David Hulme, University of Manchester, Brooks World Poverty Institute

LISTEN | Prof. David Hulme on poverty, inequality & the refugee crisis

On September 25-27 the international humanitarian community will convene at the Sustainable Development Summit in New York City to announce the post-2015 development agenda. So-called, the Sustainable Development Goals (SDGs) are a new set of global aims designed to follow up the Millennium Development Goals (MDGs) that have underpinned United Nations (UN) processes since 2000, and will cover the period 2016-2030. David Hulme, Professor of Development Studies at the University of Manchester and head of Brooks World Poverty Institute explains the background to “all this goal-setting” to Sarah, and his thoughts on why reducing poverty and inequality, globally, should be a priority. He also comments on shifting power dynamics in the international financial markets and the refugee crisis.

Transcript below.

As a starting point, maybe you could explain a little bit about the Millennium Development Goals, or just the notion of – 
All this goal-setting stuff. Well the United Nations has set goals for the last 50 or 60 years. Usually they’ve been specific goals, like eradicating smallpox, eradicating polio, getting more kids into primary education. But in the 1990s there was a real dynamism to this process, following the end of the Cold War, and NGOs emerging and Civil Society getting active. A whole set of UN conferences set hundreds of different goals and targets for the world. Nobody quite knew what they were doing, but in the late 1990s, first the OECD’s Development Assistance Committee pulled a few of them together into a list. Then the United Nations began to pull them together into lists. In 2000, 2001, after lots of politicking, lots of which was hidden, eventually the United Nations agreed on the Millennium Development Goals, a list of eight goals – about 20 targets in the end. The number of targets were increased, with 60 indicators. The overarching message was to eradicate poverty, but actually it was basically to reduce poverty significantly, over 2000 and 2015. Then, what’s happened is – when you say something is ending in 2015, people start saying, so what’s going to happen after 2015? So now all this goal setting has become a fairly standardised UN process.

So that’s relatively new – as far as Development goes?
As far as Development [goes], but as far as anything goes. Because these goals now have moved from Millennium Development Goals, that were about poverty reduction in developing countries, to an overarching set of global goals, for all countries. One of the big differences about the Sustainable Development Goals is that they will be universal. All countries are meant to commit to pursuing them. So we’re not just monitoring what’s happening in poorer countries and developing countries. In a way, every country in the world, or 193 member countries, should actually do something, if they sign up to them.

Are they – can they be mandatory?
No, no – I mean, that’s one of the biggest things that hasn’t changed, from 2000, is none of this is a treaty, none of it is mandatory. So you can say you’re going to do it, but it’s not enforceable. That’s one of the things that makes it different from some of the things that are happening at the moment with climate change. The meetings in Paris, in December about climate change, are looking to come up with a treaty, and then countries that agree to that country’s conditions can expect to be challenged, and have to account, at the United Nations for achieving or not achieving what they’ve committed to. With the Sustainable Development Goals, whilst there’s a lot of energy and interest and – well, certainly verbal commitment to them, countries are not prepared to say, we’ll make these a treaty.

Why do you think it’s important, or do you think it’s important for there to be universal, overarching goals?
I think there’s two main reasons, and I probably don’t agree with the main, main reason, that most people agree with. The main reason that most people will argue is that, when you’ve got goals and targets it makes it more likely that you can get organisations and individuals to pursue those goals and targets. A sort of management by objectives focus, a results-based management focus, and that’s very much where the Millennium Development Goals came out of. That actually, if we can set goals, and then we can get people to – not necessarily form a treaty, but to agree to them, then we can get individuals and organisations to pursue those goals. I mean, that’s worth doing – it’s worth trying, but I think actually more important is, basically, challenging social norms, and changing social norms. So I think actually the main achievement of the MDGs, and the main achievement of the SDGs will be, just a more generalised [shift] to think – yeah. We should reduce poverty, and we should put more effort into that. Yes, we should be looking at inequality, be concerned about it, and we need to do something about it. Yes, sustainability is incredibly important. I tend to see it in that broader sense of moving towards getting people to sort of change the social norms that they sign up to. If you could get it to extend into effective management by objectives that would be nice, but, I mean there’s a whole lot of study of management by objectives and it doesn’t always achieve its goals. It’s the value-change one that interests me.

