World Poverty: Too Little Too Late.

A trinity (not the Holy) of influential bodies:  the World Bank (WB), United Nations (UN) thCAO34NGVand the International Monetary Fund (IMF), aided by an army of bureaucrats have set a goal of seriously denting the sheer number living in ‘extreme’ poverty by 2030. Ending world poverty is an admiral aim which deserves acclamation and thoughtful support.

A High Level Panel of the UN met recently, April 2013, to look back at the achievements of the Millennium Development Goals, (MDG’s) set in 2000. According to the blurb, “…the panel met with a sense of optimism and deep respect for the Millennium Development Goals.” They applauded:

  • The fastest reduction in poverty in human history. (China & India)
  • 0.5bn fewer living below the $1.25 threshold.
  • Child deaths down 30%

The panel set a new challenge, “Central to this is eradicating extreme poverty from the face of the earth by 2030.” Quite a task they have set themselves. Good luck.

During the course of the meeting they acknowledged the work of the MDG’s and the guiding ‘spirit’ of the organisation. Nonetheless, their objective is to go beyond the previous ‘goals’. In doing so they brought to our attention a few omissions of the previous cohort:

  • They did not focus enough on the poorest.
  • Were silent on conflict and its consequences.
  • Were quiet on good governance – (see later).

“Most seriously the MDG’s fell short by not integrating the economic, social and environmental aspects of sustainable development…” www.pdfownersguide.net  I would call that game, set and match to the new guys. The old guys have probably been pensioned off with a nice golden handshake.

David Hulme, had already savaged the thinking behind the MDG’s when he pointed out that while China and India were hailed for reducing ‘extreme’ poverty they, “…pretty much ignore[d] the MDG’s”. Moreover, the implementation was top-down and in need of better targeting. They may have taken notice of Hulme’s observations.  cpd.org.bd/Post/MDG/OPseries/SVOP2.pdf

Professor Rehman Sobhan was equally blunt when he suggests that the MDG’s,              “…address the symptoms not the causes of poverty”. post2015.files.wordpress.com/2013/04/sv-op/   Thus it would seem that the WB and its partners have pretty much wasted thirteen years!

If we examine the WB’s analysis of the situation June 2013, their target is to reduce ‘extreme’ poverty to 3% or below by 2030. They acknowledge that there are still 1bn people living in ‘deep’ poverty, while inequality was rising in developing countries. Certain restraints are also recognised vis-à-vis the need for ‘rapid economic growth’ and long term ‘structural changes’ and these must be sustainable for their targets to be achieved.

A number of points can be raised here: over the 13 years of MDG’s those in ‘extreme’ poverty declined by 0.5bn. Now the WB are accepting that 1bn people are still in ‘extreme’ poverty, so how many years will it take to ‘eradicate’ that number? There are only 17 years left till target day. Meanwhile ‘inequality is still rising’ in developing countries! The other puzzle is that while the UN wants to ‘eradicate’ extreme poverty, the WB is happy to reduce it to 3% or fewer. Is one being too ambitious or the other too cautious? Alternatively both may be flying as high as a kite!

Achieving their stated aim immediately comes under scrutiny when reminded that Oxfam warned that 100m more people face poverty because of price rises. Incredibly thCAJPIQU2the WB threshold of $1.25 does not include increases in fuel and food in its calculations, according to the charity. Mindboggling! It was such price rises that caused the food riots of 2007/2008. A report by the International Food Policy Research Institute (2011) found that the riots were similar to those of 1972/74 and warned that we can expect more. The causes were identified as: fuel hikes, bad weather, lack of investment and speculation. On that basis I would concur that more food crises will happen.

In 1981 the threshold was $1; it was not revised until 2005, twenty-four years later, to a paltry $1.25 a-day. Therefore it is obvious that no account is taken of inflation; yet inflation can have an unbearable impact on peoples’ lives. It would seem a callous disregard for the ‘nether’ people. Living standards can be grossly affected by continuous increases on goods. A few examples will suffice to make the point:

Kenya: 10%         Nigeria: 12.1%                   Argentina: 25%                 India: 9%         (all 2012)

The recent riots in Brasil are testament to how hard life can be to make ends meet, just to wake up and find the government wasting vast sums on prestige projects.

