Editorial: Make Poverty History
Update 108. 31 March 2005
The 'Make Poverty History' campaign is designed to influence decisions at this year's Group of Eight (G8) summit in July. It brings together a number of issues. These include reform of the world trade system, the reduction in the burden of third world debt, and the re-configuring of aid flows to make them more efficient. The overall objective is to make it more likely that developing countries will meet the Millennium Development Goals, set down five years ago by the UN.
We in the PSG have long sought to encourage the linking of these campaigns, since clearly each of the three 'prongs' of Make Poverty History is linked to the reduction of poverty. They are all things that the international community could and should be pressing for. We have also argued that Latin America, and Peru in particular, must not be left out amid all the concern for Africa. To the three prongs could be added the improvement of corporate social responsibility by international investors, and the adoption of ethical codes of practice on the part of transnational companies.
Each prong has a direct relevance for Peru, a country that seems ever further from meeting many of the Millennium Development Goals, especially those related to reducing poverty and inequality:
Peru is hampered by unfair trade rules, especially with respect to agriculture (the sector in which many of Peru's poorest citizens are employed). The unfairness is exemplified by the Free Trade Agreement (FTA) currently under negotiation with the United States. Unwilling to counter the United States and desperate to maintain its textile exports in the US market, the Toledo administration appears willing to sign up to the FTA whatever the conditions imposed by Washington. The US wants to prise open markets for its farmers, and Peru will therefore have to contend with a flood of cheap, subsidised US grains.
Peru's debt remains very substantial, and as a 'Middle Income Country' Peru gets none of the benefits of the Highly Indebted Poor Country (HIPC) initiatives. Around a quarter of Peru's government revenues are destined to service external debt, which means that spending on social welfare programmes is reduced as a consequence.
Peru's share of international aid has declined in recent years. The most recent programme to close is that of the UK's Department for International Development (DFID), whose office in Peru closed its doors at the end of March. The DFID programme showed how even limited aid funds could be used in innovative ways that benefited poor people. By far the largest donor left in Peru is USAID (US Agency for International Development), whose main rationale is to fight 'the war on drugs', not the war on poverty.
If we add to this the need to improve on corporate social responsibility, there is also a long way to go. As we show in our most recent report on mining, there is some good news here, but there is also plenty of bad. And when the euphoria of new investment flows ebbs, Peru will once again experience net outflows of resources as profit repatriation picks up.
As a supporter of 'Make Poverty History', the PSG will be devoting much of its energies over the next few years to looking at ways in which the international community can really help the country meet the stated objectives of reducing poverty, inequality and social exclusion. These are not just problems for Africa.
You can take part in the Make Poverty History Campaign by visiting
www.makepovertyhistory.org and by joining thousands of other campaigners on July 2nd 2005 in Scotland at the G8 summit to make sure that world leaders make responsible decisions.
You can also take action by sending an email or a letter to your local MP, asking them to lobby Gordon Brown, the Chancellor, to ensure that at the G8 summit - taking place this July in Scotland, he urges other finance ministers to put an end to the damaging economic policy conditions that come with debt relief and aid. You can also ask your MP to sign the Make Poverty History Early Day Motion 9 on this subject.