Human misery's growth industry

In the poverty arena there is some splendid news and some dreadful news. In 1981, 40 per cent of the world's population suffered absolute poverty, and today the proportion has fallen by a whopping half (albeit an amount that is skewed due to the remarkable economic advances of China and India with their vast populations). This slashing of poverty is a success story unprecedented in humankind's history and to be acclaimed to the skies.

On the darker side, and as this book admirably demonstrates, the remaining poverty crisis lies with a group of about 50 "failing states" comprising the "bottom billion" unfortunates whose problems resist established strategies for reducing poverty. These failing states - generally small nations such as Haiti, Malawi, Afghanistan and others concentrated in Africa and Central Asia - pose the crucial challenge of the developing world today. They are falling ever further behind most sectors of the global community, even declining into an absolute drop in livelihoods.

Their people are constantly hungry, and they enjoy no basic housing, no secure water supply, no toilets or sanitation, no electricity, no health facilities or schools - and no prospect of escape from their destitution.

As this book's author, a professor of economics at Oxford University, points out, "many of these countries are not just falling behind, they are falling apart".

Worst placed is sub-Saharan Africa, with 450 million people sliding ever deeper into poverty, highlighted by growing hunger and disease, making for a veritable vortex of degradation and despair. In 1981 the region housed one in ten of the world's poor, an amount that by today has soared to almost one in two. This situation has been grossly aggravated by Aids. The region features one-seventh of the world's population but nearly two thirds of all HIV cases, and two out of three Aids deaths occur here. According to Paul Collier, the 50 countries concerned are usually afflicted by a set of "traps", notably over-dependence on a few natural resources, poor governance all round and civil wars. Traditional responses such as foreign aid do not work against these traps, and globalisation can actually make matters worse as it drives development away towards more progressive nations. What is required, Collier postulates, is a powerful push for radical reforms, devised and promoted by leaders within the countries concerned rather than by outside agencies.

Prominent as part of the poor governance problem is grandscale corruption.

This canker is more profound than we might suppose. When President Mobutu of Zaire was obliged to leave office, it is thought that his personal wealth of $5 billion (£2.54 billion) was greater than the official economy of his country. According to a recent report from the World Bank, African elites hold $700 billion to $800 billion outside the continent, and every year $150 billion more leaves in illicit capital flight, an amount greater than all foreign aid and debt relief. Corruption cuts tax revenues by at least half, thus reducing funds for schools, health centres and the like. Overall corruption can account for as much as 2 per cent or even more of annual economic growth. So pervasive and profound are its impacts that were it to be controlled, and good governance installed, there could often be a threefold increase in per capita income and major reductions in welfare factors such as child mortality. All in all, corruption often proves to be the single biggest obstacle to development. Collier presents a dire conclusion. "If nothing is done about it, the bottom billion will gradually diverge from the rest of the world economy over the next couple of decades, forming a ghetto of misery and discontent. An impoverished ghetto of 1 billion people will be increasingly impossible for a comfortable world to tolerate."

Collier also offers solutions. He calls for a bold new plan supported by the industrialised nations, with focus on a thorough-going attack on corruption, plus preferential trade policies and new international charters, even "carefully calibrated military interventions". Whatever one makes of this last measure, Collier's emphasis on across-the-board reforms goes way beyond traditional strategies that seek to fine-tune economies rather than redesign entire portions of the development engine.

The book should serve as a provocative reader for development-crats of many a stripe. While portions of the text are unduly opinionated, Collier rightly urges governments to place governance at the top of reform priorities. The book could have even served as an agenda for the recent G8 summit in Germany. But when we cast around for agencies to make the running we should keep an eye open for stodgy bureaucracies. The UN's Anti-Poverty Programme lists 54 goals with 449 proposals enshrined in a 3,800-page plan.

It is all so complicated that it leaves nobody accountable.

Norman Myers is visiting fellow, Green College, Oxford.