Women’s National Democratic Club

The National Security Implications of Global Poverty

Good Afternoon. Thank you, for that kind introduction. It is an honor to be back before the Women’s National Democratic Club. I am especially pleased to address a subject I believe gets far too little attention in this town. That is: global poverty and why it matters to the American people.

In this sense, Washington is, again, a bit of an anomaly. For this year, alone, no less disparate a collection of characters than actors Sharon Stone and Will Smith, musicians Bono and Bob Geldof, Nelson Mandela, UN Secretary General Kofi Annan, and British Prime Minister Tony Blair have declared 2005 the year the world must take dramatic action to “make poverty history.”

Like the Jubilee 2000 and AIDS campaigners before them, evangelical Christian groups have joined with Live-8 rock stars and NGO activists to galvanize public support for an ambitious global poverty reduction agenda. The ONE Campaign to Make Poverty History, symbolized by a white wrist band, is gaining grassroots momentum throughout the country.

This year’s G-8 meeting was their first target of opportunity followed by the UN Millennium Review Summit last month. In December, WTO Ministers will meet in Hong Kong to determine whether it will be possible by 2006 to fulfill the promise of the “Doha Development Round.” As the U.S. government and American people consider their response to this agenda, they should bear in mind that global poverty is neither just hip nor solely a humanitarian concern. In real ways, it can threaten U.S. national security.

Today, more than half the world’s population lives on less than $2 dollars per day, and almost 1.1 billion people live in extreme poverty, defined as less than $1 dollar per day. For the indigent, who lack clean water, food and medicine, poverty is a killer -- the most proximate security threat they face. Yet, it is not just those in remote places who die from poverty. In a world in which threats are increasingly transnational, persistent poverty in far away places undermines the security of Americans here at home. The end of U.S.-Soviet competition, the civil and regional conflicts that ensued, and the rapid pace of globalization brought to the fore a new generation of dangers. These are the complex nexus of transnational threats – infectious disease, environmental degradation, international crime and drug syndicates, proliferation of small arms and weapons of mass destruction and, of course, terrorism. Each eludes easy government control. None respects either borders or super power.

Rarely do these threats remain confined to countries on the margins of globalization. The map of vulnerable zones ranges from the Caribbean, parts of Latin America and Africa to Central Asia, from the Caucasus and the Middle East to South and East Asia. 53 countries around the world have average per capita GDP of less than $2 per day. Each is a potential weak spot in a world in which maximal cooperation from states everywhere is necessary to reduce and contain transnational threats. Indeed, global poverty, itself, indirectly but substantially, threatens U.S. national security. Allow me to elaborate.

Poverty and Conflict

Civil and regional conflicts cost lives and ruin economies but they can also incubate virtually every type of transnational threat by creating the optimal anarchic environment for external predators. Al Qaeda established training camps in conflict-ridden Sudan and Afghanistan and purchased diamonds from the West Africa conflict zone of Sierra Leone and Liberia. Al Qaeda also raised recruits in Chechnya, Bosnia and Kashmir. It targeted American soldiers in Somalia and, now, Iraq. Arms merchants as well as criminal and drug syndicates have profited from conflict zones in Colombia, Bosnia and Tajikistan. New diseases, like Ebola, Marburg, and West Nile spread from war-torn Congo, Angola and Uganda. Biodiversity, such as the mountain gorillas of Rwanda, can be lost in war zones.

Conflict, even in distant places, may impact the United States more directly -- by spurring refugee flows, interrupting the supply of crucial commodities, and degrading potential export markets. Conflicts often result in costly humanitarian emergencies, destabilize whole sub-regions and, sometimes, necessitate outside intervention. U.S. forces have deployed in recent years to evacuate American citizens, provide humanitarian assistance, restore order, or keep the peace in the Balkans, East Timor, Somalia, Liberia and Haiti. The British and French recently sent troops to Sierra Leone, Cote D’Ivoire, the Central African Republic and eastern Congo.

Among the important drivers of such costly conflicts is poverty. Numerous studies demonstrate that declining national income, low GDP per capita, primary commodity or natural resource dependence, and slow economic growth increase the risk and length of civil conflict. A country at GDP per capita of $250 has, on average, a 15% risk of experiencing civil war within the next five years. At a GDP per capita of $5,000, the risk of civil war is less than 1%.

