Why We Are Not Supporting Jeffrey Sachs to be World Bank President -Sachs’s approach to development remains top-down and formulaic.

B y John Cavanagh, Robin Broad  March 14, 2012 - 1:00 PM ET

Editor's Note: Jeffrey Sachs's candidacy for World Bank president has drawn the backing of a number of progressives, who laud his focus on ending extreme poverty and hunger and improving agricultural outcomes in developing countries. Should we throw our support behind Sachs? John Cavanagh, director of the Institute of Policy Studies, and Robin Broad, professor of international development at American University, argue that his approach to development sounds good but remains flawed. Jeffrey Sachs himself responds. We'll publish the next round of debate in the coming days!

[See also very good dialogue at the end of the article with well known pundits chiming in on the issue. JE]

Jeffrey Sachs—economist, author and United Nations adviser—has publicly launched his candidacy to become the next World Bank president. Several prominent progressives whom we respect, including Congressman John Conyers, the Center for Economic and Policy Research’s Mark Weisbrot, and Just Foreign Policy’s Robert Naiman, have publicly endorsed Sachs’s candidacy. We disagree.

Over the years, Sachs has championed some key progressive policies, including debt cancellation for the poorest countries and a financial speculation tax to generate revenues to fight global poverty. He also advised the Congressional Progressive Caucus on their outstanding “People’s Budget.”

But this does not make Sachs the right person to lead the World Bank. For starters, this is a moment when we should be actively seeking a candidate from the South—someone who has walked the walk to embrace a bottom-up approach to development. Many names come to mind, including the South Centre’s Martin Khor and Charles Abugre of the UN Millennium Campaign. The so-called gentlemen’s agreement that allows the US government to select an American to head the bank was wrong in the 1940s; it is even more illegitimate now.

Moreover, Sachs’s overall policy record remains disturbing. Over two decades ago, he burst onto the scene as an adviser to governments that adopted “shock therapy” to tame inflation. In countries like Bolivia and Russia, the austerity became infamous for the havoc it wreaked on ordinary people.

Today, Sachs’s approach to development remains, at its core, top-down and formulaic. Elsewhere, we have critiqued Sachs’s book The End of Poverty for overemphasizing the power of trade and new technologies to put the poorest on a ladder to modernization. (He once famously said, “My concern is not that there are too many sweatshops but that there are too few.”)

Sachs has applied this approach in his well-publicized Millennium Villages in Africa. African colleagues have relayed criticisms that mesh with our own. Through these villages, Sachs has been a promoter of outside money to pay for (among other things) chemical-dependent “green revolution” farming. One village alone is reported to have had a $50,000 a year fertilizer bill. While this undoubtedly can lead to an initial boost in agricultural yields, it is hardly sustainable in the longer run economically (yields dwindle as soils get compacted from chemical inputs), socially (farmers drown in debts), or environmentally (fossil fuel-based chemical fertilizers contribute to climate change).

The reality of the villages’ chemical-dependent agriculture undermines Sachs’s reputation as an expert on climate change and other environmental issues. UN Special Rapporteur on the Right to Food Olivier de Schutter has pulled together years of evidence to show that small-scale farmers can grow ample food and can reduce fossil-fuel emissions by shifting from chemical to “agro-ecological” farming. The international small-scale farmer-led Via Campesina movement has embraced such an environmentally sustainable “food sovereignty” approach.

The next World Bank president should support this shift. Farmers and the poor need more control over natural resources, not a transfer of aid-dependent inappropriate technologies which serve neither farmers, nor consumers, nor the planet.

It is also time for a World Bank president with a bit of humility. Sachs has never, to our knowledge, apologized to those who suffered as a result of his early adherence to austerity measures, just as the bank has never apologized nor made reparations for its mistakes. The bank needs a president who cannot just look back at past mistakes, acknowledge them and learn from them but who also understands the real costs of such mistakes. Children starve. Natural resources are plundered. People die. If it is to have any legitimacy whatsoever, the World Bank needs a president who can gain the trust of and then learn from the experiences of farmers and fisherfolk and the urban poor who are all too often the victims rather than the beneficiaries of faulty World Bank loans and conditions.


