisis,panly becausethe crisis appearslohavea linkage rirb world integration, which manyNGOshaveopposedfor a longtime.

5.

Critique/Assessment of Government'sResponses

To arulysewhetherthe govemmentsocialwelfareprognmm€swere able to reachthe IEople worseaffectedby the crisis, the Socio-Economic Surveyrdid a 1999 study on brsehold accessibility ro socialwellareservices Tbe surveyrevealsthat 13 percentofhouseholdswereidentifiedas poor by povertyline. Tbesehouseholds were eligible to obtainlow-incomemedicalcards,aimedto provide blrh servicesto nearpoor households with smallco-payment.Only 9.9 percentof rhe Eel eligible households obtainedlow-incomemedicalcards. Of the 9.0 percent,5.8 Fc€Dr with low-incomemedicalcardswere norr-poorhouseholds and 1.3 Dercenrwere an poor Only I 6 and 1 3 percentofultra poor andpoor households obtainedthe cards (Table6 at theannexshowsthe percentage ofthe poorhouseholds who wereableto access tb govemment'ssocialwelfare programmes). :t total of34.7 percenthouseholds ownedhealthinsurancecard.Ultra poor andmarginal por holding this card constitutedabout 3.8 and 2.? percent,respectively.These hrseholds shouldnot havepaid fof healthservices. Theyshouldhold low_income medical .rds for Aee. T> SciGEcorcmicSurvelis theonlynationwidesourceof datafor measuring th€pove.tyin Thailand.

I

I I

II I

cd.ErtryReports:Povertyin Thaitand

cltildren,oniy 2 3 perc'ertwereableto with school-aged Of the 59.5percentofhouseholds governmentscholarship.Of the2.3 percentonly 0 2 ofultra poor and0.1 percent obaain The benefitwent to nearpoor afld non-poor obtainedthe scholarship. ofpooi households by L9 and0.2 percent. rouseholds the socialpensionfor with elderly,or y 3.2 percenthad accessed Ofthe 31.4 households elderly.The other 29.2 peraentdid not have accessto this socialwelfareprogramme. into 4 $oups: 2.2 percentnon-poo. Delineatirgthese3.2 percentofthe total households while merely hadaccess,0.3 and0-4 percentultra poor andpoor households, households the benefit. hadaccessed 0 4 percentnearpoo. households Giventhe abovestatistics,it canbe saidthatthe govemment'ssocialwelfareprogtammes, *hile meantto mitigatethe impactofthe 1997cdsison the poor,werenot ableto reach the mostlulnerablegroups,the poor andthe ultra poor, as expected.Propertargetingof ofsocial welfareprogrammes rhemostrllnerable groupis crucialtoensurethe succ€ss

6.

Summaryand Conclusion

6.1 Summary TheKingdomof Thailand,capitalBangkok,is boundedby Burmaon the northandwest, by by Cambodiaandthe Gulfof Thailandon the southeast, bJ-Lao PDR on the northeast, Bunna on the southwest and llalaysia on the south, and by the Atdaman Sea it has a total areaof513,115 km2 The country'stotal mountainous, Predominantly populationis 62.3 million, with an annualpopulationgrowth of 0 8%. Majority of the habitants areThaiwhile the largestmino.itygroupis Chinese ofThai societywhile the impressive Povertyandinequalitycontinueto be a characteristic gowth ratesofthe early 1990stendedto reduceor transcendconcernsaboutinequality, drecrisisof 199?underlineddeep,regional.socialandurban/ruraldivides. Thailandhad one of the highestGDP growthmtesin the world in the pastfew decades, averaging7.6 percentper annumfrom 197'tto 1996.Between1988and 1996,Thailand's povertyincidencedroppedfrom about33 percentofthe populationto aboutI I percent, to morethan 1 rnillionpeoplebeinglifted out ofpoverty eachyear' n-anslating The country's€conomicprosperitycameto a suddenhalt whenthe economiccrisisstmck up to Tlailand in 1997.The incidenceof povertydeclinedsteadilyin the two decades -997 Sincethe crisis,therehasbeena reve$alofthis trend. The latestfiguresshowthat :i 9e%ofthe populationareliving belowa definedpovertyline of886 Bahtperpersonper ratesin roonth.Thecrisiscausedmanyeconomicandsocialproblems,includingincreased poverty inequality. in and u!€mploymentand inflation aswell as Povertyremainsacutein someareas.Recentstudiessuggestthat 92 percentofpovertyin havingthe highestincidenceofpovertyat 19.4percent Tbailandis rural,with the northeast

