Download Poverty, a term often associated with being poor, has plagued

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The reasons for poverty’s existence in the developing countries
Name: Rex Law
Teacher: Mr. Nicholson
Course: Honours Thesis
Date: 5/2
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Poverty, a term often associated with being poor, has plagued humankind for many
generations. It has been an epidemic, often depriving human beings of the basic
necessities such as: food, water, shelter, and has contributed to the death of billions of
people. It is estimated that half of the world – nearly three billion people – live on less
than two dollars a day.1 The United Nations (UN) defines those who live in extreme
poverty as in “absolute poverty”, which means that the population lacks the basic things
required to live, such as: enough food, safe drinking water, sanitation, healthcare, shelter,
education, and access to benefits. It is estimated by the UN that of the world’s 6 billion
people, about 1.2 billion – one fifth – live in absolute poverty.2 It is also horrifying to
note that for the 1.9 billion children who live in the developing world, there are: 640
million children without adequate shelter, 400 million children with no access to safe
water, and 270 million children with no access to health services.3 While many people
from the rich Western world are living in luxury, millions of people in developing
countries are forgotten. In addition, the combined wealth of the world's 200 richest
people hit $1 trillion in 1999, as the combined income of the 582 million people living in
the forty-three least developed countries is only a small $146 billion.4 Poverty is a reality
that cannot be totally abolished and persists in today’s society, while growing worse in
developing countries. Therefore, who or what is to be blamed for poverty in developing
1
Anup, Shah. "Causes of Poverty." Poverty Facts and Stats. 18 Feb 2005. Global Issues. 20 May.
2005 <http://www.globalissues.org/TradeRelated/Facts.asp>.
2
Kaye Stearman, World Issues: Poverty (Fressingfield: Roger Coote Publishing, 2002) 10.
3
Anup, Shah. "Causes of Poverty." Poverty Facts and Stats. 18 Feb 2005. Global Issues. 20 May.
2005 <http://www.globalissues.org/TradeRelated/Facts.asp>.
4
Anup, Shah. "Causes of Poverty." Poverty Facts and Stats. 18 Feb 2005. Global Issues. 20 May.
2005 <http://www.globalissues.org/TradeRelated/Facts.asp>.
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countries? Poverty in developing countries is the result of colonialism, poor
geographic location, and weak governance.
The apologists for colonialism claim that the Western colonialist and European
rule have helped the developing countries. They brought knowledge, development and
promoted economic growth. The country of Uganda is a good example of the benefits of
colonialism. There, the British government had instilled stable infrastructure and
governing institutions. Uganda, a country that was once plagued with traditional
practices, has a stable economy with efficient civil services and a democratic
government. According to Muhumuza William, published author of “The paradox of
pursuing anti-poverty strategies under structural adjustment reforms in Uganda”, the
country of Uganda was achieving macroeconomic stability. Its per capita income was
approximately US $57 and from 1962 to 1971, its economy had achieved a steady real
GDP growth of 5.5%. Moreover, because of the British influence, the Ugandan economy
had knowledge, development and growth. It was apparent during the 1960s and 1970s
that Uganda was on its way to reducing poverty and having economic stability.5
However, because of political conflict and economic mismanagement, the government of
Yoweri Museveni took over and suddenly there was a virtual collapse of the economy
and state structures. The system that the British had instilled collapsed and Uganda once
again appeared to be hopeless. Because of the mismanagement, its infrastructure reached
an advanced state of disrepair and much of its productive sectors of the economy had
collapsed. Inflation was 240% per annum, real GDP had declined by 15% of what it had
5
Muhumuza, William. "The paradox of pursuing anti-poverty strategies under structural adjustment
reforms in Uganda." Journal of Economic and Social Studies 10 Jan 2002: 27. :271- .. Elibrary. 20 May
2005
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been in 1971, and tax collection was 6% of their GDP.6 According to the critics of
colonialism in the developing countries, colonialism is seen as a negative aspect that
hinders the development of the developing countries. They argue that the developed
countries have stripped the developing nations of their natural resources, have oppressed
their people, and have destroyed their economies. Yet the example of Uganda proves
otherwise. As evidence shows, Uganda would not have achieved a tremendous growth of
5.5% annually without the help of the British and its governing structure. The British
gave them knowledge, development and promoted its economy. However, due to the
selfish gain of the Ugandan government and independence achieved on October 9th,
1962, Uganda has since been a state of devastation with poverty growing worse and
millions dying each year of diseases and unsafe conditions.
