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Manipulating our sympathy: Will the UN and Oxfam continue their habits of deception?

By Jeremy Carl
web posted March 28, 2005

Much as those of us who work live and work in South Asia are usually grateful for anything that pulls global attention off of Iraq and causes people to focus on this vitally important part of the world, the tragic Indian Ocean earthquake and subsequent tsunami are not the sort of focusing events that anyone would have wished for. While much work remains to be done, individuals and governments from around the world responded with a tremendous outpouring of sympathy and financial generosity.

But as the UN and Oxfam, among other organizations, take a leading public role in responding to this tragedy while attempting to raise billions of dollars, donors are of course concerned that their money is used wisely and non-politically for the purposes most needed. And they are equally concerned that the extent of the tragedy is not magnified by organizations that are seeking to exaggerate an already horrible event in order to build their build their fiefdoms. Unfortunately, given the way that the UN and Oxfam have recently manipulated news about hunger both globally and in our region, aided and abetted by the laziness of the mainstream media, the signs are not encouraging.

As an example of their mentality, one needs only to look at the recent report from the UN's Food and Agriculture Organization (FAO) which announced that there are 852 million malnourished people in the world. Such statistics are sobering enough, and they become even grimmer in the media's gaze. In the wake of the report's release, New York Times reporter Elizabeth Becker wrote that "after a slow but steady decrease, the number of chronically hungry people rose to nearly 852 million in [the FAO's] latest survey, an increase of 18 million since 2000."

As a current resident of India, the country with by far the largest population of malnourished people in the world, these numbers are not surprising. Even on my daily rounds in Delhi, India's richest city, I encounter extreme poverty all around me.

But for those who are interested in pursuing productive solutions to the hunger problem, FAO's decision to employ a deceptive publicity strategy to market the latest news on global hunger and the uncritical acceptance of this data by the establishment media is very disturbing. And when this strategy is viewed in the context of similar tactics employed by the UN's International Labor Organization (ILO) and Oxfam, both of which also recently released global reports on poverty, a disturbing pattern emerges. Unfortunately, it seems that these agencies are far more interested in exaggerating the admittedly serious problem of hunger and obscuring the progress that has been made than they are in telling the truth.

Typical of the "amen" coverage that followed these reports was the news from the BBC, which referred to "the worsening situation in China and India" as the cause of the alleged rise in global poverty. But as I will show, contrary to these reports, global hunger in China, India, and the rest of the world is improving, not worsening. That these organizations, which should be leading public education about issues such as world hunger, are either completely innumerate or simply choose to be deceptive for political reasons is as depressing as it is instructive.

The real hunger numbers

When the latest FAO report came out, the Times' Becker intoned ominously that the rise in the number of hungry in the world was "reversing a promising trend" and that it "rais[es] new questions about global inequities" as if such questions had not been raised before. Of course, this is nonsense. Fortunately, there has been no reversal of the positive trend toward reducing hunger. There has only been a (probably short-term) slowing of the very positive trend of sharply reducing hunger. While everyone would obviously prefer that hunger is reduced quickly rather than at a moderate pace, the fact remains that never in human history have such a small percentage of people been hungry, and the global percentage of those hungry, scaremongering aside, is continuing to shrink.

But it is clear that The UN and the New York Times either do not understand this reality or instead that they choose to ignore the difference between relative and absolute values. According to the FAO's own data, the number of hungry in the developing world grew at 2.2 per cent (or by a total of 18 million people) but the overall developing world population grew by 8.2 per cent meaning that the population grew almost 4 times as fast as the number of hungry people. So the percentage of people in the developing world who are hungry fell. Over the decade as a whole, the number of hungry in the developing world fell 1.1 per cent while the population in developing regions grew by 18.2 per cent. Such results could hardly be described as an abject failure. And anyone who doubts that percentage, rather than absolute number of poverty is the right measure of global progress against poverty, should consider the following: Would you rather live in a society of 10 people where 8 were in poverty or a society of 100,000 people where 9 were in poverty? According to FAO, poverty would have "grown" by 12.5 per cent in the second society.

Becker also gets her dates wrong referring to a rise in poverty "since the year 2000". But the FAO's most current data sampled was from the year 2000. No subsequent data is presented. It is discouraging that the Times fact checkers could not catch this obvious of a mistake.

Sadly, hidden beneath the political propaganda that inevitably accompanies the release of such reports, there generally good basic research. There are many dedicated and talented people working at various roles in the UN, whose work is almost invariably distorted to match their higher-ups political agendas. FAO's Report grudgingly acknowledges progress in the war against hunger, but buries this acknowledgement behind much more prominently placed doom and gloom.

