360° Analysis

World Minimum Allowance: $2 Everyday


February 26, 2012 19:59 EDT

Establishing a fund to give $2 a day to the hungry around the world might be the answer to alleviating global hunger.

Capital is urgently needed for saving banks, saving the Euro, investing in renewable energy, for states, and for companies. But what about poor and hungry people?

Poverty evokes a lot of sentimental feelings and has many definitions. According to one accepted definition, poverty is the situation where you have to live with less than 60% of the average income in your country. Therefore, the threshold of poverty, in real terms, differs across borders. In rich countries, social welfare pays more than the average income of people in poor countries. I shall never forget the answer of some Burkina Faso cotton workers when I visited that country in 2006. Burkina Faso is a country in west Africa, with an average income of $400 per year. The cotton workers, asking me for a tip as compensation for taking photos, told me “our workforce is too expensive—cheaper cotton is being imported from the United States.” There was no bitterness in their answer, and this is not intended to be the place to discuss agricultural export programmes.

Relative and absolute poverty are quite different from each other. My choice is a very simple one: hunger. If the FAO, the Food and Agricultural Organisation of the UN, is right, roughly 1bn persons worldwide suffer from hunger, malnutrition, and poor health in connection to hunger. Other statistics tell us that around 1bn people worldwide live on less than $2 per day.

Now, let us have a small crosscheck. These people do not live from zero but their income is limited to something under $2 per day. Let us take an average of $1 per day. Since each person must eat and to drink for 365 days every year, we need $365bn dollars per year to greatly reduce global hunger.

Putting things in perspective, this sum is much less than that required by the European Stability Mechanism (ESM) and other European and US liquidity-enhancing financial tools for overcoming the present crisis. Individual banks such as the German Hypo Real Estate needed more than €100bn to be rescued from ruin.

A child that dies from hunger is of no systemic relevance. However, it is a shame that strong forms of hunger still exist in parts of the world when it is a question of human life. A program intended to give everybody on this world a minimum of $2 per day is also a programme to give back dignity to all of humanity.

Hundreds of programs combating hunger have failed, so why should we bother trying again? Beyond the fact that such an argument would reflect a cynical attitude, the idea here is very different from previous ones. The method for generating funds for such a program needs to be revolutionary: Take the financial transaction tax, add some international funds, and create a World Minimum Allowance Fund.

How would this fund work? If we need $365bn to $500bn dollars annually, the task is relatively affordable in comparison to the staggering sums required to rescue banks of systemic relevance from collapse. In addition, it is different from all existing social and humanitarian programmes and might be the ultimate financial and humanitarian approach to ending global hunger.

The point of the World Minimum Allowance is to give money in kind to needy persons who will be responsible for how it is spent. They will experience an increase in their purchasing power, independent of their age, nationality, religion, or gender. For children below 14, the money could be given to the mothers. Social entrepreneurship programmes such as microfinance initiatives have shown the high degree of responsibility that is elicited once you place trust in people.

The next objection is corruption, and the sad truth is that corruption occurs in poor and rich countries alike. Therefore there must be some control over who gives what to whom. Now, in the field of companies, we have a whole and powerful industry dealing with quality control, certification, and structured processes. What we need is therefore a quality norm—let us call it “ISO 99.99” for the proper, transparent, and safe distribution of world minimum allowance money to those who need it. We should probably not think of one global organisation but rather of several regional funds or authorised organisations such as churches, foundations, trade unions, or other trustworthy social bodies. These will be controlled by certification institutions and authorised by the local governments to do their job.

Finally, how can one prevent the abuse of such a system? This is a serious topic, and one that involves a certain degree of control, creativity, and stable processes. I have an example from my country, Germany: Unexpected as it may be, there are many poor people in Germany as well. A countrywide initiative called “Tafelladen” (“Over the Counter Shop”) helps poor people buy food and non-food articles cheaper than anywhere else when they show a document to prove that they are registered within low income categories.

One could argue that though such a bureaucratic control works well in Germany it is unlikely to be much use in Burkina Faso, India, Nigeria, or Haiti. Even if this may be true to a certain extent, fairly good statistics concerning the average income of people in a given region exist, even for poor countries. And here I would go for the benefit of the doubt: It is much better to have a radical programme for eradicating hunger than to step aside due to the danger of a certain extent of abuse. Moreover, programmes evolve: This is why certification is needed for the practical working of the World Minimum Allowance Funds.

Think about it twice. It is an initiative connected to human dignity. It can make you proud of being a part of it. It can be solved by proper organisation. And it is cheaper than saving the Euro, system-relevant banks, or the US economy, important as they are.

The views expressed in this article are the author's own and do not necessarily reflect Fair Observer’s editorial policy.



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