Issues

Third World Poverty

One of the great scandals of injustice in our time is the huge inequality and poverty that exists in the world. As part of our call to justice, we should be calling for Trade Reform, Increased Aid, and Debt Relief.

• One half of the world's people (3 billion) live in 'poverty' (on less than $2/ day). 1.3 billion people live in 'absolute poverty' (on less than $1/ day).
• 800 million people lack access to basic healthcare. 17 million people, including 11 million children, die every year from easily preventable diseases and malnutrition.

Such appalling poverty in our world today is an indictment of our world system and greed. While the west languishes in self-indulgence, much of the world continues to starve. The causes of such poverty are complex. Historical factors such as colonialism as well as geographical considerations play a role. But some of the causes that perpetuate it also lie in unjust structures that keep the poor oppressed.

A call for reform
Whatever the cause, it is morally indefensible that it should be allowed to continue while much of the world is so wealthy. The result of such poverty and oppression is not only immense suffering and inequality. It also produces resentment that becomes the fertile breeding ground for extremism.

Solutions are not straightforward, but the existence of such poverty is an issue of Christian concern that requires a response. God calls his church to a response of compassion and justice that will lead us to:

• Give generously and sacrificially.
• Live and act justly.
• Speak prophetically.
• Pray selflessly.

Today, international discussion focuses on the Millennium Development Goals (MDGs). These are a set of targets to reduce poverty and disease in developing countries, and to improve the health, education, and rights of everyone across the world. These goals were agreed by world leaders in 2000, but are already seriously off track. Without trade reform, increased aid, and debt relief, the goals will not be met.

Trade

The situation

• The rules of international trade are stacked in favour of the most powerful countries. Rich countries pay their farmers and companies subsidies to export food, while poor countries are forced to open their markets to free trade and unfair competition. This is destroying the livelihoods of poor farmers.
• According to the UN, trade rules cost the developing world $700 billion a year. If Africa could increase its share of world trade by just one per cent it would generate US$70 billion - five times what the continent gets in aid.
  

The call for justice

• End the massive export subsidies used in rich countries.
• Special treatment for poor countries at the WTO.
• An end to the IMF and World Bank setting poor countries' trade policies.

What you can do

• Speak: Join the campaign for trade justice movement (eg through Christian Aid or Tear Fund).
• Act: Look out for and buy Fair Trade goods to assure your own money is spent to give a just price to the producer.
• Pray: For justice for the poor in the world trade system.

Read more on the background of the trade issue.

Aid

The situation

• Aid is falling well short of the 0.7% of GNP that countries have agreed upon.
• Too often "aid" is given for prestige projects, tied to trade deals, or conditional upon unhelpful cuts in government spending. Such aid does not help the poor. Only 24.3% of aid goes to the poorest countries.

The call for justice

• Donors to deliver at least $50 billion more in aid per year.
• A binding timetable to be set for spending 0.7% of national income on aid.
• Aid to be made to work more effectively for poor people.

What you can do

• Speak: Join the campaign for more and better aid (eg through Oxfam).
• Act: Give generously and sacrificially of your own wealth to well-targetted and well-run charities for the poor.
• Pray: For world leaders to act justly for the poor in the giving of aid.

Read more on the background of the aid issue.

Debt

The situation

• 52 poor countries are in a debt crisis. The rich world forces them to spend huge sums repaying old debts while millions live in poverty.
• Every day Sub-Saharan Africa pays millions of dollars to the rich world in debt service. Many countries are forced to spend more on debt than on healthcare or education.

The call for justice

• The unpayable debts of the world's poorest countries should be cancelled in full, by fair and transparent means.

What you can do

• Speak: Join the Jubilee Debt Campaign (jubileedebtcampaign.org.uk).
• Act: Develop a personal attitude of forgiveness towards others' debts and faults.
• Pray: For debt cancellation to become a priority on the international agenda.

Read more on the background of the debt issue.

Background on Trade, Aid, and Debt.

Background on Trade

International trade is worth $10/ minute, yet a child dies of hunger every 8 seconds. The global trading system lies at the heart of global inequality. The rules of international trade are stacked in favour of the most powerful countries and their businesses.

