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The World
Bank’s new president, Robert Zoellick, passed a major
milestone: his first time leading the bank’s annual
meetings. As the world’s finance and development ministers
descended on
Washington
last week, Zoellick established himself firmly at the head
of the most important agency designed to ensure that
globalization does not leave people behind, mired in
desperate poverty. But he faces a planet that has changed
far more rapidly than his institution has.
The Third
World has shrunk, but it hasn’t vanished. The new Third
World—the hard core of the development challenge that
Zoellick faces—is composed of about 50 countries that are
home to a billion people. Globalization is propelling
China and India toward wealth, and both are closing in on
the prosperous with unprecedented speed.
But
globalization is not working for the bottom billion. Their
incomes have been virtually stagnant. From 1960 to 2000,
the new Third World experienced no growth at all.
Meanwhile, the economies of the rest of the developing
world have enjoyed accelerating growth, decade by decade.
First gradually, then rapidly, the bottom billion have
fallen away from the rest of mankind. Encouragingly,
Zoellick has picked up on this. “Globalization must not
leave the bottom billion behind,” he told the National
Press Club before the meeting. But it already has.
During the
golden decade of the 1990s, between the end of the Cold
War and 9/11, the bottom billion’s divergence from the
middle 4 billion people on Earth accelerated to 5 percent
a year, measured in per capita gross domestic product. By
the millennium, the income gap between the average
citizens of the bottom billion and those of the middle 4
billion was 5 to 1. And if you think THAT wealth gap is
alarming, think about the lucky billion—in Europe, North
America, Japan and elsewhere—at the top.
One part
of the problem is the World Bank and the United Nations,
which focus on poverty like a bean counter. That only
confuses the real issue. It is not enough that absolute
levels of poverty start to fall in the new Third World.
The further a billion people fall behind the rest of
humankind, the more it will present the world of our
children with unmanageable pressures. Even as the world’s
economies are bifurcating, the Earth continues to draw
closer together socially through information and
migration. So youth in the bottom billion KNOW that they
are being left behind. To catch up, they will need
spectacular increases in growth.
Most of
the bottom billion live in
Africa, but the countries at the bottom are scattered across the
continents: places such as
Haiti and
Bolivia in Latin America, Yemen in the Middle East, many
of the “stans” in Central Asia, and Laos and East Timor in
East Asia.
They are
nearly all small, which is part of the problem. Countries
with small and poor populations tend to lack the critical
mass of educated and talented people to diagnose failure
and do something about it.
Globalization has compounded this shortage by making exits
both feasible and attractive: the bottom billion are
hemorrhaging their limited talent. Chinese students go
back to
China,
Indian students now go back to India, but students from
the countries of the bottom billion don’t go back.
Many of
these small countries are also plagued by civil war.
Imagine if India or China were divided into 50 countries.
Do you think they would all be at peace? To be small is
also to be at the mercy of your neighbors, especially if
you are landlocked.
Suppose
this country were not the United States but the Divided
States, each sovereign and self-serving. The great
manufacturing and agricultural heartland states would have
been strangled at birth by the absence of interstate
highways, railways and canals. The plight of
Niger,
which is dependent on Nigeria, and of Uganda, which is
dependent on Kenya, is to be landlocked and located in the
Divided States of
Africa. A third of
Africa’s population lives in such countries.
So how can
Zoellick and others help the bottom billion catch up? In
each country of the new Third World, reformers are
struggling with entrenched interests. Catching up depends
on the reformers winning these struggles. We can’t do that
for them, but we can make their battles a whole lot easier
than they have been.
In 1945
the United States got serious about rebuilding Europe.
Yes, there was aid, through the Marshall Plan. But there
was also trade: Washington reversed the protectionism of
the 1930s and created the General Agreement on Tariffs and
Trade, thereby integrating Europe into the US economy. And
there was also security:
Washington reversed the isolationism of the 1930s and created Nato,
thereby stabilizing
Europe by placing
US troops on European soil for decades. And there was also
a shrewd attempt to create systems that produce good
governance: Washington created the Organization for
Economic Cooperation and Development and encouraged the
formation of the European Economic Community, thereby
starting the process of mutually setting standards that
locked first Greece, Spain and Portugal and then much of
Eastern Europe into democratic market economies.
It’s
feasible to get the bottom billion on a more prosperous
track, but doing so will require a serious approach that
utilizes all the instruments at our disposal—and is
sustained for at least two decades. Indeed, we will need
the same toolkit we used in the recovery of postwar
Europe: aid, trade, security and good governance, though
utilized differently.
Aid will
probably be more or less as important to helping the
bottom billion as it was to saving postwar Europe: part of
the solution but not decisive. The exclusive reliance on
aid has distorted what should be institutions and energy
devoted to development. Instead of development agencies,
we have aid agencies. Instead of pressure from the street
for development, we have pressure for aid.
The
distortion of institutions and citizen pressure is
self-perpetuating because it crowds out consideration of
other approaches. (What, for example, do you imagine aid
agencies lobby for?) Our utter neglect of trade, security
and governance policies for the bottom billion is a
scandal—and an opportunity. Properly used, these policies
have real power, which is why they were employed for the
recovery of
Europe. Zoellick
and others who care about world poverty have to learn how
to use the full array of policies, rather than pretending
that it can all be done with aid.
Saving the
bottom billion will also require the United States and
Europe to work together. The emerging economies will need
to do the same. To produce this unity of serious purpose,
caring will not be enough: goodness is in limited supply.
Fortunately, it can be reinforced by the less morally
demanding (and therefore better supplied) motivation of
enlightened self-interest.
Moved as I
am by the miseries of life at the bottom, I, too, have a
self-interested stake here: I am fearful of the world that
my six-year-old son will inherit unless we wake up. The
generation of Harry S. Truman and Dwight D. Eisenhower
rose to the challenge of restoring
Europe and gave us a safer world. Our own generation now has its
own choice to make: whether to face up to our
responsibilities or, like the generation of the 1930s, to
go into collective denial and sleepwalk into a nightmare.
It isn’t
just about Zoellick. In our democracies, politicians will
ultimately do what we ask of them. It is our collective
responsibility to grasp the challenge posed by the bottom
billion—and, critically, to get up to speed with the
issues to understand what can be done about it. Only then
will our politicians move from gestures to serious,
effective actions.
Collier, a
professor of economics at
Oxford,
is the author of The Bottom Billion: Why the Poorest
Countries Are Failing and What Can Be Done About
It. |
