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The 'Dangerous Delusions' About How to Help the World's Poor

I spoke to one of the people behind a report called "The Poor Are Getting Richer and Other Dangerous Delusions" about how this week's World Economic Forum in Davos will get things wrong.
21.1.15

A panel at a previous meeting of the World Economic Forum (Photo by Rethy K. Chhem/IAEA)

Today, in Davos, Switzerland, world leaders gather for the annual World Economic Forum (WEF) will pat each other on the back about the world being better than ever. While the WEF's recent Global Risks report talked darkly of interstate conflict, high structural unemployment and a worsening climate situation, the mood at this event is usually marked by triumphalism, as politicians and philanthropists award themselves accolades for solving the world's problems.

Annoncering

The idea is that we're living in a golden age. Leaders point to mankind's past and say, "But you're not dying of diphtheria like your Victorian ancestors" as if century-old historical gratitude was some kind of answer to questions about injustice and darkness in the here and now. Of course, the world doesn't really work like that. Poor people don't have to be grateful that they're not in imminent danger of being eaten by a sabre tooth tiger.

The social justice campaign group Global Justice Now has released a report entitled, "The Poor Are Getting Richer and Other Dangerous Delusions" which undermines a number of assumptions about economics and development being promoted by political and business leaders at Davos. These assumptions include the idea that the poor are getting richer, that big business and free markets are the answer, that aid necessarily makes the world a fairer place and that Africa needs some kind of white saviour.

To find out more about it, I spoke to the report's author, Alex Scrivener.

VICE: What did you find in this report and how did you find it?
Alex Scrivener: The difficult bit is where to start. The initial title was actually, "The State of the World", so it's a broad report! I've been working on it for what has felt like years but was actually a few months. It's more a collation of secondary research – bringing together a lot of different information which is already out there in a form which provides quite strong evidence against the myths that purvey a lot of the discourse around global poverty, justice and the state of the world, essentially.

Annoncering

To me, it strikes against an overarching narrative. Bill Gates has said that, "By 2035 there will be almost no poor countries left in the world", and this is a misleading quote your report picks up on.
You're absolutely right; it does tie in to a critique of the overall narrative. The Davos summit is where the world's super rich, governments and business leaders get together and try and convince themselves that they're the good guys. The discourse around the fact that the poor are getting richer – and all the sort of things that they'd like to have us believe – is quite convenient because instead of casting them as undeserving beneficiaries of a system that allows 80 billionaires to earn the same amount of money as half the world's population, it casts them as philanthropic heroes. It means that Bill Gates holds the keys to defeating poverty, which is a huge distortion of reality.

And that's wrong?
There's some truth in what he says, in that the direction the world is going in is away from there being poorer or richer countries… But we have increasingly a situation where countries are rich but the people living in them are poor because of the huge inequality of wealth.

How have you defined "poor"? In absolute terms, or factoring in inequality
It's an interesting question and it's not a question anyone's had a definite answer to. I'd say for us poverty isn't a set income or even a set level of inequality. It's about not having the power to make basic economic choices. So poverty exists regardless of whatever monetary income you have in dollar terms. Having said that, there are various international measurements of poverty that are completely arbitrary, like the World Bank's, which is if you live on below $1.25 a day. Since 1981, though, the number of people living on under $2 a day in sub-Saharan Africa has doubled.

Annoncering

Though the rise from 288 million to 562 million living in poverty is pretty damning, Sub-Saharan Africa's population has grown, so could you argue that it was inevitable that the numbers of poor people there would rise?
Even in terms of proportion it's not great, because if you look at it that way it just means that we've pretty much stayed where we are after the last thirty years. Thirty years of aid, thirty years of hot air from philanthropists, aid agencies, about how much they're helping Africa has actually not really done anything to reduce the proportion of people who are living underneath that completely arbitrary poverty line. And if you look at raw numbers, things are a lot worse.

