Ending Poverty In Our Generation: Still Time if We Try

Prof. Jeffrey D. SachsDirector of the Earth Institute at Columbia University

Rockefeller Center for Public Policy and Civic Leadership

Dartmouth CollegeOctober 13, 2010

The Poverty Trap:

Income is below subsistenceSaving is zero or negativePopulation growth, climate change, environmental degradation, poor governance, and conflict are all leading to further decline

The Solution: Targeted Investments to End the Poverty Trap

Raise income and saving, reduce population growth, reverseenvironmental degradation, and create self-sustaining growth

The Millennium Development Goal Strategy

A Parable of a Millennium Village

Subsistence is $300 per personInitial Income (Output) is $200 per person (“sub-subsistence”)Saving is zero when income is below subsistence ($300)Saving is 50% of net income above subsistence ($300)

Improved inputs (fertilizer-seed) raise net income by $2.50 for each $1 of input up to a maximum of $250 of inputs

All saving is devoted to agriculture inputs up to $250All saving beyond $250 is devoted to capital improvements withmarginal productivity of 0.3

Three Scenarios:

No Official Development Assistance (ODA): Poverty Trap

Two-Year ODA for inputs: Temporary boost to income, not sustainable

Four-Year ODA for inputs: Boost to income is sustainable

After four years, the household has built up income sufficiently to self-finance inputs on an ongoing basis

ODA Levels in Three Scenarios

Income Levels in Three Scenarios

Household Saving in the Three Scenarios

Input Use: Sustainable Input Use with Four-Year Input Subsidies

Africa is a big and diverse continent!

Five Core Interventions

• Food production: Agricultural inputs

• Access to primary education (school meals, IT)

• Access to health care

• Access to infrastructure: roads, electricity, telephony and IT communication, safe water and sanitation, irrigation

• Business development

Built on Community-Led Development and Local Professional Management

AGRICULTURE

• Fertilizer• High-yield Seeds• Treadle Pumps and Supplemental Irrigation• Agricultural extension

HEALTH

• Construction of clinics (Level 3)• Upgrading hospitals (Level 4)• Medical supplies • Improved staffing and salaries for health workers• Training of Community Health Workers• Improving access to family planning services

EDUCATION

• Construction of high-quality classrooms• Books and supplies• Teacher training• Mid-Day Meals• Computers• Internet connectivity in some schools• School-to-School Program

INFRASTRUCTURE

• Extending Cell phone coverage throughout the village• Internet connectivity in schools, health centers• Road grading, road construction• Increasing access to water resources, innovative electrical systems

TARGET SECTORS AND EXAMPLES OF INTERVENTION STRATEGIES

FUNDING STRUCTURE

Source: Earth Institute, Millennium Promise

Donors

Partner organizations (e.g. NGOs, corporate)

Local and National Governments

Village members

$60

$20

$30

$10

Village costs per person per yrUS dollars

Outcomes in Sauri, Kenya

Comparisonof 2005 and2009

Harvests of Development, 2010, www.millenniumvillages.org

0

510

1520

2530

3540

4550

2006 Q3, 2007 Q4, 2007 Q1, 2008 Q2, 2008 Q3, 2008 Q4, 2008

Institutional Deliveries in Ruhiira cluster (% of total births)

Institutional Deliveries in Uganda cluster (% of total births)

1.6

1.7

1.8

1.9

2

2.1

2.2

2007 2008

Utilization rates of health clinics in Ruhiira Cluster (No. of visits per person per year)

Mwandama, Malawi

Sauri, Kenya

Sauri, Kenya

Mayange, Rwanda

Bonsaaso, Ghana

THE MILLENNIUM DEVELOPMENT GOALS

1. Eradicate extreme poverty and hunger

2. Achieve universal primary education

3. Promote gender equality and empower women

4. Reduce child mortality

5. Improve maternal health

6. Combat HIV/AIDS, malaria and other diseases

7. Ensure environmental sustainability

8. Develop a global partnership for development

Note that 7 million of the8.8 million deathsoccurred in Sub-Saharan Africa andSouth Asia

The Lift-Off Since 2000 in Global Financing for Health(yet still only one-third of recommended levels)

Source: OECD Development Assistance Committee

Some Choices for America

Figure 12.3: Pentagon Spending and Malaria Needs

00.5

11.5

22.5

33.5

Two Days'Pentagon

Spending (FY 2007)

Malaria Control forAfrica (annual)

Bed Nets for allAfrican SleepingSites (five years'

coverage)

President's MalariaBudget (FY 2007)

Bill

ion

s o

f U

.S. $

Source: Data from Congressional Budget Off ice (2007) and Teklehaimanot, McCord and Sachs (2007)

Towards a Global Ethic

“So let us not be blind to our differences, but let us also direct attention to our common interests and the means by which those differences can be resolved. And if we cannot end now our differences, at least we can help make the world safe for diversity. For in the final analysis, our most basic common link is that we all inhabit this small planet. We all breathe the same air. We all cherish our children's futures. And we are all mortal.”

John F. KennedyAmerican UniversityJune 10, 1963