the end of poverty jeffrey sachs director, un millennium project
TRANSCRIPT
The End of Poverty
Jeffrey Sachs
Director, UN Millennium Project
Portrait of 4 Countries
• Malawi– The perfect storm
• Bangladesh– On the ladder of improvement
• India – Center of an export services
revolution
• China – The rise of affluence
http://www.terradaily.com/images/epidemics-aids-malawi-malnourished-afp-bg.jpg
Malawi
MalawiA perfect storm
• Villages devastated by AIDS– Only children and grandmothers left
• Poor soils, poor yields– No one to work the fields
• Little food to eat• Malaria, but no medicines
– No nearby clinics
• In cities, are clinics– No AIDS medicine– Patients come to die.
• $1 a day could save them
Grandmother with 15 orphaned children
BangladeshOn the ladder to development
• Per capita income doubled since independence (1971)– Infant mortality 1/3
• Sweat shops in Dhaka– Women walk 2 hours to work– First step out of extreme poverty
• Microcredit more available• Health care more available
– And birth control
• Women now more empowered– Want education– Want fewer children
Rice millinghttp://courses.dce.harvard.edu/~phils4/3406.JPEG
IndiaCenter of an Export Services Revolution
• Several steps up the ladder of development
• Information Technology companies– College grads earn $250-
500/month– Service U.S. companies– Buy U.S. computers
• Northern India still largely rural and poorIT workers in Bangalore, India
http://newsimg.bbc.co.uk/media/images/41089000/jpg/_41089458_indiaintel203.jpg
ChinaThe rise of affluence
• Beijing: one of the world’s economic capitals.– Average Annual income
> $4,000 per capita
• Urban professionals– Affluence, travel, trendy
• Foreign investment – And technology
• Competitive enterprises– Exported $400 billion in 2004
http://i1.trekearth.com/photos/32961/beijing1.jpg
Beijing
Ascending the ladder of economic development
• Rural Population– Malawi: 84%
– Bangladesh 76%
– India 72%
– China 61%
– USA 20%
• Employment in Services– Malawi 25%
– USA 75%Rural India
http://filer.case.edu/org/uisa/images/index/comingtomeeting.jpg
Ascending the ladder of economic development
• 5 billion people are on the ladder of economic progress– Poor, low, middle, & high income– Rising incomes, education, sanitation,
health, possessions
• 1 billion people are not on the ladder of economic progress– Extreme poor– Unable to escape from extreme material
deprivation– Trapped by disease, physical isolation,
climate stress, environmental degradation, extreme poverty
Mexico: on the ladderhttp://www.loscabosguide.com/tequila/cabowabo.htm
Global poverty is declining
http://www.economist.com/images/20070428/CFN282.gif
Poverty has increased in Africa
Our generation’s challenge
• The end of poverty– Help the poorest escape
extreme poverty• To get a foothold on the ladder
of development
– Ensure that the moderately poor have a chance to climb the ladder
• Give development assistance
• Eliminate trade barriers
World Bank water project, S. Africa
http://web.worldbank.org/WBSITE/EXTERNAL/OPPORTUNITIES/GRANTS/DEVMARKETPLACE/0,,contentMDK:20200526~pagePK:180686~piPK:180184~theSitePK:205098,00.html
Effect of the Industrial Revolution
http://www.unmillenniumproject.org/documents/TimeMagazineMar142005-TheEndofPovertysmall1.pdf
Effect of Industrialization
• Urbanization– Due to improved agriculture
• Food prices fall• Employment in cities
• Social Mobility– Hierarchies unravel
• Market based economy
– Gender roles change• Employment rather than child-
rearing for women
• Division of Labor– Specialization increases– Efficiency goes up
Urban workers, Brazil
http://wwwimage.cbsnews.com/images/2003/09/25/image575166x.jpg
How does prosperity spread?
• Transmission of technologies
• Science-based methods to organize production
• Historical examples:– Steam engine– Factory machinery– Railroads– Global steamers
• Suez, Panama canals
– Electrification– Internal Combustion engine– Nitrogen-based fertilizer
http://indiana-transit-museum.visit-indianapolis.com/
Why some countries fail to thrive• Poverty trap
– Poor rural villages lack• Trucks• Paved roads• Power generators• Irrigation channels
– Human capital is low• Hunger• Disease• Illiteracy
– Natural capital is depleted• Trees cut down• Soil exhausted
– Need more capital, but unable to save for future
Rural village, Sierra Leone
http://imageevent.com/dyet/october;jsessionid=vzm4aori21.lion_s
Why some countries fail to thrive
• Physical geography– Landlocked
• high mountains• No coast, navigable rivers, or
harbors– Ex: Bolivia, Ethiopia, Tibet
– Arid– Tropical diseases
• Malaria
– Problems can be overcome• But it costs moreSahara desert
http://www.curious-software.com/images/desert.jpg
Why Some countries fail to thrive
• Fiscal Trap– Government cannot pay
for infrastructure• Population poor
– taxation not feasible
• Government corrupt, or incapacitated
– cannot collect tax
• Debt load too high– Revenue goes to interest
– Debt cancellation may be only solution
http://www.worldvision.com.au/seekjustice/readmore.asp?sectionid=7&articleid=117
http://www.pridesoaring.com/index.6.gif
Why Some countries fail to thrive
• Governance Failures– Governments should:
• Promote infrastructure• Create an environment
conducive to investment– Crime free– Bribery free– Protect property
