In this Texas community 60 percent of people live under the poverty line. The current recession may push more children into poverty. Photo: Jakob Vølver (flickr)

The current recession could land another three million children in poverty — with disastrous long-term consequences, according to a new report by the children's advocacy organization First Focus.

Children raised in poverty tend to have lower-than-average lifetime earnings and are much more likely than their unimpoverished peers to remain poor. First Focus cites research that says on average, children who spend more than half their life in poverty end up making 39 percent less than the median income.

Says Bruce Lesley, president of First Focus:

"If we do not act now, the current economic climate will lead to millions more children living in poverty, which will cause a severe economic loss for our nation's future. When children enter poverty at a young age, their ability to achieve the American dream is diminished. They are 13 times more likely to remain in poverty for several years after the recession ends, leading to adverse effects on lifetime earnings as well health outcomes."

The ultimate cost of those additional impoverished children to the U.S. economy? More than $1.7 trillion, according to the group.

Photo: hdod (flickr)

Chicken giant Tyson Foods is helping Rwandan women raise their own chickens as part of the ambitious UN-sponsored Millennium Project to combat world hunger, disease and poverty.

Rwanda is a place that needs help: Nearly half of children there suffer from chronic malnutrition, and two-thirds of its population lives below the poverty line, according to Food for the Hungry.

But you might ask what Tyson, an Arkansas-based company, is doing in the small African nation. Especially since it insists in a press release announcing the project that it has no plans for commercial chicken production in the country.

Tyson's philanthropic efforts, not surprisingly, focus on hunger relief — efforts accomplished mostly by giving away their own products. But on this project they've teamed up with the Millennium Project, led by prominent development economist Jeffrey Sachs.

Sachs visited Tyson headquarters earlier this week, where he told employees that hunger breeds instability — and how ending hunger is in our national-security interest.

"You cannot stabilize a hungry place," he said, "Troops can never do it. We need you, we need the ability to grow food, we need modern technology to be able to solve these problems."

Watch a few minutes of Sachs' speech here.

It seems obvious that poverty and terrorism are closely interwoven. The search for answers in last week's terrorist attacks in Mumbai has prompted the links between the two to be probed once again.

But how associated are they, really?

Back in 2002, the general consensus was that poverty relief efforts could be a leading tactic in the fight against terror. Since then, however, a number of researchers have taken issue with this correlation, starting with the fact that the 9/11 attacks were carried out by middle-to-upper-class men. (A 2003 paper suggests that terrorist groups may recruit well-educated, well-off members because they can blend into their Western targets.) Harvard professor Alberto Abadie ties the rate of terror events to a nation's political freedom as well as its size, elevation and weather — but not its economic status.

The rationale behind the idea that terrorism can be a by-product of poverty persists because it seems pretty logical. Poverty can surely lead to a sense of societal alienation, which could make people more likely to join a terrorist group. Assuming that is the case, extending the benefits of economic growth to marginalized communities could lessen the threat of terrorism. But is this perceived alienation actually a result of poverty, or something else entirely?

Anecdotally, poverty relief efforts — especially education — appear to be powerful antidotes to terror. A prime example is American Greg Mortenson's efforts to build dozens of schools in remote areas of Afghanistan and Pakistan, which are documented in the book Three Cups of Tea. According to Mortenson, "Education in general is a powerful tool to provide alternatives to the illiterate, impoverished areas that are the recruiting grounds for terror."

With 14,000 terrorist events in 2007 alone, attempts to understand the roots of terrorism aren't mere academic exercises. Correctly determining the true causes of terrorist activity can mean the difference between a successful anti-terror strategy and thousands of lives lost.

Photo: *LJ*(flickr)

This weekend’s gathering of leaders of 20 of the world’s biggest economies didn’t yield a clear-cut solution to the global financial crisis. It did, however, signify a fundamental shift to a world where emerging economies like Brazil, India and China wield greater influence than ever before.

Of these, China is certainly the biggest. With $1.9 trillion in foreign exchange reserves, China is being courted to contribute funds to the International Monetary Fund to be used for emergency loans for struggling countries. China has made no promises yet, preferring instead to focus on its own economy with a $590 billion stimulus plan. Whether China agrees to contribute to the IMF or not, there’s no doubt that the country is poised to play a much larger role in global economic decision-making.

