The End of Poverty:
by Jeffrey Sachs, Penguin Books, 2005, 368 pages.
The End of Poverty is a positive book about the possibilities of eliminating extreme poverty in the world within a few decades. But it is also a hard-hitting book, declaring that the priorities and strategies of most rich countries must change if this goal is to be achieved. It is time, says Sachs, to realize that the destiny of the wealthy nations is intrinsically tied to the welfare of the have-not nations.
Jeffrey Sachs has traveled and worked in more than a hundred countries – advising their leaders on economic development and reduction in poverty. Based on the insights gained from this broad experience, Sachs suggests that the unilateral strategies recommended by the World Bank and the International Monetary Fund (IMF) do not work in most situations. Their standard remedy for failing economies is basically what they call structural adjustment. On the ground that means budgetary belt-tightening on social programs to allow them to service their international debt, privatizing industry and social services, liberalizing trade laws to allow for global competition, and eliminating corruption.
Sachs provides abundant evidence that in most cases such a remedy actually serves to perpetuate poverty or even increase it in poor regions of the world. This one-of-a-kind remedy often overlooks the fundamental problems hindering the poorest of the poor to reach even the bottom rung of the development ladder. The bald forces of capitalism, he notes, when left to themselves can cruelly pass by regions facing obstacles that require collective and global action to overcome. Ravaged by preventable disease, cut off from scientific advancement, lacking infrastructures that provide basic necessities like education and transportation networks, these economies frequently don’t even register on the global economic development radar screen.
In most cases, argues Sachs, the only way forward is for rich countries to cancel the debt owed them by poor countries and to beef up their foreign aid. But the kind and amount of aid offered should be clinically determined by special needs in each case and not tied to economic advantages rich countries reap from such aid. What Sachs doesn’t say, but is well documented by writers such as John Perkins in Confessions of an Economic Hit Man, is that at least some rich nations have since WWII deliberately created third-world debt to their own advantage. The strategy basically has been for rich countries to keep poor countries in perpetual debt so that they can manipulate internal polices in poor countries in ways that allow for unhindered exploitation of their resources.
So, for example, Sachs points out that while a specific country may be given a hundred million dollars of foreign aid annually, that country could be spending six hundred million a year servicing its debt to banks in rich countries. That means there is still a five-hundred-million dollar drain from the poor country to the rich. At the same time rich countries usually write the trade rules that benefit their own economics while harming those of poor counties. So Sachs suggests the following:
As a global society, we should ensure that the international rules of the game in economic management do not advertently or inadverently set snares along the lower rungs of the ladder in the form of inadequate development assistance, protectionist trade barriers, destabilizing global financial practices, poorly designed rules for intellectual property, and the like, that prevent the low-income world from climbing up the rungs of development. (p. 24)
This was a heavy read for me in a field I am not at home in. It definitely stretched my horizons and gave me a realistic hope that with enough political will and cooperation on the world stage, poverty could in fact be eliminated in the world within a generation. But, as Sachs says repeatedly, it will require a shift in strategy both in rich and poor countries that addresses the underlying causes of poverty. To those who suggest that the price tag is too high for rich nations, Sachs would say that the price of continued poverty where 20,000 persons die of poverty daily, will eventually be even higher.
By the way, Jeffrey Sachs is the economist Bono leans on most heavily as he continues to make the case in centers of world power for debt forgiveness in poor countries. After reading this book, I realize more keenly that Bono’s dream of eliminating poverty is not just a pie-in-the-sky fantasy, but a realistic possibility supported by the arguments of an articulate worldly-wise economist.
For most of my life I have reflected on poverty on a smaller scale. But this exposure to a macro-vision of the roots and possible solutions of global poverty give me much to think about. I have lost a little more of my innocence by reading this book.