Having survived the depredations of war, sickness and a natural disaster in rural Bangladesh, Pramila was sure her life would unravel completely when a fire destroyed her grocery store, her entire stock, her two cows and her stored-up crops.
Help was at hand, however, thanks to a revolutionary finance system known as microcredit, pioneered in the 1970s by Muhammad Yunus and his Grameen Bank. “The Grameen Bank visited her the next morning,” Yunus records in his autobiographical book, Banker to the Poor. “Part of the loan she used to start up a small grocery store and the rest she invested in fertilizer for her irrigated land. With the help of her three grown sons, she was able to start paying off the loan. Three months later Grameen gave her a housing loan, and she constructed herself a new house.
“She is currently in her twelfth loan. She owns and leases enough land to sell about 10 mounds of rice paddy [unmilled rice] a year, after feeding her whole family.”
Do such innovative approaches show the way to relieve the plight of the poorest of the poor? Will poverty ever truly become history—consigned to a past economic dark age?
It would be naïve to think that one single solution fits all problems and needs. In this article we look at some conflicting views but also at some hopeful, even visionary, approaches to the malaise of grinding poverty.
A More Thoughtful Globalization
At one end of the spectrum is the economic case made for full globalization. While some positive results have clearly come from sending aid to developing countries to help mitigate poverty, according to “Tired of Globalisation” in the November 3, 2005, issue of The Economist, it’s worth reviewing “the experience of China, South Korea, Chile and India.” The British weekly advocates “the solution that worked in the past in America, western Europe and Japan: open, trading economies, exploiting the full infrastructure of capitalism. . . . In other words, globalisation.”
“Most people are unaware of the daily struggles for survival, and of the vast numbers of impoverished people around the world who lose that struggle.”
But many of the world’s poorest are not even in the position of the average Chinese or Indian. Globalization may have brought benefits to some, but it has also brought devastating problems to others.
International economist Jeffrey Sachs is director of Columbia University’s Earth Institute, as well as advisor to UN secretary-general Kofi Annan and to numerous governments and high-level international agencies. In his book The End of Poverty, he sets out a detailed and ambitious blueprint for tackling the plight of the “poorest of the poor.”
Make Corruption History?
Ironically, the gap between rich and poor is far greater within Africa than it is worldwide. There, more than 300 million—about a third of the continent’s total population—subsist on less than $1 per day while, according to Merrill Lynch’s 2006 “World Wealth Report,” the wealthiest 100,000 have a combined worth of about $800 billion, up from $700 billion just a year ago. “Forget about the gap between north and south,” wrote Aidan Hartley in Britain’s The Spectator (June 25, 2005). “The wealth gap within countries like Kenya is far, far worse than in any other part of the globe.”
The money that has been sunk into Africa is indeed enormous. Hartley remarked, “After joyriding their way through six Marshall Plans’ worth of aid Africa is poorer today than 25 years ago.”
True, the reality of graft and corruption has to be factored in to the management of aid and trade, but this is not just an African problem. As recent multibillion-dollar accountancy frauds and the thousands of illegal kickbacks to Saddam Hussein in the UN’s oil-for-food program attest, corruption and graft blight all societies, not just African ones.
Sachs notes that the various solutions applied in the recent past have often been too narrow, not thought through well enough, or just plain wrong. He believes that the development economics of the International Monetary Fund (IMF) and the World Bank need to be drastically overhauled: the IMF “has focused on a very narrow range of issues, such as corruption, barriers to private enterprise, budget deficits, and state ownership of production,” he says. “When in Afghanistan or Bolivia, the IMF should think automatically about transport costs; when in Senegal, attention should turn to malaria.”
Inviting consideration of “clinical economics,” Sachs writes that, like the human body, economies are often complex in their ailments and will therefore require differentiated, often complex diagnosis and treatment. As in good medical intervention, monitoring and evaluation are essential, and a stringent code of ethics has to be applied.
But the economist also realizes that there are some larger, general issues to resolve. He mentions the need to deal with three big questions: “What is the best way back to international trade? How do we escape from the barnacles of bad debts and inefficient industry? How do we negotiate new rules of the game to ensure that the emerging global economy will truly serve the needs of all of the countries of the world, not only the richest and most powerful?”
