Archive - Jan 2009
January 30th
Corruption Plagues the Poor
The "cancer of corruption" is rampant in poor countries and needs to become a social priority, development economist Ajit Mishra writes in Forbes.
Corruption, or abuse of public office for private gain, hurts the poor and undermines anti-poverty programs, Mishra reports from India. In corrupt societies, poor people are cut off from aid and access to public goods like water, health care, credit and education.
Payments have been made for non-existent public works, money has been disbursed to fictitious (sometimes long dead) persons, employed persons are paid only a fraction of the stipulated wage with the rest being appropriated by officials. This is not an isolated example; anti-poverty programs around the world have encountered similar problems. In some cases, the leakage from corruption can be as high as 80 percent.
Mishra says laws to curb corruption have proven ineffective, and that without methods to apprehend and punish corrupt officials, the growth potential of poor countries will continue to be severely inhibited.
January 29th
Mining in Ecuador: Investment or Exploitation?
Countries: Ecuador
Despite ongoing protests by environmental and indigenous rights groups, Ecuadorean lawmakers approved a mining bill earlier this week to permit large-scale projects tapping the country’s gold, silver and copper deposits. The point of contention: Will the new law promote responsible investment or careless exploitation?
President Rafael Correa revoked nearly 80 percent of mining concessions in April 2008, which mainly affected big Canadian companies. The popular Correa, who is seeking reelection this spring, promises that the revised law will bring about better environmental controls, protection from land speculators and 300,000 new jobs.
But indigenous community organizers aren't satisfied. They say large-scale mining hurts the environment and keeps power in the hands of multinational corporations. The Confederation of Indigenous Nationalities of Ecuador (CONAIE) has continued to organize nationwide demonstrations and block roads. Last week, 9,000 indigenous people shut down transportation along the Panamerican Highway south of capital city Quito.
Indigenous-rights groups argue that the mining law contradicts the new Ecuadorean constitution, which introduced a Bill of Rights for nature that grants protection for ecosystems.
Correa criticized opponents of the law as "fundamentalists" who would "condemn us to forever be beggars sitting on a sack of gold." Others disagree. As reported in Upside Down World:
President of the CONAIE Marlon Santi pointed out that the "majority of mining concessions are on indigenous and campesino lands." He also challenged President Correa’s program of "change," saying that "the people who grow potatoes, who grow maize, who live in the Amazon and the mangroves, we are where change is coming from."
Seeing the Poor as Customers

"Most of us look at the 1 billion men, women and children in the world who live on less than a dollar a day and see poor people," writes BusinessWeek. "But Paul Polak sees market failure."
Paul Polak is a 75-year-old former psychiatrist who founded a non-profit called International Development Enterprises. He calls himself a "Global Poverty Fighter."
For the past 25 years, Polak has worked with small farmers in developing countries to provide low-cost products that support self-sufficiency — drip irrigation products for small farmers with limited access to water, rice fertilizer to increase yields, and water-storage products that can be used in extreme temperatures.
An entrepreneur at heart, Polak believes in approaching the poor as customers — not charity recipients. He says 17 million people have climbed out of poverty thanks to his inventions.
Watch to learn more about Polak's entrepreneurial approach to fighting poverty.
January 28th
A Billion for a Billion
Keeping with a UN target of committing 0.7 percent of national income to alleviating poverty and hunger, Jose Luis Rodriquez Zapatero the prime minister of Spain has pledged 1 billion euros to strengthen food security around the world.
UN Secretary-General Ban Ki-moon says the global food crisis has increased the number of hungry people to "an intolerable 1 billion."
Spain is giving a billion for a billion. Check out how other countries measure up at the Millennium Development Goals Monitor.
Mapping for Change

We have elevation maps, weather maps, and population maps. So why not soil maps? It may be the key to the food security of an entire continent.