On the other hand, colonialism of the past and present has hindered the
development of the developing countries. The years of colonialism have left the
developing nations with a destructive economy, foreign debt, and a lost culture. Because
of these factors, the developing nations have not been able to compete with the world
markets and thus poverty rates are higher in these nations. The country of Niger has been
struck with the problems of a destructive economy. Considered as one of the poorest
nations in the world, the country of Niger never had successive government services and
sufficient funds to develop an economy. Its current GDP is at a lowly US $9.716 billion
and ranks 137 out of the 232 countries.7 Constantly in debt and requiring foreign aid,
Niger gained independence in 1993 from France and has been a recipient of foreign aid
6
Muhumuza, William. "The paradox of pursuing anti-poverty strategies under structural adjustment
reforms in Uganda." Journal of Economic and Social Studies 10 Jan 2002: 27. :271- .. Elibrary. 20 May
2005
7
"World Factbook." Niger. 2005. Central Intelligence Agency. 22 May. 2005
<http://www.cia.gov/cia/publications/factbook/geos/ng.html#Econ>.
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since December 2000. Niger qualified for the enhanced debt relief under the
International Monetary Fund program for Highly Indebted Poor Countries (HIPC) and
signed an agreement with the fund on a Poverty Reduction and Growth Facility (PRGF).8
Approximately 63% of Niger’s population is under the poverty line and only 70,000
people are educated enough or skilled enough to work in the labour force and gain wages
and salaries. Most of the citizens of Niger work in the agricultural industry, which
constitutes 90% of its labour force. Although only 3.54% of the land is arable, due to
intense drought, soil erosion, and over grazing, the Nigerien economy, landlocked in the
Sub-Saharan area, is solely centered on subsistence crops, livestock, and some of the
world's largest uranium deposits. The country of Niger is too poor to afford to give its
citizens an education and so citizens farm regardless of their land use. Most often, the
ground yields little to no results and thus the country of Niger is plagued with poverty.
The GDP per capita is US $900, which is a more comforting statistic although much of
the population – 63% live under the poverty line – does not earn or own quite as much as
this. In addition, nearly half of the government's budget is derived from foreign donor
resources. Although Niger’s foreign debt is low – US $1.6 billion – it cannot afford to
pay off what it owes and thus requires foreign aid to keep the basic services available.
Debt relief provided under the enhanced HIPC initiative significantly reduces Niger's
annual debt service obligations, freeing funds for expenditures on basic health care,
primary education, HIV/AIDS prevention, rural infrastructure, and other programs geared
8
"World Factbook." Niger. 2005. Central Intelligence Agency. 22 May. 2005
<http://www.cia.gov/cia/publications/factbook/geos/ng.html#Econ>.
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at poverty reduction.9 Niger has managed to receive US $341 million of economic
aid and needs to inject back within the economy in order to reduce poverty.
Consequently, the country of Niger is crippled by the French oppression and colonialism
that gave it nothing in return. The Nigeriens never had education and the skills provided
for them to adapt to the world markets and have suffered since. Because of the lack of
skills, the country of Niger has had a destructive economy left behind by the French ever
since its independence in 1993. Hence, colonialism has given the country of Niger a
devastating and poor economy that has little hope of reducing poverty.
In addition, foreign debt has also hindered the development of the economy.
Because of colonialism and oppression, some countries in Africa have borrowed money
so great that it can never be returned. Africa’s total GDP is valued at US $1.635 trillion
yet 60% of it is counted as external debt owed to its lending countries. The country of
Nigeria, situated between Benin and Cameroon, has long been plagued with poverty.
