CIDA's Policy on Poverty Reduction

A. INTRODUCTIONThe Government's foreign policy statement,Canada in the World, released on February 7,1995, provides a clear mandate for CanadianOfficial Development Assistance (ODA):"The purpose of Canada's ODA is to supportsustainable development in developingcountries, in order to reduce poverty and tocontribute to a more secure, equitable andprosperous world."Canada's development assistance program recognizesthe vital link between poverty reduction andsustainable development, and is built on a broadarray of programs and policies working togetherin an integrated way.Poverty results from the lack of human, physicaland financial capital needed to sustain livelihoods,and from inequities in access to, controlof, and benefits from political, social or economicresources. In an interdependent world, povertyin developing countries increasingly affects theeconomic, social and political welfare of developedcountries. Poverty can lead to serious globalproblems, such as environmental degradation,political and economic instability, and large-scalemigration of people in search of a better life.In this context, the policy will provide a frameworkfor poverty reduction and will guide programmingin each of the six programming prioritiesfor ODA: basic human needs; women indevelopment; infrastructure services; humanrights, democracy and good governance; privatesector development; and the environment.In addressing the challenges posed by poverty,important distinctions must be made between"relief" and "reduction". Poverty relief addressesthe poor's survival needs, their immediate problems,and the effects of inequities. It does notenable the poor to secure or sustain their livelihoods,or to end the ongoing cycle of poverty.Poverty reduction is a process by which the causesof deprivation and inequity are addressed.Clearly, "relief" activities can be critical in dealingwith famines and other disasters-- indeed, shorttermsurvival strategies are crucial for theextremely poor. However, the challenge lies inmaking the transition from the short-termresponse of relief activities to interventions whichwork to reduce poverty in the long run.Poverty reduction is complex and difficult, anddespite considerable programming experience inCIDA, it remains a challenge. <strong>CIDA's</strong> approachto poverty reduction will require:◆◆◆a better understanding of the country-specificand local characteristics of poverty;a coordinated use of project, program, institutionalsupport and policy interventions toachieve maximum impact; anda clear view of <strong>CIDA's</strong> role and capabilities.2