Tuesday, October 14, 2008

Arab World: Grinding Poverty Meets Extravagant Wealth

As I wrote this post, I looked at other Blog Action Day posts about poverty. I was tempted to ditch my sober discussion for a more chirpy, hopeful, feel good post with multiple links encouraging people to donate to this or that charity. However, with as serious a subject as poverty, I cannot do chirpy, and though donations to charities are absolutely critical, most offer only stop-gap measures to alleviate poverty, not to eliminate it.

There is perhaps no better time to talk about poverty, or rather the persistence of poverty than now as the world's economic house of cards, constructed by unscrupulous speculators comes crashing down. The whole debacle exposes as myth the idea that unfettered, unregulated capitalism is good for the common man, that when the man on the top of the pyramid makes untold sums of money, those at the bottom should be thankful for the crumbs that trickle down. The past decade has seen an unprecedented accumulation of wealth both in the West and elsewhere, but instead of alleviating the problems of poverty, it has significantly widened the gap between the rich and the poor. In many developing countries the problems are exacerbated by poor governance and corruption but also by the conditions imposed by lending agencies like the IMF and World Bank. Loans are often given subject to free-market, free-trade reform that encourages privatization and deregulation. These conditions, imposed by lending agencies have failed to help alleviate poverty in recipient countries whose governments and even less their people have little say in how aid is being used.

Nowhere in the world is that discrepancy between wealth and poverty more glaring than in the Arab world . Oil-exporting countries have made untold billions of dollars whereas the economies of neighboring non-oil exporting countries have stagnated. However, the unprecedented injection of wealth into the area has not altered the indices of poverty according to a recent report. The reasons for this lack of progress are many but a few stand out. The frenzied building activity in the Gulf and Saudi Arabia has consumed billions on over the top showpieces that have done little for the economic sustainability of the countries themselves and even less for the long term economic prospects of the region. Whereas the Atlantis resort in Dubai features rooms for $25,000 a night, in Yemen, 4 in 10 people live on less than $2 a day. In the pursuit of national prestige, Saudi developers are planning to build a skyscraper taller than Burj Dubai at the cost of $1,000,000,000 (billion) at a time when bread riots are breaking out in Egypt as subsidies are being curbed.

Why should those who have help those who don't? If not for pure altruism, then for self preservation. Poverty and economic instability breeds political instability. Wealthy oil producers need to invest in projects that promote a sustainable economic future for the region. The region needs to coordinate its economic future and, not a moment too soon, the first Arab economic forum is scheduled to be held in Kuwait next January.
Of course simply throwing money at the problem will not solve it. Here is what I think, as a non-economist, is needed to help reduce poverty:
  • Provide immediate debt relief to developing countries
  • Donors should not force recipient countries to adopt free-market "reforms" that are detrimental to their own people.
  • How aid money is to be spent has to be the decision of recipient countries as represented by local NGOs and civic groups who are best equipped to decide how best to spend the aid.
  • Top-down investments to create jobs should be matched by bottom-up investment into small businesses, education, basic infrastructure and health care to create sustainable economic growth and jobs that provide living wages.
  • Service economies, especially ones that services the needs of richer countries are not the intrinsically stable and are not the answer. A sustainable economy is one in which its citizens produces "something" tangible.
  • Now more than ever, sustainable economies are by necessity ones that are environmentally sustainable. It is also the poor who bear the brunt of environmental neglect.

Above all, donors and developing countries need to get off they high horse and start listening to the people they are trying to help; they know what they need and how best to do it.

(Cartoon: Naji Al Ali)


وكاله أنباء العربي الفقير/Poor Arab News Service said...

excellent intro to the cause of poverty and excellent recommendation to combat it

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