15 may 08 global poverty presentation
DESCRIPTION
This presentation is meant to provide a lay audience with an understanding of the underlying factors driving the economics of Global Poverty.TRANSCRIPT
A Framework for Understanding the Economics of Global Poverty
Jim Donahue
15th May [email protected]
© 2008 Jim Donahue
Overview
1. Nearly half of the world still lives in poverty
2. Some countries have moved from being poor to rich
3. Africa continue to lag behind
4. Mobile telephony is a key enabler for growth in poor countries
5. There is an ongoing debate about what needs to be done to fight extreme poverty
Appendices:
A. Case Study of Malawi: Can it move from poverty to prosperity?
B. Example lifestyles at different levels of economic development
2
1. Nearly half of the world still lives in poverty
3
How are rich and poor countries defined?
How can poor countries become rich?
GNI/Capita (PPP 2004)
- >$20,000
- $10,000 - $20,000
- $5,000 -$10,000
- <$5,000 Source: World Bank Development Indicators - GNI/capita, PPP – 2004
5
Most of the world lives in developing countries and nearly half earn less than $2 per day
01020304050607080
High Income(> $20,000 US)
Upper Middle(10-$20,000)
Lower MiddleIncome (5-$10,000)
Low Income (<$5,000)
33 2541
73
Number of Countries
Population
0
500,000,000
1,000,000,000
1,500,000,000
2,000,000,000
2,500,000,000
3,000,000,000
High Income(> $20,000 US)
Upper Middle(10-$20,000)
Lower Middle(5-$10,000)
Low Income (<$5,000)
1 B
.2 B
2.2 B2.7 B
Source: World Bank Development Indicators - GNI/capita, PPP – 2004
1 Billion <$1/day
3 Billion <$2/day
International Poverty Lines:
Developed Countries
Developing Countries
6
Extreme poverty has been reduced in recent years, but nearly half of the world still lives in poverty
1981
40% less than
$1/day
Additional27% on
less than $2/day
33%
Greater than $2/ day
Total Population: 4.5 Billion
Less than $1/day 1.5 Billion
Less than $2/day: 3.0 Billion
2004
19% less than
$1/day
Additional29% on
less than $2/day
52%
Greater than $2/day
Total Population: 6.4 Billion
Less than $1/day: 1.0 Billion
Less than $2/day: 3.0 Billion
Source: World Bank Development Indicators - % Poverty 1981 - 2004
2. Some countries are moving from being poor to rich
7
8
There of numerous examples of countries moving from being poor to rich
Today’s Emerging Markets
(% growth 2004-05)
Turkey – 7.4%
Venezuela – 9.3%
China – 10.2%
Estonia– 9.8%
Argentina – 9.2%
S. Africa – 4.9%
Malaysia – 5.9%
Philippines – 5.0%
Indonesia – 5.6%
India – 9.2%
Angola – 20.6%
Europe
Greece 2005($23,620)
Greece 1950
Spain2005 ($25,820)
Spain2000
Ireland 1988
Ireland 2005($34,720)
Japan and the Asian Tigers
Japan 2005($31,410)
Japan1950
S. Korea, 2005 ($21,850)
S. Korea 1970
Taiwan 1960
Taiwan 2005(25,000)
Source: World Bank Development Indicators
9
Europe
Czech –$20,140 (6.1%)
Hungary-$16,940 (4.1%)
Estonia -$15,420 (9.8%)
Poland -$13,490 (3.4%)
UK- $32,690 (1.8%)
France - $30,540 (1.2%)
Germany -$29,210 (1.0%)
Italy -$28,840 (0.0%)
Spain -$25,820 (3.4%)
Russia -$10,640 (6.4%)
Romania-$8,940 (4.1%)
Turkey - $8,420 (7.4%)
Ukraine-$6,720 (2.6%)
GNI per Capita/ Growth Rate
(PPP 2005 US$)(%Growth 2004-05)
Source: World Bank Development Indicators
Years to Double Size of the Economy
Developed Countries
Newly Emerging Markets
Key steps to poverty reduction through growth: 1. Create a good investment climate2. Create formal economy jobs 3. Empower the poor to participate in the economy
10Geography
People/Culture
Governance
Infrastructure, Health, Education
Indirect factors influencing investment decisions:
Informal/ Sustenance
Economy
Private Sector Formal
Economy
3. Health and education levels
empower the poor to move into
formal economy jobs
2. Private investment and
export industries create jobs and help grow the
