Towards the end of poverty

Discussion in 'Politics & Current Events' started by Matt in the Hat, Jun 2, 2013.

  1. soccernutter

    soccernutter Moderator
    Staff Member

    Tottenham Hotspur
    Aug 22, 2001
    Near the mountains.
    Club:
    Tottenham Hotspur FC
    Nat'l Team:
    United States
    I think Chile, one of the more consistent economies over the last 20+ years in the "developing" world, has a wealth gap that now matches the US.
     
  2. ceezmad

    ceezmad Member+

    Mar 4, 2010
    Chicago
    Club:
    Chicago Red Stars
    Nat'l Team:
    United States
    True, rich people have gotten very rich in Latin America, but poverty has definitely decreased and the middle class has gotten much bigger.

    http://www.brookings.edu/~/media/pr...declininginequalityinlatinamerica_chapter.pdf

    2000 - 2007 decrease Gini.

    And

    [​IMG]

    [​IMG]
     
  3. ceezmad

    ceezmad Member+

    Mar 4, 2010
    Chicago
    Club:
    Chicago Red Stars
    Nat'l Team:
    United States
    But here is a chart that make the high taxing Europeans look better after income redistribution.

    [​IMG]
     
  4. argentine soccer fan

    Staff Member

    Jan 18, 2001
    San Francisco Bay Area
    Club:
    CA Boca Juniors
    Nat'l Team:
    Argentina
    The interesting thing -speaking of the last decade or couple of decades - is that throughout the world globalization brought two trends. One is a decrease in poverty, and the other is an increase in inequality. This is because the same forces that are bringing many of the most poor people out of the most extreme poverty are also making a small percentage of people extremely rich.

    Latin America has been an exception, and in general in the last decade it has seen both a reduction in poverty and a decrease in inequality.

    This is partly because there was already so much inequality to begin with, but also because of other factors. One factor is that the socialist programs of some countries -Brazil is a good example- when planned judiciously, have contributed to the decrease in inequality.

    Another reason is that much of the inequality had been created by regulations or accommodations that in most Latin American nations resulted in virtual monopolies ran by a few powerful families favored by the government. For example, there is a reason why the richest man in the world is the owner of Mexico's telephone company, and believe me, it's not that the guy is brilliant like a Steve Jobs. And this is true to a greater or lesser extent in many industries, not just an obvious one like a telephone company. The result has been that rich people got richer by providing inefficient services thanks to special protection from the government.

    One interesting observation is that Latin American's poor have been helped significantly by the low cost items coming from places like China and South East Asia. This has made many products affordable to great numbers of people who didn't have access to them in the past. Yet it did come at a cost to the magnates of the local industries, who as I said often overcharged and were inefficient, and contributed to the wealth disparity. So, some of the same forces that create income disparity in parts of the world are in fact helping in Latin American.

    This has to be kept in mind when Latin American leaders rage against globalization. Often they claim to be protecting the poor, but are in fact protecting the megarich who control the local industries and benefit from the virtual monopolies that they owe to friendly government regulations. Obviously freer trade and globalization does not help these powerful people keep their status quo.

    One irony is that both globalization/freer capitalism and the socialist policies have worked well in conjunction to the benefit of Latin American poor, and yet for political reasons they are painted in black and white terms by ideologists from both sides as though one is good and one is evil, and if you are for one you have to be against the other. And yet there is a way - and to some extent there has been a clear way, particularly in places like Brazil -to benefit from the capitalistic effects of globalization while also enacting appropriate policies to help the poor get more benefits from it.

    Sadly, often the demagogues use ideology as a shield or diversion to protect themselves and their powerful friends, and i fear this is now happening, and in the process there is a danger that the benefits we've seen in the decade could be short lived, or at the very least that they will be limited, as leaders return to the protectionist policies of the past.
     
    guignol and soccernutter repped this.
  5. Cascarino's Pizzeria

    Apr 29, 2001
    New Jersey, USA
    No kidding. Every other person at Disneyworld was Brazilian!
     
  6. argentine soccer fan

    Staff Member

    Jan 18, 2001
    San Francisco Bay Area
    Club:
    CA Boca Juniors
    Nat'l Team:
    Argentina
    Interesting. I was looking at a wiki table that showed that the tax revenue in Argentina as a percentage GDP is relatively high, at 37.2 %. By comparison, the USA is listed at 26.9 % Brazil at 34.4 %, and the UK at 39.0 % of GDP. Some others: Ireland at 30. 8 %, Spain at 37.3 % and Sweden at 45.8 %. (Other South American countries are lower, like Chile 18.6 %, Colombia 23 %, Venezuela 25 %.)

    http://en.wikipedia.org/wiki/List_of_countries_by_tax_revenue_as_percentage_of_GDP

    For reference, Argentina has its corporate tax rate set at a flat 35 percent, and the income tax for individual goes up also to a 35 percent for the highest bracket, and the brackets are very progressive based on income. I believe the corporate is higher than most Western European nations, and the top bracket individual income tax is lower. Argentina also has a high sales tax at 21 percent, and that is a regressive tax. But most Western European countries have a high sales tax as well.

