Chatt med Jeffrey Sachs

moderator: Nu startar vi chatten med den amerikanska ekonomen och FN-rådgivaren Jeffrey Sachs, som slåss för att utradera fattigdomen i världen. Välkommen med dina frågor på engelska!

AE: Why did the "chockterapy" fail in Russia, when it succeded in so many of the eastern countrys?
Jeffrey Sachs: In a nutshell, "shock therapy" means rapid transformation based on three principles: (1) rapid market reforms; (2) domestic political consensus; and (3) ample foreign assistance to smooth the shocks. In Poland, all three factors applied. In the Russian case, there were problems with (1), (2), and (3). Russia's own reforms were less coherent (often receiving bad advice from IMF for example). There was less political consensus (since Russia did not see itself, as Poland did, as "returning to Europe"). And probably most important, there was little help from the US and Europe, compared with the help given to Poland, for example. Russia did not receive debt relief; did not receive a currency stabilization fund; and did not receive much help in the balance of payments or to face a grave social crisis. In short, the US Government continued to view Russia as a competitor or even adversary rather than as a new partner in freedom. In my opinion, the West lost an opportunity to help smooth Russia's economic and political transition.

Petter: What is the most important issue to deal with when fighting global poverty?
Jeffrey Sachs: The most important solution is to translate technological capacity (in health, agriculture, infrastructure) into practical programs on the ground. When this is done (e.g. in the Global Fund to Fight AIDS, TB, and Malaria, or the campaign to eradicate smallpox, or the Green Revolution in Agriculture) the results can be tremendous. Success in translating technology in to action requires: (1) good science; (2) national action plans; and (3) a financing mechanism, like the Global Fund, to turn programs into reality.

Madeleine Adfel: How can poverty be wiped out when the division between rich and poor is getting wider, even in the western world. Bigger and better pension agreements, redundancy pay outs for the high earners, enormous bonuses for bank workers etc etc, when pensioners are trying to survive on small pensions and we have the highest food prices ever. Poverty in the third world is obviously a terrible problem where people are starving to death, but somehow seeing your neighbour in Sweden living in luxury together with those who cannot afford even a treat is awfully hard as well. The gap between rich and poor is too wide and is widening every year. A curb on all bonuses and similar pension scheme for all. I hope you agree? We got to look at ourselves before we can put the rest of the world to right.
Jeffrey Sachs: We need to look BOTH at ourselves and the world's poor. We should be fighting inequality at home -- through an ample social policy -- and fighting poverty abroad. There is enough money in fact to do both. It is a question of value, politics, and will. In the US the inequalities have gotten to be so big that they threaten America's democratic institutions. The banks and other large companies have a grossly excessive hold on US politics. This corporate power must be brought back under control. The companies need to live within the rules of the game, not to shape them through excessive lobbying, as the banks did during the past 20 years.

Martin: How possible is the UN millennium goals, given global warming (drought, climbing sea levels) the depletion of the worlds fish population (lack of food) and last but not least that the human population are growing from about 7 billion to 9 billion (2050). Aren't the Africa projected to double its population? How are poverty supposed to be eradicated given this forecast .
Jeffrey Sachs: You are right that there are three distinct but interrelated points on the policy agenda, as I also suggest in my book Common Wealth: Economics for a Crowded Planet. These are: (1) the fight against extreme poverty; (2) the fight for sustainability (in energy, food production, urban design, etc.); and (3) the stabilization of the world's population at around 8 billion by 2050, rather than 9.2 billion as projected by the UN in its "medium" forecast. Each of these great challenges -- poverty, sustainability, population -- is feasible, through targeted strategies backed by global financing. Yet only one of these three, by itself, would be bound to fail. All three are synergistic.

Olle: Do you think a one world government & a one world economy would solve the problems?
Jeffrey Sachs: I think that we need strong global cooperation but with independent nations. In a way, the European solution looks like a kind of model. The EU calls for many common policies among the members, but still leaves a lot of freedom of action for distinctive national policies and budgets.

David: Hello Mr Sachs! Which branch within economics should I study to get the best knowledge and the most effective tools to work with poverty issues? /David
Jeffrey Sachs: Poverty is cross-cutting, so keep your eyes open on many areas, both within and beyond economics. As a start, I would suggest: economic development theory and history, public economics (budgets and corrections of market failures), and macroeconomics. But also: public health, agronomy, demography, public management, all are important disciplines as well. You might look at the curriculum of the new Masters in Development Practice being launched by Columbia University and many partner institutions around the world.

Elias Hartvigss: The timeline for the Millennium Development Goals are catching up and this spring I heard from UNDP that the financial crash hit the economic development extremely hard in low development countries. Do you believe that the MDG:s still can be fulfilled? And after 2015, when a new framework needs to be made, do you believe it's going to be very similar to the existing MDG or will we see a new approach in the work against extreme poverty?
Jeffrey Sachs: We are surely running out of time. The last chance for a decisive breakthrough will be the 2010 MDG Summit at the UN in September 2010. Fortunately, President Obama has pledged to come to the MDG Summit with a globally agreed plan to achieve the MDGs. If the world can agree on an accelerated strategy, backed by financing, then the MDGs are within reach. They need an extraordinary level of effort within the poor countries matched by a much greater effort at international cooperation and financing.

