The dilemma of poverty amid growth

Ensuring Socio-economic Justice

Abul Fadl

Rabi' al-Awwal 07, 1419 1998-07-01

Features

by Abul Fadl (Features, Crescent International Vol. 27, No. 9, Rabi' al-Awwal, 1419)

Poverty and hunger are age-old human conditions. Today, as humanity awaits the advent of a new millennium, the world continues to be polarized into poor and rich countries. In spite of great technological advances and decades of post-independence, post-colonial experiments in development, the gap between the rich and poor continues to grow wider and widespread hunger and poverty continue to be among the most critical problems confronting mankind. Available statistical data indicates that the rich North grows ever more overfed and overweight, while the poor South becomes mired deeper into the swamps of want, hunger and malnourishment. Between 1960 and the early 1990s, the richest 20 percent of the world’s population have increased their share of gross world product from 70.2 percent to 82.7 percent, says the United Nations annual Human Development Report.

In contrast, the share of the poorest 20 percent has decreased from 2.3 percent to 1.1 percent. The worldwide number of people scraping a living on less than a US$370 yearly income now stands at about 1.3 billion, some 25 percent of the total world population, most of whom live in Southern, ‘third world’ countries. Around a billion are illiterate and another 840 million suffer from outright hunger or under-nourishment.

In a letter sent recently to the British Medical Journal, a group of physicians warned that the failure to tackle poverty is pushing humanity into the abyss of a serious health crisis. The letter cited poverty as the underlying cause influencing the prevalence of numerous health problems throughout the world. These problems include the facts that many babies are left without proper vaccination, that millions of people lack access to clean water and proper sanitation, that life-saving drugs are beyond the reach of many of those who need them, and that some 600,000 women meet an unnecessary death during child birth every year.

This bleak picture directs attention to one of the saddest realities of our times: despite decades of greater average prosperity, the gulf between the rich and poor of the world continues to grow wider. But since mankind in general has been able to achieve a sustained increase in per capita economic and agricultural output, the explanation for this widening gap cannot be in terms of an overall inadequacy of global production.

Rather, it is to be found in systemic processes and institutional arrangements governing the global distribution of income and wealth as well as in the iniquitous character of many national processes of growth. The complex causes that contribute to the making of this pitiable reality therefore mostly arise from human failings, leading to a reduction in the quality of life for large numbers of people.

For one thing, national development policies adopted by many ‘third world’ countries in the post-independence period were characterized by an obsession with western-style industrialization. Such a bias resulted in the aggravation of structural deformities and severe imbalances within these traditionally agrarian countries leading in the process to a phenomenal rise in landlessness and the conversion of large numbers of small land-owning peasants into wage-earning agricultural labourers.

Many others were driven out of cultivation altogether to join the swelling ranks of the urban poor. These distortions then contributed to the increasing concentration of domestic economic power in the hands of a small, mainly urban, elite.

Yet the global geography of poverty has been shaped by the workings of a number of international forces. Foremost among the mechanisms aggravating the grossly inequitable global distribution of wealth is free trade. The problem is that when poor countries finally threw away the yoke of decades, and in some cases centuries, of colonialism, they found that their economies depended upon exporting very few products to the western developed countries. Within such a scheme of things, these economies became vulnerable to the decline or fluctuation in the prices of commodities and a continuous deterioration in the terms of trade that favoured the rich. These processes resulted in the incidence of a net flow of resources from the poor to rich countries.

Moreover, and despite all the western claptrap about free trade, the rich countries have managed to effectively undermine the poor countries’ quest for fairer free trade. For instance, agricultural protection by the United States and the European Community has taken a heavy toll on the poor countries’ economies as it not only shuts their farm imports out of these important markets but also allows the rich to dump their own subsidised surpluses on the world market, thus blocking their poorer competitors. Free trade in manufactured goods is similarly frustrated by the rich through an elaborate system of tariffs, quotas and tight restrictions on imports from developing countries. The World Bank, for instance, estimates that the quota system established by the Multi-Fiber Agreement costs developing countries about US$75 billion in potential exports of textiles annually. On the other hand, trade with the rich nations, whether in raw materials or manufactured goods, tends to further aggravate inequalities within poor countries. The fruits of this trade accrues mainly to the owners of capital in the export sector or to local industrialists who cooperate with the multinational companies.

The processes dominating the contemporary international labour market provide another mechanism that accentuates global inequality. Curiously enough, there is a very narrow space, if any, for the free movement of labour across national borders in the currently dominant capitalist ideology of free trade, free enterprise and free movement of capital. As millions of people are becoming uprooted and suffer from the dislocations occasioned by the increasing globalization and interdependence of the world economy, rich countries are moving in the direction of imposing more restrictive immigration controls. Even in such quintessential nations of immigrants as America, Australia and Canada, an unmerciful backlash against new arrivals, especially unskilled workers from poor countries, has been on the rise.

While rich countries are becoming more selective in admitting foreign workers, preferring those with useful skills, the economies of the poor countries are disrupted as they lose a disproportionate number of those they most need.

Muslimedia: July 1-15, 1998

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