Fair sum of $20,000 for every have-not

Toward the end of 2006, the OUN-WIDER published statistics according to which more than half residents of this planet were living in misery; their incomes did not exceed $2,200 and they shared one percent of the world’s wealth. If all money available at the time were to be split even among the citizens of the earth, each would receive $20,500.

Dr. Anthony F. Shorrocks, director of UNU-WIDER (Helsinki), held lectures in Kyiv recently, focusing on this unfair distribution of funds. He was invited to visit Ukraine by the Kyiv School of Economics, in collaboration with the Finnish embassy. Dr. Shorrocks is a leading expert in poverty assessment and analysis. He held an open lecture entitled “Changeable World Well-Being Controlling Models.” He delivered it to an audience made up of participants in a Kyiv Economics School conference and guests from other higher education institutions in Ukraine and Belarus. Before the lecture Dr. Shorrocks kindly granted an interview to The Day, considering that this newspaper acted as a media partner of the project.

Dr. Shorrocks, has the world financial crisis affected the predicted scope of poverty?

“There is no concrete answer to this question now. During my lecture I will provide data relating to 2000 and 2005. Regrettably, no updated data is available. Obtaining it will take time. Our statistics indicate that the distribution of [personal] incomes has not changed since 2006. It is possible to assume that rich people in Ukraine and Russia are strongly influenced by the foreign exchange fluctuations. Under the circumstances, people who are doing business using these fluctuations are in the front ranks on the world market.

“When rich people start losing money, more often than not they end up having something left. When this happens to poor people, they lose all their savings after losing their jobs; they also suffer health problems; they can no longer live the way they used to. Their ability to start a business of their own is limited by the sum on their savings bank accounts. Also, the rich and the poor have a different kind of access to bank loans.”

Do you think we could expect a cardinal redistribution of material resources after this world economic crisis?

“I don’t think so. There will be no global redistribution. People in possession of great wealth will be replaced. Let me give you an example. Picture a two-room apartments whose tenants keep changing, yet whose percentage ratio remains the same. I should also point out that the differences between certain countries can change, once again due to the exchange rate oscillations.”

Which countries do you think stand a chance of adding to their wealth and which are on the losing side? Which countries will become the most prosperous ones 50 years from now?

“China stands a good chance of getting ahead of Japan in 50 years, because most of the Chinese have the same personal incomes. At the same time, India is a country inhabited by very rich and very poor people. Its middle class is not as strong as that in China. As for Arab countries, we do not expect any global changes there; some individuals will make a name for themselves there, rather than countries.

“The United States is in for a decline, although the situation won’t get serious enough for this country to fall apart. They have their superior technologies — it’s just that the US will find other rivals in doing business. This country is faced with a worsening situation now that China is getting stronger. Anyway, they will keep their number one status in the world, even though the competition is getting tougher.

“Likewise, it is hard to say anything about the situation in Russia in so many words. This isn’t a homogenous country. Here everything depends on the cost of its [energy] resources. If you can tell me how much they will cost, I will tell what will happen to Russia.”

What about Ukraine?

“Unfortunately, I don’t know much about Ukraine, although I can say that it has much in common with Russia. Interestingly, both Ukraine and Russia could take steps to improve the situation with their poor. Here combating corruption comes first. This is very important, for this will enable them to take a step forward. Also, the national interests should be defended on a proper level.”

Do we stand a chance any time soon of improving the global situation with poverty as it was before the world crisis?

“We would want poor people to get richer, of course. There is a great deal to be done to solve this problem. Above all, we need to protect the property rights. If poor people cannot have their property legally protected, this will not improve their status. Such laws are ambiguous in Ukraine and Russia. There are also countries without these laws. Another important aspect is the way to preserve one’s capital. Poor people often have no access to deposit accounts.”

What steps, measures, or strategies would you recommend to the world’s leading countries and the heads of state in order to successfully combat poverty and improve humankind’s material condition in the near future?

“I have no secrets with regard to combating poverty in time of crisis. There are so many overstatements. People are mostly pessimistic, but I am optimistic. I believe that the situation in some countries will have improved by the end of the year. I visited London recently and I found no alarming signs of a global crisis. There were no signs that something awful was happening.”

Could you suggest a way to propagate your optimism among our people and mitigate their fears?

“Social programs are very important in this context. They protect people. Such social programs are very effective in Finland and Norway. Even if one loses one’s job or has to work part time, one is sure to be aided by the state. That’s why there is no panic there. Panic is where people are not protected.”