[Comment] Rx for Global Poverty

from the Washington Post

By Robert J. Samuelson

What's the world's greatest moral challenge, as judged by its capacity to inflict human tragedy? It is not, I think, global warming, whose effects -- if they become as grim as predicted -- will occur over many years and provide societies time to adapt. A case can be made for preventing nuclear proliferation, which threatens untold deaths and a collapse of the world economy. But the most urgent present moral challenge, I submit, is the most obvious: global poverty.

There are roughly 6 billion people on the planet; in 2004, perhaps 2.5 billion survived on $2 a day or less, says the World Bank. By 2050, the world may have 3 billion more people; many will be similarly impoverished. What's baffling and frustrating about extreme poverty is that much of the world has eliminated it. In 1800, almost everyone was desperately poor. But the developed world has essentially abolished starvation, homelessness and material deprivation.

The solution to being poor is getting rich. It's economic growth. We know this. The mystery is why all societies have not adopted the obvious remedies. Just recently, the 21-member Commission on Growth and Development -- including two Nobel-prize winning economists, former prime ministers of South Korea and Peru, and a former president of Mexico -- examined the puzzle.

Since 1950, the panel found, 13 economies have grown at an average annual rate of 7 percent for at least 25 years. These were: Botswana, Brazil, China, Hong Kong, Indonesia, Japan, South Korea, Malaysia, Malta, Oman, Singapore, Taiwan and Thailand. Some gains are astonishing. From 1960 to 2005, per capita income in South Korea rose from $1,100 to $13,200. Other societies started from such low levels that even rapid economic growth, combined with larger populations, left sizable poverty. In 2005, Indonesia's per capita income averaged just $900, up from $200 in 1966.

Still, all these economies had advanced substantially. The panel identified five common elements of success:

· Openness to global trade and, usually, an eagerness to attract foreign investment.

· Political stability and "capable" governments "committed" to economic growth, though not necessarily democracy (China, South Korea and Indonesia all grew with authoritarian regimes).

· High rates of saving and investment, usually at least 25 percent of national income.

· Economic stability, keeping government budgets and inflation under control and avoiding a broad collapse in production.

· A willingness to "let markets allocate resources," meaning that governments didn't try to run industry.

Of course, qualifications abound. Some countries succeeded with high inflation rates of 15 to 30 percent. Led by Japan, Asian countries pursued export-led growth with undervalued exchange rates that favored some industries over others. Good government is relative; some fast-growing societies tolerated much corruption. Still, broad lessons are clear.

One is: Globalization works. Countries don't get rich by staying isolated. Those that embrace trade and foreign investment acquire know-how and technologies, can buy advanced products abroad, and are forced to improve their competitiveness. The transmission of new ideas and products is faster than ever. After its invention, the telegram took 90 years to spread to four-fifths of developing countries; for the cellphone, the comparable diffusion was 16 years.

A second is: Outside benevolence can't rescue countries from poverty. There is a role for foreign aid, technical assistance and charity in relieving global poverty. But it is a small role. It can improve health, alleviate suffering from natural disasters or wars, and provide some types of skills. But it cannot single-handedly stimulate the policies and habits that foster self-sustaining growth. Japan and China (to cite easy examples) have grown rapidly not because they received foreign aid but because they pursued pro-growth policies and embraced pro-growth values.

The hard question (which the panel ducks) is why all societies haven't adopted them. One reason is politics; some regimes are more interested in preserving their power and privileges than in promoting growth. But the larger answer, I think, is culture, as Lawrence Harrison of Tufts University argues. Traditional values, social systems or religious views are often hostile to risk-taking, wealth accumulation and economic growth. In his latest book, "The Central Liberal Truth," Harrison contends that politics can alter culture, but it isn't easy.

Globalization has moral as well as economic and political dimensions. The United States and other wealthy countries are experiencing an anti-globalization backlash. Americans and others are entitled to defend themselves from economic harm, but many of the allegations against globalization are wildly exaggerated. Today, for example, the biggest drag on the U.S. economy -- the housing crisis -- is mainly a domestic problem. By making globalization an all-purpose scapegoat for economic complaints, many "progressives" are actually undermining the most powerful force for eradicating global poverty.

Food crisis has changed game on beating poverty: U.N.

from Reuters

By Robin Pomeroy

ROME - World leaders must radically change their strategy toward beating poverty now that hunger can no longer be staunched by cheap food, the head of the United Nations farm aid agency said.

At a food summit in Rome next week, the international community must recognize that poverty challenges have changed and agree to reverse years of neglecting poor farmers, said the head of the International Fund for Agricultural Development.

"They (governments and donors) have taken cheap, affordable food on the international market for granted. We no longer can do that and we have to realize it's a profound structural problem," IFAD President Lennart Bage said in an interview late on Monday.

Initially called to address the effects of climate change on food security, vast food price hikes that continued well into this year have shifted the summit's focus to what U.N. Secretary-General Ban Ki-moon has called a "global crisis".

Although not a donors' conference, world leaders are due to agree a statement on how to address food shortages and a task-force set up by Ban will issue an action plan.

Bage said a period of global abundance, which ran for 25 years from the early 1980s, had made some countries complacent.

"Many African leaders have said to me: 'Why should we use scarce resources for agriculture when there is abundant and cheap food available on the international market'.

"We were lulled into complacency that there's abundant and affordable food available -- that's not longer the case."

A range of factors have contributed to the price surges, including poor harvests in some exporting countries, record low stocks and rising oil prices driving up costs.

But the fundamental challenges of a growing population and rising demand for a richer diet in places such as India and China will not go away, Bage said.

"Never in any period in human history have so many people moved out of poverty as in the last 20 years.

"That's a good thing but we need to see to it that it's workable in an environmentally sustainable way. We need to re-engage in the very basis of human existence -- namely food."

IFAD runs projects aimed at giving long-term help to small farmers and is involved in countries worst affected by the food crisis, such as Haiti.

People died in the Caribbean nation in food riots that toppled the government in April and future harvests are threatened as people have had to eat seeds meant for planting.

Bage said success stories such as Vietnam, which has helped small farmers to the extent that the country is now a significant exporter of some commodities, such as rice and coffee, showed aiding farmers could work.

Such projects meant the world would be able to feed a population expected to grow by 50 percent by 2050 to 9 billion.

Too few homes for low-income renters

from the Columbus Dispatch

By MARK FERENCHIK

The foreclosure mess gripping central Ohio affects not only homeowners but renters, too.

People losing their homes end up in apartments and other rental units, leaving less space for low-income renters.

So it was under that cloud that two buses left yesterday for a tour of affordable housing that the Columbus Housing Partnership has built or renovated in Franklin County.

The point: It can be done.

The warning: The city needs a whole lot more of it.

“There's a huge gap between the number of affordable housing units and the need,” said Amy Klaben, the Housing Partnership's president, who says the county needs 17,000 more units for families making less than $15,000 a year.

Poor people often spend 55 percent of their income on housing, Klaben said.

The nonprofit partnership has been taking government officials, lenders, board members and others on similar tours the past few years. But this tour was designed to also drive by boarded-up, foreclosed homes on the way to partnership sites.

Those on the buses saw the partnership's 34 rent-to-own homes in Franklinton and a $10 million redevelopment of the Bending Brook apartments in Urbancrest, a subsidized-housing complex once plagued by drugs and crime but now described as safe and livable.

“Our children can go outside and play,” said Abdukadir Matan, 55, a native of Somalia who has lived in Bending Brook with his wife and three children for four years after living in a homeless shelter in Hartford, Conn.

Klaben estimated that foreclosures have affected at least 100,000 people in Franklin County owner-occupied and rental units since 2004.

Those in rental units are hit especially hard because the law allows landlords being foreclosed on to give tenants just three days' notice to evict them, said Bill Faith, executive director of the Coalition on Housing and Homelessness in Ohio.

Foreclosures in Franklin County increased to a record 2,639 during the first three months of this year, Klaben said. Vacancy rates have dropped in Franklin County, to around 6 percent, compared with the national average of 6.6 percent, said Jay Scott, executive director of the Columbus Apartment Association.

Though he can't specifically point to foreclosures as the reason, Scott said people are deciding to rent rather than buy.

Before the foreclosure crisis, the area had a glut of rental housing, Faith said. “Landlords were offering incentives for people to move in.”

Many social service agencies struggling

from the Evanston Review

By BOB SEIDENBERG

Staff members who sometimes wore sweaters in Peer Service Inc. offices this past winter weren't necessarily making a style choice.

"We have people who would like us to have our thermostat set at 72 degrees, but we just can't afford it," said agency director Kate Mahoney, talking about the cutbacks that have hit the not-for profit drug prevention and treatment program, which has offices in Evanston and Glenview.

Mahoney wasn't alone in talking about funding challenges social service agencies face at a recent conference on the issue at Northbrook Village Hall. Lorretta Live, a domestic violence service provider with the Evanston/North Shore YWCA, told representatives that some 607 women across Illinois did not receive services in the past funding year due to budget problems.
A sick feeling

"I've stood in the hallway of the Skokie courthouse with many a crying woman and said, 'We can't help you today,'" she said. "It's horrible to be in that position.

"If she doesn't come back, you always wonder what happened to her."

Sandra Stumme, representing Metropolitan Family Services in Evanston, said funds have gone flat at the agency, which receives an estimated 67 percent of the funds from government sources. The agency provides a wide range of services for low- and moderate-income families.

While the agency has tried to be more efficient, it still isn't covering costs, she said.
Recessions take a toll

In tracking five recessions starting with the first between 1973-1975, the study found that giving fell an average of 1.3 percent, adjusted for inflation. In non-recession years from 1966 through 2006, giving has increased an inflation-adjusted 4.3 percent, the report found.

