Foreign Aid FAQs – #9 “They’re poor because they’re lazy”

Foreign Aid FAQs – #9 “They’re poor because they’re lazy”

A common attitude nowadays is that people are rich because they work hard and deserve to be wealthy, whereas people are poor because they are lazy, feckless and incapable. Does this idea hold up?

Many people living in developing countries actually work far harder than their counterparts in the developed world. For example, Mexico and Costa Rica have the longest average weekly working hours of the OECD countries at 42.9 and 42.6 hours respectively. Compare this with the average working week in the United States of 34.4 hours, and in the UK of 32.3 hours.[1]

People living in poverty aren’t in that position because they’re too lazy to earn a decent wage. They’re in that position because their national economies aren’t very productive. For example, poor soil quality and a lack of mechanisation in agriculture mean that many farmers in developing countries have to spend many hours performing back-breaking work just to produce enough food to feed themselves and their families, let alone produce a surplus to sell.

Many people living in the world’s poorest countries have no option but to send their children out to do manual labour, just to earn enough money to eat. The idea that these parents are so heartless that they would put their own children through this misery just out of their own laziness is not only offensive but downright ludicrous.

We tend to lose sight of the role that luck plays in our lives. The lottery of birth is still an extraordinarily powerful determinant of how someone’s life will turn out.

Those of us living in rich countries such as the UK benefit from centuries of history and economic development which we had absolutely no part in. It is because of this history that we have effective public institutions, democracy, high quality education and healthcare, comparatively high-paying jobs, etc. A person born in a rich country has a far greater chance of having a good standard of living than if that exact same person had been born in a developing country.

The concept of natural economic justice – that people are rich or poor purely as a result of their own individual talent and effort – is both dangerous and demonstrably false. The world is full of examples of lazy, untalented rich people who are wealthy because of who their parents were; and intelligent, talented, hard-working poor people who, because of circumstances beyond their control, haven’t had the opportunity to improve their lot in life.

The successful American investor Warren Buffett put it well when he expressed humility at the extent to which his own personal talent was responsible for his success:

I personally think that society is responsible for a very significant percentage of what I’ve earned. If you stick me down in the middle of Bangladesh or Peru or someplace, you’ll find out how much this talent is going to produce in the wrong kind of soil. I will be struggling thirty years later. I work in a market system that happens to reward what I do very well – disproportionately well. [2]

It’s important to recognise that how our life turns out is not only a result of our individual skill and effort, but are in large part down to luck. Donating to international development charities and supporting foreign aid to help those living in poverty overseas is, in part, recognition that if the lottery of birth had turned out differently, we could so easily have been in their position ourselves.

[1] www.fortune.com/2015/11/11/chart-work-week-oecd/
[2] Quoted in Ha-Joon Chang, 23 Things They Don’t Tell You About Capitalism, p. 30.


The views expressed in this article are those of the author and do not necessarily represent the views of Development in Action.

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Foreign Aid FAQs – #8 “Why has nothing been achieved?”

Foreign Aid FAQs – #8 “Why has nothing been achieved?”

The fight to eradicate global poverty has been going on for decades. Yet despite all the money that has been donated and all the work that has been done, international development charities are still running adverts showing how horrendous the situation is in some countries around the world and asking for money to help. This is understandably frustrating – What on Earth did they spend all that money on if not to solve this problem? you may think, Either they wasted the money or they’re too incompetent to spend it correctly – either way, they’re not getting any more of my money!

The first thing to say in response to this is that an enormous amount has been achieved in the field of international development. For example, below are some key achievements of UK foreign aid since 2011:[1]

  • 11 million children supported into education.
  • 30 million people prevented from going hungry.
  • 7 million malaria nets distributed.
  • 5 million people given access to clean water and sanitation.
  • 67 million children immunised against preventable diseases.
  • 13 countries supported to have freer and fairer elections.

Yet despite all this progress, the task is far from complete. Poverty has not been eradicated, and billions of people around the world still have a standard of living which is far below what most people in the developed world experience.

So why has this issue not been solved yet? Part of the reason is the sheer scale of the problem. More than 60% of the world’s population live on less than $7.40 a day – the amount which it has been calculated is required to achieve normal human life expectancy of just over 70 years.[2] That’s about 4.2 billion people. Each year, rich countries spend around $125 billion on foreign aid, which is an awful lot of money. But divide this by 4.2 billion people and it works out at just $30 each per year, or $0.08 a day. So while the generosity of people in the developed world has meant that a large amount of money is devoted to tackling global poverty each year, unfortunately it is still not enough given the scale of the problem.

