Jeffrey Sachs, professor of the University of Columbia and director of The Earth Institute gave a conference this past Thursday in Cartagena. In his speach, the international expert talked about topics such as poverty, innovation, and inequality, but emphasized climate change, which he believes will have a great impact on Colombia. Sachs discussed with Portfolio magazine the current macroeconomic climate, and the role of Colombia in the global economy.
According to Mr. Sachs, the world is now growing at a reasonable rate and has become more stable, though Asia has de-accelerated. If modern and sensible economic policies are adopted throughout the world, Sachs believes that most countries will see a modest economic recovery in the medium term.
Sachs believes that Latin America has experienced slower growth due to their dependency upon commodities. Commodity prices have fallen sharply over the past three years, led by a more than 50% drop in the price of petroleum. Sachs indicated that countries which are dependent upon commodities are more vulnerable to price swings, and that countries such as Colombia must diversify their economy in order to weather these storms.
At present, coal is Colombia’s third largest export. Globally, coal is being used less and less, though its use will not disappear immediately. Sachs implored Colombia not to invest heavily in more coal exploration, as the value of that coal when it is extracted in five years will likely be far lower than it is now.
The professor instead recommended that the Colombian government invest more in alternative sources of energy. Such an investment would put the country ahead of the curve and could position the country for great things in the next decade. However to achieve that goal, Colombia will need scientists and engineers to evaluate the situation and devise a strategy. One issue that is holding Colombia back is academics and education, as mathematics and science are far behind other countries. He used Colombia as an example of a country that has, however, produced great artists, poets, and diplomats.
Mr. Sachs also addressed the disparity between the wealthy and poor classes in Colombia. He said that there is no easy solution for enriching the poor, but that abject poverty can be eradicated. In most countries, he said, unfortunately the poor will remain poor.