The story of Africa’s rising(Nigeria) continues to mislead many experts on development proclaiming the “end of poverty,” activist Thomas Pogge contends that poverty won’t go away anytime soon, unless the rules that escalates inequality are addressed at their roots.
This week the United Nations, Clinton Global Initiative among others gather to discourse the struggle and explore solutions for the challenges of developing nations. The agenda for this year’s meetings centres on gender equality, the role of technology, awareness raising, access to capital etc. Very little attention is paid to the role of welfare, nor methods addressing inequality directly. If development is about people and it is, then we are not nearing the end of poverty as the development industry tell us. In reality, well over half of human beings are still suffering major deprivations, lacking access to the basic needs, challenges such as child labour, chronic undernourishment, illiteracy, and lack of access to safe drinking water, shelter, sanitation, electricity, and essential medicine.
However, in absolute term conditions among humanity’s poorer half have greatly improved in the last two decades. But the trend depends heavily on the definitions and methods used for measurement. In simpler term; the poor’s benefit from the Africa rising story is obliterate by the narrowing of their piece of the bolstering pie.
The UN Food and Agricultural Organization just a while ago transformed a steadily rising undernourishment trend into an unwaveringly falling one by introducing an “improved methodology” that counts as undernourished only those whose caloric intake is “inadequate to cover even minimum needs for a sedentary lifestyle” for “over a year.” This definition leaves out those who suffer other nutritional deficits (vitamins, proteins, minerals) and those who are not decently nourished by the sedentary diet because they must do serious physical work like running around hawking on the streets of Lagos for a living.
The World Bank similarly improved the extreme poverty trend by lowering its international poverty line from $1 per person per day in 1985 dollars to a grotesquely inadequate $1.25 in 2005 dollars.
The morally relevant comparison of existing poverty, in any case, is not with historical benchmarks but with present achievable in practice: How much of this poverty is really unavoidable today? Going by this standard, our generation is doing worse than it was three decades ago.
To eliminate extreme poverty, the most vulnerable would need only six percent of global household income – a shift of just 2.7 percent channelled to them; channelled because, addressing inequality requires specific measures. Yet the global distribution is shifting in the opposite direction: The top five percent of humanity gained 2.9 percent of global household income between 1988 and 2008, and now capture nearly half.
In the same period, the poorest 30 percent’s share was compressed from 1.52 percent to 1.25 percent, despite all development assistance efforts. The benefit Africa’s poorest and most vulnerable derive the economic growth is decimated by the narrowing of their slice of the expanding pie.
One crucial driver of national and global income polarization is regulatory capture, called “money in politics” on the left and “crony capitalism” on the right. Corporate and elite interests capture the basic rules of the economic system (governing investment, taxation, trade, intellectual property, etc.), which so profoundly influence the economic distribution. The wealthiest agents have the strongest incentives and also the best opportunities to engage in concerted lobbying, and thus perpetually shift the rules in their own favour. What this means for reducing poverty in Africa is that, if the poor and the static income group known as the middle-class spends everything they earn, it is still insignificant. African government must device strategic means to ensure equitable redistributions to the benefits of the poor. Affordable housing for example, access to road networks, clean water, sanitation, etc.
Development assistance can be helpful, but it also sustains the status quo by feeding the complacent Africa government’s belief that enough is being done. In any case, aid and these nice conversations glorifying the African growth story on its own cannot overcome the powerful headwind generated by a supranational institutional order designed by the rich for the rich. The majority are still the poor and if they are left behind, it affects overall growth and development statistics. To many Africans, the positivity of Africa rising is a myth as it is not reflective in the lives and experiences of the majority.
Only by government intervention can inequality be reduced, the private sector will not suddenly develop a conscience to do so, neither will the elites, they have no incentives to. What seems more plausible for these meetings on growth and development is for advanced experts and economies to tell Africa leaders the truth, rather than gloat over the symptoms of these challenges under the guise of charity.