|
MONTERREY,
Mexico -- Words in politics matter. Especially
if they represent a major shift in thinking,
if not yet action. So said Harvard University's
Stone
Professor of International Trade, Jeffrey D.
Sachs, at the International Financing for Development
Conference in Monterrey, Mexico. In his opening
remarks at the International Business Forum,
held
on the first day of the conference, Professor
Sachs reminded the audience that the conference
was important
for two critical reasons: Recommitment of the
world to the UN's Millennium Development Goals
of September
2000, and the announcement of the Bush Administration's
plans to play a more positive role in supporting
and increasing foreign aid. "This administration
came into office skeptical of aid," said Sachs. "But
September 11 was a wake-up call, and the Monterrey
Summit is an important event where they realized
that the old arguments against aid were not right
and will not work." According
to Sachs, although the US commitment to increasing
aid is not a breakthrough in terms of money, it is
a breakthrough in terms of the direction of US policy
towards foreign aid. President Bush's recent commitment
barely increases the US role in terms of money," he
said. The US still remains the "stingiest" donor
of foreign aid at a level of 0.1 percent of GNP.
The Bush proposal last week will raise this to 0.12
percent.
"Although, it does not accomplish anything
close to what needs to be accomplished, it
puts in the administration as a supporter of
aid," said Sachs. "And the President
has said that more money will come if aid can
be shown to be effective."
Sachs, who runs Harvard's Center for International
Development, was appointed by UN Secretary
General Kofi A. Annan as Special Adviser on
the UN's Millennium Development Goals for a
one-year term that began February 1. Since
then the professor has been playing a vital
role in lobbying senior politicians to become
more engaged in development challenges. He
has been working closely with President Bush's
advisory team to present a case for increased
aid. Sachs has also been pushing business leaders
to play a more active role in development efforts
to meet the Millennium goals in the areas of
health, poverty reduction and the environment.
At the International Business Forum, Sachs
stressed the need for business to supply the
vital technologies needed to provide solutions
to the desperate poverty that engulfs the world
today.
"The anti-globalization movement is not
losing steam," said Sachs. "And at
its core is really a anti-business, anti-corporation
movement. As long as businesses focus on only
efficiency and not equity for the poorest consumers,
this movement will escalate to great proportions.
This powerful movement is not going to go away
unless business is seen as a better contributor
to development challenges."
Sachs specifically referred to the issue of
private-sector-led growth in infrastructure
industries in poor countries.
"We support all kinds of privatization
of infrastructure, but privatization of water
and power is a delicate issue," said Sachs. "Its
access to poor people is critical in their
daily life. Lecturing countries on the needs
of privatization without giving solutions on
how the poorest lot is going to access these
vital infrastructures does not help. Poor people
cannot pay market price; they have to be given
differential pricing. The businesses need to
be ready for that." Sachs warned that,
if fair pricing is not considered, business
would be taken by surprise when riots ensue
on privatization proposals being pushed across
the world.
Stressing the dire need for businesses to
go into the poorest markets, Sachs said that
business engagement in rich and middle-income
countries like Brazil and Mexico is not about
development but fostering economic growth through
private-sector-led strategies. Business has
not properly engaged in the poorest countries,
except in instances where there is oil under
the ground or some other critical resource.
"Foreign Direct Investment is the lifeblood
of successful economic growth," said Sachs. "And
it is incredibly concentrated in only a few
countries."
Sachs
stated that the development goals are the
text and
the subtext of the Monterrey meeting. "We
are living in a world of divide as never before," said
Sachs. "If our cars in the US get any
larger, we are all going to be driving tanks.
We have money spilling out of our wallets right
now. On the other side we have people dying
due to hunger and disease-at least 8 million
people dying of poverty, living at the edge
of subsistence. This should be unacceptable
to everyone including the business sector."
The heartening thing about the inequality
gap, Sachs noted, was that the Millennium goals
are achievable due to technological breakthroughs
in health and nutrition, and agro-bio technologies
are so powerful and economic progress so rapid
in some parts of the world, that in the history
of mankind there is, for the first time, a
real chance to eliminate poverty through political
and private commitment.
Sachs is of the view that the international
business community needs to understand development
a lot better than it does today to formulate
practical solutions, and that business needs
to see clearly how deep the challenges are
and how complex life is for the poor.
"The poor are poor not because they are
lazy or corrupt," emphasized Sachs. "But
because they suffer from the highest rate of
endemic disease, they live on the most fragile
soil, they live on slopes or up in the mountains
where they are geographically isolated or they
have extreme water stress."
In
his closing remarks, Sachs said that while
there should
have been a commitment to doubling
foreign assistance in the next few years to
solve the issues of poverty, "This conference
is important still, as it is going to strengthen
the international commitment to the Millennium
Development Goals, and that's not a bad accomplishment
for a week's work."
| 
