Why only industrialisation can end poverty

Jeffrey Sachs, the "world's most influential economist", began a series of Reith lectures last week that will take him to Britain, China and America, giving him an opportunity to have a "worldwide conversation" about making globalisation work, says David Smith in The Sunday Times. His theme is that the world is extremely crowded and getting more so the global population is forecast to rise from 6.5 billion to ten billion by 2050 with the result that we are putting huge pressure on the world's resources and seeing competition for those resources causing disastrous global conflicts.

However, Sachs is optimistic that all this can end well, says Matthew d'Ancona in The Spectator. If handled properly, the current stresses could "actually leverage us into a world of true sustainable development". His approach would be to favour small-scale, feasible measures, rather than grand utopian projects, and to push up the aid budgets of rich countries to 0.7% of GDP so laying the foundations for change (to buy fertiliser, high-yield seeds, antibiotics, anti-malarials, mosquito nets and to drill bore holes for safe drinking water). Relatively speaking, the figures aren't that high: Sachs points out that the whole of Africa could be equipped with anti-malaria bed nets for less than the USA spends a day on the Pentagon.

This thesis doesn't make sense, says Dominic Lawson in The Independent. I find it incredible that "such an intelligent man" can't see that Africa's ruling classes will simply expropriate any new aid dollars with exactly the same attention to detail as they have the old. Note that so far almost two and a half trillion dollars worth of aid have "achieved nothing but economic stagnation" in Africa. Sachs's retort is that the aid had been spent in the wrong way.

MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

So does he know the right way? It's clearly correct that we have a "moral duty to do the best we can" for the world's wretched, but that will involve learning from those countries which have transformed their economies, such as China. Sachs may think that industrialisation is a bad thing because it is killing the planet, but it is also the only thing that can really end poverty.

MoneyWeek is written by a team of experienced and award-winning journalists, plus expert columnists. As well as daily digital news and features, MoneyWeek also publishes a weekly magazine, covering investing and personal finance. From share tips, pensions, gold to practical investment tips - we provide a round-up to help you make money and keep it.