Preparing for the 21st Century: Winners and Losers

1.

Everyone with an interest in international affairs must be aware that broad, global forces for change are bearing down upon humankind in both rich and poor societies alike. New technologies are challenging traditional assumptions about the way we make, trade, and even grow things. Automated workplaces in Japan intimate the end of the “factory system” that first arose in Britain’s Industrial Revolution and spread around the world. Genetically engineered crops, cultivated in biotech laboratories, threaten to replace naturally grown sugar, vanilla, coconut oil, and other staple farm produce, and perhaps undermine field-based agriculture as we know it. An electronically driven, twenty-four-hour-a-day financial trading system has created a global market in, say, yen futures over which nobody really has control. The globalization of industry and services permits multinationals to switch production from one country to another (where it is usually cheaper), benefitting the latter and hurting the former.

In addition to facing these technology-driven forces for change, human society is grappling with the effects of fast-growing demographic imbalances throughout the world. Whereas birthrates in richer societies plunge well below the rates that would replace their populations, poorer countries are experiencing a population explosion that may double or even treble their numbers over the next few decades. As these fast-swelling populations press upon the surrounding forests, grazing lands, and water supplies, they inflict dreadful damage upon local environments and may also be contributing to that process of global warming first created by the industrialization of the North a century and a half ago. With overpopulation and resource depletion undermining the social order, and with a global telecommunications revolution bringing television programs like Dallas and Brideshead Revisited to viewers everywhere from Central America to the Balkans, a vast illegal migration is under way as millions of families from the developing world strive to enter Europe and North America.

Although very different in form, these various trends from global warming to twenty-four-hour-a-day trading are transnational in character, crossing borders all over our planet, affecting local communities and distant societies at the same time, and reminding us that the earth, for all its divisions, is a single unit. Every country is challenged by these global forces for change, to a greater or lesser extent, and most are beginning to sense the need to prepare themselves for the coming twenty-first century. Whether any society is at present “well prepared” for the future is an open question;¹ but what is clear is that the regions of the globe most affected by the twin impacts of technology and demography lie in the developing world. Whether they succeed in harnessing the new technologies in an environmentally prudent fashion, and at the same time go through a demographic transition, will probably affect the prospects of global peace in the next century more than any other factor. What, then, are their chances?

Before that question can be answered, the sharp contrasts among the developing countries in the world’s different regions need to be noted here.<a name=”>Before that question can be answered, the sharp contrasts among the developing countries in the world’s different regions need to be noted here.² Perhaps nothing better illustrates those differences than the fact that, in the 1960s, South Korea had a per capita GNP exactly the same as Ghana’s (US $230), whereas today it is ten to twelve times more prosperous.³ Both possessed a predominantly agrarian economy and had endured a half-century or more of colonial rule. Upon independence, each faced innumerable handicaps in their effort to “catch up” with the West, and although Korea possessed a greater historical and cultural coherence, its chances may have seemed less promising, since it had few natural resources (apart from tungsten) and suffered heavily during the 1950–1953 fighting.

Decades later, however, West African states remain among the most poverty-stricken countries in the world—the per capita gross national products of Niger, Sierra Leone, and Chad today, for example, are less than $500⁴—while Korea is entering the ranks of the high-income economies. Already the world’s thirteenth largest trading nation, Korea is planning to become one of the richest countries of all in the twenty-first century,⁵ whereas the nations of West Africa face a future, at least in the near term, of chronic poverty, malnutrition, poor health, and underdevelopment. Finally, while Korea’s rising prosperity is attended by a decrease in population growth, most African countries still face a demographic explosion that erodes any gains in national output.

This divergence is not new, for there have always been richer and poorer societies; the prosperity gap in the seventeenth century—between, say, Amsterdam and the west coast of Ireland, or between such bustling Indian ports as Surat and Calcutta⁶ and the inhabitants of New Guinean hill villages—must have been marked, although it probably did not equal the gulf between rich and poor nations today. The difference is that the twentieth-century global communications revolution has made such disparities widely known. This can breed resentments by poorer peoples against prosperous societies, but it can also provide a desire to emulate (as Korea emulated Japan). The key issue here is: What does it take to turn a “have not” into a “have” nation? Does it simply require imitating economic techniques, or does it involve such intangibles as culture, social structure, and attitudes toward foreign practices?

This discrepancy in performance between East Asia and sub-Saharan Africa clearly makes the term “>This discrepancy in performance between East Asia and sub-Saharan Africa clearly makes the term “third world” misleading. However useful the expression might have been in the 1950s, when poor, nonaligned, and recently decolonized states were attempting to remain independent of the two superpower blocs,⁷ the rise of super-rich oil-producing countries a decade later already made the term questionable. Now that prosperous East Asian societies—Korea, Taiwan, and Singapore—possess higher per capita GNPs than Russia, Eastern Europe, and even West European states like Portugal, the word seems less suitable than ever. With Taiwanese or Korean corporations establishing assembly plants in the Philippines, or creating distribution networks within the European Community, we need to recognize the differences that exist among non-Western economies. Some scholars now categorize five separate types of “developing” countries in assessing the varied potential of societies in Asia, Africa, and Latin America.⁸

Relative national growth in the 1980s confirms these differences. Whereas East Asian economies grew on average at an impressive annual rate of 7.4 percent, those in Africa and Latin America gained only 1.8 and 1.7 percent respectively⁹—and since their populations grew faster, the net result was that they slipped backward, absolutely and relatively. Differences of economic structure also grew in this decade, with African and other primary commodity-producing countries eager for higher raw-material prices, whereas the export-oriented manufacturing nations of East Asia sought to keep commodity prices low. The most dramatic difference occurred in the shares of world trade in manufactures, a key indicator of economic competitiveness:

SHARES OF WORLD TRADE IN MANUFACTURES ¹⁰

Thus, while some scholars still refer to a dual world economy¹¹ of rich and poor countries, what is emerging is increasing differentiation. Why is this so?

