Poverty Development: International Poverty Net

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© 2012 by Al Sadi. All rights reserved.

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Published by AuthorHouse 09/12/2012

ISBN: 978-1-4772-1880-8 (sc)

ISBN: 978-1-4772-1881-5 (e)

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Contents

Preface

Method and strategy

Introduction And Theoretical Framework

Introduction

Theoretical Framework

Chapter One: Poverty and Social Exclusion

1.1 Introduction

1.2 Poverty and social exclusion

1.3 Calculating poverty

1.4 Allocating and reasoning poverty

1.5 The moral question

Chapter Two: International Aid and Development Programs

2.1 International aid

2.2 Aid Post Cold War

2.3 The Washington Consensus & Adjustment Programs

2.4 Aid Conditionality

2.5 Reverse engineering for Aid in agriculture

2.6 The Millennium Declaration

Chapter Three: Free trade and poverty development

3.1 Historical Background

3.2 The age of globalization

3.3 Free trade and economic growth and development

3.4 Free Trade interconnectedness with Global Risks, Consumption and Empowerment

3.5 Free Trade and WTO

3.6 Democratic practices

3.7 Protectionism

3.8 Case Study

Conclusion

References

End Notes

Poverty Development

-International Poverty Net-

Poverty fighting turns to be moving on the opposite direction, the result was instead a dramatic poverty development process privileged and led by different policies and international institutions. The good will of international community is blocked by certain pressure groups and rich entities that vacuumed all the initiatives to fight poverty from its contexts. Policy makers in rich countries played great role in creating the kind of environment that escalated poverty both in rates and numbers. Nobody can anticipate where are we heading at nor what would be the exact consequences. Who cares has become most used in expressing others circumstances of living, and We became most important and dominant in serving self-egoism.

Poverty development is a well organised process that serves social Darwinism and inequality. The rich became richer and the poor became poorer and excluded. This book is dedicated to discuss this issue and expose the way international institutions act with poverty in a try to find remedy for one of the most complicated issues in the world.

This book will help us understand the poverty net and the obstacles that face poor countries from escaping their poverty trap. It questions the kind of international double standards versus moral obligations needed to be fulfilled to help the vulnerable nations and communities to improve their living standards, instead of making them follow a dream of reaching the western standards and values.

Al Sadi is a master degree holder in international relations and Conflict Settlement, Global Studies Institution in the University of Gothenburg. He worked as ex-Iraqi Nuclear program Team Co-ordinator during the 1990:s and author of political history.

We are humans as far as we take care of each other. But, is it human to be happy when millions are starving? Is it human nature who created a world where investments on pets industry in rich societies far exceeds the aid given to the poor, and is more than enough to make poverty a history… I doubt it!

Acronyms

AMS: Aggregate Measurement of support

BWI: Bretton Woods Institutions

CFDT: Compagnie Francaise pour le Développement des Fibre Textiles

CMDT: Compagnie Malienne pour le Développement des Textiles

EC: European Community

EU-EPA: European Union Economic Partnership Agreement

FDI: Foreign Direct Investment

GATT: General Agreement of Tafiffs and Trade

GDP: Gross Domestic Product

GNI: Gross National Income

HDR: Human Development Report

HIPC: High Indebted Poor Countries

HPI: Human Poverty Index

IMF: International Monetary Fund

IPE: International Political Economy

LAC: Latin America and the Caribbean

LDC: Low Developed Countries

MCA: Millennium Challenges Account

MNC: Multi-National Companies

MVA: Manufacturing Value Added

NIC: Newly Industrial Countries

OECD: Organization for Economic Cooperation and Development

ODA: Official Development Assistance

PMS: Poverty Monitoring System

PPP: Purchasing Power Parity

PPS: Purchasing Power Standards

PRSP: Poverty Reduction Strategy Paper

SACU: South African Customs Union

SHIA: Swedish Handicaps International Association

SYCOV: Syndicat des Producteurs de Coton de Vivirers (the National Union of Cotton and Food Crop Producers).