C.qfiry Reportsr Poverty in Thaitand

ir 1996.This figure roseto 24.0percentand30.8 percentin 1998and 1999respectively *bile the inc.easein povertyincidencein the northeastdueto the crisiswas quite severe' se situationwasrelativelyworsein thecentralandsourhemregions The Governmentof Thailandprovidedthose affectedby the Asian crisis, the most include:l. Theseprogrammes rllnerable sector,with varioussocialwelfareprogrammes. loan education groups; schemes tkough 2. education low income iElth cardsystemfor pension for for drop-outstudents;and 3. social programsand govemmentscholarships eiderly. Howevet studies show that the programmeswere not able to reach the target beneficiaries asmuchasthey should. The participationof severalNGOs and their roles in poverty alleviationin Thailandis significantand well recognisedby the gove.nment.Emphasishas beenplacedon the This newapproach ofcommunities,socialcapitalandgrasvootsorganisations. importanca participation anda higherdegreeof stakeholders' leadsto moredecentralisation

6.2 Conclusion 7 The economic crisis has affected the whole economy, covering all groups.However,the impacthasbeenhighly anddemographic socioeconomic uneven.Somepeopleh&vesufferedmorethanothers. 2 The main objectivesof future social protectionshould aim for continued poveny reduction,improvementof the quality of life and self"reliance, promotionof productiveand freely chosenforms of employmentas well as for men and women,and proteclionof wlnerable decentwork opportunities groupsth.rough properrisk managemant. In orderto achievetheseobjectives,it would be necessaryto funher extendthe social protectionsystemand to promote community-based social protection.This could be achievedby strengthening existingprogrammes. Z An efficient allocationof limited resourcesis absolutelyessential.Welltargetedsocial welfare or safety net programmesare imponant meansto links of proper poverty all€viation alleviate poverty. The comprehensive programmosshouldbe developedby thoseresponsibleagencies.An efficient ofpovertyreductionis ofgreatimportance. andeffectiveimprovement

CountryReports:Povertyin Thailand

)ources AsianDevelopment Bank,AsianDevelopment Outlook2001 .{sianDevelopmentBank, CountryAssistance Plan (2001 - 2003) Thailand;December 2000 AsianDevelopment Bank; CountryStrategyandProg.amUpdate(2002- 2004)Thailand; July2001 \atenuj, Sunantha;"Povertyand Inequalityduring Crisis Period in Thailand";World Bank,undated PJapongsakom, N. et. al.; "The Processof FormulatingPovertyReductionStategiesin Thailand';ThailandDevelopment Research Institute,2000 Racelis,Mary and M. Guevara;"Socio-CulturalFactorsAJrectingPovertyand Pov€rty Reductionih Asia;AsianDevelopment Bank,October2001 The NationalStatisticalOflice; "CountryPaperon Pov€rtyMeasurcmentin Thailand"; Paper preparedfor the Seminaron Poveny Statistics,Economic and Social Commission for Asiaandthe Pacificin Bangkok,Thailand;June1999 Lnired Nations DevelopmentProgrammes;"A Glance at Poverty in Thailand,'; http://w\wvurldp.or.th/focu sarea"/Dovert v/sIancepovthalbtnt

1l

a5untryReport3:Povertyin Thailand

Annex:Tables Table3. AveragePovertyLine ofThailand Unit: Baht Years 1988 1990 1992 t994 1996 1998 1999

473

522 600 636 737 878 886

Survey,NationalSlatisucal OfEccofThailand;(Natenuj.undated) Sourcc:Socio-Economic

able4. Yeals

lncldenceln lhalland(ln oercent

Municipal Areas

l98l

r986 1988 1990 1992 t994 1996 1998 1999

5.9 8.0 6.9 3.6 1.6 1.4 l3

Sanitary Districts

Rural Areas

I3.5 18.6 2t.8 t8.2 t2.7 9.6 5.8 '1.5

27.3 25.8 40.3 33.8 29.'/ 2t.2 149 173 21.5

8.8

Whole Kinedom 23.0 29.5 2'7.2 23.2 16.3 114 t3.0 15.9

\.rtce: Socio-l;ronontic Sun,ey,National StatisticalOltrceolThoiland: (Natenuj, ndated)

Table5. Per

of Poorbv Areas Municioal Areas

1988 1990 1992 t994 1996

r998 1999 S'urte. Sacio L"co omic Sufley, National StatisticalOllice oJThailand; NatenuJ, utldated)

l. F F t r| I I

Table6. Period 1988 1990

t992 1994

r996

of Yer ( aDltaHr)useholdIncome

Gini

Qrintile

i|ld€x

I

48.5 52.4 53.6 52.7 51.5

4.6

3.9 4.0

Quintile

Quintile

8.I 7.3 7.0

12.5 I 1.5 l1.l

19.0

7.2

11.6 I 1.8 11 . 9

19.9 19.9 19.8 19.3

7.5

1998 1999

5 1 .I 4.2 7.6 5ll 3.8 7.1. source s^GLcononr sunev.uanon@a1

Table7.