The difference between telling people what to do, and it being willingly done?
Whether it’s quite that sharp, but that’s the sort of focus that you could see. The Millennium Development Goals, and certainly the way they were used by people like Jeffrey Sachs and the Millennium Project, and some donors was – having got agreement from them – to say to developing countries, well this has been agreed, you will do these things to achieve it. That may or may not have worked to some degree, but I think longer term, and for more effective change, it’s getting people to actually change the way they think. Certainly, if you were to criticise the MDGs, then one of the things you could say is that, rich nations made commitments about aid, about fair trade, about climate change, and haven’t honoured them. And the accountability processes haven’t kicked in. I mean, someone like [ex-Italian Prime Minister] Silvio Berlusconi, he committed to the Millennium Development Goals at UN meetings. He then reduced Italian aid, made it less effective. Did very little in world trade, or finance negotiations to help developing countries. But there was no feedback process which said to him, in 2000, 2001 you actually stood up and said you were going to pursue these. And now you’re doing these concrete things which are going to stop Italy from achieving them. Those accountability processes didn’t operate. I think that’s partly because, in a way it was left at this grand level of government agreements. It didn’t get people around the world to actually think, well – yeah, it’s great that the UN is thinking about these things, but maybe it means that I need to think a little bit more about what my government’s doing for poverty reduction, what it’s doing for climate change. I’d see that as the bigger game – because when you get people to change their values in democratic settings, then you get policy changes, and you get those policies implemented. If you don’t get the people to go with you, then you can get the policy changes, but then it just sort of drifts.

There’s been a lot of volatility between 2000 and now, economically. People are talking about inequality, and maybe more people are affected by the effects of it. Do you think perhaps the world’s in more of a place to –
To think about these things. Hopefully so, but one’s got to be realistic. My prediction would be that if you look on the 27th, 28th, 29th of September, when the UN General Assembly is meeting to discuss the Sustainable Development Goals, you’ll probably get more media coverage of whoever’s won the lottery that week in the UK, than you will of these plans to transform the world. This is still part of an elite conversation, in that way. The Millennium Development Goals certainly put poverty into the media more often – it created annual reviews, which often got reported. It had 5-year meetings in 2005 and 2010, so that even some of [the UK’s] top newspapers talked a little bit about what was happening with poverty and that. So in a way it’s created opportunities for people to engage more. But certainly – it’s hard to say with poverty, but certainly with inequality – there is a much wider recognition that inequality’s been increasing, and that this is a bad thing. Certainly for poor people, and many middle class people realising that, actually it’s a really bad thing for them. I think one of the changes that we may get with the Sustainable Development Goals is much more of a focus on poverty and inequality, rather than just a focus on extreme poverty.

Why do you think it’s important that either inequality, or poverty, or both are reduced – or eradicated?
I think it’s important to reduce poverty because it just seems absolutely immoral to me that we live in an affluent world – we have more than enough food, we have more than enough technology, finance and understanding to ensure that people get their basic needs. That wasn’t the case in previous generations. But actually, the amounts of world resources that you need to reduce the suffering of extreme poverty is relatively limited. To me there’s a very clear ethical case on that. When you look at inequality, I think you’ve got an ethical case about that, but I think also growing evidence that the rise in inequality that we’ve had, particularly in rich countries, means that actually nobody’s getting the sort of world in which they want to live. Even the mega billionaires, they’re not living in a politically stable world, in which they can see that rapid social advancement is occurring.

I think there’s a real need to recognise that we need to be attacking poverty, but also inequality at the same time. And that actually, tackling inequality will mean that you tackle poverty more effectively. But also that, more broadly it will help to create the sorts of societies where we want to live, people more generally, and certainly the sorts of societies where one would want one’s children and grandchildren to live, in the future. Particularly when you look at inequality. There’s been several books that have looked at “the one percent” [recently], but in a way it’s going beyond that. It’s the 0.01, or the 0.001 percent. Enormous amounts of wealth and assets are being controlled by small numbers of people, and that’s bad in two ways. One is it may be bad in itself, that those people have got control of those resources, and resources that were shared more equitably would be able to achieve social goals. But the second thing is that, people who control that volume of resources are actually able to control the political system, so that even in democracies like America – when you look at public policy in America –

