Surely not this third world development stuff again ? Haven’t we finished with all that ? What’s happened with the money from last time ?
It’s hard not to get frustrated by the fact that the world’s poorest countries seem always to be with us. There’s an appalling déjà vu in images of pot-bellied African children dying or of young men attempting to rule down the barrel of a gun. It wouldn’t be surprising if the next epidemic was of compassion fatigue and we all just got on with our own lives.
So it’s perhaps particularly ironic that the latest UK campaign against global poverty rejoices in an acronym usually associated with speed, MPH. On aid, trade and debt however it’s not so much a question of Miles Per Hour, more like “minimal progress heretofore”.
In 1970 the world’s richest countries agreed to provide 0.7% of their wealth in aid by 1980. Thirty-five years later and all we have managed is 0.25%, a quarter of one penny for every £1 we have, an amount so small we don’t even have a coin for it any longer. The total value of aid has just reached $70 billion.
Following the Jubilee 2000 campaign the world’s richest countries agreed to forgive $100 billion of developing country debts. Five years later and only $46 billion has actually been cancelled. Meanwhile the total debt burden stands at $375 billion with $30 million being repaid every day
The World Trade Organisation proudly announced in 2001 that it would negotiate a “development round” for the benefit of countries in the South. The offers made by the richest countries were then so unfavourable that for the first time developing countries came together led by Brazil, India and China to reject the deal. The “development round” remains to be completed and meanwhile the UN estimates that developing countries are losing potential earnings of $700 billion every year.
So however deadeningly familiar the issues may be, there is no question that we have a lot further to go before justice is done. And there is real human suffering here: over one billion people have less than $1 a day to live on; 30,000 are dying every day. In 2005 therefore “MPH” stands for the MAKEPOVERTYHISTORY campaign. Its ambitions were expressed by the U2 rock group musician Bono: “We can make extreme poverty history, I really believe that. The kind of stupid poverty where kids are dying for the lack of an immunisation that costs 20 cents, or for lack of food in a world of plenty. Don’t we want to be the generation that says no to that?”
Poverty is of course a worldwide issue. I am writing this on the day of the launch of the Church Action on Poverty Lent Challenge. Three million UK children live in poverty. But where poverty here results in social exclusion, elsewhere especially Africa it results in early deaths: the WHO estimates that every hour 500 African mothers lose a child. It may not be appropriate to try and construct league tables of human misery but there is little doubt who would top any such table.
As well as the scale of the needs there are other reasons for focusing on the international development issues of aid, trade and debt in 2005. In September the UN will be reviewing progress on the Millennium Development Goals, set in 2000, to halve world poverty by 2015. The WTO will be holding its next Ministerial meeting in December in Hong Kong. Ahead of both those events the world’s most powerful countries will meet here in the UK in July to discuss an agenda set by our Government for what it likes to call its “development presidency” of the G8 nations. 2005 will also be the twentieth anniversary of the Live Aid concerts for the Ethiopian famine and in the UK Comic Relief will celebrate its tenth anniversary.
In response to this conglomeration of opportunities a Global Call to Action on Poverty has been launched. It comprises 40 national campaigns already and a further 20 countries are now establishing their campaigns. All of them are focusing on aid, trade and debt and the campaigns in developing countries are additionally calling on their Governments to improve their standards and stamp out corruption in particular.
Poor governance in developing countries results in abuse of human rights and in a lack of access for the poorest people to education, health and other services such as water, power or transport without which it is that much harder or even impossible for them to make a living. These failings also explain the popular view that aid is largely wasted, lining the pockets of dictators and being salted away in Swiss bank accounts. But even that perception underlines that there are responsibilities on both sides – the corrupters as well as the corrupted – to deal with this issue.
It is also salutary to remember that much aid never leaves donor countries and is instead tied to purchase of their goods and services. Developing countries must use 93% of the “aid” they get from Italy to buy Italian products or employ Italian advisers ! A recent World Bank study of a health project in Bolivia found that the three aid donors could not agree on the rules for procuring the necessary materials and equipment. They decided that each of them would be responsible for a different floor of the hospital. This proved unworkable and so after two years nothing had been built. Although the UK does not tie its aid, £1 of every £5 of our aid budget is spent on consultants. Altogether only some 40% f aid is estimated to arrive in developing countries as cash which they are free to use in accordance with their own priorities. And even that money generally goes to richer countries: EU aid is estimated to be worth just $0.55 to each person in the poorest countries while $5.74 goes to each person in the much richer countries of eastern Europe.