ofPoor

ll.l

Quintile 4 20.7 19.2

Quintile 5 54.2 57.8 59.0 56.7 56.7 56.5 )6)

Re

r| r| I

t

t

Source:socio-F,conomicSuney,Nitiino-Sn*ncar

o.fThaiIand; (Narenuj.undated)

Table8, Percentage of UltraPool Marginalpoor,Nearpoor andNon-poor Household's Accessto VariousSocialWelfareprogramsprovidedby the Government t999 Sociol Ultra Poor Mrrginal NearPoor Non Poor Atl Wdfare Poor Households low income 1.6 1.3 1.3 ia 9.9

medicalca-rd Health insurancecard SocialPension for Elderlv Govemment Scholarship

3.8

2.7

6.5

2l.7

34.7

0.2

0.4

0.4

2.2

3.2

0.2

0.1

o.2

1.9

2.3

Solttce: Socio-Econonic Suney, Na@

Vietnam

I I

Povertyin Vietnam JOHANNAZULUETA

1.

lntroduction

Iiris paperis part of a studyof povertyreductioninitiativesby govemmentandNGOSin eight {SEAN countries,namely:Philippines,Indonesia,Cambodia,Vietnam,Burma, Lao PDR view ofpove.ty situation iirailand,andEastTimor. The studyaims10presenta comprehensive poverty to by differentsectorsin the eightcountries.Also, it ajmsto comeup :itd the responses 'iiih recommendations or collaboration to development NGOs regardingareasof interventions :rrb their.espectivegovernments towardspovertyreduction.The studymainlyusedsecondary !:a (witten documents, books,andintemet) l-:is paper focuseson Vietnam.It is divided into six parts. The first part presentsthe :.i:oduction. The secondpart describes the demographicprofile of and poverty situationin '. nam The the maincausesof poverty. The fourthfeatu.esthe responseg : third discusses to :c\eny by the govemment,intemationaland local NGOs, includingintemationaldonors,and ::e church. The fifth presentsan assessment by som€ institutionsand analystson the particularlythe government's,to poverty. The sixth part presentsthe r.r.risectoralresponses, .;mmaryandconclusion.

2.

Profile

2.1 Geographyand Demography ::. SociaiistRepublicof Vietnam,capitalHanoi, is locatedil Southeast Asia, borderingthe 3:f of Thaiiand,Gulf of Tonkin, and South China Se4 alongsideChina, Lao PD\ and --:jrbodia lts total areais 329,560km2, with its land arcaat 325,360km?. Vietnam is :;rlosed of low, flat deltain the southand north andhilly, mountainous areasin the far north ::. :lorthwestregionsof the country. An agriculturaleconomy,the country'sexportsare fice, :'::ee. te4 rubber,crudeoil, garments, andseaproducts. pegthepopulationof Vietnamat 79,939,014, i...ent estimates with a g.oMh rat€of 1.45%.The :,:,=rry''sbirth tute rs 2123, while its deathrale,6.22 pet 1,000population. Vietnamhas a :,-rg population,with halfofits populationbeingchildren. -.-e'ram's ethniccompositionis primarilyVietnamese(about90%). Fifty-three(53) minority Hoa, Tay, Thai,Hmong,Khmer,Nung,Muong,Cham,and a::'jps accountfor the remainder: r-s nountaingrcups.Chinese comprise1.87o. .- :ountryhasoneofthe highestadultliteracyratesin the developing world -- 96.570for males with well-educated ![c tl 29lofor females.Households headsarebefterableto takeadvantage :f i-remam'seconomicboomthanhouseholds whoseheadshavelittle or no education.Urban

r| I I I I I

t

CountryReports: novenyin Vietnaln households and householdsheadedby someoneof white_collaroccupation have benefit€d significantly from the country'seconomtcgrofih. Vietnam'sofficial languageis Vietnamese.Otherlanguages spokenareFrencl;variousChinese dialects, Khmer,andothertribal andmountainareali=ngu:ages. fngtish ls increasingty favourea asa secondlanguage. Amongthereligionspresentin thecountry_are Mahayana Buddhism,Theravada Buddhism,Hoa, Hao, Cao Dai, Istam, Hinduism, and Christianity(p*d..il;il;"R;;; catholic, some Protestant). Table1. Totallandarea PopuJation CsDital

325,360 km 79.939.014

Eaonom \larn exports

Rice.coffee.tea.rubber.seaprodrras,cn de

\lirrf

\l3ror Rcligions

Mahayana Buddhism.-tenvada Buddhism,Hoa,Hao,CaoDai, Islam, Hinduism,andChristianitv