formal economy
1. Key private sector investment decision factors:
11
Six types of underlying factors help to explain a country’s ability to attract investment and grow
Growth (1990-2003) %
Investment (% GDP) %
Exports (% GDP) %
Imports (% GDP) %
Unemployment (00-05) %
Inflation (Avg. 1990-03) %
Gross National Income (GNI)
Economic Output
Economic Performance
GNI per capita
% Industry
% Agriculture
% Services
Geography• Climate
• Arable Land
• Net energy imports
• Natural resource
• Access to trade routes
• Natural Disasters
People• Population growth
• Net Migration
• Ethnic Groups/ Cultural Values
• Population age profile
Governance• Governance Rating: x%
• Competitiveness Index: x/125
• Ease of Doing Business: x/175
Infrastructure• Paved Roads %
• Telecoms
• Internet/PC
• Reliable power
• Water/ Sanitation
Health• Life expectancy
• Child Mortality
• Immunisation
• AIDS%
• Tuberculosis %
Education
• Male Literacy
• Female Literacy
• Primary
• Secondary
• Tertiary
• Political Stability• Control of Corruption• Democracy/People’s Voice• Rule of Law• Gov’t/Regulatory Effectiveness
Economy Poverty
<1$
Between $1 and $2
> $2
12
United Kingdom
Growth (Avg. 1990-03) 2.7%
Investment (% GDP) 16%
Exports (% GDP) 25%
Imports (% GDP) 28%
Unemployment (00-05) 4.6%
Inflation (Avg. 1990-03) 2.7%
GNI: $2.273 trillion (2005)Population: 60 million (2005)
Economic Output
Economic PerformanceGNI/capita, PPP:$32,690 (2005)
Services: 72%
Industry: 27%
Agriculture 1%
France
GNI: $2.169 trillion (2005)Population: 61 million (2005)
Economic Output
Economic Performance
GNI/capita, PPP:$30,540 (2005)
Services: 73%
Industry: 24%
Agriculture 3%
Growth (Avg. 1990-03) 1.9%
Investment (% GDP) 19%
Exports (% GDP) 26%
Imports (% GDP) 25%
Unemployment (00-05) 9.9%
Inflation (Avg. 1990-03) 1.5%
Source: World Bank Development Indicators
> $2 > $2
Economy PovertyEconomy Poverty
13
France (GNI/Capita, PPP $30,540)
United Kingdom(GNI/Capita, PPP $32,690)
Geography• Temperate/ Continental
• Arable Land
• Net Energy imports
• Natural Resources
• Access to trade routes
• Natural Disasters
People• Births per woman: 1.7
• Net migration: +.16%
• Ethnic Groups/ Culture
• Population age 0-14: 18.2%
Governance• Governance Rating: 90%
• Competitiveness Index:10/125
• Ease of Doing Business: 6/175
Infrastructure
• Paved Roads 100%
• Mob Tel :112%
• Internet: 42.3%
• Reliable power
• Water/ Sanitation
• Life expect: 78
• Child Mort: 0.6%
• Immun: 80%
• AIDS: 0.2%
• TB: 0.12%
Health Education
• M Literacy: 99%
• F Literacy: 99%
• Primary: 99%
• Secondary: 95%
• Tertiary: 64%
• Political Stability• Control of Corruption• Democracy/Voice• Rule of Law• Gov’t/Reg Effect’ness
Geography• Temperate/ Continental
• Arable Land
• Net Energy imports
• Natural Resources
• Access to trade routes
• Natural Disasters
People• Births per woman: 1.9
• Net migration: + .1%
Governance
Infrastructure
• Paved Roads 100%
• Mob Tel: 80%
• Internet :36.5%
• Reliable power
• Water/ Sanitation
• Life expect: 79
• Child Mort: 0.5%
• Immun: 86%
• AIDS: 0.4%
• TB: 0.12%
Health Education
• M Literacy: 99%
• F Literacy: 99%
• Primary: 99%
• Secondary: 93%
• Tertiary: 54%
• Ethnic Groups/ Culture
• Population age 0-14: 18.6%
• Governance Rating: 89%
• Competitiveness Index:18/125
• Ease of Doing Business: 35/175
• Political Stability• Control of Corruption• Democracy/Voice• Rule of Law• Gov’t/Reg Effect’ness
Sources: World Bank Development Indicators 2005, WEF Global Competitiveness Rankings 2006, World Bank Governance Index-2005, UN Population Division : Net Migration 1995-2000/Births per woman 2004, Koppen Climate Classification, ITU Mob/Internet Ranking 2005
14
Asia
India China
Extreme Poverty reduction since 1980
70 million fewer
400 million fewer
….but it is improving
Millions are living in poverty…..
