| |
Viewpoint
Letters to the editor
Afghanistan: no shortcut to democracy
11/2004 |
|
Letters to the editor
Counterfeiting
The World Bank needs innovative theory,
D+C 2004:4, page 162
Nina V. Michaelis writes that the neoclassical school of thought is not able “to say anything about the distribution of welfare ... and, therefore, does not pay the developing countries’ poverty problem adequate attention.” This shows the common confusion between poverty and distribution. With “distribution of welfare”, the author must have meant the distribution of income. If you measure this with the Gini index, as Michaelis would probably do too, then what the economists Ravi Kanbur and Lyn Squire have established in an essay applies for the change of inequality and poverty: “It is difficult to establish a simple formula relating changes in aggregate measures of inequality such as the Gini index to changes in poverty. The Gini index can increase or decrease, leaving poverty unchanged, if the distribution above the poverty line changes, and poverty can increase or decrease without any change in the Gini index if there are appropriate offsetting changes in distribution among the nonpoor.” Or in the words of Meinhard Miegel: “Talking about poverty and meaning material equality is conceptual counterfeiting.”
Michaelis’ sentence “population growth is a serious obstacle to development” also lacks the empirical basis; there even is no convincing empiricial evidence for the theoretically claimed connection. There are three arguments to this: Firstly, as Kuznets has shown, from 1750 to 1960, it was the countries with the greatest economic expansion – the Western industrialised countries – that also registered the greatest population growth. Secondly, a comparison of Ghana and Taiwan shows that the populations of these two countries have increased by about the same rate since 1950. However the real gross domestic product (GDP) per capita in the same period (in dollars from 1990) rose by 10.9 percent in Ghana and by 1579.5 percent in Taiwan. Similar population growth obviously did not impede Taiwan’s phenomenal rise in any way whatsoever. Thirdly: if population growth in developing countries is really a “serious obstacle to development”, then ceteris paribus, the growth of social product must increase with a shrinking population growth. There is no sign of this. The “serious obstacle to development” has clearly abated in the past forty years in all regions of the world – however, there have been no signs of a corresponding increase in growth rates.
Prof. Dr. Jürgen H. Wolff,
Ruhr-Universität Bochum
One-sided
PPP in the UN system: The Industry Cooperative Programme,
E+Z 2004:6, page 263
I would have expected that a review of the book by Alexander G. Friedrich, former head of the UN Food and Agriculture Organisation’s off-shoot Industry Cooperative Programme (ICP), would also mention the second perspective of the political proceedings in the FAO at that time. This was articulated back then by Erich Jacobi and Solon Barraclough, among others. I recall scathing articles in the international press against the activities of the ICP. The critics rated the creation of the ICP as a – from their point of view, unfortunately successful – political strategy to dissuade the FAO from supporting smallholders and to favour industrial agriculture. This was accompanied by the stopping of agricultural reforms in Latin America and the dissolution of the Comité Interamericano de Desarrollo Agrícola (CIDA), after the US government had initially supported these reforms for a few years as part of the Alliance for Progress.
This should at least be commented on in the review for a book with such a self-congratulatory tone. Friedrich did not even make a single mention of what – in his view – the positive outcomes of the work of the IPC have been.
Dr. Peter Lock, Hamburg
No solution
The benefits of migration,
D+C 2004:10
The deployment of Filipino workers overseas was originally intended as a temporary solution to the problem of unemployment and rising oil prices during the early years of the Marcos authoritarian regime. Marcos had negotiated the placement of Filipino construction workers in the cash-rich Middle East countries so that the country could pay for its oil imports. This initial deployment gave rise to a full-blown overseas recruitment industry that in the last 30 years has sent more than 8 million Filipino workers to about 165 countries, but only a fraction of them are still in construction. Many are domestic helpers or employees in the service sector. Beyond the Gulf region, Filipinos have found opportunities in other regions of the global labor market. Filipinos, for example, dominate the crews of the world’s merchant and cruise ships. They work as underpaid laborers in the sweatshops of Taiwan and South Korea, caregivers in many old people’s homes in North America, entertainers in Japan, and domestic help in Hong Kong, Singapore, Spain and Italy. What started out as a stopgap measure has become the economy’s defining feature. This phenomenon has bred an extraverted culture that is less concerned with contributing to the nation’s development than with preparing for overseas migration.
Overseas employment is to Filipinos a blessing and a curse. It has allowed the government to maintain a climate of superficial prosperity and economic stability by encouraging consumption. But the continuous flow of remittances from abroad has also made the development of the local economy’s productivity less urgent. More and more farmlands lie uncultivated each year as farmers abandon agriculture in favor of overseas work. The result of this is that an increasing number of people from the countryside are thrown out of work and forced to move either to the uplands or to the cities.
To understand this peculiar feature of the Philippine economy is to understand how the country can register a modest economic growth rate of about 4.5 % per year while the number of jobless people also increases. The growth is consumption-driven. It is fuelled by billions in workers’ remittances, that in turn allow the government to engage in deficit-spending and heavy borrowing.
This pattern of national existence does not solve poverty. Neither does it place the country’s productive capacity on a more stable foundation. It has only exacerbated income disparities.
Prof. Dr. Randolf S. David,
University of the Philippines, Manila
The editor reserves the right to shorten readers’ letters. The shorter a letter is, the greater the chance of it being published.
|
