Jeffrey Sachs: The End of Poverty

Evan Smith, Summer 2006

Jeffrey D. Sachs has a practice of making bold claims. "We actually have within our ability, because of the power of technology and because of the phenomenal wealth that exists in the world, an opportunity that is remarkable and that, I think, is a great danger to not take. And that opportunity is to end extreme poverty in our time." This assertion seems immediately less ambitious after considering the speaker, whose bold policy visions have helped end extreme hyperinflation in Bolivia, turn communist Poland into a successful market economy, and now guide the sweeping United Nations Millennium Development Goals , which aim to halve extreme poverty in the world by 2015. In his latest book of bold policy recommendations, Sachs lays forth a development plan that, he argues, could extinguish extreme poverty on the planet by 2025 and thus actually achieve one of the primary aims of development economics.

Jeffrey Sachs is at once a scientist and a preacher in the field of economics. One of the most recognizable and important academics today, Sachs's work has spanned the world in both the field and the pulpit. As the spokesman for the UN Millennium Project and special advisor to UN Secretary General Kofi Annan, Sachs preaches his reforms and policies to audiences of world leaders and Comedy Central viewers alike. But he is also an economist whose studies have made important academic contributions. Like any famous academic - and like any celebrity in general - Sachs is not without his critics. But few would question his intentions in advocating these reforms. Sachs now works tirelessly to advance a development agenda that could eliminate extreme poverty and does so with a passion and intensity motivated by his conviction that this agenda will save and improve human life at tremendous magnitudes.

He explains poverty in terms of both our profound interdependence and the implications for the developing and developed world. "These are problems that demand our attention not only because they are harrowing facts, but because in a time in which we are so interconnected, harrowing facts around the world directly impact our bodies in ways that we can't imagine. Whether it's the avian flu in Nigeria, whether it's terrorism, or whether it's the spread of AIDS out of sub-Saharan Africa, harrowing facts around the world are harrowing facts for everybody." Sachs sees the security and well-being of the entire world - not just the developing world - to depend on the success of development initiatives. He asks rhetorically, "Why care about a poor, land-locked failed state halfway around the world?" His one word response: "Afghanistan. For Sachs, the war on poverty is a war on terror, a war on disease, a war on over-population, and a war on environmental degradation. And so his bold speech is motivated by the urgency and importance of his message.

Sachs tackles the problem of extreme poverty - living on less than $1 a day - at its African epicenter. For decades, politicians, lenders, and even many development economists have dismissed Africa's poverty as too problematic to solve. But where others see an unyielding riddle, Sachs sees a tough but surmountable challenge. "We have to address these problems because they are solvable problems once they are addressed in a way that more accurately diagnoses and treats them, not just addresses them in the superficial ways we have seen in the past." Generalized prescriptions like good governance, market liberalization, or debt relief fail to comprehensively and effectively treat poverty in any African country. Instead, he argues, it is necessary to understand each case individually and thoroughly, and customize the response. In Africa, "poverty is not a matter of bad manners, or lack of will, or corruption or any other myths propagated by parts of the rich world.It is also not impervious to change." For these countries, "there is a solution to poverty, but to find that solution, poverty requires a proper diagnosis and that proper diagnosis has not yet been made." Sachs believes his "clinical economics" can do just that.

Clinical economics is the specific diagnosis and appropriately tailored treatment of an individual country's poverty. Each will differ with the impoverished African country, but common to all, Sachs argues, are three major failures: a failure of health, a failure of agricultural productivity, and a failure of connectivity. He believes that Africa is, because of these failures, caught in a poverty trap that makes development efforts that do not address these failures useless. Of all, health receives the most attention in his speech and writing. He contends that because of the high prevalence of disease, the co-morbidity of diseases in Africa, and poor or non-existent health and medical infrastructure, impoverished Africans are subject to afflictions that prevent work and kill productivity. Sachs blames the persistence of these problem on the lack of aid promised 36 years ago and repeatedly since by rich nations.

Because of the high prevalence of disease, the co-morbidity of diseases in Africa, and poor or non-existent health and medical infrastructure, impoverished Africans are subject to afflictions that prevent work and kill productivity.

