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
    Meriem Oudmane
    April 16, 2020
    La crise sanitaire du Covid-19 a montré plusieurs fragilités et limites du système économique mondial. En plus de son impact très négatif sur l’économie, cette crise a des impacts sociaux très inégaux et qui varient d’une couche sociale à une autre. Elle a un impact dévastateur sur les ménages pauvres qui n’ont pas suffisamment d’épargne et de ressources financières et ceux ayant des emplois vulnérables[1]. Si le télétravail est une option pour certains, ce n’est pas le cas pour plu ...
  • Authors
    Sahil S.R. Shah
    April 15, 2020
    As with the rest of the World, the impact of COVID-19 in Kenya has stretched beyond the sphere of healthcare and the spread of the actual virus, as economic development outcomes are expected to be seriously affected by the disruption caused both globally and locally. In fact, one of the working hypotheses of the impact of COVID-19 on African nations is that the substantive impact of the virus on livelihoods will occur less from health-related issues than the economic shock, disrupt ...
  • Authors
    Co-signed by
    and 50 African intellectuals
    April 13, 2020
    50 African intellectuals including Kako Nubukpo, Alioune Sall, Carlos Lopes, Cristina Duarte, Felwine Sarr, Achille Mbembe, Reckya Madougou, Souleymane Bachir Diagne, Franck Hermann Ekra and Hakim Ben Hammouda co-signed this call to mobilize the intelligence, resources and creativity of Africans to defeat the COVID-19 pandemic. Severe Acute Respiratory Ryndrome Coronavirus 2, (SARS-CoV-2), is the scientific name for the virus responsible for a highly contagious and potentially fata ...
  • Authors
    Co-signée par
    et 24 intellectuels africains
    April 13, 2020
    Vingt-cinq intellectuels africains dont Kako Nubukpo, Alioune Sall, Felwine Sarr, Achille Mbembe, Reckya Madougou, Souleymane Bachir Diagne, Franck Hermann Ekra et Hakim Ben Hammouda cosignent cet appel à la mobilisation des intelligences, des ressources et de la créativité des Africains pour vaincre la pandémie de Covid-19. Covid-19 est le nom scientifique du virus responsable d’une maladie respiratoire très contagieuse pouvant devenir mortelle. Épidémie puis reclassée pandémie pa ...
  • Authors
    Yonas Adeto
    Thomas Gomart
    Paolo Magri
    Greg Mills
    Karin Von Hippel
    Guntram Wolff
    April 9, 2020
    في وقت توجه فيه كل دول العالم تركيزها نحو الشأن الداخلي لمواجهة وباء فيروس “كورونا”، أكد العديد من الباحثين المغاربة والأجانب في الشأن الاقتصادي والسياسي على ضروة التفكير بطرق يستطيع من خلالها فاعلون خارجيون تقديم المساعدة للدول الفقيرة، “ويجب أن تتم الاستجابات في إفريقيا من خلال تنفيذ أفضل الممارسات فيما يتعلق بالتعاون الدولي”. وفي ذات السياق دعا الخبراء، وجلهم مسؤولون عن مراكز دراسات أوربية وإفريقية ذات صيت عالمي، من بينهم الخبير الاقتصادي المغربي كريم العيناوي، مدير مركز السياسا ...
  • Authors
    Yonas Adeto
    Thomas Gomart
    Paolo Magri
    Greg Mills
    Karin Von Hippel
    Guntram Wolff
    April 9, 2020
    Covid-19 should change global politics. The speed and scale of its transmission, and the severity of its impact is not, we know now, to our cost. As the virus rapidly tracks people vectors worldwide, the control of its impact is inextricably linked to the availability of resources and depth of governance. For these reasons, global leaders should focus on its impact among the most vulnerable, and in particular in Africa. Just three months ago, on 31 December 2019, Chinese authoritie ...
  • Authors
    Yonas Adeto
    Thomas Gomart
    Paolo Magri
    Greg Mills
    Karin Von Hippel
    Guntram Wolff
    April 9, 2020
    Alors que le coronavirus se propage à travers le monde, la capacité d’atténuer son impact est liée aux ressources disponibles et à l’efficacité des autorités publiques. Voilà pourquoi il nous paraît primordial que les dirigeants internationaux se concentrent sur les conséquences de la pandémie sur les plus vulnérables, en particulier en Afrique. Il y a trois mois, le 31 décembre, les autorités chinoises informaient le bureau de Pékin de l’Organisation mondiale de la santé (OMS) d’u ...
  • Authors
    April 8, 2020
    Les 20 et 21 février, les chefs d'État ou de gouvernement de l'Union européenne ont entamé la dernière phase de négociation du cadre financier pluriannuel 2021-2027 de l'UE, le budget de l'Union pour sept ans. Bien que ce Conseil européen ait peu progressé - une longue tradition à ce stade des négociations au sein de l'UE - les discussions se sont concentrées sur les réductions proposées des fonds structurels et des fonds de soutien à la politique agricole commune, et sur le solde n ...
  • Authors
    Mouhamadou Moustapha Ly
    April 7, 2020
    Le Covidonomics est la branche de l’analyse économique qui s’intéresse aux mécanismes par lesquels la pandémie affecte les économies du monde ainsi que les réponses de politiques économiques qui puissent répondre aux défis inhérents à la propagation du Covid-19. */ La présente contribution propose des réponses de politiques économiques et sanitaires qui soient contextualisées suivant trois périodes. La crise sanitaire Covid-19, au même titre que l’angoissante question du changemen ...