15 May 08 Global Poverty Presentation

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This presentation is intended to provide a general audience with an understanding of the key factors underlying the economics of global poverty and an overview of the issues and arguments surounding …

This presentation is intended to provide a general audience with an understanding of the key factors underlying the economics of global poverty and an overview of the issues and arguments surounding this complex issue.

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  • 1. A Framework for Understanding the Economics of Global Poverty Jim Donahue 15th May 2008 jimdonahue7@yahoo.co.uk © 2008 Jim Donahue
  • 2. Overview 1. Nearly half of the world still lives in poverty 2. Some countries have moved from being poor to rich 3. Africa continues to lag behind 4. Mobile telephony is a key enabler for growth in poor countries 5. There is an ongoing debate about what needs to be done to fight extreme poverty Appendices: A. Case Study of Malawi: Can it move from poverty to prosperity? B. Example lifestyles at different levels of economic development 2
  • 3. 1. Nearly half of the world still lives in poverty 3
  • 4. How are rich and poor countries defined? How can poor countries become rich? GNI/Capita (PPP 2004) - >$20,000 - $10,000 - $20,000 - $5,000 -$10,000 - <$5,000 Source: World Bank Development Indicators - GNI/capita, PPP – 2004
  • 5. Most of the world lives in developing countries and nearly half earn less than $2 per day Number of Countries Developing Countries 80 73 Developed Countries 70 60 41 50 40 33 25 30 20 10 0 High Income Upper Middle Lower Middle Low Income (< (> $20,000 US) (10-$20,000) Income (5- $5,000) $10,000) Population 3,000,000,000 2.7 B 2.2 B 2,500,000,000 International 2,000,000,000 3 Billion Poverty <$2/day Lines: 1,500,000,000 1 Billion 1B 1,000,000,000 <$1/day 500,000,000 .2 B 0 High Income Upper Middle Lower Middle Low Income (< 5 (> $20,000 US) (10-$20,000) (5-$10,000) $5,000) Source: World Bank Development Indicators - GNI/capita, PPP – 2004
  • 6. Extreme poverty has been reduced in recent years, but nearly half of the world still lives in poverty 1981 2004 19% less than 40% less 33% $1/day than 52% Greater $1/day than $2/ day Greater Additional than $2/day 29% on Additional less than 27% on $2/day less than $2/day Total Population: 4.5 Billion Total Population: 6.4 Billion Less than $1/day 1.5 Billion Less than $1/day: 1.0 Billion Less than $2/day: 3.0 Billion Less than $2/day: 3.0 Billion 6 Source: World Bank Development Indicators - % Poverty 1981 - 2004
  • 7. 2. Some countries are moving from being poor to rich 7
  • 8. There of numerous examples of countries moving from being poor to rich Today’s Emerging Europe Japan and the Markets Asian Tigers (% growth 2004-05) Ireland 2005 Japan 2005 ($34,720) ($31,410) Spain2005 Taiwan 2005 ($25,820) (25,000) Greece 2005 S. Korea, 2005 Estonia– 9.8% ($23,620) ($21,850) Argentina – 9.2% S. Africa – 4.9% Malaysia – 5.9% Turkey – 7.4% Spain Ireland 2000 Venezuela – 9.3% 1988 China – 10.2% Japan 1950 Philippines – 5.0% Greece Indonesia – 5.6% Taiwan 1950 1960 India – 9.2% Angola – 20.6% S. Korea 1970 8 Source: World Bank Development Indicators
  • 9. Europe GNI per Capita/ Years to Double Size of the Economy Growth Rate (PPP 2005 US$) Developed (%Growth 2004-05) Countries UK- $32,690 (1.8%) Newly Emerging Markets France - $30,540 (1.2%) Germany -$29,210 (1.0%) Italy -$28,840 (0.0%) Spain -$25,820 (3.4%) Czech –$20,140 (6.1%) Hungary-$16,940 (4.1%) Estonia -$15,420 (9.8%) Poland -$13,490 (3.4%) Russia -$10,640 (6.4%) Romania-$8,940 (4.1%) Turkey - $8,420 (7.4%) Ukraine-$6,720 (2.6%) Source: World Bank 9 Development Indicators
