Ending Poverty, UN-style

The Diplomad has a post calling attention to a new UN document, spanning some 3,000 pages, which purports to hold the key to ending world poverty. While a noble goal, which should be advanced by all peoples, it is worth noting that many have tried and failed to reduce poverty. The UN's proposal seems to be no more likely to succeed; judging by their "10 key recommendations," the bulk of the proposal is for developed nations to greatly increase their "official development assistance (ODA)," in other words pour more money down the sinkhole. I would be far more supportive of foreign aid if it were more effective; charity is an obligation on all peoples, provided that it actually improves the situation. Unfortunately, most foreign aid to the Third World goes directly into the pockets of the local Presidents for Life, with a little off the top for the various middlemen (read: United Nations bureaucrats).

To the report's credit, it does advocate the reduction of trade barriers via the Doha round of negotiations. Trade barriers have their place in statecraft, but are less and less justified as the state becomes more affluent. Furthermore, the critical infrastructure needed in the poor countries will only be built if a great deal of investment comes flowing in, not through the hands of government officials. And private companies will only put down infrastructure in a country if they can sell their goods, there or elsewhere.

Unfortunately, a lot of the language in the report seems to revolve around coordination, agencies, programs, strategies, central plans, et cetera, et cetera. Once again, the UN is missing the point. Central plans were the great contribution of the Soviet Union, and look what happened to them. A much better basis for a sustained growth in wealth would be the cumulative actions of individuals acting to better themselves, with taken in total would produce staggering changes.

In this regard, I am a fan of microlending as a way of giving local entreprenuers the capital they need. The classic example is for a poor family to get a small loan to buy livestock, and repay the loans over time with proceeds from the milk or offspring. Loans to individuals also force a level of fiscal discipline which is noticeably absent in recipients of aid payments.

More importantly, microfinance is built on individual initiative, industry, personal choice and the growth of commerce. These all promote moral virtues and responsibility, as opposed to simple aid grants which promote a mentality of dependency and sloth. Of course, one could argue that dependency and sloth are exactly what the governments of the world want in their citizens...