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Fighting poverty, a global challenge
Sun, 31 Aug 2008 18:02:57
By Patricia Khashayar, MD., Press TV, Tehran
The following is an interview with the Executive Director of World Innovation Foundation Charity
(WIFC), Dr. David Hill, on poverty and its causes.
Q. Poverty has become a global challenge, affecting nearly all world countries, what are the main
causes of this international problem?
A. According to Mollie Orshansky who developed the poverty measurements for the US
government, "to be poor is to be deprived of those goods and services and pleasures which
others around us take for granted."
But this is a sedate definition for the majority of the worlds poor and where in the developing
world can one consider poverty to be a daily battle just for human survival.
That is the big difference in perceptions here between the rich capitalistic west and around half
the population of the world. I can tell you now that things will not get any better by continuing to
adopt the 'West's' capitalist system to defeat poverty in the developing East and where it will
cause immense harm both in human misery and global wars eventually.
The reason I say this is really common sense, for as the population of the world increases to
between 9 billion and 12.5 billion people by 2050, and as the world's basic natural resources to
sustain life dwindles to an acute situation, wars are inevitable under the dictum of the capitalist
market system.
In this respect, nations only go to war basically for economic reasons if you read into the causes
of wars and the underlying objectives for those who started them. The first and second world
wars were economic wars and the latter was definitely fuelled by poverty in Germany and the
imperialistic aspirations of Japan (economics, in other words).
Therefore, the right economic mechanisms will either destroy the human experience forever or
allow the human experience to live on for thousands of millenniums to come. But I have to say
that most probably, this greatest decision of human existence will be determined in this present
century as the effect of depleting non-renewable natural resources meets head on with 9-12.5
billion people to be fed, clothed and housed.
Q. Many international organizations and companies have attempted to fight poverty and improve
the quality of life in the world, what do you think of such approaches? How successful have these
efforts been?
A.Overall and presently, the World Bank, the IMF and IFC have failed the world's poor and in
doing so, have hardly improved the lives of half the population of the world. Indeed, these
institutions have impoverished the world's poor through un-repayable national debts with their
massive repayments structures that alleviate nothing.
For all-in-all, the post application process of the Bretton Wood's thinking has totally failed the
poor of the world and where the executing institutions need abolishing and replacing with ones
that in the future have successful outcomes. This is where a new system should be created and
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totally focused on social relief and justice, not pandering to the calls of the profit driven private
sector capitalist market that permeates the present world.
For as Friends-of-the-Earth state, "The World Bank Group has steadily increased its support of
the private sector over the years and its private sector lending arm, the International Finance
Corporation (IFC), is an increasingly important facilitator of private investment in the developing
world. A part of the World Bank Group whose mission as a development institution is to promote
development and alleviate poverty, IFC's lending to the private sector is often at odds with this
mission."
To put poverty into perspective, it pervades all countries both rich and poor.
Q. Could you provide us with some statistics showing the prevalence of this global issue? How
many countries are affected by it?
A. In this respect, I give hereafter a mere present-day snapshot of the global problem relative to
poverty and where all nations suffer from this iniquity. Therefore the capitalist system according
to current information available does not work in the interests of the elimination of poverty and
where therefore a better system has to be found, and quickly!
Unfortunately, this highly needed 'change' thinking will not come from the present
'establishment/status quo' thinking of the 20th century economic class, but from 'independent'
revolutionary thinking of this present century.
1.World Poverty- According to the World Bank, in 2008 there are still 987 million people living on
US $1 a day or around 15 percent of the world's population. Adding to this, a further 2 billion
people still live on US $2 dollars a day that combined together equate to 45 percent of the
world's population. But taking into account inflation since the 1 and 2 dollar arbitrary poverty line
was introduced by World Bank economist Martin Ravallion, poverty has not declined in real terms
and is in fact increasing.
This is indifference to what the World Bank et al are telling the world. In this respect, a dollar
today is only worth 55 percent of what it was in 1998 or the equivalent present day worth of US
$1.82. Therefore, the primary statistics released by the World Bank with regard to poverty are
totally flawed and very wide off the mark. Considering this therefore, global poverty is far greater
today than it was a mere decade ago and the trends are not encouraging for the future.
2. USA- According to Education News Colorado on 18th June 2008, more kids are now living in
poverty than in 2000, but more alarmingly they now live at extreme levels of poverty.
According to the author JS Hacker in his book, "The great risk shift: The new insecurity and the
decline of the American dream", 58.5 percent, of all Americans will spend at least one year
beneath the poverty line at some point between ages 25 and 75.