Those mandarins that quantify the figures and set the targets seem divorced from the reality of a day to day existence. Their only concern is the target; the people are amorphous. I have mentioned in previous posts on world poverty how they disavow the ‘nether’ people; those in the darklands between the $1.25 a-day and the $2 a-day. No one is sure of the number of ‘nether’ people but it is well over a billion. They should carry out a survey in the Kibera in Kenya or a favela in Brasil to ascertain what difference the 75 cents makes.

“…when the Tendulkar Committee was asked to review India’s poverty line, it recommended raising the line from USD 1 a-day to USD 1.25 a-day. As a result 189 million Indian’s moved below the poverty line. This suggests that moving people above and below a poverty line is a fool’s game that tells you little about the nature and sources of poverty”. Rehman Sobhan

Before greed walked the land in the guise of bankers’, success had come easy for the WB, the UN and the IMF. Both China and India had had an industrial spurt which resulted in millions of menial jobs being created and thus lifted millions beyond the ‘frugal’ threshold. An estimated 680 million alone in China transformed the poverty landscape and brought joy to the ‘trinity’; their panacea had been found. Then the bankers froze their assets!

The recession that began in 2008 may be “…the worst in 100years.” www.telegraph.co.uk/finance   It has lasted five years and may take another 5 years before trading makes a good impact on peoples’ lives. Geoffrey Moore, has documented, 3 depressions, 6 sharp recessions and 5 mild recessions in the period 1920 / 2000. The downturns vary in length from six months to 18 months and longer. www.econlib.org/  Based on these figures and the fact that 17 years remain before the ‘trinity’ target date, I would suggest we will experience a few more recessions by the due date.

While developed countries can cushion the hardship of those affected with their welfare system there is still a huge cost to the nation. “However, the size of today’s welfare state, some economists argue, is hindering recovery by piling state debts higher and preventing the economy from realising its full potential.” Telegraph, op. cit.  citing the National Institute of Economic and Social Research.

We have the ludicrous situation whereby big business is making big profits by farming out jobs abroad. Meanwhile, the state is borrowing money by the bag full to pay for the welfare system and the rest of us have to pay ever more tax to pay the debt off. Why don’t we give our tax to big business and they can keep the jobs at home!

Periods of prolonged unemployment can create a severe impediment to those who seek work or who lose the motivation to get back on the road again. The consequence is the gradual development of an underclass which has considerable cost implications further down the road.

The hopes of the trinity rest on the prerequisite of industrial growth and significant political changes. However, the economy is subject to a number of vagaries:

  • The frequency of recessions.
  • Speculation – see food crises.
  • Greed, the cause of the present depression.
  • Saving and spending habits of the people.
  • The influence of government.
  • The extent of monopoly V competition.
  • The environmental impact of unchecked industrial growth.

There seems to be a lack of coherent economic thinking on the part of the trinity: “It is perfectly possible to have economic growth without the creation of new jobs or improvements in working conditions.” www.huffingtonpost.com/michael-shank/  I have a

They will listen!

They will listen!

noted in World Poverty: America the NY Times of 2006, “…growth alone is an insufficient indicator of national well-being.” Meanwhile, it is hoped that India will be a major contributor to the eradication of extreme poverty; however, “…it will be a mediocre-at-best investment in destination for the next decade.” Proactiveinvestors.com

As the ‘trinity’ do not have the power to dictate the world economy, their scheme is as much at the mercy of the market as are the rest of us. Even with periods of sustained growth, poverty has persisted and will continue to, until the world economy is governed by a more visible ‘income distribution’. This is not simply a case of giving people money; wages will have to rise and profit margins will have to be lower.

A more credible income distribution on a world scale should be the prerequisite that the trinity promote. This can be achieved by an insistence on a minimum wage in each society. I’m sure the UN can pass a resolution of that nature and have enough bureaucrats to monitor the compliance to it. Or is that politically unfeasible?

In terms of political change / structural change required; that could take a whole lot longer than envisaged. We are dealing with base human traits. When selfishness and greed walk hand in hand the rest of us better watch out. Corruption is so embedded in several nations that it will take time and a high degree of sophistication to rid it from the land.

