Exclusive: Compassionate Capital for Economies Without Borders: The new International Development Perspective
In its appearance of invincibility in spite of soaring rhetoric over the years at countless fora and its self-perpetuating nature, poverty is beginning to look like a necklace that humanity wears to its own shame, yet cannot remove from its neck.
Majority of the population in the developing world plus a sizable number of unjustly “left- behinds” are struggling against being entombed in it. As nations or as individuals.
The tragedy, as John Kenneth Galbraith once wrote, is that ‘’poverty enforces the very attitudes and actions that make it self-perpetuating.’’ It kills freedom, kills the entrepreneurial spirit, saps the energy, kills productivity and turns the mind into the most docile, almost incapable of the most basic questions.
Hence the world’s dictatorships or pseudo-democracies thrive in Africa and other parts of the world where poverty reigns. The poorer the nation, the less questioning the people and the less disposed to accountability the government. Of course, consequently, the more impoverished the society gets, the less accountable the government to a people too poor to demand any of their rights. And the gyre turns endlessly.
So the cycle of poverty has to be broken in as wide a swath of the world for good governance to take root and for peace to reign in the world.
As Galbraith said, the poor cannot save and therefore can never advance. Even in countries where an endowment of resources may yield some blessings by way of cash from sale of such, the erosion of the institutional framework for sound management occasioned by poverty-induced docility on one hand and poor leadership on the other, make such savings meagre. Much is either looted or mismanaged. The nations seem blessed but the people remain poor. Again, because poverty has the unassailable power to reinforce the very conditions that make it thrive, the cycle goes unbroken. No savings, no wealth.
On the other hand, to use Galbraith’s words, the rich (nations or individuals) not only save, they do so in excess even. The task at hand now is how to make the savings in the rich part flow to the parts where there is none.
Of course, there is a flow already. AID: which does not do much to help the poor out of their situation. And RUTHLESS CAPITAL, largely from private hands ,only to places with some raw materials or resources. For a tidy profit, at any cost to the lives of the people (Congo, Nigeria, Angola etc). But to eradicate poverty, where money is badly needed is in infrastructure: Education, roads, power plants, dams for irrigation, and those capital- intensive utilities that would create the enabling environment for the poor to climb out of the mire, liberate their minds and free their energy.
Not aid, as it is now, can do this, for it is too little and too self-serving of the aid givers. Not just trade as it is because the balance is still tilted against the poor and therefore they cannot get much from trade even in their resources where such is available. Why, therefore, can’t humanity get together and pursue a seemingly ridiculously idealistic goal of ECONOMIES WITHOUT BORDERS in which desperate nations are identified and their resources plus the excess resources of the affluent are pooled together to develop those institutions and infrastructure that will make clawing out of poverty possible.
Such nations may have to give up a bit of their sovereignty, may be under the auspices of a new body set up for the purpose of ECONOMIES WITHOUT BORDERS, for a period of construction and that of partial payback. This is in the belief that there is an identifiable period within which the people would be enlightened enough to sustain the institutions, see the benefits, insist on good , transparent management that would engender wealth creation and, of course, payback by way of such successful nation and its people earning enough to save and being in a position to join the INVESTORS in the pool.
Private capital, while substantially available, is not patient enough for this ideal. Aid from rich governments and individuals can never be sufficient. It has to be a larger dose of both, pooled together as an investment fund .COMPASSIONATE CAPITAL. STILL FOR PROFIT. FOR THE FUTURE OF THE WORLD. Because with the rampaging poverty, the chasm being created between the rich and the poor is growing into an abyss into which the whole of humanity cannot afford to fall.
This is ridiculous? How many poor nations can be targeted?
Well, since so many lofty ideas appear incapable of breaking the vicious cycle of poverty of resources, poverty of leadership or governance and poverty of the people, why not a ridiculous one?
And one nation as a starting laboratory would not be a bad idea. At least, it would serve as a model.
This article is brought to you in partnership with World Economic Forum