Another reason is that global poverty is an ongoing problem. For instance, vaccinating children against preventable diseases is not a one-time fix, but something that needs to be done again and again for each new generation. Lots of work has been done to get developing countries to a stage where they are self-sufficient, for example South Korea was previously an aid recipient but is now not only self-sufficient but is itself an aid donor. However, until this is achieved for every country, some will still require ongoing assistance.

Climate change is undoing some of the good work which has been done over the years, and is creating additional work which needs to be done. Developing countries have been hit hardest by climate change, having to cope with more frequent extreme weather events and droughts, and falling crop yields. They are having to spend a lot of money just adapting to climate change, never mind actually improving their situation. For example, climate change adaptation costs Sub-Saharan African countries a total of $10.6 billion a year.[3]

Progress in eradicating global poverty has not been as rapid as we may have liked because of growing global inequality. The gap between rich and poor has been steadily growing to the point where now 8 billionaires have the same amount of wealth as the poorest half of the world’s population.[4] This extreme level of inequality is a major barrier to developing countries reaching a point where they are self-sufficient.

It’s important to be honest about the limitations of aid. The sheer scale of global poverty means that charity alone cannot solve the problem. Nor can it, when what is given to developing countries with one hand in the form of foreign aid is taken with the other through debt repayments, repatriation of corporate profits, tax avoidance, unjust trade rules, land grabs, etc. (see this article for more information).

Aid and charity have an important part to play in the eradication of poverty, but they must be accompanied by the creation of a global policy environment which supports developing countries and gives them a fair chance at catching up with their rich counterparts, rather than the current policy environment which is rigged in favour of the rich and has allowed an ever greater proportion of global wealth to be concentrated in the hands of a few. Only when this is achieved will we be able to eradicate global poverty for good.

[1] www.gov.uk/government/uploads/system/uploads/attachment_data/file/538878/annual-report-accounts-201516a.pdf
[2] www.theguardian.com/global-development-professionals-network/2015/nov/01/global-poverty-is-worse-than-you-think-could-you-live-on-190-a-day
[3] www.healthpovertyaction.org/wp-content/uploads/downloads/2014/08/Honest-Accounts-BRIEFING-webFINAL.pdf
[4] www.theguardian.com/global-development/2017/jan/16/worlds-eight-richest-people-have-same-wealth-as-poorest-50


The views expressed in this article are those of the author and do not necessarily represent the views of Development in Action.

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GDP and its usefulness as a developmental indicator

GDP and its usefulness as a developmental indicator

Globally, whenever policy-makers promise to deliver “growth”, they are often exclusively referring to Gross Domestic Product. But is this really the best way to measure economic growth? Economies are complex with their web of internal and external feedback loops. Hence, does GDP accurately reflect all that complexity, or is the indicator too simplistic? Cameron Broome will evaluate the usefulness of GDP as an indicator of development.

In the 1930’s, America was plunged into a deep economic depression as a result of the Wall Street Crash, caused by currency speculation and “margin-buying”. Influenced by the work of John Maynard Keynes, President Roosevelt was keen to adopt expansionary fiscal policies to revive the US economy. However, before designing policy-prescriptions, Roosevelt wanted to improve his understanding of the state of the economy. Only sketchy data such as stock indices and freight car loading was available. Thus, Simon Kuznets and his team developed the first set of national income accounts, akin to what we now refer to as “GDP”.

David Hall/Creative commons license
David Hall/Creative commons license

Gross Domestic Product refers to the sum of the value of goods and services produced within an economy in a given period of time; “real” means the figure has been adjusted for inflation, while “per capita” means the total value has been divided by the population size. GDP is simple, easy to understand and facilitates (historical) comparison between countries.

However, GDP does not take into account the economic effects of environmental degradation. In Kenya in 1963, land cover by forest was 10%. By 2006, this had dropped to 1.7%. Deforestation creates huge amounts of valuable timber; if sold, GDP increases, indicating an increase in “growth”. But Kenya’s economy relies heavily on agricultural exports (e.g. tea and flowers) and eco-tourism. Deforestation increases the risk of soil erosion and desertification, damaging Kenya’s ecological health. Agricultural yields could be thus be reduced leading to a loss of income. Eco-tourism revenues could also be diminished, due to the deterioration of Kenya’s physical environment. Hence, overall, deforestation is likely to have negative economic impact on Kenya (and that is before you even consider the economic losses resulting from global warming, fuelled by deforestation). But GDP suggests deforestation results in a net economic benefit, highlighting the simplicity of the indicator.

