The good news is that gains have been made in reducing poverty. Between 1990 and 2010 – a period when communism fell and markets opened – the percentage of people living in extreme poverty in developing economies dropped by half, to 21 percent.
Still, that still leaves more than 1 billion people surviving on $1.25 or less a day. As Nelson Mandela once said, poverty is not an act of nature – it's a man-made problem that can be overcome and eradicated by the actions of us all.
The World Bank has set an ambitious goal of bringing the last billion people out of extreme poverty by 2030, and it's an endeavor we all should support. It truly will "take a village," because the World Bank can't end poverty solely through its development work.
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The question then is what more can be done and, not surprisingly, there are reasonable differences on the other tactics we should employ. For instance, some call for forgiving the debts of poor countries, while others advocate for micro-financing programs that provide loans at the grass roots.
There's another solution that has gotten little attention, yet is sitting right before us: enacting trade reforms that make it easier for every artisan, every entrepreneur, and every peasant farmer to sell their goods freely in other markets.
At UPS, we've always believed in the enabling power of trade, and I'm heartened this sentiment is gaining currency in development circles. For instance, the World Bank noted in a 2009 report that "sustained long-term poverty reduction depends on stimulating economic growth, which in turn depends on trade policy reform."
History shows that nations that open their economies to trade become more prosperous over time. Liberalizing trade creates the supply and demand that prompts businesses to hire more employees, which in turn enables these workers to feed their families.
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