Poverty and Disease

Disease poses an additional threat to U.S. national security. At least thirty new diseases have surfaced globally in the last three decades, while twenty previously detected diseases have re-emerged in new drug-resistant strains. Today, more than two million people cross international borders daily. The confluence of accelerating globalization and newly emergent diseases has proved deadly for Americans and others in the developed world. AIDS, SARS, Hepatitis C, antibiotic-resistant TB, dengue fever and West Nile virus are just a few of the newly discovered infectious diseases that have spread from the developing world to the U.S. or other wealthy countries.

Marburg virus, a remarkably contagious hemorrhagic fever, erupted in rural Angola last fall and has already killed at least 329 people. If just one infected person arrives in the slum-infested capital, Luanda, and comes in contact with one of the thousands of U.S. expatriates working in the oil sector who travel regularly back and forth to the U.S., Marburg could make its way to Houston.

Health experts’ most alarming predication is that the H5N1 strain of avian flu, which is rampant in poultry stocks in about a dozen Asian countries and now Europe, will soon mutate into a virus easily transmitted from human to human. If this occurs, WHO’s conservative estimate is that a pandemic could erupt killing between 2 million and 7.4 million people. An additional 1.2 billion would fall sick and 28 million would require hospitalization. A worst case estimate is that more than 60 million could die, exceeding the 40 million who perished in the great influenza epidemic of 1918-1919.

HIV/AIDS has already cost the world over 20 million lives. With more than forty million infected, this pandemic is the greatest killer of our time. Having decimated America’s gay community in the 1980s, it is now the single biggest killer of African American women aged 25 to 34. As President Clinton determined in 2000, AIDS also threatens U.S. security. It weakens fragile states by hollowing out their militaries, stealing their most productive citizens, and leaving behind masses of orphans, who may turn to combat, crime or terror to survive. HIV/AIDS also may slow growth and deter investment in key emerging markets like South Africa, India, China and Brazil.

Poverty contributes substantially and often directly to the spread of infectious disease. By spurring population growth, contributing to immune-compromising malnutrition and exacerbating crowding and poor sanitary conditions, poverty fuels the transmission of disease. Water-borne diseases now account for 90% of infectious disease in developing countries. Roughly two million people will die this year of tuberculosis, most in the developing world, but the U.S. has also seen a resurgence of antibiotic resistant tuberculosis, especially in immigrant populations. Further, as the search for clean water and fire wood drives impoverished people deeper into forested areas, the risk of animal contact and exposure to new pathogens increases.

AIDS and malaria are endemic in many poor regions, though the causal link with poverty is disputed. There is no doubt, however, that both diseases dramatically erode economic growth. While AIDS began in many places as a killer of the upper echelons of society, it is now prevalent in poor communities in the U.S., China and Africa. Poverty and unemployment may drive prospective workers to leave home in search of work, such as to mining hostels in South Africa, where promiscuity is common and condom use is rare. Impoverished women, lacking education and awareness about disease transmission, or simply powerless, may engage in prostitution to feed their children. Without access to testing and treatment, many transmit the disease unwittingly to their partners and newborn children.

At the same time, poor states almost universally lack adequate health infrastructure, diagnosis and treatment regimes, and disease surveillance. According to the World Health Organization, low and middle income countries suffer 90% of the world’s disease burden but account for only 11% of its health care spending. The lack of health infrastructure and surveillance capacity does not just kill Asians and Africans. By contributing to the late detection and poor treatment of new and re-emergent diseases, they reduce the capacity of host countries to contain outbreaks, such as Marburg or avian flu, before they spread. The economic, health and security consequences of these weak links in the global public health chain are potentially as dire for in the United States as they have proved deadly in the developing world.

Poverty and Environmental Degradation

Environmental degradation in the developing world can also have long-term adverse consequences for the U.S. Loss of biodiversity alters delicate ecosystems, reducing the world’s stock of diverse flora and fauna, which have produced important medical benefits for mankind.

