Solving poverty

Debates in the Senate chamber are usually sedate affairs. One or two senators listening (or not) to a read speech delivered to the speaker with little emotion. It was therefore something of a shock when, as part of a Senate debate on poverty, a senator fixed those of us in the public gallery squarely in the eye, shook his finger at us and launched a tirade against the very notion of aid (Hansard, October 17, p34).

On Monday and Tuesday, October 16 and 17, I was privileged to be part of a large lobbying campaign at Parliament House in Canberra as part of Anti-Poverty Week. I was part of Voices for Justice, a campaign sponsored by Micah Challenge, a global Christian campaign committed to halving world poverty by 2015.

Micah Challenge is a sister campaign to Make Poverty History. There were about 130 of us, ranging from high school students to retired farmers: not professional lobbyists, just ordinary Australians with a message about justice and compassion for our world.

Over the two days we visited over 70 politicians from all parties. As expected, the response was varied. The Greens and Democrats have already adopted policy stances that reflect the substance of what we were asking - namely an increase in overseas aid to 0.5 per cent of Gross National Income by 2010 rising to 0.7 per cent by 2015 and explicitly targeting of this aid towards achieving the Millennium Development Goals (MDGs).

Labor Party politicians were generally supportive of the aims but naturally face the difficulty of making explicit financial commitments in an election year. Coalition politicians, while supportive of the aid program, were predictably focused more on issues of corruption and governance as impediments to the effectiveness of aid spending.

The notable exception however, was Liberal Senator Brett Mason from Queensland. “It is not aid but trade that is rescuing the Third World,” Senator Mason thundered. According to Senator Mason, it is free trade and the consequent economic growth that is rescuing the global poor from dire poverty.

“Sir Bob Geldof and Bono were serenading the poor in Live Aid and Live 8. That was important and they raised a lot of money to fight poverty. But that is absolutely nothing compared to the transfer of wealth to the Third World that has come about by the freeing of trade with the Third World.”

Senator Mason then proceeded to hold up new Nobel laureate for peace, Professor Muhammad Yunus and his Grameen Bank as primary evidence for his free market versus aid argument.

Most of us in the Voices for Justice lobbying group are neither economists nor development experts, however, most of us were also sufficiently aware of the world to know that Senator Mason was either ill-informed or else deliberately ignoring reality to promote an ideological position.

First, the Micah Challenge campaign is not an “either or” campaign but rather, a “both and” campaign. While this particular lobbying effort focused on more and better aid, the Micah Challenge campaign includes a call for fairer trade to assist in achieving the MDGs as well as debt cancellation. We have never considered that a single policy response would solve the massive problem that is global poverty.

Increased trade can certainly be a source of great wealth. Oxfam estimated in 2002 that if Africa, East Asia, South Asia and Latin America were each to increase their share of world exports by one per cent, the resulting gains in income could lift 128 million people out of poverty. However, the problem is that the current rules that govern world trade are rigged in favour of rich countries and their corporations.

The freeing of world trade simply has not happened and the trade “liberalisation” that has taken place has not necessarily been to the benefit of the world’s poor people. Senator Mason claimed: “The Third World countries have access to First World markets and can sell their products.” That would be news to European and US farmers receiving subsidies of US$1 billion per day from governments so they can export commodities to Third World countries and so deny access to Third World farmers.

The reality is exactly the reverse of Senator Mason’s claim. Poor country exporters still face significantly higher tariffs from rich countries than those applying in the reverse direction. The World Trade Organisation (WTO) while maintaining a façade of representational democracy is, according to Oxfam, governed by a dictatorship of wealth.

Senator Mason points to China as the great example of freer trade reducing poverty. However, another Nobel Laureate Joseph Stiglitz points out that the Chinese success has come precisely because China did not liberalise their economy according to the standard “Washington Consensus” formula. Furthermore, it must be acknowledged that the Chinese success story is limited to the eastern cities and extreme poverty still exists in many regions. It is possible to have strong growth and still leave many people behind.

Second, Senator Mason fails to understand the nature of aid. According to the senator, aid is simply welfare; money paid to lazy individuals to do nothing. As such, it is destructive. Such payments may well be destructive but they not represent what foreign aid is all about.

Aid is about empowering people to participate in their communities, to take control of their lives and to benefit from the economic growth that fairer trade policies may create.

In fact, a key component of many community-based aid projects is micro-credit. Rather than being a free market alternative to aid, micro-credit, such as that practiced by Grameen Bank, steps in where commercial banks and other financial institutions fear to tread.

It gives groups of women, in particular, the opportunity to work their way out poverty. Senator Mason states that this “mixture of capitalism and social responsibility has done far more to deliver people from poverty than all the aid in the world ever has” without realising that this very mixture is, in fact, aid at work.

On one point Senator Mason is right. He stated, “the way to tackle poverty … is by giving people opportunity, not welfare”. However, that opportunity does not automatically come as GDP rises. The economic theory of the “trickle down effect” or “rising boats” has been discredited (to the extent it ever had any real credence). For those who are marginalised, those who don’t have clean water to drink, those without sanitation, those suffering from AIDS, malaria etc, those without education, those outside our modern society, giving opportunity means using aid to tackle those barriers.

The Micah Challenge is all about giving that opportunity. It is about basic justice - ensuring that all people can live dignified lives and participate in their communities.

This will not happen automatically as the rich get richer. It needs deliberate action by governments and individuals, to ensure these opportunities are available; deliberate action to provide education, to give access to clean water and to tackle diseases.

It is such a shame that Senator Mason chose to attack our campaign on ideological grounds rather than do as the 8th Millennium Development Goal asks, “develop a global partnership for development”.

If we work together, if we use all the tools at our disposal (trade justice, aid, debt cancellation and others), if we accept the need for justice in our world then poverty can indeed be halved by 2015. Rather than argue, let’s Make Poverty History.