About 1.3 billion people live in conditions of extreme poverty. Though this social evil affects the life of so many people, it gained importance in the international arena only towards the end of twentieth century.
Poverty elimination is now a transnational issue. It has caused dramatic changes like migration, demographic explosion, ethnic rivalry and ethnic cleansing.
Now, even 10 years after what appeared to be fundamental changes in how global poverty eradication would be tackled (including new pledges made to reduce one-dollar-a-day poverty, the creation of Millennium Development Goals, increased finance for development scheme and other changes), there is still little evidence that the planning, financing and implementation of efforts to assist the poor have transpired.
Policies are focused on poverty, national governments now own national strategies, poor countries and their donors work in partnership, assessments of performance against targets feed into iterative plans and accountability processes, and commitments to increased aid, fair trade and mitigating climate change have been made. However, a criticism of this could be that all these changes are superficial. Policy statements about poverty reduction have proliferated, but plans remain on what can be afforded and not what is needed. There is more national control over poverty reduction plans, but other key policy issues — such as the Medium Term Expenditure Framework and other key macroeconomic parameters — are overseen by the Bretton Woods Institutions and the IMF. Developing countries now own their national policies as long as they stay close to the orthodox neoclassical economic thinking. Civil society can participate more in debate about poverty reduction, but the party politics and national assemblies make only bare mention of poverty. Aid levels have risen, but are now either falling back or being misused. With relatively few exceptions, national governments and leaders in both the poor and rich countries can make promises about poverty reduction targets and actions and know that they will not be held to account by their citizens or put under pressure because of non-compliance with international norms. So while the rhetoric of global poverty reduction has been transformed, the practice has only slightly shifted in a progressive direction.
Now let’s be a little more specific and look at the rise of Asia, which may help in reducing global poverty. After 40 years of Cold War and the end of bipolarism, the 1990s witnessed a sudden and dramatic change. New powers with material capabilities (technological, productive, destructive capabilities, etc.) have emerged. BRIC (Brazil, Russia, India and China) and BRICSAM (BRIC plus South Africa and Mexico) have emerged as nations with macro-economic stability and political maturity. Projections of future global poverty reduction are based on the assumption that relatively high levels of global growth — and especially growth in India and China — will continue for several decades. Such growth would not only reduce poverty, but also re-structure the global political economy.
The growth of China and India, specifically, effects global poverty in three ways: The first is through the domestic impact of economic growth and, for levels of absolute poverty, this depends on the distribution of the benefits of growth within each country. Recent patterns have been highly unequal, and substantial populations in both of these countries still live in poverty. Shanghai has achieved living standards similar to Portugal, while some other provinces still face poor living conditions and poverty. In India, the disparity can be seen between urban and rural India, and the gap in the development process in the states is massive. Mumbai has a vast middle class population living alongside an equally large number of slum-dwellers.
The second effect is the impact that China and India’s growth will have on other countries. Already the demand of the Chinese economy for natural resources has led to China’s commercial and political links with African countries deepening, creating mutual benefits.
The third is the role that India and China will play in global public policy. Both countries are expanding their foreign aid activities with a focus on bilateral programs that relate to strategic commercial and geopolitical interests.
In recognition of the policy changes that still must be made in order to end poverty in these countries, and elsewhere, groups such as ASEAN (the Association of Southeast Asian Nations), the EU and BRICSAM have been formed with the aim of achieving economic and political stability and combatting internal problems like poverty and unemployment. But unfortunately, while the formation of these blocks has been successful in giving an economic boom to the member nations, their role in poverty reduction is still disputed.
Arjun Atree is a fourth-year law student at Christ University in Bangalore, India.