African Development for the Completely Bloody Ignorant

We apologise for the inconvenience

Rav Casley Gera — Sat, 01 Nov 2008 18:19:31 +0000

The more attentive of you may have noticed I haven’t updated this site for some time. I am still intending to finish trawling through the various plans for Saving Africa that are out there, as well as the many criticisms of those plans. But life keeps getting in the way.

If you think you’d like to help out, I’d love to hear from you. You could summarise a book or research a topic. No specialist knowledge needed - that’s the point!

Email me at africa @ brasstacks.org.uk if you can lend a hand. Or just sit tight - I’ll get back to it soon, I promise.

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Millennium Project: Why we must act - and how much it will cost

Rav Casley Gera — Sun, 17 Feb 2008 17:37:13 +0000

We’ve reviewed the proposals of the UN Millennium Project, the top-level think-tank set up by Jeffrey Sachs and Kofi Annan to recommend ways for the world to meet the Millennium Development Goals. Like Sachs’ personal plan for ending poverty by 2025, it’s a considerable shopping-list of investments and reforms to be heavily supported by rich-country aid. So let’s get down to the nitty-gritty and see how much it will all cost - and why the Project believe it’s worth it.

To calculate the aid needed to achieve the goals, of course, breaks down into two calculations: the total cost of the project, minus the level of extra spending poor countries can afford to provide themselves. The report recommends a detailed assessment process for each country to calculate its needs and ability to spend, so a hard-and-fast number wouldn’t be available until that process was complete. However, to get a sense of it, the Project worked with local organisations to come up with “needs assessments” for five countries including, most usefully for our purposes, Ghana. The basic costs for all low-income countries studied were similar, although the balance of different spending priorities differs. Here’s a detailed look at Ghana’s plan. (p56)

You can click for a larger view. As you can see, education and health are the main investment priorities, closely followed by energy and transport infrastructure. In terms of funding, the level of aid required (bottom row) increases consistently up to 2015. Note, however, that the level of funding from Ghanaian households and the government also increases. In fact, the report estimates governments will be able to spend 4% more of GDP - that’s a considerable increase in government budgets - on investments to meet the goals by 2015. This would be met by new taxes and re-directing current low-priority spending. So this isn’t a free lunch.

What do these calculations translate into at global level?

The report - which was published in early 2005 - estimates that financing every low-income country to meet the MDG’s would cost $73 billion in 2006, with annual spending rising to $135 billion by 2015. However, there are a host of other costs: $10 billion to support middle-income countries like Brazil and India, spending on staffing and running aid agencies, debt relief, etc. In total, the cost of meeting the MDG’s everywhere is for $121 billion in 2006, with annual payments rising to $189 billion in 2015. The table below shows the costs laid out.

So that’s the amount of aid needed, right? Well, not quite. Some existing aid can be “reprogrammed” to meet the MDG’s, which takes a bit off the figure; but equally, some existing aid needs to be maintained that isn’t strictly goal-related. What’s more, to help all low-income countries to meet the goals won’t be possible; governments that don’t show the necessary planning, and commitment to democracy and human rights, won’t be eligible for help.

With these adjustments, we get a final figure of $135 billion in 2006, with annual spending rising to $195 billion in 2015. As the table below shows, this is substantially more than the current levels promised when the report was published. (p57)

So what does this work out as, in real money? Well, it’s between 0.44 and 0.54% of rich countries’ GNP. So this is still short of the 0.7% of GNP we’ve been promising for aid for around thirty years. To put it another way, it’s around double the current level of aid. This roughly chimes with the report of the Commission for Africa, who proposed providing another £25 billion (around $50 billion) of extra aid now and more after 2010.

Of course, this doesn’t mean donors don’t have to reach 0.7%. The table above doesn’t include many things currently receiving major aid, such as spending in countries of geopolitical importance, like Afghanistan and Iraq. To accommodate that spending on top of the MDG spending would probably need aid of 0.7% rich-country GDP by 2015.

Since the 0.7% target was agreed in 1970, it has been reaffirmed several times, most recently in 2003. But so far, only five countries -Denmark, Luxembourg, Netherlands, Norway and Sweden - have reached the target. Several other countries, including Britain, have timetables to meet it by 2015. But the US, which because of its vast economy would account for almost half of the total extra aid needed, is currently at less than 0.2%. The report endorses Gordon Brown’s plan for an International Finance Facility to front-load aid by issuing bonds based on donor commitments. In other words, bonds are sold on the market that give the buyer the right to receive future aid, and the money raised can be given right away to poor countries.

The benefits of meeting the goals

Is it worth it? The report certainly thinks so. Meeting the goals means a host of changes of great benefit to the world’s poorest people:

300 million more people lifted out of poverty between now and 2015 than on current trends; In Africa, 150 million people lifted out of poverty, as opposed to an increase of 75 million in the number of extremely poor people under current trends
230 million fewer people undernourished than on current trends; in Africa, 75 million fewer; as opposed to 25 million more on current trends
3.4 million fewer children dying each year, the benefits seen almost entirely in Africa

HIV infections, deaths in pregnancy and childbirth, slums, and poor sanitation would all be reduced. Plus, the report notes, millions of people, particularly women and girls, would have increased rights and opportunities, and the environment would be better protected. (p60-62)

What’s more, the goals are a step on the way to eliminating extreme poverty altogether. If countries maintain 0.7% GNP aid after 2015, the report argues, extreme poverty can be “substantially eliminated” by 2025. Here the report is unsurprisingly in agreement with the Project’s director, Jeffrey Sachs. (p60)

In addition, the report argues, there are security benefits to achieving the goals. Poverty is linked to state failure, conflict, excess migration and other causes of instability. And, the report argues, poor countries’ faith in the international system - already impaired by previous broken promises on aid - will be lost entirely if the goals aren’t supported. “If we do not act now,” it says portentously, “the world will live without goals.” (p64)

So that brings to an end our long trawl through the poverty proposals of Jeffrey Sachs and the UN Millennium Project. I’ll prepare a quick one-post summary of the key points for reference. Then, we’ll look at some of the critics of Sachs’ proposals, and what it is they dislike.

Page numbers come from the Overview Report. You can also see the full 300+ page version, ten key recommendations, or the reports of the individual task forces.

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Millennium Project: Getting Started

Rav Casley Gera — Sun, 10 Feb 2008 20:08:03 +0000

There’s a section in the UN Millennium Project Report entitled “Getting started in 2005 - launching a decade of bold ambition”. The first few sentences make depressing reading. “There is still enough time to meet the Millennium Development Goals - though barely,” it notes. “Without a bold breakthrough in the coming year, a large number of countries that could still achieve the goals will be consigned to failure.” (p50)

Oh dear. Indeed, for all the celebrations that met 2005’s historic aid pledges by the G8 at Gleneagles, Scotland, the truth is that a serious bid to meet the goals has not yet begun. The extra aid promised has yet to materialise. It seems likely, therefore, that the MDG’s won’t be met everywhere by the agreed deadline, 2015.

And yet, the goals remain the most comprehensive and internationally supported development framework ever agreed (though they certainly have their critics). So even if 2015 is unachievable, aiming for 2017 seems better than giving up. So let’s pretend that, a little behind schedule, the world is now eager and ready to fund and support the UNMP’s recommendations. Where do we start?

Every developing country that wants to be eligible for support should prepare an MDG-focussed poverty reduction strategy, a plan to achieve the goals complete with precise costings and measurements of the aid required.
Fast-track countries, that are most suitable to receive support, should be identified (more on this below).
International agencies should immediately begin working with poor countries to train thousands of teachers, doctors, planning professionals, engineers, and “village specialists” in health, agriculture, forestry, road maintenance and other basic skills. This is to ensure that once infrastructure projects such as new schools and hospitals begin, they aren’t messed up by lack of staff, as has often been the case in the past.
The “quick wins“, cheap interventions proven to be effective, should be implemented in all as widely as possible. It would take just two years, the report argues, to distribute anti-malaria bed nets to all at-risk African children.
Middle-income countries like China and South Africa, while they have their own poverty issues, should also be invited to join the coalition working towards the goals for poor countries. While their ability to contribute financially may be limited, they can offer expertise, training and certain key cheap materials - for example, China produces artemisinin, a key ingredient of anti-malaria medicine. (p50-55)

But for many rich-country observers, point 2 is the key obstacle. With so many poor countries, with widely varying standards of government, and different needs, how can we identify those best suited to receive extensive support straight away?

Fortunately, the report notes, someone has beaten us to it. In fact, five separate systems have recently assessed poor countries’ governance and economic policies according to fairly strict standards. They are:

The Heavily Indebted Poor Countries Initiative, the major debt relief system launched in the late 1990s;
The US’ Millennium Challenge Account, an aid initiative launched by the Bush administration;
The African Peer Review Mechanism, in which African countries submit their policies and governance to review by other African countries;
The poverty reduction strategy process itself. Although a true process for assessing MDG-focussed poverty plans is yet to be put in place, countries’ existing PRSP’s are assessed by the World Bank and IMF, and several have recently been praised for their quality and comprehensiveness.
and a recent World Bank study identified 18 countries that have good policies and a history of using aid well, and development needs that could see them absorb another $30 billion in aid. (p51-52)

Of these systems, the Millennium Challenge has some of the highest standards , with just 19 of Africa’s 54 countries having so far qualified, including Ghana, Mozambique and Niger. HIPC has been similarly strict, with 19 African countries having completed the process of qualification and a further eight having begun the process. All in all, the report argues, reviews of these assessment mechanisms would bring up a list of “at least a dozen” countries eligible for immediate fast-track support, with Senegal and Tanzania likely to be included. (p50)

So, by identifying these countries and getting immediately started with investment and training, and by encouraging poor countries to prepare detailed plans for meeting the MDG’s, it’s still possible, the report argues, to get the process off to a flying start.

Finally, next time, we’ll remind ourselves of the argument for taking the steps necessary to meet the goals.

Page numbers come from the Overview Report. You can also see the full 300+ page version, ten key recommendations, or the reports of the individual task forces.

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Development: a Super Tuesday primer

Rav Casley Gera — Tue, 05 Feb 2008 13:51:01 +0000

The ONE campaign, the modern US incarnation of the Make Poverty History / Global Call to Action on Poverty campaign of 2005, has put together a handy comparison of the presidential candidates’ positions on key development issues. Of the major candidates, as a rule, Hillary Clinton’s are the most detailed and John McCain’s vaguest, with the similarities between Barack Obama and Clinton outweighing the differences.

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Millennium Project: International public goods

Rav Casley Gera — Mon, 04 Feb 2008 17:38:17 +0000

A sort of global brain trust established by Kofi Annan to tell the world how to meet the Millennium Development Goals, the Millennium Project proposes major investments in infrastructure and social programmes in poor countries, funded largely by rich-country aid, and reforms to the international trade system. But it also calls for co-operation between rich and poor countries in another area - “global and regional public goods.”

What on earth does this mean? Well, “public goods” are goods which can’t be limited to one person. Clean air is a public good, as are roads. Because they can’t be controlled in that way, they can’t be sold for profit, which is why they tend to be looked after by governments out of tax money. But what about public goods that cross country boundaries? The UNMP argues we need to look again at our strategies for investing in and protecting those. (p47-8)

Regional public goods

Take for example regional infrastructure. For many land-locked African countries, the only access for goods to ports for export comes through other countries. If a country invests in improving its roads, but the countries lying between them and the port don’t make matching investments, little is gained. For maximum effectiveness, transport projects need to be co-ordinated between countries.

Perhaps most seriously, environmental issues tend to ignore country boundaries. (This is especially true in Africa, where country boundaries stem from age-old colonial decisions and bear little resemblance to natural barriers such as rivers and the edges of forests or deserts.) One country’s over-farming could lead to “desertification” of land, for example, which could easily spread to neighbouring countries. Also, conflicts in one country can easily spread to surrounding countries, or destabilise them through massive refugee flows. (The Second Congo War, which cost around 4 million lives in the late 1990s, was started largely by disruption from the Rwandan genocide of 1994.)

To better tackle all these issues at a regional level, the report calls for regional co-ordination to be built into country strategies to achieve the MDGs. Poverty reduction plans should include plans for regional co-operation in four areas: transport, water and energy infrastructure; environment; economic policy harmonisation; and political dialogue and transparency along the model of the African Peer Review Mechanism, where African countries share submit their governance for review by neighbours.

In addition, the report calls for increased funding by rich countries for regional organisations. Africa has a range of these, including the Economic Community of West African States (ECOWAS) and the Southern African Development Community (SADC).

But what about global public goods? The report focuses on two: global scientific knowledge, and the environment.

Global science

Scientific advancements in fighting disease, generating energy, agriculture and so on benefit all of humanity and can massively help the development of poor countries. (For example, scientific research into improvements in agricultural production - creating hybrid, sturdier breeds of rice - brought about the “Green Revolution” that has saved millions from starvation in Asia and kickstarted the region’s economic growth.) But such advancements require vast expenditure on research, usually funded by governments (although the Green Revolution research was in fact mostly funded by nonprofits, the Ford and Rockefeller Foundations). In practice, this means the vast majority of basic scientific research is funded by rich country governments, and naturally largely focuses on rich-country problems. For example, the WHO believes $4 billion a year is needed to combat malaria; the current funding is around $300 million. (full report, p229)

Now, the report argues, a two-pronged approach must remedy this. First, rich countries should devote more attention to poor-country problems, like sexual and maternal health, when funding scientific research. $7 billion of extra funding each year should be put forward by rich countries to research agriculture, energy, and climate change. At the same time, rich countries should support scientific research in poor countries by increasing funding for universities. (overview report, p49)

The global environment

While issues like desertification are regional, climate change is global. It stands to worsen the situation of poor countries through increasing droughts, floods, and tropical diseases. And yet, the primary responsibility for solving it must lie with the rich and middle-income countries that have largely created it. The report calls for rich countries to take immediate steps to stabilise and reduce carbon emmissions, and develop carbon “sinks” such as increased forest space to help stabilise the level of carbon in the atmosphere (although the report stops short of detailed proposals, which would probably fill at least another 400-page report).

…

The report’s proposals in this section are fairly uncontroversial, but nevertheless significant. I’d like to have seen more robust proposals for regional cooperation, as African governments in particular are notoriously bad at it. While increased funding for regional organisations can work when the will is there, too often it’s lacking, leaving some countries punished for others’ short-sightedness.