The WB must pay more heed to its own guidelines and drive them home with as much vigour as can be generated:

World Governance Indicators

  • Extent of democracy.
  • Political stability
  • Quality of public services
  • Private sector development
  • Rule of law
  • Control of corruption

These are building blocks to a better future and as such need to be forcibly applied where appropriate. However, the adherence to the principle of free trade is illogical in the interim as local industry needs a head start as it cannot compete with the conglomerates of the developed economies. As this could lead to countries becoming net importers which compounds poverty, does not relieve it or eradicate it.

How feasible is ‘sustainable development’? Can we have every nation working to full capacity making goods for sale? How many more cars, trucks and chimneys spouting out their muck can the environment endure? Is the end to extreme world poverty wishful thinking on a large scale? For 50 years and more the problems of poverty have been fought and there seems no end in sight. All the questions and answers are tied together, like a bunch of flowers, with a pretty ribbon, on which is inscribed, politician.

“Nearly a billion people entered the twenty-first century unable to read a book or sign their name.”             www.globalissues.org/article/26/poverty

Now here is a travesty; it is unconscionable that in the modern era a problem of such magnitude exists. “… now’s the time for your tears.” Bob Dylan: The Lonesome Death of Hattie Caroll. This is a prime cause of poverty and as such should be tackled with the utmost haste.

I came across a shellshock of a fact: “Schoolgirl absenteeism could be cut in half by simply providing free sanitary towels.”  en.wikipedia.org/wiki/Poverty#   It is too staggering for words.

We have a problem Houston. A problem identified by Charles Handy: “Group-think is dangerous because like-minded groups have like- minded ideas and find it hard amongst themselves to re-frame any situation.” The Age of Unreason (1989)

Even rock stars are not immune:

“…extreme poverty has been cut in half the last 20 years, and the facts show that we can get it to virtually zero within a generation-but only if we act.” Bono, U2

We have a host of organisations for by the ‘trinity’ who are trapped by the $1.25 a-day threshold and the spiel that accompanies it. Perhaps they need to be reminded:

“Minds are like parachutes. They only function when they are open.”  James Dewar, 1842-1923.

“Half the harm that is done in this world is due to people who want to feel important. They don’t mean to do harm-but the harm does not interest them. Or they do not see it, or they justify it because they are absorbed in the endless struggle to think well of themselves.”  T.S.Eliot

World poverty will not taking the high road just yet.

 

World Poverty: We are ALL Digits.

thCAX5TE0TThe World Bank (WB) deals in statistics; people it would seem are a function of the stats. Judgements will be made, decisions will be taken and resources allocated on the basis of the figures. World poverty is but a number and numbers make for understanding, or do they? By its own admission the WB accepts that the poverty threshold of $1.25 a-day is “very frugal”. Nonetheless the WB holds fast on the figure; meanwhile the South Asian Bank promotes a $1.35 a-day threshold as more realistic.

I don’t know how the calculation is done to arrive at either figure but what is abundantly clear is that the higher the threshold the more people that come under its umbrella and thus more are considered to be living in ‘extreme’ poverty. The $1.25 a-day relates to what can be purchased in the USA for that amount. Of course it has no bearing on what can be purchased in Kenya, Chad or in Honduras, for the same daily allowance, unless all prices are the same.

There is a very powerful political agenda being advanced by the WB, one that suits Conglomerates rather than promoting local business. The celebration of the huge drop in ‘extreme’ poverty mainly due to the industrial surge by China seems to have been taken as a panacea to rid the earth of all poverty. Consequently, the WB has sought to impose the China model elsewhere. As we have noted, China is booming and the WB applauds the results but what are the consequences of such rapid growth?

A look at recent film footage from China shows an environmental and human downside to the industrial expansion. Quite visible is the smog that hangs in the atmosphere; whilst behind the closed doors are the poor working conditions that the people are forced to endure. Such is the celebration of the growth that few listen or take heed of the warnings:

“The same is true of other developing countries, for growth in these lands is not environmentally neutral and raw materials are not elastic.”  The Hungry Spirit, P54. Charles Handy,

One light shines and the WB leads us walking blind into a well of human misery and potential environmental catastrophe. One is reminded of the ‘Dark Satanic mills’ of 19th century UK. Are the millions of child labourers, who earn a pittance working in the most hideous, squalid conditions; are they and their families removed from below the poverty line if they earn a cent above the $1.25 a-day threshold? How can poverty be understood on purely monetary terms?

