By Baher Kamal
MADRID, Oct 10 2022 – Africa. The birthplace of “Homo Sapiens.” The land of plenty. The origin of farming. The richest region in terms of natural resources. And human capital. Home to over 1.3 billion humans, continues to be looted.

With 500 million plus people living in extreme poverty, Africa has also been transformed in a sort of grave for half of the world’s victims of terror. The continent is also the land with the highest suicide rate on Earth. Why?

Gold, diamonds, lithium…

The illegal exploitation of precious metals and minerals such as gold, silver and diamonds, are fuelling the extremists with significant sources of income, and benefiting the groups that control extraction, and trafficking routes – The vast Sahel region in particular has become “home to some of the most active and deadly terrorist groups”, says the Head of the UN Office on Drugs and Crime (UNODC)

“The evidence is there that the illegal exploitation of precious metals and minerals such as gold, silver and diamonds, are fuelling the extremists with significant sources of income, and benefiting the groups that control extraction, and trafficking routes.”

This is what the Head of the UN Office on Drugs and Crime (UNODC) on 6 October 2002 stated, informing that the vast Sahel region in particular has become “home to some of the most active and deadly terrorist groups.”

See some of the major facts Ghada Waly submitted to the UN Security Council:

• Illegally mined gold and other precious metals are being fed into the legitimate market, providing huge profits for traffickers;
• Wildlife trafficking has also been reported as a possible source of funding for militias, with the illegal trade in ivory alone generating 400 million US dollars in illicit income each year;
• Around 3,500 victims of terrorist acts in sub-Saharan Africa last year, nearly half of those recorded worldwide;
• Such criminal exploitation strips the people of Africa of a significant source of revenue. It robs the millions of people who depend on these natural resources for their livelihoods. And it fuels conflicts and exacerbates instability;
• Mineral supply chains are often linked to child abuse, human trafficking, forced labour and other human rights violations… With 60% of Africa’s population under 25 years of age, young people are both the future of the continent but also its most vulnerable citizens.

The Ambassadors sitting in the UN Security Council heard these words. Five of them represent the world’s biggest arms producers –those used by terrorist groups– and their markets are the top beneficiaries of the business of exploiting precious minerals.

The highest suicide rate

But there is much more to tell. The very same day, 6 October, the World Health Organization (WHO) launching another horrifying data: Africa has the highest suicide rate in the world.

Ahead of World Mental Health Day on 10 October, Dr. Matshidiso Moeti, WHO’s Regional Director for Africa, called for “significant investment…to tackle Africa’s growing burden of chronic diseases and non-infectious conditions – such as mental disorders – that can contribute to suicide”.

A couple of specific facts presented by the world specialised body:

• Mental health problems affect 116 million people in the African region, up from 53 million in 1990.
• The continent also has six of the top 10 countries for suicide in the world, while for each suicide in Africa, there are an estimated 20 suicide attempts.

Mental health deserves less than half a dollar

Despite the urgency of the problem, African governments allocate less than 50 US cents per person to treat mental health problems, says WHO. This is five times more than in 2017, but it is still well below the recommended 2 US dollars per person for low-income countries.

Additionally, mental health care is generally not included in national health insurance schemes, WHO said, noting that in Africa, there is only one psychiatrist for every 500,000 inhabitants.

This is 100 times below the WHO recommendation.

Additionally, mental health workers mostly work in urban areas, often leaving rural communities without any support. “Mental health is integral to wholesome health and well-being yet far too many people in our region who need help for mental health conditions do not receive it.”

‘Old’ and ‘modern’ robbery

The robbery of Africa is not new. European merchants in the early years of 16th century initiated the known as the Transatlantic slave trade. Tens of thousands of Africans were hunted mostly in West Africa, loaded in the holds of ships, chained, minimally fed to keep them alive, surrounded by rats, and shipped for European colonies in the Americas.

Then, in the 1880s, in what became known as the “Scramble for Africa,” European countries raced to occupy the continent, seeking economic, commercial, and strategic profits.

Once the European empires’ military and economic powers were diminished following two World Wars, their African colonies started accessing independence in the early 1960s.

But such independence did not last long.

In fact, Western-based private corporations have soon replaced the European-State colonisation, extracting oil, gold, diamonds and all sorts of precious metals and mineral resources, including highly demanded coltan and lithium, just to mention some.

