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Column: 3 billion people continue to live in poverty as the G8 summit takes place

As world leaders prepare to meet, the reality of three billion people – 40 per cent of the world’s population – living in extreme poverty will cast a shadow over their photocalls, writes Justin Kilcullen.

Justin Kilcullen Director of Trocaire

IF A VILLAGE inhabited by 100 people was controlled by a handful of wealthy individuals, who presided over the lives of 40 desperately poor inhabitants, ten of whom permanently hovered on the verge of starvation, it would probably not be considered a very attractive place to live.

Outsiders would point to the contrasting fortunes of the inhabitants and wonder not merely about the fairness of the village’s system, but about the long-term viability of the village existing at all.

Yet, we all live in this village – this beautiful, if flawed, place called Earth.

40 per cent of the world’s population lives in extreme poverty

Next Monday, the leaders of eight of the world’s most industrialised nations will begin a two day summit in Fermanagh. As world leaders prepare to meet, the reality of three billion people – 40 per cent of the world’s population – living in extreme poverty will cast a shadow over their photocalls.

The Millennium Development Goals (MDGs), unveiled in 2000 and due for completion in 2015, have recorded notable successes, yet the stubborn problem of extreme poverty persists. The question is: why?

As long ago as the 1960s, President Julius Nyerere of Tanzania said “give us trade not aid”. He saw that the prices for products exported from newly-independent African states, such as coffee, remained under the control of commodity markets in the West. Without radical reform of this system, which would enable countries to work their way out of poverty, the poorest countries would never become masters of their own destiny. And so it is today.

A key challenge set out in the MDGs was to reform the structures that govern economic relations between developed and developing countries, including fairer trade rules. Sadly, the world’s wealthy states failed to take this seriously.

Tax avoidance schemes deprive developing economies €123bn annually

Instead of reforming trade and the financial sector, we continued to thrust neoliberal reforms on under-developed economies, removing all barriers to foreign investment, privatising industries and demanding tax holidays for extractive industries whose company profits often far outweigh any benefit to local communities.

Tax avoidance schemes deprive countries in the developing world of €123bn each year, enough to fund the MDGs several times over. Corruption and tax avoidance has ensured that 1.5 billion people living in ‘resource rich’ countries live on less than $2 a day.

We denied developing economies the chance to develop their own industries, instead pursuing policies which made them almost completely reliant on inward ‘investment’. We did this because the wealthy nations are not interested in developing poor economies for the benefit of the people who live there, but to benefit themselves. We have recently seen the tragic consequences of this in clothing factories in Bangladesh.

Tackling the underlying causes of poverty requires political will

If there is to be any hope of eradicating global poverty it will require radical change in how we in the northern countries shape our relations with the developing world. The recently approved EU Directive to force European companies in extractive industries, such as mining and timber, to publish what they pay developing states for natural resources is a good start, but much more is needed.

Sadly, there is a dearth of pro-poor governments in the developing world, with many blindly following the western model of economic development. The human rights of their citizens are trampled as soon as a multinational company waves a cheque book. Land is seized, people are silenced. Society becomes divided into those who can participate – the wealthy and the educated – and a large underclass who are excluded.

When organisations have risen up to challenge inequality, they have often been quashed. In the past five years alone over 60 countries have introduced legislation to discourage, even prohibit, activism,often on behalf of poor people. Local organisations are only to be involved in providing basic services to the poor – feed the people, do not ask why they are hungry.

Where the circumstances have been created to favour development initiatives, such as investment in education and healthcare and the participation of citizens, the development indicators have improved significantly. The Philippines and Ghana are examples of such countries.

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Ultimately, tackling the underlying causes of poverty requires political will. We must become serious about a number of issues, including closing down tax loopholes, reforming trade and protecting our environment.

“Money has to serve, not rule”

We need a new sustainable development model, with accountability, transparency and a genuine commitment to shared development and solidarity over self-interest at its heart. Pope Francis recently criticised “wild capitalism”, calling for “person-centred ethics in the world of finance and economics”. Having previously spoken widely about the need to protect the environment, Pope Francis remarked, “money has to serve, not to rule”.

Some economists – presumably those who think we are doing just fine as we are – have derided these ideas as simplistic, but there are a growing number of others who recognise the fragility of market-based economies in the absence of shared values.

The world needs a new and realistic alternative vision if we are to deliver justice to the poor.

We can still fix this village.

Justin Kilcullen was appointed Executive Director of Trócaire in 1993 having worked for many years in Africa and Asia. Having qualified as an architect in 1975, Justin began working overseas in Tanzania before moving to Asia, specialising in the design and construction of refugee camps for Cambodian and Vietnamese refugees. He joined Trócaire in 1981 as Africa Programme Officer and later served as Trócaire representative in Laos.

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About the author:

Justin Kilcullen  / Director of Trocaire

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