Chicago State University CH1 The Age of Sustainable Development Paper Hello, please check the instructions and the assignment 1. The assignment worths a lo
Chicago State University CH1 The Age of Sustainable Development Paper Hello, please check the instructions and the assignment 1. The assignment worths a lot.
Readings
Canvas-SDGs Africa:
Jeffrey Sachs. The Age of Sustainable Development. Chapter One (pdf)
John W. McArthur: Own the Goals – What the Millennium Development Goals have Accomplished, Foreign Affairs, March/April 2013
Nancy Birdsall, Dani Rodrik & Arvind Subramanian (2005). How to Help Poor Countries. Foreign Affairs 84(4): 136-152
TED talks:
Jacqueline Novogratz: Invest in Africa’s own solutions (video 2005): http://www.ted.com/talks/jacqueline_novogratz_invests_in_ending_poverty.html
A Quest to End Poverty a video playlist (2013): http://www.ted.com/playlists/67/the_quest_to_end_poverty.html
MDG & SDG:
The Millennium Development Goals (MDGs) and the Sustainable Development Goals (SDGs): Since their inception in 2000, The Millennium Development Goals have revolutionized the global aid business, using specific targets to help mobilize and guide development efforts. They have encouraged world leaders to simultaneously tackle multiple dimensions of poverty and provided a standard for judging performance. The MDGs expired the end of 2015 and new goals, the SDGs, are in place now.
Please inform yourself about the MDGs and SDGs theres a lot of material on Canvas and elsewhere online. You can start here:
SDGshttp://www.undp.org/content/undp/en/home/sustainable-development-goals.html
Success Story?https://www.wvi.org/united-nations-and-global-engagement/article/were-mdgs-success
2030 Agenda for Sustainable Development https://sustainabledevelopment.un.org/post2015/transformingourworld
Africa:
54 countries 55 states are recognized by either AU, UN or both
https://africacheck.org/reports/how-many-countries-in-africa-how-hard-can-the-question-be/
African Union https://www.au.int/
Somaliland http://www.bbc.com/news/world-africa-14115069
News: https://allafrica.com/
Written Blog Post #1 marked on blog as Post 1: due by midnight the day before the class meets
8/27 for the Tuesday class; 8/28 for the Wednesday class
a) Jacqueline Novogratz in her TED talks brings up the question on how to define poverty. What is her answer? What is her main message? Find at least one other TED talk on this subject and reflect on it.Do you agree or disagree with the message?
b) What is the vision, the goal of the SDGs? What is the effect of neo-liberalism (cutting government spending promoted by the World Bank and IMF)?
c) John McArthur in Own the Goals talks about Players on the Bench. Who are they and what does he criticize?
d) The article How to Help Poor Countries (2005) addresses the question of more aid money. Please elaborate. What are suggestions made by the authors? Do you agree? July/August 2005
ESSAY
How to Help Poor Countries
Nancy Birdsall, Dani Rodrik, and Arvind Subramanian
Nancy Birdsall is President of the Center for Global Development in Washington,
D.C. Dani Rodrik is Professor of International Political Economy at Harvard’s
John F. Kennedy School of Government. Arvind Subramanian is Division Chief in
the Research Department of the International Monetary Fund. The views
expressed here are their own and not those of their respective institutions.
GETTING DEVELOPMENT RIGHT
The year 2005 has become the year of development. In September, at the UN
Millennium Summit meeting of heads of state, in New York, leaders of wealthy
nations will emphasize their commitment to deeper debt relief and increased aid
programs for developing countries. The Millennium Development Goals, the
centerpiece of the conference’s program, call for halving the levels of world
poverty and hunger by 2015.
The summit will focus on increasing international aid to 0.7 percent of donors’
gross national product to finance a doubling of aid transfers to especially needy
areas, particularly in Africa. With respect to global trade, efforts will center on the
Doha Round of multilateral trade negotiations and opening markets to important
exports (such as cotton) from developing countries. The discussions will thus
proceed based on two implicit but critical underlying assumptions: that wealthy
nations can materially shape development in the poor world and that their efforts
to do so should consist largely of providing resources to and trading opportunities
for poor countries.
These assumptions ignore key lessons of the last four decades — and of economic
history more generally. Development is something largely determined by poor
countries themselves, and outsiders can play only a limited role. Developing
countries themselves emphasize this point, but in the rich world it is often
forgotten. So too is the fact that financial aid and the further opening of wealthy
countries’ markets are tools with only a limited ability to trigger growth, especially
in the poorest countries. The tremendous amount of energy and political capital
expended on these efforts in official circles threatens to crowd out attention to
other ways in which rich countries could do less harm and more good. A singular
focus on aid and market access at the September 2005 Millennium Summit should
not leave other potentially rewarding measures on the back burner.