  • 10. Key steps to poverty reduction through growth: 1. Create a good investment climate 2. Create formal economy jobs 3. Empower the poor to participate in the economy 1. Key private sector 2. Private investment decision factors: Informal/ investment and Sustenance export industries Economy create jobs and help grow the Infrastructure, formal economy Health, Education Private Sector Governance Formal Economy Indirect factors influencing investment decisions: 3. Health and education levels People/Culture empower the poor to move into 10 formal economy Geography jobs
  • 11. Six types of underlying factors help to explain a country’s ability to attract investment and grow Economic Output Gross National Income (GNI) Education Infrastructure Health Economy Poverty • Paved Roads % • Male Literacy • Life expectancy % Agriculture • Telecoms • Female Literacy • Child Mortality > $2 <1$ % Services • Internet/PC • Primary • Immunisation • Reliable power • Secondary • AIDS% Between $1 % Industry and $2 • Water/ Sanitation • Tertiary • Tuberculosis % Governance Economic • Political Stability • Governance Rating: x% • Control of Corruption Performance • Competitiveness Index: x/125 • Democracy/People’s Voice • Rule of Law GNI per capita • Ease of Doing Business: x/175 • Gov’t/Regulatory Effectiveness People Growth (1990-2003) % • Population growth • Ethnic Groups/ Cultural Values Investment (% GDP) % • Net Migration • Population age profile Geography Exports (% GDP) % • Natural resource • Climate Imports (% GDP) % • Access to trade routes • Arable Land Unemployment (00-05) % • Natural Disasters • Net energy imports Inflation (Avg. 1990-03) % 11
  • 12. France United Kingdom Economic Output Economic Output GNI: $2.273 trillion (2005) GNI: $2.169 trillion (2005) Population: 60 million (2005) Population: 61 million (2005) Economy Poverty Economy Poverty Services: 72% Services: 73% Agriculture 1% Agriculture 3% Industry: 27% Industry: 24% > $2 > $2 Economic Economic Performance Performance GNI/capita, PPP: GNI/capita, PPP: $32,690 (2005) $30,540 (2005) Growth (Avg. 1990-03) 2.7% Growth (Avg. 1990-03) 1.9% Investment (% GDP) 16% Investment (% GDP) 19% Exports (% GDP) 25% Exports (% GDP) 26% Imports (% GDP) 28% Imports (% GDP) 25% Unemployment (00-05) 4.6% Unemployment (00-05) 9.9% 12 Inflation (Avg. 1990-03) 2.7% Inflation (Avg. 1990-03) 1.5% Source: World Bank Development Indicators
  • 13. United Kingdom France (GNI/Capita, PPP $32,690) (GNI/Capita, PPP $30,540) Education Education Infrastructure Infrastructure Health Health • Paved Roads • Paved Roads • Life expect: 79 • M Literacy: 99% • M Literacy: 99% • Life expect: 78 100% 100% • Child Mort: 0.5% • F Literacy: 99% • Child Mort: 0.6% • F Literacy: 99% • Mob Tel :112% • Mob Tel: 80% • Immun: 86% • Primary: 99% • Primary: 99% • Immun: 80% • Internet: 42.3% • Internet :36.5% • AIDS: 0.4% • Secondary: 93% • Secondary: 95% • AIDS: 0.2% • Reliable power • Reliable power • TB: 0.12% • Tertiary: 54% • Tertiary: 64% • TB: 0.12% • Water/ Sanitation • Water/ Sanitation Governance Governance • Political Stability • Political Stability • Governance Rating: 90% • Governance Rating: 89% • Control of Corruption • Control of Corruption • Competitiveness Index:10/125 • Competitiveness Index:18/125 • Democracy/Voice • Democracy/Voice • Rule of Law • Rule of Law • Ease of Doing Business: 6/175 • Ease of Doing Business: 35/175 • Gov’t/Reg Effect’ness • Gov’t/Reg Effect’ness People People • Births per woman: 1.9 • Ethnic Groups/ Culture • Births per woman: 1.7 • Ethnic Groups/ Culture • Net migration: + .1% • Population age 0-14: 18.6% • Net migration: +.16% • Population age 0-14: 18.2% Geography Geography • Natural Resources • Temperate/ Continental • Natural Resources • Temperate/ Continental • Access to trade routes • Arable Land • Access to trade routes • Arable Land • Natural Disasters • Net Energy imports • Natural Disasters • Net Energy imports 13 Sources: World Bank Development Indicators 2005, WEF Global Competitiveness Rankings 2006, World Bank Governance Index-2005, UN Population Division : Net Migration 1995-2000/Births per woman 2004, Koppen Climate Classification, ITU Mob/Internet Ranking 2005
  • 14. Asia Millions are living in poverty….. India (2004) China (2004) GNI per Capita/ <1$ Growth Rate > $2 <1$ Between (PPP 2005 US$) > $2 (%Growth 2004-05) $1 and $2 Between Hong Kong-$34,670 (7.3%) $1 and $2 Japan -$31,410 (2.6%) Taiwan - $25,400 (5.0%) ….but it is improving S. Korea-$21,850 (4.0%) India China Extreme Poverty 70 million 400 million reduction since 1980 fewer fewer Malaysia - $10,320 (5.2%) Thailand - $8,440 (4.5%) China - $6,600 (10.2%) Philippines - $5,300 (5.0%) Indonesia - $3,720 (5.6%) India - $3,460 (9.2%) Vietnam - $3,010 (8.4%) 14 Source: World Bank Development Indicators
  • 15. China India Economic Output Economic Output GNI: $2.3 trillion (2005) GNI: $804 billion (2005) Population: 1.3 billion (2005) Population: 1.1 billion (2005) Economy Poverty Economy Poverty <1$ Agriculture 22% Services: 33% > $2 Agriculture 15% <1$ Between > $2 Services: 51% $1 and $2 Industry: 27% Between Industry: 52% $1 and $2 Economic Economic Performance Performance GNI/capita, PPP: GNI/capita, PPP: $6,600 (2005) $3,640 (2005) Growth (Avg. 1990-03) 10.3% Growth (Avg. 1990-03) 5.9% (9.2) Investment (% GDP) 44% Investment (% GDP) 24% Exports (% GDP) 34% Exports (% GDP) 14% Imports (% GDP) 32% Imports (% GDP) 16% Unemployment (00-05) 4.2% Unemployment (00-05) 5.0% Inflation (Avg, 1990-03) 4.9% Inflation (Avg, 1990-03) 6.8% 15 Source: World Bank Development Indicators
  • 16. China India (GNI/Capita, PPP $6,600) (GNI/Capita, PPP $3,460) Education Education Infrastructure Infrastructure Health Health • Roads ND • Roads 57% • M. Literacy: 98% • Life expect: 71 • Life expect: 68 • M. Literacy: 95% • Mob Tel: 30% • Mob Tel 8% • Child Mort: 3.7% • F. Literacy: ND • Child Mort: 8.7% • F. Literacy: 81% • Internet: 6.3% • Internet: 1.7% • Primary: 98% • Immunis: 86% • Immun: 67% • Primary: 95% • Reliable power • Reliable power • Secondary: 70% • AIDS: 0.4% • AIDS: 0.9% • Secondary: 79% • Water/ Sanitation • TB: 0.12% • Water/ Sanitation • TB: 0.26% • Tertiary: 15% • Tertiary: 28% Governance Governance • Political Stability • Political Stability • Governance Rating: 38% • Governance Rating: 43% • Control of Corruption • Control of Corruption • Competitiveness Index:54/125 • Competitiveness Index:43/125 • Democracy/Voice • Democracy/Voice • Rule of Law • Rule of Law • Ease of Doing Business: 93/175 • Gov’t/Reg Effect’ness • Ease of Doing Business: 134/175 • Gov’t/Reg Effect’ness People People • Births per woman:1.7 • Ethnic Groups/ Culture • Births per woman 3.1 • Ethnic Groups/ Culture • Net Migration: -.03% • Population age 0-14: 23.6% • Net Migration: -.03% • Population age 0-14: 