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Richer nations should help the poor

By DAVID HULME | China Daily Global | Updated: 2020-11-13 08:03
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Rise in economic and social inequality must be stopped for the well-being of all


Despite the economic setback caused by the novel coronavirus pandemic, we live in an affluent world. We produce enough food to feed the entire planet and we have the resources to meet everyone's basic needs. Reallocating just 1 percent of global wealth would eradicate extreme poverty at a stroke. Yet 3 billion people are deprived of at least one basic human need-food, potable water, sanitation, primary education or shelter. Almost 700 million people went to bed hungry last night and 19,000 children will die today of easily preventable causes.

As economic growth has slowed down, nationalism has been on the rise in many countries, and helping the distant poor has slid down the international agenda. This must be stopped. It is time to go back to basics and ask "should rich and rising nations help the poor… and, what are the best ways?" This means looking beyond foreign aid and charity at the broader ways in which better-off countries can raise the prospects of poor people: trade, finance, climate change mitigation, migration and other things.

There are two main reasons for this. First, it is the right thing to do-the moral argument. Our common humanity means that those of us who are doing well should help those whose basic needs are not met.

Second, the better-off would be foolish not to help the poor and their national governments. This argument is about mutual benefit. If we want a prosperous, environmentally sustainable, politically stable and healthy world for ourselves and our children and grandchildren, then we must help poor people wherever they happen to live. Issues such as new diseases, extreme weather events, international migration, organized crime and terrorism have transnational causes. They must be dealt with through global action built on multilateral cooperation. No country can solve these problems by itself.

The pandemic provides an obvious example. It threatens the lives and livelihoods of people around the world. While its worst impacts have been on the poor-uncounted deaths, hunger, disability, curtailed education-it also has impacts on the better-off. Business growth rates have slowed down, children are in lockdown in universities in Australia, Europe and the United States and foreign travel plans are canceled.

Worse could come if the novel coronavirus mutates. As the World Health Organization advises, all countries need to work together to reduce disease transmission, develop and share with others COVID-19 vaccines and be better prepared for the next pandemic. There will be one: new strains of Avian flu, Ebola, Lassa fever or the Zika virus, for instance, or something new.

So, how can rich and rising nations help the world's poor and help themselves? In the West, the orthodox answer has been through government-to-government foreign aid and charity. What has this achieved? We know that aid can work. Aid-financed campaigns have eradicated smallpox globally and polio is close to eradication; insecticide-treated bed-nets have driven down infant mortality rates in Africa; and millions of AIDS sufferers are alive and well today because of aid-financed antiretroviral medicines. But, it does not work all the time and, critically, foreign aid has not created inclusive and sustainable development for recipients.

Looking beyond aid there is a growing consensus that economic structural transformation in poorer countries requires action by both the state and businesses. The state has an important role to play in technologically upgrading economic activity, providing infrastructure and public services-particularly health, education and social protection. Commercial companies need to be dynamic and successfully compete in a globalized economy. As I argue in my book Should Rich Nations Help the Poor?, if high-income and economically rising nations are serious about helping the world's poor, they need to go beyond aid and adopt joined-up policies for international development.

First, international trade policies must be reformed so that poor countries and poor people can gain a greater share of the benefits derived from trade. Second, national and multilateral actions must be taken against climate change through mitigation of its effects and supporting adaptation. Third, global finance needs reforming to stop the illicit and illegal extraction of income from poor countries to rich countries by corporations and corrupt elites. Fourth, international migration must be recognized as a highly effective means of reducing poverty, achieving inclusive growth alongside meeting the needs of the aging populations in Europe and East Asia.

Continuing with existing policies is not a viable option for two reasons. The most obvious is climate change. The material foundation for humanity's improved living standards over the last two centuries was achieved by carbon profligate economic processes. This cannot continue as global warming has set off disastrous environmental changes. Globally, we must move to an environmentally sustainable economic model through the Paris Agreement on climate change. But that needs leadership. China and the US should step forward.

Less obvious, but just as important, the rise in economic and social inequality in countries must be stopped. Contemporary global economic processes and social norms generate income and wealth inequalities on a previously unimaginable scale. The richest 1 percent of humanity will soon own as much wealth as the remaining 99 percent. High levels of inequality hampers growth, undermines education and health services, exacerbates poverty and may lead to political decline-as seen in the United Kingdom and the US.
This analysis sets a challenging agenda. We need an all-out war of ideas to raise levels of public understanding of why rich and rising nations must help poor people and poor countries. We live in one world, and if we want good lives for ourselves and future generations, then environmental sustainability and global social justice must be pursued.

Multilateral action by rich and rising nations can systematically tackle the big issues for international development: trade, climate change, access to finance and technology, migration, and inequality. This may seem unlikely, but so did abolishing slavery, winning votes for women, establishing international humanitarian law and the Paris Agreement.

The author is a professor at the Global Development Institute at University of Manchester, United Kingdom and College of International Development and Global Agriculture at China Agricultural University. The author contributed this article to China Watch, a think tank powered by China Daily. The views do not necessarily reflect those of China Daily.

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