Sachs believes that basic infrastructure such as roads, power and ports must be put in place for development, and that human capital must be nurtured through better health and education; otherwise markets and opportunities to trade will bypass vast swaths of the world, leaving its peoples impoverished and without respite from suffering. So for this expert, the answer to poverty is also to pull the world’s extreme poor into the global economy, but to do so with due consideration to local needs and challenges.
It’s widely acknowledged that powerful first-world retail companies are often predatory in their relationships with local sweatshops in poor countries, acting without due regard to working conditions or pay. Sachs acknowledges how tough the lives of the predominantly female labor force generally are, but he points out that they have at least moved a vital step up from the no-hope trap of extreme poverty. Pressure should be applied to improve conditions, he says, but the fact that a technological infrastructure is established is the most important thing, because a company, and therefore its employees and suppliers, can begin to move up the technology ladder. For instance, in the case of the apparel industry, companies outsourcing production to poorer countries would provide training until local enterprises could gain enough experience to begin creating their own original garment designs.
However, to Jeremy Seabrook, author of The No-Nonsense Guide to World Poverty, the sweatshops and those who knowingly patronize them are predators, pure and simple.
Seabrook attacks the “semi-religious cult of consumerism.” Being pitied for subsisting on less than $1 a day and brought into the “cold embrace” of the market economy is not always to the good. Ownership of a small tract of land or the freedom to hunt and roam in a jungle or forest is lost once the free gifts of nature all become commodities in the shrinking world of globalization. In his view, “once measures of wealth and poverty depend solely on money, poverty becomes incurable.”
He points out that the loss of an indigenous people’s land is a one-way journey from rural self-sufficiency to urban destitution. It forces them to embrace the same cold-hearted desire for money—as contrasted with sufficiency—that engineered their disenfranchisement. This is the same philosophy that has, from the time of the Industrial Revolution, driven people away from a degree of self-sufficiency on the land to cramped slum accommodation and dependency on the modern-day equivalents of William Blake’s “dark Satanic mills.”
“Whichever way you look at it,” Seabrook insists, “extreme poverty persists while social injustice increases all the time. This has a powerful impact on discussions of poverty, since the model of improvement embodied in globalization is that the poor will become a little less poor only if the rich become much richer.”
“The rich are hooked forever upon the boundless growth of the agent of their enrichment and no longer know the meaning of ‘enough.’ The ancient dream of ‘sufficiency’ is lost.”
Politically, the will to end world poverty eludes us. Even the most promising initiatives seem to start big on talk and end small on action.
Take the nearly five years of World Trade Organization negotiations to lower trade barriers in agriculture and manufacturing, which began optimistically with the Doha Development Agenda in Qatar in November 2001. Subsequent conferences took place in Cancún, Geneva and Hong Kong, though negotiations finally collapsed in July 2006. That the meetings have failed to produce anything except acrimony and accusations illustrates that self-interest usually prevails over magnanimity, particularly when one of innumerable pressure groups is on a leader’s back: oil, gas, cotton, big agriculture and so on. Agriculture tariffs have proved to be the hardest of all to grapple with.
A Zero-Sum Game?
Canceling debt is a positive step in helping poor nations move forward, but what many of the economic leaders of Third World nations want most is simply a level playing field.
Many of the West’s markets are heavily subsidized. Yet according to some commentators, reducing those subsidies wouldn’t be nearly as helpful to developing countries as cutting tariffs, particularly in farming. Freer trade through subsidy reduction would benefit Third World farmers by raising food prices, but at the expense of consumers, including those who already can’t afford to feed their families. Tariff cutting, on the other hand, at least according to this theory, would be much more advantageous to the world’s poor, especially if such cuts were made in conjunction with increased aid where needed. This means, of course, that politicians would have to take difficult and politically counterintuitive steps to remove the protections that import tariffs provide vulnerable, and often vociferous, home markets.
But wealthy Western nations, particularly the United States, fear populous nations that are beginning to prosper, as though “their” success comes at “our” expense. Perhaps they’re forgetting that Indian information-technology workers who provide low-cost services to Western consumers use Dell computers and Microsoft software to do it.
It is simplistic to believe that the rich get rich just because the poor get poorer. This is not to say that many of the rich have not been acutely adept at getting even richer on the backs of the poor. And perpetuating negative myths about the poor has been a historically tried and tested means of self-justification.
