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World poverty - What will NOT cure the problem?
Wed, 24 Sep 2008 16:21:37
By Patricia Khashayar, MD., Press TV, Tehran
The following is the second part of an interview with the Executive Director of World Innovation
Foundation Charity (WIFC), Dr. David Hill, on poverty and its causes as the Millennium Goals are
being reviewed by donor countries in New York this week.
Q.We hear everyone say Capitalism and Globalization are the solutions to the global challenge.
Do you believe they can save our world?
A.Let me start by saying that 'Capitalism' and 'Globalization' will never solve the poverty
problem. It is geared towards sheer greed and the personal good of the very few in this world
and where the rest suffer at the hands of these two impostors of universal wealth creation.
Indeed, if the present socio-economic systems and cures were so good, why according to the
IBON Foundation in 2007 was there an estimated 1.5 billion people who did not have or were
lacking of a real job.
Therefore, from this little statistic alone, capitalism and globalization are not working as nearly a
quarter of the world's population do not meaningful jobs. It must be just for the good of the very
powerful few I can in all honesty conclude. That is why it is so bad for human sustainability and
the long-term existence of humankind.
In this respect, I am also drawn to the words of the great spiritual/political leader and
humanitarian Mahatma Gandhi who in 1928 stated, "God forbid that India should ever take to
industrialization after the manner of the West. The economic imperialism of a single tiny island
kingdom (the UK) is today keeping the world in chains. If an entire nation of 300 million took to
similar economic exploitation, it would strip the world bare like locusts."
Taking into account what Gandhi said, one has to ask was he thinking of the US through a
premonition, one wonders when he stated these words? Amongst a world of tributes after
Gandhi's death, Albert Einstein paid his tribute by saying, "Generations to come will scarcely
believe that such a one as this walked the earth in flesh and blood."
In many ways, a fitting tribute I would say from the greatest scientist to the greatest
humanitarian of the 20th century.
Q. Since your last interview with Press TV outlining the dire poverty problem in today's world
(Aug.31,2008), we have witnessed the start of the global financial crisis. In other words, today's
trend is leaning toward worsening the current global situation instead of improving it. Has this
prevented you from continuing your mission to tackle poverty?
A.This has not swayed me in the least away from what we have to do to stem and eradicate
global poverty and which I have to say is inextricably interlinked with the possibility of a future
peaceful world and human existence. Far from it, for it has reinforced a solution that my
institution has put forward.
It is radical, but that is what the world needs today to save it from the extreme excesses of
unrestricted capitalism. For the capitalist economic mechanism is a recipe for eventual social and
economic destruction on a global scale. Indeed, the US presently as an example of progressive
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and opulent excess now has an unprecedented and unsustainable household, corporate and
public debt of $51.1 trillion as of 2007, equivalent to nearly four times the GDP of the USA. Next
year, things will be far worse to say the very least.
Q.How do you see the future of this global crisis?
A.I estimate that the global losses on share values, corporate losses by banks and the propping
up by central banks since the beginning of last year to the end of 2008, will be in excess of $6
trillion and may be as much as $7 Trillion. At the turn of 2009, I predict compound losses of up
to $8 trillion or around 13 percent of the total economic output of the world.
These are the true figures I believe and not the doctored ones put forward by governments so
that they do not embarrass their political management of their national economies and therefore
the world economy.
This has rendered many of the shares nearly worthless or of zero value as we have seen
recently. Added to this, as the Iraq war may cost the US between $1 Trillion and $2 Trillion,
according to the US Congressional Budget Office, by the time it is finished and the Afghan war at
between $250 billion and $500 billion, the USA in particular is suffering under a capitalist
regulatory system. In this respect also I have to comment that Nobel economist Joseph Stiglitz
independently assesses the cost at $4 trillion for the two wars.
Therefore, the congressional assessment may be on the low side, which is the more probable
outcome knowing that governments always keep assessment low due to it being the taxpayer's
The cost of the long term caring for Iraq and Afghanistan veterans, including disability payments,
will cost nearly $400 billion according to professor Stiglitz assessments also.
Q.What is the underlying cause of the diseased condition we are facing today?
Over the past quarter of a century, there were just a very few Nobel Economists who questioned
the economic virtues of an unsustainable debt ridden economy. Now it is becoming clear by the
year that the economic mechanism that we use is not fit-for-purpose in this century or for that
matter all future centuries to come, the latter, if we are lucky enough to survive past the 21st
century, using the dictates of present capitalism and super-capitalism, globalization.