With a GDP of US $125.7 billion, about 60% of the population is under the poverty line.
Much of this is due to the foreign debt incurred over the years that cannot be returned.10
The GDP per capita in Nigeria is only US $853 compared with US $24,575 for Australia,
US $26,251 for Canada, and US $22,093 for the UK. Yet it is still forced to divert much
of their GDP – around US $1.7 billion – to repay their rich western creditors as
repayment for US $28.5 billion in debt.11 Furthermore, Nigeria’s rich oil industry can be
seen as hope that is given to the people of Nigeria. Revenues net of production costs and
9
"World Factbook." Niger. 2005. Central Intelligence Agency. 22 May. 2005
<http://www.cia.gov/cia/publications/factbook/geos/ng.html#Econ>.
10
World Factbook." Nigeria. 2005. Central Intelligence Agency. 22 May. 2005
<http://www.cia.gov/cia/publications/factbook/geos/ni.html#Econ>.
11
"Jubilee Report." Drops of oil in a sea of poverty. 2001. Jubilee Organization. 27 May. 2005
<http://www.jubileeplus.org/analysis/reports/Nigeria.pdf>.
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foreign company earnings total approximately US $11 billion per annum, which for
a population of 111 million people equates net revenue of only US $100 per person, and a
lowly US 27 cents per day.12 Much of the foreign aid that was given, because of poor
governance and corruption, has failed. A massive 65% of projects, accounting to 76% of
funds loaned to Nigeria have said to have failed. Because of foreign debt, Nigeria will be
expected to spend around US $1.7 billion per annum on debt service to its rich Western
creditors, while spending only US $300 million a year on healthcare.13 In a country that is
plagued with AIDS/HIV and malaria, this will not be sufficient to help people survive.
Hence, Nigeria has been haunted by its foreign debt since its independence. Colonialism
has wrecked the Nigerian economy as well as encouraged them to take on foreign loans,
which cannot be have paid off due to the lack of skills and inadequate education system
that the country has.
In addition to colonialism causing destructive economies and encouraging foreign
debt, colonialism has also destroyed the native culture. Many African nations, such as the
people of Algeria, lost their sense of identity and culture. Furthermore, past colonial
regimes in Algeria imposed higher taxes on Muslims than on Europeans. The Muslims, in
addition to paying traditional taxes, also paid new taxes, from which the colonies were
often exempted. In 1909, for instance, Muslims, who made up almost 90 percent of the
population but produced 20 percent of Algeria's income, paid 70 percent of direct taxes
and 45 percent of the total taxes collected. The colonies were allowed to control how
12
"Jubilee Report." Drops of oil in a sea of poverty. 2001. Jubilee Organization. 27 May. 2005
<http://www.jubileeplus.org/analysis/reports/Nigeria.pdf>.
13
"Jubilee Report." Drops of oil in a sea of poverty. 2001. Jubilee Organization. 27 May. 2005
<http://www.jubileeplus.org/analysis/reports/Nigeria.pdf>.
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these revenues would be spent. As a result, the European towns had well structural
municipal buildings, paved streets lined with trees, fountains and statues, while Algerian
villages and rural areas benefited little if any from tax revenues.14 Besides the
discrimination, the colonial regime also restricted their education for the Algerian people
who had previously relied on religious schools to learn reading and writing. Not only did
the colonial state refuse land to the religious institutions and schools in 1843, but they
also refused to allocate enough money to maintain schools and mosques properly and
provide an adequate number of teachers and religious leaders. In 1892, more than five
times as much was spent on education for the Europeans than for the Algerians. Attempts
to institute bilingual, bicultural schools, intended to bring Muslim and European children
together in the classroom, were a conspicuous failure, rejected by both communities and
were taken out after 1870. Not only did colonialism tear apart an economy, encouraged
foreign loans, but also destroyed the culture that the native countries had. Without these
factors, the developing nations that were once under colonial rule would have developed
their own economy, not have taken foreign loans and would still have their culture
remain untouched.