The breadth of China's role could depend on its ability to keep its own economy chugging along. A UN-sponsored report released over the weekend suggests China’s widening gulf between the country’s rich and poor threatens to undo recent economic gains by reducing consumer spending and productivity.

China’s stimulus package, with a focus on low-income housing and rural infrastructure, may help to shrink these growing inequalities. Since more than ever the world is looking to China to provide economic stability, they can’t afford to get this wrong.

Life expectancy in Kerala is 73 years — which is comparable with Europe and the U.S. Photo: © World Bank / Curt Carnemark (flickr)

India's southern state of Kerala has received international attention not only for its beaches and temples, but also for statistics that suggest people of limited means can live long, healthy lives. (Its life expectancy of over 73 years puts it on par with some of the world's most advanced countries.)

But Kerala's rising affluence has challenged the stability of a once-thriving public health system. Indications are that wealthy patients are increasingly turning to high-tech, private clinics for care, putting the public health care system at risk.

PRI’s The World reports an emergence of “lifestyle ailments” like diabetes and heart disease in Kerala, a tropical state on India’s southwestern coast with 18 million residents. Kerala's per capita annual income is a mere $300, but like the whole of India, recent economic growth has meant a booming middle class. At the same time, its population, according to the program, has become less active and more prone to obesity.

The demand for specialized care for a new set of health issues has put a strain on Kerala’s public health system. Public hospitals are losing experienced doctors to better-paying jobs at private clinics.

“People no longer see the government health institution as a place where they would go by choice,” explains Dr. V Raman Kutty at Kerala’s Centre for Health Science Studies. “They would go only if there is no other option.”

As the gap between rich and poor widens, is Kerala’s exceptional status sustainable? Academics will wrestle with that question in January, when the state's Centre for Development Studies hosts a conference on Challenges of Human Development in India. "The pervasive social and economic inequalities," reads the conference announcement, "are a matter of concern for India."

Dark clouds over a dealership. Flickr: Micah A. Ponce

On Monday, the U.S. Senate will take up a bill to extend $25 billion in emergency loans to the auto industry.

The numbers are grim. In the most recent quarter, General Motors lost $6.9 billion dollars, which is over $3 million an hour. Compared to GM, Ford's loss for the quarter was "only" $3 billion. GM sales are down almost 50 percent from a year ago, their U.S. market share is down to 22 percent (from over 40 percent in the 80's), and its stock is trading at a lower price today than it did in 1946. CEO Rick Wagoner warns that GM will run out of cash in early 2009 if something drastic doesn't happen soon.

What to do? One group, including NY Times columnist David Brooks, argues that the government should let them fail. As one Republican senator put it, "I do not support the use of U.S. taxpayer dollars to reward the mismanagement of Detroit-based auto manufacturers in such a way that allows them to continue and compound their ongoing mistakes." But with the economy likely in recession, as many as three million lost jobs is not easy to stomach for even the most dedicated free marketeer.

Many opinion makers identify the automakers' biggest problem as being expensive union contracts and pension liabilities. These are what makes it impossible for Detroit to make a profit building high-quality small cars — the sector with the most resilient sales.

Honda, Toyota, and Nissan all build small cars in North America profitably, but they run non-union factories. So while the employees in those factories are paid wages competitive with Detroit run plants, they have medical plans that are much more austere (think higher co-pays) than those provided to United Auto Workers members and 401K retirement plans rather than more expensive guaranteed-benefit pensions.

If that diagnosis is correct, then an important question is this: Will the Democrats who control Congress or the new Obama administration, whose political campaigns received significant financing from labor unions, have the courage to stand up to the UAW and ask them to renegotiate their contracts with the Detroit Three?

Only one thing seems certain right now: This is a story worth paying careful attention to the next few months, not only for its immediate relevance to the U.S. economy, but also for its potential to affect global trade and labor relations both domestically and abroad for years to come.

The October 18 issue of the Economist. Photo: The Economist

The credit and financial crisis that has engulfed the world has created a firestorm of comment about capitalism and free markets.

The cover of the October 18th issue of the Economist proclaims, "Capitalism at Bay." The lead editorial quotes French President Nicolas Sarkozy declaring: "Laissez-faire is finished."

If he is correct, what does that mean to Global Envision? We are founded on the belief that markets provide an important way for the poor to work their way out of poverty. Mercy Corps, our parent organization, is similarly oriented, boasting "community-led and market-driven" programs. The fate of capitalism impacts the world — especially its poorest residents.

