‘Historically, the private sector has had somewhat of a mixed relationship with the poor.’
by
Kevin
on Sun 29 Jul 2007 08:37 PM BST
So is quoted from the World Bank report (2003) ‘Poverty in Guatemala’ in a paper by Roman Krznaric, titled ‘The Limits on Pro-Poor Agricultural Trade in Guatemala: Land, Labour and Political Power’. The paper goes on to say that the only reference to the economic elite in Guatemala in over 200 pages of analysis is to say that ‘economic and political resources remain concentrated among the economic elite of predominantly European descent’. Krznaric asks why there is no follow-up examination of the extent of this concentration and its consequences for poverty reduction. Good question!
The current consensus, among neo-liberal economists and international institutions, according to Krznaric, is that countries with more open economies achieve higher growth rates than those with less open economies, and that growth is good for poverty reduction. This paper looks at two valuable export crops, sugar and mange-touts (snow peas) and shows that the poor have not benefited to the extent that the World Bank suggests. This was before the implementation of CAFTA in 2005, which Krznaric suggests will have a devastating effect on the Guatemalan subsistence economy, so very vital for a large section of the agricultural population.
The question now is, how devastating has it been?
The paper can be found in the March 2006 edition of the ‘Journal of Human Development: Alternative Economics in Action’ and the abstract states: ‘The persistence of rural poverty in Guatemala since the early 1990s challenges the purported association between agricultural export growth and poverty alleviation. Lack of access to education, health and credit, and the historical legacies of land inequality, labour exploitation and ethnic discrimination, are preventing growth from reaching the rural poor. Most analyses, including the World Bank's recent 'Poverty in Guatemala' report, fail to consider how the economic and political power of the country's economic elite perpetuate and exacerbate poverty. A focus on two of Guatemala's most dynamic agro-export sectors - sugar and snow peas (mange-tout), both reputed to have had a significant impact on poverty alleviation - reveals the limits on pro-poor growth. Policy recommendations to promote pro-poor growth that are derived from the analysis include full implementation of the labour code, a national land-titling programme, and cultural programmes to change elite attitudes towards poverty and development.’
The paper is very interesting and readable – maybe that’s what is meant by ‘alternative economics’!
There is an earlier version (2005) published, as an occasional paper, in the Human Development Report Office of the UNDP.
