The End of Poverty – How we can make it happen in our lifetime by Jeffrey D. Sachs
Jeff strongly believes that our generation has the opportunity to end extreme poverty in the world’s most desperate nations and stop the vicious cycles of bad health, bad debt, bad economics, bad strategies, bad choices, insufficient action and sometimes bad luck that hold back more than a billion people.
Most people will agree that extreme poverty is bad and should be addressed but are we prepared to pay to price for taking the next steps in building an equitable world where all lives have the same values and dignity regardless of color and origin? In a world where distance no longer determines who your neighbor is, paying the price of equality and equity is not just having a good heart, it is being smart! History will be our judge, but what will be written is entirely up to us: Who we are, who we’ve been and what we want to be remembered for. We can’t say our generation did not know how to do it or could not afford it or did not have the reasons to do it. It’s up to us.
In the End of Poverty, Jeff argues that ending poverty is possible. The book is not a prophecy but it’s a guide and a call for our generation to sermon our courage and face head-on the issue of extreme poverty and solve it once and for all.
Jeff shows that while economics preach individualism and decentralized markets, our safety and prosperity depend so much on collective decisions to fight disease, promote good science and education for all, provide critical infrastructure and act in unison to help the poorest of the poor. When the preconditions of basic infrastructure (roads, power and ports) and human capital (health and education) are in place, markets are powerful engines of development. Without those preconditions, markets can cruelly bypass large parts of the world, leaving them impoverished and suffering. Collective action, through effective government provision of health, education, infrastructure, as well as foreign assistance when needed, underpins economic success.
From Malawi to Bolivia, from Poland to Russia, from China to Bangladesh and many other countries with different contexts and history, Jeff shows how sound and thought through measures succeeded or failed to raise countries to the first economic ladder where progress was subsequently possible within a global market. Our generation is able to put struggling countries on a progression of development that moves from subsistence agriculture towards light manufacturing and urbanization, and on to high-tech services. The greatest tragedy of our time is that one sixth of humanity is not even on the development ladder. A large number of the extreme poor are caught in a poverty trap. They are trapped in disease, physical isolation, climate stress, environmental degradation and by extreme poverty itself.
The author argues that the very hardest part of economic development is getting the first foothold on the ladder. Our generation challenging is to help the poorest of the poor to ascend to the ladder of economic development.
The crucial puzzle for understanding today’s vas inequalities is to understand why different regions of the word have grown at different rates during the period of modern economic growth. The vast differences in power contributed to faulty social theories of these differences that are still with us today. When a society is economically dominant, it is easy for its members to assume that such dominance reflects a deeper superiority – whether religious, racial, genetic, cultural or institutional – rather than an accident of timing or geography.
Jeff believes that the single most important reason why prosperity spread, and why it continues and will continue to spread, is the transmission of technologies and ideas underlying them. Even more important than having resources in the ground, such as coal, is the ability to use modern, science-based ideas to organization production and use. The beauty of ideas is that they can be used over and over again, without ever being depleted.
The most common explanation for why countries fail to achieve economic growth often focuses on the faults on the poor: poverty is a result of corrupt leadership and retrograde culture that impede modern development. However, something as complex as a society’s economic system has too many moving parts to presume that only one thing can go wrong.
Eight major categories of problems can cause an economy to stagnate or decline. (1) Poverty trap: poverty itself as a cause of economic stagnation. (2) Physical geography. (3) Fiscal trap. (4) Governance failures. (5) Cultural barriers. (6) Geopolitics. (7) Lack of innovation and (8) The demographic trap.
Economic development requires a government oriented toward development. The government has many roles to play. It must identify and finance the high-priority infrastructure projects, and make the needed infrastructure and social services available to the whole population, not just to a select few. The government must create an environment conducive to investments by private businesses. It must also fight corruption, maintain internal peace, security, maintain judicial systems and defend the national territory. The necessary reforms must be led by an executive team, with a real executive leader, able to take action and produce results and able to mobilize and find the required outside help.
The end of poverty will require a global network of cooperation among people who have never met and who do not necessarily trust each other. Most people in the world would accept the fact that schools, clinics, roads, electricity, ports, soil nutrients, clean drinking water and the like are the basic necessities not only for a life of dignity and health but also for economic production.
At the most basic level, the key to ending extreme poverty is to enable the poorest of the poor to get their foot on the ladder of development. The extreme poor lack six kinds of capital:
- Human Capital (Health, nutrition, and skills needed for each person to be economically productive
- Business capital (the machine, facilities, motorized transport used in agriculture, industries and services)
- Infrastructure (roads, power, water and sanitation, airports, and seaports, and telecommunications systems that are critical inputs into business productivity)
- Natural capital (arable land, healthy soils, biodiversity etc.)
- Public institutional capital (the commercial law, judicial systems, government services and policies that underpin the peaceful and prosperous division of labor)
- Knowledge capital (the scientific and technological know-how that raises productivity in business output and the promotion of physical and natural capital)
A country would need (1) a differential diagnosis, which identifies the policies and investments that the country needs; (2) an investment plan, which shows the size, timing and costs of the required investment; (3) a financial plan to fund the investment plan; (4) a donor plan, which shows the donor commitments for filling the funding gap; (5) a public management plan that outlines the mechanisms of governance and public administration that will help implement the public investment strategy.
Any strategy chosen must consider the human factor. Human beings with their propensity to war and conflicts, fears, unhealthy competition, and other ills.
In the end, however, it comes back to us, as individuals. Social commitments are commitments of individuals. What will the future say? Let the future say of our generation that we sent forth mighty currents of hope, and that we worked together to heal the world.
Hi sir. Can you publish also a french version of your article?
ReplyDeleteHey thank you for the request. I tend to write a summary in the same language as the book. I'll be publishing a french summary for a similar book within a week. I'm sure you'll enjoy it.
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