The

By John Greenwald

To Jeffrey Sachs, the glaring gap between rich and poor in Latin America is a major cause of the debt crisis that has racked the region. The boyish Harvard & economist, an adviser to debt-ridden countries from Bolivia to Poland, blames wealthy Latin elites for dodging taxes and arranging self-serving subsidies that have "sucked the blood" from many governments, forcing them to borrow heavily.

That blunt diagnosis is typical of Sachs, 34, an economics wunderkind who was a tenured professor at 29 and has become a champion of debt relief for developing countries. He first gained renown for his advice to Bolivia, which slashed its inflation rate from more than 20,000% in 1985 to 15% today. When Sachs visited Argentina last June, talk-show hosts rushed to schedule interviews. In a single hectic week last month, Sachs was in Peru and Brazil and then jetted to Warsaw, where he advises the new government.

Sachs' message is simple: debtors must reform their economies by methods that include collecting more taxes from the elite, while U.S. banks must forgive at least half their $59 billion of loans to Latin borrowers. "I don't believe we should move in small steps," says the economist.

Such advice has often placed Sachs in a cross fire between U.S. bankers, who oppose large-scale debt forgiveness, and populist foreign critics, who resent his calls for fiscal austerity. Walter Wriston, the former chairman of Citicorp, whose Citibank unit has more than $8 billion in outstanding Latin American loans, calls Sachs "a paid flack for the countries of Latin America." Wriston argues that widespread loan write-offs would prevent Latin countries from receiving new credit. At the same time, Julio Bravo, finance secretary of the Bolivian Worker's Central Union, charges that as a result of Sachs' advice, "salaries have decreased, the firing of workers has increased, and policies respond to the interests of the business sector."

Sachs, whose work in Latin America is underwritten by the United Nations, responds that "if one person can be attacked from so many directions, there hasn't been enough contact between sides" in the debt crisis. "Much of my work," he notes, "is just sitting quietly in a back room analyzing data with members of the government." Sachs did that on a 1986 trip to Bolivia, when he arrived to find that the Planning Minister had resigned and the government was ready to drop its anti-inflation program. But after examining the latest figures, Sachs argued that the program was sound and persuaded leaders to stick with it.

In the same vein, Sachs believes that the Latin debt crisis will eventually ease. He considers a plan that Treasury Secretary Nicholas Brady unveiled last spring, which calls for limited debt reduction, a modest but encouraging step. "There has been a lot of progress," Sachs says. "The thinking is much more realistic."

With reporting by Elizabeth Love/La Paz