[A-List] One in five of the world's people lives on less than $1 a day

[Bill Totten]

by Jessica Williams

from her Fifty Facts That Should Change the World (Icon Books, 2004)

Here is the saddest fact about poverty: it really doesn't have to be
this way. For less than one per cent of the income of the wealthiest
countries each year, the worst effects of poverty could be greatly
diminished. <1>  People would have enough to eat, basic services like
health and education would be available to all, fewer babies would die,
pandemic diseases could be brought under control.

Poverty is not just a matter of a lack of material wealth - the ability
to buy bread, say, or basic farming tools. Where there is poverty,
people do not get access to medicine or healthcare, so their years of
healthy life are diminished. Rather than staying in school or receiving
training, children are sent out to work. The cycle of ill health and
deprivation is hard to break. People living in poverty are vulnerable,
and they are voiceless. Where there is no security of food or income,
people cannot make choices. They easily fall prey to crime and violence.
A young woman in Jamaica sums up her feelings: she says poverty is 
'like living in jail, living in bondage, waiting to be free'. <2>

In 2000, the United Nations agreed in its Millennium Development Goals
to halve the number of people living in poverty by 2015. Just three
years later, the UN was already warning that the world was falling
behind on those targets. At least four times between 2000 and 2003, 
rich and poor countries had promised to work together to alleviate
poverty. Richer countries agreed to pledge 0.7 per cent of their
national incomes, while poorer countries agreed to implement political
reforms to ensure aid money was spent wisely and accountably. <3>

But agreeing to make a commitment and then actually honouring it are 
two very different things, and it seems that rich countries are 
already falling behind in their commitments. Aid contributions from the
countries of the OECD's Development Assistance Committee (which account
for at least 95 per cent of world aid disbursements) rose by nearly 
five per cent in 2002 but amounted to just 0.23 per cent of gross
national income <4> - well below the UN's suggested 0.7 per cent. 
The UN is warning that although some countries are on target to reach
the Millennium goal on poverty, many others will not. Overall, the
targets should be met - but if we take two large countries out of the
equation, India and China, they will not be. Why are some countries
succeeding and others failing - and what can we do about it?

In the 1990s, the proportion of the world's population living in extreme
poverty - defined as living on an income of below $1 a day, adjusted for
relative purchasing power - fell slightly, from 30 per cent to 23 per
cent. <5> In China, more than 150 million people have moved out of
poverty in the past decade. <6>

But in 54 developing countries, income fell during the 1990s. Twenty of
these were in sub-Saharan Africa, and seventeen were in Eastern Europe
and the Commonwealth of Independent States (CIS). In Eastern Europe, 
the fallout from the collapse of communism has led to spiralling
unemployment and rapid economic decline. In Africa, development has been
hit hard by falls in life expectancy caused by the HIV/Aids pandemic,
and small land-locked countries have been hit hardest of all. At current
growth rates, it will take until nearly 2150 for sub-Saharan Africa to
halve the number of people living in poverty. <7>  Some countries are
getting richer, yes; but many are getting poorer.

Across the world's population, the divide between rich and poor is
growing ever wider. We think of countries like Brazil showing grotesque
levels of inequality between wealthy industrialists and the urban poor
living in shanty towns, but distribution of wealth across the world's
people is even more unequal than that. <8>  In 1960, the per-capita
gross domestic product (GDP) of the richest twenty countries was 18
times that of the poorest twenty. In 1995, this gap had yawned to 37
times. <9>  Today, the world's richest one per cent receive as much
income as the poorest 57 per cent. <10>

Even in countries where poverty levels are declining, there are
inequalities which mean not everyone is benefiting from those advances.
China's development strategy directs funding towards industry and away
from agriculture, so people in the richer coastal regions profit at the
expense of the rural poor. In Mexico, the poorest states in the south
are far from the US border and so opportunities for trading and
employment are few; the richest ten per cent of the population earn 
35 times more than the poorest ten per cent. <11>  A high degree of
inequality in a society leads to a vicious circle: people have less
incentive to work hard because advancement in society is very difficult,
and this leads to rising crime, social unrest and corruption - which in
turn threatens economic stability. <12>

If we cannot succeed in meeting the Millennium Development Goal on
poverty, the industrialised world will have failed. We will have failed
not only the people that we promised to help, but in some way we will
have failed ourselves. Listening to our leaders trumpet the benefits of
globalisation and worldwide free trade, we believed that we were doing
something to help. We must make sure that our governments and our
multinational companies prove usright.

First of all, we need to think about reducing poverty as an imperative.
When governments look to cut public spending, overseas development aid
is often among the first areas to be trimmed - but it shouldn't be. 
As economist Jeffrey Sachs and director of the UN Human Development
Report Sakiko Fukuda-Parr wrote, 'the question is not whether the rich
countries can afford to do more or have to choose between, say, defense
and reducing world poverty. Since less than one per cent of national
income is needed, the question is only whether they will make the
elimination of the world's extreme poverty a priority.' <13>

Development aid should, for example, be put at a far higher priority
than the wasteful and unfair system of agricultural subsidies paid out
by the US and Europe. The Organisation for Economic Co-operation and
Development (OECD) member countries spend around $300 billion a year in
supporting their farming sector - more than five times what they spend
on development aid. <14>  This lavish aid encourages farmers to produce
far more crops than they need to, and surpluses are then dumped on the
developing world.