Sarkozy tends to make conflicting statements — in the same speech that he declared laissez-faire was finished he also said “capitalism is the system that has enabled the extraordinary development of western civilization” — so I suggest we not take the current European Union president too literally.

Markets, in fact, have impacted the entire world, not just in the West. As the Economist points out, "In fact, far from failing, the overall lowering of 'barriers to intercourse' over the past 25 years has delivered wealth and freedom on a dramatic scale. Hundreds of millions of people have been dragged out of absolute poverty. "

If the result of the credit crisis is a retreat from the market economy, it will be a very sad result. “This is a difficult time to defend free markets," opines the Financial Times. "Nevertheless they must be defended, not only on their matchless record when it comes to raising living standards, but on the maxim that it is wise to let adults exercise their own judgment.”

On this last point: Some of the judgment exercised in the credit crisis has been so poor that even those of us who favor free markets are ready to consider some degree of credit-market oversight going forward.

To what extent the U.S. is willing to fight for freer markets will depend largely on the policies of President-elect Barack Obama.

His campaign position on trade, at least, is a worry. His emphasis has varied over the last 20 months, but a protectionist position — as some of his supporters will undoubtedly push for — it would be sad not only for America but for the world's poor. My guess — and my hope — is that he'll focus on making trade more friendly to the environment and to workers, but not create barriers to trade. He's also likely to create programs to retrain those whose jobs are shipped overseas. This is important. People do lose jobs because of trade agreements (although more new jobs are created by them than are lost).

Companies like General Electric and Caterpillar are already lobbying the yet-to-be formed Obama administration to resist calls for greater protectionism.

"When people are afraid, they want to create barriers to trade,'' GE Chief Executive Officer Jeffrey Immelt said in an Oct. 27 speech at Columbia University in New York. "It would be a real crime, I think, if we allowed the current economic volatility to make us move backward in globalization.''

Venezuelan President Hugo Chávez supported many social programs under "Socialism for the 21st Century" with oil revenue. Photo: Nueva Perspectiva (flickr)

Last week oil prices dipped under $70 a barrel for the first time in over a year. While the lower price may have Americans at the gas pump celebrating, it’s bad news for the leaders of oil-rich countries that made long term plans based on the high price of oil.

Venezuela, Iran and Russia went on a spending spree when oil hit $100 per barrel and then planned upcoming government budgets on the peak price.

The high price of oil allowed these countries to thumb their nose at the West with little risk of a response. Venezuela advanced its socialist agenda both at home and in the region. Iran ignored U.S. nuclear related sanctions, and Russia reasserted itself by invading Georgia.

But because they assumed the price of oil would stay high, they might soon be on receiving end of such gestures. The Washington Post reports that:

According to independent estimates, [Iran and Venezuela] need an average oil price of up to $95 a barrel to fund the populist subsidies and social programs they have launched in recent years — not to mention billions of dollars in arms purchases from Russia. Venezuela has been furiously importing food to fill empty shop shelves, while Iran heavily subsidizes domestic fuel.

Venezuelan President Hugo Chávez has gone on the record as unworried about the falling oil prices citing Venezuela's $40 billion in foreign currency reserves. However, Ricardo Hausmann, a Venezuelan economist who teaches at Harvard, doesn't share Chavez's confidence. “We’re in the same situation of people who have lost a limb but can still feel it. I don’t know how long it will take for Chávez to realize he’s lost a limb."

In response Iran and Venezuela pressured OPEC to cut production by 2 million barrels a day. OPEC members initially took a wait-and-see approach, wary of intensifying a global economic crisis or further decreasing global oil demand, before agreeing to cut production by 1.5 million barrels a day in an attempt to drive up prices.

But skeptics question whether significant production cuts won't simply decrease demand for oil — or whether it will influence the price at all. If OPEC can't drive prices back up to their historic highs, Venezuela, Iran and Russia may face a tough reality as they come off their own oil high.

Photo: The Tenth Dragon (flickr)

Eight hundred million peasants in China have never been allowed to own their land. Under new reforms by the Chinese government, farmers can trade, subcontract or lease their land — options they have never had before.

In a rather dramatic policy shift, the government has assigned small plots to farmers in communist China. Proponents say this unprecedented plan will lead to “larger, more efficient farms that could increase output” at a time when China isn’t growing enough food to feed its own people, according to the New York Times.

