Archive for February, 2008

Poor Dad, Poor Son

29 February, 2008

Those folk on the other side of the pond love a rags to riches story. But only 6% of children born to parents with a family income at the very bottom move to the very top (see the Economic Mobility Project here). Your chances of pulling off a “poor dad, rich dad” escape are actually quite slim.

And those chances dramatically worsen if you have a dark skin. Two thirds of all Americans earn more today than their parents did at the same age in the 1960s — the American dream — but black kids are far less likely to climb the income ladder than white kids (see Julia Isaacs here). More than half of all black children born to parents in the bottom quintile stay in the bottom — compared to 31 per cent of white children. And this doesn’t just apply to the poorest; blacks born into the middle class in the 1960s are far less likely than whites to earn more than their parents.

America cannot afford to stay as it is. Poverty is destructive, especially of young minds. High stress in poor families impairs brain development — particularly language ability and memory — according to Harvard researchers (go here). The cause? It seems the body releases harmful chemicals that impair cognition in the brain.

We leave the last word to Paul Krugman in the NYT: “Living in or near poverty has always been a form of exile, of being cut off from the larger society. But the distance between the poor and the rest of us is much greater than it was 40 years ago, because most American incomes have risen in real terms while the official poverty line has not. To be poor in America today, even more than in the past, is to be an outcast in your own country. And that, the neuroscientists tell us, is what poisons a child’s brain. ”. Quite so.

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Reasons to be Cheerful, Part 2

27 February, 2008

I started the year with Reasons to be Cheerful, Part 1. And promised Part 2. The winter gloom then stalled me (the nadir was reached on January 24). But I rallied, and here is Part 2:

1. Plumpy’nut is gaining ground. Famine and cheerfulness certainly don’t go together. But we should celebrate Plumpy’nut — a peanut paste containing vitamins, minerals and powdered milk. It did wonderful work during the 2005 Niger famine (go to MSF here). Created by André Briend, a French scientist, Plumpy’nut can be made locally, and eaten straight from individual foil packets, allowing most malnourished children to be treated at home, not in the (often unavailable) hospital.

2. The Davos Bubble finally burst. After years of pushing hot air above a small town in the Swiss mountains, folk now realize that nothing comes of these mega-events — except a great deal of posturing. Did Davos generate anything useful? We doubt it. But let us know if we’re wrong (in the meantime for some Davos substance read Simon Maxwell’s posts on the ODI blog).

3. The Mail & Guardian goes from strength to strength. But in a Monocle interview proprietor Trevor Ncube worries about press freedom in South Africa: “The test often comes during bad times. Bad times come when politicians feel under threat. With 20 million South Africans living below the poverty line there could be a revolution. But one gets comfort from our constitution and the vibrant, civil society”

4. Malaria vaccines now look feasible. Trials of a malaria vaccine in Mozambique cut the infection rate of infants under five months by 65%. And providing free bed nets (a passion of Jeff Sachs) really does work according to a new WHO study. Malaria can be beaten back.

5. The Second Chronic Poverty Report is nearly complete, and will be out by mid-year. In the meantime, you can read the first one here.

So on to Part 3 soon (maybe by the Spring). Meanwhile, you can check out the Ian Dury version here.

The New Sport: Attack the Homeless

23 February, 2008

Living on the streets is a wretched existence. From London to New York to Calcutta, there are millions of homeless people across the world. Many are children. About 600,000 families and 1.35 million children experience homelessness in America every year (see National Alliance to End Homelessness). The sharp increase in property foreclosures is adding more.

And now to increase their misery comes a new sport: attack the homeless.

The New York Times reports that: “Nationwide, violence against the homeless is soaring, and overwhelmingly the attackers are teenagers and young adults. In Florida the problem is so severe that the National Coalition for the Homeless is setting up speakers bureaus to address a culture that sees attacking the homeless as a sport”. Its the same sad story in England with attacks in Canterbury and Manchester. You can even video and post the results on the Web (go here). Such fun 😦

Can Donors Help Cook Up Growth?

