A millennium of servitude, uncovering the roots of poverty

Bharat Jhunjhunwala, New Delhi

United Nations Secretary-General Kofi Annan is a happy man. Four years ago under his leadership the United Nations General Assembly established Millennium Development Goals in eight areas: poverty, primary education, women's equality, child mortality, maternal health, disease, environment and a global partnership for development.

In a report in September this year, Annan expressed satisfaction: "In four short years, the Millennium Development Goals derived from the Millennium Declaration have transformed the face of global development cooperation." He gives statistics to show that substantial progress has been made on the first seven goals. He has asked for increased financial assistance from the rich countries to take the mission forward.

Certainly there has been improvement in parameters such as that of poverty. It has to be examined, however, whether this improvement comes along with solutions to the fundamental problems of poverty. The cancer patient certainly gets relief by taking an analgesic, but his true treatment lies in radiotherapy. Administering analgesics without radiotherapy can lull him into believing that treatment is afoot, dissuading him from taking the right treatment and worsening his condition.

Developing countries hold 80 percent of the world's resources but their share in the world income is only 20 percent. The prices of goods produced by them are declining due to competition among them. On the other hand the prices of the goods produced by the rich countries are increasing behind the protective wall of patent laws. The price of coffee, tea, rubber and cotton are declining but Bill Gates is selling his Windows software at higher prices.

Annan recognizes the problem. "The long-term downward trend and volatility in non-fuel commodity prices continue to pose a major challenge to exporting countries," he says, and asks that the "international community should renew its efforts to alleviate these problems by improving existing mechanisms and considering new approaches".

But Annan is spectacularly silent on what these new approaches may be. The result is that this crucial problem is relegated to cold storage. Clearly, he is disinterested in solutions to the basic problems of poverty in developing countries and busy administering analgesics.

Truly, the basic problems are getting worse. Proof of the same is available in Annan's report. There has been an increase in unemployment in all developing regions except for a marginal improvement in Africa since the Millennium Development Goals were accepted. The unemployment rate of young people aged 15-24 years in Latin America increased from 12.4 percent in 1993 to 16.6 percent in 2003. The same story is repeated in Eastern Asia, Southern Asia, Southeastern Asia, Western Asia, Oceania and the Commonwealth of Independent States.

Interestingly, the situation in rich countries shows improvement, with unemployment down from 16.7 percent to 14.6 percent. It is clear that the economies of the developing countries are worsening while those of the rich countries are improving. Another indicator of this is that the percentage of goods admitted free of duty by rich countries from developing countries has declined from 62 percent in 2000 to 57 percent in 2002.

Annan does not discuss in his report why inequality among developing and rich countries is increasing. He repeatedly stresses that there has been improvement in the Millennium Goals in the areas of poverty, education, etc. Grahame Thompson of The Open University explains the politics of this approach thus: "The emphasis on 'poverty' allows the issue of 'inequality' to be backgrounded. There has been a desperate flurry of activity to bolster the 'we have all benefited from globalization' thesis with a display of evidence that absolute poverty has been reduced internationally (or has not gotten worse). But international inequalities are a somewhat different matter, and here the evidence is much less surefooted. Indeed, it looks as though the trend in international inequalities has worsened during this period of globalization." The silence of Annan as well as the Millennium Development Goals on the question of inequality is inexcusable.

Annan, moreover, leaves the crucial economic issues at the mercy of the rich countries. The press release accompanying the Millennium report says, "The primary responsibility for Goal 8 - having to do with issues such as trade, aid and debt - lies with the developed countries." This is outright unacceptable. No country has become developed except by one's own efforts. Such talk distracts the attention of the developing countries from uplifting themselves through their own efforts.

Rich countries are presently dependent on India, China and oil producing countries. These countries are purchasing currencies of North American and European countries to the tune of US$100 billion-plus every year. The strength of the dollar and euro rests on these purchases. Annan does not draw our attention to using this money for improvement of poverty, education, etc.

Without saying so, he wants us to continue depositing our $100 billion with the rich countries and place our attention on demanding an increase in aid of $50 billion per year! The reason is that if we stop purchasing dollars and euros, the economies of the rich countries will come under pressure.

Developing countries should ignore the advice of Annan to place themselves at the will and mercy of rich countries. Their agenda should be as follows: (1) Make OPEC-like cartels of their goods being imported by rich countries to increase their incomes; (2) Challenge the patent laws within the WTO and, if necessary, walk out of that institution; (3) Place limitations on large domestic and foreign companies that use job-eating production technologies; and (4) Withdraw forex reserves from the dollar and euro and place them in currencies of other developing countries.

Indeed, developing countries should consider throwing out all United Nations agencies like UNICEF and UNDP which distract us from adopting the above measures to solve the basic problems of poverty. If we listen to Annan we shall remain in servitude through the next millennium. The people of developing countries may be more educated and healthy, but they will remain poor.

The writer is a freelance economic columnist based in New Delhi. He can be reached at bharatj@nda.vsnl.net.in