Part I Poverty Reduction Plans, Capital Solutions and Financial Strategies, Oh My!

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Part I

The Ministry of Finance and Economic Development in Ethiopia sent the Managing Director of the International Monetary Fund the Ethiopia’s Sustainable Development and Poverty Reduction Program (SDPRP) in August of 2002. Those can be found here.

The first thing that stood out to me about these document is the size. It’s a book. Over 200 pages of carefully researched statistics and monitoring would have taken time and money to do As one of Moyo’s many points, she states in Dead Aid that limited accountability is one of the (numerous) reasons for the failure of aid.

The second thing that stood out to me was the initial statement that economic growth is not the primary policy goal in order to achieve a reduction in poverty.

I was instantly curious as to what their main goal was, if not economic growth.

The documents said that their main strategies that they would be suggested are focused on rural, agricultural development. They also said that a free-market economic system was the primary goal in that it would help the economy develop rapidly, decrease the need for aid dependency (specifically food) and focus on the poor as the primary targets for economic growth to benefit.

Photo: University of Stanford

Photo: University of Stanford

The article’s focus on rural, agricultural practices reminded me of Rosamond Naylor’s response to Edward Miguel’s article, Africa’s Turn? She said:

“Although the overall economic situation in sub-Saharan Africa appears to have improved in recent years, any discussion about a sustained turnaround for the region must consider the rural sector and the role of agricultural development in improving the livelihood of the poor. Even as better macroeconomic management and higher export commodity prices have in recent years led to per capita income growth in several countries, the poorest rural populations—the landless or small landowners who are net consumers of food—remain desperately poor. According to World Bank statistics, over half of sub-Saharan Africa’s rural population still lives in poverty, and the depth of poverty is greater than in any other region of the world, with many surviving on roughly $0.60 per day.”

I also looked at Senegal’s Poverty Reduction Strategy Plan (PRSP), which was completed much more recently. This one was much shorter than Ethiopia’s report, less than half the size actually.

I noticed from the beginning that they broke the report off into time periods, allowing the reader to understand the context of the policy report, which was informative and helpful.

The first thing I found interesting was No. 4 in the context portion. It reads:

“It was formulated in a difficult international economic context, marked by the surge in the prices of food and energy products, combined with an uncertainty triggered by the likelihood that it might rapidly change. Besides, the persistence of the financial crisis illustrated by the turmoil in financial markets as well as the difficulties encountered by the advanced economies should, most probably, increase the risks of slow‐down in world economic growth, but could on the other hand redirect part of the FDI flows.”

I didn’t know what FDI flows were off-hand until I Googled and found it meant the Foreign Direct Investment inflows and outflows.

The inflows are the amount of investment the country gets by non-resident investors and the outflows are the amount of investments made by residents of, in this case, Senegal, into other nations.

The second thing that stood out was that about 2/3rds of the Senegalese population is under 25 years old! Also, that half of the population lives in rural areas, which was a little less surprising. With so many young people, I can’t imagine there would even be enough teachers in Senegal to teach the population, even if that were financially possible. I found those numbers to be really interesting fact about Senegal and I’m sure since 2010, those number have changed dramatically many times more.

Check out some more recent statistics on their population in this Youtube video byYouth Heroes:

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