26th January 2007
Sent to The Age on 8 January 2007 for publication but not published. Hence put up on my newly re-activated blog.
Many of the arguments by Peter Singer ("Giving till It Doesn't Hurt") in The Age of 6 January 2007 to persuade developed countries to open up their purse strings to alleviate poverty in developing countries were so misplaced that I couldn't help throwing my hat into the ring.
First, it is insulting to be at the receiving end of someone’s charity. Self-respecting people do not care for displays of charity towards them. Trade on equal terms, yes. Open exchange of ideas, sure. But for the West to take upon itself the role of looking after the poor of other sovereign countries is paternalistic and reeks of the "white man's burden". Self-respecting peoples everywhere simply ask to be left free to determine their own destiny, even if this destiny seems to others to include a fair share of poverty and disease. Unwanted donations are a form of political humiliation.
Second, Singer fails to show how the aid, even if it were free of political complications, will actually reach the poor. Singer suggests that $808 billion can be raised each year. Presumably this must reach the poor. But the reality is that most of it will end up in the Swiss bank accounts of illegitimate or corrupt politicians and bureaucrats.
Indeed, Singer himself has identified the rampant political corruption in these countries by citing Thomas Pogge: "international corporations are willing to make deals to buy natural resources from any government, no matter how it has come to power." In reality this is an absolutely chronic problem. Even when aid is directly supervised by the West, as in the case of the reconstruction of Afghanistan or Iraq, corrupt practices nullify the entire effort. And in my previous life I have personally witnessed the active misuse by politicians and bureaucrats of aid funneled through grossly over-paid United Nations officials.
And as foreign aid is fungible, it also arms and strengthens corrupt regimes everywhere. Therefore, foreign aid almost invariably makes poverty much worse than it was before. Foreign aid is mostly poison.
“Give a man a fish and you will feed him for a day. Teach him how to fish and you will feed him for a lifetime.” Erstwhile poor countries that took the path of freedom and good governance – the lessons from the West, experienced economic growth and were able to eliminate poverty. South Korea and Hong Kong readily come to mind. The West must teach its methods, not provide fish to the corrupt.
Third, my calculations show that even poor countries like India possess sufficient money to completely eliminate poverty, if they choose to adopt a negative income tax model. Instead, India has a range of subsidies and other “poverty alleviation programs” that are primarily used by its politicians to line their pockets. The point is that poor countries do not need anyone’s charity to eliminate poverty. They consciously choose not to.
However, not all is lost for those of us who are appalled at the ongoing poverty in the world today. We can do quite a few things to assist. But that does not require spending $808 billion annually to spoon-feed people in developing countries.
The West can conclusively transform the world through free trade and by communicating the message of freedom and good governance to recalcitrant countries.
Singer rightly cites Herbert Simon’s view that social capital is responsible for 90 per cent of what people earn in wealthy societies. Indeed, the level of freedom in a society is the primary determinant of its governance, and hence of its success.
As the demand for freedom must necessarily be ‘home grown’, ie. endogenous to the poor countries, methods of the sort suggested below will do far more for poverty than a trillion dollars spent on a war of freedom or on charity: (a) significant increase in the funding of high-quality students from developing countries who must then commit to return to their countries for at least five years after their education, and (b) bringing in senior bureaucrats from developing countries into long term “training-cum-secondment” roles within the local, state and federal governments of Western countries. This will enable these public servants to experience at first hand how freedom is operationalised.
The principles of freedom and good governance will then flow back to these poor countries, motivating the necessary change in social and political perspective.
There are no shortcuts to the elimination of global poverty.
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These views are entirely my own, based on experience in working in Indian state governments, and do not represent the views of any organisation I work with or have worked in the past.