Sunday, February 25, 2007

The End of Poverty

I have private English language lesson, every two weeks, for two hours. During a conversation at this lesson about a topic of the world's development gap, I commented on the book "Guns, Germs and Steel" by Jared Diamond as my most impressive book and explained the contents of the book. My teacher then recommended "The End of Poverty" by Jeffery Sachs. I was strongly interested in the book because not only was the introduction written by Bono of U2, but I felt reliance in my teacher. I got this book as soon as possible.

I haven't read this book completely, but I think it will be "the best book I have read in 2007" even though it is just January now. the reason I feel so is as follows:

1. Subject of this book
They say that people should help poor people. Of course, I agree for some time I have been interested in people from very poor countries, for example, Africa. I know that there are many poor people all over the world, even in developed countries. However, I think that there is a vast difference between most poor people in developed countries and poor people in very under developed countries. The point is "they can live and develop by themselves or not". "The End of Poverty" concentrates on these kinds of people.

2. "Calm optimism"
The subtitle of the book is "How we can make it happen in our lifetime". Yes, this book isn't for people who keep grieving the world's problem, but for people who have the will to change it better.
This book has many data and chart (fortunately, they are easy to understand even for people who feel allergic to mathematics like me). They sometimes show tragic present state, sometimes a bright possibility. Jeffery Sachs emphasizes that we can change the world in our lifetime in both cases. Such "calm optimism" is the reason I love this book.

3. Exciting case studies
This book is not just only data, theory, and proposal. Dr. Sachs is an active, practical economist. His career as a consultant for some countries economical politics is broad, beginning in Bolivia, Poland, Russia, etc. These case studies are excellent; both as interesting documentaries and a friendly political economic textbook. I have no knowledge of political economic, but I can feel excited by Dr. Sachs's adventure.

4. New viewpoints and information
I am learning many viewpoints and information on this issue of the world's poverty. I will write about them in detail in my next entry, but the most surprising hopeful information I have learned is that "the wealth of the world isn't constant." Dr. Sachs says that the world economy is developing entirely, not dependent on only depriving the third world's wealth by developed countries. I think it is the fundamental fact of believing in the phrase "change the world", because if the world's wealth is constant, the only solution to make poverty history is to decrease population. We human beings can develop together all over the world –unfortunately, we cannot vanish economic differences among many countries immediately but I think it is very big and good news.

What kind of people are those? An example of Malawi people is introduced in this book. People cultivate crops, but there aren't enough to sell to other people because the amounts are very small, even for family members. To make matters worse, even if they can product enough amounts of crops, they have no road or car to sell them to market.

Reasons of cultivating production shortage are two; The first is the low technique of agriculture. People have less chance of higher education, cannot afford effective fertilizers. The second is epidemic. AIDS massacres adults, malaria kills all ages, even though we have a method to cure both diseases. Such epidemics make desperate cases; Because of dying all sons and daughters, a grandmother is left to raise as many as 15 grandchildren. Under conditions like these, people cannot live and develop by themselves.

New viewpoints and information that "The End of Poverty" brings to me

1. Solutions for economic crisis of developing countries are very similar to clinical medicine.
Dr. Sachs says the reasons for failures while helping developing countries are due to a lack of fundamental viewpoints as follows;

1) The human body (economy) is composed of complex system. There is not only one failure. In addition to, one failure tends to cause other failures.

2) An individual diagnosis is important because of the complex system. Doctors know that fever symptoms have many causes. There are many diagnoses for that, so doctors have a checklist to diagnose precisely.

3) All medical treatments are family treatments. If a doctor treats a child properly, only a diagnosis isn't enough. He / she needs to understand the child's family environment.

4) Observation and feedback are necessary. A good doctor knows each diagnosis is not the final answer but hypothesis. If he / she finds out a failure, he /she changes their treatment flexibly.