India (2004) China (2004)GNI per Capita/
Growth Rate(PPP 2005 US$)
(%Growth 2004-05)
Source: World Bank Development Indicators
Hong Kong-$34,670 (7.3%)
Japan -$31,410 (2.6%)
Taiwan - $25,400 (5.0%)
S. Korea-$21,850 (4.0%)
Malaysia - $10,320 (5.2%)
Thailand - $8,440 (4.5%)
China - $6,600 (10.2%)
Philippines - $5,300 (5.0%)
Indonesia - $3,720 (5.6%)
India - $3,460 (9.2%)
Vietnam - $3,010 (8.4%)
<1$ Between $1 and $2
> $2<1$
> $2Between $1 and $2
15
China
GNI: $2.3 trillion (2005)Population: 1.3 billion (2005)
Economic Output
Services: 33%
Industry: 52%
Agriculture 15%
India
GNI: $804 billion (2005) Population: 1.1 billion (2005)
Economic Output
Services: 51%Industry: 27%
Agriculture 22%
Economic Performance
GNI/capita, PPP:$6,600 (2005)
Growth (Avg. 1990-03) 10.3%
Investment (% GDP) 44%
Exports (% GDP) 34%
Imports (% GDP) 32%
Unemployment (00-05) 4.2%
Inflation (Avg, 1990-03) 4.9%
Growth (Avg. 1990-03) 5.9% (9.2)
Investment (% GDP) 24%
Exports (% GDP) 14%
Imports (% GDP) 16%
Unemployment (00-05) 5.0%
Inflation (Avg, 1990-03) 6.8%
Economic Performance
GNI/capita, PPP:$3,640 (2005)
Source: World Bank Development Indicators
<1$> $2
Between $1 and $2
Between $1 and $2
<1$
> $2
Economy PovertyEconomy Poverty
16
India(GNI/Capita, PPP $3,460)
Geography• Temperate/ Continental
• Arable Land
• Net Energy imports
• Natural Resources
• Access to trade routes
• Natural Disasters
People• Births per woman:1.7
• Net Migration: -.03%
• Ethnic Groups/ Culture
• Population age 0-14: 23.6%
Governance
Infrastructure
• Roads ND
• Mob Tel: 30%
• Internet: 6.3%
• Reliable power
• Water/ Sanitation
• Life expect: 71
• Child Mort: 3.7%
• Immunis: 86%
• AIDS: 0.4%
• TB: 0.12%
Health Education
• M. Literacy: 98%
• F. Literacy: ND
• Primary: 98%
• Secondary: 70%
• Tertiary: 15%
China(GNI/Capita, PPP $6,600)
Geography• Tropical, Temperate, Dry
• Arable Land
• Net Energy imports
• Natural Resources
• Access to trade routes
• Natural Disasters
People• Births per woman 3.1
• Net Migration: -.03%
• Ethnic Groups/ Culture
• Population age 0-14: 32.4%
Governance
Infrastructure
• Roads 57%
• Mob Tel 8%
• Internet: 1.7%
• Reliable power
• Water/ Sanitation
• Life expect: 68
• Child Mort: 8.7%
• Immun: 67%
• AIDS: 0.9%
• TB: 0.26%
Health Education
• M. Literacy: 95%
• F. Literacy: 81%
• Primary: 95%
• Secondary: 79%
• Tertiary: 28%
• Governance Rating: 43%
• Competitiveness Index:43/125
• Ease of Doing Business: 134/175
• Political Stability• Control of Corruption• Democracy/Voice• Rule of Law• Gov’t/Reg Effect’ness
• Governance Rating: 38%
• Competitiveness Index:54/125
• Ease of Doing Business: 93/175
• Political Stability• Control of Corruption• Democracy/Voice• Rule of Law• Gov’t/Reg Effect’ness
Sources: World Bank Development Indicators 2005, WEF Global Competitiveness Rankings 2006, World Bank Governance Index-2005, UN Population Division : Net Migration 1995-2000/Births per woman 2004, Koppen Climate Classification, ITU Mob/Internet Ranking 2005
17
India is struggling to improve its poor infrastructure in an effort to improve its capacity to grow
3. Africa continues to lag behiond
18
Sub-Saharan Africa is not on track to meet the UN Millennium Development Goals by 2015
19
Goal 1: Eradicate Extreme Poverty and Hunger
TARGET Halve, between 1990 and 2015, the proportion of people whose income is less than $1 a day