Deforestation is increasing, due to clearing of trees to open arable acreage in marginal areas. Logging for trade in exotic African and Asian hardwoods has magnified the problem, resulting in the loss of 2.4% of the world’s forest cover since 1990. Desertification is also spreading to the extent that two billion hectares of soil, or 15% of the planet’s land cover, is already degraded. Although carbon emissions in rich and rapidly growing economies are the main culprit, desertification and deforestation can accelerate global climate change. Global warming is already rendering coastal areas more vulnerable to flooding and expanding the zones into which mosquito-borne and other tropical diseases can reach.

Much of the world’s environmental degradation can be attributed to population pressure. From 1950 to 1998, the world’s population doubled. It has grown a further 14% in the last ten years to 6.4 billion. By 2050, global population is on track to reach nine billion. This growth has occurred disproportionately in the developing world. Poverty substantially fuels this growth, as families have more children in response to high infant mortality and in order to increase income potential.

Poverty and International Crime and Narcotics Trafficking

Transnational crime syndicates pose another type of threat. They reap billions each year from illicit trafficking in drugs, hazardous waste and chemicals, humans, endangered species, and weapons – all of which reach American shores. Terrorist groups have raised funds through tactical alliances with transnational criminal syndicates operating in lawless zones from the Philippines to Afghanistan to the Tri-border region of South America. In turn, trade in illicit goods and arms helps to perpetuate conflict, thereby creating durably hospitable environments for terrorists.

Low-income states are often weak states that lack effective control over substantial portions of their territory and resources. Conflict, difficult terrain and corruption render them even more vulnerable. Under-resourced and poorly trained immigration and customs officials as well as police, military, judiciary and financial systems create vacuums into which transnational predators can easily move. Where ecological conditions permit, poverty also fosters ideal socio-economic conditions for drug production, as in the Andes, parts of Mexico, and South Asia. Where production is difficult, drug trafficking may still thrive, as in Nigeria and Central Asia. Not surprisingly, the drug couriers, human slaves, prostitutes, petty thieves, and others drawn into global criminal enterprises often come from the ranks of the unemployed or desperately poor.

Poverty and Terrorism

Finally, poverty contributes, indirectly but significantly, to transnational, anti-U.S. terrorism perpetrated by sub-state actors such as Al Qaeda. While there is much debate over whether poverty causes individuals to become terrorists, this question misses the larger picture, which is poverty’s role in facilitating terrorist activity at the country level. Nevertheless, the controversy bears some scrutiny, if only because it has gained currency.

Skeptics argue that the 9/11 hijackers were predominantly middle class, educated Saudis, so poverty cannot bear any meaningful relationship to terrorism. Others note that the poorest are struggling merely to survive and have no capacity to plan and execute terrorist acts. They claim that, if poverty spawned terrorism, there would be a lot more terrorism in the developing world.

Such analyses are unconvincing in several respects. First, a significant body of contrary evidence undermines the argument that socio-economic conditions are unrelated to the recruitment of terrorist foot soldiers, if not their leaders. Poverty, vast income disparities, joblessness, and lack of hope for the future may engender sufficient levels of fatalism, perhaps especially among educated, but under-employed youth, to render them vulnerable to recruitment by radical groups linked to terrorists.

The social and economic circumstances under which Al Qaeda and militant Islam emerged in the Middle East, Southeast Asia, Central Asia and North Africa also belie this sweeping conclusion. In the greater Middle East, the emergence of a youth bulge in the 1970s was followed by the rise of political Islam. Many of these countries suffer from high unemployment rates, an exploding labor force and stagnant real wages. For several decades, Saudi Arabia, home of many 9/11 hijackers,Guantanamo detainees and foreign fighters now in Iraq has experienced declining GDP per capita at times greater than almost any other country in the world. In Southeast Asia, the educational and legal systems of several countries fell apart in the wake of the 1997 Asian financial crisis, creating a void which has since been partially filled by radical institutions and madrassas. Numerous analysts hold that Al Qaeda has gained adherents and global reach in part by seizing on the hopelessness and despair of aggrieved Muslims in all of these regions.

