Hopeful Message About the World’s Poorest

29-Mar-2011

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A banker turned social finance entrepreneur. Liu-Yue built and managed two social enterprises to help make the world a better place. Liu-Yue co-founded Oxstones Investment Club a social financial education website that helps facilitate the exchange of ideas on emerging alternative investment opportunities along the new Silk Road (emerging markets). Liu-Yue also co-founded Cute Brands, Inc. – Cute and Happy with a Cause! Cute Brands is a cause-oriented, character-based brand licensing and social impact fund that creates social awareness on global issues and societal challenges through character creations, and also supports select charities (WWF, WCS, and ASPCA) through consumerism. A NYC native, Liu-Yue worked as an Executive Associate at M&T Bank in the Structured Real Estate Finance Group. Prior to M&T, he held a number of positions in emerging markets bonds and Latin American equities at SBC Warburg Dillon Read (Swiss Bank), OFFITBANK (the wealth management division of Wachovia Bank), and in small cap equities and special situation investing at Steinberg Priest Capital Management (family office). Liu-Yue has a Bachelor of Science in Finance and Marketing from the Stern School of Business at NYU, and an MBA specializing in investment management and strategy from Georgetown University. He also completed graduate studies in international management at the University of Oxford, Trinity College.







By DAVID LEONHARDT, NY Times,

In the not too distant past — 1980 — one of every six babies born in the West African nation of Liberia died in infancy. Overall life expectancy was a mere 48 years. The great majority of Liberians couldn’t read in 1980. Most girls had never attended school.

Over the last 30 years, infant mortality has fallen sharply, and life expectancy has jumped to 58 years. Most Liberians today can read. More than 80 percent of girls attend school. Politically, the country is much freer than it was in 1980, the year of a deadly coup.

Economically, however, Liberia has been the world’s single worst performer over the last 30 years. Per capita income has fallen an astounding 80 percent, according to official World Bank statistics, which makes the country an extreme example of Africa’s long-running economic troubles. While people may debate the causes of those troubles — corrupt and autocratic governments, feckless foreign aid, postcolonial hangover — everyone seems to agree that Africa is a story of failure.

But is it?

In a new book called “Getting Better,” Charles Kenny — a British development economist based in Washington — argues that the answer is absolutely not. Life in much of Africa and in most of the impoverished world has improved at an unprecedented clip in recent decades, even if economic growth hasn’t.

“The biggest success of development,” he writes, “has not been making people richer but, rather, has been making the things that really matter — things like health and education — cheaper and more widely available.”

Money matters, of course. It goes a long way toward determining the quality of people’s lives and their reported happiness. You can argue, as Mr. Kenny does, that the turmoil in the Middle East and North Africa stems in part from the contrast between economic stagnation and progress in education and health. People are no longer satisfied with the bare essentials.

But when Mr. Kenny and I spoke recently, he made a good case that the world had paid too much attention to economic numbers and ended up with some misleading caricatures as a result: China great, India good, Latin America mediocre, Africa bad.

In fact, life expectancy is longer, and has risen more lately, in Libya and Syria than in China. The average lifespan in Libya — 74 years — is now only four years behind that of the United States.

Among the seven major regions into which the World Bank divides the planet, life expectancy has grown more since 1980 in the Middle East and North Africa than anywhere else (12.2 years). South Asia has had the second biggest gain (9.6 years), Latin America (8.9 years) is third and East Asia fourth (8.1 years). Yemen — the latest political hot spot — has closed almost its entire longevity gap with India since just 1990, for example. Liberia has closed nearly half its gap with India over the same span.

The main reason is that health and well-being are cheaper than they used to be. Africa and large parts of Asia and Latin America remain abjectly poor. But they can often still afford antibiotics, immunizations and clean water. So even as African countries have fallen further behind economically, some have begun to catch up in other areas.

Just as important, their citizens, who are better educated than their ancestors and have far better access to information, often have the political power to demand better basic services. Compared with past decades, vastly more people today live under a political system that at least resembles democracy. It was only 40 years ago that women in Switzerland — Switzerland! — could not vote.

One caveat to Mr. Kenny’s argument is that progress in Africa has slowed over the last decade or so, largely because of the scourge of H.I.V. And by any definition, the quality of health and education in sub-Saharan Africa remains horribly low.

Several countries there still have a life expectancy of only about 45 years. By comparison, life expectancy in the Stone Age was about 34 years, notes Gregory Clark, the University of California, Davis economist who wrote “A Farewell to Alms,” an economic history of the world.

“Despite the creation 60 or more years ago of cheap medical interventions that can dramatically reduce infant mortality and despite considerable medical aid and assistance from the rich countries,” Mr. Clark told me, “the poorest countries in Africa have advanced life expectancy 10 years from conditions in 200,000 B.C.”

Mr. Kenny responds that H.I.V. is akin to a modern plague. The fact that sub-Saharan Africa has made even modest progress while battling the plague is remarkable. Much of the rest of the world, meanwhile, continues to make great progress on health, education, infrastructure and even human rights.

He is certainly right that people often overlook this progress and instead believe that global misery is intractable. “The strongest argument against a moral imperative to act,” as Mr. Kenny says, “is that we are powerless to make things better.” Clearly, we aren’t powerless. The real question is not whether foreign aid and local government programs can work — it’s which programs work and which do not.

The most hopeful part of Mr. Kenny’s hopeful message is that progress in health, education and human rights may ultimately bring economic progress as well. He is cautious on this point, noting that economists have failed time and time again to come up with consistent explanations for economic growth.

But African growth has accelerated over the last decade, and the acceleration followed improvements in education and other basics. It’s true that Africa’s growth is unimpressive compared with the Asian miracle, but the growth is still the most rapid in Africa’s recorded history. Perhaps those investments in Africa’s people needed time to produce returns.

As I read “Getting Better,” I couldn’t help but think of some parallels with life in the United States. Our own economic growth has been disappointing for much of the last four decades. Over that same period, though, other aspects of American life have improved enormously. A large majority of Americans experience far less discrimination today — be it discrimination based on sex, race, religion or sexual orientation — than they would have 40 years ago. For most people, life was not better in the fondly remembered 1950s and 1960s.

In the aftermath of the global recession, with rich countries growing slowly, poor countries struggling with high food prices, and Japan coping with a genuine disaster, it is easy to focus on the world’s economic problems. Those problems are real, and most governments are not doing enough to respond to them.

But it’s also worth taking a few minutes to think about the lessons from the recent successes. The gains in health and education over the last few decades have been unprecedented for much of the world. And there is reason to hope that healthier, better educated people are ultimately less willing to accept autocracy or economic stagnation.

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