Goal 2: Achieve Universal Education
TARGET Ensure that, by 2015, all children will be able to complete a full course of primary schooling
Goal 4:Reduce ChildMortality
TARGET Reduce by two thirds, between 1990 and 2015, the under-five mortality rate
Goal 6:Combat HIV/AIDS,Malaria &Other Diseases
TARGET Have halted by 2015 and begun to reverse the spread of HIV/AIDS
√√ - goal achieved- goal achieved
√√ - on-track- on-track
xx – not on-track – not on-track
√√ - goal achieved- goal achieved
√√ - on-track- on-track
√√ - good progress- good progress
30 out of 48 African countries have GNI/capita less than $2,000 and are not well integrated into the global economy
20
LIBYA
EGYPT
TUNISIA
NIGER
CHADSUDAN – 5%
ALGERIA
MOROCCO
MALI
WESTERNSAHARA
MAURITANIA
SENEGAL
IVORY COAST
7%
LIBERIA GHANA 51%
TOGO
BENIN
SIERRALEONE
BURKINAGUINEA NIGERIAGUINEA
BISSAU
THEGAMBIA
CAMEROON
CENTRALAFRICANREPUBLIC
CONGOGABON
EQUATORIALGUINEA
Democratic Rep of Congo
ANGOLA
TANZANIA
ETHIOPIA
KENYA
UGANDA
RWANDA
BURUNDI
SOMALIA
DJIBOUTI
ZIMBABWE
ZAMBIAMOZAMBIQUE
MADAGASCAR
SOUTH AFRICA
BOTSWANA
NAMIBIA
LESOTHOSWAZILAND
MALAWI
RedSea
Source: World Bank Development Indicators - 2005
GNI/Capita, PPP
->$20,000
- $10 – 20,000
- $5-10,000
- $2 – 5,000
- < $2,000
Paul Collier proposes a model of four traps to explain why some countries are unable to grow out of poverty
21
The Conflict Trap The Natural Resource Trap
Landlocked with bad Neighbours
Current Conflicts:• Somalia• Cote d’Ivoire• Chad• Sudan
Recent Conflicts:• DRC• Congo Republic• Liberia• Sierra Leone
• Nigeria – Oil
• Zambia – Copper
• Botswana – Diamonds
• Sierra Leone – Diamonds
• DRC – Diamonds, etc
• Chad – Oil
• Angola – Oil, Diamonds
• Malawi
• Central African Republic
• Burkina Faso
• Rwanda/ Burundi
• Uganda
• Chad
• Zimbabwe
• Somalia
• Chad/Sudan
• Nigeria
• Angola
• DRC
• Ivory Coast
Source: The Bottom Billion, Paul Collier, Oxford University Press, 2007
Bad Governance
Globalisation reinforces poverty for many poor countries
• Wealth of global investments opportunities highlights high risk of poorest countries for both foreign and local investors
• Even more difficult to compete against other Asian competitors such as India and China
• Increased emigration opportunities intensifies ‘brain drain’ of limited pool talent
22
Malawi’s economy reflects challenges typical of many African countries
Geography• Tropical wet and dry
• Arable Land
• Net Energy imports
• Natural Resources
• Landlocked
• Natural Disasters
People• Births per woman: 6.1
• Net Migration: -.08%
• Ethnic Groups/ Religion
• Population age 0-14: 45%
Governance
Infrastructure
• Paved Roads 18.5%
• Mobile Tel: 3.3%
• Internet: 0.3%
• Reliable power
• Water/Sanitation
• Life expect: 37
• Child Mort: 17.8%
• Immun: 77%
• AIDS: 14.2%
• TB: 0.44%
Health Education
• M. Literacy: 76%
• F. Literacy: 49%
• Primary: 71%
• Secondary: 29%
• Tertiary: 0.4%
•Governance Rating: 31%
•Competitiveness Index:117/125
•Ease of Doing Business: 110/175
• Political Stability• Control of Corruption• Democracy/Voice• Rule of Law• Gov’t/Reg Effect’ness
GNI: $2.1 billion (2005)Population: 13 million(2005)
Economic Output
Economic Performance
GNI/capita, PPP:
$650 (2005)
Services: 49%Industry: 15%
Agriculture 38%
Growth (Avg. 1990-03) 3.0%
