Criticism Of Un Eradicating Poverty Via Economic Growth Economics Essay

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In September 2000, the world leaders gathered at the United Nations Headquarters in New York to adopt the United Nations Millennium Declaration. The Declaration contained 8 Goals and 18 targets where more than 189 countries would commit to achieve by 2015. The idea was to create a global partnership where countries would take affirmative action to realize what are now know as the Millennium Development Goals (MDGs). The eight goals include combating HIV/AIDS and other deceases, promote gender equality and create a global partnership for development. The principal aim however is set in Goal 1 where it is proposed that by 2015 extreme poverty must be eradicated and this is where this study will be focused. The World Bank has provided its support through policies as well as the IMF together with numerous other non-governmental organisations (NGOs) and UN agencies. These goals have been described as revolutionary and the corner stone of human development however not everyone shares the same perspective.

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Much criticism has surrounded the strategies taken to achieve Goal 1. This is mainly because the central strategy set out by the UN to achieve the eradication of poverty is through economic growth and a constant increase of donations. [1] Although this could be a starting point, discussion is raised as to whether this would be appropriate, as countries in Africa are in great debt. Furthermore the fact MDG's have drifted away from a Human Rights Approach which was proposed in the Declaration puts Goal 1 at danger as transactions made in relation to financial aid, may not indeed benefit the poor. An assessment will be made on whether indeed Goal 1 is too heavily relied on financial aid, what solutions can be provided and whether a move toward a Human Rights Based approach will be more successful in achieving the eradication of poverty.

Preliminary Criticism of the Millennium Development Goal 1:

To begin with Goal 1 has been subject to the criticism that the results produced will be shockingly modest. Goal 1 specifically targets halve the 1.1 billion people living in extreme poverty (1$ US Dollar a day) from 1990 by 2015, however it is reported that 75 million more people in 2008 have been pushed into hunger meaning that there are now 923 million in extreme poverty today. [2] This illustrates that there was a failure to evaluate, when drafting the Declaration,that poverty may increase after 1990 thus widening the gap between those who can overcome poverty and those who will remain in it. In other words, even if poverty is halved by 2015, there will still be more than 450 million people living in extreme poverty. No plan has been made to help the other half so far.

It would appear here that the promise for eradication of poverty was easier made than done. Herfkens supports this however argues that despite all the complexities and criticism the MDG's are still the "best thing that has ever happened." [3] None the less this is not true for all the countries in fact Clemens et al reported that despite the argument that the MDG' will produce modest results , for Sub - Saharan Africa achieving MDG's results are "implausible" because they are extremely ambitious especially in relation to Goal 1. [4] They report that most countries in Africa who were top priority in the developing agenda will miss the Goals by margins, and in fact the only reason that any success story will be reported is because countries in South Asia who contain half of the world's population have already made progress in economic growth.

These preliminary criticisms unfortunately epitomise the outcome of the MDG's. This is mainly because if Goal 1 is not met, then the other goals will fail as well as all the goals are interconnected. Alas, if poverty is not solved how will hunger be solved, infant death be decreased or treatment and further education be afforded? The possible reasons for failure will be analysed following.

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Eradicating Poverty through Economic Growth:

What has been happening so far:

It is safe to assume that the main way the UN aims to achieve Goal 1 is through rapid economic growth. [5] This is also set in the Poverty Reduction Strategy Papers (PRSPs). In order to increase economic growth an increase in financial aid by donor countries is stressed. Basically this is done through donations from rich countries, and those donations are then channelled through the World Bank and UN Agencies. The reason behind accelerating donations is because more aid would be the only source of income for poor courtiers. [6] Donor countries pledged to reach a 0.7% of their GNP for official development assistance (ODA). [7] It is fair to mention here that donor pledges to achieve the MDG's are completely voluntary and there is no legal enforcement or penalty if these countries do not honour the promise.

