The End of Poverty: Economic Possibilities for Our Time by Jeffrey Sachs - Essay Example

Number or College Introduction Poverty is the shortage of basic necessities of life that are not there or cannot be fulfilled. Poverty can be simply termed as the lack of money, or more described as the deprivation of almost everything in life. There can be three types of poverty: 1.1 Extreme poverty It can be referred to as the state of severe deprivation of basic human needs, which commonly includes food, water, sanitation, clothing, shelter, health care, education and information. According to the estimation of World Bank in 2008 about 1.29 billion people were living in extreme poverty. Out of these 1.29 million there are 400 million people who live in tremendous poverty in India and 173 million are in China. In the Saharan African region the percentage of extreme poor is as high as 47% by the readings of 2008, from the 1990 to 2010 the rate of extreme poverty has increased and thus it is a great challenge to the world to reduce the levels of extreme poverty (News & Broadcast, n.d.). 1.2 Moderate poverty It can be defined as a type of poverty where general needs are met. This includes countries where the estimated income falls from $1 to $2 per day. Moderate poverty is most common problem of the countries where hyperinflation exists. 1.3 Relative poverty It is defined as economic inequality in the location or society in which people live. If we refer to history we get to know that poverty had been mostly accepted as inevitable as traditional modes of production were insufficient to give an entire population a comfortable standard of living. After the industrial revolution, mass production in factories made wealth increasingly more inexpensive and accessible. Of more importance is the modernization of agriculture, such as fertilizers, in order to provide enough yields to feed the population. People who practice asceticism intentionally live in economic poverty so as to attain spiritual wealth. Poverty is the part of any social culture that exists in this world. It can be termed as a negative element of the society that unfortunately is there presents everywhere. Developed or developing, countries also face poverty to some extent. The economic imbalance is very contradictory and is so far the main reason of poverty. Education, health, geography, infrastructure all relate to the subject. How we define poverty is critical to politics, policy and academic debates about the concept as Lister (2004) has examined. However a lot of work is done to define poverty and policies have been made to at least reduce the extreme poverty. Individuals, groups or families in the population are said to be in the poverty when there is lack of resources, and the utmost necessities of living that includes diet, medication, shelter, transportation etc are not met. There are many countries in the world that are suffering from extreme poverty and the efforts made for them do not seem to have any effect on reducing the poverty. The world is trying to do its best to reduce poverty, one of the policy based effort is social policy. Social policy, at its best, is transformative and it cannot be separated from efforts to create employment that is growth centered and can make structural changes (Bangura, 2010). Inequality is described as the major cause of poverty by most of the researches. It is said by Bangura (2010), that poverty and inequality should be considered as the parts of the same problem. The World Banks "Voices of the Poor," based on research with over 20,000 poor people in 23 countries, identifies a range of factors which poor people identify as part of poverty. These include: Precarious livelihoods Excluded locations Physical limitations Gender relationships Problems in social relationships Lack of security Abuse by those in power Disempowering institutions Limited capabilities Weak community organizations Moore (2007) argues that some analysis of poverty reflect pejorative, sometimes racial, stereotypes of impoverished people as powerless victims and passive recipients of aid programs. Book written by Jeffery Sachs in 2005, titled “The End of Poverty” is a good work on the subject. It has a detail overview of what can be done to reduce poverty according to the writer. 2. About the Author Jeffrey D. Sachs is well known economist all around the globe; he is associated with ‘sustainable development’. He is also senior UN advisor. He is a bestselling author and his columns that are published in monthly newspaper are printed in more than 80 countries of the world. New York Times published that, "probably the most important economist in the world," and Time Magazine listed his name twice in the list of 100 most influential world leaders. Time Magazine also talked about him saying that he is "the worlds best known economist." A recent survey by The Economist Magazine had termed Professor Sachs as the worlds three most influential living economists of the previous decade (Prof. Jeffrey Sachs, n.d.). According to The Earth Institute - Columbia University (n.d.), Professor Sachs is recently serving as the Director of The Earth Institute, Quetelet Professor of Sustainable Development, and Professor of Health Policy and Management at Columbia University. He is Special Advisor to United Nations Secretary-General Ban Ki-moon on the Millennium Development Goals, and was serving at the same position under former UN Secretary-General Kofi Annan. He is co-founder and Chief Strategist of Millennium Promise Alliance, and is director of the Millennium Villages Project. He is a native of Detroit, Michigan, and had received his B.A., M.A., and Ph.D. degrees at Harvard. In the past seven years he has written three bestseller books in the fields he is related to: The End of Poverty (2005), Common Wealth: Economics for a Crowded Planet (2008), and The Price of Civilization (2011). Sachs is considered as one of the world’s leading experts on economic development and the fight against poverty.  His work on ending poverty, promoting economic growth, fighting hunger and disease, and promoting sustainable environmental practices, has taken him to more than 125 countries with more than 90 percent of the world’s population.  For more than a quarter century he has advised dozens of heads of state and governments on economic strategy, in the Americas, Europe, Asia, Africa, and the Middle East. Sachs is the recipient of many awards and honors, including membership in the Institute of Medicine, the American Academy of Arts and Sciences, Harvard Society of Fellows, and the Fellows of the World Econometric Society.  