Poverty

Insure Nourishing Food and Productive Work for All

Almost half of the world – over three billion people – live on less than $2.50 a day. Feeding, sheltering, and finding adequate health care is next to impossible for folks in these circumstances. A tragedy. As Bono said of the fall 2008 economic bailout, “It’s extraordinary to me that the United States can find $700 billion to save Wall Street and the entire G8 can’t find $25 billion to save the 25,000 children who die every day from preventable disease.” When income disparity increases, social instability grows. Sooner or later those who live in abject poverty revolt. There is a moral and practical imperative to lift all to some threshold level of prosperity. Key moves:

1. Stabilize population. The earth has only so much carrying capacity. Too many people added at too fast a rate endanger all. The mix of strategies needed has already been tried successfully by a number of countries.

2. Educate the best and the brightest. Ireland went from the poorest nation in the European Union to the second most prosperous in thirty years. Its economic plan: subsidize and highly educate the best talent in the country; free them to work overseas; trust that eventually they will return home to form a well-educated workforce. If the world heeds this lesson, we will identify the poorest communities around the world – rural Montana, slums in Rio, steppes in Russia – and provide promising students scholarship programs in prosperous countries. This is China’s strategy now. Send students to Harvard and it will benefit all Chinese in ways unseen.

3. Focus on what works. Much positive progress has come not from the top down but has bubbled up. Local people know what works. They can identify and replicate successes. Outsiders also provide help. Pioneered by Muhammed Yunus, founder of the Grameen Bank in Bangladesh, micro credit (loans of small amounts of money to borrowers’ clubs composed of individuals who aspire to start or grow small businesses) provided an economic start for 100 million people by 2005. The new goal for 2015 is to involve 500 million people.

Water scarcity is a major source of poverty in South Africa as well as other countries. Trevor Field invented a Play Pump, a water system run by kids playing on a merry-go-round which pumps clean water for the village. Field is a social entrepreneur, a person with a workable idea to address a major problem. William Drayton began the Ashoka Foundation to identify and fund such persons to scale up projects that have succeeded locally. This idea is spreading way beyond Ashoka’s impressive efforts. In fall 2008 a partnership between the U. S. Government and the Case Foundation was formed to install 4,000 water pumps in ten African nations, bringing clean water to as many as 10 million people.

Economic clustering is an idea that has worked well in developed countries and is poised to take hold in poor African countries. Strong equity and lending institutions focus on geographic areas that have the talent to re-tool. For example, Nissan, Saturn, and Toyota form a synergistic cluster in Tennessee. The focus in Seattle is aircraft manufacturing. Much production is now centered in Asia. Savvy African countries are preparing to provide the next manufacturing centers.

4. Build new institutions. Much of what ails our current economic system composed of two sectors – the public and the private – can be cured by adding a third sector, the “commons” sector, argues Peter Barnes in Capitalism 3.0. The “commons” refers to assets owned by all people in common – the air, water, nature’s diversity. Barnes promotes setting up “commons authorities” to hold commons assets in trust, for example, a sky trust, water trust, land trust. These trusts would sell permits to companies that, for example, pollute the atmosphere. Revenues collected from these fees would then be used both for developing renewable energy and also for dividends to citizens as is done by the Alaska Permanent Fund.

The “new philanthropy” pioneered by Bill Clinton, Bill and Melinda Gates, and Rockefeller Philanthropy Advisers focuses on a world problem, creates a strategic plan to solve it, and marshals market forces to leverage change. To ratchet down the cost of anti-viral AIDS drugs, the Clinton Foundation gained commitment from national governments to buy drugs in bulk, then negotiated the price of drugs down 50%. Manufacturers still made handsome profits while the numbers served skyrocketed.

Global goal-setting institutions are now in operation. To achieve the UN Millennial Goal of ending extreme poverty by 2015, a global compact has been created between rich and poor nations to raise the income of extremely poor people. This includes a Multi-Donor Budget Support Policy that offers major financial support to any country that presents a Poverty Reduction Strategy. Economist Jeffrey Sachs’s Millennial Village Project showcases how a package of specific interventions can equip extremely poor people to start earning. Next step: all donor countries need to carry out promises already made.

5. Interconnect strongly. Rich trade relationships around the world bring peace, security, and prosperity. Work is going on to insure that we all play by the same labor and environmental rules.

Great progress is being made on funding wide Internet and cell phone access. This allows a Bangladeshi mother who wants to sew for a living to communicate her need for a sewing machine to a would-be donor in Saskatchewan. A Cameroonian taxi owner can call his American business mentor for advice.

People-to-people exchanges bring prosperity and should also be funded and encouraged. A former Peace Corps volunteer returns to his village in Kenya, sees its need for a school, then takes this on as a family project. As we foster exchanges — city-to-city, company-to-company, region-to-region — contact grows, and cooperative development projects blossom.

Results We Can Expect: These key steps to end extreme poverty equip people at the bottom to start earning, to have the satisfaction of seeing each family member healthy and prepared for a productive future. They provide not a hand out but a hand up. We know how to do what needs to be done. There’s a part to play for everyone. Finally, we can make poverty history.

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