Publications /
Opinion

Back
To solve extreme poverty, give people money
Authors
March 4, 2024

This blog was originally published on huawei.com

 

What impact do you think ICT and connectivity can have in fighting global poverty?

At the World Bank we had a very enthusiastic and optimistic view on the potential impact of technology and ICT. Brazil had a cash transfer program for poorer families where households received money directly from the government, regardless of whether they had bank accounts. The money was not distributed by hand but done electronically: the government had built a registry of 25 million Brazilians considered to be below the poverty threshold. The money was transferred to the women of the household. It had a huge impact because it was straightforward and empowered the families, particularly the women, giving them money for basic needs. 

One of the advantages of this kind of technological registry was that we could know the poor by name. We could potentially collect information on their different needs, in terms of infrastructure, education, health care and so on, that could give the government a potential guide for specific policy interventions in particular neighborhoods. Multilateral institutions do not govern, they support; they give policy advice and finance programs. But in addition to providing funds, a major function of the World Bank is to play a hummingbird role. Hummingbirds pollinate flowers, and these multilateral institutions can also pollinate with knowledge. 

With the Brazilian experience, the World Bank was keen to learn and participate – helping Brazil to develop a system for checking whether the money was really reaching those who needed and deserved it. And it was amazing: the rate of good targeting was close to 95%, with just a 5% margin of error. The Bank was ready to disseminate the experience with other interested countries, although Asians are not fond of this kind of direct cash transfer, as it’s seen to potentially undermine the will of poor people to get out of poverty. But overall we were proud to play this hummingbird role, to be the bridge in terms of knowledge dissemination and knowledge pollination.

 

And was it connectivity that provided the ability to share the knowledge?

We knew the role ICT could play in battling global poverty, because it provides tools and solutions that empower individuals and communities. Access to information and education is facilitated by ICT, which makes it potentially easier to break the cycle of poverty. But you need certain conditions in place – the infrastructure and affordable access to it for the adoption of ICT tools – so governments and organizations need to invest in building this infrastructure. 

We did a survey in 2010 which found that, in the poorest 20% of households, seven out of ten had a mobile phone. They were more likely to have access to mobile phones than to toilets or to clean water. It’s incredible. But that allowed financial inclusion, as shown by the experience of countries like Kenya, with its M-Pesa digital payment system. Even with the old-style, more primitive cellphones, they were able to develop a network that reduced the cost of a remittance. 

I also remember meeting the former UN Secretary-General, Kofi Annan, who he talked about a project to install cell phone towers around Lake Victoria. The number of casualties because of storms taking fishermen by surprise was significant. And this network would provide weather warnings to be shared with inhabitants surrounding the lake through cellphones using visual mechanisms – so even illiterate people could be warned. I remember how enthusiastic we all became with this great example of how ICT can improve the conditions of poor people. 

 

It comes back to your point about access to information, about knowledge and being able to access these services.

Exactly. ICT can also help farmers, informing them about weather patterns, market price, where to locate their products, and also best practices in farming. I saw it in Brazil, where an agricultural engineer explained to me how he cherry-picked 18 different types of seeds appropriate to the needs of his soil. He was able to maximize his activity using equipment and weather forecasting to decide when to seed, when to collect and so on. 

There’s so much potential. But for ICT to become concrete and effective, you have to have the corresponding policies in place – that access to reliable and affordable internet infrastructure. And also promotion of digital literacy, to help those Lake Victoria inhabitants do even better, for instance. You have to have the regulatory framework, to encourage innovation, and at the same time, protect the interests of users. 

ICT with AI is a double-edged sword. It has a tremendous potential to increase productivity and to facilitate learning, but it has the potential to exclude too, with questions about security and misinformation. So it's a double-edged sword. It all depends on the presence of a regulatory framework. You have to have an environment where public-private partnerships can flourish, so as to accelerate the deployment of ICT solutions and reach the underserved. So there is potential but there is also risk.

 

Is that risk especially acute for poorer areas? 

Education is the base. We should not underestimate the potential of learning and development among poor people: once they have the basics, they can go up the ladder. And there are improvements in governance that can come with ICT. In one case, parents of schoolchildren had an app to give information to the central government about the attendance (or not) of teachers at school. With this mechanism of bottom-up monitoring, the absence of teachers dropped dramatically. This improvement was made possible by ICT.

 

The goal of SDG1 is to eradicate extreme poverty worldwide, and half of all poverty worldwide by 2030. Is it going to be achieved – and if not, why not?

We have made undeniable progress towards those goals, owing to a combination of world economic growth and policies directed at exactly that goal. More recently, however, it looks like we have stagnated, particularly in Africa. But let’s go back: do you know why the Brazilian cash transfers that I spoke about earlier went to the women?

 

Because the women will spend it more responsibly?

A survey done in the 1990s in Brazil, and replicated in other parts of the world, shows that in households where women have a strong say over how resources are used, the weight and height of babies are better than those where the male is in charge. When I gave classes in very chauvinistic or very racist places I would say: “Well, gender colleagues, the women are just better, and that's the proof.”

