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15 May 08 Global Poverty Presentation

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This presentation is meant to provide a lay audience with an understanding of the underlying factors driving the economics of Global Poverty.

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15 May 08 Global Poverty Presentation

  1. 1. A Framework for Understanding the Economics of Global Poverty Jim Donahue 15 th May 2008 [email_address] © 2008 Jim Donahue
  2. 2. Overview <ul><li>Nearly half of the world still lives in poverty </li></ul><ul><li>Some countries have moved from being poor to rich </li></ul><ul><li>Africa continue to lag behind </li></ul><ul><li>Mobile telephony is a key enabler for growth in poor countries </li></ul><ul><li>There is an ongoing debate about what needs to be done to fight extreme poverty </li></ul><ul><li>Appendices: </li></ul><ul><li>Case Study of Malawi: Can it move from poverty to prosperity? </li></ul><ul><li>Example lifestyles at different levels of economic development </li></ul>
  3. 3. <ul><li>Nearly half of the world still lives in poverty </li></ul>
  4. 4. How are rich and poor countries defined? How can poor countries become rich? GNI/Capita (PPP 2004) <ul><li>>$20,000 </li></ul><ul><li>$10,000 - $20,000 </li></ul><ul><li>$5,000 -$10,000 </li></ul><ul><li><$5,000 </li></ul>Source: World Bank Development Indicators - GNI/capita, PPP – 2004
  5. 5. Most of the world lives in developing countries and nearly half earn less than $2 per day 33 25 41 73 Number of Countries Source: World Bank Development Indicators - GNI/capita, PPP – 2004 Population 1 B .2 B 2.2 B 2.7 B 1 Billion <$1/day 3 Billion <$2/day International Poverty Lines: Developed Countries Developing Countries
  6. 6. Extreme poverty has been reduced in recent years, but nearly half of the world still lives in poverty Source: World Bank Development Indicators - % Poverty 1981 - 2004 1981 40% less than $1/day Additional27% on less than $2/day 33% Greater than $2/ day Total Population: 4.5 Billion Less than $1/day 1.5 Billion Less than $2/day: 3.0 Billion 2004 19% less than $1/day Additional29% on less than $2/day 52% Greater than $2/day Total Population: 6.4 Billion Less than $1/day : 1.0 Billion Less than $2/day: 3.0 Billion
  7. 7. <ul><li>2. Some countries are moving from being poor to rich </li></ul>
  8. 8. There of numerous examples of countries moving from being poor to rich Today’s Emerging Markets (% growth 2004-05) Source: World Bank Development Indicators Turkey – 7.4% Venezuela – 9.3% China – 10.2% Estonia– 9.8% Argentina – 9.2% S. Africa – 4.9% Malaysia – 5.9% Philippines – 5.0% Indonesia – 5.6% India – 9.2% Angola – 20.6% Europe Greece 2005 ($23,620) Greece 1950 Spain2005 ($25,820) Spain2000 Ireland 1988 Ireland 2005 ($34,720) Japan and the Asian Tigers Japan 2005 ($31,410) Japan1950 S. Korea, 2005 ($21,850) S. Korea 1970 Taiwan 1960 Taiwan 2005 (25,000)
  9. 9. Europe Czech –$20,140 (6.1%) Hungary-$16,940 (4.1%) Estonia -$15,420 (9.8%) Poland -$13,490 (3.4%) UK- $32,690 (1.8%) France - $30,540 (1.2%) Germany -$29,210 (1.0%) Italy -$28,840 (0.0%) Spain -$25,820 (3.4%) Russia -$10,640 (6.4%) Romania-$8,940 (4.1%) Turkey - $8,420 (7.4%) Ukraine-$6,720 (2.6%) GNI per Capita/ Growth Rate (PPP 2005 US$) (%Growth 2004-05) Source: World Bank Development Indicators Years to Double Size of the Economy Developed Countries Newly Emerging Markets
