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21 Things They Never Tell You About Poverty & Poor Countries February 27, 2014

Posted by OromianEconomist in Africa, Africa Rising, African Poor, Agriculture, Aid to Africa, Dictatorship, Domestic Workers, Economics, Economics: Development Theory and Policy applications, Environment, Ethnic Cleansing, Food Production, Oromo, Oromo the Largest Nation of Africa. Human Rights violations and Genocide against the Oromo people in Ethiopia, Poverty, Self determination, The Colonizing Structure & The Development Problems of Oromia, The Tyranny of Ethiopia, Theory of Development, Uncategorized, Youth Unemployment.
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  • Poverty-as-rule-not -exception is difficult to bend our minds around because we tend to base our views about the world on direct experience. If people around us seem mostly well-fed and content, then why shouldn’t everybody else be? We still don’t know as much as we should about poverty and we try to ignore poor people. Most people’s experience of the global poor is the waiter at their table or the pool attendant, the ones lucky enough to have jobs. Only by direct experience and immersion in local circumstances is it possible to have a vague inkling of what it might be like to be genuinely destitute. There’s no obligation on holidaymakers to go wandering around in slums, but anybody who claims knowledge about deprivation should experience or observe it first-hand for themselves, ideally for a long time.
  • Which undermines my first four points. As Morten Jerven says in his book Poor Numbers: How We Are Misled By African Development Statistics And What To Do About It, “the most basic metric of development, GDP, should not be treated as an objective number but rather as a number that is a product of a process in which a range of arbitrary and controversial assumptions are made.” Jerven finds that the discrepancy between different GDP estimates is up to a half in some cases. This supports my experience from working in the least developed countries, where statistics offices are usually underfunded and don’t have the resources to collect data often or well enough.
  • There’s a kind of false scientism: foreign academic economists spend ages refining complicated econometric models despite the raw material being rubbish. In the absence of good numbers, the only immediate alternative is to live in a country, to use good theory and to rely where necessary on case studies and even anecdote.
  • A report from Oxfam last month pointed out that 85 people, about as many as would fit on a double-decker bus, own as much wealth as the bottom half of the world’s population.
  • The Spirit Level by Kate Pickett and Richard Wilkinson shows that equality is good for everyone. Redistribution reduces poverty and makes life better for the rich in the form of less crime, better education and a more cohesive society. Global inequality is getting worse, not better. If we don’t radically reduce inequality the poor will eat us, so aid isn’t an option, and it’s not about the rich world “saving” the poor. It’s essential for everyone.
  • Although things are improving, a huge chunk of the world’s population remain poor. Over a fifth of humans, 1.29 billion, are considered extremely poor . In effect the equivalent of every man, woman and child in Europe, the United States and the Middle East scrape by on 75 British pence a day adjusted for the cost of living in each country. About a third of the world lives on less than $2 a day. The poorest half of the world – 3.5 billion people – own only 0.71% of the world’s wealth between them.
  • A billion people live in chronic hunger. Nearly a third of all children are chronically malnourished, which unless addressed before the age of two often leaves them stunted and mentally impaired. A sixth of the world’s adults can’t read or write and many more have only rudimentary literacy. Sub-Saharan Africa has only two doctors for every 10,000 people, which is partly why on average its inhabitants live to an average age of 56.
  • Rather than a term like “developing” to describe these people and countries, the travel writer Dervla Murphy’s phrase “majority world” is more accurate.
  • “The four basic needs: food, housing, clothes and medicine must be cheap and easy for everybody. That’s civilisation”, says Jon Jandai, a farmer from northeast Thailand. I’d add primary, secondary and tertiary education, too.
  • Lower income countries have leapfrogged some technologies. For example many will never install fixed telephone lines because mobile coverage is so good. Vast numbers of people will never touch a PC, doing all their computing on a smartphone or tablet.
  • The governments of poor countries should be more adventurous, leapfrogging ideologies too. Some proponents of economic growth argue that environmental sustainability and a focus on happiness will handicap poverty reduction. But it could enable some countries to prioritise the important things in life. Endless growth is impossible and undesirable.
  • Beyond a certain point rich inefficiency is the real problem. Why do developing countries ape the development paths and economic structures of the West? We are wage slaves who perform bullshit jobs so that we can service our mortgages. The advance of the car ruined everyone’s quality of life so that a minority can sit in air-conditioned metal boxes in jams. Clever though-leadership in the majority world could lead the way for the rich. Bhutan’s idea of Gross National Happiness is an example.
  • There’s plenty of food to go round. World agriculture produces 17% more calories per person today than it did 30 years ago despite a 70% population increase, due to rising yields, higher farming intensity and more use of land. The real problems are the system of distribution and energy use. If the rich world didn’t hog all the food and produce it inefficiently there’d be enough for everyone.
  • The amount officially spent on each poor person globally is US$20 a year, according to the World Bank. The amount has doubled in the last decade following a dip in the late 1990s. But several opinion polls show that rich country inhabitants think they’re much more generous than they really are. Americans think that their government spends 28% of the budget on aid when it’s really about 1%. Brits are almost as bad. The result of this widespread overestimation of generosity is that many people in rich countries want to cut aid.



Emergent Economics

Prompted by Bill Gates’s annual letter and the response from the Overseas Development Institute I thought I’d list some of the things that in my experience seem to be less understood about poor countries. (I wanted to list 23 things like Ha-Joon Chang on capitalism but I couldn’t think of another two). I use the word poor on purpose because although the word risks sounding patronising or dismissive, euphemisms like developing and less-developed can be worse. Thoughts are welcome.

1. Poverty is the rule, not the exception.For most people life just isn’t as good as it is for you and I, the comfortable people from a country rich enough to allow us the literacy, time and Internet access to read blogs written by well-meaning left liberals. Poverty-as-rule-not -exception is difficult to bend our minds around because we tend to base our views about the world on direct experience. If…

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