Jeffrey Sachs: Why Development Aid is a Win-Win Solution

    Jeffrey Sachs gives a lecture on resource-based investments in low-income countries on Oct. 6, at the sidelines of the annual meetings of the World Bank and International Monetary Fund. Photo by: Joe Athialy / CC BY-NC- Joe AthialyCC BY-NC-

    What do rich nations stand to gain from helping to uplift the developing world? Security, prosperity and a noble heart, says economist Jeffrey Sachs.

    “The most we have to gain is our heart. Because to turn away from the world’s poorest people and leave them to die, will be devastating for our souls,” Sachs, who is also the United Nations special adviser on the Millennium Development Goals, told Euronews in an interview.  

    Assisting poor nations now can also help to thwart potential pandemics and wars, which Sachs said will entail more costs to fight as compared to addressing development needs.

    The developing world is also the future of markets and trade, Sachs argued.

    He said: “[I]f we’re smart, it’s markets! It’s business! It’s the future of prosperity! People have a hard time imagining that right now. But it’s gonna come to pass. And it’s going to be China and Africa! That will be the trade.”

    Most donor nations are squeezing their aid budgets as the financial crisis has left them cash-strapped. Sachs said the crisis is no reason for donors to balk at their aid commitments.

    “When the financial crisis came, I said there are ways still to do the financing. Do we really have to bail out the banks and then watch these bankers walk away with tens of billions of dollars in bonuses? The point I’m making is that we have no shortage of money if we really want to do this,” Sachs said.

    Sachs estimated that some USD40 billion each year is needed to to help achieve health-related Millennium Development Goals. If properly spent for building clinics, hiring community health workers, distributing mosquito nets and providing antiretroviral medicines, the money can help to provide comprehensive basic primary health care, he said.

    “The MDGs are achievable, at least in a technical sense, but we really need to accelerate, to change the trajectory. Up until now, the rich countries have talked a lot more than they’ve delivered,” Sachs said.  

    He noted that the world was not on track to meet the MDGs even before the financial crisis struck.

    “You know, I’d go to, let’s say the finance ministry in Germany, and talk to the most senior civil servants. And they would say to me: ‘Mr Sachs, do you really believe that we’re going to do that? No way!’ And I said: ‘But your Chancellor said so…’ ‘Oh, come on! Don’t believe this!’ They were right, I was shocked!,” Sachs shared.

    He said donors should take advantage of these tough economic times to invest in “our own long term sustainability,” calling for investments in a low-carbon economy and clean transportation.

    “Or we should use our underemployed resources to lend money at very favourable terms, long-term, to finance the power sector, or the roads, or the water and sanitation in Africa. In other words, our factories could actually help build African infrastructure if we provided the long term financing to do it, and we’d help get recovery in our countries and development in Africa,” he added.

    About the author

    • Ma. Rizza Leonzon

      As a former staff writer, Rizza focused mainly on business coverage, including key donors such as the Asian Development Bank and AusAID.