The end of World Poverty is possible. Are we up to the challenges?
As determined by the United Nations, the level of extreme poverty is less than $1.08 per person per day. We have a popular wisdom that says, if folks would just get busy, there would not be poor. The $1.08 amount is the amount required for subsistence. If you earn less then that, there is no excess available to capitalize growth; therefore the countries remain poor.
By contrast, average income for more developed countries is 27,000 dollars per year, with government generally free to collect about 7,000 dollars in taxes. In terms of development, developed countries have more of an ability to regenerate or develop their country. Average taxes paid in Ethiopia, a poor country, are $110.00.
If these countries are going to have anything to invest to make their country grow, they need an infusion of capital just to pay their basic necessities. In these poor countries, the average per capita income is $0.77 per day. Just to be able to subsist, they have to have enough money to bridge this 31 cent gap or about 113 dollars per year.
If you figure out this for 20% of the world’s population, this comes out to 124 billion dollars to be supplemented by more developed nations. The total world economy for 2008 was 20.2 trillion. The 124 billion is 0.6% of total world gross domestic product. Gross domestic product is the sum of all a nations good and services. Taxation to get to this point is .07 cents for every 10 dollars earned.
Before we hop on to the spend more money tree, let’s look at what we are spending now:
Total Relief aid 76 billion
Debit relief 6 billion
Support government 12 billion
Direct basic needs 15 billion
Amount paid back yearly 11 billion
We have talked about the need, but most people would have reservations about larger aid. Many people would say, “We give money, but we don’t get any bang for our buck.” We can look at this and get a general idea of what is true. In the sub Sahara thirty dollars per year is given. Remember that 113 dollars of supplemental income is required.
Of that amount
$5 given for consultants
$3 given for emergency rations and people movement.
Some of this is debt relief. This is relief that really only exists on paper. Debts are forgiven that couldn’t be paid back anyway.
$.06 given for hunger relief per capita.
To think that we won’t get in any bang for our buck is preposterous. Six cents won’t buy much of anything in this country or there.
Another popular issue in not giving foreign aid is that recipients are so corrupt that money would disappear. I think there are some valid concerns here. Here is the actual truth that governs government: poor countries have poor governments. If people are poor, they don’t have time to watch the government. They are certainly not well educated. Poor government and poverty become a self-perpetuating cycle.
Some would argue that foreign aid is not a good investment. In terms of unrest, where are the hotspots of the world. They are in poor countries. Where have major insurrections taken place? Soviets arose in the economic chaos following the last Czars. Nazi Germany was a result of post World War I depression. Someone with an economic plan can put forward a plan of change and details are simply skimmed over. If this world were safer with less unrest, we would need less military. Today we spend thirty times more on military then on foreign aid. The only other country that comes remotely close is Greece whose financial situation is almost as perilous as our own.
We have dealt with the whys and why nots. Now we get to the important idea of should we? It is a value judgment; it is a type of judgment that powers the very essence of the world.
We have to a large extent eradicated polio in the world today. It was a massive job and we have reaped the benefits in productivity and better use of resources. Except for sporadic outbreaks small pox is also gone.
Extreme poverty in the world is twenty percent. 1.1 billion people subsist on less than $1.08 per day. One generation ago the number in extreme poverty was one out of three Two generations poverty was one out of two. In the United States with a history of isolationism we tend to use United Nations and conspiracy often in the same sentence. Regardless of what we think, there has been progress.
The countries with capital to spend are the US with up to 51% of all the available resources. Japan has 18%. Italy, Germany, France and United Kingdom compose a combined 18% of resources. As I have shown, we will end up living in a more stable and settled world if we take care of the world, as it exists today.
How rich are we? Four hundred of our richest Americans have more money than the poorest four countries on earth.
Poor countries 57 billion
400 richest Americans 69 billion.
In those poor countries there are 161 million people, climbing rapidly. They all compete to use the amount of money that is less than the 400 Americans earn.
Could we? Remember the amount to bring this about—0.7 percent of gross domestic product. Does this include typical boots on the ground to make sure this happens? Probably not, but how much does an occasional administrator cost. If we aren’t putting out massive upheavals, maybe military personnel will need something to do. We also have a society that in the past has put forth massive numbers of Peace Corps volunteers.
In the 1960’s President Kennedy galvanized this country to go to the moon. “We choose to go to the moon, not because it is easy, but because it is hard.” The entire project cost twenty four billion with yearly expenditures equalizing three billion. GDP in 1966 was about 784 billion. We invested about 3.84 billion to make this happen. We did it out of military paranoia. We did it out of fascination. The relevant part is we did it. The amount needed today is 0.7% of GDP probably until 2025. This is doable and will create a better world.
What type of world will be live in? In the end, it is up to us.
Sachs, Jeffery D, The End of Poverty: Economic Possibilities of Our Time, Penguin Press, 2005