A moment in history?
The modern world has always encompassed extremes of affluence and poverty. But in 2005 the confluence of advocacy, political serendipity and natural disaster has rapidly pushed the plight of the impoverished up the agenda of the wealthy as never before. The sharpness of the challenge being thrown down on behalf of the poor and the pressure on the rich to take action in response is unprecedented, as is the level of debate on a topic previously all but ignored by the public and mainstream media.
As a result of this campaign by the International Development Community (IDC) and non governmental organisations (NGOs), rich governments are likely to raise their aid budgets and expand debt relief significantly while hopefully revising international trading rules in a more pro-poor direction.
This is good news. The more sobering side of this story is that deploying this political and financial capital effectively in the war against poverty will be a complex and difficult undertaking – as a look backwards tells us. Over the last 50 years, the international community has spent more than a trillion US dollars, and many times that amount in effort, exhortation and emotion, to relieve human suffering and create the starting conditions for poor people to escape poverty.
Clearly, this assistance has brought much shortterm relief, achieved real breakthroughs against devastating diseases and the scourge of famine and contributed to the long-term development prospects of poor countries. But at the same time, much aid has been ineffectively and inefficiently used and failed to deliver the broad-based gains in growth and quality of life that had been promised.
This means past efforts to tackle poverty are not necessarily a reliable guide to what should be done in the future. And precisely how the international development community will use the new opportunities on offer to eradicate poverty is a vitally important question for many reasons.
There’s a great deal of public money at stake and bold claims are being made about using it to ‘Make Poverty History’. More importantly, there remains great need. After fifty years of international development assistance, two billion people still live on less that US$2 per day. Great uncertainty remains about the mix of policies and interventions needed to stimulate equitable economic growth.
Yet set against this great need and the doom and gloom that still inform the aid debate, there are positive signs of progress in Africa, and elsewhere, that demand to be acknowledged and supported.
Enterprise first So the question of what to do now to most effectively overcome poverty is challenging. Much advice is being tabled by commentators and expert committees such as the UN Millennium Commission and the UK Commission for Africa.
The ultimate focus of all of the wisdom on offer today is the same basic issue the international community has been struggling with for many years. And that is this: how, when and where should the international development community intervene to best help developing countries create the conditions that facilitate sustainable and equitable economic growth?
This is where the recent experience of Shell Foundation may be of value. Since 2000, we’ve been exploring systematically the questions of how to catalyse and scale-up market and enterprisebased solutions to poverty – and how to harness to the same task, the value-creating assets of multinational corporations.
There are sound reasons for this focus. History demonstrates that a flourishing, responsible private sector, built on a broad base of enterprise, including small and medium sized enterprises (SMEs) and well-regulated foreign direct investment (FDI), has been key to delivering the sort of economic growth in developing countries that we know pulls poor people out of poverty.
Going forward, common sense suggests the SME sector in particular must grow on a massive scale if the Millennium Development Goals are to be achieved and sustained and if lasting gains are to be secured from the opportunities created by debt relief and fairer trade.
Most importantly, the growth of enterprise offers poor people the hope that there’s an economic ladder to personal betterment they can climb by dint of honest effort. If this hope does not exist, there is a danger they stop looking up and forward and resign themselves to poverty – permanently.
To learn more about this author, visit Shell Foundation's Website.
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