Added to this, the Baby Milk scandal in China that effected between 50,000 and 100,000 babies
shows to what excesses the capitalist system will go to make a profit, the deaths and direct harm
of even babies.
Going on from this, in Britain it was reported very recently that one firm alone through short
selling of HBOS shares prior to its demise made $355 million in just 2 minutes of transactions.
On the other side of the coin, millions of investors, normal working people, lost most of their
saving investments. This excess shows clearly that the capitalist system is wrong in the long-
term for over 9 out of 10 of the world's people.
For next year, I predict that due to these rising exponential costs, we shall have a global
recession that will take at least 5-years to stabilize.
But the main influence of this capitalist system when it goes frighteningly wrong is on the poor,
some 3 to 3.5 billion human beings that equates to half the population of the world. Of course it
also affects all those in the capitalist West where private investors have lost trillions of dollars in
share values and therefore from their pension funds.
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Indeed in respect of the latter, a time-bomb is already ticking as the West will have far more
pensioners to support financially over the next quarter of a century. These are basically terrifying
ordeals that all western economies will have to suffer in the years to come as the financial
problems now also have undeniable consequences on the future for the old, even in America
where things will be very hard indeed.
But up to now, it has to be said that the world has not developed a system of universal
development that allows all humans to live peacefully and without want or need. For as Pope Pius
XI once remarked, "Totalitarian communism and unregulated capitalism are united in their
Q.Could you expand on what that really means?
A.Totalitarian communism's "satanic optimism" is based upon the belief that the suffering of the
workers can be eliminated by public ownership of all elements of production. Unregulated
capitalism bases its ideology on the idea that unrestricted market forces can guarantee peace
and prosperity. The collapse of the Soviet Union proved the former is wrong and the collapse of
the US financial institutions proves that the latter is wrong also.
Q.In conclusion, regarding what you said, could you guide us as to how we can improve this
Consequently, I have identified things that will NOT solve the poverty problem and which I state
as follows. Unfortunately, if we do not change our ways in this world, up to 95 percent of the
world's population will eventually be susceptible to relative poverty during the present century.
The first of these is Globalization and the Capitalist System
Globalization or super-capitalism creates great wealth through international trading, but
unfortunately only for the few and where the destruction of jobs at home, increased poverty for
the exploited countries and a non-sustainable world order is the outcome for the rest.
Indeed, nearly two decades after the reforms and globalization strategy was put into place in
India as an example, the World Bank's report on poverty in September 2008 stated that between
1991 and 2005 their nation's poor had grown by 39.8 million, an increase of 9.6 percent in
relative terms when we up the level of income from $1 a day to $1.25 a day.
In reality, the overall picture is that 42.2 percent of all Indians or 4 out of 10 Indians were
classified as still being poor in 2005. Others, including their ministers recently have said that the
more accurate figure is closer to 800 million or 8 out of 10 Indians.
The present capitalist system can therefore be seen as creating more impoverishment for the
people than the wealth that it creates for them. As a single example of this, Cochabamba is one
of the largest cities in Bolivia and in 1999 the World Bank required that the Bolivian government
privatize their water services in return for a reduction of its debts.
The US giant Bechtel and one of largest construction companies in the world was awarded the
contract. Immediately after Bechtel acquired the Cochabamba water system and before any of
the promised investments in infrastructure were ever made to improve and expand water
services, Bechtel raised the price of water by 100 percent.
Many Bolivians overnight were simply forced to do without drinking water for their very
existence. But, the same law to allow this takeover that privatized the water system also
privatized the collection of water, including rainwater collected in barrels. Consequently, with no
drinking water humans cannot live, but where the capitalist system does not care if people live or
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Unsurprisingly the majority of the Bolivian people immediately voted for the cancellation of the
contract with Bechtel. When this demand was met with utter silence from the Bolivian
government officials, the citizens went on a citywide strike, but where still the government
defended Bechtel's right to privatize by dispatching armed military troops into the streets of
Cochabamba to disperse the crowds.
