TIG: It is a known fact that extreme poverty has remarkably decreased in the last 25 years; yet, as much as countries have managed to defeat the specter of poverty, others have become poorer and have suffered illiteracy, child mortality and disease on a daily basis. How do you explain this phenomenon?
F. Mahdi: The phenomenon of poverty increasing in some regions while declining in others is quite normal and economies that are based on market forces have better opportunities, and tend to grow faster than others. Such counties may attract capital, develop exports, raise their investment rates and GDPs, and by growing faster, they tend to employ more people. It is through the employment nexus that much of the poverty alleviation occurs; however, this is not sufficient to eradicate poverty because there are certain areas, even in dynamic economies, which tend not to be attractive enough to private investors and, therefore, remain poor. On a global level, this is also magnified; you have countries that are affected by conflict, civil wars, and tend to have increasing rates of poverty because of the destruction of productive powers. In such countries standards of living tend to plummet, such as in the Iraq case as a result of sanctions and war or in Palestine or Sudan or Zaire as a result of war and instability. No doubt stability encourages investors. In Lebanon for example, investment has risen since the 1990. Presently, however, with the turbulence, some investors are reluctant about investing.
TIG: In what ways would democratization help governments fight poverty and other problems and achieve the MDGs? And if democratization were a viable solution, how could countries with closed systems, such as, Yemen, for example, democratize?
F. Mahdi: Yemen is a country with a parliamentary system; yet, the economy is low and poverty is rampant. It is more complex than that in a country like Yemen. The country has problems related to institutions, tribalism and democracy. However, we have seen economies that are not democratic that have grown, but then they reach a point where they have to democratize or will lag behind such as countries in Eastern Europe or South Korea, who had to go through a democratic process in order to have stable investment. The issue of democracy is broader than the issue of poverty alleviation. We can talk of economic democracy, and the MDGs are really about the right to development which is a democratic right. You cannot continue living in a world of inequality, whether on a global or local level. The MDGs is an agreement that world leaders have arrived at stating the poor have the right to development and this is democratic right. Realizing this commitment requires a lot of partnership and developed countries will have to assist poor ones to develop.
TIG: Poor countries are often blamed for causing their own poverty due to corrupt government and administration. They are urged to democratize in order to achieve the MDGs; however, there are poor countries with honest governments but suffer endless cycles of destitution. How are the Goals achieved in such countries?
F. Mahdi: If we go to theories of development, we talk about the vicious circle of underdeveloped countries. [When] you’re poor you start from a low level of income and you don’t have enough savings to invest in order to grow. Many counties with low per capita income do not have sufficient savings to have lets say 20-25% rate of investment. They cannot do it because they are more or less tantamount consuming most of the production that they make and produce during a year. In those cases, I think even when you have honest governments, they seem to have no financing to grow and they need all the help they need. An honest government is useful of course because the money will not go to waste.
TIG: It has been recommended by the SG that developing countries with extreme poverty should, by 2006, adopt and implement a national development strategy to meet the MDG targets by 2015. This strategy should function on the basis of gender equality, environment protection, rural and urban development, health systems, education, science, technology and innovation. How would these strategies be monitored? To what extent are they obligatory? And how would closed totalitarian regimes in the Arab world implement such strategies?
F. Mahdi: Most of those countries that need help have international development institutions such as the UNDP, FAO, UNIDO. They are not on their own. But the act of developing those strategies should really be a national act because if you impose a strategy on a country the people of which will not own, the strategy cannot function. Normally, I would say it becomes a collaboration of effort between development institutions and national government and many of those strategies have poverty goals that governments will have to reach, let’s say reducing poverty by 15 to 20% over a period of time. In return, some of their debt would be waved. You surely know about the highly indebted poor countries initiative where the Bretton Woods institutions can wave some of the debt of those countries. Debt is a huge problem and servicing it consumes a good proportion of the budget.
I was looking into the Lebanese case and I saw that 48% of expenditure goes into debt services. Of course it’s not all external debt servicing because most of the debt is domestic, but once you service the debt what is left goes into social services like health and education which are ingrained in the MDGs. Therefore, the more you cut out from the budget for debt servicing the less you have for social development. These countries need all the help they can get. I think the countries that have funding will be able to achieve the MDGs. It is those with no money to build educational systems or achieve gender equality or youth employment, such as Yemen, Mauritania, Somalis Djibouti, Comoros and so on, who will probably fail to achieve the MDGs by 2015.
TIG: The achievement of the MDGs necessitates the cooperation of both developed and developing countries, especially if Goal 8 is to be met. While developing counties are urged to open up, developed counties are required to provide aid and support. However, poverty in certain counties is the result of bad economic policies and tariff barriers on exports of poor countries. What do you think is the most viable solution to allow poor countries’ exports flow into the markets of industrialized ones while still protecting the latter’s local industry?
