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Economist Jeffrey Sachs warns of high price of ignoring poverty

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Economist Jeffrey Sachs warns of high price of ignoring poverty

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One of the most respected figures at the recent UN Millennium Development Goals review summit was US economist Jeffrey Sachs.

He heads the Earth Institute at New York’s Columbia University and is the author of numerous articles and books including “The End of Poverty.”

Named one of the World’s 100 Most Influential People by Time magazine, Sachs is also Special Advisor to the UN Secretary General on the Millennium Development Goals or MDGs.

Speaking to euronews, he criticised the policies pursued by industrialised countries, and says they are likely to pay a high price for failing to help the world’s poorest countries:

Valérie Gauriat, euronews:
“First of all, how realistic are the Millennium Development Goals for 2015. Do you expect anything more than promises?”

Jeffrey Sachs “The MDGs are achievable, at least in a technical sense, but we really need to accelerate, to change the trajectory. Up until now, the rich countries have talked a lot more than they’ve delivered.”

euronews:
Concretely, how much money is needed to meet the MDGs, and what percentage of the G8’s GNI (Gross national income) for instance, does it represent?

Jeffrey Sachs
“To meet the three main health goals – saving mothers, saving children, fighting epidemic diseases – would require 40 billion dollars a year from the rich world. But we are a 40 trillion dollar annual income of those countries. So that amounts to one tenth of one percent of our income, that, if properly directed to build clinics, hire community health workers, get mosquito nets out, use anti-retroviral medicines and so forth, could enable comprehensive basic primary health care.”

euronews:
“How does MDG expenditure compare with military expenditure or money spent for anti-terrorism measures from the US or Europe?

Jeffrey Sachs
In the US we’re spending five percent of GNP on military things, and we’re spending 0.2 percent of one percent of GNP on peaceful development. So we’re spending 25 times more on the military than we are on peaceful development. And then they tell me in Washington: ‘Oh we don’t have money for that, I don’t know where we could find the money in the budget, the budget’s tight!’ Well what about looking at the Pentagon, what about looking at 100 billion dollars in Afghanistan, not accomplishing anything, except making the country more dangerous, not less dangerous!

“Europe understands that the military approach doesn’t make sense. Europe lives next door to Africa which is the epicentre of these challenges. And when Europe doesn’t invest, you get mass migration, you get all sorts of problems, everybody understands this. So Europe does better, but Europe does not follow through. Unfortunately, Germany, France, Italy are probably not going to meet the promises that they made for 2010.”

euronews:
“How much has the recent global financial crisis actually cost development, and is it a real good excuse or is it just an excuse not to move forward?”

Jeffrey Sachs:
“We weren’t on track to meet our eight targets even before the collapse. You know, I’d go to, let’s say the finance ministry in Germany, and talk to the most senior civil servants. And they would say to me: ‘Mr Sachs, do you really believe that we’re going to do that? No way!’ And I said: ‘But your Chancellor said so…’ ‘Oh, come on! Don’t believe this!’ They were right, I was shocked!

“When the financial crisis came, I said there are ways still to do the financing. Do we really have to bail out the banks and then watch these bankers walk away with tens of billions of dollars in bonuses? The point I’m making is that we have no shortage of money if we really want to do this.”

euronews:
“Do you think the developed economies are actually dealing properly with their own crisis, in terms of market regulation, budgetary cuts. Are they doing the right thing to recover?”

Jeffrey Sachs:
“This is the time we have to invest. We shouldn’t go back to that consumption boom. In fact we don’t want to go back to it. But we should use those resources to make investments. What kind of investments? Investments in our own long term sustainability, in the environment for instance. And moving to a low carbon economy, in moving to clean transportation, in weaning ourselves away from fossil fuels. These are the investments we should make. Or we should use our underemployed resources to lend money at very favourable terms, long-term, to finance the power sector, or the roads, or the water and sanitation in Africa. In other words, our factories could actually help build African infrastructure if we provided the long term financing to do it, and we’d help get recovery in our countries and development in Africa.

euronews:
“So actually what do rich countries have to gain from reaching the MDG goals and adversely what do they have to lose from it?”

Jeffrey Sachs:
“The most we have to gain is our heart. Because to turn away from the world’s poorest people and leave them to die, will be devastating for our souls. It will also be dangerous because it will not be forgotten. It was also dangerous, it’s the point I’ve been making, leaving people to pandemic disease, that’s obviously dangerous. Leaving people to the collapse of their societies, like Somalia, or Yemen, or Afghanistan; this is, this is absurd! We end up there in war which can solve nothing! Which is a hundred times more expensive perhaps than having addressed the underlined needs in the first place. And finally, you know, if we’re smart, it’s markets! It’s business! It’s the future of prosperity! People have a hard time imagining that right now. But it’s gonna come to pass. And it’s going to be China and Africa! That will be the trade. China is all over Africa, it’s investing, it’s giving grants, it’s doing things that I would have expected Europe and the United States to be doing!”

euronews:
“Do you foresee a time when rich nations will no longer be rich, and their economies strangled by emerging nations, starting with China for instance?”

Jeffrey Sachs:
“You know, it won’t be China that will strangle us, it will be our own short-sightedness if it comes to pass. We’re rich right now but we’re so misusing our wealth. We were on a consumption binge, year in and year out. We still have huge budget deficits because our politicians tell the public ‘we’re going to cut your taxes’ and they keep promising to cut the taxes! But how are we going to pay for government? And so we have a real risk of having reached an incredible level of affluence and then gradually handing it away.”