Another report, sponsored last year by the United Way of Metropolitan Chicago and The Chicago Community Trust, found that "stagnant and decreased funding," combined with other changes, "have created financial stress and management challenges for agencies."

Government funding, "which represents the most significant source of revenue for the sector, is changing and has not kept up with increased costs," the report concluded. "As a result, competition has intensified for private funding. Yet private philanthropy, such as foundations and United Way, has been unable to fill the gap."
Agencies compete

"Basically agencies are competing for a finite pool of donated dollars and the costs of living are going up," said United Way spokeswoman April Redzik, summarizing the findings. "A lot of government services have changed to being more fee for services, forcing agencies to put more money out to run their programs."

Yet, the problem doesn't exist across the board and may not have touched down in some places.

"Frankly some communities are faring better than others," said Maureen DiFrancesca, chief professional officer for United Way of North Shore. The agency has chapter boards in Evanston, Wilmette, Winnetka, and communities all through the North Shore.

In those communities not faring as well, there's a question of whether the economy is at cause, "or is there something else that needs to be addressed," DiFrancesca said. "Maybe even in a more operational way...," DiFrancesca said.
A record-setting year

For instance, the Evanston Community Foundation, established in 1986, just completed a record-setting year in 2007, bringing in contributions and allowing it to fund a growing number of community initiatives, said executive director Sara Schastok.

Moreover, the great bulk of contributions, approaching 80 percent, come from individuals, Schastok noted.

"The biggest thing right now is for organizations that depend a lot on government funding," she said. "That funding is down, and the way of funding in the state is to look at more reimbursement for direct services as opposed to really supporting agencies and the work they do in the communities."

Demand for those services, meanwhile, is up, the United Way said in its report.

The report, for instance, notes such trends as a 14 percent growth in five years in the number of people living in poverty, and an 84 percent growth in 10 years in the number of working poor families living in the suburbs. Growth in the over 65-population, is expect to have doubled by 2030. And the number of individuals released from state prisons annually who return to Chicago is approaching 20,000.

Agencies such as Peer Services try to meet many of these needs, providing drug treatment and education programs designed to direct clients away from further trouble. With the sluggish economy, however, the agency is seeing slowed payments from the state as well, Mahoney said. As a result, the agency had to set up a line of credit and borrow money to meet expenses, she said.

High food prices add to violence in war zones: ICRC

from Reuters

By Stephanie Nebehay

GENEVA (Reuters) - The global food crisis threatens to spark even more violence in war zones where millions of people are already vulnerable, the International Committee of the Red Cross said on Tuesday.

The humanitarian agency vowed to press on with its work in 52 countries despite a rise in food prices that has led it to lift planned spending on rations by almost 200 percent to 100 million Swiss francs ($98 million), one-tenth of its 2008 budget.

"There is a potential for food-related violence. In contexts where people are already in a very bad situation, and we have already seen examples, you could come to food crisis-induced violence," ICRC President Jakob Kellenberger said.

The agency issued its annual report on Tuesday, and Kellenberger told a news conference it was especially important that help reach conflict areas and other hotspots where accessing food aid can be "a question of survival".

The ICRC will need to spend large sums this year to provide civilians caught up in armed conflict with food and protection, Kellenberger said. "It is quite clear that it will be a year of very high expenditure. That has a lot to do with the food situation."

The Swiss-based agency is stepping up food distribution in Yemen and Somalia, where rising food prices and fighting are taking a heavy toll on the destitute. Kenya and the Democratic Republic of Congo are also in line for more food, and Chad, Haiti and Afghanistan are seen in critical need.

FOOD PRICES SPARK RIOTS

The world prices of basic foodstuffs have risen steeply in the last year, sparking riots in some countries.

The ICRC now estimates it will need to buy 92,000 tonnes of food this year, a spokesman said.

It spent 944 million Swiss francs ($919 million) last year on relief projects in countries including Iraq and Sudan where basic services such as healthcare have largely collapsed, the annual report said.

Worldwide, it operated water and sanitation projects that helped more than 14 million people, and provided medical supplies to hospitals and clinics that treated nearly 2.9 million patients.

Sudan, where it has more than 1,500 staff, was the ICRC's single largest operation in 2007 for the fourth straight year, with a budget of 94 million Swiss francs ($92 million).

In Sudan's western Darfur state, where government troops and rebels have been fighting since 2003, the ICRC is one of the few humanitarian groups working in remote rural areas.

Last year it visited 2,400 places of detention holding more than 500,000 detainees in 77 countries, including suspects held at the U.S. naval base at Guantanamo Bay and in U.S. prisons in Iraq and Afghanistan.

In Iraq, it is visiting more than 20,000 detainees held by U.S.-led forces, Kurdish authorities in the north, and Iraq's Justice Ministry, Kellenberger said.

Interview with Muhammad Yunus

from Middle East online

We started the Millennium with the war on terror, and all our resources, all our attention, all our discussions are concentrating on terrorism. Billions of dollars went into a war, which we have not achieved anything, notes Muhammad Yunus.


[The following is a transcript of an interview with Muhammad Yunus by Amy Goodman from Democracy Now!]

AMY GOODMAN: “Banker to the poor,” Muhammad Yunus is the Bangladeshi economist who was awarded the 2006 Nobel Peace Prize. Yunus shared the Nobel with the Grameen Bank, which he founded three decades ago. The microcredit program he pioneered has helped hundreds of thousands of impoverished Bangladeshis, mainly women, by providing small unsecured loans, which are then repaid. Yunus accepted the Nobel award in Oslo a little over a year ago. Muhammad Yunus is the first Nobel Peace Prize winner from Bangladesh. He has just come out with a new book called Creating a World Without Poverty: Social Business and the Future of Capitalism. Muhammad Yunus joins us for the rest of the hour in our firehouse studio.

Welcome to Democracy Now!

MUHAMMAD YUNUS: Thank you.

AMY GOODMAN: Before we talk about microloans, I wanted to deal with this terrible issue that has just arisen in East Timor. A fellow Nobel Peace Prize laureate, Jose Ramos-Horta, now in the hospital in Australia, he has survived an assassination attempt, two bullets to his chest and his stomach, though he’s in very serious condition. You know Jose Ramos-Horta.

MUHAMMAD YUNUS: I know him very well. He’s a very good friend. I have known him long before he received the Nobel Peace Prize. He was a very enthusiastic supporter of microcredit. He has been pleading with me to come to East Timor to start a program, and I did when he was the prime minister. And then, this is still running. I was shocked to hear this news, and I sent him a message, and we are all praying for his life so that he comes back to full health.

AMY GOODMAN: For those of you who may have missed it, the president of East Timor, Jose Ramos-Horta, as well as the prime minister, both, there were assassination attempts on their life. Xanana Gusmao was not hit. Jose Ramos-Horta was.

Well, Muhammad Yunus, explain microcredit. Explain the whole idea behind the Grameen Bank.

MUHAMMAD YUNUS: The idea is, an overflowing majority of the people in the world don’t have access to financial services from the conventional financial institutions, the banks, so they’re left to the loan sharks, moneylenders. So we know about moneylenders, loan sharks, all the time. We read about them, we hear about them, but don’t do anything about them. So it continues, it flourishes.

So in one of my experiences in Bangladesh, I saw an extreme situation in a village, where money lending was still going on and people are becoming victims, so I wanted to address that issue in that village level. So I made a list of people who were borrowing from loan sharks. When my list was complete, there were forty-two names on my list, and the total money they borrowed was $27. This is back in 1970s, early ’70s. And I was shocked that for such a small amount of money, people have to go through such a horrible experience. So I thought I can solve the problem. It’s very easy. If I give this $27, they can return the money to the loan sharks, and they’ll be free. And that’s what exactly I did. And it created such a sensation among them.

I thought if you can make so many people so happy, such a small amount of money, why shouldn’t you do more of it. So I wanted to do more of it by linking them with the bank. Bank said, no, bank cannot lend money to the poor people. So I’m with this issue: why can’t the bank lend money to the poor people? So for months I was struggle. Finally, I persuaded them by offering myself as a guarantor. I said, “I’ll sign all your papers. I’ll take the risk. And you give the money.” That was the beginning in 1976. And it worked.

So gradually expanded the program, but banks were not very enthusiastic about it. So I thought, why don’t I create a separate bank for them? So I created a separate bank, Grameen Bank, or Village Bank, and then expanded and expanded. It doesn’t need any collateral, first thing, no guarantee, no lawyers, no legal papers between the lender and the borrower. It’s a trust-based banking. People, particularly women, take small loans, who never did before had any experience of handling money. But for the first time, she takes a little amount of money that she has a—she can organize her courage to do that, and then go into earning money by investing this money, raising chicken, doing some handicrafts and so on, and pay back the bank in weekly installments. That’s what the microcredit is all about.

AMY GOODMAN: Why women?

MUHAMMAD YUNUS: I was complaining against the conventional banks. I said, “Why men?” 100 percent, nearly 100 percent of the borrowers of conventional banks in Bangladesh are men. So I raised the issue. They are not only wrong by rejecting poor people; they are also wrong by rejecting women of all class. So when I began, I wanted to make sure half the borrowers in my program are women. So this is how I started.

And it took a long time, because women themselves said, “No, don’t give the money to me. I don’t know anything about money. Give it to my husband.” I said, “No, that’s not what we want. We want you to look at that.” And we worked very hard to break the fear, because it’s a fear that she was supposed to—I mean, she was hiding behind, because she didn’t want to touch money, this is trouble. So, gradually we peel off the fear and build a confidence in her to try out with small money, $20, $30 of loans. And it worked. She got very excited. She wanted more and continued in it.