Donald Trump for president!
Donald Trump for president. Those who have these vast sums of money, it’s not that their voices are 100 or 1000 or 1million times – it is that it’s a billion or a trillion times [louder]. It sort of doesn’t matter that you’ve got millions of people who are losing out. It’s simply the power of their voice, can get control of the media, can get the lobbying done in Washington, which will give them the laws that they want, so that they get further tax exemptions. And you get that crazy situation after the financial collapse, when America was potentially financially constrained, in which you’ve got laws, and pressure, to reduce the taxes of people who are earning megabillions of dollars a year, at the same time as you’re cutting a few cents off unemployment payments, and all these pensions and support. And medicare and these sorts of things. That just seems pretty crazy.

Do you think America would be the most powerful actor in that sense? As far as financial markets go – where does the power mostly lie?
It’s difficult to say, because partly you can base it in countries, but then of course when you begin to look at the companies involved, often they’ve got their shareholding outside of that country. In the past one could have said, it’s America. It’s by far the world’s largest economy, and it was dominating the world economy. Over the last 20 years, that’s changed with the rise of China in particular, and to a lesser degree the rise of India and the Latin American emerging powers. Still, financial power is centered very much in the USA. But then, when you look at other players, then the UK is a very significant player. Partly through the role of the banking and financial companies that are based in the UK and its historical position in the way that London is so central to those financial markets. But things have changed as one saw last week when the Chinese Yuan was depreciated. Chinese finance is beginning to shape what’s happening in the world.

If you look at the way that finance is being reshaped, it’s quite interesting to see what’s happened. In particular, the US, and the US Congress has resisted reforming the World Bank and the IMF. They’re saying, let’s pretend the world is still 1945. Let’s pretend that America and Europe are the dominant industrial economies of the world. In 2015 that’s not the case! Manufacturing is based very much in China, and then across other parts of Asia. And that failure to reform those institutions means that we’ve now got China, and more broadly the BICs – well, Brazil, Russia, India and China, the BRICS – changing things, and so we’ve actually got the Asian Infrastructure Investment Bank. Which is on the same scale as the World Bank, which China in a way is taking a lead in getting 57 countries to contribute capital to, and to become members of. The USA is very annoyed that the UK has joined that. But the UK in a way is recognising that global finance is no longer dominated by America. There are now other players, such as China. And the UK in a way has agreed to go with that Chinese initiative. The BRICS are establishing a new bank, to compete with the World Bank. Another institution to compete with the IMF. So, finance having changed very little from 1945, suddenly it’s changing quite rapidly.

It sort of seems like a missed opportunity – or that it would be common sense to reform, rather than say, no! We’ve got the way, or, how we’re doing it is right.
It would be common sense if you were saying, what sort of world do we want? And do we, particularly the USA, want to be respected as good global citizens? It would make common sense to engage with, yeah we have to reform the World Bank and the IMF. Because the world is not at the end of WWII. The world is now well on its way into the 21st Century. But also, actually, if you were to think in selfish terms, it’s pretty foolish of the USA not to engage with that. Because if you look at international institutions, they are always products of the historical moments at which they’re created. And then they change, hardly at all, for decades afterwards. If America engaged energetically to reform international financial institutions now, it would have quite a loud voice. If it waits another 10 or 20 years, it will actually have a much weaker voice and China will have a much stronger voice. So in a way, it doesn’t have to engage with those decisions now, but when it comes to refining them, the Chinese voice will then be locked in on a much bigger scale than it would if they negotiated earlier. Whether you think of more altruistic, or more selfish reasons, it’s pretty foolish. But then the US Congress is, if you look at it quite crazy. It’s behaving as though the rest of the world is a small economy, as though there’s the American economy – and then the rest of the world is this bit player. It just doesn’t seem to be looking at the data.

I guess that for me is where I always come back to too. Even if you just think things should change because that would be nicer, and for the ethical argument – it just seems to make sense either way.
I think particularly in the US position, if they did a real political take on it, then really they should be looking to renegotiate these things. They should’ve actually probably tried to renegotiate them during Obama’s period. Certainly they should be looking during the next presidency. Because, even if the Chinese economy slows down – suppose growth were to collapse to 4 or 5 percent – that’s still much more than the US economy’s going to be achieving. And it looks like Indian growth is on the rise at the moment. However you look at it, the longer the US leaves it, the smaller its economy is going to be, in global terms.

