# The Despouy Report on Human Rights and Extreme Poverty/Part II

Source: United Nations Document E/CN.4/Sub.2/1996/13 28 June 1996 ENGLISH Original: ENGLISH/FRENCH/SPANISH adopted by the Sub-Commission on Prevention of Discrimination and Protection of Minorities
Official Title : THE REALIZATION OF ECONOMIC, SOCIAL AND CULTURAL RIGHTS Final report on human rights and extreme poverty, submitted by the Special Rapporteur, Mr. Leandro Despouy The Despouy Report

## Contents

* Introduction
* Part I - THE SCOURGE OF POVERTY
* Part II - ACTIVITIES OF INSTITUTIONS AND INTERNATIONAL ORGANIZATIONS RELATING TO POVERTY
* Part III - A HUMAN RIGHTS APPROACH TO EXTREME POVERTY
* Part IV — HUMAN RIGHTS FOR ALL AS A UNIVERSAL OBJECTIVE AND AS A MEANS OF ERADICATING EXTREME POVERTY
* Part V — RECOMMENDATIONS
* Annex I HUMAN RIGHTS RESOLUTIONS WITH A BEARING ON EXTREME POVERTY MANY OF WHICH SUPPORT THE NEED FOR THE STUDY
* Annex II FURTHER ACTIVITIES BY INTERNATIONAL INSTITUTIONS AND ORGANIZATIONS WITH A BEARING ON POVERTY
* Annex III A DEFINITION OF EXTREME POVERTY

## II. ACTIVITIES OF INSTITUTIONS AND INTERNATIONAL ORGANIZATIONS RELATING TO POVERTY
### A. Towards a new paradigm: sustainable human development

75. Traditionally, the concept of development has had a strong economic connotation. It defined a country’s growth and was usually expressed in figures, percentages and mathematical formulas. Thus for many years politicians, economists and development planners have used average per capita income as an indicator of a country’s progress or decline. As a result, many national development activities focused exclusively on economic growth, often ignoring the human side of development and the potential of social investment for accelerating it.
76. In recent years, however, this extremist economic viewpoint that somewhat simplistically identifies "economic growth" with "development", has begun to be re-examined, and an extremely interesting debate is under way in different international circles. The latest UNDP reports reflect this welcome development. They link economic growth with other basic human indicators such as life expectancy, adult illiteracy, infant mortality and equality between the sexes, as components of the concept of human development. In other words, new parameters, just as reliable as the old ones but much more revealing of peoples’ economic, social and cultural progress, are being incorporated into assessments of development.
77. This re-examination is based on a demonstrable fact: economic growth does not necessarily produce well being for the whole population. One all too often hears it said that an improvement in an economic indicator does not, in practice, bring equal benefits to all sectors of the population. Growth should thus be considered not so much in quantitative as in qualitative terms. In human development, account should be taken not only of economic expansion, but also of how fairly its results are distributed. Unlike the effects of economic crises, which generally hit the most disadvantaged layers of the population first and hardest, progress, and especially wealth, tends to concentrate in the most well to do sectors and not to filter downwards as easily. This explains why the Fourth United Nations Development Decade proposes a "broadly based" model of development as an international strategy, one in which economic progress is distributed as widely as possible among all sectors of society.
78. Development must also be "sustainable": present needs must be met through the rational and appropriate use of existing resources without compromising supplies or the future for later generations. This is why so much emphasis is currently placed on ecological balance, protection of the environment, etc., as a sine qua non if the benefits of progress are to last and development is to be sustainable.
79. As stated in numerous resolutions of the Economic and Social Council, the Commission on Human Rights and the Sub Commission, popular participation in decision making is one of the essential ingredients or motors of development. This implies, inter alia, that development should be of the people, by the people and for the people: development has to be planned around people, not people around development.
80. In short, the concept of human development could be said to be based on a much truer and more comprehensive understanding of reality, since if we attempt to evaluate objectively the level of development of a given country, we must in addition to its economic growth indicators also examine the extent to which its inhabitants genuinely exercise their economic, social and cultural rights, participate in the political life of their country and make use of their freedom.
81. As we shall see, this has two advantages. On the one hand, it shows where human rights as a whole belong among the irreducible components of sustainable development, and on the other, it supersedes the traditional approach to international technical and economic cooperation, including social considerations and other human priority areas among its main goals and objectives. There has been a marked increase in recent years in the resources made available under international cooperation for health, education, justice, human rights in general, protection of children, women, disabled persons and other vulnerable groups, ecological conservation, protecting the cultural heritage of indigenous populations, and so forth.
82. As we shall see later on, this new paradigm has, predictably, not had an equivalent impact on all the programmes and activities of the various bodies and organs of the system, although it is clear that it has pervaded their literature.
83. The activities of some of the main entities working directly or indirectly to eradicate poverty are reviewed below. For reasons of space only three are described in the body of the report; some other international organizations working in the field are listed in annex II. A brief mention will also be made of the activities of the non governmental organizations involved in development programmes, support for very small business ventures, etc., such as the Grameen Bank.

