The man with a plan

A new Jeffrey Sachs book on how to end global poverty provides fresh insights but stale solutions, writes Salil Tripathi

Thursday April 21, 2005

In a Washington Post review of Jeffrey Sachs's new book The End of Poverty, William Easterly, professor of economics at the New York University, wrote: "It's perhaps fitting that he (Sachs) has enlisted Bono, the lead singer of U2 and development activist, to pen an introduction: the rock star as economist meets the economist as rock star."

Indeed, among Sachs's many talents praised by Bono in that introduction is his natural, rhetorical voice which can enthral audiences.

Sachs is a master of the tone; he knows just when to drop his voice to arouse sympathy, and exactly when to raise the pitch to challenge those he chastises, which these days includes almost anybody who questions the premise of further aid flows in poor countries.

While Sachs's lecture at the London School of Economics last week wasn't like a rock concert, he was certainly the star: the director of the Earth Institute at Columbia University received a long ovation when he ended his speech and a serpentine queue formed to have his book autographed.

Like No Logo or Globalisation and its Discontents, Sachs's The End of Poverty is ubiquitous among development practitioners and students fed up with the state of the world. And quite rightly, too.

The dire poverty in which one-sixth of humanity lives is a matter of deep shame. And Sachs eloquently presents their stories, telling us of the nearly 20,000 people who die daily because of extreme poverty; of a grandmother who is looking after nearly two dozen Aids orphans, of women who spend up to seven hours a day walking miles to collect water and cook for the family.

He issues a challenge to the Department of International Development, which wants to sell mosquito nets in malaria-prone regions of Africa as a social marketing experiment. These people can't afford to buy the nets - just give them to them, Sachs pleads.

Sachs has little time for those who talk of tough love; still less for those who are worried that someone will sell the nets on the black market, pocket the money and transfer it to a Swiss bank account. He acknowledges that corruption is a problem, but insists it is not the sole cause of poverty. Many other factors are at work, he says, including bad climate, geography, politics, international trade policies, the burden of debt and the absence of relief.

When the G8 leaders meet in Gleneagles, Scotland, in July, Sachs wants them to come with their chequebooks. Excuses won't do. States in the Organisation for Economic Cooperation and Development (OECD) must live up to the widely-accepted standard of 0.7% of gross domestic product to be given as aid.

Few would quarrel with the problems and priorities Sachs identifies; few would question the basic assumption that greater flow of resources is desirable, other things being equal. But the solutions have been tried before.

The question is, will it work now? Sachs suggests that if the detailed suggestions he has made about micromanaging agricultural, health, technological and fiscal policies in the developing world are carried out properly, extreme poverty will vanish by 2025.

To implement his plan, he wants the UN secretary general to run it, involving UN agencies and international financial institutions, by implementing projects funded by donor country contributions, to ensure that the financing gap is always filled.

But isn't that, on a different scale, something the world has already tried, with, to put it politely, mixed success, over the past five decades? Why should fresh cheques be written, to be given to the very entities which were created to solve this problem in the first place, and which haven't had much success to boast of? Sachs has limited time for those who question this vision.

Sachs's economic reforms include shock therapy - which he advocated for Poland and Russia - coupled with a huge transfer of resources to the affected country. But Easterly, who has been an economist at the World Bank, is suspicious of the man with a plan, or what he calls Sachs's "great leap forward".

Easterly knows an ambitious plan when he sees one; he wrote entertainingly of such plans in his sobering book, The Elusive Quest for Growth: Economists' Adventures and Misadventures in the Tropics, which is a useful reality check of what can be achieved in the real world.

Easterly says Sachs's plan is "strikingly similar to the early ideas that inspired foreign aid in the 1950s and '60s. This legacy has influenced the bureaucratic approach to economic development that's been followed ever since ... Sachs should redirect some of his outrage at the question of why the previous $2.3 trillion didn't reach the poor so that the next $2.3 trillion does."

Bearing that in mind, Easterly calls Sachs a utopian in the Karl Popper sense of the term. An outraged Sachs has called Easterly a dystopian.

It would be convenient to say that the truth lies in between, but it usually does muddle between such extremes. Sachs is right about identifying the problems; but it may be worthwhile pausing and finding out what works where and how, as Easterly suggests, before plunging headlong to commit a huge transfer of funds, if the disappointments of the past are not to be repeated. If they are repeated, it will make it harder to raise resources in future.