THE BLOG

How Economic Growth Can Lift Even More People Out of Poverty

23/02/2017 16:06

A few years ago I met a woman in South Sudan. She arrived at a clinic I was visiting. She was carrying her 12-year old son on her back, having walked for two days in the heat to get to there. Her son had elephantiasis - a disfiguring disease that can easily and cheaply be treated with a drug that costs no more than six cents. The drug kills the worms that result in the disfigurement and disability that the disease brings. Very sadly for this woman and her son, the clinic was out of stock of the drug.

That's when I learnt that suffering is caused not by poverty alone but by the failure of the systems that should provide for people. In richer countries we don't worry that essential drugs will be out of stock because by and large the system works.

Strong systems and transparent and accountable institutions lie as much at the heart of economic growth as they do in responding rapidly to humanitarian crises or supplying essential medicines efficiently and effectively.

Supporting economic growth to help the poor is part of this government's redefinition of Britain as a "leader in economic growth", "making globalisation work for everyone". After all, 73% of the world's poor live in middle-income countries. At Crown Agents we know from long experience that investing in poor and middle-income countries in order to speed up growth and trade can lift people out of poverty. And of course in Africa we are seeing some of the fastest rates of economic growth.

But, we have also learnt that there are ways to do this that don't damage society, bringing more positive impact for more people, not just those with access to wealth. There are ways to lift the prospects of more people firmly into the future and at the same time protect society and the environment.

For economic growth to be a successful route out of poverty the systems for enterprise to flourish in must be strong, sustainable, transparent and fair. This means, for example, that trading partners create job opportunities for local people. That different models of business are encouraged, in particular social enterprises. That barriers into business are removed for women and young people, people with disabilities and the very poor. That financial systems, customs and border controls are effective and transparent. That reforms are driven by local leaders. And, when help is brought in from outside from partners, it works in partnership to 'go with the grain' rather than imposing a so-called 'best practice' solution that may work well in one place, but not everywhere.

Crown Agents was born out of British-driven global free trade. We are now a high impact social enterprise. Back in the nineteenth century we understood that good systems matter. What we know now is that pragmatic approaches that recognize the importance of politics, understand and align with trends in country will most effectively embed sustainable, long-term positive change.

And so, here are three pieces of advice we can share with others:

Firstly, you must work with local leaders and people who's job it is to manage and deliver services. In Northern Nigeria we worked with Sightsavers to treat close to 14 million people against neglected, but easily treated, diseases. We did this by prioritizing deep local partnerships and training many of the 4000 staff working in the local and regional and federal authorities on secure storage, safe transport, anti-pilfering and reverse supply chain to ensure that every unused antibiotic is returned and does not appear on the open market.

Secondly, corruption is best tackled in the open, with active public engagement and political backing. In Ukraine the Revolution of Dignity in 2014 created a chance for reform of the Ministry of Health, which had suffered from documented corruption. Social activists, NGOs and software companies came together to propose a new approach to drug procurement. Their public support enabled the government to bring us in as outsiders to introduce a new system that so far has saved 37% on the cost of oncology drugs alone.

Thirdly, technology, new and old, can be disruptive for good - or it can be captured by self-interested elites. We are working with tech companies, public sector policy makers and NGOs on using new technologies such as solar and drones in poor and middle-income countries. The drop in the price of solar energy opens it up to healthcare centres. But the wisest governments are looking carefully at how to encourage the market, for example by setting quality standards to build public confidence in reliable products. Drones could revolutionise the supply of drugs - but only if they are carefully used and regulated and attention is given to building trust and participation with those benefitting from them.

The aim of the UK Government's new Economic Development Strategy - "helping developing countries harness the formidable power of trade for reducing poverty" could transform lives and livelihoods. Or flounder on systems that fail to deliver to beneficiaries, or are weak in the face of corruption, or enable only a small segment of society with access to wealth to benefit

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