Africa has the most depleted soils on earth. A major problem is a lack of information on how to care and maintain land. What type of fertilizer should be used? How much? With which soil type? When should I rotate my crops? How long should I rest my land? Without the answers to these and other questions, the soil is degrading over time, losing nutrients with every harvest, with every harvest getting smaller and smaller. A soil map can answer these questions and, hopefully, help to reverse the trend.
The International Center for Tropical Agriculture (CIAT) is mapping the soil of all 42 countries of sub-Sahara Africa as the first step to building a global map online. The soil map will be created using soil samples and satellite imagery, which will allow for detailed and precise prescriptions for small farmers and their lands. Outreach workers and farmers associations will be trained on how to use the map and translate the information to farmers on their land.
It’s a four-year, $18-million program paid for by the Bill and Melinda Gates Foundation and Alliance for a Green Revolution in Africa (AGRA).
This program has the power to revolutionize agriculture in Africa. Nteranya Sanginga, director of CIAT's Tropical Soil Biology and Fertility Institute has said that "[w]ith accurate soil maps, we find farmers can increase their yields by around 60 percent, and sometimes double." Sounds like a plan for success worth mapping.
January 27th
Weekly Comment Contest Winner!
Congratulations to Katie from Portland, OR for winning this week’s comment contest and the $25.00 prize! Katie responded to our post “Emissions Trading: Good for All or Good for None?”
Globalization plays a role as both a threat and an opportunity in carbon trading. As the article above mentions, the U.S. has been a culprit in taking advantage of off-shore polluting and has long been independent of global efforts to improve emissions when it failed to ratify the 1997 Kyoto Protocol.
BBC News reports that the EU is expanding its Emissions Trading Scheme in order to include more industrialized nations, including poorer nations where help is needed.
Part of the plan to cut emissions will cost 175 billion euros annually by 2020, much of which the EU says will be needed in developing countries. The pact will be determined in Copenhagen in December, which would be a successor to the 1997 Kyoto Protocol.While the EU is expanding emissions control standards in developing nations, how will they find a way to include developed nations, like the U.S., as well as China and India? It is promising that the EU hopes to encourage a green infrastructure in these countries, but what about countries with the resources that fail to be responsible for their effects on the environment?
Emissions trading is a complex and controversial approach to reducing emissions worldwide. Critics argue that emissions trading will prohibit economic growth in developing countries, while others insist that action be taken now to prevent further damage caused by global warming. What do you think? Share your thoughts and keep commenting for a chance to win next week!
Gazans Digging To Survive

A stated aim of Israel's military strikes in Gaza was to destroy underground tunnels between Egypt and Gaza because they're used by Hamas to smuggle in weapons.
But Gazans argue that there are two kinds of tunnels running from Gaza to Egypt: militant and civilian. Hamas-controlled tunnels are "supposedly steel-ribbed and large enough for a car to pass through," according to Time. And unlike civilians, who dig in plain sight of the Egyptian border security and Israeli surveillance aircraft, Hamas members are more secretive and obscure about the location of their tunnels.
Gaza's civilians claim their tunnels are necessary. Israel essentially sealed Gaza's borders to everything but humanitarian aid after Hamas took control of Gaza in June 2007, making the tunnels the only means for transporting everything from medicine, cement, chocolate bars, and even lion cubs for the zoo, according to Time.
"It's a lie to say that we use these tunnels to only bring in weapons. We're bringing in the ordinary stuff that keeps Gaza alive. If the Israelis opened the border crossings, we wouldn't have to be doing this," a Gazan resident tells Time.
According to the New York Times, the tunnels are also a primary source of income for some 25,000 young men. Tunnel diggers can earn $100 for every meter they dig — making the tunnels one of the biggest sources of employment in the territory. And they were back to digging as soon as the truce was signed.
"If Israel keeps the borders sealed off, we'll keep digging and only Allah can stop us. Let the Israelis drop their bombs. Without the tunnels we can't survive anyway," says Aymad, a tunnel digger. "And if a bomb catches me underground, well, they won't have to dig my grave."
