By Jeffrey SACHS,
Director of the Harvard Institute for International Development and
Gallen Stone Professor of International Trade at Harvard University, has
been chief foreign economic advisor to the governments of Russia, Poland,
and Bolivia.
JEFFREY SACHS
CAMBRIDGE: The rich countries meeting in June at the G-7 Economic Summit
in Cologne had some interesting things to declare about their relations
with the poor countries. First, they acknowledged without ever quite admitting
it that their earlier attempts to reduce developing-country debt had failed.
Therefore they signaled the start of a new program, immediately dubbed
the Cologne Initiative, to reduce further the debt burden of the so-called
Highly Indebted Poor Countries (HIPCs). Second, they instructed the IMF
and the World Bank to rethink their development strategies, in order to
put more focus on social problems, particularly health and education.
One could of course be quite cynical about both announcements. After
all, it has been clear to most objective observers for many years that
the rich countries had no realistic strategy for reducing the unrecoverable
debts of the poor countries, yet such critics were told to be patient,
that everything was okay. Moreover, only the finance ministers of the G-7
could possibly have believed that the IMF and World Bank were doing a good
job in the poorest countries. In truth, their record is often disastrous,
or simply irrelevant. The IMF in particular has no strategy for long-term
economic development, even though the United States has assigned the IMF
the lead role in economic development in dozens of poor countries.
Another reason for cynicism is that the G-7 did not move mainly on their
own initiative, but rather in response to a growing cry of international
civil society for action on behalf of the world's poorest. Credit for the
Cologne Initiative goes strongly to the worldwide movement known as Jubilee
2000, a grassroots movement based on the biblical concept of Jubilee, in
which unrecoverable debts should be forgiven in order to allow the debtor
to make a fresh start in life. The Jubilee 2000 movement has adherents
in all parts of the world, including Pope John Paul II, rock stars such
as Bono of the Irish group U2, and non-governmental organizations representing
many religions and professions.
We should move beyond cynicism, however, in embracing the new Cologne
Initiative, especially to push the G-7 countries to do all that needs to
be done to make the Initiative successful. The details of the Initiative
announced in Cologne were disappointing, but these details can still be
changed under international public pressure. At least the initiative pointed
in the right direction.
The motivation for urgent action on behalf of the poorest nations is
clear. The 42 countries that are part of the HIPC initiative have a combined
population of around 700 million. Around three-fourths of these people
live in Africa. The combined HIPC population has a life expectancy of around
50 years, compared with 78 years in the rich countries. Around one-third
of their children are malnourished, and will consequently suffer a lifetime
of physical and cognitive disabilities. Many will never finish even primary
school or be able to play an effective role in modern society. Diseases
are rampant, including an AIDs epidemic that killed about 2 million people
in Africa last year, and malaria, which took over 1 million lives.
A successful Cologne Initiative would build on the following concepts.
First, the debts of the countries suffering from extreme poverty and illness
would be forgiven entirely. Around 25 countries out of the 42 HIPC countries
probably need complete debt cancellation. Second, the United Nations Development
Program (UNDP) and the World Bank, rather than the International Monetary
Fund, should take the lead in helping these countries. Both the UNDP and
the World Bank would help to ensure that debt forgiveness opens the way
to new and ambitious programs of social improvement, focusing on health
and education.
The UNDP should turn its annual Human Development Reports into concrete
guidelines for social action, to help ensure that each impoverished country
has the adequate resources to provide effective programs for children's
vaccines, AIDS prevention, meals for impoverished children, improved access
to clean water, and mother-and-infant medical care. The UNDP should also
have the task of coordinating the specialized agencies of the United Nations
on behalf of the world's poorest, to ensure that key organizations such
as United Nations Children's Fund (UNICEF) and the World Health Organization
(WHO) have the access and financial resources to fulfill their missions.
The Cologne Summit announcements so far fall short of these objectives.
The debt relief proposals are still too small. The role of the IMF remains
too large. Public health goals are still too far down the list of priorities.
But we should maintain hope and pressure on the international organizations
and the rich countries. Already, international actions have pushed the
G-7 in a new and hopeful direction. With a continued worldwide movement
on behalf of global justice and economic development, a much more ambitious
program for the world's poorest can still be reached.
© Project Syndicate, June 1999







