Global Poverty

Chris White Excerpts

Thursday 1st July 2010 Commons Chamber

[Chris White (Warwick and Leamington) (Con)]

Thank you, Madam Deputy Speaker. I will keep it brief.

I congratulate my hon. Friends the Members for Wirral West (Esther McVey) and for Stevenage (Stephen McPartland), and the hon. Member for Rochdale (Simon Danczuk), on their excellent and thoughtful maiden speeches.

More than 60 years ago, the Beveridge report was published. It identified the five giants that threatened Britain in the wake of post-war reconstruction: want, disease, ignorance, squalor and idleness. It showed a country scarred by the events of the great depression—one of the worst financial disasters that the world has ever witnessed—and sought to find a way in which to bring about a fairer society. Perhaps now, in the wake of the most recent recession—the deepest since the 1930s—we should reflect on how to reconstruct a fairer global community.

Fortunately, in our own country we have made great strides in tackling each of the five giants that Beveridge identified. Elsewhere across the world, people have not been so lucky. The facts and figures may be over-told, but they still make for sobering reading. According to the most recent millennium development goals report from the United Nations, 1.4 billion people live on less than $1.25 per day, while it is believed that more than half the world lives on less than $10 per day; 17% of the world are undernourished; 11% of the world’s children still do not receive a primary school education; 74 out of every 1,000 children die before they are five years old; 536,000 women and young girls die every year across the world as a consequence of complications in pregnancy; despite falling infection rates, about 2 million people die of AIDS every year; and 36% of people in the developing world live in poor housing. The statistics go on and on.

As we enter a new decade, has the time not come for the developed world to put an end to rhetoric and meet the fundamental challenges that confront the world in dealing with global poverty? The most important of those challenges is economic development, an issue that has been brought further to the fore by the global economic crisis. It is believed that, as a result of that crisis, nearly 100 million more people have remained in poverty than would otherwise have been the case.

According to the United Nations, while productivity—a primary indicator of economic development—has steadily risen in the developed world, productivity in the developing world has been sluggish. Between 1998 and 2008, output per person employed—measured in 2005 United States dollars—rose from $60,000 to $71,000 among those working in the developed regions, while in the developing regions output per person rose from $8,000 to $11,000. That is just over a quarter of the growth of the developed world. Limited increases in productivity indicate that an economy has little potential to create new jobs. Moreover, that can lead to stagnant wages, which keep hundreds of millions in poverty and prevent the creation of the stable domestic markets that are essential to further economic progress.

The link between economic development and reducing poverty seems obvious, but while a great deal of the focus has been on aid, it ignores the necessity of encouraging growth in developing countries. That is less eye-catching and more difficult to achieve, but in the long term it will produce better results.

A report published in 2006 by USAID, the United States Agency for International Development, highlighted the position of South Korea and Ghana. In 1950, South Korea’s per capita income was $770. Ghana’s was slightly higher, at $1,222. By 2000, however, South Korea’s per capita income had risen to $14,000, while Ghana’s remained at around $1,280. The figures for life expectancy, literacy and infant mortality have improved dramatically in South Korea since 1950, but the problems continue to dog Ghana. That is despite the hundreds of millions of pounds given to Ghana by Britain alone over the past few decades.

Although I do not doubt the necessity of aid to assist people in developing countries who live in poverty, we must not allow ourselves to mistake aid for the cure. Aid must be used as a short-term means in order to achieve economic development, which is the long-term end. Schools and hospitals, the beginnings of a solid infrastructure, are the things that aid can help to achieve. However, the real work of lifting people out of poverty will be done only by a growing economy, with the creation of jobs and rising wages.

That work can be done enough through encouraging a fiscal and administrative reform. Countries can, thus, be helped to adopt tax systems that are fairer, easier to implement, less vulnerable to corruption and less distorting to economic activity, in order to help to develop transparency. We also need to ensure that strong monetary frameworks are in place. I am glad, therefore, that the Government have taken such a keen interest in ensuring that economic development is placed at the heart of our poverty-reduction strategy. I welcome, for example, our support for a pan-African free trade area, which we hope will lead to the greater development of markets within developing countries and help to generate a cycle of prosperity.

Moreover, an issue that goes hand in hand with economic development is that of governance. As was worryingly reported only a few years ago by the National Audit Office, aid is often open to abuse. Poverty reduction budget support—that is money given directly to the Governments of recipient countries—represents more than £1 billion of DFID’s budget and is the preferred method of distribution. That comes with the risk of funds going missing and being misdirected for the private gain of individuals within Governments. We must ensure that Governments that receive this aid do not do this, and I welcome the coalition’s commitment to supporting the development of local democracy and civil society in order to create the environment necessary for stable governance to follow. Moreover, the commitment to ensuring that there is full transparency in aid and to publishing details of all UK aid spending is also a step in the right direction.

Aid given by this country has the potential to help tens of millions of people across the world and, as part of larger multilateral packages, to help hundreds of millions. However, I am reminded of the fact that the Department that deals with reducing global poverty is called the “Department for International Development”. That title recognises the simple truth that development—in particular, economic development—holds the key to reducing and eventually eliminating global poverty. As we look forward to tackling the great giants of global poverty, we should ensure that we place long-term economic development before eye-catching spending commitments. I am glad that the Government seem to be taking that course, and I hope that they continue in that direction.