F. Mahdi: I agree. This is the core issue. Market access is one of the means of development of developing countries. Under various stipulations, LDCs which are landlocked are allowed to export unhindered to the market of the developed counties. On the other hand, we find that the sector where the developing countries can export best, which is agriculture, is exactly the sector which is highly subsidized in developed counties. Until recently, the total subsidies of the OECD countries have amounted to 300 billion and came down to 250 billion. With this kind of subsidy, how can developing countries compete? They cannot. Once I went to Darfur in the 1990s and found Nestle dried milk on the market, knowing that they have lots of cows. This indicates that it was subsidized and competing with a local product. Developing counties are not getting enough reciprocity on the reduction of subsidies on agricultural production of developed countries and this is an area that needs to be focused upon.
TIG: There has been a stress on global development assistance. Each developed country should establish a timetable to achieve a 0.7 % target of gross national income for official development assistance no later than 2015. What can you tell us about this? How serious and effective is it?
F. Mahdi: Currently, the ratio is about 1/3 of the estimated figure. The 0.7 % of domestic income is not achieved. Should those countries decide to raise their commitment to 0.7, of course, this means there will be a lot of financial flows to developing countries, and that would translate into higher rates of consumption on investment.
TIG: We know that the Millennium Declaration is not a legally binding document. Therefore, states have only a moral commitment to secure a safe and sustainable world. However, violations are constantly taking place and problems of desertification and climate change are on the rise. How can the international community, in your opinion, who is led by major powers who are main emitters of CO2, handle the issue of environmental sustainability?
F. Mahdi: This should be approached by adherence to the Kyoto Protocols and others that are viable to sustainability. But it’s not only the green house gases one should be worried about. It is here where the MDGs need to be more specific. For instance, in our region, desertification is a major problem. In Sudan for instance, the desert encroaches on arable land by about 10 km a year. In 10 years time, that’s 100 km. This means huge loss of productive capacity in arable land and agriculture. In other countries of the region, the water issue is a serious problem. Our region is the most water parched of the world and we’re consuming more than we have. Much of this consumption goes to agriculture, which is sometimes subsidized, in the case of the subsidized wheat in one of the ESCWA countries, whose production necessitated a lot of drilling of water wells and depleting lots of water. Sustainability requires more than looking at the green house gas effect. We have to look also at soil erosion, water and energy depletion. This is a region that lives on oil and gas and we now realize that this is also depleting. There are very few finds of major oil fields worldwide and this is an indication of depletion.
TIG: What are the most pressing concerns in the MENA region today? Are there any countries on their way to meeting the MDG target? Could you name a few?
F. Mahdi: I would not like to name countries because it could be sensitive, but LDCs and countries in conflict are the ones that will find it more difficult to achieve the MDGs. The GCC with its significant financial resources will not find it great difficulty in achieving most MDGs. This part of the world; ie: Syria, Jordan Lebanon, would probably achieve many of the Goals if the region remains stable. However, if we go into turbulence, I will not be so optimistic. As regards the North African region, well it’s difficult to say. I mean Tunisia was growing fast as an economy and opening to Europe.
Algeria has much financial resources these days although it passed through a terrible period of conflict between the mid 1980s to mid 1990s that really retarded development. I also know that productivity in that country is not very high. They invested a tremendous amount of money in industry in the 1970s, and in the mid 1980s they went into debt while the management of those industries was not too efficient. With the restructuring they have had since then, the efficiency factor is better now and that could generate the process of self sustaining economic growth with the non oil sector, but the country remains dependent on hydrocarbons for finance. Their financial condition seems to be better than before. So probably they will achieve several of the MDGs.
Morocco is basically dependent on agriculture and tourism. Agriculture is very much dependent on weather, so one year it’s ok, the next year it’s not. In industry, they were doing well in garment until the alleviation of the dismantlement of the country quotas of exports in 2005 for textiles. Since then Morocco has suffered tremendous unemployment in the garment industry because of cheap garments coming form China and India and so it is a problem. Globalization is making it more possible for importers to import from cheaper sources without hindrances and countries with higher wage levels and lower productivity will not be able to compete with those dynamic economies in Asia.
TIG: You know that we are a youth organization and we concentrate on the role of youth in promoting and achieving the MDGs. What role can Arab youth play towards this aim?
F. Mahdi: Before one goes into activity, one should go into making people more sensitive and aware of what the MDGs are. I don’t think that beyond the official walls of multinational organizations people are sufficiently aware of the MDGs. But we should look at it as part of the UN resolutions on the right to development. So I think youth organizations should sensitize their members on what this implies and then try to educate people in terms of the right to development, especially on the issue of youth unemployment.
To contact Dr. Mahdi, write to: mahdi@un.org or go to:
www.escwa.org.lb
To contact TIG write to:
may@mdg.takingitglobal.org
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