Ending Poverty: Moving Beyond More Aid and Fair Trade

As the United Nations seeks increased financial assistance from donor countries to help meet the flagging Millennium Development Goals (MDGs), the inadequacy of international aid and fairer trade agreements has never been so clear. In 2007 alone, aid to developing countries fell by 8.4%, leaving huge challenges ahead to meet the Gleneagles G-8 target of doubling aid to Africa by 2010. In July, the Doha round of trade talks collapsed again for the third time as developing countries refused to bow down to US pressure allowing increased access to their markets. These factors, alongside the rise in hunger as a result of the food crisis and the worsening global financial crisis, underline the low global priority given by rich nations to the world’s poor.

Pledges and promises of aid to eradicate poverty made by rich nations over the past four decades have resulted in few changes for the Global South. If genuinely concerned with poverty reduction, all OECD member states would have long ago reached the 0.7% target for aid, pledged via the United Nations in 1970. Thirty-eight years later, not a single G8 country has met this target. Any reasons or excuses are rendered largely irrelevant when considering that it took a matter of days for Western governments to find an estimated three trillion dollars to bailout banks caught in the financial crisis. The Jubilee Debt Campaign estimates that less than a quarter of this amount is needed to wipe the debts of the poorest 100 countries – simply to allow them to meet their people’s most basic needs.

At a time when the rise in food prices has caused an additional 105 million people to join the ranks of the hungry, the impact of the economic crisis is likely to see the needs of the developing countries further sidelined as Western governments rush to divert money to contain the problem.

Systemic Failures

As these crises worsen, the global trading system continues to do more harm than good. Import surges of heavily subsidized goods flood the markets of poor countries, wreaking havoc on domestic producers and driving many out of business and into poverty. Additionally, rich nations consistently force developing countries to lower their tariffs while refusing to do so themselves, thereby denying poor farmers the right to protect their livelihoods. The situation is further exacerbated when considering that two-thirds of developing countries are now net food importers. The WTO and the international trading system that it promotes has served to strengthen the status quo, keeping those at the top of the ladder in place while kicking away the ladder from those at the bottom.

Even if the targets for aid and trade were met in the near future, the underlying problems of how trade and aid are administered would continue. Aid would still leave developing countries in a state of dependence upon rich nations and continue to come with conditions attached forcing them to open up their markets to foreign goods and services. Furthermore, aid used by poor countries to pay their external debts would detract them from providing the most basic needs for their citizens. On a broader level, the unaccountable and undemocratic ways in which the World Bank, the IMF and the WTO function would not be addressed, much less resolved, while the enormous influence of corporate lobbying groups would persist.

Calling for better trade rules and more aid to reduce poverty and growing inequality is not enough to achieve real change. The neoliberal ideologies of economic growth are enshrined in the very institutions that are designed to help developing countries prosper. A belief in the free market, deregulation, privatization and corporate globalization is the basis upon which these institutions operate. We have seen in recent weeks how unsustainable the current economic system is and how liable it is of causing a financial tsunami upon the lives of people everywhere.

The biggest financial crisis since the 1930s is not taking place in a vacuum – its roots are based in the neoliberal ideologies stemming from the Washington Consensus dating back to the 1980s. Only a few weeks ago, it seemed we had reached a stage where the conceptual apparatus of neoliberalism had become “so embedded in common sense as to be taken for granted and not open to question.” Since then, the world’s most profitable banks have been part-nationalized, a worldwide recession is looming and a global crisis in confidence in the current economic model has become the norm.

Recent events have demonstrated that to continue working within the confines of the global economic framework may result in slight changes for a small proportion of the world’s poor, but will not be significant enough to achieve targets such as the UN’s Millennium Development Goal of halving hunger by 2015. This goal, which is already insufficient, was made further unattainable since the World Bank revised the international poverty line from $1.08 to $1.25 per day, effectively plunging a further 430 million people into extreme poverty overnight.