If rich countries decided to end agricultural subsidies and remove
barriers to imports from the developing world, the results could be
dramatic. For every dollar that developing countries receive in aid,
they lose two dollars because of unfair trade barriers. <15>  Market
liberalisation needs to go both ways, so that developing countries don't
open their doors only to be faced with stiff rich-world trade rules.

But merely dropping trade barriers won't solve the problem. Reducing 
the crippling debt burdens faced by many developing countries is a
crucial part of any poverty-reduction strategy: once they are freed 
from the need to spend all their resources in servicing enormous loans,
governments are able to spend more on vital infrastructure, health and
education.  G7 leaders committed to cancelling $100 billion worth of
debts owed by the 42 poor countries that were identified by the 
World Bank and the IMF as 'highly indebted poor countries' (HIPC); by
September 2003, 21 countries should have completed the HIPC initiative
and had some of their debt forgiven. In fact, only eight countries had
reached this point. Aid agencies are critical of the glacial pace of
progress, and the perceived reluctance on the part of the IMF and the
World Bank to take the lead in debt forgiveness. <16>

It is clear that in order to put in place important development
infrastructure - like schools, hospitals, water and sanitation systems -
large injections of donor finance will be needed. But this should be in
the form of grants, not loans, as the last thing many of these countries
need is to take on yet more debt. It also needs to be effective aid,
given to the right people at the right time, and with a sense of the
distortions that massive injections of money can cause to a society 
and its people.

The UN Human Development Report summarises good practices for donors and
recipients. On the part of donors, aid should encourage decentralised
decision making (by local communities rather than central governments),
co-ordination of projects and programmes to align with the country's
needs, and accountability. Aid should also not be tied to specific
conditions. On the recipient's side, there should be institutional
reform to promote transparency and good governance, more widespread
participation in development issues and an increased level of oversight
(by non-governmental organisations, civil society and individuals) to
increase accountability. <17>  Simply put, donors can do much to make
sure the money goes where it's needed, and recipients can make sure it
gets spent on the right things by giving people in communities a voice.

Developed nations also need to be prepared to share technology to help
poorer countries. This doesn't mean just computer and communications
technology, though that is important, but also making patent laws
accessible to innovators in developing countries, committing to
researching and developing drugs to combat illnesses that are endemic in
the developing world, and helping to provide clean energy alternatives
to reduce pollution and lower fuel costs. Providing training to help
people get the most out of their land may be the most valuable donation
of all: for example, the Heifer charity helps families by donating
livestock and training to small farmers and communities. Once the farm
is back on its feet, the recipients then 'pass on the gift' by donating
their animal's offspring to another needy family. <18>

Above all, we need to make sure that the forces of globalisation do not
work merely to make rich countries richer. The benefits need to flow
both ways. Developing nations made their voices heard loud and clear 
at the World Trade Organisation talks in Cancun, and put the issue of
poverty and trade at the top of the world's agenda. Now it is up to 
the developed world to rise to the challenge.

On the eve of the Cancun talks, Britain's chancellor Gordon Brown wrote
that afterwards, 'globalisation will be seen by millions as either a
route to social justices on a global scale, or a rich man's camp'. <19>
The developed world doesn't have much time to change the course of
globalisation, but then it's not that hard to do what's required. Living
up to our promises, giving people a voice, playing fair - none of these
things seems unreasonable. In fact, they seem like the very least we
should be doing.

Notes

One in five of the world's people lives on less than $1 a day.

 <1> Jeffrey Sachs and Sakiko Fukuda-Parr, 'If We Cared To, We Could
Defeat World Poverty', LA Times, 9 July 2003.
 <2> World Bank World Development Report 2000/2001.
 <3> Sachs and Fukuda-Parr, 'If We Cared To, We Could Defeat World
Poverty', op cit.
 <4> 'OECD DAC Countries Begin Recovery in Development Aid', OECD press
release, 22 April 2003.
 <5> UN Human Development Report (UNHDR) 2003.
 <6> Ibid.
 <7> Ibid.
 <8> Ibid. Using the Gini coefficient - a measure whereby 0 stands for
perfect equality and 1 stands for complete inequality - Brazil measures
0.61 , while the world measures 0.66.
 <9> World Bank World Development Report 2000/2001.
<10> UNHDR, 2003.
<11> Ibid.
<12> Jubilee Research, 'Inequality and Poverty - a Spiral of Despair',
www.jubilee2000uk.org.
<13> Jeffrey Sachs and Sakiko Fukuda-Parr, 'If We Cared To, We Could
Defeat World Poverty', op cit.
<14> Report for OECD Round Table on Sustainable Development, 
January 2003.
<15> Oxfam, 'Rigged Rules and Double Standards',
www.maketradefair.org/stylesheet.asp?file=03042002121618&cat=2&subcat=6&select=1.
<16> Jubilee Research at the New Economics Foundation, 
'Real Progress Report on HIPC', September 2003.
<17> UNHDR, 2003.
<18> www.heifer.org.
<19> 'Drugs Are Just the Start', Guardian, 28 August 2003.

Please also see "Debt, Reforms And Social Services" 
by Mandisi Majavu, ZNet Commentary (September 18 2004)
http://www.zmag.org/sustainers/content/2004-09/18majavu.cfm

Bill Totten     http://www.ashisuto.co.jp/english/