Our moment to get serious about global poverty
By Charles Alhgren
Lawrence Today magazine, Spring 2002
Charles Ahlgren retired in 1997 after a 30-year career with the Foreign Service. Specializing in economic affairs, his State Department postings have taken him to Addis Ababa, Ethiopia; Singapore; Capetown and Pretoria, South Africa; Wellington, New Zealand; and Caracas, Venezuela. From 1986-89, he was consul general in Chiang Mai, Thailand, supervising the United States' anti-narcotics efforts in the "Golden Triangle" region of Southeast Asia. A member of the Peace Corps in the program's infancy, he taught at the University of Nigeria from 1962-64 before joining the State Department in 1967. As Stephen Edward Scarff Memorial Visiting Professor, he spent the first two terms of the 2001-02 academic year teaching American Diplomacy: Ethics and the National Interestand The Politics of Globalizationin the government department.
Despite spending nearly a trillion dollars over five decades, it now seems clear that the postwar efforts of the United States and other industrialized nations to develop the Third World have accomplished little. Fifty years ago there were 2 billion people on the earth, about half of them living in poverty. Today there are 6 billion, and half of them still live in poverty.
No wonder, then, that development assistance has been widely discredited -- the term commonly used in Washington is "aid fatigue." I've certainly found no constituency here in Wisconsin in favor of more foreign aid. The general perception is that foreign aid "give-aways" have not won us friends and have largely gone to corrupt elites like Mobutu in Zaire and Marcos in the Philippines, not to the poor. Certainly there is much truth to this negative view of development assistance; the global war on poverty to date has been a flop.
Less than $1 a day
Yet we cannot, we must not, give up the struggle for development. The need has never been greater. Over one billion people live on less than one dollar a day. In over 60 low-income countries, individual consumption has declined by about one percent annually over the past 15 years. Millions of our fellow human beings die each year of easily preventable diseases such as diarrhea and malaria. Increasingly desperate, Third World people are destroying our planet's lungs, the rain forests, to obtain food and firewood or risking their lives swimming the Straits of Gibraltar, crossing the Arizona desert in search of work, or stowing away in shipping containers. The Third World is clearly in a deep social crisis. And, since four out of five people on earth live in the Third World, humanity is in crisis.
In part because we haven't done enough, or haven't done it right, the poor of the world are still with us, and growing more numerous every day. In this brave new world of open economies, international capital markets, and global competition, the gap between the rich and poor countries continues to widen. And, thanks to the globalization of communications, the poor of the world are increasingly aware of this growing disparity.
Herein lies the danger. The United States is sadly deluded if it believes it can exist as an island of peace and prosperity in such a sea of poverty and despair. Our world has shrunk, and in the new, globalized, highly interdependent world, we in the developed countries will be increasingly affected by events in the Third World. In the new global economy, our interests, needs, and indeed our very destinies are inextricably linked.
We have been slow to recognize this, and although we have been the chief beneficiary economically of this globalizing world, our contribution to the needs of the least fortunate has been steadily decreasing since the days of the Marshall Plan. Most Americans are ignorant of this withering away of aid, and we like to think we are still the most generous country in the world.
The Scrooge factor
Polls show that the average American believes we spend 10 percent of our federal budget on foreign aid. In actual fact, however, the United States now spends less than half of one percent of the budget on foreign aid and ranks dead last on the list of the 21 largest aid donors in terms of aid given as a percentage of Gross Domestic Product. The poorest of the poor, the 600 million Africans, get little more than a billion dollars a year from us -- that is, about four dollars a year from each American. In Wisconsin alone, that much is spent annually on deer hunting. No wonder, then, that we are increasingly perceived around the world as, in the words of economist Paul Krugman, a Scrooge country.
As I have worked in Africa, Asia, and Latin America over the past four decades, this national miserliness has been a source of great personal anguish. I saw so much malnutrition, babies with swollen bellies, young people with no work and no hope, and I often asked myself, "Doesn't my country care about this world of poverty and suffering?"
It should care, because the economic health of the Third World matters immensely to us, for a whole host of reasons.
First, we have a positive stake in the Third World economies, because of important markets and $500 billion in investments there.
Second, there is the so-called "avoidance agenda": we want to avoid such costly things as environmental degradation (some of the world's most important zones of biodiversity are in the Third World, including the rain forests); the spread of diseases, deadly pathogens resistant to drugs, across our borders; international crime, such as trafficking in drugs and people, not to mention terrorism; state failures that usually lead to costly humanitarian or military interventions and sometimes to civil or regional wars; and large refugee movements and humanitarian crises.
In short, global inequalities have strategic significance and Third World economic failures can be very costly for the United States. After September 11, it should be obvious that we can no longer afford to be complacent about Third World economic failure; it menaces our very way of life. Self-interest, as much as humanitarian impulses, requires that America make a new and profound effort to ease global poverty, ignorance, and disease.
We need not act alone
What policies should the United States pursue to address these concerns? Given our rather dismal track record with development to date, is there anything we can do that might work better than in the past?
