A Framework for Understanding the Economics of Global Poverty Jim Donahue 15 th  May 2008 [email_address] © 2008 Jim Donahue
Overview Nearly half of the world still lives in poverty Some countries have moved from being poor to rich Africa continue to lag behind Mobile telephony is a key enabler for growth in poor countries There is an ongoing debate about what needs to be done to fight extreme poverty Appendices:  Case Study of Malawi: Can it move from poverty to prosperity? Example lifestyles at different levels of economic development
Nearly half of the world still lives in poverty
How are rich and poor countries defined?  How can poor countries become rich?  GNI/Capita  (PPP 2004) >$20,000 $10,000 - $20,000 $5,000 -$10,000 <$5,000  Source: World Bank Development Indicators - GNI/capita, PPP – 2004
Most of the world lives in developing countries and nearly half earn less than $2 per day  33 25 41 73 Number of Countries Source: World Bank Development Indicators - GNI/capita, PPP – 2004 Population 1 B .2 B 2.2 B 2.7 B 1 Billion <$1/day 3 Billion <$2/day International Poverty Lines: Developed Countries Developing Countries
Extreme poverty has been reduced in recent years, but nearly half of the world still lives in poverty Source: World Bank Development Indicators - % Poverty 1981 - 2004 1981 40% less than $1/day Additional27% on less than $2/day 33%  Greater than $2/ day Total Population: 4.5 Billion Less than $1/day 1.5 Billion  Less than $2/day: 3.0 Billion 2004 19% less than $1/day Additional29% on less than $2/day 52%  Greater than $2/day Total Population: 6.4 Billion Less than $1/day : 1.0 Billion Less than $2/day: 3.0 Billion
2.  Some countries are moving from being poor to rich
There of numerous examples of countries moving from being poor to rich Today’s Emerging Markets  (% growth 2004-05) Source: World Bank Development Indicators Turkey – 7.4% Venezuela – 9.3% China – 10.2% Estonia– 9.8% Argentina – 9.2% S. Africa – 4.9% Malaysia – 5.9% Philippines – 5.0% Indonesia – 5.6% India – 9.2% Angola – 20.6% Europe Greece 2005 ($23,620) Greece  1950 Spain2005 ($25,820) Spain2000 Ireland 1988 Ireland 2005 ($34,720) Japan and the Asian Tigers Japan 2005 ($31,410) Japan1950 S. Korea, 2005  ($21,850) S. Korea 1970 Taiwan 1960 Taiwan 2005 (25,000)
Europe Czech –$20,140 (6.1%) Hungary-$16,940 (4.1%) Estonia -$15,420 (9.8%) Poland -$13,490 (3.4%) UK- $32,690 (1.8%) France - $30,540 (1.2%) Germany -$29,210 (1.0%) Italy -$28,840 (0.0%) Spain -$25,820 (3.4%) Russia -$10,640 (6.4%) Romania-$8,940 (4.1%) Turkey - $8,420 (7.4%) Ukraine-$6,720 (2.6%) GNI per Capita/ Growth Rate (PPP 2005 US$) (%Growth 2004-05) Source: World Bank Development Indicators Years to Double Size of the Economy Developed Countries Newly Emerging Markets
Key steps to poverty reduction through growth:  1. Create a good investment climate 2. Create formal economy jobs  3. Empower the poor to participate in the economy Geography People/Culture Governance Infrastructure,  Health, Education Indirect factors influencing investment decisions: Informal/ Sustenance Economy Private Sector Formal Economy 3. Health and education levels empower the poor to move into  formal economy jobs 2. Private investment and export industries create jobs and help grow the formal economy 1. Key private sector investment decision factors:
Six types of underlying factors help to explain a country’s ability to attract investment and grow Gross National Income (GNI) Economic Output Economic Performance GNI per capita % Industry % Agriculture % Services Governance Governance Rating:  x% Competitiveness Index: x/125  Ease of Doing Business:  x/175 Economy Poverty <1$ Between $1  and $2 > $2 Growth (1990-2003) % Investment (% GDP) % Exports (% GDP) % Imports (% GDP) % Unemployment (00-05) % Inflation (Avg. 1990-03) % Geography Climate Arable Land Net energy imports Natural resource  Access to trade routes  Natural Disasters People Population growth Net Migration Ethnic Groups/ Cultural Values Population age profile Infrastructure Paved Roads % Telecoms  Internet/PC Reliable power  Water/ Sanitation Health Life expectancy Child Mortality  Immunisation AIDS% Tuberculosis %  Education Male Literacy Female Literacy Primary  Secondary Tertiary Political Stability Control of Corruption Democracy/People’s Voice Rule of Law Gov’t/Regulatory Effectiveness
United Kingdom Economic Performance GNI/capita, PPP: $32,690 (2005) Services:  72% Industry:  27% Agriculture  1% France GNI:  $2.169 trillion (2005) Population: 61 million (2005) Economic Output Economic Performance GNI/capita, PPP: $30,540 (2005) Services:  73% Industry:  24% Agriculture  3% Source: World Bank Development Indicators > $2 > $2 Economy Poverty Economy Poverty Growth (Avg. 1990-03) 2.7% Investment (% GDP) 16% Exports (% GDP) 25% Imports (% GDP) 28% Unemployment (00-05) 4.6% Inflation (Avg. 1990-03) 2.7% GNI:  $2.273 trillion (2005) Population: 60 million (2005) Economic Output Growth (Avg. 1990-03) 1.9% Investment (% GDP) 19% Exports (% GDP) 26% Imports (% GDP) 25% Unemployment (00-05) 9.9% Inflation (Avg. 1990-03) 1.5%
France  (GNI/Capita, PPP $30,540) United Kingdom (GNI/Capita, PPP $32,690) Geography Temperate/ Continental Arable Land Net Energy imports Natural Resources Access to trade routes  Natural Disasters People Births per woman: 1.9 Net migration: + .1% Governance Infrastructure Paved Roads 100% Mob Tel: 80%  Internet :36.5% Reliable power Water/ Sanitation Life expect: 79 Child Mort: 0.5% Immun: 86% AIDS: 0.4% TB: 0.12%  Health Education M Literacy: 99% F Literacy: 99% Primary: 99% Secondary: 93% Tertiary: 54% Ethnic Groups/ Culture Population age 0-14: 18.6% Governance Rating: 89% Competitiveness Index:18/125  Ease of Doing Business: 35/175 Sources: World Bank Development Indicators 2005, WEF Global Competitiveness Rankings 2006, World Bank Governance Index-2005, UN Population Division : Net Migration 1995-2000/Births per woman 2004, Koppen Climate Classification, ITU Mob/Internet Ranking 2005 Geography Temperate/ Continental Arable Land Net Energy imports Natural Resources Access to trade routes  Natural Disasters People Births per woman: 1.7 Net migration: +.16% Ethnic Groups/ Culture Population age 0-14: 18.2% Governance Governance Rating: 90% Competitiveness Index:10/125 Ease of Doing Business: 6/175 Infrastructure Paved Roads 100% Mob Tel :112%  Internet: 42.3% Reliable power Water/ Sanitation Life expect: 78 Child Mort: 0.6% Immun: 80% AIDS: 0.2% TB: 0.12%  Health Education M Literacy: 99% F Literacy: 99% Primary: 99% Secondary: 95% Tertiary: 64% Political Stability Control of Corruption Democracy/Voice Rule of Law Gov’t/Reg Effect’ness Political Stability Control of Corruption Democracy/Voice Rule of Law Gov’t/Reg Effect’ness
