THE CURSE OF INEQUALITY
SÄHKÖISET LISÄSIVUT
sininen.jpg (661 bytes) + Poverty

Has the IMF Woken Up
to the Poverty Problem?

Why has poverty increased, even though the world has become more affluent? Is there no alternative to the growing inequality that brings premature death to millions of people each year?

Even recently the mighty Directors General, the World Bank's James Wolfensohn and the International Monetary Fund – IMF's Michel Camdessus pursued macroeconomic structural adjustment programmes in the third world which exacerbated poverty in many countries. The aim was to redirect these unfit economies onto a growth path at the expense of the poor. The Directors General argued for the policy by appealing to its long-term benefits.

In the late 1990s new viewpoints began to figure in their speeches.

"A strong social component is in any case needed: well targeted and cost-effective social safety nets, more public spending for education and health care, and income generation opportunities for the poor", Camdessus paraphrased in February 2000.

Camdessus continued: "Within countries and between nations the widening gap between the rich and poor is morally infuriating, economically wasteful and creates prospects for social explosion. We now know that merely enlarging the cake is not enough. The way it is divided also has major significance for development dynamics."

The World Bank is showing a similar change of direction. Why is this?

It is due to the poor results of the policy pursued in the developing country economies and to greater criticism of the social consequences of these solutions. Esteemed economists have also joined in this criticism, including Jeffrey Sachs and Joseph Stiglitz, who began his own public attack in January 1998 in Helsinki while still working as Chief Economist to the World Bank.

Around the world the trade union movement and non-governmental organisations have long demanded a change in policies that impoverish the underprivileged. It is no news to union activists that a steep income distribution hampers economic growth and that the lack of social safety nets causes suffering and social instability.

Based on their own experience union activists have been sceptical of the views of their rulers, according to which the enrichment of the wealthy leads to greater benefits trickling down to lower social groups.

Minister Seeks Overall Vision

Poverty is caused by the combined impact of several factors. It is impossible to relieve poverty without considering the factors engendering it in several policy sectors. In an interview published at the beginning of year 2000 in the magazine Kumppani Sweden's development minister Maj-Inger Klingvall argued as follows: "Development aid alone will not achieve the year 2015 goal of halving the number of those living in poverty. An integrated vision to overcome poverty must therefore unite our work in security, trade, environmental, agricultural and refugee policy",

A Success Story in India:
The Self-Employed Women's Association

More than two decades ago in the State of Gujarat in India a group of poor women established the Self-employed Women's Association – SEWA as a self-help group. Contrary to the expectations of outsiders this became a real success story.

By the beginning of the year 2000 SEWA's rank and file included 240,000 self-employed artisans, street vendors, paper pickers, bidi rollers and poor entrepreneurs working in many other trades. There are over 60 occupations represented in the organisation.

SEWA functions as a trade union negotiating over problems with the authorities. The members are trained and enjoy banking services, meaning that they no longer need to resort to loans from moneylenders resulting in a dangerous spiral of debt.

The work has improved the self-esteem of the women and improved their status. SEWA's area of work has grown beyond the borders of Gujarat.

In 1995-1999 the Trade Union for the Municipal Sector - KTV co-financed SEWA's activities. The goal was especially to promote the organising of street vendors and seasonal workers in the construction industry, and to improve their ability to secure their own rights.

SEWA's self-sufficiency has improved and the community has become an important example, even by international standards, of the ability of even the poorest women to rise socially.


Disease

In Southern and Eastern Africa the HI-virus and the AIDS disease that it causes have spread so extensively that the average life expectancy has fallen in a shocking manner in many countries, even by as much as 10 to 20 years. Most of those who die are men and women at their best working age. In the most problematic countries AIDS has made orphans of as much as a quarter of all children.

According to an estimate by the United Nations special organisation UNAIDS, in the most affected areas the disease has caused an annual loss of 1 to 2 per cent in gross domestic product over an entire decade. The disease does not kill only uneducated people but also takes a massive toll of health care staff, teachers and entrepreneurs, thus further exacerbating the social crises in these countries.

