The Fight Against Poverty
A Proposal By
His Excellency Dr. Cheddi B. Jagan
President of Guyana
Recognizing the potential problems in the foreseeable future, that poverty can result in the undermining of democracy, President Cheddi Jagan, well respected, knowledgeable and venerable politician, seeks to influence world leaders and educate people with regards to "the environment of intense economic and social crisis". Living in a world where issues of politics, the economy, social justice and the environment are at a watershed, this proposal is penetrating, extremely important and timely.
During a World Summit on Social Development held in Copenhagen, Denmark, March 6-12 1995, Dr. Cheddi Jagan put forward his vision, mandates and proposals. The text of his address is reproduced in full with kind permission. Editor.
Mr. President
Your Excellencies
Distinguished Delegates
Ladies and Gentlemen:
The time for this important conference is finally here. The Social Summit is under way. The ears and eyes of the world are fixed on us here in Copenhagen. People everywhere are listening and watching with high hopes that this World Summit on Social Development will produce a strong international commitment to improving their welfare.
The many millions who now live in abject poverty and despair are impatient for change. We who lead them have the inescapable obligation to improve the conditions of their existence. We therefore have to ensure the success of this Summit.
The spread of poverty, unchecked across geographical frontiers but particularly so in the poorest countries of the world, the continuous swelling of the ranks of the unemployed and those that are underemployed, even in situations of reasonably sustained economic growth, and the impact of these and other pressures on our societies, as a result of on-going political, economic, ideological, ecological, social and cultural crisis, has led to increasing social tensions, the undermining of traditional values and to the loss of direction.
Solutions to these problems cannot be postponed. Continued inaction on the part of political leaders will result only in further disintegration and the eventual collapse of our social systems. We owe it to our peoples as well as to future generations, whose interests we must consider, to devise remedies that would lead to better lives, better societies and a better world. Indeed, this is a time for action–a time for urgent action!
Ultimately, the resolution to these pressing problems lies in the actions of each of our governments at the national level and the response of the international community to what we do. After all, we live in an interdependent world–a world which is virtually a global village. Regrettably, modernization and globalization have led to widening gaps between the rich, the ‘haves’, and the ‘included’ and the poor, the ‘have-nots’ and the ‘excluded’ in both the North and South, and between the North and South. The globalization of poverty is a reflection of underdevelopment, mounting population pressures, relentless environmental degradation, injustice and intolerance.
Since taking office just over three years ago my government has pursued stringent efforts to steer our economy through successive programs of structural adjustment. The attendant socio-economic burdens have been immense and our people have borne them valiantly.
However, small and vulnerable countries, such as Guyana, find that the key contributing factors to our problems, and hence to their solutions, exist largely outside our immediate control. Despite our steadfastness and our political will to stay the course, our endeavors will not be successful unless supported by the international community in a meaningful and practical way.
In the assessment of the World Bank, over 40% of our population now exist below the poverty line. This is primarily due to our huge foreign debt stock which is about 500 percent of GDP, and represent a per capita debt of US$2,785, or more than five times Guyana per capita income in 1994. In 1992, national and foreign debt payments were 79 percent of current revenue and external debt servicing utilized 42 percent of export income. Some improvements have been made, but the debt burden is still crushing.
The results in social terms have been a massive drain on our skilled and unskilled work force and severe dislocation within families and in the larger society. The social infrastructure, including health, education and welfare provisions, has been seriously undermined by the hardships resulting from structural adjustment measures and from debt servicing obligations.
The impact of these two factors on our economic, social and political life deserves greater elaboration, for while my government has achieved growth of 8 percent in gross domestic product (GDP) in 1994, appreciable progress in other areas remain sluggish. The poor growth in personal incomes, particularly for employees in the public sector, continue to limit our efforts at ensuring sustainable recovery and the distribution of the benefits of economic growth. The sectors especially affected are health and education – two areas prone to the negative effects of debt servicing and structural adjustment measures.
For us, the daily struggle for meeting the basic needs of our people through the provision of effective access to health coverage and education poses a difficult if not impossible challenge. Poorly paid health workers and educators serve to compound the over-stretched and woefully inadequate facilities in these important sectors. Hospitals are forced to function on occasions without the very minimum of supplies of equipment and drugs, and schools are equipped only with the barest necessities. As if to make matters worse, numerous individual households cannot meet the requirements for ensuring that children are sent to school, and continue there. The fight for daily survival at all levels often necessitates that even the very young in many cases are forced to contribute towards the maintenance of self and family. In this stark reality family structures become tenuous at best and often succumb to severe pressures.