5) The doctor is considered specialist personnel.
I was a consultant for call centers to construct or to diagnose them. These five points convince me very much. I find it difficult to believe that the IMF or other organization didn't have such a basic method, because of this, it has been a tremendous tragedy for the world. They are the doctors of the country and its many people.

2. The reason for Africa's poverty
They guess many reasons for Africa's poverty. The two biggest of these reasons are "History of Western countries plunder" and "corruptions of politicians" But both of these are wrong, says Dr. Sachs. Some countries, which have had harsh periods of westerners' plundering, are developing. A good example is Vietnam. According to the research by Transparency International, some African countries are less corrupt than some Asian countries. However, as to economic development, Asian countries are higher than African countries. If these opinions are correct, what is the true reason for Africa's poverty?

The answers, according to Dr. Sachs, are epidemics, droughts and distance from the world's market. Tremendous people have died from AIDS and malaria in Africa. Most of the African people live in rural areas, which have few infrastructure systems. It means they are vulnerable to droughts and have difficulty participating in market – no available transportation. These answers are easy to understand and convince me, as a reader of "Guns, Germs and Steel", whose theme is geographical features have made the world's development gap, not biological gap of human races.

3. The reason for the different results between China and the East European / Russian countries
Dr. Sachs, as an economical politics consultant, managed to plan successful economics growths of Bolivia and Poland, but failed in Russia. (He wrote it in this book frankly, it made a favorable impression on me.)
I had a question in association with this case. Why did Russia (the Soviet Union) fail in and China succeed in developing economics? Both were similar socialist countries. This book has a clear answer about this:

1) The Soviet Union had a huge amount of external debt but China didn't.

2) China had long coastlines that supported an economic development dependent on exporting. However, the Soviet Union and East European countries didn't have such long coastlines, therefore they also didn't have an advantage to access international trading at low costs.

3) China had co-operators who lived in overseas countries and made Chinese communities. They played the roles of overseas investors and became role models. On the other hand, generally, the Soviet Union didn't have such overseas communities.
4) The Soviet Union encountered a steep decline of producing oil at the starting point of their innovation, but China didn't.

5) The Soviet Union proceeded with their own industrialization that depended on original technologies that were not compatible with the West (the USA, EU and Japan). However, China's technologies still stayed at a low level, so she introduced machines and processes to the West easily.

I feel it is an irony that the Soviet's industrialization annoyed their development. To change the subject, personally, I think Stalin's only good deal was the propulsion of Soviet's industrializations. Now that I found out the propulsion was not profitable, what was Stalin's good works?
4. How can we make extreme poverty end?

Dr. Sachs' answer to this question is also clear. He said that wealthy countries should support extreme poverty with countries 0.7% GNP. (Of course, it is important to know not only "how much" but also "how". This entry focuses on "how much". For your information, Sachs said this about "how" - the first priorities to invest in are roads, electric power, transportation, soil, drinkable water, sanitary accommodations and disease control.) If wealthy countries proceed this program till 2015, the cost to support extreme poverty countries will decrease.

How much is lack? The USA has the largest amount of lack for 0.7% GNP, 38 billion dollars. Japan has lack for 13 billion dollars, about 100 dollars per person. For this situation, Dr. Sachs proposed a new tax system for collecting more money from billionaires.

In this book, he wrote nothing like "we shall begin to act for making poverty history personally" Instead, he proposed readers to move governments to support poor countries. I found out that realistic solutions to exterminate extreme poverty are by politics, which is more powerful than people's acts.

The power of this book
I wrote a lot about this book. The biggest impression was that I could realize make extreme poverty end, which was something that weighed on my mind. Dr. Sachs provides hope and a solution to this problem through his calm optimism. I think we will be proud of our generation if it will be the generation to make extreme poverty history.

For that, I have applied to donate money to the UNHCR. Next, I feel the need to watch politicians and reflect on it for the purpose of voting or for signatures. I am an ordinary man who manages to support my family and myself. This book made me solve the problems of poverty.
That is the power of this book.