Geography has a positive influence in whether or not a country can grow and
produce. Although many strong economic countries lie in the moderate regions, global
production is highly concentrated in these coastal regions of temperate climate zones
areas and holds 52.9 percent of the GDP of the world. While Japan resides in poor
geographical regions (volcanoes, earthquakes, typhoons, mountains), they have
maintained a strong economy while keeping poverty levels low. Geography has a strong
14
"Algeria-Hegemony of the Colons." Library of the Congress Country Studies (2005). 24 May
2005 <http://lcweb2.loc.gov/cgi-bin/query/r?frd/cstdy:@field(DOCID+dz0031)>.
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impact, but because of strong governmental policies and good balances of trade, the
country of Japan has been able to reduce its poverty levels. Based on statistics from
World Factbook, an informative site which compiles information on different countries of
the world, Japan has few natural resources and poor geography while having many active
and powerful volcanoes. In addition, they are struck with approximately 1,500 seismic
occurrences every year.15 Tsunamis and typhoons occur seasonally and have tormented
the people of Asia and Japan. During the 2004 Northwest Pacific Typhoon Season, the
Northwest Pacific basin was hit with a total of 21 typhoons. Japan was struck the hardest,
as over 220 people died or went missing; this was the largest casualty count since 1983.
Moreover, the typhoon cost Japan US$4 billion worth of damages.16 Although these
natural hazards and poor geography have destroyed the Japanese economy time over
time, the ability of the Japanese to recover economically is incredible. Even though the
Japanese are impeded by the poor land geography, they are able to direct their food
production and economic industries into other sectors. With government-industry
cooperation, a strong work ethic, innovative high technology, and a small defense
allocation – only 1% of their GDP, Japan has been able to rise to the top as the second
most technologically-powerful economy in the world after the US. It is also the thirdlargest economy after the US and China, measured under the purchasing power parity
(PPP) basis.17 With regards to food production, Japan is usually self-sufficient in rice,
15
"World Factbook." Japan. 2005. Central Intelligence Agency. 22 May. 2005
<http://www.odci.gov/cia/publications/factbook/geos/ja.html>.
16
"Perspectives." 2004 – Year of the Storms or Typical Storm Year?. 2004. Pacific Disaster Center.
18 May. 2005
<http://www.pdc.org/perspectives/2004_hurricanes.pdf#search='number%20of%20typhoon%20occurrence
s%20in%20japan'>.
17
"World Factbook." Japan. 2005. Central Intelligence Agency. 22 May. 2005
<http://www.odci.gov/cia/publications/factbook/geos/ja.html>.
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however, it imports 50% of its requirements of other grain and fodder crops.
Because of few natural resources, their industry is highly dependent on imported raw
materials and fuels. Japan imports about 5.449 million barrels of oil per day, which is the
highest out of all the developed countries and is ranked first, while Canada is ranked at
ninth, importing only 1.145 million barrels of oil per day.18 Since Japan imports so much
oil, it can be explained that its economy is heavily dependent on manufacturing and
servicing. Also, Japan’s GDP (Gross Domestic Product) is at US $3.745 trillion while
having a GDP per capita of US $29,400, which shows the significance of its trade and
economic management.19 The ability to have trade with other countries and develop
themselves within the world markets is the key to Japan becoming such a prosperous
nation despite having little natural resources. Their exports total up to US $538.8 billion
per year compared to their imports, which is only at US $401.8 billion. Japan’s GDP is
ranked fifth in the world and their service industry, which features manufacturing and
technology, represents 74.1% of their GDP. The Treaty of Kanagawa with the United
States brought about Japan’s trade and growth with the world in 1854. Japan opened its
ports, began to intensively modernize and industrialize, which helped them achieve
economic stability to this day. To achieve economic stability, the government of Japan
have had strong governmental policies leading to low poverty and very low
unemployment rates. Their unemployment rate is at a lowly 4.7% and ranks 144 out of
18
"Oil Import Rankings." Top20. 2005. Allyoucanread.com. 25 May. 2005
<http://www.allyoucanread.com/rank_oil_imports.asp?r=t>.