We’ve now looked over most of the UNMP’s shopping-list of investments and changes needed to achieve the Millennium Development Goals. But this is a whopping ten-year plan. How to get started? Next time we’ll look quickly at the report’s scheme to put the world on the right path.

Unless otherwise indicated, page numbers come from the Overview Report. You can also see the full 300+ page version, ten key recommendations, or the reports of the individual task forces.

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Millennium Project on Trade

Rav Casley Gera — Mon, 28 Jan 2008 16:41:18 +0000

One of the most common arguments you hear against increasing aid to Africa can be summed up in a single slogan: “trade, not aid”. It’s by trading with other countries, the argument goes, that formerly poor countries in Asia have transformed their economies and slashed poverty. Simply supplying more aid might help keep people alive, but not give put countries on the long-term path out of poverty.

It’s certainly true that international trade has worked well for Asia. China and India have seen millions lifted out of poverty since they opened up their economies in the late 1970s and 1990s respectively. But the UN Millennium Project argue, in their 2004 report on strategies to meet the Millennium Development Goals, that the idea that trade and aid are somehow opposed is a myth, and “the slogan ‘trade, not aid’ is misguided.” (p46)

Instead, the report argues, trade reforms go alongside investment and social programs, funded by aid, in helping poor countries meet the Goals. We’ve already looked at the report’s investment plans, so now let’s see its recommendations for reforming the way international trade is carried out.

The report makes explicit its belief that, in the long term, free trade is in everyone’s best interest. It suggests the world adopt a “conveniently distant” target - perhaps 2025 - for the total removal of barriers to trade in goods, and a substantial reduction in barriers to trade in services (such as banking services). This puts the report somewhat at odds with the Commission for Africa, whose own report emphasised poor countries’ right to protect their economies.

This is a long-term framework, though. More immediately, the report calls for several changes:

Abolish agricultural subsidies. You’ve probably heard of schemes like the Common Agricultural Policy in the EU, which heavily subsidise farmers in order to support their livelihoods and the countryside. As well as being extremely expensive, these schemes harm poor countries by making exports from rich countries cheaper for many Africans than goods grown at home! As well as ending such subsides, the report calls on rich countries generally to reduce barriers to agricultural trade, and particularly to end specific taxes on imports of certain goods, such as cotton, which are primarily made by developing countries. (p46)
Manufactured goods made in poor countries, such as clothes, don’t generally have to compete with subsidised goods from rich countries. However when exported to rich countries, they often face crippling import tarrifs that make them too expensive to succeed. Because rich countries have agreed various free-trade initiatives through groupings like the EU, many place higher tarrifs on goods from poor countries than on goods from other rich countries. And the barriers developing countries put up are also a problem. Although they’re designed to prevent goods flowing in from rich countries, they also act against trade between poor countries - preventing, for example, trade between neighbouring African states. Such trade could not only help those economies grow, but may help reduce conflict between African states. Therefore, the report calls for a quick reduction to zero of tarriffs on imports of nonagricultural goods. However, the report does give developing countries more time to adjust, proposing a deadline of 2025 for the removal of their barriers, against 2015 for rich countries. (p46-7)

Free trade in services has been a controversial idea, with many arguing that poor countries could be forced to sell off their remaining public services and to remove regulations on things like banking to fulfil the requirements of the World Trade Organisation’s GATS initiative. The report suggests a trade - that developing countries should lessen their opposition to allowing in foreign services, in exchange for rich countries loosening their restrictions on temporary labour, which is also part of GATS. The idea is that the gains to poor countries from remittances from workers abroad - which currently total $300 billion a year - outweigh the risks of liberalising services a little. It’s one of the report’s most striking recommendations. The Africa Commission, too, however, broadly endorses GATS for poor countries and says further liberalisation of temporary labour could benefit Africa to the tune of $14 billion a year. (p47)

Of course, there are already some systems in place in the international trade system to make allowances for poor countries. They’re known as “special and differential treatment“, and allows exemptions and delays to the implementation of free-trade agreements for countries meeting certain requirements. The report calls for this measure to be expanded, and crucially, for the exemptions offered to usually be longer, to give poor countries time to adjust. (p47)

In addition, the report notes, much of the focus of aid-funded investment should be to improve the competitiveness of poor countries’ exports. Investment in transport infrastructure such as roads, for example, can slash the costs of taking goods to market, letting farmers sell them cheaper and still make more money. At the same time, however, efforts to make poor countries’ exports more competitive (i.e., cheaper) shouldn’t be made at the expense of the environment, or of labour protections like minimum standards for working conditions. (p47)

Trade is a highly complex issue, and the report’s recommendations have to be put in the context of the wider discussion at the time it was written. The immediate context was the Doha Round of WTO negotiations, which was an attempt to agree international trade rules. Despite being billed as a “development round” that would put poor countries first, the deal ultimately fell apart under opposition from many developing countries, largely over the rich countries’ refusal to reduce agricultural subsidies. Some pundits said the Round’s collapse was a tragedy for poor countries, while others said that the likely deal would have made matters worse. The report’s general support for Doha suggests they are in the first category. Later, we’ll look at the trade conversation in more detail and see how these proposals differ from other sets of recommendations. The key things to remember however, are that the report explicitly supports free trade as part of the solution to meeting the MDGs, and calls on both rich and poor countries to take steps to liberalise trade; but it asks for more time for developing countries to make the necessary adjustments.

Having discussed both trade and aid, you’d think the report had covered the changes to the international system needed to meet the Goals. Well, not quite. Next time, we’ll look quickly at its recommendations regarding “regional and global public goods.”

Page numbers come from the Overview Report. You can also see the full 300+ page version, ten key recommendations, or the reports of the individual task forces.

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Millennium Project: making aid work better

Rav Casley Gera — Mon, 21 Jan 2008 16:17:00 +0000

We’ve seen the recommendations of the UN Millennium Project, the coven of experts led by Jeffrey Sachs tasked with advising the world how to meet the Millennium Development Goals, for the investments and reforms poor countries need to make to meet the goals. But what about rich countries? How does the international system of aid and trade need to change to make the goals possible?

A key area of controversy is aid. Critics of Sachs argue that aid is often wasted, and even can make matters worse for poor countries. Such critics point to studies which suggest that there’s no clear relationship between the levels of aid a country receives and its rate of economic growth. But the problem with these studies, the report argues, is that they look at total aid levels, including things like emergency aid which can’t legitimately be expected to generate growth. Indeed, because this sort of aid is typically given at time of crisis, you could look at the figures and falsely conclude that it is causing, not alleviating, the problems.

The key, the report argues, is to measure the effectiveness of that aid which is intended to generate growth - direct financial support to investments in infrastructure and services. According to a 2004 study¹, such aid does contribute significantly to economic growth, if combined with well-intentioned and reasonably effective governance. (p41)

At present, however, the report acknowledges that the development systems of rich countries - particularly aid - are not working as they should. “Low-quality” aid, the report states, “has fostered the serious misconception that aid does not work.” (p40)

The report outlines 10 changes donors need to make to make aid, and their general part in the development process, work better.

The MDGs aren’t at the centre of aid processes. The IMF, World Bank, and donor countries “have not encouraged the countries to take the Millennium Development Goals seriously as operational objectives.” Some countries have devised MDG-focussed plans but have been denied the funding to implement them (Jeffrey Sachs gives the example of Ghana). Others have been advised not to even bother. Instead, rich countries should affirm the goals as the centrepiece of development - “the fulcrum of policy,” as the report put it earlier - and fund them accordingly.
Strategies and needs aren’t assessed at country-by-country level. There’s no established assessment framework that can separate corrupt governments from deserving ones, or precisely calculate the needs of each country. Donors need to carefully assess each country separately, using common criteria SACHS LINK>
Short-term focus. Development is a long-term process, and meeting the Goals is a ten-year project. But PRSPs often last just three years, and aid is often revised annually. Instead, plans should be made within a ten-year framework, and aid should be offered for the whole 3-5 year life of a PRSP.
Technical support isn’t adequate. The numerous specific expert organisations within the international development community - the World Health Organisation, WHO etc - tend to limit their involvement in poor countries to small pilot projects. Instead, they should be encouraged to provide help to governments in developing and implementing massive scale-up plans.
Agencies aren’t coordinating their support. The various agencies compete for donor support, and the UN agencies in particular have poor relations with the World Bank IMF. Instead, the UN Development Group, and its country teams based in each location, should co-ordinate the activity of all multilateral agencies within an agreed funding framework and in support of an agreed plan to meet the goals in each country.
There isn’t enough money. Neither aid nor debt relief is currently designed to help countries meet the goals. Aid is often not provided for education, training or salaries, some of the vital elements of building up public services. And promised increases in aid to meet the goals aren’t happening quickly enough (this was written before the 2005 Gleneagles commitments, which - if fulfilled - will go a long way to addressing this). The MDGs should be the basis for future aid levels.
Debt relief, too, ignores the goals. Measurements for debt relief are based around enabling countries to meet largely arbitrary economic indicators, and not on freeing up resources to meet the goals. Instead, “sustainable” debt should be considered as a level of debt compatible with meeting the Goals.
Aid delivery is poor quality. Aid is:
- unpredictable;
- limited to emergency and technical help, not to long-term investmetns;
- tied to contracts with donors, or to donors’ pet priorities instead of recipients’ plans;
- not evaluated for effectiveness;
- often given to poorly-governed countries for political reasons.
Instead, aid should be focussed on well-intentioned but weak governments, and take the form of general budget support to help them meet their PRSPs.
MDG priorities are being ignored. Issues such as regional integration, the environment, gender equality, sexual health, roads, electricity… and several more, are often overlooked by donor’s development priorities. All these should receive more attention, within the context of comprehensive development plans.
Donors’ priorities are incoherent. In terms of both their aid and trading policies, donors often give with one hand and take with the other, for example supporting agriculture exports with aid and then discouraging them with tariffs. Instead, trade policy, as well as aid, should be aligned with the MDGs, and rich countries should adopt the same stringent transparency standards they expect from poor countries. (p39-46)

Let’s look a little more at point 2 - calculating support according to the needs of different countries. Middle-income countries, primarily in Asia and Latin America, can largely finance meeting the goals themselves, the report notes. For Africa, however, states mostly fall into four categories, each with its own needs:

Well-governed countries who are stuck in a “poverty trap”. For these countries, major extra aid is needed, based on an MDG-focussed poverty reduction plan. Aid should be largely without strings.
Poor countries with ill-intentioned governments. Countries like Zimbabwe, where the government is part of the problem, there isn’t much of a case for increased aid. Most aid should go to charities, and any given to the government should have strict human rights and economic conditions.
Poor countries with well-intentioned but weak governments. For these countries, investments in direct services should be accompanied with investmnt to improve administrative and management capacity. With appropriate support, these countries will “significantly outperform current expectations”
Conflict countries, including those falling into, or climbing out of, wars. Here, quick aid is essential (while currently, promises often come quickly, but the actual aid takes much longer). Quick action can help end violence and restore essential services, and the promise of further aid can act as an incentive for maintaining the peace.
Geographically vulnerable countries, for example landlocked, island or mountain states, or those very prone to natural disasters. These will require additional responses in transport, communications, or disaster warning, prevention and preparation.
Geopolitically important states. Here, the problem is not typically too little action, but too much. Iraq, for example, has received a level of aid and debt relief given its size and economic situation. While aid for such states may be necessary, it shouldn’t be allowed to distract from other countries, nor should it mean lessening requirements of good governance. (p43-44)

By implementing the changes described, and applying the right solutions to the right areas, the report argues, development support from rich countries can be an essential and effective tool to meet the MDGs.

But there’s more to development than aid. What about trade policy? This has been one of the most contentious areas of recent debate about development. Next time, we’ll look at the Project’s ideas in this area.

1. Clemens, Radelet and Bhavnani, “Counting chickens when they hatch: The short term effect of aid on growth,” Center for Global Development, 2004.

Page numbers come from the Overview Report. You can also see the full 300+ page version, ten key recommendations, or the reports of the individual task forces.

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UN Millennium Project: Scaling-up

Rav Casley Gera — Wed, 16 Jan 2008 15:29:19 +0000

We’ve already looked at how Professor Jeffrey Sachs believes small, proven interventions at local level can be “scaled up” - accompanied, of course, by a matching scale-up of aid to pay for it all. What does his UN assignment, the UN Millennium Project, have to say on the topic?

Multiple examples, the report notes, show that scaling-up can work:

Vietnam’s success at beating a 1991 malaria epidemic, where free bednets and treatments nationwide tackled the problem quickly
Tanzania’s abolition of school fees, and massive investments in new schools and teacher training, increasing primary school enrolment from around 60% to around 90% and achieving gender equality (p34)

But nevertheless, there are real challenges to be faced in scaling-up the MDG interventions: the sheer number of different areas of action; the need to reach millions of people in each country. The report outlines several key factors which are needed to make it work:

Political commitment at the top level;
Concrete objectives and plans of work, with specific targets and timetables;
Delivery systems that are locally appropriate, but also standardised and easily replicable: for example, there are standardised guidelines for Malaria treatment;
Substantial funding - Tanzania’s education budget had to more than double to achieve the changes above;
Abolition of user fees;
Upgrade of infrastructure and increased staffing;
Co-ordination of government, NGOs and community organisations, donors, and the private sector;
A role for communities in planning and design of services;
Close monitoring of progress, with alterations made along the way if needed;
Long-term, stable, predictable donor finance.

Governance

Crucial to achieving effective scale-up, of course, is effective governance. But the report is eager to point out that the common phrase “poor governance” has two distinct meanings:

Corrupt leadership, where government has poor or selfish motives, or is run to the benefit of a particular tribe or ethnic group
Weak leadership, where the government’s intentions are good, but its efforts are impaired by lack of resources, technical expertise, or poor management. (p35)

While comment about governance, particularly in Africa, tends to focus on corruption, the report states that “Many of the world’s poorest countries lie closer to this second category.”(p35) In these cases, investment can also be made to improve governance. The following steps can help:

Promote the rule of law with adequately trained, staffed government and legal systems;
Promote political and social rights through human rights assessments of developing country governments;
Accountability, transparency, and participation by all sectors of society, especially the poor;
Promote private sector growth through sound economic policies and management
Support civil society and NGOs as partners in meeting the MDGs. (p36)

This is all pretty top-level stuff, but it gives a clear steer as to the requirements for an effective scale-up of interventions at national level. But is it enough to convince those critics who believe aid is often wasted? We’ll look at some of the criticisms of the report in a few weeks. Of course, it isn’t just problems within developing countries that are currently slowing progress towards the goals. As we’ve already seen, there are also issues with rich countries and their relationships - as donors and as trading partners - with developing countries. We’ll look a little at this next time.