Why I'm the Right Candidate for World Bank President

Who else but me among the widely rumored candidates has a record of standing for the poorest of the poor?

by Jeffrey Sachs on March 14, 2012

I greatly thank The Nation for taking up the important question of the next World Bank president. Several developing-country governments, including Haiti, Jordan, Kenya, Malaysia and Timor-Leste, have already nominated me, and several more will do so in the coming days, because they know me as somebody who has stood firmly with them for more than a quarter-century in the fight against poverty, hunger and disease. My track record as the adviser to UN Secretary General Ban Ki-Moon and to former UN Secretary General Kofi Annan on the Millennium Development Goals is warmly appreciated. My recommendations on how to achieve the MDGs have been very widely adopted and have contributed to significant advances in the fight against disease and poverty in recent years.

I would be the first-ever development practitioner and anti-poverty professional to be World Bank President, just what is needed given the bank’s mission of a “world free of poverty.” It is high time that the institution is led by a professional with a lifetime of commitment and achievement in the fight against poverty. The first eleven World Bank presidents came from banking, defense or politics.

While Cavanagh and Broad might not like everything about me or about my ideas in The End of Poverty, they should be more careful about what they wish for. The other US candidates for the position are certainly not development leaders and have no track records fighting poverty. Some have track records quite to the contrary. President Obama, as far as we know, is not considering Martin Khor, but he is considering Larry Summers. Who else but me among the widely rumored candidates has a record of standing for the poorest of the poor for decades: on debt cancellation, disease control, climate change, peace through development, support for popularly elected governments and many other issues?

The Bank president should be a highly qualified development leader from any country. I am seeking the position as a world candidate, not a candidate of the United States alone. I am gratified that so many governments around the world agree and endorse my candidacy. I hope that the US government agrees as well, since the US nomination will likely determine the next World Bank president.

My own track record has been consistently on the side of the poor. Starting more than twenty-six years ago I called for debt cancellation for over-indebted developing countries, and I led the fight for debt reduction from the earliest days of that battle, helping to win debt reductions for Bolivia, Poland, Nigeria and many other countries. I am also very proud that my recommendations a dozen years ago to establish the Global Fund to Fight AIDS, TB and malaria, and then the US PEPFAR and PMI programs, are now contributing to millions of lives saved from malaria, AIDS and TB.

There is some misunderstanding about the macroeconomics of stabilization in Bolivia, which is not surprising since those events occurred more than two decades ago. I urge readers to look at the data, not the rhetoric, and have prepared a short presentation showing the main economic outcomes. My role in Bolivia was to help the country end a devastating hyperinflation of 24,000 percent, fight successfully for debt cancellation and stabilize the economy, which allowed Bolivia to return to growth and significant social improvements. I worked there for two years, not more. I was not a long-term adviser. As for Russia, I simply wish that my advice had been heeded, both inside Russia and by the Western powers. Alas, Mr. Cheney was guiding US policies in 1992 (as defense secretary) and as a result, the United States and the West withheld vital help to Russia when it could have made a vast difference. What the West offered to Poland it denied to Russia. I resigned at the end of 1993, after two frustrating years, and after that was consistently an outspoken opponent of corrupt privatization. (Ironically, I have been often blamed for the very policies on privatization that I ardently opposed.)

As for the Millennium Villages, I warmly invite Broad and Cavanagh to check the facts. The Millennium Villages are African-run, with the agronomy at each village cluster based on local conditions. African agronomists are selecting the mix of organic and inorganic soil nutrients on the basis of local scientific recommendations in view of the soil types, soil nutrient conditions, crop varieties and climate conditions. There is no formula imposed from the outside. That would indeed be absurd. And the $50,000 a year for fertilizer for a village 5,000 people that Cavanagh and Broad cite comes to $10 per person in a year, a minimal sum to help get the poorest farmers out of poverty. It has done that. The project is not based on “giveaways,” as the initial fertilizer vouchers were used only to help impoverished farmers—without credit, income, bank balances or collateral—to get started in raising their productivity. The strategy has worked. The farmers now generally obtain their fertilizer as do farmers anywhere: with seasonal credits.

The results are very powerful, and continue to improve as the project progresses. Farmers’ incomes are increasing sharply in most sites, and that is net of the costs of farm inputs. Mortality rates are way down, and so too is stunting, meaning that under-nutrition is falling. Readers can follow Millennium Villages to get the most recent scientific publications of the project. An important publication will soon appear regarding the health improvements in the villages. Scholars interested in further information about the project can also contact the leaders of the project in East and West Africa....

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