Real GDP per capita also refers to an average hypothetical citizen and ignores inequality; GDP may increase but only a limited few may be better off. Income and wealth inequalities matter because they can weaken future economic growth prospects. Politically, inequality can fuel anti-globalization sentiments, as exhibited by Britain’s EU referendum result. Social and political instability of this kind not only makes countries less attractive in terms of foreign direct investment but it can also fuel the resurgence of dangerous economic nationalism. Significantly, low-income households also have a higher “marginal propensity to consume” than higher-income households. After taxation and mandatory spending, low income households have little disposable income left. Overall, they are thus more likely to spend a higher percentage of their income than high income households. Hence, by redistributing wealth from higher income households to lower income households, economic growth is likely to be stronger. Scholars like Stiglitz refer to this as “trickle-up economics”, in contrast to “trickle-down economics” as part of orthodox economic thinking.

The biggest question of all is does uber-consumption really make us happy? It is a remarkable paradox that despite being at an historic global high in terms of technical advancement and technological development, global levels of happiness are low (with high spatial geographical variation). Western societies are often anxiety ridden, burdened by mental health issues. The pursuit of money can reduce leisure time, particularly with family. Illustrating this idea, a recent poll suggests that 65 per cent of employees on zero hours contracts are happy with their work-life balance, compared to 58 per cent of people on regular contracts. Thus, Sweden have introduced a six hour work day to try improve the work-life balance of Swedes. Stressed individuals are likely to be less productive; they are also more likely to be ill (both mentally and physically) leading to greater healthcare costs. Hence, some scholars suggest development indicators should reflect levels of happiness.

PROCIFOR/Creative commons license
PROCIFOR/Creative commons license

Undoubtedly, there will never be a perfect indicator of development. Measuring happiness is difficult and highly subjective. Estimating the economic losses from environmental degradation is also difficult; ecosystems are complex with their web of internal feedbacks. In addition, wealth is often hidden in secretive offshore bank accounts. Hence, attempting to measure all three of the variables discussed in one indicator is an impossible task. Instead, policy-makers should use a range of indicators to measure development, each focused on a particular element of economic activity. GDP is still a useful indicator. But it is far too simplistic to be used on its own, as it offers a very narrow view of a country’s development.


The views expressed in this article are those of the author and do not necessarily represent the views of Development in Action.

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Tax avoidance and International Development: An Elephant in the Room

Tax avoidance and International Development: An Elephant in the Room

Following the Panama Papers, Aaron Cohen-Gold examines the need to put international tax avoidance at the heart of the development agenda.  

The Panama papers revealed many secrets. The tax affairs of the Cameron family; the hypocrisy of the Icelandic President; the gross behaviour of select Multi-National Companies (MNCs); and the complicity of British territories in tax avoidance schemes worth hundreds of billions of dollars a year.

But one revelation, conveniently overlooked, encapsulates the tale of global inequality better than any other: the sheer number of African businessmen, officials and Western MNCs willingly cheating the world’s poorest continent out of billions of dollars. Consider Uganda, where oil and gas companies diverted $400 million of tax through offshore accounts in Mauritius; or the corrupt Tanzanian ring of officials and businessmen who leaked $120 million of tax from national energy providers; or Kenya’s second most senior judge, linked to 11 different companies in the British virgin Islands worth over $100millions dollars. All this on a continent where 414 million people live on less than $1 a day.

Those on the political right use such observations to call for disengagement from Africa; they question why we should provide aid to a continent being plundered, often most ruthlessly, by its own leaders. On a purely economic plain, divorced from the very real social, health and economic benefits of aid, their frustration is justified.

Matthew Straubmuller / Creative Commons License
Matthew Straubmuller / Creative Commons License

Though estimates vary – often due to a lack of government data – almost every African country loses more than 5% of its GDP in illicit financial flows; indeed, several African countries leak almost 20% of their annual GDP through avoidance and evasion schemes.  For perspective, a similar rate in Britain would mean the annual loss of more than $500bn – enough to fund our NHS five or six times over.

Rather than withdraw from the African continent, the entire world has a responsibility to act for two reasons. Firstly, as a recent UN report discovered, developing countries lose roughly £100bn of tax every year through offshore financial hubs – many of which exist in places like Panama, Ireland, and the British virgin islands. Put simply, as the African Union recently lamented, all the money that leaves Africa illegally ends up somewhere else in the rest of the world.  It is not, in other words, purely an ‘African problem’ from which we can disengage; it is the institutions, countries and laws of the wider world that facilitate this gross injustice. Indeed, the average African tax rate wouldn’t need to be so high on ordinary Africans if the wealthiest paid their fair share and if the world invested in effective tax-monitoring systems in Africa. This is fundamental to the sustainable development of African states. 

