Off Topic Messages

Throwing Money Into The Poverty Pit

Wed Sep 21, 2005 5:31 pm

Millennium Flop
by Alvaro Vargas Llosa
21 September 2005

Since 1948, not a single country has significantly reduced poverty as a result of foreign aid.



Dozens of heads of state are gatherer in New York last week for a U.N. summit that will discuss, among other things, foreign aid. According to a U.N. progress report, the Millennium Development Goals, one of which is to halve extreme poverty by 2015, will almost certainly not be achieved. Despite the fact that in 2004, foreign aid reached a record 80 billion dollars, the report concludes, “in low-income countries higher levels of aid are needed.”

Foreign aid was invented in 1948 with President Truman’s Four Point Program. In almost six decades, some 2.3 trillion dollars have been dished out worldwide to poor countries by rich ones -- about half the cost of World War II! In that time, not a single country has significantly reduced poverty as a result of foreign aid.

If we examine U.S. foreign aid in the last decade, we find that there is no relation between these transfers and the reduction of poverty. In Egypt, extreme poverty as a percentage of the population has remained the same despite the money given to that country, the second biggest beneficiary of U.S. largesse. China, while receiving two thousand times less aid than Egypt, reduced extreme poverty by half. Bolivia, one of the eleven biggest recipients of U.S. assistance, has managed to double the percentage of people living in extreme poverty.

If the world’s top leaders lacked information about the causes of the wealth of nations, one might understand why this week’s summit is filled with bad-conscience rhetoric. But the causes of the wealth of nations are well known: open economies and secure property rights. The countries that are moving in that direction are reducing poverty; those that are not are getting worse. (On average, the first type of countries reduced poverty from 60 to 19 percent of the population in the last three decades, while the second type has managed only a twelve percent reduction.) What has helped Chile become a country on the path to development is not foreign aid, which it has received in negligible amounts, but economic reforms that have lured 100 billion dollars of productive investment since the mid-1970s.

One wonders why a learned man like Jeffrey Sachs, who until a few years ago advised poor countries to open their economies, is today the intellectual force behind the Millennium Development Goals approach. He is pushing rich countries to devote 0.7 percent of their GDP to foreign aid. He argues the figure is not arbitrary because it would take 0.6 percent of their GDP to give one dollar every day to the more than one billion destitute people worldwide. But, as economist Surjit Bhalla has responded, if you take into account the fact that one dollar will buy you different amounts of goods and services in different countries, in terms of purchasing power, foreign aid already adds up to twice the amount needed to give one dollar a day to every destitute person!

In fact, aid to the least developed countries has consistently gone up in absolute terms. In the last fifteen years, the U.S. has doubled the aid given to those nations. The United Kingdom has almost tripled it. Australia, Germany, the Netherlands, and Spain have expanded theirs by between 50 and 60 percent.

Foreign aid has become a propaganda tool. It does not have as much to do with alleviating poverty as with blaming rich countries for being rich. It is interesting to note that the U.N. report includes detailed lists of how much aid each donor country is giving but not of how much aid each recipient country is getting. In other words, the donors, rather than the beneficiaries, are accountable for the money!

It is no surprise extreme poverty will not be halved by 2015. It is only because of China and India, two countries that have been opening up their economies, that extreme poverty has been somewhat reduced in total numbers since 1990. In Sub-Saharan Africa, where a large portion of foreign aid is destined, extreme poverty has actually risen by two percentage points; in Latin America it has declined by just over one percent! Very few countries in Sub-Saharan Africa have engaged in major reform; and in Latin America, reform has been half-hearted or misguided compared to reform in Central Europe or Eastern Asia.

The perversion of foreign aid is that it creates a dependency that makes it very difficult to eliminate it in the future because of the suffering this might bring. That is not to say people in rich countries should not be free to make private donations. Of course, they should and they do. But unlike private donors, governments are driven by political pressure to persist in their policies at the expense of citizens who have no choice in the matter.

Politicians tend to idolize poverty. But poverty is a horrible condition. Precisely because getting rid of it is a very worthy goal, the U.N. should focus on reform and on those aspects of its report that are more relevant to development, such as the need to reduce protectionism. Currently, one third of the exports from developing nations are subjected to trade barriers in wealthy nations. Why not direct all that political energy to getting rid of commercial barriers rather than pushing rich nations to throw more capital into the bottomless pit?

Wed Sep 21, 2005 5:39 pm

Eagle -

You wrote:
In that time, not a single country has significantly reduced poverty as a result of foreign aid.


But how many hungry bellies have been filled ?

How many lives have been saved ?

Surely they are important statistics, too ?

Wed Sep 21, 2005 8:20 pm

Yes, Colin, those are important to remember. I do think that it's more important, however, for us to wake up and realize that this isn't a problem that monetary contributions will ever solve. There's a root cause to every problem and this one is not being properly addressed.

Wed Sep 21, 2005 8:32 pm

Eagle -

Many people in the world are hungry.

The root cause ?

They don't have enough to eat !

