Through a trial-and-error process (conducted on and off Sajha), I knew that
reviewing their books in a negative light or commenting unfavorably (but with
verifiably true evidence) upon the public actions of some well-known Nepalis
can lead to:

a) ad hominem attacks
b) loss of friendship
b) desperate attempts to damage one's reputation, and so on and on.

But I was NOT aware of the extent even big-shot economists such as Jeff Sachs take a bad review in a newspaper in this manner (see below).

oohi
ashu

http://www.washingtonpost.com/wp-dyn/articles/A64541-2005Mar24.html

Letters
Sunday, March 27, 2005; Page BW12

Up From Poverty

William Easterly, who reviewed my book The End of Poverty (Book World, March 13), is notorious as the cheerleader for "can't-do" economics. For years as a World Bank staffer, he watched failed programs during the era of World Bank "structural adjustment lending" and reached the erroneous conclusion that any bold effort to help the poorest of the poor would fail. He wrongly made the Bank's shortcomings into a general theory. The World Bank has since moved on, but Easterly has not.

When The Washington Post asked Easterly to review my book, therefore, it knew it would get a polemic, not a review. True to form, Easterly provides a crude caricature of my ideas. Easterly asserts, as he has falsely done before in the New York Times, that I envision a vast central-planning apparatus led by the U.N. secretary general and legions of U.N. staff. What I actually say is that the specialized U.N. organizations like UNICEF can offer great expertise to poor countries, not that they should be central planners. I also say that the secretary general should help coordinate the efforts of U.N. agencies, the International Monetary Fund, the World Bank, and donors. As the book makes utterly clear, poverty reduction must be managed by poor countries themselves, starting in the villages.

Easterly criticizes my "mind-numbing technological jargon" concerning nitrogen-fixing trees, antiretroviral medicine and rainwater harvesting. Sorry, but that's the stuff of real life for poor people -- how to grow crops, fight disease, survive droughts. Easterly has a trained incapacity -- seeing every development problem as a problem of corruption, rather than an issue as well of soils, disease and isolation. Both governance and geography play a role.

Easterly's simplistic approach fits well with many conservatives in Washington, who would rather blame the poor than help them. Somehow the world's poorest people are made out to be our enemy. According to this upside-down worldview, the people dying of malaria are out for our money -- all $3 per year that it would cost each person in the rich world to help Africa mount an effective control program!

Easterly's call to do things piecemeal is vacuous. Shall we do vaccinations this decade, AIDS control the next, malaria control in the 2020s, clean drinking water in the 2030s, and food production in the 2040s? There is no reason why we can't help poor countries to invest in clinics, schools, roads and improved farms during the next 20 years. The size and scope of the requisite effort -- less than 0.7 percent of rich-world GNP (i.e., 70 cents on each $100 of GNP) -- is modest.

Easterly's tendentious claims about decades of wasted aid are flat-out wrong, and my book takes on these fallacies in detail (as does an article of mine in the March/April issue of Foreign Affairs). Most of the small flow of U.S. aid to Africa has been for emergency food relief and consultant salaries, rather than investments in clinics, schools and the like.

Easterly's charge that I am utopian gets it backward. Easterly's World Bank experience made him into a dystopian, seeing the worst in everything and expecting failure everywhere. I have had the good fortune to participate in successful efforts to stop hyperinflations, introduce new and stable national currencies, convert centrally planned economies to market economies, and establish the Global Fund to Fight AIDS, TB and malaria. The results are practical solutions to pressing problems.

Easterly's diatribe is his stock and trade. What is less predictable is that The Washington Post would have passed up the chance to discuss the ideas in my book. It's too bad, since our nation's misguided under-investment in ending poverty is one of the great blunders of our foreign policy and one of the great missed opportunities of our time. It's so wrong-headed, in fact, that it is likely to change significantly in the next few years.

JEFFREY D. SACHS

New York, N.Y.

William Easterly replies:

Well, at least he didn't mention my bald spot! It's a shame that Jeffrey Sachs chose ad hominem attacks over intellectual debate. His colorful vitriol didn't leave him room to answer the key questions. Why didn't aid officials implement his easy solutions to world poverty already, after half a century of foreign aid? How will his top-down, many-pronged solutions conceived in New York get feedback from the faraway poor on whether they are actually getting what they most need?

For example, Sachs says that modest sums would control malaria in Africa. Doesn't he have a little curiosity about why this easy problem wasn't solved with some of the $568 billion (in today's dollars) in foreign aid given to Africa over the last 43 years? His answer seems to be that there was too much aid going to emergency food relief (5 percent of rich-country aid to Africa from 1975 to 2003) and consultant salaries.