Secondly, while the holes in Africa’s financial system threaten to drown ordinary Africans in poverty, it also threatens to render our enormous investment in foreign aid and international development unsustainable. In 2014, a UN Sponsored investigation found that at least twice as much money seeps out of Africa every year through tax avoidance, evasion and criminal activities than enters the continent through foreign aid. Focusing only on offshore tax havens, for every $1 gained through aid programmes, Africa loses $1.30 through offshore trading. In macro terms, the developed world is financing its own tax inequalities – while Africans and African states are plunged into ever-deeper poverty. To be clear, this does not mean that we should cease giving aid. We should do the opposite and invest in the future of ordinary Africans even more. But we can no longer afford to do so without tackling the tax elephant in the room.

Emergency aid, vaccinations and educational programmes are clearly invaluable – and Britain has much to be proud of in this area, particularly in its work under the last Labour government. But unless we empower governments in poor and developing countries to collect the taxes they are owed – without which governments can only borrow more debt to finance public services – we will impose a glass ceiling on the enormous benefits of grass-roots development projects. A healthier and increasingly aspirational population won’t want to remain in countries plundered by global inequalities – they will, as Europe can testify, seek a better life elsewhere. It is for this reason that the UN General Assembly recently described reform of the world’s finance and tax laws as the number one means of implementing the promises in last year’s Sustainable Development Goals.

allispossible.org.uk / Creative Commons License
allispossible.org.uk / Creative Commons License

In turn, this necessitates two conclusions. First, if we are serious about tackling global poverty and inequality – and if we want to successfully develop the world’s poorest countries – international tax reforms have to be at the centre of the world’s agenda. Second, and this cuts to the heart of an issue currently in the minds of many Britons, no one country – not even one continent or free trade area – can tackle this problem in isolation. Indeed, no single problem in today’s world exists in a bubble; we already recognise that poverty rates are intricately connected to conflict, terrorism, corruption, health, and education levels. The same principle should now be applied to how we view international tax avoidance and evasion.

The world of 2016 is interconnected; inequalities are now produced on a global scale. Whether in relation to war, migration, tax or terrorism, this demands more international cooperation than ever before. In the interests of international development, tax avoidance should now form the centre of this discussion. It is in all our interests – especially for those of us committed to social justice – to ensure that we learn this lesson from Panama sooner rather than later.

 

 


The views expressed in this article are those of the author and do not necessarily represent the views of Development in Action.

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Does Globalisation increase or decrease inequality, or neither? 


Does Globalisation increase or decrease inequality, or neither? 


Globalisation has changed the world dramatically. Whether this is for the good or the bad is highly contested. Mainstream sources continually remain defiant on spurring out the benefits of globalisation. Here, Anastasia Nicosia questions this status quo and asserts the possibility that globalisation is increasing inequality.

Globalisation can be best understood as a set of political-economic institutions and policies which contribute, if not generate, enhanced interdependence between countries through the creation of a free global market. This process of global integration is thought to bring benefits to all countries, as market mechanisms are advertised by some as the most efficient enablers of development and economic growth.

However, and in reality, globalisation operates in different ways amongst different countries, bringing enormous economic benefits to some and equally immense negative social and environmental consequences to others. Stigliz has stated that globalisation in itself is neither good nor bad. As long as a country enters the “free” global market at its own right and under its own terms, globalisation can bring enormous benefits.

Asia Society / Creative Commons License
Asia Society / Creative Commons License

 

Hence, in the right hands and at the right time, entering the free market can boost a country’s economic and social development. The United Kingdom opened its border in the 19th century in a time of national prosperity, a prosperity it managed to achieve thanks to its protectionist laws which shielded its own workers from foreign competition. Once it was ready to compete globally it embraced globalisation. Other European countries and the United States followed shortly after, once they felt they could catch up and compete with other market.

However, globalisation processes in the wrong hands and at the wrong time can increase inequalities both within and between countries. The current stream of rapid globalisation is led and sponsored by international financial institutions, such as the IMF (International Monetary Fund) and the World Bank, thus making contemporary globalisation more similar to the latter type than to the former one undertaken by the now developed countries. Naomi Klein reports in her bestseller “The Shock Doctrine” (2007) the many times in which neoliberal policies, such as deregulation, privatisation and liberalization, have been imposed on countries borrowing from both the IMF and the World Bank. Of the many, Chile, Argentina, South Africa, Poland and Russia are just a few cases in the long list of imposed-globalisation procedures. International financial institutions, led by the very same countries that are now developed because of a more cautious entrance into the free market, are now “inviting” less developed countries to reach prosperity in a completely different manner to their own development process.