Asia … .but it is improving GNI per Capita/ Growth Rate (PPP 2005 US$) (%Growth 2004-05)  Source: World Bank Development Indicators <1$ Between $1 and $2 > $2 <1$ > $2 Between $1 and $2 India China Extreme Poverty reduction since 1980 70 million fewer 400 million fewer Millions are living in poverty….. India  (2004) China  (2004) Hong Kong-$34,670 (7.3%)  Japan -$31,410 (2.6%) Taiwan - $25,400 (5.0%) S. Korea-$21,850 (4.0%) Malaysia - $10,320 (5.2%) Thailand - $8,440 (4.5%) China - $6,600 (10.2%) Philippines - $5,300 (5.0%) Indonesia - $3,720 (5.6%) India - $3,460 (9.2%) Vietnam - $3,010 (8.4%)
China GNI:  $2.3 trillion (2005) Population: 1.3 billion (2005) Economic Output Services:  33% Industry:  52% Agriculture  15% India GNI: $804 billion (2005)   Population: 1.1 billion (2005) Economic Output Services:  51% Industry:  27% Agriculture  22% Economic Performance GNI/capita, PPP: $6,600  (2005) Economic Performance GNI/capita, PPP: $3,640  (2005) Source: World Bank Development Indicators <1$ > $2 Between $1 and $2 Between $1 and $2 <1$ > $2 Economy Poverty Economy Poverty Growth (Avg. 1990-03) 10.3% Investment (% GDP) 44% Exports (% GDP) 34% Imports (% GDP) 32% Unemployment (00-05) 4.2% Inflation (Avg, 1990-03) 4.9% Growth (Avg. 1990-03) 5.9%  (9.2) Investment (% GDP) 24% Exports (% GDP) 14% Imports (% GDP) 16% Unemployment (00-05) 5.0% Inflation (Avg, 1990-03) 6.8%
India (GNI/Capita, PPP $3,460) Geography Temperate/ Continental Arable Land Net Energy imports Natural Resources Access to trade routes  Natural Disasters People Births per woman:1.7 Net Migration: -.03% Ethnic Groups/ Culture Population age 0-14: 23.6% Governance Infrastructure Roads ND Mob Tel: 30% Internet: 6.3% Reliable power Water/ Sanitation Life expect: 71 Child Mort: 3.7% Immunis: 86% AIDS: 0.4% TB: 0.12%  Health Education M. Literacy: 98% F. Literacy: ND Primary: 98% Secondary: 70% Tertiary: 15% China (GNI/Capita, PPP $6,600) Geography Tropical, Temperate, Dry Arable Land Net Energy imports Natural Resources Access to trade routes  Natural Disasters People Births per woman 3.1 Net Migration: -.03% Ethnic Groups/ Culture Population age 0-14: 32.4% Governance Infrastructure Roads 57% Mob Tel 8% Internet: 1.7% Reliable power Water/ Sanitation Life expect: 68 Child Mort: 8.7% Immun: 67% AIDS: 0.9% TB: 0.26%  Health Education M. Literacy: 95% F. Literacy: 81% Primary: 95% Secondary: 79% Tertiary: 28% Governance Rating: 43% Competitiveness Index:43/125  Ease of Doing Business: 134/175 Governance Rating: 38% Competitiveness Index:54/125  Ease of Doing Business: 93/175 Sources: World Bank Development Indicators 2005, WEF Global Competitiveness Rankings 2006, World Bank Governance Index-2005, UN Population Division : Net Migration 1995-2000/Births per woman 2004, Koppen Climate Classification, ITU Mob/Internet Ranking 2005 Political Stability Control of Corruption Democracy/Voice Rule of Law Gov’t/Reg Effect’ness Political Stability Control of Corruption Democracy/Voice Rule of Law Gov’t/Reg Effect’ness
India is struggling to improve its poor infrastructure in an effort to improve its capacity to grow
3.  Africa continues to lag behiond
Sub-Saharan Africa is not on track to meet the UN Millennium Development Goals by 2015 √   - goal achieved √   - on-track x  – not on-track √   - goal achieved √   - on-track √   - good progress Goal 1:  Eradicate Extreme Poverty and Hunger TARGET  Halve, between 1990 and 2015, the proportion of people whose income is less than $1 a day Goal 2:  Achieve Universal Education TARGET  Ensure that, by 2015, all children will be able to complete a full course of primary schooling Goal 4: Reduce Child Mortality TARGET   Reduce by two thirds, between 1990 and 2015, the under-five mortality rate Goal 6: Combat HIV/AIDS, Malaria & Other Diseases TARGET  Have halted by 2015 and begun to reverse the spread of HIV/AIDS
30 out of 48 African countries have GNI/capita less than $2,000 and are not well integrated into the global economy Source: World Bank Development Indicators - 2005 LIBYA EGYPT TUNISIA  NIGER CHAD SUDAN – 5% ALGERIA MOROCCO MALI WESTERN SAHARA MAURITANIA SENEGAL IVORY COAST 7% LIBERIA GHANA 51% TOGO BENIN SIERRA LEONE BURKINA GUINEA NIGERIA GUINEA BISSAU THE GAMBIA CAMEROON CENTRAL AFRICAN REPUBLIC CONGO GABON EQUATORIAL GUINEA Democratic Rep of Congo ANGOLA TANZANIA ETHIOPIA KENYA UGANDA RWANDA BURUNDI SOMALIA DJIBOUTI ZIMBABWE ZAMBIA MOZAMBIQUE MADAGASCAR SOUTH AFRICA BOTSWANA NAMIBIA LESOTHO SWAZILAND MALAWI Red Sea GNI/Capita, PPP >$20,000 $10 – 20,000 $5-10,000 $2 – 5,000 < $2,000
Paul Collier proposes a model of four traps to explain why some countries are unable to grow out of poverty The Conflict Trap The Natural Resource Trap Landlocked with bad Neighbours Current Conflicts: Somalia Cote d’Ivoire Chad Sudan Recent Conflicts: DRC Congo Republic Liberia Sierra Leone Nigeria – Oil Zambia – Copper Botswana – Diamonds Sierra Leone – Diamonds DRC – Diamonds, etc Chad – Oil Angola – Oil, Diamonds Malawi Central African Republic Burkina Faso Rwanda/ Burundi Uganda Chad Zimbabwe Somalia Chad/Sudan Nigeria Angola DRC Ivory Coast Source: The Bottom Billion, Paul Collier, Oxford University Press, 2007 Bad Governance Globalisation reinforces poverty for many poor countries Wealth of global investments opportunities highlights high risk of poorest countries for both foreign and local investors  Even more difficult to compete against other Asian competitors such as India and China Increased emigration opportunities intensifies ‘brain drain’ of limited pool talent
