The End of Poverty by Jeffrey Sachs - Book Report/Review Example

Introduction The book The End of Poverty, by Jeffrey Sachs, makes a number of arguments about how to alleviate poverty in the poorest countries in the world. One of the main arguments is that if the wealthiest countries in the world would increase the amount of money they put into foreign aid for the next decade, these poorer countries could become self-sufficient by 2025. This would obviously only happen if the money was spent properly, which is a difficult thing to ensure because there are so many variables present. The wealthy countries would have to contribute combined aid of between $135 and $195 billion for the next ten years, which may seem like a lot but it is not, according to Sachs, because it would only represent a small increase in the gross domestic product percentage of each country. Sachs is a valid source on this issue, as he has worked as an economist for various institutions and countries and is even a special advisor to the United Nations on global poverty. Extreme poverty, which is defined by Sachs as having an income of less than a dollar per day, is a significant problem, as it is responsible for countless deaths worldwide each day and is solely responsible for the extreme living conditions in many developing countries. This book uses a number of significant analyses from Sachs’s own experiences, which give the book a very legitimate feel. Also, Sachs discusses many of the causes of global poverty and gives solutions to how these problems can be fixed and why the governments of these countries should listen to his theories and implement these solutions. Sachs’ Ideology One of the main reasons for extreme poverty, according to Sachs, is that much of the world suffers from poor geography, poor road and rail networks, and/or poor healthcare. This makes travel to and from these locations difficult, which cuts down on the amount of trade that other countries are willing to do with that particular country. It also makes these regions unviable for tourism, which is a main source of income for many wealthy nations. This makes it very difficult to maintain any type of economic growth, as there is very little to build on. Even though “todays search for cheap labor has moved jobs from rich countries to poor,” (Landes, 520) the disparity between the countries remains. Without any immediate sources of viable income, these countries have become trapped in subsistence mode, which makes it nearly impossible for them to develop at a significant rate. All of the money that these countries do produce goes into maintaining what the people do have, rather than developing this money into something more and improving the impoverished conditions that are present. They cannot afford to invest this money into things that would allow the country to grow significantly and, therefore, the countries will never grow under these economic conditions. Sachs argues that these countries must develop their healthcare and transportation methods in order to develop because the western world would need these places to become more developed in this sense in order to make investment in them an option. Currently, the infrastructure in many developing countries is too inconvenient for those in the western countries to even consider using. This means that plants will not be set up in these regions, which means that fewer jobs are available for them. Inadequate healthcare also contributes to this, as it is not viable to invest in a region of the globe where workers are constantly sick and dying of disease. Western corporations will only invest in a region if it is seen as something that will be financially rewarding and these poor regions are generally not able to provide that to them. Sachs argues that financial aid must be invested in a manner that would improve things to the point where these countries would become financially rewarding for foreign investment. This means improving the healthcare systems and the transportation networks to the point where foreign investors will no longer be scared off by them. Once private investors begin to appreciate these regions, the money will come along with them at a greater rate. If the corporations receive a great return on their investments, a market led economic growth will occur in these regions, which will allow for these countries to begin to do more than simply subsist; they will be able to flourish under this system, according to Sachs, which is a positive situation for both developed and developing nations. Members of the United Nations “agreed at the United Nations World Summit on Social Development in Copenhagen in 1995 to reduce by half by 2015 the proportion of people living in extreme poverty,” (Allen and Thomas, 3) which means that work is being done to help this problem. Methods of Alleviating Global Hunger and Poverty Sachs’ ideology goes even further than this, as he outlines some specific methods of achieving these goals. For instance, he makes the argument that the proper use of technologies and involvements that we might see as being minor could be very influential in the fight against global poverty, as “they must interpret correctly the needs of the poor and they must meet those needs quickly and competently“ (Hancock, 7). One such advancement would be the use of cell phones, which would improve communications between various areas of developing nations, which would improve infrastructure. This would make the country seem much more connected and would allow for various regions of these poor nations to work together in order to improve living conditions. Another important advancement would be the use of fertilizer, which would improve the quality of the soil, making the production of healthy crops possible. This is something that people in the western world take for granted, but many of these poor countries lack the nutrients in the soil to product efficient crops. Efficient crops will lead to more food being produced and, therefore, healthier people. This will take some of the strain off of the fledging healthcare systems in impoverished nations and will also make the people in these countries work m ore efficiently. Medication is another thing that would help out greatly, as those who get sick in impoverished areas often are left to die because the proper medication is not available to them. If this money was invested in medication, it would allow people to live longer and, therefore, they would be able to accomplish more. Another idea presented by Sachs is to provide bed nets for people in order to prevent mosquito bites, which are often responsible for malaria outbreaks. This simple solution could prevent many illnesses in impoverished regions of the globe, which would make them more attractive for foreign investment. Sachs makes the point that these types of efforts have been successful in the past, as smallpox is a disease that plagued many areas of the globe for a very long time and it was eradicated through a joint effort of many wealthier countries. Sachs makes the argument that at a summit in 2002, many of the developed countries in the world proposed that they each donate 0.7 percent of their respective gross domestic products in order to help fight global poverty. Sachs ideology would require less than this amount and it would, according to him, do much more good because the money would be spent on something