It's intriguing that someone calling for (and providing) so much foreign technical advice to Africa (including advice on controlling malaria) implies that consultant salaries are a waste -- they were 25 percent of aid to Africa over 1975-2003. Anyway, if it takes so little, the other 70 percent of the aid budget should have had enough room to control malaria, but it didn't. And yet there was progress in other areas, like increased vaccination and access to clean water in Africa. Shouldn't we examine why these things worked and others didn't? The piecemeal approach doesn't mean less money or less effort for the poor; it means redirecting resources away from the utopian schemes at the top (that have already failed) toward rewarding those at the bottom who find things that work for the poor.

The Editor adds:

In reference to Jeffrey Sachs's assertion that The Washington Post "passed up the chance to discuss the ideas" in his book: Sachs appeared on Book World Live on Tues., March 15, to discuss those ideas directly with our readers.

Looks like both of them are consultants. The high demanding and less working types.
I personally feel the world would be a better place if there were no development workers in the first place because practically speaking they are always responsible for painting depressing picture on anything.

Just look at the above debate, only a development worker can have all the time to do those things. Does all that make any sense???? Sorry this seem off topic ....

manab, i would not classify jeffrey sachs under the "high demanding and less working type" category. just check out his bio at http://www.earthinstitute.columbia.edu/about/director/fullbio.html
and you will realize that he has done a lot to alleviate poverty and increase awareness of the myriad problems that third world countries confront. he is also a formidable academic (tenured full prof at harvard at age 29).

i must say that i have not heard of easterly. while this mud slinging certainly is not worthy of jeff sachs, i say that when people try to misrepresent you, you cannot afford to keep quiet.

But then there is no guarentee that just because you are in Harvard you can rock the world. I am more for street smart people. I am too anti - NGOs workers to even consider them any good at all.

I think the greatest social workers and the people contributing to poverty reduction are the businessmen and no matter how small they are, i am with them always....rest are all hoax and paper work..........

no, he does not need a piece of paper to show that he rocks. his actions speak for themselves - just check out the stuff he's done in many developing countries in south america/africa. however, i agree that businessmen also have made a significant impact. examples: the bill and melinda gates foundation, the carnegie corporation, the getty foundation, ford foundation, etc. etc.

Here is an old interview with Jeffrey Sachs whe he visited Nepal about 10 years ago.
Some of the stuff in the following interview is dated, of course. But parts of the interview might still be relevant, even with China's rising to the north of our border.

Enjoy,

oohi
ashu
************************************

ENJOY THE UPDRAFT OF THE INDIAN ECONOMIC BOOM

Jeffrey D. Sachs

Hailed as "probably the most important economist in the world" by the New York Times, Jeffrey D. Sachs, is the Galen L. Stone Professor of International Trade at Harvard University -- the institution from where he earned his BA summa cum laude in economics in 1976 and a PhD in 1980. A vocal and influential advocate of "shock therapy" (that is, rapid transition from command to market economy), Professor Sachs has served as an advisor to the governments of, among other countries, Bolivia, Poland, Mongolia, and was, until last January [1994], the leader of the team of advisors to Boris Yeltsin. [He was also named as one of the "Fifty for the Future: Time's roster of America's most promising leaders age 40 and under" (Time, December 5, 1994). He was said to be "to ailing economies what Albert Schweitzer was to disease-stricken backwaters."] In Kathmandu last August on a private visit, Harvard's most widely- known economist since John Kenneth Galbraith spoke to Ashutosh Tiwari in the lounge of the Yak'n'Yeti Hotel. Excerpts from the 40-minute interview:

QUESTION: The economic order of the world is in transition. Political changes are underway in many countries. Command markets are going the way of free markets. Meantime, critics are saying that it's not democracy that has triumphed, but consumerism. As an advocate of free market, how do you respond to this charge?

SACHS: I don't see [the worldwide economic transition] as a triumph of consumerism. I see it more as a triumph of political freedom and economic freedom. Freedom in and of itself is for the people to be able to satisfy their highest aspirations. Besides, practically speaking, we have seen that those countries which have allowed free markets, that is privately-led, outward-oriented economies, to function have prospered the most.

Earlier, the strategy was to let the state control the market. Now, [the transition] has proven that the state-led economic growth has largely failed -- in country after country, state after state. People previously under economies that did not allow free market are now exercising their freedom to experiment with it.


