The latest World Economic Report from the International Monetary Fund focuses some attention on the problem of increasing food prices. The IMF reports that food costs are rising more quickly than core inflation and that these costs are increasing for countries around the World.
But the burden of the higher prices is falling on poor consumers in developing countries where food inflation is more dramatic.
How to get presidential candidates talking about poverty? It’s not just a question we at Bread for the World are asking. Lots of other people want to know the answer. That’s clear from an event I attended yesterday at the National Press Club. Spotlight on Poverty and Opportunity: Foundations Ask Presidential Candidates What They Will Do for America drew dozens of supporters, mostly representatives from groups like us around the beltway. The event kicks off an initiative of the same name that will run at least until the 2008 presidential election is settled. David Beckmann was invited to speak. The press conference coincided with the release of polling data by the Alliance to End Hunger, polling that demonstrates hunger and poverty are issues that have traction with voters, and David was there to talk (briefly) about the polling results. I was there because Bread for the World Institute was given a space to handout the new 2008 Hunger Report Executive Summary, but I also attended the press conference and heard all the other speakers. They included current and former members of Congress. No one running for president, though—but then ain’t that the problem we all were there for in the first place? Based on what everyone was saying, you’ve really got to wonder how come the presidential candidates don’t feel the same sense of urgency about poverty as we all do. Are these candidates in touch with reality? Let me suggest something bold: perhaps we should turn the mirror around on ourselves. Are we the ones out of touch with reality?
This morning, as I was getting my fix of world news from the BBC news website, I read about 25,000 landless farmers who marched on Delhi from all over India to demand land reform and land rights. It reminded me of the speech that India's Prime Minister Dr. Manmohan Singh made on the 60th anniversary of India's independence from the British--August 15, 2007--where he said "Sixty years ago the people of India began a new journey as a free nation, inspired by the message and vision of Mahatma Gandhi. But Gandhiji’s dream of a free India would only be fully realized when we banish poverty from our midst". This was an important message to lead with at a time when the Indian economy is growing at a historic and apparently mesmerizing 9%, if the world's media is anything to go by. This weekend's protest in Delhi is a stark reminder that not everyone is benefiting from India's economic growth and that poor people in rural and remote areas are being left behind. By coming to Delhi, the landless farmers were driving home the point that there are two Indias and that the India that is thriving in the global economy will not be allowed to forget about the India that is not. Dr. Singh's speech focused on the need to make key investments in rural development, agriculture, health and education so that all Indians benefit from India's growth. Much the same can be said for countries in Sub-Saharan Africa and Latin America.
The recently-released World Development Report - Agriculture for Development - highlights the importance of agriculture, and the efficacy of agricultural development in alleviating poverty. The recent increase in agricultural commodity prices further underscores the urgency of increased attention to the issue, since most of the world’s poor – even those living in rural areas – are net food buyers. It’s only through increased agricultural productivity in the developing regions of the globe that growing populations can be fed while keeping the lid on food prices.
The WDR also serves to highlight the relative neglect of agriculture in both US development assistance and the broader community. The global volume of Official Development Assistance (ODA) to agriculture, expressed in constant 2002 dollars, decreased from US$ 6.2 billion to US$ 2.3 billion between 1980 and 2002. In percentage terms, this amounts to a reduction from 17 to 3.7 percent.
Good governance is the base for development. Political institutions define all the relationships of development policies. Investing in good governance will allow for a radical change to reduce poverty and hunger in sub-Saharan Africa. Most of the regions misery can be explained by lack of good governance. For instance, in 1960s Africa was ahead of Asia and poor governance explains most of the failure to this progress.
It is with this notion that a bright and forward looking millionaire
from Sudan, Mohamed Ibrahim, started a foundation that rewards
sub-Saharan African leaders who exit office peacefully. He launched a
$5 million annual prize in October 2006 and this week the foundation
announced that former Mozambique president Joaquim Chissano won the
innaugural Mo Ibrahim Prize for Achievement in African Leadership. He
was selected from among 13 African former heads of states that left
power in the past three years. Kofi Annan led the foundation’s prize
committee and the award is based on a complex index devised by Robert
Rotberg from Harvard University’s John of Kennedy School of Government.
The main criterion for selection is based on the leaders’ commitment to
democracy and improving governance. The award, the first of its kind
and world’s most comprehensive ranking of African governance, is
supported by key world personalities including Nelson Mandela, Alpha
Konaré, Bill Clinton, and Tony Blair.
Continue reading "The Mo Ibrahim’s Index- Rewarding Good Governance" »
The New York Times published an alarming op-ed on Saturday, October 20. “A Global Tax Cut,” by Justin Muzinich and Eric Werker, proposes the federal government offer tax credits to U.S. companies that will invest in “qualified developing countries.” Not a bad idea, perhaps, but Muzinich and Werker pitch this as an alternative to official development assistance (ODA). They briefly discuss the main problem with ODA: very little gets to the people who need it the most. Right after they pitch the tax cuts they claim the following:
A similar program that focuses on domestic poverty has been a resounding success. In 2000, Congress created a program giving businesses that invest in poor communities within the United States a tax credit equal to 39 percent of the cost of the investment. The theory was that poverty and joblessness in poor communities could be ended only by developing local businesses, not by an aid check. Seven years later, so many businesses want to invest in poor areas that only a quarter of the companies that applied for tax credits in 2006 received them.