Lars Plougmann / Creative Commons License
Lars Plougmann / Creative Commons License

 

List, in 1841, had already predicted this contemporary globalisation situation when he described that once a country obtains economic greatness, it kicks away the ladder which it used to reach such prosperity, in order to deprive others of the means to obtain it. Hence, developed countries, by prohibiting through their lending institutions various economic policies such as protectionism and restrictions on imports to developing countries, they are effectively kicking away the ladder they themselves used to become developed. They preach to developing nations the benefits of free trade when they themselves did not go through that difficult path in the first place. By introducing developing countries into the free market ahead of time, international financial institutions are increasing global inequality, since developing countries are stuck in an inferior position to their developed counterparts to which they are dependent for both technology and investments. By imposing as conditionalities deregulation and free trade, weak borrowing economies to the IMF and the World Bank will have to enter the global market, and since they are not fully developed they will not pose a threat to the developed countries.

Once inside such a dispersing global market they will not have the chance to develop in the same way the current rich countries had, therefore they will probably never pose a threat to the latter. Economically weaker countries cannot compete with the world. Indeed opening up to the free market has been followed by the disruption of hundreds of local businesses everywhere in the developing world, as for example in Jamaica. Since developed countries, through the Bretton Woods institutions, have repeatedly been kicking away the protectionist ladder they themselves used to develop, globalisation can be seen as increasing inequality, as they have turned the process into an economic, political and social domination rather than interdependence.

 

 

 


The views expressed in this article are those of the author and do not necessarily represent the views of Development in Action.

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Affirmative Action in India: Is backward the new forward?

Affirmative Action in India: Is backward the new forward?

Sarita Devi (name changed) 38, seems unhappy with her daughter Sonam’s board result – a public examination occurring at the end of the 10th and 12th grade education in India. But she seems far more disappointed that she does not qualify as a Scheduled Caste (SC), Scheduled Tribe (ST) or Other Backward Class (OBC): “I am only a housemaid, but had I been a member of a backward community, my daughter would have made it to the list of at least a decent university”. Her words are a sounding board to what the reality of many middle and lower class Savarna caste individuals in India face. Here Mridulya Narasimhan discusses the successes and failures of positive discrimination in India.

Reservation against reservation

India’s caste system, for all practical purposes, was created over 1500 years ago for a simple classification of occupations in a feudal society. Those at the bottom of this caste pyramid were in charge of menial jobs and were forbidden to interact with the upper class.

©Marc A. Garrett /Creative Commons License
©Marc A. Garrett /Creative Commons License

India’s constitution of 1950 propagated positive discrimination based on similar quota systems that existed in part of British-India during the 1920s. The idea was to reserve seats in public jobs as well as in the education system to bridge the growing inequalities between these castes. Over the past few decades the stark boundaries between castes have somewhat blurred and people are no longer bound by economic restrictions. But the reservation policy, intended to exist only for a decade, has managed to largely outlive its purpose for the past 65 years.

Thus far, there have been very few attempts to causally establish the impact of reservation in public jobs on the livelihoods of backward classes although a 2010 study by Aimee Chin and Nishith Prakash, based on 16 of India’s biggest states, shows that there is no impact of reservations on Scheduled Castes on poverty and standard of living.

In India most people take up job opportunities in an unorganised or semi-organised setting or in a private organisation so the impact of facilitating public jobs to those deemed as ‘lower caste’ is actually unknown.

There is no mandate for private firms to entertain reservation as a part of their employment policy; however, some choose to take voluntary measures: the Tata conglomerate is one of those with an active agenda of affirmative action. The multinational giant, headquartered in Mumbai, does in-house surveys to assess its Dalit and tribal workforce; they also go to the extent of setting lower requirements for exam marks for Dalit’s.

Tamil Nadu for example, has 69% reservations set aside for Scheduled Caste (SC), Scheduled Tribe (ST) or Other Backward Class (OBC). With the general population competing for 31% of available seats, general applicants have now started to migrate to the private institutions and MNCs – further skewing the ratio.

©Arpana Sanjay /Creative Commons License
©Arpana Sanjay /Creative Commons License

The general population are concerned with the lower eligibility requirements for SCs, STs and OBCs. It is a vicious cycle – lower requirements are indicative of the fact that those ‘backward castes’ are expected to be less capable than most others. With such an expectation in place, those currently classified as backward continue to perform sub-optimally, defeating the entire purpose of the chance given to them. Furthermore, this tends to decrease overall standards of living of society as even the ‘Savarna’ classes are deprived of opportunities that are tied up in quotas.

 

Affirmative action: In the affirmative                                                                                                         

Affirmative action has certainly achieved some of it’s basic goals, but has lost its purpose along the way. According to a study conducted in 2009, one-in-fifteen graduates and one-in-ten secondary school students were Dalits. Also, Dalits who had only 1.6% of top-tier civil servant jobs, now account for over 16%. Though they continue to lag behind other groups; this number has grown over the past few decades. According to the Mahmood-Ur-Rahman Committee Report, Muslims constitute 10.6% of Maharashtra’ population but represent only 4.4% in public services. This is evidence of inclusion but the effect on aptitude of candidates still remains inconclusive.