19
"World Factbook." Japan. 2005. Central Intelligence Agency. 22 May. 2005
<http://www.odci.gov/cia/publications/factbook/geos/ja.html>.
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the 183 countries of the world.20 Hence, the country of Japan shows the importance
of world market trade and the ability to adapt to sudden changes. The country of Japan
has not been blessed with favourable geography, however, they were able to develop
themselves through global trade and finding a market niche – technology and the service
sector. Although Japan imports a lot of resources, they are able to utilize those raw
materials to make excellent finished goods. Those finished goods add up to Japan’s
massive exports, which total US $538.8 billion. Hence, regardless of geographical
location, a country can reduce poverty if they have a strong government and a balance of
trade such as the example of Japan.
In contrast, physical geography can have an effect economically on a country and
their poverty rates. Without favourable conditions for food production and a suitable
geographic location for trade, it is difficult to have a prosperous economy and build
wealth. Besides Japan, many nations residing in poor geographic locations are in poverty
because they are isolated, full of diseases, and cannot grow food whereas, good
geographic locations elevates people from poverty because they are rich in natural
resources, cooler in climate and can produce vast amounts of vegetation and agriculture.
The late 18th century Scottish economist, Adam Smith, examined the relationships
behind prosperous nations and poor nations and derived that physical geography does
have a factor in explaining the poverty that exists in the world. According to his book,
The Wealth of Nations, Adam Smith examined that locations near navigable waterways
and coastal ports had an advantage because they were able to control their shipping routes
and widening their imports and exports. He contended that physical geography of a
20
"World Factbook." Japan. 2005. Central Intelligence Agency. 22 May. 2005
<http://www.odci.gov/cia/publications/factbook/geos/ja.html>.
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region can influence its economic performance. As Smith saw it, large markets
allowed economics of scale in production, specialization of labour, and cost reductions.21
The United Kingdom displays an example of this. With a GDP of over 1.782 trillion and
ranking eighth in the world, the United Kingdom has a strong economic infrastructure
that dates back to the late 18th century and early 19th century. Based on its relatively
small geographic location – only 244, 820 sq. km – this encouraged Britain to explore
and utilize its sea ports to its advantage.22 Their early trade with the world markets lead
them to industrialize faster and to build fleets of ships that would enable them to travel
and trade with the world. They were able to trade resources from other nations and added
colonies to their vast empire. While the United Kingdom supports Smith’s philosophy, a
ranking of GDP for every country of the world would immediately reveal a gap between
the rich and the poor nations. The great majority of the poorest countries lie in the
geographical tropics – the area between the tropic of Cancer and the tropic of Capricorn.
On the other hand, most of the richest countries lie in the temperate zones: South Africa,
Canada, France, Australia and Japan with US $491.4 billion, US $ 1.02 trillion, US
$1.737 trillion, US $611.7 billion, and US $3.745 trillion respectively.23 The countries
that lie between the tropic of Cancer and the tropic of Capricorn are: Somalia, Bhutan,
East Timor, Guyana, and Marshall Islands with US $ 4.59 billion, US $ 2.9 billion, US $
21
Sachs, Jeffrey D., Andrew D. Mellinger, and John L. Gallup. "The Geography of Poverty and
Wealth." Scientific America Magazine 2002. 21 May 2005
<http://www.cid.harvard.edu/cidinthenews/articles/Sciam_0301_article.html>.
22
"World Factbook." England. 2005. Central Intelligence Agency. 22 May. 2005
<http://www.odci.gov/cia/publications/factbook/geos/uk.html#Econ>.
23
"World Factbook." Rank-Order GDP. 2005. Central Intelligence Agency. 22 May. 2005
<http://www.cia.gov/cia/publications/factbook/rankorder/2001rank.html>.
