The End of Poverty Jeffrey D. Sachs: A book review by Shekhar
The End of Poverty
Author: Jeffrey D. Sachs
Jeffrey Sachs, in his book ‘The end of Poverty’ has provided his global road-map to end the extreme poverty by 2025. He repeats – such road-maps are ‘operational’ ways to address the poorest of the poor.It sounds like the author has several genuine reasons to be optimistic about the equal and broad-based economic growth across the globe despite the disparity that is visible since past two centuries. This book brings some the heart striking insights and experiences of Jeffery Sachs- that aspires us to rethink the status of poor countries marching towards prosperity and happiness.
Every time he describes the disparity seen in the development pattern of the global south and north, he asks- Why 1/6 of the total humanity enjoys the higher living standard with all sorts of needs being satisfied while there remain ‘the bottom billion’ humanity still fighting to meet the minimum requirements to live a deserving human life?
Why Africa fell in the trap of poverty? How India and China are shaping the global economy and politics? Can Millennium Development Goals be achieved? Why such a vast amount of foreign aid is not working effectively to alleviate the poorest of the poor? How some of the poverty stricken countries were able to escape the trap of poverty and step in the ladder of economic growth and sustainability? How can we end the extreme poverty by 2025? These questions are some of glimpses of Jeffrey’s quest for truth in this highly crowded and differentiated world.
Growth in past TWO Centuries
What went wrong and right in past two centuries? According to Jeffery, 900 million populations in 1800 AD increased to 6.1 billion in 2000. In these two centuries world average per capita income increased by nine times but still we find such a high income gap between Africa and Europe or Asia and USA. The statistics suggest that due to countries-specific technological innovation, wave of industrialization, urbanization, smooth international trade, favorable political and social environment, those gaps in income has been increasing despite several efforts to end the poverty
Jeffery identifies the dissimilar rate economic growth in different section of the world map. He acknowledges the ‘consistency’ of 1.7 annual growth that US maintained due to which American per capita income increased by 25 fold while sub-Saharan Africa and east Asia fell in the trap of extreme poverty. He
Major economic events and Actors
According to Jeffery, various macroeconomic events like the two world wars, the great depression of 1930s, Oil boom in Middle East gulf countries, the spread of colonialism by powerful countries and the fall of European led globalization has major stake in determining the world views towards the economic scenario of the present world. He explains how the saving and capital accumulation, specialization in trade, technological advancement and social as well as structural adjustment in the overall economic policies had led to the economic boom of different development countries. At the same time, he claims that only self-sustaining economic growth can take the hold of growth rather making people rich by applying discriminatory economic policies.
Sachs, at one point, brings an important statistic of September 11 terrorist attach of World trade Center. At the tragic event, three thousand American died at the terrorist attack. At other side, 10,000 die every day in Africa due to AIDS, TB and malaria. Sachs argues that those ‘10000’ can be saved by diverting economic energy in Africa instead of spending huge budget in military resources to achieve victory over Iraqis and Afghani terrorists.
He acknowledges the role of multilateral agencies like United Nation, World Bank and International Monetary Fund in fighting with poverty that has trapped Asia, Africa and Latin American. He doesn’t not lag behind to doubt over their effectiveness and efficiency in distributing funds and resources to reach the poorest of the poor. According to him, Millenuim Development Goals is not only fight against income disparity but also vulnerability to disease, exclusion from education, chronic hunger, environmental degradation and uniform global economic growth.
Lessons from India and China
Jeffery presents India and China as one of the two ‘most watched’ growing economies in the world that are going to shape the global economy and politics. First he identifies what went wrong in those two countries that led them to lag behind USA and Europe in economic time line. Later the historical background was followed by the policy level intervention in escalating their economy in the global scenario.
According to Sachs, China was unable to tick the ladder of economic growth due to various defaults in trade policy constrained by political changes led by Maoist-influenced Chinese leadership. He wonders how china, which 25 years ago was still emerging from the chaos of Cultural war, has become one for the most important trading powers of the world. Since 1978 China has been the world most successful economy- 8% per capita per year. Difficult to imagine but 64% poverty line was reduced to 17%. Chinese technological innovation, open to trade and democratic principles has led china to the present position in global economy as stated in the book.
At the same time, He talks about the India caught in various cultural hierarchies and the British Raj of East India Company which led to deceleration in development path. The book explains clearly how poverty stricken 1978 India under the economic leadership of great development economist like Man Mohan Singh overcome the major hurdles and established the country as the center for Information technology. Today India is recognized for export of textiles, apparel electronic, pharmaceutical, automobiles component and religious tourist hub and these factors are leading to the 6% annual growth in Indian economy. Through such explanation, Sachs wants to remove the west dominance in shaping the global economy and politics. The one way is the return of China and India.
Lessons for Nepal
‘Nepal is a poor country’- this is the social reality. The country which has always been recognized as the ‘country of Mount Everest’ and ‘Birth place of Gautam Buddha’ in fact has not been able to escape from the poverty cycle. Why Nepal despite innumerable political changes, vast amount of natural resources and potential in the tourism sector is not escalating in the development ladder? This question, I guess is the hardest one for Nepalese policy makers and development actors because how hard they might try to convince through the development theories and case studies, the bitter reality is that ‘Nepal is poor’.
Sachs brings some of the intriguing issues under consideration that might be ‘mantra’ for landlocked poor country like Nepal. International fund flowing in the nation if used efficiently, according to Sachs, a country can break the vicious cycle of poverty and escalate the ladder to progress. Sachs implicitly talks about various obstacles to the landlocked country like Nepal – the country despite having such vast amount of resources and geo-political opportunities (India and China being the neighbor) has been trapped in civil war, political turmoil and unemployment. Sachs suggest that the high transport cost, government failure to promote peace and safety so as to create appropriate environment for investment, cultural barriers like gender discrimination and exclusion and Geo-political barriers like Indian monopoly in Nepal’s market might be the major reason behind such low development trends. While Sachs underscore the inefficiencies of multilateral and bilateral fund in not being able to reach poor due to high operational cost ruined by corruption.
Taking Chinese economy as the example, Sachs appreciates the role Chinese Economist Society, a group of young Chinese economist most education in West in providing China a sustainable direction towards economy boom. In Nepal, KathmanduUniversity- arguable the best university has that potential to produce excellent graduates who will provide efficient pathways to development in today’s critical hour of contribution drafting process. Similarly, Nepal can learn lesson from the India’s poverty intervention programs like ‘The Green Revolution of Asia’, ‘agricultural revolution’ and ‘Spread of Family planning’. India’s economic policy to end the most crippling bureaucratic restriction on international trade and investment can be the ideal strategy to follow for Nepalese policy maker. The contribution of Indian Institute of Technology (IIT), whose graduates are hired in UN, World Bank and IMF- Kathmandu University (KU) can stand at their position to meet the need of such manpower.
Hence, Sachs’ -the end of poverty has certainly raised the hope for poor people but his experiences and insights will be proved genuine only if poor countries are able to escape from the vicious cycle of poverty by 2025- and that is the greatest challenge of our generation as said by Sachs.
Shekhar KC (08)
MDEVS First year
Book Review Assignment 2