The new wave: The Supreme Court ruling

A welcome change was the Supreme court, the apex judicial authority of India, quashing UPA government’s decision to include Jats in the OBC category. A similar judgement was made in January to reexamine the reservations placed on the Maratha community in India. These judgements tried to emphasise a move away from traditional methods of understanding realtionships through caste differences and instead recognising backwardness “as a manifestation caused by the presence of several independent circumstances, which may be social, cultural, economic, educational or even political. New practices, methods and yardsticks have to be continuously evolved, moving away from a caste-centric definition of backwardness. This alone can enable recognition of newly emerging groups in society, which would require palliative action.

Conclusion

In the Indian context, judicial oversight and vote bank politics are perpetuating inequality rather than redressing it. But with judgements like those made by the Supreme Court with respect to the Jat community there is still hope that the government will look at social backwardness through a fresh lens.

What India needs at this point is perhaps positive discrimination based on factors other than castes. Any policy, no matter how well-intentioned, that is based on historical injustice, will only lead to injustice for those truly deserving backward sections in India.

And while we wait upon the truly backward to be represented in this country, many like Sarita’s daughter try and make the best of the situation. Sonam is now pursuing her education through open university.


The views expressed in this article are those of the author and do not necessarily represent the views of Development in Action.

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Monopolising Necessities: Bolivia and Water

Monopolising Necessities: Bolivia and Water

The contemporary proliferation of neo-liberal policies on a global scale has accentuated issues of unequal access to our fundamental human necessities. Although there should be no hierarchical structure to basic human needs; the modern economic system has transformed such needs into saleable goods. Dan Stead argues that, through the case of clean water production and distribution, we can observe how a historically freely flowing resource has been harnessed as a commodity. 

In many developing nations, the collection of water is a personal task performed at individual household level. The global economic system however has led to the expansion of capitalist economic practice across international boundaries. As we can observe in an abundance of cases, this has led to increased privatisation of available resources resulting in the monopolisation of water access at the hands of a few transnational corporations.

Pressures on governments, particularly in the global south, to deregulate water resources and succumb to the orthodoxy of neoliberalism, severely hinders the ability of those living in poverty to gain access to fresh water. The case of Bolivia represents just one example of a decentralising nation-state opening up its markets to privatisation by attracting direct foreign investment, facilitated by low taxation. World Bank loans frequently set the conditions for the expansion of neoliberal economic policy within developing nations, citing inferior governments plagued by localised corruption as the reason for decentralised investment and skilled management. This in the case of Bolivia however, ensured a basic human right became a marketed product.

©USAID/Creative Commons License
©USAID/Creative Commons License

The San Francisco based multi-national, Bechtel, alongside Aguas del Tunari were able to monopolise water supplies and increase prices in to fund the construction of a reservoir reserve system. Privatisation cut off many homes, accentuating gulfs in social class within Bolivia and creating further problems of poor health and sanitation.

Ultimately, this move sparked conflicts such as the Cochabamba riots in 2000. Eventually the violence led to the removal of the Tunari Water Corporation contract which had doubled the price of water since taking resource control in Bolivian cities. Human agency prevailed as people refused to be priced out of their basic rights, yet the case brought into focus the shocking scale of profit over needs with increasing resource privatisation.

Although fresh water is ultimately a finite resource and safe-supply needs financing, access to clean drinking water is still as low as 71% in rural Bolivia. International pressures on the government to adhere to free market policies allowed no room for negotiation of a set water mains connection fee, isolating many poorer rural communities.

In contrast, the marketing of water within so called developed nations can be determined an entrepreneurial master stroke. In the UK we purchase bottled water as a convenience good despite the fact that tap water is readily available at homes and public buildings. With global sales currently at around $60bn per annum, the industry has grown exponentially in recent decades. Marketing campaigns aim to inform consumers of bottled mineral water’s ability to reap health benefits such as Volvic, Evian etc. It seems wrong that we should have a choice of which ‘healthy’ water we should be able to purchase when many in the developing world struggle to source any.

The increasingly globalised capitalist nature of water supply will only seek to further exploit those in need, as is observable within Bolivia. The UN World Water Development Report of 2012 predicted in 2030, 47% of world population will be living in areas of high water stress, yet we in the developed world still take water resources for granted.

©Alejandro Erickson/Creative Commons License
©Alejandro Erickson/Creative Commons License

It is clear that water inequalities are becoming increasingly politicised and there should now exist a fundamental framing of them as a global issue requiring global stewardship and solutions. The reaction to the water barons operating within Bolivia offers us a forward thinking and integrated approach of how to tackle future water supply and control issues.