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370 million, US $ 2.9 billion, and US $ 115 million respectively.24 Hence,
favourable land geography attributes to the success in the developed countries. In
addition to land geography, the importance of climate is crucial to the development of a
region. According to the World Health Organization, 300 million to 500 million new
cases of malaria occur every year. Globally, around 40% of the population is at risk and
in Sub-Saharan Africa, 3000 children under the age of five die of malaria each day.25
According to Jeffrey Sachs, renowned economist and scholar of global economics,
geography affects the prevalence of disease:
Many kinds of infectious diseases are endemic to the tropical and
subtropical zones. Especially the type of diseases in which is created
before entering the human hosts. Malaria is common in Sub-Saharan
Africa because of the heat and tropical regions whereas in colder regions,
these tropical diseases will not spread and hence, diseases are easier to
spread and harder to control in tropical regions.26
Generally, diseases impede workers productivity and because great portions of poor
climate regions contain infectious diseases, poverty prevails and destroys the country, the
economy, and the people. A high number of diseases can alter the age structure of a
country's population. Societies with high levels of child mortality tend to have high levels
of fertility. Mothers bear many children to guarantee that at least some will survive to
adulthood. Hence, young children will constitute a larger proportion of that country's
population. With so many children, poor families cannot invest much in each child's
education. In addition, high fertility also takes away the role of a woman in society
because child rearing takes up so much of their lives. Lastly, geography has a large effect
24
"World Factbook." Rank-Order GDP. 2005. Central Intelligence Agency. 22 May. 2005
<http://www.cia.gov/cia/publications/factbook/rankorder/2001rank.html>.
25
"Fighting Malaria." 2005. World Health Organization. 24 May. 2005
<http://www.who.int/features/2005/malaria/en/>.
26
Sachs, Jeffrey D., Andrew D. Mellinger, and John L. Gallup. "The Geography of Poverty and
Wealth." Scientific America Magazine 2002. 21 May 2005
<http://www.cid.harvard.edu/cidinthenews/articles/Sciam_0301_article.html>.
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on food production such as production of the major food grains: wheat, maize, and
rice. Wheat grows only in temperate climates, and maize and rice crops are generally
more productive in temperate and subtropical climates than in tropical zones.27 England,
for example, is situated in a temperate climate where more than one-half of the days are
overcast and has about 23.46% of land that is arable. On the other hand, Libya, which
situated in a desert, is extremely dry and contains mostly flat land and has only 1.03% of
land that is arable. Therefore, geography is a major factor in determining a country’s
economy, spread of diseases, and food production. As demonstrated through the cases
between the developing countries and the developed countries, the developed countries
certainly have an advantage and are better off than the developing nations with poor land
geography.
Most of the developing countries in poverty are usually because of government
mismanagement and corruption. While some are caused by leaving behind a poor
economy, incurring large foreign loans, and losing their culture and identity, the country
of Bhutan has seen none of that but yet still remains in poverty. The country of Bhutan
has a good government system yet because of the government trying to preserve its
culture and tradition, it has restricted global trade. The GDP of Bhutan is ranked at a
lowly 171 out of 232 countries with a GDP of US $2.9 billion.28 Its economy, one of the
smallest and least developed, is based on agriculture and forestry, which produces income
for more than 90% of the population. Agriculture, which accounts for 45% of its GDP,
27
Sachs, Jeffrey D., Andrew D. Mellinger, and John L. Gallup. "The Geography of Poverty and
Wealth." Scientific America Magazine 2002. 21 May 2005
<http://www.cid.harvard.edu/cidinthenews/articles/Sciam_0301_article.html>.
28
"World Factbook." Bhutan. 2005. Central Intelligence Agency. 22 May. 2005
<http://www.cia.gov/cia/publications/factbook/geos/bt.html#Econ>.
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consists largely of subsistence farming and animal husbandry.29 The industrial sector
is technologically backward, with most production relying on human manufacturing and
requiring little to no machinery. The GDP per capita in Bhutan is at US $1,400 and they
experience a growth rate of 5.3% which is considerately high for such an isolated
country.30 Although trade with India is frequent, Bhutan only imports and exports
US$196 million and US$154 million respectively, which does not help them on a global
market.31 In regards to education, model education, social and environmental programs
are underway with support from multilateral development organizations. However, each
economic program accounts for the government's desire to protect the country's
environment and cultural traditions. Bhutan can be seen as a country that has little
corruption and government mismanagement, but desires to protect their culture and
tradition. They would rather be isolated than open up their markets to free trade. Only in
recent years have they decided to open up to tourism. The building of Bhutan's
hydropower and its potential as an attraction for tourists and Bhutan is slowly becoming
acknowledged. Having two airports and only one television network in an area of 47,000
sq. km explains why Bhutan desires to maintain closed doors and to keep their tradition.
