Many countries in the Caribbean and Latin America have achieved significant growth over the years, Chile, Barbados, Trinidad and Tobago and Brazil, to name a few, but these countries have not been able to solve their problem of poverty. According to an ECLAC report, the Caribbean and Latin American region had an overall economic growth rate of five percent for 2006, and for 2007, growth was expected to be about 4.5 percent.
Specifically, Caribbean countries are expected to grow by 6.3 percent, South America by 5.4 and Mexico and Central America by 4.1 percent. In the case of individual countries, for example, Chile has experienced growth rates of five to seven percent over the last years and, in fact, had the highest nominal Gross Domestic Product (GDP) per capita in Latin America in 2006; Barbados’ growth rates have averaged between three to five percent since 1993; Trinidad and Tobago had a growth rate of 12 percent in 2006 and Brazil’s growth rate in 2006 was four percent.
Despite these glowing figures, the ‘zinc fences’ (a characteristic of poor communities in some Caribbean countries) are not coming down, and the barrios and low and no income communities in Latin America are not getting fewer: note that in Chile where poverty is reported to have declined between 2000 and 2003, 9.6 percent live on two dollars per day; in Barbados, those living below the poverty line in 2003 was 13.9 percent; in Trinidad and Tobago it is 21.1 percent and in Brazil, those living below the national poverty line comprised 30 percent of the population.
Significantly in Brazil, the data has shown that despite its economic growth over the years, there was an overall increase in poverty between 2001 and 2003, but “improvements” were seen in the country’s rural areas. In the cases of Argentina and Mexico, poverty “declined” between 2002 and 2004: in Argentina, poverty declined, not in rural areas but in urban areas by 16.0 percentage points and indigence by 9.8 points; Mexico showed “a further reduction in poverty between 2002 and 2004.
Despite ECLAC’s glimmer of optimism, in the cases of Chile, Argentina and Mexico, Head of the Organisation of American States (OAS) in his presentation at the 2007 summit of Latin American leaders (mentioned above) stated that leaders of all political and ideological persuasions need to work towards strengthening democracy in their countries as they all faced the common challenge of reducing poverty and corruption. And, President of Guyana, Bharrat Jagdeo lamented the regional decline into further poverty, and called on the leaders present to stem the slide of this social scourge in a region where upwards of 50 million people, who live in squalor and lack the basic social services, also suffered from hunger and access to food.
In other cases in the Caribbean where many people are living below the poverty line, the figures, according to a 1999 survey are as follows: Antigua and Barbuda 12 percent; Belize 35 percent; Dominica 33 percent; Grenada 20 percent; Guyana 43 percent; Jamaica 32 percent; St. Kitts/Nevis 15 percent; Saint Lucia, 25 percent; St. Vincent and the Grenadines 17 percent. Jamaica has, however, reported in 2005 that since 1999, there has been a decline in the incidence of poverty which has shown a consistent downward trend since 1992.
In 2005, the figure stood at 19 percent. Overall, however, poverty remains an ongoing challenge, despite significant improvements in social and economic indicators. In fact, some 25 percent of the region’s people subsist below nationally defined poverty levels. But while we can say that there have been improvements in the condition of the poor, although we are not clear on the measurements, standards and goals of poverty alleviation/reduction programmes, poverty still remains at unacceptable levels and, therefore, on national agendas as a social issue which will not go away.
That poverty continues to be a challenge in Caribbean and Latin American societies is not a mystery. As open, dependent, export-propelled and import-oriented economies, particularly in the case of the Caribbean, their integration into global capitalism through unequal terms of trade, and the unbalanced transfer of capital, technology, finance and aid, not only creates balance of payments problems, but also continue to benefit the local elites at the expense of the poor. For example, the structural adjustment programmes of the IMF and the World Bank and the various monetary and fiscal measures they force on the heavily indebted governments of the Caribbean and Latin America have created ‘new’ poverty while exacerbating the ‘old’. In real terms, structural adjustment pushes the poor towards greater pauperisation and dispensability.
In Jamaica, for example, the IMF’s standard prescription for all countries experiencing balance of payments problems resulted in a high international debt, the deterioration of health services and other social services, a devaluation of the dollar, increase in inflation rates, policies of liberalization of trade, cutbacks in the education budget, a drop in export earnings, a removal of food and agricultural subsidies, high levels of unemployment, shrinking of the local agricultural sector and an opening of the economy to foreign capital. This is not specific to the Caribbean and Latin America. Cheryl Payer in her classic piece, The Debt Trap: The International Monetary Fund and the Third World presents an exposé on the system of aid and credit in which the IMF dictates internal policies in borrowing nations, frustrating the efforts of these ‘developing’ countries to gain control over their own economies.
Based on case studies of Brazil, the Philippines, India and Indonesia, Payer discusses the foreign exchange needs and resources of these countries, their balance of payments crises and the adverse socio-economic consequences of IMF intervention which can also assume a political role. The IMF, she concludes, is really an obstacle to independent national growth and development.
In the case of Grenada, aid meant the divestment of all government-owned enterprises, high levels of unemployment and a discontinuation of all social programmes. The situation is no different in Latin America as Hayter acknowledges. Teresa Hayter in her early piece, Aid as Imperialism draws our attention to the offer of foreign ‘aid’ and its negative implications for countries of Latin America and the Caribbean.