Page numbers come from the Overview Report. You can also see the full 300+ page version, ten key recommendations, or the reports of the individual task forces.

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UN Millennium Project: small interventions = big difference

Rav Casley Gera — Sat, 12 Jan 2008 15:24:47 +0000

The UN Millennium Report proposes each country prepare a detailed shopping-list of interventions, from education and health to environmental protection, to achieve the Millennium Development Goals. But what kinds of interventions do they have in mind? The report outlines a host of “quick wins” - comparatively cheap, highly effective investments that could be effective in most developing countries - that give us a good sense of what later investments could entail.

Here are some examples:

abolishing fees for school uniforms
nitrogen replenishment treatment for agriculture
free school meals
breast feeding support with micronutrient supplements
annual deworming of schoolchildren
basic health training in villages
antimalarial bednets
eliminate health fees for essential services
increase sexual health
expanding AIDS, malaria and TB treatment, for example achieving the “3×5” target of getting 3 million people onto AIDS treatment by 2005 (the report came out in late 2004)
slum upgrading
establishing off-grid electricity sources for remote areas, including solar
legislation to ensure property rights for women
campaigns against violence towards women
appoint science advisors for presidents and prime ministers, getting women into policy processes, community support for tree-planting.

“The Quick Wins are not the only interventions needed to reach the Goals,” points out the report, but “the ones with very high potential short-term impact that can be immediately implemented.” (p26)

Still, that gives us an idea of the specific kinds of investments the Project envisage - a similar list to those outlined in Sachs’ book, and many also tried out in Sachs’ Millennium Villages. But as we noted with reference to the villages, it’s one thing to make interventions in certain areas, another to “scale up” to making interventions at national and Africa-wide level. What kind of guidance does the Report offer on scaling-up?

Page numbers come from the Overview Report. You can also see the full 300+ page version, ten key recommendations, or the reports of the individual task forces.

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UN Millennium Project: Plans to end poverty

Rav Casley Gera — Mon, 10 Dec 2007 20:38:07 +0000

The UN Millennium Project, a sort of specially-convened think tank put together by Kofi Annan to report on how the world can meet the Millennium Development Goals, often suggests very similar proposals to its director, Jeffrey Sachs, and his book The End of Poverty. I’m choosing, in the absence of evidence to the contrary, to assume that this is because Sachs’ own thoughts have been informed by the hundreds of experts consulted by the UNMP’s numerous task forces, and not because Sachs himself had undue influence over the project’s Report. Certainly, one of the areas where they both share the most common ground is in their proposals for country-level plans to achieve the MDGs. Each developing country, the report argues, should put together a plan for investment and reform that would see it achieve the MDGs by the deadline in 2015. The plan shouldn’t be focussed on what can be achieved with current funding levels, as many are now; instead, the baseline for “realistic” should be what it takes to achieve the MDGs, and it will be up to the international community to fund plans that are well drafted. Financial considerations, the report argues, should not be a driving factor in making the plans, though technical constraints should.

Fortunately, the report notes, the development industry already has a system that can be adapted for this purpose: the nattily-named Poverty Reduction Strategy Paper. These are poverty plans which, since the mid-1990s, developing countries have been required to complete to receive support from the World Bank and IMF. The strategies were brought in in response to criticisms that poor countries were being given no say in reforms to their economies designed to reduce poverty; but they also enable donors to assess developing country governments’ commitment to - and capacity for - poverty reduction. Now, the UNMP argues, “MDG-focussed PRSPs” will give poor countries a way of planning massive poverty reduction strategies to meet the MDGs - and give rich countries a clear guide to how much extra aid they need to provide. (p24)

So what do these plans need to cover?

The nature and underlying causes of poverty - and how it varies by region, gender, age, and so on. Is poverty in one particular country mostly urban? Rural? Female?
Exactly what public investments are needed, from transport to education, to meet the goals. These should not be vague statements, but precise measurements.
Both a ten-year framework for achieving the MDGs (remember, the report was published in early 2005, ten years before the goals’ deadline) and a 3-5 year plan for immediate action.
A public sector management strategy, ensuring the country’s public sector is up to the task. This should include things like measurement and accountability, human rights, and so on. In addition, it should plan ways to decentralise decision-making for the carrying out of the plan to local level.
A private sector strategy focussed on building up business in order to kick-start economic growth and reduce the country’s dependence on aid.
While some countries, including most of Africa, will need aid beyond 2015, some can be expected to “graduate” from aid before then. These country’s PRSPs should also include an aid exit strategy for a timed, orderly transition to self-sufficiency.

So when it comes to the actual investments needed, what sort of thing does the report have in mind? It breaks its suggestions down into seven “investment-and-policy clusters”.

Rural development

AIM: increase food production

achieve a “21st-Century African Green Revolution” by supplying soil nutrient fertilisers and training in better soil management techniques
invest in rural transport, communications, drinking water and sanitation, irrigation, and energy
all in an environmentally sustainable way

Urban development (p28)

AIM: upgrade slums, prevent new slums developing, and provide jobs

Improve tenant’s rights and security of tenure for people who live in slums
Support poor-people-led efforts to build decent housing
Strengthen urban planning systems, ensuring poor people’s input, especially women’s
Expand basic infrastructure to slums
Reduce air and water pollution
Establish “special investment zones” to encourage business growth
Strengthen NGOs and civil society groups and encourage their voice in discussions

Health

AIM: ensure universal access to essential services

Focus health efforts on district hopitals, with these acting as hubs for local services
Train more doctors and nurses
Build hospitals and clinics
Provide more medicines
Strengthen management
Eliminate user fees for essential services
Train community workers - “barefoot doctors” - to provide simple treatments, educate communities, and involve them in decision making
Establish systems to monitor and evaluate district service

Education

AIM: ensure universal primary education and expand secondary and higher education

Build schools and train teachers where there are shortages
Revise curricula to ensure relevance and eliminate gender bias
Give parents and communities power to hold schools accountable
Eliminate primary school fees
Use special initiatives to reach vulnerable children who aren’t in school
Recognise civil society organisations as “legitimate partners in debate”
Meeting the goals will also require “political transformation” to commit to universal education and eliminate favouritism

Gender equality

AIM: invest to overcome gender bias¹

Collect gender-focussed data for essential services to check extent of problem
Protect sexual and reproductive rights and provide access to reproductive health services²
Ensure women have equal legal rights with regard to land tenure etc
Increase women’s representation in politics
Protect women from violence

Environment

AIM: invest in improved resource management³

Integrate environmental strategies into all policies
Promote regulatory reforms to protect environment
Introduce environmental monitoring
Replant forests
Treat waste water
Restrict chemical pollution
Remove subsidies that encourage environmentally risky behaviour

Science

Create science advisory groups to advise governments
Expand science and engineering faculties in universities
Make science curricula more business focussed
“Promote infrastructure development as a technology learning process”⁴ (p28-31)

However, the report notes, the seven areas are interdependent. No one can be invested in on its own. In each area the different sectors will have different levels of priority, but PRSPs must aim to achieve the goals in all sectors to be effective.

The report outlines a little of what the balance of priorities should be for each region. For sub-Saharan Africa, it argues that the popular belief that governance should be the main focus is wrong. Many parts of the continent, it argues, are well-governed, but stuck in a “poverty trap”. Instead, the primary focus should be on:

rural and urban productivity;
major investments in public health to tackle AIDS, TB, malaria, and child and maternal mortality;
sexual and reproductive health to provide more manageable family sizes;
building more schools, training more teachers, and providing incentives for girls and vulnerable children to attend school;
major investment in water management and energy;
tackling legal and social barriers facing women and girls.

This all still sounds a bit vague, right? In fairness, as the report notes, the precise package of interventions needed will vary widely around the world because of environmental, social, political and cultural factors. In addition, different countries are in different positions now, because of past investment, and so will need a different balance of remedies to meet the goals.

Fortunately however, the report does outline a host of specific interventions - the so-called “quick wins” - which can be done quickly, relatively affordably, across the developing world and will bring rapid gains towards the goals. We’ll take a look at those next time, along with the report’s thoughts on how best to scale up the interventions.

Bit vague, dontcha think? The specific MDG goal for gender equality is to eliminate gender disparities in education.
Sounds uncontroversial, but this is an allusion to providing both contraception and abortion services, which can be decidedly problematic in some countries. Even now, US aid is blocked to organisations that advise on abortion.
Notice how much vaguer these later sections are than those on health and education. A similar problem occurs with the goals themselves - those on poverty, education, health and so on are very precise, latter ones on education and “global partnership” maddeningly vague.
I have no idea what this means.

Page numbers come from the Overview Report. You can also see the full 300+ page version, ten key recommendations, or the reports of the individual task forces.

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The UN Millennium Project

Rav Casley Gera — Wed, 05 Dec 2007 19:02:23 +0000

We’ve looked in detail at Jeffrey Sachs‘ proposals for massive increases in aid to Africa, and developing countries elsewhere, in a bid to end extreme poverty by 2025. We’ve also looked at the Millennium Villages project, Sachs’ bid to prove the effectiveness of aid at a local level. But Sachs isn’t only known for his personal advocacy and that of his department at Columbia University, the Earth Institute. He was also director the UN Millennium Project, a side-arm of the UN Development Programme, the UN’s main development-focussed organisation. Their report offers a detailed look at the practicalities of Sachs’ plan.

Sachs was invited to set up the UNMP in 2002 by Kofi Annan. The catalyst was 2000’s Millennium Declaration, in which the world adopted the Millennium Development Goals as the basis of development policy. The UNMP’s task was to convene experts in all the different areas of development, from education to governance, and to prepare a report on how to achieve the goals. With Sachs at its head, the Project published its report - Investing in Development: A Practical Plan to Achieve the Millennium Development Goals - in 2005, neatly coinciding with Sachs’ book, the Make Poverty History campaign, and the report of the Commission for Africa. The Project was then wound up, passing ongoing duties to a new UNDP group.

The report is not just Sachs’ work. It was put together by the co-ordinators of the ten UNMP task forces, which each brought together experts to look into their area:

hunger
education and gender equality
child and maternal health
HIV/AIDS, malaria, TB and access to essential medicines
environmental sustainability
water and sanitation
slums
trade
science, technology and innovation

Hundreds of experts, the report says, had an input. Nevertheless, the report’s recommendations have many similarities to Sachs’ own ideas. I assume that that’s not because Sachs had undue influence over the report, but rather that his own thoughts have been influenced by the expertise represented in the UNMP (The End of Poverty was published in early 2005, and presumably was being written as the UNMP was preparing its final report). Nevertheless, the report is strikingly clear in its recommendations, giving the impression there was little dissent on issues such as aid levels. Surely, though, there were such disagreements, as economists bicker over such issues every day. It’s possible that the experts consulted were selected for their proven agreement with Sachs’ ideas, but I haven’t heard that that was the case. Either way, the report is, officially at least, the sum of a major research project into how best to meet the goals. But it also, I reckon, serves as a useful summary of the “big push” school of thought on Africa, of which Sachs is certainly an exemplar.

Like the Africa Commission’s report, the UNMP’s comes in two versions: a full 300+ beast, which I haven’t read, and a 72-page overview, which I have (you can also read the overview report on the website, including the useful summary of ten key recommendations). Those after real detail can also download the reports of the individual task forces.

Without the long autobiographical buildup of Sachs’ book, the report can get straight into the issues. First, it looks at why the goals matter, and how - and why - the world isn’t currently (as of late 2004, when the report was prepared, and even more so now) on course to meet them.

Why the goals matter

The goals, the report notes, are a unique effort - the first time the world has agreed measurable, timed targets for addressing extreme poverty. What makes them special, the report argues, is that the ambitious targets they contain have never been “so utterly affordable” before - mirroring a point made by Sachs, that a gradual decline in the proportion of the developing world’s people experiencing extreme poverty means that it is now possible to plan for its abolition. (p1)

The report attributes the goals with a double significance. For rich countries, it notes, they are “the fulcrum of international development policy” - a framework within which all development efforts can be coordinated. But for people in poor countries, they’re nothing short of “the means to a productive life” - the difference between a precarious existence, potentially one drought or bout of illness away from death, and a secure footing. Achieving the goals would lift hundreds of millions out of extreme poverty, save 300 million from hunger, and save 30 million children from a premature death. Moreover, the report notes, the basic needs the goals aim to ensure more people have - education, adequate food and shelter, and so on - are basic human rights as covered by the Universal Declaration of Human Rights, and so achieving the goals helps fulfil previous international commitments. (p4-6)

In addition, the improvements required to meet the goals are an investment in future economic development. Education, a healthier workforce, and the potential for savings and investment in growing businesses all mean that achieving the goals would kick-start growth in the long term. Finally, the report points out - again, as Sachs, and campaigners such as Bono also have - that the goals are “a linchpin to global security”. Poor, hungry societies are more likely to experience conflict and dislocation. Weak government and scarce resources, both characteristics of poor countries, are strongly linked to state failure and outbreaks of conflict between and within countries. Economists have demonstrated that civil war and rebellion is often as much about gaining control of scarce resources than about political change. In fact, an economic shock that reduces a country’s economy by 5% increases the country’s chance of civil war by half (p6). Drug production and trafficking is also more common in poor countries.

Where things stand

The MDGs are measured from 1990 to 2015, so the report was prepared over halfway through the period.¹ And the good news is, there has been much progress - between 1990 and 2002, the number of people in extreme poverty declined by around 130 million, life expectancy rose, and more people in the developing world gained access to clean water. (p8) The common perception that things in poor countries just keep getting worse is, by these measures, false.

