Asia is home to about 2/3 of the world’s poorest people. Underdeveloped nations in Asia (the same is true elsewhere) struggle to maintain a foothold in an ever-globalizing world economy. An approach to helping solve some of these problems was explained in The Japan Times today. Lennart Bage, president of the International Fund for Agricultural Development for the United Nations, writes that since 1990 the per capita income of the entire Asian region has increased by 75 percent. What was behind this remarkable improvement? The nations that prospered and advanced the most (in terms of eradicating poverty) were those that pumped money into rural and agricultural development. Bage writes:
Broad-based development in rural areas can boost small-scale agriculture, which increases the demand for seeds, irrigation, fertilizer, tools, processing and transportation — which in turn leads to more jobs in the off-farm sector. With increased incomes, hundreds of millions of rural people are better able to enter into the global economy and purchase manufactured goods and services.
But that’s not the whole story. What Bage fails to mention is that this type of development needs to be a local initiative, and one protected by the rule of law. There is no mention of corruption in central governments or local bureaucracies that, in many places, prevent investment funds for development being converted into bribes and graft. I don’t disagree with the premise that agricultural development is a good idea for undeveloped nations, but for this to be the most "efficient exit" from extreme poverty there needs to be a demand for justice and accountability among those who control the flow of aid. In an Acton Commentary last year, Rev. Michael Oluwatuyi wrote:
Above all, corruption and lack of effective rule of law present huge hurdles to would-be investors. In many countries, much local economic activity is under the control of the state, which necessarily leads to political influence and favoritism. Many government officials, both important and petty, believe that their position allows them to harass business people and extort outrageous fees and bribes. This corruption, combined with excessive regulation, deters both local and foreign investment. It is a problem that must be addressed not only by legal measures but also by the inculcation of a culture of personal moral responsibility that recognizes the damage done to the common good by corrupt exchanges.
Maybe, instead of calling rural and agricultural development THE answer to extreme poverty the United Nations should dig a little deeper and credit the principles of free economy as the solution to poverty. As Oluwatuyi writes, "Economic freedom is a route to ending poverty and starting the process of building a prosperous country." A change in the fundamental economic policies of undeveloped nations — including a greater respect for the rule of law and ethical business practices — is required before the world’s poor can make lasting progress.