Malawi’s economy reflects challenges typical of many African countries Services:  49% Industry:  15% Agriculture  38% <1$ > $2 Between $1 and $2 Economy Poverty Sources: World Bank Development Indicators 2005, WEF Global Competitiveness Rankings 2006, World Bank Governance Index-2005, UN Population Division : Net Migration 1995-2000/Births per woman 2004, Koppen Climate Classification, ITU Mob/Internet Ranking 2005 Geography Tropical wet and dry Arable Land Net Energy imports Natural Resources Landlocked  Natural Disasters People Births per woman: 6.1 Net Migration: -.08% Ethnic Groups/ Religion  Population age 0-14: 45% Governance Infrastructure Paved Roads 18.5% Mobile Tel: 3.3%  Internet: 0.3% Reliable power Water/Sanitation Life expect: 37 Child Mort: 17.8% Immun: 77% AIDS: 14.2% TB: 0.44%  Health Education M. Literacy: 76% F. Literacy: 49% Primary: 71% Secondary: 29% Tertiary: 0.4% Governance Rating: 31% Competitiveness Index:117/125  Ease of Doing Business: 110/175 Political Stability Control of Corruption Democracy/Voice Rule of Law Gov’t/Reg Effect’ness GNI:  $2.1 billion (2005) Population: 13 million(2005) Economic Output Economic Performance GNI/capita, PPP: $650  (2005) Growth (Avg. 1990-03) 3.0% Investment (% GDP) 8% Exports (% GDP) 27% Imports (% GDP) 41% Unemployment no data Inflation (Avg, 1990-03) 31.1%
Malawi Poverty Reduction Strategy (2004/05) WTO Doha Round Private Foreign  Direct Investment Governance Infrastructure Paved Roads 18.5% Mob Tel: 3.3%  Internet: 0.3% Reliable power Water/ Sanitation Life expect: 37 Child Mort: 17.8% Immun: 77% AIDS: 14.2% TB: 0.44%  Health Education M. Literacy: 76% F. Literacy: 49% Primary: 71% Secondary: 29% Tertiary: 0.4% Governance Rating: 31% Competitiveness Index:117/125  Ease of Doing Business: 110/175 Political Stability Control of Corruption Democracy/Voice Rule of Law Gov’t/Reg Effect’ness Nurse Training Salary Top-ups Nutrition Programs HIV Youth training ICT Skill Training Rural Electricity Roads Projects Water Distribution Train 3000 Teachers 154 Teacher Houses 22 New Schools Educational Material Campus for Mzuzu Univ Female Scholarships Courtrooms & Judges Anti-Corrupt Bureau New Financial Systems Economic/ Industrial Policy Reform Services:  49% Industry:  15% Agriculture  38% Tourism Standards Agricultural Productivity Tourism Committee Small-scale Irrigation Off-shore Fishing Fish Farming Mobile Telephony Promote Small-scale Mining Increase Telecom Capacity Farmer cooperatives World Bank Projects EU Projects IMF/WB Debt Cancellation Other/NGO Projects UK DFID Projects UK DFID Projects UK DFID Projects
Political instability and poor governance have been problems in many African countries -  but many conflicts are ending and governance is improving Source: World Bank Governance Indicators - 2005 Improved Governance Rating (1996 – 2005):  Botswana (Corruption) Ghana (Democracy) Mozambique  (Stability) Tanzania (Effectiveness) DRC (Democracy, Regulations) Nigeria (Democracy) Madagascar   (Corruption) Liberia (Democracy) Senegal (Stability, Democracy) Political Stability - Year conflicts ended  - Conflicts still unresolved 2007 2002 2002 1999 2003 1993 2003 2002 1992 1994 Other Developing Country Governance Ratings: China – 38% India – 43% Turkey – 47% Romania – 52% LIBYA – 22% EGYPT 36% TUNISIA – 51% NIGER – 29% CHAD - 11% SUDAN – 5% ALGERIA 29% MOROCCO 42% MALI 46% WESTERN SAHARA MAURITANIA 44% SENEGAL IVORY COAST 7% LIBERIA GHANA 51% TOGO BENIN SIERRA LEONE BURKINA GUINEA NIGERIA 14% GUINEA BISSAU THE GAMBIA CAMEROON CENTRAL AFRICAN REPUBLIC CONGO GABON EQUATORIAL GUINEA Democratic Rep of Congo – 3% ANGOLA 14% TANZANIA 36% ETHIOPIA – 18% KENYA 26% UGANDA 30% RWANDA BURUNDI SOMALIA 0% DJIBOUTI ZIMBABWE 5% ZAMBIA 31% MOZAMBIQUE 38% MADAGASCAR 50% SOUTH AFRICA 64% BOTSWANA 74% NAMIBIA 58% LESOTHO SWAZILAND MALAWI 34% Red Sea World Bank Governance Rating 2005 75% 50- 75% 25 – 50% 10 – 25% 0 – 10%
Africa’s economic growth since the mid-1990’s is more promising for poverty reduction, but diversification away from commodities is still a challenge Source: World Bank, African Development Indicators, 2007 Annual GDP Growth (2000-2005) > 5% - 18 countries 3- 5% -16 countries 1-3% - 6 countries < 1% - 6 countries Countries with Average Growth Greater than 5%, 2000-2005 - Sustained, diversified growth -  Dependant on oil as major export LIBYA – 5.3% EGYPT 3.7% TUNISIA – 4.5% NIGER 3.7% CHAD 14.5% SUDAN  6.1% ALGERIA 5.1% MOROCCO 4.3% MALI 5.9% WESTERN SAHARA MAURITANIA 4% SENEGAL IVORY COAST  -0.1% LIBERIA GHANA 5.1% TOGO BENIN SIERRA LEONE 13.7% BURKINA FASO 5.6% GUINEA NIGERIA 5.9% GUINEA BISSAU THE GAMBIA CAMEROON 3.7% CENTRAL AFRICAN REPUBLIC CONGO GABON EQUATORIAL GUINEA 23.2% DEM REP CONGO 4.4% ANGOLA 9.9% TANZANIA 6.5% ETHIOPIA  4.7% KENYA 3.4% UGANDA 5.6% RWANDA 5.1% BURUNDI 5.6% SOMALIA DJIBOUTI ZIMBABWE  (5.7%) ZAMBIA 4.7% MOZAMBIQUE 8.4% MADAGASCAR 2.0% SOUTH AFRICA  3.9 BOTSWANA 5.9% NAMIBIA 4.7% LESOTHO 2.9% SWAZILAND 2.5% MALAWI 3.4% Red Sea
