This presentation is intended to provide a general audience with an understanding of the key factors underlying the economics of global poverty and an overview of the issues and arguments surounding this complex issue.

1. A Framework for Understanding
the Economics of Global Poverty
Jim Donahue
15th May 2008
jimdonahue7@yahoo.co.uk
© 2008 Jim Donahue

2. Overview
1. Nearly half of the world still lives in poverty
2. Some countries have moved from being poor to rich
3. Africa continues to lag behind
4. Mobile telephony is a key enabler for growth in poor countries
5. There is an ongoing debate about what needs to be done to fight
extreme poverty
Appendices:
A. Case Study of Malawi: Can it move from poverty to prosperity?
B. Example lifestyles at different levels of economic development
2

3. 1. Nearly half of the world still lives in poverty
3

4. How are rich and poor countries defined?
How can poor countries become rich?
GNI/Capita (PPP 2004)
- >$20,000
- $10,000 - $20,000
- $5,000 -$10,000
- <$5,000
Source: World Bank Development Indicators - GNI/capita, PPP – 2004

5. Most of the world lives in developing countries and nearly
half earn less than $2 per day
Number of Countries
Developing Countries
80 73
Developed Countries
70
60
41
50
40 33 25
30
20
10
0
High Income Upper Middle Lower Middle Low Income (<
(> $20,000 US) (10-$20,000) Income (5- $5,000)
$10,000)
Population
3,000,000,000
2.7 B
2.2 B
2,500,000,000
International
2,000,000,000 3 Billion Poverty
<$2/day Lines:
1,500,000,000
1 Billion
1B
1,000,000,000 <$1/day
500,000,000 .2 B
0
High Income Upper Middle Lower Middle Low Income (<
5
(> $20,000 US) (10-$20,000) (5-$10,000) $5,000)
Source: World Bank Development Indicators - GNI/capita, PPP – 2004

6. Extreme poverty has been reduced in recent years, but
nearly half of the world still lives in poverty
1981 2004
19% less
than
40% less
33%
$1/day
than 52%
Greater
$1/day
than $2/ day Greater
Additional
than $2/day
29% on
Additional
less than
27% on
$2/day
less than
$2/day
Total Population: 4.5 Billion Total Population: 6.4 Billion
Less than $1/day 1.5 Billion Less than $1/day: 1.0 Billion
Less than $2/day: 3.0 Billion Less than $2/day: 3.0 Billion
6
Source: World Bank Development Indicators - % Poverty 1981 - 2004

7. 2. Some countries are moving from being poor to
rich
7

8. There of numerous examples of countries moving from
being poor to rich
Today’s Emerging
Europe Japan and the
Markets
Asian Tigers
(% growth 2004-05)
Ireland 2005
Japan 2005
($34,720)
($31,410)
Spain2005 Taiwan 2005
($25,820) (25,000)
Greece 2005 S. Korea, 2005 Estonia– 9.8%
($23,620) ($21,850)
Argentina – 9.2%
S. Africa – 4.9%
Malaysia – 5.9%
Turkey – 7.4%
Spain Ireland
2000 Venezuela – 9.3%
1988
China – 10.2%
Japan
1950 Philippines – 5.0%
Greece Indonesia – 5.6%
Taiwan
1950 1960 India – 9.2%
Angola – 20.6%
S. Korea
1970
8
Source: World Bank Development Indicators

9. Europe GNI per Capita/
Years to Double Size of the Economy Growth Rate
(PPP 2005 US$)
Developed (%Growth 2004-05)
Countries
UK- $32,690 (1.8%)
Newly Emerging Markets
France - $30,540 (1.2%)
Germany -$29,210 (1.0%)
Italy -$28,840 (0.0%)
Spain -$25,820 (3.4%)
Czech –$20,140 (6.1%)
Hungary-$16,940 (4.1%)
Estonia -$15,420 (9.8%)
Poland -$13,490 (3.4%)
Russia -$10,640 (6.4%)
Romania-$8,940 (4.1%)
Turkey - $8,420 (7.4%)
Ukraine-$6,720 (2.6%)
Source: World Bank 9
Development Indicators

