Jeffrey D. Sachs is among the few economists from the developed world who empathize and sympathize with the world’s poor. He views the world as a global super-community in which the disparate human societies have a common destiny. A world in which true progress will only be possible if we rise as a unit, if the world’s poor are helped out of the circumstances of their birth. His book, The End of Poverty: Economic Possibilities for Our Time, especially forcefully argues this view. It follows that a recurring theme in the book is the need for a paradigm shift in our global economic views. It stresses that all nations need to come together in order to create a poverty free, science based and stable world. It forcefully argues the need for a multi-dimensional approach to eradication of poverty now afflicting millions of world citizen. Sachs aptly names his method of analysis as "clinical economics" comparing it to that done in the field of medicine. He employs differential diagnosis techniques to examine problems afflicting poor states and prescribes a multi-faceted approach to solving these challenges.
Sachs is undoubtedly one of the most brilliant economic minds of our time, and the book confirms that much. Drawing from economic theory, world history and his own experiences as an advisor to world leaders – from Bolivia to Russia to the UN – Sachs presents what may pass as a global manifesto on poverty eradication. To be sure, most economists in developing economies like Kenya will not find Sachs’ arguments ingenious. Much of what Sachs proposes has been said in the developing world before, only no one was listening. What is striking in Sachs’ arguments, however, is the fact that they come from a Harvard Business School type of mind. Sachs dispels the standard western teaching that poverty in the developing world is solely a function of poor governance. Delving into world history, he shows that the economic bi-polarity characteristic of the world today is no coincidence but rather a function of geographical factors and historical injustices.
Sachs’ definition of poverty conforms to the controversy ridden one of the United Nations and borrows much from the Millennium Development Goals (MDGs). It however goes ahead to classify poverty into three degrees:
i. That of the estimated 2.5 billion people in urban areas with access to such facilities as education, nutrition, housing, transportation, and reasonable nutrition he calls relative poverty.
ii. That of the estimated 1.5 billion people who survive on levels above subsistence yet find it hard to meet certain basic needs he calls moderate poverty.
iii. That of the estimated one billion people who find it impossible to even meet the most basic of needs he calls extreme poverty.
The extreme poverty category is especially the most vulnerable. Living on less than one dollar a day, this category makes up an estimated one sixth of the world population. A disproportionately large number of those in this in this category are in sub-Saharan Africa and south-east Asia. And one gets the feeling that it is this group that Sachs is committed to liberate.
Such a concern has been with humanity for as long as recorded history can tell. Indeed, all the major world religions place an almost numinous importance to helping the poor. Such thinkers of the Enlightenment period as Thomas Jefferson and Immanuel Kant persuasively argued for this cause, and Sachs notes as much. But never have the reasons outlining the causes of the world’s wealth-poverty divide been so clearly put.
Sachs in his characteristic self uses his good writing skills to put forward and explain the major causes of poverty. The End of Poverty analyses the causes of poverty using non-classical and classical theories and is revolves around the now widely accepted tenet in the third world that poor people (and countries) are poor because they are poor; that poor countries are held in a vicious of poverty. He posits that the main causes of poverty in the developing world are tied to issues of geography, demography, geography and unique climates characteristic of most of these poor countries. The writer compares the economics of the state to that of households in order to make his points on causes of poverty clear to the reader. He claims that stultified economic performance characteristic of most poor economies can be attributed to eight major factors1:
i. As already intimated, poverty itself engenders poverty as the poor lack the capital to advance themselves in this respect.
ii. Cultural barriers that prohibit certain sections of the population, particularly women, from engaging in economic activities.
iii. Demography is also a major for the reason that poor people, curiously, have abnormally high fertility rates. For this reason, poverty spawns itself.
iv. Lack of innovation in most poor countries.
v. The physical geography of certain countries is such that it is more expensive to put up signal guides, roads, railways, and other physical infrastructure.
vi. Poor governance and governance structures.
vii. There are fiscal barriers with the result that governments lack the funds to invest in essential areas.
viii. Geopolitics is also a major factor as trade barriers stultify economic growth.
From the slew of reasons above, we see that Sachs is against simplistic arguments that are characteristic of most western economists; economists who have the propensity to tie poverty in the developing to poor governance only. Although he certainly agrees with them that poor governance is a major factor in engendering poverty in the developing world, he also convincingly advances other arguments for the causes of poverty especially in Africa viz: malarial infections, concentration of much of the population away from the coast, over-reliance on rain fed agriculture and poor soil management techniques.
Thus the strength of Sachs’ argument is that it is multifaceted. He asserts that one “of the weaknesses of [conventional] development thinking is the relentless drive for a magic bullet, the one decisive investment that will turn the tide.” This “does not exist”, he says (Sachs, 2006). Sachs, thus, looks at the issue of poverty through many possible perspectives and attempts to offer solutions using well researched academically well grounded hypotheses and practical experience. Sachs’ displays good understanding and knowledge of why some countries have succeeded while others have failed in the task of poverty eradication. Sachs argues that those countries that have succeeded are those that have tailored their economic policies to circumstances on the ground. He maintains that each country is suited to its own unique economic model and that different solutions should be recommended for different states.
The writer offers a conceptual framework and specifies certain policy suggestions with a view to solving the social, political and economic challenges confronting the third world by the year 2025. One thing that clearly comes out of this book is that the writer sees the problems of the developing world through the eyes the world poor. He has been with them and is truly empathetic. However, Sachs is a realist and submits that there are states that are in the habit of paying lip service to their obligations of eradication of poverty and that for this reason his slew of prescriptions may not work for all. He is nevertheless convinced that increased assistance to poor countries by developed countries can dramatically change the nature of world wealth-indigence divide in ways we cannot anticipate as yet. Sachs goes further to suggest where the funds should be channeled for maximum impact to be felt. He notes the areas of human capital development capital, technological development, public sector reforms, research, natural resources, and infrastructure development as being of paramount importance. Sachs comes out as a firm believer in science as a panacea for much of the world’s problems and makes the bold claim that the problems of extreme indigence ''can be met, with known, proven, reliable and appropriate technologies and interventions.'' He says that what is required is funding and proper coordination.
Sachs lays the responsibility of co-coordinating this whole exercise at the door of the United Nation (where he was then an advisor to the then Secretary General, Kofi Annan). Sachs also castigates the developed world, notably his own United States of America, for paying lip service to the task of poverty alleviation. He wants them to take a more proactive role in the task, especially in funding projects aimed at meeting the Millennium Development Goals. Sachs makes the bold claim that an active commitment by all developed countries to set aside 0.7 percent of their Gross National Product towards eradication of world poverty would see alleviation of extreme poverty by the year 2025.
On the face of it, Sachs’ approach seems repetitive and may be branded as borrowing from the dependency theory and neo-liberalism. However, Sachs disagrees. He rejects the neo-liberal teaching that democracy and good economic performance are causally linked; he denies conventional wisdom that democracy and laissez-faire system are the only preconditions for growth in a political economy. He gives a slew of examples of countries in China and Middle East which have registered impressive growth but whose governance structures do not conform to the hyped liberal democracy of the western world. Sachs prescriptions do not conform to dependency theory in the sense that he proposes investment by rich countries in poor countries only with a view to helping the poor countries have a take off launch pad, From here, he claims that the countries will be able to sustain their economies.
Sachs is clear in the book that the role of governments in this task is facilitation and creation of policies aimed at meeting this end. His experience as an advisor to world leaders and organizations makes him conclude that governments have a role to play and that proper governance structures have to be put in place to expedite the process of poverty eradication. He warns against the Russian workers’ kind of approach to this task. The Russian workers message to employers that “you pretend to pay us, we pretend to work” seems to have been adopted by developed and developing nations’ government. Sachs says that a number of “poor countries today pretend to reform while rich countries pretend to help them” (Sachs, 2006).
Sachs exudes confidence and optimism that if all countries change their approach to problems now afflicting the world, especially that of extreme poverty, then we can end extreme poverty in our generation. Sachs says that concerted efforts at eliminating poverty have had success in the past and that they can do so now. He cites the example of the Marshall Plan under President Harry S. Truman. In this plan, the United States helped rebuild Europe by investing heavily in Europe after the WWII. The outcome of this initiative was impressive yet the U.S. invested just slightly over a percentage of its Gross National Product. As has already been intimated, Sachs is convinced that with an investment of just about 0.7 percent of the rich countries’ Gross National Product, global poverty can be eliminated in the next 25 years.
Sachs’ ideas have been criticized for assuming a perfectly science based world thus ignoring the moral perspectives of the political economy. Moreover, it is claimed that Sachs is too steeped in the utopian thinking of the period of Enlightenment and that, for this reason, his prescriptions seem to ignore certain economic realities. However, the book is a masterpiece economic from a world citizen committed to the cause of creating a more just and stable world. It is undoubtedly a good book from a great mind.