South Africa’s diversified economy still has its issues but provides hope for African growth GNI:  $223 billion (2005) Population: 47 million(2005) Economic Output Economic Performance GNI /capita, PPP: $12,120   (2005) Services:  65% Industry:  31% Agriculture  4% Economy Poverty <1$ > $2 Between  $1and $2 Sources: World Bank Development Indicators 2005, WEF Global Competitiveness Rankings 2006, World Bank Governance Index-2005, UN Population Division : Net Migration 1995-2000/Births per woman 2004, Koppen Climate Classification, ITU Mob/Internet Ranking 2005 Growth (Avg. 1990-03) 2.3 (4.9)% Investment (% GDP) 17% Exports (% GDP) 28% Imports (% GDP) 26% Unemployment (00-05) 27.1% Inflation (Avg, 1990-03) 9.0% Geography Dry, Temperate, Continental Arable Land Net Energy imports Natural Resources Access to trade routes People Births per woman: 2.8 Net Migration: -.01% Ethnic Groups/ Culture Population age 0-14: 32% Governance Infrastructure Paved Roads 21% Mob Tel: 72%  Internet: 6.8% Reliable power Water/ Sanitation Life expect: 46 Child Mort: 6.6% Immun: 83% AIDS: 15.6% TB: 0.5%  Health Education M. Literacy: 87% F. Literacy: 85% Primary: 99% Secondary: 65% Tertiary: 15% Governance Rating: 64% Competitiveness Index:45/125  Ease of Doing Business: 29/175 Political Stability Control of Corruption Democracy/Voice Rule of Law Gov’t/Reg Effect’ness
4. Mobile telephony is a key enabler for ending extreme poverty
Mobile telephony has a broad range of benefits appropriate to fighting poverty in developing countries Mobile Telephony Telecom infrastructure Emergency and distance health benefits Access to internet  Infrastructure,  Health, Education % Industry % Agriculture % Services Increased Mobile penetration increases GNI Growth  Faster Overall Growth Productivity Benefits Across All Sectors:  Access to agriculture market prices and other information Jobs in rapidly growing telecom sector Low-cost enabler  for micro-businesses Banking for previously ‘unbanked’ Increased international remittances Innovative use of text services New Targeted Services
Vodacom in the Democratic Republic of Congo (DRC) is an example of how private investment in mobile telephony can create jobs in Africa Using cellular networks to ‘leapfrog’ fixed line technology  In 1997 less that 15,000 landlines for 65m people Vodacom grew to 3 million mobile subscribers since 1997 Alieu Conteh, founder and chairman of Vodacom Congo showed entrepreneurial possibilities Now one of the country’s biggest employers 600 employees/ 5,000 contractors Planning to create the country’s first stock market and float Vodacom Congo in a public offering Source: The New York Times, 17 th  June, 2007, What Does Africa Need Most: Technology or Aid?
5. There is an ongoing debate about what needs to be done to fight poverty
The Optimists:  Poverty can be eliminated in Africa – more aid is needed for a ‘big push’ Jeffery Sachs: UN Millennium Development Goals can be met, but would cost $150-200 billion a year in aid by 2015 2005 G8 Glen Eagles Summit leaders pledged to double aid to Africa from $25 to $50 billion per year by 2010 Bob Geldof’s Africa Commission and Live8 supported more G8 aid funding Bono: Led debt relief campaign and foreign aid increases in US Bill Gates using resources to address treatable diseases Tony Blair, Gordon Brown, Bill Clinton global poverty initiatives
Jeffery Sachs advocates a number of simultaneous interventions at the village level for sustainable development Infrastructure Health Education Millennium Villages Agriculture Road improvements and community vehicle access Internet and mobile telephony access Electricity for small businesses Nutrition and clean water Health services and facilities HIV/AIDS, TB and Malaria Treatment Primary and secondary education  Eliminate gender  disparity ICT training Agricultural productivity and training Irrigation, fertiliser Support new village businesses 79 Millennium Villages operating or planned in twelve different countries in Africa:  Ethiopia, Ghana, Kenya, Madagascar, Malawi, Mali, Mozambique, Nigeria, Rwanda,  Senegal, Tanzania and Uganda.
The Pessimists: Aid has not been effective Temporary Famine Relief? Where has $2.3 trillion in foreign aid over past 50 years gone? Corrupt and wasteful Bureaucrats? Swiss bank accounts?
Paul Collier proposes a more balanced agenda for action to tackle poverty in the poorest countries The Conflict Trap The Natural Resource Trap Landlocked with bad Neighbours Source: The Bottom Billion, Paul Collier, Oxford University Press, 2007 Bad Governance Globalisation reinforces poverty on many poor countries Military support for post-conflict countries Charter for post-conflict governance Aid for reconstruction International laws and norms for resource wealth Substantial aid to develop infrastructure and for basic social services Military support to prevent coups Trade policies encouraging exports Intelligent use of aid to encourage reform Selected use of military intervention (e.g. Sierra Leone) ‘ Big Push’ temporary aid for export infrastructure Temporary trade protection from Asian competitors
7 things you can do to help fight global poverty Educate yourself about the causes and solutions of poverty Vote and let your politicians know you care about global poverty Contribute to organisations fighting poverty Buy fair trade goods Invest in companies that trade ethically Volunteer for NGOs fighting poverty – build a school! Tell others about poverty – give a presentation to your child’s school

15 May 08 Global Poverty Presentation

  • 1.
    A Framework forUnderstanding the Economics of Global Poverty Jim Donahue 15 th May 2008 [email_address] © 2008 Jim Donahue
  • 2.
    Overview Nearly halfof the world still lives in poverty Some countries have moved from being poor to rich Africa continue to lag behind Mobile telephony is a key enabler for growth in poor countries There is an ongoing debate about what needs to be done to fight extreme poverty Appendices: Case Study of Malawi: Can it move from poverty to prosperity? Example lifestyles at different levels of economic development
  • 3.
    Nearly half ofthe world still lives in poverty
  • 4.
    How are richand poor countries defined? How can poor countries become rich? GNI/Capita (PPP 2004) >$20,000 $10,000 - $20,000 $5,000 -$10,000 <$5,000 Source: World Bank Development Indicators - GNI/capita, PPP – 2004
  • 5.