10. Key steps to poverty reduction through growth:
1. Create a good investment climate
2. Create formal economy jobs
3. Empower the poor to participate in the economy
1. Key private sector
2. Private
investment decision factors: Informal/
investment and Sustenance
export industries Economy
create jobs and
help grow the
Infrastructure, formal economy
Health, Education
Private
Sector
Governance
Formal
Economy
Indirect factors influencing
investment decisions:
3. Health and
education levels
People/Culture
empower the poor
to move into
10
formal economy
Geography
jobs

11. Six types of underlying factors help to explain a
country’s ability to attract investment and grow
Economic Output
Gross National Income (GNI)
Education
Infrastructure Health Economy Poverty
• Paved Roads % • Male Literacy
• Life expectancy
% Agriculture
• Telecoms • Female Literacy
• Child Mortality
> $2 <1$
% Services
• Internet/PC • Primary
• Immunisation
• Reliable power • Secondary
• AIDS%
Between $1
% Industry
and $2
• Water/ Sanitation • Tertiary
• Tuberculosis %
Governance
Economic
• Political Stability
• Governance Rating: x%
• Control of Corruption Performance
• Competitiveness Index: x/125 • Democracy/People’s Voice
• Rule of Law
GNI per capita
• Ease of Doing Business: x/175 • Gov’t/Regulatory Effectiveness
People
Growth (1990-2003) %
• Population growth • Ethnic Groups/ Cultural Values
Investment (% GDP) %
• Net Migration • Population age profile
Geography Exports (% GDP) %
• Natural resource • Climate
Imports (% GDP) %
• Access to trade routes • Arable Land
Unemployment (00-05) %
• Natural Disasters • Net energy imports
Inflation (Avg. 1990-03) %
11

12. France
United Kingdom
Economic Output Economic Output
GNI: $2.273 trillion (2005) GNI: $2.169 trillion (2005)
Population: 60 million (2005) Population: 61 million (2005)
Economy Poverty
Economy Poverty
Services: 72% Services: 73%
Agriculture 1% Agriculture 3%
Industry: 27% Industry: 24%
> $2 > $2
Economic
Economic
Performance
Performance
GNI/capita, PPP: GNI/capita, PPP:
$32,690 (2005) $30,540 (2005)
Growth (Avg. 1990-03) 2.7% Growth (Avg. 1990-03) 1.9%
Investment (% GDP) 16% Investment (% GDP) 19%
Exports (% GDP) 25% Exports (% GDP) 26%
Imports (% GDP) 28% Imports (% GDP) 25%
Unemployment (00-05) 4.6% Unemployment (00-05) 9.9%
12
Inflation (Avg. 1990-03) 2.7% Inflation (Avg. 1990-03) 1.5%
Source: World Bank Development Indicators

13. United Kingdom France
(GNI/Capita, PPP $32,690) (GNI/Capita, PPP $30,540)
Education Education
Infrastructure Infrastructure
Health Health
• Paved Roads • Paved Roads • Life expect: 79 • M Literacy: 99%
• M Literacy: 99%
• Life expect: 78
100% 100%
• Child Mort: 0.5% • F Literacy: 99%
• Child Mort: 0.6% • F Literacy: 99%
• Mob Tel :112% • Mob Tel: 80%
• Immun: 86% • Primary: 99%
• Primary: 99%
• Immun: 80%
• Internet: 42.3% • Internet :36.5%
• AIDS: 0.4% • Secondary: 93%
• Secondary: 95%
• AIDS: 0.2%
• Reliable power • Reliable power
• TB: 0.12% • Tertiary: 54%
• Tertiary: 64%
• TB: 0.12%
• Water/ Sanitation • Water/ Sanitation
Governance Governance
• Political Stability • Political Stability
• Governance Rating: 90% • Governance Rating: 89%
• Control of Corruption • Control of Corruption
• Competitiveness Index:10/125 • Competitiveness Index:18/125
• Democracy/Voice • Democracy/Voice
• Rule of Law • Rule of Law
• Ease of Doing Business: 6/175 • Ease of Doing Business: 35/175 • Gov’t/Reg Effect’ness
• Gov’t/Reg Effect’ness
People People
• Births per woman: 1.9 • Ethnic Groups/ Culture
• Births per woman: 1.7 • Ethnic Groups/ Culture
• Net migration: + .1% • Population age 0-14: 18.6%
• Net migration: +.16% • Population age 0-14: 18.2%
Geography Geography
• Natural Resources • Temperate/ Continental • Natural Resources • Temperate/ Continental
• Access to trade routes • Arable Land • Access to trade routes • Arable Land
• Natural Disasters • Net Energy imports • Natural Disasters • Net Energy imports
13
Sources: World Bank Development Indicators 2005, WEF Global Competitiveness Rankings 2006, World Bank Governance Index-2005, UN Population
Division : Net Migration 1995-2000/Births per woman 2004, Koppen Climate Classification, ITU Mob/Internet Ranking 2005