Despite all this developing countries are developing much faster than we did ourselves. India now has the same per capita income as the UK did in 1820. But at that time the UK had not made the social and institutional advances which India already has: universal suffrage, a central bank, income tax and limited liability, a professional bureaucracy, and minimum labour regulations including for children.
Ultimately world poverty will be ended through economic growth. But there are now 100 million more people living in poverty on less than $1 per day than there were in 1990 even though world income has grown 2.5% per year since then. Aid is needed to reach the people excluded from general rising prosperity - it reaches the parts other finance does not !
And aid does work:
· Aid was 80% of Mozambique’s 1990s post-war budget helping to pay for the repatriation of 2 million refugees, disarming and reintegrating 96,000 soldiers, meeting election expenses and clearing landmines. Since then the Mozambique economy has grown by 8% per annum for a decade and so aid has reduced from 50% to 26% of the country’s Gross Domestic Product;
· Uganda increased its spending on water and sanitation fivefold from 0.5% to 2.4% of its national Budget. At the same time donors doubled their aid for water. As a result between 1997 and 2001, 2.2 million people got access to clean water;
· UK-supported research in India has led to the adoption of disease-resistant chickpeas and the use of natural insecticides. Chickpea production has increased ninefold adding £29 million to farmers’ incomes.
Nonetheless as mentioned above, the biggest potential boost to development is fair trade. Even if all aid promises were kept, the aid would be worth less than a third of the income developing countries could earn for themselves under a fair system of global trade rules. Indeed it is the present unfair trade rules which produce some of the need for aid. The USA provides $3.4 billion in subsidies to its cotton farmers (and incidentally even these subsidies themselves are not fair: 1% of the farmers get 25% of the subsidies and 67% get nothing at all !). Some 76% of the cotton which the US farmers produce is then exported. This increase in supply reduces world prices. The incomes of 10 million cotton farmers in West Africa have been halved and so their countries’ need for aid has increased. Burkina Faso is estimated to lose $13.7 million in cotton earnings and receives $10 million in aid from the USA. Chad loses $5.7m and gets aid of $6m while Togo loses $7.4m and gets $4m of aid.
Western countries’ history of protecting their own farmers and manufacturers with such subsidies goes back a long way. In fact in the UK it was Edward III in the 14th century who first put tariffs on imports of woollen cloth in order to build up the English wool industry. In the 18th century the Navigation Acts required the use of British ships to carry goods to the UK. Developing countries now however are being denied similar opportunities to build up their own manufacturing capacities. The Economic Partnership Agreements (EPAs) which the EU and others are trying to negotiate with individual countries generally demand liberalisation from developing countries, insisting that they open up their markets in a free trading system rather than a fair one.
Debt is the last of the MAKEPOVERTYHISTORY campaign demands. The poorest countries are crippled by the burdens of odious debts built up under repressive regimes such as the 1974-81 Marxist military government of Colonel Mengistu in Ethiopia. The poorest countries are actually exporting money to the West with some $3 of debt repayments going North for every $1 of aid which goes to them in the South.
The recent meeting of Finance Ministers from the G7 countries (i.e. the G8 minus Russia) appeared to agree further moves to cancel debts owed not to individual countries but to multilateral institutions like the World Bank and the International Monetary Fund. But impressive promises have been made before only for subsequent action to be much less convincing. Ethiopia has had just $2 billion of its $10 billion debt cancelled leaving the country still making $100 million in debt repayments every year compared with spending of just $65 million on water and sanitation despite the figures that only 1 Ethiopian in every 25 has a toilet.
Debt cancellation like aid does work. Cancellations in Mozambique resulted in free immunisations for children while in Malawi, Tanzania, Uganda and Zambia primary school fees were abolished.
So now you are enthused once again not only that something should be done about global poverty but that it can be done, how do you get involved with MAKEPOVERTYHISTORY ?
The most obvious step is to wear the campaign’s symbol, a white band as launched on the New Year’s Day edition of the Vicar of Dibley. They are available in development charity shops or via the links on the website www.makepovertyhistory.org. The bands can be worn all the time but there will be three “White Band Days” during the year, the first of which, on 2 July, will coincide with the G8 summit in Scotland. On that day also there will be a mass lobby of the summit in Edinburgh.
The anticipated General Election campaign will of course be an opportunity to raise aid, trade and debt issues with candidates but there is no need to wait until then to lobby the politicians. Again the website will provide links to plenty of email and letter-writing campaigns. However if you are at all uncertain and would like further information please do contact Alan Redhouse.
Best of luck and happy activism. Together before this generation passes away, we can make poverty history !
David Redhouse