Policy Dialogue on Poverty and Inequality
28th May 2019 08:30AM-1PM @Kigali Marriott Hotel
Organized joinly by EPRN Rwanda and UNDP
1. Introductory background
Poverty reduction efforts around the world have scored good success, Rwanda being one of the most successful examples. However, the road to ending poverty in all its forms by 2030 requires further and more focused efforts. Poverty reduction cannot be seen in isolation when it is proven that rapid economic growth does not by itself reduce inequalities and in some cases, it worsens them Using Rwanda as a case. Also it is possible to have a dialogue on income and non-income inequality. How have countries attempted to cover the gender inequality gap ? Is vulnerability to unemployment among the youth threatening inequality measurement outcomes ? What have been major efforts to reduce inequality between cities and secondary cities and urban and rural areas ? Are there any concerns of digital divides inside the countries ?
To create a shared understanding on the interrelated nature of poverty and inequality as well as uncover creative solutions for reducing inequality and eradicating poverty in the region, the Economic Policy Research Network (EPRN) in collaboration with the United Nations Development Programme (UNDP) organized a policy dialogue that brought together researchers and policy makers to discuss about poverty and inequality with development partners, public and private institutions, academicians and civil society organizations..
2. Dialogue highlights
MC : Dr Jacob Niyoyita Mahina, EPRN Member
The dialogue was held on 28th May 2019 at 8.00 am and started with welcoming of participants into Kilimanjaro ball room at Marriot Hotel by EPRN. We had participants from public institutions, non-governmental organizations, development partners, private sector institutions, academicians among others plus media for coverage of the whole event.
2.1. Participants’ snapshot
Out of 136 participants, females were 35 (i.e 25.7%).
2.2. Remarks by senior participants
2.2.1. Opening remarks by Dr Faustin Gasheja (EPRN Board Member)
Ladies and Gentlemen,
Allow me to welcome you all to this important policy dialogue jointly organized by the Economic Policy Research Network (EPRN) and the United Nations Development Program (UNDP). Some of you have been attending various events organized by EPRN others, is for the first time, we are happy to have you all on board today.
The mission of EPRN Rwanda is to contribute to the evidence based economic policy making by providing high quality research, building capacity and creating networking opportunities. One of our flagship activities is policy dialogues whereby experts from various field meet and discuss on a specific policy issue and come up with some policy recommendations to inform policy making.
Ladies and gentlemen,
Through the 2030 agenda for sustainable development, governments have pledged to eradicate poverty (sustainable development goals (SDG 1) and to reduce inequalities within and among countries (SDG 10). Despite an increasing body of knowledge on these topics, development partners, researchers and policy makers struggle to identify and prioritize strategies and policies that are truly effective for achieving these goals.
Of the 19 most unequal countries in the world, 10 are in Africa, according to the UNDP’s Income Inequality Trends in Sub-Saharan Africa. Income inequalities in different countries differ by degree, but the more important distinction is the factors that shape them.
Furthermore, there are multiple dimensions of inequality that go beyond income and contribute to deprivation and vulnerability. The root causes of inequality are rarely the same from country to country and may include restricted access to land, capital and markets ; inequitable tax systems ; excessive vulnerability to unfavorable global markets ; rampant corruption ; and the patrimonial allocation of public resources.
Poverty reduction efforts across the globe and in Africa have scored good progress, Rwanda being one of the most successful examples. However, the road to ending poverty in all its forms by 2030 requires further and more focused efforts. Poverty reduction cannot be seen in isolation when it is proven that rapid economic growth does not by itself reduce inequalities and in some cases, it worsen them.
Ladies and gentlemen,
To create a shared understanding on the interrelated nature of poverty and inequality as well as uncover creative solutions for reducing inequality and eradicating poverty in the region, EPRN Rwanda in collaboration with the UNDP Rwanda, is organizing a policy dialogue/ debate about poverty and inequality.
Today’s topic is policy dialogue about poverty and inequality and the objective of this dialogue will focus on issues related to poverty and inequality in Africa with strong focus on Rwanda and the ways to address it. The outcomes of the discussion will be instrumental in informing and defining the scope of new research initiative on the topic of poverty, vulnerability and inequality in Rwanda to implement the global UN principle for sustainable development of “ Leaving no one behind”.
Ladies and gentlemen,
I take this opportunity to welcome and thank each of you for your positive response to our invitation and I wish you fruitful deliberations during this session.
