Tuesday, September 21, 2010

Sachs vs. Easterly over MDGs, again!

Jeffrey Sachs bats for “multi-donor pooled funding that has clear timelines, objectives and accountability”.

We need a major change of funding toward pooled donor funding. Bilateral aid would remain, but mainly to promote demonstration efforts and innovations. The core of assistance would use pooled mechanisms to scale up what has been proven to work, avoiding fragmentation and poor accountability. Indeed, there are moves in this direction: a new maternal and child health initiative to be agreed this week saw African leaders specifically request that the support should come through the Global Fund. Similarly, infrastructure funding could be scaled up through new public-private financing pools for roads, rail and power, via the World Bank and African Development Bank.

William Easterly mocks Sachs and argues that only trade-fuelled growth can help the world’s poor. He thinks that private sector is the one that will help in reducing poverty, not aid.

This is all the more misguided because trade-fuelled growth not only decreases poverty, but also indirectly helps all the other MDGs. Yet in the US alone, the violations of the trade goal are legion. US consumers have long paid about twice the world price for sugar because of import quotas protecting about 9,000 domestic sugar producers. The European Union is similarly guilty.

Equally egregious subsidies are handed out to US cotton producers, which flood the world market, depressing export prices. These hit the lowest-cost cotton producers in the global economy, which also happen to be some of the poorest nations on earth: Mali, Burkina Faso and Chad.

According to an Oxfam study, eliminating US cotton subsidies would “improve the welfare of over one million West African households – 10 million people – by increasing their incomes from cotton by 8 to 20 per cent”.

To be fair, the US government has occasionally tried to promote trade with poor countries, such as under the African Growth and Opportunity Act, a bipartisan effort over the last three presidents to admit African exports duty free. Sadly, however, even this demonstrates the indifference of US trade policy towards the poor.

The biggest success story was textile exports from Madagascar to the US – but the US kicked Madagascar out of the AGOA at Christmas 2009. The excuse for this tragic debacle was that Madagascar was failing to make progress on democracy; an odd excuse given the continued AGOA eligibility of Cameroon, where the dictator Paul Biya has been in power for 28 violent years. Angola, Chad and even the Democratic Republic of the Congo are also still in. The Madagascan textile industry, meanwhile, has collapsed.

It is already clear that the goals will not be met by their target date of 2015. One can already predict that the ruckus accompanying this failure will be loud about aid, but mostly silent about trade. It will also be loud about the failure of state actions to promote development, but mostly silent about the lost opportunities to allow poor countries’ efficient private businesspeople to lift themselves out of poverty.

This kind of ideological battle will be fought for a long time to come. Similar form of battle was fought in the past, is being fought right now, and will be continued in the future. In a way, both are right, and both are wrong. Sometimes ideology blinds sensible reasoning. It is seen vividly in economics (incessant right and left tussle) than in any other subject. Perhaps, this is what adds spices to economics!

The human cost of Maoist insurgency in Nepal

Preliminary estimates (number):
Killed - 16,791
Disappeared - 1,327
Internally displaced - 78,708
Widowed - 9,000
Disabled - 4,305
Property lost - 11,775


It would be interesting to see the economic costs as well. Is there any that I missed?

A note from flood-hit region of Pakistan

My good friend Adil Solaiman from Pakistan penned this note after visiting a relief camp in a flood-hit area in Pakistan. A must read.

--------------------------------------------------------------

I'm not big on writing notes and tagging a bunch of people, some of whom I haven't spoken to in many years, but I feel this is an appropriate time to do so. On September 16th, 2010, I, along with an aunt, a cousin, and an guide from the area traveled to Nowshera, Pakistan to distribute goods at a flood relief camp. Here, I'd like to share my experiences from the trip, as well as ask you all to not forget the 20 million Pakistanis who are struggling to get their life back in order after the worst floods in Pakistan's history. I know its long, but I hope you will bear with me.

In the early hours of Thursday September 16th, our team loaded our truck with 40 bags of relief goods that were purchased the day before using donated funds. These funds, totaling 40,000 rupees (£300, $450), were collected from both from family members as well as students from the Penn State College of Medicine. The bags were assembled at a grocery store in Islamabad, and each bag contained 1kg rice, 3kg lentils, 0.5 kg sugar, 0.5 kg salt, 0.5 kg tea, 0.5 kg powdered milk, and 1 packet of spices. It was estimated that this was enough food to feed a small family for several days, and our goal was to reach 40 families in the area. So on Thursday morning, we loaded our truck and set off to Nowshera, a city about 100km west of Islamabad.

As we approached Nowshera, I immediately began noticing tents scattered throughout relief camps around the city. There were some large camps, some smaller ones composed of only five to ten tents. The majority of tents I saw had the logos of either the UNHCR (United Nations High Commission for Refugees) or of CARE International. There were also tents from several other international firms, which was good to see. I was actually fairly impressed by the international presence on the ground. In addition to the tents from international organizations, I met a team of Indonesian doctors and nurses at a rest stop outside of Mardan. They were disaster relief specialists, and this was their second tour of the region since the floods have hit. They expressed their concern at the tremendous need of the flood victims, but also expressed their optimism at the efforts they have coordinated and also the global response. This also filled me with confidence.

