Jeffrey Sachs: You Ask The Questions

Are we entering adepression that will be the worst since the 1930s?

Anita R

Brighton

The Great Depression was caused by a series of historical cataclysms, many related to the First World War, followed by massive policy failures of central banks, compounded by the lack of international co-operation and a breakdown of trade. There is no need to repeat such a massive debacle. We are facing financial mismanagement following deregulation, natural resource scarcity and environmental threats – which are very big challenges but don't translate into disaster unless we profoundly mismanage them. I believe there is considerable vigour in the world economy and potential to address our environment and resource problems. Our best hopes are cool heads, avoiding violent conflicts and protectionism, and working co-operatively on challenges.

Should central banks be bailing out institutions who were the victims of their own greed?

NIGEL EVANS

Sheffield

We need to avoid financial panics that become self-fulfilling crises, while not bailing out poor management and recklessness. The usual idea is for central banks to ensure liquidity but not ensure against insolvency, and to keep markets liquid without stoking inflation. The US skirted close to the line with the partial bailout of Bear Stearns. It is also flirting with overly-inflationary monetary policies. Central banks are close to the margin between being guardians against panic, and becoming agents of moral hazard and inflation.

Have the IMF and World Bank caused more poverty than they have cured?

Daniel Finnie

London

The IMF took on the control of low-income African and Latin American economies in the 1980s and 1990s, and did a poor job of it by emphasising extreme belt-tightening rather than debt relief. It had almost no knowledge of real development challenges. Since early this decade, it's mainly gotten out of the way to the benefit of the institution and the countries. The World Bank has similarly had a poor run since 1980 by its excessive zeal for free-market policies in countries which need huge increases in public investments. It forgot that the private economy needs complementary public investments, especially in infrastructure, environment, education, public health, and agriculture. The Bank now seems to be reforming well. The world needs a healthy IMF and World Bank, and both seem on the mend.

With inflationary pressures in China, is it the end of its great growth?

Usman Butt

London

China still has phenomenal growth potential, based on rapid technological upgrading and massive savings rates. It faces serious challenges of environmental management. As China gets richer, its growth rates will decline to those of high-income countries, but I still expect 7 per cent per year in the years ahead, possibly higher.

What happens when the oil runs out?

Dotun Fara

by email

If oil production peaks abruptly and begins to decline, we will have a very serious period of readjustment as more expensive alternatives and oil-saving technologies are brought on line. For example, coal can be liquefied but at a high cost. If we anticipate the peak of oil and it is delayed by a decade or two, we can have smooth adjustment to alternative energy, plus energy-saving technologies in automobiles, buildings and industry.

Can economic development and the fight against climate change co-exist?

Simon Routledge

Fulham

It is possible to combine economic development and climate change mitigation (the reduction of greenhouse gas emissions) by turning to low-emission energy technologies and energy-saving technologies. The potential for solar power is vast. If we invest heavily in these alternatives, there are enough prom-ising options that we should be able to find our way through this maze.

Is it possible for the whole world to be rich, or does capitalism need failures?

Janice Taylor

by email

The whole world could be rich, since wealth depends on productivity, not on the presence of the poor. By spreading better technologies in all parts of the world, all the world can share in prosperity.

Should we be realistic and admit the Millennium Development goals will never be reached ?

Donald Hayman

Runcorn

The Millennium Development goals are still achievable, but we are surely running out of time, especially in Africa. In 2002, the rich countries promised a significant increase in aid, to reach 0.7 per cent of GNP of the donor nations, but that has not occurred. The donor promises were reiterated again at Gleneagles in 2005, when the participants and millions of activists vowed to "make poverty history." Yet even those promises have not been fulfilled. We should remember how fast progress can be by noting that Unicef and others have helped Africa to reduce measles deaths by 91 per cent since 2000. Food production in Africa could be doubled by 2015. Children could be in school, receiving midday meals, de-worming, and proper textbooks and educational instruction. If we understand the goals as requiring a set of interconnected public investments carried out in a businesslike way through a shared effort of donor and recipient governments, the 2015 goals are still feasible. The limiting factor in most cases is lack of donor follow-through. In some cases, like Zimbabwe, the limiting factor is despotic rule.

