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Jewish World Review July 19, 2005 / 12 Taamuz, 5765 Poor Africans need land rights By Robert Robb
http://www.JewishWorldReview.com |
At the G-8 summit, the news was the big things the big boys
pledged to do to relieve African poverty.
The major developed countries — the United States, Canada, Britain,
Germany, France, Italy, Russia and Japan — would forgive even more
governmental debt and double development assistance to Africa, reaching $50
billion a year by 2010.
There actually isn't anything much new in this news. Over the last 40
years, Africa has been given an estimated $450 billion in foreign aid. Yet
incomes have remained stagnant and poverty rates heartbreakingly high.
Three months earlier, a much smaller initiative took place that went
virtually unnoticed. Yet it actually holds much more hope of alleviating
poverty in Africa than all the big pledges of the big boys.
It was a grant from President Bush's Millennium Challenge Corporation to
Madagascar. Bush has recognized the futility of the
government-to-government aid for big projects approach, and sought to
change the way in which the U.S. dispenses economic development assistance.
Aid would be given only to countries adopting governmental reforms
conducive to democratic capitalism. The Millennium Challenge Corporation,
named after the lofty U.N. goal adopted at the turn of the century to
largely eradicate worldwide poverty by 2015, was established to render the
scrutiny and make the grants.
The Bush initiative has been widely panned. Bush pledged $5 billion a year
for it, but has not pushed for full funding. Over the last two years,
Congress has appropriated just $2.5 billion total. But the Bush
administration hasn't been able to spend hardly any of even that.
In fact, the grant to Madagascar, made this April, was the first. And it
was small potatoes, just around $110 million.
Madagascar is a largely rural and impoverished country. Per capita GDP is
just $800 a year and half its population lives in poverty.
According to The Economist magazine, Madagascar initially made a
business-as-usual proposal for the Millennium grant — the preferred big
project of each cabinet member.
The Millennium Challenge Corporation suggested that the country think more
broadly and consult more widely with its people to identify blockages to
improving their economic lot.
Which Madagascar did, with telling results. What the people wanted most was
legal entitlement to what they owned and controlled.
Less than 7 percent of land in Madagascar is legally titled. The government
has a backlog of 200,000 title requests, but processes only about 1,500 a
year.
As a result, rural subsidence farmers don't have the capital nor the
incentive to improve or protect the land upon which they work. This is also
environmentally disadvantageous, since it promotes a practice of exhausting
land and then moving on.
That the poor in Madagascar wanted, first and foremost, legally protected
property rights illuminates the insight of Peruvian economist Hernando de
Soto, most clearly explicated in his book, The Mystery of Capitalism. De
Soto has inventoried the assets the poor in developing countries already
control, and they are considerable. But, because the poor do not usually
have legally protected property rights to what they possess, they are what
he calls dead capital — they cannot be leveraged for economic improvement.
In much of the developing world, the poor tend to live and work outside the
formal institutional and governmental structure. In Mexico, for example, de
Soto estimates that nearly half of employment and a third of the country's
output is in what he calls the informal sector.
Compared to the big ideas of the big boys, this may seem like a small
thing. In fact, The New York Times, in an editorial, positively turned up
its nose at the Madagascar grant, lecturing that "real growth cannot
exclude the basics," such as running water, clinics and schools.
But truly eradicating poverty requires unleashing the productive capacity
of the poor. And for that, legally protected property rights are the most
fundamental "basic" of all.
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JWR contributor Robert Robb is a columnist for The Arizona Republic. Comment by clicking here.
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