Ending Poverty: Some Ideas
By Steve Gillman
The following ideas about ending poverty are limited, but
useful. I am not presenting a coherent theory at all, but just
some suggestions that come from Muhammad Yunus. He is the founder
of Grameen Bank, and a pioneer in micro-credit who has single-handedly
helped millions of the people of Bangladesh leave behind extreme
poverty by way of entrepreneurialism.
In his book, Creating a World Without Poverty, Yunus
suggests that we need to clearly define poverty and the measures
that will indicate it has been overcome. He also thinks these
should be different for each area of the world, depending on
many factors. They should be based on specific living conditions
more than just income level. Here is the list of ten signs that
his Grameen Bank looks for to determine that a family is out
of poverty.
1. The bank member and her family live in a tin-roofed
house or a house worth at least 25,000 taka (roughly equivalent
to $370). The family members sleep on cots or a bedstead rather
than on the floor.
2. The member and her family drink pure water from tube
wells, boiled water, or arsenic-free water purified by the use
of alum, purifying tablets, or pitcher filters.
3. All of the member's children who are physically and
mentally fit and above the age of six either attend or have finished
primary school.
4. The members minimum weekly loan repayment installment
is 200 taka (around $3).
5. All family members use a hygienic and sanitary latrine.
6. All family members have sufficient clothing to meet
daily needs, including winter clothes, blankets, and mosquito
netting.
7. The family has additional sources of income, such as
a vegetable garden or fruit-bearing trees, to fall back on in
times of need.
8. The member maintains an average annual balance of 5,000
taka (around $75) in her savings account.
9. The member has the ability to feed her family three
square meals a day throughout the year.
10. All family members are conscious about their health,
can take immediate action for proper treatment, and can pay medical
expenses in the event of an illness.
Yunus explains that poverty cannot be defined in one way for
all people. A list like the one above, if created for a rural
area of the United States, for example, might need to include
having a car, since this tends to be a necessity in those areas
for getting to work and even buying food. And certainly more
than $75 in a bank account is needed.
One thing that would help in ending poverty in the poor countries
of the world, is social businesses. These are businesses which
have not profit as their goal--although they may need that to
sustain themselves--but the meeting of a social need. I explain
this in my review of Yunus' book, which you can read here:
Creating a
World Without Poverty - My Review
Another thing that can help is ending the unfair treatment
of poor countries.Yunus calls for free access to U.S. markets
for products from Bangladesh. Currently there are high tariffs
for Bangladeshi products. In 2006 500 million dollars was paid
in duties on just $3.3 billion in goods exported to the U.S.
This represents an overall rate of 15% in tariff duties. Meanwhile,
the same year, the United Kingdom paid about the same 500 million
in duties, but on exports of $54 billion. That means Bangladesh
is taxed at a rate sixteen times as high.
Why should a poor country, where 40 percent of the children
have stunted growth due to malnutrition, be treated in this way?
In part it is a matter of which products are exported to the
United States, since some good have higher duties. Another reason
is a very simple if unpleasant one. It is that poor countries
don't have the same bargaining power versus rich countries, and
so end up paying more.
Yunus thinks that if Bangladesh is allowed duty-free access
to U.S. markets that exports would double within five years,
and wages would rise, and the economy as a whole would do much
better. He also points out that this would allow more exports
of cotton and other goods from the U.S. to Bangladesh, helping
the United States economy as well.
The Millennium Development Goals of 2000, agreed to by the
countries of the world, including the United States, called for
duty-free access to world markets for all of the least-developed
countries. So far, this and other parts of the agreement that
aimed to alleviate poverty, have been mostly ignored by the wealthy
nations.
Implementing these two ideas alone--building more social businesses
and eliminating tariffs on goods from poor countries--could start
the process of ending poverty in the word.
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