But progress in many areas is way off target, and varies wildly around the developing world. For sub-Saharan Africa, it’s a depressing story: the region is not on track to meet a single goal (p3). Where there is progress, such as on gender equality, it’s far too slow. And in many areas, including extreme poverty, hunger, and child mortality, there’s no significant progress. This useful chart summarises the situation (click for a larger version).

The proportion of Africans living in extreme poverty (with an income of less than $1.08/day in 1993 PPP dollars) increased slightly, from 45% to 46%, between 1990 and 2001. (p9) Interestingly, though we think of African poverty as primarily rural (and 73% of rural Africans are extremely poor), sub-Saharan Africa even leads the world table for the share of the population living in slums, with more than 40% in that category in many African countries. (p12) The report calls the region “the epicentre of crisis”. (p9) It stresses, though, that progress is poor elsewhere too. Western and Central Asia have seen increasing hunger and poverty, for example, in part as a result of the painful adjustment from communism. (p3,9)

Why progress is so patchy

What’s going wrong? The problem, the report argues - and this is one of the sections where it most strongly seems to be chanelling Dr. Sachs - is that the engine of development, economic growth through trade, is bypassing whole areas because of a lack of basic infrastructure like roads, and human capital such as education. Without these, villages rely on basic primary export industries - growing cash crops like coffee - and this has become an increasingly poor way to survive, thanks to environmental stress and plummeting prices. In cities, too, poverty reinforces itself - the poorest members of society, crowded into slums, have the least opportunity to speak up and demand better infrastructure and proper services.

Because of these obstacles, the report argues, market forces alone won’t achieve the goals. Major investments are needed in energy, transport, decent housing, health and education. With those basic needs met, “jobs and foreign investment will begin to flow in”. (p15)

But this isn’t exactly a new idea. So what’s stopped this investment occuring?

1. Governance failures. Development requires the rule of law, protection for property and human rights, appropriate public investment, effective public administration, and a host of other things. Where these are missing, foreign and domestic investment in the economy is threatened. For example, without protection for private property, foreign businesses will consider a country too risky to invest in. It’s implied, but not openly stated, that governments in many developing countries are failing in these areas, through lack of will in some areas and lack of capacity in others.

2. Poverty traps. Even well-governed countries, however, may be unable to benefit from trade and start real economic growth, simply because they are so poor. Without basic infrastructure, these countries can’t plug into growth; but without growth their governments can’t obtain the revenue needed to make the necessary investments. Low savings, uncontrolled population growth, and an exodus of talented minds abroad all worsen the situation. These problems are exacerbated by the debt-servicing commitments of many poor countries, which often eat up the little tax revenue their governments manage to collect. Geographical factors like distance from ports also have a big effect, and discriminate particularly against Africa, with its vast size, dense rainforest, and malarial and drought-prone climates.

For well-governed countries stuck in a poverty trap, the answer is a “big push” of investment between now and 2015, aimed at establishing the basic infrastructure needed for growth. Such investment would have to come from foreign donors.

3. Pockets of poverty. Though we tend to look at poverty from a country-by-country perspective, there are also significant variations in income within countries. Even middle-income countries can have large numbers of extremely poor people, and even when a country’s economy is growing, sections of the population can be left out. For example, Western China hasn’t benefitted much from the boom affecting the Eastern half of the country where ports are nearer. However, this is less of an issue in Africa, where many countries are desperately poor almost all over.

4. Areas of specific policy neglect. Sometimes governments simply aren’t trying. The less technical, more political aspects of the goals - like environmental sustainability and gender equality in education - are sometimes simply not given priority by governments, or simply ignored. In particular, maternal health doesn’t get the attention it deserves, despite Africa’s high levels of deaths in pregnancy and childbirth.

In short, the unevenness of progress towards the goals is the result of both structural problems such as geographical obstacles; the sheer scale of the task, as with countries lacking basic infrastructure, and sometimes lack of will or ability of governments to see the task through. The report isn’t too specific about what the balance is in different country’s cases, preferring to talk in general terms. But behind these broad concepts lie a host of different problems: “poor governance”, for example, encompasses everything from well-meaning governments lacking talented civil servants, to murderous dictatorships like Robert Mugabe’s in Zimbabwe. The key, the report goes on to argue, is to identify what the obstacles are in each specific country’s case. That process is the focus on the next chapter, and next time.

Confusingly, though the effort to meet the goals began in 2000, they are measured from 1990. So July this year marked the “halfway point” of efforts to meet the goals, triggering a wave of reports, speeches and statements bemoaning the lack of progress. But the halfway point of the actual period they cover was back in 2002.

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Jeffrey Sachs: why - and how - we should act

Rav Casley Gera — Fri, 30 Nov 2007 23:13:36 +0000

Over the last few weeks (and months) we’ve gone on a bit of an odyssey through Jeffrey Sachs’ The End of Poverty and found out how the man the New York Times calls “probably the world’s most important economist” believes that with carefully targeted interventions in health, education and agriculture, along with reform of governance and of trade rules, we could end extreme poverty by 2025. We’ve seen how he thinks it should be done, how it should be run, and how it should be paid for. Finally, let’s remind ourselves of why he believes we must take action - and how the obstacles of political inertia in the US can be overcome.

It’s in our interest

Like other advocates, including his friend Bono, Sachs points out that investing in eliminating poverty is an investment in security. “Hard evidence,” he argues, “has established strong linkages between extreme poverty abroad and threats to national security.” (p331) Economic failure leads to state collapse: genocide, civil war, revolution, with their attendant refugee and humanitarian crises. More influentially these days, failed states are likely to become a haven for drug traffickers, extremists and, yes, terrorists.

Sachs has a bad habit of saving his most impressive statistics till the very end of each point he makes, preceding them with a page or two of vagueness. He probably thinks it makes the book “accessible” and not, as Vanity Fair called it, “a dreary slog with only charts and graphs for company”. He does it again here, with some a-little-too-school-level talk about the economic roots of Communism and Fascism. Then, he cites a CIA study that identified infant mortality, economic openness and democracy as closely correlated to state failure. (p333) And given the US’ fondness for bombing or invading failed states, there does seem to be a strong case that a dollar spent ending poverty now is a dollar saved on fighter planes in fifty years’ time. Sachs lists 27 American military interventions since World War 2, of which only 2 didn’t come in the aftermath of some sort of state failure. (p334)

This idea isn’t news: Bush himself, Sachs notes, has expressed the link between poverty and the terrorist threat in speeches. (p335)

We promised!

This isn’t school, and saying you’d give someone your crisps at lunchtime because they carried one of your bags doesn’t mean you have to. But if you repeatedly, over a period of years, promise to give 0.7% of your money to the world’s poor, and then repeatedly fail to do so, you’re going to start losing credibility eventually. The US has committed itself to 0.7 in at least two international statements, in 1992 and 2002, but still officials often deny that major aid increases are part of the US’ development policy. “Spin as we might in the United States about our generosity,” Sachs intones, “the poor countries are fully aware of what we are not doing.” (p340)

How to sell it

Sachs has already noted that the public isn’t half as opposed to aid as pundits like to think. The success of the ONE campaign, with over 2 million Americans expressing support, suggests the issue of poverty in Africa is exercising the American public, especially churches. And recent and historical precedent shows how a political consensus for action can be built. The key, Sachs explains, is to have a series of giant rock concerts, and get Will Smith to click his fingers a lot.

Just kidding. Naw, the key is to get the people you’d expect to be against you on your side. When the US government needed to build support for its Marshall Plan for massive aid to Europe after World War 2, they involved the Republican opposition; recruited financial experts to approve the scheme; ensured the President consistently made the case for the Plan; and instituted a massive public information scheme to ensure the public understood the reasoning behind the plan. A similar co-ordinated leadership campaign now could ensure public support for a massive aid increase - and if the scheme was paid for primarily by the rich, as Sachs proposes, it would be even easier to get the public on board. (p341-2)

There is recent precedent. The Jubilee 2000 campaign for debt cancellation faced a wall of opposition from rich-country governments and the World Bank, and apathy from the public. But by convincing churches and influential figures on the religious right of the moral case for debt relief, the campaign won mainstream support and achieved impressive results in Congress. And similarly, the support of right-wing Senator Jesse Helms - won over by Bono’s prosyletising - proved vital in securing a huge increase in US funding for AIDS medicine in Africa.

A historic challenge

The End of Poverty begins with a dizzyingly birds-eye take on economic history, and it ends in similarly high-minded fashion. Action to end poverty, Sachs argues, sits within the framework of classic enlightenment thought, with precursors like:

the democratic republicanism of John Locke and Thomas Jefferson;
Adam Smith’s belief that capitalist economics could, if shaped correctly, push human progress forward to incredible extremes;
the androgynously-monikered Marie-Jean-Antoine Condercet’s prediction that science and technology could achieve similar miracles; and
Immanuel Kant’s call for systems of global cooperation to maintain and develop free trade between nations.

“It is our breathtaking opportunity,” Sachs explains, possibly foaming at the mouth a little, “to be able to advance the Enlightenment vision of Jefferson, Smith, Kant and Condorcet.” To help create political and economic systems that promote human well-being, and ensure the voice of the governed; to promote and spread science and technology worldwide, are quintessentially progressive ideas in the Enlightenment tradition. “Our generation’s work can be defined in Enlightenment terms.” (p351) Ending poverty, Sachs asserts, is nothing less than the next step in human development.

An enlightened globalisation

The more immediate context is globalisation. Sachs is surprisingly positive about the effects of the anti-globalisation movement that first came to attention in Seattle in 1999 with the protests outside the G8 meeting. “I applaud the overall movement,” Sachs explains, “for exposing the hypocrisies and glaring shortcomings of global governance and for ending years of self-congratulation by the rich and powerful. Before Seattle…. there was little said about the world’s poor.” (p355) However, Sachs is unquestionably pro-globalisation in principle. The antiglobalisation movement, he says, reminds him of the opposition of Indian academics to free trade during his visit there in the early 1990’s. “Those views were passé then,” he notes, “and are more so today. By now the antiglobalisation movement should see that globalisation, more than anything else, has reduced the numbers of extreme poor in India by two hundred million and in China by three hundred million since 1990.” (p355) Many of the movement’s criticisms of specific companies and their unscrupulous behaviour are valid, Sachs notes, are valid, but their more general rejection of capitalism and globalisation isn’t.

Instead, Sachs seeks ‘an enlightened globalisation,’

a globalisation that addresses the needs of the poorest of the poor, the global environment, and the spread of democracy. (p358)

Such a globalisation would mean supporting negotiations towards free trade, but also insist that governments would honour their commitments on aid and debt relief. It would also, Sachs argues, see the US return to a multilateral relationship with the world and end its “reveries of empire”. (p359)

Nine steps

Sachs concludes by outlining nine steps to building a world order that would amount to an enlightened globalisation, complete the enlightenment project, and mean free jelly beans for everyone on Tuesday afternoons. Probably.

Commit to ending poverty by 2025
Adopt a plan to meet the Millennium Development Goals
Enhance the voice of the poor in the international community
Bring the US back to the multilateral system
Restore the independence of the IMF and World Bank from undue rich-country influence
Strengthen the UN
Harness global science to address the needs of the poor, through public and philanthropic funding
Promote sustainable development
Make a personal commitment as individuals. “It is from numberless diverse acts of courage and belief that human history is shaped,” Sachs quotes Robert Kennedy. (p367-8)

Whether this all sounds like vague waffle, I don’t know. Coming at the end of 368 quite densely-packed pages of numbers, it seems kind of OK. If you want more of Sachs’ more general worldview, the place to go is his recent BBC Reith Lectures.

And that is, basically, it. It’s been a long ride. Soon, we will look at Sachs’ myriad critics, and how he counters their arguments. But before that, we will look at one more significant Sachs document: the UN Millennium Development Report. This is the full, nuts-and-bolts, packed-with-charts summary of exactly how the Sachs Plan would work, and it gives us an easy way to compress the World According To Sachs into a few short posts. Coming up. In the meantime, your thoughts on the Sachsism we’ve seen so far, and on The End of Poverty, are welcome below.

All page references are from the UK paperback edition of Sachs’ The End of Poverty.

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Jeffrey Sachs wants your money

Rav Casley Gera — Wed, 28 Nov 2007 13:10:37 +0000

After some introductory economics lessons and a bit of autobiography, we’ve finally got through Jeffrey Sachs’ plan for eliminating poverty by 2025. Now it’s time to answer the key question: go on then, how much?

The short answer: $135bn a year - as opposed to the $65bn/yr currently being spent - now, rising to $195bn a year by 2015. After that, we’ll see. In other words, we need to double aid for a while, then add the same amount on again. That’s for the whole of the developing world, not just Africa. This amounts to around 0.5% of GDP, still less than the 0.7% we’ve been promising for thirty years. We should put the rest in, too, to have something aside for when climate change starts to bite.

There, that’s the short answer. ADHD sufferers, sod off now.

Still with me? Good. It’s worth going into a bit more detail. Beware: there will be numbers.

A quick way to calculate something very complicated

Sachs starts with an initial, illustrative sum which, as it turns out, generates a very familiar figure to the more complex arithmetic. How much sheer money is the developing world short of to meet everyone’s basic needs? Basic needs means 1.08 purchasing power parity dollars a day at 1993 rates, and if that sounds like Martian, you need to read this. Let’s just call it $1.08 a day. 1.1 billion people, by the last count, live under this income level and their average income is $0.77 a day - yes, that’s right, about the price of a Mars bar. That’s a shortfall of 31 cents a day, or $113 per year. That times 1.1 billion people equals $124bn. That’s about 0.6% GDP of the main donor countries. (p290)

In other words, for the first time in history, the longstanding commitment to give 0.7% of GDP for aid - first pledged back when disco sucked and flares were first fashionable - would actually be enough to lift everyone out of extreme poverty. This is new. In 1981, Sachs notes, the shortfall was larger, rich countries weren’t as rich, and $1.6% of GDP would have been needed. (p291)

Why has ending poverty got cheaper?

