The separate worlds of rich and poor are widening

July 19, 1996|By Jonathan Power

TOKYO -- Eighty-nine countries are worse off economically than they were 10 years ago. Since there are only 160 countries with usable data bases, this statistic contained in the Human Development Report published here this week by the U.N. Development Program is startling -- and damning, for it could have been largely avoided.

In part this predicament was the fall-out from the 1973 and 1979 oil-price hikes. In part it was aggravated by the recession of the 1980s that struck most of the industrialized countries and radiated to their Third World trading partners. In part it arose from domestic ills, ranging from civil war to to economic and political mismanagement, from natural calamities to over-dependence on unstably priced commodities,

In 19 countries per-capita income is below the levels of 1960 or before. These include not only war-torn Haiti, Lebanon, Liberia, Nicaragua, Rwanda and Sudan, but also peaceful Venezuela and Ghana. And in 70 countries levels of incomes are less than those reached in the 1960s and '70s.

The world;s very rich are getting richer as the numbers of poor increase. The assets of the world's 358 billionaires exceed the combined incomes of countries accounting for nearly half of the world's people.

In Mexico there was only one billionaire before the reformist free-market president Carlos Salinas de Gortari started privatizing state companies in 1987. Now there are 24; nearly all got rich on government privatization. But Mexico as a whole is worse off than it was in 1970. In such countries economic decline has lasted longer and gone deeper than the Great Depression of the 1930s.

There are, however, success stories. Basic advances in health, longevity and education have risen faster in the developing countries in the last 30 years than the industrialized world achieved in more than a century. Life expectancy went up by 30 percent. Primary-school enrollment jumped from 48 percent to 77 percent.

These accomplishments are partly attributable to modern medical science but mostly to the go-for-it attitudes of many governments and the often derided international aid agencies.

The challenge is to combine high levels of human development, low unemployment and rapid economic growth, creating a ''virtuous cycle'' in which worker productivity rises and triggers an increase in real wages which in turn attracts more investment in human capital, in education and access to social services.

According to Professor Richard Jolly, the former deputy executive director of UNICEF who is the principal author of this year's report, the pace setters are the East and Southeast Asian countries.

Fastest and fairest

These countries, led by Japan, not only have grown fastest; they also have been most fair in their distribution of income and assets such as land and credits. Not least, they have built their growth by investing in health and education for all, however poor.

Five developing countries stick out for their innovation over the last 30 years. Malaysia, instead of being traumatized by the race riots of 1969, used the bitter experience to formulate a 20-year plan to raise growth and human development, reduce poverty and racial discrimination, and improve education and health standards. The success of that 20-year plan led to a follow-up plan in 1990 that seeks to continue the winning formula of economic growth and equity.

South Korea, likewise, has surged in a single generation. In 1945 only 13 percent of adults had any formal schooling. By 1990 average years of schooling for all reached 9.9 years, higher than in the industrialized countries. Again the recipe for success is a mix of economic incentives and high investment in the essentials of life.

Taiwan, Singapore, Hong Kong and, of course, the long-time example of Japan, also followed the course of mixing high rates of economic growth with equity and human development.

There seems no reason the rest of the world, in particular the 89 countries that have regressed, can't emulate them, although some, as in sub-Saharan Africa, cannot progress until they are relieved of debt burdens accumulated over the last 30 years. This latest U.N. report is a blueprint for social and economic success. Presidents and prime ministers everywhere should read it.

Jonathan Power writes a column on the Third World.

Pub Date: 7/19/96

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