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Poverty amidst plenty:
But is a doubling of aid really a solution to the crisis?
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In
the end of poverty: economic Possibilities For Our Time, Jeffrey
Sachs documents the 'end of poverty' scenario with passion and
conviction. It is a universal dream, much like the dreams encapsulated
in rock music, from the Beatles to U2. Sachs makes three major
points in defence of the dream that now is the time poverty can
be ended.
First, that the aid provided by donor countries
in the past was inadequate; second, that the way the aid was channelled
was inappropriate; and third, that "new" policies are
necessary.
In essence, time for a "new" order,
and, more money. Sachs asserts that today only 0.6 per cent of
the rich world's GDP is needed to eradicate poverty. Since for
decades the rich have agreed, in principle, to give aid equal
to 0.7 per cent of GDP, the end of poverty can happen on our beat.
Sachs recognises that aid has not been fruitful
in the past. But his answer: we need more aid! How much more:
roughly double the present $60 billion (Rs 2,64,000 crore). But
this time, we are assured, if directed towards infrastructure,
education, health, governance, the result will be different. But
that's precisely what the World Bank etcetera have been doing
since inception 60 years ago. So what does the present (and past)
$60 billion-a-year not achieve that the new $120 billion (Rs 5,28,000
crore) will achieve?
Sachs
does not have the answer, but he has the faith. One has come to
expect significant value-addition from Sachs. But his book is
mostly a case of value-subtraction. Why this harsh conclusion?
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THE END OF POVERTY
Economic Possibilities For Our Time
By Jeffrey D. Sachs
Penguin
PP: 396
Price: Rs 792
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Let's look at Sachs's analysis, diagnoses
and policy conclusions-the clues are the heavy recycling of old,
old ideas. Analysis: "Even though life-saving solutions exist...
these families and their governments simply lack the financial
means to make these crucial investments". Diagnosis: "The
chronic lack of donor financing robs poor countries of their poverty-fighting
zeal." Solution: "When we get practical,
and speak of investments in specific
areas-roads, power, transport, soils, water and sanitation, disease
control-the task is suddenly a lot less daunting... As I have
stressed repeatedly, the actual transfer of funds must be based
on rigorous, country-specific plans that are developed through
open and consultative processes, backed by good governance in
the recipient countries, as well as careful monitoring and evaluation".
Since
Sachs quotes fellow travellers of the poverty industry, pi (examples:
World Bank, United Nations Development Programme) so approvingly,
he should know that "rigorous analysis, consultative process,
good governance, country-specific plans, mothers' milk" etcetera
are precisely what the pi has done for the last 40 years, and
claims it will do for the next fifty. (Ending poverty is a never-ending
process). But is that reason enough for the rich countries, or
anyone for that matter, to double the aid money? And along the
way, to increase allocations to international agencies by 50 per
cent, to $15 billion (Rs 66,000 crore) a year? No. But Sachs says
'yes'. (Presumably, more aid for the wolf will ensure better teeth
for better treatment of poor, poor Snowblack).
The question remains: how successful has
aid actually been in reducing poverty? In 1987, world poverty
was 28 per cent of the world's population. After 14 years of robust
growth, both in developing country GDP (especially Asia) and in
aid, poverty has been brought down to only 24 per cent; that is,
a cumulative pace that did not even exceed population growth!
Now I believe these numbers vastly understate the decline in poverty,
and that growth worked rather well in reducing poverty. Considerable
evidence also exists to at least hint at the possibility that
aid was not effective. So what's the case for more of the same?
The poverty industry advocates a virtuous
circle for themselves and a vicious cycle for the poor. The pi
claims that but for them, the poverty problem would be even greater.
That they have spent money only to help-so what if large amounts
went to create jobs, and rich incomes, and rich pensions in the
West. At least, the goal of the anointed, by the anointed, and
of the anointed, was noble. Success was not possible because there
wasn't enough money. Double the money, and follow the same policies,
and Sachs assures us, the performance will also double. Which,
on a low base of past performance, will not be enough to reduce
poverty by much; and then the pi experts will argue for yet more
money. Keeps everyone in business, and happy to be doing something,
anything, to help the poor.
This book is about the end of nightmares.
The difference between Sachs and others who share his vision (difficult
not to share it-how can one be opposed to waking up each morning
to a "beautiful day"?) is that it is indeed okay, even
desirable, for rock star Bono (who writes the foreword) to set
the pace for our dreams. Rock stars are allowed, even expected,
to be idealistic. And Bono deserves all the accolades for his
music, and for his fight for the downtrodden. Alas, the same cannot
be said of Sachs. Economists are trained to be realists. The advocacy
of dreamonomics or Bononomics is not something expected of an
economist, let alone a star economist.
-Surjit
Bhalla
The reviewer is the author of Imagine There's
No Country: Poverty, Inequality and Growth in the Era of Globalization,
IIE, Washington, 2002
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CUSTOMER MANIA
By Ken Blanchard, Jim Ballard &
Fred Finch
Harper Collins
PP: 194
Price: Rs 195 |
Billed as 'the
ultimate customer services book' by no less than Tom Peters, Customer
Mania provides an insightful account of building a superlative
customer service organisation through the lens of Yum, the restaurant
company that runs kfc, Pizza Hut and Taco Bell.
Ken Blanchard, the celebrated author of the
One Minute Manager series and his co-authors advocate a common
sense as common practice approach here. Treat customer-facing
employees as the most important people in your company, and then
they in turn will treat customers as the most important people
in the world. And just how? Understand people involved with your
business-customers, suppliers, franchisees, employees and investors.
And if that sounds too simple, even simplistic... well, it is
pretty much so, say the authors.
Spelling out a four-step formula, rooted
in Yum's experience in turning itself from a lacklustre entity
five years ago to a hot-and-happening company today, the book
explains how to build a customer-focussed company. The good part:
the book does not fight shy of asking tough questions.
-Shailesh Dhobal
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HOW TO DEAL WITH VAT
By Kul Bhushan
Pearson Power
PP: 197
Price: Rs 195 |
Even after 10
years and countless jaw-jaw sessions, India's state-level value-added
tax, or vat, continues to elude national consensus. It has been
witness to the rise and fall of many a government portraying it
as a good way to simplify taxation and curb black money, without
actually implementing it.
Finally, on April 1, 2005, it was activated
in most states, but it is still not VAT as the international community
knows it. Popular ignorance of vat has been a hurdle, as also
resistance from small shopkeepers. Here, Kul Bhushan, former editor
of The Nation, presents a vat primer that cuts out all the jargon.
Step by step, the book takes the reader through how to calculate
and pay it, with a few light-hearted quips along the way. The
100 Frequently Asked Questions on vat are a help as well.
-Ashish Gupta
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