Causes of Global Poverty

17/12/2014 17:38

Many cases can be made for the root cause of global poverty, among which are war, debt, trade imbalances, skewed distribution of resources, natural disasters, colonialism, imposed monopoly over strategic resources,  and the infamous slave trade which started in the sixteenth century. In this blog, I will focus on four factors that I believe to be responsible for poverty.

War and Global Poverty

The first and most obvious culprit responsible for global poverty is war. One can point to any war in history and find that with the succession of every war, there is great devastation. Not only are social and public infrastructure like buildings, schools and hospitals usually destroyed, there is obvious loss of lives – able bodied men and women – who would otherwise contribute to the growth of the economy, are often inevitably lost during the war. The results therefore, are always catastrophic. The Second World War for example, greatly devastated many nations around the world, including some of the victorious powers of that war like Britain and France. Germany, which wasn’t victorious in the war, is one of the nations whose economy, industry and infrastructure were completely destroyed, needing extensive reconstruction after the war. Because most of the basic infrastructure was destroyed, and many lives were lost, poverty was inevitable.

Most African nations are still plagued with absolute poverty both in rural and urban areas because of civil conflicts and revolutions. The Democratic Republic of Congo (DRC) for example, which has been fighting one civil war after another since the end of President Mobutu Sese Seko’s reign in 1996, ranks among one of the poorest nations in the world. The irony is that DRC is naturally endowed with many resources and minerals like diamonds, gold and copper.  It remains one of the poorest nations on earth, largely because of the endless civil conflicts in this nation, and also in part, due to the ridiculous debt burden this nation carries. Somalia, another nation in sub-Saharan Africa hosts one of the largest numbers of people living in absolute poverty, and this can be attributed to civil conflict and other contributing factors like terrorism.

 

Natural Disasters

Natural disasters have also contributed to the global poverty index. The 2010 earthquake in Haiti greatly devastated a nation that was already struggling economically. This catastrophe claimed the lives of over 230,000 Haitians and destroyed the homes of at least 279,000^[1], leaving many people homeless, and those who were already struggling to get by, were left even worse off. Most of the infrastructure in the nation’s capital of Port-au-Prince was also destroyed during this earthquake. Even with humanitarian aid efforts, the situation in Haiti is still worrying because so many people in this nation are still living in absolute poverty, many people do not have access to basic necessities like food, water, education or health care, a deficit which will inevitably result in more deaths. 

Furthermore, the 2004 tsunami which affected many countries especially in South Asia resulted in the deaths of at least 227,898 people and left over 1.7 million people displaced.[2] This historic catastrophe spiralled what was an already desperate state of affairs in Indonesia, India and Thailand where a considerable number of people were already living in poverty. The displacement of people from their homes, loss of infrastructure, created an immediate need for basic needs like shelter, food and health care.

The international response to most natural disasters is usually admirable, as it should be, because it is our moral imperative as human beings to respond to the immediate and devastating misfortunes of others. Over 14 billion was raised by the Global North to help the nations directly affected by the 2004 tsunami.[3] Equally, the response to the Haiti earthquake of 2010 was impressive, over 7 million was raised by the American Red Cross through text messaging donations, and at least 770 million Canadian dollars was pledged by the Canadian government through humanitarian aid, and matching the donations of private donations made by generous Canadians.[4]

While humanitarian aid is not a long term solution to poverty and only seeks to address the basic needs of those affected immediately following the disaster, it is amazing that even though big sums of money are raised in response to disasters, the funds never seem to be enough to alleviate poverty, even by small margins. After the immediate response wears off, and the dollars stop pouring in, the number of people still living in abject poverty is appalling.

 

What Does Colonialism Have To Do With Global Poverty?

Global poverty in poor nations has also been attributed to the evils of colonialism. Many of the nations that were colonized by super powers are still faced with poverty today. Colonization, which happened in three different waves on the African continent, saw to the external domination and rule of African nations, India, and Bolivia among others by western nations, namely; Britain, France, Portugal, Spain, Belgium, Italy, Holland, America and Russia. The colonialists went into the developing world, acquired land, took over their economies, and exploited all natural resources for their benefit. All the resources and money from the colonies was ferried back into the Global North, and these resources were used to develop the Global North instead of retaining them in the Global South. 

