After Genoa: When it comes to reducing poverty, the G7 should look to scientific evidence rather than politics, says Jeffery Sachs
Published: July 23 2001 18:45GMT | Last Updated: July 23 2001 18:50GMT
FINANCIAL TIMES
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In the wake of Genoa's battle-zone summit, leaders of the
Group of Seven industrialised countries have promised to make
globalisation work for the world's poor. These leaders should start by
taking seriously the scientific evidence on global poverty and
environmental degradation. Four weeks ago, Science magazine published detailed estimates that the fight against Aids in the developing world would require more than $9bn a year, most of it from rich countries. The G7 summit committed just $1.3bn to a new global fund to fight Aids, malaria and tuberculosis - and even that is on an uncertain timetable. |
In May, the US National Academy of Sciences confirmed the importance of man-made climate change, to which the US is the largest contributor and in which poor tropical countries are the greatest losers. Yet the US does not even have a negotiating position on climate change. The G7 has been neglecting the evidence for years because real solutions require budgetary outlays by rich countries. US aid for the poorest countries is a meagre $5 per American per year, in a country with an income of $36,000 per capita. This causes other rich countries to limit their own efforts. The rest becomes a charade: lots of high-flown rhetoric from the G7, the International Monetary Fund and the World Bank. But who is fooling whom? The poorest continue to suffer and die prematurely, the world remains a dangerous and divided place and global meetings have become armed camps. During the years of G7 inaction, the evidence has accumulated on what needs to be done. The G7 leaders are right that globalisation, properly designed, can be part of the solution. They are right that the poorest countries need to be able to increase exports in world markets. But increased export competitiveness requires a healthy and educated labour force and access to rich-country markets. Adequate health and education are beyond the financial means of the poorest countries, and rich-country markets are protected in key sectors such as clothing. The recent management of debt relief is a good illustration of how the G7 puts politics first and evidence last. Rather than looking at how much debt relief countries really need if they are to fight disease and give even a basic education to their children, the G7 summiteers in Cologne in 1999 arbitrarily defined a "sustainable" level of debt as equal to 150 per cent of exports. That threshold, which still applies, is vacuous nonsense. It has no relationship to the needs of countries such as Tanzania or Burkina Faso. An approach based on evidence would start with the needs of poverty reduction and fashion debt relief to help meet those needs. That approach would show that dozens of countries need their debts cancelled entirely and even then will need large-scale help. All is not lost, however. In spite of every tug of US politics to look inward rather than outward, the Bush administration has been thinking creatively about global poverty alleviation. True, the administration has still not realised that the budgetary costs will be higher than it would like. But it has made progress on some underlying concepts that, if brought to fruition, could help to pull the G7 out of its morass. First, the administration has adopted the core vision that poverty alleviation programmes should be designed to get the job done, with quantifiable targets relying on the best scientific evidence of how to proceed and on ex post evaluation. Thus the administration became the first country to champion the global fund for disease control and has insisted that expertise in public health and medicine, rather than politics, should guide the allocation of funds. Second, to its enormous credit, the administration has recognised the utter financial bankruptcy of the world's poorest countries. It is this basic truth that lay behind George W. Bush's innovative proposal last week to shift from loans to grants in World Bank programmes for the poorest countries. If the initiative targets the countries that really need it, the proposal will not only be adopted but will also mark a breakthrough towards realism. The US and the rest of the G7 must be brave enough to look at the scientific evidence on disease control, climate change, education and environmental degradation and let it guide the flow of resources towards global poverty alleviation. The US in particular will have to give larger sums to help the world's poor. The needed sums are large in absolute terms but tiny compared with the vast incomes of the rich countries. An additional $20bn a year in grants, which would go far, signifies just $20 a person among the 1bn people in the rich world. Either the G7 will spend more money - and spend it well - on poverty alleviation, or its leaders will continue to hide in bunkers from a large part of humanity that is ever more desperate and uncomprehending of the moral obtuseness of the world's rich. The writer is director of the Center for International Development at Harvard University |
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©2001 by the President and Fellows of Harvard College.
Last revised 7/24/2001