THE END OF POVERTY BY JEFFREY SACHS

One would never doubt the true intentions of the author in ending global poverty, not just him, but the collective strategies he envisioned. His ambitious plan to end poverty in a couple of decades is not just amazing but an effort to reckon with. He is not an ordinary person who wakes up from his bed, fantasizes about the idea, but a renowned macroeconomist, a field man with a multitude of experiences, having worked alongside some of the finest leaders of his time, including Kofi Annan. Also, he got his hands dirty in policy implementation with some health and finance ministers of countries from Africa to Europe, Asia, and South America. His words must therefore carry weight to summon your attention. He believes that if we are generously proportionate, then abject poverty will be a thing of the past, not tomorrow, but today. He lamented how the US spent hundreds of billions of dollars in wars ($460 billion to be precise, since after 9/11 when it declared war against terror); he argued that a tenth of it could make a lot of difference between life and death. Eight million people died annually due to poverty-related perils, be it unsafe water, malaria, AIDS, hunger, etc. This, therefore, prompted Mr Sachs to call for collective action to end these unnecessary, untimely, and avoidable deaths.

 

"The End of Poverty: Economic Possibilities for Our Time" by Jeffrey D. Sachs is a 400-page document that was first published in 2005 by Penguin Press, New York. The book carries practical examples of policies and budgets that could bring an end to the most demeaning conditions faced by the poorest of the poor, and this was dramatically narrated by the author using his eyewitness experience in 18 chapters. Mr Sachs strategically carried us along the different segments of the globe x-rating their challenges and penning down the possible policy interventions needed to get the state on the economic ladder of development. This, he did painstakingly analyzing the support needed to kick start the economic progression and end the poverty trap bedeviling the state. It was not a general approach for all, no! But a contextual approach administered in the style of clinical diagnosis void of any imperial motives. Mr Sachs emphasized the cruciality of roles harmonization among international, regional, and national governments, agencies, and partners in creating a world free from extreme poverty.

 

 

Nthandire - Malawi

To understand the dire need of Malawians, Mr Sachs visited the village of Nthandire, where only five able-bodied males between the ages of 25-40 survived the catastrophic sweep of AIDS. The village consisted of a bunch of old women and children, with grandmothers overseeing three, five, or seven grandchildren in typical abject poverty circumstances. Most grandmothers had witnessed the death of one or two of their grandchildren due to hunger or malaria, as the hospital was about 10km away, and they had to carry the child on their back to cover such a distance with little hope of getting medication after consultation. This kind of scenarios redefined one’s view of poverty and highlighted how desperate aid is needed to bridge the gap between life and death in this corner of the world.

 

One interesting aspect is the city hospital in Malawi, where ART (Antiretroviral Therapy) was given to privileged individuals among AIDS patients who could afford a dollar a day, and about 400 of them were responding to treatment. In stark contrast, a 150-capacity ward was packed with more than 400 patients (AIDS patients) dying due to a lack of resources to treat them. “Strangers shared beds, with some patients lying head-to-toe and others beneath the bed, all waiting to die. These sorrowful conditions could be avoided with aid from the global community.” Mr Sachs lamented.

 

Malawi had more than 900,000 HIV-infected patients, and the then Vice President, Mulawesi, submitted an ambitious plan to the global community of donors, including the US, to provide ART for 300,000 patients over five years. Although this would have reduced the number of patients by one-third, it was deemed too costly, and the plan was advised to be cut down. After negotiations, the plan was reduced to cater to 40,000 patients, and even then, the Global Fund for AIDS, TB, and Malaria further reduced it to 25,000, reluctantly signing a death warrant for the other patients. Caroll Bellamy of UNICEF described the situation as a "perfect storm."