Along with coping with the global economic crisis, China is trying to appease decades of rural discontent felt by farmers who have protested against their lack of land rights and the burgeoning corruption of collective ownership. Too often, “local officials and developers have illegally seized farmland for urban expansion while paying minimal compensation to farmers.”

However, opponents of this new land reform worry that millions of landless farmers will leave the countryside for better-paying work in cities. If these farmers are unable to find work, they won’t have any land left in the countryside to go back to.

Thirty years ago, economic reforms launched China’s rise. But while cities grew wealthy, the countryside remained poor. Let’s see if these reforms give Chinese farmers the same opportunities for financial gain as their urban counterparts have enjoyed.

It's high time to focus cash and energy on alleviating global poverty. Photo: Stitch (flickr)

After a few fumbled attempts on their own, global financial leaders gathered in Washington D.C. last weekend to develop a joint plan to prevent the spread of the financial crisis.

Imagine if they focused just a fraction of that attention on alleviating global poverty. After all, high food and fuel prices pushed an additional 75 million people further into poverty this year.

"When food prices peaked and began to come down, despite the fact that conditions within poor countries remained hugely adverse, attention already started to wane," development economist Jeffry Sachs told Reuters. By contrast, the world's finance ministers jumped to commit incredibly large sums of money when credit markets started to fail — a crisis that continues to hold the world's attention.

"The amounts that are needed (to help the poor grow more food) are in the low billions of dollars and we're talking every day now about a new commitment of hundreds of billions for this and hundreds of billions for that," says Sachs. "The truth about poverty is that the poor don't need very much."

In other words, $700 billion — or whatever the astronomical total the worldwide bailout turns out to be — would go a long, long way.

In the spirit of global discussion, Blog Action Day urges bloggers everywhere to concentrate on one subject. Last year it was the environment. This year it's poverty. But who says the environment and poverty have to be addressed as separate subjects?

Van Jones agrees. He's a social entrepreneur, author of the new book Green Collar Economy and founder of Green for All.

Jones says the world faces two major crises: ecological destruction and the widening gap between rich and poor. The issues may appear different, but there is a single solution: build "an inclusive green economy strong enough to lift people out of poverty."

To Jones that means "green[ing] the bailout" by allocating $350 billion for investment in green technologies and industries: solar panels, wind turbines, weatherized buildings, wind farms and a new cadre of green-collared workers.

That's a lot of work. And there are millions of people that don't have work. I believe that the moral challenge of the next century is to connect the people who most need work to the work that most needs to be done.... We need green pathways out of poverty and into prosperity.

Jones is right. It's time we stopped thinking about these issues separately. It's time to think outside the box. It's time to green and grow the economy. Or, as Jones says in this video, it's time for a "Green New Deal."

First, food and fuel prices skyrocketed, causing serious problems for families in the developing world. Now, the worldwide credit crisis has delivered yet another serious blow to the economic outlook for low and middle-income countries.

At the start of the International Monetary Fund/World Bank annual meeting, World Bank President Robert Zoellick warned that the triple threat is potentially a “tipping point” that would “push poor people to the brink of survival.” World finance and development ministers urged wealthier governments not to ignore aid commitments in the midst of their own economic woes. The World Bank has developed a list of 28 of the countries most vulnerable to the triple threat of increased food and fuel prices and the financial crisis.

Not suprisingly, 13 out the 28 countries on this list are in Africa. But sub-Saharan Africa may avoid the worst of the global financial meltdown. A recent article in the Economist points out that the region has a number of things working in its favor. These include a highly regulated banking sector that is relatively unlinked to the Western financial system and natural resources that are drawing investment from countries like China, India and the United States.

Back in January, two IMF staffers noted that investor confidence in Africa was on the rise. Still, it's hard to argue that Africa can continue to make as much progress without outside help, like the promised $350 million more in agricultural loans from the 185-country-owned World Bank. “The stark reality," Zoellick says, "is that developing countries must prepare for a drop in trade, capital flows, remittances, and domestic investment, as well as a slowdown in growth."

Photo: deCadmus (flickr)

In most progressive political circles, Wal-Mart is more reviled than revered. So it can come as a shock to hear the massive American retailer has teamed up with Global Envision's parent, Mercy Corps — a humanitarian agency known for its leanness and innovative approaches to poverty — on a project that benefits small indigenous farmers in impoverished Guatemala.

