Jeffrey D. Sachs
Penguin, 2005
Much of the world is concerned about terrorism. This involves addressing the deeper causes of global instability. Societies are destabilized by extreme poverty. Collin Powell said, “war on terror is bound up in the war on poverty”. The destinies of the 'haves' is intimately linked to the destinies of the 'have-nothing-at-alls'.
Some people are concerned that improvements in poor countries would come at the expense of the USA. This is not true. The world economy is not a zero sum system.
So what is to be done? Why are some countries poor, and other countries rich? These are questions addressed in the following sections.
History of Poor Countries
All regions of the world were poor in 1820. After that time, differences between countries began to result in increasing differences in wealth. It is interesting to note that the primary force behind increases in wealth was 'technology', not the exploitation of poor people and countries.
Now, about 1/6 of world in a poverty trap. There is no single explanation for this situation. The histories are complex. Here are some key factors that have been influential in keeping many countries in poverty.
> geographical barriers – where countries are landlocked, being physically isolated, without access to ports. This would also result in high transport costs and limited opportunity for commerce.
> lack of access to natural resources – for example, America was blessed with abundant natural resources and many coastlines and ports for commerce.
> subjugation to colonial powers – which extracted resources from the poor countries and helped maintained distinct disadvantages for the subjugated countries. Colonial powers existed as recently as the 1960's. Many of the current generation in Africa experienced colonialism first hand.
> poor national choices after colonialism - after liberation, many third world countries chose not to participate in world economy. They therefore missed out of years of growth.
> environmental issues – many poor countries have arid conditions, massive droughts, poor agricultural productivity, falling food productivity per capita, desertification, deforestation. For example in my region of Mali, men have to travel by donkey 2 days out and 2 days back in order to find and deliver wood for cooking fires. Also, ecological conditions favor killer diseases like malaria, shistosomiasis, dengue fever, TB, and dozens of others.
> lack of infrastructure - few and poor roads, electricity, and motor vehicles
> demographic trap – a high birthrate because children act as social security in old age. The government provides no such old age benefits). However, the increasing population leads to deeper and deeper poverty over time.
> fiscal trap - taxation not feasible because the countries are so poor. Hence there is no money for improvements in infrastructure and basic facilities for education and health.
> inept, corrupt government – one of the vestages of colonialism are government cultures of greed and corruption. This is a significant problem standing in the way of future development work.
> international debt load – many poor countries were sold high international debt by other countries and international banks. The repayment load may significantly reduce poor countries abilities to reinvestment in their own countries.
The Response
Given the above history, what is the recommended response?
There is no single remedy for every country. A good differential diagnosis is needed in order to develop appropriate plans, systems, financing, good government & good management. In general, investments in people and infrastructure are required. For example, roads, ports, power systems, agricultural fertilizer and systems, water, sanitation, health, education (include family planning), and communications systems are required.
And what is the cost of these investments?
** $0.31/poor person/day, for a total of $113/person/year
For the 1.1 billion poor people on earth, that would be $124 billion worldwide. $40 billion is required for sub-Saharan Africa. This equates to 0.6 percent of overall donor income. Funding would be needed for a decade or more. It is said that this is well within the developed countries ability to pay.
Summary
This is a summary of Jeffrey Sachs' book The End of Poverty (Penguin Books 2005) For your consideration, it offers a framework for understanding and responding to poverty worldwide, as supported by the Millennium Development Goals. The goal is to end extreme poverty in the world by 2025 . How will you choose to respond?