Development & Aid, Economy & Trade, Financial Crisis, Food & Agriculture, Global Governance, Headlines, IPS UN: Inside the Glasshouse, Latin America & the Caribbean

Q&A: “Massive Transfer of Power to the Poor” Needed In Crisis

Franz Chávez interviews ROBERTO HAUDRY of the International Fund for Agricultural Development

LA PAZ, Jul 8 2009 (IPS) - Innovative solutions at a time of crisis, extending services and technology to the poor and building democracy around the initiatives of ordinary citizens are the prescription to combat poverty that Roberto Haudry, head of IFAD for the Andean subregion, would suggest to Latin American governments.

Roberto Haudry Credit: Franz Chávez/IPS

Roberto Haudry Credit: Franz Chávez/IPS

In this interview with IPS, the International Fund for Agricultural Development’s (IFAD, a U.N. agency) programme manager for Bolivia, Colombia, Ecuador and Peru urges the region’s leaders to scrap the economic models responsible for widening the poverty gap, and do away with “tinpot democracies” that oppose massive transfers of resources and power to the poor.

Haudry takes a keen interest in the changed culture and the new diplomatic opportunities arising from U.S. President Barack Obama’s attitude toward Latin America, and advises regional leaders to take bold initiatives toward forging alliances with civil society, companies and universities in the United States.

IPS: What impact is the global financial crisis having in Latin America? ROBERTO HAUDRY: The global financial crisis has not hurt Latin America too badly so far. In terms of economic growth it is doing well. But there has been a crucial impact on the United States and Europe.

The first effect has been a drop in migrant remittances, which have beceom the principal source of income for people in Latin America.

International aid contributes no more than 10 billion dollars (a year to the region), because capital flows are negative: Latin America pays out more than it receives from rich countries. The principal source of foreign exchange is private investment, and this has dwindled because of the crisis.

Remittances were bringing in a total of 100 billion dollars (a year in Latin America and the Caribbean), but this sum has now fallen by 20 billion dollars and the effects are very serious, because a large proportion goes to pay for health, education and food. In Bolivia, remittances declined by 20 percent, and by a similar amount in Mexico.

I think with the next signs of recovery from the crisis, remittances will return to their former level. We all hope that will be the case.

IPS: So what direction should be taken, after this difficult period for global finance? RH: What this crisis indicates is that we cannot just continue with more of the same. We must be innovative and become allies of the migrant workers who send remittances in order to multiply the value of these revenues. That is a practical way to fight poverty.

Another is the use of technology. We cannot allow a situation in which campesinos (small farmers) do not have a cell phone, a bank account, or life insurance. We need a whole range of technological mechanisms and a social vision to overcome Latin America’s biggest problem, which is inequality.

In a village that is five or 10 hours from the nearest hospital, a cell phone with a camera could be of vital help in an emergency, to get advice in the local language about what to do before moving an injured person.

Let’s use cutting-edge technology, and provide the poorest and most vulnerable with the most and the best technological services to close the gap. The problem is not just economic growth, but reducing inequality.

IPS: Latin American countries are following a variety of different approaches to solving the problem of poverty. How do you think they are doing? RH: Each country has its own way of doing things, and each democracy decides how to tackle the problem.

But I don’t think repeating what has been done over the last 25 years, without any changes, will take us beyond the growth with inequality which has characterised Latin America for the last 20 years.

Whatever democratic choice is expressed in public policies, I think the main issue is to reduce inequality by massive transfers of technology into the hands of the poorest of the poor.

The other half of the equation is: how much power do the poor have? What resources do they manage themselves on their own initiative and according to their own forms of democracy?

A democracy is not a system where everyone conforms to a uniform, blinkered mindset, without a central government. A democracy is a population of citizens fulfilling their own objectives, within a social and political setting that encourages people to take the initiative.

Any democratic system in Latin America that accomplishes a massive transfer of resources to the poor, so that they can develop their own productive initiatives, is the thing we are looking for.

What we don’t need is mechanisms that go through a long series of intermediaries, like giving public resources to a ministry, which passes some on to an institution, and so on until eventually, the campesino is given a few pesos and four training courses.

Unless we make massive transfers of resources and power to the poor, we will continue to have tinpot democracies based on lies. More lies are no solution at all.

IPS: How similar are the policies espoused by President Barack Obama in the United States, aimed at restoring the state’s role in promoting economic recovery, to the models used in Latin America? RH: There are many similarities between the Obama administration and what could be done in Latin America, especially in regard to strengthening the role of the state and democratic institutions, in contrast to the messianic opinions of certain powerful elites, or those with militaristic attitudes.

There is a huge and fertile opportunity to cooperate with the United States. But there is also an enormous difference. Obama is printing money to save U.S. companies and the position of the United States in the world. I hope none of our regional governments copies the idea of printing currency in order to finance any activity it considers essential.

In the medium term, U.S. policy is going to bring about massive currency devaluations in our regional economies, which are closely linked to the dollar. I think that in terms of monetary policy, our countries should be very cautious and not assume that nothing is going to happen, especially with the dollar.

IPS: And how could a balanced relationship of mutual cooperation be achieved between this region and the United States in order to overcome the crisis? RH: The United States is importing a number of technologies to fight poverty that IFAD has developed in the Third World, and I think many of our countries have a role to play in helping the United States emerge from its crisis, based on our experiences.

For instance, the technology for performing bank transfers by cell phone was developed in South Africa and Malawi, and in Southern Africa over three million poor people are using this method for transfers and purchases.

This technology was introduced in the United States only last year, and is a big hit. The uses of cell phones range from supermarket shopping discount schemes, to systems providing mass services.

One way to bolster the U.S. financial system is to help poor people save, through instruments like cell phone banking that are user-friendly and based on familiar technology.

That is a huge example of cooperation which should be reciprocal, and in which IFAD is able to support the African American and Latino populations in the United States.

In Colombia IFAD has a programme which in the medium term plans to offer young African Americans the opportunity of sharing the experiences of rural groups and communities of black people in Latin America, to learn how they live.

This is the kind of cooperation we want to see happening in the world: exchanges between peers, as equals. In future they could give rise to economic solidarity enterprises linking young people from, say, a Chicago, Illinois neighbourhood with people in Los Yungas, Bolivia, to put music on the market or learn from technology.

IPS: How can better relations be achieved with the United States? RH: The Obama administration opens up a cultural opportunity for new relations with Latin America , and it’s a great opportunity, whatever democratic decision is taken by a particular country.

Ties with the United States must be reinvented and cannot be bound by the past. As (Italian Marxist political theorist) Antonio Gramsci said, politics is not only the art of the possible, politics is all about the future. It requires boldness, and those who have no initiative in politics will be the losers.

We should develop relationships with U.S. civil society, with companies, universities and the government.

Republish | | Print |