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Jewish World Review May 21, 2002 /10 Sivan, 5762

Amity Shlaes

Amity Shlaes
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Geography does matter when it comes to development, but aid must nonetheless be linked to good governance | Two centuries ago, a scholar named Thomas Robert Malthus wrote that the world was bound to starve, since our ability to produce food simply couldn't keep up with our baby production. The former trend was arithmetic, the latter geometric. Malthus also happened to be a Church of England curate, and infused his portrayal of inevitable famine with religious fervour.

These days Malthus would seem to be thoroughly debunked, not only by better farming but also by the general increase in economic productivity. Moore's Law, which says that the processing power of computers will double ever eighteen months, is in its way an answer to Malthus.

Still, we have our modern Malthusians, especially among the international development and aid crowd. Since September 11, many of them have been focusing, Malthus-like, on the rising population growth of Africa, the Middle East and Asia, and arguing that - without serious expansion of development aid - this growth will lead to global disaster.

Even economists who formerly limited their arguments to the terms of mundane macroeconomics and microeconomic fundamentals now speak of the importance of aid, education, and geographic destiny.

A case in point is Jeffrey Sachs of Harvard, the great development doctor of the 1990s. From his "shock therapy" for Poland to his work in Bolivia, Prof Sachs put his mark on the post-Cold War economies. But he was mostly concerned with fiscal and monetary policies, not social work.

Now Mr Sachs feels differently. He says that it is time to face to the fact that governments' economic adjustments alone won't rectify the developing world's problems.

Responding to an email from me, he explained why: "Remoteness can be a death knell. This is certainly one of the reasons why development hasn't worked in many of the poorest places in the world - the Andean altiplano, the landlocked countries of the African Sahel, the remote regions of Central Asia."

And Malthus? "Malthus was wrong on the global scale, but was certainly right on the local scale in some parts of the world -- especially impoverished rural regions cut off from technological progress."

In Prof Sachs's view, economists and world leaders have sinned by ignoring these problems (and perhaps supposing that economic growth would make all things right). The West should have devoted greater resources to foreign aid.

"We faked it for 20 years", he says, "pretending to be fighting epidemic disease and illiteracy, but giving a pittance of real aid to the poorest countries that really needed it." Now it's time, to his mind, to rectify our failings. This year he is moving to a new post at Columbia University's Earth Institute, an appropriate-sounding home for his new geographical approach.

The aid battle is one Prof Sachs and his pals are likely to win, given the new pro-development mood. But are they really as fatalist as they seem? Prof Sachs says "no" - and that he is a realist. "I'm NOT a geographical determinist," he wrote to me. "I'm trying to stress that things are more complicated than usually seen. Middle income and rich countries tend to grow, but very poor countries do not.

"There are indeed at least three reasons:
1. They are badly governed (Zimbabwe, no doubt)
2. They are acutely distressed by virtue of geography (landlocked highland countries, remoteness in general from major markets and sea lanes...)
3, They are trapped in poverty, in the sense that countries with very low levels of human capital (health, education, accumulated skills), very poor nutrition, very low technological productivity (and the other stresses that I just mentioned), typically have extremely low saving rates, since people are living at subsistence. It's like an individual surviving on 1500 Kcal per day, without the energy reserve to be productive. This poses a trap..."

It is hard to disagree with these points. Geography can indeed be a trap. Indeed, the sad truth is that commodity-rich regions are often as likely to produce poverty or war as commodity-poor ones.

But one danger in the new Malthusianism is its emphatic focus on geography. One has the feeling that governance is going to be left out of the picture by brains less subtle than Prof. Sachs's. They will merely focus on the emotional side of this story, and back the Bono-style pouring of aid into poor places, regardless of whether the nasty regimes use that aid to snap up Mercedes for themselves (or to buy children's sexual favours, as was recently reported of one African country.)

A second danger is that multilateral organisations such as the United Nations Development Programme will use the new crisis mood as an excuse for mission creep. In other words, the money will really be, in good measure about enlarging these entities and their programmes. Here one has to ask: does a more powerful UNDP really mean there will be less hunger in places where politics, and not Malthusian food shortages, are really the cause of malnutrition?

This does not mean that geography does not matter at all: as Mr Sachs wrote me, "It does not pay for Nike to produce shoes in Burundi" - Burundi is simply in the wrong location, and may always need more help than some other countries. Malnourished children matter too. The reality though is that we cannot emote our way to world stability and healthy schoolchildren in the developing world, no matter how sorry we feel for them.

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JWR contributor Amity Shlaes is a columnist for Financial Times . Her latest book is The Greedy Hand: How Taxes Drive Americans Crazy and What to Do About It. Send your comments by clicking here.


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