14. Asia
Millions are living in poverty…..
India (2004) China (2004)
GNI per Capita/
<1$
Growth Rate
> $2 <1$ Between (PPP 2005 US$)
> $2 (%Growth 2004-05)
$1 and $2
Between
Hong Kong-$34,670 (7.3%)
$1 and $2
Japan -$31,410 (2.6%)
Taiwan - $25,400 (5.0%)
….but it is improving
S. Korea-$21,850 (4.0%)
India China
Extreme Poverty 70 million 400 million
reduction since 1980 fewer fewer
Malaysia - $10,320 (5.2%)
Thailand - $8,440 (4.5%)
China - $6,600 (10.2%)
Philippines - $5,300 (5.0%)
Indonesia - $3,720 (5.6%)
India - $3,460 (9.2%)
Vietnam - $3,010 (8.4%)
14
Source: World Bank
Development Indicators

15. China India
Economic Output Economic Output
GNI: $2.3 trillion (2005) GNI: $804 billion (2005)
Population: 1.3 billion (2005) Population: 1.1 billion (2005)
Economy Poverty
Economy Poverty
<1$ Agriculture 22%
Services: 33% > $2
Agriculture 15% <1$
Between
> $2 Services: 51%
$1 and $2
Industry: 27% Between
Industry: 52%
$1 and $2
Economic Economic
Performance Performance
GNI/capita, PPP: GNI/capita, PPP:
$6,600 (2005) $3,640 (2005)
Growth (Avg. 1990-03) 10.3% Growth (Avg. 1990-03) 5.9% (9.2)
Investment (% GDP) 44% Investment (% GDP) 24%
Exports (% GDP) 34% Exports (% GDP) 14%
Imports (% GDP) 32% Imports (% GDP) 16%
Unemployment (00-05) 4.2% Unemployment (00-05) 5.0%
Inflation (Avg, 1990-03) 4.9% Inflation (Avg, 1990-03) 6.8%
15
Source: World Bank Development Indicators

16. China India
(GNI/Capita, PPP $6,600) (GNI/Capita, PPP $3,460)
Education Education
Infrastructure Infrastructure
Health Health
• Roads ND • Roads 57%
• M. Literacy: 98%
• Life expect: 71 • Life expect: 68 • M. Literacy: 95%
• Mob Tel: 30% • Mob Tel 8%
• Child Mort: 3.7% • F. Literacy: ND • Child Mort: 8.7% • F. Literacy: 81%
• Internet: 6.3% • Internet: 1.7%
• Primary: 98%
• Immunis: 86% • Immun: 67% • Primary: 95%
• Reliable power • Reliable power
• Secondary: 70%
• AIDS: 0.4% • AIDS: 0.9% • Secondary: 79%
• Water/ Sanitation • TB: 0.12% • Water/ Sanitation • TB: 0.26%
• Tertiary: 15% • Tertiary: 28%
Governance Governance
• Political Stability • Political Stability
• Governance Rating: 38% • Governance Rating: 43%
• Control of Corruption • Control of Corruption
• Competitiveness Index:54/125 • Competitiveness Index:43/125
• Democracy/Voice • Democracy/Voice
• Rule of Law • Rule of Law
• Ease of Doing Business: 93/175 • Gov’t/Reg Effect’ness • Ease of Doing Business: 134/175 • Gov’t/Reg Effect’ness
People People
• Births per woman:1.7 • Ethnic Groups/ Culture • Births per woman 3.1 • Ethnic Groups/ Culture
• Net Migration: -.03% • Population age 0-14: 23.6% • Net Migration: -.03% • Population age 0-14: 32.4%
Geography Geography
• Natural Resources
• Natural Resources • Temperate/ Continental • Tropical, Temperate, Dry
• Access to trade routes • Access to trade routes • Arable Land
• Arable Land
• Natural Disasters • Natural Disasters
• Net Energy imports • Net Energy imports
Sources: World Bank Development Indicators 2005, WEF Global Competitiveness Rankings 2006, World Bank Governance Index-2005, UN Population
Division : Net Migration 1995-2000/Births per woman 2004, Koppen Climate Classification, ITU Mob/Internet Ranking 2005 16

