Definition of Poverty and Poverty Reduction:

Robert McNamara Becomes the pioneer that include poverty, social, and economic
development as one of the World Bank significant agendas. It all started when
Robert McNamara was still the Us Defense secretary, he conveyed a speech in
Montreal, 1966. He expressed that “working on poverty reduction could maintain
the peace in the security realm” and he started that “economic developments could
solve that problem”. Therefore, after Robert McNamara became the president of
the World Bank, the there for the third World Development Report (WDR) in 1980
was about economic growth, poverty, and human development. The focal point
from this WDR is the definition of poverty, which is:

“… Absolute poverty – a condition of life so characterized by

malnutrition, illiteracy and decease as to be beneath any reasonable definition of
human decency”.

This poverty definition is still used today because in the recent WDR, World Bank
publications are still referring to this definition in categorizing poor countries.

The World Bank also generate an action to eradicate poverty which is commonly
head as poverty reduction. Different than the definition of poverty, the term of
poverty reduction is kept expanding and deepening day by day. I believe that there
is no single recipe or general “cure” to eradicate poverty , which makes the term
poverty problems. Therefore, research and development on poverty reduction and
crucial to keeping up with the world progress. Also, the poverty reduction action
should be adaptive.

In 1980 WDR, the poverty reduction action was based on economic approach
where the World Bank recommend their members to support industrialization,
economic acceleration, and equal distribution in public services. The reason for
only using economic approach is because the World Bank believed that the
increase of economic growth will automatically reduce poverty in a country.
Moreover, this economic approach is based on one of the GDP formulas that
believes that the higher economic activities will increase the GDP too. Afterwards,
the World Bank acknowledges that poverty is not a simple economic problem
because it also related to the political sphere. During this period, the World Bank
acknowledged that poverty could be cause d by the structural system which makes
them concentrate on structural adjustment policy. Poverty became the main there
again in the 2000/2001 WDR. The World Bank gave three recommendations to
reduce poverty:

“… First, promoting opportunity by stimulating economic growth,

making markets works better for poor people, and building up their assets”.

“… Second, facilitating empowerment by making state and social

institutions more responsive to them”.

“… Third, enhancing security by reducing the risk of such events as

wars, disease, economic crisis, and natural disasters”.

In addition to that, the World Bank also found the correlation between the
environment and poverty where the assumption is similar to the relationship
between economic growth and poverty. In this case, good environment
management could decrease the number of poverty because the supply for
production and consumption is fulfilled.

From the explanation above, it shows the term “poverty reduction” has been
growing over time to find the remedies for poverty issues. Nevertheless, since the
World Bank is an international organization, they are trying to find the silver lining
in every poverty issue that happens in this world to create an easy understanding
about poverty and poverty reduction. Therefore, the recent WDR usually contains
some generalization of the poverty issues, remedies to reduce poverty based on the
particular country poverty problem.