Nonetheless, pleased with its catchpenny statistical endeavours so far, the WB has set its next goal, to reduce ‘extreme’ poverty throughout the globe to 3% or less by 2030. However, it does recognise that more than 1billion people still live in destitution and that inequality is rising in developing countries. The WB offers a caveat by admitting it has, “established ambitious but achievable goals.” They also accept that the target is, “highly optimistic” and requires, “rapid economic growth,” as well as, “long term structural changes.” This is quite an array of caveats and while I wish them well, I cannot muster the same belief that they obviously possess.

My attention was particularly drawn to:

“It will require sustaining high rates of economic growth across the developing world…” and “ social policy changes not seen yet in many poor countries,…” now that is what I call ambitious!

I am intrigued by the “long-term structural changes”
mentioned and by just how long these changes will take and crucially, how they will be implemented? Surely changes of a major kind such as envisaged will require local support and wherewithal to impose them? The time factor is also critical here; the WB has given themselves, 20 years or so; does that constitute long-term? Or is it satisfactory for the reforms to be in the pipeline? Can the WB guarantee the support locally to implement the changes or do they have an alternative method in mind?

What of the “social policy changes not seen yet…”? Is this just wishful thinking on the part of the WB or a necessary prerequisite? Are we to see a health service and an education system manifest themselves overnight? When will they start and do the governments involved fully endorse these mammoth undertakings? Where will the staff for the numerous jobs come from? My advice to the WB is to get their skates on!

The task becomes even more daunting when the foundation from which they start is so unstable.

“In 12 countries in sub-Sahara Africa, the extreme poverty rate is above 60%; in four cases it is above 80%.” A great deal of credit is due for the basic honesty that is displayed. However, when India is added to the picture, with 33% of people globally living below the poverty line then we must start to think in terms of miracles. Their realistic assessment, I believe, condemns the ambitious target set before the engine is started.

Another major criticism of the plan is the one to retain the threshold at $1.25. Introduced in 2005, the threshold is now unrealistic because it does not take into account inflation from then to the present day. To maintain the rate set as a global rate is a false position as price rises are not universal, they differ depending on the economic stability of the individual nations. This, therefore, appears as a game played with numbers and gives credence to the notion that the WB’s main concern is looking good; a policy of self-promotion. It reminds me of a little book I came across in a second-hand bookshop, titled, How to Lie with Statistics, by Darrell Huff, 1954.

An indictment of the $1.25 a-day threshold is exemplified if we consider a threshold of $2 a-day, which raises the number trapped in poverty from 1.4 billion to 2.6bn. Is that why the WB is sticking to the prescribed threshold? If these figures are reliable then we have 1.2bn people living in a shadow place between darkness and light, fighting a constant battle with hunger and hades, yet daring to hope. Therein lies the true miracle of the human spirit. www.prb.org/Articles/

“Torture numbers, and they’ll confess to anything.” Gregg Easterbrook.thCA6407G6

We can all use statistics to promote or defend our argument, and it is very difficult to ascertain the truth or otherwise of facts and figures, as bias is a constant intruder into our thoughts. However, to begin on a false premise would seem to lack moral certitude. Nonetheless, a number of points can be raised here; Oxfam (2008) warned that 100million more people may face poverty due to price increases as the $1.25 a-day does not take into consideration increases in fuel and food. (bbc.co.uk) “In addition in developing countries the informal economy predominates for all income brackets except for the richer, urban upper income bracket population.”

www.en.wikipedia.org/wiki/Gini_coefficient#Gene

In effect money does not play a large part in the lives of these poor people. To add to the downcast mood we have another opinion from Oxfam (2008) when they point out that in sub-Sahara Africa, 50% live in ‘extreme’ poverty and have done for the past 25 years. Elizabeth Stuart. (bbc.co.uk).  The point here, surely, is that poverty in sub-Sahara Africa is endemic and the sheer scale of the task to eradicate it will take more than the 15/20 years allotted to it by the WB. A similar case can be made about India.