Fewer extremely poor people. For all the doom ‘n’ gloom about poverty, it’s easy to lose track of the good news - that the proportion of the world’s population in poverty has never been smaller. 1.1bn is just over a sixth of the world; a generation ago the poor made up something more like one-third, and mid-20th Century more like half. That’s worth repeating - in the course of the Twentieth Century, we went from a world mostly extremely poor, to one where only one-sixth of people are consigned to extreme poverty. It’s still too many, of course. But it’s worth noting the progress. The great thing is, the number is now sufficiently small that eliminating poverty entirely becomes affordable. The downside is, the last few are always going to be those whose poverty is most stubborn.
The rich world today is rich. Far more so than a generation ago. And because the very rich own a greater proportion of the wealth than before, you can raise huge sums for development just by stinging them (more on this later).
Technology, god bless its silicon socks, is on our side. Mobile phones, the internet, logistics, new medicines, new agricultural products: these all help in different ways. They need to be put to work on the job more effectively.
Don’t forget we’re ending extreme poverty here, not all poverty (despite the book’s title, which states the opposite). There will always be rich and poor, as that’s relative. This is about enabling people to meet basic needs.
Equally, this isn’t about transforming whole societies. It’s great if countries become efficient market economies, democracies, transparent and so on, but it’s not all strictly necessary to get people onto the ladder of growth. Focus on the practical interventions, and it’s not as scary - or expensive.

….and now the complicated way

This is back-of-a-matchbook stuff, though. The full process of assessing the need is more complex, and at this stage Sachs is offering only an estimate.

Before we can get to the headline figures, we need to agree exactly what we’re buying. This is called “needs assessment.” And this has six steps (Sachs does like his bullet points):

Identify the package of basic needs
Identify which aren’t being met in each country
Work out how much it’ll cost to meet them - with population growth borne in mind
Work out how much each country can pay
Work out how much is left for donors to pay
Work out how donors will divide it up

So what’s in the “package of basic needs”? Well, it’s the kind of thing employed in the Millennium Villages - key ones include safe drinking water, primary education, nutrition programs, anti-malaria nets, paved roads, and access to modern cooking fuels (to prevent illness from indoor fumes). It’s important to note that these needs are so basic that basically everyone in rich countries has access to these. This is not “poverty” in the New Labour sense. This is a kind of poverty we in rich countries have almost forgotten exists.

As for how much it’ll take to meet them, in practice this usually is focussed on meeting the Millennium Development Goals. So at this stage, we’re only planning up to an interim point - the MDG’s call for a halving of extreme poverty. Once we’re there, we can assess the challenge to get the rest of the way. - so in some cases it’ll be aiming to meet needs for half the population by 2015, and the rest later. The UN Millennium Project (another Sachs vehicle) estimates that in Ghana, Tanzania and Uganda - as well as some non-African poor countries - the cost would be about $110 per person, per year, till 2015. (p293)

Who pays for what? The UNMP calculations assume that households themselves can pay for some things - energy, water, and investments in agriculture, with differing levels of subsidy for the poor (the extremely poor pay nothing). It also estimated that governments could muster up an extra 4% of GDP to support progress towards the MDGs, through better tax collection and taking money from other things, like corruption and war. In middle-income countries like Brazil, households and the government between them have enough money to fulfil the goals - they’re failing largely through problems of politics. Poor countries, though, need roughly $65 of the $110 to come from donors (of the rest, households are supplying $10 and governments $35).

Based on these rough estimates, we’re looking at $40bn per year for sub-Saharan Africa, or $80bn/yr for the whole developing world. By 2015, this rises to $83.4bn for Sub-Saharan Africa, $134.7bn for the world. Of course, this assumes that all countries qualify. In practice, this won’t happen because of requirements on governance and transparency, so the real figure would be less. (p295)

“Hang on, that’s $80bn/yr. You said $135bn!” I hear you cry. No, really, I can hear you. Over the internet. With, um, Skype. “So where does that extra $55bn go? Not on private jets for Jeffrey bloody Sachs, I hope.” Well, no. The thing is, not all aid goes on the kind of direct budgetary support that Sachs is talking about. Of the $65bn we currently give, for example, only $12bn goes to poor countries in a way they can use to support investment. The rest went to middle-income countries, or on debt relief, technical assistance (read: expensive experts), and emergency assistance. Some of this is necessary, and needs to continue in addition to the extra money on investment. Plus, extra money is needed to actually run the agencies that will co-ordinate and manage the money, and to provide extra capacity to existing agencies like those of the UN. In addition, as we mentioned last time, an extra $7bn/yr is needed for scientific research into poor-country problems neglected by commercial science. The final tally for all of this - minus countries that probably won’t qualify - equals $135bn/yr now, increasing gradually to $195bn/yr by 2015. This is about 0.44% of rich-world GDP, rising to 0.55% by 2015. (p299)

See? Told ya. Sachs acknowledges that “clearly there is not a high degree of precision in these estimates.” The point, though, is that they show that the MDG’s can be met, and poverty eventually eliminated, within the previously agreed 0.7% target.

Is this a unique assessment?

No. You might remember the Commission for Africa alled for a doubling of aid to Africa, from £25bn to 50bn, with a further £25bn after 2010. Sachs is looking at aid worldwide, but proposes the same basic formula: a doubling (from $65bn to $135bn, or about £30bn to £65bn in 2005’s exchange rates), followed by a similar extra amount again after 2010. A doubling of aid has also been proposed in 2001 by a dedicated commission and endorsed in 2004 by the leaders of the UK and France. And in the end, a doubling of aid became the central demand called for by campaigners at the Gleneagles G8 summit of 2005, more of which in the future.

So what happens after 2015?

Sachs makes a lot of people nervous with his talk of an antipoverty effort lasting till 2025. After all, ten years is a lot less time to spend money on a problem than twenty years - and in practical terms, it could mean sustaining support for the initiative across five different US presidencies. So he’s eager to reassure: needs after 2015 would be substantially less than before. China would, according to the plan, be free of extreme poverty; and India and even sub-Saharan Africa would have it down to below 20% of the population (it’s 40% in sub-Saharan Africa now). It will continue to fall, but some countries will need money right up till 2025.

So who pays?

So. It’s been a sumptuous, five-course development feast, and now the bill’s arrived. And, as usual, you’re thinking back to the menu; remembering how cheap your main course was; watching your ex’s new boyfriend picking at his leftover lobster; and looking at the bill, and thinking: no way are we splitting this evenly.

In reality, it’s not about who consumed what, as it is, after all, aid. It’s about ability to pay. If every rich-world country gets up to 0.5% GDP (of course, some are already there, and some are up to 0.7%), who would be contributing the most? The answer is, of course, the US - its mammoth economy gives it by far the biggest share of the responsibility. The sheer scale of the US’ share, though, is shocking. Its 0.5% responsibility would total $55bn/yr; its current contribution is around $18bn/yr. That difference - $37bn - is over half, 51%, of the additional money needed.

I’ll say that again. If the US got up to 0.5% of GDP on aid it would provide over half the additional money needed for the whole anti-poverty effort. If Japan, Germany, the UK, France and Italy joined in too, that would account for 90% of the shortfall. (p302) If Sachs’ calculations are sound, six countries hold the future of the world’s poor in their hands.

Getting the US to stump up

The good news is that the UK and France have put timetables in place to reach 0.7%, in addition to their Gleneagles pledges on aid; so in theory at least, we don’t have to worry about them. Perhaps because of this, or perhaps because it’s his home turf, Sachs focuses firmly on the US. He points out that to get all the way to 0.7% - more, remember, than is required to eliminate poverty -from the current level of 0.15% is a cost equivalent to less than a third of the annual growth of the US economy.

Still, to make it easier on the average American, Sachs proposes focussing the fundraising on the very richest. And let’s not forget, people, just how mind-meltingly rich these people are. The richest 400 Americans, Sachs calculates, have more money than the people of Botswana, Nigeria, Senegal and Uganda put together - 161 million people. If these 400 gave ten percent of their income to antipoverty efforts, that alone would raise $7bn, a healthy chunk of the shortfall - and that’s in 2000 numbers; they’re richer now. (p305)

Now, remember those tax cuts for the rich that President Bush controversially put in place soon into his first term? They have saved the richest 0.6% of Americans - those with incomes above 500,000 - over $50bn per year. You could more than pay the US’ share of the extra aid needed just by rolling back a portion of the Bush tax cuts. To put it another way, the extra $70bn/yr needed globally is a little more than some estimates of the annual cost of the Iraq war.

Sachs’ actual practical suggestion is a 5% income tax surcharge on income in the US above $200,000 each year. This would bring in the $40bn/yr needed, and, let’s face it, have precisely no negative effect on the lives of those paying. (p307-8)

So there you go. The good news is, it’s very, very affordable. The bad news is, much of the power to do it rests with American gazillionaires. Perhaps it’s not surprising there’s been little progress under the President who refers to gazillionaires as “my base”.

So - assuming we’re all won over and the case for much more aid has been made - why has it proven so hard to actually get the money put up? Sachs’ book was written before the 2005 Gleneagles summit committed to $50 billion more aid by 2010, near what Sachs asked for. But two years on, there’s still no sign of the actual money. What’s the problem?

Not, Sachs argues, the will of the American public. “A vote for foreign aid has often been described as the toughest vote for a congressman,” he admits. But “in fact, these political risks are ridiculously overstated.” 54% of Americans, he notes, agree that foreign aid is the responsibility of governments. (p331) And a whopping 87% agree with government spending to “give food and medical assistance to people in needy countries (let’s face it, would you say no to that if you were asked in public?).” (p340) The problem is not that they won’t pay, but that they greatly overestimate the amount they’re already paying in aid. A survey in 2001 showed that Americans believe on average that 20% of the federal budget goes to foreign aid! It’s actually less than 1%. (p329) Instead, the failure has been one of politicians, “a lack of political leadership… to ask the public for greater efforts.” While President Bush has discussed poverty and raised the US’ aid spending, Sachs notes, he hasn’t even nearly made the case for the kind of massive aid increases Sachs wants - so we can’t know that the US public would reject them.

Reminding ourselves why

There are, of course, some very serious arguments against increasing aid. And Sachs devotes a chapter of the book to refuting them. But we’re going to park that for a while, and come back to it once we’ve outlined the case against aid in detail. Next time, we’ll turn to Sachs’ last chapters where he reminds us of the reasons for action, and puts the antipoverty effort in a wider context.

All page references are from the UK paperback edition of Sachs’ The End of Poverty.

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Scaling up 2: Global Compact

Rav Casley Gera — Sat, 24 Nov 2007 13:04:22 +0000

Last time, we saw how Jeffrey Sachs outlines the case for greater investment through aid in developing countries: how, he argues, an increase in six different kinds of capital - human, business, infrastructure, the environment, public institutions, and knowledge - can make the difference between an economy growing out of poverty, and one sinking ever further in. Now, let’s see exactly what mechanisms he believes will enable us to manage this almighty aid effort.

Ending poverty by 2025, Sachs argues, requires a “global compact” between rich and poor. Poor countries must commit to the goal of ending poverty, and stop letting corruption and war get in the way; and rich countries must follow through on the promises they’ve already made to provide more help.

You heard that right: the promises they’ve already made. One of Sachs’ key arguments is that, even before the campaigns and Gleneagles pledges of 2005, rich countries had already repeatedly acknowledged¹ that aid is essential for ending poverty and promised to provide more. Yet at present (the book was written before Gleaneagles), Sachs admits, neither side is sticking to its side of the bargain: “poor countries pretend to reform, while rich countries pretend to help them.” (p268) It’s commonly said that we’re already pouring money into Africa, and every new aid effort is announced with great fanfare. But the actual amounts available, Sachs argues, are a fraction of what is needed. In Ethopia’s case, for example, $70 per person per year of aid is needed, and only $14 is currently available. (p267)

What makes it more absurd, Sachs argues, is that rich countries know that more money from them is the key requirement for poor countries to meet the Millennium Development Goals - the often-repeated pledges that form the backdrop to current development policy, at least in theory. The West trumpets progress towards the goals, and wrings its hands when progress is slow, but doesn’t admit its own lack of investment - despite promises to the contrary - is the main problem.

On poor countries’ side, Sachs accepts that “poor countries have no guaranteed right to meet the Millennium Development Goals or to receive development assistance from the rich countries. They only have that right if they themselves carry through on their commitments to good governance… Not all governments will want to, or be able to, make such a commitment, and those nations need not apply.” (p269) But there are many cases, Sachs argues, where the commitment and governance are there, and it is the rich countries who are breaking the deal. “The biggest problem today is not that poorly governed countries get too much help, but that well-governed countries get far too little.” So how can rich countries put the infrastructure in place to meet their commitments?

1. Plan to meet the MDGs, and eliminate extreme poverty after.

Part of the problem is poverty of ambition. Many poor countries have put together Poverty Reduction Strategy Papers (PRSPs). These plans, required for World Bank support, outline how a country plans to spend its aid. The problem is, they tend to be based around the aid the countries already know is going to be available, so they fall far short of planning to meet the Millennium Development Goals. The rhetoric of the MDGs is completely divorced from the day-to-day reality of canvassing, planning for and using aid.

Instead, countries should put together MDG-focussed PRSPs: plans to achieve the Millennium Development Goals. Then it’s possible to work out how much extra money is needed, and the conversation about aid can become more informed. The fault for this having not happened, Sachs points out, lies not with the caution of developing countries but the stinginess of rich countries: Ghana’s detailed, carefully-planned PRSP of 2002 gave a map to meeting the MDGs, but rich countries only coughed up a quarter of the $8bn it asked for.

An MDG-focussed poverty reduction strategy would have five parts:

A ‘differential diagnosis’ to see precisely which investments are needed in what balance;
An investment plan that outlines how much is needed and when;
A financial plan that calculates how much countries can provide and how much needs to come from donors;
A donor plan - who will pay, when; and
A public management plan that shows how the investment will be done, managed, and monitored.

If all of these elements are present, Sachs argues, most of the conventional arguments against aid fall away. A thorough public management plan can ensure money isn’t wasted; proper investment planning prevents the money coming in too quickly or slowly, for example not building hospitals till you’ve trained the doctors to work in them.

Regarding the financial plan, it’s worth noting that poor countries are expected to make a contribution to the extra spending. Poor countries can have trouble raising significant amounts of tax, but Sachs estimates most poor countries could devote an extra 4% of GDP - a high proportion of the total government budget - to MDG investments.

It’s also vital financial plans are realistic, not just about the amount of investment, but the duration. Many countries, Sachs points out, will need support and special investment not just for a few years, but to 2015 and beyond. Some will need support right up to 2025.