The developing countries most successfully catching up with the West are the trading states of the Pacific and East Asia. Except for Communist regimes there, the Pacific rim countries (including the western provinces of Canada and the United States, and in part Australia) have enjoyed a lengthy boom in manufacturing, trade, and investment; but the center of that boom is on the Asian</i> side of the Pacific, chiefly fuelled by Japan’s own spectacular growth and the stimulus given to neighboring economies and trans-Pacific trade. According to one source:</p>
<blockquote>In 1962 the Western Pacific (notably East Asia) accounted for around 9 percent of world GNP, North America for 30 percent, and Western Europe for 31 percent. Twenty years later, the Western Pacific share had climbed to more than 15 percent, while North America’s had fallen to 28 percent and Europe’s to 27 percent. By the year 2000 it is likely that the Western Pacific will account for around one-quarter of world GNP, with the whole Pacific region increasing its share from just over 43 percent to around half of world GNP.<a name=”>The developing countries most successfully catching up with the West are the trading states of the Pacific and East Asia. Except for Communist regimes there, the Pacific rim countries (including the western provinces of Canada and the United States, and in part Australia) have enjoyed a lengthy boom in manufacturing, trade, and investment; but the center of that boom is on the Asian side of the Pacific, chiefly fuelled by Japan’s own spectacular growth and the stimulus given to neighboring economies and trans-Pacific trade. According to one source:

In 1962 the Western Pacific (notably East Asia) accounted for around 9 percent of world GNP, North America for 30 percent, and Western Europe for 31 percent. Twenty years later, the Western Pacific share had climbed to more than 15 percent, while North America’s had fallen to 28 percent and Europe’s to 27 percent. By the year 2000 it is likely that the Western Pacific will account for around one-quarter of world GNP, with the whole Pacific region increasing its share from just over 43 percent to around half of world GNP.¹²

East Asia’s present boom is not, of course, uniform, and scholars distinguish between the different stages of economic and technological development in this vast region. Roughly speaking, the divisions would be as follows:

(a) Japan, now the world’s largest or second largest financial center and, increasingly, the most innovative hightech nation in the nonmilitary field;

(b) the four East Asian “tigers” or “dragons,” the Newly Industrialized Economies (NIEs) of Singapore, Hong Kong, Taiwan, and South Korea, of which the latter two possess bigger populations and territories than the two port-city states, but all of which have enjoyed export-led growth in recent decades;

(c) the larger Southeast Asian states of Thailand, Malaysia, and Indonesia which, stimulated by foreign (chiefly Japanese) investment, are becoming involved in manufacturing, assembly, and export—it is doubtful whether the Philippines should be included in this group;

(d) finally, the stunted and impoverished Communist societies of Vietnam, Cambodia, and North Korea, as well as isolationist Myanmar pursuing its “Burmese Way to Socialism.”

Because of this staggered level of development, economists in East Asia invoke the image of the “flying geese,” with Japan the lead bird, followed by the East Asian NIEs, the larger South-east Asian states, and so on. What Japan produced in one decade—relatively low-priced toys, kitchen-ware, electrical goods—will be imitated by the next wave of “geese” in the decade following, and by the third wave in the decade after that. However accurate the metaphor individually, the overall picture is clear; these birds are flying, purposefully and onward, to an attractive destination.

Of those states, it is the East Asian NIEs that have provided the clearest example of successful transformation. Although distant observers may regard them as similar, there are notable differences in size, population,<a name=”>Of those states, it is the East Asian NIEs that have provided the clearest example of successful transformation. Although distant observers may regard them as similar, there are notable differences in size, population,¹³ history, and political system. Even the economic structures are distinct; for example, Korea, which began its expansion at least a decade later than Taiwan (and democratized itself even more slowly), is heavily dependent upon a few enormous industrial conglomerates, or chaebol, of whom the top four alone (Samsung, Hyundai, Lucky-Goldstar, and Daewoo) have sales equal to half Korea’s GNP. By contrast, Taiwan possesses many small companies, specializing in one or two kinds of products. While Taiwanese are concerned that their firms may lose out to foreign giants, Koreans worry that the chaebol will find it increasingly difficult to compete in large-scale industries like petrochemicals and semiconductors and ship-building at the same time.¹⁴

Despite such structural differences, these societies each contain certain basic characteristics, which, taken together, help to explain their decade-upon-decade growth. The first, and perhaps the most important, is the emphasis upon education. This derives from Confucian traditions of competitive examinations and respect for learning, reinforced daily by the mother of the family who complements what is taught at school.

To Western eyes, this process—like Japan’s—appears to concentrate on rote learning and the acquisition of technical skills, and emphasizes consensus instead of encouraging individual talent and the habit of questioning authority. Even if some East Asian educators would nowadays admit that criticism, most believe that their own educational mores create social harmony and a well-trained work force. Moreover, the uniformity of the system does not exclude intense individual competitiveness; in Taiwan (where, incidentally, twelve members of the fourteen-member cabinet of 1989 had acquired Ph.D.s abroad), only the top one third of each year’s 110,000 students taking the national university entrance examinations are selected, to emphasize the importance of college education.¹⁵

Perhaps nothing better illustrates this stress upon learning than the fact that Korea (43 million population) has around 1.4 million students in higher education, compared with 145,000 in Iran (54 million), 15,000 in Ethiopia (46 million), and 159,000 in Vietnam (64 million); or the further fact that already by 1980 “as many engineering students were graduating from Korean institutions as in the United Kingdom, West Germany and Sweden combined.”¹⁶