'Monetary contributions' can put food in their bellies and save their lives.

Sorting out the reasons why they have a lack of food and putting that right are a separate problem, which also needs financing.

Either way, they need cash !

Denying them this will solve nothing.

Wed Sep 21, 2005 8:36 pm

Colin wrote:
Many people in the world are hungry.

The root cause ?

They don't have enough to eat !



No...I'd venture a guess that the root cause of increased starvation isn't that we can't keep up with doling out money and free food...it's that we've overproduced human beings in areas with limited resources to provide the necessary basics.

Wed Sep 21, 2005 8:38 pm

EagleUSA wrote:Colin wrote:
Many people in the world are hungry.

The root cause ?

They don't have enough to eat !



No...I'd venture a guess that the root cause of increased starvation isn't that we can't keep up with doling out money and free food...it's that we've overproduced human beings in areas with limited resources to provide the necessary basics.


Better round them up and shoot them then!

Wed Sep 21, 2005 8:42 pm

TJ wrote:
Better round them up and shoot them then!


I don't normally condone that sort of thing, TJ...but if you're serious, I'd consult the gun control activists for their opinion.

Wed Sep 21, 2005 8:42 pm

TJ -

You wrote:
Better round them up and shoot them then!


Hey, ammo costs money, you know !

Cut off their aid, and let nature take its course.

Wed Sep 21, 2005 8:49 pm

ColinB wrote:TJ -

You wrote:
Better round them up and shoot them then!


Hey, ammo costs money, you know !

Cut off their aid, and let nature take its course.


Careful though, not sure everyone gets sarcasm.

Wed Sep 21, 2005 8:54 pm

TJ -

You wrote:
Careful though, not sure everyone gets sarcasm.


You're warning me ?

What about your 'round em up & shoot em' ?

Wed Sep 21, 2005 8:55 pm

You mean neither of you guys were serious?

Wed Sep 21, 2005 8:58 pm

ColinB wrote:TJ -

You wrote:
Careful though, not sure everyone gets sarcasm.


You're warning me ?

What about your 'round em up & shoot em' ?



It applied to mine too :) Think I'm being slow anyway. Eagle wasn't serious. Long day :?

Wed Sep 21, 2005 9:02 pm

8 million people lived in Ireland before the "Great Famine" (Starvation! Food was being exported from the country at the time)

Tens of thousands died of hunger and many more left the country in "coffin ships" to America, and on cattle boats to England, and others were shipped, against there will, to Australia.

Native Americans sent us money!!!

I suppose the poor should have ate cake instead of the rotting potatoes?Ireland's population is now about five and a half million for the whole island.

According to JFK when he came here in the 60s, "Ireland is the best fed country in the world"......well that was well before KFC and MacDonald's arrived!

Wed Sep 21, 2005 9:02 pm

It is a complicated picture and I'm aware that foreign governments
such as those in Africa are among the most corrupt , and are especially brutal to their own people, never mind Mother Nature, etc.

I just wanted to say that I stumbled upon some an extremely
sad TV report from the BBC News on cable the other night
about the famine in Niger. Mothers and their babies, todders, etc.
covered with flies- and starving. One mother has to walk by a fruit
stand each day because she can't afford the now inflated prices- it
did finally rain. And they did talk about how aid can screw up the market system, etc.


Such images are, sadly, almost cliched. But it killed me to see it.
Heartbreaking, even. We were stunned watching it - and normally
I'm kind of cold-hearted about the news.

It sort of puteven the devastation to of the USA's gulf coast to shame.
No Americans are starving or have to right now. Seeing little
babies with bloated stomaches covered with flies, well, it makes
you ashamed to be typing away on this mb, to be honest.

Africa is a total mess. I hope the world can do something about it.

It's enought to make you sentimental about the colonial period.

And I've been hearing about famine since the '80s.

Here are two of the links that deal with it:


http://www.ifex.org/en/content/view/full/69348/
http://news.bbc.co.uk/2/hi/africa/4239888.stm
Last edited by Gregory Nolan Jr. on Wed Sep 21, 2005 9:13 pm, edited 1 time in total.

Wed Sep 21, 2005 9:05 pm

ColinB wrote:Eagle -

Many people in the world are hungry.

The root cause ?

They don't have enough to eat !


- this is also caused by a drastic reduction in agricultural careers.

Not many guys and gals want to be farmers.

vegetables...dairy...livestock...BORING!

Many generations now want to go to the big city and be rock stars, and models, and movie stars, and Elvis experts, and all sorts of exciting things to get them off the farm - if they ever did grow up on one to begin with.

Over the decades there has been a depletion of soil used for growing FOOD in opt for becoming parking lots, theme parks, whatever.

and how many farmers are out there dilligently sowing and harvesting FOOD at this moment?

- not as many as there used to be.

Not as many.

That anti-ag syndrome does not contribute to hunger?
Last edited by Graceland Gardener on Wed Sep 21, 2005 9:17 pm, edited 1 time in total.