  10. 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 Geography People/Culture Governance Infrastructure, Health, Education Indirect factors influencing investment decisions: Informal/ Sustenance Economy Private Sector Formal Economy 3. Health and education levels empower the poor to move into formal economy jobs 2. Private investment and export industries create jobs and help grow the formal economy 1. Key private sector investment decision factors:
  11. 11. Six types of underlying factors help to explain a country’s ability to attract investment and grow Gross National Income (GNI) Economic Output Economic Performance GNI per capita % Industry % Agriculture % Services Governance <ul><li>Governance Rating: x% </li></ul><ul><li>Competitiveness Index: x/125 </li></ul><ul><li>Ease of Doing Business: x/175 </li></ul>Economy Poverty <1$ Between $1 and $2 > $2 Growth (1990-2003) % Investment (% GDP) % Exports (% GDP) % Imports (% GDP) % Unemployment (00-05) % Inflation (Avg. 1990-03) % Geography <ul><li>Climate </li></ul><ul><li>Arable Land </li></ul><ul><li>Net energy imports </li></ul><ul><li>Natural resource </li></ul><ul><li>Access to trade routes </li></ul><ul><li>Natural Disasters </li></ul>People <ul><li>Population growth </li></ul><ul><li>Net Migration </li></ul><ul><li>Ethnic Groups/ Cultural Values </li></ul><ul><li>Population age profile </li></ul>Infrastructure <ul><li>Paved Roads % </li></ul><ul><li>Telecoms </li></ul><ul><li>Internet/PC </li></ul><ul><li>Reliable power </li></ul><ul><li>Water/ Sanitation </li></ul>Health <ul><li>Life expectancy </li></ul><ul><li>Child Mortality </li></ul><ul><li>Immunisation </li></ul><ul><li>AIDS% </li></ul><ul><li>Tuberculosis % </li></ul>Education <ul><li>Male Literacy </li></ul><ul><li>Female Literacy </li></ul><ul><li>Primary </li></ul><ul><li>Secondary </li></ul><ul><li>Tertiary </li></ul><ul><li>Political Stability </li></ul><ul><li>Control of Corruption </li></ul><ul><li>Democracy/People’s Voice </li></ul><ul><li>Rule of Law </li></ul><ul><li>Gov’t/Regulatory Effectiveness </li></ul>
  12. 12. United Kingdom Economic Performance GNI/capita, PPP: $32,690 (2005) Services: 72% Industry: 27% Agriculture 1% France GNI: $2.169 trillion (2005) Population: 61 million (2005) Economic Output Economic Performance GNI/capita, PPP: $30,540 (2005) Services: 73% Industry: 24% Agriculture 3% Source: World Bank Development Indicators > $2 > $2 Economy Poverty Economy Poverty Growth (Avg. 1990-03) 2.7% Investment (% GDP) 16% Exports (% GDP) 25% Imports (% GDP) 28% Unemployment (00-05) 4.6% Inflation (Avg. 1990-03) 2.7% GNI: $2.273 trillion (2005) Population: 60 million (2005) Economic Output Growth (Avg. 1990-03) 1.9% Investment (% GDP) 19% Exports (% GDP) 26% Imports (% GDP) 25% Unemployment (00-05) 9.9% Inflation (Avg. 1990-03) 1.5%
  13. 13. France (GNI/Capita, PPP $30,540) United Kingdom (GNI/Capita, PPP $32,690) Geography <ul><li>Temperate/ Continental </li></ul><ul><li>Arable Land </li></ul><ul><li>Net Energy imports </li></ul><ul><li>Natural Resources </li></ul><ul><li>Access to trade routes </li></ul><ul><li>Natural Disasters </li></ul>People <ul><li>Births per woman: 1.9 </li></ul><ul><li>Net migration: + .1% </li></ul>Governance Infrastructure <ul><li>Paved Roads 100% </li></ul><ul><li>Mob Tel: 80% </li></ul><ul><li>Internet :36.5% </li></ul><ul><li>Reliable power </li></ul><ul><li>Water/ Sanitation </li></ul><ul><li>Life expect: 79 </li></ul><ul><li>Child Mort: 0.5% </li></ul><ul><li>Immun: 86% </li></ul><ul><li>AIDS: 0.4% </li></ul><ul><li>TB: 0.12% </li></ul>Health Education <ul><li>M Literacy: 99% </li></ul><ul><li>F Literacy: 99% </li></ul><ul><li>Primary: 99% </li></ul><ul><li>Secondary: 93% </li></ul><ul><li>Tertiary: 54% </li></ul><ul><li>Ethnic Groups/ Culture </li></ul><ul><li>Population age 0-14: 18.6% </li></ul><ul><li>Governance Rating: 