Submitted by Sameer Dossani, Sep 1, 2007 10:14

The one line of the article that I really agree with is this: "The Sachs plan is a proposal to ameliorate the symptoms of poverty, not treat its cause." I guess part of the disagreement is about what those root causes are. There's no doubt that a government implemented industrialization plan is needed in many African countries. There's also no doubt that most of those countries already have such plans drawn up (whether they're good or bad plans is another discussion), they just can't implement them because of lack of short term funds.

Those funds would be there if not for the coercive powers of the multilateral system, particularly the IMF. IMF rules dictate that no more than 8% of an annual budget in any country should go to public-sector wages. The result is that medical supplies are readily available even in exceedingly impoverished countries like the Central African Republic, but there is no money for doctors and nurses to administer mush-needed care. In the Democratic Republic of Congo, interim governments have been forced to follow the IMF line on the taxation of the (largely South African) diamond mining companies resulting in taxation rates of 12-15%. Neighboring Botswana taxes those same companies at around 50% and, partly as a result of that policy, is the only country in sub-saharan Africa that has made some progress over the years if you look at the UNDP's Human Development Index. Legal capital flight alone is 3 times the amount of aid going into Africa; no one knows the figures for the illegal capital flight, but it's likely a bigger amount.

So yes, industrialization is the question and aid is not a solution. But it's worse than not a solution. It's a bandaid that covers up part of the wounds caused by a system of robbery. Where I get angry at this author (and economists and academics in general) is when there is a lot of hang-wringing about "how will Africa develop" without an acknowledgment that the international system places such monumental constraints on African economies that the best of ideas could never be implemented. If we're serious about poverty in Africa, first we would stop stealing (perhaps by extending and really implementing the foreign corrupt practices act), we would end IMF conditions (perhaps as a step towards ending aid altogether) and allow African legal and economic systems to begin addressing these questions through democratic consultations with their own populations. It's not for me (or Mr. Clark) to postulate a development/industrialization plan for the Congo. That question is for the Congolese to answer. Through policies that we directly or indirectly support, we are encroaching on the space in which that discussion could take place.

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