• Defend borders
– Poor governance results in• State Failure
– War, revolution, anarchy– Economic failure
Singaporehttp://www.asiatravel.com/singapore/panpac/index.html
Why Some countries fail to thrive
• Cultural Barriers– Religions that block the role of
women• Deny economic or political rights• Deny education• Result:
– Undermines half the population’s contribution to development
– Slows demographic transition
– Blocking religious or ethnic minorities
• Prevented from jobs, schooling• Extreme: ethnic cleansing
http://politicalhumor.about.com/library/images/bltalibanwomen.htm
U.S. Civil Rights
• Slaves freed after Civil War– Did not have civil rights for
another 100 years in South• Employment• Voting• Protection under the law
• Equality in public places• Equal education
– Legislation blocked in U.S. Senate by southern states
– Lynching common• 3,446 lynchings: 1882-1968
http://www.worldsfamousphotos.com/wp-content/uploads/2007/03/1930-lynching.jpg
U.S. Women’s Rights
• Women in 1800s did not have– Inheritance or property rights
• Women were the property of their husbands
– Custody rights
– Voting rights
– Higher Education opportunity
• Women’s right to Vote– Susan B. Anthony and Elizabeth Cady Stanton
• Worked tirelessly for women’s vote
• Began in 1851 lobbying state legislatures
• Formed women’s suffrage movement
– 1920: 19th amendment passed
• Equal Rights Amendment– still has not passed
Susan B. Anthony & Elizabeth Cady Stanton
http://z.about.com/d/womenshistory/1/0/w/L/2/anthonystantonseated1.jpg
Why some countries fail to thrive
• Geopolitics– Trade barriers erected by
foreign countries• Impede economic development
• May target a despicable regime– Often ends up impoverishing
population
– Without toppling the regime
• N. Korea, Cuba
North Korea
http://www.rotten.com/library/history/countries/north-korea/
South Korea
Why some countries fail to thrive• Lack of innovation
– Small market for new inventions• No profits = no inventions
– Endogenous growth cycle:• Big markets encourage invention• Inventions promote big markets
– Low income countries:• 37% population• 11% GDP• 1% patents
– Need foreign investment to bring technology
• Key to East Asian economies• Sweat shops are first step• Starts at port cities
Sweat Shop in Dhaka, Bangladesh
http://www.siu.edu/~perspect/05_fall/images/sweatshop.jpg
Why some countries fail to thrive
• The demographic trap– High fertility rates in the
poorest countries– Poor families choosing to have
many children• Disastrous
– Cannot invest in each child– High fertility next generation
– Demographic transition can occur fast
• Ex. Iran– 1980 fertility = 6.7– 2000 fertility = 2.6
• Education for girls is keyIran
http://www.middle-east-online.com/pictures/big/_10613_iran-women-13-7-2004.jpg
Five Development Interventions
1. Boost Agriculture– Fertilizers
– Cover crops
– Irrigation
– Improved seeds
– Storage facilities
119 to 4,800
63 to 118
26 to 62
5.00 to 25
0 to 4.99
Kg fertilizer/Ha of cropland
http://www.overpopulation.com/faq/Natural_Resources/Food/fertilizer_per_hectare/maps/africa.html
Five Development Interventions
2. Improve basic health– Village clinics:
• One doctor for 5,000
– Free anti-malarial bed nets– Effective medicines
• Malaria• Aids
– Birth attendants– Reproductive health
services
Sierra Leone Hospitalhttp://www.kambiahospital.org.uk/
Five Development Interventions
3. Invest in Education– Meals for all children at primary
school• Improve quality of education• Improve attendance
– Vocational training• Modern farming • Computers• Electrical wiring• Diesel mechanics• Carpentry
– Adult Education• Hygiene, • HIV/AIDS
School meal, Ghana
http://newsimg.bbc.co.uk/media/images/41111000/jpg/_41111190_10_schoolhildyghana.jpg
Five Development Interventions
4. Power, Transport and Communications– Electricity in villages
• Lights, computers, pumps, refrigeration, food processing
– Trucks, roads• Bring fertilizers, fuels
• Transport harvest to market
• Transport people to hospital
– Mobile phone• Connect with outside worldKenya village
http://upload.wikimedia.org/wikipedia/commons/thumb/b/b8/Orma_Village_Kenya.jpg/800px-Orma_Village_Kenya.jpg
Five Development Interventions
5. Safe drinking water and sanitation– Health benefits
– Save hours of toil for women and children
Carrying water, Zimbabwe
http://www.bobjanet.demon.co.uk/urchin/4life/zim.htm
Five Development Interventions
• Total cost to village: – $70 per person/year
• Benefits– Double or triple food yields– Reduction of chronic hunger– Improved school attendance– Reduction of water-borne disease– Rise in cash incomes
• Sales of grain and cash crops• Food processing, carpentry, small
manufacturing, horticulture, aquaculture, animal husbandry
– Reduction in AIDS deathsBumper crops, Malawi
http://news.scotsman.com/topics.cfm?tid=503&id=1434172002
The giving gap
• The U.S. is far behind – on its pledge of 0.7% GNP
• Usual excuses– Corruption and misrule
• Thus money down the drain
• Bush (2004)– “…the greatest power on the face of the
earth, we have an obligation to help the spread of freedom. We have an obligation to feed the hungry.”
• U.S. aid to sub-Saharan Africa:– $3 per African (2002)
• 6 cents per African received after expenses and emergency aid
http://home.comcast.net/~markthoma/Graphics/poverty2.jpg