TPRM: Trade Policy Review Mechanism

USDA: United Stated Department of Agriculture

UN: United Nations

UNCDP: UN’s Committee for Development Policy

UNSG: United Nations Secretary General

USDA: United States Department of Agriculture

WB: the World Bank

Preface

The book structure

The book proceeding is as follows:

• Introduction: Theoretical Framework and structure

• Chapter One: Poverty and social exclusion

Introduction to Poverty in the world and the reasons behind using Free Trade as the main procedure to poverty reduction, and how poverty has become a moral issue per se in the international community. Social exclusion and poverty definition as well as Poverty and inequality distribution in the world, and the different poverty measurements used to allocate poverty.

• Chapter Two: International aid and development programs

Aid and development programs and the Millennium Development Declaration will. The chapter will investigate the different global institutions engaged in this process and the effects of Washington Consensus and BW’s (WB and IMF) structural adjustment programs and other conditionality procedures over poor nations.

• Chapter Three: Free trade and poverty reduction

Free trade influence on global poverty and the way WTO act to regulate market exchange of products, under the high influence of protectionism. The effects of protectionism as a counter force to free trade. The chapter will take agricultural sector further in consideration for its high relevancy to poverty reduction due to the fact that the majority of poor people live in agrarian lands in developing countries. In addition to a case study on Sikasso in African Sub-Sahara region.

• Conclusion

The conclusion will depend on the analysis of collected information and data, and will make its recommendation in the case of poverty measurement and reduction. The conclusion will answer the questions raised in the book introduction.

Method and strategy

Qualitative source criticism¹ and text analysis will be practiced in this book to make sure of the Credibility, genuineness, time factor, tendency and independency of the material and documents and authorships, while text analysis will be used in analyzing different literature and progress reports. All texts will be systemized and then critically analyzed. Collecting different texts that are taken from a variety of sources and publications will be sorted in respect to the book different chapters, and will be then analyzed to see the points of divergence and convergence among these different texts. Similarities can help support credibility and differences in conclusions can help understand different perspectives and elaboration of information. I do not intent to reflect pragmatically on current poverty reduction policies, but critically analyze them and the available possibilities to reach poverty reduction goal. I will define the important areas of the problem which became overshadowed by market complexities and development conditionality. This is to be done with explorative dimensions with the hope to reach some conclusions that awake some positive spirit on chronic poverty and the possibilities to reduce it. The question of rationality is also important in deciding texts’ credibility. Many texts were questioned in respect to its background and in respect to other results elsewhere. Some measuring points will be questioned to decide whether it is rational to apply or not. Some other points like the Millennium goals will be discussed to decide its rationality in terms of taken procedures and time frame. By analysing legislative texts in different concerned institutions like the UN, the BW’s IMF and WB and some other procedural texts and laws issued in the USA and OECD as well as the WTO; it will be possible to paint poverty picture of reality.

The book will avoid to go in depth on historical narration of the discrepancies of the different international institutions and procedures that paved the way to the current high expansion of poverty such as the colonial period, yet, some reflections will be pointed out on the Bretton Woods institutions, the Washington consensus adjustment programs, as well as the way financial aid were/are granted and the way aid development programs are implemented. The main concern will be on the relation between free trade and poverty reduction post-Cold War (1990—) and in respect to globalization in our modern time. There will be some focus on the role of agriculture in poverty reduction more than other non-agricultural activities due to the urgent need for food in our modern time where 2/3 of poor people live and work in agricultural lands and to the direct relation between food and economic growth in these poor countries.