89% </li></ul><ul><li>Competitiveness Index:18/125 </li></ul><ul><li>Ease of Doing Business: 35/175 </li></ul>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 Geography <ul><li>Temperate/ Continental </li></ul><ul><li>Arable Land </li></ul><ul><li>Net Energy imports </li></ul><ul><li>Natural Resources </li></ul><ul><li>Access to trade routes </li></ul><ul><li>Natural Disasters </li></ul>People <ul><li>Births per woman: 1.7 </li></ul><ul><li>Net migration: +.16% </li></ul><ul><li>Ethnic Groups/ Culture </li></ul><ul><li>Population age 0-14: 18.2% </li></ul>Governance <ul><li>Governance Rating: 90% </li></ul><ul><li>Competitiveness Index:10/125 </li></ul><ul><li>Ease of Doing Business: 6/175 </li></ul>Infrastructure <ul><li>Paved Roads 100% </li></ul><ul><li>Mob Tel :112% </li></ul><ul><li>Internet: 42.3% </li></ul><ul><li>Reliable power </li></ul><ul><li>Water/ Sanitation </li></ul><ul><li>Life expect: 78 </li></ul><ul><li>Child Mort: 0.6% </li></ul><ul><li>Immun: 80% </li></ul><ul><li>AIDS: 0.2% </li></ul><ul><li>TB: 0.12% </li></ul>Health Education <ul><li>M Literacy: 99% </li></ul><ul><li>F Literacy: 99% </li></ul><ul><li>Primary: 99% </li></ul><ul><li>Secondary: 95% </li></ul><ul><li>Tertiary: 64% </li></ul><ul><li>Political Stability </li></ul><ul><li>Control of Corruption </li></ul><ul><li>Democracy/Voice </li></ul><ul><li>Rule of Law </li></ul><ul><li>Gov’t/Reg Effect’ness </li></ul><ul><li>Political Stability </li></ul><ul><li>Control of Corruption </li></ul><ul><li>Democracy/Voice </li></ul><ul><li>Rule of Law </li></ul><ul><li>Gov’t/Reg Effect’ness </li></ul>
  14. 14. Asia … .but it is improving GNI per Capita/ Growth Rate (PPP 2005 US$) (%Growth 2004-05) Source: World Bank Development Indicators <1$ Between $1 and $2 > $2 <1$ > $2 Between $1 and $2 India China Extreme Poverty reduction since 1980 70 million fewer 400 million fewer Millions are living in poverty….. India (2004) China (2004) Hong Kong-$34,670 (7.3%) Japan -$31,410 (2.6%) Taiwan - $25,400 (5.0%) S. Korea-$21,850 (4.0%) 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%)
  15. 15. China GNI: $2.3 trillion (2005) Population: 1.3 billion (2005) Economic Output Services: 33% Industry: 52% Agriculture 15% India GNI: $804 billion (2005) Population: 1.1 billion (2005) Economic Output Services: 51% Industry: 27% Agriculture 22% Economic Performance GNI/capita, PPP: $6,600 (2005) Economic Performance GNI/capita, PPP: $3,640 (2005) Source: World Bank Development Indicators <1$ > $2 Between $1 and $2 Between $1 and $2 <1$ > $2 Economy Poverty Economy Poverty Growth (Avg. 1990-03) 10.3% Investment (% GDP) 44% Exports (% GDP) 34% Imports (% GDP) 32% Unemployment (00-05) 4.2% Inflation (Avg, 1990-03) 4.9% Growth (Avg. 1990-03) 5.9% (9.2) Investment (% GDP) 24% Exports (% GDP) 14% Imports (% GDP) 16% Unemployment (00-05) 5.0% Inflation (Avg, 1990-03) 6.8%
  16. 16. India (GNI/Capita, PPP $3,460) Geography <ul><li>Temperate/ Continental </li></ul><ul><li>Arable Land </li></ul><ul><li>Net Energy imports </li></ul><ul><li>Natural Resources </li></ul><ul><li>Access to trade routes </li></ul><ul><li>Natural Disasters </li></ul>People <ul><li>Births per woman:1.7 </li></ul><ul><li>Net Migration: -.03% </li></ul><ul><li>Ethnic Groups/ Culture </li></ul><ul><li>Population age 0-14: 23.6% </li></ul>Governance Infrastructure <ul><li>Roads ND </li></ul><ul><li>Mob Tel: 30% </li></ul><ul><li>Internet: 6.3% </li></ul><ul><li>Reliable power </li></ul><ul><li>Water/ Sanitation </li></ul><ul><li>Life expect: 71 </li></ul><ul><li>Child Mort: 3.7% </li></ul><ul><li>Immunis: 86% </li></ul><ul><li>AIDS: 0.4% </li></ul><ul><li>TB: 0.12% </li></ul>Health Education <ul><li>M. Literacy: 98% </li></ul><ul><li>F. Literacy: ND </li></ul><ul><li>Primary: 98% </li></ul><ul><li>Secondary: 70% </li></ul><ul><li>Tertiary: 15% </li></ul>China (GNI/Capita, PPP $6,600) Geography <ul><li>Tropical, Temperate, Dry </li></ul><ul><li>Arable Land </li></ul><ul><li>Net Energy imports </li></ul><ul><li>Natural Resources </li></ul><ul><li>Access to trade routes </li></ul><ul><li>Natural Disasters </li></ul>People <ul><li>Births per woman 3.1 </li></ul><ul><li>Net Migration: -.03% </li></ul><ul><li>Ethnic Groups/ Culture </li></ul><ul><li>Population age 0-14: 32.4% </li></ul>Governance Infrastructure <ul><li>Roads 57% </li></ul><ul><li>Mob Tel 8% </li></ul><ul><li>Internet: 1.7% </li></ul><ul><li>Reliable power </li></ul><ul><li>Water/ Sanitation </li></ul><ul><li>Life expect: 68 </li></ul><ul><li>Child Mort: 8.7% </li></ul><ul><li>Immun: 67% </li></ul><ul><li>AIDS: 0.9% </li></ul><ul><li>TB: 0.26% </li></ul>Health Education <ul><li>M. Literacy: 95% </li></ul><ul><li>F. Literacy: 81% </li></ul><ul><li>Primary: 95% </li></ul><ul><li>Secondary: 79% </li></ul><ul><li>Tertiary: 28% </li></ul><ul><li>Governance Rating: 43% </li></ul><ul><li>Competitiveness Index:43/125 </li></ul><ul><li>Ease of Doing Business: 134/175 </li></ul><ul><li>Governance Rating: 38% </li></ul><ul><li>Competitiveness Index:54/125 </li></ul><ul><li>Ease of Doing Business: 93/175 </li></ul>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 <ul><li>Political Stability </li></ul><ul><li>Control of Corruption </li></ul><ul><li>Democracy/Voice </li></ul><ul><li>Rule of Law </li></ul><ul><li>Gov’t/Reg Effect’ness </li></ul><ul><li>Political Stability </li></ul><ul><li>Control of Corruption </li></ul><ul><li>Democracy/Voice </li></ul><ul><li>Rule of Law </li></ul><ul><li>Gov’t/Reg Effect’ness </li></ul>
  17. 17. India is struggling to improve its poor infrastructure in an effort to improve its capacity to grow
  18. 18. <ul><li>3. Africa continues to lag behiond </li></ul>
  19. 19. Sub-Saharan Africa is not on track to meet the UN Millennium Development Goals by 2015 √ - goal achieved √ - on-track x – not on-track √ - goal achieved √ - on-track √ - good progress Goal 1: Eradicate Extreme Poverty and Hunger TARGET Halve, between 1990 and 2015, the proportion of people whose income is less than $1 a day Goal 2: Achieve Universal Education TARGET Ensure that, by 2015, all children will be able to complete a full course of primary schooling Goal 4: Reduce Child Mortality TARGET Reduce by two thirds, between 1990 and 2015, the under-five mortality rate Goal 6: Combat HIV/AIDS, Malaria & Other Diseases TARGET Have halted by 2015 and begun to reverse the spread of HIV/AIDS
  20. 20. 30 out of 48 African countries have GNI/capita less than $2,000 and are not well integrated into the global economy Source: World Bank Development Indicators - 2005 LIBYA EGYPT TUNISIA NIGER CHAD SUDAN – 5% ALGERIA MOROCCO MALI WESTERN SAHARA MAURITANIA SENEGAL IVORY COAST 7% LIBERIA GHANA 51% TOGO BENIN SIERRA LEONE BURKINA GUINEA NIGERIA GUINEA BISSAU THE GAMBIA CAMEROON CENTRAL AFRICAN REPUBLIC CONGO GABON EQUATORIAL GUINEA Democratic Rep of Congo ANGOLA TANZANIA ETHIOPIA KENYA UGANDA RWANDA BURUNDI SOMALIA DJIBOUTI ZIMBABWE ZAMBIA MOZAMBIQUE MADAGASCAR SOUTH AFRICA BOTSWANA NAMIBIA LESOTHO SWAZILAND MALAWI Red Sea GNI/Capita, PPP <ul><li>>$20,000 </li></ul><ul><li>$10 – 20,000 </li></ul><ul><li>$5-10,000 </li></ul><ul><li>$2 – 5,000 </li></ul><ul><li>< $2,000 </li></ul>
