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Boosting the poor – Writer says problem ‘overstated’

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Some nonprofits overstate poverty in order to justify large budgets and staffs.

That’s the opinion of Christopher Lingle, author of “The Rise and Decline of the Asian Century,” writing in the Christian Science Monitor on July 5.

Most international agencies measure poverty using earnings benchmarked in U.S. dollars, Lingle says. Under this system, the depreciation of a local currency could increase the number of poor. Furthermore, the amount a person earns in U.S. dollars says nothing about local conditions and costs.

The U.N. Conference on Trade and Development is among those guilty of exaggerating poverty. The group’s “Least Developed Countries 1999 Report” says that poor nations are increasingly marginalized and poor. The report also shows amazing improvements, however. Per capita GDP in the world’s poorest countries rose from $163 in 1980 to $235 in 1997. Over the same time mortality rates dropped from 116 to 108 per 1,000 live births and food supply rose from 2,050 to 2,145 calories per capita per day.

There are ways to help the poor without throwing more money at aid agencies, Lingle says.

Redistributing wealth from the haves to the have-nots can be counterproductive. Redistribution removes the incentive for better-off members of the community to work harder and increases tax evasion. Ironically, governments may be left with less money to spend on social programs.

Labor regulation can also be harmful. Laws that make it hard to fire workers also make it costly to hire them.

Lingle suggests that governments review their policies with an eye to improvements. A good place to start, he says, is by depoliticizing a country’s economic and social life.

Governments should also pursue rapid economic growth, which benefits the poor because it allows prosperity to be widely shared. Openness to foreign trade and fiscal discipline also benefit the whole economy, and by extension the poor.

For full story, go to the Christian Science Monitor.

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