As everyone will by now probably be aware, this summer provides perhaps the best opportunity yet for positive action to be taken to reduce world poverty. With the G8 meeting of leaders from the world's richest countries less than a month away, we should all take a look at the main issues concerned and just how they influence unnecessary poverty.
Trade
Trade is how people get (materially) richer. By focussing on what they produce best and then exchanging it with others, people and nations get access to goods that they could otherwise never have. However, there are many barriers to trade. Rich Western nations 'protect' their industries through things such as subsidies and taxes on imports.
The classic example is the Common Agricultural Policy (CAP) of the European Union. CAP's aim was to make Europe self-sufficient in food production. It succeeded, but is no longer needed. European countries pay big subsidies to farmers (in the form of guaranteed prices) for production; thus the farmers produce more than they would in an open market because they know everything they produce will be sold. This over-production forces prices down (imagine there were ten billion iPods in your local Tesco—they would be really cheap). The artificially low prices mean 'Third World' farmers lose out as they have not been subsidised and cannot make profit. Under fair trade they would be producing the most competitively priced items in many markets but they lose out because the French Government (for example) does not want to upset its farmers (who are understandably concerned about their loss of income) by cutting subsidies.
If Western governments followed what all their economists regard as the best way to wealth (free and open trade without subsidies) then all nations could compete on a level playing field, producing what they are best at for the benefit of all. The irony is that subsidies harm the economy of the country giving them to their industries—France could access cheaper food and have more money to spend on things such as healthcare if they could reduce money paid to farmers (though this, it has to be noted, involves a certain amount of pain for the farmers).
Some estimates suggest that Western governments pay about $50 billion in aid but give about $300 billion in subsidies to their farmers.
Debt
The debt story goes like this:
1. Rich countries lent money to poor countries for them to invest to make themselves richer.
2. Corrupt and bad governments of poor countries did not spend the money very well. They (sometimes understandably) bought things like guns to try and hold onto power rather than investing in infrastructure (roads, schools, hospitals etc).
3. The poor countries stayed poor.
4. The rich countries asked for the loans to be paid back.
5. The poor countries pay large parts of what little money they have to the rich countries—you don't want to default on a loan to a rich powerful country if you want good weapons to keep you in power.
Simple solution: write off the debts and the poor countries will have more money to spend on infrastructure and make themselves richer.
Problems:
- If banks were to write off debts because people are a bit hard up then the whole system could collapse: who would give a loan if it was unlikely to be paid back? Rich countries need guarantees that it won't happen again if they cancel debt—remember, if the international financial system collapses (as opposed to being reformed) then there will be a whole lot more of us living in poverty.
- What if the poor countries' governments then spend the money on guns again?
Well, this is where it gets complicated, and systems are suggested for cancellation of debt in return for democratic reforms. These are a good idea—we want to help the people who are in poverty, not their corrupt leaders.
Aid
If we give more money to poor people to spend on things that make them less poor, then they will be less poor and they will be able to help their children and future generations look after themselves. Thus we won't have to give them so much money in the future, and they will have more money to spend on things like whisky and golf so we will get more money. Everyone wins.
So as long as money is spent on long term projects (building schools, paying teachers, building hospitals, paying doctors, ensuring good sanitation and clean water, building roads etc) as well as short term projects (giving people food so they don't die) then this helps. Hence the call for 'more and better' aid should be listened to. Aid, to be effective, does not have to cost huge amounts to rich countries. The Labour government has pledged to increase Aid to 0.7% of national income. If all Western governments did the same it would make a huge difference.
HIV/Aids
HIV/Aids is killing thousands of people in Africa every day. It goes without saying that it is hard for a country to get richer if a large part of its economically active population is sick, dying or dead (this severely curtails your ability to contribute to the economy). Education is crucial to stop the spread of the disease which is often not talked about in Africa because of the stigma. The West can help by paying for education programmes and funding more teachers and nurses.
Drugs are available to treat sufferers, but they are costly, because the companies who patented them keep prices high to recoup their research and development costs. Obviously we don't want drug companies to stop researching treatments for the worst illnesses, so a system where (perhaps) governments help to fund research needs to be found. Research is costly and this makes drugs costly so poor countries cannot afford them. Drugs exist which can save thousands (if not millions) of lives now. Either the companies need to provide the drugs at much lower prices or Western governments need to buy the drugs to give to the Third World. Again it is not as simple a problem as it first appears, but a system where the world's sickest get drugs that can now be produced cheaply surely should not be beyond us.
Corruption
This may come as a shock but some governments are only interested in holding onto power and don't really care about the people in their country. In the West this is fine as they eventually get found out and voted out (they do, don't they?!). If there is no democratic means of doing this then violence usually occurs. As an example imagine if the West had given aid to Iraq with Saddam in charge. Whatever your views on what has happened in Iraq over the last few years, it is fair to say that a lot of money was spent by Saddam's 'regime' on things such as fancy palaces and keeping the family happy. This money might have been spent on things like hospitals in a democracy. Thus Western governments are right to try and pressure (or maybe encourage is a better word) Third World countries to become democracies. More democracy nearly always coincides with less poverty. It is another reason why it is sometimes good that help given to poor countries should come with strings attached. This is a controversial, complicated minefield. Does poverty cause corruption or vice versa? Measures to reduce one usually reduce the other.
Finally
It may make the Make Poverty History campaign less fashionable but its aims (and most of its suggested means for reaching these ends) are supported by the people at the top of the British Government. Gordon Brown has put forward proposals for big increases in aid, for writing off debts and for making trade rules fairer. What has to be hoped for is that Tony Blair, having put poverty and climate change at the top of the agenda for this summer's G8 meeting, can persuade the leaders of the world's richest countries to agree to Gordon Brown's proposals. He is more likely to succeed with the force of public opinion behind him and pressuring him and other leaders.
Make Poverty History website: http://www.makepovertyhistory.org/ MPH is the UK-based campaign of the Global Call to Action Against Poverty alliance: to find out more in other countries visit http://www.whiteband.org/