Wed Sep 21, 2005 9:15 pm

G G -

The world is awash with surplus food.

It just isn't in the right places, that's all.

Wed Sep 21, 2005 9:20 pm

Well, if you're referring to the US, as you seem to be,
"family farms" have sadly become a thing of the past.

The economics of it I think drives the cultural denigration of farming.

Agr-Business has very much taken over. If one looks around,
you can still find some family farms, but it's sadly very yester-year.

And it's true: we glamorize a lot of garbage that is never going
to pan out for people: "Careers" (lots of luck) as sports stars,
rappers ( :roll: ) movie stars, etc.

And we do tend to look down in the US on folks who work with
their hands and sweat, etc. Now that techology has taken over,
we have many kids who learn in schools only the glamour
of "high-tech" jobs - in offices.

Shortly in the U.S. we're going to have major vacacencies in the jobs
like the construction trades. A lot of these jobs actually offer
strong wages and benefits - unlike office cubicle computer jobs.

And given another disaster, sadly many people in the US have
forgotten how to be self-sufficient. And I speak for myself even.

We're more remote from producing what we live off of then ever before.

I guess Africa would like to have that kind of problem.

Wed Sep 21, 2005 11:38 pm

Greg -

You wrote:
Well, if you're referring to the US, as you seem to be, "family farms" have sadly become a thing of the past.


Don't be so defensive !

I didn't single out the US !

Europe has its fair share of butter mountains etc.

Wed Sep 21, 2005 11:57 pm

Nothing like having a "room" full of guys talking past each other.

:lol: :lol: :lol:

Thu Sep 22, 2005 2:13 am

ColinB wrote:G G -

The world is awash with surplus food.

It just isn't in the right places, that's all.


Right...and you think we should make people put it in the right place? Gotta love that socialism at work. Why strive to be better when you can steal it from you fellow man and redistribute how ye sees fit.

Thu Sep 22, 2005 10:40 am

geno -

You wrote:
Right...and you think we should make people put it in the right place? Gotta love that socialism at work. Why strive to be better when you can steal it from you fellow man and redistribute how ye sees fit.


Why strive to be better ?

These people are starving because they're lazy, are they ?

Being a right-wing reactionary doesn't mean you have to stop being a humanitarian, does it ?

You don't have to give up normal compassion for your fellow man when you join this club, do you ?

Looks like you have !

Thu Sep 22, 2005 11:37 am

Just a few weeks back I was watching a documentary regarding starvation in Africa (sadly I missed the beginning), and I was completely surprised when it turned out that the countries receiving foodhelp are forced to quit with their own farming (dont remember exactly what products). Otherwise they wouldnt receive any help.
The help giving countries produced the same products as the poor ones, so they wanted the market for them selves.
They interviewed farmers and they showed their farms, now empty, not in use.
The poor countries are trapped in a circle. If they farm what they can and want, they get no foodhelp, if they dont, they get food but cant make the situation better for themselves.
This is perhaps not very common (I hope), but it shows everything isnt always black&white...
I believe there is much that can be done to make things better, in many ways.
I also believe that similar things like this can be a part of why the problem never seems to go away...

Thu Sep 22, 2005 5:55 pm

Colin B,

Last time I saw, I paid my taxes. It isn't like the U.S.A. is devoid of their share of socialism.

As for me "not caring". That is a crock of bullsh*t. I lost a healthy part of my retirement to United Way as well as me NEVER passing a donation drive without dropping in money. I can't count the number of times that I was gonna buy something and I just said f*ck it, and dropped the rest in to the Salvation Army plate. And even though I hate it, I have on occasion even gave money to beggers. I remember a time that my Exwife and I gave these two stinky strangers a ride. Stupid for sure, but I believed their story. I got them to a shelter, and felt better for it. Maybe I was duped, but I don't like to think so.

Funny but the deeds always seemed to find a way to pay me back later, and I never missed the money.

What makes me angry is people like you who accuse me of not caring or giving up normal compassion, when I simply state how it is possible to work your way up from nothing. Plus you make the assumption that I think ALL starving people are lazy. There are always the ones that have no choice. For those..again, I pay taxes and they are accounted for. The ones I have a problem with, are the one's that milk the system.

P.S. I can't help it. Though it is opposite to this post..remember Groucho stating from Monkey Business-"I have worked my way up from nothing to a state of extreme poverty! :lol:

Thu Sep 22, 2005 6:01 pm

Geno -

You wrote:
What makes me angry is people like you who accuse me of not caring or giving up normal compassion


I guess it's just the cold-hearted way you post on here.

Your latest post has shown a modicum of improvement.

There's hope for you yet !

Thu Sep 22, 2005 6:06 pm

Right Colin, as if anything I say on here is the whole story. You see from any other posts, that if I make any kind of personal reference, it would come back on me full turn. Although "modicum" is hardly the word...unless you are implying that my improvement doesn't mean I need much since I have contributed all along.

Never said I disliked you Colin. We disagree on pollitics, but remember I pmed you before, and there is no way I would compare you with some of the animals that post here.