    Most of theworld lives in developing countries and nearly half earn less than $2 per day 33 25 41 73 Number of Countries Source: World Bank Development Indicators - GNI/capita, PPP – 2004 Population 1 B .2 B 2.2 B 2.7 B 1 Billion <$1/day 3 Billion <$2/day International Poverty Lines: Developed Countries Developing Countries
  • 6.
    Extreme poverty hasbeen reduced in recent years, but nearly half of the world still lives in poverty Source: World Bank Development Indicators - % Poverty 1981 - 2004 1981 40% less than $1/day Additional27% on less than $2/day 33% Greater than $2/ day Total Population: 4.5 Billion Less than $1/day 1.5 Billion Less than $2/day: 3.0 Billion 2004 19% less than $1/day Additional29% on less than $2/day 52% Greater than $2/day Total Population: 6.4 Billion Less than $1/day : 1.0 Billion Less than $2/day: 3.0 Billion
  • 7.
    2. Somecountries are moving from being poor to rich
  • 8.
    There of numerousexamples of countries moving from being poor to rich Today’s Emerging Markets (% growth 2004-05) Source: World Bank Development Indicators Turkey – 7.4% Venezuela – 9.3% China – 10.2% Estonia– 9.8% Argentina – 9.2% S. Africa – 4.9% Malaysia – 5.9% Philippines – 5.0% Indonesia – 5.6% India – 9.2% Angola – 20.6% Europe Greece 2005 ($23,620) Greece 1950 Spain2005 ($25,820) Spain2000 Ireland 1988 Ireland 2005 ($34,720) Japan and the Asian Tigers Japan 2005 ($31,410) Japan1950 S. Korea, 2005 ($21,850) S. Korea 1970 Taiwan 1960 Taiwan 2005 (25,000)
  • 9.
    Europe Czech –$20,140(6.1%) Hungary-$16,940 (4.1%) Estonia -$15,420 (9.8%) Poland -$13,490 (3.4%) UK- $32,690 (1.8%) France - $30,540 (1.2%) Germany -$29,210 (1.0%) Italy -$28,840 (0.0%) Spain -$25,820 (3.4%) Russia -$10,640 (6.4%) Romania-$8,940 (4.1%) Turkey - $8,420 (7.4%) Ukraine-$6,720 (2.6%) GNI per Capita/ Growth Rate (PPP 2005 US$) (%Growth 2004-05) Source: World Bank Development Indicators Years to Double Size of the Economy Developed Countries Newly Emerging Markets
  • 10.
    Key steps topoverty reduction through growth: 1. Create a good investment climate 2. Create formal economy jobs 3. Empower the poor to participate in the economy Geography People/Culture Governance Infrastructure, Health, Education Indirect factors influencing investment decisions: Informal/ Sustenance Economy Private Sector Formal Economy 3. Health and education levels empower the poor to move into formal economy jobs 2. Private investment and export industries create jobs and help grow the formal economy 1. Key private sector investment decision factors:
  • 11.
    Six types ofunderlying factors help to explain a country’s ability to attract investment and grow Gross National Income (GNI) Economic Output Economic Performance GNI per capita % Industry % Agriculture % Services Governance Governance Rating: x% Competitiveness Index: x/125 Ease of Doing Business: x/175 Economy Poverty <1$ Between $1 and $2 > $2 Growth (1990-2003) % Investment (% GDP) % Exports (% GDP) % Imports (% GDP) % Unemployment (00-05) % Inflation (Avg. 1990-03) % Geography Climate Arable Land Net energy imports Natural resource Access to trade routes Natural Disasters People Population growth Net Migration Ethnic Groups/ Cultural Values Population age profile Infrastructure Paved Roads % Telecoms Internet/PC Reliable power Water/ Sanitation Health Life expectancy Child Mortality Immunisation AIDS% Tuberculosis % Education Male Literacy Female Literacy Primary Secondary Tertiary Political Stability Control of Corruption Democracy/People’s Voice Rule of Law Gov’t/Regulatory Effectiveness
  • 12.
    United Kingdom EconomicPerformance GNI/capita, PPP: $32,690 (2005) Services: 72% Industry: 27% Agriculture 1% France GNI: $2.169 trillion (2005) Population: 61 million (2005) Economic Output Economic Performance GNI/capita, PPP: $30,540 (2005) Services: 73% Industry: 24% Agriculture 3% Source: World Bank Development Indicators > $2 > $2 Economy Poverty Economy Poverty Growth (Avg. 1990-03) 2.7% Investment (% GDP) 16% Exports (% GDP) 25% Imports (% GDP) 28% Unemployment (00-05) 4.6% Inflation (Avg. 1990-03) 2.7% GNI: $2.273 trillion (2005) Population: 60 million (2005) Economic Output Growth (Avg. 1990-03) 1.9% Investment (% GDP) 19% Exports (% GDP) 26% Imports (% GDP) 25% Unemployment (00-05) 9.9% Inflation (Avg. 1990-03) 1.5%
  • 13.
    France (GNI/Capita,PPP $30,540) United Kingdom (GNI/Capita, PPP $32,690) Geography Temperate/ Continental Arable Land Net Energy imports Natural Resources Access to trade routes Natural Disasters People Births per woman: 1.9 Net migration: + .1% Governance Infrastructure Paved Roads 100% Mob Tel: 80% Internet :36.5% Reliable power Water/ Sanitation Life expect: 79 Child Mort: 0.5% Immun: 86% AIDS: 0.4% TB: 0.12% Health Education M Literacy: 99% F Literacy: 99% Primary: 99% Secondary: 93% Tertiary: 54% Ethnic Groups/ Culture Population age 0-14: 18.6% Governance Rating: 89% Competitiveness Index:18/125 Ease of Doing Business: 35/175 Sources: World Bank Development Indicators 2005, WEF Global Competitiveness Rankings 2006, World Bank Governance Index-2005, UN Population Division : Net Migration 1995-2000/Births per woman 2004, Koppen Climate Classification, ITU Mob/Internet Ranking 2005 Geography Temperate/ Continental Arable Land Net Energy imports Natural Resources Access to trade routes Natural Disasters People Births per woman: 1.7 Net migration: +.16% Ethnic Groups/ Culture Population age 0-14: 18.2% Governance Governance Rating: 90% Competitiveness Index:10/125 Ease of Doing Business: 6/175 Infrastructure Paved Roads 100% Mob Tel :112% Internet: 42.3% Reliable power Water/ Sanitation Life expect: 78 Child Mort: 0.6% Immun: 80% AIDS: 0.2% TB: 0.12% Health Education M Literacy: 99% F Literacy: 99% Primary: 99% Secondary: 95% Tertiary: 64% Political Stability Control of Corruption Democracy/Voice Rule of Law Gov’t/Reg Effect’ness Political Stability Control of Corruption Democracy/Voice Rule of Law Gov’t/Reg Effect’ness
  • 14.