Beginning with a 1970 UN General Assembly resolution and reaffirmed numerous times since, the rich nations of the world have promised 0.7 percent of their GNP in development assistance, but have consistantly given significantly less. Sachs speaks strongly against the countries who have reneged on their promises. "The US is the biggest laggard in terms of aid as a percentage of GNP with only 0.16 percent, but only five developed countries have actually met the goal of 0.7 percent. Those are Sweden, Norway, the Netherlands, Luxembourg, and Denmark." He emphasizes the health crisis as a particularly desirable, but unmet, target of aid. "Malaria will kill 2-3 million children in Africa this year. The paradox of malaria is that it's a 100 percent treatable disease.this is not AIDS where you require doses of medicines for the rest of one's life, this is a disease that can be treated by medicines that cost $1 and prevented by insecticide-treated mosquito nets for 70 cents a child per year. At the cost of one day's Pentagon spending in a given year, millions of lives could be saved from a treatable disease. That's the reality. Unsolvable? Ridiculous. This is solvable, but are we doing it? No. That's the paradox." Partly because of the prevalence of disease - many of which are treatable - Africans are caught in a poverty trap that, Sachs argues, keeps them from earning incomes or becoming productive enough to even get on the first rung of the economic ladder. Instead, because aid has not addressed these mostly basic and preventable diseases in a way in which it has been promised, hundreds of millions of Africans will be doomed to poverty or even death.

But this claim is frequently and centrally challenged by his critics. Studies by development economists for decades have shown productivity gains to eliminating disease of 10-20 % , and these gains, critics argue, are insufficient for reducing poverty in any appreciable way. Sachs responds that because of the co-morbidity of disease in Africa, and because of the links of poor health and structural failures across all aspects of rural and urban life in Africa, these studies are not entirely applicable. Instead, eliminating health failures will help remove barriers to functionality and productivity across all of these economies in ways that these studies do not account for. Also, Sachs explains, "because incomes in these countries are very imprecise and hard to measure, it is difficult to know precise returns for eliminating health problems. Instead [I'm] talking about just getting countries on that first rung of the ladder and removing barriers to that first step." And so while data do not exist to show the causal link from reducing health failures to sustained development, Sachs is confident that such steps are essential to sustained African development.

Also crucial to breaking Africa's poverty trap, Sachs believes, is an agricultural revolution similar to that of the Green Revolution in India which helped double, triple, and even quadruple agricultural yields and generate income that now has India on a path towards sustained economic growth. High yield variety seeds created in the developed world were introduced through the 1960s and 70s in rural India and Southeast Asia and were responsible for historic gains in agricultural output. Sachs believes India to be a useful comparison because "places like India and others that were in extreme poverty only two generations ago have been able to develop out of extreme poverty substantially on their on resources, but I emphasize substantially and not entirely, because aid played a huge role in spurring this development." Aid, in this case, came in the form of new seeds, fertilizer, and irrigation.

But these high yield seeds were adopted at very low rates in Africa. "There has been only a 20 % uptake of high yield varieties in Africa, but an 80 % uptake in South and East Asia. African maize growers are planting open-pollinated varieties that are not improved. They're using their own seeds for the next season. So the difference is you have farmers who don't use fertilizer, who don't use irrigation, who don't use improved seed varieties in these semi-arid environments and you put the package together and you get 1 ton per hectare and they're starving. And population in the rural areas is doubling every 23 years. And the environment is being degraded because when you farm a crop and don't fertilize it, don't put nutrients back, you're depriving the soil of nutrients. In traditional African agriculture when populations were lower, they used slash and burn. But once you reach a population of about 70 per square kilometer in the rural areas, the fallowing system which takes 20 years to naturally restore the soil nutrients can no longer work. So what happens is that the situation is getting worse, not just staying steady." Sachs is describing a Malthusian crisis in rural Africa - where populations have run ahead of their ability to feed themselves, causing their hunger and poverty to worsen. Because these high yield seeds require irrigation and fertilizer Africans either cannot access or cannot afford, Sach believes aid should be targeted toward distributing inputs to help increase agricultural productivity.