Because there’s been such a popular conversation around inequality, do you think there are some misconceptions, or perceptions about the issue, just with the public?
One of the positive things that I find in the very contemporary discussions about inequality, is there are far fewer people – both academics but also advocates – who are prepared to say inequality is a good thing. I mean, you go back to the 1980s, with Margaret Thatcher and Reagan, but even to the 1990s and that, then in a way there were quite significant numbers of people who would say, no, inequality is a really good thing. Because people get rewarded for taking risks and working hard, and that shows everybody else that they should take risks and work hard. That’s a very fine argument, apart from the fact that all of the evidence increasingly shows us that people who get control of vast amounts of resources then rig the game, so that nobody else can compete with them. They take on monopoly, or oligopolistic positions, and don’t allow other people to compete. I think it’s very positive that that argument is not made so much now. But still, and it’s particularly the case in the USA that still – I do find it amazing the middle classes, and the upper middle classes in the USA, are still inclined to think that their system is functioning. When social mobility in the USA is down.

The only way that you’re likely to be really wealthy in the USA now is by being born in a wealthy family. A few people may get through, through the internet, through these new companies, but essentially your parents’ economic position predicts your economic position. If you want to get into an Ivy League university, then be born of parents who went to Ivy League. Those things have changed. And that’s certainly the case in the UK. I find that certainly in my own position. I come from a council estate in Liverpool. I don’t think people on council estates in Liverpool get the sort of lives and opportunities, just absolutely unrelated, to do that. That sort of social mobility is no longer around. That’s, I think a real loss of opportunity for societies, and even for economies – that people, maybe with talent are likely to be constrained very early on, because they won’t get the education, or they won’t get the internship – because internships only go to rich kids, whose parents can let them take on non-fee paying internships. I think those sorts of things definitely need to be tackled. But certainly, I mean the way that Piketty’s book and Joe Stiglitz’ book and these sorts of books, and recently Tony Atkinson’s books on inequality have been debated, I think is a sign that people are getting concerned. Whether you’re looking at elite policymaking circles, or broader debates.

I guess hearing it from economists makes a difference too.
Hearing it from the economists makes a difference, but it is a pity when you focus only on the economists. Sometimes I talk like an economist, but I’ve never been trained as an economist, so I have to be very careful. But no, the problem with economists is they tend to use income and assets as their measures. But often, if you really want to get people excited, then it’s good to look at inequalities outside of those sorts of things. A very stark example, a couple of years ago my daughter was pregnant. I was quite worried about her health, and her blood pressure, all those sorts of things. But if you look at pregnant women inequalities, then you know – had she been in a West African country, it would be 200 times more likely she’d die, during the course of her pregnancy. 200 times more likely to die! That’s an enormous amount! I was worried about the small risks that she had when her blood pressure went up and there were signals. But 200 times more likely to die? Explain to me how that can be fair – because this woman was born in Mali, or born in Nigeria. She deserves that? I just can’t understand that. I think often if you look at health inequalities and those sorts of things, that’s when things really hit home.

I guess a very pertinent example at the moment is the refugee crisis. Do you have any thoughts on that?
Well, we were talking this morning – I haven’t seen the image yet, of the 3 year-old Syrian child, on the fronts of the newspapers, but I mean there’s a very stark example of inequality. A family, with a child, who felt that they had next to no prospects. That the only way that they could develop prospects for their child was by paying quite high fees to people smugglers, who’ve probably abused them along the process, and then have put them into a boat that’s sunk in the Mediterranean. Clearly, the problems that we’re facing at the moment are on quite a large scale, but essentially in Europe then the conversation about how to deal with them is not occurring at the moment. In the UK, we may not be part of Schengen, but we are part of humanity. We have made commitments to supporting refugees. And given the scale of refugees that are coming out of Syria, some of them out of Iraq and Afghanistan, where we engaged in wars that were meant to solve the problems, and therefore have some direct responsibility, then clearly having a conversation with sets of European partners about how we better manage this situation, how we accept refugees without creating a flow that we can’t manage, needs to be part of those discussions.

