The Inter-American Development Bank (IDB) has reported that remittances to Latin America and the Caribbean will decline this year based on data collected by its Multilateral Investment Fund. This information, billed as an announcement, was made public by IDB President Luis Moreno at a news conference on Monday. But perhaps concurred would have been a better word, since this is not new information for anyone with a modicum of commonsense, including and especially the actual receivers of remittances, some of whom may already be feeling the impact of the decline.
The issue continues to be what will replace these remittances, which for some families represent the ability to keep their feet slipping off the edge of the abyss into certain poverty. While there are suggestions that relatives of immigrants use the sums they receive to maintain lavish lifestyles – and some do − there is increasingly overwhelming evidence that in many instances the money people wait anxiously for each month is used to supplement a minimum wage income for a single parent and pays for rent, water and electricity, to buy medicine or send children to school, and in some cases becomes the difference between having a daily meal and going hungry.
The reality is that poor nations which had a difficulty generating jobs and resources will do far worse in the current crisis. Foreign direct investment has also shrivelled; trade arrangements and agreements have shifted to allow for the most competitive and best quality products to dominate markets; and tourism has seen and will likely continue to see contractions.
The answer right now points to an increase in aid. The question that follows is: where will it come from? Looked at from a global perspective, the effort to end poverty or at least to try meeting the Millennium Development Goal to eradicate extreme poverty and hunger seems impossible. If the goal is met it is expected that by 2015, the figure of more than 1.4 billion people living on less than US$1.25 a day would be reduced by half; some 790 million chronically undernourished people would be reduced by half and the nearly 200 million and counting unemployed people would have achieved full productive employment and decent work. That is the big picture which appears to be an extremely tall order.
Peter Singer, Professor of Bioethics at Princeton University does not believe this to be the case. In his new book, The Life You Can Save: Acting Now to End World Poverty, a sort of a DIY to end poverty, he posits that if the millions of people who have, give but a small percentage of their income toward the care of desperately poor children, thus reducing the burden of care on their equally poor parents, world poverty would shrink in real terms. His thinking has been compared to that put forward by Professor Jeffrey Sachs of the Earth Institute at Columbia University, an advocate for meeting the poverty MDG, whose belief is, simply put, that there is enough in the world for all its peoples, but there needs to be a more equitable distribution of resources. Professor Singer’s concept has also been likened to one of last year’s bestsellers, Nudge: Improving Decisions About Health, Wealth, and Happiness, by Richard Thaler and Cass Sunstein, which explores the idea of guiding (nudging) individuals towards sensible lifestyle choices.
In a recent column he wrote for Project Syndicate and which was published in this newspaper on Tuesday, Prof Singer posits, “One reason that we can afford to increase the amount of aid we give is that the amount we are giving now is insignificant in comparison to what we spend on other things. The United States government, for example, spends about $22 billion on foreign aid, while Americans privately donate perhaps another $10 billion.
“Compared to the $787 billion stimulus package signed by President Barack Obama last month, that $32 billion is trivial. It’s also less than $0.25 for every $100 that Americans earn. Of course, some nations do better: Sweden, Norway, Denmark, The Netherlands, and Luxembourg all exceed the United Nations target of allocating the equivalent of 0.7% of gross national income in foreign aid. But even $0.70 for every $100 is still not a lot with which to confront one of the great moral problems of our age.”
And that dilemma is whether one small section of the world’s population can continue to defend spending billions on toys, cars, planes and jewellery and waste millions more using and abusing energy, food and water, while the majority of the people starve.