15 February, 2008

Making an economy grow should be easy. Just invest in technology (to raise labour productivity — a new seed variety for instance). Add lots of education (especially high quality primary schooling). And then a dash of institutions (protecting the property rights of investors). Oh, and don’t forget the infrastructure. Voilà! 10 per cent growth year-on-year, and before you know it everyone will be rich (and moaning about how unhappy they are).

So, all you need is a growth cookbook (maybe this is Nigella’s next opus?). You could pick up a US one (a bit tired around the edges, but well-tested homely fare). Or an Asian takeaway (select from Malaysian, Korean, Chinese, or Vietnamese). Or how about Scandinavia’s rather bland — but very successful — growth Smörgåsbord? (Finnish being our favourite).

What you will not find is much from Africa. Indeed the shelf is largely bare, Botswana and Mauritius excepted. And it is Africa that aid donors are mostly concerned about (although the Pacific islands and Haiti are huge challenges too). True, Africa is now growing, pushed ahead by rising commodity prices. But Africa has been here before (the 1970s, when it largely squandered the fruits of the last commodity boom — resulting in economic turmoil, spectacularly so in Nigeria). Nobody is yet writing up Africa as a growth success-story — because recent growth seems so fragile.

And a lot of that growth doesn’t reach the people who need it: GDP is rising fast in Angola and Equatorial Guinea but the average person doesn’t see much benefit, let alone the poor (on Angola see my book here). Nigeria looked more hopeful last year, especially after the debt deal. But never underestimate the ability of Nigeria’s politicians to clear the pot before anyone else gets a turn (see recent back-sliding on corruption).

So what’s an aid donor to do? This is now becoming urgent — we hear that donors are pushing growth up their priority list. Seems sensible: countries will remain aid-dependent until they get their GDP up. And growth can reduce poverty, especially when new jobs and tax revenue (for pro-poor public spending) are the result (however, the chronically poor can miss out, and some types of growth harm poor people — see our recent post).

But which growth cook-book will donors turn to? And will the recipes be palatable to aid-recipients? We’ll return to this theme in a future post. Meanwhile, over to Nigella.

What next for Kenya? The Poor will Suffer — That’s Certain

14 February, 2008

The big guys are still talking. Agreement was reached last week on a framework peace plan, brokered by Kofi Annan (the Ghanains previously sent in President John Kufuor to no avail — you can’t help but admire their persistence). The framework commits both parties to avoid inflammatory statements and hold more meetings. Annan is pushing them still — the outline of an interim government might emerge soon (breaking news: a deal to write a new constitution is reported here). At least parliament was recalled — a key step.

In public both the Orange Democratic Movement (ODM) led by Raila Odinga and the Party of National Unity (PNU) led by Mwai Kibaki are keeping to a hard line: claiming no deal is in place. You might say it’s what happens in private that matters — around the negotiating table. That’s only partly true. Political leaders need to rein in their increasingly volatile and aggressive supporters. More murders (at least 1,000 since December) add fuel to the fire — and generate a momentum that the politicians might find hard to stop. “Let Annan do his bit but there is going to be no resolution. The clashes will continue”, said one youth manning a road block (see a BBC report here).

Will the agreement work? Who knows. The poor will suffer — that’s certain. For them it gets worse day by day, in at least 5 ways:

1. Family incomes are under intense stress. Tourism revenue has collapsed. One Masai community used to earn £400 (approx $800) per month from tourist visits: now all gone (story here). Over a quarter of a million people have fled their homes (and livelihoods). Result: more chronic poverty (see Tom Jayne et al on Kenya here).

2. Education and health-care are very disrupted. HIV and TB patients are finding it hard to collect their life-saving medicines. TB patients must repeat the whole course again (see Rhona’s blog on The Lancet Student). And TB develops drug resistance when treatment is incomplete. NGOs are working hard to help. But one MSF worker describes the situation of a HIV-positive mother who needs formula milk for her baby: “It broke my heart to see this woman, badly beaten up, sitting in the waiting bay with her four month old baby. She was making her way back home to fetch the baby’s patient card when they got hold of her. She looked completely petrified.” (story here). Infant mortality is rising.