He has received more than 20 honorary degrees, and many awards and honors around the world. Professor Sachs is also a recurrent contributor to major publications such as the Financial Times of London, the International Herald Tribune, Scientific American, and Time magazine (The Earth Institute Columbia University, n.d.).. Prior to joining Columbia, Sachs spent over two decades at Harvard University, as Director of the Center for International Development and the Galen L. Stone Professor of International Trade (The Earth Institute Columbia University, n.d.). 3. About the Book The End of Poverty as described from its name is about poverty. The main focus of the author is to provide how poverty can be decreased if not ended fully. The book is not about the one factor associated to poverty but it is about all aspects of the problem. The perspective of the author is however different than the usual in terms of solutions that are formulated. Sachs (2005) talks about the normal ways of dealing with poverty and thinks that people do not seem to pay attention on such a core need for the society betterment. One of his main points in the book that is important according to his school of thought is that rich countries should cancel all kind of dept to be paid by the poor countries so that the chances of their development increases. He also thinks that the development aid by the rich countries should increase to 7% from the present 2%. He quotes “economic development is real and widespread” and thus the rich countries should help the poor countries in economic growth. The book has a lot of material from the writer’s experiences that relates to the subject. Examples are given about the countries like India, China, and Bangladesh to show the levels of poverty and economic development. Sachs (2005) tells that one-sixth of world’s population is at the lowest level of poverty where there is illness and hunger. This is the poorest category of poverty and the people live on less than $1 per day. He starts right from the 1700s, the time when the world was extremely poor than it is today. Industrial revolution marks the beginning of new era and the situation started to improve. With the invention of steam engine mobilization things started to improve. Although it was restricted to some areas but was it was an improvement. Huge military and financial advantages were taken through the coal fuel industry. The sea way transportation was another aspect of the early development. But the restriction of the facilitation at some part of the world and not all over caused the inequality of economic growth that is one of the major reasons of the problem. By the time the introduction of telegraph, development of coal engine to combustion engine, the things started getting better in some parts of the world but not all. According to Sachs (2005), in the modern world the communication system and technology can make it possible to deal with the poverty in a much better and effective way. By the time the world started to progress, if the socialist and the undeveloped countries had contributed to economies of the world, the economic development would have been far better. The economic development should have started in poor countries long ago. According to Sachs (2005), the poor countries remained land-locked and the brutal colonial powers exploited the poor countries by making bad national policies which made them even poorer. Sacks (2005) provide ways to increase income on personal level. By saving, trading, using the right and updated technology and booming resources possible income can be increased. By this he also points out that doing the opposite will make the income reduce. Lack of saving, absence of trade, technology reversal, decline of natural resources, adverse productivity shock, population growth, physical geography, fiscal trap, governance failure, cultural barriers, geopolitics, lack of innovation, and demographic trap are all poverty causing elements (Sachs, 2005). Sachs (2005) is related to the field of health too and thus relates poverty to health and economics terming it as “Clinical Economics”. He says “poverty causes diseases and diseases cause poverty”. If there is a failure in one system it effects the others parts too especially economy gets affected. Diseases are to be controlled in order to reduce poverty. He also believes that Millennium Development Goal is also important in reducing poverty. Extreme poverty should be identified and treated and proper fiscal frameworks should be made and implemented. To explain poverty with examples and differentiate its types and situations at different level Sacks (2005) talked about different countries and there problems. He also provided the solutions to their problems according to the geographic, political, economic situation of the region. He also realizes that the present aid situation is not sufficient, characterizing current practice as: “Many poor countries today pretend to reform while rich countries pretend to help them” (Sachs, 2005).  Sachs (2005) proposes that direct assistance from rich to poor countries should increase dramatically, but he specifies that the funds should be used in six categories of key investments: Human capital should improve health, nutrition, and skills. Business capital should improve technology in agriculture, industry, and services. Infrastructure should improve roads, power, sanitation, transportation, and communications. Natural capital should improve soils and ecology. Public institutional capital should improve legal, governmental, and police systems. Knowledge capital should improve scientific and technological expertise. Sachs (2005) strongly believes that everything must start from the village. It is important for people to live in villages too and as everyone cannot shift to cities so that the balance is maintained and more production becomes possible. He says that the urban and rural communities should work together and both should be provided with the basic necessities of good life. Especially the health, transport, and education should be made possible in villages. He believes that the rich world would readily provide the missing finances but they will wonder how to ensure that the money made available would really reach the poor and that there would be results. Therefore a strategy is required for scaling up the investments that will end poverty, including governance that empowers the poor while holding them accountable. The poor countries themselves need to understand their problems and should try to use their natural resources at their best to improve the situation. He proposes five strategies that are important to reduce poverty and they are, diagnosis to identify and invest on policies, making