Should I buy food flown in from Africa, or avoid it because of climate change?

Andy Waller

Southend

Yes, buy its products, which raise local incomes and help Africa get on a path of economic development. The climate-change effects are small, and the products cannot be produced locally.

With food shortages, how can we avoid "starve thy neighbour" policies?

ADAM WRIGHT

by email

The key is to raise global food production in line with rising demand, and keep international markets open. The supply side has been hampered by very low production in Africa and other regions, droughts, and by the diversion of crop lands to biofuels. We need a three-pronged supply approach. First, we should implement urgently a fund for smallholder agriculture in low-income regions to double food production. Second, we should reverse gover-nment mandates on biofuels that compete with food production. Third, we should "climate-proof" crops to economise on water with better crop choices and drought-resistant varieties.

The earth clearly cannot support this many people. Should we introduce restrictions on family sizes?

Philippe L

London N1

We should encourage all parts of the world to achieve fertility rates consistent with a voluntary stabilisation of population of no more than eight billion by the year 2050. That is achievable, though the current business-as-usual trajectory will take the global population to well over nine billion. In many parts of the low-income world, the total fertility rate is more than five children per woman, and in some places, such as rural Africa, more than six. A rapid and voluntary reduction of fertility can be achieved through free, universal, and voluntary access to family planning and contraception; girls staying in school at least through the secondary level, delaying the onset of childbirth; child survival, giving families confidence that their offspring will survive; women's empowerment; and leadership in support of familyplanning.

Does aid keep poor countries poor and reliant?

Colin Morgan

Cardiff

If aid is just dribbled out as a handout, there will be no end to it. If aid is at a robust level to empower the poor to get out of the poverty trap, then countries will be able to end their aid dependence, as China has done. A short period of sufficient aid, enough to raise productivity above poverty levels, can break long-term dependence.

Should we embrace GM crops to solve hunger?

Rihan Coult

by email

GM technologies have huge potential in three areas. The first is where genes from drought-resistant plants are introduced into crops. The second is improved nutrition (missing amino acids for example) in food crops. The third is improved pest resistance. Care should be taken to minimise environmental or health threats but we should not turn our backs on a highly-promising technological option.

Would you run for office?

Nicola Blakely

Farringdon

It's doubtful, since I have the opportunity to help dozens of countries now, rather than pursuing the foreign policy of a single country. On the other hand, the quality of politics in my country during recent years has been so low that we all feel the need to help improve US public life. The US can still make a huge contribution to the world if it turns to global sustainable development and peaceful problem solving.

Should George Bush go down as one of the worst US presidents in history?

Laura Grant

by email

His administration is considered by many historians about the worst, in competition with Warren Harding or James Buchanan. One of the worst seems likely, worst is still in competition.

Can carbon trading work?

Tom Lawrence

Cambridge

There is a good case for putting a price on carbon emissions but it is more straightforward to do it as a tax rather than a system of tradable permits. It would be easier to tax carbon at source – coal, oil, and gas companies. Tradable permits or carbon taxes will not help develop low-emission technologies. We need to combine carbon pricing with initiatives to promote sustainable energy and farming technologies.

Who are your heroes?

Lucas Holme

Manchester

Makers of peace. I am gripped by John Kennedy's last year, between the Cuban Missile Crisis in October 1962 and his death in November 1963. He helped to save the world from hothead generals and pessimists by finding a peaceful resolution of the Cuban missile crisis, and then bravely led the way to the first post-war treaty with the Soviet Union (the Partial Nuclear Test Ban treaty) insisting peace was possible through a rational recognition of common interests. He received invaluable support from Harold MacMillan: the "special relationship" at its world-saving finest.

Jeffrey Sach's new book Common Wealth: Economics for a Crowded Planet (Allen Lane, £22.00) is out now