3. A lasting solution must address Kenya’s deep inequality (see my paper here). This dates back to colonial times but intensified after independence in 1963, especially when former president Daniel arap Moi got to work. His network of patronage kept the big guys happy while the economy, once of Africa’s most promising, stagnated (growth picked up again over the last few years, the result of the global commodity boom). The Kikuyu — the country’s largest ethnic group and the one to which President Kibaki belongs — have dominated politics and commerce (Moi, who backed Kibaki in the elections, is from the Kalenjins, one of the smaller communities). Kibaki has lost some of the support of Kikuyu professionals — who have done well from the economic growth of the last few years. This is a sign of hope. When there is growth, the contending parties have an incentive to keep it going — if they have benefited. But many Kenyans have missed out or not benefited at all. They can take the economic hardship — because they are already used to hard times. The politics and the economics of conflict therefore interact. Consolidating a political solution depends on delivering tangible gains to the excluded (and fast).

4. As the economy sinks, so it becomes easier for nascent warlords to recruit the poor for their purposes — the slums have divided along ethnic lines. Most of the ODM protestors — in Nairobi and other places — belong to the Luo and Klenjin communities. They turned on the Kikuyus. Kibera, the big Nairobi’s slum, saw much anti-Kikuyu violence. And then the Kikuyus took their revenge. This is an acceleration of the rising ethnic violence seen over recent years (especially over land claims, further exploited by local political leaders). Organized crime is profiting handsomely from the looting, taking the banditry that has bedeviled Kenya to new heights (see this video by the Guardian’s Xan Rice). Conflict that starts as grievance often ends up driven by greed, making it all the more difficult to halt (see discussion here and here).

5. How to restore faith in the democratic process? The peaceful transition in 2002 — which ended the 24-year old presidency of Moi — gave hope to the poor that their vote would achieve real change (go here and read Joel Barkan in Foreign Affairs). The longer this goes on, the more difficult it becomes for the parties to move beyond the framework peace deal. And without a permanent deal the murders will continue. Time works against peace.

6. For aid donors it’s a tough call. They have large programmes in Kenya. They must act in good faith (and be seen to be doing so). The World Bank got off to a bad start, when a leaked memo appeared to support the result of the flawed December election. The director of the Royal African Society, Richard Dowden, has a scorching Op-ed piece in the Guardian on the British response. The ODM has called on donors to shut down aid: “A government that steals the vote from its own people will steal any aid given to it” (reported here). That’s a very powerful argument. Zimbabwe is the precedent (no OECD-DAC aid to speak of, just humanitarian help). But aid sanctions are tools that need to be kept in reserve as we await the outcome of the Annan initiative.

We leave the last word to Edward Clay (who was the UK’s High Commissioner to Kenya 2001-05). In a letter to the Economist he writes: “…the poorest, whether in the slums of Nairobi or in the rural areas, had all too little to lose in the recent violence. Most people living in the slums are inhabitants of shanties erected at the whim of rapacious landlords, who are themselves part of the political class. Some of these residents have now had their votes stolen as well…. The poorest attack their equally poor neighbours and set fire to the little they have in common not because they hate these targets in themselves but because they see no other adequate way to express their grievance”. That is Kenya today.

China in Africa — More Light, Less Heat, Please

6 February, 2008

Much heat, but not enough light, is being generated by recent commentary on China’s economic and political drive into Africa. Here are 7 thoughts (maybe they add light, or just more heat — let us know):

1. China’s investment. Much needed: jobs and growth will flow. But also disquiet. Investment snapshots: China is now Zimbabwe’s biggest foreign investor (Mugabe has a friend); China has lent Gabon US$ 83 million for a hydro-electric dam (we await an environmental assessment); China is taking stakes in some of Africa’s biggest investors — Rio Tinto is the latest (hope this doesn’t weaken corporate social responsibility). Africa needs more investment, but China must act responsibly.

