Want to reduce poverty? Look to local business, not the state

Syed Kamall
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We often focus more on how much money we spend, rather than what – and how – we spend it on (Source: Getty)

Gandhi called poverty the worst form of violence. Nelson Mandela said none of us can truly rest as long as poverty persists in our world.

There will be those who believe that eradicating world poverty may be a challenge we never fully meet, but I believe it is incumbent upon us to do our best. While statistics show that the number of people living in extreme poverty globally has declined, most of us agree that more needs to be done.

So how come, despite the billions raised in taxes to spend on the welfare state or donated to large NGOs, there is still so much poverty? Could it perhaps be because we tend to measure the success of our response by input rather than output, in terms of money given, or proportion of GDP redistributed, rather than by results produced?

Read more: Oxfam would rather make us all poorer than feed the world

In the past, there have been legitimate concerns over aid money propping up dictators, and feeding corruption and complacency rather than helping the needy. We have heard of donated funds spent on “white elephant” factories, damaging dam projects, and roads to nowhere.

Nearer to home, there have been cases where the EU has been inadvertently responsible for similar follies through its social fund and regional development budget. Some also have concerns over donations to large NGOs funding generous salaries of chief executives and press officers, rather than those providing aid on the ground.

This misallocation may stem from the fact that we often focus more on how much money we spend, rather than what – and how – we spend it on.

This may be where left and right diverge. The left’s view is broadly that poverty alleviation has failed because the government does not tax the rich enough in order to distribute more money to the poor, administered by more public servants – in other words, measuring by the input of the state.

In contrast, many on the right argue that poverty is best tackled through cutting taxes and allowing the additional wealth generated to create better jobs and opportunities, thus helping the poor – measuring by the output of the private sector and individuals.

Clearly, output is what matters. We need to open the conversation about different ways to tackle poverty and exclusion, with different means of delivery and different objectives.

And the evidence shows that, if output is the goal, locally inspired initiatives are more successful than big top-down projects directed by the state.

Through my political group, the European Conservatives and Reformists, I organised a Global Summit on Poverty last Friday, to look at local community non-state solutions for fighting poverty.

We heard from experts from across the country, Europe, and the world.

There were video messages from former Australian Prime Minister Tony Abbott, broadcaster John Humphrys, and former Nato chief Anders Fogh Rasmussen. One of the concrete proposals from the conference is the creation of a “do tank” (not a think tank) to link different grassroots projects and use their shared expertise and contacts as the incubator to grow them and create new ones.

We could become a network linking together businesses, local community projects, philanthropists, foundations, and those with much-needed skills.

I hope that the event can be a step towards a profound and lasting re-examination of the causes of poverty, and how we can best address it. Ultimately, we want to redraw the scope of what we mean by aid, and redefine how we can tackle poverty as individuals and communities, rather than exclusively as nations and states or through global NGOs.

Will our conference change things overnight? Of course not. Can we ever truly eradicate poverty? Maybe not. But that should not stop us trying, or from looking at whether our efforts so far have been as effective as they should be.

Jesus may have cautioned that “the poor you will always have with you”, but he was not telling anyone to leave them to it, or to leave stones unturned in seeking the best ways to help.

Read more: Conflating multinational corporates with murderers? Oxfam has gone too far

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