Investment (% GDP) 8%
Exports (% GDP) 27%
Imports (% GDP) 41%
Unemployment no data
Inflation (Avg, 1990-03) 31.1%22
<1$> $2
Between $1 and $2
Economy Poverty
Sources: World Bank Development Indicators 2005, WEF Global Competitiveness Rankings 2006, World Bank Governance Index-2005, UN Population Division : Net Migration 1995-2000/Births per woman 2004, Koppen Climate Classification, ITU Mob/Internet Ranking 2005
23
Governance
Infrastructure
• Paved Roads 18.5%
• Mob Tel: 3.3%
• Internet: 0.3%
• Reliable power
• Water/ Sanitation
• Life expect: 37
• Child Mort: 17.8%
• Immun: 77%
• AIDS: 14.2%
• TB: 0.44%
Health Education
• M. Literacy: 76%
• F. Literacy: 49%
• Primary: 71%
• Secondary: 29%
• Tertiary: 0.4%
•Governance Rating: 31%
•Competitiveness Index:117/125
•Ease of Doing Business: 110/175
• Political Stability• Control of Corruption• Democracy/Voice• Rule of Law• Gov’t/Reg Effect’ness
Malawi Poverty Reduction Strategy (2004/05)
Nurse Training
Salary Top-ups
Nutrition Programs
HIV Youth training
ICT Skill Training
Rural Electricity
Roads Projects
Water Distribution
Train 3000 Teachers
154 Teacher Houses
22 New Schools
Educational Material
Campus for Mzuzu Univ
Female Scholarships
Courtrooms & Judges
Anti-Corrupt Bureau
New Financial Systems
Economic/ Industrial Policy Reform
Services: 49%
Industry: 15%
Agriculture 38%
Tourism Standards
Agricultural Productivity
Tourism Committee
Small-scale Irrigation
Off-shore Fishing
Fish Farming
Mobile Telephony
Promote Small-scale Mining
Increase Telecom Capacity
Farmer cooperatives
WTO Doha
RoundPrivate
Foreign Direct
Investment
World Bank Projects
EU ProjectsIMF/WB Debt Cancellation
Other/NGO Projects
UK DFID ProjectsUK DFID Projects
UK DFID Projects
Political instability and poor governance have been problems in many African countries - but many conflicts are ending and governance is improving
24
LIBYA – 22%
EGYPT 36%
TUNISIA – 51%
NIGER – 29%CHAD - 11%
SUDAN – 5%
ALGERIA 29%
MOROCCO 42%
MALI 46%
WESTERNSAHARA
MAURITANIA 44%
SENEGAL
IVORY COAST
7%
LIBERIA GHANA 51%
TOGO
BENIN
SIERRALEONE
BURKINAGUINEA NIGERIA
14%
GUINEABISSAU
THEGAMBIA
CAMEROON
CENTRALAFRICANREPUBLIC
CONGO
GABON
EQUATORIALGUINEA
Democratic Rep of Congo
– 3%
ANGOLA 14%
TANZANIA 36%
ETHIOPIA – 18%
KENYA 26%
UGANDA 30%
RWANDABURUNDI
SOMALIA 0%
DJIBOUTI
ZIMBABWE 5%
ZAMBIA 31% MOZAMBIQUE
38%MADAGASCAR
50%
SOUTH AFRICA 64%
BOTSWANA 74%
NAMIBIA 58%
LESOTHOSWAZILAND
MALAWI 34%
RedSea
Source: World Bank Governance Indicators - 2005
World Bank Governance Rating
2005
- 75%
- 50- 75%
- 25 – 50%
- 10 – 25%
- 0 – 10%
Improved Governance Rating (1996 – 2005): • Botswana (Corruption)• Ghana (Democracy)• Mozambique (Stability)• Tanzania (Effectiveness)• DRC (Democracy, Regulations)• Nigeria (Democracy)• Madagascar (Corruption)• Liberia (Democracy)• Senegal (Stability, Democracy)
Political Stability
- Year conflicts ended
- Conflicts still unresolved
2007
2002
2002
1999 2003
1993
2003
2002
1992
1994
Other Developing Country Governance Ratings:• China – 38%• India – 43%• Turkey – 47%• Romania – 52%
Africa’s economic growth since the mid-1990’s is more promising for poverty reduction, but diversification away from commodities is still a challenge
25
LIBYA – 5.3%EGYPT 3.7%
TUNISIA – 4.5%
NIGER 3.7% CHAD
14.5% SUDAN 6.1%
ALGERIA 5.1%
MOROCCO 4.3%
MALI 5.9%
WESTERNSAHARA
MAURITANIA 4%
SENEGAL
IVORY COAST
-0.1%
LIBERIA GHANA 5.1%
TOGO
BENIN
SIERRALEONE 13.7%
BURKINA FASO 5.6%
GUINEA NIGERIA 5.9%
GUINEABISSAU
THEGAMBIA
CAMEROON 3.7%
CENTRALAFRICANREPUBLIC
CONGO
GABONEQUATORIALGUINEA 23.2%
DEM REP CONGO 4.4%
ANGOLA 9.9%
TANZANIA 6.5%
ETHIOPIA 4.7%
KENYA 3.4%
UGANDA 5.6%
RWANDA 5.1%
BURUNDI 5.6%
SOMALIA
DJIBOUTI
ZIMBABWE (5.7%)
ZAMBIA 4.7% MOZAMBIQUE
8.4% MADAGASCAR 2.0%
SOUTH AFRICA
3.9
BOTSWANA 5.9%
NAMIBIA 4.7%
LESOTHO 2.9%
SWAZILAND 2.5%
MALAWI 3.4%
RedSea
Source: World Bank, African Development Indicators, 2007
Annual GDP Growth (2000-2005)
> 5% - 18 countries
3- 5% -16 countries
1-3% - 6 countries
< 1% - 6 countries
Countries with Average Growth Greater than 5%, 2000-2005
- Sustained, diversified growth
- Dependant on oil as major export
GNI: $223 billion (2005)Population: 47 million(2005)
Economic Output
Economic Performance
GNI /capita, PPP:$12,120 (2005)
Services: 65%
Industry: 31%
Agriculture 4%
Growth (Avg. 1990-03) 2.3 (4.9)%
Investment (% GDP) 17%
Exports (% GDP) 28%
Imports (% GDP) 26%
Unemployment (00-05) 27.1%
Inflation (Avg, 1990-03) 9.0%
Geography• Dry, Temperate, Continental
• Arable Land
• Net Energy imports
• Natural Resources
• Access to trade routes
People• Births per woman: 2.8
• Net Migration: -.01%
• Ethnic Groups/ Culture
• Population age 0-14: 32%
Governance
Infrastructure
• Paved Roads 21%
• Mob Tel: 72%
• Internet: 6.8%
• Reliable power
• Water/ Sanitation
• Life expect: 46
• Child Mort: 6.6%
• Immun: 83%
• AIDS: 15.6%
• TB: 0.5%
Health Education
• M. Literacy: 87%
• F. Literacy: 85%
• Primary: 99%
• Secondary: 65%
• Tertiary: 15%
• Governance Rating: 64%
• Competitiveness Index:45/125
• Ease of Doing Business: 29/175
• Political Stability• Control of Corruption• Democracy/Voice• Rule of Law• Gov’t/Reg Effect’ness
Economy Poverty
<1$
> $2Between $1and $2
South Africa’s diversified economy still has its issues but provides hope for African growth
Sources: World Bank Development Indicators 2005, WEF Global Competitiveness Rankings 2006, World Bank Governance Index-2005, UN Population Division : Net Migration 1995-2000/Births per woman 2004, Koppen Climate Classification, ITU Mob/Internet Ranking 2005
4. Mobile telephony is a key enabler for ending extreme poverty
27
Mobile telephony has a broad range of benefits appropriate to fighting poverty in developing countries
• Telecom infrastructure
• Emergency and distance health benefits
• Access to internet
Infrastructure, Health, Education
% Industry
% Agriculture% Services
Mobile Telephony
• Increased Mobile penetration increases GNI Growth
Faster Overall Growth
Productivity Benefits Across All Sectors:
• Access to agriculture market prices and other information
• Jobs in rapidly growing telecom sector
• Low-cost enabler for micro-businesses
• Banking for previously ‘unbanked’
• Increased international remittances
• Innovative use of text services
New Targeted Services
28
Vodacom in the Democratic Republic of Congo (DRC) is an example of how private investment in mobile telephony can create jobs in Africa
• Using cellular networks to ‘leapfrog’ fixed line technology – In 1997 less that 15,000 landlines for 65m people– Vodacom grew to 3 million mobile subscribers since 1997
• Alieu Conteh, founder and chairman of Vodacom Congo showed entrepreneurial possibilities