2. China is to get copper and cobalt in a loan deal with the DRC. Hmm, the murky world of foreign investment in the Congo — say no more. Plenty of western nations haven’t practiced what they preach in the DRC. Can China do better? Will countries that received debt relief from the OECD-DAC donors under the HIPC Initiative (and then the MDRI) again build unsustainable debt positions — this time with loans from China? Helmut Reisen over at the OECD Development Centre finds no evidence of ‘imprudent lending’ by China to debt relief beneficiaries — so far. But this is one to watch.

3. Aid. The World Bank has hitched its wagon to China — a real sign of the times. China helped replenish the World Bank’s soft-loan arm (the International Development Association) last year — the first time it has contributed to IDA. And World Bank President Robert Zoellick wants more joint project lending with China (and Justin Yifu Lin has been appointed as the Bank’s new chief economist). This is all good news. Now that China is a Bank partner its aid stands a chance of being more rigorously assessed. And this moves China closer to bringing its aid within the OECD-DAC framework (see Richard Manning). More transparency might result. But it’s early days still.

4. Human rights. Oh Dear. One positive: China watered down support for Mugabe last year (Mugabe has a fickle friend). A big negative: Darfur (Sudan has oil, Zimbabwe does not). China is a permanent UN Security Council member. It needs to live up to the associated responsibilities (not helped when the other members don’t, notably the present US administration — see John Bolton’s latest fulmination against the UN here — but only if you must).

5. The Chinese Development ‘Model’. African commentators have been talking up China as a model. Seems more appealing than the policies the western donors pushed for years. And who can ignore growth rates of 10% year on year (even if the numbers look a might suspect to us)? China has lifted the largest number of people out of poverty in history — and Africa could sure use a lot of that. But fans forget (i) China has an enormous internal market — so import substitution is a more viable strategy than in tiny African countries (Africa needs an EU-style free trade zone to get anywhere near the economies of scale that Chinese companies enjoy). (ii) China is very good at mobilizing public revenues from growth — and Africa’s tax systems are mostly awful (iii) China’s one party state can force its way through development blockages that Africa’s young democracies cannot — and woe betide any Chinese who protest too vigorously (most African government’s don’t monitor access to the Internet in the way China does: Mugabe excepted). (iv) China’s model has involved stupendous environmental damage — we don’t need any Three-Gorges style projects in Africa, thank you.

6. Authoritarian regimes can retain political power if they ride a vigorous private sector — delivering rising living standards to keep (most) people happy. This is China’s political model. It appeals to some African leaders (notably Ethiopia and Rwanda). But to succeed you have to limit your ‘take’ — not a lesson likely to find favour with Africa’s long-stranding authoritarians but one that Africa’s next generation of political leaders might note (hopefully democrats, but also new authoritarians overthrowing the old).

7. That ‘other China’ — Taiwan — offers a model of how to make a successful transition to democracy while retaining (and strengthening) a vigorous maket economy. Taiwan is one of development’s great poverty success stories — a point that gets lost amidst the clamour of praise for its big brother neighbour. Taiwan is also aiming to win African friends.

That’s my 7 points. A good source of information on China in Africa is the Centre for Chinese Studies at the University of Stellenbosch. They do a weekly briefing, where some of the news cited here comes from. For China itself go to the Centre for Chinese Studies at Manchester University. And remember what Chou En-lai said when asked about the effects of the French Revolution — “its too early to tell”. Maybe that’s the case for China in Africa.

Surging Food Prices — Globalization’s Downside

4 February, 2008

Globalization is often said to be good for the poor. The jury is in fact still out. But for certain, many of the poor are now being hit by rising global food prices — FAO’s food price index was up 37% in 2007, on top of the 14% increase in 2006 — and globalization is the cause.

How so? Asia’s demand for food is surging along with robust economic growth and urbanization. And with oil close to $100 a barrel — again due to strong global growth — the world’s farmers are turning land over to corn and sugar for ethanol. The New York Times summarises it all here.

Folk are getting worried. Over on the ODI blog Simon Maxwell reports from Davos that World Bank President Robert Zoellick and World Food Programme (WFP) Head Josette Sheeran are both running initiatives to highlight the ‘forgotten MDG’ (No.2 — Halve, between 1990 and 2015, the proportion of people who suffer from hunger).

