The G20 Summit in Melbourne is now history, as is the Australian tour of U2. Both tried to grapple with the issue of world poverty. One, it seems to me, will be more successful than the other.
As for the Melbourne meeting of world finance ministers, the usual melodramatics were on display. Angry protestors hurled urine-filled balloons at police, and shouted anti-Bush and anti-Howard slogans. Just how all that is supposed to relieve global poverty remains unclear. But it apparently made some people feel good.
And feeling good is often seen as more important than sound economics. When Bono flies around in his private jet and charges people an arm and a leg to hear him perform, all the while denouncing capitalism and the West, he undoubtedly feels good as a result. Just how many poor people however are helped by such activities is another matter altogether.
Now Bono is genuinely concerned about helping the poor, and he deserves credit for that. But whether his rockenomics will in fact help anyone is a moot point. Past initiatives by celebrities and rock stars to combat global poverty have been less than convincing. But at least a lot of young people who participated in such events would be feeling good about themselves. But how will the world’s poor be feeling?
The G20 meeting also tried to deal seriously with the issue, but minus the rock music and bumper sticker ethics. And their strategies may well do more for the world’s poor. Helen Hughes, writing in today’s Australian (November 20, 2006), suggests that the emphasis of the G20 meeting – free trade and economic growth – is far preferable to the old worn-out appeals to socialism by the rock stars.
How successful, or otherwise, foreign aid has been, is part of her concern. “The Group of 20 Finance Ministers met at the weekend to discuss ways to maintain global prosperity so that China, India and the other Asian countries that are developing can trade their way out of backwardness and poverty. The emphasis was on what could actually be done to maintain monetary stability.”
She continues, “Is this a reason for bullying workers in banks or the Defence Department? Or for ageing rock stars who have run out of musical inspiration to attack Australia’s foreign policy? A policy, remember, that does much more to help developing countries get on their feet than pouring buckets of money into the maws of corrupt ‘Big Men’ who not only keep their countries poor but murder their own citizens by the hundreds of thousands can ever do. The evidence that aid has failed to help poor people or turn corrupt politicians toward growth is now mountainous. Has Bono become deaf listening to his own music?”
The history of foreign aid has not been impressive: “Governments that have been forgiven debt have incurred more and larger debts to fund their obscene lifestyles. Mercedes’ most lucrative market is for their armoured limousines in Africa and the Middle East. Aid was used to buy a jet plane so that an African potentate with 30 wives could fly around the world begging for food aid. Non-government aid workers and the World Food Program are being kept out of Darfur and other African hot spots. They are asked for huge bribes when they are given access. A great deal of food aid, despite aid workers’ best endeavours, finishes up being sold in souks.”
After examining some Asian economic success stories, she turns her attention to the South Pacific: “The Pacific receives more aid – dominantly Australian – per capita than any other region. But aid is not going to the 85 per cent of people who still live in villages. In Papua New Guinea, HIV/AIDS is reaching African levels because there is no education or healthcare. In the South Pacific as a whole after 30 years of aid there are 1.5 million, mostly male, unemployed or underemployed. There has been no growth. People are not starving because women work in gardens and orchards, but gangs of youths are roaming the streets of Port Moresby and Lae and spreading to other Pacific centers. Port Moresby repeatedly features among the most unliveable cities in the world. The government elites that absorb the aid live behind barbed wire and send their children to Australia to be educated.”
She concludes: “Rockeconomics is no path to development. Compassionate Australians must take the trouble to understand why aid is not a panacea and often not even a help. We know that trade is more effective than aid and must avoid harming people in developing countries through aid.”
Global poverty is a complex and very real problem. It is good that those other than economists draw attention to it. But economic realism, not clichés from rock stars, is needed to turn things around. And there is nothing wrong with celebrities displaying a conscience. But their concerns need to be wedded to clear thinking and economic nous in order for them to be put to good use.
http://www.theaustralian.news.com.au/story/0,20867,20785442-7583,00.html
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