Wal-Mart reputation is far from spotless. It is sued between two and five times every weekday in federal court, according to a group that tracks Wal-Mart litigation and supports lawyers for plaintiffs fighting the retail giant. It's also been cited for child-labor law violations in three states, accused of aggressively fighting employee efforts to unionize, and criticized for squeezing suppliers and threatening the health of local retail.

Among the questions the partnership raises: Is Mercy Corps being used as public relations window dressing? How do Wal-Mart's business motives align with Mercy Corps' charitable ones? And most importantly, would training farmers to be Wal-Mart suppliers eventually lead to their exploitation?

The deal between Mercy Corps and Wal-Mart also involves the U.S. Agency for International Development, which is keen to see humanitarian groups team up with U.S. corporate interests to put a dent in developing-world poverty. The so-called "Inclusive Market Alliance" is backed by financial commitments of $1.1 million from USAID, $600,000 from Wal-Mart, and $500,000 from Mercy Corps.

Here's why the agreement made sense from Mercy Corps' perspective. Rural Guatemala remains stubbornly poor. In 2000, 75 percent of Guatemala's 6.4 million poor resided in rural areas. Until now, the agency's programs in Guatemala have focused on helping indigenous groups to gain ownership of land, and to farm that land productively.

Most small Guatemalan farmers sell to market middlemen, who have earned the pejorative nickname "coyotes" — they're the ones who profit from the transactions, rather than the farmers. Farmers could earn a higher return selling high-value products to large-scale buyers, i.e. supermarkets.

Wal-Mart controls a large share of Guatemala's supermarket industry. They have an interest in finding good, reliable suppliers, and in cutting out those same coyotes that are despised by farmers. They're willing to invest money in training and equipping farmers with the knowledge and tools they need to grow quality produce that supermarket shoppers want to buy.

As part of the program, farmers participate in trainings on processing and post-harvest techniques to meet national and international agricultural standards, and critical pricing and negotiation skills.

"Due to a great variety of buyers," explains Douglas Ovalle, who manages the project for Mercy Corps, "there is no danger of Wal-Mart owning the market 100 percent. What this project helps to do is expand options for the farmers."

And those expanded options, he says, will lead to greater income for small-farm families — many of whom lack even electricity and running water.

To many Americans, Wal-Mart is a wanna-be monopolist. To Mercy Corps and the struggling Guatemalan farmers it's trying to help, Ovalle says, Wal-Mart is "just another buyer."

Photo: knottleslie(flickr)

Afghanistan’s economy is getting a boost from a very unlikely source — Reality TV. In a new show called “Fikr wa Talash," or “Dream and Achieve,” Afghan entrepreneurs propose new business ideas to a panel of local business leaders, who award winners with up to $20,000. According to the International Herald Tribune, the show is wildly popular, and its creators hope that its success will help foster entrepreneurial growth all over Afghanistan.

Not only could the show popularize entrepreneurial spirit in one of the world's poorest countries, but it also shows promise for promoting gender equality. Two of the top five finalists in “Fikr wa Talash” are women entrepreneurs — a new concept in a country that only permitted women to work seven years ago.

It will be interesting to see if the viewing power of Reality TV, a traditionally tawdry genre in the U.S., can be successfully harnessed for social and economic benefit elsewhere.

Women in line at a hospital window. Photo: World Bank Photo Collection (flickr)

India's public health care system is in a state of crisis.

Time Magazine recently ran photos of hospitals swamped with patients and their families in a report that says India's "massive population" has led to "overloading systems where they do exist and aiding the spread of disease in the many places they don't." A Brookings Institution report says the rural medical practitioners who perform 80 percent of India's outpatient care "have no formal qualifications for it. They sometimes lack even a high school diploma."

But the Wall Street Journal reports that India's central government is stepping up with a new National Health Insurance Program. For just $1, India's poor can receive a card that entitles them to $700 of care at most public or private hospitals.

To enroll, families must make less than $100 per year and pay the $1 fee. To support the program the government will pay out $1 billion to insurance companies, who say their involvement will help them market to participants whose future income may turn them into paying customers. Already, about 1.5 million people have signed up, and plans for expansion are in the works.

While the use of the card is limited to care at hospitals, it still goes a long way to reduce the chance that medical debt will financially crush already-impoverished families. And with one-third of the world's poor living within its borders, India is right to address its health care challenge.