For example the back cover of FAO's report states that "The number of chronically hungry people in the developing world has fallen by only nine million since the World Food Summit baseline period of 1990–1992. The conclusion is inescapable – we must do better." In fact, using the data within the report, the percentage of malnourished people in the developing world fell from 20.3 per cent to 17.0 per cent in the most recent decade. This means that on a percentage basis, 16.3 per cent fewer residents of the developing world were hungry at the end of the decade than at the beginning. One can quite reasonably argue that we need to do better, but it is hard to argue in the face of such numbers that significant progress in the battle against hunger is not being made. And as we will see, in areas where good governance and free markets have flourished, the drops in poverty have been even more dramatic. This is to say nothing of the progress that is being made in bringing the formerly relatively poor into the middle and upper income classes, a process which is occurring at an even faster rate than is poverty reduction.

Not just the FAO

If the FAO were alone in putting out deceptive information about hunger, it would be cause for concern. But a glance at other similar organizations releasing studies contemporaneously reveals an ominous pattern. For example, UN's The International Labor Organization (ILO) reported that, as the New York Times announced breathlessly "half of the world's workers, or 1.4 billion people, earn less than $2 a day, the highest number ever recorded." But while the ILO's press release accompanying their report almost gleefully trumpets the record number of workers working at under $2 per day figure as its headline, their source documents tell a different story. While formal unemployment has risen modestly over the decade, a record 2.8 billion people were at work as of 2003. In fact, the study shows that the percentage of those at under $2 per day is even lower than that of the previous year.

ILO's own statistics show that between 1980 and 2000 the number of those working at the $1 a day poverty level (in constant dollars) has been halved with further strong reductions projected for 2015. $2 a day poverty, while down only 22 per cent, is likely down to "only" that degree because so many people have gotten relatively better off and moved from the $1 to $2 a day category, thus significantly offsetting the large number of people in the $2 per day category who moved out of poverty entirely. And here too, a small increase in working poverty in Sub-Sarahan Africa over this time period offsets the larger trend of dramatic reductions in working poverty almost everywhere else in the world. And even the ILO acknowledges, in a sentence buried in the document "It is expected that the trends in total number and in shares [of the working poor] will decrease in 2004." In other words, things are getting better.

The ILO projects that that with further expected economic growth in developing countries, the number of those living on less than $1 per day (in constant dollars), the so-called "poorest of the poor" will in fact be halved by between 2000 and 2015, which would qualify as strong progress by any measure. Again, this would suggest we are doing a pretty good job of reaching the people who need it most. But again, this data could only be found by those who waded through the entire report, not those who read, and reported on, the press release.

And such deceptiveness is not just a hallmark of the UN. A chart in the recently-released Oxfam hunger report entitled more "wealthy, less generous", should actually read, a "lot more wealthy, and somewhat more generous." According to Oxfam's own statistics, while income has grown by 300 per cent per capita in developed countries since 1960, aid donations per capita has grown only approximately 50 per cent.

In this case Oxfam uses percentages when raw numbers are more appropriate. While saying that the percentage of aid budgets has halved since 1965, the external GDP of the U.S. is not what developing country governments should be worried about. They should care about whether, in real terms, developed countries are giving more money to developing countries now than they were previously. And the answer here is a resounding yes, despite the fact that the countries they are contributing to are much richer than they were in 1960 and thus far more capable of managing their own affairs without foreign aid.

In addition the statistic used by Oxfam to justify its accusations of stinginess, percentage of GDP donated, is very deceptive, as it inevitably favors countries that prefer bigger government. A more relevant metric would look at foreign aid as a percentage of government spending. For example the U.S Government spends 19.6 per cent of our GDP whereas Cuba's government spends 50 per cent1 but this hardly means that Cuba's government cares more than twice as much about its citizens than the U.S. does about its citizens. Rather these disparate expenditures reflect different philosophies of governance. A more relevant, but rarely used metric, would be to examine aid as a percentage of overall government budgets, where the U.S. one suspects, would fare much better. And America's supremacy in private charity, on both an absolute and per cent of GDP basis, is unmatched in the world according to virtually every source that has studied the issue.

Furthermore, much of the "decrease" in development aid in recent years was born of the realization that much development aid goes down a sinkhole, serving solely to enrich corrupt elites and consolidate their hold on power. Was the billions of dollars given to Mobutu's Zaire (Now the Democratic Republic of the Congo) really aid money well spent? After a civil war over the last decade that left over 3 million dead, the results seem doubtful.

Not just Asian successes

In addition to distorting the record of accomplishment in the fight against hunger, Critics are quick to claim that any progress malnourishment as a result of progress in India and particularly China, while deriding the liberalization movement as a failure elsewhere. But again, FAO's own data tells a different story. Over the last decade, only North Africa/Middle East and Transition Economies (Former Soviet Union and Eastern Europe) showed even small increases in the proportion of people living in hunger. These were already by far the "richest" of the developing regions, with the most room for slippage. And as we shall see, even these rises were essentially illusory.