Once we achieved that goal of fifty-fifty, then we saw money going to the family through women brought so much more benefit to the family compared to the benefit when you lend the money through men. Women took good care of the money. Women transferred the benefit to the children immediately, improved the household and going towards a better life for themselves in a long-term vision. Men were mostly to enjoy right now, not in a long-term way, in a kind of a readymade way, so that sort of thing. So we changed our policy: we started focusing on women. Today, we have seven-and-a-half million borrowers in Grameen Bank in Bangladesh. 97 percent are women.

AMY GOODMAN: And who runs the bank? The bank is a for-profit?

MUHAMMAD YUNUS: Bank is a for-profit. It’s owned by the borrowers, so the profit goes back to the borrowers again, so that way it’s a full circle. It’s a corporate body. It has a management team, and I head the management team. There’s 27,000-plus employees, the staff of the bank, which go around around the country to serve these seven-and-a-half million borrowers and meet them physically within a week, because we do the business at the doorstep of the borrowers, so they don’t have to come to our office. Office, for us, to keep the records, not for our business. So we do the business at the doorsteps, so women feel very comfortable. She doesn’t have to go any place. She do the business at her place, and so on.

AMY GOODMAN: You have an interesting comparison in your book, Creating a World Without Poverty, to get a sense of the population density of Bangladesh. You squeeze all the people of the United States into Wisconsin, and it’s still not as dense as Bangladesh.

MUHAMMAD YUNUS: That’s fact, yes. It’s amazing how density of population can happen in Bangladesh. Another way I explain, if you take the whole world population, bring it to the United States, the density that you will create by putting six billion people in the United States, today density in Bangladesh is slightly higher than that. So you can imagine how much the density is.

AMY GOODMAN: And yet, since the Grameen Bank has been established, has the level of poverty changed in Bangladesh?

MUHAMMAD YUNUS: It has. It has. Poverty has been declining in Bangladesh very steadily. During the ’90s, poverty has declined on an average of one percent per year.

AMY GOODMAN: About half the people are poor?

MUHAMMAD YUNUS: Used to be more than that, 80 percent poor, and gradually it’s declining. We are one of those countries, I would say lucky countries in the world, which will be meeting the Millennium Development Goal number one, to reduce poverty by half by 2015. So between 2000 and 2015, the poverty level in Bangladesh will be reduced to half. And if we can continue with our progress, most likely that we’ll achieve that goal before 2015. So that’s a tremendous kind of excitement for us.

AMY GOODMAN: Muhammad Yunus, what was the effect of winning the Nobel Peace Prize, you and the Grameen Bank, on the work that you do?

MUHAMMAD YUNUS: It’s a wonderful thing. Of all the prizes in the world, Nobel Prize is unique in its position, the tremendous amount of excitement it generates in the whole world about the prize. The moment the prize is announced, every single newspaper in the world makes it a front-page news. Every television station, it’s a main news item. And people get interested to know what you do, how you got it, what is it that you have done over years. So it creates a lot of attention and awareness.

We have been trying to explain why microcredit is so important for poor people to change their life, improve their income, but not too many people paid any attention to it. The moment the Nobel Peace Prize was announced, everybody wants to hear you, what you did, how you did it. And everybody asks, how can we do more? Can we do something about it? So all the doors which you tried to knock and never opened suddenly open, and people are willing to talk and go from there. So I’m taking, too, advantage of that, and now that I have the opportunity to discuss and explain this so important piece in reduction of poverty, so I’m doing that, and I’m getting good response from people.

AMY GOODMAN: Well, while everyone praises the cause of helping poor women in Bangladesh, some critics say microcredit is being misconstrued as a way of ending poverty. After you received the Nobel Peace Prize last year, we spoke with Vandana Shiva, the world-renowned environmental leader, physicist, ecologist. I wanted to play just an excerpt of what she had to say and then get your response. This is Vandana Shiva.

VANDANA SHIVA: I’m very happy that the Grameen Bank and Yunus got the Nobel Peace Prize. I would only say, let us not think this is a solution to every situation that creates poverty. It’s a solution in a particular context. But it cannot be the solution when land is being grabbed from the peasants and leaving them in poverty. For example, in this whole land grab under the special economic zones that’s taking place in India right now—and foreign direct investment in real estate is part of the driving force for this—that cannot be solved by microcredit. It needs a solution in terms of respecting the land rights of the peasants and not treating land of the poor as something that can be grabbed by the rich.

The recent report of Helsinki actually gives worse figures than Muhammad Yunus gave: one percent of the world’s wealthy are owning 80 percent of the world’s wealth. And I would say, they are then turning that wealth into owning 80 percent of the world’s resources, real material natural resources, the land, the water, the biodiversity, the forests, the minerals.

I think there’s a second context in which microcredit could actually create a problem, and it’s the kind of context in which we have been forced to work. As credit for unaffordable seeds moves nonrenewable seeds, genetically engineered seeds, hybrid seeds into rural areas in India, we are seeing a new kind of debt trap created.

Farmer suicides, of which there have been 150,000 in the last decade of market opening made possible because of credit, micro and macro. 150,000 is a large number of peasants being wiped out. I have called this a genocide. And it’s being made possible by putting money available, credit available, so that they could get seeds of Monsanto. In fact, it’s a debate, old debate, I’ve had with Yunus, because there was a time he was going to use microcredit to move GM seeds and Monsanto seeds to the Bangladeshi women. And we had to have a debate, and thank goodness he backed out of that agreement. […]

Credit, loans, money circulation cannot solve the problems of alienation of participating in earth democracy. Privatization of water leading to a high cost of water could be financed by flows of credit, but the solution to access to water is rights to water. Rights cannot be substituted by credit. Rights need to be recognized as rights and collective rights to the common wealth of this planet—the atmosphere, the water, the seeds, the biodiversity. That needs a rights solution. Credit can come after that rights solution has been offered.

AMY GOODMAN: That is Vandana Shiva. Muhammad Yunus, your response?

MUHAMMAD YUNUS: Well, there are several things, and that one is—it’s a misinterpretation of microcredit. We are not saying that this is the solution for all poverty. We are saying this is an important item in solving poverty. Poverty is multidimensional thing; it’s not a single thing. So microcredit is a fundamental issue in bringing financial services to the poor people. What about the education? What about the health? What about the political rights? What about the human rights, and so on? So all these things have to be brought in. We deal with only one aspect: microcredit. And we are saying microcredit should be accepted as a human right. It’s so fundamental, so basic thing to it.

About GMO, about the—we never did that. This is—

AMY GOODMAN: The genetically modified seeds.

MUHAMMAD YUNUS: Genetically modified seed. This was also a misinterpretation. We were accused that we are giving microcredit to buy the genetically modified seeds. Garmeen Bank works with women, with the landless families, extremely poor. They are not farmers. We deal only with women, 97 percent women, only with landless people, extremely poor people. They are not anywhere near farm owners, the farming. They don’t buy seeds in the market. So we have no reason why we should give microcredit to them to buy the seeds, when they don’t have own land at all. So this is an extension to accuse Grameen Bank that they are doing the wrong thing.

AMY GOODMAN: But the idea that others would embrace it as a way to say this is bringing justice to very poor people, when she says it’s about access to water, not credit, that counts.

MUHAMMAD YUNUS: I was saying that everything is important. Access to credit is important. Access to water is important. Access to health is important. Access to education is important. Nothing is unimportant. I’m saying we do everything we can. Don’t ignore the others. Just because you do one thing, it’s not because the others are not important. Everything is important. So let’s do it all together. That’s what my new book, Creating a World Free from Poverty, is talking about. It’s creating a different kind of system.

Poverty is not a created by the poor people. Poverty is created by the system. The system includes everything, the institution, the concept, the policies and everything. So we are saying we have to address those things. We are—in our work, in Grameen Bank, we are addressing the financial system. But there are many other systems which needs to be addressed.

AMY GOODMAN: Explain your idea of social business.

MUHAMMAD YUNUS: Yes, and I am saying that the conceptual framework of capitalism itself is at fault. That’s what created all the problems. So we have to address that also. And the concept of business, for example, only way the concept of business is defined in a capitalist theory is a business to make money. Profit maximization is the sole mission of business.

And I’m saying this is a misinterpretation of a human being. Human being is not a machine. Human being is not a robot. It’s not a money-making machine. A human being is much bigger than making money. Money-making is an important part of a human being, but certainly it’s not the totality of human being. Human being is much bigger than that. It’s also caring being. It’s a sharing being, wants to make a difference in the world. That part is not included in the business world, in the economic world.

AMY GOODMAN: Explain the example you begin Creating a World Without Poverty with, and that is the Grameen-Dannon relationship.

MUHAMMAD YUNUS: Sure.

AMY GOODMAN: That’s Dannon yogurt.

MUHAMMAD YUNUS: That’s right. So I’m saying there should be at least one more type of business in order to justify the totality of human being. This is a business dedicated to others, not to yourself. The current business is all dedicated to “myself,” everything. I am the center of my business. I gain. So I’m reversing that, creating another business calling, social business, that’s dedicated to others completely and nothing for me. So it’s kind of coming together. We can create those kind of businesses, where it’s a non-loss, non-dividend company with a social objective.