    Asia … .butit is improving GNI per Capita/ Growth Rate (PPP 2005 US$) (%Growth 2004-05) Source: World Bank Development Indicators <1$ Between $1 and $2 > $2 <1$ > $2 Between $1 and $2 India China Extreme Poverty reduction since 1980 70 million fewer 400 million fewer Millions are living in poverty….. India (2004) China (2004) Hong Kong-$34,670 (7.3%) Japan -$31,410 (2.6%) Taiwan - $25,400 (5.0%) S. Korea-$21,850 (4.0%) Malaysia - $10,320 (5.2%) Thailand - $8,440 (4.5%) China - $6,600 (10.2%) Philippines - $5,300 (5.0%) Indonesia - $3,720 (5.6%) India - $3,460 (9.2%) Vietnam - $3,010 (8.4%)
  • 15.
    China GNI: $2.3 trillion (2005) Population: 1.3 billion (2005) Economic Output Services: 33% Industry: 52% Agriculture 15% India GNI: $804 billion (2005) Population: 1.1 billion (2005) Economic Output Services: 51% Industry: 27% Agriculture 22% Economic Performance GNI/capita, PPP: $6,600 (2005) Economic Performance GNI/capita, PPP: $3,640 (2005) Source: World Bank Development Indicators <1$ > $2 Between $1 and $2 Between $1 and $2 <1$ > $2 Economy Poverty Economy Poverty Growth (Avg. 1990-03) 10.3% Investment (% GDP) 44% Exports (% GDP) 34% Imports (% GDP) 32% Unemployment (00-05) 4.2% Inflation (Avg, 1990-03) 4.9% Growth (Avg. 1990-03) 5.9% (9.2) Investment (% GDP) 24% Exports (% GDP) 14% Imports (% GDP) 16% Unemployment (00-05) 5.0% Inflation (Avg, 1990-03) 6.8%
  • 16.
    India (GNI/Capita, PPP$3,460) Geography Temperate/ Continental Arable Land Net Energy imports Natural Resources Access to trade routes Natural Disasters People Births per woman:1.7 Net Migration: -.03% Ethnic Groups/ Culture Population age 0-14: 23.6% Governance Infrastructure Roads ND Mob Tel: 30% Internet: 6.3% Reliable power Water/ Sanitation Life expect: 71 Child Mort: 3.7% Immunis: 86% AIDS: 0.4% TB: 0.12% Health Education M. Literacy: 98% F. Literacy: ND Primary: 98% Secondary: 70% Tertiary: 15% China (GNI/Capita, PPP $6,600) Geography Tropical, Temperate, Dry Arable Land Net Energy imports Natural Resources Access to trade routes Natural Disasters People Births per woman 3.1 Net Migration: -.03% Ethnic Groups/ Culture Population age 0-14: 32.4% Governance Infrastructure Roads 57% Mob Tel 8% Internet: 1.7% Reliable power Water/ Sanitation Life expect: 68 Child Mort: 8.7% Immun: 67% AIDS: 0.9% TB: 0.26% Health Education M. Literacy: 95% F. Literacy: 81% Primary: 95% Secondary: 79% Tertiary: 28% Governance Rating: 43% Competitiveness Index:43/125 Ease of Doing Business: 134/175 Governance Rating: 38% Competitiveness Index:54/125 Ease of Doing Business: 93/175 Sources: World Bank Development Indicators 2005, WEF Global Competitiveness Rankings 2006, World Bank Governance Index-2005, UN Population Division : Net Migration 1995-2000/Births per woman 2004, Koppen Climate Classification, ITU Mob/Internet Ranking 2005 Political Stability Control of Corruption Democracy/Voice Rule of Law Gov’t/Reg Effect’ness Political Stability Control of Corruption Democracy/Voice Rule of Law Gov’t/Reg Effect’ness
  • 17.
    India is strugglingto improve its poor infrastructure in an effort to improve its capacity to grow
  • 18.
    3. Africacontinues to lag behiond
  • 19.
    Sub-Saharan Africa isnot on track to meet the UN Millennium Development Goals by 2015 √ - goal achieved √ - on-track x – not on-track √ - goal achieved √ - on-track √ - good progress Goal 1: Eradicate Extreme Poverty and Hunger TARGET Halve, between 1990 and 2015, the proportion of people whose income is less than $1 a day Goal 2: Achieve Universal Education TARGET Ensure that, by 2015, all children will be able to complete a full course of primary schooling Goal 4: Reduce Child Mortality TARGET Reduce by two thirds, between 1990 and 2015, the under-five mortality rate Goal 6: Combat HIV/AIDS, Malaria & Other Diseases TARGET Have halted by 2015 and begun to reverse the spread of HIV/AIDS
  • 20.
    30 out of48 African countries have GNI/capita less than $2,000 and are not well integrated into the global economy Source: World Bank Development Indicators - 2005 LIBYA EGYPT TUNISIA NIGER CHAD SUDAN – 5% ALGERIA MOROCCO MALI WESTERN SAHARA MAURITANIA SENEGAL IVORY COAST 7% LIBERIA GHANA 51% TOGO BENIN SIERRA LEONE BURKINA GUINEA NIGERIA GUINEA BISSAU THE GAMBIA CAMEROON CENTRAL AFRICAN REPUBLIC CONGO GABON EQUATORIAL GUINEA Democratic Rep of Congo ANGOLA TANZANIA ETHIOPIA KENYA UGANDA RWANDA BURUNDI SOMALIA DJIBOUTI ZIMBABWE ZAMBIA MOZAMBIQUE MADAGASCAR SOUTH AFRICA BOTSWANA NAMIBIA LESOTHO SWAZILAND MALAWI Red Sea GNI/Capita, PPP >$20,000 $10 – 20,000 $5-10,000 $2 – 5,000 < $2,000
  • 21.
    Paul Collier proposesa model of four traps to explain why some countries are unable to grow out of poverty The Conflict Trap The Natural Resource Trap Landlocked with bad Neighbours Current Conflicts: Somalia Cote d’Ivoire Chad Sudan Recent Conflicts: DRC Congo Republic Liberia Sierra Leone Nigeria – Oil Zambia – Copper Botswana – Diamonds Sierra Leone – Diamonds DRC – Diamonds, etc Chad – Oil Angola – Oil, Diamonds Malawi Central African Republic Burkina Faso Rwanda/ Burundi Uganda Chad Zimbabwe Somalia Chad/Sudan Nigeria Angola DRC Ivory Coast Source: The Bottom Billion, Paul Collier, Oxford University Press, 2007 Bad Governance Globalisation reinforces poverty for many poor countries Wealth of global investments opportunities highlights high risk of poorest countries for both foreign and local investors Even more difficult to compete against other Asian competitors such as India and China Increased emigration opportunities intensifies ‘brain drain’ of limited pool talent
  • 22.
