Optimist - in this issue

On 13 October it was announced that the 2006 Nobel Peace Prize had been awarded to the Grameen Bank and its lfounder, Professor Muhammad Yunus, for their efforts to create economic and social development from below using microcredit. Explaining this unexpected and inspirational choice, the Nobel Committee stated that “lasting peace cannot be achieved unless large population groups find ways in which to break out of poverty.” On hearing the news, ‘banker to the poor’ Professor Yunus exclaimed, “I’m delighted, really delighted they have endorsed a dream to achieve a poverty-free world.”Much needs to be done for this dream to be realized, though the last two years have witnessed much needed glimmers of hope for the achievement of the Millennium Development Goals, aimed primarily at eradicating poverty. 2005 began with the greatest ever international relief effort following the 26 December 2004 tsunami, demonstrating just how much can be achieved through global solidarity and commitment, and since then the G8, EU and millions of the world’s citizens have kept world poverty high on their agendas. But it cannot be ignored that six years after the pledges of the Millennium Declaration – in which the world promised to “spare no effort to free our fellow men, women and children from the abject and dehumanizing conditions of extreme poverty” – thousands of children still die needlessly every day: the equivalent of three tsunamis every single month. The promise to the world’s poor effort, it appears we are barely making any effort at all.

Industrialized countries first made the promise to dedicate 0.7 percent of their Gross National Income (GNI) to development aid in 1970, but only five states have lived up to their word – none of them members of G8. Increased prosperity in rich countries has simply not translated into increased generosity. The world’s richest 500 individuals now have a combined income greater than that of the poorest 416 million. The benefits (unlike the adverse consequences) of globalization and economic growth are not trickling down to those most in need.

Rich countries today give half as much,as a proportion of their income, as they did in the 1960s. Since 1990 annual per capita income has risen by over USD 6,000 while per capita aid has fallen by USD 1. Increased prosperity in rich countries has simply not translated into increased generosity.

If the MDGs were truly guiding government decisions, overriding priority would be being given to eradicating extreme poverty and ensuring the sustainable use of natural resources. Instead, for the time being, these goals are being encouraged as desirable by-products of traditional economic growth, rather than primary objectives. While economic growth can be one relevant indicator for the progress of countries already on the development ladder – notably much of Asia and South America, for states stuck in the poverty trap it is not the prime concern. For those countries – including much of Sub-Saharan Africa – which are poorer today than they were 30 years ago, poverty, disease and weak infrastructure make it very difficult to attract investment, accumulate capital or, especially where AIDS and malaria are rife, maintain a trained workforce. These are the countries that are being left behind by the traditional economic growth paradigm.

“Between 1990 and 2001, for every USD 100 worth of growth in the world’s income per person, just USD 0.60 found its target and contributed to reducing poverty below the USD 1-a-day line. ... This approach is both economically and environmentally inefficient.” Growth isn’t working, The New Economics Foundation, 2005.

The UN Millennium Project estimates that the MDGs could be met by 2015 if rich countries (especially the U.S. and Japan) dedicated just 0.54 percent of their GNI. Fortunately, in 2005 the EU states pledged to contribute at least 0.51 percent by 2010, and have targets to reach 0.7 percent within a few years after that. Such firm commitments are sorely needed from the U.S., Japan, Canada, Australia and all other industrialized states. In addition, developing countries must prioritize the MDG targets in their national strategies, and increase budget allocations to basic social services in line with a UN recommendation to spend at least 20 percent on these sectors.

Over a year has passed since G8 leaders agreed to cancel the debts owed by 40 of the world’s poorest countries to the World Bank, IMF, and African Development Fund, and increase aid by USD 50 billion by 2010, with half of this going to Africa. Progress is being made, but care must be taken that these promises are kept, and similar commitments are needed in the field of international trade – as will also be discussed in this issue of The Optimist.

While the Nobel Committee is right to highlight the links between fighting poverty and building peace, care should be taken not to “securitize” the sustainable development agenda. In today’s mind-set, “security” all too often implies erecting walls and barriers whereas sustainable development requires cooperation and solidarity. Eradicating poverty is a moral imperative in its own right, not just because it poses a potential threat to people in rich countries worried about illegal immigration, radicalization and other spillover effects.

Just as a microcredit loan can liberate one family from the poverty trap, rich countries need to meet the start-up costs of a human development take-off in the poorest countries: attacking the HIV/Aids and malaria pandemics; securing clean water and sanitation for all; ensuring basic healthcare and education are available for free to everyone; and investing in essential transport, power and communications facilities. It is impossible to claim that they cannot afford to do this. WHO estimates that an annual investment of just USD 27 billion targeted at improving public health in Africa would save 8 million lives per year. That is less than one thousandth of rich country income, and a fraction of what is currently spent on arms.

As Nelson Mandela recently put it: “Massive poverty and obscene inequality are such terrible scourges of our times – times in which the world boasts breathtaking advances in science, technology, industry and wealth accumulation – that they have to rank alongside slavery and apartheid as social evils.”

17 October 2006 was the fourth Global White Band Day. Across the world millions of people showed their support for the fight against poverty and called on governments to keep their 2005 promises. With all that is at stake, it is only fitting that “Make Poverty History!” has become a war cry for a generation, and the real challenge for today’s leaders.