Improving basic services will depend on the degree to which the poor participate in policy making, says a new World Bank draft report. Sherine Abdel-Razek takes a look Gone are the days when the World Bank's (WB) magical prescription in developing economies was privatisation. Even World Bank economists are now realising that privatisation, an increase in public spending and boosting growth rates are not enough to improve services to the poor. Rather, it is the empowerment of the poor, their participation in policy making and the monitoring of service providers that is now believed to be an integral part of the solution. In fact, this is the core theme of the draft of the WB's World Development Report (WDR) for 2004. Entitled, "Making Services Work for the Poor", the draft was discussed at the Egyptian Centre for Economic Studies (ECES) earlier this week, as a part of similar roundtable discussions held in many countries. These discussions are intended to give the authors of the report feedback before launching their final version next September. "Services are failing poor people," said Shantayanan Devarajan, director of the WDR. "In most developing countries worldwide, people lack access to most basic services like health, education, water and sanitation." He stressed that, while increases in public spending and growth-boosting policies are fundamental, they are not a guarantee that the poor will necessarily benefit. "In Uganda, for example, we found that only 13 cents of every dollar spent on education goes towards free primary education, which mainly benefits the poor, who might not reach higher education," he said. "Our experience and research in different countries showed that the richest 20 per cent of any society gets double what the poorest 20 per cent obtain from any increase in public spending on services," Devarajan added. This also applies to Egypt. According to a study issued by the ECES on education and employment in Egypt, the government allocates five per cent of GDP to education, yet school maintenance deteriorated, the number of students per teacher increased and the proportion of students resorting to private tutoring increased. Ahmed Galal, executive director and head of research at the ECES, points out that most of the expenditure on the education process is absorbed by bureaucracy and wages. Nothing is channelled to improving curriculums or making teachers more efficient or to encourage student enrollment. According to Galal, even economic growth -- which in Egypt stands at around 2-4 per cent, compared with a targeted figure of 6 per cent -- is still not the main guarantee of improved living standards for the poor. "This growth must be related to generating new job opportunities, for example. If we are pushing growth through encouraging investments by giving tax exemptions, we are favouring capital against labour," he said. The previous panacea of selling services to the private sector were strongly criticised in Devarajan's presentation of the report draft. "This would mean that we are giving the government an excuse to walk away from its responsibilities. It still has to fulfill its obligations," he said. ECES's Ahmed Galal supports this view, explaining that privatisation should only be applied when the service delivery process is well regulated by the state. He believes that private management needs to be highly scrutinised in a way that guarantees that a service of good quality be delivered, both to the needy and the well-off in a society. "Take the Build, Operate and Transfer (BOT) way of privatising management in the electricity sector in Egypt," Galal said. "It turned out to be a terrible thing and it has proved to be extremely costly for the government." The solution, according to the WB, is that the poor have a say in the service delivery process and monitor service providers. "Cuba does not have the best economic figures in Latin America. However, it has excellent health and education services. The Cubans manage their schools and health centres with strong boards that are able to hire and fire doctors or teachers according to their performance," Devarajan said. As for Egypt, Galal says this approach could be successfully applied. "We can use the voucher technique for schools. The government gives parents free vouchers to enroll their children in whichever school they choose. Schools attracting more children, thus getting more vouchers, should be allocated more funds," he explained. Devarajan was keen to stress that even absenteeism rates in schools run in this manner have declined dramatically. He added that cultural background and a sometimes passive attitude among the poor could theoretically hinder this approach but stresses that, until now, it has succeeded wherever applied.
