Wealth Creation can end Poverty Mar 02

Eliminating poverty is the biggest challenge of our time as almost half the world’s population (2 billion people) struggle for survival on less than USD2 per day. The desperately poor, deprived of education, health, home and opportunity to work, face starvation, disease and death each day of their short life. Such global poverty is the mother of conflict, terrorism and migration that threaten peace and security for the rest of us. How can we end this injustice of poverty that violates human dignity of so many? How can we empower such poor people to have a stake in their own local economies so that they can engage in enterprise that produces a surplus – a surplus that will finance their education, health and shelter?

What did Monterrey identify as the challenges we face:-

1.              Inadequate funding as most of the affluent countries have not met their pledge of giving 0.7% of their GNP for development assistance.

2.              Trade barriers and subsidies, especially in agriculture, restrict developing countries from accessing our markets.

3.              Inadequate technical assistance in enhancing capacity building in food production and processing industries such that poor countries do not realize the value added for export of finished products.

4.              Inadequate investment in rural infrastructure to allow access to water, energy, transportation, education and health.

5.              Failure of developing countries to establish good governance, democracy, and law and order that can offer peace, continuity and stability to communities.

The EU, as the largest donor in the world, contributes Euro 25 billion per annum amounting to more than 50% of all development assistance. In Monterrey, the EU has pledged that by 2006 its Member States will lift their contributions to a minimum f 0.33% of their GNP such that the average for the EU will be 0.39%. This amounts to an increase of Eurasia 7bn over the next 4 years. The USA, unwilling to commit a % of its GNP, contributes a meagre Euro 10bn per annum  (0.1% of GNP). It gives substantial military assistance e.g. Euro 5bn to Israel and Euro 2bn to Egypt but such aid does nothing to enrich the life of the poor! In Monterrey, in response to international pressure, the USA has pledged to increase its aid by Euro 5bn over the next four years. This is a step in the right direction but far short of what the world expects from such a rich nation that finances its prosperity on debt that it only partly services!

The EU and the USA extend substantial subsidies to their farmers to ensure that their rural economies are sustained. Sadly, such subsidies in the west have encouraged intensive farm production resulting in excess food that is dumped on the markets of developing nations e.g. subsidized milk powder exports to Tanzania and Jamaica have devastated the local dairy farmers. The farmers in poor countries face declining incomes. The poor can neither grow their food competitively nor buy the surplus from the west that floods their shops!

Asian countries e.g. China, India, Indonesia and Bangladesh were food deficient and net importers 20 years ago. Subsidy to their farmers, selecting appropriate seed, irrigation and other such investment in their agriculture has transformed them to self-sufficiency in food. They now have surpluses for export! Sadly, food production in sub-Saharan Africa over this same period has declined as the international investment to help their rural economies fell from Euro 14bn in 1988 to Euro 8bn in 1998. Such a decline must be reversed to eliminate rural poverty in Africa.

As a member of the EU Parliament delegation to Monterrey, I was delighted to express this view strongly in all discussions. Many participants shared my view and so I hope there will be action soon!