  21. 21. Paul Collier proposes a model of four traps to explain why some countries are unable to grow out of poverty The Conflict Trap The Natural Resource Trap Landlocked with bad Neighbours <ul><li>Current Conflicts: </li></ul><ul><li>Somalia </li></ul><ul><li>Cote d’Ivoire </li></ul><ul><li>Chad </li></ul><ul><li>Sudan </li></ul><ul><li>Recent Conflicts: </li></ul><ul><li>DRC </li></ul><ul><li>Congo Republic </li></ul><ul><li>Liberia </li></ul><ul><li>Sierra Leone </li></ul><ul><li>Nigeria – Oil </li></ul><ul><li>Zambia – Copper </li></ul><ul><li>Botswana – Diamonds </li></ul><ul><li>Sierra Leone – Diamonds </li></ul><ul><li>DRC – Diamonds, etc </li></ul><ul><li>Chad – Oil </li></ul><ul><li>Angola – Oil, Diamonds </li></ul><ul><li>Malawi </li></ul><ul><li>Central African Republic </li></ul><ul><li>Burkina Faso </li></ul><ul><li>Rwanda/ Burundi </li></ul><ul><li>Uganda </li></ul><ul><li>Chad </li></ul><ul><li>Zimbabwe </li></ul><ul><li>Somalia </li></ul><ul><li>Chad/Sudan </li></ul><ul><li>Nigeria </li></ul><ul><li>Angola </li></ul><ul><li>DRC </li></ul><ul><li>Ivory Coast </li></ul>Source: The Bottom Billion, Paul Collier, Oxford University Press, 2007 Bad Governance Globalisation reinforces poverty for many poor countries <ul><li>Wealth of global investments opportunities highlights high risk of poorest countries for both foreign and local investors </li></ul><ul><li>Even more difficult to compete against other Asian competitors such as India and China </li></ul><ul><li>Increased emigration opportunities intensifies ‘brain drain’ of limited pool talent </li></ul>
  22. 22. Malawi’s economy reflects challenges typical of many African countries Services: 49% Industry: 15% Agriculture 38% <1$ > $2 Between $1 and $2 Economy Poverty 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 Geography <ul><li>Tropical wet and dry </li></ul><ul><li>Arable Land </li></ul><ul><li>Net Energy imports </li></ul><ul><li>Natural Resources </li></ul><ul><li>Landlocked </li></ul><ul><li>Natural Disasters </li></ul>People <ul><li>Births per woman: 6.1 </li></ul><ul><li>Net Migration: -.08% </li></ul><ul><li>Ethnic Groups/ Religion </li></ul><ul><li>Population age 0-14: 45% </li></ul>Governance Infrastructure <ul><li>Paved Roads 18.5% </li></ul><ul><li>Mobile Tel: 3.3% </li></ul><ul><li>Internet: 0.3% </li></ul><ul><li>Reliable power </li></ul><ul><li>Water/Sanitation </li></ul><ul><li>Life expect: 37 </li></ul><ul><li>Child Mort: 17.8% </li></ul><ul><li>Immun: 77% </li></ul><ul><li>AIDS: 14.2% </li></ul><ul><li>TB: 0.44% </li></ul>Health Education <ul><li>M. Literacy: 76% </li></ul><ul><li>F. Literacy: 49% </li></ul><ul><li>Primary: 71% </li></ul><ul><li>Secondary: 29% </li></ul><ul><li>Tertiary: 0.4% </li></ul><ul><li>Governance Rating: 31% </li></ul><ul><li>Competitiveness Index:117/125 </li></ul><ul><li>Ease of Doing Business: 110/175 </li></ul><ul><li>Political Stability </li></ul><ul><li>Control of Corruption </li></ul><ul><li>Democracy/Voice </li></ul><ul><li>Rule of Law </li></ul><ul><li>Gov’t/Reg Effect’ness </li></ul>GNI: $2.1 billion (2005) Population: 13 million(2005) Economic Output Economic Performance GNI/capita, PPP: $650 (2005) Growth (Avg. 1990-03) 3.0% Investment (% GDP) 8% Exports (% GDP) 27% Imports (% GDP) 41% Unemployment no data Inflation (Avg, 1990-03) 31.1%
