Posts Tagged ‘bbc’

Climate Change in Bangladesh – BBC Photos

7 December, 2008

Bangladesh is one of the countries that will be worst affected by climate change. Rising sea and coastal water levels and more frequent storms threaten this low-lying country. Adapting Bangladesh to climate change is urgent – especially to prevent the reversal of recent progress in poverty reduction there.

An excellent set of pictures on the theme of climate change in Bangladesh can be seen at the BBC here.

BWPI will be undertaking with BRAC a new research programme on climate change and its implications for poverty in Bangladesh. Watch this space over the coming months. In the meantime check out the BWPI and CPRC working paper series for more on Bangladesh.

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Keynes is Back. But What to Do, Darling?

24 November, 2008

Britain’s Chancellor of the Exchequer, Alistair Darling is praising Keynes – along with just about everyone else. He’s boosted public spending (go here). The present focus on fiscal policy reflects the fear of a ‘liquidity trap’ – which Keynes first identified in the 1930s. The Bank of England is set to cut interest rates further, but this might not encourage banks to lend. So monetary policy alone can’t do the trick (it is said). Hence public spending. And now tax cuts.

Today we hear the Chancellor’s plans (at 3.30 pm: go here). The government’s spin machine was busy over the weekend so a VAT reduction will hardly come as a surprise. The FT reckons it will be a £12.5 bn package:

“At the heart of the stimulus package is an expected “temporary” cut in the VAT rate from 17.5 to 15 per cent, the lowest standard rate allowed in the EU. Food, children’s clothing and some other items have always been zero-rated in Britain”.

Will a VAT cut work? Canada cut its sales tax at the beginning of 2008, but this had modest effects on total spending, according to the ‘Undercover Economist’, Tim Harford interviewed on the BBC Today programme this morning. For a critique of the Canadian tax cuts from a poverty perspective see GrowingGap. Canadian readers: send us your views.

To cut taxes now, taxes have to rise later. Economists describe this as borrowing from ourselves. Spending won’t rise if we fully anticipate the future tax increase. Or at least that’s what some macro-economists say (see Robert Barro). It’s called Ricardian Equivalence (drop that into your next pub conversation on the economic crisis: sure to impress). Economist readers: please up-date us on whether Barro is right.

Will businesses cut prices following a VAT reduction? They are slashing prices in any case, in advance of Xmas – a last ditch hope that the sales can carry them through the new year. Buyers stormed Marks & Spencers last week, following a 20% price cut. So we might all now afford fresh underwear. But will stores cut prices further, or take some of the VAT cut to rebuild their margins?

Ann Pettifor of the New Economics Foundation interviewed on the BBC yesterday was skeptical about tax cuts (Ann was one of the first people to predict this crisis). She believes that people will instead save the VAT cut (i.e. you will still buy the same basket of goods, but now the basket will be cheaper and you won’t add any more items. Your money is then deposited in one of Britain’s hopeless banks or under your mattress). Ann points out that if the money is spent then a lot will go on foreign imports (true, but I don’t think this is necessarily as bad as is often believed. The Americans need help too. I’ll do my bit by buying a new Apple Mac).

Other ideas I have come across: delay VAT payments by small businesses for six months. Many small businesses are penalized by the larger firms not paying their suppliers on time (a zero-cost way for the latter to fund themselves). Peter Mandelson promised a crack down, but doesn’t seem to have achieved much yet. In the recession of the early 1990s, small business failures were running at a 1,000 a week. So maybe government could help with a delay in VAT payments. Housebuilders want a continuation of the present holiday on stamp duty to get the housing market re-started. Readers might like to comment on the merits of each.

But there are two ideas from the Get Fair campaign that I really like.

First, immediately invest £4bn in measures to halve child poverty by 2010. Child poverty costs at least £25 billion each year in losses to the Exchequer and in reduced GDP, according to research from the Joseph Rowntree foundation. So spending tax revenue on eliminating child poverty now would actually save public money in the future. Surely a good idea.

Second, Get Fair says improve the take-up of existing benefits: they estimate that this would help 500,000 pensioners out of poverty. Here in the UK we have just had Remembrance Sunday, a day on which we remember those who gave their lives to defend Britain – especially in the Two World Wars. A 20-year old in 1940, is now 88. Helping our pensioners now, especially those in poverty (2.5 million of them) will be one of our last chances to thank their generation.

So, over to you Darling.

Addicted to Aid?

19 November, 2008

Next week’s Panorama on BBC One is running a programme on aid to two countries for which Britain is one of the biggest donors. To judge from the blurb, it’s going to be very critical:

“Reporter Sorious Samura visits Uganda and his home country of Sierra Leone to reveal how aid money is lost, stolen and frittered away. He stops at a showpiece hospital, run by a well-funded health department, that looks like a warzone – yet its carpark is home to dozens of new 4x4s for ministry staff. He questions a former minister accused of stealing funds and offers his vision of how Africans can take control of their own destiny”.

Sorious Samuara has done some brilliant films exposing Africa’s “big men” and their corrupt ways, the other side of the coin to the region’s hunger and poverty (go here). But I do hope that he offers more than the usual critique of aid in the Panorama programme.

Yes, corruption is rife in Sierra Leone (it was a big issue in the last elections, with a clean-up promised: see this BBC report). And on a recent visit to Uganda I saw that the local media is full of stories of corruption (the benefits of a free press in Africa! See The New Vision). DFID is presently “ghost-busting” in Uganda (go here).

But I very much doubt that either Sierra Leone, Uganda (or Mozambique – another post-conflict country) would be where they are today without the aid they received to help reconstruction.

This is not in any way to argue that graft or misuse of aid money should be tolerated. But I get tired of the one-sided criticisms of aid that are trotted out repeatedly. For some background reading before the programme check out: the Chronic Poverty Report for Uganda, Joe Hanlon on corruption in Sierra Leone, a special issue of the Swedish Economic Policy Review on aid, and Roger Riddell Does Foreign Aid Really Work? – the best account by far of what aid can, and cannot, do.

So we shall see what Panorama concludes – especially, as Sorious Samura asks: how can Africans take control of their own destiny and graduate the continent away from aid dependence? Let us know what you think of the programme – and the big issues that it tackles.