Climate catastrophes, migration…

The world scientific community has repeatedly informed that while Africa produces between 2% and 3% of all gas emissions, the continent carries the burden of over 80% of all climate catastrophes, majorly generated by the five permanent members of the UN Security Council.

As a consequence of its impoverishment and the unbearable load of external debts, the abuses of world’s trade, the continued exploitation, the induced corruption, and the severe droughts and floods, Africa is now home to 1 in 2 humans living in extreme poverty, and hunger.

No wonder then that thousands of Africans continue to attempt to escape poverty and hunger, fleeing to Europe in search of jobs that allows them and their families to survive.

Hundreds of them have drowned in the sea, and those who have managed to survive continue to be prey to human smugglers and traffickers who force them into ‘modern’ slavery, sexual exploitation, trade in vital organs, etcetera.

And anyway, those who finally reach European lands are now being pushed back, shipped to other countries in exchange for money, and swept away to States with high records of human rights abuses.

The looting of a whole continues unabated.

By Gregory Chen
WASHINGTON DC, Oct 10 2022 – As we approach 2030, the Sustainable Development Goals look harder than ever to achieve. Shocks to the global economy caused by climate change, COVID-19, and conflict threaten humanity’s survival. For the most vulnerable, trends are moving in the wrong direction with an additional 75 to 95 million people now living in extreme poverty compared to pre-pandemic World Bank projections. By the end of this year more than 657 million people will still be living in extreme poverty substantially more than in 2018.

Though we cannot blame the recent crises alone. Even before the crises of the past few years the globe was beginning to realize addressing extreme poverty required new approaches. Economic growth alone remains insufficient and conventional anti-poverty policies and programs were not addressing the root problems affecting the most marginalized.

What can countries do to end the most severe forms of poverty?

While private organizations like BRAC (where I work) have a role to play, it is governments that are best positioned to take the lead tackling extreme poverty at scale. Governments have the mandate, the infrastructure, and the financing to transform the lives of the most vulnerable people.

Governments increasingly recognize a growing body of research which tells us people in extreme poverty face multiple reinforcing barriers – a lack of nutrition, education, and social exclusion which contribute to a deficit of hope and self-confidence. Together, these multiple factors create a poverty trap that is challenging to escape. Addressing only a few of these barriers at a time is insufficient for people out of poverty traps. Many governments have begun to recognize this in the past decade as growth lifted many out of poverty but large pockets of people remained excluded.

Women gather to discuss social issues and add to their group savings as part of the Bab Amal (Door of Hope) Graduation project in Upper Egypt (Sohag, Egypt). Credit: BRAC/Robert Irven 2022

Escaping a poverty trap requires a “big push” – a significant transfer of resources and\ support that can address multiple barriers in one go. One “big push” proven to break the poverty trap is referred to as the Graduation approach (though it may be called different things in diverse settings). Graduation is a sequenced set of interventions that address the unique circumstances of poverty within the local context. This approach meets participants’ day-to-day needs, provides training and assets for income generation, financial literacy and savings support, and social empowerment through community engagement and life skills training – all facilitated through coaching that calls for regular interactions with participants.

A period of intense coaching enables participants to build resilience and self-confidence by empowering them to save, diversify their sources of income, access safety nets, and develop coping mechanisms to major shocks and build up self confidence. These combined interventions are delivered in a 2-3 year time bound period, empowering participants to begin an upward trajectory out of extreme poverty and with greater ability to link to wider government support.

Graduation programs are designed to positively impact all household members, but the approach focuses on direct engagement with working age women. These women are disproportionately affected by extreme poverty and most likely to use their greater capacities to reinvest in their households’ development.

At its core, Graduation is about recognizing that when empowered with the right tools and resources, people can be agents of change for themselves, their households, and their communities.

A high return on investment

The Graduation approach is an investment with returns that grow over time. Rigorous evaluations report that four years after participants start, Graduation delivered benefits that began to exceed program costs. Compared to standalone narrower interventions like lump sum cash transfers, after 3 to 4 years after the initial intervention, Graduation programs deliver greater household benefits – including greater consumption, income, and savings. Research from India shows that ten years after starting the program, participants see approximately 400% ROI, and projections suggest this return could reach 1100% over the participant’s lifetime. Since the investment is time limited and may not be repeated its ROI over the longer term can save costs and build resilience.