I think in a way the migration that we’re seeing at the moment is part of that. One’s got to watch that one doesn’t get mixed up with these things, and obviously a lot of the push over the recent weeks is coming from Syria and Iraq, and Afghanistan. But in a way, now that Europe’s friends in North Africa – people like Gaddafi are no longer around, then we’ll have to look at inequality between nations. The estimates vary between 17-25 times, but if the average wage in Europe is 17-25 times the average real wage in Africa, then what do you think’s going to happen? Africans aren’t stupid. They will move up here. We’re going to have to manage these things how they do. Obviously, particularly when you look at poverty reduction, then migration is probably one of the most effective ways of rapidly reducing poverty. And of redistributing opportunities.

I work on Bangladesh – the average Bangladeshi, who moves out of Bangladesh, within four or five years their real income is 10 times what it would have been in Bangladesh. And they’re sending resources back to Bangladesh which were unimaginable when they were part of that economy. These things help to reduce poverty in Bangladesh, help to create the sorts of talented manpower, demand for people who we need, particularly in Europe with a potentially ageing population. So, certainly looking at these inequalities between nations and trying to work out how we manage them – I mean, obviously no country is likely to open its doors and allow one or two or three million people in, in a year. That would be disruptive. But one could begin to work through what sort of flows of population one could manage, and how that would fit in and work these things out. But obviously, the politics in Europe have begun to work against this, with the rise of right wing parties that have a very strong anti-immigrant lie as their principle, that – all the problems we face are from the immigrants. Well, no, that’s clearly not the case.

What would you say to a working class person in, any of those countries who, for example is worried about immigrants coming and stealing jobs?
First of all, that the government needs to be very careful about working class people who are on vulnerable incomes, and are worried [about] austerity. First of all, you have to be listened to. Because you have problems and our government in the UK at the moment maybe is making you more insecure about those. But then, secondly just think about these migrants. Think about the migrants who you meet in your life. If you do actually picture those migrants then, for most people, those migrants are actually in the National Health Service. Thank goodness for all those Asians and Africans which are providing me, and particularly my aged parents with health services. I’ve had excellent services from Polish plumbers – many of these migrants are providing us with skilled and semi-skilled services, which we seem to appreciate. Certainly, if one looks into the sorts of ageing of the UK population which is going to occur, then we are going to need, certainly, to manage flows of people so that we keep a reasonable demographic balance in our population, and we don’t end up with an aged population that can’t take care of itself financially, or in practical terms.

I think one certainly needs to look at that closely. I think raising the minimum wage, and a whole set of devices like this, so that there are pressures on employers so that all people on low wages, be they recent immigrants, or working class people with generations of ancestors in the UK are on a decent wage, and can make a living out of it. It is at the bottom end of the labour market that you’ve got to look, because that’s often where the impacts are – certainly likely to be perceived. And if there are impacts, then that would be where one would have to look. But if there were negative impacts that doesn’t mean that you haven’t got policy tools that you could use to try and absorb those impacts. It may be that one would need to look at the flows of unskilled people, and it might be, by controlling the levels of unskilled people coming in, that you would in a way ensure that there’s not disruption to your more unskilled working class population in the UK. But you could also look at other tools, such as minimum wages, such as living wages, such as the forms of social protection that they’ve got. And whether training and skilling up would actually liberate them from being trapped in relatively unskilled labour.

So the resources are there, they’re available to accommodate X number of arrivals?
I’m moving out of things that I follow the statistics closely on, but certainly the evidence that I’ve looked at tends to indicate that, while perhaps 10-15 percent of arrivals may be UK resource-absorbing, 85 percent are not. So that fairly quickly, if you look at immigrants to the UK as a group, or to other parts of Europe, then in a way they’re more likely to make a dynamic contribution than actually take resources out of the system. But obviously, even if you put a large group of migrants into an area where there’s very little social housing, you’re going to create a problem of social housing. If you put at short notice a large group of recent immigrants into a schooling system when there’s not enough places for children, then you’re going to create that. So one has to find ways of getting around those problems.


David Hulme is Professor of Development Studies at the University of Manchester, and Executive Director at the Brooks World Poverty Institute.

Sarah Illingworth is a freelance journalist and Editor at Impolitikal. She has an MSc in Poverty & Development from the University of Manchester. Read more by Sarah.