To begin with, we need not go it alone. There is a growing international consensus that the moment has arrived to once again step up the war on global poverty. The United Nations General Assembly has adopted the Millennium Declaration, which commits member governments to work toward an ambitious set of development goals for the year 2015. By that date, the U.N. hopes to reduce infant mortality by 75 percent, achieve universal primary education, and reverse the spread of AIDS.
It is easy to be cynical about the United Nations and the international community. In the past they have often set lofty goals and then ignored them. Unlike many previous undertakings, however, the Millennium Declaration provides for the establishment of a mechanism to mobilize financial resources to achieve its development goals, and it has established a high-level panel on financing development, headed by former Mexican President Ernesto Zedillo. Zedillo has recommended a comprehensive list of actions to be carried out in the areas of trade, debt relief, and investment, not just in the area of foreign aid. His report does, however, call for doubling the amount of foreign aid to be given to poor countries each year for the next 15 years. This would require an additional $50 billion a year from the West and Japan.
The British have already strongly endorsed the goals of this new U.N. initiative and have announced that they will increase their foreign aid by 45 percent over the next three years. The Bush administration, however, has yet to show any enthusiasm for this endeavor. While a Senate resolution calling for tripling foreign aid over five years is gaining bipartisan support, Secretary of the Treasury O'Neill is known to be skeptical and Republican House leaders are openly hostile. They seem to be sticking to their long-standing position that market forces, and market forces alone, are all that is required to pull the Third World up.
My work in developing countries tells me that market forces alone won't be enough -- many African countries, especially, are just too poor to achieve sustained economic growth by themselves, and they lack the necessary infrastructure to attract foreign investment. Even given debt relief and duty-free access to developed markets, there still are many developing countries that desperately need foreign aid to move forward, which is why we must contribute our share of the new U.N. aid initiative.
I strongly believe that if the United States doesn't get involved and doesn't show leadership at this juncture, this will be another failed initiative. The U.S. contribution to the initiative would be about $15 billion a year -- a lot of money, certainly, but less than the supplemental appropriations requested just for the Pentagon this year and next.
Idealists can support this as the right thing to do, as it will reduce world poverty, disease, and hunger, but there are reasons why realists, too, should support this initiative: Doesn't it make sense to spend a fraction of our homeland defense budget to prevent more failed states that harbor terrorists? To have a more developed world to trade with? To avoid costly interventions abroad?
Foreign aid that works
What is to prevent additional aid from being wasted by inefficient or corrupt Third World regimes, as has so often been the case? It should be made clear that the U.N. plan does not advocate simply giving large sums to Third World governments; rather, it is a very balanced and doable plan. Moreover, in the past, too much of our own aid has gone for security or other political purposes, not for humanitarian relief or poverty reduction. Where we have given humanitarian or development aid, we've had some notable successes.
There are enough "lessons learned" that we can now target aid in a much more effective manner. We have seen, for example, that a little can go a long way in tipping the balance towards successful outcomes -- vaccination programs, for example, or micro-credit projects. This is particularly true in the field of health, where such relatively cheap measures as distributing bed nets soaked with insect repellant and providing rehydrating fluids can make a tremendous difference.
The World Health Organization recently issued a report by a group of economists and health experts, headed by Jeffrey Sachs of Harvard, on the links between macroeconomics and health. The report shows that just a few health conditions are responsible for a high proportion of the avoidable deaths in the poor countries and that a handful of well-targeted measures could save the lives of around 8 million people per year. Since a healthy workforce is required for economic growth, investment in health care pays five- or sixfold dividends to the economy.
We can and should link our aid to specific performance indicators, such as increases in primary school enrollment. We should also target aid to those countries that practice pro-growth macroeconomic policies and initiate democratic reforms. Reforms are also needed in the world trade and financial systems. A reduction of developed-country agricultural subsidies, for example, would greatly benefit Third World agricultural export prospects.
The war on world poverty, like the war on terrorism, won't be easy, quick, or cost-free to win, but we cannot continue to claim global leadership on the cheap. Whatever victory in the war on poverty may cost, in the long run it will be cheaper than the tragic consequences of continuing to neglect the Third World.
A defining moment
Properly managed, and with a little imagination, development assistance can work. We should seize the moment, get involved in the new global development coalition that is forming, and help create a Marshall Plan for the new era, the era of globalization. Without economic development, none of America's goals in the world -- peace, democracy, expanding markets, human rights, the preservation of the global environment -- can be achieved.
The time has come to reengage, to demonstrate global leadership on the issue of Third World development. We must not let the opportunity slip away and must fully support the new international effort to help the world's poor. Not only is it in our own best interests, it is the right thing to do. We may be a Scrooge nation, but growing up in Appleton I learned that we are not a nation of Scrooges. No. We are a people of compassion, grace, and charity.
I try to impress on my students that, as sons and daughters of Lawrence, they are among the privileged of this world. Consequently, they have an obligation to serve, a responsibility toward present and future generations. This is true, of course, for all of us.
Just as the Second World War was the defining moment for Tom Brokaw's Greatest Generation, this is our moment. If we can seize it, we will be remembered not just for winning a cold war or the war on terrorism, but for having answered the ancient call of the Prophet Isaiah to "Undo the heavy burdens, and let the oppressed go free."