Securing Basic Human Needs

The current economic system, based on ever-increasing economic growth as the overarching solution to fighting poverty, is both ineffective and unsustainable. The key to tackling poverty and inequality must come from a change in principles and priorities from which practical steps can be taken to put long-term structures in place. One such solution would be to define and redistribute essential resources in order to immediately secure basic human needs. The universal right to a life of dignity and survival has long been enshrined in article 25 of the 1948 UN Declaration of Human Rights which states that “everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing, medical care and necessary social services.”

There is no reason why 967 million people should go to bed hungry every day. The problem is not defined by a scarcity of food, but by the insufficient access to resources for millions of the world’s poor who lack the necessary purchasing power to survive. The ‘trickle-down theory’ of economic growth, or the political promise that wealth accumulated by the rich would eventually permeate down through society, has proven to be grossly insufficient in dealing with the urgent demand for basic and essential needs.

To immediately reduce inequality and end extreme poverty, a new international mechanism is required which can facilitate a greater economic sharing of essential resources. The most critical of these are land, basic agricultural produce, water, energy and essential medicines, which together need to be defined, withdrawn and protected from international markets and no longer traded by multinational corporations. A similar initiative was supported by over 100 civil society organizations at the recent WTO talks. Bolivia, Cuba, Venezuela and Nicaragua presented a proposal to remove healthcare, education, water, telecommunications and energy from the WTO “on the basis that these essential public services are human rights which governments have an obligation to provide, and should not be treated as tradable commodities.”

Although the UN is in need of considerable reform, it should play a lead role in redistributing essential resources. It is the only international body with the experience, expertise and financial resources to initiate and coordinate such a crucial program. A new body within the UN needs to be responsible for a short-term emergency relief program to address the urgent needs of the 50,000 people who die each day from poverty, of which 30,000 are children. Simultaneously, a long-term program could begin to coordinate securing the wider basic needs of the global public.

A genuine change in principles and a renewed sense of commitment is urgently needed to tackle extreme poverty and inequality. A global undertaking of this scale would not come without further challenges and complexities, but it would lead to rapid and progressive change as low-income countries lift themselves out of poverty without permanently relying on financial hand-outs. Campaigning for the redistribution of essential resources, rather than just more aid or fairer trade, is the first vital step to securing the basic needs of the world community.

Davinder Kaur is the Communications Officer for Share the World’s Resources, an NGO advocating for essential resources such as food, water and energy to be shared internationally. She can be reached at davinder@stwr.org. Read other articles by Davinder, or visit Davinder's website.

2 comments on this article so far ...

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  1. Ramsefall said on November 19th, 2008 at 5:02pm #

    Davinder writes:

    “Import surges of heavily subsidized goods flood the markets of poor countries, wreaking havoc on domestic producers and driving many out of business and into poverty. ”

    Big sharks eating the little sharks, time to start acting like civilized human beings after realizing the error their ways. Poverty is all to easily created and controlled by what Davinder indicates of subsidized food and tariffs, but the impact is even greater with the big agrobusiness industry selling their seeds on contract at 4x the price of non-engineered seeds. Not only is a direct result of increased poverty brought on by such hegemonic influence and false promises, that suicide rates in India’s cotton production region is climbing as well.

    We need institutions or groups that like promoting democracy through community based organization and solidarity, the same needs to take place with food production. While impoverished regions continue to go hungry from lack of food, developed nations will be facing epidemics from consuming low-quality, genetically engineered, hormone induced crap. GMOs only complicate the world’s food crisis, and could soon overshadow this economic crisis.

    Your article raises additional critical questions on world food production, Davinder, a topic easily overlooked with so much coverage of economics and politics. If we don’t begin to resolve what could be a monumental issue in a short period of time, the issue will eventually confront the entire human race, developed or undeveloped.

    Best to you.

  2. Did Ypu Kmow said on November 19th, 2008 at 9:24pm #

    WTO, World Bank, IMF
    All are interested in one thing promoting Corporate agendas. They are as I call them, the great pretenders, pretending to help the poor when they are in fact exploiting them. All for profit. In my opinion they are all, quite corrupt. The rich countries feeding on the poor countries.
    Exploiting their natural resources and getting cheap slave labour.
    World Bank Promotes Fossil Fuel Pollution as well