Andreas Bernber: Is it adeqate to talk about how many people that lives on less than one dollar a day? Does'nt the reasent increase of starving people show that many people risk extreme poverty, even if they live on, let's say one and a half dollar/day?
Jeffrey Sachs: The $1-per-day standard is arbitrary and hard to measure. We need a "basic needs" approach to extreme poverty, in which extreme poverty means lack of access to adequate food supply, public health, or a safe physical environment (e.g. safe drinking water and sanitation). We should measure the capacity of households and countries to meet basic needs. This would give a more accurate picture of extreme poverty.

Andreas Bernber: What changes would like to see in foreign aid. What are the biggest challenges?
Jeffrey Sachs: We need: (1) countries honoring the commitment to 0.7 percent of GDP or higher (as Sweden does). The US is at 0.2 percent of GDP, a shortfall of $70 billion per year! (2) more donors, including some of the newly industrialized countries, gradually increasing to 0.7 (3) well-targeted aid, mainly through multilateral funds, such as the Global Fund to Fight AIDS, TB, and Malaria (4) public-private partnerships, in which companies, NGOs, and governments team up to deliver key goods and services

Oskar: What is your take on the criticisms posed by Naomi Klein, and the criticisms in general of your 'shock treatment' used in post-communist countries?
Jeffrey Sachs: Ms. Klein has several valid complaints about "market fundamentalism" which tried to use markets to solve all problems. I never believed in such an approach. That is why I also combined three things: (1) market reforms; (2) social programs; and (3) extensive international help for poor and crisis-ridden countries, including debt cancellation. Fortunately, when these elements have been put in place, as in Bolivia and Poland, the results were very good under VERY difficult circumstances (the economies were in a very deep crisis which required emergency action). When the West has failed to help countries in crisis, such as was the case with Russia, the results are much less good. Thus, a proper response to crisis requires a mix of strong reforms and strong international help.

daniel: in what way is sweden a rolemodeL? theres is loads of poverty here as well. people thats not in the system, so to speak??
Jeffrey Sachs: Sweden and its neighbors (Norway, Finland, Denmark) have done a better job than the rest of the world in combining: (1) market economy; (2) active social policies; (3) high-performance, low-corruption democracy;(4) strong commitment to science and technology; and (5) generous and long-sighted help for the rest of the world. I'm a BIG FAN!

J: Would you say tha the liberal perspective, with free trade etc would be the best way to solve the issues of poverty and growth?
Jeffrey Sachs: The liberal perspective is only a part of the story. Open international trade is surely a good idea, but so too is a major role of the state in the economy, in the following areas: health, education, infrastructure, environmental protection, and science and technology. The art of economic development includes a proper balancing among the state, private, and civil-society sectors.

mj: What could be a possible solution for the developing countries that are dealing with massive dept that is stunting their growth abilities?
Jeffrey Sachs: When debts become so high that they cripple the ability of a country to achieve development, the debts should be renegotiated downward, or cancelled outright in many cases. I've been arguing this point since 1985. Fortunately, dozens of countries have succeeded in negotiating debt relief, though many more still need it.

Daniel: Hello Mr Sachs, a honour for me to be able to chat with you today. I would like to know what you think about corruption in the developing countries? When you send funds there, how can you make sure that the money is being used for that purpose that it was sent? I said this, because I am argentinian, and I know little about corruption in my country and I know that it is if not the biggest, one of the biggest problems down there. How have you and UN seen this thing? Thank you very much. Regards
Jeffrey Sachs: First, corruption is indeed pervasive, not only in Washington! (where the corruption has indeed been very high in recent years). We need governance systems that expose corruption, and guard against it. Never give aid as unconditional cash transfers. Never give aid on the basis of "trust" alone. Give aid according to a rigorous and quantified plan of action. Make sure that an aid program can and will be audited and verified, according to quantitative objectives, and milestones.

Jonatan: In my studies I have followed your work and I must wonder, how can you remain so unanimously positive and manage to always see possibilities where others see failure or mistakes?
Jeffrey Sachs: I have been encouraged by the many cases of success: eradicating smallpox, increasing coverage of anti-retrovirals, the Green Revolution, successes in family planning, big increases in school enrolments. Yes, there are lots of shortfalls, and millions of deaths per year due to extreme poverty. Our ability to cooperate is highly imperfect. Yet our tools and potential are vast. Let's keep working towards the success which is in our reach!

Jeffrey Sachs: Thanks to all of you for great questions. I'm sorry that in this chat I'm only able to skim the surface. We'll keep up the discussion in other ways, no doubt! I am being "whisked off" to another meeting. Thanks to everybody for such warm hospitality, and thanks to Sweden -- as always -- for your global leadership in the great challenges of sustainable development. I am always inspired when I come here. Many thanks, and so long for now. More soon, I hope! Jeff Sachs

moderator: Då var det dags att avsluta chatten, det har kommit många frågor och alla har tyvärr inte hunnits besvaras! Ett stort tack till alla medverkande!

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