Week #9 Sachs & Moyo

Jeffrey-Sachs_1720258c1

  • Sachs’s believes the problem with eradicating extreme poverty is the lack of rich countries giving the money they have pledged. Many try to claim that the amount of money needed is out of reach of possibility and with so many economic problems in the rich countries themselves, how is it possible to also help the nearly billion people in need. “Most important, the task can be achieved within the limits that the rich world has already committed: 0.7 percent of the gross national product of the high-income world, a mere 7 cents out of every $10 in income”(Sachs 288). According to Sachs if the rich countries followed their pledges then they would be able to achieve many of the MDGs goals most importantly the goal to eradicate extreme poverty. He also suggests targeting not only the rich nations themselves but by taxing the very richest people in these countries a higher rate that would go towards helping the poorest in the world. This he feels is a fair way to pay for the additional funds needed. I think in theory this method would be effective because you would be gaining the additional funds from the rich countries that would allow many of the poorest to be risen above poverty. Also this plan would not disadvantage those in rich countries that are not doing well financially it would put all of the burden on the wealthiest in the nations. While I think the plan would be effective if able to be put in place there are many barriers from allowing this. First these rich countries would need to be convinced to raise taxes on the wealthiest in the nation without taking any for domestic cash infusion the funds would go abroad to help eradicate extreme poverty. This would be difficult as in the US it is hard to raise taxes when it would benefit us convincing the public to raise taxes for helping those abroad seems unlikely. Also the problem with where the funds would be sent if they were taken from the wealthiest is if the funds would be watched to insure proper use or would it just be giving money away. While his plan would be effective if put in place as the amount of money donated would finally meet the pledges these countries promise the implementation has issues to work out.aidgraph
  • Sachs discusses possible outcomes by 2015 such as the rate of “extreme poverty will have declined from about 40 percent of the population today to under 20 percent”(Sachs 303). He had optimism that if the correct amount of aid was given so that extreme poverty began to become less and less it would also coincide with the lessening of aid needed. While the aid would be lessened it would open the door for direct foreign investment as the country could focus on advancing business interest rather than focusing on helping its extremely poor population. With this increase in investment it would also help quicken the countrys road to economic viability as the amount of jobs increase and standard of living also increase.Brazil1English
  • Extreme poverty in some regions of the world have decreased in particular in China and India where poverty has fallen a good amount and quality of life has increase substantially for much of the population. When looking at the total poverty numbers reduction they look good but when looking closer, certain regions such as Sub Saharan Africa the results are not as dramatic. While some countries have made progress others have not or their progress is much behind their Asian counterparts. In Namibia according to the World Bank in 2004 the poverty percent of population was 37.7% while in 2009(the most recent data) the poverty percent of population was 28.7%. While Namibia looks to be on track to meet the goal of 20% by 2015 they are not in the majority. Most countries have had less success than this when trying to meet the MDGs.
  • Sachs claims that people from rich countries claim that giving to Africa are hopeless because the money would go “right down the drain”(Sachs 309). With many pointing to Africa’s corrupt governments and lack of morals among other reasons why aid to Africa is hopeless and if the US and others actually gave the estimated $30 billion pledged the money would do no more good than line the pockets of the already rich in these countries while helping those in need very little. Sachs calls this a myth because ha says since we have actually never given anywhere near the amount needed claiming giving will hurt is wrong. I have heard what he calls myths and I don’t think they are to a certain extent. Trying to not address these issues by simply stating the fact that not enough money has been giving is not the correct path. While aid is important it must also be giving to the right people who will spend it correctly for true relief. For massive amounts of aid to work tracking the money is even more important as with such large numbers funds by corrupt governments can pocket a lot while spending as little as possible to really help.
  • When looking at the bad governance myth that Sachs talks about and looking past the corruption of past governments in Africa it is easy to see where rich country sentiments come from. If we are willing to think globally and not just think oh well in the past there was corruption there must be now we should be proactive in addressing countries where there are problems and support ones that already fight corruption. If those in the rich-world realized that helping these poor countries, although now may cost billions of dollars, that the future potential trade relationships and investment potential will be multiple times better after they are helped. We must continue to view the world as a global unite where we help those in need as at the end of the day we are also helping ourselves. If those in rich countries were more informed about individual countries and current African problems past prejudices could be thrown to the wayside as we help advance Africa out of poverty.

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  • While Moyo discusses the effect China has had on Africa in a positive light for most of the chapter including deep infrastructure development in many countries that have helped immensely. While Moyo doesn’t explicitly talk about her issues with China’s problems with governance and human rights at home she discusses the issues China’s no strings attached investment approach has had on Africa. Since China is willing to give loans and investment “offer of US$9 billion to rebuild the entire rail network nine billion dollars, no strings attached, and thus no reform required”(Moyo 108). The Chinese investors unlike the EIB do not care how the country they are investing in is run or what human rights issues are present if they see a way to improve financially from the investment or a Chinese firm gets the bid they do not care. This causes issues when others like the EIB and US wanting reform before investment because the countries will simply go to China where no reforms are required. China should see even with these short-term gains if they could get these countries to reform to be better places for foreign direct investment the potential future profits would outweigh the short-term profits they have created. Also some worry with no strings attached investment the Africans themselves are put on the back-burner to financial gain.

 

 

Dambisa Moyo Dead Aid                               Part II                                      pp. 98-125

Jeffrey Sachs The End of Poverty                   Chapters 15 & 16                     pp. 288-328

 

 

 

 

 

 

 

 

 

 

 

 

 

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