Thirty-seven million Americans live in poverty according to the US Census Bureau, the "Income,
Poverty and Health Insurance Coverage Report" for 2007, US Census Bureau, 26th August 2008
(quoted by Press TV on 27th August 2008).
3. Pakistan- According to the Asian Development Bank in its report of August 2008, the number
of poor in Pakistan grew since 1999 from 32 percent of the population to 40 percent of the
population in 2002.
4. Chile- According to the Inter-American Bank of Development's report of August 2008, food
prices internationally were up 68 percent between January 2007 and March 2008 and where if
food prices remain high in Chile, the nation's poverty rate will increase from 12.3 percent to 17.2
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percent.
5. Peru- Due to high international food prices poverty will rise from 44.2 to 49.5 percent of the
population according to the August 2008 report by the Inter-American Bank of Development.
6. Canada- A report in late 2007 by The United Way of Greater Toronto stated that 30 percent of
Toronto families, amounting to about 93,000 households, were living in poverty. A similar study
in 1990 showed that about 16 percent of families were in the same situation and therefore a 14
percent increase in a mere 17 years.
7. Mexico- Latin American News Agency quoted on 18th August 2008 that 8 million additional
Mexicans had been pushed into poverty over the last two years due to the soaring fuel prices and
their impact on food prices. At least 18.5 million Mexicans now live in extreme poverty.
8. Scotland, UK- More than 1million Scottish households will face fuel poverty before the end of
the year after two energy firms announced huge increases in the price of gas and electricity -
Media comment on 22nd August 2008.
9. United Kingdom-There are 900,000 more people living in severe poverty than there were in
1997. The gap in infant mortality between the poorest and richest households has grown -
George Osborne, Conservative Party shadow Chancellor of the Exchequer, August 2008.
10. India- In July 2008 after the collapse of the World Trade Organization (WTO) negotiations,
India's commerce minister Kamal Nath stated that India is a country where 700 million people
live on a maximum of 2 dollars a day and where 300 million people of these live on 1 dollar a
day, equating together to 87 percent of the total population of India.
11. China- Although China has gone through an unprecedented economic miracle, achieved in a
single generation, there are still 300 million Chinese living on a maximum of USD2 a day and
2/3rds of this number on only USD1 a day - BBC interview late 2007.
Q. How has Globalization influenced poverty? Has it succeeded in overcoming the problem or has
it worsened the situation?
A. Indeed, according to the environmental activist Lorna Salzman, for the millions squatting in
hovels daily (over 1 billion people), they derive NOTHING from globalization. It is infuriating to
realize that globalization is a total scam for the vast majority of the world's people.
In terms of the poor and what a capitalist predicts for their future, James D. Wolfensohn stated
in 1999 when he was President of the World Bank, that out of the 6 billion people living on our
planet, 3 billion live on less than two dollars a day. By the end of the next fifteen years (2015),
these will be 4 billion out of 8 billion (living on the same amount). In other words, the UN's
Millennium Development Goals of halving poverty by 2015 was defunct before it even began.
These two statements in many ways say everything to me in terms of future world poverty
adopting the dictates of capitalism, as we have on the one hand the environmental activist and
on the other hand the head of the institution that is charged to reduce poverty. Both say
basically that capitalism and globalization will do nothing for the poor, other than to further
impoverish them or keep the status quo.
But overall I have made some basic observations,
1. Capitalism harnesses self-interest in a helpful and sustainable way but only for those who can
pay. The poor therefore have no part in this inequitable system.
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2. Capitalism increases inequality. In modern times, China and India are experiencing this social
problem already.
3. Capitalism is a system that uses people to make a very small minority rich beyond their
wildest dreams and a world that suffers through that process. Indeed, although capitalism gives
the people a wage, it has no real human conscience and where people are always at the whims
of the rich who employ them. As world population grows and the Earth's natural finite resources
depletes forever, one does not have to be an Einstein to see that the present capitalist system
will eventually fail human development with catastrophic effects.
Indeed, the capitalist system has made the very few enormously rich but left half the world
conversely poor. This can be seen in that the richest 5 percent of the world's countries generated
64 percent of the world's output and income in 2007. Therefore, world income and wealth is
distributed very unequally and where the bottom 95 percent of countries earned only 36 percent
of world GDP last year.
Indeed, only a minority of people become rich through capitalism and where the vast remainders
of people live in comparative poverty. Considering the ramifications of this, it cannot be right for
either the sustainability of our planet or the very survival of the human experience itself in the
long term.