None the less in 2009 the United States, the United Kingdom, Japan, France and Germany exceeded the United Nations official Development target of 0.7%. It has been reported by the Organisation for Economic Co-operation and Development (OECD) that the US was the largest donor providing 28.7 billion US Dollars representing a 5.4% increase from 2008. [8] Despite these injections of billions of dollars, still much more is needed. In fact it has been estimated that in 2015 Ghana alone will need an investment of 124 billion US dollars or the MDG's will not be achieved. [9] This illustrates how heavily dependent the Millennium Development Goals are on financial aid. The question however is whether these massive surges of money are actually helping in achieving Goal 1.

Financial aid to achieve Goal 1 has produced mixed results. For example in East and South Asia improvements have been dramatic and have been considered as a "role model" in for other countries to follow in their footsteps. [10] However, as predicted in Sub-Saharan Africa there is a rise in poverty despite all efforts and billions of dollars worth of financial aid. What will be explored are academic opinions on why financial aid policies are not the only solution for achieving G1 and further on what the alternatives action could be.

What is wrong with giving more aid?

Academics strongly argue against an increase in aid. A leading discussion is made by Verweij and Gyawali, where they argue that poor countries have remained destitute due to the lack of Government control. [11] They object to further aid as poor countries like Uganda have kleptocratic and corrupt Governments which means that economic growth is not feasible. This is a solid argument as financial aid will not be sustainable if the political situation is not resolved since poverty eradication policies to achieve Goal 1 must be adopted though domestic policies. It has been further highlighted that this is reflected through the fact that African countries, even before the MDGs were created, have received massive official donation assistance (ODA) over the past decades and even some complete overwriting of debts however they still did not manage to solve poverty. [12] It has been considered "naive" of the UN to believe that vast amounts of aid would solve Africa's problem as some of these countries are constantly in violent conflict thus aid turns into military arms. [13] In fact due to the overall governmental chaos poor people are abused. They cannot make investments so that they can overcome hunger or invest in infrastructure. In fact it has been stated that poor people are "caught in a vicious circle" as families living in sustenance cannot make savings. [14] This makes economic growth impossible.

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Furthermore as there is no functioning Government system in most countries in Africa it has been argued that more aid does not help as money cannot be transformed into capital as there are no property rights, honest judiciary or civil service. [15] Varweiji et al further argues that aid gets poured into unnecessary projects and even gives the government rights to take decisions without the consent of their citizens as development aid reduces the need to collect taxes. They give the example of Suriname and Zambia where it is argued that the most powerful from the poorest countries "lavish" in mansions built by taking money right out of the government budget. [16] This illustrated how aid and government money fall into the wrong hands and countries like Zambia have done little if nothing in achieving any economic growth despite financial aid.

As mentioned previously, UN agencies are given the donations and they redistribute them to the various countries accordingly. However much debate has risen as to whether UN agencies are the appropriate body to allocate the funds correctly for the achievement of Goal 1. Due to its bureaucracies and complex policies it has been argued to lead to almost a complete lack of action and the authors explain that after almost 50 years the UN has failed in addressing the most basic issues of corruption and governance in Africa. [17] Furthermore it has been suggested that the UN is failing because they have adopted a "one size fits all" policy in redistributing the donations. [18] This means that all countries get the same aid. The argument rests on the fact that if they are pressing for more aid, Africa should be at the top of the list thus new strategies should be adopted from more appropriate distribution of funds. Pressure on the UN should be given in order to make sure that ODA is used for the correct aims and not be used for short term political agendas and commercialisation. [19] 

What more can be done? Achieving the MDGs and beyond:

In this section what will be evaluated is whether there are other strategies in order to achieve the eradication of poverty. Although the proposed ideas could take effect today, given that there are only 5 years for the MDG's to be achieved most of these strategies are unlikely to be implemented on time. Nevertheless much discussion and public awareness has been raised relating to supplementary strategies to achieve these goals, and there is still hope that UN agencies will adopt them.