However, the primary flaw in the conventional argument that poverty is unrelated to terrorism is its failure to capture the range of ways in which poverty can exacerbate the threat of transnational terrorism -- not at the individual level -- but at the state and regional level. Poverty bears indirectly on terrorism by sparking conflict and eroding state capacity, both of which create conditions that can facilitate terrorist activity.

Poor countries with limited institutional capacity to control their borders and coastlines can provide safe havens, training grounds, and recruiting fields for terrorist networks. To support their activities, networks like Al Qaeda have exploited the territory, cash crops, natural resources and financial institutions of low-income states. It is estimated that 25% of the foreign terrorists recruited by Al Qaeda in Iraq have come from North and Sub-Saharan Africa.

Militants have also taken advantage of lax immigration, security and financial controls to plan, finance and execute operations in Kenya, Tanzania, Ethiopia and Indonesia. Al Qaeda is now believed to have extended its reach to approximately 60 countries worldwide.

Country-level poverty may also weaken state capacity to provide essential human services, and thereby, render states more vulnerable to predation by terrorist networks. In low-income countries, social and welfare services are often inadequate, creating voids in areas like nutrition, education and health that may be filled by radical NGOs or madrassas. In Mali, Somalia and Bangladesh, for example, international Islamic charities are closing the welfare gap, and terrorist activity is reportedly on the rise. In Yemen, and most recently in Pakistan following the earthquake, radical charitable groups associated with terrorist organizations have delivered social welfare services when governments fail to do so. In this fashion, terrorist groups garner public support, while also using such charities to fundraise.

In sum, poverty plays a complex and dual role in facilitating the emergence and spread of transnational security threats. First, it substantially increases the risk of conflict, which in turn serves as especially fertile breeding grounds for such threats. Second, poverty, more indirectly, can give rise to conditions at the local or state level that are conducive to each of these transnational threats. Beyond degrading human security, it can severely erode state capacity to prevent or contain such threats, each of which can create such adverse conditions within and beyond state boundaries that poverty is, in turn, increased. Thus, a downward spiral or extreme doom loop is set in motion, in which poverty fuels threats that contribute to deeper poverty, which intensifies threats. Discerning and disaggregating this dangerous dynamic is essential to grasping the important, if complex, national security rationale for far greater U.S. and international action to reduce global poverty.

Conclusion: Breaking a Doom Spiral?

Given this doom loop, what are we doing about global poverty? Momentum for action is building in several capitals. Based on recent donor country commitments, the OECD now estimates that overall ODA flows to developing countries will increase by at least $50 billion by 2010. Sixteen of the world’s twenty two major donor countries including France, the UK, Germany, Italy and Greece have pledged to meet the 2002 Monterrey Financing for Development Conference target of devoting 0.7% of their gross national income to overseas development assistance. Japan promised to double aid to Africa within three years. While not yet committing to 0.7%, Canada recently promised to double by 2010 its development assistance over 2001 levels. G-8 leaders agreed at Gleneagles to increase development assistance to Africa by $25 billion annually by 2010, nearly $17 billion of which will be financed by European countries. The major outlier is Washington.

Indeed, President Bush has ruled out raising the U.S. up from the current 0.16% of per capita gross national income spent on development assistance (which places the U.S. second to last among OECD countries) to the Monterrey target of 0.7%. On the eve of the G-8 Summit, President Bush pledged to double aid to Africa by 2010, but relatively little of that additional $4 billion represents new money. Rather, the President can meet this goal simply by keeping his earlier promises to fully fund his Millennium Challenge Account and HIV/AIDS initiative. The President also claims to have “tripled” aid to Africa over the last four years; in fact, total U.S. assistance to Africa has not even doubled. It has increased 56% in real dollars (or 67% in nominal dollars) from FY 2000 to FY 2004, the last completed fiscal year.

More than half that increase is emergency food aid -- not assistance that alleviates poverty. Overall, the U.S. pledge toward the G-8 goal is small compared to Europe’s, given the relative size of the U.S. economy. It also falls well short of the customary minimum U.S. contribution to multilateral funding instruments of at least 25 percent, or $6 billion.

