Fight poverty by giving the poor social security

Programmes such as these must be replicated across developing countries and donors can play an important role.

A recent study by HelpAge International shows that a pension of $11 per month for everyone over 65 could be introduced into Malawi at a cost of no more than 1.6 per cent of GDP — around $70 million per year.

While Malawi itself may struggle to finance a programme of this size, donor funding could easily cover half the cost — and this would be only 2 per cent of overall donor assistance to the country.

The current economic crisis teaches us that we need to stop seeing such programmes as mere welfare.

Instead, they need to become a key element in the economic growth strategies of developing countries.

The Maoist government of Nepal — one of the world’s poorest countries — has recently announced that it will be spending almost 1 per cent of its GDP to increase the reach and the size of its universal pension scheme. If Nepal can do it, there is little reason why similar schemes cannot be put in place across the world.

Stephen Kidd is director of policy and communications at HelpAge International