 

So, when it comes to tackling extreme poverty, basically go through women. Looking after them should be your starting point?

That’s exactly right. They prioritize the use of resources, and this could have long-term implications. Children who are better fed, and with better school and health attendance – and the money is conditional on that – will be higher human capital when they become adults.

RELATED CONTENT

  • Authors
    March 29, 2023
    يبين معدل نشاط المرأة المغربية1 انخفاضا أصبح هيكليا على مدى السنوات العشرين الماضية. وتزداد حدة هذا الانخفاض نظرا لضعف مستوى هذا المعدل، الذي يعتبر من بين أدنى المعدلات في العالم. ومع ذلك، تم تنفيذ العديد من الإصلاحات والبرامج والإجراأت أو يجري تنفيذها لتحسين ظروف المرأة، اقتصاديا واجتماعيا، وفي المناطق الحضرية والريفية. هل نواجه ظاهرة مجتمعية أم مجرد مشاكل تتعلق بالنمو الاقتصادي؟ ما هي الدروس التي يمكن استخلاصها من مختلف الدراسات والتحليلات التي أجريت في هذا الاتجاه وما هي الأدوات ...
  • Authors
    March 29, 2023
    Le taux d’activité des femmes marocaines (*) affiche un déclin devenu structurel depuis une vingtaine d’années. Ce déclin est encore plus critique vu le faible niveau de ce taux, considéré parmi les plus bas à l’échelle mondiale. Pourtant, plusieurs réformes, programmes et actions ont été menés ou sont en cours de déploiement pour améliorer les conditions de la femme, aussi bien au niveau économique que social, et dans les milieux urbain et rural. Sommes-nous face a ...
  • March 28, 2023
    كشفت دراسة نشرتها المنظمة الدولية للهجرة حول العاملات الموسميات بعد انتهاء مدة إقامتهن في إسبانيا والعودة إلى المغرب، أن أكثر من 83٪ من النساء يدعمن أسرة مالياً. وقد تم إجراء العديد من ال ...
  • March 24, 2023
    Ce papier est consacré au Nouveau Modèle de Développement des provinces du Sud (NMDPS), lancé par Sa Majesté le Roi Mohammed VI dans son discours de Laâyoune du 6 novembre 2015. L’accent y sera mis sur les réalisations au titre de ce Nouveau Modèle de Développement durant la période 2016-2022. Dernier volet d'une insertion définitive de ces provinces au sein du Royaume, ce nouveau modèle est doté de moyens financiers en conséquence, passant de 77 MM de dhs à 81 MM de ...
  • Authors
    March 23, 2023
    On Friday, March 10 -2023, the US and the world discovered that the Federal Deposit Insurance Corporation (FDIC) had seized the Silicon Valley Bank after SVB’s customers had withdrawn an extraordinary $42 billion from their deposits on March 16. This $4.2 billion an hour, or more than $1 million per second for ten straight hours, an unprecedented event made possible by the use of Apps by many startup founders to access their accounts and advise their friends to do the same -what the ...
  • Authors
    March 22, 2023
    Silicon Valley Bank (SVB), the sixteenth largest bank in the United States, experienced a bank run in early March 2023, and was closed by the U.S. Federal Deposit Insurance Company (FDIC) on March 10. This bank failure, followed by others, creates fear of contagion throughout the U.S. and global banking systems. This Brief identifies four factors leading to the SVB crisis: i) Sharp interest rate increases by the Federal Reserve, which adversely affected SVB’s income and balance shee ...
  • March 21, 2023
    كشفت دراسة نشرتها المنظمة الدولية للهجرة حول العاملات الموسميات بعد انتهاء مدة إقامتهن في إسبانيا والعودة إلى المغرب، أن أكثر من 83٪ من النساء يدعمن أسرة مالياً. وقد تم إجراء العديد من الدراسات حول هذا الموضوع، لتحليل الظروف المعيشية للمهاجرات الموسميات، سياقهجرتهن الدورية، أوضاعهن الاج...
  • Authors
    Camila Callegari
    Tarik Tanure
    Ana Carolina Oliveira Fiorini
    Edson Domingues
    Aline Magalhães
    Fernando Perobelli
    Alexandre Porsse
    André F. P. Lucena
    Eveline Vasquez-Arroyo
    Mariana Império
    Luiz Bernardo Baptista
    Roberto Schaeffer
    March 20, 2023
    This Paper was originally published on mdpi.com   Cities play a fundamental role in reducing greenhouse gas emissions and advancing the 2030 Agenda for Sustainable Development. In this context, public authorities need tools to help in identifying the best set of available solutions for the urban environment. Here, we developed an approach to help decision makers in evaluating sustainable solutions, considering aspects such as emission rate, economic attractiveness, job creation, a ...
  • Authors
    Zakaria Elouaourti
    March 15, 2023
    The aims of this article were twofold. First, to tackle the issue of convergence from an analytical point of view by presenting the mathematical developments of the main economic growth models, which emphasized that the convergence of African economies is conditional to the investment level in the early stages of physical capital accumulation. As the latter increases, the convergence of African economies is determined by other factors (investment in research and development (R&D ...