Help the Fourth World

January 23, 2000|By Roger C. Altman

NEW YORK -- The economic explosion of the 1990s exposed a huge and disturbing income gap between the industrialized and developing worlds. The divide was wide before, but technology and globalization have expanded it to nearly incomprehensible breadth.

Technology drives economic performance today, and poorer nations just don't have it. Yes, the gulf between the haves and have-nots in America is wide, but it is nothing compared with this global crisis. Sadly, few are paying any attention.

During last fall's trade summit in Seattle, involving the world's leading nations, the widening gap never came up. With the laissez-faire brand of capitalism so celebrated now, it is apparently an unpopular subject. Yet, half the world's population is increasingly threatened with economic oblivion.

That is dangerous for world stability, and we should not resign ourselves to it. If this planet truly splits in two -- the rich and the very poor, with an ever-widening gulf between them -- it will be an unstable place.

The Fourth World, the least-developed parts of Africa and Asia, will become even more fertile territory for brutality, state-sponsored terrorism and mass tragedy. There will be more spots crying out for intervention, such as North Korea, Iraq and Rwanda, and some will be more dangerously armed.

The solutions, if there are any, don't involve Western governments writing big checks. Washington may be the capital of the richest nation, but it shows pitifully little interest in its own poor, let alone those in Africa and India.

No, hope centers on ever-cheaper technology that enlightened businesses and certain philanthropic foundations will bring to the Fourth World. The basic premise is that supply can induce demand: The availability of extremely low-priced cellular phones, Internet access or medicines, for example, can create consumers, even in distressed markets.

Yes, there are also a few changes in Western policies, other than money, that can help. The size of the income gap is breathtaking. In the United States, inequality has widened sharply. Four of every five households now take home a smaller percentage of the national wealth than 20 years ago. But it is the global gap that truly shocks. The income disparity between the richest and poorest fifths of the world's population was 30 to 1 in 1960; today, it is 75 to 1.

Technological divide

In this age, technology drives productivity, which, in turn, determines standards of living. But the gap in technological capability between wealthier and poorer nations is huge and growing. Look at communications. Virtually all homes in the developed world have phone service; half of all Americans have a computer at home. But there are only 14 million phone lines in all Africa, fewer than in the Los Angeles metropolitan area, and almost no computers in homes.

Incredibly, there are more Internet users in the United States than in the other nine most-populous nations combined. Do we want the two planets that such an ever-widening gap will create? Should we just concentrate on ourselves and wait to see what happens? Or is there a responsibility to try harder to lift these places up?

At bottom, it is a moral issue. Over the foreseeable future, these poorest regions do not pose a strategic threat to the United States and to countries north of the equator. Nor will our own economic fortunes be much affected by their poverty. But it is unconscionable to do nothing while 3 billion people living on less than $2 a day recede further into oblivion. And with all the new and fantastic tools of technology we possess, there is a greater opportunity to improve their fate. But how?

One key is the same technology that is widening income inequalities. It may ultimately be the economic salvation of the developing world. That's because the accelerating speed of technical advancement is relentlessly lowering the price of all technology -- from laptops to Internet service.

We also see it in satellite television. Many in the developing world who don't have access to broadcast or cable networks now have access to satellite systems. Then there is the unique historical phenomenon of the Internet. Soon, any laptop user in Africa or China will be able to download all information from the greatest libraries in the world.

Will the corporate sector and world-capital markets help to establish these technologies in poorer regions? The example of wireless communications is encouraging. It is spreading everywhere as operators and investors recognize the potential. It turns out that consumers are prepared to spend high proportions of their income on it.

Consumers consider it a necessity, like food and shelter, and it lets them bypass the five-year wait for inept telephone monopolies to install land-line phones. And cellular telephones are available because many wireless companies are practically giving them away to sign up customers.

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