In the Eastern Europe and Former Soviet Union, the tremendous difficulties involved with moving from communism to capitalism made some difficulties inevitable during the last decade. But even the apparently minor setbacks in this region are largely a product of a few rotten apples seeming to spoil the whole bunch. Increases in hunger were concentrated almost exclusively in Tajikistan, Kazakhstan, and Uzbekistan, three of the worst governed and most corrupt former Soviet Republics. For the vast majority of the rest of the region, poverty diminished. Uzbekistan alone accounts for almost all of the "growth" in poverty experienced in Eastern Europe and the former Soviet Union over the decade. Removing the 47 million residents of Uzbekistan and Kazakhstan and Tajikstan from the calculation in both time periods and poverty among the region's other 363 million residents actually declined from 5.5 per cent to 5.3 per cent over the period. This is just one illustration of a fact that the UN, filled with corrupt states of various stripes, is always loath to acknowledge publicly. Well-governed (or even not-horribly governed) countries have little problem making progress against poverty. It is not lack of foreign generosity, but domestic corruption that tends to ensure countries stay poor.

Similar results can be found in the Middle East. While FAO's study prominently displays the alleged growth in poverty in the region, a check of the country tables does not seem to support such a conclusion. Until one reads a well-buried footnote, that Iraq and Afghanistan's growth in poverty over the decade has not been put in the table due to a lack of accurate data on an individual county basis but estimates "have been included in the relevant regional aggregates". If one removes the increase in poverty caused by Saddam Hussein (abetted, depending on one's political views, by U.S. sanctions or the UN's oil for food corruption) and the Taliban's Afghanistan, then regional poverty, despite government corruption and hugely depressed prices for oil, the region's core economic commodity, were unchanged over the decade.

Meanwhile these small and largely illusory regional setbacks were more than offset by large reductions in hunger over the decade throughout the world's poorest regions, including Latin America/Caribbean, Asia/Pacific and Sub-Saharan Africa. Once again FAO's own data belie its gloomy rhetoric. While the early 1990s gains against hunger were driven largely by China and India which awakened from their socialist slumber and liberalized, 5 of 11 regions studied By FAO had increases in percentage of people hungry in the early 1990s. But by the late 1990s, gains were much more broad-based with only 1 in 15 regions studied by the UN (war-ravaged Central Africa) showing an increase in poverty percentage, while Southern Africa, East Africa, and the Caribbean, registered percentage poverty declines that were unmatched by any region in the first half of the decade, including China and India. On a country basis the news was equally positive, with the vast majority of countries showing decadal declines in poverty, and the rare exceptions almost always being particularly poorly-governed states.

Free markets and the establishment's failed solutions

But if international organizations and the establishment media are exaggerating the problem, they are equally guilty of proposing dubious solutions. For example, FAO and the Times highlight Brazil's Zero Hunger Program, which provides free school lunches bought with food only from small to medium sized farmers as an example of a "virtuous circle" that reduces hunger by burnishing income as well as nutrition. But while such programs may have short run success, in the long run they introduce unsustainable market distortions that call for increasing public subsidies to keep them running. Research in India (as well as other developing countries) has consistently shown that subsidizing farmers (in this case by purchasing produce that may be sold at uncompetitive prices) is the wrong way to break the poverty cycle, as has been noted not just by conservatives but also by liberal economists such as Nobel Laureate Amartya Sen.

Subsidies for farmers, even when targeted and well-intentioned, are invariably subverted by powerful interests and end up going primarily to wealthier farmers. This is true from the U.S. to India to Brazil. Instead policy should focus on raising the incomes of the poor and removing tariffs that raise commodities prices. This will allow the poor to purchase more food. This must be done in a sustainable way not by simply subsidizing agriculture, which has all-too many practitioners in almost every country in the developing world. While it is possible that Brazil's program may have a short-term stopgap effect in staving off poverty, In the long run, the children of Brazil will be better off with more inexpensive meals in their mouths regardless of source, rather than an taking more expensive meals produced at uncompetitive prices.

To the Times credit, it does explicitly mention agricultural subsidies and tariffs from developed countries (Including the U.S., though the Japan and the self-righteous E.U are even worse offenders) are a prime cause of this hunger as 80 per cent of the chronically hungry are subsistence farmers in developing countries, who are hurt by developed country subsidies. In fact, countries such as India, which are forced to subsidize their farmers several percentage points of GDP simply to remain competitive, still provide a net -25 per cent agricultural subsidy when developed country trade and input subsidies are factored in. All the more reason why the U.S. voters must insist to their representatives to stop throwing away literally hundreds of billions of dollars to subsidize wealthy farmers with the net effect of keeping the developing world farmers at poverty levels. If the U.S. government wants to be in the business of starving foreigners, at least they shouldn't be using our tax dollars to do it.

