Does rising GDP alleviate poverty
Saturday, 30 October 2010
The first target of the Millennium Development Goals (MDGs) is to eradicate extreme poverty and hunger. The word extreme has been prefixed before hunger. So after achieving the target poverty will be there but not an abject one.
Eight goals were fixed at the conference held under the auspices of UN in 2000. Other seven goals are (ii) Active universal primary education (iii) Promote gender equality and empower women (iv) Reduce child mortality (v) Improve maternal health (vi) Combat HIV/AIDS, malaria and other diseases (vii) Ensure environmental sustainability and (viii) Develop a global partnership for development.
Eradication of hunger from the globe has been a fancy for the rich nation for long. In 1974, Henry Kissinger, then US secretary of State told the first world food conference in Rome that no child would go to bed hungry within ten years. Just over 35 years later still one billion people go to bed hungry. In 1976, Robert McNamara, then president of the World Bank, sent a caveat to the people of the world that the poverty would be exterminated by 2000. Coming in 2000 the target was refixed and the number of the poor people whose income is less than one dollar a day would be halved by 2015.
Increase of Gross Domestic Product (GDP) has been prescribed for poverty alleviation. This will be done through free market economy. The late president of the USA Ronald Regan gave the sermon that the surplus wealth of the rich would trickle down to the poor. But how? No way has been found. GDP is calculated from the total value of goods and services produced in an economy over a specified period.
There is no doubt that there has been sharp growth in agriculture, industrial and also services. But again there can be no denying that the free market economy has led to the concentration of wealth and the gap between the rich and the poor have been widened. This has been the global phenomenon including the USA. In India, top ten billionaires own wealth equivalent 12 per cent of the GDP. Then how much is left for 400 million Indian who have been groaning under the abject poverty. In this connection it may be mentioned that in India the number of billionaires in one of the highest in the world.
The political and social observers believe that this poverty is the main cause for the rise of the Maoist movement in India who propagate that the rich people are common enemy of the poor people. In Bangladesh, there has been admission of the fact of rise of inequality. Let us quote from the government papers. “Despite rise in household income, income distribution has become more unequal over the time. The bottom 5.0 per cent of the population received 0.77 per cent of the total income in 2005, down from 0.93 per cent in 2000. The bottom 40 per cent of the population which coincides with the share of the poor in total population received only 14.4 per cent of the total income in 2005. On the other hand the top 5 per cent received nearly 27 per cent of the total income in 2005.”
The strident movement of the nouveau riche forbids us to believe that there has been reversal of the scenario which dates back to five years. In the same document (National Strategy for Accelerated Poverty Reduction) it has been further stated: “To protect the poor from falling into deeper poverty, five priority areas have been identified in the strategy paper, which include social safety net programmer, food security, disaster management, micro credit and non-farm activities.”
Hence it is clear that late President Kennedy’s adage that rising tide lifts all foots dose not seem effective. The government of Bangladesh in particular and all other countries in general does not have any option but to implement the aforesaid strategies for eradication of poverty. Legally and socially it is not possible to take control of the surplus wealth of other and distribute among the people. Robinhood is a fiction, not a reality.
For almost two decades the word CSR (Corporate Social Responsibility) has been buzzing around the globe. CSR activities generally mean those activities performed by a corporate for the welfare of the employees and also for the people living around the institution and the environment. A company is to work in addition to the activities which a company carries out for which it has been established. To do good for its employees is not a new concept.
In the early twenties Ford Motor Company was famous and acclaimed for paying very high wages to its employees. Tata of India has developed township wherever it has set up industries for providing civic facilities to its employees. Both the government and the civil society think that a part of the income can be extracted from the company in the name of CSR.
The governor of Bangladesh Bank is very serious about CSR activities and has directed the central bank mandarins to be watchful about the commercial banks. Nobody can raise any question about the spread of CSR activities. But there is a pause. But if the activities are politicised or left at the caprices and whim of the individuals then the whole objective is frustrated.
First of all, the people along with the locality where the corporate will have the first line of CSR activities. Secondly, if its CSR activities are to be shifted in a greater perspective, the beneficiaries will be common people in a maximum way. Let us cite an example.
The road running from Airport to Bangabhaban is over decorated. This road should be very smooth and well maintained for the movement of foreign dignitaries. But with a view to hoodwinking the foreign guests the route is overdecorated, but irony is that nothing can be hidden to them as there are other services to give them the real picture. There are innumerable roads in the important areas of the city with hundreds of potholes. These roads should be taken care of. Excessive spending on promotion of cricket in the name of CSR activities is a social crime because hundreds of thousands of children in urban and rural areas are still deprived of the minimum facilities of games and sports.
Similarly, a corporate chief cannot spend CSR money to satisfy his own desire or liking, say financing golf, a game devoid of people. The CSR activity is that it should always take care of less fortunate and deprived people. On many occasion the humanitarian appeal is made through media to come forward with financial assistance for the medical treatment of some unfortunate persons. A fund can be created by pulling money from various corporate houses for carrying out CSR activities. A very dangerous symptom is being observed; bureaucracy is going to interfere with CSR activities. Bureaucracy means government which will in turn be politicised. This should be shun.