BOOTSTRAPS
Consider Nicaragua and Vietnam. Both are poor countries with primarily
agricultural economies. Both have suffered from long periods of conflict. And
both have benefited from substantial foreign aid. But only Vietnam has reduced
poverty dramatically and enjoyed steady economic growth (five percent per capita
since 1988). Nicaragua has floundered economically, with per capita growth too
modest to make a real dent in the number of poor people.
Vietnam faced a U.S. embargo until 1994, and it is still not a member of the World
Trade Organization (WTO). Despite these obstacles, it has found markets for its
growing exports of coffee and other agricultural products and has successfully
begun diversifying into manufacturing as well, especially of textiles. Nicaragua,
on the other hand, benefits from preferential access to the lucrative U.S. market
and had several billion dollars of its official debt written off in the 1990s. Yet its
coffee and clothing export industries have not been able to compete with
Vietnam’s.
Why has Vietnam outpaced Nicaragua? The answers are internal: history and
economic and political institutions have trumped other factors in determining
economic success. Access to the U.S. market and the largesse of Western donors
have not been powerful enough to overcome Nicaragua’s history of social and
economic inequality: land and power there have long been concentrated in the
hands of a few elites, and the government has failed to invest enough in
infrastructure and public welfare.
The experiences of many other developing countries confirm the importance of
specific internal factors. Like Vietnam, neither China nor India — the two
emerging superstars of the last quarter century — has benefited from trade
preferences. And neither has received much foreign aid compared to countries in
Africa and Central America. But by enacting creative domestic reforms, China and
India have prospered, and in both countries poverty has plunged.
On the flip side, many African countries have been unable to match Vietnam’s
success, despite being no poorer or more agrarian. True, education and health
indicators have improved markedly in Africa, and some of its countries have
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achieved macroeconomic stability. But even in the best-performing countries,
growth and productivity remain modest, and investment depends completely on
foreign aid infusions. It may be tempting to ascribe the rare African successes -Botswana and Mauritius, for example — to high foreign demand for their exports
(diamonds and garments, respectively), but that explanation goes only so far.
Obviously, both countries would be considerably poorer without access to markets
abroad. But what distinguishes them is not the external advantages they enjoy, but
their ability to exploit these advantages. Natural resource endowments have often
hurt many developing countries: the word “diamond” hardly conjures images of
peace and prosperity in the context of Sierra Leone, and oil has been more curse
than blessing for Angola, Equatorial Guinea, Nigeria, and many others.
Witness the case of Mexico. It has the advantage of sharing a 2,000-mile border
with the world’s greatest economic power. Since the North American Free Trade
Agreement went into effect in 1994, the United States has given Mexican goods
duty-free access to its markets, has made huge investments in the Mexican
economy, and has continued to absorb millions of Mexican laborers. During the
1994-95 peso crisis, the U.S. Treasury even underwrote Mexico’s financial
stability. Outside economic help does not get much better. But since 1992,
Mexico’s economy has grown at an annual average rate of barely more than one
percent per capita. This figure is far less than the rates of the Asian growth
superstars. It is also a fraction of Mexico’s own growth of 3.6 percent per year in
the two decades that preceded its 1982 debt crisis. Access to external markets and
resources has not been able to make up for Mexico’s internal problems.
A notable exception to the limitations of outside assistance is European Union
membership. By offering its poorer eastern and southern neighbors not just aid
transfers and market access but the prospect of joining the union, the EU has
stimulated deep policy and institutional changes and impressive growth in about
20 countries. But the exception proves the rule: the EU is not just an economic
arrangement; it is also a political system in which member states transfer extensive
legal powers to the central authority. In return, the center shoulders significant
responsibilities for the economic well-being of each member.
Unfortunately, accession to the EU or to any other major power is not an option
for most of the poorest parts of the world — and increasing the financial resources
and trading opportunities for the poorest countries is not a sufficient substitute.
EASY ACCESS
To start, there is the question of market access. Currently, the international trade
system is full of inequities. Rich countries place their highest tariffs on imports
important to developing countries — garments and agriculture, for example. The
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tariffs escalate as the level of processing increases, discouraging industrialization
in the poor countries. In addition, multilateral trade negotiations lack transparency
and often exclude developing countries from the real action. Using WTO
procedures to settle trade disputes requires money and technical expertise, both of
which poor countries lack.
But to say that these flaws seriously hamper development in struggling economies
would be to overlook the remarkable success in the last two decades of Vietnam
and China in exporting manufactured goods, of Chile in exporting wine and
salmon, and most recently of India in exporting services. These countries have
achieved success in exporting, despite the impediments. And barriers on
manufactured exports from developing countries were even higher when the Asian
“tigers” first arrived on the scene in the 1960s and 1970s.
