The Millennium Development Goals (MDG), set for 2015, helped government and non-government organizations, corporations and civil society concentrate on poverty reduction, education and health issues in developing countries. Considerable funds have been poured into research, policies and targeted programs to achieve the MDGs. Alternative models of aid, such as social entrepreneurship, fair trade, microfinance or social marketing have become popular across the world. As a result, the MDG Report 2008 reveals progress in most goals and countries.
However, between 320 million and 1.4 billion people are still chronically poor, most in Sub-Saharan Africa and South Asia. Moreover, critics note that most aid does not actually reach the poor. According to ActionAid, the world’s two biggest donors, the United States and France, direct 90% of their aid to technical assistance, which is often inefficient and overpriced. Beside that, development aid from developed countries has been declining in the last 3 years.
Considering the scarcity of resources and frequent mismatch between donor priorities and the needs of the poor, it is increasingly apparent that poor countries need to take the lead. To meet the MDG goals, country poverty reduction strategies need to be developed based on more detailed data on poverty. Different interventions, which reflect the complex origins of poverty, need to be implemented. Initiatives with the highest positive impact and cost-benefit ratio must be identified, whereby the multiplicity of interventions and local specifics are considered before any intervention is replicated and scaled-up to the national level. In any case, a clear target group, accountability, and monitoring and evaluation measures need to be set and followed. Moreover, these interventions have to become an integral part of all national policies and the agenda of each ministry and government office.
It is increasingly recognized that it is those mired in poverty who know best what will assist them overcome it. Therefore, even global institutions like the World Bank or the United Nations suggest that “voices of the poor” need to be included in the formulation of an integrated framework of policies, its implementation and evaluation.
There is another perspective to the national and international aid. Evidence shows that the poor are very active and creative in generating income and increasing their well-being. Microfinance and other innovative social business models, which put the poor in the center and address their different needs in a sustainable way, are providing a viable alternative of bottom-up poverty reduction.
More research still needs to be done on poverty and social exclusion. Even more efforts have to be made to efficiently implement the evidence-based policies. Further, enterprises need to be encouraged to focus on a particular social cause, which can give all stakeholders a reasonable return on their investment, be it in microfinance, food industry or health care. Leaders of current social enterprises or hybrid non-profit organizations, as well as media and consumers in the developed countries can play a big role in this development. Ultimately, development aid urgently needs to reflect the call for transparency, localization, efficiency and participation of the poor. The current global economic slowdown does not afford the waste of any more dollars, euros or rupees.
