The End of Poverty was a book I picked up last year. Its optimistic title caught my eye, intriguing me to attempt reading it, despite sucking at economics in Junior College.
What makes someone brilliant is not just his depth of knowledge but his ability to explain complex issues in simple terms for a layperson to understand. Jeffrey Sachs has managed to do that for me.
I was amused by Bono's foreword. Can a rock star write? The answer is yes, and poetically. However, Bono is quick to play down his celebrity status, and assert that in years to come, Sachs' autograph will be worth more than his.
The key points in Sachs' book are that while the world is slowly moving out of extreme poverty, there are some who are still stuck in the 'poverty trap'. An impoverished household has no savings, thus there is no capital investment. With depreciation, it results in negative economic growth. However, with the right assistance, there will be enough for household savings, leading to investment (e.g. in farming equipment) that will then lead to economic growth, offsetting depreciation and population growth.
However, there are obstacles. The middle zone of the African continent is a haven for mosquitoes, hence the region is plagued by malaria. AIDS is also a serious problem, and farmers are crippled by the lack of basic medical help and high prices of fertiliser for their farms.
Other countries in South America, for instance, suffered from lack of connectivity due to their extreme geographical conditions. China and India, both separate case studies of interest, were held back by their inward nature and divisive caste system respectively, though they are obviously catching up now. Poland suffered from its over-reliance on the USSR after the fall of Communism but is also catching up.
Another obstacle, Sachs argues, is the fact that rich countries are not giving enough aid to poor countries. How can this be? Sachs bravely mentions the names of officials in various agencies who are misguided about the whole issue. He also raises a most salient point about an issue that will hit home to many Americans:
On the spending side of the budget, the United States spent as much in Iraq for two weeks of support for the war (about $2.5 billion) as it does for an entire year of economic development assistance in Africa. In its first two years, the Iraq war cost about $60 billion per year, roughly the same increment needed to reach 0.7 of GNP.
Figures are in US dollars, of course. Makes you feel a bit ill, doesn't it? Sachs also argued, in his chapter 'Why We Should Do It', that the US could do better by investing in poorer countries. He notes that 'virtually every case of US military intervention abroad since 1960 has taken place in a developing country that had recently experienced a state failure.' 25 states are listed, including Vietnam, Cambodia, Lebanon, Somaliaa and Bosnia-Herzegovina. Prevention is better than cure - don't let a country's situation deteriorate in the first place.
Sachs concludes with nine steps to ending poverty:
- Commit to ending poverty. Sounds easy, but can the whole world do it?
- Adopt a Plan of Action. Leaders must have specific plans to meet goals.
- Raise the Voice of the Poor. It's time for poorer countries to make noise, via the G3 and G20 within the WTO.
- Redeem the Role of the United States in the World. I was amused with this statement but totally agree that things need to change. (Go Hillary! Go Barack!)
- Rescue the IMF and the World Bank. Sachs says these institutions have been misused and behave more like loan sharks than as representatives of their respective governments.
- Strengthen the United Nations. This I agree with. The UN is not as strong as it should be, and it needs more clout to do the right things. But will the powerful countries (ahem, aforementioned) be willing to cede their power?
- Harness Global Science. Sachs notes that innovation develops in richer countries while eluding poorer countries who can't invest in it. There must be a special effort to look beyond market demands (in rich countries) and address the needs of poorer countries.
- Promote Sustainable Development. This is an environmental concern. Sachs elaborates that when families are no longer threatened with extreme poverty, the environment also benefits as its resources are no longer sapped dry. He warns however of industrial damage in developing economies.
- Make a personal commitment. It's up to each one of us. Are we up to the challenge?