### B. United Nations Development Programme

84. UNDP’s contribution in this area has been considerable, first, because of its decisive role in both elaborating and implementing the concept of sustainable human development. As stated above, this has transformed the old approach to international cooperation. The diversification and expansion of cooperation to include social and other areas or sectors of human priority have made for more cooperation projects geared towards the disadvantaged sectors of the population. Second, UNDP has made the eradication of poverty its highest priority. It was already one of UNDP’s six main objectives in its 1992 1996 programme, and support for grass roots organizations, non governmental organizations and government agencies responding to the needs of the poor was a distinctive feature of its strategies.
85. Lastly, its analytical documents and papers based on concrete experience in various countries are extremely interesting, as are the guidelines given in some of its publications, which serve as a general framework for the preparation of national poverty-eradication strategies.

### C. World Bank

86. In its 50 years of existence, the Bank and its four subsidiaries making up the World Bank group have conducted over 6,000 financing operations together worth over $300 billion, in some 140 countries. Ever since it was founded, one of the Bank’s main objectives has been the eradication of poverty. Established at the end of the Second World War, it played a decisive role in the economic reconstruction of Europe and Japan and is today the main conduit, worldwide, of economic resources and technical assistance for developing countries.
87. Until the late 1970s, nearly all the loans were for infrastructure, such as the construction of roads, dikes and ports. When the foreign debt crisis occurred in the early 1980s, the World Bank, together with the International Monetary Fund, began encouraging countries to apply "structural adjustment programmes". Basically, these were certain types of loans the granting or disbursement of which was contingent on countries’ adoption of economy measures or policies which the Bank felt Governments should apply to return major macroeconomic variables such as the budget deficit, the balance of payments or inflation to equilibrium.
88. The common feature of the conditions is their tendency to reduce the budget deficit and open up the economy. The first major objective (eliminating the budget deficit) is based on the expectation that the debtor countries will achieve a trade surplus that will enable them to continue servicing their external debt. The second (opening up the economy) is designed to ensure that debt-servicing payments do not affect the industrialized countries’ export flows. Lastly, monetary stability guarantees that tax revenues, converted into dollars, will allow external payments to be met.
89. The bitter criticism aroused by this imposition of outside conditions on national economic policies grew when people realized the social costs that structural adjustment programmes entailed in most developing countries where they were introduced. Studies by United Nations social and human rights bodies and the many resolutions those bodies adopted agree on this point. Among the many objections to such programmes are that they impede the exercise of the right to development, that the adjustment burden is distributed unequally, usually falling on the low income sectors and accentuating disparities, and that the measures designed to relieve their negative effects are inadequate or hastily contrived. But the criticisms most often heard are those that emphasize the adverse effect of structural adjustments on economic, social and cultural rights.
90. Judging by its reports, however, the World Bank has introduced some interesting innovations in recent years, both in its assignment of economic resources, by putting social aspects among its priorities, and in its working methods, by considerably increasing its contact with non governmental organizations. A better understanding of this trend is provided by the Bank authorities in the Bank publication, Les leçons du passé, les enjeux de l’avenir (The lessons of the past, the stakes of the future):
"The stakes have changed over the years. The Bank group has learned from experience, and been led to shift its development approach". "Whereas we initially thought that growth would eventually filter down to the poor by osmosis, we have now realized that curbing poverty also requires taking measures to aid the most disadvantaged and most vulnerable groups".
91. This encouraging approach has made the World Bank one of the main world sources of investment in sectors such as education, health, family planning and the environment in developing countries. Once it was realized that this type of investment in human capital is essential for growth, the volume of Bank loans in those areas rose from 5 per cent of the total in the early 1980s to over 17 per cent in financial year 1994. At the World Summit in Copenhagen, the Bank announced that it intended to increase its contribution to the social sectors by some 50 per cent over the following three years. More recently, James Wolfensohn, a few days after taking office as the President of the Bank, reaffirmed this trend, adding, "Without parallel social development, there can be no satisfactory economic development". Finally, the Bank has expressed willingness to respond favourably to requests from Governments for cooperation in the field of human rights education and has decided to assign responsibility for coordinating such programmes to the Office of the United Nations High Commissioner for Human Rights.
92. Although the Special Rapporteur does not have the information to evaluate the scope or extent of the changes that have taken place, he considers it important to draw attention to the new relationships that have grown up between the Bank and non governmental organizations; in the words of a Bank publication, "The World Bank has changed its working methods over the last five years. Participation has taught it to listen to its partners and provide grass roots organizations with the means for planning and achieving projects". For financial year 1995, 41 per cent of the projects approved by the Bank included a role for non governmental organizations.