2.2 Poverty Situation a:1"iT:!,1 remainsasoneofthe world,spoorestnations. With a Gini coefficrentof.35, it has :-<ed It0countries (1998). Latest statistics ,f,"rll ti"i i#'""""r.y,s cNP per 9y! -of 174 =--]a is US $370 whiie its GDp Dercapitais US$ 400. ffrny-r"re""per"e"t (j7 %) of jts :E:cle li'e belowthe povertyline. Ninetypercent(90olo) ofthe poor live in ruralareasandare :r..:i: nantlyfarmers.Majorityofthesepeoplebelongto ethnici.orp, - -:-'r povertyis alsoprevarent in vietnam- It is not, howevgr,so pervasive asrn the rurarareas. li:i ci tlte poorin theseareasarenew migrants, usuailyunregistered, un"rpfoy"a, or haveno rriejobs Theyhavedifficultyaccessing basiciocial service"" i:e ilco of childrenare malnourished,l4oZof whom suffer from severemalnut tion. Life 1rc-r.cv rs about67 yearsfor malesand72 yearsfor females. llr-=c. i 5^millionyoung peopleare addedto the labour force per year.25 million people, errc-.e for 60%of thelabourforce,areunemployed or underemoloved.

CountryReports:Povertyin VietnEm Table2: Socioeconomic Indicatorsof GDPpercapita GNP per capita GINI coeflicient Humandevelopment index(HDI)

Povertyincidence Rural Urban Annual growth .ate Life expectarcyat birth Male Female Adult literacy mte Male Female Infantmoflalityrate(perl,0OO Iivebinns, Unemployment rate

us $400(2000) us $370(1999) .35(1998) I I 0"' out of I 74 countries 37% (1998) 45yo 9Yo | 45o/o(2001)

69.56years(2001) 67.12years 12.19yearc 93.'7%(1995) 96.5yo 9l.2% 30.24(2OOt\

7A%(reee) 6.syo(2000)

3.

Determinantsand Causesof Poverty

A numberof factorscausepovertyin Vietnam.Theseinclude:unevendistributionofeconomic groMh, minimalgovernm€ntbudgetfor basicsocialservices,largefamiliesin rural areaswith few gainfully employedmembers,unfavourableclimatic conditions,l960,s Vietnam war, economictransition,andAsianeconomiccrisis.

I I I I Il

r| r| r|

3.1 Unevendistribution of economicgrowth. Uneven_distribution ofeconomicgrowth in which grov,this mainlyconcentrated in urbanareas, hasmadepovertyin the countryas a largelyrural phenomenoqwith 45% of rural population Jivingbelowthe povenyiine. Povertyincidencein urbanareaswasreducedto lessthar loz in 1998. Therewasalsoan increasein educational enrolmentfor both boysandgirls. Accessto inflastructure alsoincreased aswell asownershipofconsumervariables.However,armost40oz ofthe populationstill lived belowthe povertyline in 199g. Hence,rural povertyalJeviation is left behindand the ruralpoor'saccess to basicservices, suchaseducationandhealth is still not readilyavailable.The gap betweenthe rich and poor remainslargq with the gap betweenthe poorestand.ichestquintilesincreasingfrom 7.3 timesin 1996to 8.9 timesin 1999. There is alsoa big discrepancy in living standards betweenruralandurbanareas.

3.2

lvlinimolgovernmentbudget on basic services

G-overnment spendingon basicserviceswas a mere9.5% of total govemmentexpenditures in 1997,up from 6.1% in 1980@acelisand Guevar420Ol). The Vietnamese govemm€nrspent around12-14%ofits totalbudgetfor socialprotectiondu.ingthe yearsl99o,ld97

I Corhtry Rcports: Poverty in Vietnam

3.3 Ldrge families with few employedmembers Poorhouseholdsin rural areashavelarge numberof children but with a few gainfully employed members.Few, or none at all, non-farm employmentare available. Thus, more memberswere dependentratherthan productive.

3.4

Lackof dccessto ldnd and basic social sewices

Thepoor havelittle or no land; they lack accessto cultivat€dland. They lack savingsand access to credit, techtology, basic services(e.g., health and education),material resources,and other physicaland social infrastructures (e.g., informationand markets). Also, genderinequality existsdamongthem.

3.5 Severeclimatic conditions Peopleliving in the oentralregionexperienceseyer€naturalcalamities,suchas tlphoons and floods,accounting lor theirimpoverished situation.