Anxious governments are keeping a close watch over food inflation; it’s politically dangerous — especially to authoritarian states. The urban poor may join street protests organized by political dissidents. And the rural poor often can’t produce enough to eat (if they are farmers) — while the poorest are often labourers without any land at all. Rural discontent is a big worry for the Chinese government (many rural people have not shared in China’s globalization-driven economic boom). Food riots have now taken place in Indonesia and Pakistan (See the FT report here).

Some governments are stepping up price controls; China, Russia and Thailand have all capped basic food staples. Malaysia is planning to stockpile basic foods. Venezuela is threating to expropriate food companies that hoard.

We have been here before; the 1970s saw the widespread adoption of price controls (that then create black markets, and decrease producer incentives, thereby exacerbating shortages) and large government subsidies to contain the consumer price of food (fiscally ruinous unless you have generous oil revenues). Governments often swear that these measures are temporary — but they are politically very difficult to remove once in place. For the poor, better measures are social protection and targeted nutrition interventions (consumer food subsidies often benefit the rich more than the poor since the rich consume more food — especially meat, including animals fed with subsidized bread).

Eventually food output should rise to dampen at least some of the price rise (although this effect could be muted by the switch of crop land to corn for ethanol). But the chronically poor have very few means to cope: being largely unskilled they find it hard to get compensating wage increases when food prices rises; many are women with young (and hungry) children; and many are too old or too sick to find work. So even if production does rise eventually, the chronically poor could get badly squeezed by rising food costs. They can’t wait.

This is not just a problem for the poor world. The US government buys surplus food for distribution through food banks such as America’s Second Harvest — but these purchases are now at a 26-year low as farmers switch to biofuel crops. So the food banks face shortages — at a time of rising unemployment and a stalling economy.

Here in Britain we have much the same story. Except now its got caught up with another debate about food quality (see our recent post about the history of British food).

Talking chicken, a free-range bird costs £6, while one eking out its miserable life in a battery-farm goes for 3 quid. But many poor families can afford only the latter. And they get berated by middle-class foodies for not feeding their families well. Jay Rayner in The Guardian worries that “We have managed to confuse our foodie obsessions – a set of lifestyle choices for the affluent – with a wider and much more serious debate on public nutrition that affects the very poorest in society”.

Of course you can go vegeterian (a good idea in itself), but British bread prices are up following a 15% rise in the price of flour (a standard loaf cost 52p in 2000; now its nearly £1). There is no escape.

The Poverty Olympics: The world’s most ‘livable’ city for whom?

4 February, 2008

Did you catch the sporting event of the year on Sunday? The event that every participant had been in ‘training’ for all their lives. No it wasn’t the African Cup of Nations or even the Super Bowl. It was the world’s first Poverty Olympics held in Vancouver. Here participants were invited to take part in events such as the welfare hurdles and the poverty line high jump and were supported by mascots such as Itchy the Bedbug and Creepy the Cockroach.

However, behind the rather amusing fascade lies a very serious message. The event was organised by the Poverty Olympics Organizing Committee — a group of citizens and community organisations campaigning against increased levels of poverty (in a city that has just been voted as the world’s most ‘liveable’ by the UN). In 2010 Vancouver is to host the Winter Olympics. At the time of the bid promises were made that the Olympics would leave a positive legacy for all of Vancouver’s residents. This included building more social housing, reducing homelessness, and making sure poor people weren’t displaced by Olympics-driven development. However, at the same time the British Columbia Government cut social housing spending and social assistance was made increasingly difficult to obtain.

The aim of the Poverty Olympics was to highlight the growing social inequalities in the city as well as the plight of the poor in what is one of the world’s most affluent cities. The event focussed particularly on those living in Downtown Eastside — the city’s poorest neighbourhood — which was singled out last year by the United Nations Population Fund as a sign of ‘trouble in paradise’ where (the HIV rate is 30% — the same as Botswana’s). Homelessness in Vancouver doubled between 2002 and 2005. And levels of child poverty are the highest in Canada.