This is what globalization, the World Bank and governments in concert together can do to the
world's poor, the reason why capitalism is possibly the greatest threat to humanity's existence in
Another major failure of the capitalist system amongst a multitude of problems is that it looks
after its own. In this respect and as an example, when the collapse of Leman Brothers was
imminent and with headquarters in the USA, $8 billion was transferred from London to New York.
This was to pay the salaries and last bonuses of the head office before its death. Unfortunately,
the 5,000 employees in London were left wanting. Therefore, when companies contract in the
capitalist system, it is clear that the parent company always wins to the demise of all others
across the world.
This is a very fragile situation for any system, especially for those who do not control the world
markets and where the winner always takes all. In other words, the poor will always lose out,
regardless of whether or not they live in the developing world or the West.
Added to this, super-capitalism (globalization) is creating poverty through over extraction of the
world's natural resources. Indeed according to the New Economics Foundation on Sep.23,2008
the world slid into "ecological debt", having used up all the planet's natural resources that it can
provide this year without compromising the planet's ability to sustain itself.
In this respect, the Foundation stated that humans are using up resources such as forests and
fisheries, the lungs of the world, and producing more waste than the planet can absorb. From the
Sep.23, 2008, the world is overshooting nature's budget and its sustainability limit. The world
has been in this non-sustainable situation since the 1980s, the NEF said.
Compounding this unsustainable over-extraction process by the capitalist system that is directly
causing global warming, scientists are now saying that the release of millions of tons of highly
toxic methane is being accelerated from the artic seabed.
Methane is 20 times more damaging than CO2. Therefore, super-capitalism is providing our
deathbed in the long-term if we do not check its influence on the planet and our ability/capability
to sustain human life itself.
These and other negative effects of globalization and the capitalist system will do immense harm
to the poor in the years ahead. Indeed, even more will die through starvation, lack of clean
drinking water and manmade disasters.
The second of these is Government intervention
Eight years ago, in September 2000, more than 100 presidents, prime ministers and leaders of
the world's nations met in New York and unanimously agreed upon the Millennium Development
Goals (MDGs). On most counts according to senior UN executives, the MDG are failing.
Indeed things are getting far worse by the year and where development assistance is dropping
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year-on-year from a high of $107 billion in 2005 to $104 billion in 2006 and where the recent
OECD figures show a further fall by over 8 percent to $104 billion in 2007. Therefore, things can
only get more extreme in the years ahead for poverty itself and the people afflicted with this dire
Indeed, according to South African MP Ben Turok in September 2008 where he stated that
contrary to the myth that wealth trickled down to the poor, the state's emphasis on growth had
done little if anything to ameliorate poverty, which had worsened since 1994.
In other words it had not worked. Indeed, there are many cited reports and studies on the WEB
that show that governments are failing the poor of the world through a dependence on the profit-
driven capitalist system and growth.
Unfortunately, it has to be said about governments and politicians in particular that they are
mainly interested in their own status. They look inwardly, do not look outwardly and do not
address poverty for what it really is, the root of all disharmony between humans caused through
the have and the have nots' condition. Capitalism is therefore in many ways the catalyst of this
system that causes ultimately the dire poverty problem itself.
Added to this, governments are also very closely allied to corporations, who only look at profit
and poverty as a social responsibility for simply their shareholder image. Governments are also
inextricably tied to what big business does in the main and where poverty is not a priority, even
though it should be a social responsibility for all.
Consequently, as a great deal of government policy revolves around business strategies, poverty
is placed on the back burner until usually people in the streets force the issue.
My overall opinion is that governments do not really take poverty seriously enough because the
people affected in their country are small or where the majority of people who do suffer from
acute poverty, have no power at all to change things.
It is an irony of the political system that does not protect its citizens from the symptoms, anguish
and effects of poverty, for not until the people are enough in numbers or have enough strength,
does poverty show its ugly face to political regimes.
Unfortunately, I have to say that over the next half a century, there could be quite a lot of
anarchy in all countries because governments do not take the poverty problem seriously enough
to reduce it.
Indeed, a few million here and there in capital investments may keep the status quo or allow for
a few million deaths through starvation, disease and lack of drinking water, but this will never
reduce or eradicate poverty. What is required is a major investment that just does not feed for a
week, but gives people the means to sustain themselves without outside support.