Equally, the donor plan is essential so countries can predict aid flows and plan accordingly. Right now, one of the main restrictions on aid effectiveness is that it’s short-term, so you never know when you’re going to have to sack people or close a hospital from lack of funding. The donor plan must also outline how aid will be harmonised. Right now, Sachs admits, a huge number of different agencies funding and spending aid is leading to chaos. Instead, everyone involved should focus on what they do best: country partners supporting small projects; multilateral institutions co-ordinating the flow of large-scale budget support money. The donor money itself should be pooled centrally and given out in line with the plan.

The public management plan is the crucial one for poor countries. It covers a host of techniques needed to ensure the money is spent right:

Decentralisation so local adaptations can be made at local level
Training so the public sector can develop the capacity to spend and manage the money
Information technology to help monitor and co-ordinate the use of the money
Benchmarks, clear, measurable targets for the effects of the investment, adapted to local conditions
Audits so it can be confirmed all money is being spent legitimately and in line with the plan
Monitoring and evaluation so that progress towards the benchmarks can be constantly assessed.

While this should primarily all happen at country level, some things only work regionally. Roads that cross borders, for example, are useless if only one country’s section is repaired. New regional groupings and institutions, like the East African Development Bank, should be supported to help ensure regional co-ordination of investment. This works with public management too: the African Peer Review Mechanism of NEPAD is helping improve governance across Africa by letting countries submit their systems to other countries for review.

2. Put the system together properly.

The current system of aid delivery - including country-to-country bilateral donations, the World Bank and IMF, the UN, and regional schemes like the African Development Bank - is messy and incoherent. It simply can’t process the amounts of money required with the necessary planning and oversight. Instead, the UN Development Programme should take a co-ordinating role. Each low-income country should have a dedicated UN team, reporting directly to the head of the UNDP.

This might sound commonsensical. But right now, the IMF and World Bank are given far greater control over development than the UN. The UN’s range of agencies, from the World Health Organisation to the UN Human Settlements Program, have a huge range of expertise - but are often forced to calling Sachs himself, he claims, to find out what the IMF and World Bank are up to. The reason for this? Some would argue it’s because the UN is inefficient. To Sachs, it’s because while the UN is governed by all countries equally, the World Bank and IMF are dominated by the rich countries that provide most of their funds - and who want to retain control of the development process. This short-term approach should give way to co-ordination by the UN, with the expertise in economics provided by the World Bank and IMF part of the team.

3. Fix the obstacles at global level.

Some problems are too big to fix at country, or even regional level, even with the help of the international community. Global issues need global answers:

The debt crisis. The rich world’s feet-dragging over debt contrasts badly with the hugely successful Marshall Plan, where the US gave, not loaned, millions of dollars to rebuild Europe after World War II, letting the world economy recover much more quickly. The debt burden is preventing such growth in poor countries today, and Sachs says the debts of the highly indebted countries should be cancelled - and further support come as grants, not loans.
Trade policy. Long-term economic growth in poor countries must be built on exports to rich countries. But trade barriers, from import tariffs to subsidies, prevent poor countries trading on an even basis. Trade reform shouldn’t be used as a substitute for aid, as many of the benefits of trade accrue to middle-income countries; for the very poor to benefit from trade, they must be helped onto the ladder through aid first. Similarly, while reducing agricultural subsidies will be a good thing, it isn’t a magic bullet benefit, as major exporters like Brazil would benefit most.²
Science for development. Technology, from new agricultural varieties to anti-retroviral AIDS drugs, is vital for development. Yet the technologies that have made a difference so far have normally been developed for the rich world, where the commercial markets are strongest, and later exported to poorer countries. Imagine how many more breakthroughs there would be if more money was focussed on research directly into poor-world problems. The UN Millennium Project, another Sachs vehicle that we’ll be looking at soon, calls for $7 billion per year to be put aside for research into poor-country technologies - tropical agriculture, energy for remote areas, climate forecasting and adjustment, water management and sustainable management of fragile ecosystems. Research into vaccines into things like HIV can be encouraged by rich countries promising to buy vaccines from pharmaceutical companies should they be developed.
Environmental stewardship. Climate change is, of course, the elephant in the developmental room: it’s big, it could have an enormous effect on the futures of the poor, and we all prefer to pretend it’s not there. In fact, though, poor areas are likely to face some of the most serious consequences - reductions in rainfall will be catastrophic in some parts of Africa. Rich countries must stabilise their carbon emissions at a safe level, support poor countries in adapting to climate change, and fund research to learn more about the likely effects on poor countries.

And that, in essence, is the Sachs plan at a macro, global level. In a few posts’ time we’ll look at the UN Millennium Development Report, which spells it all out in more detail. Next, though, we’ll skip to the bit which gets everyone excited: how much will it all cost?!

For example, the “Monterrey Consensus” on aid, which the US and other developed countries signed in 2002, reaffirmed the commitment to providing 0.7% of GDP as aid, and the Johannesburg summit later that year committed countries to “concrete efforts” to move towards 0.7. The US’ current aid budget is a little under 0.2%.
In fact, Sachs acknowledges, several African countries would be made worse off, as they are net importers of food from rich countries. Nevertheless, in the long term, reducing subsidies is a good idea as they are grossly inefficient and in the long run African food exports should increase.

All page references are from the UK paperback edition of Sachs’ The End of Poverty.

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Scaling up: intervention at a global scale

Rav Casley Gera — Sun, 02 Sep 2007 22:23:36 +0000

After a detour to the Millennium Villages, we’re now in the final stages of our long hop, skip and jump through The End of Poverty, the ambitious blueprint for eliminating extreme poverty by Professor Jeffrey Sachs. Last time, we looked at the on-the-ground investments in things like fertiliser which Sachs argues can transform lives in rural villages relatively cheaply - and which he’s testing out in the Millennium Villages. Now, let’s see how he believes this approach works when applied at a global scale.

Sachs reiterates a point he’s made before: that the very poor are stuck in a “poverty trap” that leaves them unable to benefit from trade. If you can grow barely enough food to feed your family, you can’t invest in the tools, improved fertilisers and other materials needed to improve yields so you can sell some of your produce. Indeed, if your plough breaks, you can’t even replace it, so your productivity actually declines.

But it’s not just physical capital such as tools that the poor lack. Sachs outlines six major types of capital the poor are short in:

Human capital: health, nutrition and skills
Business capital: machinery, tools, transport
Infrastructure: roads, power, telecoms
Natural capital: fertile soil, running water
Public institutional capital: rule of law, property rights, policing
Knowledge capital: scientific know-how for future development.

This last includes top-level investment, like India’s Institutes of Technology, which have helped it become a hugely successful IT services exporter; it also means training individuals at village level as community health workers, agricultural experts and so on.There are no shortage of ways such capital can be reduced. Simple wear and tear, such as overfarming, can lead to a decline in natural capital, business capital, and infrastructure. Moreover, population growth means that the share of natural capital available to each individual is always decreasing.

For capital to increase, on the other hand, requires investment. Either individuals must be able to save to invest in their personal capital; or, by paying taxes, must help the government invest. If this investment is possible, the capital growth enables economic growth, raising incomes.

Sachs gives a simple example of how the level of capital a household has determines whether or not they can get on the ladder of development. Watch out: there are numbers.

[scarynumbers]

Say that an economy needs $3 of capital for every $1 of goods it produces. And say that natural depreciation reduces the society’s capital by 2% a year. The economy has 1 million people, each with capital of $900. $900 produces $300 of production, or income. That’s less than $1/day, which classifies them as extremely poor. $300 a year is just enough for subsistence and not enough to save. And the population is growing at 2% a year, so in ten years there’ll be 1.2 million people. Ten years on, the capital stock has declined to $750 million; between 1.2 million people we’re down from $900 each to $628 each - generating income of only $209 per person. Simply through the passing of time, the very poor get poorer still.

If, on the other hand, you start with everyone having $1800 of capital, and therefore $600 annual income per person. Households manage to save $90 per person each year. That adds $90 million to the total capital stock, which outweighs the depreciation of $36 million (2% of 900 million). The next year’s capital stock totals $1854 million, which means income (divide by three) of $618 million. Even divided between the expanded population of 1.2 million, that’s still an improvement - $606 each.

[/scarynumbers]

Start with a high enough capital level, and you allow the cycle of economic growth to take place. But once you did below that critical level, that’s a poverty trap - and the only way is down. (p247-249)

In fact, investment in capital usually benefits more than the example illustrates, because of returns on investment. For example, if you have a vital road like that which leads to the Kenyan port Mombasa, repairing damage to that road could hugely reduce the costs of production in several landlocked countries, benefits far greater than the actual investment put in. On the other hand, some investments have to reach a certain point before they have any effect at all - there’s no point paving half a road. This is called a threshold effect.

Still with me? Sachs’ point with all this is that investment in the lives of the poor can repay itself by plugging them into economic growth - and, in so doing, weaning them back off external investment and into self-sufficiency. In practice, poor countries lack the capital to make such investments, and donors must step in and take countries to this level through aid. “Targeted investments backed by donor aid,” says Sachs, “lie at the heart of breaking the poverty trap.” (p250)

Private versus public

Of course, capital isn’t really as simple as pouring in a pile of money. In a previous chapter Sachs compared development to medicine and proposed a complex system of diagnosis to decide which exact combination of investments will lift each country out of the poverty trap. Now Sachs points out that only some of the investments required are best performed by the government: infrastructure, human capital, natural capital, public institutions and some aspects of knowledge capital, especially scientific research aimed at improving the previous categories of capital. These aspects can be led by the public sector and funded largely by aid at first.

They’re best done by government - and this is one of Prof. Sachs’ more controversial observations - for several reasons:

First, if done by the private sector they would probably become monopolies, raising prices.
Second, some are “nonrival”, which means that one person’s use doesn’t reduce another’s ability to use. A road, for example, is a nonrival good - there isn’t a limited number of cars that can use a road in a day. A scientific discovery is another example. Because it’s not easy to make money off these, investment has to come from the public sector (even in America, Sachs notes, there’s significant public finance of science).
Third, they have “spillovers” from direct users to those around them. If you use an anti-malaria bed net, it also reduces my chance of infection by slowing the spread of the disease. Private enterprise tends to under-provide such goods, for example by charging more for bed-nets than people can afford.
Fourth, these types of capital are not only good for economic growth but are classified as human rights in the Universal Declaration of Human Rights, which includes the clause “Everyone has a right to a standard of living adequate for the health and well-being of himself and his family”. They’re good results in and of themselves, so-called ‘merit goods.’ For certainty these should be provided by the public sector.

Other areas of capital - business capital - should not be provided by governments. This is where Sachs outlines that, contrary to the occasional accusation, he isn’t a communist. Government-run businesses, Sachs argues, tend to be inefficient and run for political reasons which get in the way of effective operation. For example, factories get built in a minister’s constituency, not where they can be best run. Having said that, the government might temporarily support private business to get things moving, but withdraw when businesses become self-sufficient. An example of this is providing farmers with free or subsidised fertiliser for a few years.

“Differential diagnosis”

Working out the precise checklist of interventions needed in each place is difficult. Urban areas have different needs to rural areas; climate, mineral and agricultural wealth, all make a difference. What’s clear nevertheless, Sachs argues, is that investments must come together. There’s no single ‘magic bullet’ which alone will make the difference, although economists like to think there is - for example, right now it’s public institutional capital, with constant talk about ‘governance’. Reducing child mortality, for example, obviously requires improved human capital and infrastructure through health spending. But it also needs natural capital, for protection against drought; public institutional capital, for the management and effective use of investment; and knowledge capital, for scientific research into future improvements in health and nutrition. Each country, and at a more local level each area, needs a targeted package of investments matched to its specific needs.

It can work, Sachs says

Sachs offers ten examples of scaling-up programs that have proved successful. I’ll quickly describe two:

The ‘Green Revolution’ in Asia is Sachs’ primary example of how improved agricultural results can transform an entire economy, kick-starting economic growth. Investment by the Rockefeller Foundation, a once-mighty American money-pot, led to new high-yield types of staple crops in Mexico and then across Asia. For the first time, there was enough food to go round, thanks to rich-country scientific support.
The spread of contraception in the poor world has been “an example of scaling up par excellence“. The UN Population Fund was established in 1969 to co-ordinate the spread of planned parenthood techniques, and helped raise the use of contraceptives by couples in developing countries from 10% in 1970 to 60% in 2000. This has helped bring about a reduction in the average children born to every woman from 5 in 1950 to 2.8 now. And as we’ve seen before, that has knock-on effects for child mortality, as families have no more children than they can feed.

Technologies that have been proven to work at local level can, and should, be expanded to national level and beyond, argues Sachs. But in Africa, proven technologies like anti-malaria bed nets remain available to tiny proportions of the population. The heart of Sachs’ plan is a process for scaling-up those technologies across poor countries. Next time, we’ll see how Sachs says this will work.

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Criticisms of the Millennium Villages: some thoughts

Rav Casley Gera — Sat, 25 Aug 2007 14:28:37 +0000

Earlier, we looked at some of the criticisms of Jeffrey Sachs‘ Millennium Villages Project. Now, let’s see if they stand up. If you haven’t read the first post, do so first or this won’t make much sense. Or read our intro to the project. Jeffrey Sachs hasn’t, to my knowledge, published a detailed rebuttal of the criticisms, so this is me with my thinking cap on. Disagreements, ripostes, additional resources etc. are very much welcomed.

Local input.

It seems like the project is stuck between a rock and a hard place here. On the one hand, it has been criticised for insufficient attention to the views of local people. On the other hand, it’s been pointed out that allowing elected committees to manage the project runs the risk of corruption and division along clan lines. Indeed, a recent article manages to criticise the project from both these angles at the same time! The truth is that all on-the-ground development work walks a tightrope when it comes to local input. Often, local customs or habits - such as the denial of full benefits to women, for example - are part of what needs to be overturned for success. By having formally elected committees, the MVP has a level of local input that is, I think, unusual. The fact that, for the most part, the problems of tribalism described in the article haven’t derailed the project entirely may suggest they’re getting the balance right. If, for example, they’d tried to prevent villagers simply voting along clan lines, how could they have avoided legitimate charges of colonialism?

