Ending poverty in 2025

Ending poverty in 2025

Arya B. Gaduh, Contributor, Jakarta

It was once said, poverty would always be with us. Jeffrey
Sachs, a world-class economist and professor at Columbia
University, does not fully agree: Poverty, at least the worst
kind, can be eliminated. In The End of Poverty, he proposes a way
for the world to achieve this, not in our grandchildren's or even
our children's lifetime, but in ours. If rich countries pay up
their dues, he believes it is conceivable to stop extreme poverty
by 2025.

The End of Poverty is, for the most part, about Sachs' passion
to end poverty by 2025. Behind this passion is his decade-long
experience in Africa, where he observes first-hand the plight of
people living in extreme poverty, a condition marked by the
inability to meet even the most basic needs for survival. The
experience taught him "a considerable amount about extreme
poverty, the power and limits of globalization, and the
indomitable strength of the human spirit in the face of
adversity." (p. 188).

The experience also taught him that extreme poverty was
possible to eliminate. With the right approach, and adequate
outside assistance, the poorest of households can begin to meet
their minimum needs, allowing them a sustainable livelihood of
their own. His objectives to end poverty, then, are "to end the
plight of one-sixth of humanity that lives in extreme poverty and
struggles daily for survival" and "to ensure that all of the
world's poor, including those in moderate poverty, have a chance
to climb the ladder of development" (p. 24).

What causes extreme poverty, particularly in Africa? Bad
governments (and governance) have taken a bad rap as the culprit
for Africa's poor economic performance. But according to Sachs,
this would be misleading: compared to other countries around the
world with similar income and quality of governance, Africa's
growth was as much as 3 percent lower. So, argues Sachs, extreme
poverty in Africa was essentially a result of bad luck from
adverse geography, and insufficient infrastructure (p. 314).

Sachs is at his best in providing compelling arguments to
explain the underlying cause of extreme poverty. He skillfully
mixes economic growth theory, empirical findings, and sprinkles
anecdotes to explain the notion of "poverty traps". Without
outside help, households in a poverty trap will see their capital
shrink and finally, destitution. But the governments of countries
stuck in a poverty trap do not have the resources to assist these
households.

So, he proposes to have rich, foreign governments help these
households instead. To do that, rich countries should live up to
their promises, made in Rio de Janeiro 1992 and in Monterrey
2002, to increase foreign aid to 0.7 percent of their gross
national products (GNP). Of the rich countries, the United States
is the laggard, contributing a mere 0.15 percent of its GNP in
2003. Rich countries also need to coordinate their policies
better through the three major international institutions: the
United Nations, the World Bank and the IMF.

His proposal on the donor side is, I think, quite
comprehensive and workable. However, Sachs is missing a critical
element: What about the mechanism on the receiving side? Sachs
took issue at excuses made by the U.S. government, based on
prejudices against African governments, to avoid giving financial
aid to the continent.

However, the problem of corruption in Africa -- and in most
other developing countries -- is real. Without a similarly
comprehensive proposal to tackle this, it is not hard to imagine
how the other proposal may fall on deaf ears.

Sachs clearly acknowledges that there are two parties to a
compact to end poverty. "Poor countries have no guaranteed right
...to accept development assistance from rich countries. They only
have that right if they themselves carry through on their
commitments to good governance" (p. 269).

However, it is no easy task to figure out and ensure real
commitments to good governance. A detailed proposal to do that is
badly needed -- and the book's lack of such a proposal makes it
rather incomplete.

This issue aside, The End of Poverty remains a valuable read.
Economists, policy analysts, development specialists and
activists will find gems all over, particularly as Sachs shares
his personal and professional experience in advising countries in
Latin America, Eastern Europe, the former Soviet Union, Asia and
Africa.

For the rest of us, it states the possibilities of our time:
"how our generation could mobilize our capacities in the coming
20 years to eliminate the extreme poverty that remains" (p. 4).
In short, it's a statement of hope.