Jagdish Bhagwati vs Bono and Jeffrey Sachs over aid to Afirca

[raft]

- This is a repost of my message to the U2withashout spanish forum-
On March 21th, La Nación newspaper from Buenos Aires published an interview to Jagdish Bhagwati, in reference to an open letter he wrote to Bono which was published last Feb 17th on the Financial Times.
Bhagwati, is a Columbia University Proffesor in Economics, much renowed among the cientific community. He normally has a liberal approach to development issues.
In the letter, he critizised Bono's method to achieve the goal of ending extreme poverty in several African countries. In particular, he goes against the pretended rapid acceleration of the flow of funds towards these countries, as they might have difficulties absorving them which can be counterproductive.
The original letter opens an interesting debate, without much more support, yet, than the personal views of what has happened in the last years with this initiatives.
The article in La Nacion (spanish) reproduces part of the letter and adds a few Q&A.
Finally, I also found an recent interview -March 20th- to Jeffrey Sachs, the main economist behind Bono's proposals, whom is also the giving the theoretical support. He answers, in part, to Bhagwati.
Here are the links
Original letter by Jagdish Bhagwati in the Financial Times (UK)
http://us.ft.com/ftsuperpage/superpage.php?news_id=fto022720061527288891&page=1
La Nacion (Argentina) interview (spanish)
http://www.lanacion.com.ar/cultura/nota.asp?nota_id=790777
Interview to Jeffrey Sachs on IRINNews (UN office for humanitarian affairs office)
http://www.irinnews.org/report.asp?ReportID=52322

 

[Liesje]

In the letter, he critizised Bono's method to achieve the goal of ending extreme poverty in several African countries. In particular, he goes against the pretended rapid acceleration of the flow of funds towards these countries, as they might have difficulties absorving them which can be counterproductive.

Thanks for posting this. I haven't had time to read your links yet, but I sort of agree with this statement. Money is not always the solution. In my experience, I've come to believe that the main issue Africa faces is distribution. There is a complete lack of infrastructure and health care systems. Without these, it's impossible to effectively allocate money and donations of supplies or medicines. In the past, food has rotted and donated pharmaceuticals have gone to waste because they're just not getting to the people that need them. On the other hand, I do think Bono's right to push the debt issue. Certain countries who have overcome, or are in the process of overcoming corruption need to use more of their budgets for dealing with the infrastructure and health care issues. When I was in Tanzania, I learned that in that country, there is one doctor per 200,000 people. That's like everyone in Richmond, VA only able to see a single doctor. We also met with people who were HIV+ and had already developed AIDS. These people suffered for 10 years without treatment because although the gov't had the money to help them get medicine, they live in such remote locations with no access to transportation, they were not able to receive aid until grassroots church groups moved into their area.

Anyway, I suppose I should shut up now since I haven't had the chance to read the letters yet....

 

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Re: Re: Jagdish Bhagwati vs Bono and Jeffrey Sachs over aid to Afirca

Originally posted by When I was in Tanzania, I learned that in that country, there is one doctor per 200,000 people. That's like everyone in Richmond, VA only able to see a single doctor. We also met with people who were HIV+ and had already developed AIDS.
Anyway, I suppose I should shut up now since I haven't had the chance to read the letters yet.... [/B]

Part of the alternative proposals are to support education for in central economies for people of these countries and pay upon their return.
Also in the discussion is whether part of the money should be directed to more research in diseases that affect those countries but that must be conducted in developed countries.
It's interesting, it would be nice if someone could ask for Bono's opinion, as this is not bad oposition, but , I believe, great for discussion.

 

[biff]

I read Bhagwati's letter when it first came out, and made great efforts to communicate with him, as I had several comments to make in response. I never heard back from him.

 

[oktobergirl]

As soon as I get some time, I'm going to dig into this it looks very interesting. Thanks for posting!

 

[raft]

And I just found an ex-assistant at my Microeconomics, Econometrics and Finances courses in undergraduate has released this paper:
http://ideas.repec.org/p/wpa/wuwpif/0510001.html
Abstract:
Between 1989 and 2003, low-income countries received $100 billion in debt relief. The stated objectives for much of this debt relief have been to reduce debt overhang and to free up recipient government resources for development spending that would otherwise have been used for debt service. In this paper we empirically assess the extent to which debt relief has been successful in meeting these objectives, using a newly-constructed database measuring the present value of debt relief for 62 low-income countries. We find little evidence that debt relief has affected the level and composition of public spending in recipient countries. We also do not find evidence that debt relief has raised growth, investment rates or the quality of policies and institutions among recipient countries. Although we cannot rule out the possibility that our failure to find evidence of positive impacts of debt relief is due to a variety of data and statistical problems, the evidence reported here does suggest that some skepticism is in order regarding the likely benefits of further large-scale debt relief.

 

[ntalwar]

There's an interesting (looking) book called "Confessions of an Economic Hit Man".

Here's a review excerpt from amazon:

"Perkins writes that his economic projections cooked the books Enron-style to convince foreign governments to accept billions of dollars of loans from the World Bank and other institutions to build dams, airports, electric grids, and other infrastructure he knew they couldn't afford. The loans were given on condition that construction and engineering contracts went to U.S. companies. Often, the money would simply be transferred from one bank account in Washington, D.C., to another one in New York or San Francisco. The deals were smoothed over with bribes for foreign officials, but it was the taxpayers in the foreign countries who had to pay back the loans. When their governments couldn't do so, as was often the case, the U.S. or its henchmen at the World Bank or International Monetary Fund would step in and essentially place the country in trusteeship, dictating everything from its spending budget to security agreements and even its United Nations votes. It was, Perkins writes, a clever way for the U.S. to expand its "empire" at the expense of Third World citizens. While at times he seems a little overly focused on conspiracies, perhaps that's not surprising considering the life he's led. --Alex Roslin "