Where the Next Crises Are

June 05, 1994|By SARA ENGRAM

While economists quibble about the effects of ratcheting interests rates up or down, Mahbub ul Haq is drawing the world's attention to real-life economics. Mr. Haq, Pakistan's former finance minister, is the guiding light behind the United Nations' Human Development Report, a survey that looks behind the numbers to see how economic forces play out in the lives of people around the world.

The fifth annual report was released this past week, and the news is mixed.

On the bright side, more people than ever live under relatively pluralistic and democratic governments. Last year, elections were held in 45 countries, some for the first time.

In recent decades, Third World countries have developed at an unprecedented rate of economic growth -- three times faster than industrial countries did a century ago.

There has also been significant improvement in living standards in many parts of the world. In 1960, almost 70 percent of humanity existed in abysmal poverty, compared to only about 32 percent living in such conditions today.

On the other hand, despite these improvements in the developing world, one-fifth of this population goes to bed hungry every night. One-fourth of them lack access to basic necessities like safe drinking water, and fully a third of the population in these countries lives in abject poverty -- or, as the report says, ''at such a margin of human existence that words simply fail to describe it.''

Meanwhile, despite a decline in global military budgets, spending on weapons and armies still equals the combined income of half the world's population. The report notes that military spending usually decreases the chances that families can live and rear their children in peace.

Throughout the world, threats to security are becoming more difficult to isolate, and more difficult to deal with through traditional notions of defense. Drugs, AIDS, terrorism, pollution -- these forces respect no national borders and can rarely be countered effectively by military force. Moreover, technology, modern transportation systems and other forces enable these threats to spread rapidly around the world.

Good news and bad. If it sometimes seems that the history of human progress is a story of one step forward and two steps back, take heart. Recognizing problems is the first step in solving them.

That's the beauty of the Human Development Report, and its Human Development Index, which ranks countries according to such indicators of human well-being as life expectancy, literacy rates and individual purchasing power.

This index provides a useful contrast to more standard economic measuring sticks, notably the familiar Gross National Product (GNP). For example, a comparison of a country's ranking on the Human Development Index (HDI) and its per capita GNP provides a striking illustration of its development philosophy. For some countries -- such as Gabon, Namibia or Saudi Arabia -- the GNP rank is far ahead of the HDI, suggesting that these governments could make better use of their wealth in improving the lives of their people.

Other countries -- such as Sri Lanka or Costa Rica -- rank higher on the HDI than in per capita GNP, suggesting that these governments have directed more resources toward human development.

Do these measures matter? Mr. Haq presents persuasive evidence that paying attention to human development is the most sensible road to political stability as well as economic prosperity. A year ago, the 1993 Human Development Report noted the HDI gap within Mexico, with the poor, southern state of Chiapas ranking far below the more prosperous north. In January, field workers in Chiapas opened a violent rebellion against state and national governments, forcing government officials into negotiations on social, economic and political issues.

This year, the report highlights the dangerous disparities between the economic well-being of whites and blacks in South Africa. The HDI gap between those two segments of the population is four times more severe than the gap between whites and blacks in the United States. Unless these disparities are addressed quickly, South Africa's inspiring odyssey toward a free and democratic state could take a violent detour.

Brazil and Nigeria are also at risk. In those countries, regional disparities are especially severe. A person in northeastern Brazil will, on average, die 17 years earlier and earn 40 percent less than someone in the southern part of the country. In Nigeria, regional disparities are among the worst in the world.

Those statistics are signs of trouble ahead. When the Chiapas story repeats itself in Brazil or when once-thriving Nigeria dissolves into chaos, nobody can say we weren't warned.

Sara Engram is editorial-page director of The Evening Sun. Her column appears here each week.

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