The second common characteristic of these countries is their high level of national savings. By employing fiscal measures, taxes, and import controls to encourage personal savings, large amounts of low-interest capital were made available for investment in manufacture and commerce. During the first few decades of growth, personal consumption was constrained and living standards controlled—by restrictions upon moving capital abroad, or importing foreign luxury goods—in order to funnel resources into industrial growth. While average prosperity rose, most of the fruits of economic success were plowed back into further expansion. Only when economic “>The second common characteristic of these countries is their high level of national savings. By employing fiscal measures, taxes, and import controls to encourage personal savings, large amounts of low-interest capital were made available for investment in manufacture and commerce. During the first few decades of growth, personal consumption was constrained and living standards controlled—by restrictions upon moving capital abroad, or importing foreign luxury goods—in order to funnel resources into industrial growth. While average prosperity rose, most of the fruits of economic success were plowed back into further expansion. Only when economic “take-off” was well under way has the system begun to alter; increased consumption, foreign purchases, capital investment in new homes, all allow internal demand to play a larger role in the country’s growth. In such circumstances, one would expect to see overall savings ratios decline. Even in the late 1980s, however, the East Asian NIEs still had high national savings rates:

COMPARATIVE SAVINGS RATIOS, 1987 ¹⁷

The third feature has been a strong political system within which economic growth is fostered. While entrepreneurship and private property are encouraged, the “tigers” never followed a laissez-faire model. Industries targeted for growth were given a variety of supports—export subsidies, training grants, tariff protection from foreign competitors. As noted above, the fiscal system was arranged to produce high savings ratios. Taxes assisted the business sector, as did energy policy. Trade unions operated under restrictions. Democracy was constrained by the governor of Hong Kong, dirigiste administration in Singapore, and the military regimes in Taiwan and Korea. Only lately have free elections and party politics been permitted. Defenders of this system argued that it was necessary to restrain libertarian impulses while concentrating on economic growth, and that democratic reforms are a “reward” for the people’s patience. The point is that domestic politics were unlike those in the West yet did not hurt commercial expansion.

The fourth feature was the commitment to exports, in contrast to the policies of India, which emphasize locally produced substitutes for imports, and the consumer-driven policies of the United States. This was traditional for a small, bustling trading state like Hong Kong, but it involved substantial restructuring in Taiwan and Korea, where managers and workers had to be trained to produce what foreign customers wanted. In all cases, the value of the currency was kept low, to increase exports and decrease imports. Moreover, the newly industrialized economies of East Asia took advantage of favorable global circumstances: labor costs were much lower than in North America and Europe, and they benefitted from an open international trading order, created and protected by the United States, while shielding their own industries from foreign competition.

Eventually, this led to large trade surpluses and threats of retaliation from European and American governments, reminding us of the NIEs’ heavy dependence upon the current international economic system. The important thing, however, is that they targeted export-led growth in manufactures, whereas other developing nations continued to rely upon commodity exports and made little effort to cater to foreign consumers’ tastes.¹⁸ Given this emphasis on trade, it is not surprising to learn that Asia now contains seven of the world’s twelve largest ports.

Finally, the East Asian NIEs possess a local model, namely Japan, which Yemen, Guatemala, and Burkina Faso simply do not have. For four decades East Asian peoples have observed the dramatic success of a non-Western neighbor, based upon its educational and technical skills, high savings ratios, long-term, state-guided targeting of industries and markets, and determination to compete on world markets, though this admiration of Japan is nowadays mixed with a certain alarm at becoming members of a yen block dominated by Tokyo. While the Japanese domestic market is extremely important for the East Asian NIEs, and they benefit from Japanese investments, assembly plants, engineers, and expertise, they have little enthusiasm for a new Greater East Asia co-prosperity sphere.<a name=”>Finally, the East Asian NIEs possess a local model, namely Japan, which Yemen, Guatemala, and Burkina Faso simply do not have. For four decades East Asian peoples have observed the dramatic success of a non-Western neighbor, based upon its educational and technical skills, high savings ratios, long-term, state-guided targeting of industries and markets, and determination to compete on world markets, though this admiration of Japan is nowadays mixed with a certain alarm at becoming members of a yen block dominated by Tokyo. While the Japanese domestic market is extremely important for the East Asian NIEs, and they benefit from Japanese investments, assembly plants, engineers, and expertise, they have little enthusiasm for a new Greater East Asia co-prosperity sphere.¹⁹

The benefits of economic success are seen not merely in East Asia’s steadily rising standards of living. Its children are on average four or five inches taller than they were in the 1940s, and grow up in some of the world’s healthiest countries:

COMPARATIVE LIVING STANDARDS²¹

A Taiwanese child born in 1988 could expect to live 74 years, only a year less than an American or a West German, and 15 years longer than a Taiwanese born in 1952; a South Korean born in 1988 could expect 70 years on earth, up from 58 in 1965. In 1988 the Taiwanese took in 50 percent more calories each day than they had done 35 years earlier. They had 200 times as many televisions, telephones and cars per household; in Korea the rise in the possession of these goods was even higher.²⁰

In addition, the East Asian NIEs enjoy some of today’s highest literacy rates, once again confirming that they are altogether closer to “first” world nations than poor, developing countries:

