Assess the View that Poor Countries Will Always Remain Poor (20)

An essay plan including Modernisation and Dependency Theory, Neoliberalism and World System’s Theory, Bottom Billion and Neo-Modernisation theory, as well as contemporary trends such as war and conflict and environmental decline and case studies such as India, China, Afghanistan and Haiti.

Introduction

The view in the question is most closely associated with Dependency Theory which argued that poor countries would remain poor due to their exploitation through colonialism and then neo-colonialism.

However, the historical record of the last 200 years of industrial development clearly shows that the above view is overstated: most poor countries, including many ex-colonies, have got wealthier, and have done so through a number of different strategies. However, it is also true that despite enormous increases in wealth globally, many countries remain trapped in poverty.

In order to address the question above I will do the following:

Firstly I will review the various theories of development which have pointed to a number of different causes of and related solutions to poverty in order to demonstrate the overwhelming historical evidence against the view in the question.

Secondly, I will discuss how emergent global problems such as the spread of war, conflict and terrorism, increasing consumption and environmental decline could mean that those countries which today are still poor today might well remain poor in the future.

Numerous theories of development have pointed to a number of causal factors related to poverty – according to these theories if certain things happen then poor countries are likely to remain poor…

  • Modernisation Theory – Poor countries remain poor because of their traditional values
  • Dependency Theory – Poor countries remain poor because of the legacy of colonialism and neocolonialism
  • World Systems Theory – Poor countries remain poor because of trade rules established by the WTO which works on behalf of rich countries and TNCs.
  • Neoliberalism – Poor countries remain poor because of too much Official
  • Development Aid and Corrupt governments
  • People Centered Development – The question of whether poor countries are economically poor is irrelevant – there are many different paths to development and many different ways of measuring development
  • Paul Collier’s Bottom Billion Theory – Poor countries remain poor because of Four traps – Poor governance, ethnic conflict, the resource curse and being landlocked with poor neighbours
  • Hans Rosling and Jeffry Sachs – Poor countries remain poor because of the poverty trap and lack of Official Development aid from the west

Conversely, if certain things happen, then poor countries will not necessarily remain poor. Countries will develop if….

  • (MT) Poor countries need to learn from the West, industrialise and progress through the five stages of growth
  • (DT) Poor countries need to break free from Western Capitalism and isolate themselves through socialist models of development
  • (WST) They position themselves as semi-periphery countries, manufacturing goods rather than exporting raw materials – e.g. The Philippines/India/ China
  • (NL) Poor countries need to open up their markets through deregulation, privatisation and low taxation – e.g. Chile
  • (PCD) There are diverse paths to development but all of them should respect the principles of equality, democracy and sustainability.
  • (BB) We need a Marshal Aid plan for the Bottom Billion, countries need to sort out poor governance and we need fairer trade rules
  • (Hans and Jeff) We still need massive aid injections, which need to be targeted initially on improving health, but also on women’s rights and education.

Case studies and global trends information which suggests poor countries will remain poor 

  • War and Conflict/ Terrorism
  • Higher rates of consumption as countries develop
  • Environmental challenges and the lack of global agreements on climate change
    Increase Military Expenditure
  • The increasing power of TNCs and lack of fair trade rules
  • The lack of commitment to giving official development aid by rich nations
  • Haiti
  • Iraq/ Syria
  • Afghanistan
  • Liberia

Case studies and global trends information which suggests poor countries will continue to develop

  • The lowering of birth rates
  • The increasing number of children in school
  • Bill and Melinda Gates Foundation
  • The UN’s sustainable development goals
  • Continued Economic growth globally
  • China
  • India
  • Brazil
  • Nigeria

Conclusion and Analytical Points – Using the evidence above BUILD a conclusion

From the above evidence it is clear that not all countries have remained poor….

The most applicable theory which helps us explain underdevelopment today is ____________________ and following this theory poor countries are most likely to develop if….