3,6 Vietnamwor, economictransitiondnd Asiancrisis Th€ long-termefects of the war (1960'sVietnamWar) continueto contributeto the poverty situation in thecountry.Vietnam's transition froma command economy to a marketeconomy is alsoseenasoneofthe causes of poverty.Withthetransition, statesubsidies public for weliare havebeenreduced. The 1997 Asian crisis createdan economicslowdowr! causingunemployment and underemployment, hence thelossof income.Unemployment hascaused thenominalincomes of households to d€crease, hence thedeoease in thepurchasing powerofbothdomestic consumers andforeignmarkets. With this hascomethe stagnationof agdculturalproductsand a large percentage lostto agdculture.

4.

Responses TowardsPovertyReduction

4.1 Government 4.1.1 Doi Moi Policies(Reformation and Renovation)

I I I I

Povertyreductionhasbeenthe centralgoalofthe vietnamese govemmentsincethe reunification of North and South Vietnam in 1976. The gover nent believes that economic growh is fundamentallyneededto increaseincome for everybodyand that it plays ar important role in eradicatinghunger and poverty. The number of poor people increaseswith a stagnantand unstableecoflomy, hence maifiaining a high rate of economicgrowth is the key to poverty reduction.

Co.r|try Reports: Poverty in Vietnam

With the implementation ofthe couqtry's"doi moi" policies(reformationandrenovation),aimed at transformingthe economyfrom a centrallyplannedto a market-based economyin 1986, povertywasreducedfrom 70% in the mid-1980sto around500/0 irr 1992. ln 1998,povertyaiso declinedto 37Yofrom 58%o in 1993. Povertyreductionduringthis time, howevel resultedfrom stfong economicgro*th rather thaa improved distribution(Racelis and Guevar4 2001). Economicgrowth wasunevenlydistributed,hencepovertyis mainly concentratedin rural areas. Nevertheless, Vietoam'spolicy of"doi moi" (renovation)in the 1980's$adually lifted farmers out of pov€rty. Under this policy, the gover nent replacedcollectivefarms by a systemin which land is allocatedto individualhouseholds.lt legalis€dprivateeconomicaativity and removedcontrol on prices.Also, it legalisedForeignDirect Investments and eliminatedtrade period, During barriers. this Vietnambecamethe world'ssecondIargestriceexponer. In 199l-2000,Vietnam'saverageannualgrowth ftte was 7.5yo.the country experienceda considerableincreasein living standards. Vietnam becameself-sufficientin food and transformedinto a major food expo.ter. The country'stotal investment,including foreign investm€nt, alsorcseduringthisperiod. Figure l: IncidenceofPovertvin 1993and 1998

Owftll lorsty tr19!3

6tSS8

Source:Socio-EconomicDeveloDmena CenEewcbsite

Figure2: PovertyRatesAccofdingto MOLISA* Assessment

* Mnistry oflabour, Ilvalids, and SocialAiahs

GE*ry Reportsi Poverty in Vietnem Sr.!:

Centsewebsite Development SocicEconomic

1-l-2 NationalTarget Programmefor Hunger Erodication and Poverty Reduction (TEPR) ,4.majorgovemmentprogrammeresponseto alleviatepoverty was-theHEPR! a consolidationof rhe vdious government prognmmes to addressthe problem of poverty in Vietnam This ptogrunme intendedto provide an integratedpolicy and planning fiamework and coordinate alsoaimedto eliminateckonic ifr'Jns acrossdifferentsictorsand minist es. The prograrnme in the aountryto 10%by the year2000 ofpoor households hungerandreducsthe percentage Tle followingweresomeofthe HEPR-smainaxes: l. 2. 3. 4. 5. 6. 7.

Investmentin basicinfrastructure Provisionofcredit for poorhouseholds of landdistribution Readjustment Provisionofhealthservicesfor the poor training of vocational Expansion for ethnicgroups Assistance Fundraisingfor povertyalleviationprcgrammes

th€ govemmentwasableto implementmorethan4,000projectsin 1,870 Underthisprogramme, communities.The amountof creditallocatedfor the poorhasbeenincreasing ln disadvantaged creditfor the poor. to provideconcessional 1996,theBankofthe Poorwasalsoestablished

4.1.3 SocialfuotectionProgrammes for the poor' Theseconsist formalsocialproteotionprogrammes alsodeveloped Thegovemment of thi Social GuaranteeFund for Regular Relief and the ContingencyFund for pre-Harvest andDisaster. However,the benefitsof the Fund for RegularRelief reachedonly a Starvation 24 percentof orphans,15 percentofdisabled, minorityofthose qualifiedto receiveassistance: and46 percentofsolitaryelderly(RacelisandGuevara,2001) 4.1.4 Policy of creating opportunities for the poor Anotherpolicy responseby the govemmentis to createopponunitiesfor the poor and support throughthe following; thesepeopleaswell. This creationofopportunitiesis manifested to basicservices, suchashealthandeducalion, Increasing access physical andsocial; both Developinginfrastructure, productivityin agriculturc; Increasing Inqeasingthe incomeofthe poorin urbanareasthroughjobcreation; Protectingtheenvironment; Stengtheningthe abitity of the poor to accesscredit tkough programmes'such as microfinancing; ofthe minorities; 7. Raisingthe living standards poor andvictims ofnatuml disasters. nets for th€ Developiog safety 8. 9. Developingthe eaonomy;

1. 2. 3. 4. 5. 6.