17. India is struggling to improve its poor infrastructure
in an effort to improve its capacity to grow
17

18. 3. Africa continues to lag behind
18

19. Sub-Saharan Africa is not on track to meet the
UN Millennium Development Goals by 2015
TARGET Halve, between
Goal 1:
1990 and 2015, the
Eradicate proportion of people whose √ - goal achieved
Extreme Poverty income is less than $1 a
√ - on-track
and Hunger on-
day
x – not on-track
on-
TARGET Ensure that, by
Goal 2: Achieve
2015, all children will be √ - goal achieved
Universal able to complete a full
√ - on-track
Education on-
course of primary schooling
√ - good progress
TARGET Reduce by two
Goal 4:
thirds, between 1990 and
Reduce Child 2015, the under-five
Mortality mortality rate
TARGET Have halted by
Goal 6:
2015 and begun to reverse
Combat HIV/AIDS,
the spread of HIV/AIDS
Malaria &
Other Diseases
19

20. 30 out of 48 African countries have GNI/capita less than
$2,000 and are not well integrated into the global economy
TUNISIA
MOROCCO
ALGERIA LIBYA
WESTERN
EGYPT
SAHARA
Red
Sea
MAURITANIA
NIGER
MALI
SENEGAL CHAD
SUDAN – 5%
THE
GAMBIA DJIBOUTI
BURKINA
GUINEA GUINEA NIGERIA
BENIN
BISSAU
CENTRAL ETHIOPIA
SIERRA TOGO
AFRICAN
LEONE
REPUBLIC
LIBERIA CAMEROON
IVORY GHANA SOMALIA
UGANDA
Democratic Rep
COAST 51% EQUATORIAL
of Congo
7% KENYA
GUINEA
GABON CONGO RWANDA
BURUNDI
TANZANIA
MALAWI
GNI/Capita, PPP ANGOLA
->$20,000 ZAMBIA
MOZAMBIQUE
- $10 – 20,000 MADAGASCAR
ZIMBABWE
NAMIBIA
- $5-10,000 BOTSWANA
- $2 – 5,000
SWAZILAND
LESOTHO
- < $2,000
SOUTH
20
AFRICA
Source: World Bank Development Indicators - 2005

21. Paul Collier proposes a model of four traps to explain why
some countries are unable to grow out of poverty
The Conflict Trap The Natural Landlocked with Bad Governance
Resource Trap bad Neighbours
Current Conflicts: • Nigeria – Oil • Malawi • Zimbabwe
• Somalia • Zambia – Copper • Central African Republic • Somalia
• Cote d’Ivoire • Botswana – Diamonds • Burkina Faso • Chad/Sudan
• Chad
• Sierra Leone – Diamonds • Rwanda/ Burundi • Nigeria
• Sudan
• DRC – Diamonds, etc • Uganda • Angola
Recent Conflicts:
• Chad – Oil • Chad • DRC
• DRC
• Angola – Oil, Diamonds • Ivory Coast
• Congo Republic
• Liberia
• Sierra Leone
Globalisation reinforces poverty for many poor countries
• Wealth of global investments opportunities highlights high risk of poorest countries for
both foreign and local investors
• Even more difficult to compete against other Asian competitors such as India and China
21
• Increased emigration opportunities intensifies ‘brain drain’ of limited pool talent
Source: The Bottom Billion, Paul Collier, Oxford University Press, 2007

