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Recession or Not—Let’s Fight Global Poverty

In the midst of the worst economic crisis in a generation, Jeffrey Sachs insists that we need to focus on wiping out the most extreme poverty on the planet.

In the midst of the worst economic crisis in a generation, Jeffrey Sachs insists that we need to focus on wiping out the most extreme poverty on the planet. Not just for the sake of the poor, but also for our own.

There’s still ample money around to markedly improve the living standards for the world’s “bottom billion,” says the author of Common Wealth: Economics for a Crowded Planet.Sachs,director of the Earth Institute at Columbia University and special adviser to United Nations Secretary-General Ban Ki-moon, argues that a relatively small-scale investment by the West in practical items—antimalaria nets, cook stoves, cellphones—would raise the poorest people above the threshold of subsistence.

His attempts to link poverty reduction and rural development to long-term environmental sustainability have gained the Harvard-educated economist almost rock-star cachet. When not meeting with economic ministers in Brazil or addressing financiers in London, he can often be found surveying the quality of life in an isolated African hamlet with Bono or Angelina Jolie.

What’s in all of this for the “have” nations? Increased global security, Sachs insists. Since the Sept. 11 attacks, he has come to believe that the best way to create security for the wealthiest countries is to markedly improve the lives of the poorest in the developing world. (Read an excerpt from Common Wealth.)

Q. What is the simplest way to pull a nation out of poverty?

A. The key for places in the world stuck in extreme poverty is basic investment in the core needs of those communities. Basically, these are farm communities, so agriculture is very high on the list. So are health, education, roads, power, water and sanitation, Internet connectivity and basic business development, such as micro-finance. I emphasize a practical approach to help the poorest of the poor address their basic needs and raise their productivity so that they can then make their way out of poverty over the long term.

Q. Isn’t this way too expensive for advanced nations to handle today?

A. What I’m proposing is not a massive wealth transfer; I’m not saying we need to equalize incomes. The things I’m proposing would leave poor communities very poor, but would put them in a position where they are beyond the survival threshold so that the children are surviving and going to school, so that the parents are productive enough to be earning an income, not simply living at subsistence.

Q. What’s the bottom line?

A. When you make the calculations, the costs to the rich world are less than 1 percent of its income. That’s the bargain of the planet. Not only would less than 1 percent of our income save millions of lives every year, help children to be healthy, properly fed and properly schooled, it would also create a much safer planet and one that would be much safer for our own children and their children.

Q. The challenge seems pretty overwhelming.

A. For the past decade I’ve been working with teams of specialists across all the major sectors of people’s lives. Working with doctors and public health specialists on what it would take to control disease, to enable mothers to have safe childbirth, to properly nourish children. Working with agronomists on what it would take to ensure food security and income for the farmers. I’ve been working with civil engineers on what it would take to build roads and to have power, electricity and cook stoves in these communities. I’ve been working with the phone giant Ericsson on what it would take to bring mobile telephones to all the remote rural areas and then to have the right kind of applications on their phones that could really empower these communities.

Q. You say the cellphone is a great development tool. How so?

A. Well, it turns out that, given the way the economics of mobile phones work, it really makes sense for service providers to put up towers just about everywhere, even in very poor rural areas. The towers don’t cost all that much. It’s also possible to divide user charges into tiny amounts for a few seconds of phone time. In very poor communities, the phone companies have very cleverly set contracts or arrangements for subscribers that allow even extremely poor households to get at least a small bit of connectivity.

This means that mobile phones, without the need of foreign assistance, are reaching huge numbers of people. In African villages you now have at least a few phones around, and everybody knows who has them. If a mother is dying in childbirth and needs a truck or an ambulance, it’s now possible to provide emergency response in ways that were unimaginable just a few years ago.

Q. In terms of poverty and development challenges, doesn’t Afghanistan, now very much on the radar of the Obama administration, face issues similar to those in sub-Saharan Africa.

A. Afghanistan is one of the poorest countries in the world and has two of the biggest risk factors for impoverishment. One is that it’s a landlocked country. That means that it’s quite hard to be engaged in normal international trade—for example, in the manufacturing sector. Manufacturers like to invest right at a port on the coast of a continent.

The other major risk factor for Afghanistan is that it is very dry and drought-prone. This is a hungry, water-stressed part of the world, and water stress is a terrible burden on development because we use water to grow food. If we can’t grow enough food, people are hungry. When people are hungry, societies are unstable.

Q. What needs to be part of the administration’s overall strategy in Afghanistan?

A. There really are very serious security problems in Afghanistan. Still, we should not misunderstand the basic truth that as many troops as we put in, Afghanistan will not be stable unless we address—and help Afghanistan and its neighbors to address—the challenges of water, hunger, disease and illiteracy. Afghanistan needs transport and communication, a solution to its water crisis, investment in agriculture and investment in schools and training.

Q. Most Americans have never seen Afghanistan but presumably would like to help in some way. What can they do?

A. Well, I first would encourage everybody to learn and to read and understand about these challenges and to appreciate that there are hundreds of millions of people in desperate need where we have the capacity to help, and by helping, to make a safer world. So the first thing is make the commitment to be well-informed. Have an open mind and open eyes and ears about this.

Then there are many things that individuals have been doing and can do. I worked with a number of philanthropists in New York City and around the world to establish a nongovernmental organization, a not-for-profit called Millennium Promise. People who go to our website can learn a lot about our activities—for example, the way a contribution of $10 to enable a child to sleep under an antimalaria bed net can save lives. We find that the more people learn, the more they want to be involved.

Q. We live in a world clearly worried about shrinking balance sheets and shrinking economies. Do you worry that your ambitious goals will be delayed as we go through massive global restructuring?

A. We’re seeing that happen right now. Some countries are slashing their development aid budgets. Italy, which hosts the G-8 this year, cut its aid sharply. I was just in Africa and saw people suffering extreme hunger partly because the mines that created the jobs in their communities have closed down because of the global economic crisis and there’s no income to buy food. So the crisis is very big, and at the same time the development assistance is threatening to decline significantly. This would be a horrendous clash. It would raise the instability in the world considerably.

Q. Sounds like a deep, deep problem.

A. This is very worrisome. I’ve been stressing how we need to ensure that we don’t attempt to balance our budgets or respond to this crisis on the backs of the world’s poorest, hungriest and disease-burdened people. This would be cruel and lead to a horrendous outcome. And because helping those people costs less than a penny on the dollar, we don’t have to do it that way. We can afford to help them, and by doing so help ourselves.

Michael Zielenziger writes about banking and the economy.