CountryRepofts: Povertyin Vietnam

E

10.Ensuringsocialjustice; 11.Encouraging family andpopulationplanning,and 12. Encouraging foreigndirectinvestment or FDL 4.1.5 GO-Donor-NGO Poverty WorkirE Group A joint govemment-donor-NGo Pove.tyWorking Group was createdin 1999to undertakea comprehensive analysisof poverty issues. The goup produceda rcport enti ed Vietuam: Attacki g Pover\t, combininganalysisof quantitativedatafrom the Vietnamliving standards surveysand qualitativedata fiom four (4) panicipatorypoverty assessments for an in-depth analysisofthe povertysituatiooin Vietnam. Thereportlaysout a three-pronged approach to attackingpoverty(LrNdata): L Createopportunitiesfor employmentand producinggrowth through promoting broad-basedgrowth and economic opportunities,and by investing in human development andphysicalinfrastruature 2. Ensureequity through increasingpeople(especiallythe poor) empowermentand participation 3. Reducethe rulnerability of the poor to unforeseenevents(e.g. sickness,poor harvests) throughthe strengthening andsupportingofformal andinformalsafetynets 4.1,6 ComqehensivePoverty ReductionStrategy (CqRS) The govemmentalso developedthe CPRS,servingas a documentthat effectivelyincorporates poverty reduction efforts between sectorsacrosstho country, and that guid€s, enforc;s, and monitorstheactivities,involv€ment,andperformance ofall developedpartGs. The following arc maoro mechanisms and policies,promotingeconomicgrowh and create resources for povertyalleviation:

r| I I I I I I

1) Createa fai. andcompetitivebusiness environm€nt 2) Maintainmacroeconomic stabilitythough improvingtradeandfiscalpolicies 3) Mobiliseand use effrcientlyresources for the poor throughincreasinginvestmentfrom statebudgetfor socialdevelopment 4) Administrative reform (Thetablesat the amex outlineth€ policiesto be implemented by the governmentdu.ingthe years2001-2003.The tablesgive a comprehensive outlineofpolicies andmeasures mentioned in the2000IPRSPwith regardto the macromechanisms mentionedabove). 4.1.7 Nationol Employment Generationprogromme (NEGp) The NEGP includ€semploymentpromotioncentres,vocationaltraining,careeradvising,and trainingcentres.On the average, jobs for 1.2to 1.3million peoplearecreatedperyear.(lpRsp,

_-.!fc-r Reports:Povertyin Vietnam

l:'-'- I:e private,collective,a.ndcoope.ative economicsectorsabsorbabout9070ofthese new qr: -.r::.:. intothe labourforce.

' ' a astablishment of microfinancinginstitutions :,:.r- De!elopment Resea.ch Centre reports that the govemmeht established several 1_r: :::1rce institutions. Theseare as follows:

\'ietnameseBank of the Poor (VBP) set up in January1996by the communist sovernment to eliminatehungerandalleviatepoverty : \'ietnamese Bankof Agriculture(\BA) -i PeopleCreditFund(PCF)- is underthe directmanagement ofthe CentralBank.The projectis fundedby ADB andCIDA with technicalassistance liom SDID Desjardin As of September1998, there were 983 casesserving625,000clients and with consolidated assets ofUS$ 128million. I \ticrofinanceResource Centre(MRC). .

1.2

NGOSand Other Sectors

: . i:riei! in Vietnamis makingits presence felt in key cities,suchasHanoiandHo Chi Minh. \',!:: :: oi organisations, suchas intemationalresourceagenciesor donororganisations and .:,:-Lr:: irtemationalNGOsand massorganisations, in civil society Vietnamis involvedin a r_r-i ::::e ofcommunitydevelopment effortseitherwith the government or independent of it. -:r:-:;::,.ial \GOs startedto emergeafterthe 1986"doi moi" policy. In 1992,atotai of 110 -::!.:r--:. agencies,mostly Westem,were listed as operatingin Vietnam. Majority of these i::_:-.:::-.rioiked along children,health,and educationissues. Only a few of theseagencies ,
::. also NGOs and NPOs registeredunder a governmentagency. They are loosely :ct::::; andseldomget financialsupportfrom govemment.Many ofthe NGOSin Vietnam !=: :s:--rlishedby universitiesand researchinstitutes. Theseare, however,quasi-Ncos L.* .:.rJ Guevara,2001)becausedespitestronglinks with the governmentand familiarity cc =e -::er's policies,theyoftenhaveweaknetworksat the grassroots level. :.;rlE:::'e.is civil societyimplementedin variouspartsofthe countryare informal social Farm€rs.otherinterestgroups,or evenwholgcommunities rr're---:r- \..hemes(microfinancing). € .c '-:e:e financingschemes Under this scheme,membersmaLeregularcontributionsand r :r:E: :o ge! insurance benefitsduringemergencies andold age.

