We lost 17 years of development

By: Solita Collas-Monsod - 9 years ago

Prof. Jeffrey Sachs flew in earlier this week to give a lecture on sustainable development and launch the Sustainable Development Solutions Network (SDSN), which is a United Nations initiative. Jeff Sachs was then UN Secretary General Kofi Annan’s special advisor on the Millennium Development Goals (MDGs), which are “retiring” this year after 15 years, and retains the same position under Ban Ki-moon.

Which is why Sachs was here in the first place. Ban has spent the last three years hammering out, with the 193 UN member-countries, what came out last Monday and is called “Transforming our World: The 2030 Agenda for Sustainable Development.” Ban calls it “a roadmap to ending global poverty, building a life of dignity for all and … is also a clarion call to intensify efforts to heal our planet for the benefit of this and future generations, leaving no one.” It is scheduled to be approved in September, when the UN General Assembly meets in a Sustainable Development Summit, which Pope Francis is expected to attend.

And Sachs has been with Ban every step of the way. The SDSN is either Ban’s or Sachs’ brainchild, and there are individual members, country members and regional members. Membership is composed of universities, research centers, civil society organizations, business and other knowledge centers in different countries, all with one major objective: to ensure that the Sustainable Development Goals (SDGs), which replace and continue the MDGs, will be met by 2030. They are supported by an SDSN Assembly and an SDSN Leadership Council, based in New York. Sachs is chair of the SDSN Assembly and director of SDSN, whose secretariat is Columbia University, where he is director of the Earth Institute.

There were eight MDGs, and now there are 17 SDGs. That’s what happens when you shift from experts (surely a large number, who crafted the MDGs) to countries—193 countries in all, plus business, plus civil society, who had their own priorities, and jealously guarded every single word they could get in. Not only are there 17 SDGs, there are also 169 targets. Compare that to the 18 targets (later expanded to 22) of the MDGs. But the two sets of goals are not mutually exclusive. The SDGs, among others, continue what the MDGs started, and add more. For example, the first SDG is “to end poverty, in all its forms everywhere” by 2030. Compare that with the first MDG, which was to halve poverty by 2015 from its levels in 1990.

How is poverty defined? People living on less than $1.25 a day. For national poverty lines, the target is to halve again the poverty levels in 2015. So for the Philippines, the target will be to bring poverty incidence to 8.4 percent by 2030 (from 33.6 percent in 1990 to 16.8 percent in 2015, a target which we did not reach, to 8.4 percent in 2030).

The 193 countries, ours included, have been hammering out these and other goals and targets. They all think it is doable. Sachs thinks it is doable. I’m going to stand with him on this one.

Why do I put such great faith in what Sachs says? Look at his biodata. Long career as a development economist (macroeconomics is his forte)—a practicing one, that is, with several developing countries under his belt, Brazil, Poland, Peru and Russia among them.

What a lot of people do not know is that he was the first economist of international stature who came out and offered help to the Philippines in 1986, when the country was fighting its way out of its foreign debt crisis, having just overthrown the dictatorship. He gave what I thought was very good advice (and what subsequent events validated) on macroeconomic policy and on how to negotiate with creditors.

Sachs was very critical of International Monetary Fund policy and the Philippines’ stance with respect to its creditors (his position has been validated since then). And my colleagues in Cory Aquino’s Cabinet (those involved in negotiations) treated him cavalierly. At first, he thought that it was because he was young (32 years old at the time, although he was a full professor at Harvard at 28) and baby-faced. So he called on his colleague, Rudiger Dornbusch (economics students will know his stature), to come and do the explaining. Which Dornbusch did, flying, at his own expense, to Washington from Massachusetts. It was something like the Avengers, helping each other.

But to no avail. Dornbusch got the biggest insult of all when he came to the Philippines and was told by a finance undersecretary that he (Dornbusch) didn’t know his macroeconomics. Dornbusch was stunned into speechlessness.

The long and short of it was that the Philippines did not follow Sachs’ (and Dornbusch’s) advice. What was the essence of that advice, quite apart from sound macroeconomics? It was this: When what you are receiving from your creditors is less than what you are paying them, you have the upper hand. Well, we had the upper hand. We didn’t take advantage of it. Result: It took our country until 2000 to regain the real per capita income levels we had before the debt crisis. We did not lose a decade of development, we lost more like 17 years. Of course, not all of this is due to our mishandling of our debt negotiations, but I would say that it was responsible for a large part.

So, Jeff Sachs tells me we can achieve our sustainable development goals. I say, Amen. And follow his advice all the way.