2.2.1. Key Note Address by Mr. Stephen Rodriquez Resident Representative UNDP Rwanda
Representative of MINALOC,
Representative of NISR,
Ladies and gentlemen, all protocols observed.
Mwaramutse, good morning and welcome to this policy dialogue !
I am very happy to be here with you this morning because this is an important topic. And I am very pleased to see that EPRN is tackling these issues through its economic research work. We need more discussions and debates on matters of this nature not only here in Rwanda but across the continent, and indeed across the world.
So again, let me congratulate EPRN on taking the initiative.
But let us first see what the research tells us. The data is clear. Over the past decades, billions of people have emerged out of poverty. In 1960 about 65 % of the world lived in extreme poverty. This dropped to 44 % in 1981 and is now a little over 8 % of the world population. As the World Bank President said recently, “Over the last 25 years, more than a billion people have lifted themselves out of extreme poverty, and the global poverty rate is now lower than it has ever been in recorded history. This is one of the greatest human achievements of our time.”
But that 8.6% is still over 736 million people living in extreme poverty. Sadly, the truth is also that the majority of them live in Sub-Saharan Africa. Nigeria is now seen as the single country with the largest population of poor people.
We should also take note of the fact that the rate of poverty reduction has declined, sharply, since 2013. This has been due to many factors, including the fall in commodity prices, the increase in conflicts, and other factors that affect developing countries. So the poor will now wait longer to emerge from their poverty.
The other, perhaps more interesting data, is that globally, the gap between the rich and the poor keeps widening. We are all familiar with the staggering figures highlighted by Oxfam at Davos earlier this year, where they stated that in 2018, 26 people owned the same amount of resources and assets as the 3.8 billion people who make up the poorest half of humanity. Many people criticized this figure as being too simplistic, and maybe even inaccurate. But if it were wrong, it was not by much. Whichever way you look at it, less than 100 people own more than 3.8 billion people. And if truth be told, this gap is widening.
Growth, when it happens, has disproportionally benefited higher income groups while lower income households have been left behind. Since 1980, the share of national income going to the richest 10 percent has increased rapidly in the United States, Canada, China, India, and Russia and more moderately even in Europe. Over the same period, it has remained stable but at very high levels in Brazil, the Middle-East and, unfortunately, Africa, where the richest 10 percent of the population absorbs 54.5 percent of the national income. In Rwanda, we have noted that inequality is on the decline but has slowed. With a Gini coefficient of 0.429 ; UNDP sees Rwanda among the countries among the low- inequality category. But there is no room for complacency.
What else do we know ? Well
- We know that the poorest countries are the most unequal.
- We also know that no country has successfully developed beyond middle-income status while retaining a very high level of inequality in income or consumption
But here is something else we need to consider : While the rich are getting richer, and the poor poorer, this is all within a system of globalisation that leads us to destroy our oceans, pollute our air and environment, wipe out wildlife, damage our eco-systems and our climate. And again, it is the poor who suffer the most from this destruction of our natural environment.
So the system that generates this inequality generates a range of other challenges.
I also want to note that when we discuss inequality it is not just economic or income inequality we are discussing. Inequality is often an issue of access – for example, there is spatial inequality which refers to people living in certain locations not having access to the same opportunities as others, such as access to quality education, social services and healthcare. We also see inequality in access by gender or others form of identity, such as people with disabilities and certain minority groups.
Together, these many forms of inequality adversely affect human life and well-being. Because our sense of well-being is grounded in how we see ourselves doing in relation to others around us.
The data is irrefutable. In every country where studies have been done, high levels of inequality is correlated with higher levels of violence, tensions, imprisonment, drug abuse, obesity, teenage pregnancy, and mental health issues. Inequality often tears at the fabric of social cohesion, and generates intolerance, discrimination against others, and the breakdown in the rule of law.
In today’s world, we are seeing some of the early signs of the likely long-term consequences of growing inequality. Tensions across countries, calls for protectionism, us-versus them barriers, shutting of borders and tighter controls on migration recreate a mythical past of harmony and prosperity.
The signs are there. But we are wanting in solutions.
When crafting Agenda 2030 the global community was mindful of this issue of growing inequality. This is why SDG Goal 10, reduced inequalities, was included. The global community realized that without a clear commitment to the reduction of inequalities globally, and between and within nations, we can have little hope of sustaining progress on poverty eradication, prosperity and peace.
This is an issue that must be on the agenda of every country, in Africa and elsewhere. This is an issue for policy makers to take seriously.