A total rethink in terms of approach is vital and it does not help when those who can affect change fail to deliver. In 2005 the G8, (the eight most economically powerful

Agony does not sleep

Agony does not sleep

countries) set a target to double aid to Africa by 2010; that target was never met. Since the mid-1950s donor nations have poured over $1 trillion into the Horn of Africa and yet today these countries are still in a state of perpetual misery. The sadness continues for several of these nations as famine has reared its ugly head (2013) in Somalia, Sudan and South Sudan. Unfortunately the good news that the WB would like us to believe is overwhelmed by the bad.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Charity: Does it Work for You?

There are many who need charity and many who depend upon it. It would seem that poverty and the poor will be forever with us, such is the nature of our system. Charities are therefore a positive thing as anyone with a modest degree of humanity would not like to see others go without. It is a truism that everyone cannot be rich, nor can everyone be in good health; thus help is essential for those less fortunate than others.

However, what started as a philanthropic gesture has grown into a massive business. Some charities have an income that would far outstrip all but the largest conglomerates. Two examples should suffice as an illustration: Oxfam has an income of £385,500,000 that is one sizeable figure. They also employ 4,900 people. The employed figure is not so huge for such an organisation with such an income, until you add the 22,000 volunteers. Then you can start to appreciate that Oxfam is a very large company.

The other example is the’ Save The Children Fund’ with an annual income of £332,880.000 and employ around 5,000 workers. I am in total agreement with the sentiment of helping children. No child has a say in where or when they are born. Likewise s/he has no incline that they can become a burden. It does not matter whether born of love or lust, their future is our future too. Think of your own twilight years, of the society that would make you feel secure, the society that you want for your own offspring. That humane society, that vision, becomes severely blurred when a majority do not share your altruism.

Most people are aware via 24hr TV news stations, and the daily diet of crime reporting in our newspapers, that the disillusioned and disaffected and the pure evil find a means to survive, and we all suffer the vacuity of their activity. If charities can help some of these lost souls, then more power to their elbow.

That ends the sermon, lest we break into hymn.

I as other members of the public have been accosted on the street, had flyers throughthCA57R6FM the door and had my emotions bombarded by TV advertisements to give a little and often. If I do give then I want to know where the money is going and how it is being used.

There is disquiet about the use of donations to charity. No doubt they do some good and are praiseworthy but other aspects may leave a sour taste in people’s mouth. Donors want to know that their contribution is being well spent, that it reaches the places that it should. A report by ’New Philanthropy Capital’ based on a survey of 3,000 donors highlighted, “The report has sparked fresh concern that charity leaders are failing to prove the effectiveness of their work.” (Guardian 14 March 2013) The illuminating phrase is the reference to, ‘fresh concern’ which suggests a long term failure.

As of December 2012, there are 162,915 charities in the UK with an income of £58.5 billion. Both these figures are immense. My first thought when I looked at the number of charities, was duplication. I dug a little deeper and found several examples were duplication was indeed the case, e.g. 23 different bodies for ‘autism’, eight within London. No disrespect to anyone involved in one of these charities but would it not make more economic sense to combine their effort. Harness the energy and knowledge rather than a disparate approach.

Likewise, with water in a number of African states. Some of the charities were very focussed in one area and their income reflected this. I don’t doubt they are doing some good, e.g. ‘Pipedreams’ in Tanzania and ‘IRWA’ in Sudan, but more could be done by linking up with a more substantial body and pressing their case.

thCAQA6CPNI had to look twice at the total amount raised by the charities of £58.5bn. That is a staggering sum of money. Where does all the money go? It is more than the Gross Domestic Product (GDP) of many countries. This is where doubt creeps in, because the advertisements are constant, news of more tragedy seems to be a more frequent alert nowadays. One is lead towards a conclusion of waste. Is there waste on a massive scale? Is corruption on a similar curve? The poverty, the need for aid does not diminish, it’s as constant as the sun in the Sahara desert.

Transparency is a buzz word at the moment and I thoroughly recommend the charities to adopt it as a philosophy. Scepticism is almost a tangible force and will only grow stronger with a current debate on International Aid and the 0.7% of UK GDP being earmarked to be spent on aid. That constitutes a lot of dosh to spend abroad at a time of hardship at home. Joe Public, is finding a bitter winter compounded by a freeze on income a huge burden.