    So I wonder, if as a percentage the tax revenue in Argentina is not much lower than it is in Europe, how do the European nations manage to lower their inequality significantly more, as shown in the quoted chart? Is it because a much larger percentage of their tax revenue is getting back to the poor people? Seems odd because Argentina, Brazil and other South American countries have to different extents instituted income redistribution policies that are considered aggressive.
     
  7. Chesco United

    Chesco United Member+

    DC United
    Jun 24, 2001
    Chester County, PA
    Club:
    DC United
    Nat'l Team:
    Argentina

    I've heard there is a very high rate of tax dodging in Argentina.
     
  8. argentine soccer fan

    Staff Member

    Jan 18, 2001
    San Francisco Bay Area
    Club:
    CA Boca Juniors
    Nat'l Team:
    Argentina
    Yes that is true, but the tax revenue has to be calculated taking into account the tax dodging. The percentage numbers are based on what is actually collected.
     
  9. ceezmad

    ceezmad Member+

    Mar 4, 2010
    Chicago
    Club:
    Chicago Red Stars
    Nat'l Team:
    United States
    Also Argentina Collects high export and import taxes right?


    So yes that is interesting, it could be that data on redistribution programs are hard to collect or may not be believed accurate (like say official inflation %).

    But yes Argentina does collect taxes on par with European countries.

    http://www.oecd.org/ctp/tax-global/revenuestatisticsinlatinamerica.htm

    I wonder if things like fuel subsidies count towards the chart I quoted, I have read numbers that Mexico spends more money on subsidizing gasoline than they do in Education or Health Care, so maybe those types of subsidies do not count in the transfers data points.

    Or maybe Christina is using all that tax money to subsidize Riquelme’s salary at Boca. ;)





    [​IMG]
     
  10. argentine soccer fan

    Staff Member

    Jan 18, 2001
    San Francisco Bay Area
    Club:
    CA Boca Juniors
    Nat'l Team:
    Argentina
    Yes. That's where there is a lot of evasion. Bribes, double invoicing and so on. My experience is, you can't sell to Argentine companies unless you agree to provide them with a fake invoice. But even so, even after all the tricks, the duties still comes up very high. The rates are set ridiculously high under the assumption that everyone will cheat and they'll still have to pay a high duty.

    And on top of it the importer has to pay the value added tax, part of which can only be recovered later when they sell the goods. It's a huge upfront cost that benefits the big players and keeps potential small importers from entering the market.
     
  11. argentine soccer fan

    Staff Member

    Jan 18, 2001
    San Francisco Bay Area
    Club:
    CA Boca Juniors
    Nat'l Team:
    Argentina
    I don't know about Riquelme, although I wouldn't put it past her if it helps her politically, but I'm sure there are lots of unofficial creative "transfers of income" that cannot be quantified.

    For example, paying public servants very little money, but knowing that they make their income mostly from bribing the citizens, primarily the middle class. Some planning officials have only one job, to put a stamp of approval on projects that businesses propose. (expansion, moving, whatever the business may need to do). And to do so the officials have a large staff, whose only job basically is to collect the bribes, so the official can agree to put his stamp on the document.

    Police officers come into that category too. There's no way they can live on their salary, but it is assumed they'll supplement their income with bribes. I would consider this to be unquantified redistribution of income as well.

    And all the public union employee jobs that pay little but the worker doesn't have to do anything. I suppose that is a creative way to transfer income as well, that doesn't show up in the charts.

    Yeah I love my birth country.
     
  12. ceezmad

    ceezmad Member+

    Mar 4, 2010
    Chicago
    Club:
    Chicago Red Stars
    Nat'l Team:
    United States
    Think of it as long term stimulus spending, you would not want the unemployment numbers to go up right, it looks bad during elections :p .

    Here in Chicago we love to pay people to not work (as long as they vote the right way during elections).
     
  13. dapip

    dapip Member+

    Sep 5, 2003
    South Florida
    Club:
    Millonarios Bogota
    Nat'l Team:
    Colombia

    Is not that different from Colombia or Mexico.

    Questions for you:

    1. How does Argentina rate against international competition? Not far from the mentioned countries.
    http://cpi.transparency.org/cpi2012/results/
    2. Do you think that the bribers are not guilty?
    3. Who benefits more from the results of a proper bribe? The public servant or the entrepreneur?
     