Why money alone won't work: India as a case study

Becker correctly notes that 80+ per cent of the poor are rural (compared to just over half the global population) and more than half are subsistence farmers. This is also not surprising as farming is highly correlated with poverty in almost all developing countries. While well-fed celebrity anti-globalization activists in India like Vandana Shiva and Arundhati Roy simplemindedly celebrate the antiquated farming techniques that are so correlated with poverty, the poor they claim to represent are the ones who suffer. Shiva, Roy and other Indian political activists disdain contract farming, agricultural biotechnology, Green Revolution technologies and other modern inputs that would improve farm incomes in favor of the farming techniques of the past that left India reliant on food imports to meet its domestic needs.

But despite the dubious efforts of Shiva, Roy and their ilk, even India, which has the dubious distinction of being the FAO report's whipping boy, is far from a hopeless case. While India has 221 Million malnourished people, an increase of 18 million in just five years (an increase that, incidentally, accounts for the entire global "rise" in hunger over that time period) the news is not nearly as bad as FAO wants us to believe. In fact, the key perpetrator, according to the UN, in the "rise" in the number of hungry over that period actually had a (very small) decline in its percentage of hungry citizens over the last five years. In other words this entire dramatic "rise" in poverty in India during the latest FAO survey period is entirely an illusion related to the fact that India gained population during this time. And of course, on a percentage basis, there continue to be many other countries with a higher percentage of malnourished citizens than India.

Like many other countries in its situation, many of India's problems are not due to lack of money (as Oxfam and the UN would have you believe) but are a result of massive fraud and corruption in government programs that assures that only a small percentage of the food and economic development aid designed in India actually makes it to the intended recipients. Even a just-released Indian government survey acknowledged that 58 per cent of anti-poverty aid India does not reach the poor , and this is surely an underestimate. As just one of many Examples, Lalu Prasad Yadav, the former chief minister of Bihar State, India's poorest, stole several hundred million dollars of aid intended for rural development within the state. His punishment, after a brief time behind bars, (during which his wife was elected chief minister and he ruled the state from prison by proxy) is that he is now a valued and important member of India's ruling government coalition and remains one of India's most popular and powerful politicians. Given the endemic problem of corruption, the best solution would be to find a way to route around government, rather than allowing them to steal more money. This reinforces that the only sure way out of poverty in the long-term is a growth-oriented strategy.

India again provides an outstanding example of how growth allows nations to empower themselves to lift themselves out of poverty and also why this growth must be matched by good governance if poverty is to be reduced. In 1995-1996 budget year, India had gross governmental receipts of approximately $58.1 Billion in inflation-adjusted 2004 dollars. Thanks to India's robust economic growth and consequent higher tax collections in the decade, India's gross receipts collections grew to $105.3 billion in 2003-2004. Even when only tax collections are considered (and not receipts from other beneficial activities such as privatization of loss-making state enterprises) India's receipts grew from $35.9 Billion in inflation adjusted 2004 dollars to $56.4 Billion. The taxes alone represent a 57 per cent increase in annual tax receipts in less than a decade in real terms.

This represents a wealth gain of of more than $20.5 Billion annually that the government can spend on the social sector. If the government fails to do this effectively, through corruption or incompetence, that is ultimately the fault of the government and not certainly the economic growth that makes this possible. This $20 Billion annual sum India has gained in the last five years also dwarfs any amount that it could ever hope to receive in annual anti-poverty grant assistance. And it will rise each year that India's economy, and therefore tax revenues will grow Once again, the question is not having the budget, it is setting the right priorities and making sure money generated goes to its intended recipients. If India got its governance in order, it could solve its poverty problem with the resources it has today

Why we should care

Why does all of this matter? When international organizations such as the UN, the liberal media establishment and leading NGOs disguise reality in order to advance their own political agendas it obscures what is really going on in the developing world. This deception leads people to question the very successful free market transition that has in fact taken root in many developing world countries. Such deception allows various far left groups to continue to advance an anti-market and anti-globalization agenda by creating a public mood that things are getting worse and deceiving others with their rhetoric. And of course, the reality on the ground makes such deceptions easy. Because there still are a lot of very poor people in developing countries, including ones such as India that have undergone a transformation to the free (or at least more less unfree) market. There are just a lot less poor people than there used to be. It's easy for the media to run pieces selectively highlighting the very real suffering that is still going on while totally obscuring the real, meaningful and continuing progress that has been made.

We have a long way to go before we can declare a victory over poverty. But by promoting an economically liberal environment of free trade, reduced regulation, good governance, and rule of law, we will continue to make progress: Even if the UN and the media establishment don't want you to know about it.

Jeremy Carl is a Visiting Fellow in Resource and Development Economics at the Energy and Resources Institute (TERI), New Delhi India.

 

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