QUESTION : In your lecture [at the Bankers' Club in Thapathali on August 26], you said that as part of economic reforms, state-led industries should be privatized. In Nepal, privatization is widely seen as giving "democracy" only to those who have "capital" as opposed to those who have "wealth." How can privatization work when, in practice, its starting premise is biased against the poor?

SACHS: Worldwide experience shows that state-led industries bleed the national treasury. Governments cannot go on bailing out the ailing firms all the time. Privatization is one way to reduce the burden of the state and make those industries accountable and responsive to the market forces.

Privatization does not mean giving the firm to your friend: It takes great political skill and sensitivity on the part of the government to push it through. The major prerequisite to privatization is that the process should be open, honest, competitive and transparent. The workers within the enterprise and others must feel that they have a stake in firms that are being privatized. As in Mexico, the government could earmark a part of privatization funds to go into social sectors, and stick to that commitment. Shares could be sold at low prices so that even the poor can afford them -- a strategy along the lines of Margaret Thatcher's 'popular capitalism.'

Greater the care taken to make the process of privatization fair and transparent, the greater and the more effective the benefits. Compared to India's, however, Nepal's privatization is ahead and doing well. You've privatized three or more industries; while India has privatized none . . . (laughter) you be the leader, and show India the way to reforms.

QUESTION:Talking of India, you have said that "[it may well be] the fastest growing nation in the developing world in the second half of the Nineties." Why?

SACHS: India has a vast reservoir of labor and talent. With stable democracy, a good legal system and able entrepreneurs, it is poised for economic growth. In 1991, it introduced economic liberalization. Its previously closed economy has opened up to the outside world. It has reduced tariff barriers, made the rupee partially convertible and done away with the license system. But all that is not enough for India to be a true powerhouse -- for which India has ample potential -- in the world economy.

QUESTION: Why?

SACHS: Because all those steps go only half the way to full liberalization. Trade reforms have yet to take place in India. Consumer goods, for example, are not up for trade with other countries. Indians are ambivalent to foreign direct investment
(FDI): They are afraid that Americans will start buying up their industries.

But trade is a two-way street, benefiting all. Labor is highly regulated in India. Labor law reforms are necessary. Financial sectors such as banks should be strengthened away from the grasp of the state, and value-added tax structure, together with privatization, could pave the way to growth. In addition, private sector could finance some of India's infrastructure- building activities such as road, power, and telecom. All these would actually free the government, currently burdened with running almost all the sectors, to concentrate on the most needy sectors such as health, education, and spreading the wealth to the poor.

QUESTION: But given India's reluctant and suspicious politicians, what's to keep them from not going full steam ahead with reforms? What's the incentive for them to push for quick reform?

SACHS: India will have to go for full reforms. International pressure and the benefits accruing from participation in the world economy will not stall its reforms. More to the point, India is, at present, sufficiently strapped for cash. There are investors coming in with cash that India needs. Political will is important, of course. But a group of investors with money when you don't have much is also a powerful incentive to go ahead with reforms. Good reforms, after all, are also good politics, and India's politicians have realized this.

QUESTION: In the face of such a giant of an economy waking up next door, one wide-spread fear in Nepal is that with no correspondence legal and political reforms on our part, Indian businessmen will swamp Nepal in the name of liberalization . . . and that we will end up being cheap laborers in Indian-owned business units all over Nepal. How do we reconcile the logic of free trade with the art of safeguarding Nepal's sovereignty?

SACHS: Today's world is so economically interdependent that no country's economy can afford to be away from the reach of the global economy. Nepal is no exception. The benefits of joining the global economy with a deeper pool of finance, technology, production, and capital and labor are many. Nepal has started the process of economic liberalization . . . I say 'go ahead with the reforms.' Trade, I say again, is a two-way street.

Ten years ago, Nepal exported 90 percent of its goods to India. Today, it exports 90 percent of its goods to the rest of the world, earning more in the process. Now that the Indian market is booming, Nepal cannot remain aloof from that regional, dynamic market. The costs of being isolated are just too high. So Nepal should look into the coming economic boom in India, and decide how best to ride the wave. So Nepal might as well enjoy the updraft of the booming Indian economy. But to get the most out of the Indian boom, legal reforms, among other reforms, must take place soon and simultaneously in Nepal.

QUESTION: Nepal has an open border with India. Many Nepalis think that this arrangement is not in Nepal's advantage, for Indian laborers can easily come to Nepal and take over the jobs of semi-skilled Nepali laborers . . .

SACHS: I do not know the historical details. But open borders do present complex issues. Yes, on one hand, Indians come to Nepal to work. But you must not forget that there are also many Nepalis working in India . . . Without a proper study, however, it's hard to say what is or is not good for Nepal when it comes to the issue of its open border with India.

