Week 9: Sachs & Development / Moyo & China

Jeffrey Sachs suggestion in Chapter 15, The End of Poverty, is to use rich in high-income countries to lift all of the world’s extreme poor to an income that meets basic needs.  His list five reasons why the level of required effort is modest:

  • The number of extreme poor has declined to a small proportion of the world’s population (1.1 billion people)
  • The goal is to end extreme poverty, not end all poverty, and to close the gap between rich and poor
  • Success in ending the poverty trap will be easier than it appears
  • The rich today are vastly rich
  • Our tools are more powerful than ever

Sachs uses these five reasons as justification to sharing investment cost among the large nations and less than one percent of the rich-world income.  I do not think his suggestion is sustainable for the long-term.  Over time, a countries power and income can change as countries shift from phase three to phase four and beyond, as shown in the demographic transition model (Figure 1.1).

Figure 1.1 Demographic Transition Model

For my country to examine the official development assistance (ODA), I choose Zambia, the country I have been examining for weeks now. Health and population, as well as social infrastructure is the main need.  According to OCED, the 2012-2013 average bilateral ODA by sector was the following:

  • Education = 6%
  • Health and Population = 33%
  • Other Social Infrastructure and Services = 35%
  • Economic Infrastructure =  9%
  • Production = 7%
  • Multisector = 2%
  • Programme Assistance = 6%
  • Action Relating To Debt = 0%
  • Humanitarian Aid = 0.71%
  • Other = 3.13%

The world’s extreme poverty rate is about 15%.  For the world average poverty has gone down by 20%, yet in some countries of sub-Saharan Africa it is not the case.  Zambia is especially the case; as data from the World Bank shows the poverty headcount of people living on less than $1.25 a day has gone up from 65.3% in 1993 to 74.3% in 2010.  There is however, reason to believe that percent has gone down as the economy is one of the fastest growing in recent years.

Chapter sixteen focuses on the myths of why aid programs would fail in Africa.  The big three he examines are:

  • Corruption
  • Lack of Democracy
  • Lack of Modern Values

Sach states that the repeated assertion of corruption or poor governance is Africa’s “venal sin”, the deepest source of its current malaise.  He makes a connection between a country’s income rise to improved government, which is measured by the ability to keep the government honest.  I do not think the argument is strong enough to debunk the notion that corruption as a culprit is a myth.

The lack of democracy relates to corruption.  Work by Jeremy Weinstein has examined how the democracies of the sub-Saharan countries are just shells of democracies with one party systems and violent takeovers.

The only myth I agree with (somewhat) is the lack of modern values.  I do not believe sub-Saharan countries are impoverished because they have no regard for modern social systems.  My problem with his culture debate is while culture changes with economic times and circumstances, this process takes decades to change.

Thinking globally will help create a two-way street that can benefit the developing countries, but also the developed countries that are offering assistance and working to bring the countries out of poverty.

Moyo identifies some objections about China’s record on governance and human rights.  She notes how western countries were working on a deal with the Nigerian railroad only to get undercut by China which offered more money with no strings attached.  Many westerners are weary of China, because they are unsure of China’s endgame.  China seems not to be bothered by bad human right or the political system of the countries of Africa.  I personally believe there is an endgame to the no strings attached approach, such as opening up markets to Chinese products, I am just unsure if it is the right strategy.

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