Sachs: ‘China’s development strategy is more successful than Europe’s’

Jeffrey Sachs [UNIDO/Flickr]

One of the world’s leading economists, Jeffrey Sachs, has told EURACTIV’s partner WirtschaftsWoche why Africa needs more development aid. He also urged Europe to be more like China.

Jeffrey Sachs is one of the world’s leading experts on economic development and the fight against poverty. He is special adviser to United Nations Secretary-General Ban Ki-Moon on the Millennium Development Goals, having held the same position under former UN Secretary-General Kofi Annan.

The refugee crisis threatens European unity and nearly five million Syrians are still counted as refugees. How much development aid is going to be needed to allow them to return to their country?

Syrians are fleeing the war, so we need to end that as quickly as possible. After that, many refugees will return home and the crisis will ease off.

So you are against sending more development aid to the region?

Every day, huge sums of money are sent into warzones. Honestly, I do not agree with this. In my opinion, Saudi Arabia and the US should assume responsibility for the rebuilding of Syria. The CIA and the Saudis wanted to overthrow Bashar Assad. But that didn’t work and is now the main cause of the crisis we now find ourselves in. German and European development aid should focus on Africa. That is where really poor people live, who desperately need help.

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The European Commission wants to set up a fund for African countries. Countries that host refugees will benefit financially. Those who don’t cooperate will receive less.

We urgently need a global education fund. Most children in Africa do not go on to attend secondary school, which is a direct contributing factor to poverty. Many then try and cross the Mediterranean and it ends up being their final journey. We also need much more investment in infrastructure: railways, roads, the internet and most of all in power supply. Africa is the last place in the world where numerous areas still don’t have access to power. In the future, if there is more infrastructure and an educated workforce, then more companies will set up shop in Africa.

How much is that going to cost?

For health and education this will amount to about $50 billion a year. Just for infrastructure projects alone, Africa could use $200 billion. Infrastructure could be financed via low-interest and long-term loans. We have a huge surplus of savings around the world. Private investors do not know where to put it. If the public sector shows them the way, they will follow.

One of the largest donors in Africa is the Chinese development bank.

It invests gigantic sums in African power plants and roads. It’s extremely valuable to the continent.

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The Chinese bring their own workers with them, so there is no job creation.

That’s right. But, the infrastructure generates other businesses and jobs. China’s development strategy is more successful than Europe’s. First, you build the roads and lay the powerlines, then the rest of the economy follows.

China does not mind investing in dictatorships. Is that a problem for you?

The Chinese are only interested in the projects. I think that this is useful.

The Middle Kingdom certainly has more money at its disposal than the West.

We are talking about sums of money around the three or four trillion dollar mark, that’s out of a worldwide global output of $110 billion. A large part of it should be provided by private investors.

So European citizens should be investing like the Chinese?

It’s in their best interests and also Africa’s. Only by making such investments can we hope to put an end to the refugee crisis.

wirtschaftswoche

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