### D. International Monetary Fund

93. The International Monetary Fund has not proved so sensitive to the progress in social matters being made at the international level. Given that its purpose is of a "macroeconomic nature, the IMF contribution to social development can only be indirect and its advisory role in social policy matters is necessarily a limited one". "In the social sphere, analysis and technical or general policy advice are, to a large extent, matters for international organizations other than IMF, such as the World Bank, the regional development banks, FAO, ILO, UNDP and UNICEF, as well as bilateral donors and non governmental organizations." Nevertheless, the IMF’s Board of Directors said in 1988 that it was "necessary to help member countries evaluate the consequences of IMF adjustment programmes on income distribution and poverty, to improve the IMF services’ understanding of the mechanism by which adjustment policies affect the poor sectors of the population and to take greater advantage of the experience and skills of the World Bank and United Nations agencies".
94. As part of its international supervisory role, IMF has drawn attention to a series of questions involving problems of unemployment and the labour market in the industrialized countries, the economic advantages of reducing unproductive expenditures, institution building and human resource investments in the developing countries and the social protection safety nets in the economies in transition. In addition, realizing that structural adjustments usually have short term negative effects on the poorest and most vulnerable sectors of the population, IMF has advocated the adoption of certain palliative or corrective measures. Some are temporary measures, their purpose being to measure out or stagger the negative effects of adjustment. Others involve direct consumer subsidies, public works programmes, protection of public-sector social expenditures, support for small businesses, food security, etc. These palliative measures, however, have not much changed the critical opinions that most United Nations social and human rights agencies still hold on the undesirable impact of structural adjustment programmes on both sectors. This is reflected in Commission on Human Rights decision 1996/103, adopted at its most recent session, deciding to establish an open ended working group of the Commission to elaborate policy guidelines on structural adjustment programmes and economic, social and cultural rights. The decision provides for the working group to meet for a period of one week prior to the fifty third session of the Commission, in March 1997.