Identifying the main drivers of inequality is the first step in properly designing and targeting policies to counter it. Here, we already have enough research. What we now need are policies and programs, both social and fiscal, to reduce inequalities.
Globalization and growth have spurred levels of economic development that many of us could not have imagined. Yet, this has not translated into reduced inequalities. Why ? Because not every country, region, city and social group was equipped to reap the fruits of globalization. People everywhere do not have the same quality of education and skills, the same access to the global value chains, the same social safety nets, the same progressive tax regimes etc. that are needed to level the playing field.
A blind focus on economic growth as the only means to achieve human development will only make this problem more acute. Policies that foster growth are not automatically going to reduce poverty or inequality. For inequalities to be reduced, growth should be inclusive, and this requires a clear commitment and action from policy makers.
- Reducing inequality often means investing in education and skills development to prepare the population to benefit from economic growth.
- Reducing inequalities requires fiscal policies that redistribute national resources to reach the most vulnerable ; this includes things like progressive tax systems which are not only fair, but also a key requirement for balanced development.
- Similarly, reducing inequality also means addressing the way labor and capital are rewarded in the economy ; this includes putting in place appropriate labour laws and minimum wage policies that ensure that labor is fairly rewarded.
- Reducing inequality also calls for robust and well-targeted social protection policies.
- Finally, since inequality has territorial dimensions (spatial exclusion), as well as gender and group identity dimensions ; optimal policies to reduce inequalities must have the ability to go sub-national and local and must be flexible and targeted as I mentioned.
To conclude, ladies and gentlemen, let me stress once again the necessity to put inequality on top of our agenda.
There is a line I have always loved from Bob Dylan’s song, Blowing in the Wind. It says,
Yes, ’n’ how many times can a man turn his head, And pretend that he just doesn’t see ?
Just doesn’t see the poor, just doesn’t see the inequality, and just doesn’t see the exclusion and barriers that many people face to enjoying a decent quality of life.
Let us not be blind to what is happening around us.
Thank you for your kind time and attention.
Murakoze Cyane, thank you !
2.2.2. Keynote address from Guest of Honour-MINALOC – Justin Gatsinzi (Programme Manager at LODA)
We are happy that this policy dialogue comes at a time when the NISR has gone an extra mile to measure and disseminate the multi-dimensional poverty indices working against Rwanda. To respond to the SGD call, I can relate to the social transformation pillar in NSTI as it aspires and commits to develop Rwandans into a capable state and instil in people quality standards of living and a secure society. The pillar drives the country to move towards becoming a poverty free country to ensure a free fair election. Ensure quality education for all aiming at building a knowledge based economy and transitioning to modern Rwanda with urban settings in the households. It is with this part the ground that any policy dialogue, research and development initiative to not only consider the known classic and neo-classic theories of development but should narrow down and customize to the national context. In the Rwandan chapter, the multi-dimensional nature of poverty matters, and human capital development is recognized as being central addressing campus aid to tackling child poverty, gender equity and integrating youth in ministry of development, engaging the civil society organisations and private sector is still needed in Rwanda while consideration of the comparative advantage with the abundance of human labour in most cases unskilled or semi-skilled should be considered in the innovative technological and industrialization initiatives. I would like to wish you fruitful discussions, come up with policies that can be relevant to our NST1.
Thank you very much.
2.3. Main Presentations :
After the opening remarks, the dialogue proceeded with presentations.
Topic 1 : “Income Inequality Trends in Sub-Saharan Africa” by Yemesrach Assefa - Economic Advisor UNDP
The presentation addressed reasons why income inequality is an important issue globally through showing its trends across the globe which showed that income inequality was on the rise almost everywhere. The presentation went on to address the key drivers of inequality and one of them being liberalization of policies of the 1980s and 1990s, volatile ToT, FDIs execrated income polarization while remittances are equalizers.
The presentation would later present its policy recommendation as seen below :
a. Promote inclusive growth anchored on macroeconomic policies
b. Accompany demographic transition with complementary policies - social protection, inclusive urbanization and industrialization policies, etc
c. Invest heavily in human development
d. Adopt sound governance and macroeconomic environment – e.g., Progressive taxation and fiscal citizenship
Topic 2 : “Rwanda Poverty panel report” by Mr Kamana Rogers, Data Analyst – NISR
This presentation aimed at showcasing the Rwanda Poverty panel report from NISR. The presentation covered evolution of GDP and poverty and also explained how poverty is measured. The report also consisted of poverty dynamics and also explaining the economic growth to changes in poverty. This aimed at showing who has gained from the economic growth. The study shows that poverty is lower in urban areas than in rural areas. The study also indicates that there was statistically significant reduction in the headcount poverty rate in Kigali city but not elsewhere.