Will this progress last into the twenty-first century? Politically, Hong Kong’s future is completely uncertain, and many companies are relocating their headquarters elsewhere; Taiwan remains a diplomatic pariah-state because of Beijing’s traditional claims; and South Korea still worries about the unpredictable, militarized regime in the north. The future of China—and of Siberia—is uncertain, and causes concern. The 1980s rise in Asian stock-market prices (driven by vast increases in the money supply) was excessive and speculative, and destined to tumble. Protectionist tendencies in the developed world threaten the trading states even more than external pressures to abandon price supports for local farmers. A rise in the value of the Korean and Taiwanese currencies has cut export earnings and reduced their overall rate of growth. Some Japanese competitors have moved production to neighboring low-cost countries such as Thailand or southern China. Sharp rises in oil prices increase the import bills. High wage awards (in Korea they increased by an average 14 percent in 1988, and by 17 percent in 1989) affect labor costs and competitiveness. The social peace, precarious in these recent democracies, is damaged by bouts of student and industrial unrest.<a name=”>Will this progress last into the twenty-first century? Politically, Hong Kong’s future is completely uncertain, and many companies are relocating their headquarters elsewhere; Taiwan remains a diplomatic pariah-state because of Beijing’s traditional claims; and South Korea still worries about the unpredictable, militarized regime in the north. The future of China—and of Siberia—is uncertain, and causes concern. The 1980s rise in Asian stock-market prices (driven by vast increases in the money supply) was excessive and speculative, and destined to tumble. Protectionist tendencies in the developed world threaten the trading states even more than external pressures to abandon price supports for local farmers. A rise in the value of the Korean and Taiwanese currencies has cut export earnings and reduced their overall rate of growth. Some Japanese competitors have moved production to neighboring low-cost countries such as Thailand or southern China. Sharp rises in oil prices increase the import bills. High wage awards (in Korea they increased by an average 14 percent in 1988, and by 17 percent in 1989) affect labor costs and competitiveness. The social peace, precarious in these recent democracies, is damaged by bouts of student and industrial unrest.²²

On the other hand, these may simply be growing pains. Savings ratios are still extremely high. Large numbers of new engineers and technicians pour out of college each year. The workers’ enhanced purchasing power has created a booming domestic market, and governments are investing more in housing, infrastructure, and public facilities. The labor force will not grow as swiftly as before because of the demographic slowdown, but it will be better educated and spend more.²³ A surge in overseas investments is assisting the long-term balance of payments. As the populous markets of Indonesia, Thailand, and Malaysia grow at double-digit rates, there is plenty of work for the trading states. A hardening of the currency can be met by greater commitment to quality exports, high rates of industrial investment, and a move into newer, high-technology manufacture—in imitation of the 1980s re-tooling of Japanese industry when its currency hardened swiftly. Nowhere else in the world would growth rates of “only” 5 or 6 percent be considered worrying, or a harbinger of decline. Barring a war in East Asia, or a widespread global slump, the signs are that the four “tigers” are better structured than most to grow in wealth and health.

2.

For confirmation of that remark, one need only consider the present difficult condition of Latin America, which lost ground in the 1980s just as East Asia was gaining it. Here again, distinctions have to be made between various countries within the continent, with its more than 400 million people in an area almost 7 million square miles stretching from the Rio Grande to Antarctica, and with a range of political cultures and socioeconomic structures. Argentina, which around 1900 had a standard of living suggesting that it was a “developed” economy, is very different from Honduras and Guyana. Similarly, population change in Latin America occurs in three distinct forms: such nations as Bolivia, the Dominican Republic, and Haiti have high fertility rates and lower life expectancies; a middle group—Brazil, Colombia, Mexico, Venezuela, Costa Rica, and Panama—is beginning to experience declines in fertility and longer life expectancy; and the temperate-zone countries of Argentina, Chile, and Uruguay have the demographic characteristics of developed countries. ²⁴

Despite this diversity, there are reasons for considering Latin America’s prospects as a whole: the economic challenges confronting the region are similar, as are its domestic politics—in particular, the fragility of its recently emerged democracies; and each is affected by its relationship with the developed world, especially the United States.

Several decades ago, Latin America’s future appeared encouraging. Sharing in the post-1950 global boom, benefitting from demand for its coffee, timber, beef, oil, and minerals, and enjoying foreign investments in its agriculture, industry, and infrastructure, the region was moving upward. In the thirty years after 1945, its production of steel multiplied twenty times, and its output of electric energy, metals, and machinery grew more than ten-fold.<a name=”>Several decades ago, Latin America’s future appeared encouraging. Sharing in the post-1950 global boom, benefitting from demand for its coffee, timber, beef, oil, and minerals, and enjoying foreign investments in its agriculture, industry, and infrastructure, the region was moving upward. In the thirty years after 1945, its production of steel multiplied twenty times, and its output of electric energy, metals, and machinery grew more than ten-fold.²⁵ Real gross domestic product (GDP) per person rose at an annual average of 2.8 percent during the 1960s and spurted to an annual average increase of 3.4 percent in the 1970s. Unfortunately, the growth then reversed itself, and between 1980 and 1988 Latin America’s real GDP per person steadily fell by an annual average of 0.9 percent. ²⁶ In some states, such as Peru and Argentina, real income dropped by as much as one quarter during the 1980s. With very few exceptions (Chile, Colombia, the Dominican Republic, Barbados, the Bahamas), most Latin American countries now have per capita GDPs lower than they were a decade earlier, or even two decades earlier (see chart below).