  23. 23. Malawi Poverty Reduction Strategy (2004/05) WTO Doha Round Private Foreign Direct Investment Governance Infrastructure <ul><li>Paved Roads 18.5% </li></ul><ul><li>Mob Tel: 3.3% </li></ul><ul><li>Internet: 0.3% </li></ul><ul><li>Reliable power </li></ul><ul><li>Water/ Sanitation </li></ul><ul><li>Life expect: 37 </li></ul><ul><li>Child Mort: 17.8% </li></ul><ul><li>Immun: 77% </li></ul><ul><li>AIDS: 14.2% </li></ul><ul><li>TB: 0.44% </li></ul>Health Education <ul><li>M. Literacy: 76% </li></ul><ul><li>F. Literacy: 49% </li></ul><ul><li>Primary: 71% </li></ul><ul><li>Secondary: 29% </li></ul><ul><li>Tertiary: 0.4% </li></ul><ul><li>Governance Rating: 31% </li></ul><ul><li>Competitiveness Index:117/125 </li></ul><ul><li>Ease of Doing Business: 110/175 </li></ul><ul><li>Political Stability </li></ul><ul><li>Control of Corruption </li></ul><ul><li>Democracy/Voice </li></ul><ul><li>Rule of Law </li></ul><ul><li>Gov’t/Reg Effect’ness </li></ul>Nurse Training Salary Top-ups Nutrition Programs HIV Youth training ICT Skill Training Rural Electricity Roads Projects Water Distribution Train 3000 Teachers 154 Teacher Houses 22 New Schools Educational Material Campus for Mzuzu Univ Female Scholarships Courtrooms & Judges Anti-Corrupt Bureau New Financial Systems Economic/ Industrial Policy Reform Services: 49% Industry: 15% Agriculture 38% Tourism Standards Agricultural Productivity Tourism Committee Small-scale Irrigation Off-shore Fishing Fish Farming Mobile Telephony Promote Small-scale Mining Increase Telecom Capacity Farmer cooperatives World Bank Projects EU Projects IMF/WB Debt Cancellation Other/NGO Projects UK DFID Projects UK DFID Projects UK DFID Projects
  24. 24. Political instability and poor governance have been problems in many African countries - but many conflicts are ending and governance is improving Source: World Bank Governance Indicators - 2005 <ul><li>Improved Governance Rating (1996 – 2005): </li></ul><ul><li>Botswana (Corruption) </li></ul><ul><li>Ghana (Democracy) </li></ul><ul><li>Mozambique (Stability) </li></ul><ul><li>Tanzania (Effectiveness) </li></ul><ul><li>DRC (Democracy, Regulations) </li></ul><ul><li>Nigeria (Democracy) </li></ul><ul><li>Madagascar (Corruption) </li></ul><ul><li>Liberia (Democracy) </li></ul><ul><li>Senegal (Stability, Democracy) </li></ul>Political Stability - Year conflicts ended - Conflicts still unresolved 2007 2002 2002 1999 2003 1993 2003 2002 1992 1994 <ul><li>Other Developing Country Governance Ratings: </li></ul><ul><li>China – 38% </li></ul><ul><li>India – 43% </li></ul><ul><li>Turkey – 47% </li></ul><ul><li>Romania – 52% </li></ul>LIBYA – 22% EGYPT 36% TUNISIA – 51% NIGER – 29% CHAD - 11% SUDAN – 5% ALGERIA 29% MOROCCO 42% MALI 46% WESTERN SAHARA MAURITANIA 44% SENEGAL IVORY COAST 7% LIBERIA GHANA 51% TOGO BENIN SIERRA LEONE BURKINA GUINEA NIGERIA 14% GUINEA BISSAU THE GAMBIA CAMEROON CENTRAL AFRICAN REPUBLIC CONGO GABON EQUATORIAL GUINEA Democratic Rep of Congo – 3% ANGOLA 14% TANZANIA 36% ETHIOPIA – 18% KENYA 26% UGANDA 30% RWANDA BURUNDI SOMALIA 0% DJIBOUTI ZIMBABWE 5% ZAMBIA 31% MOZAMBIQUE 38% MADAGASCAR 50% SOUTH AFRICA 64% BOTSWANA 74% NAMIBIA 58% LESOTHO SWAZILAND MALAWI 34% Red Sea World Bank Governance Rating 2005 <ul><li>75% </li></ul><ul><li>50- 75% </li></ul><ul><li>25 – 50% </li></ul><ul><li>10 – 25% </li></ul><ul><li>0 – 10% </li></ul>
  25. 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 Source: World Bank, African Development Indicators, 2007 Annual GDP Growth (2000-2005) > 5% - 18 countries 3- 5% -16 countries 1-3% - 6 countries < 1% - 6 countries Countries with Average Growth Greater than 5%, 2000-2005 - Sustained, diversified growth - Dependant on oil as major export LIBYA – 5.3% EGYPT 3.7% TUNISIA – 4.5% NIGER 3.7% CHAD 14.5% SUDAN 6.1% ALGERIA 5.1% MOROCCO 4.3% MALI 5.9% WESTERN SAHARA MAURITANIA 4% SENEGAL IVORY COAST -0.1% LIBERIA GHANA 5.1% TOGO BENIN SIERRA LEONE 13.7% BURKINA FASO 5.6% GUINEA NIGERIA 5.9% GUINEA BISSAU THE GAMBIA CAMEROON 3.7% CENTRAL AFRICAN REPUBLIC CONGO GABON EQUATORIAL GUINEA 23.2% DEM REP CONGO 4.4% ANGOLA 9.9% TANZANIA 6.5% ETHIOPIA 4.7% KENYA 3.4% UGANDA 5.6% RWANDA 5.1% BURUNDI 5.6% SOMALIA DJIBOUTI ZIMBABWE (5.7%) ZAMBIA 4.7% MOZAMBIQUE 8.4% MADAGASCAR 2.0% SOUTH AFRICA 3.9 BOTSWANA 5.9% NAMIBIA 4.7% LESOTHO 2.9% SWAZILAND 2.5% MALAWI 3.4% Red Sea