 

Bangladesh on the Ladder of Development

Mr Sachs' trip to Bangladesh reported yet another approach to their economy, which, though poor, was not as dire as that of Malawi. However, his keen observation of the large number of women between the ages of 18-25 engaged in the garment industry was worth mentioning. Although the union charged the garment industry owners with exploiting the women, who worked straight for 12 hours with little break, the industry created vast opportunities for these women. Most were uneducated and from nearby rural settings; otherwise, they would have been married off in their villages. Instead, they sought a life in the garment industry, creating relative freedom for themselves and even boosting their respective village economies through their purchasing power and remittances. This dimension begs one to take another outlook, rather than completely dismissing the industry as suggested by some unions due to exploitation through underpayment and abuse. The garment industry serves as a refuge for these women against the traditional expectations they would have faced back in their villages, which they were not ready to succumb to.

 

India: Center of Export Services Revolution

Mr Sachs further took us to India, navigating the life especially in the city center, where the IT-dominated industry was booming as a result of data transcription services for US hospitals provided by Indians. This has created a significant impact on the economy, generating proportionately lucrative income for Indians. Such IT-related opportunities, including outsourcing from the West, have become the norm and are revolutionizing income generation in the country. This has led India to produce high quality entrepreneurs and engineers, especially with heavy investment in the Indian Institue of Technology (IITs), a collection of seven world class, affiliated campuses around the country. It has made India compete effectively in the IT industry and by mid 1990s, they were already taking leadership positions at Microsoft, McKinsey & Company, Citigroup, numerous banks and other major International IT firms.

 

China: The Rise of Affluence

China is another country that Mr Sachs looked into, and he was astonished by the expansion of their economic level, which had recently emerged from a cultural revolution. Their 8% growth rate then, rapid technological advancement, and increased per capita income were evident in the lives of young professionals in Beijing. This further proved that development is not just possible but achievable.

 

Ascending the Ladder of Economic Development

Where is poverty most prevalent? The answer lies in South Asia and Sub-Saharan Africa, where various forms of poverty exist. The pressing challenge for this generation, Mr Sachs concluded, was to help individuals overcome these hurdles and climb the development ladder, just as we saw in India, China and other places.

 

World Order of Economy

The first world refers to the US, Europe, and Japan, which are dominated by capitalist economies. The second world, on the other hand, refers to socialist-led economies, such as the Soviet Union – today’s Russia, characterized by a single communist party, state-owned means of production, and central planning, distinct from those of the first world. In contrast, the third world comprises rising post-colonial states that seek to develop their economies internally, often through subsidies and other measures, without aligning with either the first or the second world. Economic growth can be driven by various factors, including increased per capita income through savings and capital accumulation, specialization and trade, technological advancements, and greater natural resources per person. It can also result from a combination of these factors. Analyzing global economic growth from 1980 to 2000, Mr Sachs observed that some countries advanced on the economic ladder, while others declined. This trend was seen across all categories, from high- to low-income economies.

 

Household Poverty Trap

The author highlights various factors contributing to economic decline and illustrates how an economy grows using a household example. A family relying on farmland to feed itself can experience growth through four key phenomena: saving for capital accumulation, specialization and trade, adopting technological advancements, and harnessing natural resources. While not all four factors may be present, this model provides a framework for understanding economic growth. This discussion leads to an exploration of the poverty trap, where income barely covers basic needs, leaving little room for savings. Factors like illness and family expansion can further reduce resources, making it challenging to escape poverty. This topic becomes a significant focus area for intervention, as discussed in the author's clinical economics.

 

Clinical Economics

I must say that I admire this chapter, as it practically brings out the true colors of the grand problem we face globally in attempting to assist developing economies. Mr Sachs argues intelligently that we must approach Development Economics as medicine, clinically understanding the complexity it has before preferring solutions. Whenever developing economies call on the first world for succor, they're usually directed to the IMF, being the world's loan giver. Though the IMF is manned by bright and motivated economists, some of whom the author trained, he argues that their approach is similar to telling countries to tighten their belts when they don't even have belts of their own. He argues that the majority of economists are from the first world, and therefore their approach may not necessarily help these economies.