Many Government are Adopting Graduation

Due to Graduation’s proven impact, many governments are investing in the approach, integrating it into existing programs. It is estimated that more than 15 government programs have developed Graduation approaches across Latin American, Africa, and Asia. Among them include governments in Kenya, the Philippines, and India. These are most often not new standalone programs but integrated within existing Graduation programs, where the Graduation package is particularly emphasized for certain target populations.

Yolanda, a participant of the DSWD’s Padayon SLP Graduation project, is visited by her coach Julius, who helps ensure she is making steady progress and has the tools and knowledge she needs to overcome any challenges or shocks. (Iloilo City, Philippines). Credit: BRAC/Robert Irven 2022

In the Philippines, despite the many challenges created by COVID-19 in 2020, participants in the Philippines’ Department of Labor and Employment (DOLE) Graduation program had more resilient livelihoods and better savings and financial management, according to Asian Development Bank (ADB). The Government of the Philippines is now on its second iteration of Graduation integration offered through the Department of Social Welfare and Development with support from ADB and the Australian government.

The Government of Kenya is also investing in Graduation with the Kenya: Social and Economic Inclusion Project (KSEIP) in partnership with Global Development Incubator, BOMA Project, Village Enterprise, the World Bank, and the UK government (FCDO). Following a successful pilot in 2019, KSEIP will transition from a narrower unconditional cash transfer to a fuller package of Graduation.

A Few Leading Governments are Implementing at Scale

Some governments have moved beyond testing to delivering at scale. In the Province of Bihar in India, a large rural development program (called JEEViKA) established a special window for a Graduation program known as Satat Jevvikoparjan Yojana (SJY), which has reached 140,000 households in extreme poverty since 2018. Other Provinces in India may follow suit expanding their own Graduation programs as well. Additionally, countries such as Ethiopia and South Africa are looking to further adapt their already large scale programs with more Graduation elements added that can deliver long term results.

As governments implement scaled programs we have reasons to be confident that these investments will bring durable results. While we must address today’s crises, our work to dramatically reduce and eliminate extreme poverty will not happen with slipshod short-term band-aids. Governments can begin to fully address extreme poverty with smart investments that will over time lead to permanent changes that eliminate extreme poverty.

While governments will lead, they cannot do it alone. The international community, particularly multilateral institutions, can provide the financing required to operate at scale. NGOs and community-based institutions can be partners in last mile delivery assisting the government where needed. Researchers can focus their methods more on how scaled programs operate (rather than on repeat small scale impact evaluations) so that we can make wider decisions on adapting for scale.

It is high time for us to lean on the evidence, evolve programmatically, put government in the lead, and benefit from all the testing and research that has led us to solutions that can work.

IPS UN Bureau

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Excerpt:

Gregory Chen is Managing Director of BRAC’s Ultra-Poor Graduation Initiative

By Anis Chowdhury and Jomo Kwame Sundaram
SYDNEY and KUALA LUMPUR, Oct 10 2022 – The dogmatic obsession with and focus on fighting inflation in rich countries are pushing the world economy into recession, with many dire consequences, especially for poorer countries. This phobia is due to myths shared by most central bankers.

Anis Chowdhury

Myth 1: Inflation chokes growth
The common narrative is that inflation hurts growth. Major central banks (CBs), the Bretton Woods institutions (BWIs) and the Bank of International Settlements (BIS) all insist inflation harms growth despite all evidence to the contrary. The myth is based on a few, very exceptional cases.

“Once-in-a-generation inflation in the US and Europe could choke off global growth, with a global recession possible in 2023”, claimed the World Economic Forum Chief Economist’s Outlook under the headline, “Inflation Will Lead Inexorably To Recession”.

The Atlantic recently warned, “Inflation Is Bad… raising the prospect of a period of economic stagnation or even a recession”. The Economist claims, “It hurts investment and makes most people poorer”.

Jomo Kwame Sundaram

Without evidence, the narrative claims causation runs from inflation to growth, with inevitable “adverse” consequences. But serious economists have found no conclusive supporting evidence.

World Bank chief economist Michael Bruno and William Easterly asked, “Is inflation harmful to growth?” With data from 31 countries for 1961-94, they concluded, “The ratio of fervent beliefs to tangible evidence seems unusually high on this topic, despite extensive previous research”.

OECD evidence for 1961-2021 – Figures 1a & 1b – updates Bruno & Easterly, again contradicting the ‘standard narrative’ of major CBs, BWIs, BIS and others. The inflation-growth relationship is strongly positive when 1974-75 – severe oil spike recession years – are excluded.