### E. World Summit for Social Development Copenhagen, 6 12 March 1995)

95. The World Summit for Social Development, attended by nearly 100 Heads of State and Government, as many representatives again of various international organizations and over a thousand non governmental organizations, was a landmark in the history of international relations. The Declaration and Programme of Action adopted at the Summit invest social problems with importance similar to that traditionally attached to political, economic and security matters by the planet’s leaders.
96. The 10 commitments of the Copenhagen Declaration on Social Development reflect a consensus on the importance of the social dimension of development. They also define poverty, unemployment and social exclusion as the three biggest social problems affecting mankind at the end of the century. In this connection, it should be noted that every world summit held in the last decade has made poverty and its eradication a central concern.
97. The main ideas of the Copenhagen document in the area that concerns us are the following:
(a) It is essential to create an economic, political, social, cultural and legal environment conducive to social development. Development must be durable, economic growth must be broadly based and the trade system must be equitable. When structural adjustment programmes are agreed to, they should include social development goals concerned in particular with eradicating poverty, promoting full and productive employment and enhancing social integration.
(b) Owing to the harmful effects of poverty on people’s material and spiritual lives, its eradication from the face of the earth is an ethical, social, political and economic imperative. Extreme poverty is an offence to human dignity. It prevents the full enjoyment of human rights and places people in situations in which it is impossible for them to fulfil their responsibilities.
(c) There is an obvious link between poverty, on the one hand, and isolation and exclusion, on the other. Integration and social cohesion are best achieved in societies that are stable, secure and just, i.e. societies based on the promotion and protection of all human rights. For this reason, the poor sectors of the population should be duly informed of their rights and provided with the means of enforcing them, and communication to and with those sectors must be improved.
(d) Poverty, especially extreme poverty, is a multidimensional, multifaceted phenomenon that cannot be fought with economic measures only, but requires action in many different areas and the introduction of intersectoral policies.
(e) For reasons of effectiveness as well as justice, poor people must be involved in the preparation, implementation, follow up and evaluation of programmes aimed at society as a whole or them in particular. They may participate directly or through associations able to represent them, and the establishment of such associations should be encouraged and supported.
(f) Recognition should be given to the role played by the family in the fight against poverty and as a factor of social cohesion.
(g) Both poverty and extreme poverty are found in all countries, although to differing extents. It is thus a disturbing trend to observe that increasing wealth for some is accompanied by a growing poverty for others.
(h) Lastly, a distinction should be made between poverty and extreme poverty, and a definition of the latter developed. The objective is to clarify thinking on the subject, for this will be both valuable and necessary when specific policies for the eradication of poverty are designed. At the threshold of a new millennium, the great achievement of the Copenhagen Summit is, for the first time in history, to have placed the eradication of extreme poverty among mankind’s most urgent objectives.
* ↑ See the UNDP annual Human Development Reports for 1991 1996.
* ↑ See Leandro Despouy, "New strategies in international cooperation", report prepared by the World Conference on Human Rights (A/CONF.157/LACRM/9).
* ↑ See "Technical cooperation with the Government of Paraguay in the sphere of human rights", document prepared by Leandro Despouy (E/CN.4/1994/78/Add.1).
* ↑ See "From Poverty to Equity: An Empowering and Enabling Strategy".
* ↑ See Juan C. Sánchez Arnau, "Recesión, ajuste estructural y pobreza rural en América Latina" (Recession, structural adjustment and rural poverty in Latin America), an FAO document.
* ↑ See, inter alia: Final report by Mr. Danilo Turk on the realization of economic, social and cultural rights (E/CN.4/Sub.2/1992/16); the successive reports of the Working Group on the Right to Development; the reports of the Secretary General, in particular in document E/CN.4/Sub.2/1995/10, entitled "Preliminary set of basic policy guidelines on structural adjustment programmes and economic, social and cultural rights" and the report contained in document E/CN.4/1995/25. UNICEF's 1989 report, "Adjustment with a human face", is still valid today. Among the many resolutions on the subject, Sub Commission resolutions 1991/27, 1992/29 and 1994/37 and Commission resolution 1993/14 are worthy of mention.
* ↑ According to the World Bank 1995 annual report, the Bank's education sector loans totalled over $2 billion for each of the last three financial years. During financial year 1994, 25 per cent of the Bank's total investment loans directly targeted the poor. In document A/CONF.157/PC/61/Add.19, prepared for the Vienna Conference, the Bank reported that nearly half its operations have a component linked to the removal of obstacles to women's participation in the economy.
* ↑ This trend is also to be observed in the various regional development banks. For example, the Inter American Development Bank, IADB, managed to increase its annual loan capacity to $7,000 million with an undertaking that 40 per cent of the lending volume or half of its operations would be aimed at the social agenda, equity and poverty relief.
* ↑ See A/50/698, para. 34, and E/CN.4/1996/51.
* ↑ World Bank, Actualités, "La participation est efficace", 29 February 1996
* ↑ All the material in quotation marks relating to IMF in this chapter has been taken from the IMF paper submitted to the Copenhagen Summit, entitled "Economic policy dialogue with the IMF: the social aspect".
* ↑ Briefly, these are: (1) to create the appropriate economic, political, social, cultural and legal environment for achieving social development; (2) to eradicate poverty; (3) to promote full employment; (4) to promote social integration; (5) to ensure equality and equity between men and women; (6) effectively to ensure equitable access to quality education and medical care to everyone; (7) to accelerate the development of Africa and the least developed countries; (8) to ensure that structural development programmes include social development goals; (9) to increase significantly the resources assigned to social development and (10) to strengthen the framework for international cooperation for social development, through the United Nations.
* ↑ Viz. the United Nations Conference on Environment and Development, held at Río de Janeiro from 3 to 14 June 1992; the World Conference on Human Rights, Vienna, 14 to 25 June 1993; the International Conference on Population and Development, Cairo, 5 to 10 September 1994 and the Fourth World Conference on Women, Peking, 4 to 13 September 1995.