The Seattle Initiative's policy paper, Building a Better World: A New Global Development Strategy to End Extreme Poverty (pdf), notes these basic conditions:
- 2.8 billion people today, almost half of the world's population, live on under $2/day.
In extreme poverty, living on under $1/day, people do not have adequate nutrition, clean water, or medical care. They do not have skills or education to better their lot. Seventy percent live in impoverished rural areas. They mostly live in the 1/4 of the world countries, the poorest, where population growth is still a major problem.
- in 1999, over an estimated 1.1 billion people lived on under $1/day in conditions of extreme poverty. (More info at: UN Millennium Development Goals.)
The main points of this essay are: first, it is feasible to greatly reduce extreme poverty and, second, the effort to fight extreme poverty could be used to promote neoliberal economic strategies that are destructive to the environment and to worker's rights. An additional point is that the business interests of the wealthiest philanthropists are likely to be advanced through the promotion of the Seattle Initiative.
Here is a quote from the Seattle Initiative website's front page:
How can the United States address the most urgent challenges of our time?
The answer given: Eliminate Extreme Poverty.
- Environmental Degradation
- Regional Instability
- Economic Uncertainty
The Initiative's executive summary makes a bold statement about their intent to pursue this objective:
We have concluded that extreme global poverty is at the root of many of the gravest challenges facing the world at present - from HIV/AIDS to terrorism, from environmental degradation to regional instability - and that its elimination is the single most important step we can take in realizing a better future for the United States and the world. We are committed people who want our government to seize this opportunity for leadership and lasting change for the benefit of all. Over the next year, our intent is to raise national awareness among business and civic leaders of the nature of global poverty and the importance - and feasibility - of eliminating the worst of it within our lifetime.
The lives of the impoverished of the world are not disconnected from the U.S. The Initiative notes "nearly one-third of total U.S. trade is with developing counties." Economic impoverishment is linked to political instability.
The Initiative planning group, after study of development issues, found that extreme poverty can be "cut dramatically or even eliminate[ed]." It will take around $50 billion annually (an estimated $40 to 60 billion, U.S. dollars) to make significant progress in fighting extreme poverty. They note that $50 billion/year is already given as development aid from wealthy to poor countries ($51 billion in 2001). The Initiative aims to help raise a U.S. proportion of the additional $50 billion, estimated at $20 billion annually, through public and private sources. The Initiative suggests that these funds are available.
The U.S. national budget in 2004 is estimated at $2.3 trillion dollars, with the GDP estimated at $11.5 trillion. The current U.S. aid budget is approximately 1% of the total national budget vs. around 18% for defense. The U.S. Department of Defense budget for 2005 is projected to be over $428 billion (so far); 2004 is projected at $434 billion. This does not include the Department of Homeland Security with an estimated budget of $31 billion in 2005. Contrast this with the budgets of the Environmental protection agency, $8 billion/year, and the Department of Health and Human Services, 0.5 billion/year.
The percentage of the U.S. percentage of the national budget given in development aid is the lowest of industrialized nations. The U.S. military budget is equal to that of the budgets of the countries with the next 10 largest military budgets. The U.S. can afford to trim its Defense department alone by less that 5%, or $20 billion.
In our globalizing neoliberal economy, the wealthiest have an interest in maintaining and extending their influence over political-economic bodies that generally follow neoliberal strategies. Neoliberal policies include deregulation of trade that favors corporations. This includes policies such as those in the NAFTA trade liberalization agreement where corporations have the ability to apply to a kangaroo court to overrule national regulations that protect the environment and labor rights. Organizations that advance a neoliberal agenda globally include the WTO, the International Monetary Fund, and the World Bank. Policy in these organizations has been dominated the U.S. for decades so as to implement U.S. economic and foreign policy goals.
In general, when governments give foreign aid, they do so to advance their foreign policies. George Monbiot provides an example, in On the Edge of Lunacy, of national self-interest in foreign policy: "During the Cold War, it was used to buy the loyalties of states which might otherwise have crossed to the other side. Even today, the countries which receive the most money tend to be those which are of greatest strategic use to the donor nation... " Monbiot also notes, "foreign policy is also driven by commerce, and in particular by the needs of domestic exporters. Aid goes to countries which can buy our manufacturers' products. Sometimes it doesn't go to countries at all, but straight to the manufacturers." Monbiot quotes the U.S. Agency for International Development on a revealing statistic in this matter: "Close to 80 percent of the U.S. Agency for International Development's contracts and grants go directly to American firms." Large foundations, such as the Ford and Macarthur foundations, historically have also used aid to extend US foreign policy and business interests.
There are various motives in philanthropy. Most of the wealthiest have an interest in social stability. Altruism is another. As Monbiot notes, direct extensions of business interests through aid giving is another. If self-interested and altruistic philanthropy and neoliberal business sense can be made to go hand in hand, so much the better for the wealthiest. This raises some questions:
What kind of development do people in developing countries want?
The basis for concern regarding promotion of neoliberal strategies through the Seattle Initiative can be seen in the main points of Initiative's development platform:
In practice, will the wealthiest work to enable bottom up development, as the Seattle Initiative explicitly espouses? Or, will they work to extend neoliberal economic policies - which bypass national-level labor and environmental protections?
- Investing in People: Promoting Development Through Healthy, Educated People and Economic Opportunity
The first point is the most altruistic and perhaps the least debatable in terms of development strategies. In the words of the Initiative's brief, "Experts agree that investment in poor people, particularly poor women, through increased access to education, health, land, and credit, is key to successful development." In terms of goals, the Initiative endorses the UN Millennium Development Goals.
- Investing in Countries: Supporting Good Governance and Open Political and Economic Systems
- Making Markets Work: Opening the Global Marketplace to Poor Countries and Poor People
- New Initiatives: Encouraging Innovative Approaches and Public-Private Partnerships
The last three of the four points all leave a lot of room for promoting neoliberal strategies, with the middle two almost including descriptions of neoliberalism in the text of the brief. The third point in particular begins, the U.S. "should support trade liberalization efforts that benefit developing countries." A major argument here is to eliminate protections in wealthy countries that keep poor countries from competing, such as in agriculture, which impacts the 70% of the world's poor who live in rural areas. However, the primary beneficiaries of removing these protections will be large corporations.
The Initiative notes that environmental sustainability and protecting workers rights are concerns in the liberalization of trade. These are issues of contention in the ongoing WTO talks. Some forms of liberalization which include environmental and labor protections may be needed. However, if $20 billion or so is in play for development aid in the U.S. budget, neoliberal policies which benefit corporations the most (and sacrifice environmental and labor controls) will likely become conditions attached to the programs as they go through policy making and legislation.
In other words, do we want equal and liberal trade where the environment and workers are protected and trade grows? Or, do we want liberal trade where these are not protected and mostly it is only corporate profits that grow, for a while? In a sustainable world, the former is necessary.
Trade liberalization is an uneven process. Rich countries promote liberalization in poor countries, but practice protectionism at home. Consider agriculture: It is probable that due to the political power of agriculture industries that agricultural protections will be kept in place in developed countries. If this remains the case (and perhaps in any case), it is imperative that developing countries be supported in protecting key agricultural industries.
While strategies of eliminating poverty are a primary concern here, it is also important to consider other agendas the wealthy may have in philanthropy. A case in point is the Gates family.
The Bill and Melinda Gates Foundation is the largest foundation in the U.S. at $22.5 billion in net assets (as of 2002). Bill Gates, Sr., due to donations from his son, now has one of the top ten wealthiest foundations, independently. Just as the Gates help to fight AIDS, the family's effort to fight poverty is very generous. However, there may be mixed motives for the Gates in development.
Based on their 2002 annual report, the Gates Foundation gave over $240 million in donations to a libraries and educational projects, out of a total of $977 million in grants in 2002. Overlapping with these expenses is a multi-year "$250 million effort to provide free access to computers through providing "tools" and "training" to public libraries. Other donations included a major effort to upgrade the technology resources in many poor schools. The Gates also gave $420 million to global health projects, much of this to university and institution based research, including $200 to the NIH for facilitation of research into diseases in poor countries. The Gates are very concerned about the impact of diseases and the extreme poor. The Gates are helping many people. All of this is wonderful.
There are some concerns: Donations to libraries and educational projects have included Microsoft software in computers and create MS users and experts, even growing MS markets. Further, biomedicine is 13% of the U.S. economy. It makes both philanthropic and good business sense for the Gates to cultivate information resources in biomedicine. So. In future aid, development workers and researchers in developing countries may end up secondarily helping disseminate Microsoft computers, services, and training. The Gates philanthropy will then secondarily extend the use of MS software in the developing world.
This is not a vague concern. In the Seattle Initiative brief, on the fourth point on public-private partnerships, this argument is made, "The promotion of technology aimed at developing countries can help build a country's information, communication and technology (ICT) infrastructure. This can directly help develop efforts by making it possible to track and measure health delivery and other programs. ICT is an essential and powerful component to build economies and increase personal income..."
For the Microsoft founder and Gates family, the Seattle Initiative is good philanthropy and good business sense. Consider this scenario: Suppose the Gates Foundations give say $500 million/year to fight poverty. The U.S. government and other donors give $19.5 billion. MS software and services will probably be promoted, perhaps through between 1% and 5% of these funds, perhaps more (large project grants usually have a built IT equipment and administration factor). This then is a sweet matching grant program. Are foundation and U.S. funds going to be used promote open source software? Probably not with the Gates involved. Some argue that free/open source software rather than proprietary software can be a very beneficial economic factor in development.
If U.S. foreign aid is flowing for profoundly important issues such as education and economic development, then moderate benefits (and not the 80% in handouts as mentioned above) to U.S. corporations are a secondary concern. If aid goes through, the main issues are the extension of neoliberalism vs. other development strategies. These issues are concerns for U.S. tax payers and for development workers globally.
While the Seattle Initiative raises questions about development strategies, the strongly affirmed aid direction is heartening. The introduction of Seattle Initiative's policy brief states "the interests of the United States - our own stability and economic health - are bound up with the fate of the world's poor." Social movement activists and nongovernmental organizations have been making arguments like this for decades, while at the same time critiquing the destructive impact of neoliberal economics. The Seattle Initiative calls for activists and development workers to rededicate to grassroots work and planning for sustainable development.