In some areas the disease has cut agricultural production by half of normal levels. HIV/AIDS has become the worst infectious disease in human history after the Black Death that halved the population of Europe in the 14th century.

In many countries the care of AIDS patients requires as much as half of their already otherwise quite inadequate health care budgets. Ordinary people and the State cannot afford the medicines that could prevent the virus from infecting unborn children and otherwise slow its progress.

Lack of funds has also meant inadequate preventive health education. This is also due to the backward attitudes of policymakers in many countries. The national leadership in Uganda, on the other hand, began an open health education programme at an early stage, thanks to which the number of new cases reported has clearly begun to fall.

The Return of Disease

Increased interaction between the various regions of the world has created a new health risk. Tuberculosis and diphtheria once again threaten the industrialised countries, even though it was once believed that these old scourges had been eradicated. One by-product of increasing tourism is that venereal diseases and various salmonella bacteria and other microbes responsible for gastro-enteritis have spread from country to country at an increasing pace.

The Economy and Health

In the 1990s the economy of the former Soviet Union area collapsed. This led to a radical fall in the standard of health care. The decline was a cruel example of the close connection between the condition of the economy and health care.

Poverty, however, does not necessarily mean a poor standard of health care. The rulers of impoverished Cuba have, for decades, favoured health care with the consequence that child mortality, for example, has fallen to the level of the industrialised countries.

A Little and a Lot

Public health spending in affluent countries is 40 times greater than in poor countries.

 

  Health care expenditure in gross domestic product (%) Health care expenditure per capita (USD purchasing power parities)
publicly financed privately financed
Low-income countries

1,0

3,2

   52

Middle-income countries

2,4

2,0

  183

High-income countries

6,0

3,6

2 280


Child Labour and Illiteracy

From the Cradle to the Building Site

140 million children were born each year during the 1990s. Many of these children were already involved in working life even when their Finnish contemporaries were starting school. The number of working children aged 5 to 14 years is estimated at 250 million. 110 million of these are girls.

The main reason for child labour is poverty. The International Labour Organisation – ILO and the United Nations Children's Fund UNICEF estimate that families in the developing countries derive 10 to 25 per cent of their incomes from child labour.

Although child labour is most common in the developing countries, there are also millions of working children in the USA, in the southern Member States of the European Union and in the United Kingdom.

The biggest stir has been caused by the manufacture of carpets, footballs and clothes by child labour for sale to Western consumers. As a result of the stir the problem has largely been acknowledged and efforts have been made to relieve it in several international projects.

The most vigilant Western importers – such as Kesko in Finland, which is the largest importer of goods from the developing countries - seek to ensure that the production chain of the goods that they procure does not include child labour.

Consumers, however, still get little information about these long chains of production and distribution, and may unintentionally purchase the results of child labour.

At the first stage the international campaign to eliminate child labour seeks an immediate end to child labour in its worst forms and to help as many children as possible to attend school. These goals are promoted by projects to increase family incomes so that sending children to work ceases to be an economic necessity.

The International Labour Organisation – ILO co-operates with the authorities, trade unions and non-governmental organisations in dozens of developing countries to relieve the child labour problem. Finland co-finances the ILO's principal child labour project.

One in Ten Work in Export Production

Child labour in the developing countries focuses on agriculture, animal husbandry and household work. In a similar manner in the past in Finland children assisted their parents in the work on their own farm and in earning incomes. The decisive difference is that in Finland the children also went to the school.

In the developing countries one tenth of child workers serve in export enterprises. These employ children because in many tasks children are more adept and because the defence of rights is more difficult for children than for adults.

The internationalisation of business life increases the global interest in production arrangements in various countries. This offers hope in particular for effectively relieving the child labour problem of export enterprises.