However, some of the challenges in the world today suggest that some underdeveloped countries might remain poor in the future. For example…

On balance I feel that that while all countries will probably not remain poor (delete as appropriate) (1) the majority of poor countries will remain poor and only a few will develop / (2)  most developing countries will develop but a few are likely to remain poor/  (3) add in an alternative closing sentence of your choice…

Global Development Revision Notes

If you like this sort of thing, then you might like my Global Development Revision Notes

 Global Development Notes Cover53 Pages of revision notes covering the following topics within global development:

  1. Globalisation
  2. Defining and measuring development
  3. Theories of development (Modernisation Theory etc)
  4. Aid, trade and development
  5. The role of organisations in development (TNCs etc)
  6. Industrialisation, urbanisation and development
  7. Employment, education and health as aspects of development
  8. Gender and development
  9. War, conflict and development
  10. Population growth and consumption
  11. The environment and sustainable development

 

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Jeffry Sachs – Summary of The End of Poverty, Chapters 12-16

This is a brief summary of the case Jeffry Sachs made for International Development Aid in his 2005 book ‘The End of Poverty’. Taken mainly from chapters 12-16

(1) Why is Aid needed?

Sachs argues that injections of aid are needed to break the poverty trap –because there is no where else money is going to come from when there is insufficient income to tax or save.

Sachs uses a description of a visit to Sauri village in Western Kenya to describe the poverty trap – the villagers face a range of poverty related problems including poor food yields due to lack of fertilisers and nitrogen-fixing trees, the fallout from diseases such as AIDS and malaria and the fact that children cannot concentrate in school because of malnutrition. All energies and money are basically spent on combating disease and staying alive.

As a result of the poverty trap the village faces under investment in the following five areas

  1. Agriculture
  2. Health
  3. Education
  4. Power, transport and communications infrastructure
  5. Sanitation and water.

Aid needs to be spent boosting whichever of these areas are undeveloped (and all of them, all at once, if necessary) because a weakness in one can mean money is wasted on another (it’s pointless spending billions on education if disease means kids can’t concentrate in school, or lack of roads means they can’t get to school.). This should be based on what Sachs calls a ‘clinical diagnoses‘ of a countries requirements.

(2) How much aid is needed?

There’s a number of ways of looking at this>

$70 per person per year for at least 5 years would being sufficient to provide suitable investment in these five areas for the poorest regions on earth (basically the bottom billion who are stuck in the poverty trap). After an initial 5 year period, Sachs believes that this figure should reduce considerably and that 10 years should be sufficient for a country to be self-sustaining financially.

Looked at globally The World Bank estimates that meeting basic needs costs $1.08 per person per day – 1.1 billion people lived below this with an average income of 77 cents. Making up the short fall would mean $124bn/ year, or 0.7% of rich world GNP.

(3) Arguements for providing International Development Aid

Firstly, using aid to eradicate poverty will make the world a more secure place

The US spends 30 times as much on its military as it does on aid (for the UK it’s about 8 times as much, 2002 figures), but spending money on military solutions is not going to make an insecure world more secure.

A CIA task force examined 113 cases of state failure between 1957 and 1994 and found that three explanatory variables are the most common:

  1. High infant mortality rates (which indicate low levels of material well-being)
  2. Openeness of the economy – the more open, the less stable
  3. Democracy – the more democratic, the more stable.

Sachs rounds off by listing 25 countries which America has intervened in following State Failure since 1962. His point is that state failure typically leads to US intervention, which is more costly than the price of providing aid which would prevent such interventions.

Secondly, Official Development Aid  is crucial to provide health, education and infrastructure, and because it makes up a significant part of the total income of many countries.

Thirdly,The  public will support a massive increase in aid if there’s leadership on the issue – nearly 90% of the US public support food aid (it depends how you frame the question). Also, broad support was garnered for The Marshall Plan, The Jubilee Drop the Debt Campaign and The Emergency AIDS campaign.

Fourthly – There is evidence that Aid can work:

Besides the usual green revolution and eradication of smallpox examples Sachs also cites…

  • The Global Alliance for Vaccines and Immunisation
  • The Campaign against Malaria
  • The Eradication of Polio
  • The spread of family planning
  • Export Processing Zones in East Asia
  • The Mobile Phone Revolution in Bangladesh

Five – the West can easily afford it 

Sachs points out that the richest 400 individuals incomes stand at just under $70 billion dollars, and the first two years of the Iraq War, which was an unexpected cost, was $60 bn a year, so basically yes. He also recommends a 10% additional tax on the richest for the purposes of development.