One of the most prominent discussions is to relieve countries from their debt and indeed many action plans have emerged in order to help countries in achieving the Goal 1. [20] In order to do so, the Heavily Indebted Poor Countries (HIPC) Initiative was launched in 1996 so that special schemes can be provided to qualified countries in order to relieve the debt. [21] It has been suggested that debt relief can raise economic growth and as a by product reduce poverty as private investments may be deterred thus making more resources available for growth. [22] Although this will require the governments, private creditors, IMF, the World Bank, and the African Development Fund (ADF) to cancel money which is owed to them, and usually those who criticise against more aid are also against debt relief, the Uganda situation begs to be acknowledged.

Uganda due to the HIPC initiative has managed to save up to 90 million US dollars a year. [23] This was achieved through Uganda's government initiating in adopting a Poverty Eradication Action Plan (PEAP) that were implanted through policy. However, it has been reported by the Ministry of Finance, Planning and Economic Development that this will not be sustainable. [24] One of the factors is that not all creditors were willing to provide debt relief, and this can be blamed on the fact that there is no obligation for them to do so despite the apparent dependence on it. [25] Thus much more is needed than just a promised, there needs to be legal international enforcement so that if a country qualifies, debt cancelling becomes mandatory if the eradication of poverty is ever to be achieved.

Furthermore excess money, either through debt cancellation or donations, are managed through policies and institutional settings domestically. Such policies should guide national strategies to eradicate poverty through a capital accumulation process which would effectively create a sustainable poverty reduction strategy rather than having short term ones as those criticised under PESP's. [26] However the UNDP has evaluated that there is no guarantee that any fixed policy would guarantee any positive results to all nations in need. [27] As such, UNDP could produce tailored policies to countries that should be considered a priority such as Ethiopia and Zambia. This way the there will be a move away from the current trend to only provide financial aid and inappropriate policies.

A positive move forward is the HIPC Debt Strategy and Analysis Capacity Building Programme which helps countries to remain out of debt and facilitates governments to implement national strategies in order to benefit to the maximum when money is saved from debt relief. [28] This type of involvement is vital in order to achieve all the MDGs as advice is given to countries on how to invest money properly for sustainable development.

As such PRSP's which is the main policy force for achieving goal 1, also aims to help low-income countries to set up national policies to help in economic growth. However it has been argued that PRSP's undermine the MDG's. The main criticism is that the indicators set in the PRSP's set "medium-term" targets that do not reflect the gravity of international sustainable development goals. [29] The PRSP'S guidance notes imply that targets should be feasible and consistent so that governments can remain focused on the appropriate use of their resources. [30] In fact PRSP's set more realistic targets and this should be considered by countries against the ambitious targets set by the MDG's. What has been suggested is that countries should be both ambitious and realistic when adapting policies to achieve the eradication of poverty so that long term objectives can be realised. [31] Thus the gaps created by RPSP's and those created by the MDG's can be balanced out through national policies for successful results.

As mentioned donor countries have no obligation to keep their promise to give aid to achieve the MDG's; donations are given on a voluntary basis. This leads to the constant need to triple and quadruple aid, simply because annually the promised amounts of aid are not given by everyone. If the UN is serious about solving the problem a mandatory duty should be invoked in order for there to be an obligatory fixed income from countries to be directly used to achieve the goals. This could be done through international law instruments.

The problem is however, that not all rich countries are equally wealthy. It has been suggested that a new system should be created that will form a compulsory obligation for wealthy countries to contribute a fixed amount every year according to their countries wealth. [32] This will help with the inconsistencies of donations that leave counties with an overflow on money one year, and a substantial lack of it the next. A compulsory obligation will lead to consistency of the flow of funds which is vital in order to create economic growth. This will subsequently create slow yet sustainable development that will lead to the eradication of poverty maybe not by 2015, but possibly further down the line.