• Now one of the country’s biggest employers– 600 employees/ 5,000 contractors
• Planning to create the country’s first stock market and float Vodacom Congo in a public offering
29Source: The New York Times, 17th June, 2007, What Does Africa Need Most: Technology or Aid?
5. There is an ongoing debate about what needs to be done to fight poverty
30
The Optimists: Poverty can be eliminated in Africa – more aid is needed for a ‘big push’
• Jeffery Sachs: UN Millennium Development Goals can be met, but would cost $150-200 billion a year in aid by 2015
• 2005 G8 Glen Eagles Summit leaders pledged to double aid to Africa from $25 to $50 billion per year by 2010
• Bob Geldof’s Africa Commission and Live8 supported more G8 aid funding
• Bono: Led debt relief campaign and foreign aid increases in US• Bill Gates using resources to address treatable diseases• Tony Blair, Gordon Brown, Bill Clinton global poverty initiatives
31
32
Infrastructure Health
Jeffery Sachs advocates a number of simultaneous interventions at the village level for sustainable development
Education
Millennium Villages
Agriculture
• Road improvements and community vehicle access
• Internet and mobile telephony access
• Electricity for small businesses
• Nutrition and clean water
• Health services and facilities
• HIV/AIDS, TB and Malaria Treatment
• Primary and secondary education
• Eliminate gender disparity
• ICT training
• Agricultural productivity and training
• Irrigation, fertiliser
• Support new village businesses
79 Millennium Villages operating or planned in twelve different countries in Africa:
Ethiopia, Ghana, Kenya, Madagascar, Malawi, Mali, Mozambique, Nigeria, Rwanda, Senegal, Tanzania and Uganda.
The Pessimists: Aid has not been effective
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Temporary Famine Relief?
Where has $2.3 trillion in foreign aid over past 50 years gone?
Corrupt and wasteful
Bureaucrats?
Swiss bank accounts?
Paul Collier proposes a more balanced agenda for action to tackle poverty in the poorest countries
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The Conflict Trap The Natural Resource Trap
Landlocked with bad Neighbours
Source: The Bottom Billion, Paul Collier, Oxford University Press, 2007
Bad Governance
Globalisation reinforces poverty on many poor countries
Military support for post-conflict countries
Charter for post-conflict governance
Aid for reconstruction
International laws and norms for resource
wealth
Substantial aid to develop infrastructure
and for basic social services
Military support to prevent coups
Trade policies encouraging exports
Intelligent use of aid to encourage reform
Selected use of military intervention (e.g. Sierra
Leone)
‘Big Push’ temporary aid for export infrastructure
Temporary trade protection from Asian
competitors
7 things you can do to help fight global poverty
1. Educate yourself about the causes and solutions of poverty
2. Vote and let your politicians know you care about global poverty
3. Contribute to organisations fighting poverty
4. Buy fair trade goods
5. Invest in companies that trade ethically
6. Volunteer for NGOs fighting poverty – build a school!
7. Tell others about poverty – give a presentation to your child’s school
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