Cdlr

5.

n gdts: Po\rerty ln Vietnam

--

--

(Basedon the Assessment Critique/Assessment on the

2mo IPRSP)

Despite\-etnam's ongoingpoverty situatiorLthe govemmenthas had significant achievements in poverty reductionover the pastyearsand hasbeenregardedby the intemationalcommunity to be adotrg the countries with strong performarce in poverty reduction. (Ioterim poverty RedrctionStrategyPapei,2000). Vietnamhasbeensuccessful in implementingpoliciesthat give p.iority to agriculturaland rural development,contdbutingto hunge.eradicationand po\ertyreduction,incomegrofih, andthe improvement of living standards in rural areas. Also, jobs ii has adoptedvarious mechanismsto create and opportunitieswith help from th€ qolemfl ent and community. Tb€perc€ntage ofhungryandpoorhouseholds in Vietnamdeclinedfrom nearly30oZin the early l99)s to zoyo in 1995, and to an estimatedll% in the year 2000. The percentageof coftmunitiesthathasno or little basicinfrastructure hasbeendeclining. h Lie 1990s,growthwasdrivenby the rulal sector,whereagriculturalland,literateandhealthy lahlr were relativelyand evenlydistdbuted. Thus,growth was accompanied by remarkable .Eduoionsin poverty. Growthwould have beenmorc favourableif policiespromotedmore hbNr-using industrialgrouth. Meanwhile,structuralreformsintendedto promoteemployment, erpons, and broad-basedeconomic groMh were set out in the Interim povertv Reduction So-aegy Paper(IPRSP)for the year2000. However,the PRSPdid not ad€quately describethe analyicalwork andconsensus buildingthat 6e govemmenthas carriedout fof designinga socialsafetynet for workersin state-owned derprises that may be adverselyaflectedby structuralreforms. It wouldbe importantifthe PRJPwouldpromoteequityandrecognisesomeprovincesandvulnerable groups.Remoteareas i ne country may not benefit from faster employment creation, expect€dfrom the reform po3ramme, as what happenedin the 1990s Hence, there is a need for regular and accurate po\erty monitoringthat can identify emerginginequalityand higl ight the importanceof oees:resappropriate to address the povenyissuein theseremoteareas. so{,]rd sectoral strategies,promoting the delivery of high quality seftices to the poor rural lo.cmunitiesmoreequitably,wouldbe crucialfor povertyreduction.Therefore, the gov€mment orgirt to pursuegovemanceand administrativereform to ensuresuccessofits Dovefi reduction gB-s TbePRSPshouldlikewiseconsiderthe needto tackleissues,suchas alienationAom decisionralitrg processes,the lack of meaningfuldialogue betweenlocal authoritiesand poor iGlunities, and accessto legal systemfor the poor, as thesearc centralto the govemment's @. of promotinggrassroots democracy. kriermore, the proposalto develop local ethnic minority developmentplans should be &rated in the PRSP. Expedencein Vietnam and elsewheresuggeststhat strongcommunity ard monitoringof theseplans are importantin Flicipation in the design,implementation, r5eling relevant,realistic,andefective development Dlans.

CountryReports:Povertyin Vietnam

10

Genderissuesard attemptsto addresssuch issuesare seenin th€ PRSP. However, the PRSP shouldemphasise the importanceofwomen participationin particularactivities. It shouldalso usemorc recentanalltical work on the situationof womenin the country. Summingup, the main critiques on the govemment'spolicy agendaon poverty reduction focus on the needfo. structuralrcfo.ms, es well as the needto promoteequity in the distribution of resourcesa.nd,/or opportunitiesto wlnerable goups. The needto addressinequality, panicularly genderand ethric issues,are also essentialto achievethe full poverty reduction strategy the goverrunenthaslaid out.

6.

