Money is the solution to global development issues – quartz

Money is the solution to global development issues – quartz

After two years of setbacks due to the coronavirus, the international development community has personally returned to New York for the United Nations General Assembly. The issues are the usual, if made more pressing due to the loss of lives and resources during the pandemic. Poverty, inequality and climate change are discussed in panel discussions and addresses, with exemplary calls to move from words to deeds, to think about innovative solutions, and to strengthen partnerships.

But the tool for dealing with most of the world’s challenges is neither innovative nor complex, as Nobel Economic Laureate Abhijit Banerjee stated during a session of the Clinton Global Initiative, the two-day conference organized by the foundation initiated by former US President Bill Clinton to address global development issues.

When asked what is needed to solve the world’s most pressing challenges, Banerjee said simply, “I think money. Everything else is second to none.”

To reduce poverty, give people money

Banerjee said money transfers have proven to be the most effective solution to poverty alleviation.

“We don’t need to be so sophisticated, we don’t need to worry too much about incentives, but we have to be good at giving people some money and letting them live a better life,” he said.

The idea, however logical, is a radical departure from the anti-poverty theories of the past, which relied on the belief that people living in poverty should not be trusted to spend money wisely. However, this belief is no longer as widespread as it used to be. “Even the poorest people in the world are fully capable of leading productive lives,” said Banerjee, who shared the 2019 Nobel Prize in Economics for developing an empirical approach to poverty alleviation.

Poor countries and rich provinces

There is enough money in the world for the poorest countries to live up to decent standards of living, if only the rich world were willing to share it. The same dynamic applies when the criteria involved include living with climate change. Banerjee said the way to mitigate his impact, and compensate those already affected by it, is money, and lots of it — “in greater numbers than anything we’re talking about.”

The Director-General of the World Trade Organization, Ngozi Okonjo-Iweala, who was a member of the same committee, added that what we need besides money is solidarity. As the pandemic has shown, resources do nothing without wanting to share them.

Hearing them speak to an audience of rope-clad conference-goers at the air-conditioned Hilton in Midtown Manhattan, at a conference that is the embodiment of the bona fide industrial development complex, it’s hard not to see their point.

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