Comment Contest Winner!
Congratulations to Manasi in Portland, Ore., this week's winner of our weekly comment contest. Manasi's comment on What a Slowing GDP Means for China's Workforce earned her a $25 prize to keep or donate to a project of her choice at Global Giving.
China has come up with its own stimulus plan to deal with the global recession and rising unemployment, according to the International Herald Tribune. Unlike the U.S., China has few debts, a small budget deficit and therefore more funds to invest in new spending plans. In order to quickly create jobs for millions, China is planning to spend $88 billion this year on construction of intercity rail lines and improving roads and highways throughout almost every city, town and county across the country. This plan will not only create millions of jobs, but will also curb China's dependence on cars, foreign oil and reduce air pollution. The stimulus plan will also include environmental projects like water treatment plants.
Economists are arguing about the actual feasibility of this plan and how quickly it will be executed. But most experts say that China will move faster than the U.S. in implementing their stimulus plan. This is because the government controls large sectors of the economy and is able to seize private property when it wants without all the legal and environmental regulations the U.S. government has to deal with. China is also planning to spend $123 billion to provide universal health care within the next 2 years according to the Tribune.
In a country that has seen the fastest growing GDP in recent years, perhaps it will be able to pull off this larger than life plan — even in a recession!
Whether the Chinese government will be able to stem the deepening economic crisis remains to be seen — right now it is hitting China's workers hard.
A Global Stimulus Package?
Now that American taxpayers have bailed out Citigroup, AIG and Bank of America (along with a host of others) and are about to finance a massive economic stimulus bill, what about chipping in for a stimulus package that targets developing economies?
That's what Robert Zoellick, president of the World Bank, advocates in a recent New York Times op-ed. After all, why should the poor in developing countries have to pay the price for a crisis they didn't start?
The United States could begin by pledging some $6 billion of its own $825 billion stimulus package — just 4 percent of what was provided to American International Group. With this modest step, the United States would speed up global recovery, help the world’s poor and bolster its foreign policy influence.
Zoellick expects other countries to follow America's generous example; Britain, Saudi Arabia and others have already expressed interest.
Any global stimulus, Zoellick explains, should support investments in human capital, public-private partnerships to supply communities with basic services, small- and medium-sized businesses, and microfinance institutions that lend to the poor.
The current economic crisis has already pushed an additional 100 million people into poverty, reversing a 20-year trend toward poverty reduction. If a global stimulus package has the potential to boost incomes in the developing world — and attaining all benefits that go along with that, from lower disease rates to less crime — Americans would be smart to consider it.
Can A Minimum Wage Save the World?
Paying people a decent wage may not be just a humane thing to do; it may be the key to jump-starting our ailing international economy.
The logic goes like this. The economic slowdown hit the U.S. hard, which is causing the demand for goods to drop. Countries like China and India are struggling to fill the gap by trying to increase domestic demand for the goods manufactured in their respective countries. By establishing a healthy minimum wage in these countries, people will be able to buy more and, thus, keep the engines of industry moving smoothly, despite the lull in demand from the West.
Global asset manager and author Richard Duncan is a key proponent of this "trickle-up" theory. As Newsweek reports:
Duncan, now a partner at Blackhorse Asset Management in Singapore, believes that kind of government intervention — undertaken within Asia or imposed by the U.S. via import tariffs for any nation not following set minimums — is more important today than ever, as the region's deep pools of labor effectively thwart the market from pushing up wages fast or far enough on it own.
Convincing Asian governments to dampen what they believe to be their biggest business advantage — low wages — won’t be an easy task. Instead, movement towards this goal may come externally, with the new Obama administration keen to negotiate trade agreements with higher labor standards.
It’s still not clear if this theory will actually work. A Global Envision post from earlier this month discussed a New York Times editorial that argued that trade agreements that push for higher wages will force factories out of business, causing their employees to take even less palatable jobs.
So who’s right? Will raising wages help or harm the millions of factory workers across the world?
January 26th
Drop in Grain Prices Hurts Africa
After suffering through last year's global food crisis, the return of grain prices to reasonable levels is widely welcomed. But the New York Times reports today that the swift drop in grain prices is reducing the odds of countries like Senegal achieving food independence anytime soon, and could, in fact, lead to financial ruin for the Senegalese farmers who planted more rice this year in hopes of selling it at the higher price.
As Simple as a Conversation
The Brooks World Poverty Institute is holding a conference in Dhaka, Bangladesh about adapting cities to climate change. But it's not what they're talking about that's revolutionary, it's who's doing the talking.
Studies, papers, and articles are released everyday discussing the effect of climate change on the world's poorest. Journalists, politicians, academics, bloggers, everyone seems to have an opinion on how, why, and what to do. The only people whose voices aren't being heard seem to be the people most affected.
Well the academics are stepping down from their ivory towers to the streets of Bangladesh. Climate change seems like an appropriate topic for the capital of a country where predictions of rising sea levels put 55 percent of the Bangladesh population at risk. Medical News Today reports Professor David Hulme, Associate Director of BWPI as saying:
"Our engagement with poor people from the outset means that their knowledge and their preferences will help shape the projects designed to improve their lives. In the past, poverty researchers have been guilty of exploring solutions that they believe will work for the poor, rather than listening to what poor people really want."
One project to be discussed at the conference, which is co-sponsored by a Bangladeshi NGO, is a barge for traders in Dhaka's market to use during flood season.
This is the first of an annual conference on poverty that will be hosted by various developing countries. Although discussing city plans with citizens seems like a no brainer, the conference is being hailed as "groundbreaking" for discussing poverty and climate change with the poor. Let's hope the experts won't be afraid to get their feet wet and their hands dirty, and the academics and "the people" continue their conversation.

January 23rd
What a Slowing GDP Means for China's Workforce
Most countries would love their economies to grow by 8 percent a year in a recession. But for China, at least, its expected 8-percent GDP growth in 2009 might really sting.
Yes, 8 percent is an impressive figure considering the economic times, but it's still a substantial dip from last year's 13-percent clip.
And that difference could spell dire consequences for China's workforce. One international economist says every percentage-point decline in GDP growth costs China two million jobs. Ouch!
A Looming Danger for the Global Economy
As the recession takes hold, the fed continues to cut interest rates, and countries around the world cut growth forecasts, the Economist warns of another looming danger for the global economy: protectionism.
For the first time in more than a generation, two of the engines of global integration—trade and capital flows—are simultaneously shifting into reverse. The World Bank says that net private capital flows to emerging economies in 2009 are likely to be only half the record $1 trillion of 2007, while global trade volumes will shrink for the first time since 1982.
This twin shift will force wrenching adjustments. Countries that have relied on exports to drive growth, from China to Germany, will slump unless they can boost domestic demand quickly. The flight of private capital means emerging economies with current-account deficits face a drought of financing as well as export earnings. There is a risk that in their discomfort governments turn to an old, but false, friend: protectionism. Integration has less appeal when pain rather than prosperity is ricocheting across borders. It will be tempting to prop up domestic jobs and incomes by diverting demand from abroad with export subsidies, tariffs and cheaper currencies.
Harrowing Hyperinflation
Zimbabwe's current hyperinflation rate sounds as flabbergasting as it is: 6.5 quindecillion novemdecillion percent.
That's 65 followed by 107 zeroes, and the number is doubling nearly every day. Zimbabwe's Harare Tribune says that bank withdrawals are limited to an amount that won't even cover half a loaf of bread.
Staggering inflation has made the currency practically worthless — causing locals to turn to foreign currencies like the U.S. dollar, the South African rand, Botswana pula or Zambian kwacha and reviving bartering, reports the UN news service.


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