Measuring Poverty Developed/Developing Canada Megaprojects World Bank IMF SAPs HIPC Off Shore Farming

Measuring Poverty Across the Globe The most common measure is the poverty line which is the minimum income required to pay for basic needs Developing Country poverty line is 1.25$ per day per person according to the World Bank yet they are people in the same country who make up to 5$ a day who remain poverty stricken What about people in Canada who make 10$ an hour that live in poverty?

Measuring Poverty in Developed and Developing Countries The standard World Bank international number of 1.25$ per person per day cannot be applied to all countries We must look at individual countries to determine at what level people are unable to afford minimum food, shelter, healthcare, and education services and what obstacles are there

Measuring Poverty in Canada Statistics Canada uses a low-income cut-off (LICO) to determine those living in poverty LICO is defined as a household that spend more than 70% of its income on food, clothing, and shelter Before tax income Yet the federal government agency NCW or National Council of Welfare uses after tax income to measure poverty

Why Can’t We Feed the World? 1 billion people in developing countries go hungry every day, yet the world has enough food to feed 6.79 people on Earth WHY? Poor people cannot afford the food that is available Farmers who do not own their land and migrant labourers are the first to feel the effects of drought, crop failures, or economic downturns

Megaproject Investment After WWII , the International Monetary Fund and World Bank were set up as UN agencies to give loans and development assistance to help improve standards of living Encouraged developing countries to invest in megaprojects to promote economic growth 1960s Western banks loaned billions to African countries Western banks encouraged the IMF and World bank to pay off debt of developing countries Lenders changed but debt remained

Impact of Mega Projects Many of these initiatives caused environmental damage Global economic downturns impact developing nations so that they cannot repay debts Some loaned money is embezzled into bank accounts of corrupt dictators Money at times has been used to fund conflict over development

Structural Adjustment Programs (SAPs) Today, African countries alone owe 227 billion The IMF told these countries to restructure their economies to repay the debt using Structural Adjustment Programs (SAPs) Pursue foreign investment, cash crops for export and private companies to run government services

Cycle of Debt Many negative effects of SAPs Poor countries forced to sacrifice spending on health and education to meet the demands of SAPs and repay debt Some countries forced to increase prices on staple foods and electricity Resources become under control of foreign investors SAPs benefit the investor

Multinational Corporations restrict the ability of developing national to pay off debt HOW? Natural resources of developing nations are under the control of Multinational Corporations farmers forced to sell products to these Multinational Corporations at low prices so little to no profit is made and debts cannot be paid EX. West African Cocoa farmers

Heavily Indebted Poor Countries Initiative Launched in 1996 by the International Development Association (IDA) and International Monetary Fund (IMF) The goal is to ensure that poor countries are not crippled by debt Provides debt relief to poor countries with external debts that severely burden export earnings or public finance By 2008, 57 million US was committed to help HIPC

Canada and the HIPCI Called for a easing of debts owed by HIPCs The goal is to reduce the debt load of HIPCs so their scarce resources can go towards poverty reduction rather than interest payments Canada has forgiven all overseas development aid debt to all HIPCs except Myanmar because it is governed by a military dictatorship

Loans Are Not Aid Since 1986, Canada’s bilateral aid for development has been in the forms of grants as opposed to loans 10 Latin American countries have been allowed to pay debts by investing in environmental and other sustainable development projects in their own countries

Off Shore Farming Wealthy countries with little agricultural land or water purchase or lease farmland from poor countries. Food is grown and then shipped back to the country that owns the land

Concerns About Off Shore Farming Environmental concerns with use of pesticides/herbicides Hard for local farmers to prove they own the land Threatens food production of developing countries EX Ethiopia Saudi Arabia owns land in Ethiopia and got its first shipment of food at the same time the UN World Food Program was helping to feed 10 million people in Ethiopia