  26. 26. South Africa’s diversified economy still has its issues but provides hope for African growth GNI: $223 billion (2005) Population: 47 million(2005) Economic Output Economic Performance GNI /capita, PPP: $12,120 (2005) Services: 65% Industry: 31% Agriculture 4% Economy Poverty <1$ > $2 Between $1and $2 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 Growth (Avg. 1990-03) 2.3 (4.9)% Investment (% GDP) 17% Exports (% GDP) 28% Imports (% GDP) 26% Unemployment (00-05) 27.1% Inflation (Avg, 1990-03) 9.0% Geography <ul><li>Dry, Temperate, Continental </li></ul><ul><li>Arable Land </li></ul><ul><li>Net Energy imports </li></ul><ul><li>Natural Resources </li></ul><ul><li>Access to trade routes </li></ul>People <ul><li>Births per woman: 2.8 </li></ul><ul><li>Net Migration: -.01% </li></ul><ul><li>Ethnic Groups/ Culture </li></ul><ul><li>Population age 0-14: 32% </li></ul>Governance Infrastructure <ul><li>Paved Roads 21% </li></ul><ul><li>Mob Tel: 72% </li></ul><ul><li>Internet: 6.8% </li></ul><ul><li>Reliable power </li></ul><ul><li>Water/ Sanitation </li></ul><ul><li>Life expect: 46 </li></ul><ul><li>Child Mort: 6.6% </li></ul><ul><li>Immun: 83% </li></ul><ul><li>AIDS: 15.6% </li></ul><ul><li>TB: 0.5% </li></ul>Health Education <ul><li>M. Literacy: 87% </li></ul><ul><li>F. Literacy: 85% </li></ul><ul><li>Primary: 99% </li></ul><ul><li>Secondary: 65% </li></ul><ul><li>Tertiary: 15% </li></ul><ul><li>Governance Rating: 64% </li></ul><ul><li>Competitiveness Index:45/125 </li></ul><ul><li>Ease of Doing Business: 29/175 </li></ul><ul><li>Political Stability </li></ul><ul><li>Control of Corruption </li></ul><ul><li>Democracy/Voice </li></ul><ul><li>Rule of Law </li></ul><ul><li>Gov’t/Reg Effect’ness </li></ul>
  27. 27. <ul><li>4. Mobile telephony is a key enabler for ending extreme poverty </li></ul>
  28. 28. Mobile telephony has a broad range of benefits appropriate to fighting poverty in developing countries <ul><li>Mobile Telephony </li></ul><ul><li>Telecom infrastructure </li></ul><ul><li>Emergency and distance health benefits </li></ul><ul><li>Access to internet </li></ul>Infrastructure, Health, Education % Industry % Agriculture % Services <ul><li>Increased Mobile penetration increases GNI Growth </li></ul>Faster Overall Growth <ul><li>Productivity Benefits Across All Sectors: </li></ul><ul><li>Access to agriculture market prices and other information </li></ul><ul><li>Jobs in rapidly growing telecom sector </li></ul><ul><li>Low-cost enabler for micro-businesses </li></ul><ul><li>Banking for previously ‘unbanked’ </li></ul><ul><li>Increased international remittances </li></ul><ul><li>Innovative use of text services </li></ul>New Targeted Services
  29. 29. Vodacom in the Democratic Republic of Congo (DRC) is an example of how private investment in mobile telephony can create jobs in Africa <ul><li>Using cellular networks to ‘leapfrog’ fixed line technology </li></ul><ul><ul><li>In 1997 less that 15,000 landlines for 65m people </li></ul></ul><ul><ul><li>Vodacom grew to 3 million mobile subscribers since 1997 </li></ul></ul><ul><li>Alieu Conteh, founder and chairman of Vodacom Congo showed entrepreneurial possibilities </li></ul><ul><li>Now one of the country’s biggest employers </li></ul><ul><ul><li>600 employees/ 5,000 contractors </li></ul></ul><ul><li>Planning to create the country’s first stock market and float Vodacom Congo in a public offering </li></ul>Source: The New York Times, 17 th June, 2007, What Does Africa Need Most: Technology or Aid?