High levels of malnutrition and illiteracy undoubtedly impose further burdens on our society, with dire consequences for the future viability of the country. In all of this my Government is hard put to meeting its very basic obligations, committed as we are to maintaining the rigid course of adjustment and fulfilling our debt servicing obligations. Linked to these factors and to the continued growth in unemployment among the youths and the inability of most to earn a decent living are emigration and the cultivation, production and trafficking of illegal drugs, itself a growing menace in the Guyanese society.
While these occurrences take place in Guyana and their consequences are most felt by our society, confining their impact to our borders, especially in the case of narcotics production and trafficking is beyond the realm of human capability.
We have often pointed in several papers and pronouncements since taking office that there is a need to twin economic growth with social justice. Without the latter, the former will only benefit those who have traditionally benefited – those who already have – while those living on and below the poverty line will continue to suffer more and more. This is not the way to establish dignity of the individual and the welfare of the human community.
It is time that we, in our collective wisdom, recognize that a key source of political and social instability, which plagues the world, has its origins in the structural crisis of modernization, fierce trade confrontation and an unfair system of international economics, by which net resources are transferred from the South to the North in service of external indebtedness and other financial obligations. We must treat not only symptoms but also the root causes of absolute poverty, hunger, disease and illiteracy.
Important also is the recognition by no less authoritative a source than the World Bank that, notwithstanding the efforts of creditors in assisting Severely Indebted Low-Income Countries (SILIC) to manage their debts, the debt stock of these countries remain unsustainably high, leading to an acute problem of debt overhang.
Similar conclusions have emerged from sources such as the G7 Summit, the Non-Aligned Movement and the Commonwealth Finance Ministers, citing especially the problems posed by the ‘debt overhang’ and the need to reduce the debt burden of severely indebted countries.
The policy reforms instituted by my Government are a matter of firm commitment. But our frustration at the lack of significant recovery thus far compels us to conclude that we cannot successfully hope to grapple with the incidence of discord and disintegration in our society without an appreciable alleviation of our onerous debt and debt-service burdens, that we cannot effectively develop our economy when the conditions of our participation in world trade, and of the majority of developing countries, remain unfavorable.
The declining value of our primary exports and the relative and often real increase in the cost of essential foreign imports, particularly in the face of constant devaluations of our national currency, combine to limit severely our ability to pursue many of our national goals and objectives.
Our commitment is to ensure and guarantee the rights of each of our citizens, including the right to work and to a decent livelihood; to strengthen our newly restored democracy and above all to secure the attainment of our development goals through sustained, equitable economic growth. We are equally dedicated to the proper management, protection and preservation of our natural environment and the promotion of the welfare and culture of our Indigenous People. Nor will we forget our commitment to honor our international obligations.
It is extremely difficult, if not impossible, given the acute scarcity of resources nationally, to satisfy these responsibilities. Our reliance on the mechanism of the market has so far not enhanced our ability to provide solutions to the critical problems. Instead, less control and fewer resources at our disposal conflict with the very objectives which we strive to attain.
At the international level, the playing field is palpably uneven and the norms, and standards which appear to govern it, serve at times to undermine our national goals, or the level of concentration that we pursue as a global objective. The reality has been the continuing decline in levels of ODA and other forms of development assistance, a re-arrangement of priorities and a reneging on established commitments. Paradoxically, the flow of arms and dangerous weapons persists unchecked especially in existing or potential areas of tension or conflict.
Mr. President, I have sought in recent times to address all of the foregoing concerns as reflective of the necessity for a New Global Human Order in which the needs, hopes and aspiration of each citizen will assume primary importance.
My proposal is founded expressly on the requirement for guaranteeing to every woman, man and child the rights, respect and recognition that have been so well underscored by international agreements; for ensuring accountability and transparency in governance; for securing the physical and material well-being of people through economic growth and development; and for facilitating these objectives through a global compact that assures support for their attainment.
My proposal for a New Global Human Order comprises a combination of ideas that have been made over the years, but which were hitherto ignored, invariably because of political considerations prior to the more recent changes in the configuration of the world’s political and economic climate. They are also based on new considerations that have to be made in light of the results (and lack of results) of the more recent world changes.