PER CAPITA GDP OF LATIN AMERICAN COUNTRIES²⁷

The reasons for this reversal offer a striking contrast to the East Asian NIEs. Instead of encouraging industrialists to target foreign markets and stimulate the economy through exportled growth, many Latin American governments pursued a policy of import substitution, creating their own steel, cement, paper, automobiles, and electronic-goods industries, which were given protective tariffs, government subsidies, and tax-breaks to insulate them from international competition. As a result, their products became less attractive abroad.²⁸ Moreover, while it was relatively easy to create a basic iron and steel industry, it proved harder to establish high-tech industries like computers, aerospace, machine-tools, and pharmaceuticals—most of these states therefore still depend on imported manufactured goods, whereas exports chiefly consist of raw materials like oil, coffee, and soybeans.²⁹

Secondly, economic growth was accompanied by lax financial policies and an increasing reliance upon foreign borrowings. Governments poured money not only into infrastructure and schools but also into state-owned enterprises, large bureaucracies, and oversized armed forces, paying for them by printing money and raising loans from Western (chiefly US) banks and international agencies. The result was that public spending’s share of GDP soared, price inflation accelerated, and was further increased by index-linked rises in salaries and wages. Inflation became so large that it was difficult to comprehend, let alone to combat. According to the 1990 World Resources report, “in 1989, for example, annual inflation in Nicaragua was more than 3,400 percent; in Argentina inflation reached 3,700 percent, in Brazil almost 1,500 percent, and in Peru nearly 3,000 percent. Ecuador, with only 60 percent inflation, did comparatively well.”³⁰ In such circumstances the currency becomes worthless, as does the idea of seeking to raise national savings rates for long-term capital investment.

GROWTH OF LATIN AMERICAN INDEBTEDNESS (SELECTED COUNTRIES) ³¹

Another result is that some Latin American countries find themselves among the most indebted in the world, as the chart below shows. Total Latin American indebtedness now equals about $1,000 for every man, woman, and child. But instead of being directed into productive investment, that money has been wasted domestically or disappeared as “capital flight” to private accounts in United States and European banks. This has left most countries incapable of repaying even the interest on their loans. Defaults on loans (or suspension of interest payments) then produced a drying up of capital from indignant Western banks and a net capital outflow from Latin America just when it needed capital to aid economic growth.³² Starved of foreign funds and with currencies made worthless by hyperinflation, many countries are in a far worse position than could have been imagined twenty-five years ago.³³ For a while, it was even feared that the region’s financial problems might undermine parts of the international banking system. It now appears that the chief damage will be in the continent itself, where 180 million people (40 percent) are living in poverty—a rise of 50 million alone in the 1980s.

Given such profligacy, and the conservative, “>Given such profligacy, and the conservative, “anti–big government” incumbents in the White House during the 1980s, it was predictable that Latin America would come under pressure—from the World Bank, the IMF, private bankers, Washington itself—to slash public spending, control inflation, and repay debts. Such demands were easier said than done in the existing circumstances. Islands of democracy (e.g., Costa Rica) did exist, but many states were ruled by rightwing military dictatorships or social revolutionaries; internal guerrilla wars, military coups d’état, labor unrest were common. Even as democracy began to reassert itself in the 1980s, the new leaders found themselves in a near-impossible situation: inheritors of the high external debts contracted by the outgoing regimes, legatees in many cases of inflationary index-linked wage systems, targets of landowner resentment and/or of guerrilla attacks, frustrated by elaborate and often corrupt bureaucracies, and deficient in trained personnel. While grappling with these weaknesses, they discovered that the Western world, which applauded the return to democracy, was unsympathetic to fresh lending, increasingly inclined to protectionism, and demanding unilateral measures (e.g., in the Amazon rain forests) to stop global warming.

Two other weaknesses have also slowed any hoped-for recovery. One is the unimpressive accomplishments of the educational systems. This is not due to an absence of schools and universities, as in parts of Africa. Many Latin American countries have extensive public education, dozens of universities, and high adult literacy rates; Brazil, for example, has sixty-eight universities, Argentina forty-one.³⁴ The real problem is neglect and under-investment. One citizen bemoaned the collapse in Argentina as follows:

Education, which kept illiteracy at bay for more than a century, lies in ruins. The universities are unheated and many public schools lack panes for their window frames. Last summer [1990] an elementary school teacher with ten years’ experience earned less than $110 a month. An associate professor at the Universidad de Buenos Aires, teaching ten hours a week, was paid $37 a month. A doctor’s salary at a municipal hospital was $120 a month…. At times, teachers took turns teaching, or cut their class hours, because they and their students could not afford transportation.³⁵

Presumably, if resources were available, those decaying educational and health-care structures could be resuscitated, helping national recovery; but where the capital can be raised in present circumstances is difficult to see. Moreover, in the strife-torn countries of Central America there is little education to begin with; in Guatemala, the latest census estimated that 63 percent of those ten years of age and older were illiterate, while in Honduras the illiteracy rate was 40 percent.³⁶ Unfortunately, it is in the educationally most deprived Latin American countries that resources are being eroded by swift population increases.

Despite these disadvantages, recent reports on Latin America have suggested that the “>Despite these disadvantages, recent reports on Latin America have suggested that the “lost decade” of the 1980s will be followed by a period of recovery. The coming of democratic regimes, the compromises emerging from protracted debt-recycling talks, the stiff economic reforms (cutting public spending, abandoning indexation) to reduce inflation rates, the replacement of “state protectionism with import liberalization and privatization,”³⁷ the conversion of budget deficits into surpluses—all this has caused the Inter-American Development Bank to argue that “a decisive and genuine takeoff” is at hand, provided the new policies are sustained.³⁸ Growth has resumed in Argentina, Mexico, and Venezuela. Even investment bankers are reported to be returning to the continent.

Whether these changes are going to be enough remains uncertain, especially since the newly elected governments face widespread resentment at the proposed reforms. As one commentator put it, “Much of Latin America is entering the 1990s in a race between economic deterioration and political progress.”³⁹ Whereas Spain, Portugal, and Greece moved to democracy while enjoying reasonable prosperity, Latin America (like Eastern Europe) has to make that change as its economies flounder—which places immense responsibilities upon the political leadership.