The Worst Forms of Child Labour

The most urgent need in tackling child labour is to put a stop to its worst forms. In June 1999 the Member States of the International Labour Organisation – ILO approved an agreement on this. This agreement specifies the worst forms of the child labour as follows:

  • slave and forced labour,
  • trafficking in children, prostitution and pornography,
  • forced conscription of children in armed conflict,
  • use of children in illegal activities, especially in production and trade in narcotics, and
  • tasks that endanger the health and moral welfare of children.

This joint decision by the Member States of the ILO sharpens the fight for a total end to the worst forms of child labour. The ending of other forms of child labour will require a more protracted campaign. The short-term goal is to achieve a quantitative reduction in this area.

Schooling for Everyone
for the Cost of an Ice Cream

Why is it that 73 million girls aged 7 to 11 years and 57 million boys of the same age do not attend school? The most important immediate reason is that the governments and families of the developing countries are unable to finance education for all children.

Compared with the global level of affluence, however, the required sums are not especially large.

To send all children aged 7 to 11 years to school would require an additional global education budget of only a little over EUR 7 billion annually. In its 1999 report UNICEF pointed out that this sum is less than Europeans spend on ice cream and Americans spend on cosmetics each year.

In the late 1990s the 52 poorest countries spent about EUR 22 billion on servicing of their foreign debt.

Annual investment in education in the poor and otherwise developing countries is EUR 84 billion.

School or Death?

"A 10 percentage point increase in primary school enrolment of girls can be expected to reduce infant mortality by 4.1 deaths per 1,000, and similar rise in secondary school enrolment by a further 5.6 deaths per 1,000. In concrete terms, in Pakistan, for example, this would mean that an extra year of schooling for an additional 1,000 girls would ultimately prevent roughly 60 infant deaths." – paraphrased from the education section of a UNICEF report: "The State of the World's Children 1999".

The Sialkot Children
and Hospitals in Finland

Public Services International – PSI notes that Sialkot in Pakistan is one of the world's most important producers of scissors, crutches and other surgical and dental care instruments. The local authorities and the International Labour Organisation – ILO estimate that one in seven of its 50,000 workers are children. "Most of the instruments are exported to the industrialised countries for use ... in surgery, dental care and animal medication. The participation of child workers in production has an immediate global impact on nurses and other public sector health care staff", PSI notes.

The Pakistani authorities and international organisations in Sialkot are working together in a project intended to encourage a gradual transfer of thousands of children from work to school.

The Village School in Pakistan

Finnish trade unions and local union branches are financing a project in the Pattal Munda village in Pakistan, whereby a primary school has served the village since February 1999. By the first autumn the school had already enrolled 125 students and 4 teachers.

"The landowners and other employers of the neighbourhood are furious: it has become difficult to find cheap labour as the kids spend their time at the school. Adults now have to be employed in farm work", wrote journalist Tiina Ritala about life in the region in December 1999.

"Education is a sustainable solution to the child labour problem", comments Pakistani Zaheer Ahmad Taj. Zaheer leads the local textile and leather workers union PNTLGWF, which co-operates with the Finnish trade union organisations.

Result of a Rank And File Whip-Round:
A Decent Washroom for a Children's Home

The children of children's home number 20 in Saint Petersburg, Russia, got a decent washroom just before the turn of the millennium. The renovation project and materials were financed by members of the Trade Union for the Municipal Sector - KTV.

In summer 1998 dozens of residents from the children's home enjoyed an opportunity to camp in Finland, financed by the KTV organisation and arranged by its activists in the City of Turku.

Education for Girls
is the Key to Many Problems

In 1995 more than half of all girls of 6 to 11 years of age in Sub-Saharan Africa did not attend school. In Southern Asia the corresponding proportion was over a third.

In recent decades, however, educational enrolment by girls has become more common everywhere.

This has a positive impact not only locally but also in a much broader sense, because higher enrolment by girls lowers the birth rate and child mortality. Both of these slow down global population growth, which in turn relieves the threat of famine and environmental catastrophes.

The increase in enrolment by girls accelerates economic development in the developing countries and thus in the whole world.

A Difference of More
than One Hundred-Fold

In 1994 the least developed countries spent USD 9 per capita on public education. The corresponding sum in the industrialised countries was USD 1,211.

