NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Jeff Sachs, Director of the Earth Institute at Columbia University in New York City, spoke Tuesday, March 14 at the Center for Global Development here in Washington. Professor Sachs has long been identified as a strong proponent of a publicly-led drive against global poverty. As Director of the UN Millennium Project, Jeff has been highly influential in defining the Goals and the pathways to achieving them. While I agree wholeheartedly with him on the diagnosis of the disease, I have found it hard to put much stock in his cure: more public money. Not because it wouldn?t help. Of course it would. It is the moral course of action., and the politically wise thing to do. But years of observation have made a cynic: it’s simply not going to happen. And yet, Jeff’s talk at CGD this week lead me to believe that the Millennium Village projects on which Earth Institute has embarked are perhaps less distant in practice from the private sector-led development approach we take here at Nextbillion.

As usual Jeff painted, in just a few bold strokes, a powerful and stirring portrait of poverty on-the-ground in sub-Saharan Africa: unique disease burden, depleted soils, lack of transportation infrastructure, under-financed (and yes, corrupt) governments. But he was not just trying this time to be a prophet, calling us to action on debt relief or increased aid. He talked about the Millennium Villages projects as creating the conditions necessary for markets to flourish, and for SME entrepreneurship, and real economies, to take hold. (The influence of climate change on Africa, and its implications for agriculture, is a discussion for another day.)Second, he focused on strategic sectors, mentioning agriculture, health, and service connectivity. (Note: The End of Poverty, his recent book, singles out five: boosting agriculture, first and foremost, to get populations beyond ?sub-subsistance? and into self-sufficiency in food, improving basic health, investing in education, bringing power to villages, and providing clean water and basic sanitation.)

Third, he described an outcome-based set of metrics – measuring the interventions by what they actually accomplish, which is sensible, refreshing, and well aligned with the kind of metrics that business can appreciate.

Fourth, he talked about the ways the project has found to work with, but not necessarily through, governments, , delivering the money directly down at the village level where it is needed–to my mind, a good model. As in the book, he asserts that the money to make a difference is very modest, per capita (under $100 p/a), and almost all of it is for commodities; relatively little for people. Staff costs–at industrial economy wages–are a pet peeve of his, and rightly so, about bilat/multilat aid. Almost all is for staff; his staffs are all locals, not ex-pats. Back to the point, however, about commodities. The problem in many villages is not lack of knowledge about inputs–seed, fertilizer, etc., but rather lack of money to purchase them. With standard agricultural inputs, yields go up radically, and to a level which will, in short order, take populations out of the extreme poverty and move them toward ?normal? economic growth. Above all else, what is needed are new ideas to deliver meaningful quantities of standard ag inputs broadly and sustainably across the Continent. If this doesn?t describe a real business opportunity, I don?t know what does.

Fifth, while the MV projects are now funded almost entirely by philanthropic money, he understands that other stakeholders are necessary to scale and replicate – the model is no good without money, and he readily admits that.

He and I part ways on where the real money will come from, as I noted at the top of this comment. Yet we don?t seem so far apart on the solutions. It is not so hard for me to imagine, as in the example of seed and fertilizer, above, pulling together a self-interested consortium of agriculture input and output companies to work collaboratively and creatively (with the public sector and civil society) to create the instruments which might make progress in replicating and scaling the success of MV agriculture projects. Why would they do it? To facilitate the creation of millions of new customers, of course. Subsidized at first, no doubt, but moving with speed toward (equitable and non-distorting) local market pricing. Enlightened self-interest can be a powerful engine to pull millions out of poverty.