32.4% Geography Geography • Natural Resources • Natural Resources • Temperate/ Continental • Tropical, Temperate, Dry • Access to trade routes • Access to trade routes • Arable Land • Arable Land • Natural Disasters • Natural Disasters • Net Energy imports • Net Energy imports Sources: World Bank Development Indicators 2005, WEF Global Competitiveness Rankings 2006, World Bank Governance Index-2005, UN Population Division : Net Migration 1995-2000/Births per woman 2004, Koppen Climate Classification, ITU Mob/Internet Ranking 2005 16
  • 17. India is struggling to improve its poor infrastructure in an effort to improve its capacity to grow 17
  • 18. 3. Africa continues to lag behind 18
  • 19. Sub-Saharan Africa is not on track to meet the UN Millennium Development Goals by 2015 TARGET Halve, between Goal 1: 1990 and 2015, the Eradicate proportion of people whose √ - goal achieved Extreme Poverty income is less than $1 a √ - on-track and Hunger on- day x – not on-track on- TARGET Ensure that, by Goal 2: Achieve 2015, all children will be √ - goal achieved Universal able to complete a full √ - on-track Education on- course of primary schooling √ - good progress TARGET Reduce by two Goal 4: thirds, between 1990 and Reduce Child 2015, the under-five Mortality mortality rate TARGET Have halted by Goal 6: 2015 and begun to reverse Combat HIV/AIDS, the spread of HIV/AIDS Malaria & Other Diseases 19
  • 20. 30 out of 48 African countries have GNI/capita less than $2,000 and are not well integrated into the global economy TUNISIA MOROCCO ALGERIA LIBYA WESTERN EGYPT SAHARA Red Sea MAURITANIA NIGER MALI SENEGAL CHAD SUDAN – 5% THE GAMBIA DJIBOUTI BURKINA GUINEA GUINEA NIGERIA BENIN BISSAU CENTRAL ETHIOPIA SIERRA TOGO AFRICAN LEONE REPUBLIC LIBERIA CAMEROON IVORY GHANA SOMALIA UGANDA Democratic Rep COAST 51% EQUATORIAL of Congo 7% KENYA GUINEA GABON CONGO RWANDA BURUNDI TANZANIA MALAWI GNI/Capita, PPP ANGOLA ->$20,000 ZAMBIA MOZAMBIQUE - $10 – 20,000 MADAGASCAR ZIMBABWE NAMIBIA - $5-10,000 BOTSWANA - $2 – 5,000 SWAZILAND LESOTHO - < $2,000 SOUTH 20 AFRICA Source: World Bank Development Indicators - 2005
  • 21. Paul Collier proposes a model of four traps to explain why some countries are unable to grow out of poverty The Conflict Trap The Natural Landlocked with Bad Governance Resource Trap bad Neighbours Current Conflicts: • Nigeria – Oil • Malawi • Zimbabwe • Somalia • Zambia – Copper • Central African Republic • Somalia • Cote d’Ivoire • Botswana – Diamonds • Burkina Faso • Chad/Sudan • Chad • Sierra Leone – Diamonds • Rwanda/ Burundi • Nigeria • Sudan • DRC – Diamonds, etc • Uganda • Angola Recent Conflicts: • Chad – Oil • Chad • DRC • DRC • Angola – Oil, Diamonds • Ivory Coast • Congo Republic • Liberia • Sierra Leone Globalisation reinforces poverty for many poor countries • Wealth of global investments opportunities highlights high risk of poorest countries for both foreign and local investors • Even more difficult to compete against other Asian competitors such as India and China 21 • Increased emigration opportunities intensifies ‘brain drain’ of limited pool talent Source: The Bottom Billion, Paul Collier, Oxford University Press, 2007