The relationship does not become negative even when 1974-75 are included. Also, the “Great Inflation” of 1965-82 did not harm growth. Hence, there is no empirical basis for setting a particular threshold, such as the now standard 2% inflation target – long acknowledged as “plucked from the air”!

Developing countries also have a positive inflation-growth relationship if extreme cases – e.g., inflation rates in excess of 20%, or ‘excessively’ impacted by commodity price volatilities, civil strife, war – are omitted (Figures 2a & 2b).

Figure 2a summarizes evidence for 82 developing countries during 1991-2021. Although slightly weakened, the positive relationship remained, even if the 1981-90 debt crises years are included (Figure 2b).

Myth 2: Inflation always accelerates
Another popular myth is that once inflation begins, it has an inherent tendency to accelerate. As inflation supposedly tends to speed up, not acting decisively to nip it in the bud is deemed dangerous. So, the IMF chief economist advises, “Don’t let inflation ‘genie’ out of the bottle”. Hence, inflation has to be ‘nipped in the bud’.

But, in fact, OECD inflation has never exceeded 16% in the past six decades, including the 1970s’ oil shock years. Inflation does not accelerate easily, even when labour has more bargaining power, or wages are indexed to consumer prices – as in some countries.

Bruno & Easterly only found a high likelihood of inflation accelerating when inflation exceeded 40%. Two MIT economists – Rüdiger Dornbusch and Stanley Fischer, later International Monetary Fund Deputy Managing Director – came to a similar conclusion, describing 15–30% inflation as “moderate”.

Dornbusch & Fischer also stressed, “Most episodes of moderate inflation were triggered by commodity price shocks and were brief; very few ended in higher inflation”. Importantly, they warned, “such [moderate] inflations can be reduced only at a substantial … cost to growth”.

Myth 3: Hyperinflation threatens
Although extremely rare, avoiding hyperinflation has become the pretext for central bankers prioritizing inflation prevention. Hyperinflation – at rates over 50% for at least a month – is undoubtedly harmful for growth. But as IMF research shows, “Since 1947, hyperinflations in market economies have been rare”.

Many of the worst hyperinflation episodes in history were after World War Two and the Soviet demise. Bruno & Easterly also mention breakdowns of economic and political systems – as in Iran or Nicaragua, following revolutions overthrowing corrupt despotic regimes.

A White House staff blog noted, “The inflationary period after World War II is likely a better comparison for the current economic situation than the 1970s and suggests that inflation could quickly decline once supply chains are fully online and pent-up demand levels off”.

Myth 4: Evidence-based policymaking
Central bankers love to claim their policymaking is evidence-based. They cite one another and famous economists to enhance the aura of CB “credibility”.

Unsurprisingly, the Reserve Bank of New Zealand promoted its arbitrary 2% inflation target mainly by endless repetition – not strong evidence or superior logic. They simply “devoted a huge amount of effort” to preaching the new mantra “to everybody who would listen – and some who were reluctant to listen”.

The narrative also suited those concerned about wage pressures. Fighting inflation has provided an excuse to further weaken workers’ working conditions and pay. Thus, labour’s share of income has been declining since the 1970s.

Greater central bank independence (from the executive) has enhanced the influence and power of financial interests – largely at the expense of the real economy. Output and employment growth weakened as a result, worsening the lot of the many, especially in the global South.

Fact: Central banks induce recessions
Inappropriate CB policies have often slowed economic growth without mitigating inflation. Hawkish CB responses to inflation can become self-fulfilling prophecies with high inflation seemingly associated with recessions or growth collapses.

Before becoming Fed chair, Ben Bernanke’s research team concluded, “an important part of the effect of oil price shocks [in the 1970s] on the economy results not from the change in oil prices, per se, but from the resulting tightening of monetary policy”.

Thus, central bank interventions have caused contractions without reducing inflation. The longest US recession after the Great Depression – in the early 1980s – was due to Fed chair Paul Volcker’s 1979-81 interest rate hikes.

A New York Times opinion-editorial recently warned, “The Powell pivot to tighter money in 2021 is the equivalent of Mr. Volcker’s 1981 move”, and “the 2020s economy could resemble the 1980s”.

Fearing an “extremely severe” world recession, Columbia University history professor Adam Tooze has summed up the current CBs’ interest rate hike frenzy as “the single most dramatic simultaneous tightening of monetary policy ever”!

Phobias, especially if based on unfounded beliefs, never offer good bases for sound policymaking.

IPS UN Bureau

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