In my columns, I often pick on American political behaviour at home and around the world. It is, therefore, a pleasure today to present some of Professor Jeffrey Sachs’, who is an economist and adviser to the UN Secretary General on the Millennium Development Goals (MDGs), key ideas. In his book, The End of Poverty (2005), he discussed how to end extreme poverty in 20 years, which could be realised, inter alia, through more aid and agricultural policies. He is one of America’s finest social scientists, and his advice is also of importance to Pakistan.
In his syndicated column last week, Professor Sachs warned the two American presidential candidates that they should not reduce government spending. They should spend more. In the Western economies, the government sector accounts for about half of the countries’ economies. It is, therefore, naïve and wrong to think of reducing the public sector in a time when America and the West are in recession.
There is about eight percent unemployment in America and poor welfare support for the needy. At such a time, the government needs to spend more, Professor Sachs advises. But then the Americans are quite ignorant about politics and economic realities. I am not just talking about the voters; I am also talking about the professional politicians. So, they may not understand the advice they are given, not to speak of finding ways to implement relevant reforms.
Professor Sachs’ column was prompted by presidential candidate Mitt Romney’s pick for running mate and candidate for Vice President, Congressman Paul Ryan, who has a “plan”, or I suppose it should be called an “outline” for how he thinks the US can reduce its deficit and develop a more sustainable government budget, with less unemployment. He simply wants to cut government spending, but not collect more revenue.
True, like many other Western governments, the US is spending money it does not have. This is “ostrich politics” and a disgrace to the world’s richest country’s leaders. Hence, President Barack Obama, too, has been forced into accepting the conservative Republican Party’s argument of reducing government spending, but he also wants to raise taxes for the richest Americans. That will not balance the government budget, but it will help, especially in creating more revenue for unemployment benefits and other social services.
Romney and Ryan will do the opposite; they will let the richest pay even less tax, arguing that they will then be able to invest money in the productive sectors and create new jobs. This is just conservative logics, or maybe rather, election rhetoric with little connection to the real world. The trickle-down effect will be negligible.
Will the politicians in question, the topmost ones in the world, listen to reason? Will Professor Sachs’ advice, based on sound theories and empirical evidence from research, be studied by Obama and Romney and their election campaigns? Will we have a more nuanced and realistic debate, where economics and welfare are seen together?
First, I believe that President Obama knows very well that Professor Sachs is right. But he seems not to be daring enough to try to implement his advice for various tactical reasons. He may fear that the voters don’t understand the connection between high government spending, high taxes and good welfare services for those who need such services. Today one-sixth of the Americans live below the poverty line, to no fault of their own. Even if it were, a social state protects those who fall on the roadside and do not ask why it happened.
Second, presidential candidate Romney and his running mate may genuinely believe that it is right that the government should spend less, be less involved in the provision of services and instead leave it to charity and the private sector to do more. They may even believe that lower tax for the richest will actually lead to the creation of more jobs, never mind that it would take long and have a limited effect.
Professor Sachs discusses issues in a way that most social scientists and development specialists would do, but perhaps not all economists. He bases his arguments not only on information from America, but also many other industrialised and developing countries. His advice related to the MDGs is focused on the poorest countries, and the disadvantaged segments within these countries. As an adviser to many African and Asian governments and organisations, including, the Islamic Development Bank (IDB), his knowledge and thinking become relevant to us in Pakistan.
We can certainly learn something from him when he advises that the rich should pay more tax so that the government can be in a position to assist the needy, remembering that a large proportion of Pakistanis live below the poverty line. Professor Sachs’ advice is, probably, understood more easily in Pakistan than in America. Yet, the willingness and ability of Pakistani leaders to implement his proposals may be questioned.
In our time, it is common to advocate a change from development aid from abroad to better terms for international trade. We also seem to admire the rich and powerful, forgetting that they may often have reached their heights through ruthless and even dishonest ways, and many started out with inherited wealth, too.
Now, then, Professor Sachs - and I - still believe that development aid is important contrary to what many advocate today. Many also believe that the results of the development aid were less than impressive. That may well be true. The 20-odd donor countries never gave more than a single percentage of their gross domestic product in aid; America gave only a third of a percentage. If we really wanted aid to matter, and help the former colonies back on their feet, we should have given manifold the amounts we gave.
We should have focused more on the primary sectors - health and education. We should have had much better democratic decision-making systems for planning, implementation and control of projects and programmes for aid and tax collection. We should always have worked through and with the governments of the countries in question. I am sure we would then have been able to help develop better and less corrupt civil services. About Africa, Professor Sachs has said: “Africa’s governance is poor because Africa is poor.”
Yes, I talk in past-tense about development aid because I fear that for the West’s own convenience, the development aid will continue to crumble. Few listen to Professor Sachs and me - and the many international organisations, the United Nations, the international NGOs and others. Well, some of them often speak for themselves, forgetting that they should only speak for those they have been mandated to help.
Let us listen to the good American Professor Jeffrey Sachs, who argues so well for development aid, tax collection, provision of social welfare - and capitalism, too, as the basis for development and value generation. After all, he is not a socialist. He is, perhaps, a social democrat, like me, but that was not any achievement for me having grown up in Norway, one of the world’s most developed welfare states. It was an achievement for Professor Sachs to understand that states must be social and that economic development is no end in itself; it is only important if it can lead to the betterment of ordinary people’s lives - in America and Pakistan.
    The writer is a senior Norwegian social scientist based in Islamabad. He has served as United Nations specialist in the United States, as well as various countries in Africa and Asia. He has also spent a decade dealing with the Afghan refugee crisis and university education in Pakistan.
    Email: atlehetland@yahoo.com