Addressing Root Causes of Poverty:
Think Globally, Act Locally...or vice versa?
Jed Koball, Companionship Facilitator, Red Uniendos Manos, JH Peru
In recent weeks, the video Wealth Inequality in America, which calls attention to perceptions, ideals and realities of wealth distribution in the United States, has been circulating through social media. It makes the startling claim that 1% of the population controls 40% of the wealth, and that 50% of the population owns only 0.5% of stocks and bonds held in the U.S. These are just two of many gross figures of inequality presented in the video. This reality of unequal wealth distribution, according to the producer, paints a picture far more dramatic than what the population at large actually perceives wealth distribution to be in the U.S., and it is much more dramatic still than what 92% of the population believe ideal wealth distribution should look like in the U.S. Suffice it to say, the gap between the rich and the poor is of concern to people in the U.S., and one could conclude that addressing this gap should be a priority.
But, as I reflect on the video I am reminded that this particular conversation about poverty and wealth distribution pertains to the United States. I live in Peru. As a former Young Adult Volunteer (YAV) in the Philippines, a development worker in Nicaragua, and now a Mission Co-worker based in Lima, this conversation about poverty invites a question I have wrestled with for years: why go around the world to address poverty when poverty exists at sobering levels across the U.S?
Initially, I find myself in a defensive position when faced with this question, recalling a litany of responses I have learned to repeat and even preach:
- ¨For God so loved the world...¨ (John 3:16) If God´s love for us is not bound by national borders, why should our response?
- ¨An injustice anywhere is a threat to justice everywhere¨ (Martin Luther King, Jr.)
- And of course, a personal favorite I used to employ when serving as an Associate Pastor of a affluent church in New York where I helped lead mission trips abroad - ¨it is a life-changing experience!¨
Don´t get me wrong. There is validity in each of these responses and others as well. But, none of these responses singularly or collectively have been able to reconcile a conflict I feel within myself when faced with this challenging question about serving abroad – a question that I trust comes from a place of compassion for the poor in the U.S. and not contempt for our neighbors around the world.
In time, I have come to realize that no answer will ever reconcile this internal conflict – not because there is a problem with participating in global mission, rather there is a problem with the question itself. The question assumes that poverty in the U.S. exists in a vacuum, distant and unrelated to poverty around the world. Similarly, it assumes that effective response to poverty can only be done at the local level (social services, job training, development projects, etc.)
At a time when some may question why the church is dedicating resources to address global poverty when we have increasing poverty in the U.S., I contend that for the very reason that poverty exists in startling numbers in the U.S. that we must engage more deeply, carefully, and prayerfully in global mission. If we are serious about addressing poverty, then we must do so not only at the local level and in hands-on ways (which are very legitimate responses!), but also at the global level and in strategic ways. For us to more fully comprehend and effectively address root causes of poverty, we must do so together with our global partners.
Our global partners in Peru, Red Uniendo Manos Contra la Pobreza, together with Presbyterian churches in the U.S. have been doing this for over a decade. Their story begins in the Andean town of La Oroya, Peru. Recently named one of the five most contaminated cities in the world, 99% of the children of La Oroya have severe and chronic lead poisoning. The source of contamination in La Oroya is a metals smelter owned by the New York based corporation Renco Group whose sole investor is a billionaire from Brooklyn - Ira Rennert. While Mr. Rennert profited hundreds of millions of dollars over the past decade, his investment in Peru failed to comply with Peruvian environmental standards.
It was enough to know that a U.S. corporation was responsible for the impoverished health of children in La Oroya in order to engage Presbyterians in the U.S. in a campaign to hold the corporation accountable. It was more still to learn that the Renco Group was also the owner of a lead smelter in Herculaneum, Missouri that also contaminated the air and soils, disregarding the law and poisoning a community.
For nearly a decade, Presbyterians in the U.S. together with our global partners in Peru worked prayerfully and carefully to expose this billionaire of his wrongdoing and to demand that local and national governments, both in Peru and the U.S., hold him and his companies accountable. They were largely successful in not only gaining international media exposure to this injustice but subsequently achieving the increased enforcement of environmental regulations in both places.
But, in 2009, an unexpected twist revealed that the root cause of injustice in La Oroya and Herculaneum was not just one irresponsible corporation, rather an economic and political structure that allowed the corporation to get away with running roughshod over the basic right of people to breathe clean air.
In 2009, a free trade agreement between Peru and the U.S. was enacted. At precisely the same time, Renco Group, claimed that its investment in La Oroya was going bankrupt and that it would not be able to fulfill its environmental responsibilities. It asked for a bailout from the Peruvian government. Initially, we believed it was merely taking advantage of fallen metals prices due to the recent global economic crisis and that the timing of the trade agreement was a mere coincidence. It was not until over a year later that we realized how calculated this move was.
In 2010, after having been denied a bailout, Renco Group filed an $800 million lawsuit in an international tribunal against the State of Peru, claiming that the Peruvian government had violated Renco Group’s investor rights as stipulated in the 2009 U.S. – Peru Free Trade agreement. It argued that Peru’s enforcement of environmental regulations was more costly to the corporation than had been indicated when it first invested in the metals smelter. According to its interpretation of the Investment Chapter of the trade agreement, this constituted an “indirect expropriation” of its investment, thus entitling it to sue the government in an international tribunal not only for losses incurred but for speculated lost profits in the future. In essence, the one who had victimized children’s right to breathe clean air in La Oroya was now itself claiming to be the victim. Because of this lawsuit the gains in environmental justice in La Oroya have been set back. Children today continue to breathe poisoned air.
This lawsuit is but one of hundreds of such lawsuits being filed by foreign investors around the world taking advantage of investors’ rights clauses found in almost all free trade agreements. Across the globe and even in the U.S.!, foreign investors are suing state governments for hundreds of millions of dollars, claiming that democratically constructed public policies that citizens must abide by do not apply to foreign investors if it costs them profits. These lawsuits not only cost governments potentially large sums of money, but worse they undermine the sovereignty of the state and make a mockery of democracy as public policies and basic human rights are disregarded, giving way to the investor´s right to make a profit.
In 2011, Presbyterians together with our global partners in Peru launched a trade reform campaign called “No Greater Rights for Foreign Investors.” Inspired by the words of the prophet Ezekiel, who cried out to the King of Tyre, “in the abundance of your trade you were filled with violence and you sinned” (28:16), the campaign is demanding a reform of trade agreement chapters on investment, including the right of foreign investors to sue governments in international tribunals. This initiative is further supported by the charge from the 215th General Assembly (2003): “Oppose multinational actions and trade agreements that elevate rights of corporations over the right of governments and indigenous peoples to pass and enforce laws that preserve the public good and protect their citizens, economies, and environments.”