Wednesday, September 07, 2005

Emerging markets, stagnating standards

While the Globe and Mail reported this week on booming business opportunities in Africa, a U.N. report released today shows that there's an awfully long way to go to alleviate African poverty:
Despite progress globally, many countries are falling behind, especially in sub-Saharan Africa, where the HIV/AIDS pandemic is dramatically reducing life expectancy and creating financial and social burdens that slow development.

The stark findings contained in the 2005 Human Development Report were presented to world leaders a week before they meet in New York for a UN summit to review progress toward the Millennium Development Goals. The goals include halving extreme poverty, reducing child deaths by two-thirds and achieving universal primary education by 2015...

Since the UN Development Fund's first report in 1990, more than 130 million people have been lifted out of poverty, Wednesday's report said. Life expectancy has increased by two years in developing countries, there are two million fewer child deaths annually and 30 million more children in school.

Yet 18 countries – 12 of them in Africa and the rest in Europe – registered lower scores on the UNDP's human development index than in 1990.

The progress that has been made should be celebrated, and it's a plus that private investment is increasing. But the investment so far has been fairly empty in terms of side benefits to local citizens: it's relied mostly on imported goods and separate infrastructure rather than creating jobs or needed services locally.

What's worse, the one country that's doing best investing in Africa still fell a long way in its standard of living: the AIDS epidemic has caused South Africa to drop by 35 places on the list despite moving out of the apartheid era. Just one more reason why it's unrealistic to try to draw a direct link between fiscal status and standard of living.

The U.N. report is yet another reminder that there's been a lot more talk than action on improving conditions in the developing world - no matter how many cell phones are selling in Congo. Unfortunately, with Gleneagles in the rear-view mirror, it doesn't look like that'll change anytime soon.

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