Overall, Bhutan’s low income and standard of living is not caused by poor government
mismanagement, but the government’s desire to preserve their culture and tradition.
Furthermore, another country that has not been affected by government mismanagement,
but still struggles with poverty is the country of Botswana. The country of Botswana has
29
"World Factbook." Bhutan. 2005. Central Intelligence Agency. 22 May. 2005
<http://www.cia.gov/cia/publications/factbook/geos/bt.html#Econ>.
30
"World Factbook." Bhutan. 2005. Central Intelligence Agency. 22 May. 2005
<http://www.cia.gov/cia/publications/factbook/geos/bt.html#Econ>.
31
"World Factbook." Bhutan. 2005. Central Intelligence Agency. 22 May. 2005
<http://www.cia.gov/cia/publications/factbook/geos/bt.html#Econ>.
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a low corruption score, which shows that their government is willing to improve
social conditions, yet their people are still plagued with poverty. According to
Transparency Organization, Botswana’s CPI (Corruptions Perceptions Index) score is 6.4
out of a clean score of 10. They ranked 24 out of 102 nations that were surveyed.32 Yet
47% of the population are still below the poverty line. However, because of good
government management and little corruption, Botswana has maintained one of the
world’s highest economic growth rates. Through government management and discipline,
Botswana has transformed itself from one of the poorest countries in the world to a
middle-income country with a per capita GDP of US $9,200 in 2004.33 Botswana’s GDP
is now currently at US $15.05 billion which has dramatically improved. As well, they
have achieved a real GDP growth rate of 3.5%, one of the highest in the African nations.
Diamond mining has fuelled much of the expansion and currently accounts for more than
one-third of GDP and for 70-80% of export earnings.34 On the downside, the government
must deal with high rates of unemployment and poverty. Unemployment is at
approximately 23.8% while population under the poverty line is at 40%.35 HIV/AIDS has
also hindered the development of the Botswana economy and infection rates are the
second highest in the world. The adult prevalence rate of HIV/AIDS is at 37.3% and
growing while over 33,000 people have died of AIDS.36 The government of Botswana is
32
"Corruption Perception Index." 2005. Transparency International Organization. 25 May. 2005
<http://www.transparency.org/pressreleases_archive/2002/2002.08.28.cpi.en.html>.
33
"World Factbook." Botswana. 2005. Central Intelligence Agency. 22 May. 2005
<http://www.cia.gov/cia/publications/factbook/geos/bc.html#People>.
34
"World Factbook." Botswana. 2005. Central Intelligence Agency. 22 May. 2005
<http://www.cia.gov/cia/publications/factbook/geos/bc.html#People>.
35
"World Factbook." Botswana. 2005. Central Intelligence Agency. 22 May. 2005
<http://www.cia.gov/cia/publications/factbook/geos/bc.html#People>.
36
"World Factbook." Botswana. 2005. Central Intelligence Agency. 22 May. 2005
<http://www.cia.gov/cia/publications/factbook/geos/bc.html#People>.
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doing all that it can to eliminate poverty. Although Botswana has the second highest
HIV rates in the world, it also “[has] one of Africa's most progressive and comprehensive
programs for dealing with the disease”.37 The economy of the country is improving and
literacy rates have jumped to 79.8% of the population. Therefore, as seen through the
cases of Bhutan and Botswana, governance and poverty sometimes do not go in hand and
there are external factors that affect poverty. The country of Bhutan has an effective
government with little corruption that promotes growth yet they value keeping their
tradition and culture more than economic prosperity. Similarly, Botswana has a stable
government that is very economically-sound yet because of HIV/AIDS, it has hindered
its development in the global world. Botswana’s government has transformed themselves
into a middle-class income country over a few years, but their poverty rates still exists. It
is difficult to reduce poverty but as seen through the cases here, government and poverty
sometimes do not have such a strong relationship where one can effectively change the
other.