Development inherently promotes the empowerment of those living in poverty, strengthening stakes to essential resources. Within Bolivia, policies relating to water supply are now set by the government rather than narrated through hegemonic corporate diction, and offers opportunities for power to be transferred to localised decision markers. Public-public co-operatives and municipal governments constitute a devolved responsibility, ensuring those who were previously denied any say in the water debate are granted a voice.

Scaled benefits include the sharing of services and co-operative agreements which maintain the public control of costs all work towards safeguarding an affordable supply rather than commodification. President Morales’ decision to appoint a leader of the Cochabamba struggle as the nation’s first water minister signifies the necessity to give power back to the people. By ensuring profit cartels and monopolies aren’t able to supersede the needs of the people, power held at local levels offers greater individual autonomy of people’s lives, aiding the development process.


The views expressed in this article are those of the author and do not necessarily represent the views of Development in Action.

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A New Big Society: social solidarity without growth?

A New Big Society: social solidarity without growth?

Mitigating climate change is often seen to be at odds with economic growth. This is confirmed by the fact that rapidly developing countries hold the lion’s share of carbon emissions. Kilian Raiser asks: can we achieve social solidarity without growth?

Never before will a topic have had this amount of political and social clout. As our politicians gather, and our societies march, we have never been so bound together, united in our collective need for action. In climate change there is an opportunity for change beyond our energy industries, a precedent for social transformation.

Change the goal

Our economic model of “growth or die” will never provide the levels of economic development we strive for. At current rates achieving $1.25 a day per person will require a century, and is still too little. $5 would be more in line with meeting basic needs, so two centuries, and a GDP per capita of $1,000,000. How many planets will we need to sustain these levels of growth? How many more of us must be exploited to provide the resources and cheap labour needed to fuel our consumption habits, which in turn drive our economy?

©Oxfam International /Creative Commons License
©Oxfam International /Creative Commons License

These absurd numbers are driven by inequality. How much less time would we need to achieve them, if our incomes were capped at say $10,000,000 per year, the rest being used to fund community development, to alleviate poverty, to combat climate change?  Andrew Simms and Naomi Klein have both recently argued that climate change is intrinsically linked to inequality. That over coming one will undoubtedly require the other.

Yet, none of the parties running for office are really debating our policies toward regulating what will undoubtedly become one of the world’s largest markets in the future: renewables. Even the Green Party, by far the most concerned with our energy future, who do advocate a swift phasing out of fossil fuels, only mention the need for a public programme for climate change mitigation and adaptation. How can we ensure that the renewable energy firms that take over from their fossil fuel counterparts will not also exhibit the same profit driven, ruthless tactics of growth? And if we are ready to discuss this why not move on from the energy sector.

Sustainability cannot be obtained with CEOs benefiting whilst jobs are cut. Sustainability will not be achieved if IT conglomerates such as Google gain the same lobbying power of our current fossil fuel and pharmaceuticals industries. Sustainability cannot be achieved if Apple continues its record-breaking profits streak. Our planet will simply not sustain these consumption habits.

Valuing society and each other

We may complain about inequality, but we have institutionalized competition. Our education systems encourage us to compete. We are tested against each other, rather than on the grounds of our own personal ability. We strive for admiration. And our technological progress has only exacerbated our disposition. Now we judge our own progress online, based on fabricated accounts of our happiness. We constantly gaze in the mirror of our smart phone screens hoping to feel better because we have already been there, because we heard it before the world did, because we reached more people, and have collected virtual thumbs up before we ever got a real one.

©Southern Africa /Creative Commons License
©Southern Africa /Creative Commons License

We shun ideas of community. Who now knows their neighbours? Or can walk into their local bar/café and be sure to strike up a conversation? Do you know the name of the person selling you groceries everyday? And yet community will define our response to climate change. Carbon neutrality relies on our communities. Politics is and should be intrinsically linked to the community.

Although we focus most of our attention on the national elections, on who wins and will govern our nation(s) for the next electoral term, we should be equally, if not more, concerned with our local community politics. Support your local MPs as much as you do the PM candidate they might represent. Effect change locally, rather than complain about the inability to do so nationally.

Policy not Personality

Politicians have a pretty low shelf life, but their policies should nonetheless take effect over a longer-term their own times in office. This is why it is important to vote for policies not personalities. If we want to achieve sustainability, we need to vote for the policies that bring us closest to these goals, policies that will continue taking effect long after their initiating personalities have retired.

Politically, climate change is a precedent for radical measures. So let’s cap global income! Not at 100,000 (still reasonably high), not even at $1,000,000 (beyond most of our wildest dreams), but at $25,000,000. The surplus each year could be used to fund global public health schemes, free education, and an open-source pool of knowledge tailored to tackling our most pressing issues.

