Tag: business-management

Can a Vision Save All of Africa?
By Joe Nocera (Talking Business, NYTimes, June 16, 2007)

It was “Malaria in Africa Week” here in New York. Not officially, of course. But by coincidence, two big malaria-related events took place that were by turns moving, inspiring and invigorating.

To attend one or both was to come away thinking that maybe the business community was finally getting serious about eradicating malaria, which kills more than a million people a year, most of them African children under the age of 5. But when you look more closely at the problem, you’re left wondering whether such a goal can ever be attained. At least, that’s what I was left wondering.

On Monday, two related organizations, Millennium Promise, co-founded in 2005 by the well-known Columbia economist Jeffrey Sachs, and Malaria No More, a spinoff started last December, held their first fund-raising dinner. Roger Waters of Pink Floyd fame spoke and sang, as did John Legend. Peter A. Chernin, the president of the News Corporation and a co-founder of Malaria No More, received a standing ovation for his malaria work. Daniel Vasella, the chief executive of Novartis, received an award; last year, Novartis lost $50 million selling, below cost, tens of millions of doses of its highly effective malaria drug to the developing world. Mr. Sachs gave a rousing, almost euphoric speech, insisting that the end of poverty and disease in Africa was within our grasp. The dinner raised an astonishing $2.7 million.

Then, on Wednesday, another nonprofit, the Global Business Coalition on H.I.V./AIDS, Tuberculosis and Malaria, held its big fund-raising dinner. This is a group that exists solely to marshal corporate support for work in controlling and reducing the three diseases. Speakers included the actor Jamie Foxx, the former United Nations ambassador Richard C. Holbrooke, and Richard Branson, the chief executive of the Virgin Group. The keynote address was delivered by Bill Clinton, who dazzled the gathering with his message of hope. The coalition raised over $2 million that night.

In the space of two days, around $5 million was raised to combat disease in Africa. Much of that money was earmarked for malaria.

In the West, and especially in corporate America, malaria has become the disease du jour. I don’t mean that cynically; it’s just a fact. Because malaria has largely been eradicated in the developed world, we in the West have ignored the fact that it has continued to ravage Africa, particularly its children. But then the Bill and Melinda Gates Foundation began to focus on it, and the United Nations made it one of the lynchpins in its calls to end third world poverty. Last year, the White House held a malaria summit meeting. Exxon Mobil, Pepsi, Chevron, JPMorgan, KPMG and many others, including most of the big pharmaceutical companies, are engaged in the fight against malaria in Africa. The current issue of Vanity Fair, “guest edited” by Bono, is devoted to Africa and has plenty of references to malaria. Included is a lengthy profile of the passionate, charismatic 52-year-old Mr. Sachs. “Messianic,” the article called him.

More than anything else — more even than the path-breaking work of the Gates Foundation — it has been Mr. Sachs’s ability to sell his vision that has caused wealthy philanthropists and large corporations to get behind the causes of eradicating malaria and ending poverty in Africa. He’s the reason George Soros gave $50 million to Millennium Promise, and why the organization has been able to raise over $100 million in its short life.

But that same vision, which is inexorably linked to malaria, but is much larger than that, has caused some mainstream economists to say that while Mr. Sachs means well, he is peddling a dream that will always be just that: a dream. “I think he is improving the lives of many people,” said Tyler Cowen, an economics professor at George Mason University (and a contributor to The New York Times). “But what he is doing is much oversold.” Mr. Cowen does not believe that Mr. Sachs’s work in Africa will endure.

The question that confronts us this morning is, Who is going to turn out to be right?

Jeff Sachs has zero patience for his critics. He makes it clear in interviews that he feels he knows better than any armchair economist what will work in Africa because “I’m out here doing things in the trenches, with a long track record.”

“I’ve seen a lot of things on the ground that have changed my view both of how to do economics and what the important issues are,” he told me. “I realized early on that I couldn’t understand the problems I was interested in without engagement, because the world is more complicated than a theoretical model.”

Mr. Sachs has always believed in engaging with the world. As a young economist, he advised the governments of Bolivia, which was struggling with hyperinflation, and Poland, which was trying to transform itself into a market economy, advocating a harsh form of economic medicine that was called shock therapy. By the time he was 35, Mr. Sachs was probably the most famous economist in the world.