2.4. Round table panel discussion on poverty and inequality
After two presentations, followed a round table discussion moderated by Professor Alfred Bizoza, EPRN Member.
Representative of DUTERIMBERE IMF :
There is a lot to be shared in relation to the topic and the intervention of civil society organizations along with the government and private sector would be the focus to empower and support the development of tactical skills in the communities intended towards the eradication of poverty and once that is done then we will be able to narrow the gap of inequality. There is of course a tremendous challenge and one that has been existent in developing countries, and with poverty and inequality, it leaves a lot to be desired and the government has made efforts through interventions like numerous policy changes and programs. For instance with Duterimbere-ONG was established with a mission to empower women to actively participate in eradication of poverty at the community level. These are the skills that are required for that active role. These intervention are very wide and with our long term partners Oxfam and other partners, we have done a lot to create opportunities to ensure their participation or their ability to improve livelihoods in their households and the community at large. There are different approaches we employed like direct engagement with the beneficiaries through establishing NGO Duterimebere that is a microfinance was one way to empower and open the doors for women in dealing with financial issues. Most women are not confident about financial issues so we try to make them shrewd and active in taking up financial issues like asking for loans and active participation in the economic activities.
Representative of NISR :
The issue of methodology is one of the components among other components. We have standard methodology that is approved at regional levels and global level. So scientific findings and methodologies are almost similar everywhere only that some countries contextualize their methodology in order to reflect on the unique situation of the country. In Rwanda we have used internal capacities and also global organizations like the World Bank and UNDP to make sure that the methodology used is sound and can produce statistics that will be reliable for different purposes like business development, policy making, decisions making. One thing I wouldn’t want to forget is that we have changed the way statistics are produced like the use of technology throughout the production process of statistics which is time saving and more effective and also has improved on the quality of produced data. In terms of human resources we used to rely on outsourced human resources which was not reliable but at least now we have our own human resources. Through the use of technology, we have been able to respond to the heavy demand for data since we take less time in producing the data.
Representative of MINALOC/LODA :
Poverty reduction and inequality is a must and as a country, through many policies and strategies there is a strong recognition that poverty intervention are on their menu. The key drivers that can kick out poverty are : recognition of the several dimensions of poverty and we need to face with evidence and as earlier stated, I think the NISR has committed as a country with evidence that poverty is an issue with many facets, meaning each facet has to tackled specially because by reducing poverty it doesn’t mean that your reducing inequality. So for Rwanda what we can change, and what is legally supported because is it in our NST1 strategy with human capital development. So as a country we strive self-reliance and this appeals to citizens being productive. There is a big ambition to expand the coverage of social protection to form the basis of people on people having access to basic services but there is a strong to go beyond the cash transfers and employ initiatives that are contributing to human capital development and for us to do this, we have to invest in early child matters and we believe that the current status that we have today, social protection has been on the receiving end for the beneficiaries but for god sake maybe there victims of what was not fixed in the previous years. So that’s why we are putting human capital development on the forefront than what we had previously done. In regards to human development, we can’t overlook quality education. Youth are fragile in a way that they deserve more than education, they deserve skills, coaching, employment and financial inclusions strategies and this why I say that beyond social security cash transfers, we need to have cash-plus initiatives. There is always room for improvement. We started small with social protection, but we are seeing effective in terms of scaling up the magnitude of the core social protection program.
Representative of OXFAM :
Oxfam works with partners to overcome poverty and injustice and in this case inequality is justice. We have done humanitarian work working with governments to ensure participatory governance, gender justice programs and sustainable life programs. Part of contribution in tackling poverty and inequality has been evident mainly in the agricultural sector and this has mainly taken form of improving productivity levels, processing and targeting small and medium enterprises, ensuring access to finances by providing guarantees for them to be able tp access loans at good terms and also ensuring access to market. Within such programs, we target mainly poor women and we have done this with partners from the private sector and with methodologies to effect change for opportunities for transformation in women. So I believe this is work that needs better tested methodology to induce development especially in the agricultural sector with value chain development because that is where majority of the women thrive and ensuring financial inclusion and transformative partnerships. Most of our projects are aligned with the NST1 and that’s why when we make a choice of transforming value chains and working on horticulture, they are aligned to the government agricultural policies and in this alignment we also try to create awareness for instance we may know that there is a fund but it is inaccessible because of lack of awareness and as CSO’s, we try to fill up that gap and build capacities of small and medium enterprises to be able access fund to be able to put up with the costs of operation hence creating jobs.