Rich countries (eg the EU and the US) pay their farmers and companies subsidies to export food - destroying the livelihoods of poor farmers. At the same time, poor countries are forced to open their markets to unfair competition, denying them the right to protect their own vulnerable producers, and restricting their access to international markets. The effects of the trade system can be seen across the developing world. Income per person in the poorest countries in Africa has fallen by a quarter in the last 20 years. The prices of many poor countries' key exports are at a 150-year low. Millions of poor people's livelihoods are being threatened, and their governments are powerless to prevent it.

International institutions set up to help are failing. Trade talks in 1995 left rich countries set to gain $141 billion while Africa would be $2.6 billion/year worse off. The IMF and World Bank have enormous power over poor countries. They use conditions attached to loans to promote free trade. While rich countries send hundreds of delegates to the World Trade Organisation, many poor countries can't afford to send any. The world's 50 poorest countries have less than three per cent of the vote at the International Monetary Fund.

Trade can be part of the solution for poor countries. But free trade, which leaves poor countries unprotected, is not the answer. We need trade justice not free trade.

Trade rules should give priority to poverty reduction. WTO agreements should be biased in favour of poor countries so that they have a better chance of using trade as a way out of poverty. This has already been agreed in principle at the WTO, but needs to be enforced.

These are three main areas of reform needed for trade justice:

• End the massive export subsidies used in rich countries. Subsidies for exporters must be ended because of their devastating impact on developing country markets.
• Special treatment for poor countries at the WTO. Changes should be made to ensure poor countries can feed their people by protecting their own farmers and staple crops. As a first step the WTO should ensure developing countries are able to self-select products on these grounds to be exempt from any further liberalisation
• An end to the IMF and World Bank setting poor countries' trade policies. Stop the World Bank and International Monetary Fund (IMF) forcing poor countries to open their markets to trade with rich countries, which has proved so disastrous over the past 20 years.

Background on Aid.

For all developing countries, the amount of aid they receive and how it is spent is a critical part of their efforts to reduce poverty.

Poverty will not be eradicated without an immediate and major increase in the amount of international aid. Rich countries have promised to provide 0.7% of their national income in aid, but almost none have fulfilled their promise. Overall, aid is 0.22% of GNP. If it had stayed at its 1992 level of 0.33%, it would today be $24 billion more than it is. The UK gives about 0.3%, and the US 0.1% (2002).

• EU annual dairy subsidy per cow = $ 913. EU annual aid per African person = $ 8.
• US military expenditure per capita = $1262. US overseas aid per capita = $46.

But also, without far-reaching changes in how aid is delivered, it won't achieve maximum benefits. Two key areas of reform are needed:

• Aid needs to focus better on poor people's needs. More aid should be spent on areas such as basic healthcare and education. It should no longer be tied to goods and services from the donor. The World Bank and the IMF must become fully democratic in order for poor people's concerns to be heard.
• Aid should support poor countries own plans and paths out of poverty. Aid should no longer be conditional on privatising or deregulating their services, cutting health and education spending, or opening up their markets: these are unfair practices that have never been proven to reduce poverty.

Background on Debt.

Loans were given to poor countries by western governments and international institutions such as the IMF and World Bank in the 60's. These became a burden in the 70's and 80's when interest rates shot up. Poor countries ended up with a larger debt than they started with, in spite of making repayments. To make matters worse, conditions were attached by lenders, requiring poor countries to cut spending on public services, such as health and education, causing suffering for many.

The Heavily Indebted Poor countries (HIPC) initiative was set up in 1996 by the World Bank and the IMF to reduce countries' debts. Despite reform in 1999, the HIPC initiative is still inadequate. It is too slow, still requires cuts in health and education spending, and is aimed at reducing rather than removing debt.

More than six years ago, rich countries promised to cancel unpayable poor country debts. They have not delivered on these promises. As a result, many countries still have to spend more on debt repayments than on meeting the needs of their people.

The following are some aspects of the call for justice in debt:

• Rich countries and the institutions they control to act immediately to cancel all the unpayable debts of the poorest countries.
• International institutions like the IMF and World Bank to stop asking poor countries to privatise basic services or liberalise economies as a condition for getting debt relief.
• The task of calculating how much debt should be cancelled to be entrusted to a fair and transparent international process to make sure that human needs take priority over debt repayments.
• Poor countries to be given more grants, rather than seeing their debt burden piled even higher with yet more loans.