Moreover a new system for distributing donations needs to be established. Many prototypes have emerged however if one would move away from a Human Rights Based approach the most appropriate would be the poverty-efficiency principle. This means that in order for aid to be more effective it should be given to countries that have the highest numbers of extreme poverty and who have governments that have effective policies that can use the aid to sufficiently help attain Goal 1. [33] Countries who do not fulfil these criteria should receive less aid. This way poverty reduction has a chance in succeeding as the focus will be on those countries that are actually able to achieve higher targets. This could be done in rotation with other countries so that when one country has overcome poverty, focus can be drawn to the next and then the next and so on and so forth. The importance of this strategy is that all counties in need will receive aid, just some countries more than others. Indeed this raises ethical and discriminatory issues however with five years to go, this is probably the best solution and it also provides a strategic framework for future plans to eradicate poverty.

As such the main way to achieve the Millennium Development Goals is by adopting a Human Rights Based Approach (HRBA). Despite Human Rights being specifically referred to in the Millennium Declaration, due to focus being shifted towards external financial aid and promoting economic growth, MDG's have drifted away from them. However by adopting a Human Rights approach human development can take a more ethical and sustainable turn. This will be discussed next.

Human Rights and the Millennium Development Goals:

Human rights contain characteristics that would help in achieving the MDG's. This is because human rights are universally absolute, apply to everyone, and create a legally binding obligation for their absolute realisation. Human Rights unlike MDG's are not represented through political commitments but rather through the unanimous acceptance by States to be bound by them and do whatever possible to achieve them. [34] As such MDG's echo Human Rights and it has been suggested that by harmonizing the two maximum results can be achieved. What will be discussed here is whether by adopting a Human Rights Approach, MDG's have a better chance to succeed as the strategies adopted so far have overall failed.

In order to achieve the MDG's certain human rights issued need to be addressed. It has been suggested that unless lack of accountability discrimination, powerlessness of the poor, that have been created by MDG's, economic growth and thus the eradication of poverty cannot be achieved. [35] This can only be realized by adopting a human rights approach as all these issues are human rights related. A Human Rights Based Approach aims to create a binding commitment based on equitable principles. However Human Rights are not always upheld by governments due to political implications, thus given the political commitment MDG's create, harmonizing the two would make human rights regain their full legal status that would help achieve Goal 1. [36] 

Four key elements have been created for the adoption a Human Rights Based approach into the MDG's. These have been generally accepted by all human rights organizations. Firstly, to align the goals and nationality defined priorities and human rights, create a transformational approach rather than technocratic, prioritize rights with policy choices and resource allocations, and finally to claim the MDGs.

Align the Goals and nationality defined priorities and human rights: [37] 

As mention MDG's are parallel to Human Rights. In fact Goal 1, to eradicate extreme poverty and hunger echoes Article 25(1) of the Universal Declaration of Human Rights. However further incorporation of human rights is needed so that targets can be achieved equitably and sustainably. In order to do so "adapting the targets" has been suggested. [38] 

This means that a national plan should be created in order illustrate to countries how Human Rights should be fulfilled in alignment with MDG's. This way, governments become more involved in achieving the Goals, and in fact it will encourage them to adopt additional human rights legislation that applies to their specific needs to sustain results as seen in Mongolia. [39] Additionally by doing so, countries will speed up the process of achieving the MDG's as they will use aid specifically where it is needed the most. Although this could work in countries like India, in Sub-Saharan Africa where acute corruption transpires it is questionable if governments who have disregarded their people's human rights for decades will apply this. This could also be solved through a Human Rights Approach.

Transformational not technocratic:

In order to overcome government corruption civil and political rights need to be reinforced. MDG's have not managed to adopt a system that will aim in empowering people. This can be done by adopting a "human rights approach to participation." [40] By doing so people will get back their basic rights to vote and express themselves which will subsequently lead to human development. The empowerment of people is essential for human development. This is one of the main reasons MDG's are not working as they do not provide a broad based national ownership but rather try to use prototype like poverty reduction strategy papers that may not apply to the development of all types of people in need. [41] 

With a government that has been elected by the people it will be less likely to be kleptocratic. A human rights approach will create a strong democratic system which will increase the capacity of both the people and the government to help in the eradication of poverty. [42] This means that any aid given will be responsibly used to promote sustainable economic growth and thus achieve the Millennium Development Goals.

