Posts Tagged ‘jeffrey sachs’

The truth about Africa

August 10th, 2005

Probably the best chapter in Jeffrey Sachs’ book, The End of Poverty, is Chapter 16: Myths and Magic Bullets describing the myths which perpetuate our apathy towards aid to Africa. Here’s his intro:

“Everything up to this point [in the book] is fine and good, except for one matter: it ignores the human factor. Take the case of Africa. Africa needs around $30 billion per year in aid in order to escape from poverty. But if we actually gave that aid, where would it go? Right down the drain if the past is any guide. Sad to say, Africa’s education levels are so low that even programs that work elsewhere would fail in Africa. Africa is corrupt and riddled with authoritarianism. It lacks modern values and the institutions of a free market economy needed to achieve success. In fact, Africa’s morals are so broken down that it is no surprise AIDS has run out of control. And here is the bleakest truth: Suppose that our aid saved Africa’s children. What then? There would be a population explosion, and a lot more hungry adults. We would have solved nothing.”

“If your head was just nodding yes, please read this chapter with special care. The paragraph above repeats conventional rich-world wisdom about Africa, and to a lesser extent, other poor regions. While common, these assertions are incorrect. Yet they have been repeatedly publicly for so long, or whispered in private, that they have become accepted as truth by the broad public as well as much of the development community, particularly by people who have never worked in Africa.” (p. 309, bold is mine)

Sachs goes on to challenge each of these assertions with a fair-minded and fact-based response. He proposes the truth as follows:

  • Money spent in Africa is not all “down the drain”
  • Well-designed aid programs are not destined to fail in Africa
  • Corruption is not the main culprit/enemy of aid effectiveness
  • Lack of full democracy does not necessarily prevent aid from being effective (think: China)
  • Africa doesn’t have core values that are much different than the rest of the world
  • Fully free markets are not the panacea for poverty elimination
  • Mature property rights and laws are not a pre-requisite for economic development (in South America, it has been documented that property rights improvements only became a priority after wealth had increased)
  • Africa’s sexual morals are not statistically that much different than other regions
  • Reducing poverty reduces population growth through accompanying lower fertility rates
  • A “rising tide” of economic development doesn’t automatically reach all citizens
  • Unregulated “survival of the fittest” has not been the history of successful economic development

I think this chapter is worth the price of the book for those who want to be able to make decisions based on the facts.

The End of Poverty book review

August 10th, 2005

endofpovertyThe End of Poverty: Economic Possibilities for Our Time

by Jeffrey Sachs

This book seeks to lay out the facts — both historical and present — on the state of global poverty and with concrete recommendations about how to move forward.

Here are a few facts:

  • world population — about 6.1 billion
  • extreme poor (< $1 income/day) — 1 billion — live at subsistence without core basics
  • poor ($1 – $2/day) — 1.5 billion — above subsistence (survival ok), but hard to meet ends meet
  • middle-income (few $1,000′s/year) — 2.5 billion — most live in cities, have housing and maybe indoor plumbing, children go to school, nutrition and clothing are adequate — but not like USA middle-class
  • high-income — 1 billion

He advocates two goals by 2025: (1) End extreme poverty; and (2) Enable all poor a place on the economic development ladder. He demonstrates how a modest 0.5% of GNP provided as as official development assistance (ODP) by the developed countries through 2015 would be adequate to achieve the UN Millenium Development Goals (MDG) which target reducing extreme poverty by 50% from 1990 levels. Since Sachs was one of the key contributors to MDG, he provides details into why these goals were chosen and how they can produce these (seemingly) dramatic results. He then declares a 2025 goal to extend MDG objectives for 10 more years at a decreasing % of rich country GDP investment level to finish off the task. Why a decreasing investment level? Because with fewer poor people, growing GNP in poor countries and continued growth of overall GDP in developed countries, the cost for ODP is simply lower.

One thing that stuck out to me is the lack of follow-through that the USA has had towards promised aid to developing nations. The US has publicly committed (signed multiple documents) that it will make “concrete efforts” to contribute 0.7% of GNP to ODA. Our current level is about 0.2%. We spend all told about $15B on aid per year (vs. $450B on military.) And of the $15B, more than half is on activities other than ODA (e.g. paying USA consultants.) For the USA to reach 0.7% of GNP as ODA here is what it would take … “With the U.S. per capita GNP rising by around 1.9% per year, the extra amount represents less than one third of a single year’s growth in GNP. So, if the U.S. were on track to reach a $40,000 disposable income by, say, January 1, 2010, it would instead reach the same income on May 1, 2010, one third of a year later.” (p. 304)

More blog postings based on this book and Sachs:

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