Human
Development Could Save the World
From the Impact of a Global Recession
By JONATHAN POWER
LONDON--The gathering economic crisis, which the
financial papers are somberly predicting has too many of the
makings of turning into a world depression, must be a time
for mental stock-taking. It comes after one of the most
successful boom periods in history, which for a while seemed
to sweep all before it, not least the old time critics of
untrammeled capitalism, free markets and wide open
societies. It coined a new word "globalisation" - - open
your doors wide and you'd gain more on the swings than you'd
lose on the roundabouts.
President Bill Clinton and his Treasury Secretary Robert
Rubin are passionate proponents of this brand of economics
and their faith appears unshaken despite all the turbulence.
As a long run theory, globalisation and 100% wide open doors
and windows in the financial and economic markets may make a
lot of sense (and some of it like free trade still does)
but, as Keynes said, "in the long run we are all dead".
Thus it should come as no surprise to rational men and
women that other rational men and women - - right now in
Taiwan, Hong Kong and Malaysia, once total devotees of
let-it-all-hang-out economics - - are now realizing a little
local control in the absence of even a modicum of
international control is called for. Why is it that the
Western powers, to give but one example, will give no
thought to the introduction of the Tobin tax (named after
the Nobel prize winning Yale University economist, James
Tobin) that would, by taxing international currency
transactions, act as a brake on speculators who dive in and
dive out of a currency without any inhibitions whatsoever?
(The tax would also provide a very useful pool of
international funds that could replenish the capital of a
re-thought International Monetary Fund.)
The most damning evidence to be marshaled against the
supposed benefits of unfettered globilisation is to be found
in the Human Development Report, published today by the
United Nations Development Programme. This measures economic
progress in all its dimensions, not just income per head but
life expectancy, adult literacy and educational
achievement.
In the round the figures look good, even spectacular. The
poorer countries of the Third World have covered as much
distance in human development during the past 30 years as
the industrialised world did in over a century. A simple but
telling fact: a child born today in a developing country can
expect to live 16 years longer than a child born 35 years
ago.
But this is more because of the hard humdrum work of
better rural health services and the rapid growth of primary
schools - - and the often derided work of the aid agencies -
- than because there has been a massive surge in economic
growth. Out of 124 Third World countries, for which there
are adequate statistics, only 21 had a per capita growth
rate of 3% or more each year between 1995 and 1998. No fewer
than 100 countries - - in the Third World and western Europe
- - have experienced serious economic decline over the past
three decades. As a result per capita income in these
countries is lower than it was 10, 15, 20 or even, for some
countries, 30 years ago.
Admittedly, there were signs during the last three years
of boom times that at last positive growth was spreading to
most of these countries too. But then, if this is now being
wiped away, by the light of a full century it is not going
to look like a memorable achievement.
To lock-in what has been accomplished on the eve of
perhaps the world's greatest ever recession is going to
require a bit less concern about the alleged long run
benefits of globilisation and more, much more, awareness
about the immediate possibilities of on-going human
development. Advancing it even in hard times need not be an
exorbitantly costly undertaking - - it means focusing in on
the essentials of basic education, health, nutrition,
reproductive health, family planning, safe water and
sanitation. The UNDP reckon it would cost a mere 0.1% of
world income. "Barely more than a rounding error", they
observe. And the results would be incredibly telling. There
is no need, as the reporters keep dispatching from countries
like Indonesia, to say a whole generation now faces no
future but a fall back into the poverty they so recently
escaped.
Already countries as disparate as Costa Rica, Tanzania,
Barbados, The United Arab Emirates, Oman, Saudi Arabia,
Malaysia and Taiwan have shown, at varying levels of
development, what can be done given political will. With
well directed resources they have sharply improved the
well-being of their ordinary citizens, at no overwhelming
cost.
They are more than a handful of countries. But they are
still a minority. These are the people the western world's
finance ministers need to talk to a little more. A little
less grand theory and a little more reflective listening
could produce a better world - - even if there is a great
recession.
September 9,
1998, LONDON
Copyright © 1998 By JONATHAN POWER
Note: I can be reached by phone +44 385 351172
and e-mail: JonatPower@aol.com
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