By Jennifer M Brinkerhoff
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Additional info for NGOs and the Millennium Development Goals: Citizen Action to Reduce Poverty
Real interest rates have tended to rise, and the spread between the deposit and lending rates has widened, both undercutting jobs and growth. Farm and nonfarm enterprises often lost access to credit as banks focused on short-term lending for consumer durables in urban areas. Banks and corporations have frequently resorted to short-term external borrowing, making the country vulnerable to capital flight and wreaking havoc in times of crisis, as was the case in East Asia in 1997. ” Yet, financial liberalization continues to be part of many so-called poverty-reduction strategies.
While most poverty-reduction strategies now devote more attention to directing scarce budgetary resources to pro-poor public expenditure, few address the issue of raising more domestic revenue in a progressive way. Public revenue that accounts for 15 per cent or less of national income is grossly insufficient for reducing human poverty. In most developing countries, domestically raised revenue is too small, not too big. ” The tax systems in developing countries often make the poor pay proportionately more than the nonpoor.
Brinkerhoff et al. ), NGOs and the Millennium Development Goals © Jennifer M. Brinkerhoff, Stephen C. Smith, and Hildy Teegen 2007 24 JAN VANDEMOORTELE Once money is put on the table, the nature of the partnership between poor and rich countries changes radically. However, it is only when the ultimate purpose of foreign aid is made clear and agreed upon between the recipient and the donor beforehand—mostly through active listening on the part of the latter—that its effectiveness and efficiency will measurably improve.