much more efficient. Sachs’s idea that world poverty can be eliminated is important because the international community has not yet been successful in addressing this problem and, therefore, new ideas are important because they keep the issue at the forefront of international politics. Problems With These Ideologies Despite all of the positive points that Sachs’s book makes, it is also important to note that his ideology does have some holes that must be addressed. One such flaw is that this ideology would require a significant amount of collusion between a number of different agencies. Since each country would be spending a very significant amount of money on this project, each country would also want to enjoy a say in where the money goes because each country will try to benefit from this investment in the future, as “sustainable development is used as an excuse for policies that would have - and still do - hurt those sections of the world community that are most vulnerable” (Beckerman, 64). This is an issue because “helping people to help themselves can really work, if the helpers meet the poor on their own terms and let the poor set the agenda” (Smith, 79). For example, if new infrastructure is created, there will be many different corporations competing for the contracts of these projects and the governments of these countries will do their best to ensure that this money goes back into their own economic system. Also, the governments of these developing countries must agree to let the developed world help them out, which they are not always happy about doing. The United Nations would have to use the money to alleviate these problems, rather than simply handing the money over to the governments and hoping that everything goes according to plan. It is certain, however, that many countries would not enjoy given foreign nations that type of influence over their country’s finances. Most of the leaders of these countries would wish to show strong leadership qualities and take on this endeavor alone, which is an obvious recipe for disaster. Sachs’ mission statement also lack humility, as he seems to believe that his method is much better than those that were previously laid out, which makes his discussions very closed-minded. By discounting everyone else’s ideologies, Sachs is falling into the same trap that has caused other ideologies to fail in the past. People must work together to alleviate extreme poverty because it is not an issue that will go away otherwise. Also, Sachs’s method is still very unproven, which could lead to problems as those who have money invested in this will not want to take a blind leap of faith because of the negative repercussions that could arise. Another negative point is that “analyses of the causes of poverty focus largely on why some countries are poor rather than on why certain segments of the population live below the poverty line,” (Yunus, 35) which is something that this ideology does not address. The Term “Shock Therapy” Sachs uses the term “shock therapy” to describe a sudden liberation of currency control, withdrawal of subsidies, and instant trade liberalization inside of a country. This technique made it so “Eastern Europe proceeded radically” (Sachs, 153) because it creates a free market economy inside of the country, which can lead to significant economic growth. Once the government stops intervening economically, the country is able to create its own market through supply and demand. This type of system has both positives and negatives, as it takes the country some time to adjust to it. At first, there are many layoffs, so the unemployment rate will rise very rapidly. This, in turn, raises crime rates and creates problems between the various classes in society. Since this all happens very quickly, the economy does not have time to gradually adjust and it forced to either adopt the new system or crash completely. This is a problem, however, because it does take time for the proper skills to be developed and for the changes that have been initiated to take effect. Since this is a western ideology, many in western society tend to take certain statues that we have for granted. Once such thing is that the majority if developed countries enjoy a certain level of diplomacy with each other, which cannot be said for the developing world. Therefore, there is always risk in showing temporary weakness for developing countries because many of them are in volatile regions of the globe. They do not have the same property laws, nor do they have the order that many developed countries enjoy. Sachs’s ideology would be similar except for it would first create conditions that would be viable for developing countries and then “shock therapy” would be used in order to help the economies of these countries grow later on. The Role of the World Bank and the International Monetary Fund Sachs makes a point of criticizing the International Monetary Funds, or IMF, by pointing out that the organization tends to help out the banks that provide the money much more than it helps the actual poor countries. This is because the corrupt governments in these countries often do not spend the money on what it is meant to be spent on and, therefore, the economies worsen as a result. This practice increases global poverty rather than helping it and, in turn, creates more problems than it alleviates. This has a negative effect on human rights because it creates a situation where the government abuses its power in order to put money into the pockets of its officials. This, in turn, allows for the poverty to worsen and the human rights violations to continue in these poor countries. This also makes it possible for corporations to underpay workers in these countries, since there is no money to be made with domestic companies. In fact, “since the early 1990s, coinciding with the collapse of the Eastern bloc, the IMF-World Bank policy prescriptions (now imposed in the name of "poverty alleviation") have become increasingly harsh and unyielding” (Chossudovsky, 18). Conclusion Global hunger has been a longstanding issue in society and it is not going to disappear anytime in the near future. Jeffrey Sachs, however, believes that his ideologies can help to make a difference with regards to this issue and, therefore, his ideas do deserve some consideration. Despite, their flaws, Sachs’ ideas do have some merit because of his track record so they should be given a chance. Works Cited Allen, Tim and Thomas, Alan. Poverty and Development: Into the 21st Century. Oxford: Oxford University Press. 2000. Beckerman, Wilfred. A Poverty of Reason: Sustainable Development and Economic Growth. Oakland: The Independent Institute. 2002. Chossudovsky, Michel. The Globalization of Poverty and the New World Order. Pincourt, Quebec, Canada: Global Research. 2003. Hancock, Graham. The Lords of Poverty: The Power, Prestige, and Corruption of the International Aid Business. New York: Atlantic Monthly Press. 1989. Landes, David S. The Wealth and Poverty of Nations: Why Some Are So Rich and Some So Poor. New York: Norton. 1999. Sachs, Jeffrey D. The End of Poverty: Economic Possibilities for Our Time. New York: Penguin Press. 2005. Smith, Stephen C. Ending Global Poverty: A Guide to What Works. New York: Palgrave MacMillan. 2005. Yunus, Muhammad. Banker to the Poor: Micro-Lending and the Battle Against World Poverty. New York: Public Affairs. 2003. Read More