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The End of Poverty
Director of The Earth Institute at Columbia University, Sachs is so sure of the efficacy of his mantra for poverty elimination that he quite a bit strays away from reality. Being in the business of explaining why countries are rich and poor and distributing advice for development on demand, he has made a good name for himself with developing nations’ governments lapping up his "how-to-do" tips. He is confident that his shock therapy has worked in Poland, but critics may not agree. Russia, another recipient of the Sachs prescription, is far from in the pink of health. India and China are too frequently projected as the latest success stories of market-driven reforms. Quite expectedly, Sachs includes them in his analysis of high-performing economies. Supremely confident about the success of economic reforms in India, he points out that "globalisation, more than anything else, has reduced the numbers of extreme poor in India by two hundred million... since 1990." Still, the poor in rural India voted out the BJP-led NDA government which thought India was "shining". He guided Chandrababu Naidu’s reform efforts in Andhra Pradesh. This is the state where some 4,000 farmers have committed suicide, as a study for the UK-based Christian Aid shockingly reveals, after a programme of free market measures was implemented. The side-effects of the Sachs treatment have not been adequately understood and analysed. If agriculture is the mainstay of a country, as in India, it needs to be put on a sound footing and made commercially viable before being exposed to competition. In India farm productivity and incomes are low, while agriculture is highly mechanised and subsidised in developed countries. Feeble WTO efforts have failed to contain US and European subsidies, resulting in cheap farm products flooding markets in the developing world and driving local farmers out of business. Such fallouts of unregulated capitalist growth have been left untouched by this world-famous champion of globalisation. There are two possible steps that America and Europe need to take to provide "freedom from want" to millions of human beings. The first is, as Timothy Garton Ash points out more honestly in an article in The Guardian (June 10, 2004), "to practise what we preach: free trade. We should open our markets to their goods and cut agricultural subsidies". The second step is to increase aid. Sachs stresses on the second, leaves out the first. If what he has left out is vital, what he has dealt with is significant too. Jeffrey Sachs, known for his hands-on approach unlike many of his arm-chair colleagues, has been making formidable efforts in facilitating development. His concerns are genuine and credentials unquestionable. Consider his successes, listed by himself: end of hyperinflation, introduction of new stable currencies, cancellation of unpayable debts, conversion of moribund communist economies to dynamic, market-based economies and the launch of the Global Fund to Fight AIDS, TB and Malaria. Not the one to be modest about his achievements or doubtful about his solutions, Sachs emerges as an excellent marketer. His facts and figures are alarming: 15,000 Africans die everyday of preventable, treatable diseases— AIDS, TB and malaria. This makes him conclude: the fate of the haves is linked to that of the have-nothing-at-alls. The problem of poverty, to an optimistic Sachs, is solvable. He prescribes liberalisation, privatisation, Western aid and good governance for ending poverty. Of course, education, health and infrastructure too need to be taken care of. He writes: "When the preconditions of basic infrastructure (roads, power and ports) and human capital (health and education) are in place, markets are powerful engines of development". Governments often follow his advice without giving adequate heed to his warning: "Without those preconditions, markets can cruelly bypass large parts of the world, leaving them impoverished". This is where the trouble starts. India, like others, began liberalisation and privatisation without first building up reliable infrastructure or ensuring good governance. The absence of dependable infrastructure along with excessive governmental controls and an unfriendly tax structure hamper the competitiveness of domestic industry, denying them a level field to play. Lack of good governance hampers reform implementation. Sachs’ excessive reliance on Western aid as a solution to poverty removal is open to question. Western aid is only promised, but often not delivered, at least not to the extent committed. Aid is crucial for extreme poverty eradication, but local individual and governmental efforts to get out of the cesspool of poverty are no less significant. Sachs has ignored this aspect. Much of what Jeffrey Sachs prescribes is known and has been widely commented upon. A serious economist of global development may not like the tips-giving approach on a familiar subject. Passion takes the better of reason at times and he carries the reader into avoidable details. The strength of his jargon-free, easy-to-read work lies in the wealth of experience he has gathered while working in Africa, Bolivia, Poland, Russia, China and India.
THE antiglobalisation movement has made its mark, and in my view, mostly for the good (except for the moments of violence that fringe elements of the movement incite). I applaud the overall movement for exposing the hypocrisies and glaring shortcomings of global governance and for ending years of self-congratulation by the rich and powerful. Before Seattle, the G8, IMF, and World Bank meeting were occasions for unqualified praise of globalisation, and for the self-serving accolades of bankers and international financiers on their contribution to the spread of prosperity. Between the speeches and endless cocktail parties, there was little said about the world’s poor, the AIDS pandemic, dispossessed minorities, women without rights, and human-made environmental degradation. Since Seattle, the agenda of ending extreme poverty, extending human rights, and addressing environmental degradation has been back on the international agenda and has attracted global media attention, albeit sporadically. Nonetheless, I oppose many of the specific positions of antiglobalisation leaders, even if I favour their moral fervour over the complacency of the rich. The antiglobalisation movement has been fuelled by legitimate moral outrage, but it has often been directed toward superficial targets, in my opinion. An anticorporate animus lies at the core of the movement, a belief that multinational corporations such as Microsoft, Coke, McDonald’s Pfizer, and Royal Shell, to name just a few, are the main villains in causing extreme poverty and environmental degradation. The views central to the antiglobalisation movement are not new. They remind me very much of what I encountered in New Delhi in 1994, when Indian academics expressed grave reservations about the liberalisation of trade and investment that had begun in India in 1991. Those views were passé then, and are more so today. By now the antiglobalisation movement should see that globalisation, more than anything else, has reduced the numbers of extreme poor in India by two hundred million and in China by three hundred million since 1990. Far from being exploited by multinational companies, these countries and many others like them have achieved unprecedented rates of economic growth on the basis of foreign investment (FDI) and the export led growth that followed. |
"WE
need to be modest about our ability to find the answers for other
societies", thus writes Timothy Garton Ash in his recent book
"Free World: Why a Crisis of the West Reveals the Opportunity of
Our Time". Jeffrey Sachs doesn’t think so; he claims with
cocksureness, typically American, that he has the answers and his book
claims to show the path out of poverty.