22. Malawi’s economy reflects challenges typical of
many African countries Economic Output
GNI: $2.1 billion (2005)
Population: 13 million(2005)
Education
Infrastructure Health
Economy Poverty
• Paved Roads • Life expect: 37 • M. Literacy: 76%
18.5%
• Child Mort: 17.8%• F. Literacy: 49%
Agriculture 38%
• Mobile Tel: 3.3%
<1$
> $2
• Immun: 77% • Primary: 71%
• Internet: 0.3%
• AIDS: 14.2% • Secondary: 29% Industry: 15%
• Reliable power
Services: 49% Between
• TB: 0.44% • Tertiary: 0.4%
$1 and $2
• Water/Sanitation
Governance
• Political Stability
•Governance Rating: 31%
Economic
• Control of Corruption
•Competitiveness Index:117/125 • Democracy/Voice
Performance
• Rule of Law
•Ease of Doing Business: 110/175 • Gov’t/Reg Effect’ness
GNI/capita, PPP:
People
$650 (2005)
• Births per woman: 6.1 • Ethnic Groups/ Religion
Growth (Avg. 1990-03) 3.0%
• Net Migration: -.08% • Population age 0-14: 45%
Geography Investment (% GDP) 8%
Exports (% GDP) 27%
• Natural Resources • Tropical wet and dry
• Landlocked • Arable Land Imports (% GDP) 41%
22
• Natural Disasters • Net Energy imports
Unemployment no data
Sources: World Bank Development Indicators 2005, WEF Global Competitiveness Rankings
22 Inflation (Avg, 1990-03) 31.1%
2006, World Bank Governance Index-2005, UN Population Division : Net Migration 1995-
2000/Births per woman 2004, Koppen Climate Classification, ITU Mob/Internet Ranking 2005

23. Malawi Poverty Reduction Strategy (2004/05)
World Bank UK DFID IMF/WB Debt Other/NGO
UK DFID EU Projects
UK DFID
Projects Projects Cancellation Projects
Projects
Projects
Train 3000 Teachers
Roads Projects
Education
Infrastructure Health
154 Teacher Houses
Nurse Training
• Paved Roads
ICT Skill Training • M. Literacy: 76%
• Life expect: 37
18.5%
22 New Schools
• F. Literacy: 49%
• Child Mort: 17.8%
Salary Top-ups
• Mob Tel: 3.3%
Rural Electricity
• Immun: 77% • Primary: 71% Educational Material
Nutrition Programs
• Internet: 0.3%
• AIDS: 14.2% • Secondary: 29%
Water Distribution Campus for Mzuzu Univ
• Reliable power
• TB:Youth training • Tertiary: 0.4%
HIV 0.44%
• Water/ Sanitation
Female Scholarships
Governance
New Financial Systems
• Political Stability
•Governance Rating: 31%
• Control of Corruption
Courtrooms & Judges Economic/ Industrial
•Competitiveness Index:117/125 • Democracy/Voice Policy Reform
• Rule of Law
Anti-Corrupt Bureau •Ease of Doing Business: 110/175 • Gov’t/Reg Effect’ness
Off-shore Fishing Agricultural Productivity
WTO
Small-scale Irrigation
Fish Farming Agriculture 38% Doha
Private
Round
Foreign Farmer cooperatives
Mobile Telephony
Direct Industry: 15%
Promote Small-scale Mining
Investment Tourism Standards
Services: 49% 23
Increase Telecom Capacity
Tourism Committee

24. Political instability and poor governance have been
problems in many African countries - but many conflicts
are ending and governance is improving
TUNISIA – 51%
Improved Governance Rating
MOROCCO
42%
2002
(1996 – 2005):
ALGERIA LIBYA – 22%
• Botswana (Corruption)
WESTERN
29% EGYPT
SAHARA
36%
• Ghana (Democracy)
Red
• Mozambique (Stability)
Sea
MAURITANIA
44%
• Tanzania (Effectiveness)
MALI NIGER – 29%
CHAD - 11%
SENEGAL 46%
• DRC (Democracy, Regulations)
SUDAN – 5%
THE
1993
GAMBIA DJIBOUTI
BURKINA
• Nigeria (Democracy)
GUINEA GUINEA NIGERIA
BISSAU 2002 BENIN
14%
• Madagascar (Corruption)
CENTRAL ETHIOPIA – 18%
SIERRA
2003 TOGO
AFRICAN
LEONE
• Liberia (Democracy)
REPUBLIC
LIBERIA CAMEROON
IVORY GHANA SOMALIA
UGANDA
COAST 51% EQUATORIAL
• Senegal (Stability, Democracy)
0%
30%
1999 2003 1994
7% KENYA
GUINEA
GABON 26%
RWANDA
CONGO Democratic BURUNDI
TANZANIA
Rep of Congo World Bank
36%
– 3%
Other Developing
Governance Rating
2002 MALAWI
Country Governance
2005
34%
ANGOLA
Ratings:
1992
14% - 75%
ZAMBIA
• China – 38%
Political Stability 31% MOZAMBIQUE
- 50- 75% • India – 43%
38%
MADAGASCAR
ZIMBABWE
- Year conflicts
2007 • Turkey – 47%
NAMIBIA 50%
5%
- 25 – 50%
ended 58% BOTSWANA
• Romania – 52%
74%
- 10 – 25%
- Conflicts still
unresolved SWAZILAND
- 0 – 10%
LESOTHO
SOUTH
24
AFRICA 64%
Source: World Bank Governance Indicators - 2005