Although it can be argued that the region’s future is in its own hands, it will also be heavily influenced by the United States. In many ways, the US–Latin America leadership is similar to that between Japan and the East Asian NIEs, which are heavily dependent upon Japan as their major market and source of capital.⁴⁰ Yet there is more to this relationship than Latin America’s economic dependence upon the United States, whose banking system has also suffered because of Latin American indebtedness. United States exports, which are fifty times larger to this region than to Eastern Europe, were badly hurt by Latin America’s economic difficulties, and they would benefit greatly from a resumption of growth. The United States’ own environment may now be threatened by the diminution of the Amazon and Central American rain forests. Its awful drug problem, driven by domestic demand, is fuelled by Latin American supplies—more than 80 percent of the cocaine and 90 percent of the marijuana entering the United States are produced or move through this region.

Finally, the population of the United States is being altered by migration from Mexico, the Caribbean, and Central America; if there should be a widespread socioeconomic collapse south of the Rio Grande, the “spillover” effects will be felt across the United States. Instead of being marginalized by the end of the cold war, Latin America may present Washington with formidable and growing challenges—social, environmental, financial, and ultimately political.⁴¹ Thus, while the region’s own politicians and citizens have to bear the major responsibility for recovery, richer nations—especially the United States—may find it in their own best interest to lend a hand.

3.

If these remarks disappoint readers in Brazil or Peru, they may care to glance, in grim consolation, at the world of Islam. It is one thing to face population pressures, shortage of resources, educational/technological deficiencies, and regional conflicts, which would challenge the wisest governments. But it is another when regimes themselves stand in angry resentment of global forces for change instead of (as in East Asia) selectively responding to such trends. Far from preparing for the twenty-first century, much of the Arab and Muslim world appears to have difficulty in coming to terms with the nineteenth century, with its composite legacy of secularization, democracy, laissez-faire economics, industrial and commercial linkages among different nations, social change, and intellectual questioning. If one needed an example of the importance of cultural attitudes in explaining a society’s response to change, contemporary Islam provides it.

Before analyzing the distinctive role of Islamic culture, one should first note the danger of generalizing about a region that contains such variety. After all, it is not even clear what name should be used to describe this part of the earth. To term it the “Middle East”⁴² is, apart from its Atlantic-centered bias, to leave out such North African states as Libya, Tunisia, Algeria, and Morocco. To term it the “Arab World”⁴³ is to exclude Iran (and, of course, Israel), the Kurds, and the non-Muslim tribes of southern Sudan and Mauritania. Even the nomenclature Islam, or the Muslim world, disguises the fact that millions of Catholics, Copts, and Jews live in these lands, and that Islamic societies extend from West Africa to Indonesia.⁴⁴

In addition, the uneven location of oil in the Middle East has created a division between super-rich and dreadfully poor societies that has no equivalent in Central America or sub-Saharan African.⁴⁵ Countries like Kuwait (2 million), the United Arab Emirates (1.3 million), and Saudi Arabia (11.5 million) enjoy some of the world’s highest incomes, but exist alongside populous neighbors one third as rich (Jordan, Iran, Iraq) or even one tenth as rich (Egypt, Yemen). The gap is accentuated by different political systems: conservative, anti-democratic, traditionalist in the Gulf sheikdoms; demagogic, populist, militarized in countries such as Libya, Syria, Iraq, and Iran.

The 1990 Iraqi attack upon Kuwait, and the different responses of the Saudi elites on the one hand and the street masses in Amman or Rabat on the other, illustrated this divide between “haves” and “have-nots” in the Muslim world. The presence of millions of Egyptian, Yemeni, Jordanian, and Palestinian Gastarbeiter in the oil-rich states simply increased the mutual resentments, while the Saudi and Emirate habit of giving extensive aid to Iraq during its war against Iran, or to Egypt to assist its economic needs, reinforces the impression of wealthy but precarious regimes seeking to achieve security by bribing their larger, jealous neighbors.⁴⁶ Is it any wonder that the unemployed, badly housed urban masses, despairing of their own secular advancement, are attracted to religious leaders or “strongmen” appealing to Islamic pride, a sense of identity, and resistance to foreign powers and their local lackeys?

More than in any other developing region, then, the future of the Middle East and North Africa is affected by issues of war and conflict. The region probably contains more soldiers, aircraft, missiles, and other weapons than anywhere else in the world, with billions of dollars of armaments having been supplied by Western, Soviet, and Chinese producers during the past few decades. In view of the range and destructiveness of these weapons, another Arab-Israeli war would be a nightmare, yet many Muslim states still regard Israel with acute hostility. Even if the Arab-Israeli antagonism did not exist, the region is full of other rivalries, between Syria and Iraq, Libya and Egypt, Iran and Iraq, and so on. Vicious one-man dictatorships glare threateningly at arch-conservative, antidemocratic, feudal sheikdoms. Fundamentalist regimes exist from Iran to the Sudan. Terrorist groups in exile threaten to eliminate their foes. Unrest among the masses puts a question mark over the future of Egypt, Algeria, Morocco, Jordan.<a name=”>More than in any other developing region, then, the future of the Middle East and North Africa is affected by issues of war and conflict. The region probably contains more soldiers, aircraft, missiles, and other weapons than anywhere else in the world, with billions of dollars of armaments having been supplied by Western, Soviet, and Chinese producers during the past few decades. In view of the range and destructiveness of these weapons, another Arab-Israeli war would be a nightmare, yet many Muslim states still regard Israel with acute hostility. Even if the Arab-Israeli antagonism did not exist, the region is full of other rivalries, between Syria and Iraq, Libya and Egypt, Iran and Iraq, and so on. Vicious one-man dictatorships glare threateningly at arch-conservative, antidemocratic, feudal sheikdoms. Fundamentalist regimes exist from Iran to the Sudan. Terrorist groups in exile threaten to eliminate their foes. Unrest among the masses puts a question mark over the future of Egypt, Algeria, Morocco, Jordan.⁴⁷ The recent fate of Lebanon, instead of serving as a warning against sectarian fanaticism, is more often viewed as a lesson in power politics, that the strong will devour the weak.

