The poor continue to give and the rich continue to receive – the case of Item 18(b)

In a world of obscene inequality we like to think things are getting better and, in some areas, things are indeed improving – literacy, girl’s education, vaccines, ARVs etc. But when it comes to the basics – power and money, same old, same old – the poor lose, the rich win.

Tucked away in the kind of report only insomniac development fundamentalists would read we find what at first sight appears to be a misprint. A report by the Secretary General of the UN to the General Assembly at its 65th session on July 30th, 2010 (‘Item 18(b) )’ of the provisional agenda, Macroeconomic Policy Questions) entitled International Financial System and Development notes that developing countries as a group continued to provide net financial resources to developed countries in 2009, amounting to $US513 billion! Surely this could not be true – the Poor World transferred $US513 billion to the Rich World? In one year? Alas, it was not a typo but a statement of fact.

Without a trace of irony, the report went on to note:

‘…while still substantial, this amount is notably lower than the record high of $883 billion reached in 2008… The decrease reflects the transitory narrowing of global imbalances as a consequence of the global economic and financial crisis. The structure of flows underlying the reversal of the increase in financial transfers in 2009 indicates, for the most part, a disorderly unwinding of accumulated global imbalances.’

However, in case anyone gets jumpy at the downturn, the Secretary General’s Report went on to note that such ‘transfers’ were expected to revert to previous levels with an ‘…expected increase in outward resource transfer from developing countries in 2010’. The estimated figure for 2010 was $US641.2 billion.

The even more interesting Annex to the Report calculated the yearly net transfer to developed economies from developing economies from 1998 to 2010 (estimate) which amounted to a staggering $US5740.6 billion.

And we wonder why the poor stay poor!

The 2011 report (66th session, Item 17(b) of the provisional agenda) is now also available and makes equally astonishing reading


Note: these, and similar issues, will be further reviewed and debated in the forthcoming 6th edition of 80:20 Development in an Unequal World, scheduled for publication in March 2012 by 80:20 Educating and Acting for a Better World and the University of South Africa Press.