The inequality debate, the idea of ’trickle-down’ – that the poor can be made less poor if the rich become richer, as this will increase demand for goods produced by the poor – is argued by the author to have failed at the global level, just as it failed at the country level. The current model of globalization is creating a global economy which systematically excludes most of the global poor. The author raises that to accelerate progress in reducing poverty after 2015 – and especially to have some hope of eradicating poverty in a meaningful sense in a period of decades rather than centuries – this needs to change. We need to shift from a model premised on the unrealistic assumption that the economic benefits of growth will automatically trickle down to the poor to one where the considerable economic benefits of poverty reduction and eradication will bubble up to the rest of the economy. This means focusing economic policy on poverty reduction, not growth, particularly in rural areas, where poverty is greatest. The author suggests options for doing this, in public works, cash transfers, income generation, rural electrification and public health and educational services. In most countries, this would require substantial improvements in tax systems, and an increase in tax collection capacity, which would itself be costly.
Health equity in economic and trade policies
The UN Food and Agriculture Organization (FAO) has launched a multi million dollar fund for import-dependent poor countries to help adapt their farming industries quickly to cope with galloping global food prices. Concern is mounting at the FAO that poor countries’ food needs will not be met by outside production this year as prices for basic commodities such as wheat are rising and supply is limited, FAO director general Jacques Diouf said in the Burkina Faso capital Ouagadougou on 12 January.
Intellectual property rights issues on the table in the newly invigorated World Trade Organization negotiations are at risk if remaining deep differences cannot be further narrowed in the coming weeks, WTO Director General Pascal Lamy said. A significant majority of WTO members support either the proposed TRIPS amendment, or the Geographic Indications extension, and the negotiations on each have been linked by proponents in the consultations. But a smaller number of members do not agree to negotiate on the CBD amendment or GI extension, though they do not exclude further discussion, according to Lamy.
India has one of the best patent laws in the world that still gives some space to its producers to make generic drugs. But international health organisations such as UNAIDS, UNITAID and Medicins Sans Frontieres have raised serious concerns that recent trends may threaten India’s role as the chief supplier of affordable medicines to Africa and other developing countries. The old policy space has been eroded because many new drugs since 2005 have been patented by multinational companies which are selling them at exorbitant prices. Indian companies can no longer make their own generic versions of these new medicines unless they successfully apply to the government for compulsory licences, and that is quite cumbersome; or unless they obtain a licence from the patent-owning multinational, and that usually comes with stringent conditions, especially for export. Another worry is that India is negotiating a free trade agreement with the European Union. Such agreements usually contain provisions such as data exclusivity and extension of the patent term, which prevents or hinders generic production. Finally, six Indian companies have recently been bought up by large foreign firms. If this trend continues, the Indian drug market may be dominated by multinationals again. It is uncertain whether they will continue to supply the developing world with cheap generic medicines when this may be in conflict with their own branded products.
According to the CIDSE, a coalition of Catholic welfare organisations in the North, the much-anticipated G20 London Summit has ended in an anti-climax. CIDSE’s presents four main criticisms of the G20 outcomes. First, the International Monetary Fund (IMF) will continue to regulate global finance and has been given a US$500 billion boost to continue to be the guardian of the global financial system, a role it has failed at so far. Although the G20 outcome acknowledges the need to reform global financial institutions, to take steps (unspecified though they be) to make these institutions more accountable and credible and to appoint the heads and senior management on merit through open and transparent process, CIDSE argues this is unlikely to have much impact on low-income countries. Second, tax havens will continue to flourish so long as they sign bilateral agreements that have proven not to be effective. The black-listing measures that the G20 has announced will do little to return the millions of euros that have been illegally taken out of developing countries and deposited in secret European bank accounts. Third, the announced US$50 billion in aid for low-income countries is little more than a repackaging of existing resources, as many countries in the European Union – the largest external funder in the world – are set to default on their aid commitments, having not yet made concrete allocations to their development budgets. The G20 communiqué is also vague regarding the modalities and the timeline for the disbursement of these funds. Fourth, a balanced and development-friendly system for international monetary stability remains elusive. The call by China to review the current monetary system based on a single reserve currency is not reflected in the communiqué. The adverse impacts of currency exchange rate instability on developing countries’ terms of trade also remain unaddressed, while the recommendation of the Expert Commission of the United Nations General Assembly President to adopt a new Global Reserve System does not appear on the agenda of the G20.
It caught observers and analysts by surprise. The Pittsburgh G20 summit witnessed the death-knell of the G8 as the sole arbiter of global economic policy and the transference of power to the G20 grouping. Officially this will take place at the G20 summit at the end of 2010 in South Korea, as Canada – in perhaps an unwelcome reminder of parochial G8 decision-making –is keen to keep ‘its’ G8 event as relevant as possible. The author argues that the G8, after much debate over its futility as a global decision-making body, is consigned as a forum to consider security matters. But the G20 counts just one African nation as a member. Although developing countries such as India, Brazil and South Africa have more authority to speak on behalf of poorer nations, the voices of low-income countries themselves were not included or seemingly solicited. ‘One of the most important successes of Pittsburgh is that that the G20 is the most qualified forum to deal with global issues,’ African Development Bank president Donald Kaberuka said, speaking on the periphery of a conference. ‘(However) (t)he way it is now structured...the low-income countries' priorities are still an appendix, a footnote.’
This year people in bars and at football matches were asking about the Group of 8 (G8) nations summit in Gleneagles, Scotland. Such unprecedented popular interest was prompted by Bob Geldof's Live 8 concerts and the Make Poverty History campaign. These initiatives were organised to raise awareness about African poverty and to pressure politicians into tackling the preventable global burden of disease afflicting billions of people living in low-income settings. When asked if his lobbying had paid off, Geldof said, “A great justice has been done”. He should have said “No”. (requires registration)
In mid July 2006 Group of Eight leaders called for more AIDS funding to improve monitoring and to give more people access to treatment. However, Eric Friedman, policy adviser for Physicians for Human Rights, raised practical concerns, including the need to double the existing number of health care workers to improve the AIDS situation worldwide. The G8 agreement calls for "building the capacity of health care systems in poor countries through recruitment, training and deployment of public and private health workers," but Friedman said the statement does not say how those goals will be achieved.
In advance of the anniversary of the G8 summit in Gleneagles (6-8 July), the Institute for Public Policy Research (IPPR) is urging G8 countries to rethink their development strategies for Africa in the light of China's growing role. David Mepham, head of ippr's International Programme, said: "...Managed well, China's economic presence could bring real benefits to Africa, with cheaper goods for African consumers and new sources of investment and aid. But managed badly, China's role in Africa could be damaging for development and worsen standards of governance and human rights.
When the leaders of the world's largest industrial nations meet in Scotland, they will debate how to address the HIV/Aids crisis and whether to significantly increase assistance to Africa. But for the summit to have a real impact on the Aids pandemic, the G8 will have to do more than increase funding; they will have to address the economic and social realities that make women and girls a special, high-risk group. Evidence from Africa shows the importance and cost-effectiveness of this strategy.