130 million school-aged children world-wide did not attend school in 1990. A clear majority of these children were girls.


Hunger

"The warning of a hunger catastrophe must be taken seriously", was the conclusion of an editorial in Finland's largest circulation daily newspaper Helsingin Sanomat in the late 1990s following a poor harvest year world wide.

Was the writer guilty of unnecessary pessimism? Not really, because every year millions of children, adults and old people, weakened by undernourishment, die in the vast territories of the third world. The editorial, however, did not refer to this topical, daily tragedy, but to the possible prospect of a worsened nutrition situation in the future.

This will occur if world food output per capita begins to fall after decades of sustained slow growth. This is a distinct possibility, as some food production factors have deteriorated over the long term. The scarcity of irrigation water and the erosion of arable land are becoming more acute, the spectrum of grain production species is narrowing dangerously, the resistance of pests to pesticides is increasing and acid rain is reducing the productivity of cultivated regions. The land area required by cities and the transport infrastructure is expanding and, as the greatest spectre haunting the future, there is the threat of climate change.

One topical sign of danger is the shrinking of world grain reserves. Nowadays, the reserve stocks of the whole world correspond only to about two months of consumption. Following bad harvests in the latter half of the 1990s these stocks decreased even below this level.

An alternative vision is represented by the techno-optimists. They believe that the new discoveries of biotechnology and other research sectors guarantee sufficient growth in food production to accommodate needs until the latter half of the 21st century when the global population, according to the prognosis, is due to peak.

The most chilling prospect in the pessimistic prognosis is the dependence of millions of people in the developing countries on imported staple food. If the harvest per capita begins to fall, then world market prices of grain will rise steeply. Who, in such a situation, would any longer finance even humanitarian aid for famine relief, when funding for humanitarian aid is already now under pressure?

The Fatal Consequences
of Nutrition Deficiencies

In its annual report for 1998 UNICEF estimates that nutrition deficiencies are contributory factors in more than half of child deaths.

While millions of premature deaths are the most visible aspects of this tragedy, they represent only a part of the damage caused by nutrition deficiencies. These include impaired disease resistance, blindness and anaemia, a predisposition to diarrhoea and limited development of intelligence and physique. Incorrect nutrition impairs concentration and learning ability. It may even affect the exposure of unborn children to its mother's HIV infection.

Redistribution in Agriculture

The Filipino professor Walden Bello suggests that a redistribution in global agriculture must be enforced by international agreement.

Professor Bello opposes the integration of agriculture in world trade and argues for integration of trade in a global development strategy. The main principles of such a reform should be:

  • an improvement in the employment and income level of agricultural producers and employees in the developing countries,
  • a general increase in food self-sufficiency in various parts of the world, and
  • implementation of the requirements of sustainable development in agriculture.

In Bello's opinion responsibility for preparing such an agreement should be assigned to United Nations Conference on Trade and Development – UNCTAD.


Far from Home

In his book Workers Without Frontiers, Peter Stalker estimates that 120 million migrants were living in various parts of the globe in the year 2000. As in earlier times, people depart for foreign countries principally in search of work and higher incomes. Increasing income gaps between the regions increases the pressure to migrate.

Few Immigrants in Finland

In the 1990s the number of foreigners permanently resident in Finland quadrupled to reach 90,000 by the end of the decade. This development is predicted to continue. Immigrants to Finland are officially received as returnees (particularly Ingrians from the former USSR), students, employees, job seekers, spouses and other family members.

The proportion of refugees among immigrants is a small one. Over the period from 1993 to 1999 Finland received over 11,000 displaced persons, of whom only handful were granted political asylum in the full sense.

Globally, however, the refugee problem is huge. By the end of 1998 there were over 11 million refugees in the world. Armed conflicts, environmental problems and lack of work are the main factors underlying migratory pressures. In 1999 most refugees were in Asia (4.6 million), Africa (3.3 million) and Europe (2.7 million).