QUESTION: Nepal is a country full of hills and mountains. [Dipak Gyawali pointed out in Himal magazine of May/June '94 that] market reforms widen the income gap between the hills and the plains -- with the former stuck to serve as the repository of migrant labor and stagnant resources, while the latter moves ahead with capital accumulation and industrialization. Are hill economies condemned to slide down as market forces assert themselves?

SACHS: With market forces in place, not all regions will grow at an equal rate all the time. The market is biased towards the plains. Because of a comparatively easy geography, the economy of the plains does grow at a faster rate than that of the hills. In the beginning, this will create 'politics of envy,' with the plains outpacing the hills on every economic indicator by a large margin. With right policies and political will, however, the hill economy can catch up with that of the plains. But that will take some time.

Take India, for example. Bihar, Uttar Pradesh, and northern states have not experienced the same kind of growth that Maharastra and other southern states have seen. But of course, there's more to the growth story than the fact of geography alone, even though that is an important factor.

QUESTION: Talking about geography, you have worked in Bolivia, which, like Nepal, is a democratic, land-locked, mountainous country with a vast rural population, and is located right next to a big neighbor [Brazil]. What lessons can Nepal draw from Bolivia's economic experience?

SACHS: Economic reforms started in Bolivia in 1985. I think that the Bolivian experience has four broad lessons to all: First, a poor country with many linguistic and ethnic division can be stable and proud. Second, a deep economic crisis can be solved through democracy by building political coalitions and understanding. Third, even with traditional industries gone, new industries can come up to equip people to be the players in the changing, new economy. And fourth, with sound economic policies, regional geographic differentiation leads to regional specialization of production of goods and services: The low-lying parts of Bolivia [comparable to Nepal's tarai] now export soybeans, a crop not widely planted previously.

There are also specific lessons to Nepal: Bolivia has enjoyed a strong political commitment to economic reforms since 1982, when democracy swept aside a dictatorial regime. The state has actively promoted the private sector in building the infrastructure. The government has taken democracy to the grassroutes through constitutional power and re-orientation of the tax system. By and large, Bolivians have more opportunities to participate in their country's economic and political systems.

Bolivia's present government came to power last year. It has been pushing for popular participation and radical decentralization. With private sector being groomed to be the engine of the economy, the government is focusing more and more on education, health, and other aspects of human resource participation. Bolivia hopes to achieve a growth rate of five to six percent. So far, the response of international investors has been good.

QUESTION: Your impatience with the slow pace of reforms in Russia made headlines in January 1994. You blamed the West for not coming through with the pledged amount of aid to Yeltsin. With regard to the developing world, would you also advocate a sort of a modern Marshal Aid that would help countries [in transition like Nepal] speed up their economic reforms?

SACHS: Aid is necessary at the critical stage of transition. But foreign aid alone has never helped any country anywhere achieve a long-term growth. We have seen many World Bank loans and aid, notably to Africa, going bad, with no clear results coming out. Such examples aside, we are seeing that the size of bilateral and multilateral financing is diminishing. More and more nations now have to look for private international money to finance their projects.


The Arun III hydro-electric project, for example, should not come through foreign aid. Putting all the eggs in one basket of aid is not sound economics. Nepal should look for international private financing to fund such huge projects.


The role of aid should be limited to two areas: First, wherever there is a need to launch acute reforms; second, wherever there exists a provision for the recipients to get the aid directly. Helping the government reform its economy is one way through which aid becomes useful. This way, rather than managing every sector of the economy, the government limits itself to improving the sectors of health and education, and making and enforcing the rules of the market that are fair and wise.

QUESTION: Finally, two short questions: what made you want to become an economist? What does it feel like being a professional who travels from country to country to "fix" broken economies?

SACHS: I did not get into economics because I was good in math, and so on. Rather, I was lucky to be born in a family where there were intense discussions about international affairs and events. In high school, I was fortunate to visit the former Soviet Union, which helped me think along the lines of what made a society function better. Going to study at Harvard was great too. One book I had to read early at Harvard was Joseph Schumpeter's Capitalism, Socialism and Democracy, which was an eye-opener. As an undergraduate, I was thrilled to discover that there was a scientific way of finding answers to many questions about society that I had been thinking of all along.

In my professional life, meeting a variety of people in all over the world has been fascinating. Working to improve the lives of people all over the world has been the most satisfying part of my career. For an economist, what others call "vacation" is mostly work. THE END