Guest post by Indur M. Goklany
On its website Oxfam reminds us that its name comes from the Oxford Committee for Famine Relief. Today it claims to work to “find lasting solutions to poverty and injustice.” So imagine the surprise when I read on WUWT that Oxfam is now pushing an international tax on maritime transport.
Why the surprise?
Such a tax would increase the price of all goods that are traded via shipping. First, it would add to the difficulties that many developing countries have in meeting their demand for food. In particular, a substantial share of the food consumed in developing countries is imported:
- In least developed countries, cereals account for 57% of the calories consumed. But net imports of cereals amount to over 15% of domestic production. [Data from FAOSTAT.]
- In Africa, cereals account for 50% of food calories consumed, but net imports amount to 41% of indigenous production.
Thus, even a small increase in the price of imported crops would push many who are already living on the margin in these areas into poverty and hunger. The UN Food and Agricultural Organization estimates that 925 million people suffer from chronic hunger worldwide. Adding to these numbers would seem to be antithetical to the purpose of the Oxford Committee on Famine Relief.
Second, a tax that would increase the price of traded goods would reduce trade and, with that, economic growth. But economic growth is the best antidote to poverty. Historical experience shows that poverty is reduced fastest where economic growth is greatest, as suggested by the following figure.
This figure shows that the most spectacular reductions in poverty occurred in East Asia and the Pacific, where the number of people living in “absolute poverty” (defined as living on less than $1.25 per day in 2005 dollars), dropped from 1,071 million to 316 million between 1980 and 2005. And as anyone who has bought anything in the past few years ought to know, their economic growth was driven substantially by trade.
To summarize, despite Oxfam’s claim that it works to “find lasting solutions to poverty and injustice,” the policies it pursues assures that it will never be out of a job.