A crusade to reduce world poverty: Bequest of the 20th Century
A crusade to reduce world poverty: Bequest of the 20th Century
Yanuar Nugroho
Director
The Business Watch Indonesia
Surakarta, Central Java
yanuar-n@unisosdem.org
In spite of the development of agriculture, scientific
knowledge and modern technology, the wealth of the poorest group
has actually fallen. The United Nations Development Program
(UNDP) this year reports that more than 1.2 billion people across
the world -- two-thirds of them women -- live in crushing
poverty, and face difficult access to food, safe water,
sanitation, basic education and health services.
The wealth of the 225 richest countries has nearly tripled in
the last six years and their assets now equal the entire annual
income of half the world's population.
Every Oct. 17, a day after World Food Day, the world marks the
International Day for the Eradication of Poverty, to boost the
drive to achieve the key goals adopted by world leaders at the
Millennium Summit in 2000: to halve the number of the world's
extremely poor people, provide elementary school education for
every child and halt the AIDS epidemic by 2015.
The global record shows that barely half that amount of
progress had been achieved; UN Secretary-General Kofi Annan said,
"overall, the world is not on track to meet the goals by 2015."
There is obviously a tremendous overlap between the 800
million people who live in a state of permanent food insecurity
and the 1.2 billion people on less than US$1 a day as UNDP
reported above.
We are constantly told of the one recipe to reduce poverty:
economic growth. Yet the UN Human Poverty Index 1998 for
industrial countries showed that Sweden, with one of the lowest
rates of economic growth per person, had the best human welfare.
Whereas the U.S., with the highest rate of economic growth (and a
higher per capita GDP than Sweden), had more people who were
"functionally illiterate" (20.7 percent) than that in any other
country; the highest proportion of population below the income
poverty line (19.1 percent) and the greatest number of people who
did not expect to reach 60 years of age (13 percent).
Thus, there has been no magic formulae to eradicate poverty.
But there are five structural points to be addressed here: (1)
human development and the environment, (2) economic management,
(3) democratic institutions, (4) empowering the poor to change
their own lives and, (5) a need for global advocacy.
First, investment in education and other essential services.
The UN found that there is no lever more significant in reducing
poverty than investment in education in addition to basic
services. Governments in poor countries need to commit themselves
to universal free primary education and affordable/accessible
basic services provision.
Second, sound management of the economy. For years the
development of poor countries was held back by lots of well
intentioned efforts by governments to spend more money; by
putting money into inefficient state enterprises that did not
work; into funds for defense forces beyond their needs; and
taking money away from essential public services.
Sound management would ensure that public spending does not
run ahead of the tax base and the revenue available to a country
and, second, making sure that the priority for the public
spending is education, health care and basic services.
Third, democratic institutions. Sound democratic institutions
at the national and village level should reflect people's
priorities and their visions for the country, are critical to
successful development. Without that we can still invest in
education, we can still manage our economy quite well, but we
will also still flounder, as we see in other regimes and
countries without a sound democracy.
Fourth, empowerment of the poor, which is much more crucial
than charity. Micro credit may be one such tool. The poor are a
better credit risk than all of us. They are much more sensible
about repaying their loans because they recognize that without
the kind of assets against which they can borrow from normal
commercial means, they have to protect their new credit status
very carefully and not betray themselves or their communities by
not repaying.
It is an incredibly powerful tool for bringing wealth to the
lowest levels of a country, although modern financial systems
(like banking) are not so willing to channel the money to empower
the poor. In a poor country like Indonesia, for example, less
than 10 percent of credit from banks are given to the poor.
Fifth, global advocacy. Ensuring that the case of the world's
poor is not lost on the international community is easy as we are
all on the same leaky ship. The rich will also sink, slowly or
quickly unless we end world poverty.
But it will not happen if the global economic system is
structured in such a way that it increases the gap between the
rich and poor.
According to the World Bank (2001), in 1960 gross domestic
product in the richest 20 countries was 18 times that in the
poorest countries. By 1995, this gap had widened to 37 times.
About 12 economies in Asia and Latin America account for 70
percent of exports from the developing world absorb almost 80
percent of investment flows to the developing world and receive
more than 90 percent of portfolio investment flows to the
developing world.
However, Sub Saharan Africa, West, Central and South Asia and
many economies in Latin America, Asia and the Pacific have been
left out of the global economy and not favored by international
investors. Clearly, free trade centered distribution of benefits
and costs are unequal.
Whether or not we succeed in this ambitious goal of ending
world poverty, the answer rests finally with all of us. It is our
world, so may we make it a safe, prosperous and peaceful place.
The writer also lectures at the Sahid University in Surakarta
and is a researcher at Uni Sosial Demokrat, Jakarta.