25. Africa’s economic growth since the mid-1990’s is more
promising for poverty reduction, but diversification away
from commodities is still a challenge
TUNISIA – 4.5%
MOROCCO
Countries with Average Growth
4.3%
Greater than 5%, 2000-2005
ALGERIA LIBYA – 5.3%
WESTERN
- Sustained, diversified
5.1% EGYPT
SAHARA
3.7% growth
Red
- Dependant on oil as major
Sea
MAURITANIA
MALI
export
4% NIGER
5.9% CHAD
SENEGAL 3.7%
14.5% SUDAN
THE BURKINA FASO
6.1%
GAMBIA DJIBOUTI
5.6%
NIGERIA
GUINEA GUINEA
BENIN
BISSAU 5.9%
CENTRAL ETHIOPIA
TOGO
SIERRA AFRICAN 4.7%
LEONE REPUBLIC
CAMEROON
LIBERIA
IVORY GHANA
13.7% SOMALIA
3.7% UGANDA
DEM REP
COAST 5.1% Annual GDP Growth (2000-2005)
CONGO CONGO 4.4% 5.6% KENYA
EQUATORIAL
-0.1% 3.4%
GUINEA GABON RWANDA
23.2%
> 5% - 18 countries
5.1% TANZANIA
6.5%
BURUNDI
3- 5% -16 countries
5.6%
MALAWI
1-3% - 6 countries
3.4%
ANGOLA
ZAMBIA
9.9% < 1% - 6 countries
4.7% MOZAMBIQUE
8.4% MADAGASCAR
ZIMBABW
NAMIBIA 2.0%
E (5.7%)
4.7%
BOTSWANA
5.9%
SWAZILAND 2.5%
SOUTH
AFRICA LESOTHO 2.9% 25
3.9
Source: World Bank, African Development Indicators, 2007

26. South Africa’s diversified economy still has its
issues but provides hope for African growth
Economic Output
GNI: $223 billion (2005)
Population: 47 million(2005)
Education
Infrastructure Health
Economy Poverty
• Paved Roads 21% • Life expect: 46 • M. Literacy: 87%
• Mob Tel: 72% • Child Mort: 6.6% • F. Literacy: 85% Services: 65% <1$
• Internet: 6.8% • Primary: 99%
• Immun: 83% Agriculture 4% Between
• Reliable power • Secondary: 65% $1and $2
• AIDS: 15.6% > $2
Industry: 31%
• Water/ Sanitation • TB: 0.5% • Tertiary: 15%
Governance
• Political Stability
• Governance Rating: 64%
Economic
• Control of Corruption
• Competitiveness Index:45/125 • Democracy/Voice
Performance
• Rule of Law
• Ease of Doing Business: 29/175 • Gov’t/Reg Effect’ness
GNI /capita, PPP:
People
$12,120 (2005)
• Births per woman: 2.8 • Ethnic Groups/ Culture
Growth (Avg. 1990-03) 2.3 (4.9)%
• Net Migration: -.01% • Population age 0-14: 32%
Investment (% GDP) 17%
Geography
Exports (% GDP) 28%
• Natural Resources • Dry, Temperate, Continental
• Access to trade • Arable Land Imports (% GDP) 26%
routes
• Net Energy imports
Unemployment (00-05) 27.1%
Sources: World Bank Development Indicators 2005, WEF Global Competitiveness Rankings
Inflation (Avg, 1990-03) 9.0%
2006, World Bank Governance Index-2005, UN Population Division : Net Migration 1995-
2000/Births per woman 2004, Koppen Climate Classification, ITU Mob/Internet Ranking 2005