Finally, Sachs contends that major improvements in connectivity are required if Africa is to be freed of its poverty trap. He explains that unlike India, where Britain built a rail network covering the entire country, Africa's rail networks are disjointed, built only from mines to urban centers, and of different gauges - a result of the desire of the competing colonial powers to prevent inter-colonial transportation and discourage invasion. Also, Sachs explains, "Africa does not have a road network. It has fewer miles of road per person and per square kilometer than any appreciably inhabited area of the world. And much of these roads are also impassable for a significant portion of the year because the proportion of paved roads is also the lowest and rains and travel can make the roads impassable for weeks and even months at a time." He argues that this lack of connectivity presents a physical barrier to poor Africans, who cannot access hospitals, cannot bring their products to markets, and cannot purchase materials.

"This year our country will spend approximately 510 billion on the military... We will spend in Africa about 3.5 billion dollars total. That's the choice that we're making as a country right now. It's not the choice that's going to get us to real security."

While aid must be given towards improving physical transportation infrastructure, Sachs maintains that aid towards improving telephone and fiber-optic connectivity can help break this trap. Citing Bangalore, India as an example of a landlocked city that was able to build an industry around the internet, he contends that physically isolated African nations at a geographical disadvantage can still reap the rewards of the modern economy if given this basic building block of connectivity.

Sachs believes that once basic health, agricultural, and connectivity conditions are met, poor Africans will be able to both use aid and investment more effectively and generate higher incomes off native resources. Yet critics maintain that poor governance and bad economic policies in Africa will continue to impoverish the continent. Once these problems are fixed, they say, markets will help lift Africans out of poverty. But Sachs replies that this is "a situation where hundreds of millions of people, utterly impoverished, who have no income, don't grow enough food to take to the market, who aren't credit worthy, whose countries are bankrupt, their populations are growing, they're mining the soil of nutrients, and the World Bank and IMF for twenty years are saying, 'Balance your budgets, squeeze yourself, tighten your belts,' as if they had belts, 'and markets will solve this problem.' Well I'm a market economist. I actually believe in markets. But what I've been trying to say for more than a decade is these people are not part of the markets, they're just being left to die, because markets can't sort people that have no market demand at all. And they're not interested in these people. They don't sell anything and don't build anything. They're in their villages and they're isolated, hungry, sick, and dying."

Sachs has grown increasingly critical of the World Bank and IMF over the past decade, blaming their bad policies, in part, for the lack of progress in Africa. "And for 20 years," he says, "the World Bank has been saying all you have to do is privatize, get government out of the markets, reduce the number of civil servants.and of course it had no effect at all because it was the wrong diagnosis. If you're going to do economic medicine make sure you give the right diagnosis. They presented their model twenty years ago and they've had twenty years to try and make it work and it hasn't. You're not going to get a Green Revolution this way. You're not going to get out of the trap." And of course, he blames the rich nations of the world, particularly the United States, for failing to meet their promised aid levels. 160 billion dollars a year - 0.7 percent of the rich world GNP - would be enough, he argues, to not only break the African poverty trap, but to eradicate extreme poverty in Africa and the rest of the world by 2025.

Sachs argues that this choice is both a death sentence to the world's poor and a security risk for the rich world as well. "This year our country will spend approximately 510 billion on the military, more than all the rest of the world's military combined. We will spend in Africa about 3.5 billion dollars total. That's the choice that we're making as a country right now. It's not the choice that's going to get us to real security." Sachs has, because of statements like these, become a highly politicized figure. But his politics are pro-development, and he speaks forcefully against policies and decisions that he feels are detrimental to this cause. He works tirelessly to combat poverty. Better environmental practices, sex education, and the end of the war in Iraq are, for Sachs, all part of this effort. And, he believes, ending poverty will reduce environmental degradation, will reduce fertility rates and the spread of STD's, and will help to prevent war. These are all both ends and means of development for him, not just political convictions.

In teaming with U2's Bono, Sachs's celebrity has steadily risen. He is easily one of the most recognized economists in the world, and his words carry authority many find crucial in the fight against poverty. Though some may disagree with his perscriptions, Sachs is convinced that he is right, and as the most powerful voice in the development effort, more than a billion of the world's poor should hope that is the case.