The Millennium Development Goals are eight international development goals that 192 United Nations member states and at least 23 international organizations have agreed to achieve by the year 2015, one of them is reducing extreme poverty. However, as teh world enters a new era of globalization and technology advancement, does international aid still play the most crucial role in eradicating global poverty?
The UN and Millennium Development Goals
In retrospect, international aid has always been the main driver and plays the most crucial role in eradicating global poverty. But, as global population continues to burgeon in recent years, how far reaching can international aid be? Essentially, we ask ourselves what is the long-term solution to eradicating global poverty.
International aid usually comes in humanitarian aids, providing basic necessities for the impoverished. Indubitably, this allows them to be able to survive and continue to live in such dire and horrendous living environment; however, is this what they hanker for? Surely not, they would want to get rid of poverty as soon as possible. But, does international aid allow them to do so? I doubt. Aid is a basic income grant, and it creates a dependency among the poor on international need, slowly, they begin to lose incentives to fight against poverty and start to rely on this “oxygen tank” to survive. in fact, most of the time, international aid has gone to the pockets of the politicians, causing widespread corruption, inefficiency and bureaucracy. And example the dictator of Zire, Mobuto Sese Seko. After he lost the support of the West when the Cold War ended, he had sufficient personal wealth to pay off the entire external debt of Zaire.
The pace of economic growth has definitely outgrow the pace of international aid. As population continues to expand, are we able to tackle the root cause of global poverty– lacking development?
Historically, poverty reduction has been a result of economic growth. The Industrial Revolution that took place during the 18th and 19th century has led to high economic growth and succeeded in reducing poverty in the West. In 1820, 75% of the population lived on less than a dollar a day, while in 2001, only about 20% do.
Hence, development is the only solution. This can achieved know-how to the locals and facilitate them in planning their economy. Bangladesh’s Bank offers a worldwide famous example- provide microloans to locals to do business, this gives locals a source of income and employment opportunities so as to reduce their dependency n aid. Recently, China announced its plan to provide a US$10bn loan to Africa and reduces its tax on African goods; its aid comes with no sting attachments. World Bank has also joined China in moving some of China’s lower skill manufacturing so provide employment. Development now plays a more crucial role in eradicating global poverty. China’s late leader Deng Xiao Ping set development as China’s main objective for governance for the next few decades and he succeeded as China ascends to become the world’s largest economy by 2050. Development is crucial but where does the capital come from? International aid. A combination of both will reduce people’s dependency on aid and provide them with a source of income.
Sounds easy right? Improving infrastructure such as education, improve living environment and personal wealth through development, the road that China, South Korea and Taiwan have walked, a perfect plan indeed. However, this is too idealistic. Why is global poverty able to stagnates for so many decades? There must be other factors that are acting as barricades to our goal of eradicating global poverty. One of these factors is poor administration, as I have touched a bit just now. Poor administration has poor policies, adding on to its corruption conundrum. In terms of economics, such administration lacks the knowledge to derive sensible and investor friendly fiscal and monetary policies; in terms of infrastructure, such administration’s over-bureaucratic nature stymies the refurbishment of the country due to corruption and inefficiency; in terms of stability, citizens’ complaints and hatred for the government has often provided a fillip for militants and revolutionary to fight against the government, worsening the situation further. An example of such country will be Somalia. The Economist honored it as the “Worst Country on Earth“.
Of course, economists have listed other ways of eradicating global poverty. However, I have seen them falling into these three broad categories- development, international aid and good governance. It is difficult to suggest which one can stands out from the rest. In-depth examination indicates that none of them can eradicate global poverty without another. Development needs the supervising of good administration while international aid provides supports in logistics, technology and capital. Coordination among these three measures is able to allow us to combat global poverty. However, the question of “which plays the most crucial role” has to be answered. In my perspective, it is good administration. A good administration can provide all the necessary conditions for a economic prosperity. It gives us investor-friendly and sound economic policy, stability in the country so that we can place an emphasis on development, education- the ultimate way to rid poverty and ultimately GDP growth. In sum, development and international aid without a good government comes at high costs and hinders mission to reduce poverty.
(It’s my first time writing on poverty, hope it flows.)
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