To the Western observer brought up in Enlightenment traditions—or, for that matter, to economic rationalists preaching the virtues of the borderless world—the answer to the Muslim nations’ problems would appear to be a vast program of education, not simply in the technical, skills-acquiring sense but also to advance parliamentary discourse, pluralism, and a secular civic culture. Is that not the reason, after all, for the political stability and economic success of Scandinavia or Japan today?

If that argument is correct, then such an observer would find few of those features in contemporary Islam. In countries where fundamentalism is strong, there is (obviously) little prospect of education or advancement for the female half of the population.⁴⁸ Where engineers and technicians exist, their expertise has all too often been mobilized for war purposes, as in Iraq. Tragically, Egypt possesses a large and bustling university system but a totally inadequate number of jobs for graduates and skilled workers, so that millions of both are under-employed. In Yemen, to take an extreme example, the state of education is dismal. By contrast, the oil-rich states have poured huge resources into schools, technical institutes, and universities, but these alone are insufficient to create an “enterprise culture” that would produce export-led manufacturing along East Asian lines. Ironically, possession of vast oil reserves could be a disadvantage, since it reduces the incentive to rely upon the skills and quality of the people, as occurs in countries (Japan, Switzerland) with few natural resources. Such discouraging circumstances may also explain why many educated and entrepreneurial Arabs, who passionately wanted their societies to borrow from the West, have emigrated.

It is difficult to know whether the reason for the Muslim world’s troubled condition is cultural or historical. Western critics pointing to the region’s religious intolerance, technological backwardness, and feudal cast of mind often forget that, centuries before the Reformation, Islam led the world in mathematics, cartography, medicine, and many other aspects of science and industry; and contained libraries, universities, and observatories, when Japan and America possessed none and Europe only a few. These assets were later sacrificed to a revival of traditionalist thought and the sectarian split between Shi’ite and Sunni Muslims, but Islam’s retreat into itself—its being “>It is difficult to know whether the reason for the Muslim world’s troubled condition is cultural or historical. Western critics pointing to the region’s religious intolerance, technological backwardness, and feudal cast of mind often forget that, centuries before the Reformation, Islam led the world in mathematics, cartography, medicine, and many other aspects of science and industry; and contained libraries, universities, and observatories, when Japan and America possessed none and Europe only a few. These assets were later sacrificed to a revival of traditionalist thought and the sectarian split between Shi’ite and Sunni Muslims, but Islam’s retreat into itself—its being “out of step with History,” as one author termed it⁴⁹—was probably also a response to the rise of a successful, expansionist Europe.

Sailing along the Arab littoral, assisting in the demise of the Mughal Empire, penetrating strategic points with railways, canals, and ports, steadily moving into North Africa, the Nile Valley, the Persian Gulf, the Levant, and then Arabia itself, dividing the Middle East along unnatural boundaries as part of a post-First World War diplomatic bargain, developing American power to buttress and then replace European influences, inserting an Israeli state in the midst of Arab peoples, instigating coups against local popular leaders, and usually indicating that this part of the globe was important only for its oil—the Western nations may have contributed more to turning the Muslim world into what it is today than outside commentators are willing to recognize.⁵⁰ Clearly, the nations of Islam suffer many self-inflicted problems. But if much of their angry, confrontational attitudes toward the international order today are due to a long-held fear of being swallowed up by the West, little in the way of change can be expected until that fear is dissipated.

4.

The condition of sub-Saharan Africa—“the third world’s third world,” as it has been described—is even more desperate.⁵¹ When one considers recent developments such as perestroika in the former Soviet Union, the coming integration of Europe, and the economic miracle of Japan and the East Asian NIEs, remarked a former president of Nigeria, General Olusegun Obasanjo, and “contrasting all this with what is taking place in Africa, it is difficult to believe that we inhabit the same historical time.”⁵² Recent reports upon the continent’s plight are extraordinarily gloomy, describing Africa as “a human and environmental disaster area,” as “moribund,” “marginalized,” and “peripheral to the rest of the world,” and having so many intractable problems that some foreign development experts are abandoning it to work elsewhere. In the view of the World Bank, virtually everywhere else in the world is likely to experience a decline in poverty by the year 2000 except Africa, where things will only get worse.⁵³ “Sub-Saharan Africa,” concludes one economist, “suffers from a combination of economic, social, political, institutional and environmental handicaps which have so far largely defied development efforts by the African countries and their donors.”⁵⁴ How, an empathetic study asks, can Africa survive?⁵⁵

The unanimity of views is remarkable, given the enormous variety among the forty-five states that comprise sub-Saharan Africa.⁵⁶ Nine of them have fewer than one million people each, whereas Nigeria contains about 110 million. Some lie in the desert, some in tropical rain forests. Many are rich in mineral deposits, others have only scrubland. While a number (Botswana, Cameroun, Congo, Gabon, Kenya) have seen significant increases in living standards since independence, they are the exception—suggesting that the obstacles to growth on East Asian lines are so deep-rooted and resistant to the “development strategies” of foreign experts and/or their own leaders that it may require profound changes in attitude to achieve recovery.