    Malawi’s economy reflectschallenges typical of many African countries Services: 49% Industry: 15% Agriculture 38% <1$ > $2 Between $1 and $2 Economy Poverty Sources: World Bank Development Indicators 2005, WEF Global Competitiveness Rankings 2006, World Bank Governance Index-2005, UN Population Division : Net Migration 1995-2000/Births per woman 2004, Koppen Climate Classification, ITU Mob/Internet Ranking 2005 Geography Tropical wet and dry Arable Land Net Energy imports Natural Resources Landlocked Natural Disasters People Births per woman: 6.1 Net Migration: -.08% Ethnic Groups/ Religion Population age 0-14: 45% Governance Infrastructure Paved Roads 18.5% Mobile Tel: 3.3% Internet: 0.3% Reliable power Water/Sanitation Life expect: 37 Child Mort: 17.8% Immun: 77% AIDS: 14.2% TB: 0.44% Health Education M. Literacy: 76% F. Literacy: 49% Primary: 71% Secondary: 29% Tertiary: 0.4% Governance Rating: 31% Competitiveness Index:117/125 Ease of Doing Business: 110/175 Political Stability Control of Corruption Democracy/Voice Rule of Law Gov’t/Reg Effect’ness GNI: $2.1 billion (2005) Population: 13 million(2005) Economic Output Economic Performance GNI/capita, PPP: $650 (2005) Growth (Avg. 1990-03) 3.0% Investment (% GDP) 8% Exports (% GDP) 27% Imports (% GDP) 41% Unemployment no data Inflation (Avg, 1990-03) 31.1%
  • 23.
    Malawi Poverty ReductionStrategy (2004/05) WTO Doha Round Private Foreign Direct Investment Governance Infrastructure Paved Roads 18.5% Mob Tel: 3.3% Internet: 0.3% Reliable power Water/ Sanitation Life expect: 37 Child Mort: 17.8% Immun: 77% AIDS: 14.2% TB: 0.44% Health Education M. Literacy: 76% F. Literacy: 49% Primary: 71% Secondary: 29% Tertiary: 0.4% Governance Rating: 31% Competitiveness Index:117/125 Ease of Doing Business: 110/175 Political Stability Control of Corruption Democracy/Voice Rule of Law Gov’t/Reg Effect’ness Nurse Training Salary Top-ups Nutrition Programs HIV Youth training ICT Skill Training Rural Electricity Roads Projects Water Distribution Train 3000 Teachers 154 Teacher Houses 22 New Schools Educational Material Campus for Mzuzu Univ Female Scholarships Courtrooms & Judges Anti-Corrupt Bureau New Financial Systems Economic/ Industrial Policy Reform Services: 49% Industry: 15% Agriculture 38% Tourism Standards Agricultural Productivity Tourism Committee Small-scale Irrigation Off-shore Fishing Fish Farming Mobile Telephony Promote Small-scale Mining Increase Telecom Capacity Farmer cooperatives World Bank Projects EU Projects IMF/WB Debt Cancellation Other/NGO Projects UK DFID Projects UK DFID Projects UK DFID Projects
  • 24.
    Political instability andpoor governance have been problems in many African countries - but many conflicts are ending and governance is improving Source: World Bank Governance Indicators - 2005 Improved Governance Rating (1996 – 2005): Botswana (Corruption) Ghana (Democracy) Mozambique (Stability) Tanzania (Effectiveness) DRC (Democracy, Regulations) Nigeria (Democracy) Madagascar (Corruption) Liberia (Democracy) Senegal (Stability, Democracy) Political Stability - Year conflicts ended - Conflicts still unresolved 2007 2002 2002 1999 2003 1993 2003 2002 1992 1994 Other Developing Country Governance Ratings: China – 38% India – 43% Turkey – 47% Romania – 52% LIBYA – 22% EGYPT 36% TUNISIA – 51% NIGER – 29% CHAD - 11% SUDAN – 5% ALGERIA 29% MOROCCO 42% MALI 46% WESTERN SAHARA MAURITANIA 44% SENEGAL IVORY COAST 7% LIBERIA GHANA 51% TOGO BENIN SIERRA LEONE BURKINA GUINEA NIGERIA 14% GUINEA BISSAU THE GAMBIA CAMEROON CENTRAL AFRICAN REPUBLIC CONGO GABON EQUATORIAL GUINEA Democratic Rep of Congo – 3% ANGOLA 14% TANZANIA 36% ETHIOPIA – 18% KENYA 26% UGANDA 30% RWANDA BURUNDI SOMALIA 0% DJIBOUTI ZIMBABWE 5% ZAMBIA 31% MOZAMBIQUE 38% MADAGASCAR 50% SOUTH AFRICA 64% BOTSWANA 74% NAMIBIA 58% LESOTHO SWAZILAND MALAWI 34% Red Sea World Bank Governance Rating 2005 75% 50- 75% 25 – 50% 10 – 25% 0 – 10%
  • 25.
    Africa’s economic growthsince the mid-1990’s is more promising for poverty reduction, but diversification away from commodities is still a challenge Source: World Bank, African Development Indicators, 2007 Annual GDP Growth (2000-2005) > 5% - 18 countries 3- 5% -16 countries 1-3% - 6 countries < 1% - 6 countries Countries with Average Growth Greater than 5%, 2000-2005 - Sustained, diversified growth - Dependant on oil as major export LIBYA – 5.3% EGYPT 3.7% TUNISIA – 4.5% NIGER 3.7% CHAD 14.5% SUDAN 6.1% ALGERIA 5.1% MOROCCO 4.3% MALI 5.9% WESTERN SAHARA MAURITANIA 4% SENEGAL IVORY COAST -0.1% LIBERIA GHANA 5.1% TOGO BENIN SIERRA LEONE 13.7% BURKINA FASO 5.6% GUINEA NIGERIA 5.9% GUINEA BISSAU THE GAMBIA CAMEROON 3.7% CENTRAL AFRICAN REPUBLIC CONGO GABON EQUATORIAL GUINEA 23.2% DEM REP CONGO 4.4% ANGOLA 9.9% TANZANIA 6.5% ETHIOPIA 4.7% KENYA 3.4% UGANDA 5.6% RWANDA 5.1% BURUNDI 5.6% SOMALIA DJIBOUTI ZIMBABWE (5.7%) ZAMBIA 4.7% MOZAMBIQUE 8.4% MADAGASCAR 2.0% SOUTH AFRICA 3.9 BOTSWANA 5.9% NAMIBIA 4.7% LESOTHO 2.9% SWAZILAND 2.5% MALAWI 3.4% Red Sea
  • 26.