Prioritize Human Rights in Policy Choices and Resource Allocation

A Human Rights Based Approach is not designed to mechanically impose policy choices or accurate allocation of resources but rather to create a framework where policy "choices" can be measured and further developed to achieve the MDG's. [43] 

Policies should reflect the realization of Human Rights. This means that all MDG's policies should be examined in order to identify if they are indeed pro-poor and human rights associated. [44] When using financial aid to try to achieve Goal 1, it must be examined whether by doing so, Human Rights remain intact. For example in order to eradicate poverty economic growth is promoted but in doing so money is spent on building a dam rather than providing adequate housing and in fact an MDG approach would measure this as achieving the target. [45] A Human Rights approach aims in prioritizing where aid is spent in order to achieve sustainable results.

Claim the MDG's

As mentioned one of the main problems with the MDG's is that there is no accountability. A HRBA aims to strengthen accountability mechanisms by ensuring that national laws implement international human rights treaty laws. [46] Accountability would also mean that countries could have a duty to maintain human rights beyond their domestic jurisdiction. [47] This would mean that donor countries will be held accountable by international instruments if they do not fulfil their duties to uphold their promise for human development. [48] If this is achieved it would be huge step towards realising the MDG's within the time frame as aid will come at a consistent manner and be use in light of Human Rights rather than commercialization. Furthermore it has been suggested that by creating an accountability mechanism, it would also create an incentive for donors to maintain their duties as boarder alliances may be created. [49] 

Overall a human rights approach is vital in achieving the MDG's. It has been argued that a HRBA may hold back efficient measures in the name of protecting human rights from being violated, [50] but the literature highlights that human rights are essential in helping the eradication of poverty in countries such of those in Africa. This is mainly because it will provide legal obligations both on the country receiving aid, and on the country providing it, with the main objective being human rights rather than temporary solutions that benefit few.

Recent Development:

Despite having the MDG's being at the top of the international agenda recent news from the UNDP home page highlight that MDGs are at risk of being put on hold. This is because of the emerging increase of armed violence. [51] In fact the UNDP reports that new policies need to be made in order to address this problem as it will have a "devastating effect" on the realization of the goals. [52] It is fair to stipulate that had the HRBA been used from the start, less money would have gone to arms. This proves that a HRBA is needed so that politics and law can be combined and people can regain power to help eradicate corrupt and violent Governments.

Conclusive Remarks:

Overall the Millennium Developments Goals target to eradicate poverty by 2015 seems doomed to fail. This is because with only five years to go, no efficient and clear method to achieve these goals has been created. There seems to be an unwillingness of States to accept any legal obligation to fulfil their promise and this can be illustrated by the fact that the Declaration has been pulled away from a human rights approach. However this can be justified by the fact that so much money has been given to help countries but still no dramatic positive results have been realised. In fact the only country that has provided results in South Asia who in fact has managed achieve economic grows despite it receiving limited aid. None the less it is fair to notice that most of the words poor are in South Asia [53] which highlights that although economic growth can be achieved it does not necessarily mean that it will go hand in hand with the eradication of poverty. It is undoubtedly true that aid is needed to achieve the eradication of poverty however without proper policies as those suggested by Human Rights agencies, the money is ill managed. Unless the UN creates a system tailored to each individual country in need no results will ever be achieved. Indeed this seems far fetch but drastic measures are needed if poverty is ever to be eradicated. Moreover the political issues that surround certain countries cripple any development thus focus should be drawn by international instruments in solving them. Thus if functioning governments emerge, and tailored policies are adopted provided that States will become legally bound through a HRBA in providing a certain tailored amount of aid each year, even within the remaining 5 years, results can be extremely satisfying. This is however easier said than done, yet with the proper dedication and co-operation between States, legal and political instruments eradication of poverty may not be solved in 5 years, but it will be given a fighting chance to be achieved and most importantly sustained in the long run.