When Franklin Roosevelt and Winston Churchill set forth the Allies' World War II war aims in the Atlantic Charter, they talked about securing "economic advancement and social security" for the entire world. In his 1941 inaugural address, Roosevelt said the world should be founded on four freedoms, including "freedom from want." He called for global economic arrangements that would secure for every nation "a healthy peacetime life for its inhabitants." US President George W. Bush recently echoed the World War II leaders by declaring, "We will also defeat terrorists by building an enduring prosperity that promises more opportunity and better lives for all the world's people." This is a worthy and urgent goal, but its realization will require significant changes in rich-country policies, particularly in the US itself.
Today's world does not offer prosperity to all. More than 1 billion people struggle each day for mere survival, and many do not succeed. During the past two years I have been chairman of the Commission on Macroeconomics and Health under the World Health Organization. Our commission received detailed evidence that millions of impoverished people die each year because they lack the barest means to stay alive. The most shocking losses are those resulting from preventable and treatable diseases, such as measles, respiratory infections, malaria, tuberculosis and AIDS. The problem is that prevention and treatment of these conditions costs money -- not a lot, but much more than is available to the world's impoverished. The commission discovered some shocking things. In the poorest countries, annual health spending is around US$11 per person per year, while at least US$33 per person per year is needed to provide minimal health services.
Rich countries must provide roughly US$20 per person to close the gap. Instead they provide just US$2 per person but nevertheless believe they are meeting the needs of the poor. When millions of people die as a result of the lack of financial help, the US and other rich countries act as if this outcome is a "natural" occurrence, rather than the result of political neglect.
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If every rich country contributed around one-tenth of 1 percent of its national income, or roughly US$0.01 for every US$10 earned, the result would be US$25 billion a year that could be used to save the lives of millions of the world's poor. That sum would make it possible to extend essential health services to the hundreds of millions of people that now lack medical attention, including treatment for AIDS, immunizations of children and the distribution of bed-nets to prevent malaria transmission by mosquitoes. Unfortunately, rich countries contribute around one-fourth of what is needed, that is, US$6 billion rather than US$25 billion. The commission estimated that 8 million people each year could be saved by a properly funded effort.
The US has been the developed world's stingiest donor, a fact unrecognized by the American people. In recent opinion surveys, Americans believe that they are the most generous country of all, and estimate that America spends around 20 percent of its federal budget on foreign aid. The truth is that less than one-half of 1 percent of the budget is spent on foreign aid. When aid is measured as a share of GNP, the US places last among all rich countries. Many European countries contribute ten times relatively speaking.
In calling for a more prosperous world for all, President Bush further demonstrated American attitudes on economic development when he said, "Trade can conquer poverty and despair." Many Americans believe that market forces alone, including international trade, can solve the problems of poverty. As a trade economist I know that this is only half right. Trade does indeed benefit the poor if rich-country markets are opened, so that the poor can sell what they produce. But trade by itself is not enough. Trade policy cannot save the millions of people who die of disease; only targeted financial assistance can do that. Besides, where disease rages, export-led growth is nearly impossible to achieve.
American stinginess, moreover, results in high costs to US security. The US intelligence community has long understood that disease and impoverishment contribute to "state failure," the technical term for political collapse, revolutions, civil wars, state-sponsored terrorism and military coups. When "state failures" occur they are often followed by costly military interventions by the US and its allies. Rich countries seem only to intervene when it is too late, rather than working seriously to head off crises and collapse in the first place.
Bush has opened a world discussion on ways to promote prosperity for all. World leaders should therefore send a resounding message to the US and to other rich countries. It is time for the rich to promote real economic development through foreign assistance at levels commensurate with the needs of the poor and through open markets that allow the poor to export their way to greater prosperity. Until those steps are taken, the world will remain dangerous and divided, with the poor suffering and dying unnecessarily, and instability and political upheaval will continue to reign.
Jeffrey D. Sachs is Galen L. Stone Professor of Economics and Director of the Center for International Development at Harvard University. copyright: Project Syndicate
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