  • 22. Malawi’s economy reflects challenges typical of many African countries Economic Output GNI: $2.1 billion (2005) Population: 13 million(2005) Education Infrastructure Health Economy Poverty • Paved Roads • Life expect: 37 • M. Literacy: 76% 18.5% • Child Mort: 17.8%• F. Literacy: 49% Agriculture 38% • Mobile Tel: 3.3% <1$ > $2 • Immun: 77% • Primary: 71% • Internet: 0.3% • AIDS: 14.2% • Secondary: 29% Industry: 15% • Reliable power Services: 49% Between • TB: 0.44% • Tertiary: 0.4% $1 and $2 • Water/Sanitation Governance • Political Stability •Governance Rating: 31% Economic • Control of Corruption •Competitiveness Index:117/125 • Democracy/Voice Performance • Rule of Law •Ease of Doing Business: 110/175 • Gov’t/Reg Effect’ness GNI/capita, PPP: People $650 (2005) • Births per woman: 6.1 • Ethnic Groups/ Religion Growth (Avg. 1990-03) 3.0% • Net Migration: -.08% • Population age 0-14: 45% Geography Investment (% GDP) 8% Exports (% GDP) 27% • Natural Resources • Tropical wet and dry • Landlocked • Arable Land Imports (% GDP) 41% 22 • Natural Disasters • Net Energy imports Unemployment no data Sources: World Bank Development Indicators 2005, WEF Global Competitiveness Rankings 22 Inflation (Avg, 1990-03) 31.1% 2006, World Bank Governance Index-2005, UN Population Division : Net Migration 1995- 2000/Births per woman 2004, Koppen Climate Classification, ITU Mob/Internet Ranking 2005
  • 23. Malawi Poverty Reduction Strategy (2004/05) World Bank UK DFID IMF/WB Debt Other/NGO UK DFID EU Projects UK DFID Projects Projects Cancellation Projects Projects Projects Train 3000 Teachers Roads Projects Education Infrastructure Health 154 Teacher Houses Nurse Training • Paved Roads ICT Skill Training • M. Literacy: 76% • Life expect: 37 18.5% 22 New Schools • F. Literacy: 49% • Child Mort: 17.8% Salary Top-ups • Mob Tel: 3.3% Rural Electricity • Immun: 77% • Primary: 71% Educational Material Nutrition Programs • Internet: 0.3% • AIDS: 14.2% • Secondary: 29% Water Distribution Campus for Mzuzu Univ • Reliable power • TB:Youth training • Tertiary: 0.4% HIV 0.44% • Water/ Sanitation Female Scholarships Governance New Financial Systems • Political Stability •Governance Rating: 31% • Control of Corruption Courtrooms & Judges Economic/ Industrial •Competitiveness Index:117/125 • Democracy/Voice Policy Reform • Rule of Law Anti-Corrupt Bureau •Ease of Doing Business: 110/175 • Gov’t/Reg Effect’ness Off-shore Fishing Agricultural Productivity WTO Small-scale Irrigation Fish Farming Agriculture 38% Doha Private Round Foreign Farmer cooperatives Mobile Telephony Direct Industry: 15% Promote Small-scale Mining Investment Tourism Standards Services: 49% 23 Increase Telecom Capacity Tourism Committee
  • 24. Political instability and poor governance have been problems in many African countries - but many conflicts are ending and governance is improving TUNISIA – 51% Improved Governance Rating MOROCCO 42% 2002 (1996 – 2005): ALGERIA LIBYA – 22% • Botswana (Corruption) WESTERN 29% EGYPT SAHARA 36% • Ghana (Democracy) Red • Mozambique (Stability) Sea MAURITANIA 44% • Tanzania (Effectiveness) MALI NIGER – 29% CHAD - 11% SENEGAL 46% • DRC (Democracy, Regulations) SUDAN – 5% THE 1993 GAMBIA DJIBOUTI BURKINA • Nigeria (Democracy) GUINEA GUINEA NIGERIA BISSAU 2002 BENIN 14% • Madagascar (Corruption) CENTRAL ETHIOPIA – 18% SIERRA 2003 TOGO AFRICAN LEONE • Liberia (Democracy) REPUBLIC LIBERIA CAMEROON IVORY GHANA SOMALIA UGANDA COAST 51% EQUATORIAL • Senegal (Stability, Democracy) 0% 30% 1999 2003 1994 7% KENYA GUINEA GABON 26% RWANDA CONGO Democratic BURUNDI TANZANIA Rep of Congo World Bank 36% – 3% Other Developing Governance Rating 2002 MALAWI Country Governance 2005 34% ANGOLA Ratings: 1992 14% - 75% ZAMBIA • China – 38% Political Stability 31% MOZAMBIQUE - 50- 75% • India – 43% 38% MADAGASCAR ZIMBABWE - Year conflicts 2007 • Turkey – 47% NAMIBIA 50% 5% - 25 – 50% ended 58% BOTSWANA • Romania – 52% 74% - 10 – 25% - Conflicts still unresolved SWAZILAND - 0 – 10% LESOTHO SOUTH 24 AFRICA 64% Source: World Bank Governance Indicators - 2005