proper investment plans, financial plan to the funds required for investment. Donor plans that provide long termed commitment, and finally the public management plan that consist of governance and public administration. He also proposes the following Global policies to reduce poverty: Debt crises: he thinks as the poor countries could not pay their debt it should be cancelled Science and Development: efforts should be made to make poor the part of development made through science Global Trade Policy: should include enough trade with poor countries so that they get a chance to earn foreign exchange Environmental betterment: rich countries should contribute in assisting financially and deal with ecosystem problems of the poor countries. In the last chapters he starts to sum up his work by discussing whether or not the rich can afford to help the poor. He explains how they can and wants the World Bank to be the first to start the effort. He also explains that not all that is given as aid is used to reduce extreme poverty. Lot of it is spending at other purpose like returning debt. He also states that the current times are required to be dealt first with extreme poverty and then moderate and relative. Sachs (2005) denies those who think that ending poverty is impossible. Also, the author identified specific interventions that are required as well as established ways to plan and implement them at an affordable rate. He thinks that America should give more to foreign aid and debates that American public thinking about the foreign aid is not correct. The opposition made by Americans is a lack of political leadership. The book can be summarized according to the author’s views. According to Sachs (2005) to propose to end poverty, adopt plans of action built around the Millennium Development Goals, raising the voice of the poor, redeem the role of the United States in the world, rescuing the IMF and World Bank, strengthening the United Nations, harness global science, promote sustainable development and make a personal commitment to become involved are required. 4. Conclusion Sachs (2005) has given a descriptive picture of poverty across the world and has discussed the different level of poverty in different countries and has tried to give solutions to the problem. He has mainly emphasized the rich countries to help financially and develop the poor countries. As described from the name the book was supposed to give an ending solution to the problem to poverty, but if the book is read it is clear that the solutions are just to reduce it to some extent. The possibilities do not seem to be presented well. ‘What may happen if’ is not the actual picture of any aspect, there is a need to explain ‘what may be done if this happens’. Rather than deliver a worldview to readers from on high, Sachs leads them along the learning path he himself followed, telling the remarkable stories of his own work in Bolivia, Poland, Russia, India, China, and Africa as a way to bring readers to a broad-based understanding of the array of issues countries can face and the way the issues interrelate. He concludes by drawing on everything he has learned to offer an integrated set of solutions to the interwoven economic, political, environmental, and social problems that most frequently hold societies back. In the end, he leaves readers with an understanding, not of how daunting the world’s problems are, but how solvable they are and why making the effort is a matter both of moral obligation and strategic self interest. A work of profound moral and intellectual vision that grows out of unprecedented real-world experience While the developed countries would certainly applaud the end of extreme poverty, there can be many questions about the assumptions behind Sachs’s proposals. All that he says sounds reasonable and his experience of correcting failed economies gives him great credibility, but in the end he seems to adopt unrealistic expectations based on his avowed Enlightenment worldview. That is, Sachs seems to assume humans as achievers of progress through their own wits and thus they are capable to create their own science-based utopia. Therefore, it seems that he sees globalization only in a positive way, as long as it is what he calls “Enlightened Globalization,” or “capitalism with a human face.” American culture was built on the Enlightenment, but it is only one possible worldview, and increasingly it is seen as a failed worldview. The world cannot be seen in the future mirror, as there are possibilities that may occur. So considering them is very important while giving a solution to any problem and not the future prediction as he himself stated. The world was enlighten before world wars happened and them it went backwards and started again to overcome loses likewise America would not have been what it is today if 9/11 would not have occurred. Furthermore, the Enlightenment placed human reason in the place of God and relegated religion to the periphery. Not surprisingly, Sachs disregards cultural differences and criticizes fundamentalist Christians as standing in the way of progress. Paradoxically, he is a globalist who remains profoundly American in outlook.  Although reading The End of Poverty is deeply educational about the world economy, but Sachs’s proposals for ending poverty is quite exacerbated on dependency. Money alone cannot end extreme poverty but he certainly seems to thinks so. The End of Poverty is a road map to a safer, more prosperous future for the world but to the border view somehow unrealistic. Also the estimate made by Sachs is quite a lot, instead of US aid provide all efforts at ground level with in the societies should also be made to deal with reduce the problem of poverty. 5. References Lister, R., (2004). Poverty.UK: Cambridge. Bangura, Y., (2010). Combating Poverty and Inequality: Structural Change, Social Policy and Politics. Switzerland: UNRISD. Moore, D., (2007). The World Bank: development, poverty, hegemony. South Africa. University of KwaZulu-Natal Press. Sachs, D. J., (2005). The End of Poverty. NY: The Penguin Press. The Earth Institute Columbia University. Full Bio: Jeffrey D. Sachs. Retrieved from http://www.earth.columbia.edu/articles/view/1770 (17 dec, 2010). News & Broadcast - World Bank Sees Progress Against Extreme Poverty, But Flags Vulnerabilities. (n.d.). World Bank Group. Retrieved December 18, 2012, from http://web.worldbank.org/WBSITE/EXTERNAL/NEWS/0,,contentMDK:23130032~pagePK Prof. Jeffrey Sachs, Director - The Earth Institute - Columbia University. (n.d.). The Earth Institute - Columbia University. Retrieved December 18, 2012, from http://www.earth.columbia.edu/articles/view/1804 Read More