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
    Alioune Sall
    Moubarack Lo
    July 2, 2020
    La transformation de la Communauté Economique des Etats de l’Afrique de l’Ouest (CEDEAO) en « confédération d’Etats » est parfois évoquée, y compris au niveau des Chefs d’Etat de la Communauté, comme une prochaine étape naturelle du processus d’approfondissement de l’intégration en Afrique de l’Ouest. La présente étude a pour objet d’en explorer la faisabilité et la pertinence, en se fondant sur l’expérience vécue dans d’autres continents. Une Confédération d’Etats peut être défini ...
  • Authors
    Datu Sadja Matthew Pajares Yngson
    June 30, 2020
    Unless trade wars end around the globe, the world is headed for the biggest recession in living memory. The crisis arising from the coronavirus will hit fragile economies in Africa, the Pacific, and the Caribbean the hardest. At such a time, the world should be dropping barriers but, instead, new barriers are being built. In the past month, U.S. President Donald Trump threatened retaliation against India unless it released supplies of hydroxychloroquine. Worse still, he got his way ...
  • Authors
    June 30, 2020
    Prior to the colonial era, money issuance in West Africa depended on slave trade. With the advent of the colonialrule, silver coins were imported then progressively imposed as a tool of coercion. The post-colonial trajectory wasdifferent for former British and French colonies. While the former regained their monetary sovereignty, the lattercontinued under a monetary union under the auspices of France. The proposal of the Eco as a single currency forECOWAS is therefore a whole new st ...
  • Authors
    Abdessalam Jaldi
    June 26, 2020
    La jeune démocratie tunisienne a réussi le double pari de juguler la propagation de la pandémie de la Covid-19, tout en s’érigeant en un modèle régional de gestion de la crise sanitaire. Désormais, le pays doit remédier aux chocs économiques engendrés par la pandémie et pourrait connaitre la pire récession de son histoire. Dans cette tempête annoncée, l’accélération de la transition économique s’avère nécessaire, non seulement pour refonder le système économique, mais aussi pour pré ...
  • June 24, 2020
    La réputation, concept majeur s’il en est, est un indicateur de l’estime accordée à une personne physique mais aussi à une entreprise ou encore à une entité étatique. Constituée d’une somme de perceptions, elle est la résultante globale de l’ensemble d’images, d’appréciations des actions et comportements de celles-ci. Ainsi, la bonne réputation d’un gouvernement est déterminée et mesurée par son aptitude à faire face aux épreuves que traverse le pays, à affronter les bouleversements ...
  • Authors
    June 22, 2020
    COVID-19 brought the global economy to a sudden stop, causing shocks to supply and demand. Starting in January 2020, country after country suffered outbreaks of the new coronavirus, with each facing epidemiological shocks that led to economic and financial shocks as a consequence. How quickly and to what extent will national economies recover after the pandemic has passed? This will depend on success in containing the coronavirus and on exit strategies, as well as on the effectivene ...
  • Authors
    June 16, 2020
    La nature indispensable du transport aérien dans la conduite de la diplomatie et des affaires, la croissance de l’économie et le développement du commerce, fait que ce secteur est aujourd’hui sous le feu des projecteurs. Bien que ce ne soit pas la première crise traversée par le secteur aérien, elle reste sans conteste celle qui a engendré le plus de dégâts en un laps de temps relativement court. Il est vrai que les industries de l’aérien et du tourisme ont toutes deux déjà été mise ...
  • June 12, 2020
    Le Laboratoire d’Economie Appliquée ( LEA) de la Faculté des Sciences Juridiques Economiques et Sociales Rabat - AGDAL en partenariat avec le Policy Center for the New South, a le plaisir de vous inviter à participer à la table ronde organisée sous le thème «Les politiques économiques d...
  • Authors
    June 12, 2020
    The United States has suffered more COVID-19 casualties than any other country and continues to report large numbers of new cases and deaths, and – as evident recently in stock markets – investors remain extremely sensitive to the epidemic’s shifting trends. As every state reopens, including most recently the New York epicenter, the fates of the American economy and of the global economy depend on whether the United States has put the worst of the epidemic behind it, or whether it w ...