  • 25. Africa’s economic growth since the mid-1990’s is more promising for poverty reduction, but diversification away from commodities is still a challenge TUNISIA – 4.5% MOROCCO Countries with Average Growth 4.3% Greater than 5%, 2000-2005 ALGERIA LIBYA – 5.3% WESTERN - Sustained, diversified 5.1% EGYPT SAHARA 3.7% growth Red - Dependant on oil as major Sea MAURITANIA MALI export 4% NIGER 5.9% CHAD SENEGAL 3.7% 14.5% SUDAN THE BURKINA FASO 6.1% GAMBIA DJIBOUTI 5.6% NIGERIA GUINEA GUINEA BENIN BISSAU 5.9% CENTRAL ETHIOPIA TOGO SIERRA AFRICAN 4.7% LEONE REPUBLIC CAMEROON LIBERIA IVORY GHANA 13.7% SOMALIA 3.7% UGANDA DEM REP COAST 5.1% Annual GDP Growth (2000-2005) CONGO CONGO 4.4% 5.6% KENYA EQUATORIAL -0.1% 3.4% GUINEA GABON RWANDA 23.2% > 5% - 18 countries 5.1% TANZANIA 6.5% BURUNDI 3- 5% -16 countries 5.6% MALAWI 1-3% - 6 countries 3.4% ANGOLA ZAMBIA 9.9% < 1% - 6 countries 4.7% MOZAMBIQUE 8.4% MADAGASCAR ZIMBABW NAMIBIA 2.0% E (5.7%) 4.7% BOTSWANA 5.9% SWAZILAND 2.5% SOUTH AFRICA LESOTHO 2.9% 25 3.9 Source: World Bank, African Development Indicators, 2007
  • 26. South Africa’s diversified economy still has its issues but provides hope for African growth Economic Output GNI: $223 billion (2005) Population: 47 million(2005) Education Infrastructure Health Economy Poverty • Paved Roads 21% • Life expect: 46 • M. Literacy: 87% • Mob Tel: 72% • Child Mort: 6.6% • F. Literacy: 85% Services: 65% <1$ • Internet: 6.8% • Primary: 99% • Immun: 83% Agriculture 4% Between • Reliable power • Secondary: 65% $1and $2 • AIDS: 15.6% > $2 Industry: 31% • Water/ Sanitation • TB: 0.5% • Tertiary: 15% Governance • Political Stability • Governance Rating: 64% Economic • Control of Corruption • Competitiveness Index:45/125 • Democracy/Voice Performance • Rule of Law • Ease of Doing Business: 29/175 • Gov’t/Reg Effect’ness GNI /capita, PPP: People $12,120 (2005) • Births per woman: 2.8 • Ethnic Groups/ Culture Growth (Avg. 1990-03) 2.3 (4.9)% • Net Migration: -.01% • Population age 0-14: 32% Investment (% GDP) 17% Geography Exports (% GDP) 28% • Natural Resources • Dry, Temperate, Continental • Access to trade • Arable Land Imports (% GDP) 26% routes • Net Energy imports Unemployment (00-05) 27.1% Sources: World Bank Development Indicators 2005, WEF Global Competitiveness Rankings Inflation (Avg, 1990-03) 9.0% 2006, World Bank Governance Index-2005, UN Population Division : Net Migration 1995- 2000/Births per woman 2004, Koppen Climate Classification, ITU Mob/Internet Ranking 2005
  • 27. 4. Mobile telephony is a key enabler for ending extreme poverty 27
  • 28. Mobile telephony has a broad range of benefits appropriate to fighting poverty in developing countries Faster Overall Growth • Increased Mobile penetration increases GNI Growth Infrastructure, % Agriculture Health, Education % Services Mobile % Industry • Telecom infrastructure Telephony • Emergency and distance health benefits Productivity Benefits Across All Sectors: • Access to internet • Access to agriculture market prices and other information • Jobs in rapidly growing New Targeted Services telecom sector • Banking for previously ‘unbanked’ • Low-cost enabler for • Increased international remittances micro-businesses • Innovative use of text services 28