Indeed, there lies the problem solver for governments but where governments are only happy to
keep face value and no more. The recent collapse in world trade talks speaks miles for this as the
poor lost out again. Consequently governments will never reduce or defeat poverty in the long-
term as they used only short-term stopgaps when crisis's happen. In this respect in the UK a
YouGov Poll in September stated that only 36 percent of people agreed that the UK government's
intervention was best.
The majority (69 percent) though stated that the provision of more and better training to help
people out of poverty was the most effective method. I have to say that neither is the answer to
the poverty problem as the mechanisms that underpin this thinking are not capable of supporting
either of them.
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The third of these is United Nation's Intervention
The United Nations has been trying desperately for nearly six decades now to reduce and even
eliminate poverty from the face of the world. Unfortunately its implementing organizations have
failed miserably with little impact on the dire problem. This is not to say that the UN is not a
good thing in its concept, for it clearly is. But overall, it is the mechanisms that they use which
are all wrong.
In this respect, I estimate that by 2025 we shall have at least 4 billion people still living in
poverty as the population of the world grows to 8 billion, and where an increasing number of
those living in poverty will be from the capitalist West. I say this because as the population of the
world grows and natural resources deplete at an ever increasing rate, there will be less for more.
Indeed, a recipe for even wars and possibly global wars in the future and all at its root, the
On the debt reduction situation for developing nations, I now also see no real chance of this due
to the present financial crisis in the rich countries. Indeed, I see a compounding effect of this
debt unfortunately, bringing even greater suffering to half the population of the world.
For the World Bank in August 2008 disclosed that an economic catastrophe had occurred in their
report on global poverty and where a further 430 million people were classified overnight as
living in absolutely poverty. The cause was in the revisions undertaken by World Bank
statisticians who had adjusted the international poverty line from $1.08 to $1.25 a day.
This totally contradicted the Bank's notable decline in extreme poverty figures of 2007, which fell
to less than one-billion for the first time. But these new figures revealed a far less optimistic
outlook and where there were 1.4 billion poor people in 2005, an increase of 986 million people
In other words, an error of some 42 percent and stating that a ¼ of the developing world was
living without sufficient means for even human survival. This was a striking indictment of how
the World Bank manipulates its figures to appear good to the world but where in reality it is year-
on-year losing the war on poverty reduction.
As stated in the reasons why globalization will not cure the global poverty problem, the World
Bank also causes more problems than it solves. This appears to be inherent in the system, which
looks after the rich and these days, exploits the poor.
Indeed, the ideology known as neoliberalism and spearheaded by the World Bank and other
institutions in Washington spawned Structural Adjustment Policies (SAPs) which have been
imposed on poor debtor countries to make sure that debt repayment and economic restructuring
is the top priority.
But the way it has happened has required poor countries to reduce spending on things like
education, health, and development, while debt repayment and other economic policies have
been made the priority. In other words the IMF and World Bank have demanded that poor
nations lower the standard of living of their people, it must be asked, what good are these
institutions in fighting poverty?
They definitely need dissolving or completely re-engineering but where the rich nations of the
world will not allow this to happen for it is not in their interest to do so. But it has to be said that
this shortsighted strategy will be the eventual undoing of the stability of the world order.
So much for the UN's place in reducing poverty. An institutional disaster in anyone's mind and
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where the United Nation's executing bodies have to change their ways of delivering poverty
reduction, for presently they are clearly failing the world's poor.
The fourth of these is Creative Capitalism and Philanthropic Foundations in General
Creative Capitalism espoused by Bill Gates is in reality a repackaged version of corporate social
responsibility or caring capitalism that has been around for more than four decades now.
This system of capitalism is in the main where corporations get smarter at finding profit
opportunities at the bottom of the pyramid. Therefore, it is still driven by the need to make profit
and not predominantly to reduce poverty.
Therefore, the system is dead before it starts, as poverty alleviation is not the top of the agenda
or its priority. Indeed, creative capitalism could just very well add to the dire problem in the
It is a capitalist system where a company says it will give a very small portion of its profits to
good causes such as the relief of AIDS. But from this, that company can sell its products on the
back of supposedly doing good around the world.
The attraction for the company in doing this is for the same reason as for normal corporate
capitalism, adding to the bottom line. Therefore, the whole process is driven by no other than
that old impostor, profit and self-interest and not the prioritization of poverty reduction.
