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Opinions of Monday, 6 March 2006

Columnist: Asumadu, Kwame Dr.

Poverty Erradication Or Poverty Alleviation?

A LACK OF COMMITMENT BY DEVELOPED COUNTRIES TO ADDRESSING INCREASING POVERTY BY DR KWAME ASUMADU Poverty in Sub-Saharan Africa including Ghana continues to grow. World Bank reports indicate that today, more than 314 million Africans live on less than $1 a day?nearly twice as many as in 1981. The African continent is home to 34 of the world's 48 poorest countries and 24 of the 32 countries ranked lowest in human development. The HIV/AIDS pandemic costs Africa 1 percentage point of per capita growth a year, while malaria kills about 2,800 Africans a day (www.worldbank.org/aids).

According to International Labor Organization ILO), in all regions, working poverty, defined as earning US$1 declined in 2005 except in Sub-Saharan Africa where it increased by another 2.5 million, and the Middle East and North Africa where it remained unchanged. The total number of US$2 a day working poverty only declined in Central and Eastern Europe (non-EU) and CIS, Latin America and the Caribbean, and most considerably in East Asia. On the other hand, it increased in South-East Asia and the Pacific, South Asia, the Middle East, North Africa and especially in Sub-Saharan Africa ((http://www.ilocarib.org.tt/news/2006/job-report.htm).

ILO reports also indicate that at 9.7 %, Sub-Saharan Africa?s unemployment rate was the second highest in the world in 2005. The Middle East and North Africa remained the region with the highest unemployment rate in the world in 2005 at 13.2 per cent.

In 2004, Africa's average rate of economic growth was 4.4 percent in 2004, with virtually all countries reporting positive growth. Projected growth in 2005 was 4.1 percent in 2005 due to the benefits from past reforms initiated more than a decade ago, and a more peaceful environment arising from the reduction of civil conflict. However, it is estimated that Sub-Saharan Africa needs to grow consistently at an average rate of 7% to make any impact at all on the current level of poverty.

Given Sub-Saharan Africa?s current non-competitiveness, including Ghana, in attracting Foreign Direct Investment, arising in part from poor infrastructure, nascent private sector development particularly small to medium enterprise, low levels of skilled labour, corruption etc. growing the economies of Sub-Saharan Africa consistently at an annual average of 7% per is a tall order indeed. Recognising this fact, the United Nations Millennium Goals initiative calls for, among other things, increased resources from developed countries to ensure that the objectives of Goal Number One are achieved i.e. reducing by half the proportion of people living on less than a dollar a day, and reducing by half the proportion of people who suffer from hunger by 2015.

The World Bank continues to be the largest provider of development assistance to Sub-Saharan Africa including Ghana, and its financial support has increased significantly in the past five years. In 2005, the World Bank?s development assistance to Sub-Saharan Africa was $3.9 billion, representing an increase of some 80 percent compared with 2000. Actual disbursements also increased to $4 billion, more than double the figure for 2000 figure. Debt relief under the Heavily Indebted Poor Countries (HIPC) Initiative also amounted to $3.1 billion. Ghana was one of the beneficiary countries of the World Bank HIPC initiatives.

While some measu rable progress towards improving human development in Sub-Saharan Africa including Ghana has been achieved over the past decade, much still remains to be done.

Since the advent of the New Partnership for Africa's Development (NEPAD) and the Poverty Reduction Strategy Paper (PRSP) process, many Sub-Saharan African countries including Ghana have assumed greater and effective ownership of their own development. Both NEPAD and the PRSP process are based on partnerships with donors, dependable financial flows, measurable results, empowerment of poor people, participation by civil society and local communities, and accountability of recipient governments to their own people.

There is little doubt that with sufficient commitment, Sub-Saharan Africa?s poverty and indeed poverty in other parts of the world can be eradicated. There is sufficient resources in the world to achieve this as demonstrated by the amount of money developed country governments are prepared to spend on initiatives they deem as priorities, and therefore more deserving of their tax-payers? funds.

One can be excused by thinking that despite the public pronouncements on the need to address poverty in developing countries such as Ghana, the actions on the ground tell a different story, and demonstrate only a tokenistic approach to tackling poverty in the world. This view is supported by how these approaches are described in almost every official document and the vast academic literature available on the subject i.e. ?poverty alleviation. The word ?alleviate? means ?to make something easier to bear, relieve or lessen.?, and suggests that the developed world, which incidentally has the resources and therefore the political wherewithal to address poverty in the world, has ?decided? only to ?alleviate? rather than ?eradicate? i.e. ?to uproot or obliterate? poverty in the world.

While not absolving present and past leaders of Ghana of blame to eradicate poverty in our country due to corruption, policy failure, the lack of political will etc, the developed world has to accept that poverty eradication in the world is now beyond the capacity of individual affected countries.

The causes of poverty in the world today are known, and what is required is a Marshall Plan similar to what was developed to address economic decline in Europe after World War II. In the 1947 Marshall Plan, the key objective was to return Europe to its pre-war economic position, to enable it to participate effectively in the global economy. While the primary beneficiary of the Marshall Plan was war-devastated Europe, the USA also benefited significantly as many of the resources needed to re-start Europe?s economy were bought from US firms. The Marshall Plan not only kick-started Europe?s economy but also contributed enormously to the economic expansion of the USA.

Today, Sub-Saharan Africa has a population of over 600 million. An estimated 30% of this population or roughly 200 million are effective consumers i.e. their purchasing power enables them to participate in the global economy through the consumption of goods and services, which invariably are imported from overseas. This compares with the populations of the USA and Japan which in 2005 were nearly 300 million and 127 million respectively. In Ghana, the situation is no different. One third or nearly 6 million of our population of 20 million can be described as middle class with the purchasing power to consumed goods and services currently traded internationally.

Poverty in the world today is one of the causes of global insecurity, and eradicating it will contribute significantly to addressing extremism. In addition, global poverty is no longer a political issue: it is a moral issue. How can the affluent world stand by and see the majority of human kind wallow in abject misery? To allow the situation to continue makes a complete mockery of global leaders who openly profess that their faith provides the moral compass for their political leaderships and therefore the policies they develop and implement.

There is still a great deal of compassion and commonsense in the world today. One hopes that the leaders, who have the wherewithal to change the course of global events and history, will now recognize that poverty in the world must be ?eradicated? rather than ?alleviated?.



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