The grift never stops, does it?

Brazil led the way. Now the UK should get behind the assault on hunger and poverty

Kevin Watkins

At its recent summit, Lula gave the G20 a chance to show its commitment to real change – and Britain can take the lead

The argument is that the rich countries should send much more money to the poor countries. Because we’d like to beat that hunger and poverty.

Indeed, we would like to beat that hunger and poverty. At which point, well, what’s the best method of beating hunger and poverty? The answer to that is obvious - economic growth. Even if we do say that past a certain point economic growth doesn’t make us all happier - not that the Easterlin Paradox is actually correct - it’s still wholly true that economic growth in poor places makes those poor places less poor and also happier and less hungry.

Good, so how do we do that? The answer is that other than the one very simple action we don’t. They do.

This past four decades of neoliberalism has seen the largest fall in human poverty in the whole history of our species. To the point that there were those Millennium, Development Goals, one of which was to make a serious dent in such poverty. The only one of the MDGs that was overachieved and early. None of it by rich countries doing very much other than agreeing to buy what looked good among the production of those poor places. What really happened is that the governments of the poor places stopped doing the stupid things that hampered economic growth. You know, followed the Washington Consensus of the ten stupid things not to do to an economy?

Poverty, these days, is caused by bad government. Bad government in those places that are poor.

So, what can we do about it? The most obvious is declare unilateral free trade. Anyone poor out there who makes something we might like then we’ll buy it without imposing ludicrous taxes or regulations upon ourselves for having done so. Other than reigniting colonialism to improve governance out there this is really the only useful thing we can do.

But what actually is the Brazilian demand?

Current aid for hunger and poverty – about $75bn annually – is not just falling for low-income countries, it is fragmented and delivered through mechanisms that weaken national ownership: only about 8% goes through national budgets.

They’re demanding that more money be fed through what is provably - poverty is caused by bad government recall - bad government. This is not a useful solution. It’s a grift.

We really do know how to beat poverty. Buy things made by poor people in poor places. Sending more cash to buy a second Rolex for the bureaucrats doesn’t do it. So, let’s do what works, not what doesn’t.

Trade not aid……hey, it worked last time.

Tim Worstall