The problems facing developed and developing countries the world over today, never claims of a New World Order, are still very appalling. Indeed, with over one billion people still living in abject poverty in various parts of the world, including the developed countries, it s more symptomatic of a New World Disorder.
In the Caribbean and Latin America, for example, we have honored our debt obligations at the great cost of tremendous suffering among our people. But the more we pay, the more we owe. As a result, living standards in our countries have been lowered to standards of the 1950’s.
Similarly, in the developed countries, unemployment, the ‘Achilles heel’ of modernization, is increasing; poverty is on the rise; housing crises are developing, resulting in millions being made homeless in places where this was never a problem.
A host of negative social phenomena are indicating that while the developing countries continue to carry the brunt of the weight of disproportionate development, we are not alone in the South. These problems – and others – are also rearing their ugly heads in the North in ways never seen before.
Dialogue has always been needed between North and South. But North/South dialogue has over the years become the dialogue of the deaf. The present situation however makes it clear that we have no choice but to listen and to act. And we have to act collectively, with an adequate role for our partners for social progress, such as the Non-Governmental Organizations (NGO), village and neighborhood self-help groups, professional associations, trade unions, farmers’ organizations, international research institutes, intergovernmental organizations and other bodies which can make informed inputs in the search for a new global dispensation.
The UN Development Decades, the G7 Summits and the IMF/World Bank prescriptions have not come up with viable answers. The ‘trickle-down’ process is not working. We now have phenomena such as ‘jobless growth’ and ‘jobless recovery’ and ‘aid fatigue and ‘donor fatigue’.
The Latin American and Caribbean Commission on Development and Environment, sponsored by the IDB and the UNDP, concluded that "more than half a century of flawed development has produced total stagnation" and called for a strategy of sustainable human development, based not on any universal strategy but "on an analysis of our own regional institutional, economic and social peculiarities and of our environmental problems".
We need a Development Agenda that will address such important issues as alleviation of poverty, expansion of productive employment and enhancement of social integration, particularly the more disadvantaged and marginal groups. Such an agenda must deal with the international competitiveness of the Third World, the basis of new modalities for international cooperation for development and financing for development. This requires that the dialogue between the North and the South be within the context of interdependence, cooperation and partnership and respect for national sovereignty.
Mr. President, our proposals in this regard are many and, as I said before, they have been shared with many of our colleagues around the globe in both developed and developing countries. They have also attracted support in the North and the South.
When my proposal for a New Global Human Order was first tabled there were skeptics who, while acknowledging they were positive, questioned where the finance would come from. My answer is simply that the proposal is self-financing and its financing would depend on the preparedness of the North to see and realize that it too has a stake in furtherance of a New Global Human Order. This isn’t only about helping the South.
A few years ago UNDP indicated that if only a small percentage of the money spent annually on the arms race was diverted to causes of peace and development, if only a tiny percentage of national budgets in developed countries was diverted towards developmental assistance to developing countries, the world could have been a better place to live, as we would have seen a definite improvement in the state of being of people in several countries. This need still stands.
The British Chancellor of the Exchequer has recently proposed that the IMF should sell US$50 billion of its gold reserves for debt relief and poverty alleviation particularly in the Least Developed Countries like Guyana. IMF Managing Director, Michel Camdessus, also called at the IMF/World Bank meeting in Spain for an aid package of US$50 billion.
The UNDP has pointed out repeatedly that if military expenditure in the 1990’s is reduced by only 3% per year, this would yield a ‘Peace Dividend’ of US$1.5 trillion. This approach, which was argued against a few years ago by the North in the name of security, is even more practical now, in light of recent world developments. A three-percent cut in global military expenditure can yield US$410 billion in the 1995 - 2000 period.
Additional funds can be raised by:
*A global tax on energy. A tax of US$1 on each barrel of oil (and its equivalent in coal) would yield around of US$66 billion annually.
*Pollution taxes.
*Taxing global speculative foreign exchange movements. A tax of 0.05% on the value of each transaction can yield US$150 billion annually. Nobel Prize Winner, economist James Tobin recommends a 0.5 percent tax which would yield a much greater sum – US$1500 billion annually.
Payments for services by poor countries can also be made to ensure global human security. This could be for environmental controls, destruction of nuclear weapons and controlling communicable diseases and narcotics. Compensation should also be paid for brain drain, exclusion of unskilled labor and restriction on trade.