Even recent history shows that when push comes to shove, it is tough for the wealthier, more powerful nations, businesses and individuals to be truly willing to let go of so much as a portion of their bounty for the benefit of others. But this is an essential element of the treatment—that is, if action on tackling extreme poverty is ever to match the volume of rhetoric.
A book published by the British government cites the Jubilee Year of an ancient nation as a way forward in debt reduction. The Rough Guide to a Better World mentions the biblical custom of forgiving debt every 50 years. This was the inspiration for Jubilee 2000, the campaign to release impoverished countries from long-term financial obligations. The idea was echoed in the July 2005 Make Poverty History and Live 8 campaigns, which focused international pressure on world leaders at the G8 economic and political summit in Gleneagles, Scotland. As a result, 100 percent of debt was written off for the 18 most heavily indebted countries (14 of them in Africa) and aid was scheduled to be doubled to $50 billion per annum by 2010.
The ancient Jubilee, which occurred every 50th year, was instituted around 3,500 years ago as part of a remarkably advanced system for minimizing poverty among a previously nomadic people. These people comprised the nation of ancient Israel. Their leader, Moses, wrote down a civil and religious code that the Bible says he received directly from God.
The Year of Jubilee
"This year will be set apart as holy, a time to proclaim release for all who live there. It will be a jubilee year for you, when each of you returns to the lands that belonged to your ancestors and rejoins your clan. . . . When you make an agreement with a neighbor to buy or sell property, you must never take advantage of each other. When you buy land from your neighbor, the price of the land should be based on the number of years since the last jubilee. The seller will charge you only for the crop years left until the next Year of Jubilee. The more the years, the higher the price; the fewer the years, the lower the price. After all, the person selling the land is actually selling you a certain number of harvests. Show your fear of God by not taking advantage of each other.”
But there was far more to it than just debt relief. In the Jubilee year, any arable land previously sold for any reason, including poverty, would revert to the family or clan that had sold it. Effectively this ensured that no one could permanently amass large landholdings; they could only lease land for whatever years remained to the next Jubilee, at a price determined accordingly. And the land could be bought back on the same basis at any time (Leviticus 25:23–28). It was also forbidden to lend money at interest (verses 35–38).
Every seven years within the Jubilee cycle, debts owed by fellow citizens were to be eliminated (Deuteronomy 15:1–3). Landowners were not to fully harvest their fields and vineyards, to allow the poor to glean the residue of the crops (Leviticus 19:9–10); and in fallow years the poor were permitted to go through the fields and gather what grew of itself (Exodus 23:10–11). Societies have not followed, except very rarely, such magnanimous principles of neighborly, mutual support. Capitalism and its child, globalization, are by their very nature amoral and selfish. When the primary motive is to amass ever greater wealth, the weak and the poor are oppressed.
A Different Perspective
The world benefits from the pioneering work of exceptional visionaries like Muhammad Yunus. And it could do worse than to implement tailored economic solutions such as those proposed by Jeffrey Sachs, or to listen to “on-the-spot” commentators like Jeremy Seabrook, who cautions us not to glibly disenfranchise people from their own environments and cultures in misguided attempts to make them like us.
Each individual in the “have” nations can do his or her part to minimize the exploitation and abuse of the world’s chronically poor. But can we realistically expect that everyone will, on the basis of assumed innate human goodness, willingly put their desire for ever-increasing personal gain aside and choose instead to act in the best interest of others, thus ending oppression and poverty once and for all? Humanity’s track record suggests not. Are we then simply to accept the inevitability of poverty?
Surprising as it may be to some, Jesus Christ’s message was also an announcement of the ultimate Jubilee of release. Speaking to His fellow countrymen, He foretold that one day oppression will be swept away: “The Spirit of the Lord is upon Me, because He has anointed Me to preach the gospel to the poor; He has sent Me to heal the brokenhearted, to proclaim liberty to the captives and recovery of sight to the blind, to set at liberty those who are oppressed; to proclaim the acceptable year of the Lord” (Luke 4:18–19). This was an announcement of the coming of the kingdom of God on the earth. In the end, it is not people who will selflessly end the suffering of the less fortunate. It is Christ who will, at last, make poverty history.