Jamie Rubin: What [do] your recommendations entail in a country like Cambodia, 12 million people with several million living in this terrible situation like we saw in the film? Are we talking about foreign assistance, are we talking about debt relief? What would you recommend?
Jeff Sachs: Certainly when you have a country that's so utterly impoverished that people are dying of their poverty, you can't be asking them to re-pay debts that may have been taken on for some foreign policy reason or a World Bank loan or something else a decade or two ago when the re-payment of the loan literally kills. And one might think "Well, the civilized world would never do that." But in fact, for dozens of countries in the world we're actually debts at the cost of millions of lives. It's the most unbelievable thing, but it is a kind of bureaucratic process. Those debts are on the books. Sure, why not collect them? You hear a lot of people say "Well, they borrowed, they should re-pay." But it's not so simple when re-payment means that there is no money available for drilling a bore well for clean water in a village or providing antibiotics and immunizations for children to keep people alive. And that's the real situation. Or fighting the AIDS pandemic, which is sweeping through so much of impoverished world. So, no,
we should not collect debt when collecting debt means death to the people that are re-paying. That's the first.
But second, what we need to do is help with the countries to find a path to real economic development. It's not simply transferring money for the sake of doing it, though when it's a humanitarian disaster, by all means I think Americans just are incredibly generous in those instances. But it's finding ways to help invest in the future of these countries. The two utterly most reliable ways are investing in the health and in the education of the children in these countries so that we don't lose another generation to disease and all of the disabilities of those who survive the disease, plus the fact that millions and millions . . . estimated 130 million, could be many more children around the world are not in primary school. They have no future economically unless they get an education. And we can help them do that. And so investing in the future of these countries is what's utterly needed in addition to not pursuing this incredible folly of collecting debt.
Jamie Rubin: Well, invest is a nice sounding word. But I think we know that means spending money. And that money has to come from somewhere. When you look at the American foreign aid budget, how do you feel? Do you feel we're spending the appropriate amount of money on these kinds of projects in countries like Cambodia?
Jeff Sachs: The foreign aid budget is shrouded in misconception and mystique. Many people think it's a quarter of our budget. Many people think that we're spending many percent of our Gross National Product every year on foreign assistance. Many people remember the Marshall Plan, which was one of the great examples of successful foreign assistance, and it was an act of incredible generosity.
Jamie Rubin: President Bush just referred to the Marshall Plan in the context of Afghanistan.
Jeff Sachs: Absolutely. Winston Churchill called it the most un-sordid act in history. The fact that Americans gave a lot of help to Europe to rebuild Europe after World War II. We did it because we wanted to live in a safe world. And we thought that that was a good way. And it proved to be a marvelous investment. But it's led a lot of Americans to think that we
must be giving a tremendous amount of money. Where is it going? It must be wasted. And the fact is actually we are giving very little money right now. This is a shock. People don't really accept it. But what we are giving right now is out of a $10 trillion economy, which means we produce $10 trillion of goods and services every year, we're giving a total of $10 billion for all of the developing world. Which means one-thousandth of our annual income.
Jamie Rubin: What would that compare to the Marshall Plan? What percentage of our national income were we spending then?
Jeff Sachs: We were spending not one-thousandth or one-tenth of one percent. But we were spending about 20 times that as a share of our income, about two percent of the gross national product in the big years of the Marshall Plan. When you spend one- thousandth of your income, what it's doing is you're taking one penny out of every $10. You're saying "Here's $10. We keep $9.99 cents for us, and we take one penny and we give for the whole developing world."
Now, we also take that penny and we divide it. And we give some to middle income countries, who are not as rich as us, but not fighting for survival, and we give only a small fraction of that penny to the countries fighting for survival. Now, why do we do that? Because a lot of our foreign assistance is political, or it's aiming for a regional problem that may be important for us, but it's not aiming at helping the poorest of the poor in the world. It's not really development assistance necessarily even. So if in all we're taking one penny out of ever $10 for our foreign assistance and we're living in a world where both for our heart and our protection we should want to do more.
Jamie Rubin: We have a president, President Bush, who said he would increase our foreign aid spending. We have the Congress, we have the American people. What accounts, in your view, for this rather small percentage of the income that we actually spend on foreign assistance? Why?
Jeff Sachs: We've got a kind of bi-partisan consensus over the last 20 years to just cut and cut and cut our foreign assistance up actually until the last year or two. This wasn't really one party or another or one administration or another. There was maybe ideologically the idea that, well, poor people, if they just take care of themselves, they ... if they take care of themselves, they can get rich. That is an American feeling. We'd like it to be true.
Maybe we don't fully understand what it's like to come out of a devastating, brutal genocide. Maybe we don't have really a fully feeling of what it's like as an impoverished country to be facing an AIDS pandemic leaving millions of children orphaned. Maybe we don't feel really how hard it is when you're living in a climate subject to extreme drought, which can leave millions of people destitute and many of those dying. Maybe we don't really know how hard it is when you're living in a malarial region, where the climate is making so much malaria that children by the tens of thousands or hundreds of thousands are dying.
We took an easy view, which said "Be like us. You can go do it." And it's a great view. In some parts of the world, it may even be true. But we haven't understood that for parts of the world, for the unlucky parts of the world, whether it's because of disease or climate or geographical isolation or the devastation of civil war or genocide. It's not simply a matter of picking yourself up by the bootstraps. If you don't have help, you can get caught in the most horrendous downward spiral.
Jamie Rubin: So you are detecting real changes now in the Congress and the executive branch and among the assistance groups? You think there's a change moving towards the kind of explosion in spending that you'd like to see happen?
Jeff Sachs: For the first time in 20 years, the foreign assistance budget is pointing up rather than down. And this is definitely a response to September 11. It's a response of Americans that are seeing the rest of the world, understanding it is a dangerous world and that we need to invest in many ways in our security. It's also Americans seeing the horrors that we
saw in the film or of the AIDS pandemic. And Americans respond with incredible generosity. They want to know that the spending can work. They've had a feeling that it's not working, partly basic they have greatly over-estimated what we're actually spending. But when you can show Americans that that money will really go to immunizations or really help children get into school or really provide clean water, Americans respond, and they will respond in large numbers and I think with generosity.
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