The Poverty Olympics Organizing Committee argues that the cost of reducing poverty in Vancouver would be around $1.34 billion. This includes building more social housing, increasing welfare entitlements and ending barriers to welfare. Sounds a lot our thinking. But this amount pales into insignificance when compared to the more than $4.5 billion that has been spent on the Winter Olympics (and the provincial and federal budget surpluses for 2006/07 — of $4 billion and $14 billion respectively). This is money that they could spend but haven’t.

For Vancouver’s rich the city may well be the most ‘liveable’ in the world. But its inner city poor tell a different story. For them Vancouver represents poor housing, poor services, low life expectancy and the failure of local and national government to provide the basic means of subsistence. Hopefully the campaign will go some way to highlighting the poverty amidst plenty which continues to exist, and is indeed increasing, in many of the world’s most affluent cities — and not just in Vancouver. London 2012 take note!!

To read more about Vancouver’s poverty and the campaign against the city’s uneven economic development and rising social inequalities see http://povertyolympics.ca/

Mobilizing for a New War on Poverty

3 February, 2008

With the US teetering on the edge of recession, rising unemployment, and a precipitous fall in house prices, poverty is moving up the political agenda. And inequality too, since the land of opportunity is generating more openings for those in the middle and higher income ranges than at the bottom.

The brand new Stanford Center for the Study of Poverty and Inequality (SCSPI) has a free policy magazine, Pathways. It asks: how might a new war on poverty be fought?

Tim Smeeding sets the scene. Of 21 nations with comparable data, the overall poverty rate varies from 5% in Finland to 20% in Mexico. The US poverty rate is 17%, the second highest of the 21, and the highest of all rich nations. The comparison with the UK is startling; policy action over the last ten years has reduced UK child poverty to 11% which, while still too high, is much lower than the US at 18%. Britain has cut its child poverty rate to 45% of the 1999 level, while US kids saw no such gains. What the Brits have done, the Yanks can too.

Hillary Clinton, John Edwards, and Barack Obama contribute to the first issue. Priority reading to find out what might happen if the next occupant of the White House declares a new war on poverty.

Why so Many Malnourished Children?

2 February, 2008

Maternal and child undernutrition is the cause of 3.5 million deaths, 35% of the disease burden in the under-fives and 11% of the total global disease burden — according to a new study by Robert Black and team in The Lancet (go here). Vitamins, minerals and a daily feed of breast milk could prevent a third of these deaths (lack of Vitamin A alone accounts for 600,000 deaths every year).

Improved nutrition in early life also makes for more productive adults — enabling them to earn higher wages (see this paper by John Hoddinott et al.). They can then afford to better feed their children. So, reducing maternal and child malnutrition can help break the transmission of poverty across the generations (see Kate Bird’s recent CPRC overview).

These numbers makes a powerful case for investing more in child (and mother) nutrition to defeat chronic poverty. But what to do exactly? The 2004 Copenhagen Consensus decided that providing micronutrients had the best cost-benefit ratio of all nutrition interventions. And this intervention was No.2 in the experts ranking of 17 possible ways to improve the world (control of HIV/AIDS was No.1).

Although malnutrition kills about 2 million under-fives every year, the world spends only $250 million on nutrition aid — according to UNICEF’s Bruce Cogill. This compares with the $3 billion spent on HIV/AIDS, which kills about 380,000 children (under 15) (Report here). It’s hard to make these resource allocation decisions, but clearly donors need to step up nutrition support — and be creative in raising the funds (increase taxes on foods associated with obesity in the rich world? Its one possibility. Generates a ‘double dividend’: more money for hungry kids, and less diabetes and heart disease in the North).

Those working with the micro-finance revolution will be pleased to know that women’s access to micro-credit improves the nutrition of young girls (see this UNU-WIDER paper by Basudeb Guha-Khasnobis and Gautam Hazarika). It helps women earn an income to feed their families, especially girls who often get less priority when times are hard. So that’s another tick in the box of micro-finance.

So far so good. But these great interventions are now pushing against a countervailing force: the recent and rapid run-up in world food prices. What is this doing to child nutrition? Let us know.