What’s much more concerning is the suggestion that people both in the village and in the UN are afraid to criticise the project: the villagers for fear that it will be cancelled, and the staff that they’ll be removed from it. Given the experimental nature of the project, an atmosphere of free discussion is surely essential. The villagers need to be reassured that the project will be continued to completion whatever happens, and actively encouraged to report problems to the project staff - who must be encouraged to listen, of course. And in the UN, too, if there is a climate of fear, a more open atmosphere must be created urgently. It’s possible such problems stem direct from Sachs’ personality - he’s described as a bully in the recent Vanity Fair article, and occasionally during his BBC Reith Lectures recently he betrayed a slight tendency to be dismissive with critics. Also, the project was personally supported by Kofi Annan and is still supported, as far as I know, at high levels within the UN - and scandals such as the Iraq oil-for-food program and allegations of sexual abuse by peacekeepers have suggested the UN’s internal transparency is poor. The project managers must have the authority to get on with the project, but debate should surely be encouraged.

I know this site has some readers who have spent or are spending time in Africa working in the field on development projects. Your thoughts on this issue - on how the balance should be struck, and whether Sachs’ project seems to be getting it right - would be very welcome.

District level

The project works in clusters of villages, but needs support from local government at district level to really work - only they can do things like improve roads. This support has been slow in coming, it seems, in some areas. It’s hard to know what to say about this - there’s clearly a problem, but it doesn’t seem entirely fair to blame the project, assuming they’ve been doing everything they can to negotiate with governments. In the first year or so the project may have been dismissive to or ignored local government, as suggested in the Rich article; the article suggests that relationships have now been forged, so hopefully the pace of district development will increase.

Perhaps this a problem that will reduce as the project is scaled-up to more villages. I can imagine it being hard for the local representative of a Millennium Villages area to convince the national government that because they’re already receiving thousands of donor dollars, they must also jump to the front of the queue for new roads and hospitals. Once the project spreads, it won’t seem as inequitable to invest in infrastructure in project areas. Then, of course, it all still has to be paid for.

Scaling-up problems

To be fair to the project, its plans to scale itself up to 100,000 villages doesn’t mean just replicating the project repeatedly. The idea is to build outwards from core villages in growing clusters, with district-level investment part of the process. Nevertheless, there are serious logistical obstacles, such as a lack of skilled personnel, to scaling-up.

What this boils down to is a key limitation of the project: the village-level investments are designed to fit within a framework of general aid-financed investment across countries, as laid out in Sach’s The End of Poverty and the UN Millennium Development Report. But right now, the investments are taking place outside of that framework. The extra aid money agreed to finance the plans at Gleneagles in 2005 hasn’t appeared; countries can’t afford to train more doctors, any more than they can to build roads.

A similar point applies to the argument that large-scale aid increases can destabilise government or the economy. Sachs’ plan - as well as related schemes such as the recommendations of the Commission for Africa - contains some measures to ensure aid increases aren’t disruptive, including a “public management plan” for each country to plot the upgrade of government capacity to match the new funding. These measures, Sachs argues, “would put to rest the current favourite explanation of donors for not doing more to help the poorest countries: the alleged lack of ‘absorptive capacity’ to use more aid.” (The End of Poverty, p274) The problem is that, while the MVP is often judged as a project on its own, successful scaling-up depends on this broader framework of investment and reform. Sachs can hardly be accused of ignoring these aspects: he’s been loudly calling for them for several years. To push ahead with scaling-up without these things in place, however, might be reckless.

The other problem of scaling-up is that of plummeting agricultural prices. What this boils down to is the question: if everyone in the countryside grows crops for sale, who on earth will buy them? I haven’t read up on it in detail, but I assume the answer must be, in the first instance, the people in the cities - an ever-growing proportion of the African population. Then, second, other countries through export. There’s no doubt that increased agricultural production can be an incredibly powerful force for economic growth - Sachs likes to cite the “green revolution” in Asia, when new crop varieties created huge increases in yields, as the obvious example.But several obstacles exist which must be overcome for the strategy to work, all of which lie outside the direct influence of the MVP. First, as previously noted, you need roads and a truck to get goods to market. You also need information on what price you should accept, so as not to fall victim to unscrupulous traders, and internet access is a big part of the story here - again something which the MVP aims to provide, but for which it needs infrastructure support.

Even more difficult, when it comes to exports you need improvement of the existing trade rules and tarriffs, which are stacked against exports from most developing countries. Without these measures, it seems entirely feasible (though I don’t know it in detail) that the benefits of increased production could be severely hampered by decreasing prices.

But there is one step that can be quickly taken to minimise the problem - diversification. This means growing more than one crop. The MVP in Kenya has so far focussed on maize, and one worker in the Rich article calls this short-sighted, saying,

Growing only maize year after year depletes the soil. It’s also a high-risk strategy, he said, as the entire crop may fail… Maize is a subsistence crop that has fed Sauri families for years, but, he contended, its price is too low to make it a cash crop. He is trying to push the project to spend more time touting vegetable crops that fetch good prices at market, such as onions, tomatoes, and cabbages.

The project is still in the subsistence phase and as it moves more into the sale phase, it seems likely that it will encourage diversification. Sachs clearly states that diversification is part of the plan.

Sustainability

The final and in many ways most fundamental criticism of the project is that it’s not yet clear that the project is on track to take the villages to independence - to end their dependence on aid. This is in part the result of many of the other aspects described above - independence depends on access to markets, for example, which relates to the trade reforms already discussed. But it’s also more essentially true that the transition from aid dependence to independence has been described by Sachs only in the broadest terms, and when their sustainability is questioned, Sachs ignores the issue completely and just focuses on agricultural and health targets. Three years into the five-year project in Sauri, Kenya, there’s no clear sign of aid dependency decreasing.

But here’s the thing: if Sachs were completely honest, I think he’d admit the five-year duration of each Millennium Villages intervention is, basically, a fantasy. The plans described in The End of Poverty talk about the elimination of extreme poverty as a twenty-year project, with a substantial part of the battle to be won by 2015, in line with the Millennium Development Goals. Nowhere that I recall in The End of Poverty does Sachs talk about serious lasting changes being made in just five years. For example, discussing the free distribution of fertiliser to Sauri, Sachs talks about independence in a ten-year timescale.

In the first few years, fertilisers and and improved fallows should be given largely for free to the villagers to boost their own nutrition and health, and to build a small financial cushion. Later on it will be possible to share the costs with the community and, eventually, perhaps in a decade, to provide the fertiliser and improved fallows on a full commercial basis. (The End of Poverty, p236. My italics)

Indeed, the FAQ page of the MVP website makes clear that five years of investment isn’t enough.

A central proposition underpinning the Millennium Villages concept therefore is that operational sustainability can be achieved in each village before the 2015 MDG deadline, although many villages will still require ongoing but generally declining financial support beyond then. For these villages, it will be crucial that existing ODA commitments for 2010 and 2015 are met and maintained until the respective developing countries graduate from the need for external support.

Five years was never intended to be enough.

I don’t, bluntly, think Sachs has been entirely honest in this. Elsewhere on the site, it’s clearly implied that five years is sufficient to reach sustainability: “each Millennium Village requires a donor investment of $300,000 per year for five years,” says the sustainability page cheerfully with no mention of further investment.

What to make of this? It seems to me that, in order to get the project off the ground, Sachs made a colossal gamble: to ask for five-year funding, knowing full well the transition from dependence to self-sufficiency couldn’t be made in that time. The results of the project would be so impressive, he must have reasoned, that donors would be willing to stump up for another five years, making sustainability a real possibility. Gradually as the five-year point approaches, he’ll place the villages more and more in a longer-term narrative, ending in 2015 with the MDGs or in 2025, and secure extended funding.

Whether you think this sleight-of-hand is honourable I’ll leave up to you. But I think it’s indicative of a wider truth: to judge the MVP as a complete project, in its current form, is in some ways to miss the point. Though Sachs is no doubt passionate about the project, it clearly exists primarily to prove the effectiveness of the interventions he proposes, and therefore to build support for his grander scheme. The MVP site repeatedly points out that the MVP fit nicely into the wider context of the 2005 Gleneagles aid commitments, designed for the kind of wider-scale intervention he proposes.

I don’t mean this to sound Machiavellian - I simply think the project has to be seen in this context. Sachs’ end game, after all, is the elimination of extreme poverty! There’s no serious prospect of the MVP process, with its existing funding structure, expanding across the very whole of Africa and elsewhere and reaching every village mired in extreme poverty. To do that would require a whole new model - extensive schemes managed by governments, and supported by massive aid from rich countries, co-ordinated by a multilateral body such as the UN. Which is, of course, exactly what Sachs proposes!

A similar response applies to the criticism that the project ignores policy issues that affect the poor. In one way, it seems like criticising a chair for not making the tea. The project is designed to show that on-the-ground interventions can transform lives; policy issues are obviously important but they come under a different header. The Sachs grand plan does address such issues (whether satisfactorily I don’t know yet), and the MVP makes a lot more sense when seen in this context.

The MVP in context

That is, I suspect, what’s really going on, and might explain Sachs’ not having given a detailed plan for the transition to sustainability for the existing MVP villages. Under Sachs’ plan, Sauri will become independent of aid, around 2015 - but in the context of a wider transition to independence for the whole of Kenya, the result of several years of intense investment in infrastructure, governance and personnel on a national scale.

“Sauri,” argues Rich, “is not yet a success.” But paradoxically, even if Sauri doesn’t meet its targets, it isn’t necessarily a failure. All it and the other existing MVP projects have to do - which is by no means easy - is to achieve good enough results that sceptics of the value of aid-led massive intervention - what Rich dubs “shock aid” - are won over. If by 2010 the rich countries have fulfilled the commitments they made at Gleneagles - to double aid to Africa, and make various other trade and debt reforms - then the MVP will have fulfilled its purpose, and will be rolled into the larger-scale investment schemes the money is intended to fund.

There clearly have been mistakes made in Sauri and the other Millennium Villages, as in any project. The suggestions that the project is brooking no criticism on the ground is especially concerning, But the criticisms that suggest the project is critically flawed may be missing the point - that it isn’t really supposed to work in isolation. Of course, many people think that the whole Sachs plan is, in itself, badly flawed, and so that isn’t going to be any consolation; we’ll look at those criticisms in detail soon.

Speaking of the Big Plan…

That, at least, is my take on it based on what I’ve read so far. Please leave your thoughts below, and also let me know about any further sources you’re aware of on the MVP. Next time, we’ll return to The End of Poverty and lay out in more detail the national- and global-level changes Sachs calls for to make the MDGs - and, ultimately, the end of poverty - achievable.

UPDATE: The Bloody Earth Institute has redesigned their website and lots of links no longer work. I’ll try to edit them all out but apologies if you get 404′d. They’ve also launched something called “Millennium Cities.” I can’t quite bring myself to look into them right now, but I will.

You can find loads more MVP sources - and work out where I stole the photos from - at My bookmark page.

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African history in ten seconds: New and improved!

Rav Casley Gera — Thu, 23 Aug 2007 21:06:46 +0000

This is becoming a wonderful, ever-growing saga, like The Land Before Time, although I think that ended after episode five, or Rocky, which I suppose will only end with Sylvester Stallone’s death. Having put together a spreadsheet detailing the history of African governance since independence, my friend John kindly put together a chart summarising the transition between governance classes over time. It was, bluntly, a hit, with several blogs around the world linking to it. Which was great!

Now John and my friend Pete have collaborated on this latest version. Like the previous, it shows the transition from colonialism to, in many cases, despotism, and more recently towards democracy. But now it’s weighted by population, so you can see just what proportion of the African population lived under each form of government at any one time. You can see a bigger version if you click through.

Want to see how it’s made, or play with the data yourself? Here’s the spreadsheet, and you can also get a detailed history spreadsheet from the original post.

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Trouble in the village?

Rav Casley Gera — Sun, 19 Aug 2007 11:15:41 +0000

Last time - what seems like months ago, apologies for the delay - we looked at Jeffrey Sachs‘ Millennium Villages, a set of 12 village-clusters across Africa where extensive aid is funding targeted packages of interventions in health, education and agriculture. Sachs believes that the programme can see villages progress from heavy reliance on aid to self-reliance, and plans to expand the scheme to 100,000 villages.

And on looking at the figures, they seem a roaring success, with impressive achievements in crop yields and health outcomes. Yet the project has met with strong criticism. One UN official working on the project says it “has made all the classic development mistakes”. Sam Rich, a development consultant, recently published his conclusions on a visit to Sauri, Kenya, the first Millennium Village. He’s impressed by some of what he saw: for example, he notes that the project is extremely well run, compared to many similar projects.

Inside a concrete compound at the headquarters of the Millennium Villages Project, development experts sat at computer monitors in glass-walled offices. As I entered, the receptionist at the front desk was on the phone: “You need notebooks? . . . How many? . . . Three hundred, is that all? Right, I’ll order them for you tomorrow. You’ll get them in a few days.”

I’ve spent the last five years in Africa, where I’ve worked with outfits ranging from big international nongovernmental organizations to tiny one-man-band agencies, but I’ve never seen an order made as breezily as this. At most NGOs, the procurement even of stationery entails filling out forms in triplicate and long delays.

However, there’s also much Rich finds which is worrying - and echoes some of the other criticisms made of the project. “Sachs and others working on the project must acknowledge that they are still learning about Africa,” he concludes. “Sauri is not yet a success.” Let’s run through some of the criticisms of the project expressed by Rich and others.

Top-down versus bottom-up

The Millennium Villages project goes to some lengths to ensure that it’s run with the input of local people. Committees are elected at the start of each to decide on strategy for Agriculture, Health, Energy, Education, Environment, Roads, Welfare and Business, and there’s an additional executive committee. But by its very nature, the project is dependent on outside financing and expertise. As this assessment by the Overseas Development Institute points out,

On the one hand, the MVP acknowledges ownership of the development process as a crucial element of success and villagers are encouraged to engage with the project from the beginning… Yet, on the other hand, the MVP proposes a “proven, integrated package of interventions to help villagers out of extreme poverty.” Hence, despite the rhetoric, the MVP has many of the features of a blueprint approach where activities to be undertaken are already defined with little choice being left to the beneficiaries.”

