The End of Poverty: Economic Possibilities for Our Time

Sachs illustrates the challenges that will confront any plan to end poverty by providing two specific examples that are distinct from the other situations he has discussed. Sachs does so because, he writes, “we must first understand what” a plan to end poverty “means to the one-billion-plus people who can be helped” (227).

First, Sachs highlights the rural poor of Sauri, Kenya, by providing an overview of a meeting held with them to discuss their needs. He proposes identifying a list of the “big five” development interventions that the international community should undertake to make it possible for Sauri to get a toehold on the bottom rung of the ladder of economic development. In this case, these interventions involve agriculture, basic health, education, power/transport/communication, and safe water/sanitation. Sachs then argues that the cost of meeting these needs is too much for Sauri but could easily be met by donors from wealthy nations.

Sachs makes the problem plain when he reveals that although the international community sends about $100 million in aid to Kenya per year, the nation is forced to pay out $600 million to service international debt. On a net basis, there is no aid to Kenya—this nation struggling with extreme poverty is paying international banks annually for past borrowing. Yet, donors are wary of providing support due to previous corruption problems with a past regime. Sachs suggests that if donors met with the current government, it would go a long way toward addressing the donors’ concerns.

For the first time in the book, Sachs provides a mini-profile of the urban poor, examining the situation of slum dwellers in Mumbai, India. He is struck, upon meeting with them, that they emphasize political empowerment to negotiate with the city to have their needs met. Their strategy is yielding concrete benefits and improved quality of life. Sachs notes that meeting the material needs of the extremely poor, particularly access to water, medical care, and similar matters, is somewhat easier in cities.

The conclusion reiterates that those in extreme poverty are working to escape the poverty trap, but they cannot do so on their own. Accordingly, Sachs calls for increased foreign aid so that places like those profiled can begin moving up the ladder of economic development.

The chapter begins by positing that the extreme poor are missing the following six types of capital: human, business, infrastructure, the “natural capital” of the environment, and “public institutional capital” (243). Their absence establishes the poverty trap that prevents the extreme poor from climbing the ladder of economic development.

The chapter proceeds with a discussion of the poverty trap that draws on numerous pictographic illustrations through which Sachs explains how poverty traps keep communities in extreme poverty through lack of necessary capital. This supports his core argument that international aid is necessary to eliminate extreme poverty in any given situation or across the board. Further, Sachs calls for packages of aid that meet multiple capital needs, with an emphasis on investment in technological capacity.

Finally, the chapter demonstrates the type of “scaling up” that is needed from the international community. These include the eradication of smallpox, the campaign for child survival headed by UNICEF in the early 1980s, the Global Alliance for Vaccines and Immunizations of the 1990s, and the push for family planning in response to population concerns.

Sachs maintains that the technology necessary to meet the MDGs largely exists but requires scaling up to meet the challenge as it stands. Thus, the way out of the poverty trap—the way to realize the end of poverty—largely depends on foreign aid and the scaling up of technology in a way that meets the survival needs of the extremely poor, so they may begin ascending the ladder of economic development.

Sachs expresses a sharp critique of “shadow play” by the international aid agencies, wherein they publicize very small projects as if they will make a significant difference while privately acknowledging that places like Ethiopia will not meet the MDGs because the resources donors devote to the issues are plainly insufficient.

Drawing on national examples from several countries with improving quality of life, the chapter argues that developing a plan to end poverty should arise as part of a global agreement. Further, the plan to reduce or eliminate poverty should be structured around the MDGs.

Sachs provides concrete requirements for actually achieving his vision of ending extreme poverty. Meeting that goal within his generation, Sachs says, will require differential diagnosis of the various poor countries or communities who need aid, an investment plan, a financial plan that identifies additional funds needed to meet the MDGs, a donor plan for securing the funds, and a public management plan for managing the funds and their implementation toward the goals identified through the differential diagnosis.

The chapter provides significant detail on each aspect of the proposed plan, but it also discusses policy concerns at the global level that require consideration. These are the debt crisis, global trade policy, science for development, and environmental stewardship.

Sachs again chides the IMF and World Bank for their dysfunctional oversight and implementation of prior programs. He then explains the need to develop much closer interaction and coordination between the IMF and World Bank and the specialized UN agencies.