Over the years different approaches have been developed in dealing with poverty in the Third World. Two basic development strategies have been developed to combat poverty. The first is the economic growth strategy, increase people’s standard of living through industrialization. Second is basic-needs strategy, which focuses on meeting the short term needs of people. Both methods have been attempted in fighting poverty. The economic growth strategy has been successfully employed in Asia with China being a recent example. The basic-needs strategy had been used throughout Africa with limited success. Hampered by civil and guerilla wars along with the death of millions by AIDS and malaria Africa seems unable to take the first basic step forward.
Jeffrey Sachs sets forth a basic-needs strategy in “Can Extreme Poverty be Eliminated?” Working with his colleagues at the U.N. Millenium Project a goal of halving extreme poverty by 2015 (compared to 1990) has been set. Sachs states that this can be accomplished if affluent nations would increase assistance to $160 billion per year. In comparing Africa to Asia, Sachs brings out the notable lack of flood plains in Africa compared to Asia but also the heavy burden Africa suffers because of tropical diseases. How should the money be spent? About one-half would be used for health and education. The majority of the remaining would be for infrastructure improvements within these nations. An example of the Millenium Project is the village of Sauri, Kenya. Over a five year period $2.75 million will be invested in this village. It is one of eleven that has been established (Rich 2007). The goal is to pour money into the village and see what happens. The infrastructure and agricultural sectors have benefited. Some of the critics point to the use of the money to support “clanism” and corruption including the reselling of supplies, by villagers, to neighboring communities (Rich 2007).
In “The Politics of Hunger” Paul Collier discusses the need to encourage large high-productivity farms to grow crops thus creating employment and a way to feed people. Using Brazil as a model he brings out how large “technologically sophisticated agricultural companies have demonstrated how successfully food can be mass-produced (Collier 2008).” Thus following the Brazilian model Africa would begin using mass produced cash crops to feed itself. Collier focuses upon three areas that Western nations must change to better combat hunger. The first is slaying the romantic populist delusion of peasant agricultural. The peasant farmer is ill prepared to cope with modern methods of a global economy. The second is war against genetically modified foods. Crops that could grow easier in the drier African climates are banned because Europe has banned the crops. The third is the subsidies of ethanol. This one act would help lower the price of food by lowering demand for the crops. (Collier 2008)
In “The Micromagic of Microcredit” we are introduced to an idea that was first developed by Nobel Laureates Muhammad Yunus, "for their efforts to create economic and social development from below.” (Nobel 2006) They have accomplished this through the use of microcredits. Microcredits are small loans given to people building their small business, enabling them to grow and increasing the savings of these people. In some areas these loans allow the borrowers to avoid the moneylenders who charge 200% interest. It also compliments Goal 3 of the U.N. Millenium Project which is to “promote gender equality and empower women” with almost 76 percent of microcredit customers being women. Private groups such as Kiva Loans and the Gates Foundation use this technique with more private groups coming online.
Each of these methods has a place in the fight against extreme poverty. All three of these methods understand that it is more than a food when it comes to poverty. Each talks about the need for creating jobs to put people to work. The objectives of the U.N. are more comprehensive in dealing with not only poverty but other issues that these poor nations feel, such as, disease, child mortality, education and environmental sustainability. The U.N. also talks about the need to empower women as does the concept of microcredit. Sachs is stressing the idea of pouring billions of dollars into the project and hope it sticks while Collier is pushing the free market as the means of achieving the goal. The use of microcredit, which empowers women, shows a steady trend of moving families out of poverty. (Nobel 2006)
In many ways these methods could be a complimentary to each other. Mass producing farms could be created in some of these nations. This would allow the production of food for many more people. It would require workers to tend the farms creating employment but whether enough to achieve low unemployment is in doubt. Mass farming versus the Millenium village is the difference between allowing the free market to function or spending billions of dollars on a program that, as has happened in the past, is here today but gone tomorrow as the next new idea comes along. These methods are also prone to corrupt governments that require a monitoring program to ensure the aid is going to correct sources. As have been shown in the past there is nothing to prevent the nationalization of the large farms causing concern with some nations. The U.N. method also seems to carry forward the romantic idea of the peasant farmer when major food production maybe needed.