Moreover, it is well documented that corruption in sub-Sahara Africa is almost endemic. Another concern is that anecdotal tales are being adopted as truth and thus shift the balance of public opinion. Transparency, well presented, not spin, can act as a George, with a mighty sword, to slay that particular dragon.

Are we being duped? Are large amounts of money being siphoned off to corruption? Is

Help or hinderance

Help or hindrance

the cost of feeding the desperate made exorbitant by the need to give backhanders? Have the charities created a monster that now consumes a large sackful of their intended gift to the people? May be it is time to think outside the box and find a way around the corruption or has corruption become too entrenched.

Above are classic examples of the sentiments often mentioned by people. If they are true or false then transparency would open the eyes of the public as well as the leaders of the charities. A powerful reason for opening the books stems from the fact that personal donors are triple givers. The large charities get money from the government as well as funding from the European Union (EU). As that money comes from taxation, then those who make a personal contribution are forking out thrice. Now I think that deserves an explanation.

I have mentioned ‘duplication’ of several charities focussed on the same objective and therefore dissipating their economic muscle, the same can be true in terms of administrative costs. E.g. location costs, warehouse, transportation, field workers, not to mention the over paid executives. It seems that the higher echelons of our society view charities as a sound place to work.

Do they really need plush offices in London? Surely with new technology; iPhone, internet, conference calls, faxes, etc., location becomes a matter of choice.

The Charity Commission (.gov.uk) in November 2012 urged the charities to, “be good, as well as do good.” Moreover, the New Philanthropy Capital survey suggests that a more open format by the charities would bring considerable benefits in contributions. Let’s put it into practice.

Aid:Where Doubts Arise

Doubts arise when the question is asked whether we know how the aid is spent and what on. Perhaps we need to be more cynical than sceptical as there seems to be a big mess out there!

The UK government has handed out £163million since 2006 for a Reproductive & Child Health Programme in India. Unfortunately, the money was siphoned off and used for a separate programme of sterilization on both men and women. Another twist in this sordid tale is that many of those who opted for the sterilization programme were bribed to participate. Does this come under: misuse, corruption, manipulation of the vulnerable or all the above?

Q. Was anyone sacked for misappropriation? No one at all? Nobody!

Is this a puzzle?

  • We give aid to Nigeria – it has its own oil supply.
  • We give aid to Angola – it has its own oil supply.
  • Ghana – ditto.
  • South Sudan – ditto.

Am I detecting a pattern here or has cynicism poisoned my faculties?

A Cover Up?

In Southern Africa attempts to establish a tarpaulin business has failed to find a world market and has thus become dependent on aid agency purchases. It seems the locally sourced raw materials are not as good as that sourced by India and China. The upshot is that the African tarpaulin is not up to international standard and so is dependent on the donor agencies buying it.

Q. If the aid agencies are prepared to subsidize a business, as they are, why not start a good business, one that can develop and bring long term employment and value to the area?

A bit of a Tiff!

It’s always about money

How can a solution to Africa’s problems ever be found when major donors can’t agree on the best route forward? (Daily Mail) Under the umbrella of Affordable Medicines, the UK government is part funding a programme to combat disease, e.g. malaria. Launched in 2009, the UK has given £72m to subsidize the purchase and distribution of the medicine.  A body known as Global Fund is administering the programme. Both the UK government and Global Fund say it is proving a success (no real data).

However, Oxfam argue that the programme is missing out the poorest and not reaching the most at risk. Oxfam further argue that the money spent, would be better used to fund professional health workers.

The tag team of UK & Global insist they are making good progress. Global, going for a knock out, suggest that Oxfam’s nose is out of joint because the scheme involves buying the medicines from the big drug companies.

This situation epitomizes why aid to Africa is failing; there is no coherent policy! See post Made of Sand: Rwanda

Help, I need somebody……..

Africa:

Too many agencies making too much broth;

Too many noses stuck in the trough.

Too much dumping causing too little growth.

Being too dependent brings too much sloth.

Too many nice guys, looking for praise,

Too much politics causes too many graves.