  30. 30. <ul><li>5. There is an ongoing debate about what needs to be done to fight poverty </li></ul>
  31. 31. The Optimists: Poverty can be eliminated in Africa – more aid is needed for a ‘big push’ <ul><li>Jeffery Sachs: UN Millennium Development Goals can be met, but would cost $150-200 billion a year in aid by 2015 </li></ul><ul><li>2005 G8 Glen Eagles Summit leaders pledged to double aid to Africa from $25 to $50 billion per year by 2010 </li></ul><ul><li>Bob Geldof’s Africa Commission and Live8 supported more G8 aid funding </li></ul><ul><li>Bono: Led debt relief campaign and foreign aid increases in US </li></ul><ul><li>Bill Gates using resources to address treatable diseases </li></ul><ul><li>Tony Blair, Gordon Brown, Bill Clinton global poverty initiatives </li></ul>
  32. 32. Jeffery Sachs advocates a number of simultaneous interventions at the village level for sustainable development Infrastructure Health Education Millennium Villages Agriculture <ul><li>Road improvements and community vehicle access </li></ul><ul><li>Internet and mobile telephony access </li></ul><ul><li>Electricity for small businesses </li></ul><ul><li>Nutrition and clean water </li></ul><ul><li>Health services and facilities </li></ul><ul><li>HIV/AIDS, TB and Malaria Treatment </li></ul><ul><li>Primary and secondary education </li></ul><ul><li>Eliminate gender disparity </li></ul><ul><li>ICT training </li></ul><ul><li>Agricultural productivity and training </li></ul><ul><li>Irrigation, fertiliser </li></ul><ul><li>Support new village businesses </li></ul>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.
  33. 33. The Pessimists: Aid has not been effective Temporary Famine Relief? Where has $2.3 trillion in foreign aid over past 50 years gone? Corrupt and wasteful Bureaucrats? Swiss bank accounts?
  34. 34. Paul Collier proposes a more balanced agenda for action to tackle poverty in the poorest countries The Conflict Trap The Natural Resource Trap Landlocked with bad Neighbours Source: The Bottom Billion, Paul Collier, Oxford University Press, 2007 Bad Governance Globalisation reinforces poverty on many poor countries Military support for post-conflict countries Charter for post-conflict governance Aid for reconstruction International laws and norms for resource wealth Substantial aid to develop infrastructure and for basic social services Military support to prevent coups Trade policies encouraging exports Intelligent use of aid to encourage reform Selected use of military intervention (e.g. Sierra Leone) ‘ Big Push’ temporary aid for export infrastructure Temporary trade protection from Asian competitors
  35. 35. 7 things you can do to help fight global poverty <ul><li>Educate yourself about the causes and solutions of poverty </li></ul><ul><li>Vote and let your politicians know you care about global poverty </li></ul><ul><li>Contribute to organisations fighting poverty </li></ul><ul><li>Buy fair trade goods </li></ul><ul><li>Invest in companies that trade ethically </li></ul><ul><li>Volunteer for NGOs fighting poverty – build a school! </li></ul><ul><li>Tell others about poverty – give a presentation to your child’s school </li></ul>

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