According to Hayter, international lending agencies such as the IMF the World Bank and the United States Agency for International Development (USAID) operate against the best economic, financial and social interests of the borrower country since this ‘aid’ has never been “an unconditional transfer of resources”. It comes with strings attached. ‘Aid’, she argues, operates in the interest of the donor countries which milk the financial resources of the less developed countries. For example, the money borrowed must be spent in the donor countries to acquire goods and services and to pay high salaries to their “consultants” and “experts”.
Inherent, then, in the relationship between debtor and creditor is ‘underdeveloped’ economies, and the consequent unacceptable levels of poverty at both the national and personal levels. This view is not out of keeping with that of Andre Gunder Frank, who in his Capitalism and Underdevelopment in Latin America, explains the roots of ‘underdevelopment’ and ‘development,’ (which go beyond simple economics) and poverty between and within nations.
We also get a view from the ‘other side’. Hancock, in his piece, Lords of Poverty, points out that the World Bank, like all other lending/aid institutions (except, for example, private donor agencies like Oxfam) mouth meaningless rhetoric about the sorry condition of the South’s poor.
Hancock, in his in depth study of official aid organisations and lending agencies, concluded that development is big business for these organisations and agencies, which include the World Bank In this respect, he notes that despite the expenditure of massive sums of money, “hundreds of billions of dollars” (to ‘Third World’ countries) there is little evidence to prove that the poor in these countries have actually benefited. Instead, international aid, he continues, pays the large salaries and underwrites the lifestyles of privilege enjoyed by the international civil servants, ‘development experts’ consultants and the many and varied “freeloaders” who staff these aid agencies.
Essentially, then, there is really no positive or direct correlation between economic growth and poverty alleviation/reduction or even eradication. What seems to be the existing situation is that there is more of an inverse relationship between the two.
However, while we acknowledge the views of proponents of poverty alleviation/reduction, we argue that however well-intentioned governments are, poverty alleviation programmes will fail not because they are ill-conceived, misconceived, badly implemented, misdirected or conceptually flawed, but because the roots of poverty and its causes have not been fundamentally attacked in what could be seen as a skirmish against poverty.
Our view in this regard is that poverty in the Caribbean and the rest of the ‘Third World’ persists, not because some governments do not care, but because its persistence is guaranteed through the social and economic structure of these societies and their corresponding politics and institutions which perpetuate that social ill, regardless of policies, programmes and projects intended to satisfy peoples basic needs. Poverty is not simply an economic issue and ridding society of this social ill or alleviating it is not simply a matter of economics.
In our view, poverty is a historical legacy and a consequence of the crises and contradictions of local and global capitalism. Even with history aside, ‘development’, in our context, has never really been about alleviating, reducing or eradicating poverty. Our emphasis has been on catching up with the ‘developed’ world through international ‘aid,’ the transfer of capital, technological advancement and economic growth which in and of itself, cannot (and has not) ensure (ensured) the last days of poverty as the literature seems to suggest.
In our view, poverty alleviation, or reduction and even eradication is just another piece of liberal capitalist rhetoric meant to assuage the people’s feelings of social, economic and political inadequacy, discontent with exclusion, deprivation and powerlessness and the injustice they breed.
In 1972, George Beckford, political economist and University of the West Indies scholar stated that poverty exists in the countries of the ‘Third World’, but it does not have to persist. Beckford was responding to the historical and growing levels of poverty brought on by the ‘underdevelopment’ of ex-colonial societies in the ‘Third World’: tropical Asia and tropical America. According to Beckford, the underdevelopment of the Caribbean and countries of the South was not accidental.
In his seminal work, Persistent Poverty: Underdevelopment in Plantation Economies of the Third World, Beckford argued that ‘underdevelopment’ stemmed from unequal relations between the South and the North through colonial domination, capitalism and slavery, and poverty was a consequence of this retarded development experienced by these ex-colonies.
At the same time, Walter Rodney, also a Caribbean scholar, argued in a similar vein. In his How Europe Underdeveloped Africa, Rodney attributes underdevelopment and the existence of national and personal poverty to the historical exploitative relationship Europe (England, France, Holland, Portugal, Belgium, Germany) enjoyed with Africa, a case which can be generalised to the Caribbean. In both cases, these political economists, who have contributed much to an understanding of the dynamics of underdevelopment, development and poverty, speak to the extraction of natural resources and transfer of wealth from the South by the North, the unequal terms of trade (resulting in balance of payments deficits) unfavourable terms of foreign investment through historical and contemporary imperial domination.
For both Beckford and Rodney, ‘underdevelopment’, social disadvantage, social exclusion and material deprivation can only be addressed in historical, structural and institutional terms which could also mean that countries of the Americas, Africa and Asia would seek not just to extricate themselves from the sphere of capitalism, but also to secure, within the international political economy, favourable terms of trade, production and exchange, investment and aid. It would also mean, inter alia a government ideologically predisposed to addressing issues of social justice, and the embrace of social and economic policies by a strong state sector which would also address the psychological damage to peoples psyche brought on by centuries of colonial domination.
If governments continue to hold ‘economics’ as the primary factor in poverty alleviation, at the expense of human rights, social justice, equal and just relations between and among all people, political involvement at the lowest levels, then this whole issue of poverty alleviation/reduction will remain the myth it is.