 

Proffering Economic Solution around the Globe

Mr Sachs then took us through his professional journey to different parts of the world, treating their economies as his patients. Starting with his encounter with leaders of Bolivia, where he was offering solutions to the case of inflation, and they asked him to come and help, as if it were that easy. He had a rollercoaster of an experience in 1985 dealing with Bolivia's hyperinflation, where 2 million pesos were equivalent to 1 dollar. He detailed the reforms executed there and how he cleverly engineered their debt relief to fast-track their economic growth. This success led to another invitation by the government of Poland. Sachs and the team did wonders there, salvaging the economy from the socialist approach as Poland broke away from the Soviet Union, with another debt relief of a whopping 50%, which Sachs convinced them to utilize the London 1953 Agreement, referencing Germany's debt waiver. Then, there was his work in Russia as the Soviet Union came to an end in 1991, with zero debt relief despite several lobbying efforts. He had similar experiences in South America and even his assignment in China and India, alongside the national economic team. Sachs detailed many factors that could make a reform work in one country, while a similar reform might prove abortive in another. He pointed out many yardsticks that work for or against economic progression, ranging from geopolitics (which made Russia impossible to get debt relief), access to seaports and global markets (which made Eastern China develop at the expense of Western China), existing economic structure (which he argued that China had less burden on its state when implementing its reforms), and other factors, including geography and internal politics, among others.

 

Africa and Aid

A sensitive overview of Africa as a thriving economy was highlighted further, but the reality painted a picture of economic, social, and health backwardness. It's simply a nexus of hunger, disease, and poverty, which can be traced, to some extent, to colonial imperialism and exploitation, bad leadership, and ecological disadvantages that create a conducive environment for malaria and other tropical diseases. Sachs lamented the extent of international neglect of Africa amidst ravaging diseases, mostly malaria, which kills an annual toll of 3 million lives, with 90% of the deaths occurring in Africa and 10% across the globe then. Similarly, AIDS became rampant, taking countless lives of able-bodied individuals in Eastern Africa on a daily basis. The limited funding provided by the IMF and the lack of WHO attention to these calamities drew Sachs' attention. With the help of other African leaders and like-minded international civil servants, and with the support of the then Secretary-General Kofi Annan, a Global Fund for AIDS, Malaria, and Tuberculosis was established.

 

Proportion of the Aid Needed

An ambitious plan was proposed to convince the world community of rich nations, or rather the First World, to donate 0.7% of their GNP towards eradicating diseases, extreme poverty, and environmental degradation, particularly in Africa and third-world nations. Although this was initially agreed upon, seeing to its implementation was something that even Mr Sachs was skeptical about, knowing that presently, the assistance given hardly reaches 0.2% of their GNP. The US was known to be a major contributor to these efforts; however, the catastrophe of 9/11 created an entirely different dimension, with GW Bush declaring a War on Terror with far more outrageous figures in comparison to what was needed to assist developing economies. I admire the sincerity and boldness of Mr Sachs in declaring an opposing and more rational view, suggesting that while military action might have been necessary in retaliation, it was equally important to address the level of poverty and diseases in these developing economies. Failing to do so would be tantamount to creating a favourable atmosphere for terrorists to use these areas as hideouts to continue terrorizing the world.

“As of 2002, aid equaled $53 billion, just 0.2 percent of rich-world GNP. If rich countries met the target, aid would reach $175 billion per year, equal to 0.7 percent of the $25 trillion rich-world GNP in 2002. For the United States, foreign aid would rise from around $15 billion per year in 2004 (0.14 percent of GNP) to around $75 billion (0.7 percent of U.S. GNP).” Mr Sachs summarized the proportionate of aid needed to end extreme poverty around the globe.

 

Sauri People

Another heart-melting encounter was with the Sauri people, a village in the Kisumu region of Kenya, comprising over 200 villagers who were eager to upscale their livelihood but were trapped by structural poverty. They were a bunch of impoverished and malnourished community members, relying solely on what they produced, which was hardly enough. The village clinic was shut down because they couldn't afford to pay the doctor; instead, they opted to trek to Yala, a few kilometers away, during medical emergencies. They didn't use fertilizers to increase their output because it was beyond their reach, and sometimes they even resorted to eating food raw due to a lack of firewood for cooking, having nearly cut down all their trees. They had no money for schools or healthcare, nor did they have enough food. "There are no cars or trucks owned or even used within Sauri, and only a handful of villagers said they had ridden in any kind of motorized transport during the past year.” Mr Sachs recounted. “Sauri village, and impoverished villages like it all over the world, can be saved and set on a path of development at a cost that is tiny for the world but too high for the villages themselves and for the Kenyan government to bear on its own," argued Mr Sachs. With proportionate aid from the rich, more villages like Sauri that are trapped in structural extreme poverty can be salvaged.

 

Big Five Interventions

1.      Agricultural inputs

2.     Investment in basic health

3.     Investment in education

4.     Power, transport and communication services

5.     Safe drinking water and sanitation

 

Mr Sachs made some quick calculations, playing with the numbers to provide the aforementioned facilities, and estimated that the combined costs of these improvements would total around $350,000 per year, or roughly $70 per person per year in Sauri, with its 5,000+ residents, for at least the next few years. These are the kind of interventions needed in every Sauri village around the globe to break the poverty trap and enable them to lay their foot on the development ladder that could allow them to keep growing on their own, without which they may not.

 

Impoverished Slums of Mumbai, India

Mr Sachs also delved into the story of the slums of Mumbai and how hardworking they are despite earning a meager income, usually working as maids, cooks, sweepers, guards, launderers, and other low-skilled, labor-intensive services. Yet, they have no toilets, or have to wait in long queues to use filthy toilets. He highlighted how, through their collective responsibility and advocacy, they were able to turn around their lives, influencing government policies to work in their favour. Mr Sachs was therefore able to capture what poverty means in both rural and urban settings and what mechanisms and approach each should be subjected to in order to find a contextual solution.

 

The author further argued that the public sector should be mainly focused on five kinds of investments:

1.      Human capital (health, education, nutrition),

2.     Infrastructure (roads, power, water and sanitation, environmental conservation),

3.     Natural capital (conservation of biodiversity and ecosystems),

4.     Public institutional capital (a well-run public administration, judicial system, police force), and

5.     Parts of knowledge capital (scientific research for healthy energy, agriculture, climate, ecology).

 

The private sector (funded largely through private savings) should be mainly responsible for investments in businesses, whether in agriculture, industry, or services, and in knowledge capital (new products and technologies building on scientific advances), as well as for household contributions to health, education, and nutrition that complement the public investments in human capital.

 

Finding solution from within the people

Emphasis in certain instances was laid on looking within, and therefore not all aid will come from outside. Empowering people to think and to provide solutions to their challenges is key throughout the suggested frameworks, especially in faraway villages from city centers, when dealing with health concerns, for example. He suggested specialized health training to produce a community health worker who can handle the basics, doing away with brain drain since such training doesn't qualify anybody to work outside their village, thus empowering the community. This is also applicable to other spheres, doing away with the cost of bringing outsiders and risking a lack of sustainability of such programs when funding halts.

 

Pilot Projects

Mr Sachs argued that the world is filled with many proven pilot projects showing different interventions, and they proved to be successful. “The antimalarial bed nets save lives in rural Africa, that anti-AIDS drugs can be administered in low-income settings, and that immunizations can be delivered in the most difficult places in the world, even in the middle of war zones.” The main challenge now is not to show what works in a single village or district; though these lessons can be of great importance when novel approaches are demonstrated, but rather to scale up what works to encompass a whole country and even the world. Here are some successful interventions around the globe:

1.      The Green Revolution in Asia

2.     The Eradication of Smallpox

3.     The Campaign for Child Survival

4.     The Global Alliance for Vaccines and Immunization

5.     The Campaign Against Malaria

6.    The Control of African River Blindness

7.     The Eradication of Polio

8.     The Spread of Family Planning

9.     Export Processing Zones in East Asia

10. The Mobile Phone Revolution in Bangladesh

These cases demonstrated some common themes. First and foremost, scaling up is possible when it is backed by appropriate and widely applicable technology, organizational leadership, and appropriate financing; we can certainly bring an end to extreme poverty.

 

The Poor Cannot Do It Alone

Mr Sachs lamented the international donors' approach of estimating aid and asking the country to make a plan for that fund; instead, he advocated for the reverse, i.e., asking for the plan on the ground from the country in question and all they need, then canvassing for the same fund to fund the project. He emphasized the urgency of waiving user fees for basic services for the poor and lifeline tariffs for certain services. The extremely poor need a waiver for basic services to enable them to move close to the ladder of development; otherwise, they will be wandering inside the poverty trap endlessly. He further argued this point, that poor countries have critical needs that cannot be solved by national investments or by domestic policy reforms. These are concerns that must be addressed at the global level. He mentioned the four most important ones thus:

1.      The Debt Crisis

2.     Global Trade Policy

3.     Science for Development

4.     Environmental Stewardship.

 

The author argued that rich countries should have given the poorest countries grants, not loans, so that the poor countries would never have been indebted in the first place. And donors insist on good governance, which is not entirely bad, he commented, yet we neglect donors' commitment to magnitude, timing, predictability, and harmonization of the fund, which sometimes affects the progression of the projects. The donors' commitment is key, Mr Sachs emphasized.

 

 

 

 

To Naysayers

Ending extreme poverty is possible; similar endeavors have enjoyed greater successes and made the world a better place, and so would this one. The author itemizes three such meritorious global interventions which many deemed impossible and may not benefit the perpetrators, yet, with intensive advocacy and collective efforts, they all became a reality, and therefore so shall ending extreme poverty in two decades. The interventions were:

1.      Abolishment of slavery

2.     End of colonialism

3.     Civil rights and anti-apartheid movements.

 

“The fact that for thirty-five years rich countries have promised but not delivered something as basic as 0.7 percent of GNP in ODA (Official Development Assistance) is not a cause for despair, but instead a basis for even greater social mobilization,” Mr Sachs affirmed his hopefulness.

 

Steps to the Goal

In the end, Mr Sachs itemized nine steps to the goal which both parties must adhere to in an effort to collectively see to the realization of ending global poverty thus:

1.      Commit to Ending Poverty

2.     Adopt a Plan of Action

3.     Raise the Voice of the Poor

4.     Redeem the Role of the United States in the World

5.     Rescue the IMF and the World Bank

6.    Strengthen the United Nations

7.     Harness Global Science

8.     Promote Sustainable Development

9.     Make a Personal Commitment

 

Reading this book will send a powerful signal within one’s brain that not just ending global poverty, but fighting any other global challenges is not just possible but achievable, provided the right financing and strategies are in place. His role in giving birth to the Millennium Development Goals and his role in their implementation has powerfully ignited the flame of his passion for ending extreme poverty. It’s therefore not just a moral responsibility but a humane thing to do to make life better. One will appreciate the global community interplay and how the Bretton Woods institutions are being driven basically on the principles of who contributes more dollars, unlike the UN General Assembly principle of one vote per country. This therefore makes the rich nations dictators of the world’s global monetary policy, which most of the time excludes the poor nations, whose input and participation are critical in solving their problems. The simplicity of his approach and its practicability based on the templates that suit contextual circumstances have been truly an honorable gesture that employs sincerity in solving global challenges. Advocacy will certainly be key in doing this, and even the voices of the poor must be raised to keep the echo of help in the ears of the rich, who will take a tiny proportion of their GNP, 0.7%, yet huge in financing the scheme of bringing an end to preventable deaths and ending extreme poverty throughout the globe.