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Whatever happened to the third world?

Published by Newsweek on 1998-10-01

The captains of global capitalism who met last week in Washington for the annual seance of the World Bank and International Monetary Fund predictably invoked the mantra of accelerated sustainable development for struggling nations. No bold proposals were unveiled to lift backward countries from their poverty, other than a Norwegian offer to write off a portion of its developing-country debt. In between lavish banquets and elegant soirees, the assembled bankers and ministers rued the continuing financial crises in Japan, Russia and Southeast Asia, and they fretted over the "contagion effect" for the rest of the world. In truth, of course, they were mourning the failure of their own fanciful and ever-changing theories of economic development for what used to be known as the "third world."

That phrase is no longer fashionable--it raised the specter of a capricious global economic race in which poor countries finished third behind the industrialized West and Japan (first place), and the former Communist bloc countries (second place). But "third world" or not, the race is still being run, and most of the 127 nations of the developing world are falling further behind in their efforts to chisel a better daily life for ordinary citizens. The global cohort of poverty (almost half of the world's population of 6 billion) has never been larger, and is still growing. More than 2 billion people live under the poverty line--which means they earn less than the equivalent of $300 annually. Most developing nations remain highly vulnerable to falling commodity prices and to the consequent problems of economic stagnation.

So why is the time-tainted placebo of "sustainable development" still in vogue among high priests of finance? Having parented the concept of pouring foreign-aid and Western technology into fragile and unprepared developing economies, these mandarins are understandably reluctant to abandon their brainchild. However, what is needed now is not tiresome prescriptions for economic progress but something that financial sultans have largely neglected--jump-starting social development in poor countries. Plainly put, social development means empowering local entities to improve the daily quality of life for everyday people. Given the deteriorating condition of many poor nations, donor-country developmentalists and their fellow travelers in poor nations would do well to put greater focus on the following:

_ Good governance. Merely advocating democracy in repressive states isn't going to suffice. The global aid entities need to create mechanisms through which local democratic institutions--such as village panchayats in India, and the banjars in Indonesia, for example--receive assistance to develop culturally relevant programs and to strengthen their governing structures. Much of the developing world is still rural, and the fruits of economic growth have been largely denied to the hinterland in poor nations.

_ International monitors. The donor community should tighten its requirements concerning corrosive issues such as bribery and graft. Corruption has increased exponentially in urban areas of developing countries, where foreign investment tends to concentrate. The appointment by agencies such as the World Bank and the IMF of international monitors to supervise the disbursal of foreign aid and investment can be another timely step in ensuring social equity. These monitors could be elder statesmen or retired financial titans whose experience could be marshalled in service of social development. They could promote better partnerships between donors and recipients.

_ Parliamentarians and small-scale businessmen. In many developing countries--Sri Lanka, Zimbabwe and Brazil are good examples--the legislative branch of government tends to be far more active in promoting development than the executive branch. Yet, legislators at both the national and local levels are largely bypassed by foreign donors in the development process. By the very nature of their (usually elective) positions, legislators are better attuned to local concerns. So are small entrepreneurs. They should be better consulted by the donor community in devising development projects.

_ Greater conditionality. Many activists and government officials in developing countries are bitter about aid conditionality, charging that financial "rules" imposed by the World bank, IMF and other donors or lenders tend to smother development initiatives. But "conditionality" can be beneficial if aid givers insist that recipients pay more attention to social issues such as children's rights, gender equality, and human-rights abuses. Why not "conditions" that would require developing countries to invite more nongovernmental organizations into development decision-making? Why not "conditions" that would establish specific targets for lowering infant and maternal mortality rates? And why not "conditions" that would require economic planners to inject issues such as reproductive health into local development plans?

_ Spiritual leaders. Western-style development is often perceived as undermining traditional values in the developing world. Critics in countries such as Malaysia, Pakistan and Guyana have railed against foreign aid on the grounds that it triggers widespread social immorality. That often may be demagoguery, but the fact remains that international development gurus have rarely invited the cooperation of local spiritual and religious leaders in constructing development programs. To be sure, some of these leaders are trotted out for the occasional "award" ceremony when foreign dignitaries "inspect" local development projects; but tapping into ancient local wisdom could prove a more useful way of honoring longstanding institutions such as preachers and shamans. Local cultures in many developing countries are influenced far more by spiritual leaders than by politicians. Social and economic development can be meaningfully served by understanding the local ethos--as much as by figuring out deficiencies in standards of living.

_ Technical partnerships. Many developing nations have gained formidable experience in fields such as family planning. Why not encourage such nations--India, Mexico, Tunisia, among others--to send more of their local technical experts to other developing nations? Such exchanges could be less expensive than dispatching pricey Western developmentalists, and could foster effective culturally sensitive programs at the grassroots.

Today's development mandarins can learn from the ways of yesterday's colonialists. How was it that only a handful of Britons governed the billions of the Indian Subcontinent for nearly two centuries? Colonial administration turned on two key concepts: coopting local entities, and formulating policies that were perceived to be of direct benefit to local citizens, no matter how much colonial powers plundered the treasures and resources of the larger entity. Colonialism was an early form of globalization; today's globalization needs to push a fresh concept: empowerment of grassroots institutions in the cause of social development. After all, all development is local.

Pranay Gupte,
Senior Writer and Global-Affairs Columnist

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