The Many Faces of the Trade Union
for the Municipal Sector – KTV

Increasing immigration to Finland is gradually diversifying the national and ethnic composition of the trade union movement. In spring 2000 the 220,000 Finnish citizens making up the main rank and file membership of the Trade Union for the Municipal Sector – KTV were accompanied by:

  • 430 Russians,
  • 351 Estonians,
  • 93 Swedes,
  • 71 Somalians,
  • 32 Moroccans,
  • 32 Yugoslavians,
  • 30 Iraqis,
  • 23 Turks,
  • 23 Iranians,
  • 21 Vietnamese, and
  • 347 members representing 74 other nationalities.

Foreigners in Union Branches

In spring 2000 almost half of the local branches of the Trade Union for the Municipal Sector – KTV had at least one foreign member. Fourteen branches had at least twenty foreigners. The highest foreign membership was in the City of Helsinki social workers branch.

The Multilingual Union Handbook

In early 2000 the KTV organisation published a handbook in English and in Russian describing the union's goals and activities and explaining the importance of organising to immigrant members whose Finnish or Swedish language is not yet adequate to obtain this information from regular union sources.

Practical Interpreters

An article in the magazine Kunta ja Me published in summer 2000 discussed the work of immigrant members working as practical interpreters in the union's branch no. 476 in Turku, Southwest Finland: "In their own work they help immigrants to manage at health centres, in psychiatric care and at the police station. All of them feel that their workload is a heavy one, because often the matters interpreted are difficult and painful. In a single day one may have to move from one emotional extreme to another. Morning duty may be at a maternity clinic attending the beginning of a new life, while the afternoon may be spent in court".

The article includes the aspirations of the Moroccan Hamid Ahari, who has worked for ten years as an interpreter, that KTV and the entire Finnish trade union movement will adopt a more radical attitude to collective bargaining. He is puzzled by the neutral attitude of the Finns towards the privatisation of Sonera Corporation, the largest telecommunications operator in Finland, and towards the redundancy notices issued by the State-owned Finland Post Ltd.

Repatriation of Earnings

The opening of foreign labour markets has created an important income source for families in many developing countries. The country in receipt of the largest sum in repatriated earnings in 1996 was India. In that year migrant labour sent over USD one billion to 14 developing countries. The total sum of money repatriated is almost equivalent to the development aid donated by the industrialised countries.

  • India 9.3
  • Mexico 4.2
  • Turkey 3.5
  • Egypt 2.8
  • Lebanon 2.5
  • Morocco 2.2
  • China 1.7
  • Jordan 1.5
  • Pakistan 1.5
  • Bangladesh 1.2
  • Brazil 1.2
  • Yemen 1.1
  • Salvador 1.1
  • Algeria 1.0

These foreign incomes, however, are insecure. At times of crisis it is the countries employing large numbers of migrant workers that are the first to dismiss their foreign labour force.

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In February 2000 Mike Moore, the Director General of the World Trade Organisation – WTO commented as follows: "The poorest need free access for their products to the markets of both the developed countries and of the other developing countries. Still more important is to assist them in building their institutions, human capacity and infrastructure, and to develop their products and services to enable diversified trade."

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

"Poverty is the greatest threat to people's health." comments Gro Harlem Brundtland, the Director General of the World Health Organisation – WHO.

"Poverty creates a basis for the spread of HIV/AIDS, and HIV/AIDS increases poverty" from a UNAIDS report published in February 2000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

800 million of the world's people are undernourished.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Economic underdevelopment leads to the emigration of educated workers. The African Capacity Building Foundation estimates that some 40,000 African doctors live outside of Africa.

Economic reasons also lead to the export of human resources from Finland. Some of those who have left - including many health care professionals - were motivated by poor working conditions in Finland.

 

In December 1999 there were 22,000 registered foreign job seekers in Finland, of whom 14,000 of these were completely unemployed. Of these job seekers 4,000 were Russians and 2,500 were Estonians. Over 1,000 job seekers originated in Somalia and Iraq, and over 700 in Iran and Vietnam.

 

 

 

 

 

 

 

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