The additional funds, the ‘peace dividend’, can be utilized for the following:
*A Works Program for physical, social and cultural infrastructure, as embarked upon by the Roosevelt New Deal Administration at the time of the Great Depression of the 1930’s.
*Increase employment by the reduction of the number of days or the number of hours worked per week without loss of pay; also reduction of the retirement age without loss of benefits.
*Tax and other incentives for the use of technology which will create jobs instead of destroying them.
*A new EU/ACP Lome Convention with enhanced assistance for the developing countries.
*A refashioned Alliance for Progress for Latin America and the Caribbean.
*Debt relief for developing countries.
With debt relief, funds will be available to lay the foundation for rapid economic growth, which can then provide the basis for expansion of world trade through the purchase of goods and services, especially capital goods, by developing countries from the developed countries.
Mr. President, it is relevant to note that Science and Technology today has within its grasp the ability, if properly harnessed, to cut hunger in half by the year 2000. But this will require a sound scientific development strategy, wider intellectual understanding, strong political will, deeper moral commitment and effective policy measures – a balanced and integrated set of economic, financial and social policies. There is an interconnection and interaction between the economic, political, institutional, ideological, ecological, social and cultural spheres.
We also need to establish new global institutions to respond to the global dimension of the existing human society. The UN itself has to play a more central role in global economic management and should have access to larger financial resources – the possible source of which we have already identified.
The Bretton Woods Institutions, the World Bank and the IMF have moved away from their original mandate and have to be brought back to doing what was originally intended. They need to concentrate on human development as distinct from the means of development. They have to be more concerned with social and human factors than with statistics of growth. We need structural adjustment with a human face.
The IMF must be adjusted to serve as a global central bank; the World Bank must return to its original mandate to mediate between capital markets and the developing countries. Official Development Assistance (ODA) must be increased to two-thirds instead of the present one-third of one percent of GNP. We need economic growth with equity, with social justice and ecological justice.
Mr. President, my colleagues in the Commonwealth are fully apprised and supportive of my proposal. Other colleagues too, both at the level of national governments and at the level of regional groupings, have been good enough to provide me with their thoughts and views on how best this initiative can be refined, concretized and advanced. I have also addressed the top executives of the IMF and the World Bank, the European Commission and other global institutions on the content of my proposal.
I would wish now to seek the endorsement of this Summit of my initiative for a New Global Human Order. A more fitting context could not be conceived than one in which the critical issues of unemployment, poverty and social cohesion are so rigorously addressed and attention given to the related concerns of debt, structural adjustment support and financial flows. It is my hope that, as this initiative matures at the level of the Commonwealth, it will be translated to the United Nations to be incorporated into the work of the General Assembly.
Our work in this World Summit for Social Development and in the United Nations must recognize that crucial to sustainable human development is the attainment of peace and political stability, economic growth with equity, healthy social conditions and environmental protection and democracy in all its aspects –political, consultative and participatory. We must also take account of the need to place people at the center of our actions, through education and training, through the provision of social safety-nets and by their empowerment and participation in the processes that affect their lives. It must also be linked to our efforts at preserving democracy, good governance and human rights, including civil and political as well as economic, social and cultural, and freedom from fear and freedom from want, and at promoting development while ensuring the rational use of the environment. Such efforts must be underpinned by firm decisions at this level to address the critical debt and resource problems affecting our countries of the South.
These objectives, I submit, can be achieved by the linking together in a common compact of our endeavors, back-stopped by the massive mobilization of political will and tangible support at the global level.
I am convinced that through a New Global Human Order, these actions can be pursued by returning the United Nations to its original purpose of promoting development worldwide.
Mr. President, Our Hosts, Her Majesty the Queen of Denmark, Her Government and the people of this country have provided us with the physical and other facilities conducive to the successful outcome of our deliberations. In doing so, Denmark lives up to its reputation for generosity of spirit to other nations. I therefore join the many others who have preceded me at this podium, to express my sincere gratitude for their warm hospitality. I wish to convey our appreciation to you, Mr. President, for chairing this important meeting, and to pledge to you our full support. Our gratitude is also due to the distinguished UN Secretary-General and his staff, who have worked assiduously to prepare the way for our discussions.
Let us move forward purposefully towards doing those things which are necessary to save our ‘global village’ from the social explosions which threaten to engulf us. We must let the rest of the world see and hear that this Social Summit has paved the way for humanity to live in a safe tomorrow and for generations to come. Thank you.
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