Is reducing world poverty the end goal?

While studying here I’ve joined a student committee on International Development Cooperation. I wrote this article for the magazine (see below). For those readers in Jyväskylä, Development Cooperation Week is held from March 6-10. (English Master’s program info here)

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When talking about international development cooperation, we usually concentrate on helping developing countries get out of poverty, or in other words, grab hold of the development ladder.

There are a thousand ways to reduce poverty and millions of people out there with their own ideas on the best approach to help countries achieve this goal.

From an economic point of view, many economists believe that breaking down international trade barriers and donating more foreign aid is the key to reducing poverty. The World Trade Organization insists that free trade is a vital tool for assisting the developing world. Giving these countries fair access to the western markets and assisting them develop their own markets surely promotes economic growth for struggling economies.

From a business perspective, many marketers are now looking further than the usual rich markets and have begun targeting developing countries as possible consumers. Some have argued that multinational companies must shift their focus from high profit margins to high volume. Even with little money to spare, a market of four billion people should not be ignored, especially when these people have so many needs to be met. (blog about this here)

But is alleviating poverty the end goal? Is closing the gap between rich and the poor our main objective for international development cooperation? When you think of world peace, do you think of everyone living the same lifestyle as people in the developed countries?

The sad truth is that we can’t all live on this planet consuming the way the developed world does. There are numerous studies out there that tell us we’re already living beyond the world’s carrying capacity. We only have to look to the big emerging economies to see the truth in this statement. We applaud China and India for their amazing economic advances, but in looking at the environmental track record associated with this growth we start to understand that a billion more cars on the road is not such a good idea.

What we need is not just development -it’s sustainable development. (blog about it here, here, here… let’s just say it’s a frequent topic)

The goal is not to just help developing countries achieve the same lifestyle as developed. That’s a disaster in the making. And the answer is not so simple either. Our rich lifestyles are contagious. Once developing countries start having money, they’ll want to imitate western consumption patterns, and businesses will surely make that an easy process. Looking at this from another perspective, who is to say that people in developing countries who have suffered from poverty shouldn’t enjoy the same luxuries we have had for decades? Tapping the massive developing market is not the big challenge. Doing so in a way that does not lead to mass consumption of non-renewable products while still maintaining a high quality of life is the real challenge.

How do we do this?

This is one of the biggest challenges facing our generation today and most likely, no one has the perfect answer to this complex puzzle. However, I have some ideas on the matter.

For business and government leaders in the developing markets: Introduce goods and services that actually fill a need. People need transportation, but do they need private cars? Would an effective public transportation system based on renewable energy be a smarter choice?

For you, me and everyone in between: Start changing your own consumption patterns! Helping the world’s poor doesn’t always involve giving money. Being a good role model can go a long way.

Development Cooperation Magazine of the student union of JYU

Here’s the mag – can be found in library, Lozzi etc. – there are only a few articles in English but worth it – nice pictures of JYY’s initiative in India too.

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5 thoughts on “Is reducing world poverty the end goal?

  1. Jay Godse says:

    I’ll define poverty as a condition where the physiological and safety needs are not being met, and not a condition where a person is unable to self-actualize.

    People helping out with poverty relief always have an alterior motive. The problem is that the more powerful they are, the more damaging the alterior motives. For example, a lot of rich governments try to help by donating millions of dollars to the poor to the poor governments of the poor countries. In the process, the various levels of government take their cut and use it to buy arms from the rich countries. This is damaging because the presence of arms reduces the poor people’s ability to have their most basic physiological and safety needs met. If it is not arms, most of these rich government officials in poor countries use their “cut” to buy goods and services from rich western countries. At the end of the day, not only does the poor person not get anything, what little he has is threatened by the extra weaponry held by the country’s ruling class. Individual donors’ alterior motives are usually to “give back” because they feel fortunate. These kinds of donations are manageable alterior motives for the poor.

    A different way exists, which is to provide resources directly to the poor. The Grameen bank (www.grameen.com) provides micro-loans to poor business folks in poor countries with no assets except their social networks. These businesses end up being profitable and pay back the loans. Because the governments and their officials don’t get a cut, both the resources and the ability to self-generate new resources is left in the hands of the poor. That is a long-term solution to poverty.

    Kiva (www.kiva.org) is a charity that operates in a similar way. It uses individual donors from rich countries to make cheap loans to poor business folks and they have a 97% payback rate. Again, both the donated resources and the means to self-generate new resources are left in the hands of the poor.

    With Kiva or Grameen, individual donors can give or loan money to individual recipients without rich or poor governments transferring the money and taking unfair cuts.

    If my definition of poverty is acceptable, then poverty reduction is a worthy goal. For the folks in the hot economies of the developed world, or from the ones in India and China making money off their hot economies, many have levels 1 & 2 of Mazlov’s hierarchy covered off. They are looking for self-actualization. That is what drives consumption. (However, if they sacrifice love and esteem for self-actualization they will lose happiness and feel as poor as their brethren in poverty). For these folks, claims of poverty are often really unhappiness due to their inability to self-actualize. Lowering the inability to self-actualize should not be the goal of poverty reduction.

  2. janeporter says:

    Agreed with most of that – FDI has always been a bigger help than ODA and as we’ve talked about before.. I’m a keener for kiva;) (haha, what poetry I have here)

    But, you say that the more powerful someone is, the more damaging the ulterior motives… ok.. but what about philanthropists like Bill Gates? What’s his damaging ulterior motive? Give him a better name – instead of just the Microsoft tycoon? So what?

    The ulterior motives come in when gov’t to gov’t donations aren’t transparent and there’s corruption at the top.

    but… the point is – what happens after that?

    Say my kiva donations really start helping a country lift itself out of poverty. they follow the same path of economic growth because their people start having more disposable income and hence, they can start buying more disposable ‘stuff’. Then what?

    How do we stop the chinas and the indias from becoming mass consumers of destruction like us?

  3. Jay Godse says:

    Bill Gates has nothing to prove financially. He has no alterior motives. Most government officials are not secure financially and often feel that they have something to prove.

    Transparency is a wonderful thing. I agree with you on that. For China and India to gain our levels of waste, they will need to provide their customers extreme value or have relatively high levels of natural resources. It’s hard for 2.5 billion people to do that when they make up almost half the world’s population.

  4. […] AIDS, malaria etc., but more importantly we need a long term plan on sustainable development. (Read previous post on full thoughts on this). This is real, long term planning – something that economists have a hard […]

  5. […] But, I have to say one thing that it often left out of the international development debate – ending poverty can’t be the end goal either.  Sustainable international development … now there’s a whole other […]

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