This unsurprisingly depleted the resources that would have otherwise been used to develop the Global South into nations that can compete favourably on the market economy. While some might argue that the past has very little significance to the present, and thus colonialism couldn’t possibly have contributed to the plight of the nations that were colonized by western powers, this couldn’t be far from the truth.

Colonialism has contributed to a slow and calculated road to poverty. Almost every nation that was colonized by a western power still lives in abject poverty. While the present levels of poverty in these nations might be attributed to many other factors, the contribution of colonization to poverty cannot be ignored. It is no surprise that the colonial powers ended up rich, while the acquired nations and states both in Africa, India and Bolivia all ended up poor, because colonial powers benefited from the rich natural resources like gold, diamonds, oil that they extracted from the nations that they acquired. 

Additionally, the land that could have been used to grow produce for sale in the local markets was also forcefully acquired by colonial masters, further stifling any efforts by the locals to actively contribute to their own economies. Signs of dependency on their masters started even during the colonial era as former agricultural farmers became tenants on their own land.^[5] The challenges of colonialism are still apparent today. Developing nations, especially former colonies, have become a hub for raw materials which are exported abroad for processing and marketing by western nations. These materials are then imported back into developing nations as finished products, and sold to these nations at high prices. It is no wonder a nation like Germany happens to be one of largest exporters of coffee, even though it doesn’t actually grow any coffee.[6] As poor nations continue to export their raw materials, a culture of dependency on the western world remains.

Since the colonial era, some of the locals in many of these nations still don’t have access to land as it’s owned by previous land owners and trans-national corporations. This is true in nations like Kenya, where vast acres of land still belong to western owners, and ownership hasn’t transferred into the hands of the Kenyan people. Even though many of these nations have now gained independence from their previous colonial masters, independence didn’t bring economic freedom.  

When the nations of the Global South won their independence, the debt of their colonial masters, which was accumulated through the development of open markets abroad was transferred to these new states, a move which was in total violation of international laws. The only solution to this debacle as proposed by the Global North, was that these nations needed to get more loans (at high interest rates) in order to repay their initial debt. These nations therefore lost their sovereignty right at the very start of their independence, and became dependent on the Global North for survival.

 

Is There a Correlation Between Slavery and Global Poverty?

Some schools of thought have often argued for slave trade as a contributing factor to the current state of underdevelopment in African states. Slave trade which started in the 16^th century saw to the illegal and brutal removal of able bodied men and women from their homes in Africa to come work in the mines and farms of their slave masters back in the western world. The moral implications and human violation of rights of these people, whose lives were traded as common cattle on the market, is apparent but along with such inhumane cruelty is the fact that the able bodied people who would have otherwise contributed to the economic growth in these African nations were exported as goods to foreign nations to foster capitalism[7]. 

Research indicates that indeed slave trade has significantly contributed to the quandary of poverty in the nations from which slaves were taken the most. One can make the argument for the case that these nations would be in a far better place if it weren’t for slave trade and colonialism. Each slave trade saw to the extraction of potential income from a continent that is now largely dependent on the western world for aid and loans as a means of economic survival. 

Slave trade therefore paved the way for colonialism in some ways and colonialism saw to the depletion of resources from colonized nations in two ways; taking the best of all the natural resources and goods produced in colonized states, and acquiring ownership of human labor and transporting said labor back to their homeland. 

The goal of colonialism was clear and well calculated – strip nations that are politically weak and impressionable of all resources that could help western powers reconstruct and develop their own economies. In return, these acquired states were promised favors and goods from abroad, goods which were in no way comparable to all the natural resources and human labor that was being ferried out. The African leaders at the time were either too short sighted or deceived by words of the colonialists into giving in to colonial rule. The acquisition of slaves also instigated violence among the people which led to the loss of more lives and further propelled nations in worse off conditions. Even after the abolition of slave trade, the legacy of slavery still lives on, and its impact remains. Recent research suggests that without slave trade, 72% of Africa’s income gap with the rest of the world would not exist today^[8]. Perhaps these two historical evils explain why some colonial powers continue to invest, send aid and give loans to the developing nations that they once ruled.