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Key Text Challenging Poverty, Vulnerability and Social Exclusion in Nicaragua: Some Considerations for Poverty Reduction Strategies

Author: S Bradshaw and B Linneker
Date: 2001
Size: 32 pages (292.73 KB)

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Summary

Is the Nicaraguan Poverty Reduction Strategy (PRS) likely to achieve real reductions in poverty? What are the specific issues that should be considered when designing PRS’s in the context of vulnerability and social exclusion? While the government claims that rural poverty was reduced in the 1990s, the poor of Nicaragua associate this period with a decline in their well-being. This contradictory finding implies that the PRS is based on inadequate poverty measures and a weak conceptual foundation. This paper considers the policy context for the production of the PRS in Nicaragua and concludes that benefits are not reaching the poor.

Nicaragua prepared an interim PRSP in 2000 in line with World Bank guidelines for entry into the Highly Indebted Poor Countries Initiative. An analysis of official poverty measurements suggests that the magnitude and depth of poverty has not reduced, despite macro-economic growth under neo-liberal policy regimes in the 1990s.

The ability of the policies proposed in the Nicaraguan PRSP to address poverty in Nicaragua is questionable. The strategy is problematic for a number of reasons:

The government poverty maps are based on controversial data. Poor people’s own experience of poverty is ignored. Programmes based on these flawed measures may actually have adverse impacts.
Labour-intensive economic growth is the most important pillar of the PRSP. However, there is no conclusive evidence to suggest that economic growth automatically translates into poverty reduction. The distribution of benefits obtained under the HIPC is a major concern, and remains to be seen.
It is uncertain whether the planned privatisation of public utilities will ensure essential public goods and assets for the poor.
The macro-economic approach of the PRSP ignores the important spatial dimension of economic relations that give rise to many urban, regional and local economic development problems.
The increasingly important role of civil organisations is largely ignored in the PRSP. In fact, national ownership of the PRSP can be contested, given the limited civil participation in its production.
Measures to build social capital and reduce social exclusion are largely absent from the PRSP.

The policy approach to poverty reduction taken in the Nicaraguan PRSP leaves many issues unaddressed. Important considerations for the future are:

Municipalities that have experienced a reduction in the depth of the poverty from 1993 to 1998 represent ‘radical’ exceptions to the general trend. Some were previously among the poorest areas and merit further research.
The central focus of the PRSP is labour intensive economic growth. The narrow focus on employment should be shifted to the broader, more appropriate concepts of livelihoods and vulnerabilities.
Enhancing the productivity of the poor is central to the PRSP. Careful monitoring of the projects proposed is necessary to ensure that the measures do not result in a reduction in the possibilities for real human development.
Eradicating social exclusion and extreme deprivation demands policies that ensure the realisation of civil rights and restructure basic markets such as land, labour and credit.
Voluntary associations and the development of social capital should be encouraged. Strong civil society co-ordination can help to break exclusion in the areas of basic markets.

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Source: Bradshaw S. and Linneker B.J., 2001, 'Challenging Poverty, Vulnerability and Social Exclusion in Nicaragua: Some Considerations for Poverty Reduction Strategies', Ave Maria College of the Americas, San Marcos, Carazo