  14. argentine soccer fan

    Staff Member

    Jan 18, 2001
    San Francisco Bay Area
    Club:
    CA Boca Juniors
    Nat'l Team:
    Argentina
    Based on my experience and talking to other business people, Argentina is pretty much par for the course in South America, which of course is not a good thing. I'd say Paraguay and Venezuela are probably the worst, and Chile is probably better, but it's pretty much the same everywhere. Mexico and Central America/Caribbean are just as bad.

    Just an anecdote about Venezuela. One time I went to visit a new customer in Venezuela. I'd met him at a trade show, and I heard he was big, so I thought it was worth a trip to see his operation and try to establish business ties. Normally when you go into an airport, anywhere in the world, you have to go through customs before you can meet anybody. And, as I used to take a couple of cartons with samples, they usually checked my boxes to see what I was carrying.

    Well, when I walked into the airport from the airplane, before passing through customs, this guy was waiting for me at the door, with an employee who offered to carry my boxes. When we got to the line where you're supposed to get checked, he went straight up to the customs official, and in front of everybody pointed at me and barked to him: "say hello to my friend". The guy waved us through, boxes and all, no questions asked.

    I've never experienced anything like this anywhere else in the world.

    It depends. Sometimes you do what you have to do. For example, if you have a business and a police officer comes by your office and casually announces that it's the birthday of the police chief in the district, then you give him some money because you know you have to, and I don't think you're guilty. But if you actively seek to find officials to bribe in order to get your business unfair benefits over your competitors, then I think definitely you are guilty.

    Again, depends on the situation. For example, if the entrepreneur needs to move into a new building and the public servant won't approve it until he gets a bribe, then it's just the public servant who benefits. On the other hand, lets say an entrepreneur bribes a customs agent and gets a shitload of goods into the country without paying the proper duties, then obviously it's the entrepreneur who benefits more.
     
  15. ceezmad

    ceezmad Member+

    Mar 4, 2010
    Chicago
    Club:
    Chicago Red Stars
    Nat'l Team:
    United States
    Legally if you are a US based Business in a foreign country and you bribe people, you are liable under USA law.

    That is why is good to get in partnership with local 3rd parties, they can do the bribing and you can act shocked when people find out that was going on.

    Just ask Wal-Mart Mexico.
     
  16. guignol

    guignol Moderator
    Staff Member

    Apr 28, 2005
    mermoz-les-boss
    Club:
    Olympique Lyonnais
    Nat'l Team:
    France
    i suppose i should be happy for all the people here this is providing feelgood for, but i fail to see how more people making their dollar a day (adjusted for inflation) is call for giving global capitalism a pat on the back or for feeling even remotely sanguine about the march of history. as a shine to the runaway concentration of the world's wealth and resources in fewer and fewer hands, the ecological timebombs ticking in countries like india and china which are the biggest motors of this supposed progress, or the cultural, social and economic plight of the tribes of borneo or the amazon, dispossessed by the huge soybean or palm oil plantations where they work to make their $1.26 per day, this communications campaign, cooked up by folks who have never been closer to poverty than 60 or 70 percentile points, is a very thin wash of varnish indeed.
     
    GiuseppeSignori and dapip repped this.
  17. ceezmad

    ceezmad Member+

    Mar 4, 2010
    Chicago
    Club:
    Chicago Red Stars
    Nat'l Team:
    United States
    I did not get what you are having a problem with?









    :p
     
  18. guignol

    guignol Moderator
    Staff Member

    Apr 28, 2005
    mermoz-les-boss
    Club:
    Olympique Lyonnais
    Nat'l Team:
    France
    oh, nothing, nothing at all! all is for the best in this best of all possible worlds.
     
  19. argentine soccer fan

    Staff Member

    Jan 18, 2001
    San Francisco Bay Area
    Club:
    CA Boca Juniors
    Nat'l Team:
    Argentina
    Perhaps on paper you make a persuasive point about the march of history, but if you go to some of the villages and see with your own eyes some of the improvements that are clearly happening and benefiting poor people, and get to know some local people and see how grateful they are for the jobs that you are indirectly providing, and hear it directly from them, you might feel a bit different about it at some level. Its different when you actually go and meet people on a personal level. At least that's been my experience in some places, particularly during my visits to China.
     
    Matt in the Hat repped this.
  20. guignol

    guignol Moderator
    Staff Member

    Apr 28, 2005
    mermoz-les-boss
    Club:
    Olympique Lyonnais
    Nat'l Team:
    France
    your personal experience is certainly valid, and exceeds mine, but i doubt it tells the whole story.

    i would be more easily convinced if more functional criteria like access to clean water, eradication of malnutrition and disease or rates of infant mortality and literacy were being used instead of an arbitrary $1.25 a day*. my guess is that these statistics would vary from region to region, and provoke reactions ranging from guarded optimism to righteous indignation, but certainly not the panglossian euphoria the economist is pandering with a title like "the end of poverty".

    i also wonder if perhaps, for all their indisputable and tragic failings, the social systems being decried here did not do every bit as well by these yardsticks as the global capitalism being praised to the skies.