The U.N and the large farms require that infrastructure improvements be made from roads and irrigation to mobile phones and disease prevention (Sachs 2006) The bright spot for the U.N. program is the adaption of the program to local needs where as large farms can only be used in geographies that would allow it. Collier also stresses the need to abandon the war on science and allow genetically modified foods that could grow in drier climates.
There are three economic perspectives that need to be viewed from these methods. The first is the Liberal Economics Perspective. This method stresses the need for privately designed methods to fight poverty. The ideas behind Collier would fit within this perspective; Private farming would be allowed to mass produce within the framework of large farms, this would create jobs and increased yield to the levels that modern technology could allow.
The Dependency Perspective says that the poor are depended upon others for aid. The continuous United Nations programs, such as the Millenium Project is an example of outside aid being used to help develop the area. The problem arises that when the aid stops will the positive effects continue or begin reversing.
Another view is the Participatory Development Perspective where locals are involved in the decision making process of how to improve their lives and what technology should be used. Microcredit fits within this framework by providing needed capital to local entrepreneurs which places the decision making at the local level where needs are known. (Kelleher 2006)
In looking over the various methods proposed to fight poverty the first question that needs to be asked is “what is causing the poverty?” For the way to fight poverty caused by war will be treated differently than if there is a lack of infrastructure; In war you are dealing with a refugee issue, while building an irrigation system may help a village achieve the ability to grow food in drought stricken areas. Another area mention by Sachs is the oversight and monitoring of aid due to past experience with corrupt governments. For areas that suffer extreme poverty the basic-needs strategy is needed. The goal is for people to achieve a minimum subsistence before moving into the economic growth strategy mode. After World War II the basic-needs strategy was used in Asia with great success. It provided a basic subsistence until the economic growth model could be allowed to work. In looking at the U.N Millenium Project I see a lack of follow up when the aid ends. The project consists of 11 villages in Africa that has received over the years with limited success. What is prevent these villages to revert back to destitution when the U.N. advisors and money leave.
Collier advocates large farming projects in these areas. As much as I like this idea I fear the corruption of these governments which could lead to nationalization and abandonment of these farms. I would begin this type of program if possible in those nations whose geography makes it possible. In looking at the different alternatives I find microcredit the most welcoming to use. Outside of education it has made the empowering of women a real possibility. It has allowed women to start or expand a business to better provide for her family and future.
Attempting to fight poverty is never an easy thing for the causes vary. It is never enough to just feed these people but also to bring in an education and jobs; for long term success there are three areas that look promising. The first is the growing trend in microcredit. As Grameen Bank has shown in Bangladesh by giving women the ability the move upward the whole family will benefit. (Nobel 2006) The other two areas involve private giving and migrant workers who send money back home. According to Holly Yeager migrant workers, in 2006; send back home $332 billion and private charity giving reached $34.8 billion. (Yeager)
Kelleher, Ann and Klein, Laura. Global Perspectives, A Handbook for Understanding Global Issues, 2006, Pearson Education
Sachs, Jeffrey D. 2005. “Can Extreme Poverty be Eliminated?” Scientific American, Sept 2005. p. 56-61
Collier, Paul. 2008. “The Politics of Hunger”. Foreign Affairs. November/December 2008
Boudreaux, Karol and Cowen, Tyler. 2008. “The Micromagic of Microcredit.” The Wilson Quarterly, Winter 2008
Rich, Sam. 2007. “Africa’s Village of Dreams” The Wilson Quarterly. Sept 2007
Yeager, Holly. 2008. “ The New Face of Global Giving” The Wilson Quarterly, Summer 2008
Yunus, Muhammad. http://nobelprize.org/nobel_prizes/peace/laureates/2006/index.html
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