I had to reread this paragraph many times. The first sentence – “a similar program that focuses on domestic poverty has been a resounding success” – alerts us right away the authors traffic in different realities than you and I. I know of a program called the New Market Tax Credit that provides a tax credit up to 39 cents on the dollar to businesses that invest in poor U.S. communities, but I don't know anyone who would describe it as a resounding success. I guess it all depends on how you define success. I don’t know what constitutes success for Muzinich and Werker. They don't say.
The World Bank released its annual World Development Report today, this years theme focusing on Agriculture for Development. Given that a large share of the world's poorest people live in rural areas and rely on agriculture for their livelihoods, it is a positive sign that the the Bank is returning to this important topic. (Incidentally, the last time the Bank focused on agriculture in their WDR was in 1982.)
Renewed attention to agriculture is needed to help developing countries increase economic growth, improve food security, and reduce hunger and poverty. Ample evidence exists to show that growth in agricultural productivity can result in pro-poor economic growth and poverty reduction.
Unfortunately, public investments in and attention to agriculture do not align with its importance. Developed countries have failed to reform their farm support programs to ensure that they do not distort trade and harm farmers in developing countries. In terms of development assistance, many developed countries are not providing adequate development funding for agriculture. A groundbreaking report by the Partnership to Cut Hunger and Poverty in Africa released in 2005 found that since 2000 US support to foreign agriculture development projects has largely been stagnant.
If this report succeeds in helping to renew the attention of the World Bank and donor countries to renew investments in agriculture, it will have provided a tremendous service to the development community and poor people around the world.
This week top UN official hailed recent economic growth of sub-Saharan African (SSA) countries. Average GDP growth in 2000-2003 was 3.7%, which then increased to 5.6 % in 2004-2006. This year it is projected to hit 6%, “perhaps the most rapid growth overall in SSA that we’ve seen in decades.” Most countries in the region have adopted better polices and strengthened their exports, plus they have benefited from debt relief. All this increases the potential for achieving sustainable development. The good news has to be tempered by the realities of conflict and corruption that are still prevalent in the region, but what makes the recent growth trends especially promising is that the region is growing faster than the global economy. This is very important considering the region is not on track to meet all the Millennium Development Goals. Africa needs to be growing at 7% to reduce poverty. Last year only a few countries in the region ( Angola, Mauritania, Sudan, Ethiopia,Liberia, Libya, Mozambique and the Republic of Congo) grew above 7%.
The fact that poverty is increasing in most of these countries makes the concept of pro-poor growth crucial. GDP growth is the key to poverty reduction; in fact, studies show that a 1% increase in per capita income will reduce poverty by 1-4%, depending on the initial conditions of the country, which is highly dependent on inequality and ownership among other things. In general, poverty reduction highly depends on economic growth. The recent growth if translated to development will decide if the MDGs are achievable targets for the region. African countries should continue adopting better policies, combat corruption and strengthen conflict prevention measures. For SSA, the challenge is to speed up growth with equitable distribution to achieve the first goal: halving poverty and hunger.
A recent decision by the World Trade Organization puts a fine point on the unfairness of US farm policy, particularly cotton subsidies. Farm subsidies are rightfully blamed for exacerbating the plight of poor farmers in developing countries such as Burkina Faso. This issue is explored in-depth in the 2007 Hunger Report, Healthy Food Farms and Families.
The decision is the latest in what has already been a long and drawn out dispute between Brazil and the United States. Brazil claims U.S. cotton subsidies violate WTO rules and depress world prices for cotton. The case has dragged on for some 5 years already, and this most recent decision certainly does not signal an end to the fight. Enough procedural steps exist to drag the dispute out indefinitely.
This sad state of affairs comes thanks to competing interests, some which seek to create a more free, more fair international trading system, and others which simply want to protect the status quo. Subsidies are, after all, big for business. The Environmental Working Group finds that cotton subsidies amounted to more than $3 billion in 2005 alone.
It's unfortunate that millions of the world's poorest people have to be stuck in the middle.
Low-wage work doesn't pay enough to support a family, that's a given -- so what should be the role of government? Improving Work Supports: Closing the Financial Gap for Low-wage Workers and their Families, by Nancy Cauthen, deputy director of the National Center for Children in Poverty, highlights several important ways government assistance can be improved to help low income families.
This is a comprehensive analysis on the state of "work supports," that nomenclature used to describe a set of government assistance programs—such as earned income tax credits, food stamps, child care assistance, public health insurance, and housing assistance—meant to compensate working families living on low wages and inadequate benefits.
