THE BLOG
29/11/2013 07:29 GMT | Updated 28/01/2014 05:59 GMT

What Will It Take to End Poverty?

Poverty has always been with humanity - even Jesus said that the poor would always be with us. Yet while nothing short of a miracle would have made poverty eradication possible 2,000 years ago - neither emperors nor kings had the knowledge or resources to do it - today, we have what it takes to tackle poverty.

by Erik Solheim, Chair of the OECD Development Assistance Committee and Former Minister of the Environment and International Development, Norway

We have the policies and the resources we need to end poverty. What we need now is political will.

Poverty has always been with humanity - even Jesus said that the poor would always be with us. Yet while nothing short of a miracle would have made poverty eradication possible 2,000 years ago - neither emperors nor kings had the knowledge or resources to do it - today, we have what it takes to tackle poverty.

Absolute poverty has been reduced by 1% every year since 1990. China and many others have successfully overcome poverty, and we can learn from their success.

So how is it done? What lessons can we learn from what has worked?

Getting people out of poverty requires the right mix of good policies, public and private initiatives, economic growth and financing.

Leadership is a key ingredient. The Chinese miracle started in 1978 with new leadership and policies. Since then, Chinese economic growth has been a huge poverty-reducing engine. Similarly, leadership has been the key to success in Turkey, Indonesia, Brazil, Ethiopia and many other countries.

Money also matters. The cost of ending extreme poverty worldwide is estimated at $150 billion, or 0.2% of global GDP. A lot of money? Not really. That same amount was made available for the latest European Union growth package. And despite the crisis, some nations show political will even when times are tough and unemployment high. Turkey had the highest increase in development spending among OECD countries last year. The United Kingdom is on target to reach 0.7% of GDP as foreign assistance. This is an impressive display of political will. If the UK and Turkey can do it, other countries can too.

Giving people cash works. Direct cash payments allow people to buy what their families most urgently need, be it clean water, food, housing or the means to start a business. These cash transfers are often given in exchange for social goods, like the Bolsa Familia in Brazil that made enrolling children in school or ensuring vaccinations a prerequisite. This flagship social policy programme contributed to halving the number of poor people in Brazil, while growing the economy by a third and reducing inequalities. In many countries, women are the preferred recipients of cash transfers because experience has shown that they use it more wisely and care more about the children. Mexico, Ecuador and Chile have learned this lesson, improving the role of women while benefitting from the effectiveness of cash transfers.

Supporting the small farmer is key. Most poor people live in the countryside, often depending on small plots of land for their livelihoods, with poor agricultural production. Many countries have found ways to help them. Farmers with property rights, for instance, are more effective and produce more food. Access to loans helps them to purchase machinery or animals and thereby increase production. New seed varieties and irrigation techniques give bigger yields with less input. Roads help get farmers' products to market -and get fertilizers to the farmers. These are simple steps, but they require public investment and private initiative. China's dramatic poverty reduction was largely driven by improvements in small-scale farming. Between 1978 and 1985, agricultural reform contributed to 10% economic growth, more food and less rural poverty. Vietnam has made similar reforms with great success, moving from being a major rice importer to become the second biggest rice exporter in the world.

Microcredit schemes give people a chance. The microcredit revolution pioneered by Muhammed Yunus in Bangladesh demonstrated that the world's poor are a hugely underutilized group of people. Banks have failed as providers of capital for very small businesses by ignoring entire groups of people. Often the only alternative are loan sharks who offer bad terms - it can be very expensive to be poor. Microcredit schemes offer a fair chance for people to break out of poverty and create new livelihoods - especially women, who are prone to be discriminated against. With microcredit, many women have seized the opportunity to set up shop and invest in moneymaking enterprises.

The world can come together to eradicate extreme poverty by 2030. We have the resources and we know how to do it - as we have seen in one country after another. If we are successful, we will save many lives and set the stage for further development. If we have the will, nothing can stop us.

Erik Solheim will be speaking at "Can we really end poverty? A debate on the future of development", hosted by the OECD and Intelligence Squared. Click here to watch the livestream on Thursday 5th December from 7pm-8.30pm UK time.