27. 4. Mobile telephony is a key enabler for ending
extreme poverty
27

28. Mobile telephony has a broad range of benefits appropriate
to fighting poverty in developing countries
Faster Overall Growth
• Increased Mobile penetration increases
GNI Growth
Infrastructure, % Agriculture
Health, Education % Services
Mobile % Industry
• Telecom infrastructure
Telephony
• Emergency and distance
health benefits
Productivity Benefits
Across All Sectors:
• Access to internet
• Access to agriculture
market prices and other
information
• Jobs in rapidly growing
New Targeted Services telecom sector
• Banking for previously ‘unbanked’
• Low-cost enabler for
• Increased international remittances micro-businesses
• Innovative use of text services 28

29. Vodacom in the Democratic Republic of Congo (DRC) is an
example of how private investment in mobile telephony can
create jobs in Africa
• Using cellular networks to ‘leapfrog’ fixed line
technology
– In 1997 less that 15,000 landlines for 65m people
– Vodacom grew to 3 million mobile subscribers since 1997
• Alieu Conteh, founder and chairman of Vodacom
Congo showed entrepreneurial possibilities
• Now one of the country’s biggest employers
– 600 employees/ 5,000 contractors
• Planning to create the country’s first stock
market and float Vodacom Congo in a public
offering
29
Source: The New York Times, 17th June, 2007, What Does Africa Need Most: Technology or Aid?

30. 5. There is an ongoing debate about what needs to be
done to fight poverty
30

31. The Optimists: Poverty can be eliminated in
Africa – more aid is needed for a ‘big push’
• Jeffery Sachs: UN Millennium Development Goals can be met,
but would cost $150-200 billion a year in aid by 2015
• 2005 G8 Glen Eagles Summit leaders pledged to double aid to
Africa from $25 to $50 billion per year by 2010
• Bob Geldof’s Africa Commission and Live8 supported more G8
aid funding
• Bono: Led debt relief campaign and foreign aid increases in US
• Bill Gates using resources to address treatable diseases
• Tony Blair, Gordon Brown, Bill Clinton global poverty initiatives
31

32. Jeffery Sachs advocates a number of simultaneous
interventions at the village level for sustainable development
Agriculture
Infrastructure Health Education
• Nutrition and clean • Primary and
• Road improvements • Agricultural
water secondary education
and community vehicle productivity and training
• Health services and • Eliminate gender
access
• Irrigation, fertiliser
facilities disparity
• Internet and mobile
• Support new village
• HIV/AIDS, TB and • ICT training
telephony access
businesses
Malaria Treatment
• Electricity for small
businesses
Millennium Villages
79 Millennium Villages operating or planned in twelve different countries in Africa:
Ethiopia, Ghana, Kenya, Madagascar, Malawi, Mali, Mozambique, Nigeria, Rwanda,
Senegal, Tanzania and Uganda.
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33. The Pessimists: Aid has not been effective
Where has $2.3 trillion in foreign aid over
past 50 years gone?
Temporary Swiss bank
Corrupt and
Famine Relief? accounts?
wasteful
Bureaucrats?
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34. Paul Collier proposes a more balanced agenda for action to
tackle poverty in the poorest countries
The Conflict Trap The Natural Landlocked with Bad Governance
Resource Trap bad Neighbours
Military support for International laws and Substantial aid to Intelligent use of aid to
post-conflict countries norms for resource develop infrastructure encourage reform
wealth and for basic social
services
Charter for post-conflict Selected use of military
governance intervention (e.g. Sierra
Military support to Leone)
prevent coups
Aid for reconstruction
Trade policies
encouraging exports
Globalisation reinforces poverty on many poor countries
‘Big Push’ temporary Temporary trade
aid for export protection from Asian
infrastructure competitors
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Source: The Bottom Billion, Paul Collier, Oxford University Press, 2007

35. 7 things you can do to help fight global poverty
1. Educate yourself about the causes and solutions of
poverty
2. Vote and let your politicians know you care about global
poverty
3. Contribute to organisations fighting poverty
4. Buy fair trade goods
5. Invest in companies that trade ethically
6. Volunteer for NGOs fighting poverty – build a school!
7. Tell others about poverty – give a presentation to your
child’s school
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