After a troubled stint working with the government of Russia, Mr. Sachs moved on to the United Nations, where he advised Kofi Annan on the problems of third world poverty. He orchestrated a huge report on poverty, which led to something called the Millennium Development Goals. And then, having helped formulate the goals, he decided to try to make them a reality. Thus was born Millennium Promise.

Although Mr. Sachs insists that he has always been consistent in his approach — “I try to design strategies appropriate to the circumstances,” he said — most other people think his Africa strategy is radically different from anything he’s done before. Mainly, he says he believes that the West needs to spend huge sums of money to control disease, improve farming, create better schools and build infrastructure in Africa. And if that can be done, he believes, economic growth, and all the good things that flow from it, will become Africa’s lot at last.

Though he is a prodigious fund-raiser, even Jeffrey Sachs can’t wave his magic wand and gather the hundreds of billions of dollars it would take to build all the roads and schools and farms and hospitals that Africa so desperately needs. So what he has done instead is to pick poor rural villages — he’s up to 79 by now — in countries with relatively stable governments, and find corporations, foundations and wealthy individuals who will adopt them to the tune of $300,000 a year for five years.

There is no question that the efforts of Millennium Promise are making a difference in those villages. The schools are drastically better, and thanks to a new lunch program, with the grain provided by the village’s own farmers, students are eating better. Each village is given bed nets coated with insecticide, which are the best way to prevent malaria, and a Novartis medicine, Coartem, which has to be taken within a day or so of malarial symptoms. Cases of malaria have dropped significantly. Mr. Sachs’s agronomists at the Earth Institute, which he runs at Columbia, create seed that can adapt to the village’s usually arid soil, and they give all the farmers fertilizer. Sure enough, the crop yield has increased, in many cases, by four to five times.

That is what Mr. Cowen means when he says that Mr. Sachs is improving people’s lives. Plainly, he is. But those efforts, laudable though they are, will not eradicate malaria or reduce African poverty in any serious way. The real question is how to turn Mr. Sachs’s efforts into more than just a pilot program that temporarily helps a bunch of villages. How will it transform all of Africa?

Ultimately, Millennium Promise is hoping that the governments of these countries will pick up where the Fortune 500 companies leave off. But given Africa’s history, that is one serious leap of faith. “He doesn’t have a coherent theory by which his model can scale up,” Mr. Cowen told me.

Take malaria again. There are several reasons companies are drawn to it. One is that a multinational oil giant like Exxon Mobil has employees in Africa, and it is in its best interest to keep them from getting sick. But another is that, on the surface, malaria really does seem solvable, and companies like to fix things. If everyone in Africa had — and used — a bed net, the incidence of new malaria cases would drop to nearly nothing overnight. And if Coartem were more widely available, far fewer malaria victims would die.

But it’s just not that simple because malaria is so intertwined with other problems Africa faces. What happens when the bed nets tear? How do you get more of them into remote villages? What do you do as the mosquitoes become more resistant to the insecticide? What happens to the clinics — and the Coartem — when the Western money goes away? How do you make malaria programs work in the middle of civil wars and strife? And most of all, how do you extend this program all across the continent? Despite the best of intentions, neither Western corporations, nor wealthy philanthropists, are equipped to solve all these problems. “Countries make their own fate,” said Bruce Greenwald, Mr. Sachs’s economics colleague on the Columbia faculty.

When you think about it like that, it seems nearly hopeless. When I spoke to Dr. Vasella at Novartis, whose company has just agreed to sponsor a village in Tanzania, he acknowledged that Mr. Sachs’s program might not work. But, he said: “That is still no reason not to try. If you don’t try you won’t know the outcome.” He added, “Unless you are willing to fail, you shouldn’t start.”

And maybe that’s the best way to think about what Mr. Sachs — and Western companies — are trying to do. Theirs is not a solution but an experiment. It will surely do some good, but it is impossible to know how much. It is a worthy effort, but probably not as profoundly transformative as he likes to portray it. And it is probably best not to get too excited, no matter how inspiring the speeches at New York fund-raisers.

Because someday malaria is no longer going to be the pet cause in American boardrooms. And then what?