Jeffrey Sachs

Attended Jeffrey Sachs's public lecture at Queen Mary, University of London. He's delivering the same public lecture at LSE next week, too, but I've just got bored with LSE's lecture theatre. :)

A sixth of the world's population (1.1bn) live in absolute poverty, with their (imputed) income less than 1 dollar a day. People in Washington, D.C., say it is all about corrupt politicians and government officials. Professor Sachs says it's not only about that.

Poor people, especially in Sub-Saharan Africa, are too poor to be part of global economic development. Compare them with the poor in China and Indian; they have been becoming part of it and starting to enjoy the benefits. What causes this difference?

African people are vulnerable in three ways. First, they are vulnerable to crop failure. Compare them to Asians. Asia has become self-sufficient in food thanks to the Green Revolution, which requires the use of irrigation and fertilizer. Africa has failed to do so because of lack in both. Africa does not have the Himalayas, which ensure high water tables across Asia along with the monsoon. In Africa, rainfall evaporates very quickly; just a short spell of no rain causes serious damage in crop yielding. They need irrigation, but they simply cannot afford it. In addition, with the population rapidly increasing, they no longer fallow land, preventing nitrogen in the air from being fixed to the ground. If they could afford fertilizer, crop yield will triple. But they simply can't afford it. It is possible to make it happen, though, if donors give money to them.

Second, they are vulnerable to disease. Malaria is transmitted far more quickly in Africa than anywhere else because Africa provides the most favourable environment for malaria virus. But it is 100% curable. They can't afford drugs or can only afford the previous generation of drugs that are no longer effective. They can't afford preventive measures, either. They don't have cash to buy insecticide or bed nets. If donors give them such things, poor Africans will no longer be vulnerable to disease.

Finally, they are vulnerable to isolation. Many Sub-Saharan African countries (along with Afghanistan, Bolivia, and Nepal in other continents) are landlocked. It is difficult for them to trade with countries overseas. On top of that, however, these countries often lack in transportation and communication infrastrucre inside the borders as well. If there is no paved road, transporting crops to the nearby market is very costly. If there is no phone, you have to walk to a faraway town, only to find there is nothing to buy today. But they simply cannot afford such infrastructure. Again, giving them aid money solves the problem.

So what we need is simply more money. At the end of his lecture, he stresses the recent movement by EU countries (UK, France, and Germany among others) to set a timetable for reaching the 0.7% target in foreign aid. (In 1970, rich countries agreed to aim for providing foreign aid equal to 0.7% of their GDP. Except some countries -Norway, Sweden, Denmark, the Netherlands, and Luxemburg - they have failed to achieve it.)

He has very few words on how to ensure that aid money will be properly spent. But his succinct summary of causes of poverty (vulnerability to crop failure, disease, and isolation) is revealing to me. Also what strikes me is his idea that there is a jump between absolute poverty and the process of economic development due to capital accumulation (physical and human). Absolute poverty prevents people from saving. In this situation, the market force does not work. It's not about too many regulations imposed by the governments.

Professor Sachs has been an advisor to the governments of many countries and visiting many poor countries around the world. His talk seemed to come from these expeeriences, not from academic works. It made me realise that my view on development has been a bit confined by mainstream development economics. (Professor Sachs is no longer part of it.) This way, the lecture was worth attending for me. (Plus, it may give me an idea useful to my research...)

The lecutre, by the way, is part of his book launch tour (see his new book website and a book review by The Economist magazine - subscription required). He also held signing after the lecture. He's like a novelist.