Rich’s piece does suggest the project’s commitment to local control may be problematic in practice. “The villagers often disappoint their benefactors,” Rich observes. “When project officials want to implement a change, they advise the committees. But the committees sometimes move slowly, because there’s not enough support for a particular proposal either within the committee or in the village as a whole.”

Worryingly, the piece suggests that debate about the methods and aims of the project is being stifled even within the UN and other agencies carrying out the work.

Many UN officials I spoke to criticized the Sauri project, but none would speak openly. It was clear that dissenting voices were not welcomed, as an
e-mail I received from one made plain: “Unfortunately I’m already in a lot of trouble for talking about what every good scientist should be talking about. The current environment is one in which scientists can no longer speak openly and expect to keep their jobs.”

How can the project have a full and frank dialogue with local people, if it can’t even have one with itself?

Equally though, there are signs of the opposite problem - of too much local control, or rather, that the influence locals have is affecting the effectiveness of the project. For example, the project started out giving each farmer free fertiliser according to the size of their farm land. After objections from locals, it now gives everyone an equal amount. Sensitive to local concerns, but a much less efficient use of resources.

The problems become more serious when you consider the dysfunctional nature of much African local government. In Sauri, a local journalist claims that the committee elections basically went along tribal lines, with the dominant Kalanya clan winning the lead positions on all committees and running the project in corrupt ways. This is a phenomenon known as “elite capture” - when an elite or dominant group wins control of a valuable resource and doesn’t share it fairly. It applies to things like diamond mines, but equally to aid money. If local politics is broken, it can’t provide a basis for management of the project.

Seeing the villages in context

The villages the MVP works with are severely isolated. To be successful, it’s essential to work outside the villages, too, in improving the wider infrastructure. For example, there’s no point growing lots of food to sell if you can’t get it to market because there’s no roads; and there’s little point in having a god clinic if there’s no decent hospital accessible for more severe problems.

The project aims to work with local and national governments to ensure these elements of the work gets done. But a look at Sauri suggests this isn’t happening. Rich speaks to a local farmer who is also the town clerk of the local seat of government:

He said relations between the local government and project organisers have been strained. “At first, there was no consultation with government. Later, they realized we were a stakeholder and they needed our assistance.” Project leaders initially wanted to build not just a clinic but a hospital in Sauri, before the government pointed out that there was already a hospital just a few kilometres away. The project wanted help from government in electrifying Sauri and grading its roads. Two years on, work has started on the roads, but there is still no connection to the national power grid.

Whether it’s the project organisers or the government that is to blame for the apparent breakdown in collaboration, it’s really bad news for the long-term progress of the project.

The policy context

It’s also been pointed out that, by focussing so rigorously on on-the-ground solutions, the project misses policy and macroeconomic (economist-speak for “the big picture”) issues that can be hugely influential over the success of the villages. For example, a project official in Rich’s article argues that

the project could be more effective if it pushed for some macroeconomic changes, rather than concentrate all its efforts in the village. For instance, farmers in Kenya don’t buy fertilizer because it costs three times as much as it does in Europe, he said. If the Kenyan government eased taxes and import duties on fertilizer, “a lot more farmers would buy it.”

Strains of expansion

Central to the project is the idea that it can be quickly “scaled-up” across Africa and other poor areas. As long as the funding can be put in place, Sachs argues, there’s no real limit to the potential of the MVP in rural areas. The interventions the projects make “can be expanded quickly to national level,” says Sachs. “But the scale-up remains fragile because of the limited and unpredictable flows of donor aid.”

But, critics argue, there are many other obstacles to scale-up than simply funding. Firstly, there are logistical problems, most notably of personnel. You can build all the clinics you want but if there aren’t enough doctors in the country to man them, what good does it do? Not just local but national-level government investment is also needed for training. There are also concerns over the impact of the level of aid scaling-up would require. The ODI paper notes that “large increases in aid inflows can provoke significant macroeconomic imbalances and undermine the governments’ incentives to build a strong and sustainable tax base.” That’s economist-speak for “increasing aid too much, too fast, can bugger up an economy.”

A more serious problem, though, is that some observers believe the entire basis of the MVP’s development plan is incompatible with scale-up to national level. As we’ve seen, the MVP focuses on agricultural outputs as its main plan for economic growth. Having developed the means to grow more crops than they need, the plan goes, the villages can begin to store it and sell it at market. This brings in money which can be invested in further improvements. This is vital to the villages’ ability to eventually get off aid, out of their “poverty trap”, and onto what Sachs likes to call “the ladder of economic growth”.

The problem, many economists argue, is that not everyone can grow maize for sale, or prices will plummet. This has happened before, as the ODI piece outlines:

As agricultural growth moves to a larger scale, the Sasakawa-Global 2000 project in Ethiopia demonstrates how vital functioning markets and transport infrastructure are. This project, with substantial donor and national support – including from the Prime Minister – promoted a package of improved seeds, fertilisers and improved crop and land management practices, and has led to considerable increases in yields. These increases were welcomed given the declining land fertility and land availability. However, bumper crops in some areas of Ethiopia in 1999 to 2001 flooded local markets and surplus maize was not traded because in many areas transport and market infrastructure were not available. Prices fell by half, and farmers were often left poorer than before.

Maize prices around Sauri, the Rich article notes, have already started to drop. In part, this reinforces the importance of transport and storage infrastructure. If crops can be sold al over the country, they’re less likely to flood local markets. But once you’re fully scaled-up, national and even regional prices could be affected. We’ve seen a similar problem in coffee-producing countries, where are more and more communities in more countries have been encouraged to shift to the crop, prices have gone through the floor.

Sustainability

Above all, observers feel the project hasn’t yet outlined the central part of its plan: the transition from aid dependence to independence. Each village project is supposed to last five years, implying that the village should be largely independent of external support by the end of that period. But looking at Sauri, it’s clear that independence in some areas is a long way off - for example, health:

The clinic has transformed health care: The incidence of malaria has decreased, family planning has increased, and soon anti-retroviral treatments will be available to people with HIV and AIDS. But when the project ends, the funds for the clinic and the doctor, the mosquito nets, and the anti-retrovirals will dry up. In three years, the Kenyan government will face the difficult choice between continuing to fund one model clinic in Sauri or cutting the budget considerably. (Rich’s article)

I’ve always assumed “aid dependency” is mostly a spectre conjured up by right-wing economists, but concern over this seems really widespread. In the recent Vanity Fair article on the villages, a senior British development worker notes:

“I want to say, ‘What concept are you trying to prove?’ Because I know that if you spend enough money on each person in a village you will change their lives. If you put in enough resources—enough foreigners, technical assistance, and money—lives change. We know that. I’ve been doing it for years. I’ve lived and worked on and managed [development] projects. The problem is, when you walk away, what happens?”

Even the villagers themselves in Sauri seem worried about it.

While life had improved in the years since the Millennium Village experiment began, Bunde wondered fearfully what will happen when the project ends, “because we have become so dependent.” (Rich)

Sachs’ response - or not

So there you have it. Some fairly weighty criticisms. Sachs has put out various arguments in favour of the project, but hasn’t (as far as I know) specifically responded to Rich’s piece and the other criticisms. When asked about the villages he tends to just say how well things are going. But from my reading so far I can tell some of the criticisms are more valid and serious than others. So next time, I’ll run through the criticisms and analyse them a little more.

Read the MVP report on the first two villages

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Villages of dreams?

Rav Casley Gera — Tue, 10 Jul 2007 23:31:03 +0000

Last time, our whirlwind tour of Professor Jeffrey Sachs’ The End of Poverty took us to Africa and his explanation of the relatively cheap, simple on-the-ground investments which he argues offer hope for the end of extreme poverty by 2025. Next, we’ll zoom out and look at his proposals at the national and global scale. But first, we should look at the local level in a bit more detail. Sachs doesn’t just write articles and give speeches, though he does that a lot. With the help of two organisations he also runs - the Earth Institute and the UN Millennium Project - he’s trying the approach out in villages across the northern part of sub-Saharan Africa. They’re called the Millennium Villages, and they give us a great opportunity to see if Sachs’ proposals really work.

The first Millennium Village was one which Sachs had already done some work in - Sauri, in Kenya. The project began in 2004. Now, the project has extended to 78 villages in 12 clusters, spread across 10 countries*. They’ve been selected to try the approach on a range of different agricultural conditions, in terms of soil type and climate. They’ve also, the project states, been chosen in countries where the government is reasonably efficient and corruption-free and committed to supporting the project. Because it’s been going the longest, most of the analysis and media coverage has focussed on Sauri, and the second village to begin the program, Koraro in Northern Ethiopia, which started the program in 2005.

So what is the project, and how does it work? Well, the short version runs thus: for five years, the project invests substantial amounts into each village to help it meet a package of over 40 interventions for basic needs like agricultural productivity, health, education, infrastructure and communication. The idea is that with this help, the villages can begin selling surplus agricultural products and other goods to other areas, and begin on the path of economic growth. The villages would have broken out of the “poverty trap” which Sachs argues prevents them from enjoying the benefits of trade.

So how does it work? The project has calculated that the investments needed cost $110 per person per year. This amount is provided from a range of sources: the villages themselves are required to provide $10; the government of the country in question $30; and rich-world donors $70. Those donations come from a mixture of governments, the UN, and private donors through Sachs’ public face of the project, Millennium Promise.

The initial focus in each village is agriculture. The project gives farmers free or subsidised fertiliser and seeds for the first few years, on two conditions: that the subsidies are phased out by year five, and that the farmers commit some of their yield to providing free meals in the local school. The results have been impressive: in Sauri in the first year, maize yields increased by 3.5 times; in Koraro, where a more mixed range of crops is grown, the first-year increase was a whopping 8.4 times. Some of this is down to improved rainfall, but at least a doubling of productivity is down to the investments, the project estimates (this powerpoint presentation by one of the project’s founders gives the stats on pages 16-18). From a starting position of widespread malnutrition, the first four villages now have only 8% of their population “food insecure” (without a stable, reliable year-round food source). Furthermore, it gives the villages the chance to sell excess crops for cash income. Crop storage - “cereal banks” - enable the villagers to take advantage of variations in price throughout the year: crops kept until April earn double the price of those sold after harvest the previous August.

The villages’ second priority is health. In Sauri, the project built a clinic in just six weeks, and the project pays a doctor to hold surgeries two days a week. The focus is on cheap, targeted interventions that offer the maximum gain: for example, anti-malaria bednets (see them in action, albeit distributed by a different group). More expensive treatments for Malaria are also provided. Again, the headline results are impressive: when the project began, 40% of the village was infected with malaria, one of the continent’s worst killers; that’s now down to 20%. HIV testing and anti-retroviral treatment is planned. In addition, free contraceptives are distributed to help reduce unplanned births and, by extension, infant mortality.

While these interventions start the process, the emphasis is very much of a bundle of changes made all at once, from ensuring safe water and toilets to obtaining electricity and safe cooking fuels. The first annual report of the Sauri and Koraro projects outlines in detail the packages of interventions.

All well and good. The problem, of course, is that all of these results are based on heavy donor contributions. The big idea of Sachs’ book - and of the Millennium Villages project - is that, by breaking the poverty trap, aid-backed interventions can place Africa on the road to growth, so aid is no longer necessary after a few years. The big question is, is this happening with the Millennium Villages? It’s a question succinctly put by Simon Bland, head of the UK Department for International Development in Kenya, in the recent Vanity Fair article on Sachs:

“I know that if you spend enough money on each person in a village you will change their lives. If you put in enough resources—enough foreigners, technical assistance, and money—lives change. We know that. I’ve been doing it for years… the problem is, when you walk away, what happens?”

As Sachs described in his book, the theory is that, with the right interventions, villages can break the “poverty trap” and begin trading and investing, enabling them to sustain growth without aid. As the Millennium Promise website puts it:

By investing in health, food production, education, access to clean water, and essential infrastructure, these community-led interventions will enable impoverished villages to escape extreme poverty once and for all. Once these communities get a foothold on the bottom rung of the development ladder they can propel themselves on a path of self-sustaining economic growth.

But how likely is this? After all, it’s one thing for Sachs to call for the scaling-up of the project to 100,000 villages if it’s a five-year commitment. But if there is no end in sight to the need for aid, that’s a very different proposition. Next time, we’ll look at the critics who say there’s little chance of the project helping villages self-sustaining. We’ll also look at some of the other criticisms of the project.

* The project expanded to 12 villages across the region first, and has recently taken in another 66 villages surrounding the initial 12. The Sauri project, for example, is actually a cluster of 11 separate small villages. The project requires regions to have pre-existing local government, in this case a single Chief and elected councillor. The project aims to cover 1000 villages by 2009, and eventually 100 000 villages.

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Sachs-obsessed

Rav Casley Gera — Thu, 28 Jun 2007 23:23:30 +0000

We are, it seems. As you may have noticed the author of The End of Poverty, Director of the Earth Institute and all-round celebrity economist recently served as the BBCs’ 2007 Reith lecturer. These annual lectures are the jewel in the crown of the beeb’s public-service current affairs broadcasting, so it’s quite a big deal. Better still, each lecture is followed by questions and answers, meaning you get to hear Sachs responding to some of the criticisms commonly put forward about his ideas.

They’re all worth listening to, but lecture 4 is the one focused on Africa and on poverty. It’s a useful summary of his view (as if our journey through his book isn’t enough), but more importantly it’s a chance to hear him respond to criticisms such as the charge that much aid is often wasted. We’ll be looking at criticisms of Sachs in detail once we’ve finished going through the book, but if you want an intro, start here.

The Americans, too, have been getting their Sachs dose, thanks to his pal Bono, who recently guest-edited an issue of the glossy mag for rich people who think they’re important, Vanity Fair. The issue is intended to broaden the view of Africa in the US and UK away from unremitting misery, but doesn’t ignore issues of AIDS and poverty: there’s a good-news story about AIDS treatment; a useful interactive map; and, yes, a story on Sachs. To be honest, it won’t tell you a thing you don’t already know about Sachs’ ideas, if you’ve been paying attention. But it gives some good detail about the Millennium Villages, where Sachs is trying his plans out on the ground (more on which soon). It also gives a good sense of Sachs the person - I’m beginning to suspect that he isn’t, actually, particularly nice. Have a read, listen to the lecture, draw your own conclusions, and tell us your thoughts below.

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