Indeed, Harvard economics professor Edward Glaeser who has studied creative capitalism in
great detail considers that we simply do not have the scale in this system to make a dent in
global poverty. Therefore, it is too small and even if it were of a magnitude to change the
situation, it would have the flaw of profit greed still at its core, that little thing that makes it all
go wrong again for the poor.
Philanthropic giving foundations only give annually a very small proportion of their great wealth
to good causes, poverty reduction being just one of them. Indeed, an analysis of all the world's
largest philanthropic foundations shows that year-on-year their wealth grows and does not
diminish. This is usually through investment in the guise of a charitable organization.
Charitable organizations do not pay corporation tax, so it is very appealing for a multi-millionaire
or billionaire to start a foundation so that the taxman cannot get his hands on his wealth, but
where he can still secure the use of the total wealth in a philanthropic process.
Basically these foundations are therefore predominantly a means to not pay taxes and to retain
personal wealth. Poverty reduction et al is not therefore the main reason why these vast
institutions are created. Consequently, these foundations are not designed primarily to do good
for good's sake but for self-interest and to acquire further wealth at the taxpayer's expense.
In many ways therefore they do more harm to the poor of this world, for at least if they paid
taxes on their vast fortunes and gave back to the people who made them rich in the first place,
governments would have more funds to redistribute this wealth worldwide.
The fifth is uncoordinated aid charities and sponsor nations
There are vast philanthropic foundations throughout the world, but where few actually maximize
their assets when it comes to alleviating and reducing poverty. This can be seen as these major
foundations have not reduced the level of poverty throughout the world. In many ways their
effect can be likened to the effect of governments on poverty. I believe that the lack of
effectiveness is due to a piecemeal and duplication approach, where resources are squandered,
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very much again like the strategies of governments towards poverty.
According to the Canadian Encyclopedia 'Historics', aid for developing countries has often been
wasted or spent inefficiently. One of the accepted problems is the bewildering array of
uncoordinated support programs in many poor countries. These inefficient systems include
bilateral aid to niche programs sponsored by religious charities to loans from the World Bank.
For example a country like Ghana, whose government must cope with an infinite array of non-
governmental organizations, along with perhaps 15 significant donor countries with missions
coming and going each year. All have their own priorities and standards for accountability. An
endeavor to restructure the aid relationship commenced in 2005 with the 'Paris Declaration'.
The aim of this was to funnel more aid toward the government budgets of developing countries,
instead of separate aid-funded projects, track results, and improve accountability.
Although it is still early days, initial information is not encouraging, as donors and NGOs still
have not integrated in any meaningful way to show an increase in the results and a reduction in
global poverty. Therefore, not until donor countries and NGOs sort themselves out and act as a
cohesive body in the fight against poverty will the lot of the poor in this world change for the
better. For as we know, in the past literally hundreds of billions have been wasted because of
duplication, corruption and an uncoordinated system of aid.
Indeed, the greatest problem appears to be direction and priorities. Every NGO has its own way
of approaching poverty and thus a multitude of strategies are formulated in an unrelated way.
Therefore, when it comes to the most important area in the reduction of poverty, the
implementation in the field of these strategies, there is no integrated coordination with other
NGOs and where the government departments of developing nations become overstretched and
There is too much for them to concentrate on and undertake. Consequently, the system to a
great extent breaks down due to its wide-ranging man-made imposed complexity brought about
by a multitude of small aid packages.
This is where I feel greatly that our institution can help in bringing together the whole system so
that it is indeed effective. Definitely, a global coordinator or continental coordinating body is
required to make positive results happen for the poor.
And the sixth of these is Religious thinking that has been interpreted wrongly
Religion is a way of life for possibly one-third to half of the population of the world. It is a belief
between a human being and God. God is inseparable from all things that are good in this world
and it is man's misinterpretations that result in bad outcomes. Consequently, as we are God's
servants, this human frailty within humankind makes the wrong decisions and assessments at
Indeed, God wishes all his children to help each other in this earthly life, but the human side of
this mandate is not held up particularly well. If it were, God's creations, you and me, would have
by now eradicated poverty by helping and giving so that human suffering would have ceased
centuries ago. Therefore, up to the present time, religion has not been a dominant force for
universal good in the true sense of the word, but it could certainly be the vanguard/powerhouse
of defeating poverty if it wished to do so in the future.
Let us hope therefore that future leaders of religions join together and make the necessary
changes in the world that God wishes to happen.