Sunday, November 28, 2004

The poor will always be with us (but there might not be as many of 'em)

(Hat tip: Pejmanesque) David Brooks writes in the New York Times:

I hate to be the bearer of good news, because only pessimists are regarded as intellectually serious, but we're in the 11th month of the most prosperous year in human history. Last week, the World Bank released a report showing that global growth "accelerated sharply" this year to a rate of about 4 percent.

Best of all, the poorer nations are leading the way. Some rich countries, like the U.S. and Japan, are doing well, but the developing world is leading this economic surge. Developing countries are seeing their economies expand by 6.1 percent this year - an unprecedented rate - and, even if you take China, India and Russia out of the equation, developing world growth is still around 5 percent. As even the cautious folks at the World Bank note, all developing regions are growing faster this decade than they did in the 1980's and 90's.

This is having a wonderful effect on world poverty, because when regions grow, that growth is shared up and down the income ladder. In its report, the World Bank notes that economic growth is producing a "spectacular" decline in poverty in East and South Asia. In 1990, there were roughly 472 million people in the East Asia and Pacific region living on less than $1 a day. By 2001, there were 271 million living in extreme poverty, and by 2015, at current projections, there will only be 19 million people living under those conditions.

Brooks notes that this is due largely to the removal of trade barriers which brings those evil multinational corporations into poorer third-world countries. Do those who complain about free trade and "outsourcing" jobs overseas recognize the benefits of this to the world's poor? This line from Brooks is sure to give my lefty pals conniptions:

Write this on your forehead: Free trade reduces world suffering.

Brooks does note some trouble spots and points out where we must concentrate globalization efforts in the future:

Of course, all the news is not good. Plagued by bad governments and AIDS, sub-Saharan Africa has not joined in the benefits of globalization. Big budget deficits in the U.S. and elsewhere threaten stable growth. High oil prices are a problem. Trade produces losers as well as winners, especially among less-skilled workers in the developed world.

But especially around Thanksgiving, it's worth appreciating some of the things that have gone right, and not just sweeping reports like the one from the World Bank under the rug.

It's worth reminding ourselves that the key task ahead is spreading the benefits of globalization to Africa and the Middle East. It's worth noting this perhaps not too surprising phenomenon: As free trade improves the lives of people in poor countries, it is viewed with suspicion by more people in rich countries.

Just once, I'd like to see someone like Bono or Bruce Springsteen stand up at a concert and speak the truth to his fan base: that the world is complicated and there are no free lunches. But if you really want to reduce world poverty, you should be cheering on those guys in pinstripe suits at the free-trade negotiations and those investors jetting around the world. Thanks, in part, to them, we are making progress against poverty. Thanks, in part, to them, more people around the world have something to be thankful for.

Now I'm no economist, but it seems to me that the efforts of globalization and free trade can be further promoted by creating a stable democracy in Iraq. Could it be that the agitating of anti-war protestors and the protestors at World Bank meetings actually works to keep the world's poor stuck in the cycle of poverty?


At 9:51 AM, Anonymous Anonymous said...

David Brooks hasn't been paying much attention if he thinks Bono really believes there's a free-lunch solution to these problems. After working with economist Paul O'Neill, Presidents Clinton and Bush, and other leaders from around the world, Bono knows it's more complicated than that, and he's said so publicly many times.

-- John


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