We created several companies, one of them that you mentioned, Grameen Dannon Company. Dannon is a big yogurt company and big water company and so on. But we created a small company in Bangladesh in collaboration with Grameen. This is designed as a social business. The company produces yogurt, but for a specific purpose, to bring nutrition to the malnourished children of Bangladesh. All the micronutrients which are missing in those millions of children in Bangladesh are put into this yogurt, the vitamin, iron, zinc, whatever is missing, into the yogurt—and it’s a fortified yogurt—and make it very cheap so that the poorest children can afford it. And once they eat this as a snack, because it’s a delicious snack that they eat—they love it—so, gradually they will regain their health. The company promised that they will not take any dividend. Grameen will not take any dividend out of it, and Dannon will not take any dividend out of it. Entire thing is dedicated to the social objective. So this becomes an example of social business.

We can create healthcare programs. For example, in the United States, 47 million people don’t have health insurance. We can create a social business to bring social—health insurance to those people, because money profit-maximizing companies don’t want to get there, because they have better alternative to make money, rather than giving health insurance to the people who cannot afford it. So we said this is a case for a social business.

Many people don’t receive healthcare programs in many, many countries around the world. We can create social businesses. There are many diseases in the world, very tough diseases like cholera, typhoid, where the vaccines are available in designs. The whole invention has been made. But it’s not produced because it doesn’t make money. So with a social business, we can create the cholera vaccines, we can create the typhoid vaccine. There are six such what they call orphan diseases, where the vaccines are available in designs, but nobody produces it, because it doesn’t serve the poor people—I mean, it doesn’t serve the interest of the businesses.

AMY GOODMAN: And those diseases are?

MUHAMMAD YUNUS: I cannot give you the whole list. I can mention two: one is typhoid, another is cholera.

AMY GOODMAN: In this country, are there social businesses that you’ve been involved with?

MUHAMMAD YUNUS: Not yet. Just beginning. One, we created, Grameen America, it’s a social business, because we want to bring the financial services to people who go to the check-cashing companies. Millions of people in this country cannot open a bank account, because banks will not consider them worthwhile to open a bank account for them. They are too small for them, so they cannot open a bank account. When they receive a check from their employer or from the government, they have to go to the check-cashing companies and pay very dearly to get their check cashed. Their thousand-dollar check should have generated $1,000. That doesn’t do it now, because they cannot have a bank account. So we want to open that.

And there are many, many payday loans. You see the advertisements and the commercials in the newspapers and televisions. Payday loans don’t have to be. And you pay high interest rate on payday loans. This is another way of ripping you off, so—because financial institutions, formal financial institutions don’t come into it. There are lots of pawnshops around. So we said we’re going to address that by designing a financial system and social businesses, and address that. So we created this Grameen America and started in Queens, in Jackson Heights in New York.

Once we developed a prototype, we can take it everywhere. That’s what we’re looking for. And there are many more social business funds. We are creating a social business fund. Those who would like to invest in social businesses in the United States, elsewhere, in terms of health insurance, in terms of microcredit, in terms of financial services, in terms of housing, this is the fund, will be available, whoever can come up with the brilliant idea, because it’s a question of designing an innovative idea in a social business, to address all the problems we see around us.

AMY GOODMAN: Muhammad Yunus, I wanted to switch gears a bit. In your acceptance speech for the Nobel in Oslo in 2006, you said poverty is a threat to peace. You also criticized the Bush administration’s so-called war on terror.

’Til now, over $530 billion has been spent on the war in Iraq by the USA alone. I believe terrorism cannot be won by the military action. Terrorism must be condemned in the strongest possible language. We must stand solidly against it and find all the means to end it. We must address the root cause of terrorism to end terrorism for all time to come. I believe that putting resources into improving the lives of the poor is a better strategy than spending it on guns. - Muhammad Yunus in Oslo, receiving the 2006 Nobel Peace Prize.

AMY GOODMAN: The effect of the war in Iraq?

MUHAMMAD YUNUS: Yeah, it’s—my first comment would be, we started this millennium, 2000, with a tremendous amount of euphoria, tremendous amount of excitement. Cold War is out, and things are taking to shape. Now we can put our resources, our attention, our policies to solve the problems of poverty, diseases and all those things. And we adopted in the Millennium Summit in New York City the Millennium Development Goals, beautiful goals. For the first time in human history, all the nations of the world got together and decided that we want to reduce poverty by half by 2015, in fifteen years’ time. It’s a tremendous amount of exciting decision. And that was a starting point.

And a few years later, couple of years later, we start with war, war on terror, and all our resources, all our attention, all our discussions are concentrating on terrorism. Forget about what it’s all about. So we derailed ourselves completely about creating a new millennium, creating a new society, changing the world with the technology coming in, with all kinds of brilliant things on the table. We could have done that, but we completely removed ourselves. Billions of dollars went into a war, which we have not achieved anything. Terrorism didn’t disappear.

I said terrorism—we have to address the basic issues of terrorism. If there’s a frustrations among people for something—either it’s an economic frustrations or it’s a political frustrations or some sense of deprivation that we are not being listened to, terrorism—it will be good breeding ground for terrorism. So why don’t we address those issues, political issues, economic issues, rather than bring the gun? Gun cannot stop terrorism. It only put the terrorism underground for awhile. It will come back in a more frightening way. So instead of trying to conquer it by guns, why don’t we go as a human problem, solve it in a human way, address those issues and solve them one by one, piece by piece? It could be done. With all the good will in the world, we could do that. So this is what I would say the most damaging thing that we have done so far.

AMY GOODMAN: What is your assessment of President Bush’s effect on the world?

MUHAMMAD YUNUS: Well, he has created a very negative image of the United States. People have not much respect in the rest of the world about the leadership, because you—like it or not, United States is the leader of the whole world, because of your technology, because of your financial power, your leadership and innovations and so on. And people look forward to you to lead them, lead the whole world.

Now, people don’t look forward to look at you, because you led them into wrong things. So people are kind of looking at United States in a very suspicious way. Is it good for us, or they are leading us to more difficult things? So that’s how I think the Bush administration will be remembered, that it has created a lot of question marks in people’s minds around the world about the leadership of the United States.

Out of Poverty With a Cow

from All Africa

The Monitor (Kampala)

INTERVIEW

Send a Cow Uganda, a non-profit NGO, will celebrate its 20th anniversary this September in helping communities overcome poverty and malnutrition through distribution of livestock to needy families. Florence Namasinga talked to the organisation's Executive Director, Mr Samuel Kawumi. Excerpts.

Are you simply engaged in giving out cows as your name suggests?

Send a Cow emerged as a response to a need to help poor communities out of poverty and malnutrition. It started in 1988 as an idea by Archbishop Mpalanyi Nkoyoyo who requested UK farmers to donate livestock to Uganda.

It has grown to cover about 36 districts spread countrywide. We now give out more than cows. Our packages range from cows to goats, poultry and organic farming. We mostly target women and children who live on their own and groups of people with disabilities.

How do you basically operate?

We have evolved from just giving out livestock for consumption to empowering rural communities to overcome poverty and malnutrition.

Because the organisation's focus was on fighting poverty, we had to shift to a wider perspective. We now have a three-dimension approach, focusing livestock farming, organic farming and social development.

On top of the livestock we empower people with information for better production. We teach people the commercial aspect to their farming so that they can produce for subsistence and then sell the remaining produce. [In this case] a cow is a catalyst to an end which is dealing with poverty and malnutrition

In 20 years of existence, what is your major achievement?

Our achievements are many. A fact that someone can stand out there and testify that his or her life has improved because of Send a Cow is no mean achievement. We have improved livelihoods of people in more than 7,000 households in Uganda.

The stories are countless. People now can take their children to school and have diverse sources of income. Some people especially in northern and eastern Uganda can now invest in many other income generating activities.

Improving food security and nutrition status is critical since 38 per cent of our country is still under poverty.

Farmers have always had a problem of finding market for their produce. What are you doing in this regard?

Our approach does not focus much on directly finding direct markets but we play a role of linking farmers to organisations like Land O Lakes that can market their produce. Organic farmers are linked to agencies like Nogamu, an organisation that supplies organic products from East Africa.

How do you ensure that the people use what you give them for that purpose?

We do a follow up in our project area and they are all success stories. First of all the livestock is given out on a loan basis. It is not for permanent keeps. So people make sure that they work hard to gain from whatever they receive from us. The moment a person gets benefits, he loans the cow or goat to another member of the group.

Ugandan products face stiff competition on the global market for lack of value added. Is this part of your concern?

Our focus has in the past been on enabling these farmers first of all produce. But we also teach them certain aspects of value additions like food preservation and ways they can improve what they have gained.

We now want to develop more linkages for farmers for example we want them to be able to open more land and grow more crops.

More People Live in Poverty - Report.

from All Africa

Byline: Pius Rugonzibwa

A majority Tanzanians has sunk deeper into poverty in the past three years despite the country's general economic growth, a recent survey shows.

The survey carried over the last year by the Research and Analysis Working Group under the National Strategy for Growth and Reduction of Poverty (Mkukuta) found out that 52 per cent of the respondents, mostly in rural areas felt their economic situation has become worse since 2005.

According to the report of the survey, which was announced in Dar es Salaam recently by the Government, the situation could become even worse amid the rising global food and fuel prices.

The report, which is entitled the 'Poverty and Human Development Report of 2007', has reinforced the widely believed conception that very few Tanzanians were enjoying the fruits of economic growth.

Only about 23 per cent of the people interviewed, largely living in urban areas, said their life style had improved, while 25 per cent said nothing much had changed.

But in all income groups, including the least poor, all perceived the current economic situation as worse off than it was three years ago. Sixty-seven per cent cited the rising cost of food among the basic needs as a major problem.

The survey assessed several variables including employment and other sources of livelihood, availability and costs of agricultural and industrial inputs, enterprise and the availability and costs of food and other basic items.