  • 29. Vodacom in the Democratic Republic of Congo (DRC) is an example of how private investment in mobile telephony can create jobs in Africa • Using cellular networks to ‘leapfrog’ fixed line technology – In 1997 less that 15,000 landlines for 65m people – Vodacom grew to 3 million mobile subscribers since 1997 • Alieu Conteh, founder and chairman of Vodacom Congo showed entrepreneurial possibilities • Now one of the country’s biggest employers – 600 employees/ 5,000 contractors • Planning to create the country’s first stock market and float Vodacom Congo in a public offering 29 Source: The New York Times, 17th June, 2007, What Does Africa Need Most: Technology or Aid?
  • 30. 5. There is an ongoing debate about what needs to be done to fight poverty 30
  • 31. The Optimists: Poverty can be eliminated in Africa – more aid is needed for a ‘big push’ • Jeffery Sachs: UN Millennium Development Goals can be met, but would cost $150-200 billion a year in aid by 2015 • 2005 G8 Glen Eagles Summit leaders pledged to double aid to Africa from $25 to $50 billion per year by 2010 • Bob Geldof’s Africa Commission and Live8 supported more G8 aid funding • Bono: Led debt relief campaign and foreign aid increases in US • Bill Gates using resources to address treatable diseases • Tony Blair, Gordon Brown, Bill Clinton global poverty initiatives 31
  • 32. Jeffery Sachs advocates a number of simultaneous interventions at the village level for sustainable development Agriculture Infrastructure Health Education • Nutrition and clean • Primary and • Road improvements • Agricultural water secondary education and community vehicle productivity and training • Health services and • Eliminate gender access • Irrigation, fertiliser facilities disparity • Internet and mobile • Support new village • HIV/AIDS, TB and • ICT training telephony access businesses Malaria Treatment • Electricity for small businesses Millennium Villages 79 Millennium Villages operating or planned in twelve different countries in Africa: Ethiopia, Ghana, Kenya, Madagascar, Malawi, Mali, Mozambique, Nigeria, Rwanda, Senegal, Tanzania and Uganda. 32
  • 33. The Pessimists: Aid has not been effective Where has $2.3 trillion in foreign aid over past 50 years gone? Temporary Swiss bank Corrupt and Famine Relief? accounts? wasteful Bureaucrats? 33
  • 34. Paul Collier proposes a more balanced agenda for action to tackle poverty in the poorest countries The Conflict Trap The Natural Landlocked with Bad Governance Resource Trap bad Neighbours Military support for International laws and Substantial aid to Intelligent use of aid to post-conflict countries norms for resource develop infrastructure encourage reform wealth and for basic social services Charter for post-conflict Selected use of military governance intervention (e.g. Sierra Military support to Leone) prevent coups Aid for reconstruction Trade policies encouraging exports Globalisation reinforces poverty on many poor countries ‘Big Push’ temporary Temporary trade aid for export protection from Asian infrastructure competitors 34 Source: The Bottom Billion, Paul Collier, Oxford University Press, 2007
  • 35. 7 things you can do to help fight global poverty 1. Educate yourself about the causes and solutions of poverty 2. Vote and let your politicians know you care about global poverty 3. Contribute to organisations fighting poverty 4. Buy fair trade goods 5. Invest in companies that trade ethically 6. Volunteer for NGOs fighting poverty – build a school! 7. Tell others about poverty – give a presentation to your child’s school 35