Tuesday, August 7, 2007

LID and Eradicating Poverty

LID 2007 is over and some clear guidlines on how to eradicate poverty have been laid down. They include an Action Plan (AP)and a list of Actions to be Undertaken (AU).

The AP includes: Creations of jobs..by providing access to land, capital etc.; creation of conducive environment for economic self-treliance; development and provision of social services and basic infrastructure; empowermenrt of women...to tap potential for econimc and social development; protection of rights of children and youth to education and healthe services; and good governance, effective administration.

Actions to be Undertaken ( AU) include: Establish a body at national level to coordinate ministries and agencies involved in poverty eradication; estab. a centralised database; prioritize the goal of poverty eradication in education, health, employment etc.; encourage participation of mu;ltinational corporations in pverty eradication programs; encourage media to raise public consciousness on issues of development and poverty; estab. programs for povertuy eradication based on proven models; and estab. basic target performance indicators....

Good God........! All those to be undertaken by relatively poor countries with more than 60% of the people living in poverty! Where can you get the money and the trained man/woman power to undertake them all? The Plan is, of course, brilliant!

In looking back at what Malaysia did to reduce poverty from more than 60% in the 1960s to some 4% as of today, I see two collosal tasks that had been successfully undertaken -

ENHANCE THE INCOME GENERATING CYCLE in the national economy, and

What constitutes the income generating cycle is for the economists to elaborate. They include encouraging the businessmen and entrepreneurs to make as much money as they can to increase govt, revenue, attract foreign capital, step up production, marketing, increase export and reduce import etc.,etc. There must be more money to redistribute...

The income redistributing cycle must be clearly identified, developed and activated for you cannot rely on the Trickle Down theory anymore. With so many opportunists around in a developing environment, nothing trickles down easily. We established FELDA, FELCRA, MIDA etc and hundreds of Funds to promote specific development of the less fortunate who are not able to compete on their own. They gave direct help to the poor with little "leakage". Mending that leakage is a huge problem, which Malaysia itself may not have succeeded in overcoming 100%. But.... the resources did reach the poor and we see result.

I think the two cycles must be emphasized. Otherwise we end end up with a rich country with many poor people or a poor country with nothing to distribute to the poor. A simple two-point plan like the above may help better than a grand plan with so many complications and prerequisites for effective implementation.

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