The findings show that 78 per cent of urban dwellers afforded three meals a day and could at least eat meat or fish three times a week. On the contrary, 55 per cent of rural dwellers afforded three meals a day and meat or fish twice a week on stressed budgets. In small towns 64 per cent afforded three meals a day.

Other problems cited in the report are the lack of reliable electricity, which was increasingly becoming a major obstacle to production in especially urban areas.

About 23 per cent of all respondents said they were using electricity as a source of lighting. Of this figure Dar es Salaam led with 59 per cent, followed by other urban areas with 43 per cent and rural areas only 11 per cent.

The rising costs of gas and electricity have as a result saw the increased use of charcoal, with urban dwellers currently consuming 83 per cent of the total charcoal produced in the country.

In agriculture, the report says the lack of adequate inputs was still a major problem. About 87 per cent of farmers interviewed said they were not using chemical fertilisers, 72 per cent were not using chemical pesticides, herbicides and insecticides, while 77 per cent could not afford improved seeds.

The report says farmers were seriously affected by the high costs and unavailability of fertilisers and other inputs, and also by the unavailability of extension services.

Pastoralists have been facing major hurdles in the form of droughts, diseases, long distance to markets, low market prices for their animals, lack of green grazing areas and inaccessibility to market information.

About 78 per cent of the pastoralists also mentioned the high costs and often lack of veterinary medicines as main problems. Seventy-six per cent of the pastoralists said the government was doing nothing to help them.

However, about 48 per cent of livestock keepers said there was an improvement in extension service provision, although most of it was said by the respondents to be coming mainly from the private sector.

Another major issue highlighted in the report is the bad state of rural roads, which has been mentioned as a setback to economic development and poverty reduction efforts. In urban areas more people acknowledged some improvements.

Bono pleased at Japan's pledge to double aid, but wants more

from Africasia

Rock star and poverty activist Bono said Tuesday that Japan's pledge to double its aid to Africa was "a fantastic news" but poor nations deserve more, a day before an African development meeting in Yokohama.

Japanese Prime Minister Yasuo Fukuda is expected to formally announce the plan -- which will see assistance doubled by 2012 -- at the conference this week.

A Tokyo official last week said the money was part of Japan's efforts to help the impoverished continent fight poverty and civil war.

"The Japanese government told us about doubling aid. It's a fantastic news. But you have to ask the question, is it really doubling the aid, or just one piece of aid?" Bono told reporters after giving a speech at Tokyo's Keio University.

"The bilateral aid was doubled, but we have to see now as we're going to G8, if the whole of the aid, multilateral aid, will be doubled?" he said, referring to the summit of the Group of Eight richest nations that Japan hosts in July.

The aid to international organisations such as the Food and Agriculture Organisation also needs to be doubled, said the U2 frontman, a guest at the fourth Tokyo International Conference on African Development (TICAD IV), which begins on Wednesday.

"I think that the Japanese people want it. It's going to happen," he said.

Japan has long used aid as a key diplomatic tool. It was the world's leading donor in 1991, but its overall assistance is slipping as it tightens its belt to deal with massive debts.

During his speech to some 800 university students, Bono said "the poorest of the poor deserve more than" Tokyo's pledge.

Asked about what he expects ahead of TICAD IV, he said: "The best success story in Southeast Asia was started from Japan. So we've come hear to learn from you, how'd you do things better in Africa?"

Tough times: Middle class losing grip on American dream

from the Orlando Sentinel

The mortgage crisis and other factors imperil the American dream.

Kate Santich

A decade ago, Mary and Jim Thompson were the epitome of America's middle class. They had a home in an Orlando suburb, two cars, good jobs, good benefits and a line of credit.

Six months ago, they were plotting how they could live out of their Jeep Cherokee.

"She was going to sew drapes so we could sleep in it," Jim said.

"We were hoping to hang on to our computers so we could keep looking for work," Mary said. "But everything else would have to go."

They had fallen behind on their mortgage payments. Mary, 45, was working only part time. Jim, 47, couldn't find work at all.

But the story of how the Thompsons tumbled to the brink of homelessness is not just about one family. To social-service workers, who see an increasing number of once-middle-class families losing their grasp on the American dream, it is the story of our times.

In April, a record quarter-million properties across the country had what the bankers call "foreclosure activity" -- default notices, auction sale notices and bank repossessions. Many are homes of middle-class families whose breadwinners found themselves out of work, overextended or struggling with expensive health-care bills.

The Thompsons were dealing with all of the above.

Serious health problems cost them their jobs: She had been an electronics technician, and he worked for Disney crafting characters' heads out of fiberglass. Without their jobs, there was no money to cover a middle-class lifestyle.

"And when it came to getting help," Mary said, "we were falling between the cracks."

No one agrees on exactly what "middle class" means. By certain federal standards, it's a family of four earning $30,000 to $70,000 a year. But studies show that most Americans think the term defines them -- including four in 10 Americans with incomes below $20,000 a year and a third of those who make more than $150,000 annually.

Last month, a survey released by the Pew Research Center found that fewer Americans now than at any point in the past 50 years think they're moving forward in life -- and nearly a third say they're moving backward.

All the Thompsons know is that they could feel a way of life slipping away.

Political football

In an election year, especially, the relative well-being of the middle class is a political football. Republicans accuse Democrats of painting a bleaker picture than reality warrants.

But James Wright, director of the Institute for Social & Behavioral Sciences at the University of Central Florida, said this much is known: "Since welfare reform, we have fewer people on welfare than we've ever had, we have more people in the labor force working more hours in more jobs -- and yet we have more homelessness and hunger than we've ever had, and the poverty rates have been going up now for seven consecutive years. I mean, you have to ask: What the hell is going on here?"

Steep increases in health-care costs, for one. In 2005, the latest figures available, disability caused nearly half of all mortgage foreclosures and 350,000 personal bankruptcies each year. It is the No. 1 reason those in the middle class fall into poverty.

There's also the steady loss of manufacturing and other jobs to workers overseas. There's downsizing, outsourcing and the hiring of contract or part-time workers with no benefits. There is dwindling membership in unions, which once protected the middle-class lifestyle. And too many people have run up too much debt brought on by too much easy credit.

"Large swaths of the population have gotten used to the idea of living every single month at the absolute limits of their paychecks, and haven't put anything away for the rainy day that now has dawned on us," Wright said.

Although that includes many upper-income families as well, the well-to-do have more of a cushion.

In Florida, the gap between have and have-nots is especially large.

"Florida ranks seventh for economic inequality -- the seventh biggest gap in the nation," said Emily Eisenhauer, a research associate at the Center for Labor Research and Studies at Florida International University. "Partly, that's the nature of Florida's economy, which doesn't have a huge manufacturing sector but does have a huge service sector."

In other words, there aren't a lot of jobs here for the middle class.

Jim Thompson would find that out the hard way.

'Hard to keep going'

For a year and a half, he applied every place he could think of, even for entry-level clerk jobs at Wal-mart and Kmart. He sent out hundreds of r�sum�s. All he landed was a part-time gig for UPS during the holidays. He worked seven days in December.

It was enough to nix their approval for food stamps.

"You reach a point where it's hard to keep going," Jim said.

They burned through Mary's retirement plan from her previous job and sold a collection of Disney lapel pins on eBay. They turned the thermostat up when it was hot and down when it was cold. And with no health insurance, they went to a $15-per-visit health clinic in Apopka and applied for prescription assistance.

Last November, they found out about a pilot project -- the Family Stabilization Program -- run by Jewish Family Services of Greater Orlando. If chosen, they would have to sign a six-month contract promising to attend financial-literacy classes, counseling and job training. In return, the agency would help them cover their mortgage, at least for a couple of months.

The idea was to prevent homelessness. But it wouldn't go on indefinitely.

"It has been a godsend," Jim said.

Experts predict things will get worse before they get better, as the full impact of the mortgage crisis hits.

But for the Thompsons at least, there is hope.

On Monday, moments after paying $87 for a state certificate to work as a security guard, Jim's cell phone rang. It was the Florida Safety Council, where he had applied to work in shipping and receiving.

"What did they say?" Mary asked.

"They said they'll let me know in a few days," he said.

Factors in poverty

from the Fort Worth Star Telegram

Star-Telegram
Why are some people poor? Experts suggest the following factors:

Lack of education

The higher the education, the more money people tend to earn, according to the U.S. Census August 2007 American Community Survey Report. In 2006, men with a bachelor's degree earned a median income of $55,446, while those with a high school diploma earned $31,715 and those without a high school diploma earned $22,151, the report states. During the same year, women with a bachelor's degree earned a median income of $36,875, while those with a high school diploma earned $20,650 and those without a diploma earned $13,255, according to the report.

Economic slowdowns

About 4 out of 10 U.S. workers often or always live paycheck-to-paycheck, according to CareerBuilder.com. If they lose their jobs, they can quickly fall into poverty. In Tarrant County, the poverty rate dropped from 13.7 percent in 1993 to 10.1 percent in 2000 as the area economy improved. It had climbed back up to 13.4 percent in 2005 as the economy worsened.

Medical costs

The inability to pay medical bills accounts for about half of all bankruptcy filings nationwide, according to a Harvard University study. In 2006, Americans without health insurance increased to 15.8 percent, edging up from 15.3 percent in 2005, the U.S. Census Bureau reports. Higher-income Americans are more likely to have insurance.

Race

In 2006, black households had the lowest median income, $32,372, compared with $38,747 for Hispanics, $52,375 for Anglos and $63,642 for Asians, the U.S. Census Bureau reports. "On average, minorities are more likely than whites to have low levels of education, lower levels of employment, lower wages and have chronic health problems - all characteristics associated with poverty rates," John Iceland writes in his book Poverty in America.

