One comment is that in the countries in which I work it is a highly contested relationship. I would say, empirically and analytically, the jury's out as to what the conclusion would be. In the countries in which we work, let's take Peru, in particular, while the primary argument that is made is that the channels through which poverty reduction might occur are the three that I noted, plus the payment of taxes, that then gets used to finance national cash transfer programs essentially, social investment programs that are cash transfers, conditional or not. So I think there's a series of questions that can be raised about those mechanisms, which isn't to denigrate them, but to ask how far conditional cash transfer programs are going to have a sustainable effect on poverty reduction, as opposed to being mechanisms for poverty alleviation. So there are design issues there. Then there are the sorts of questions that I was trying to raise earlier about the effects of fiscal transfers on local development dynamics.
Another set of questions, which I think are perhaps more significant still, are related to the effect of a significant dependence on extractive industries for the broader diversification of the economy, both within a territory, at a subnational level, and nationally. To the extent that a commitment to extractive industry doesn't translate into a diversification of the economy, poverty reduction ultimately continues to depend upon cash transfers paid through taxes or paid through these programs, and so will only continue as long as extraction continues to proceed. Once the extraction comes to an end, the absence of a diversified economy, which can provide other employment opportunities that are not dependent upon the mineral value chain, will mean that the possibilities of sustained poverty reduction are not going to be realized.
One can ask questions about these particular mechanisms, but the broader question relates to how far a diversified economy that goes beyond extraction can emerge, under circumstances where extraction is the primary player within a subnational economy or a national economy.