Introduction

And

Theoretical Framework

Introduction

Poverty existed long in history most notably during different chronic and contingent circumstances, but it has never been in such quantitative and qualitative acceleration the way it is in recent decades. The number became in hundreds of millions living under poverty standards as well as frequent hunger and starvation crises on different local, regional and international scales. It would be suffice to mention such acceleration in quantitative poverty in simple comparison, as the number of poor people living under 1$US are 1.2 billion today exceeds world total population in1850 (1 billion inhabitants), and that the number of people living under 2 $US a day today (2.8 billion) is equivalent to the world total population in the late 1950s.²

The international community went through different phases and considerations in fighting this problem, which was considered in its final end as a mixture of humanitarian, economic and security problem after long time partial addressing. This issue was addressed through different aid channels, peace keeping, and more recently through collective international efforts such as the Millennium Declaration Goals (MDGs) on 2000. The end of the Cold War evoked new trend that engaged poverty fighting process in uncertainty, namely; most of the recent poverty reduction programs are trade oriented and open market motivated under the umbrella of different kinds of trade and aid agreements. Even aid is given now under aid for trade principle. This book is going to review different strategies and techniques used to poverty reduction in an attempt to see its viability and degree of efficiency. Free trade and poverty reduction are two processes that meet and oppose each other in different points. Due to my personal interest in this subject; I decided to study the high potential for the negative side-effect in this relation, the last two decades and particularly post-Cold War that dates as well the take off period of globalization late 1980s and beginning of 1990s.

One of the main approaches and policies used in dealing with contingent poverty reduction problem is the use of some readymade recipe like the Bretton Woods (BW) adjustment programs and Washington Consensus to mission for the liberal principles and particularly free trade and markets that would allegedly help to create extra resources and incomes needed to fight poverty and to create abundance of liquidity needed to elevate different social services within health care, education and sustainable development. The liberals went further to discuss the role of free market in highlighting human rights and dignity that can be counted for further political and social participation and leads to more descent human life. There will be focus on the taken procedures to poverty reduction as mentioned above, and the (side)-effects of free market and global trade procedures on poverty, taking into consideration the counter effects of some national and regional policies of protection, to see whether the gains and wins of free trade are higher than the losses or vice versa. And to examine the efficiency of the taken procedures, techniques and policies in the international community post-Cold War, such as; financial aid and cooperation, adjustment programs, millennium declaration and free trade to reduce poverty. Free trade will be taken as the main endeavor for its interconnectedness with the rest of actors in a world that became primarily managed by liberal ideologies and globalization.

The study main questions are:

1. Why should we be concerned with poverty?

2. What is the effect of international development aid institutions on poverty?

3. What is the effect of free trade on poverty reduction?

The secondary questions are:

1. How to make the WB’s poverty measurements more realistic and applicable?

2. What is the counter role of protectionism in poverty reduction?

3. What makes poverty rise in numbers? And, how to overcome poverty net?

A lot has been written on aid, trade and poverty management, like school and academic literature, books and articles, yet, many of them agrees on the role of free trade in poverty alleviation. The difficulty is much put on the way needed to investigate reality. Many researchers consider free trade as the main solution for poverty reduction while some others consider the opposite, each from different angle and period having their references taken from the United Nations (UN), World Bank (WB), and some other organizational and individuals publications, each represent different point of view and apply different poverty measurement system in calculating poverty in numbers and rates. I could not find a study that deals with poverty reduction issue in respect to a package of procedures that can extend from empowerment of aid, free trade, reconsideration of adjustment program all together. Some studies dealt with poverty issue as a domestic one. Professor of Economics, Oxford University Economics Department Director Paul Collier, for example, discussed poverty in respect to four traps that _according to him_ did not receive adequate attention such as the conflict trap, the natural resources trap, the trap of being landlocked with bad neighbours, and the trap of bad governance in a small country³. Dr. Paul Ehrlich who elaborated the term population bomb in the 1960:s went extreme in his analysis in describing the population growth, putting the blame for poverty on population explosion.

In my search for a study that can combine international efforts with counter forces in poverty reduction; A variety of studies considered the relation between liberalization of trade and economic growth from within a positive perspective without taking in consideration the counter forces that combine free trade and increase poverty. Still, new links to the subject can