I CANNOT think of anyone who would defend the position that people should live in abject and absolute poverty. Of course, we would all like to see poverty made history — but several issues trouble me about the current state of the debate in the run-up to the Gleneagles G8 meeting, dominated, as it is, by the strong implication that generous donations of aid and debt forgiveness can significantly ameliorate, if not “cure”, poverty, especially in Africa.

The first issue is the almost exclusive focus on the poor in sub-Saharan Africa to the exclusion of the poor in other parts of the world, especially in the populous region of South Asia. According to World Bank data, there were about 430 million people living on less than $1 a day, their definition of extreme poverty, in South Asia in 2001, compared with about 315 million in sub-Saharan Africa. Moreover, some parts of Africa are richer than South Asia. GDP per capita data for South Africa, Botswana, Namibia and Gabon, for example, are higher than for India and, especially, Bangladesh, which is a poor country by any definition.

Granted, the situation in South Asia is improving, whereas the position in sub-Saharan Africa has deteriorated over the past 20 years. In 1981 more than 50 per cent of South Asia’s people lived in extreme poverty, whereas “only” 32 per cent were in this situation in 2001, reflecting the benign effects of economic growth in that region. In sub-Saharan Africa, the proportion of people in extreme poverty actually rose from 42 per cent to 47 per cent over the same 20-year period.

Moreover, World Bank projections suggest that there will be a far higher proportion of sub-Saharan Africans living in extreme poverty in 2015 (45 per cent of the projected population, nearly 320 million people) than South Asians (18 per cent, nearly 310 million people). And, on other indicators, not least of all the prevalence of HIV/Aids, Africa is clearly disadvantaged compared with South Asia. The incidence, persistence and depth of the extreme poverty in sub-Saharan Africa clearly cannot be dismissed and, doubtless, this explains the relative neglect of South Asian poverty. But it surely does not justify the lack of balance in the debate.

The second issue relates to the relative lack of discussion about the actual drivers of economic growth — assuming that it is generally accepted that economic growth will, other things being equal, “make poverty history”. The necessary conditions for growth are well-known and, I believe, reasonably uncontroversial. They include a stable and peaceful political environment (no wars); reasonably incorrupt and honest and fiscally prudent governments; efficient administrations; respect for property rights and the rule of law; open economies; and market-oriented and business-friendly tax and regulatory regimes.

Yet time and time again these conditions are flouted, especially, though not exclusively, in Africa. The brutal corruption of, for example, Robert Mugabe’s regime in Zimbabwe rightly is discussed, but all too infrequently discussed are the less headline-grabbing difficulties that businesses face daily, such as stultifying red tape and inadequate protection of property rights.

The World Bank’s business survey of 145 countries showed that four fifths of the 20 countries with the most difficult business conditions were in sub- Saharan Africa. It found that heavy regulation, bureaucratic delays and weak property rights were significant disincentives to creating and investing in African businesses. For example, it took 153 days to start a business in Maputo, Mozambique, but only two days in Toronto.

Economic growth does make poverty history. According to the World Bank, there were 390 million fewer people living in extreme poverty in 2001 than in 1981. This reflected, overwhelmingly, the rapid economic growth in China and, to a lesser extent, in India. In turn, these growth success stories reflected internal reforms rather than external, imposed actions, with the contributions of the rich countries being mainly through trade and investment, not through development aid.

If aid had been a major driver of growth, Africa would have been a star performer. Between 1975 and 2000, aid to sub-Saharan Africa averaged $24 per capita a year, compared with $5 per capita for South Asia. Yet over this period GDP per capita grew by an annual average rate of nearly 3 per cent in South Asia, compared with an annual average fall of 0.6 per cent in sub-Saharan Africa.

The conditions for wealth creation and economic growth, therefore, clearly depend on the domestic policies of individual and sovereign governments themselves — including, crucially, those of sub-Saharan Africa — and the entrepreneurial initiative of the people. They do not, on the whole, depend on the political actions of external governments and institutions. At best, aid may, peripherally, be positive; at worst, aid may do more harm than good by propping up corrupt regimes, holding back internal reforms, maintaining aid dependency and reinforcing the policy mistakes that have made poverty all too prevalent.

This brings me to my third issue: the heavy moral tone of Gordon Brown in the run-up to the G8 meeting and his emphasis on debt forgiveness and more generous aid to halve African poverty by 2015. He understands, surely, that such policies are doomed to failure without fundamental internal reforms. They are, therefore, a cruel and patronising deception. Instead, he should discuss far more frequently the push for fairer free trade at December’s Doha Round meeting in Hong Kong.

Finally, many countries in sub-Saharan Africa are growing. They are not basket cases to be “cured” by Western largesse, driven by misplaced morality and condescending post-colonial guilt. Economic activity increased by nearly 4 per cent last year, with virtually all countries reporting positive growth. Ivory Coast and, tragically, Zimbabwe were notable exceptions.

• Ruth Lea is the director of the Centre for Policy Studies

Explore Economics

• Pre-Budget Report 2008

• Budget 2009

• World Economic Forum

• The Times MPC

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive