Vinoth Ramachandra

The Poverty Business

Posted on: January 15, 2010

Karin’s article on “The Fourth Cup of Tea” provoked some criticism, but not as much as we had expected. But let us move on from charitable actions by individuals to the more important issue of structural injustices.

The poor don’t really need us. Unless, of course, they are utterly destitute, severely sick or disabled, or the victims of war and natural disasters. What they need is not our charity, but a recognition by us of their rights. They want us to remove the barriers that we (the rich) have erected, locally and globally, that prevent them from participating in their own sustainable development. On the global level, this would mean such things as removing the massive subsidies given by rich nations to their agribusinesses, ending the discriminatory practices of taxes (tariffs) on imports from poor nations, access to the life-saving pharmaceuticals stolen from their forests, and a stop to the destruction of their water-sources, soil, wetlands and atmosphere by the luxury greenhouse emissions of the well-to-do.

Americans are among the most generous and kindhearted people I know. But it is difficult for them to accept that their lifestyles are actually subsidized by the world’s poor. It is why books such as Mortensen’s are “inspiring” to conservatives, but a Chomsky or a Pilger instantly demonized (if they are read at all).

Despite all the rhetoric about “market efficiency” and “foreign aid”, the net financial flows in the world economy every year are not from the rich to the poor but from the poor to the rich. Debt repayments, tariffs on exports and falling prices of agricultural goods caused by rich nations’ farm subsidies mean that the low-income nations transfer to the rich nations around $50-60 billion a year more than what they receive in so-called aid. We need to add to this figure the cost to the poor of the export to rich nations of engineers, scientists, doctors and accountants, most of whom have been trained in state institutions at local taxpayers’ expense (and they are actively recruited by rich governments and corporations). But to obtain a more accurate figure, one should also include the fortunes of Southern politicians and businessmen that are exported to banks in Europe and North America, and the profits of multinational corporations which are sent back to their parent base in the North.

Moreover, corruption in poor nations would not be possible without the tacit support, and often active involvement, of rich corporations, banks and governments in the North. For every bribe taken, there is a bribe offered. These bribes are stored, not in local banks, but in the banking system owned and controlled by the rich nations (including, in recent years, Dubai and Singapore). And what about the status of offshore tax havens (most of which are the playgrounds of super-rich American and European tourists)? These are major means of tax evasion and money laundering, and are homes to vast pools of speculative capital that destabilize poor economies. Billions of dollars, enough to pay for the entire primary health and education needs of the world’s developing countries, are being siphoned off through offshore companies and tax havens.

I asked an African friend of mine who once worked with a UN agency in Sri Lanka, “Have any of your colleagues chosen to work in the UN because they care about the poor in Sri Lanka?” He looked at me as if I had come from another planet: “Of course not”, he said, “it is a good career move to spend a few years in a place like Sri Lanka.” Now I am sure that there are many who are motivated by genuine compassion to work among war victims, abused women or the economic poor. But it is easy to become cynical of the “development game” (yet another high-priced “foreign consultant” being flown in for yet another seminar on poverty held in a luxury hotel; yet another “think-tank” or “policy institute” on poverty alleviation or conflict-resolution; yet another doctoral thesis or paper on these topics because the funds are readily available, but none of the results of the research ever circulate down to help the people who were interviewed, measured, or categorized and on whose hospitality the researcher depended). Poverty, almost as much as War, has become big business. So it is easy to be cynical when those who suffer are so often exploited, when they become stepping-stones to academic honour or personal fortune.

More than 200 years ago Adam Smith and William Pitt recommended that the American colonies concentrate on agricultural goods and leave manufactures to Europe which had a “comparative advantage” in that area. Americans are very fortunate in that their first Treasury Secretary, Alexander Hamilton, persuaded Congress in 1791 not to heed the economic wisdom of the day. Perhaps we should do the same for the poor of the world- suggest that they would do well to turn their backs on the high-priced “experts/consultants” from the IMF and World Bank or UNDP and even the “development NGO workers” who flock to them in their SUVs, and instead learn to trust more in their own abilities and pragmatic knowledge.

8 Responses to "The Poverty Business"

Moreover, corruption in poor nations would not be possible without the tacit support, and often active involvement, of rich corporations, banks and governments in the North.

You’re kidding, right? Not be possible???????????? Wow.

[…] The rest of his essay on how, outside of disasters like the one in Haiti, the “poor do not need us”, is as usual, unmissable. […]


y dun try googling indian black money swiss bank.

Your assertion that the constant flow of wealth from the economically poor to the economically rich continues unabated is spot on. It has always been so. I think it was Nyerere, former President of Tanzania, who once said something along the lines of “just as water flows from the driest regions of the world into the sea, so wealth flows from the poorest countries to the richest.” I would be very interested to see what you have to say regarding what can be done to challenge and change this, and what role ordinary people can play to bring about such change.

Christian donor agencies would do good to reflect how much they are in the poverty business and perpetuate injustice. I have heard of Christian agencies which, for exactly the same work, pay their workers at ‘local’ and ‘foreign’ rates!

Sheer ignorance about these things is the biggest hurdle we face. This is why churches and NGOs need to spend more time in education and communication than in raising funds for “development projects”. The poor also need to be encouraged to stand up and claim their rights- not grovel before the rich. I know economists who talk about “wasted aid” in Africa without any awareness of how the amounts given are trivial in comparison with what the West has taken out of Africa. (In any case, the issue is not about aid, as I point out in the post, but the way the global economy is rigged to favour the already rich).

The same ignorance about the facts of life is encountered in local Third World situations: middle-class people in Sri Lanka, for example, are shocked when reminded that a high proportion of the foreign exchange they use has been earned by the hard labour of poor women in tea plantations, garment factories and as house maids in south-east Asian countries.

Perhaps the moral outrage over bank bonuses and corporate bail-outs is finally forcing some people in rich nations to realize how much the wealthy feed off the rest of us….

I couldn’t agree with you more.

Dear Vinoth,

Perhaps the idea of the “worth” of a person is important to any discussion on justice. Justice is grounded on rights but further grounded on the worth of the individual.

For instance, the moral system of utilitarianism would suggest we do as much good to as many people… but it may not encourage going beyond logic to lets say like the story in the Bible of Jesus going after the one lost sheep… because it excludes the discussion of “worth”…

Like Wolterstorff says “Love never falls short of justice, but often it goes beyond justice.” True love enables us to decrease oneself and increase the capacity to serve another… but true love, whether American, African, Indian… is the most difficult thing in the world! In this we are all equally miserable lovers.

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January 2010
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