Gender

In 2006, men earned a median salary of $42,210 while women earned $32,649, the U.S. Census Bureau reports. And women are far more likely to be single parents, with the responsibility of caring for and supporting children, according to Poverty in America. In 2005, 36.2 percent of single mothers lived in poverty, compared with 17.6 percent for single fathers and 6.5 percent for married couples with children, according to the report The Feminization of Poverty.

Sources: Poverty in America by John Iceland; U.S. Census Bureau American Community Survey Reports August 2007; Income, Poverty, and Health Insurance Coverage in the United States: 2006, Harvard University; CareerBuilder.com; U.S. Department of Labor Bureau of Labor Statistics; The Feminization of Poverty by the YWCA and the J. McDonald Williams Institute

Rising Prices Hit Home For Food Stamp Recipients

from the Washington Post

By Chris L. Jenkins
Washington Post Staff Writer

Christina Hall's weekly grocery shopping ritual begins Thursday night in the kitchen of her cramped mobile home in Fairfax County, with the low hum of the refrigerator and the steady drip of the faucet in the background.

"Shredded cheese, bagels, milk . . . Maybe we can do two gallons this week," she says hopefully, scribbling the grocery list on a sheet of notebook paper. She goes through a cabinet, looks in the freezer, checks a shelf behind the linoleum-covered table. "Yogurt, crackers, bananas." She jots down a dozen or so more items: salad dressing, frozen vegetables . . . "That should keep me at about $50 for the week."

A divorced mother of two, Hall receives $219 a month in food stamps; the fastidious inspection of her cupboards and the dollar-by-dollar addition she does in her head are the only way she can make the allotment last through a month.

At a time when food prices are soaring, a growing number of Americans are struggling financially and local social service agencies are seeing record numbers of applicants, advocates are concerned that the purchasing power of food stamps has shrunk since 1996, when Congress recalculated benefit levels. The result slowed the value of food stamps relative to inflation. If benefits had kept pace with inflation over 12 years, a family with one working parent and two children would be receiving an additional $37 a month, according to the Center on Budget and Policy Priorities, a Washington-based think tank.

To qualify for food stamps, recipients must have an income below 130 percent of the federal poverty level, or less than $22,880 for a family of three.

"An extra $37 a month," Hall said, chuckling. "That would be nice. Might be able to splurge every now and again."

Hall, 38, who lives in a scruffy, tree-lined cul-de-sac of mobile homes in Hybla Valley, one of the poorest sections of one of the country's richest counties, knows that the monthly payment doled out on a blue plastic debit card is meant only to supplement her food budget. The federal government's guidelines make that clear.

But her $8.75-an-hour home health aide job -- about $1,200 after taxes during a good month -- stretches only so far, with rent ($550), utilities ($100, sometimes much more), gas ($180, even in her fuel-efficient Honda Civic), a car payment ($288) and car insurance ($163). That doesn't include other expenses that come with raising a 13-year-old son and a 7-year-old daughter. The stamps are the family's entire food budget. Skyrocketing food prices and the declining value of the government benefit has made feeding the family a daily struggle for Hall, a first-time food stamp recipient.

Hall wrestled with the challenge the next day as she tried to manage the family's weekly food needs and squeeze in a few extra items for her daughter's birthday party that weekend. Her son had lost his school meal card, which allows him to eat a free breakfast at school every day, so she has to make him breakfast at home until the end of the month, adding an unexpected expense.

"Okay, we can get one package of potato chips and one package of popcorn, okay?" Hall said to her daughter, Rosita, who was having a tough time containing her excitement about the party.

Hall shops at the Aldi on Route 1, a discount supermarket along the frayed commercial strip, where many shoppers go to save money on store brand items that can be as much as 50 percent cheaper than other chains'. The week's dinner plan called for spaghetti, macaroni and cheese, sloppy Joes, tacos and chicken nuggets, plus mixed vegetables with each meal. As she shopped earlier this month, though, she was feeling lucky. Her mother had given her some ground beef and pork earlier in the week. And her son, Richard, was going on a Scout trip, so she wouldn't need as much food over the weekend. (As it turned out, Richard came home a day early, so she had to "wing it for Sunday dinner," she said later.)

Hall made her way through the store using her shopping list as a guide: two gallons of milk, $3.08 each; one package of macaroni and cheese, 59 cents; two quarts of yogurt for her lunch, $1.29. She picked out a box of yellow cake mix and chocolate frosting for Rosita's birthday cake, only to put them back later. Her mother would buy them. Into the cart went vegetables, frozen orange juice and hoagie buns. Bacon and ground turkey, initially on the list, would have to wait. "This! This!" Rosita squealed, pointing to a stack of bagel pizzas at $5.99 apiece.

"No, Grandma's going to order pizza tomorrow for the party," Hall answered, checking the price on a package of frozen french fries before throwing them back. Looking over the shopping cart, which included a package of Fruit Roll-Ups and a few other items that Rosita requested, Hall said, "we're almost at $50, anyway."

Later, in the comfort of her small trailer, festooned with Barbie-themed birthday decorations from Wal-Mart, she looked over the receipt -- $48.06. She looked satisfied .

"Well, this allows me to get away with spending $55 for next week," she said.

For the working poor of the Washington region, stretching the monthly food budget in a sagging economy is particularly difficult, because food prices in the area are consistently higher than the national average, according to the Council for Community and Economic Research, an Arlington County-based group that tracks the cost of living in hundreds of places across the country.

During the first part of this year, the group said, the region's food prices were 8 percent higher than the national average. For instance, a pound of ground beef averaged $3.33 for a Washington area shopper, compared with $2.64 nationally. That's a difference of 26 percent. A dozen eggs were 10 percent higher, while a 10-pound bag of potatoes cost 40 percent more.

The consumer price index for food has increased faster than in two decades, and it is especially grim news for people who rely on government subsidies.

"Food stamps aren't meant to supply all of a family's food, but for many people, it's become a way of life. . . . It's a struggle to make them last," said Reuben Gist, director of advocacy and outreach for the Capital Area Food Bank. He cited a 2006 study by America's Second Harvest, a hunger-relief organization, that found that only 16 percent of food stamp recipients said the allotment lasted them an entire month. "People on food stamps are calling us saying they have no idea what they are going to do."

Food stamp benefits, which average about $1 per person per meal, are based on a plan set by the federal government designed to represent a very low-cost but nutritionally adequate diet. For a family of four, the cost of the diet, known as the Thrifty Food Plan, was $567 a month in April. But, under the benefit rate set in October, which was based on June 2007 food prices, a family of four receives about $542 in benefits.

Last week, Congress overrode President Bush's veto of the $300 billion farm bill, which includes $200 billion for nutrition programs such as food stamps, school lunches and emergency food assistance. The legislation will help bring food stamp benefits in line with inflation and stop the erosion, according to national experts. But the new regulations won't kick in until October and will only make up, on average, $5 of the $37 gap.

"Next year will be the first year in the modern history of the food stamp program when food stamp value is the same as the year before," said Dorothy Rosenbaum, a senior policy analyst for the Center on Budget and Policy Priorities.

Hall said she has had to adjust her expectations. "I think I first noticed when I bought what I usually buy -- eggs, milk, you know, the basic stuff -- and it cost me over $60 for a week. I thought there was a mistake," she said.

It wasn't always like this for Hall. For several years, she had a job as a receptionist, making $15 an hour. The difficult times started when she was laid off and took the home health aide job soon afterward for nearly half the wage.

She has employed a few tricks to save here and there: picking up food from food pantries, grilling meat and vegetables on the porch to keep the gas bill down; rationing the medication that manages her Crohn's disease by only periodically taking pills that she is supposed to take daily. She and her ex-husband agreed, through a mediator, that he would pay for Rosita's after-school care, clothes and other essentials for the children.

[Comment] Financial Literacy, Silver Rights and America’s Drop-Out Generation, by John Hope Bryant

from Spotlight on Poverty

Chairman of Operation Hope offers his suggestions for solving the drop out crisis.

By John Hope Bryant

Chairman and founder, Operation HOPE

Vice chairman, U.S. President’s Advisory Council on Financial Literacy, and chairman of its Committee on the Under-Served

Specially written for the Spotlight on Poverty

Where I grew up young people regularly dropped out of high school prior to graduation. The reasons vary, from a lack of parental involvement and aspirational encouragement (parents who also many times did not complete high school themselves, yet alone college), to a powerful combination of low-self esteem and a sad lack of role models, all sending one very powerful message – why bother.

Or was it the local drug dealer who seemed to send the message that a young person did not need to stay in school, graduate, or go on to college in order for kids from the neighborhood to do well?

Or worse, the message that you were somehow a sap if you stayed in school and did well, while everyone else with smarts was “getting paid,” now. Of course no one mentioned that getting paid in this way often also involved what I called the “3 P’s”; prison, probation and parole, or worse if you were unlucky. Unlucky like my best friend George when I was growing up in Compton. George, a straight A student, was murdered before he was 18 years old, because he wanted to look “cool” like the so called “big ballers” standing on local street corners. Brilliance, wasted.

Sometimes it was as simple as a kid feeling that they needed to help out mom and dad by actively contributing to their families meager but consequential monthly household’s income. Dignity.

In all of these cases, even the remotely honorable ones, the perception, and ultimately the result was all the same.

Perception: school is not cool, or simply not important, or worse, that it will not get you anywhere. It is not tied to your aspirations in life, and it will not help you get rich.

Reality: accordingly to The Silent Epidemic report written by Civic Enterprises that shared the perspectives of high school dropouts, approximately one-third of all children, and 50 percent of minorities, in public high school drop out of high school nationwide. In many of the nation’s “dropout factories,” the percentage of dropouts far outpaces the percentage of graduates..