Many argue that agricultural tariffs in particular represent an impediment to poor
countries’ economic growth. The World Bank and organizations such as Oxfam
argue that doing away with agricultural subsidies and protectionism in
industrialized nations would significantly reduce poverty in the developing world.
European cows, the famous example goes, are richer — receiving $2.50 a day each
in subsidies — than one-third of the world’s people.
Yet the reality is that liberalizing agricultural trade would largely benefit the
consumers and taxpayers of the wealthy nations. Why? Because agricultural
subsidies serve first and foremost to transfer resources from consumers and
taxpayers to farmers within the same country. Thus, citizens of developed
countries would derive the most benefit from having those subsidies cut. Other
countries are affected only insofar as world prices rise. But the big, clear gainers
from such price increases would be countries that are large net exporters of
agricultural products — rich countries, such as the United States, and middleincome countries, such as Argentina, Brazil, and Thailand.
What about the poorer countries? For one thing, many poor countries are actually
net importers of agricultural products, and so they benefit from low world prices.
An increase in prices may help the rural poor, who sell the agricultural goods, but
it would make the urban poor — the consumers — worse off. Net poverty could still
be reduced, but to what extent depends in complicated fashion on the working
condition of roads and the markets for fertilizer and other inputs, on how much of
the gains are captured by poor farmers versus intermediaries, and on the poverty
profile of each country.
Regardless of whether agricultural liberalization increases or decreases poverty,
the impact would not be significant. Most studies predict that the effect of such
liberalization on world prices would be small. The International Monetary Fund
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(IMF) estimates that world prices would only rise by 2-8 percent for rice, sugar,
and wheat; 4 percent for cotton; and 7 percent for beef. The typical annual
variation in the world prices of these commodities is at least one order of
magnitude larger.
Take cotton specifically. The largest credible estimate of the impact of the
complete removal of U.S. cotton subsidies on world prices is less than 15 percent.
How much of an effect could this have on farm incomes in West Africa? There is
actually a useful benchmark for comparison. In 1994, the member states of the
Communauté Financière Africaine currency zone (in which 14 African countries
have had their currencies pegged to the French franc since 1948) devalued their
currency from 50 to 100 CFA francs per French franc, effectively doubling the
domestic price of cotton exports. If at least some of the resulting price gain had
gone to cotton farmers (and not to intermediaries or inflation), the farmers’
incomes would have increased in countries such as Burkina Faso and Benin.
Indeed, the price gain should have increased income and decreased poverty even
more than would the complete removal of U.S. cotton subsidies. There is little
evidence that a significant reduction in rural poverty took place, however. A
World Bank study found that poverty in Burkina Faso remained stubbornly high
and even increased in parts of the country.
Furthermore, a general reduction of trade barriers in rich countries could leave
some of the world’s poorest countries worse off. A substantial part of leastdeveloped countries’ exports enjoy favorable conditions of access to the markets of
rich countries under various preferential trade arrangements. With the end in
January 2005 of the long-standing system of quotas on apparel, for example, poor
countries such as Bangladesh, Cambodia, and Lesotho, which benefited from
preferential arrangements, justifiably have been fearing competition from China
and Vietnam. The loss of preferential access for the poorest countries is not a
justification for stopping trade liberalization in its tracks. But it is an additional
reason to be cautious when estimating the magnitude of poor nations’ gains from a
trade-centered agenda.
Of course, if global trade and growth were to implode, as in the period between
the world wars, international development would receive a serious blow. A
healthy multilateral trading system is important to keep the possibility remote, and
it can protect the poorest countries from unreasonable bilateral pressures. A
successful Doha Round could stimulate trade among developing countries and
would signal a political willingness on the part of the international community to
keep the system purring and prevent an implosion — even if the actual gains for
the poorest countries from trade-barrier reductions would be modest.
MORE MONEY?
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If not better market access, what about more aid? Boosting assistance to the
poorest countries of the world is a central recommendation of the recent reports of
the UN Millennium Project and British Prime Minister Tony Blair’s commission
on Africa, and, along with reduced corruption and better management in poor
countries, it is a cornerstone of the strategy envisaged to achieve the Millennium
Development Goals.