Summaryand Conclusion

6,1 Summary The SocialistRepublicof Vianam bordersthe Gulf of Thailand,Gulf of Tonki4 and South ChinaSea,alongsideChina,Laos,and Cambodia.With Hanoi as its capital,the republichasa totallandaxeaof325,360km'. An agriculturaleconomy,the country'sexpois arerice, coffee, tea,rubbel crudeoil, garments, andseaproducts. Lateststatisticsshow that Vietnam has a total populationof '79,939,014, half of whom are children. Around 90% of the total populationare Vietnamese. The colntry has one of the highestadultliteraayratesin the dev€lopingworld,with 96.5%for malesand91.2olo for females. Vietnam'sofficial languageis Vietnamese. Englishis considered as a secondlanguage.Among the religionspresentin the countryare MahayanaBuddhism,TheravadaBuddhism,Hoa" Hao, CaoDai,Islam,Hinduism,andChistianity. With a GINI coefficientof .35,the countryhasrar*ed I lorhout of 174countries.Its GNp per capitais US$ 370while its GDP per capitais US$ 400. Thirty-seyen (37 %) of its peoplelive below the povefty line. Ninety percent (90olo)of the poor live in rural areas and are pfedominantlyfarmers. Majority of thesepeoplebelongto ethnicgroups. Some52% of childrel are malnourished, 14% ofwhom sufferfrom severemalnutrition.Life years expectancy is about67 for malesMd 72 yearcfor females. Aiound 1.5 million young peopleare addedto the labour force per year. Twenty-fiv€ (25) million people,accountingfo. 60%ofthe labourforce,areunemployed or underemployed. Factorsthat determinepoverty in the country include: unevendistribution of economicgrowth, minimal govemmentbudget fof basic social services,large families in rural areaswith few gainfullyemployedmembers, unfavourable climaticconditions,1960'sVietnamwar, economic transition,andAsianeconomiccrisis. Amongthe govemment'srespons€stowardspovertyreductionare:the impl€mentationofthe doi rnoi (Reformationand Renovation)policies and a policy to createopportunitiesfor the poor; creationof a GO-Donor-NGOPoverty Working Group; implemenlationof p.ogrammes,suchas

.d.t

Raports:Poverty in Vietnam

ft liaiooal Target P.ogamme for Hunger Endication and Poverty Reduction (HEPR), National Cqrehensive Pove.tyReductionStrategy(CPRS),SocialProtectionProgrammes, ofmicrofinancinginstitutions. Progamme; andthe establishment E4lotment Generation of NGOSand othersectors,alsoplaysa crucialin povertyalleviation. Cn:l society,composed -ftq maketheirpresencefelt in key cities,suchas Hanoi and Ho Chi Minh. Civil societyis effons. ;rrolred in a widerangeofcommunitydevelopment recognises the valueof NGOs in povertyalleviation. It supportsNGO works The government ri:rougl the mobilisationand tapping of its own personneland material .esou.cesfor :€1elopmentinitiatives. Someprojectscivil societyimplementsin various pans of the country are informal social lrorection schemes (microfinancing). Farmers, other illterest groups, or gven whole ,-ommunities set up thesefinancingschemes.Under theseschemes,membersmake regular andold age. benefitsin timesofemergencies conrributions andcan€xpectto get insurance

I

I

tt I

r| t t t

r|

I

Tle maincritiqueson the govemment'spolicy agendaon povertyreductionfocuson the need tbr structuralreforms;the need for equitabledistributionof resources;and the need for to wlnerable groups. The needto addressinequality,panicularlygenderand opportunities erhnicissues,is alsoessential to achievethe full poverfyreductionstrategythe governmenthas iaidout.

6.2 Conclusion ,

Vietnam'seconomicgro*th in the past years has alleviatedthe country's poverty addressed this situationandin fact,it is oneofthe countriesin Asiathat hassuccessfully povertystill pervades in the country. This is mainlybecause ofthe issue.Nevertheless, people. groMh lack of capital and to resources of uneveneconomic unequalaccess access to basicservicesandresources ofthosein ruralarcas.

,

to povertyfocuson moreequitableeconomicgroMh asrrell as Govemmentresponses even distributionof resources.Among the govemmentagendaagainstpoverty are: creation of jobs development of agiculture; and provision of credit systems and microfinancingschemes.

,

Civil societyandNGOs,intemationalalrdlocal,play a crucialpart in poverty.eduction. goals. Theycollaborate with govemment, moreparticuladyin achievingshort-term

,

An important factor, contributing to Vietnam's progress in hunger eradication and povertyreduction,is the supportthe countryreceivesfrom othercountries,intemational organisations, a:rdNGOs through€xperiencesharing,and the provisionof technical assistance andfunds.

(-y

R€ports: Poverty in Vietnam

,

\ietram hasstill a longway to go to achievezerolevel poverty. Nevertheless, its plans od policiesstatedin the IPRSP,if successfullyimplemented,would pave way for funhereconomicgrowthandcontinueddeclinein the povenyincidelcein the coumry.

t Annex:Tables .E

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Who GainedFrom Vietnam'sBoom in the 1990s:An Analysisof Poverty and Inequalityhttp://eaon.worldbank. org