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Column: If we work together, global poverty can be abolished by 2030

The recipe to fight world poverty is working, writes Hans Zomer, who says global levels of extreme poverty have already fallen to half what they were 13 years ago thanks to focused efforts by the international community.

Hans Zomer

TODAY, 25 SEPTEMBER, the UN General Assembly will bring world leaders together in New York, to discuss how poverty can be abolished by 2030. And their talks will take place in the knowledge that extreme poverty levels have already fallen to half what they were when they met in the same venue 13 years ago.

In the year 2000, world leaders agreed the ‘Millennium Development Goals’, a set of new global priorities and targets on how to eradicate the worst forms of poverty, hunger, and disease.

And the Goals have been very successful. They prompted concerted and coordinated action by the world’s governments so that now we have a historic first in that nine out of every ten children in the world go to school. (See this website for examples of progress to date)

Another goal, parity in enrolment levels between girls and boys has been achieved ahead of the 2015 deadline, wiping out inequality in classrooms the world over.

The goal of providing people with access to safe drinking water has also been reached, with 89 per cent of people across the world now having access. Some 200 million people living in urban slums now have improved living conditions due to the policies inspired by the Goals.

On 25 September, world leaders are likely to conclude, therefore, that the recipe to fight poverty is working.

The key ingredients of the recipe: investment in poor people

Further analysis of how this impressive progress has come about shows the importance of political leadership and a stubborn persistence to stay the course on national social policies and other promises to the world’s poorest people.

Countries as diverse as Brazil, Bangladesh, Indonesia and Malawi, for instance, have been able to create economic growth while at the same time reducing poverty levels, improving health and education and creating greater equality in their societies.

All four countries chose to prioritise policies that purposely avoided the pitfalls of the free market. As a result, they are showing impressive economic growth figures combined with great improvements in people’s health and education levels.

In Brazil, the gross income per capita (GNI) has risen 39 per cent since the 1980s, in Bangladesh 175 per cent and in Indonesia by a whopping 225 per cent. In Brazil, life expectancy increased by 11.3 years, through improvements to the country’s health system. The figures for Indonesia and Bangladesh are similarly impressive: life expectancy increased by 12 years and 14 years, respectively.

In the 1980s, Indonesia was one of the world’s poorest countries, but its economic recovery has meant that it is now the world’s 16th largest economy, set to overtake both Germany and the UK in size by 2030.

Unlike the Asian Tigers, growth in Brazil and Indonesia is not based on a model of increased production for exports, but on mass consumption by the country’s own citizens. Investments in health, education and jobs for the poorest have lifted millions of people out of poverty and into a middle class, creating new consumer demand to sustain the economy.

Brazil and Indonesia have, it seems, anticipated the recommendations from the UN’s trade and development body UNCTAD, which earlier this month recommended that developing countries stop relying on the export of cheap goods to the world’s richest economies, and instead focus on boosting domestic incomes for the poorest and hence domestic demand.

The importance of social protection policies

Brazil’s economy was kick-started by a major government programme for poor people, the ‘Bolsa Família’ programme.

The Economist has described the Bolsa Família programme as an “anti-poverty scheme invented in Latin America winning converts worldwide”. In essence, the programme ensured that the country’s poorest families received small amounts of money for food and household items if, in return, they vaccinated their children and sent them to school.

The short term effect was that poor families had access to more and better food, and in the longer term improved their health and education levels. The national minimum wage was increased and a country-wide pension scheme was introduced.

In President Luiz Inácio Lula da Silva (“Lula”)’s first term in office, the proportion of people living in poverty fell by 27.7 per cent. The increased prosperity of millions of poor people created new demand and drove economic growth. And more importantly, the huge levels of inequality between rich and poor in Brazil started to come down.

According to the IMF, Brazil is set to become the world’s fifth largest economy by 2018, with a GDP of 3.4 billion dollars – and the booming middle class is starting to make its presence felt. Riots earlier this year showed that rising living standards are prompting young people to demand more, in particular more influence on the political process. While disruptive, it shows that Brazil’s democratisation process has taken hold.

The global middle class is on the rise

And it’s not only in Brazil that the middle class is growing. According to an analysis by the McKinsey Institute the middle class today represents some 2 billion people worldwide, and by 2025 it will have grown by another 1 billion – of which 600 million people living in developing countries.

Already now, seven of the world’s ten fastest growing economies are in Africa, and the once hopeless continent is today a locomotive that OECD countries cannot afford to ignore.

This does not mean that the future is without worries. The International Labour Organisation estimates that, while the developing world’s middle class has more than doubled in size over the past decade, the number of people living below the poverty line has also increased.

But the examples from many developing countries show that investment, both public and private, in infrastructure, education and health care aimed at poor people is smart economics.

This approach contrasts sharply with the policies of structural adjustment imposed on Latin America and sub-Saharan African in the 1980s and on present day Europe. An Oxfam report on austerity in Europe, launched earlier this month, states:

Countries in these regions received financial bailouts from the IMF and the World Bank after agreeing to adopt a range of policies including public-spending cuts, the nationalisation of private debt, reductions in wages, and a debt management model in which repayments to creditors of commercial banks took precedence over measures to ensure social and economic recovery.

These policies were a failure; a medicine that sought to cure the disease by killing the patient.

As world leaders gather in New York to consider their priorities for the next 15 years, they would do well to emphasise strategies that have learned from this failure and that aim to ensure the full inclusion of all citizens.

Addressing inequality and environmental degradation

Over the past number of years, Irish NGOs have asked poor people the world over what priorities they would set, if they had the chance. And the clear message from these consultations with poor communities across the globe has been remarkably consistent: poor people want their leaders to address inequality and environmental degradation, and they want their governments to listen to them. And they want living wages and decent work conditions.

Poor people want an economic model where no-one is left at the bottom and where everyone can contribute to society. We have real-life examples of countries that have managed to do that, and to grow their economies.

This may well be the best recipe to make poverty history.

Hans Zomer is Director of Dóchas, the Irish Association of Development NGOs, which represents 49 agencies working in the area of humanitarian and development aid. to read more about the Irish EU Presidency and global development.

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Hans Zomer

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