Aid has accomplished some great things. On the health front, smallpox has been
eradicated, infant mortality rates have been lowered, and illnesses such as diarrhea
and river blindness have been widely treated. Aid programs have improved
women’s access to modern contraception in Bangladesh and Egypt and helped
increase school enrollment in Uganda and Burkina Faso. Aid also pays for much
of the (still-limited) access to AIDS medicines in poor countries. In the last
decade, aid has helped restore peace and order after conflicts in places including
Bosnia, East Timor, and Sierra Leone. In addition, aid can be a vehicle for policy
advice and dialogue between recipients and outsiders. There have even been
macroeconomic successes, such as the $1 billion grant that allowed Poland to
establish an exchange-rate stabilization fund in 1990. By stabilizing the Polish
currency, this relatively small amount of financing provided valuable breathing
space for the implementation of broader policy reforms.
What these successes share is that they were narrowly targeted at specific
objectives. Assistance does work well, but only when the recipient countries do
the right things to help themselves and have the capacity and the leadership to
spend the money wisely. Some statistical evidence indicates a link between
financial assistance and growth. But aid has not been associated with the sustained
increases in productivity and wages that ultimately matter. During the 1990s, for
example, countries in sub-Saharan Africa received funding amounting on average
to about 12 percent of their GDP, while their average growth rate per capita
declined by 0.6 percent per year. Meanwhile, some of today’s development
successes — such as Chile and Malaysia — relied little on aid. And aid to China
and India has been very small.
There are many reasons for the mixed performance of foreign assistance. Donors
themselves cause many of the problems. Recipient countries can be overwhelmed
by the multiplicity of donors pursuing many, even inconsistent, objectives,
disbursing aid to innumerable projects and imposing a plethora of conditions on its
use. These factors contribute to rather than offset a poor country’s lack of
institutional capacity. On top of that, there is the natural volatility and uncertainty
of foreign aid, which make it difficult for recipient governments to plan their
budgets. For more than a decade, the bureaucracies of donor states and
organizations have been unable, despite good intentions and constant resolve, to
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change the political incentives and constraints that impede the reform of their aiddelivery apparatuses.
Probably more important, however, are institutional deficiencies on the recipients’
side. Aid is only as good as the ability of a recipient’s economy and government to
use it prudently and productively. Thus, the fundamental dilemma: countries most
in need of aid are often those least able to use it well. That sets limits on the extent
to which large infusions of foreign funds can make a difference.
The greatest example of the success of aid — the Marshall Plan — illustrates the
importance of homegrown institutional competence. Because the institutions and
capabilities of the United Kingdom, France, and Germany survived the war to a
large extent, even their war-ravaged economies were able to exploit fully the
potential of financial assistance.
This simple point addresses the view that aid is a sine qua non for African
development on account of the continent’s bad geography and favorable
environment for diseases. A country’s growth may in fact be hampered by its
unsuitability for agriculture, its isolated geography, and its susceptibility to
malaria and other tropical diseases. In such cases, it might seem appropriate that
donors give more. But adverse geography does not fundamentally alter the fact
that the effectiveness of assistance depends on the institutions of the recipient
country. At its best, aid has helped nations rebuild after conflicts and assisted in
achieving specific objectives. But its role in creating and sustaining key
institutions and long-term economic health has been much less clear.
SINS OF COMMISSION
To help developing countries help themselves, wealthy nations must begin to lift
the burdens they impose on the poor. Currently, the developed world uses
international trade agreements to impose costly and onerous obligations on poor
countries. The most egregious example has been the WTO’s intellectual property
agreement, the Trade-Related Aspects of Intellectual Property Rights (TRIPS).
Despite recent efforts to cushion its impact on the poorest countries, TRIPS will
make the prices of essential medicines significantly greater, and this at a time
when poor countries are being ravaged by one of the worst health epidemics ever
known — HIV/AIDS. The price increase means that money from the citizens of
poor countries will be transferred directly to wealthy pharmaceutical companies.
The resulting revenue, although a significant amount of money for the poor
countries, will be a relatively small part of the companies’ net total profits — hardly
enough to induce extra research and development.
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An international community that presides over TRIPS and similar agreements
forfeits any claim to being development-friendly. This must change: the rich
countries cannot just amend TRIPS; they must abolish it altogether. A simple
comparison makes the point clear: major industrial countries such as Italy, Japan,
and Switzerland adopted pharmaceuticals patent protection when their per capita
income was about $20,000; developing countries will adopt it at income levels of
$500 per capita, in the case of the poorest, and $2,000-4,000 for the middleincome countries. By these standards, forcing developing countries to abide by
TRIPS is about 50-100 years premature.
But costly obligations are not restricted to TRIPS. Trade agreements between the
United States and countries such as Jordan, Morocco, and Vietnam have required
the latter to adhere to intellectual property regulations that go beyond TRIPS,
further increasing the patent holder’s monopoly and restricting access to
medicines. Other trade agreements have called for developi…
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