Representative of UNDP :
First and foremost, let me congratulate Rwanda for the efforts directed towards eradication of poverty and being one of the few countries where we have witnessed one pf the fastest economic growth, human development. However Rwanda needs to start growing by double digits, it’s not easy but it has to be done. Both agriculture and industrial, service sector have to start growing by double digit, faster than they are currently growing. That is a big challenge and we have to do tackle it well. Secondly, the quality of growth has to be improved because we may grow faster but it may not result into poverty reduction, we need to start thinking, where is this growth generated how is it generated, in what ways the households, especially the poor, the youth, women are participating in the global issues. For us to increase participation in economic growth by the poor, we have to invest in quality education, nutrition so that they are capable of participating in the growth process. We need to also ask ourselves, how strong our local government in delivering quality education and health services are.
REACTIONS BY THE PARTICIPANTS (AUDIENCE) :
Participant 1 :
What are the lessons learnt from the three scenario cases i.e. social infrastructure and productivity of the population and what can be done to exploit to the advantage of Sub-Saharan Africa and most importantly Rwanda ?
Answer : There are efforts in the three case scenarios but the efforts unfortunately these efforts have not generated the desired results. Why, because there is still lack if u=inadequate technology, capacity of human resource to bring about the desired results. So we need to look into filling these gaps for us to acquire the desired results.
Participant 2 :
What are the home grown solutions for Rwanda to eradicate poverty ?
There are different initiatives to make sure we increase exports, like regional integration to increase market for exports and also made in Rwanda campaign to increase level of exports in the country.
Participant 3 :
Are the efforts for poverty aimed at poverty reduction or poverty eradication ?
I would answer this question by saying that squarely the commitment that we agreed on globally was to eradicate poverty in all its forms.
Representative of OXFAM :
I would like to thank EPRN Rwanda for this arrangement and I would recommend that this composition of strategic partnership get down to implementing these changes for the policy recommendations that have been mentioned here.
Representative of UNDP
I think it is extremely exciting to be here today, to here all these divergent views. UNDP in partnership with MINECOFIN, NISR, is planning to make paper on inequality. This is to build upon our work at a globally level and that is because we at UNDP are taking inequality very seriously. The fact that inequality varies from country to country, we would want to dig deeper and get a better understanding of inequality. We are going to use data from EICV5 and NISR, dig deeper, to understand who are the most affected, where they live.
3. Key Recommendations
I. The GoR should put much efforts in development activities for rural areas (poverty is lower in urban than rural areas, and in Kigali City compared to the other provinces. There was a statistically significant reduction in the headcount poverty rate in Kigali City, but not elsewhere).
II. Rwanda to encourage modernized agriculture through farmers’ cooperatives to fight against effects of climate changes (in EICV 5, a quarter of households reported a farm shock mainly drought). Furthermore,
III. Enhance productivity in agriculture as an important factor in labour reallocation to other sectors
IV. The EICV5 data (2016/17) show that 38.2% of people were poor. This is below the poverty rate of 39.1% observed in 2013/14, but the reduction is not statistically significant. Therefore measures for poverty reductions need to be enhanced in all sectors
V. Continuously discourage discriminatory social norms and enhance social protection initiatives
VI. Promote inclusive growth anchored on macroeconomic policies
VII. Accompany demographic transition with complementary polices-social protection, inclusive urbanization and industrialization policies etc.
VIII. Invest heavily in human development
IX. Adopt sound governance and macroeconomic environment – e.g., Progressive taxation and fiscal citizenship
X. The “tree of equity” here below contains some detailed recommendations :
4. Closing Remarks by MINALOC Representative
The guest of honor who was representing the PS-MINALOC, Mr Gatsinzi Justin gave closing remarks. He started by thanking UNDP and EPRN for organizing this policy dialogue, the country would treasure this as it helps revisit our policy and strategize. “We have also reflected the path we have desired to take and the global contributions and commitments ahead of us to continue to deepen our understanding that welfare and equity are for all, human and justice obligations. Eradicating poverty and inequality requires collaboration of civil society organizations with government and institutions” he pointed out. He congratulated all participants for their contribution and recommended EPRN to share the key recommendations with concerned stakeholders for action.
Rwanda Poverty Panel Report - by KAMANA Roger, Data Analyst, NISRDoc 1