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The End of Poverty

The End of Poverty. Jeffrey Sachs Director, UN Millennium Project. Portrait of 4 Countries. Malawi The perfect storm Bangladesh On the ladder of improvement India Center of an export services revolution China The rise of affluence. Malawi.

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The End of Poverty

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  1. The End of Poverty Jeffrey Sachs Director, UN Millennium Project

  2. Portrait of 4 Countries • Malawi • The perfect storm • Bangladesh • On the ladder of improvement • India • Center of an export services revolution • China • The rise of affluence Malawi http://www.terradaily.com/images/epidemics-aids-malawi-malnourished-afp-bg.jpg

  3. MalawiA perfect storm • Villages devastated by AIDS • Only children and grandmothers left • Poor soils, poor yields • No one to work the fields • Little food to eat • Malaria, but no medicines • No nearby clinics • In cities, are clinics • No AIDS medicine • Patients come to die. • $1 a day could save them Grandmother with 15 orphaned children

  4. BangladeshOn the ladder to development • Per capita income doubled since independence (1971) • Infant mortality 1/3 • Sweat shops in Dhaka • Women walk 2 hours to work • First step out of extreme poverty • Microcredit more available • Health care more available • And birth control • Women now more empowered • Want education • Want fewer children Rice milling http://courses.dce.harvard.edu/~phils4/3406.JPEG

  5. IndiaCenter of an Export Services Revolution • Several steps up the ladder of development • Information Technology companies • College grads earn $250-500/month • Service U.S. companies • Buy U.S. computers • Northern India still largely rural and poor IT workers in Bangalore, India http://newsimg.bbc.co.uk/media/images/41089000/jpg/_41089458_indiaintel203.jpg

  6. ChinaThe rise of affluence • Beijing: one of the world’s economic capitals. • Average Annual income > $4,000 per capita • Urban professionals • Affluence, travel, trendy • Foreign investment • And technology • Competitive enterprises • Exported $400 billion in 2004 Beijing http://i1.trekearth.com/photos/32961/beijing1.jpg

  7. Ascending the ladder of economic development • Rural Population • Malawi: 84% • Bangladesh 76% • India 72% • China 61% • USA 20% • Employment in Services • Malawi 25% • USA 75% Rural India http://filer.case.edu/org/uisa/images/index/comingtomeeting.jpg

  8. Ascending the ladder of economic development • 5 billion people are on the ladder of economic progress • Poor, low, middle, & high income • Rising incomes, education, sanitation, health, possessions • 1 billion people are not on the ladder of economic progress • Extreme poor • Unable to escape from extreme material deprivation • Trapped by disease, physical isolation, climate stress, environmental degradation, extreme poverty Mexico: on the ladder http://www.loscabosguide.com/tequila/cabowabo.htm

  9. Global poverty is declining http://www.economist.com/images/20070428/CFN282.gif

  10. Poverty has increased in Africa

  11. Our generation’s challenge • The end of poverty • Help the poorest escape extreme poverty • To get a foothold on the ladder of development • Ensure that the moderately poor have a chance to climb the ladder • Give development assistance • Eliminate trade barriers World Bank water project, S. Africa http://web.worldbank.org/WBSITE/EXTERNAL/OPPORTUNITIES/GRANTS/DEVMARKETPLACE/0,,contentMDK:20200526~pagePK:180686~piPK:180184~theSitePK:205098,00.html

  12. Effect of the Industrial Revolution http://www.unmillenniumproject.org/documents/TimeMagazineMar142005-TheEndofPovertysmall1.pdf

  13. Effect of Industrialization • Urbanization • Due to improved agriculture • Food prices fall • Employment in cities • Social Mobility • Hierarchies unravel • Market based economy • Gender roles change • Employment rather than child-rearing for women • Division of Labor • Specialization increases • Efficiency goes up Urban workers, Brazil http://wwwimage.cbsnews.com/images/2003/09/25/image575166x.jpg

  14. How does prosperity spread? • Transmission of technologies • Science-based methods to organize production • Historical examples: • Steam engine • Factory machinery • Railroads • Global steamers • Suez, Panama canals • Electrification • Internal Combustion engine • Nitrogen-based fertilizer http://indiana-transit-museum.visit-indianapolis.com/

  15. Why some countries fail to thrive • Poverty trap • Poor rural villages lack • Trucks • Paved roads • Power generators • Irrigation channels • Human capital is low • Hunger • Disease • Illiteracy • Natural capital is depleted • Trees cut down • Soil exhausted • Need more capital, but unable to save for future Rural village, Sierra Leone http://imageevent.com/dyet/october;jsessionid=vzm4aori21.lion_s

  16. Why some countries fail to thrive • Physical geography • Landlocked • high mountains • No coast, navigable rivers, or harbors • Ex: Bolivia, Ethiopia, Tibet • Arid • Tropical diseases • Malaria • Problems can be overcome • But it costs more Sahara desert http://www.curious-software.com/images/desert.jpg

  17. Why Some countries fail to thrive • Fiscal Trap • Government cannot pay for infrastructure • Population poor • taxation not feasible • Government corrupt, or incapacitated • cannot collect tax • Debt load too high • Revenue goes to interest • Debt cancellation may be only solution http://www.worldvision.com.au/seekjustice/readmore.asp?sectionid=7&articleid=117

  18. http://www.pridesoaring.com/index.6.gif

  19. Why Some countries fail to thrive • Governance Failures • Governments should: • Promote infrastructure • Create an environment conducive to investment • Crime free • Bribery free • Protect property • Defend borders • Poor governance results in • State Failure • War, revolution, anarchy • Economic failure Singapore http://www.asiatravel.com/singapore/panpac/index.html

