What are We Fighting? Post 7.

Posted on April 20, 2010 by elcaworldhunger

This is the seventh and final post in a series considering the root causes of hunger. The Millennium Development Goals serve as a helpful framework.

Millennium Development Goal 8: Develop a Global Partnership for Development

Because everyone lives on a single planet and participates in a global economy, poor countries and hungry people can’t solve their problems alone, and shouldn’t have to. There are too many ways the problems and solutions are connected to – and in some cases caused by – the rest of the world. Much of Goal 8 has to do with issues of  debt, trade, and aid, and all countries have a role in implementing changes that will give developing countries a better chance at success. Honestly, I’m feeling like I should have an advanced degree in economics to do this topic justice. Since I don’t, I’ll treat it briefly, point to other sources of information, and welcome your comments!

Debt

The debt crisis facing many developing countries is severe. Governments owe billions of dollars of debt to developed countries, and they have no way of paying it. With widespread poverty and insufficient economic output, some indebted governments do not generate even the funds to pay the interest (which is substantial). With so much of their limited money going to developed countries in debt payment, developing countries have little left over for infrastructure like roads and sanitation, or economic development policies like job creation plans and education. That such large amounts of money were loaned in the first place is the fault of both borrowers and lenders, and sometimes go back decades to corrupt regimes that no longer exist. The situation today is that many countries are facing debilitating debt that they have no way of paying and which ensures their continued national poverty. The solution includes working with developed nations on policies of debt relief and cancellation.  Jubilee is an organization doing lots of work on this front, and I recommend checking out their website if you’re interested in learning more.

Trade

Trade is another area where global partnerships between developed and developing nations is needed. Exporting goods is one way developing nations can generate more income. However, there are many barriers to their doing so successfully. First, many developed countries protect their own markets and citizens through tariffs and subsidies. Tariffs on imports increase the purchase cost of foreign goods and therefore make them less desirable than cheaper, domestic goods. The result for the developing country is that, while their production costs may be the same or less, few people in developed nations will buy their products because the final price is higher than competing products. Subsidies are another trade barrier, and agricultural subsidies are especially problematic. American farmers receive government payments for some crops, which encourages them to overproduce.  With lots of, say, wheat available, the price drops. Since American farmers get paid more than the market price through subsidies, low wheat prices aren’t much of a problem for them. But low prices and lots of wheat mean that others in the world who are growing wheat without payments from their governments can’t compete with our low prices. Not only can they not sell it to other countries, they may not even be able to see it in their own. In this example, individuals certainly won’t make a living as wheat farmers, and the country won’t make money as a wheat exporter.

So, some would say, don’t grow wheat. Make and export something else the world needs. That can work, but for a country to move into new or different industries, they need things like investment money, skilled employees, marketing knowledge, and infrastructure. If the country is already poor (and spending much of their GDP in interest on their debt), funding this type development isn’t realistic. Providing assistance for trade development and reducing trade barriers are ways wealthy countries concerned about poverty can and should help developing  countries gain entry into the global economy. Developing countries, in turn, have a role in creating governmental structures and financial policies that encourage and sustain investment and assistance.

The issues surrounding global trade and its effects on developing nations are complex. A few starting places for more information include the One Campaign website’s overview of “the issues,” Bread for the World Institute’s 2009 Hunger Report titled, “Global Development: Charting a New Course, and Paul Collier’s book titled, The Bottom Billion.

Aid

Obviously, the partnership of wealthy countries is required to funnel enough aid money to developing nations to make a difference with things like economic development. But Goal 8 goes beyond sending money. It considers other assets of the developed world and how to more equally distribute them. Of particular interest is developed countries’ possession of technology, especially in the area of computers, and pharmaceuticals. As the developed world continues to advance in these areas, its people live longer and become more sophisticated, educated, and competitive in global markets. Meanwhile, the developing world continues to suffer with preventable and treatable diseases, and lacks the benefits that mobile phone, computers, the Internet, and other technology provides. To end poverty and hunger, the partnership of developed nations must incorporate these less traditional forms of aid.

More information about pharmaceutical assistance, telecommunications, and actually all of Goal 8 – as well as the other MDGs – is available at this UN website.

Conclusion

I started this series of posts by saying that the reasons world hunger exists are complex and interrelated. While that’s very true, the upside is that it also means there are many points of entry and leverage in making a difference. ELCA World Hunger is committed to taking a comprehensive view of the problem of world hunger and tackling it from many directions, including relief, development, education, and advocacy. We hope you’ll join our efforts. To make a donation and/or learn more about how to get involved with ELCA World Hunger, please visit our website at www.elca.org/hunger.

-Nancy Michaelis

Share