(4) Sach’s view of why Aid Doesn’t Always Work – Poor Countries Aren’t Getting Enough Aid! (**This can be used to criticise Dambisa Moyo”s views on aid. )

Poor countries are receiving no where need enough aid to make a difference to development – To demonstrate this he uses the West African Water initiative as an example – Worth $4.4 million over 3 years, but this only worked out at less than a penny per person per year, no where near enough to make a difference.

He also cites the case of Ethiopia – in 2003 it would have needed approx $70 billion to kick start development – half for health and most of the rest split between food productivity and infrastructure. It was then receiving $14 per head per year which was well short of the money needed. At the time the IMF acknowledged in private that this was not sufficient but in public made no mention of this.

Another way of outlining how limited current ODA is lies in the following:

in 2002 of $76 billion total assistance….only $12 billion amounted to what might be called development support to the poorest countries (most of the rest was emergency aid, with $6 billion being debt relief and $16 billion going to middle income countries.

As a result of this countries often don’t get anywhere near what they need – Sachs cites Ghana as an example – it requested $8 billion over 5 years in 2002 and got $2 billion. His point is that $2 billion is no where near enough to kick-start development.

(5)) Myths about why aid doesn’t work (**these could be used to criticise Dambisa Moyo)

He actually lists 10, but I’ve only included the first three!

Myth One – Giving aid is ‘money down the drain’

It is common to hear Americans bemoaning the fact that there is nothing to show for the amount of aid given to Africa. This is, however, unsurprising. The total amount of aid per Africa works out at $30 per head, but of this $5 goes to consultants, $4 was for food aid, $4 went to servicing debts and $5 for debt relief, leaving $12 per African.

Of the $3 of US aid to Africa, approximately 6 cents makes it on the ground African projects.

Myth Two – Aid programmes would fail in Africa because of backward cultural norms

Sachs points out that he frequently encounters prejudiced views based on African stereotypes even among those in senior positions in the aid industry – Such as the idea that Africans don’t understand western concepts of time. He dispels this by simply drawing on his own experiences telling him different things.

Myth 3 – Aid won’t work because of corruption

Nearly all low income level countries have poor levels of governance. However, corruption is not a reason to not invest in a country because the causal relationship runs in the direction of wealth reduces corruption. This is because when incomes increase people have more of an interest in keeping governments in check and there is more money to invest in good governance through better communication systems and a more educated civil service for example.

Looking at cross national comparisons reveals two things – Firstly that African countries governance levels are similar to similarly poor countries. That is to say that governance is not especially poor in Africa, and secondly there must be something else going which results in poverty other than poor governance – there are still some very poor countries in Africa with good governance yet high poverty, he cites Ghana as one such example.

Statistical indicators reveal that African countries grew at 3% percentage points slower than countries with similar levels of governance and income between 1980 and 2000. The reason for their low growth is geography and poorly developed infrastructure.

(6) A more ambitious approach to Development Aid

Ultimately Sachs believes we should be spending more on aid rather than less!

Sachs outlines ‘a needs assessment approach’ to development which basically involves identifying a package of basic needs, figuring out the investments required,, figuring out what poor countries can pay and then working out the finance gap which is what rich countries should meet. The list of basic needs includes such things as:

  • Primary education for all children, including teacher pupil ratios
  • universal access to antimalarial bednets
  • I kilometre of paved road per person
  • nutrition programmes for all vulnerable populations
  • access to modern cooking fuels
  • Access to clean water and sanitation.

To establish these poor countries would need $110 per person per year for 10 years (calculated by the UN for five countries – Bangladesh, Ghana, Cambodia, Tanzania and Uganda.

Of this Sachs believes that households and poor country governments could pay $10 and $35 dollars respectively meaning that $65 per person per year is the finance gap

Who should pay? Basically it breaks down like this…

USA – 50%
Japan – 20%
UK, Germany, France, Italy – 20%.