The recent G-8 agreement to cancel debt to the 18 poorest nations which are committed to good governance, while providing additional resources to maintain development bank lending, is an important step. Yet, partial debt cancellation and relatively modest aid increases to Sub-Saharan Africa seem to mark the current limit of the Bush Administration’s will to reach the UN Millennium Development Goals (or MDGs).

Achieving the MDGs would lift more than 500 million people out of extreme poverty and enable over 300 million to live without hunger by 2015. It would also ensure universal primary education and reduce by two-thirds mortality rates for children under five. If the 2015 goals are met, Columbia University economist Jeffrey Sachs predicts that extreme poverty can be “substantially eliminated” by 2025.

According to the UN Secretary General, the most important elements for developed countries on the global poverty reduction agenda are: 1) increasing development assistance to 0.7% of rich countries GNI by 2015; 2) substantial additional contributions to the Global Fund for HIV/AIDS, Tuberculosis and Malaria; 3) elimination of agricultural subsidies and export credits that squeeze poor farmers out of the global market; 4) and duty-free, quota-free market access for all exports from least developed countries. To date, the Bush Administration has shown little practical readiness to implement these crucial next steps.

To some Americans, the investments and policy shifts required of the U.S. to make meaningful progress on global poverty reduction appear unaffordable and, to others, undesirable. Opening U.S. markets to goods from the least developed countries may cause further short-term job loss in sensitive sectors in the U.S. Polls show most Americans already think we spend too much on foreign aid. When asked how much they think we spend, the answer is typically 10-15% of the federal budget. When asked what we should spend, they say roughly 5%. Few know we actually spend less than 1% of the federal budget on foreign assistance.

To devote 0.7% annually of our national income to overseas development assistance would cost about $80 billion – a great sum in an age of rampant deficits, approximately equivalent to the cost of the 2002 Farm Bill, the latest supplemental appropriation for Iraq, almost a fifth of the defense budget, or almost $20 billion more than has already been spent as a down-payment on hurricane recovery. Moreover, when we have just been painfully reminded of the ghastly poverty that persists here in America, it is legitimate to ask: why we should even bother fighting poverty in Africa? And given conflict, corruption and fragile states, many wonder whether more aid to developing countries would not simply be pouring ‘money down a rat-hole?’ Can foreign aid ever make a lasting difference?

Increasingly, there is convincing evidence that foreign aid can make a crucial difference, especially in countries lacking resources to jump-start rapid economic growth. In Taiwan, Botswana, Uganda and Mozambique, foreign assistance successfully helped build the foundation for development. South Korea was able to create millions of jobs while receiving nearly $100 per person in today’s dollars of aid annually from 1955 to 1972. Botswana, the world’s fastest growing economy between 1965 and 1995, received annual aid flows averaging $127 per person during this period and rapidly expanded diamond exports. A recent study by the Center for Global Development finds that, irrespective of the strength of a country’s institutions or the quality of its policies, certain aid flows have strong pro-growth effects, even in the short-term. Not only is aid beneficial, on balance, but its effectiveness has also improved since the 1980s. Nevertheless, it will take more than large, well-targeted aid flows to “make poverty history.”

The most important ingredients are improved economic policies and responsible governance in developing countries. Yet those alone will not suffice. Rich countries will need to drop trade distorting subsidies, further open their markets, encourage job creating foreign investment, cancel debt, play a more active role in preventing and resolving conflicts, as well as assist recovery of post-conflict societies.

For the U.S. to meet this challenge, it will require a near tectonic shift in our national security policy. Policymakers must first come to view transnational security threats as foremost among our potential enemies. They must then embrace a long-term strategy in partnership with other developed countries to counter these threats. Such a strategy should be based on the imperative to strengthen weak states’ legitimacy as well as their capacity to control their territory and fulfill the basic human needs of their people. We must invest in the twin pillars of promoting sustainable democracy and development. Finally, the President and Congress must commit the resources to finance this strategy and see it to fruition. It will be expensive to do so. It may well be politically unpopular to do so. But we can be virtually certain over the long run that Americans will pay more dearly, if our leaders fail to appreciate the risks and costs to the U.S. of persistent poverty throughout the developing world.

Thank you.