This one example would probably already be enough to solve most of our political struggles. But in order to govern well, we as a society must first transform to embody the values we want to be governed by.

©James Emery /Creative Commons License
©James Emery /Creative Commons License

Climate change presents us with an opportunity. Let us ensure that our grandchildren do not inherit a world without climate change but a lot more of everything else. Let us start now by voting for policies, not personalities, for the future of our grandchildren, not the face representing us at the next global environmental summit.


The views expressed in this article are those of the author and do not necessarily represent the views of Development in Action.

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Ebola: ‘Africa’s problem’

Ebola: ‘Africa’s problem’

How does the developed world respond to crises in the developing world? Sabrina Marsh explores the current Ebola outbreak in light of inequality, international aid and globalisation. 

We have seen the news stories and read the sensationalist headlines about the spread of the deadly Ebola virus. However, with only a handful of deaths outside of the three main West African countries where the outbreak is concentrated, is this response misplaced? It is easy to put Ebola in a box along with other ‘African problems’, such as poverty, starvation and HIV/AIDS.  We in the West need to seriously reconsider our approach to Ebola, not because it is an African problem that threatens us, but because it underlines a significant flaw in how we view international problems, both politically and socially. With globalisation and the increased interconnectedness of the world, this schism between issues that affect ‘us’ and ‘them’ is narrowing.

©EC/ECHO/Jean-Louis Mosser/Creative Commons license
©EC/ECHO/Jean-Louis Mosser/Creative Commons license

The current Ebola epidemic is deadly and is the worst recorded outbreak since its discovery in 1976. It has killed over 5000 people with 14000 reported cases worldwide.  These numbers are likely to be much higher, hiding the true extent of the devastation. Most of these are confined to West Africa, with Liberia recording the highest death toll. Ebola is easily transmitted and an effective killer with the mortality rate estimated to be at 70 per cent. The first reported case for this Ebola outbreak dates back to December last year. This may come as a surprise to some with media reports making it seem this current outbreak has only recently cropped up. Such a lag in the Western world’s concern and attention highlights our biased view of what counts as a crisis.

Ebola is now on many politicians’ minds as the virus rises up the international priority list, dictated by the West. The exact causes of Ebola are not understood, although there is a general consensus that it derives from fruit-eating bats which are a West African delicacy. A lack of resources, including basic healthcare services, across many countries in Africa has done little to negate the quick spread of the virus.  By way of example, Guinea has 10 doctors per 100,000 people while the US has 245 doctors for the same number. With a number of potential cases and deaths reported in Spain and US, panic across Europe and North America is on the rise.

The current approach towards ‘African’ problems by the West is unlikely to change soon. Future crises in Africa will be met with the same delayed response. This trend has been seen with other concerns originating from Africa, such as the ongoing crisis in the DRC which continues to kill many. Even now the frenzied media attention on Ebola has been met with lukewarm responses by policymakers, with cases of refusal to send medical personnel. This is especially shocking when the WHO estimates that it will cost $1 billion to combat the disease. European governments have reacted merely by pouring millions of pounds into controls which will do little to dent Ebola’s spread. Although Ebola is unlikely to ever become a real threat in the rich West where we have access to advanced medical care facilities needed to treat and care for the sick, it is time we began to recognise these huge global resource inequalities.

©The Speaker/Creative Commons license
©The Speaker/Creative Commons license

The inequality between citizens in parts of Europe and those in sub-Saharan Africa is unlikely to change dramatically in our lifetime. However, crises such as Ebola should be used to draw attention to the need for greater equality between the developed and developing world. Heightened equality would ultimately benefit us all through greater innovation, social mobility and better education. Many governments have spent too many resources putting in place screening facilities and border controls – scare tactics – which are unhelpful for a number of reasons, including cutting off Ebola victims from aid. However, some benefits have come about due to the media attention on Ebola. Increasing amounts of funds and help have been sent to devastated regions in Africa. A significant reduction in new reported Ebola cases is reassuring.

Ultimately parts of Africa will be devastated by this virus and the economic and social consequences in the region will be overlooked by the West as a problem somewhat detached from our own concerns. However, this crisis marks a growing consensus that threats to the West are no longer simply military in form. Ebola shows us that the problems in far-flung lands are no longer remote. It is time we all looked at global problems in a more effective way, recognising the inter-dependency of citizens worldwide. We have a history of turning away from Africa’s problems, but it is time such crises are seen in a new international light which focuses on the underlying causes.

 

 

 


The views expressed in this article are those of the author and do not necessarily represent the views of Development in Action.

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