This is not good for 21st century America, and it is an economic death sentence if not changed for black, brown and low-wealth communities nationwide, or almost 100 million Americans. Can we afford to right-off almost 100 million Americans, or approximately a third of our nation’s population? Who is going to fund our Social Security fund in retirement if we do? Hello.

My experience, growing up in an inner city neighborhood is that these are not dumb kids. These are simply misdirected kids. Kids who have somehow lost their way, are low on hope and self-esteem, and unfortunately, kids who also don’t believe that education is relevant to their futures. Well, in the neighborhoods where I grew up the main messages as well as the messaging was clear –- “how do I get rich, or at least do well in life?” Isn’t that what the American dream is all about? An aspiration for every American to do well, or at least to be able to succeed or fail on his or her own steam; and to be able to take care of their respective families and responsibilities.

I believe that one way to show kids the relevancy of education is to teach them the language of money at an early age. To link education with aspirations, and to show kids how they can get rich, legally. That’s the power of financial literacy, or what I see as the first step in our growing “silver rights” movement, and the power of education too.

Without question, education is the ultimate poverty eradication tool, for when you know better you tend to do better. But financial literacy is the means by which one moves from simply avoiding the poverty trap to embracing a true prosperity agenda; for themselves, their families and their communities.

Prosperity as the partner to peace.

“Middle class folks don’t want war, …they want to shop, contribute their fare share, and (to) spend time with their families.” What’s wrong with that vision for America? Absolutely nothing. And that’s not a black middle class dream, or a white middle class dream, or a Latino, Asian or Indian middle class dream. That is simply the American middle class dream. Maybe it’s a middle class aspiration, the world over too.

In any event, with respect to our kids, we all need to make “smart sexy again,” because we have sure succeeded at making dumb sexy over the past 20 years or so. My friend Quincy Jones told me recently that it takes 20 years to create a culture. What kind of culture have we created amongst our young people over the past 20 years? Are we proud of that? Really?

I remember the Bank of America banker who came into my school classroom when I was 9 years old back in Compton, California where I grew up. I remember him as much for the starch white shirt, red tie, and crisp black suit that he wore in my class as for anything he said about banking and money, although obviously the money and banking piece had a long term impact on me too (smile). Oddly enough, I don’t remember what race he was. My point is, I had never seen a man with a suit on before, at least not one talking to me. How many kids today, particularly in low wealth communities, see a woman with a dress or business suit on, or a man with a suit on? Answer: very few.

The book “The Tipping Point” speaks to the fact that communities that are relatively stable have 5% or more of role models within them; from doctors, to lawyers, to accountants, bankers and such. And so, from say the 50% role model level all the way down to a mere 5%, a community is stable. That’s inspiring to me. As little as 5%. But, at 3.7% role models in a community, irrespective of race, everything negative explodes; from teen pregnancies to crime, to yes, high school dropout rates.

What’s the magic of 3.7% you ask? My guess is that at 3.7% the most hopeful young person cannot remember, reflect upon, understand or even appreciate meaningfully what a real role model looks like, and so no wonder every urban, inner city young person I meet these days wants to be a rap star, an athlete, or God forbid a drug dealer. It makes sense, actually. These are not dumb kids. They are modeling precisely what they see. For them, these narrow routes seem to them the broadest available routes out of poverty and despair in their communities.

No, we are not talking about dumb kids. These kids are very smart. Example.

I think drug dealing is one of the most morally offensive and disgusting “businesses” ever imagined, and when caught the perpetrators should go straight to jail. Period. Now, this said, you cannot be a dumb successful drug dealer. Yes, I said it.

If you pursue this immoral trade (of drug dealing), and you are somehow good at it, you are not dumb. You are wrong as two left shoes, but you are not dumb. You understand finance, marketing, distribution, customer service, market penetration, territory, pricing, wholesale, retail, profit margins, and maybe import and export too. No, these kids are not dumb nor stupid, but simply misdirected, and in need of hope and a practical sense of opportunity in their lives. What they need are the role models and mentors I had growing up in inner city Compton and South Central Los Angeles, which started with my amazing mom and dad.

As a result of the bad choices that many of these immensely bright these kids have made in their lives, most of them will probably never be able to secure a meaningful job at a major Fortune 500 company (who conduct background checks), but they can become an entrepreneur. Heck, they are already entrepreneurs.

What if we unleashed upon America, and the world, a new vision for the 21st century? An aspirational generation of role model inspired, positive and contributing young entrepreneurs , self-employment projects and “doers” over the next 20 years? I tell you what would happen, America would get a genuine second shot at keeping this party called Americans prosperity going over the next 100 years, because you cannot keep a third of the American population on the economic and aspirational sidelines and otherwise expect that it will.

This sort of positive vision would be good for America, and good for (once) poor people too. Now that’s aspirations in action. We need to make smart sexy again.

The 5% Challenge

What if we all came together and tackled the 5% problem of role models, or the lack thereof, in America’s low wealth, urban and rural under-served communities?

What if you, yes you, decided to give Operation HOPE, or Junior Achievement, or Boys & Girls Clubs, or the Boy Scouts or the Girl Scouts, or any number of other credible organizations or groups serving others one hour of your time per month?

Just one hour.

Let me make it even easier.

Why don’t you give me that one hour on your way to work, or your way home from work, one day per month, and use it to “tell your story” (at HOPE and Global Dignity we call it “A Course in Dignity” and you don’t have to even be financially literate to teach it), at a local school, or community organization that you yourself have some personal connection to. Or maybe it is simply near you.

What if you and 25,000 other Americans did this once a month, for just one hour, for 12 months? I tell you “what,” we could change America for the better, “that’s what.”

Yes, I remember to this very day that banker giving of their time and coming into my classroom in Compton, California, just like the kids served today by Operation HOPE’s Banking on Our Future financial literacy program remember our proud and committed HOPE Corp volunteers, who go daily into inner city classrooms all across this country. And they don’t just remember or learn that “ATM” doesn’t mean “All The Money” either. After just one hour of having one of our HOPE Corps volunteers in that classroom (it actually takes a minimum of 4 consecutive hours to complete a Banking on Our Future program set), something magical happens. Young Ms. I-Want-to-be-Popular Sanchez in the second row, or young Mr. Trying-to-be-Cool Jones in the back row, is saying to themselves --- “….I can be YOU.” And that is how you break the back of poverty in America.

There is a difference between being broke and being poor.

As I often say, “being broke is a temporary economic condition, but being poor is a disabling frame of mind and a depressed condition of one’s spirit, and we must vow to never, ever be poor again.”

At Operation HOPE we have launched a 5 million kid, 5% role model (25,000 new HOPE Corps volunteers recruited), 5 year initiative. Call it 5 by 5.

We have vowed that between now and 2012, we will reach and teach 5 million young people, with the help of 25,000 recruited HOPE Corps volunteers, and we will teach them the basics of a checking account, a savings account, and the importance of credit and investment in their young lives. We will teach them the language of money, we will give them a course in “dignity,” and in South Africa we even teach a course in entrepreneurship because there are not enough jobs to go around, and so we must then create self employment projects and a generation of entrepreneurs.

This we can do.

We must make smart sexy again, and we most begin to better show the aspirational relevancy of education to our young people, if we ever expect to meaningfully kick the high school dropout craze.

Here is my prescription for America, and the dropout generation too:

* Funding for financial literacy: Congress should seriously consider providing funding for financial literacy education and empowerment, for young people and adults alike.

* Financial literacy for every child: Financial literacy should be mandatory for every child in America, but particularly low-wealth young people who may lack proper role models. You cannot live in the largest economy in the world and not teach young people the basic language of money, yet alone the rule of capitalism and free enterprise.

* A bank account for every Americans: We should begin giving a child a bank account for their birthday, instead of a toy or game they will break, or worse forget about in 3 days flat. Civil rights icon and my personal hero Ambassador Andrew Young and I have called for a “Silver Rights Bill,” which would make an electronic debit card accessed, FDIC insured bank account a legal human right for every American. More Americans don’t have a bank account today (easily more than 30 million) than didn’t have the right to vote during the civil rights movement of the 1960’s.

* The 5% movement: with 25,000 or more Americans volunteering and committing just one hour a month, 12 months a year, teaching Banking on Our Future or some other worthy program, and being “present” in communities, we can stabilize the necessary baseline of 5% role models needed in under-served and low-wealth communities across America. This is something that every non-profit, every house of faith, government office, government office holder, and every employer can do. Encourage volunteerism and mentorship. Log onto www.operationhope.org to help us, or www.volunteer.gov to help anyone, anywhere in America, with the new White House Financial Literacy Volunteer Initiative, or what I call the Financial Literacy Corps. The Financial Literacy Corps is an initiative of the White House USA Freedom Corps and soon, the U.S. President’s Council on Financial Literacy.

* EITC for every low wealth household: if you are working and you make $40,000 or less, and particularly if you have children, which is a good portion of America, you qualify for the Earned Income Tax Credit (EITC). A bi-partisan initiative, supported by every U.S. President since President Ford, and including President Clinton and President Bush too, EITC is dignity in action, and essentially a raise or “poor man’s bonus” for working families. 1 out of 4 Americans who qualify for EITC never even requested it last year, sending $9 billion back to the federal Treasury. And if you have not filed once, you have probably not filed ever, and it is retroactive for three years. At $4,000 for the top refund recipient, that’s $12,000 in poor people’s pockets, or enough to pay off your consumer debt, cure a mortgage, send a kid to college, put a down payment on a starter home, or start a new small business. This is working poor people’s money, and financial literacy helps them understand how to claim it for themselves and their families.

America, let’s kick the dropout craze.