    South Africa’s diversifiedeconomy still has its issues but provides hope for African growth GNI: $223 billion (2005) Population: 47 million(2005) Economic Output Economic Performance GNI /capita, PPP: $12,120 (2005) Services: 65% Industry: 31% Agriculture 4% Economy Poverty <1$ > $2 Between $1and $2 Sources: World Bank Development Indicators 2005, WEF Global Competitiveness Rankings 2006, World Bank Governance Index-2005, UN Population Division : Net Migration 1995-2000/Births per woman 2004, Koppen Climate Classification, ITU Mob/Internet Ranking 2005 Growth (Avg. 1990-03) 2.3 (4.9)% Investment (% GDP) 17% Exports (% GDP) 28% Imports (% GDP) 26% Unemployment (00-05) 27.1% Inflation (Avg, 1990-03) 9.0% Geography Dry, Temperate, Continental Arable Land Net Energy imports Natural Resources Access to trade routes People Births per woman: 2.8 Net Migration: -.01% Ethnic Groups/ Culture Population age 0-14: 32% Governance Infrastructure Paved Roads 21% Mob Tel: 72% Internet: 6.8% Reliable power Water/ Sanitation Life expect: 46 Child Mort: 6.6% Immun: 83% AIDS: 15.6% TB: 0.5% Health Education M. Literacy: 87% F. Literacy: 85% Primary: 99% Secondary: 65% Tertiary: 15% Governance Rating: 64% Competitiveness Index:45/125 Ease of Doing Business: 29/175 Political Stability Control of Corruption Democracy/Voice Rule of Law Gov’t/Reg Effect’ness
  • 27.
    4. Mobile telephonyis a key enabler for ending extreme poverty
  • 28.
    Mobile telephony hasa broad range of benefits appropriate to fighting poverty in developing countries Mobile Telephony Telecom infrastructure Emergency and distance health benefits Access to internet Infrastructure, Health, Education % Industry % Agriculture % Services Increased Mobile penetration increases GNI Growth Faster Overall Growth Productivity Benefits Across All Sectors: Access to agriculture market prices and other information Jobs in rapidly growing telecom sector Low-cost enabler for micro-businesses Banking for previously ‘unbanked’ Increased international remittances Innovative use of text services New Targeted Services
  • 29.
    Vodacom in theDemocratic Republic of Congo (DRC) is an example of how private investment in mobile telephony can create jobs in Africa Using cellular networks to ‘leapfrog’ fixed line technology In 1997 less that 15,000 landlines for 65m people Vodacom grew to 3 million mobile subscribers since 1997 Alieu Conteh, founder and chairman of Vodacom Congo showed entrepreneurial possibilities Now one of the country’s biggest employers 600 employees/ 5,000 contractors Planning to create the country’s first stock market and float Vodacom Congo in a public offering Source: The New York Times, 17 th June, 2007, What Does Africa Need Most: Technology or Aid?
  • 30.
    5. There isan ongoing debate about what needs to be done to fight poverty
  • 31.
    The Optimists: Poverty can be eliminated in Africa – more aid is needed for a ‘big push’ Jeffery Sachs: UN Millennium Development Goals can be met, but would cost $150-200 billion a year in aid by 2015 2005 G8 Glen Eagles Summit leaders pledged to double aid to Africa from $25 to $50 billion per year by 2010 Bob Geldof’s Africa Commission and Live8 supported more G8 aid funding Bono: Led debt relief campaign and foreign aid increases in US Bill Gates using resources to address treatable diseases Tony Blair, Gordon Brown, Bill Clinton global poverty initiatives
  • 32.
    Jeffery Sachs advocatesa number of simultaneous interventions at the village level for sustainable development Infrastructure Health Education Millennium Villages Agriculture Road improvements and community vehicle access Internet and mobile telephony access Electricity for small businesses Nutrition and clean water Health services and facilities HIV/AIDS, TB and Malaria Treatment Primary and secondary education Eliminate gender disparity ICT training Agricultural productivity and training Irrigation, fertiliser Support new village businesses 79 Millennium Villages operating or planned in twelve different countries in Africa: Ethiopia, Ghana, Kenya, Madagascar, Malawi, Mali, Mozambique, Nigeria, Rwanda, Senegal, Tanzania and Uganda.
  • 33.
    The Pessimists: Aidhas not been effective Temporary Famine Relief? Where has $2.3 trillion in foreign aid over past 50 years gone? Corrupt and wasteful Bureaucrats? Swiss bank accounts?
  • 34.
    Paul Collier proposesa more balanced agenda for action to tackle poverty in the poorest countries The Conflict Trap The Natural Resource Trap Landlocked with bad Neighbours Source: The Bottom Billion, Paul Collier, Oxford University Press, 2007 Bad Governance Globalisation reinforces poverty on many poor countries Military support for post-conflict countries Charter for post-conflict governance Aid for reconstruction International laws and norms for resource wealth Substantial aid to develop infrastructure and for basic social services Military support to prevent coups Trade policies encouraging exports Intelligent use of aid to encourage reform Selected use of military intervention (e.g. Sierra Leone) ‘ Big Push’ temporary aid for export infrastructure Temporary trade protection from Asian competitors
  • 35.
    7 things youcan do to help fight global poverty Educate yourself about the causes and solutions of poverty Vote and let your politicians know you care about global poverty Contribute to organisations fighting poverty Buy fair trade goods Invest in companies that trade ethically Volunteer for NGOs fighting poverty – build a school! Tell others about poverty – give a presentation to your child’s school

Editor's Notes

  • #2 My interest in international politics and economics comes from my interest in understanding how the world works as a whole Comparing differences between different countries Understanding how and why thing as are so different in different parts of the world, yet some things such as basic human nature we are still pretty much the same How the world is changing through technology, trade and globalisation to bring us closer together and more aware other countries Understanding the new global issues that all nations are increasingly being forced to address such as Climate Change, AIDs, terrorism, immigration, and perhaps the biggest issue of all - Poverty As an American, I really struggled to learn about what was happening in other countries and it is given surprisingly little coverage in the mainstream media It is true that Americans know surprisingly little about the rest of the world Things are different in the UK, Europe, and the rest of the world, but global issues such as globalisation and international economics are very complex and difficult for anyone to understand - There is also a lot of misinformation about some issues where people ‘villify’ corporations, countries (such as China and India), or the whole global trading system that can be part of the solution and not the cause. So my idea is to develop easily accessible ways for people to understand these global issues such as the Pictures, Maps and Diagrams in this presentation – and maybe interactive web-sites or other media in the future And I would like to target young teenage audiences Partly because if you can understand it then adults and the general public should be able to understand it But also to encourage young people to take an interest in these issues as they are going to being increasingly important over the years and we will need to get more people involved in finding solutions to these issues