Jeffrey Sachs, author of The End of Poverty, is the director of the Earth Institute at Columbia University in New York. He believes that extreme poverty can be eliminated by 2025 by promoting trade and investment, and if development assistance targets the critical areas of agriculture, health, education, basic infrastructure and business development. He spoke to AllAfrica's Cindy Shiner.
Since aid has been going to Africa, what do you think has been done right? What are some of the best examples of successful aid?
Aid that is well targeted, scientifically based and utilizing powerful technologies to address specific challenges is by far the most successful kind of aid. And the dominant successes in recent years have been in the health area where all of those criteria apply.
If we're targeting malaria control through bed nets and the new generations of medicine, if we're targeting Aids treatment through anti-retroviral medicine, if we're targeting the control of vaccine-preventable diseases such as polio and measles or the worm infections, we see extremely powerful results at very low cost.
And if we use that logic through all of our approaches, whether it's for health, for education, for agriculture as just announced by the G8, for infrastructure and business development, we can have a tremendous success. In fact the health area demonstrates it.
Other kinds of approaches, typically on a smaller scale, in education, in microfinance, in agriculture, have the same kinds of success but they haven't been carried out at the scale needed.
You have said that aid has never been properly resourced or targeted for a focused period to end the poverty trap and thereby to break dependency on foreign assistance. Could you elaborate?
Let me give an example, which is changing, finally, after many years.
Since 1985 there has been a small and declining effort towards agriculture, but this is very ironic because the poor are predominantly living in rural areas; typically about 70 to 80 percent of Africa's extreme poor are in villages rather than in cities and most of the poor are actually farm families.
About 25 years ago the donors got a very bad idea to cut support for agriculture. They said they would let the market take care of agriculture and it was a disastrously mistaken decision. I've been involved in it day in and day out for the last several years to try to reverse that trend. And at the [recent] G8 meeting in Italy there was a new 20-billion-dollar development initiative for agriculture finally launched. I believe that will be a turning point.
Why?
Because basically they tried everything else wrong for so long that they finally came around to the idea that rather than giving food aid or neglecting agriculture it was time to invest in agriculture. I've spoken to President [Barack] Obama about it on a couple of occasions recently and I know how committed he is. He and Secretary [of State Hillary] Clinton have shown real leadership on this. They played a major role together with [United Nations Secretary-General] Ban Ki-moon in pulling this initiative together and I was very happy with its announcement.
It didn't come easily. There was a lot of discussion, a lot of changing of minds in recent years and it finally has happened. Making it move appropriately will be the next challenge, but the conceptual hurdle has finally been overcome.
Paul Collier, the author of "The Bottom Billion," thinks the G8 decision on agriculture reflected what called the latest fad in the development community, and that it would be no more successful than other areas of focus in the past, such as health and infrastructure.
I think time will show how important this decision is. We know from recent experience in Malawi, for example, that targeted assistance for smallholders has made an enormous difference in reducing hunger and boosting rural incomes, and helping to create political stability in an extremely impoverished, democratic country. [It led] to the president's re-election because of the popularity of his leadership in reducing hunger.
We've experienced in the Millennium Villages Project a remarkable increase of food production at very low cost - roughly between a fifth and a tenth of what the food would have cost if it were shipped as food aid rather than what happened, which was increased production in the villages. So I think that this [G8 initiative] will actually be very successful.
You are familiar with Dambisa Moyo's book Dead Aid. What do you make of her main assertion that aid to Africa does not work and trade and foreign investment are better answers for developing the continent?
Everybody agrees that trade and investment are extremely important so I don't want to get into a trade versus aid debate because that's useless.
But development assistance, if properly targeted, makes an enormous positive difference as well.
I've already cited some examples, which have saved lives and ensured that children don't go through life crippled for the fact that they lacked the most basic health access when they were young. By having anti-malaria medicines and anti-malaria bed nets we will, working together with African countries, help to ensure that millions of children who otherwise would die or be disabled for life will grow up healthy with a chance for the future. That's extremely important.
Similarly, directed development aid for infrastructure, for all-weather roads, for feeder roads in villages, for extending the power grid, are extremely important in raising the competitiveness of especially poor rural economies so impoverished farmers see their products reach markets. So there is no difference of opinion about the role of trade and investment.
The point is that development assistance, when properly targeted, is a very powerful complementary tool. This has been recognized for a long time, and I think it remains the predominant understanding of those of us who are engaged in development thinking and engaged in development practice.
Dambisa Moyo has called for ending aid in five years. What about ten years or 15 years?
Fifteen years is a long time and most countries can get out of the poverty trap by then. I believe we ought to promote trade and investment and targeted development assistance in several critical areas: agriculture, health, education, basic infrastructure and business development. And I believe that if this is done, extreme poverty can be eliminated by 2025 and countries can be on the ladder of development on their own with self-sustaining economic growth. That's basically a 16-year time horizon, and that's the kind of horizon that I think is needed to pull off the end of extreme poverty.
How would you characterize the present situation of foreign aid to Africa?
It has been chronically too low, on the whole very mixed in its focus, and much too much has been spent on emergency food aid as opposed to agriculture, for example. Too much has been spent on the overheads of international organizations for meetings and reports [and it has not been] well enough coordinated through mechanisms that I strongly emphasize, like global funds. I believe [global funds] are the right way for donors to pool their resources and ensure that they are used for the intended purposes.
We need to have multi-lateral, pooled development assistance so that countries essentially apply once for the funding that they need for disease control, for maternal health or for agriculture, to a pooled account and they can cut the red tape, cut the overhead of the aid agencies and make sure that coherent plans that they propose are then fulfilled.
I'm hoping that this is what's going to happen now with agriculture.
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I've been working with the international organizations and the UN secretary-general to try to put that into place and now that the G8 announcement has come I'm going to redouble my efforts to try to make this as streamlined and effective and targeted as possible.
Why has there not been greater oversight on the distribution of foreign aid in the past? Is it because taxpayers have not been demanding it?
I think this has not been a high priority of donor governments, especially. It took innovations like the Global Fund [to fight Aids, Tuberculosis and Malaria] to demonstrate that there are better ways to do this. I think [former president Ronald] Reagan and [former British prime minister Margaret] Thatcher got us badly off track. The World Bank and the International Monetary Fund got us badly off track for 20 years.
It was a period of cutting aid, not thinking it through, pretending to rely on markets that didn't exist, neglecting agriculture and neglecting disease until recent years - with the exception of immunization, which did more or less continue, but Aids, TB and malaria were really neglected.
It's taken a long time to rebuild a strategy and a focus from the so-called structural adjustment era. There still are challenges ahead because each donor wants to plant their flag. There's lots of overlap and multiplicity that should be eliminated. The amount of funding is difficult because congress and parliaments typically don't like to vote this kind of assistance, so this is not an easy area at all. Africa is not a high priority in the U.S. and Europe except for a very few exceptions and so trying to rebuild a coherent approach, especially after the structural adjustment era, has taken the better part of this decade.
Is there anything else you would like to tell us?
We're at a moment where we're going to see some real progress. Secretary Clinton's efforts and President Obama's efforts are really marking a new approach, and I believe with a new team coming into USAID we're also going to see continued change. I'm quite optimistic.