We arrived at the campsite where we were to distribute our relief goods a little past 10am in the morning. Suddenly, all my optimism and confidence vanished. Our driver had taken us to one of the most neglected parts of Nowshera. The campsite was sandwiched in between a rocky hill on one side, and a graveyard on the other. I saw tents built in ditches that would surely become flooded if it rained a little bit again, I saw tents built adjacent to and on top of graves, and I saw tents built on top of all the rocks and gravel littered along the side of the hill. For me, it was a sobering reminder of just what life has become for so many Pakistanis. In this camp, there must have been more than 50 tents, and as we were driving through, men, women, and children of all ages noticed our truck and started to follow us. We drove to the end of the camp, and our plan was that as we were driving back out, we'd toss a bag of goods to each tent as we drove by. This was to ensure that one family did not receive three or four bags while another received none at all. However, this plan quickly fell apart.

As we started to drive back, my cousin and I hopped on the back of the truck to prepare to distribute the bags. But seeing this, the people around the camp started to gather around the truck and prevented us from driving forward. They began telling us stories about how long it's been since they have received any aid, and started begging that we give them aid. The look of desperation on their faces was crystal clear. We first told the people to return to their tents and that we'd give each one a bag. When that failed, we tried to ask everyone to form a line so that again we'd ensure one bag per family to maximize those we can help. That too did not go over well. Instead, people started feeling like they had to take the initiative otherwise they might not receive any aid. More people started to gather around the truck, and at this point, my cousin and I had a decision to make. We could either stick to our plan and risk upsetting the people who had gathered, who numbered in excess of 40, or we could just distribute the goods to whoever was around. In the interest of safety, we decided to go with the latter. However, this too proved problematic. As we started to hand bags down from the truck, people started to climb onto the truck themselves and started snatching bags and running. Pretty soon, the truck was full of people each reaching for bags and trying to get off before someone else grabbed it. Luckily, there wasn't any incidents of violence, but the 40 bags of aid were gone within a matter of a minute or so. Naturally, given the way the distribution process panned out, there were people that were unable to get any bags of aid and expressed their frustration at their lack of fortune. One flood victim walked off in disgust, muttering,"Meri baari to kabhi aati hi nahin hai. Meri kissmat hi kharrab hai." (Its never my turn for to get aid. I guess my luck just sucks).

Hearing those words made my heart sink, because even though we had just distributed Rs 40,000 worth of goods, I felt like I had distributed a mere 4 rupees worth of goods. The people here were so desperate, and to see that desperation with my own eyes was very powerful. As the people walked back to their tents, some carrying our bags of aid and some not, I took a closer note at the suffering around me. I saw children popping their heads in and out of their tents, covered with sweat and dirt and fanning themselves to get some comfort. I saw pregnant women that had wandered over to the truck who now were slowly walking back. I had people coming up to me, some asking for money for medicines for their heart conditions while some asking for help for their elderly parents or young children that had not eaten anything in days. Having run out of goods, I proceeded to distribute money from my pocket to several of the flood victims that had gathered. After talking to several of the other victims that had gathered, we got back into the car and started to head out of the campsite. I left the area with mixed feelings. I knew that we had done good work today and helped a lot of people, but I couldn't help but feel that a lot more efforts like the one we had just made were required.

Leaving the campsite, our driver took us for a tour of sorts around Nowshera and Peshawar to see some of areas that were particularly affected by the floods. This was another sobering experience. Many of the places looked like they were part of a movie set. In almost every place we went, there were clothes thrown about all over the ground - indicating in just how much of a rush people had to vacate their homes when the waters struck. There were gates to houses still standing, yet the houses themselves had been washed away. There were cars, formerly used as a crucial method of transportation for the poor farmers of the region, left overturned and still full of water. Most strikingly, there were large stretches of houses that were still flooded, several weeks after the floods subsided. This is proof of the great need of people of the region, and proof that they should not be forgotten.

My reasons for writing this note are several-fold. First, to all my friends around the world, I wanted to remind you that even though it might not be headline news anymore (it never really was in the US, was it?), the need of these people is still great. It will take months, if not years for people to fully recover from this disaster. Over the next few weeks, the weather in Pakistan will cool down considerably, and the flood victims that have faced unbearable heat for the last few weeks will soon have to face the freezing cold. On behalf of them, I thank you for all you have done so far, and want to remind you that all contributions, no matter how big or how small, are very important. I hope you will continue to be generous in your contributions to the suffering people of Pakistan.

And to my Pakistani brothers and sisters. Let's be honest, most if not all of us have led very privileged lives. We (or our parents to those who were born abroad) hail from a poor country that is quickly getting poorer and poorer. We suffer from crippling poverty, rampant illiteracy, corrupt politicians, determined terrorists, electricity shortages, and a largely apathetic middle class. It is time for us to wake up and take responsibility for the future of our country. To those who are in a position to personally volunteer - DO IT. I promise it will be a very rewarding experience for you, and it's so easy to do. All you need is some money and a driver that knows his way around. But to the majority of you, please donate generously to reputable international agencies and make a positive difference to these people. Our country needs us, and it's too easy to simply ignore this need. The Quran teaches us that Allah changes not the condition of a people, until they change their own condition. Let's help make Pakistan the great country that it was destined to become, because it cannot reach there without our help and our prayers.