Vietnam's success didn't follow western rules © United Nations Development Programme

Anti-poverty campaigners continue to expose the failure of governments to honour their promises. They focus particularly on the Millennium Declaration and on the 2002 Monterrey Consensus when the richest countries renewed commitments to increase aid budgets to 0.7% of national income. Despite the success of coordinated international campaigning in the period up to the Edinburgh G8 summit in 2005, the shortfall between current flows of foreign aid and the estimated gap in financing the MDGs remains formidable.

In the area of trade and investment, campaigners continue to lobby for the removal of agricultural subsidies that protect American and European farmers at the expense of the poor. There is a new focus on tax avoidance manoeuvres by multinational corporations active in developing countries, tactics which are estimated to deny governments the receipt of annual tax revenues totalling $160 billion.

Ranged against these campaigns are those who prefer the unconditional pursuit of economic growth as the road map for eventual poverty reduction. This view frowns on state engagement in economic management or pro-poor policies, encouraging instead entrepreneurial activity through foreign investment, raising funds via the discipline of international markets.

The two countries with the greatest success in poverty reduction, China and Vietnam, create awkward precedents for policymakers. These governments have retained strong state control over key sectors of their economies, permitting only gradual liberalisation. Furthermore, they have not yet observed standards of human rights and democratic freedoms that many development agencies prefer to see.

The lack of consensus on poverty alleviation has itself proved unhelpful by pulling countries in different directions. Most of the large bilateral government donors tread a middle path. They increasingly downplay governance issues whilst promoting the concept of inclusive growth with pro-poor institutional capacity building and the provision of social safety nets to protect the poorest. The L’Aquila Food Security Initiative announced at the 2009 G8 summit in Italy suggests a new priority of investment in agriculture.

There is justifiable concern that these attempts to fine-tune solutions to global poverty may be overwhelmed by the pace of events. The failure of politicians to respond to signals of climate and economic breakdown has almost certainly provoked an inexorable rise in global poverty with unpredictable consequences. A fundamental reordering of priorities is the only available remedy for the poor. It may also prove to be the critical first step on the road to a sustainable future for us all.

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