THE END OF POVERTY: ECONOMIC POSSIBILITIES FOR OUR TIMES By Jeffrey D. Sachs The Penguin Press, 396 pages, $27.95

Book shatters myths about why poor countries don't progress

Reviewed by KEN HACKETT and JOHN RIVERA

Anyone who would write a book called The End of Poverty is asking to become a target.

And Jeffrey Sachs, the Columbia University economist who has become the rock star of the international war on poverty, has plenty of arrows in his back.

Dr. Sachs, who counts an actual rock star, Bono, among his friends, and who was featured earlier this year on the cover of TIME magazine, has become the most articulate spokesman for the United Nations’ Millennium Development Goals, an ambitious agenda that seeks to cut world poverty in half by 2015 and end extreme poverty (defined as those earning less than $1 a day) by 2025.

Dr. Sachs’ basic premise is that much of the world that lives in extreme poverty -- which includes much of sub-Saharan Africa -- is caught in a “poverty trap,” inhibited by factors such as chronic disease, geographic isolation and environmental factors such as persistent drought that keep them from getting a hold on the ladder of economic development and growth. The problems of the world’s poorest nations are difficult, but are solvable through practical and proven technologies. A huge push with key investments in people and infrastructure will provide the tools necessary to break out of the poverty trap and start on the path of sustainable development.

Faster than you can say Pollyanna, the critics piled on. New York Times columnist David Brooks called Dr. Sachs a “materialist,” who “dismisses or downplays those who believe that human factors like corruption, greed, institutions, governance, conflict and traditions have contributed importantly to Africa’s suffering.” In the pages of The Washington Post, William Easterly, an economics professor at New York University, dismissed Dr. Sachs’ proposal to end poverty as nothing more than a rehash of the Big Plan that inspired foreign aid in the 1950s and ’60s.

Whatever merits these critiques might have, they’re missing the point. Dr. Sachs has done all of us who are concerned about poverty in our world a great service, on two levels. First, by shattering myths about why poor countries in places such as Africa have not experienced economic growth, and why the millions of dollars we have funneled into these countries have seemingly had little or no effect. And second, by hammering home a hard message about how we can and must address the suffering of the poorest of the poor.

Mr. Brooks says that Dr. Sachs “dismisses or downplays” the role that human factors like corruption, bad governance or conflict play in Africa’s sufferings. Indeed, Dr. Sachs rejects the conventional arguments and explanations of both the political right and the left. While the right argues that the billions in foreign aid over the years have gone down the drain after being diverted by corrupt regimes, Dr. Sachs counters that well-governed countries in Africa -- such as Ghana, Mali and Senegal -- have failed to prosper, while corrupt regimes in Asia æ such as Bangladesh, India, Pakistan and Indonesia æ have experienced rapid economic growth. And while the left argues that underdevelopment is the legacy of colonialism and postcolonial meddling by the West, Dr. Sachs points out that other countries with similar profiles have done much better æ witness Vietnam.

As to why our aid so far has been seemingly ineffective, Dr. Sachs argues that we really haven’t given that much æ certainly not enough to bring about that critical mass that Africa needs to pull itself out of the poverty trap. Our approach to foreign aid, he says, is completely backward. As it works now, a poor country is told by the world’s aid gatekeepers æ the International Monetary Fund and the World Bank æ how much aid it can expect to receive, and then is expected to design a poverty reduction plan that conforms to that figure.

The right and sensible approach, Dr. Sachs says, would be to figure out what a county really needs in foreign assistance, and then have the International Monetary Fund and the World Bank go out and raise it from the rich donor countries. We believe that the Millennium Challenge Account, a new U.S. government international development program, is just such an approach. The Millennium Challenge Account awards aid to countries that demonstrate progress in achieving specific development goals that are defined by the countries themselves.

To achieve the investment of infrastructure necessary to lift the 1.1 billion extremely poor people in the world to a level of sustenance, Dr. Sachs estimates that the rich nations of the world need to contribute between $135 billion and $195 billion per year for the next decade. That amounts to between 0.44 percent and 0.54 percent of the gross national income of the rich nations. Considering that these countries (including the United States) reaffirmed a pledge in the 2002 Monterrey Consensus to “make concrete efforts toward the goal of 0.7 percent of gross national income as official development assistance,” Dr. Sachs’ agenda doesn’t seem so grandiose. (By the way, in 2004, U.S. foreign assistance amounted to 0.16 percent of gross national income).

We could quibble with Dr. Sachs’ simple and clear-cut strategy for ending poverty by simply increasing inputs to people, communities and nations æ that investments in infrastructure on a grand scale, such as roads and improved technology, and on a smaller scale, such as fertilizers and mosquito nets, will make poverty disappear. At Catholic Relief Services, through our 50-plus years of experience in Africa, we’ve learned that development is a lot more complicated. We are gradually shifting to much more of a knowledge/information/ empowerment/social mobilization focus as opposed to handouts of inputs. Hardware is still important, but you can’t do it without the software æ that part is actually much harder.

But all quibbling aside, Dr. Sachs’ book is a positive force for the cause of development and a must-read for anyone interested in the subject. It is a call to action for all of us who feel called to make a preferential option to the poorest of the poor.

Ken Hackett is the president and CEO of Catholic Relief Services, the international relief and development agency of the U.S. Catholic community. He sits on the board of the Millennium Challenge Corporation, which oversees the Millennium Challenge Account. John Rivera, a former reporter with The Baltimore Sun, is a senior writer at Catholic Relief Services.

National Catholic Reporter, November 25, 2005