Syed Mahbubur Rashid is a freelance writer
Eight goals were fixed at the conference held under the auspices of UN in 2000. Other seven goals are (ii) Active universal primary education (iii) Promote gender equality and empower women (iv) Reduce child mortality (v) Improve maternal health (vi) Combat HIV/AIDS, malaria and other diseases (vii) Ensure environmental sustainability and (viii) Develop a global partnership for development.
Eradication of hunger from the globe has been a fancy for the rich nation for long. In 1974, Henry Kissinger, then US secretary of State told the first world food conference in Rome that no child would go to bed hungry within ten years. Just over 35 years later still one billion people go to bed hungry. In 1976, Robert McNamara, then president of the World Bank, sent a caveat to the people of the world that the poverty would be exterminated by 2000. Coming in 2000 the target was refixed and the number of the poor people whose income is less than one dollar a day would be halved by 2015.
Increase of Gross Domestic Product (GDP) has been prescribed for poverty alleviation. This will be done through free market economy. The late president of the USA Ronald Regan gave the sermon that the surplus wealth of the rich would trickle down to the poor. But how? No way has been found. GDP is calculated from the total value of goods and services produced in an economy over a specified period.
There is no doubt that there has been sharp growth in agriculture, industrial and also services. But again there can be no denying that the free market economy has led to the concentration of wealth and the gap between the rich and the poor have been widened. This has been the global phenomenon including the USA. In India, top ten billionaires own wealth equivalent 12 per cent of the GDP. Then how much is left for 400 million Indian who have been groaning under the abject poverty. In this connection it may be mentioned that in India the number of billionaires in one of the highest in the world.
The political and social observers believe that this poverty is the main cause for the rise of the Maoist movement in India who propagate that the rich people are common enemy of the poor people. In Bangladesh, there has been admission of the fact of rise of inequality. Let us quote from the government papers. “Despite rise in household income, income distribution has become more unequal over the time. The bottom 5.0 per cent of the population received 0.77 per cent of the total income in 2005, down from 0.93 per cent in 2000. The bottom 40 per cent of the population which coincides with the share of the poor in total population received only 14.4 per cent of the total income in 2005. On the other hand the top 5 per cent received nearly 27 per cent of the total income in 2005.”
The strident movement of the nouveau riche forbids us to believe that there has been reversal of the scenario which dates back to five years. In the same document (National Strategy for Accelerated Poverty Reduction) it has been further stated: “To protect the poor from falling into deeper poverty, five priority areas have been identified in the strategy paper, which include social safety net programmer, food security, disaster management, micro credit and non-farm activities.”
Hence it is clear that late President Kennedy’s adage that rising tide lifts all foots dose not seem effective. The government of Bangladesh in particular and all other countries in general does not have any option but to implement the aforesaid strategies for eradication of poverty. Legally and socially it is not possible to take control of the surplus wealth of other and distribute among the people. Robinhood is a fiction, not a reality.
For almost two decades the word CSR (Corporate Social Responsibility) has been buzzing around the globe. CSR activities generally mean those activities performed by a corporate for the welfare of the employees and also for the people living around the institution and the environment. A company is to work in addition to the activities which a company carries out for which it has been established. To do good for its employees is not a new concept.
In the early twenties Ford Motor Company was famous and acclaimed for paying very high wages to its employees. Tata of India has developed township wherever it has set up industries for providing civic facilities to its employees. Both the government and the civil society think that a part of the income can be extracted from the company in the name of CSR.
The governor of Bangladesh Bank is very serious about CSR activities and has directed the central bank mandarins to be watchful about the commercial banks. Nobody can raise any question about the spread of CSR activities. But there is a pause. But if the activities are politicised or left at the caprices and whim of the individuals then the whole objective is frustrated.
First of all, the people along with the locality where the corporate will have the first line of CSR activities. Secondly, if its CSR activities are to be shifted in a greater perspective, the beneficiaries will be common people in a maximum way. Let us cite an example.
The road running from Airport to Bangabhaban is over decorated. This road should be very smooth and well maintained for the movement of foreign dignitaries. But with a view to hoodwinking the foreign guests the route is overdecorated, but irony is that nothing can be hidden to them as there are other services to give them the real picture. There are innumerable roads in the important areas of the city with hundreds of potholes. These roads should be taken care of. Excessive spending on promotion of cricket in the name of CSR activities is a social crime because hundreds of thousands of children in urban and rural areas are still deprived of the minimum facilities of games and sports.
Similarly, a corporate chief cannot spend CSR money to satisfy his own desire or liking, say financing golf, a game devoid of people. The CSR activity is that it should always take care of less fortunate and deprived people. On many occasion the humanitarian appeal is made through media to come forward with financial assistance for the medical treatment of some unfortunate persons. A fund can be created by pulling money from various corporate houses for carrying out CSR activities. A very dangerous symptom is being observed; bureaucracy is going to interfere with CSR activities. Bureaucracy means government which will in turn be politicised. This should be shun.
Syed Mahbubur Rashid is a freelance writer