Bottom Billion
• Used to be one billion rich and the rest poor
• The movement over the last 40 years: as
showed to us by H...
Factors the keep countries down
• Civil War
• Resource Curse
• Landlocked
• Bad governance
Civil wars
• Most rebels in sub-Saharan Africa are not
heroic freedom fighters but self-interested
brigands
– The Lord’s r...
The Resource Curse
• Countries with extractable resources – oil,
gold, diamonds– tend to worse economically
than those who...
Resource Curse -- why
• Conflict – fighting for a share
• Taxation – when they take your money, you
pay attention
• Dutch ...
Why
• Excessive borrowing – made possible by
resources as collateral
• Corruption – bred by large sums, contracts
with for...
• 3. Landlocked
• 4. Bad governance
Post conflict recovery -- Collier
• 40 % revert to conflict within 10 years
• He relates the failure to succeed to the tra...
• Denies the reality that there is no quick fix and
the failures keep piling up
• Security risks are long term
• Election ...
• Suggestion: recognize the interdependence of 3
key actors, now uncoordinated
• UN Security Council and their peacekeeper...
• If you don’t get the longterm security, you
don’t get private investment
• If you don’t get long term aide, you don’t ge...
Suggestion 2: Focus on a few critical
objectives: needs are everywhere
• Jobs, especially for young men; likely to revert ...
Improvements in basic services,
especially health
• Donors, not trusting gov’t, usually just fund
NGOs to do this
• Indepe...
Improvements in basic services,
especially health
• 1. Ministry
• 3.Delivery on the ground
• 2. In between: public indepen...
Clean government
• Really means control of the money; else it is
wasted and captured by crooks
• Needs lots of outside scr...
Hoped for outcome:
• focus on construction give jobs, security, and
infrastructure for success;
• basic services improved;...
Jeffrey Sachs on Haiti, Spring 2010
• DIA: Focusing on Haiti, you've called for
America to appropriate at least $1 billion...
• Mr Sachs: I want the money to come from the US, but
not to go through the US government. What I'd like is
for US and oth...
• And so I think that when you scan the
institutional environment, the IADB seems the
best place to do this. I think that ...
• DIA: Have you been happy with Barack
Obama's response to the disaster?
• Mr Sachs: Yes, in the sense that he's paying
si...
• I do feel, however, based on a lot of
experience, that this attention will wane
rather quickly, and so we want to
instit...
Collier bottom billion
Collier bottom billion
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Collier bottom billion

  1. 1. Bottom Billion • Used to be one billion rich and the rest poor • The movement over the last 40 years: as showed to us by Hans Rosling, now one billion rich, 4 billion doing pretty well, and one billion going nowhere: why
  2. 2. Factors the keep countries down • Civil War • Resource Curse • Landlocked • Bad governance
  3. 3. Civil wars • Most rebels in sub-Saharan Africa are not heroic freedom fighters but self-interested brigands – The Lord’s resistance army – The Congo border war (Hutu, Tutsi) – Liberia
  4. 4. The Resource Curse • Countries with extractable resources – oil, gold, diamonds– tend to worse economically than those who do not – Depends on the initial government – Five good years
  5. 5. Resource Curse -- why • Conflict – fighting for a share • Taxation – when they take your money, you pay attention • Dutch disease – increase in the real exchange rate and salaries, making products more expensive, and less competitive • Revenue volatility – hard to plan development with wide swings – Angola– 93.3% of exports are oil or diamonds
  6. 6. Why • Excessive borrowing – made possible by resources as collateral • Corruption – bred by large sums, contracts with foreign firms, and lack of oversight and transparency.
  7. 7. • 3. Landlocked • 4. Bad governance
  8. 8. Post conflict recovery -- Collier • 40 % revert to conflict within 10 years • He relates the failure to succeed to the traditional approach: – Build a political settlement first – Short term peacekeepers – home as soon as possible – Have an election of a legitimate accountable government --exit strategy.
  9. 9. • Denies the reality that there is no quick fix and the failures keep piling up • Security risks are long term • Election doesn’t solve the problem. It gives you a winner and a loser who has impetus to fight • Reasonable politics can only come later if there is security and development; with long term • Stagnation, I can only win if someone else loses
  10. 10. • Suggestion: recognize the interdependence of 3 key actors, now uncoordinated • UN Security Council and their peacekeepers: works, but needs to be a decade long • Donors who provide postconflict aid; says they tend to lose interest after a few years • But that economic recovery is a slow process – at least a decade • Post conflict government – has to do economic reform and inclusion
  11. 11. • If you don’t get the longterm security, you don’t get private investment • If you don’t get long term aide, you don’t get economic recovery • If you don’t get economic recovery, you have no exit strategy
  12. 12. Suggestion 2: Focus on a few critical objectives: needs are everywhere • Jobs, especially for young men; likely to revert to conflict if they have nothing to do • But: increasing civil service sets you up for later failure • Private jobs tough: likely to be uncompetitive in international trade • Construction sector: usually moribund; bottlenecks and graft Access to land Skills: not Halliburton, but bricklayers without borders; local firms
  13. 13. Improvements in basic services, especially health • Donors, not trusting gov’t, usually just fund NGOs to do this • Independent service authorities—3 parts • 1.Ministry: planning and policy • 3.Delivery of services on the ground – whoever can do it.
  14. 14. Improvements in basic services, especially health • 1. Ministry • 3.Delivery on the ground • 2. In between: public independent service authority which channels the money to the providers; – the NGOs are now part of the Government, not independent of it Controls where the money goes; makes NGOs accountable; government seen by the people as part of the answer: co-branded
  15. 15. Clean government • Really means control of the money; else it is wasted and captured by crooks • Needs lots of outside scrutiny: accountants without borders
  16. 16. Hoped for outcome: • focus on construction give jobs, security, and infrastructure for success; • basic services improved; • ordinary person believes the government is doing something useful
  17. 17. Jeffrey Sachs on Haiti, Spring 2010 • DIA: Focusing on Haiti, you've called for America to appropriate at least $1 billion this year and next for the country. Based on what you just said, how can I be confident that the money is going to get to where it needs to go?
  18. 18. • Mr Sachs: I want the money to come from the US, but not to go through the US government. What I'd like is for US and other donor money to be put into a multi- donor trust fund (MDTF). My specific recommendation is that the MDTF should be located at the Inter- American Development bank. There are a lot of reasons for that. In essence the IADB is a development-finance institution that works well, has a long-term commitment to Haiti, has a lot of expertise, and is competent in handling money and organising projects with the proper monitoring, auditing and evaluation.
  19. 19. • And so I think that when you scan the institutional environment, the IADB seems the best place to do this. I think that relatively little of the aid should go through the bilateral development agencies of any of the major donor countries.
  20. 20. • DIA: Have you been happy with Barack Obama's response to the disaster? • Mr Sachs: Yes, in the sense that he's paying significant attention to it. He's organised a massive effort by US agencies, including the military. So yes, I am happy with it.
  21. 21. • I do feel, however, based on a lot of experience, that this attention will wane rather quickly, and so we want to institutionalise the response and not have it depend on the day-to-day interest of the president of the United States.

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