Opinion

The Great Debate

from The Great Debate UK:

How the world’s poor live on $2 a day

Jonathan MorduchJonathan Morduch is Professor of Public Policy and Economics at the Wagner School of Public Service of New York University and managing director of the Financial Access Initiative. He is the co-author, with Daryl Collins, Stuart Rutherford and Orlanda Ruthven of Portfolios of the Poor: How the World's Poor Live on $2 a Day (Princeton University Press, 2009).

In New York City, $2 is what you spend for a ticket on the subway or to buy a coffee. But for billions of people around the world, $2 or less is the average amount of money you have to put food on the table every day, pay medical bills, keep children in school, and seize business opportunities. It seems impossible.

Foreign aid experts, policy makers, and even celebrities have a lot to say about the population living on $1 or $2 a day. The group we don’t often hear from is the poor themselves. As a result, most of us have little clue about how the poor manage to live on so little—so we fall back on our guesses and assumptions, and that then informs the way we think about foreign aid.

A few years ago, my colleagues Daryl Collins, Stuart Rutherford and Orlanda Ruthven set out to learn how poor families in Bangladesh, India and South Africa really manage to live on so little. Research teams spent a year getting to know families and recording their challenges, ambitions, strategies, failures, and successes.

Our new book, Portfolios of the Poor: How the World's Poor Live on $2 a Day, comes to conclusions that turn common assumptions upside down. Far from living hand-to-mouth, all of the families interviewed were borrowing, saving, and leading active financial lives because of their poverty, not in spite of it. One of the central conclusions is that when you live on so little and face a life of uncertainty, thinking about the future is an imperative, not a luxury. You can’t afford not to save.

Africa and the global economic crisis

- Jorge Maia is head of Research and Information for Industrial Development Corporation of South Africa, established in 1940 to promote economic growth and industrial development. The opinions expressed are his own –

Serious shockwaves are hitting Africa’s shores as the global economic crisis unfolds.

The extent and depth of the damage is extremely difficult to assess or project, but it is clear that the pattern of financial flows associated with investment, lending and trading activity has been dramatically altered, with detrimental economic and social implications for the continent at large. The adverse impact has been gradually spreading from a regional perspective – a serious setback to Africa’s recent growth performance, which had averaged 6 percent a year from 2003 to 2008.

from Africa News blog:

Time to stop aid for Africa? An argument against

Earlier this month, Zambian economist Dambisa Moyo argued that Africa needs Western countries to cut long term aid that has brought dependency, distorted economies and fuelled bureaucracy and corruption. The comments on the blog posting suggested that many readers agreed. In a response, Savio Carvalho, Uganda country director for aid agency Oxfam GB, says that aid can help the continent escape poverty - if done in the right way:

In early January, I travelled to war-ravaged northern Uganda to a dusty village in Pobura and Kal parish in Kitgum District. We were there to see the completion of a 16km dirt road constructed by the community with support from Oxfam under an EU-funded programme.

The road is bringing benefits in the form of access to markets, education and health care. Some parents say their daughters feel safer walking to school on the road instead of through the bushes. Many families have used the wages earned from construction work to pay for school fees and medical treatment. This is the impact of aid.

from Africa News blog:

Time to stop aid for Africa?

Far from being all bad news for Africa, the global financial crisis is a chance to break a dependence on development aid that has kept it in poverty, argues Zambian economist Dambisa Moyo, who has just published a new book “Dead Aid”.

Moyo’s book, her first, comes out at a time when Western campaigners, financial institutions and some African governments have been warning of the danger posed to Africa by the crisis and calling for more money from developed countries as a result. The former World Bank and Goldman Sachs economist spoke to Reuters in London.

“I’m not saying its going to be easy, I’m just saying that there is a real opportunity for policymakers to focus on coming up with more innovative ways of financing economic development. In a way the crisis actually provides the African governments with the situation where they cannot rely on aid budgets coming through from the West.”

Davos debate: What happens to development and sustainability amid crisis?

davos-delegatesDavos leaders have traditionally looked to the long term and have largely been keen on helping all nations of the world to benefit from economic development. But with politicians and businesses tied up with short term concerns about the economic crisis there’s a risk at least that efforts to spread development and to ward against the threat of climate change may go on hold, at least for a time. Reuters News asked delegates at the World Economic Forum’s annual meeting to share their thoughts on whether we should be concerned about development and sustainability slipping down the global agenda.

from Africa News blog:

Selling Africa by the pound

The announcement by a U.S. investor that he has a deal to lease a swathe of South Sudan for farmland has again focused attention on foreigners trying to snap up African agricultural land.

A few months ago, South Korea’s Daweoo Logistics said it had secured rights to plant corn and palm oil in an even bigger patch of Madagascar - although local authorities said the deal was not done yet. Investors from Asia and the Gulf are looking elsewhere in Africa too.

Investor interest in farmland – not only in Africa – grew sharply after food prices shot to record highs last year. Although commodity prices have fallen since, there is still anticipation of long term demand growth once the world emerges from its current economic troubles.

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