eBusiness Weekly
Alfred M. Mthimkhulu
Some two years ago, Kofi Annan, the former Secretary General of the United Nations (1997 – 2006) passed away. He is one of few African state men who left comprehensive writings on his life in public service. One such is his memoir “Interventions: A Life in War and Peace” published in 2012.
In the late 1960s, Kofi Annan worked for the Economic Commission for Africa (ECA). It was a time of momentous change in Africa as more newly independent states joined the recently formed Organisation of African Unity. He writes how, at the ECA, they drew up economic plans for rapid integration through, among other things, trains that crisscrossed the continent. But he left for further studies joining the World Health Organisation thereafter. He stayed with the UN till 2006. There is restrained sadness in his voice as he ruminates on the state of Africa’s development half a century later. I will come back to that sadness.
On July 2, 2005 he called on the Archbishop of Canterbury Dr Rowan Williams in England. He was calling on the bishop for spiritual guidance but had a separate question for him. Was it possible to end poverty in the world given that Deuteronomy 15:11 says “there will always be poor people in the land”?
The bishop explained that the verse stemmed from the thinking that suffering was triggered by sin and since people always sin, the poor will always be on the land. But he went on to quote Deuteronomy 15:4 which says “there should be no poor person among you” thus advising his guest that society must strive to eliminate poverty. His guest was encouraged.
His guest second tenure as the head of the UN (2002 to 2006) was a time of great policy upheaval especially on international development. It was becoming clear that interventions by the World Bank were not improving people’s lives. The World Bank itself acknowledged this. In 2006, economist Dani Rodrik summed this failure aptly even in just the title of his paper: “Goodbye Washington Consensus, Hello Washington Confusion?” In that same year, another leading economist, Bill Easterly published the book ‘The white man’s burden: why the west’s efforts to aid the rest have done so much ill and so little good’. It is the same year that Muhammad Yunus received the Nobel Prize for Peace for his pioneering work in microfinance through the Grameen Bank in Bangladesh.
In the 1990s, international development policy had focused on governments, poverty was not topical. In the 2000s, the focus shifted to “we the people” explaining Kofi Annan’s book by the same title in 2014. In seeking to ensure that the UN served the people, especially the less privileged, Kofi Annan brought to the organisation former World Bank Chief Economist Jeffrey Sachs with a mandate to tackle poverty head-on. At the time, the overarching mission was to achieve the Millennium Development Goals signed in 2000 with poverty alleviation as a key theme.
Jeffrey Sachs had published his best selling book “End of Poverty” in 2005. In it, he lobbied for capital commitments from the developed world to the developing of US$195 billion per annum from 2005 to 2025 by which time, he postulated, poverty would be obliterated. But this drew some resentment as others (e.g. Dambisa Moyo in ‘Dead Aid’) argued that such capital flows would not work as it would cripple recipient countries’ own capacities to self-propel hence the rise of the “teach a man to fish” philosophy in most non-governmental development organisations as an alternative to aid.
Earlier in 2002, two Harvard University Professors C.K. Prahalad and Stuart Hart had published an article titled ‘The Fortune at the Bottom of the Pyramid’ in which they argued that the poor were not just a charity case but an untapped and very profitable market. So now we had a perspective that lobbied for massive capital flows to the poor, another that still argued for structural reforms and another that preached sustainability through hybrid organisations called social enterprises while others saw some money being made from serving the poor. All wanted to obliterate poverty. But “whom should we believe?” asked Abhijit Banerjee and Esther Duflo in their book “Poor Economics” in 2011, eight years before they received the Nobel Prize for Economics.
What is most worrying in the face of all these policy debates on international development policy and poverty is that extreme poverty is now a sub-Saharan Africa problem than a global one. In 2012 Kofi Annan seemed to downplay his disappointment in the performance of Africa since the late 1960s yet he makes it all so clear that Africa has not progressed as much as it could have. He thus comes up with a recommendation. It is not a novel recommendation but worth re-telling in full.
He lists different types of capital that are essential for broad-based social upliftment. These include human, physical, natural and social capital. He posits that people’s lives improve when these strands of capitals are accumulated. The process of capital accumulation “requires that the income of each household be of a sufficient size to leave enough left over for both household savings and contribution to the public budget through taxation. These then enable investment in human, physical, and natural capital that in turn sustain business and economic development. What then emerges is a virtuous cycle of capital accumulation, allowing economic growth, in turn strengthening opportunities for increases in household income, and so on.”
It sounds simple yet it is elusive which is perhaps why his sadness is hard to miss when he looks back to his days at the ECA. He writes: “It is one thing for young and idealistic professionals to identify obstacles to progress and the ways they can be addressed; it is quite another for leaders to see beyond their personal interests to marshal the resources of their society to the advancement of common good.” His déjà vu.
The target now is to eliminate extreme poverty by 2030 as per SDG 1. For Zimbabwe, the target is even more bold: to be a middle-income country by 2030. Could this be the last decade of extreme poverty?
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Twitter: @mthimz
