And the poor shall forevermore be downtrodden

Question: what is it about governments, big business, institutions, non–profits, charities etc that they want to keep the poor, poor? Alright, as generalisations go, this one is one of my better ones. Two articles that made me think this appeared in the media today.

The first one was in the Independent and discussed the farming revolution in Malawi. It described how Malawi has been able to turn around from being a country that needed food aid for five million out of twelve million of its citizens to one that is exporting food.

This was achieved by the new government, led by Bingu wa Mutharika, who supported its farmers by subsidising high–yield seed and fertilisers. With the benefit of state coupons the costs of these two essential ingredients to farming success were lowered dramatically.

The cost of the subsidy system to the state was £30m. Malawi’s donors refused to fund the programme, arguing that this would not help. They were wrong. From a yield of 1.2 million tonnes of maize in 2005, the harvest was 3.2 million tonnes in 2007. More than enough to cover local demand of 2.2 million tonnes.

The simplicity of this self–help programme should have made it obvious that it would succeed. This makes one wonder why donors would boycott the effort. Could it be that they really want Africa to stay poor and wish its people to starve? After all, one can control the masses much more effectively if one controls the food supply.

Some of the many reasons voiced by the critics were stunningly stupid. The money could be more wisely spent on research. Yip, let’s do research while the people starve. Or what about — rich farmers would also benefit from the subsidies. But the trump card as always was the one about how this programme opened itself up to corruption.

The opinion that corruption is widespread in Africa is held by many. However, quite frankly, the African continent is but a babe in arms when it comes to corruption. Petty corruption would probably be the best description.

The truly awesome corruption is practiced by the developed world. In fact, corruption will follow where the real money is. And the real money is now in Europe. Forget about the Dollar, hello to the Euro. Two recent examples of this are Siemens and Liechtenstein. It’s worth checking the links.

The second article that made me ponder the topic of poverty today was by well respected South African marketer Chris Moerdyk. He submitted a letter, directed at heir–in–waiting to the SA Presidency Jacob Zuma, to the Mail & Guardian’s Thought Leader.

In this letter he discusses the petrol price rise in South Africa and that Mr Zuma had voiced some concern about the escalating fuel price. Chris Moerdyk is fairly skeptical that Jacob Zuma would do anything about the petrol price once President. The reason for this is that the government benefits immensely from a higher oil price.

Checking the figures, it appears that the SA government gets a nice little 27.9% in taxes from the price of fuel. Add to that the other taxes that it levies on the industry involved such as transport, wholesale and retail operators, and the windfall on higher oil prices is enough to make the Minister of Finance rub his hands in glee.

But that’s not all. The biggest con of all is SASOL. South Africa’s coal to oil producer charges the same prices as petroleum companies, although the cost of production of this fuel has not nearly increased at the same rate as oil has. Sasol doesn’t actually know what to do with the profits. There was talk of a special government levy….

It is therefore not entirely necessary for the petrol price in South Africa to be as high as it is. In fact not nearly that necessary. So what does the price of petrol have to do with the poor? They are the worst hit by it. Inevitably the poor live further away from work than the well off. This means that transport costs to work have escalated.

Transport costs will also impact heavily on food prices and other necessities such as fuel for heaters and cooking appliances. Most poor people, especially in Africa, cannot afford electricity. Not that the price of electricity is going to go down any time soon, or ever!

Some countries have already experienced riots because of the high cost of food. As this is being written food riots are happening in the Somali capital, Mogadishu. Haiti’s food riots were the first. A Google search offers up 3 655 articles on food riots!

Would one be surprised to read that agribusiness multinationals are making billions in profit out of the growing global food crisis? Just one example is Montsano who reported in April 2008 that its net income for the three months up to the end of February of 2008 had more than doubled over the same period in 2007. Its profits increaased from $1.44bn to $2.22bn.

Two articles on how the poor are being treated hardly supports a sweeping generalisation as made in the opening paragraph of this article. However, if one were to research this topic further, one would find a fair size body of articles and research that supports the position that the poor are getting poorer. Can one blame governments, big business, institutions, non profit organisations or charities for this? Who else?