That's specifically about Africa. Globally, poverty has gone down hugely, but the reason that figure has gone down is mostly because of China, which is interesting because China's probably the one place in the world that has had least involvement from aid agencies and philanthropists in terms of reducing poverty, so if poverty has reduced across the world it's definitely not anything to do with the philanthropic capitalist model.

What would you say to someone who said that people in the West are better off than at almost any other point in history?
I think that's a slight exaggeration, but in terms of standard of living, people make this argument with technology quite a lot and yes, technology does get better, and medicine gets better, but in terms of economic wellbeing, some other things have got worse. Wages have stagnated in the UK recently. People can't afford things that the previous generation would have seen as being quite normal – like property.

Annoncering

And if there's an elite above us making an absurd amount of money, does that make everyone else feel poorer?
Yes. Margaret Thatcher was wrong. The gap between rich and poor does matter. When you're in a society that's unequal, it's a society that becomes increasingly dysfunctional. And that's experienced in many ways. It has an economic and social affect and it devalues democracy and the voice that you have in society.

Do you think society believes that the poor are getting richer and that this is a "dangerous delusion"? The idea of progress remains something people are strongly attached to.
There's probably a bit of doublethink going on. People seem to think the myths being propagated have a lot of truth to them, when the facts don't actually add up. That's a challenge, but what's perhaps more dangerous than the belief that the world is getting better is actually the belief in the solutions that are being proposed. Whether you believe the world's getting better or not, the policy prescriptions put forward by the World Bank, the IMF, big business and most Western governments are actually doing a lot of damage.

So the idea that free trade is always the right policy in every single circumstance or that aid is the answer to global poverty is the problem. We have a situation where aid agencies are asking for £3 a month to feed people in countries that export large amounts of food. These kinds of solutions are the most damaging aspect here and the idea that the poor are getting richer as a result is a symptom of that.

Annoncering

For a long time, the continent of Africa has been portrayed as a place in need of "saving". You make a lot of critiques of aid initiatives. Does aid do more harm than good?
Well, we're not against aid. Aid can be helpful if it's directed towards combatting the structural, underlying reasons for injustice and global poverty. The problem is, more often than not, that's not the case and it's aimed at helping people in the here and now, without changing things in the long term… And a lot of aid is now going through to corporations and private sector actors because it's assumed that they know best and that can sometimes make things worse. The UK helped fund a pro-privatisation pop song in Tanzania, which was connected to the privatisation of the water industry. Two years later the company that was involved in the privatisation was expelled from the country because they were completely incompetent.

What's more worrying is this idea that aid is the answer and that people in Africa are poor and that they need the helping hand of rich countries to bail them out them out. The reason that Africa is poor in the first place is often because of policies that have been imposed from outside. In Ghana, GDP per capita was lower in 1994 than 1983 precisely because they followed all the World Bank's policy prescriptions around having open markets, free trade and privatising all their services. It's the unfair trade system we've currently got in the world that is responsible for a lot of problems and those problems can't be solved by aid, they can be only solved if we have a fairer system.

I'm not suggesting that you or anyone else has an answer to this question, but did you consider what kind of solutions there might be to the issues raised in the report?
If I knew the answer then, ironically, I'd be quite a rich man!

Or maybe you'd be ignored.
Yes! One or the other… There's no Hitchhiker's Guide to the Galaxy type solution but part of the answer to some of these problems are quite simple. We have unfair trade rules across the world: make them fairer. Corporations are avoiding tax across the world: introduce rules to stop them doing that. Climate change is a big problem: introduce stronger environmental legislation and reduce emissions. Those are actually quite boring and difficult but nevertheless strong answers to the problems we've got in the world.

You can think of all sorts of complicated market methods to avoid these questions but you have to go back to the quite boring solutions of regulation and increasing oversight of some of the crazier parts of the market in order to make the world a better place. Ultimately, the solution is made up of these kinds of things, rather than the more exciting, technological ideas put forward at Davos.

@oscarrickettnow