In this respect, it is not good for industrialized nations also and where David Brady stated in his
paper, "Did Economic Globalization Cause Greater Earnings Inequality in Affluent Democracies?"
that he presented to the annual meeting of the American Sociological Association in late 2007,
that the analysis of 18 affluent democracies from the 1960s to the present day demonstrate that
globalization significantly increased earnings inequality.
Q. How can we end poverty? Are there any practical ways which can help communities combat
this global challenge?
A. When we discuss capitalism and its link with poverty we have to read one of the most
authoritative and 'independent' modern-day reports undertaken on the subject. In this respect,
the report is from the New Economics Foundation (NEF) based in the United Kingdom. First
published in 2006 its title is, "Growth isn't working: the uneven distribution of benefits and costs
from economic growth". It reported that the world economy is giving less to the poorest in spite
of the ongoing global poverty campaign.
In this respect, the report commented that the worlds poorest have seen a 73 percent drop in
share of benefits from growth in the last decade. Indeed, according to the NEF, globalization is
failing the world's poorest, as their share of the rewards of growth plummet and where added to
this the accelerating climate change hurts the poorest most.
The NEF report revealed that the share of benefits from global economic growth reaching the
world's poorest people is actually shrinking, while they continue to bear an unfair share of the
costs.
According to the figures contained in the report, growth was less effective at passing on benefits
to the poorest in the 1990's than it was even in the 1980's, but where also it concluded in an age
of rising climate chaos, this would definitely deteriorate the future prospects for the poor even
further.
Calculations in the NEF report exposed also that between 1990 and 2001 for every US$100 worth
of growth in the world's income per capita, just US$0.60 found its way to the poor and
contributed to reducing poverty for those living on less than a dollar a day.
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This analysis equated to 73 per cent less than in the 1980's, the so called 'lost decade for
development', when US$2.20 in every US$100 worth of growth contributed to reducing poverty
for those living on less than a dollar a day.
Indeed, to achieve a single dollar of poverty reduction in the 1990's it took US$166 of extra
global production and consumption with enormous environmental impacts that hurt the poorest
most. As an example the upheaval from climate change.
The NEF report stated that the belief that global economic growth is the only way of reducing
poverty for the world's poorest people is the self-serving rhetoric of those who already enjoy the
greatest share of the world's income. Indeed, based upon the global distribution of income in
1993, even if the benefits of global growth were distributed evenly, it would benefit someone in
the richest 1 percent of the world's population 120 times more than someone in the poorest 10
percent.
Overall NEF stated that, "Our obsession with growth and our relentless pursuit of a global system
which creates ever greater dependency on it has put us on the road to perdition. This confronts
us with an artificial and unnecessary choice between the moral imperative of poverty eradication
and the practical necessity of environmental sustainability. We need policies aimed directly at
reducing poverty and ensuring environmental sustainability, leaving growth as a by-product.
That means a new global economic system which will allow, foster and support such policies at
the national level."
The problem is that the growth dictum places the economies of the developed world as
motivating models of economic development for the rest of the world to follow. But to duplicate
these standards of living, in an environmental understanding, is fundamentally invalid. Indeed,
for everyone in the world to sustain themselves at the present EU level of consumption, the
world would require twice the resources of the biosphere, an impossibility. Indeed, if we all
consumed at the rate of the USA, we would require the resources of five biospheres to sustain
ourselves, another impossibility.
Therefore, we are really fooling ourselves in believing that between 9 and 12.5 billion people by
2050 can live at this level. Unfortunately, our politicians do not tell us this and by not doing so
they create the conditions that will eventually create enormous conflict throughout the world.
I say this with no relish and can only hope that our leaders eventually see our present system of
development for what it really is, a recipe for human disaster on a momentous level and where
human extinction awaits us all.
According to the NEF report, "Orthodox economics tells us that a rising tide lifts all boats, or that,
rather than sharing the cake more evenly, it is better to bake a larger one. Ironically now,
however, sea levels really are rising, as a result of global warming and driven by the pollution
from economic growth. And millions of the poor have no boats at all to rise in. Where the cake is
concerned, the massed ranks of orthodox economists are yet to find the ingredients, or even a
recipe, to bake a spare planet to share among the world's population."
Q. In your opinion, what are the most important strategic initiatives that should be pursued on
national and international levels to confront poverty?
A. Relying on growth to deliver the world's poorest people out of poverty is both economically
and ecologically inept in even the short-term. For as NEF's figures exposed, poverty could be
reduced without growth by undertaking more effective distribution with what we already have. In
this respect, by redistributing just 1 percent of the income of the richest 20 percent of the
world's population would have the same rewards as world growth of 20 percent without
redistribution.
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