(May 13, New Delhi, Sri Lanka Guardian) We have them before - all from the West of course - a product of the Rich telling the vast mast of the Poor, why they are so.
The latest now to join procession, Jeffrey Sachs - like Stieglitz before - is certainly not unknown in the Third World, not excluding for some of his caution at the time of the notorious Asian economic melt-down a few years ago, amidst the voices of those such as George Soros and their ilk.
In a kindred view, we had Paul Elrich predicting in the 60's that Asia would inevitably have widespread famine before end of the 1970's! And so on.
According to reports, Sachs has produced a publication of some length, bringing out powerfully in Africa and elsewhere, the Statistics of Poverty, the Poverty of Aid, and the Poverty of Ideas. This is indeed a daunting task; and, certainly, of a quite different dimension from the foregoing.
But there are the dangers. As in these tomes - not really solving the phenomena - the opinions and the obiter dicta yet flash across, attracting often glowing attention and, if fortunate, ending with a Nobel Prize - the countries of the studies continuing in their same state! This is not to denigrate all and sundry - not even Prof. Sachs. Only, that it is from the 'worm's eye view' of someone born to a poor country, but who fortunately had a world exposure, including also leading other countries into paths of development co-operation.
Indeed, on the plus side of our outside friends concerned in our fate have been excellent luminaries such as were the late Jan Tinbergen, much later Galbraith, or Stanley Fischer and others. More concretely, a leading or, controversial in other ways that do not concern us here, Lawrence Summers opined for African Agriculture, that the problem was not (as often proclaimed) excessively 'intensive farming', but 'inefficiently intensive farming'.
To get to more solid ground, and Bradford de Long, in a set of penetrating studies some years ago, set out what they saw as 'the core of the Development setback in most of the Third World'. It was, briefly, as follows:-
"What makes economies grow?" they ask. "Finding the answer to that question has been the continuous aim of economists worldwide". Given a mix of many factors, they found "major roles assigned to investment in plant and equipment... The problem with earlier analyses by economists.... has been a failure to examine separately, role of investment and equipment... which has far more explanatory power for national rates of productivity growth, other components of investment and out perform many other variables included in cross country equations accounting for growth! ..."
"Poor performances in South America and in Africa have confused support for industrialization with support for industrialists... The divergence between Latin into America and East Asian outcomes ... carries an important insight into what a successful industrial policy is, and how it should be implemented", they concluded.
In the meantime, another leader of orthodoxy Ms. Anne Krueger, of the World Bank and IMF, a former high priestess of 'Export Promotion', irrespective of available Productive Base, wrote later a distinguished article in the Journal of the American Economic Association - entitled "How We Learn", - which came close to the 'singular truism that yesterday's I.S. (Import Substitution) becomes the basis for tomorrow's E.P. (Export Promotion)'.
Basically, the sing component for poor developing countries was a hitherto totally absent "Machinery, Tools and Equipment" (MTE) basis, in production which created the needed expanding Domestic Production Base (DPB) and Exports Expansion (cf. my "The Wealth of Poor Nations - LSE 1984 - and later Publications). The central chapter on entitled "Debt Deficits and the Development of Developing Countries" brought out those structural correlations forcefully, of historical poverty and the complete reversals in the new export earnings based on their new domestic foundations!
It is messages like these that call for spreading everywhere in the Third World. But there we have it!
The willingness for surrender to essential, hard, brick and mortar building up was perhaps not seen, or not popular. And so, the "Public Goods" phenomenon died hard. It was also Amartya Sen, the brilliant economist who in the 1960's declared succinctly that, "the determination of the optimum size of total savings and that of the optimum capital intensity of investment are interdependent problems" - only later, in the 90's portrayed a phenomenon in which he asserted that "Public Goods and Public Benefits" were all available but lacked rural money supply, which constituted all the problems in stagnation. The disgraceful rural low level infrastructure of all types in India - redressed beforehand in Japan, Taiwan, Korea, (progressingly) China - did not seem to figure in that type of probe. Yet, it was for this - not for his earlier penetrating analysis of investment, that Sen became a Nobel Prize Winner with the result that Development thereafter failed to be served. Sen himself seemed more or less to have stayed at this point.
Providing purchasing power is one thing. Promoting the means to sustaining purchasing power is another - as in the Chinese proverb of the Fish, the Net and the Boat! In real terms, during the notorious Asian melt down, out of the exchange destabilization in South East Asia of the late 90's, those like Mahathir Mohamed and to a certain extent others, stopped the exchange rules and prescriptions of the pandits of gloom - and came through better off, and stronger.
Continents like Africa have the brightest future. But they must take it into their hands to decide their policies, and perform for themselves - with less of the likes of even Jeffrey Sachs by himself, and their type, however genuine their concern or abilities.
In the latest, Bob Geld of, one of the world's sincerest Crusaders, is quoted as saying "Tomorrow, 280 million Africans will wake up for the first time in their lives without owing you or me a penny...." Incidentally, the ordinary African will know nothing of course - toiling at his same old work somewhere. But there is far more to it for Geldof than he thinks.
For more than he, the leaders, the Gordon Browns and all of them will soon be reminded that, without the foregoing which we have briefly outlined, they will, not long from now, be chasing yet another debt relief crusade of their consciences!
- Sri Lanka Guardian
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