The Silent Disaster of World Poverty

By John Micklethwait and Adrian Wooldridge

John Micklethwait and Adrian Wooldridge work for the Economist. They are the co-authors of "The Right Nation: Conservative Power in America" (Penguin, 2004).

Los Angeles Times

January 10, 2005

Could 2005 be the year in which mankind finally conquers extreme poverty?

This might seem an odd moment to pose such a question. The Asian tsunami has smashed lives to smithereens and demonstrated the hubris of human civilization. The more mankind dreams of taming ancient evils, the more those ancient evils return to demonstrate their power.

Yet even the darkest cloud can have a silver lining, or in this case a cotton one. The tsunami that has blighted the lives of 5 million people could eventually help improve the fate of 100 times that number. But only if the West is prepared to take really hard decisions — such as allowing Americans to buy cheaper shirts, shorts and bras.

The connection between the wave, world poverty and cheaper blouses at your local Wal-Mart may not be obvious. But begin with a simple principle: The enormous outpouring of sympathy for the tsunami victims and the $4 billion pledged so far worldwide will be most useful if it can be extended from relieving the short-term poverty caused by a natural disaster into a sustained crusade to remove the long-term scourge of poverty. One billion people on this planet live on roughly a dollar a day, and on average they can expect to die about 30 years before the rest of us do.

Historically speaking, the omens for success are not good. Worse disasters, such as the Tangshan earthquake in 1976 (which killed as many as 655,000 people in China) and the war in Congo (3 million), did not change much. Already there are fears that governments will pay for their tsunami pledges by cutting aid budgets elsewhere.

Yet there are grounds for hope as well.

The tsunami coincides with an attempt to put world poverty at the center of the global policy agenda for 2005. In July, Tony Blair will host a summit of the G-8 industrialized nations on reducing poverty, particularly in Africa. In September, the United Nations will hold a special summit to review progress on meeting its somewhat optimistic "Millennium Development" goals, which include eradicating extreme poverty and hunger and introducing universal primary education by 2015.

More important, there are signs that the summiteers have learned something from their past mistakes.

After blowing billions on big infrastructure projects, the World Bank has a better sense of what reduces poverty: investing in primary education (particularly for girls), providing better access to water, eliminating malaria and so on. Technology is also helping: The number of people afflicted by polio, for example, has shrunk from 350,000 individuals 15 years ago to just 800 people today, thanks to better vaccines.

Outside Africa and the Arab world, there have been signs that developing countries have also learned from their mistakes. By opening up their economies, India and China have dragged millions of people out of poverty. In 2004, developing countries grew by 6.1% (with China and India growing by 8.8% and 6%, respectively).

But how best can the West help? It is only proper that people should respond to a natural disaster with direct aid, but direct aid has a patchy record when it comes to the bigger job of alleviating structural poverty.

Far too often aid ends up in the bank accounts of African dictators or projects built to please the donors. That, in part, explains why the world spent $100 billion in aid in sub-Saharan Africa between 1970 and 1999, according to the World Bank, only to see a fall in real per-person gross national product across the region. In the end, there is no substitute for strengthening the economies of poor countries. With the very poorest ones, debt relief would help, but the real focus should be trade.

This is where those shirts come in. Alongside food products, textiles offer one of the best industries for the developing world; they account for half of Sri Lanka's exports, for example. But like agriculture, they are subject to heavy tariffs by Western countries. This suits American textile workers and the U.S. Treasury (which picks up several billion dollars a year in tariffs). But it helps to keep countries like Sri Lanka mired in poverty.

In 2001, a meeting of trade ministers in Doha, Qatar, led to a new push to liberalize trade in farm goods, textiles and services by the end of 2004. Now it will be lucky to get finished by 2006. By the World Bank's count, even a limited version of the Doha plan could boost global income by between $290 billion and $520 billion a year (with more than half these gains going to poor countries) and lift 144 million people out of poverty by 2015.

If you want to help the poor, give money by all means. But also give the poor access to Western markets.