In 1990, 43% of the population of developing countries lived in extreme poverty; the absolute number was 1.9 billion people. By 2000 the proportion was down to a third. By 2010 it was 21%. The global poverty rate had been cut in half in 20 years. Economist
Most of the decline in poverty has come from the radical restructuring from the strict Marxist economy of China to one that encourages the formation of rural enterprises and private businesses, promotes foreign trade and investment, and relaxed state regulations. Foreign aid had nothing do with it.
The country that cut poverty the most was China, which in 1980 had the largest number of poor people anywhere. China saw a huge increase in income inequality—but even more growth. Between 1981 and 2010 it lifted a stunning 680m people out poverty—more than the entire current population of Latin America. This cut its poverty rate from 84% in 1980 to about 10% now. China alone accounts for around three-quarters of the world’s total decline in extreme poverty over the past 30 years. Economist
Eliminating barriers to a market economy is the only foundation to lift people out of poverty.
What about aid?
“Aid has been, and continues to be, an unmitigated political, economic and humanitarian disaster for most parts of the developing world” – and Africa in particular… More than $1 trillion has been sent to Africa over the last 50 years. And what has it all achieved? She wants to know. “Between 1970 and 1998, when aid flows to Africa were at their peak, poverty in Africa rose from 11% to a staggering 66%” – roughly 600 million of Africa’s billion people are now trapped in poverty. Aida Edemariam quoting Dambisa Moyo
The solution to poverty isn’t more aid programs or other give-aways. Government to government aid projects are primarily wealth transfers from the tax payers of one country to the political elite of another. However, even the aid programs of nonprofits and churches can easily make the mistake of devastating local farmers and businessmen by flooding the market with free goods. This includes the “free” labor offered by good-hearted volunteers who pay thousands of dollars to fly to remote parts of the earth to offer a few dollars worth of unskilled labor instead of hiring locally at a fraction of the price and enabling local workers to provide for their own families.
Our contribution should be to build capacity… this is the hard work of encouraging, training, and supporting people to make it on their own. Personal transformation rarely happens as a result of receiving goods from people who you don’t know. This kind of transformation rarely happens as a result of a short-term mission trip or by giving an afternoon to do a project every few months. If you want to make a difference you have to accept that it is personal, messy, inconvenient, slow, and rewarding.
One of the most helpful books on this topic: