Building on Band-Aid

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There will inevitably be a time over the Christmas holidays when we all bask in the joy and comfort of our friends and family. And so it should be as it is the spirit of the holidays. There will also, however, likely be a time when we’re reminded of the benefits of living in a developed country where war, starvation, desperation, and a lack of hope are not commonplace as they are for so much of the world’s population. Odds are that most of us will hear what has become the anthem for helping the world’s poor during the holidays: the 1984 call to arms Do They Know Its Christmas? As we mark two decades plus after the original recording, we have an opportunity to commit to a real solution for the world’s poor instead of a band-aid.

A number of countries saw their celebrities join together in 1984 to help starving masses in Ethiopia. The United States offered “We Are the World” while Canadian artists sang “Tears Are Not Enough” both in aid for Africa. The most high profile and long lasting, however, was Britain’s “Do They Know It’s Christmas?” shepherded by Sir Bob Geldof.

More important than the specific details of these events, however, is what it represented. In the true spirit of humanity, people united to extend a hand of assistance to those in desperate need. The response was indicative of our natural desire to alleviate human suffering and create communities, countries, and a world free of abject poverty. Citizens of developed countries continue to donate, volunteer time, and press for improvements for the world’s poor. Unfortunately, our assistance continues to be a band-aid rather than a solution.

The path to eliminating the poverty that plagues the world is fundamental reform of the institutions that govern these countries. The path is known and documented: rule of law, protection of property, access to markets (free trade), appropriate government spending and taxes, and sound money are a few of the key reforms necessary to support economic prosperity.

The real problem is introducing these institutions in countries where it is not in the best interests of those in charge—too often dictators—to undertake such reforms. These types of institutions benefit average citizens and the poor by promoting opportunity and mobility. They do not, largely, benefit the wealthy and those in political power. The dilemma for those who seek to materially and permanently improve the lives of the world’s poor is how to motivate those in power to institute reforms that are not necessarily going to benefit them, and indeed, may very well reduce their influence and power.

We have an opportunity now, as we reflect on the benefits of living in a developed country during the holidays to think about a better future for Africa and all impoverished nations. Let us 21 years after Band Aid begin to implement a real solution. Specifically let us encourage all western countries to eliminate agricultural subsidies for domestic producers, including marketing boards here in Canada, which the government is currently defending at international trade talks. In addition, all trade barriers, whether tariff or non-tariff should be removed, particularly for sectors such as textiles and other basic industries where poorer countries can compete. Developed countries could divert some of their current foreign aid budgets for a limited time to finance transitions for people at home in these industries.

For poor countries to be eligible for these monumental changes in access to developed markets they must agree to implement the institutions and policies listed above, which would be verified by an independent organization. We suggest using private organizations that specialize in the analysis of economic institutions to confirm eligibility. This would provide a two-pronged improvement for poor countries and their citizens.

Allowing access to the world’s richest markets while eliminating subsidies in exchange for fundamental reform offers poor countries a unique opportunity: reform and prosper. The power of competition and information dissemination provides the incentive for the world’s poorer countries to embrace fundamental reforms and begin implementing permanent solutions to their impoverishment. This is the type of lasting, permanent and effective solution envisioned by those involved in the original efforts at alleviating suffering and desperation in the world’s poorest countries.

More on this topic

Economic Freedom of North America 2020
Economic Freedom of the World: 2020 Annual Report