Besides the effects of colonialism and poor land geography, the governance and
economic management can affect poverty in a country. Poverty and governance do go
hand in hand because with an effective government and governing policies, a country can
be free from poverty. Corruption, civil wars, and poor governmental management have
long been the cause of poverty for the African nations. According to Transparency
Organization, one of the most corrupt nations in the world is Nigeria with a CPI
37
"World Factbook." Botswana. 2005. Central Intelligence Agency. 22 May. 2005
<http://www.cia.gov/cia/publications/factbook/geos/bc.html#People>.
Law, 18
(Corruption Perceptions Index) of 1.6 out of a clean score of 10.38 Nigeria’s GDP is
valued at US $125.7 billion and has long been distracted by political instability,
corruption and poor economic management.39 Nigeria’s main source of income comes
from its rich oil industry, which provides 20% of their GDP. Since Nigeria has a vast
amount of natural resources – oil – its economy is blessed compared to the other African
nations. Although their oil production is 2.356 million billions per barrels per day, and
their oil industry provides a major 20% of its GDP, the population below the poverty line
is at a high rate of 60%, which is one of the highest poverty rates in Africa.40 The
government has done little to change this problem and because corruption is so high,
much of the money does not finance the citizen’s education or health care. Nigeria
receives about US $250 million of foreign aid from the IMF, but because their
governmental structure and economic management is poor, much of the funding is
wasted and goes instead to the government authorities.
Political and civil war will also destroy a countries economy as well as harm the
infrastructure and the people. Most countries in Africa have been known to have been in
civil wars in the last decade because of mistrust and revolt for a better government. In the
case of Rwanda, about 800,000 Tutsis have died in the genocide.41 Rwanda’s economy
has been hurt and damaged every since. About 90% of the population is engaged in the
agriculture sector. Its GDP is valued at $10.43 billion and their growth has been slow –
38
"Corruption Perception Index." 2005. Transparency International Organization. 25 May. 2005
<http://www.transparency.org/pressreleases_archive/2002/2002.08.28.cpi.en.html>.
39
World Factbook." Nigeria. 2005. Central Intelligence Agency. 22 May. 2005
<http://www.cia.gov/cia/publications/factbook/geos/ni.html#Econ>.
40
World Factbook." Nigeria. 2005. Central Intelligence Agency. 22 May. 2005
<http://www.cia.gov/cia/publications/factbook/geos/ni.html#Econ>.
41
World Factbook." Rwanda. 2005. Central Intelligence Agency. 22 May. 2005
http://www.odci.gov/cia/publications/factbook/geos/rw.html
Law, 19
only 0.9%. About 60% of the population is in poverty and many still do not have
homes and are refugees after the civil war. Rwanda has approximately 40.54% arable
land and thus is attractive for people to become farmers and grow. Yet because of this
fact, only 70.4% of the population is able to read and write. Rwanda is also the most
people-populated country in Africa and has approximately 8,440, 820 million people in
26, 338 sq. km. of land. Therefore, proper governance and economic management is
crucial to the development of any country and to reduce poverty. As seen in the case of
Nigeria, corruption has plagued the developing countries and is responsible for poverty.
In addition, civil wars have taken resources that should be allocated elsewhere such as
health care and education.
Past and present colonialism are the reasons that people are in poverty. Moreover,
because of poor geographic locations, some developing countries are also in poverty, and
weak governance has hurt developing nations. Poverty seen in developing countries is the
result of the devastating effects of colonialism, poor geographic location, and weak
governance. It is horrifying to know that millions of people are dying of poverty each
year while the rest of the Western world are living a comfortable standard of living.
Hence, people living in poverty-ridden countries need resources from developed
countries in order to free them from the oppression. If everyone can contribute a little
resource, then people in developing countries have a chance for survival.
Law, 20
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