  20. Why Some countries fail to thrive • Cultural Barriers • Religions that block the role of women • Deny economic or political rights • Deny education • Result: • Undermines half the population’s contribution to development • Slows demographic transition • Blocking religious or ethnic minorities • Prevented from jobs, schooling • Extreme: ethnic cleansing http://politicalhumor.about.com/library/images/bltalibanwomen.htm

  21. U.S. Civil Rights • Slaves freed after Civil War • Did not have civil rights for another 100 years in South • Employment • Voting • Protection under the law • Equality in public places • Equal education • Legislation blocked in U.S. Senate by southern states • Lynching common • 3,446 lynchings: 1882-1968 http://www.worldsfamousphotos.com/wp-content/uploads/2007/03/1930-lynching.jpg

  22. U.S. Women’s Rights • Women in 1800s did not have • Inheritance or property rights • Women were the property of their husbands • Custody rights • Voting rights • Higher Education opportunity • Women’s right to Vote • Susan B. Anthony and Elizabeth Cady Stanton • Worked tirelessly for women’s vote • Began in 1851 lobbying state legislatures • Formed women’s suffrage movement • 1920: 19th amendment passed • Equal Rights Amendment • still has not passed Susan B. Anthony & Elizabeth Cady Stanton http://z.about.com/d/womenshistory/1/0/w/L/2/anthonystantonseated1.jpg

  23. Why some countries fail to thrive • Geopolitics • Trade barriers erected by foreign countries • Impede economic development • May target a despicable regime • Often ends up impoverishing population • Without toppling the regime • N. Korea, Cuba North Korea South Korea http://www.rotten.com/library/history/countries/north-korea/

  24. Why some countries fail to thrive • Lack of innovation • Small market for new inventions • No profits = no inventions • Endogenous growth cycle: • Big markets encourage invention • Inventions promote big markets • Low income countries: • 37% population • 11% GDP • 1% patents • Need foreign investment to bring technology • Key to East Asian economies • Sweat shops are first step • Starts at port cities Sweat Shop in Dhaka, Bangladesh http://www.siu.edu/~perspect/05_fall/images/sweatshop.jpg

  25. Why some countries fail to thrive • The demographic trap • High fertility rates in the poorest countries • Poor families choosing to have many children • Disastrous • Cannot invest in each child • High fertility next generation • Demographic transition can occur fast • Ex. Iran • 1980 fertility = 6.7 • 2000 fertility = 2.6 • Education for girls is key Iran http://www.middle-east-online.com/pictures/big/_10613_iran-women-13-7-2004.jpg

  26. 119 to 4,800 63 to 118 26 to 62 Home > FAQ > Natural Resources > Food > Annual Fertilizer Use Per Hectare of Cropland > maps > Map of Fertilizer User Per Hectare of Cropland By Country - Africa 5.00 to 25 0 to 4.99 Overpopulation.Com Five Development Interventions 1. Boost Agriculture • Fertilizers • Cover crops • Irrigation • Improved seeds • Storage facilities Kg fertilizer/Ha of cropland http://www.overpopulation.com/faq/Natural_Resources/Food/fertilizer_per_hectare/maps/africa.html

  27. Five Development Interventions 2. Improve basic health • Village clinics: • One doctor for 5,000 • Free anti-malarial bed nets • Effective medicines • Malaria • Aids • Birth attendants • Reproductive health services Sierra Leone Hospital http://www.kambiahospital.org.uk/

  28. Five Development Interventions 3. Invest in Education • Meals for all children at primary school • Improve quality of education • Improve attendance • Vocational training • Modern farming • Computers • Electrical wiring • Diesel mechanics • Carpentry • Adult Education • Hygiene, • HIV/AIDS School meal, Ghana http://newsimg.bbc.co.uk/media/images/41111000/jpg/_41111190_10_schoolhildyghana.jpg

  29. Five Development Interventions 4. Power, Transport and Communications • Electricity in villages • Lights, computers, pumps, refrigeration, food processing • Trucks, roads • Bring fertilizers, fuels • Transport harvest to market • Transport people to hospital • Mobile phone • Connect with outside world Kenya village http://upload.wikimedia.org/wikipedia/commons/thumb/b/b8/Orma_Village_Kenya.jpg/800px-Orma_Village_Kenya.jpg

  30. Five Development Interventions 5. Safe drinking water and sanitation • Health benefits • Save hours of toil for women and children Carrying water, Zimbabwe http://www.bobjanet.demon.co.uk/urchin/4life/zim.htm

  31. Five Development Interventions • Total cost to village: • $70 per person/year • Benefits • Double or triple food yields • Reduction of chronic hunger • Improved school attendance • Reduction of water-borne disease • Rise in cash incomes • Sales of grain and cash crops • Food processing, carpentry, small manufacturing, horticulture, aquaculture, animal husbandry • Reduction in AIDS deaths Bumper crops, Malawi http://news.scotsman.com/topics.cfm?tid=503&id=1434172002

  32. The giving gap • The U.S. is far behind • on its pledge of 0.7% GNP • Usual excuses • Corruption and misrule • Thus money down the drain • Bush (2004) • “…the greatest power on the face of the earth, we have an obligation to help the spread of freedom. We have an obligation to feed the hungry.” • U.S. aid to sub-Saharan Africa: • $3 per African (2002) • 6 cents per African received after expenses and emergency aid http://home.comcast.net/~markthoma/Graphics/poverty2.jpg

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