Poverty: The Matrix of All Troubles

Poor people in oil-rich Iraq waiting for food rations/photo source-www.annabaa.org

At the onset of this millennium, the World Bank established a set of international development targets, known as the Millennium Development Goals (MDGs), to reduce poverty by half in 2015. On that point, during the annual meeting of the World Bank (WB)  and International Monetary Fund (IMF) held in Dubai, in September 2003, James Wolfensohn, then-president of the WB declared that over one billion people survive on less than one dollar a day. While around one billion people control more than 80 percent of the global Gross Domestic Products (GDP).

Eight years later, in 2011, at the spring meetings of the WB and IMF in Washington, Robert Zoellick, president of the WB then, forewarned that the world is “one shock away from a full-blown crisis”. He added that the continued ascent of food prices is the main threat to poor nations who risk “losing a generation”.

In spite of that, the World Development Indicators (WDI) 2012 of the WB acclaim that the global poverty indicator of those living on less than $1.25 per day has been cut down by half (from 44.3% in 1990 to 22.0% in 2012). In contradiction with the WDI of 2012, the WB issued on February 29, 2012, a “Global Poverty Update” manifesting that “At the current rate of progress there will still be around 1 billion people living below $1.25 per day in 2015”.

Obviously, the World Bank update has reconfigured the original goals of the Millennium Development Goals, which were set to reduce global poverty by half­­, not just to reduce the number of those living on less than $1.25 a day only. However, the same global update also reports that, “The number of people living between $1.25 and $2.00 has almost doubled from 648 million to 1.18 billion between 1981 and 2008”, which made the WB’s data in its Global Update short to provide the real data of global poverty—let alone it is inconsistent with the reality.

In any case, the world has 2.47 billion hungry souls in 2008 living on less than $2 a day compared with 2.59 billion in 1981, not counting hundreds of millions of impoverished people who were re-categorized into higher poverty bracket as a result of wage adjustments mainly to moderate the effect of recurring high inflations-let alone what the worldwide economic crisis of 2008 and its recessional aftereffects have added to the global poverty strata.

It is unreasonable to condone that the World Bank, the leading international financial organization, could not slash the numbers of poor (who subsist on less than two dollars a day) by more than 120 million people in three decades. Most likely, the mass majority of those 120 million people were Chinese citizens who made it themselves.

What a pity!

Given the actual and continuous depreciation in the purchasing value of $1.25, $2.00, or $5.00 throughout the last 30 years or so, the plain fact is that poverty has only been reduced by half in the statistical data sheets of the World Bank because of some unrealistic custom-built indicators. Unfortunately, poverty is intensifying and spreading out far and near whereto the primary objectives of the WB projected poverty reduction program became purposeless and impossible to achieve—unless they plan to rewrite their statistical data again!

In view of the delinquency of the international community and the shortcomings of international organizations to combat poverty, many people wonder about the status quo of poverty in the Middle East region and the Arab world, in particular. Except for few states of the Gulf Cooperation Council (GCC), poverty is extensively stretching out like a wildfire in most of the twenty-two Arab states, especially among the low-income classes and jobless people.

This actuality, however, is owed to many economic and socio-political reasons. The first one is a result of long years of continuous inflation and inordinate depreciation of the spending value of wages, which in effect crippled the working class and degraded the economic status of the middle-class.  The second reason is imputed to the prolonged presence of high level of unemployment, especially among the youth; and to a longstanding lack of adequate governance of state resources.

The direct visual conclusion is that the social and economic gaps between the rich and poor are widening here and there in the Arab world as never before. Rich people are becoming wealthier and more well off, while the poor are unfairly becoming poorer. It is consequential to know that impoverished people blame the state authorities, political leadership and economic elites for their ill-being; while most of the wealthy tend to lay the blame on the poor themselves. Rationally, it is unfair to impute poorness of the poor solely to their own bad arrangements and ignores the flawed economic and social policies of governments and parliaments, not to mention the role of moneymaking cliques.

The mildest illustration of irresponsible governance of many Arab authorities is Lebanon’s government. Since its formulation in spring of 2011 as yet, the current Lebanese government, headed by Prime Minister Najib Mikati and backed by Hezbollah, has not provided any socioeconomic plan or framework to tranquilize the consequences of the current very high unemployment level.

Likewise, Mr. Mikati’s government has neither made any surgical economic measures nor created social welfare mechanisms through which it can improve the conditions of the badly off and daily wage earners, most of whom were born into poverty and couldn’t have the proper education to find their way out of it or do not have political patronage to win a job in the public sector.

To make things worse, the government did not firmly regulate and control, more purposely than not, the inordinate presence of foreign cheap laborers, thus making it impossible for the underprivileged and undereducated Lebanese, especially those living in remote rural areas, to find fair paying jobs since foreign workers will work for lower wages.

As for the issue of youth unemployment, Mikati’s government fell short to generate the required business-friendly environment for foreign and domestic investments from which the Lebanese job market can grow to absorb the accumulated numbers of jobless college graduates. Disregarding that the current size of Lebanon’s economy can only provide 12,000 decent paying jobs per year, at best, which leaves more than 20,000 new graduate jobseekers each year either to emigrate or to join the unemployed club.

Given the country’s history of irresponsible governance and the failing performance of Mikati’s government, the poor will unfortunately remain poor as long as political leaders and business magnates have overwhelming influence on the authorities to maintain their notorious trade monopolization and shady commercial transactions, in spite of the detrimental consequences of these practices on the economy and low-income classes.

For the Lebanese and Arabs, public lectures and government promises about economic growth does not mean much when the mass majority of the populations are struggling to live on the day. Since the first sign of socioeconomic progress should show a downslope track in the rate of unemployment and upturn in the living standards. Actually, Arab people realize that the main origin of their socioeconomic hardships and living difficulties stems from incorrect economic planning, misgoverning, corruption of state officials, and the greedy profiteering practices of moneymaking cartels.

Obviously, there are many pressing socioeconomic issues, such as inflation, unemployment, healthcare, and public education, that need urgent reforming measures so that to confine any further escalating of poverty and unemployment; and hence put off the sparks of the foreseen civil strife.

After all, the remedies for poverty will only emerge when Arab governments start before long a real political, social, and economic reform process that can provide justice, equality, and development to all citizens.

Meanwhile, Arab leadership and economic magnates should keep in mind that poverty is the matrix of all troubles.

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Author’s Note: This article is also published at Arabian Gazette