The creation of poverty is the best way of creating wealth

Richard Moleofe | Wednesday June 10, 2015 15:30

This does not only apply to us as people; it also applies to a community of nations.  Some years past in our parliament when our government introduced the idea of poverty eradication, Hon Mmoloki Raletobana raised notified parliament that poverty eradication was not achievable. He advocated for the use of poverty reduction as opposed to eradication. Raletobana must be a very religious man because his theory of poverty eradication is very much supported by Jesus Christ. In the book of John 12 verse 8, Jesus told his disciples that the poor will always be amongst them. This was after the famous incident where a woman poured an alabaster jar full of expensive perfume.

After the three week discussion in which I sought to praise the ingenious idea by the Chinese for setting up the Asian Infrastructure Investment Bank, I shall attempt to look at the history of poverty going back as far back as the last century and how the Breton Woods Institutions, being the World Bank and the International Monetary Fund have perpetuated the cycle of world poverty.

These two financial institutions were initially established to fight poverty by lending needy countries at very low interests. They came right after the end of the Second World War as part of the Marshal Plan. At the end of the war Europe was very poor after six long years of wealth destruction.  The Marshal Plan with the aid of the Breton Woods institutions helped Europe to rise from the ashes. It is what it is today because the Marshal Plan was very much determined to eradicate poverty from the European continent.  The question is; “Why has poverty lingered in Africa for so long?” It is true that Africa remains the poorest continent in the world after being overtaken by Asia in the early seventies. However, Africa has received considerable volumes of funding from abroad. A lot of this has been allowed to go down the drain as this cash injection was diverted to sponsoring wars particularly of a civil nature. As though this was not enough, HIV and AIDS came to finish the job. Throughout the past decades, the World Bank and International Monetary Fund had no intention of eradicating poverty. I am a very strong believer in that poverty needs to be eradicated and not reduced but that is just a pipe dream. The bourgeoisie, the rich land owners and those who have the means of production want to see the perpetuation of poverty because it serves their primary needs. Without the poor, the rich would be none existent.

Let us carefully interrogate the statement by Jesus as found in the book of John 12 verse 8. Jesus said; “You will always have the poor among you, but I will not be here with you much longer.” This was a universal statement in the sense that Jesus simply said the world will never run short of people who are fuelling the fires of poverty. This is so because poverty is a creation of the wealthy class.

Structural Adjustment Programmes set by the World Bank and her sister institution are one way of perpetuating a cycle of poverty in Africa in order to keep African countries as poor as they can get. For decades now, African countries have been dealing with paying the interests charged on the initial loans that were given to them by these international financial institutions. A decade ago there was a voice of intellectuals and prominent persons that campaigned for the total cancellation of the loans. Even after the arrival of democratic governments in countries such as Ghana, the rewards of democratic dispensation are still not visible because these countries still have to contend with these huge loans. It is the same with individuals in Botswana who have gone for almost a decade without getting a meaningful salary increase.  These individuals have gone to borrow money from loan sharks who always charge exorbitant interest rates of up to 30% a month. Our government is just too happy to keep these loans sharks under her regulatory policies that bring in good income tax to the national coffers. On the other hand, no one seems to care about saving these individuals from this cycle of poverty.

It is not that a lot of these people want to see themselves in this condition, it is just that they have reached a hopeless condition of treading the road to even greater poverty. A lot of these cash loans companies are owned by senior government and parastatal officials who exist in their financial world because of these poor workers who are trapped in a cycle of poverty. These senior people would not want to advocate for any reasonable salary increase for those in the lower echelons of the workforce.  Coming back to the issue of countries, it is countries of the West who are benefiting profoundly in the cycle of poverty experienced by the African continent.  If poor countries did not exist, then rich countries would not have a dumping place for their below par goods such as substandard vehicles which cannot in anyway make it back into the markets of the very countries who exported them. Who would be buying grey car imports if third world countries did not exist? And still, who would be buying obsolete military hardware if we did not exist? These questions are not just rhetorical; they are legitimate and require answers from the West.  My theory has always been that the rich exist because of the poor. Take the poor out of the equation then the rich will be no more. In fact the rich will become the poor. The same applies to the relationship between rich and poor countries. The rich desperately need the poor to consume their products and keep the rich afloat. This is true and it applies mainly with mobile telecommunications companies. They have always admitted that they make their money on prepaid users as opposed to the contract users. The prepaid users are predominately the poor, those at the bottom of the heap as far as the pyramid of economics is concerned.

The corporate customers and other property owners and the rest of those in possession of the means of production prefer to use post-paid arrangements. In any way they do not supersede the prepaid users; the poor. This gives us clear evidence that the poor are always a majority and yet they only exist to sustain the rich. And yet the CEOs of these corporations are annually given fat cheques and by so doing they are being rewarded for systematically exploiting the poor. Turning to Botswana, there is a growing body of evidence to indicate that the gap between the rich and the poor is growing exponentially. Over the years, Botswana has used her wealth to empower a good size of her population through education programmes. After a considerable period of time from independence, the government pulled down school fees in order to create equal opportunity for all. This was the best economic empowerment that the government could ever give to its people.

 *Richard Moleofe is a Retired Military Officer (Distinguished Service Medal)