Friday, August 10, 2007

Beating world poverty

Leaders from Africa and Asia met in Langkawi, Malaysia this week for the Smart Partnership International Dialogue aimed at reducing poverty in both regions.

I've always thought the main problem in developing world poverty is found in the colonial mentality still cemented in the minds of the developing world's people.

Interestingly enough, the non-Western nations that have succeeded economically in our times are mostly those who had not suffered Western colonization.

Japan, of course, is the biggest example. Of the Asian tigers, we have China, South Korea, Taiwan and Thailand all who avoided the experience of Western colonization. Only Malaysia among the current tigers was colonized.

But Malaysia had the stalwart Dr. Mahathir bin Mohamad, a man often reviled by neighbors because of his anti-Western rants. If you compare what Malaysia has done to tackle poverty in the country during Mahathir's reign, and it compare to the other boot-licking countries in the region, and you can see the results of a proper mindset.

Malaysia went from a 50 percent poverty rate in 1970 to 15 percent in 1990 and 5.5 percent in 2000.

The problem with most developing countries is that they are waiting to be saved by the West. They're waiting for Western aid, waiting for Western private investment, waiting for the West to tell them what to do.

Vietnam may be ready to emulate Malaysia's performance, but possibly again because of the difference of its experience. After the Vietnam War, the country was forced to make it on its own without Western help. It took the tough mindset of the war and applied it to building up the country.

Be that as it may, whatever the attitude of the people, there are some things that can help in addressing the problems of poverty.

Peruvian economist Hernando de Soto believes that poor nations can rapidly increase their resources by simply processing titles to unregistered land in poor nations.

Unlike developed countries, most people in the developing world have homes on property with no title. For all intents and purposes they own the land, they are not squatters, but they have no papers that allow them to capitalize on their property.

De Soto call this "dead capital." In some countries like Ethiopia and Peru, efforts to process titles on this land has led to billions of dollars in increased capital. He believes that Africa has some $9 trillion in dead capital equivalent to three years of gross domestic product for the continent.

There's no shortage of good ideas to tackle the problem but the people of the region must take the initiative and take full responsibility for making change.