Let’s build a new, inspiring culture for our kids in the next 20 years.

Let’s make smart sexy again.

Let’s do something.

Give.

MLA slams Gov’t, poverty study

from the Cayman Compass

By Alan Markoff,

Opposition MLA Cline Glidden Jr. questioned the validity of the findings of the National Assessment of Living Conditions during his contribution to the budget debate Wednesday.

Mr. Glidden also criticised the way Leader of Government Business Kurt Tibbetts suggested the findings contradicted statements made by Leader of the Opposition McKeeva Bush concerning the state of Cayman’s economy.

The NALC report set the poverty line at CI$3,983 per annum, which amounts to $10.90 per day. The amount of that allocated for a food was $1.83 per day.

“That number is not realistic,” Mr. Glidden said, noting that Mr. Tibbetts and the rest of the government must realise the figure was not realistic in Cayman.

“What surprises me is the Leader of Government Business would use the information [in the NALC report] to criticise the Leader of the Opposition.”

In announcing the findings of the NALC study last week, Mr. Tibbetts said the results were in sharp contrast with the doom and gloom picture of living conditions painted by Mr. Bush in his budget debate.

“There was a deliberate attempt, for obvious political reasons, to convey the impression that life here was a living hell. The NALC study confounds the jaundiced perspective of the Leader of the Opposition,” Mr. Tibbetts said in his address to the House.

Mr. Glidden said he looked up statistics at the United States Department of Health and Human Services and found that in 2007, the poverty line for the 48 contiguous states was set at US$10,210 for a single person in a household. He noted that since almost all consumer goods are imported to Cayman, they are even more expensive here.

“Yet lo and behold, we’re able to get the poverty level to 1/3 that of the United States,” he said. “What kind of creative math is that?”

Mr. Glidden noted that in Alaska, where consumer goods cost more because of shipping costs, the poverty line was set even higher, at US$12,770. Because of shipping and duty cost to of consumer goods to Cayman, Mr. Glidden suggested the poverty line would have to be at the very least $15,000 in Cayman.

He added that he would have expected the government or Mr. Tibbetts, whose budget speech was themed “keeping the faith” give some reasoning as to how the poverty line could be so low for Cayman.

Although the NALC report found only 1.9 per cent of Cayman’s population was living at or under the poverty line, Mr. Glidden suggested it had to be higher than that.

“I hope the government is not making a lot of decisions based on [the NALC] report’s math.”

Boatswain’s Beach

Mr. Glidden responded to comments made by Cabinet Minister Alden McLaughlin during his debate last week. Mr. McLaughlin criticised Mr. Bush for Boatswain’s Beach losing money because he said it was built on a false premise and without a “properly articulated financial strategy”. He suggested changing the name of the tourist attraction to “McKeeva’s Folly”.

Mr. Glidden repeated the figures cited by Mr. McLaughlin during his debate, when he rattled off the losses of Boatswain’s Beach. Those losses were $557,841 in 2004; $953,000 in 2005; $4,265,000 in 2006 and $7,672,000 in 2007. Mr. McLaughlin said Boatswain’s Beach’s losses were projected to be $10 million by the end of this year.

Mr. Glidden said he was surprised the government was still trying to blame the Boatswain’s Beach losses on the previous administration three years after assuming office.

“They say the reason is bad boy McKeeva Bush, who didn’t have a plan in place,” he said, noting that three years later, the PPM had not come up with a plan to reduce losses.

“They were so happy to put their name on Boatswain’s Beach, but when it comes to losses, it’s the previous administration,” he said.

Despite the rising losses since the PPM government took office, Mr. Glidden said they persist in blaming that “bad boy from West Bay”.

“But what worked in 2005, blaming everything on the former Leader of Government Business, that’s not working any more. People aren’t listening to that tale any more.”

Balanced budget illusion

Mr. Glidden spoke about the claims of the Financial Secretary Kenneth Jefferson and cabinet members concerning the balanced budget.

“They have been bragging we have a balanced budget, but what does that really prove? What is that to hang your hat on?”

Mr. Glidden said the budgets presented by governments are often just a way of fooling the public “to create a balanced budget illusion”.

He used an example of last year when the judiciary needed $1.8 million for legal aid, but because the Opposition wanted to see a report on why the cost was so high for Cayman, only half was allocated in the initial budget. But without the report ever being done, the government came back and added another $900,000 at the end of the year with a supplemental appropriation. Mr. Glidden said the same $900,000 is budgeted in the upcoming financial year, even though the government knows full well it will have to come back and make a supplemental appropriation for an amount the judiciary knows it needs.

“When at the beginning of the financial year the government says it has a balanced budget, that doesn’t carry a lot of weight or comfort to our people because they know how the system works,” he said, adding that people must wait until the end of the financial year to make judgments about a budget being balanced or not.”

Mr. Glidden said the government was quick to condemn the opposition for questioning the budget because it was insulting to the financial secretary. He noted that Mr. Jefferson also presented the previous government’s budget, which drew the criticism of the same people who are now praising him.

“Now [Mr. Jefferson] is a good man, a conservative individual, and the country should have confidence in any budget he presents,” he said. “Back then it was the government’s budget and he was just the messenger.”

Mr. Glidden also raised the point of the Cayman General Insurance Hurricane Ivan settlement, which Mr. McLaughlin said during his debate “robbed this country of $70 million in insurance payments that we ought to have had”.

‘Lack of proper distribution causes food crisis’

from the Financial Express

ASHOK B SHARMA

The present food crisis is due to lack of proper distribution and the trading system impeding free flow of food, according to the vice chairman of International Chamber of Commerce (ICC), Victor Fung.

He said that as a short-term measure it was essential to address the problem of distribution and as a long-term strategy the global community should take up measures for raising the productivity of food crops to feed the rising population. “There is also a need to review the bio-fuel programme which uses food crops for fuel and displaces food crops for cultivation of non-food crops for fuel,” he said.

He also said that the world has to work out strategies for efficient use of energy.

Fung who is the chairman, of the Li & Fung group of Companies, which includes major subsidiaries in trading, distribution and retailing, also addressed the industry at a meeting organised by Ficci on Monday He also is the chairman of the Greater Pearl River Delta Business Council, Hong Kong Airport Authority and Hong Kong University Council.

Fung also said that China was also facing the challenges of rising prices, growing disparity in incomes, environmental problems and weak infrastructure. “There is a debate in China on how to address these challenges. That the Chinese government cares for its people is evident from its rapid response following the earthquake in Sichuan,” he said.

He called for a free and fair multilateral trade for addressing the problems of global poverty. He said that bilateral trade and free trade agreements between countries and trading blocks cannot be a substitute for a meaningful free and fair multilateral trade. He said that there was a need to see that anti-dumping measures under WTO do not lead to protectionism.

He proposed that Indian Companies can invest in IT sector in China. He said that Chinese production will continue to move offshore in Asian, African and Latin American countries.

Aid Campaigners Concerned about Achieving UN Millennium Development Goals

from Voice of America

By Tendai Maphosa
London

In 2000 the United Nations adopted the Millennium Development Goals to be achieved by 2015. One of these is halving the number of people living in extreme poverty. However, with only seven years left, campaigners are concerned that at the present rate of aid to poor countries, the goal may not be achieved. Tendai Maphosa has more in this report from London.

The Organization for Economic Cooperation and Development (OECD) recently confirmed that financial assistance to the world's poorest countries fell by 8.4 percent in real terms in 2007. This, the organization says, means aid has fallen for the second year in a row.

In 2005, G8 leaders pledged to double aid and provide an additional $50 billion a year by 2010. But going by the latest figures, aid campaigners say, the donors will be way off target. Max Lawson, a policy officer at Oxfam, describes the reneging of countries on promises they made to increase aid at the G8 summit at Gleneagles in 2005 as a scandal.

"The French and the Germans in particular are refusing to do that. We worry there is not enough domestic pressure on them," said Lawson. "They are worried about their economies, rich countries are facing the credit crunch but that's just an excuse; there can be no excuse for the richest nations in the world not delivering on these promises."

Figures however show that the decline in aid figures started in 2006 after rising every year for the past decade. Elvira Groll of Action Aid says the shortfall was revealed after the end of debt relief which she says donor countries used to highly inflate aid figures.

"Although we do consider debt relief to be very important to free resources in developing countries it's not genuine aid which helps the poorest in the countries themselves, it's not money that goes straight to the countries so Action aid has repeatedly called on donor countries to stop counting debt relief as aid and include that in their aid statistics," said Groll.

In addition, Groll says, student costs and refugee relief was also added to the aid figures.

Oxfam's Lawson says the $50 billion the G8 promised in aid could be missed by as much as $30 billion and this could cost lives.

"You can begin to count what that $30 billion could pay for," said Lawson. "The World Health Organization has made clear costings of what it would cost to cut the numbers of children dying; the number of mothers dying in child birth and to get people with HIV access to medicines to keep them alive. We calculate that the missing money could save at least five million lives so there is a direct human cost."

John Clancy, a spokesman for Louis Michel the European Commission's development and Commissioner agrees that the drop in Official Development Aid from the European Union and other donor countries is due to debt relief coming to an end. A lot of countries, he says, had been able to balance their development aid against debt relief. Clancy however says the announcement of the shortfall could be used positively.

"It offers us all a wake up call with regards to commitments," said Clancy. "These are issues that concern us all and it's very important which is why the European Commission made its call for at least its member states to stick to their commitments and to get back on track because it is reachable but there has to be of course political will."

But Oxfam's Lawson says the goal of halving the people living in extreme poverty globally may be met because of growth in China but there are big doubts in Africa where there are still millions of people living in desperate poverty.