    *saying that $1.25 is not as ridiculous a sum as first appears because it's an updating of the old "dollar a day" is not serious. first, adjusted for inflation from when? the $/d mantra was already being used in the 70's. an adjusted figure could just as well be $2 or $6.52... and remain just as meaningless. because a dollar a day was never an objective threshhold where poverty shifted to sufficiency but only an easy (and ethnocentric) sum to indicate how big the gap was between the haves and the have nots. what then was intended to evoke guilt and encourage action is now being used for self justification and even congratulation. we've come a long way, but not in a direction that does us credit.
     
  21. argentine soccer fan

    Staff Member

    Jan 18, 2001
    San Francisco Bay Area
    Club:
    CA Boca Juniors
    Nat'l Team:
    Argentina
    Of course it doesn't tell the whole story. I've seen a lot of bad things. I've seen child labor, I've seen prison labor, I've seen a factory in Bangladesh that was what I would call hell on earth. But I can say that I've seen a lot more good than bad. The creation of lots of jobs that are wanted and desperately needed, and the increased availability of affordable consumer goods to those who need them the most. You hear stories from the media emphasizing the bad things that businesses do in poor countries, a lot of horrible abuses, and I've seen some of that. And yet my experience is that significantly a lot more good than bad is happening, and for the most part the businesses are helping many many people come out of extreme poverty and improve their lives.

    In that context, the article from The Economist is refreshing to me, because it's much more in tune with the reality as I've experienced it than the many sensationalist negative newspaper articles and TV stories about poor countries that I've seen in western media that focus on the worst of the worst and try to generalize from it.

    I tend to agree with the conclusions from the article and the statistics, based on what I've personally seen, in Latin America and the Far East, in the past few years. I've observed the significant improvement in many places, in terms of real people's lives. Although I acknowledge that there is still a very long way to go.

    What exactly is being "decried" here? Can you give me a specific example from this thread? I wonder if you read what I'm posting. I believe the improvement is real based on what I've seen, and the statistics linked to in this thread do seem to bear it out. I am giving credit to a combination of the forces of free trade and globalization as well as the social policies enacted by poor countries. The only thing I'm "decrying" is those people who with limited information insist on painting things in simplistic terms of good and evil that are completely divorced from reality, only because it fits their own ideology or political agenda.

    Here is an example of my point of view, from post #29:
     
  22. guignol

    guignol Moderator
    Staff Member

    Apr 28, 2005
    mermoz-les-boss
    Club:
    Olympique Lyonnais
    Nat'l Team:
    France
    i think i read too much into a stamp of ceaucescu and a couple of other remarks about marxism. sorry.

    i also skipped many of your posts that i shouldn't have, and your #29 shows that our opinions have more similarities than divergences. i apologize for that but it's not that i intentionally ignored content but because my first post was directly inspired by the opening one, and since i was a latecomer that kind of automatically propelled me to the end. when you see my comments i that light you may understand my indignation.

    my feelings on capitalism, on communism, on mankind in general and his outlook for the future are darker than yours. and when i see such an article like this being used as a reason for smug satisfaction and a benediction to a system that i believe does at least as much harm as good, they don't brighten.
     
  23. argentine soccer fan

    Staff Member

    Jan 18, 2001
    San Francisco Bay Area
    Club:
    CA Boca Juniors
    Nat'l Team:
    Argentina
    Fair enough. And you do make valid points.

    And hey, I'm not saying our outlook shouldn't be dark. After all, we can be pretty sure that it's all going to end with extinction for the human race sooner or later, just like for every other species. I can imagine our end when it comes is not going to be pretty, I'll grant you that.

    But that doesn't mean we cannot try to make things better for the time being, and I do honestly think that the things I was doing in China and in Latin America were indeed helping some poor people. I'm not trying to sound like Mr Altruistic, I also had my own interests, but still I don't think there's anything wrong with having pride in being a small part of some good things that happened.

    And frankly, while there are a lot of bad things going on in the world, I do think we are living at a time that -from a historical perspective- is relatively good for humans, and I also do think it's still improving, although slowly. I don't think it's wrong to be pleased with that.
     
    taosjohn repped this.
  24. Cascarino's Pizzeria

    Apr 29, 2001
    New Jersey, USA
    The Hand of Fraud if you will.
     
  25. argentine soccer fan

    Staff Member

    Jan 18, 2001
    San Francisco Bay Area
    Club:
    CA Boca Juniors
    Nat'l Team:
    Argentina
    Didn't mean to cheat on my taxes. It was just a Fraudian slip. :D
     

Share This Page