This was not the mood thirty years ago, when the peoples of Africa were gaining their independence. True, there was economic backwardness, but this was assumed to have been caused by decades of foreign rule, leading to dependency upon a single metropolitan market, monoculture, lack of access to capital, and so on. Now that Africans had control of their destinies, they could build industries, develop cities, airports, and infrastructure, and attract foreign investment and aid from either Western powers or the USSR and its partners. The boom in world trade during the 1950s and 1960s, and demand for commodities, strengthened this optimism. Although some regions were in need, Africa as a whole was self-sufficient in food and, in fact, a net food exporter. Externally, African states were of increasing importance at the United Nations and other world bodies.</p>

What went wrong? The unhappy answer is “>This was not the mood thirty years ago, when the peoples of Africa were gaining their independence. True, there was economic backwardness, but this was assumed to have been caused by decades of foreign rule, leading to dependency upon a single metropolitan market, monoculture, lack of access to capital, and so on. Now that Africans had control of their destinies, they could build industries, develop cities, airports, and infrastructure, and attract foreign investment and aid from either Western powers or the USSR and its partners. The boom in world trade during the 1950s and 1960s, and demand for commodities, strengthened this optimism. Although some regions were in need, Africa as a whole was self-sufficient in food and, in fact, a net food exporter. Externally, African states were of increasing importance at the United Nations and other world bodies.

What went wrong? The unhappy answer is “lots of things.” The first, and perhaps most serious, was that over the following three decades the population mushroomed as imported medical techniques and a reduction in malaria-borne mosquitoes drastically curtailed infant mortality. Africa’s population was already increasing at an average annual rate of 2.6 percent in the 1960s, jumped to 2.9 percent during the 1970s, and increased to over 3 percent by the late 1980s, implying a doubling in size every twenty-two years; this was, therefore, the highest rate for any region in the world.⁵⁷

In certain countries, the increases were staggering. Between 1960 and 1990, Kenya’s population quadrupled, from 6.3 million to 25.1 million, and Côte d’Ivoire’s jumped from 3.8 million to 12.6 million. Altogether Africa’s population—including the North African states—leapt from 281 to 647 million in three decades.⁵⁸ Moreover, while the majority of Africans inhabit rural settlements, the continent has been becoming urban at a dizzying speed. Vast shanty-cities have already emerged on the edges of national capitals (such as Accra in Ghana, Monrovia in Liberia, and Lilongwe in Malawi). By 2025, urban dwellers are predicted to make up 55 percent of Africa’s total population.

The worst news is that the increase is unlikely to diminish in the near future. Although most African countries spend less than 1 percent of GNP on health care and consequently have the highest infant mortality rates in the world—in Mali, for example, there are 169 infant deaths for every 1,000 live births—those rates are substantially less than they were a quarter century ago and will tumble further in the future, which is why demographers forecast that Africa’s population in 2025 will be nearly three times that of today. ⁵⁹

There remains one random and tragic factor which may significantly affect all these (late 1980s) population projections—the AIDS epidemic, which is especially prevalent in Africa. Each new general study has raised the global total of people who are already HIV positive. For example, in June 1991, the World Health Organization abandoned its earlier estimate that 25–30 million people throughout the world would be infected by the year 2000, and suggested instead that the total could be closer to 40 million, and even that may be a gross underestimate.⁶⁰ Without question, Africa is the continent most deeply affected by AIDS, with entire families suffering from the disease. Tests of pregnant women in certain African families reveal that 25–30 percent are now HIV positive.⁶¹ Obviously, this epidemic would alter the earlier projections of a doubling or trebling of Africa’s total population over the next few decades—and in the worst possible way: family sizes would still be much larger than in most other regions of the globe, but tens of millions of Africans would be dying of AIDS, further crushing the world’s most disadvantaged continent.

The basic reason why the present demographic boom will not otherwise be halted swiftly is traditional African belief-systems concerning fecundity,children, ancestors, and the role of women. Acutely aware of the invisible but pervasive presence of their ancestors, determined to expand their lineage, regarding childlessness or small families as the work of evil spirits, most Africans seek to have as many children as possible; a woman’s virtue and usefulness are measured by the number of offspring she can bear. “>The basic reason why the present demographic boom will not otherwise be halted swiftly is traditional African belief-systems concerning fecundity,children, ancestors, and the role of women. Acutely aware of the invisible but pervasive presence of their ancestors, determined to expand their lineage, regarding childlessness or small families as the work of evil spirits, most Africans seek to have as many children as possible; a woman’s virtue and usefulness are measured by the number of offspring she can bear. “Desired family size,” according to polls of African women, ranges from five to nine children. The social attitudes that lead women in North America, Europe, and Japan to delay child-bearing—education, career ambitions, desire for independence—scarcely exist in African societies; where such emerge, they are swiftly suppressed by familial pressures.⁶²

This population growth has not been accompanied by equal or larger increases in Africa’s productivity, which would of course transform the picture. During the 1960s, farm output was rising by around 3 percent each year, keeping pace with the population, but since 1970 agricultural production has grown at only half that rate. Part of this decline was caused by the drought, hitting countries south of the Sahara. Furthermore, existing agricultural resources have been badly eroded by overgrazing—caused by the sharp rise in the number of cattle and goats—as well as by deforestation in order to provide fuel and shelter for the growing population. When rain falls, the water runs off the denuded fields, taking the top-soil with it.

None of this was helped by changes in agricultural production, with farmers encouraged to grow tea, coffee, cocoa, palm oil, and rubber for export rather than food for domestic consumption. After benefitting from high commodity prices in the early stages, producers suffered a number of blows. Heavy taxation on cash crops, plus mandatory governmental marketing, reduced the incentives to increase output; competition grew from Asian and Latin American producers; many African currencies were overvalued, which hurt exports; and in the mid-1970s, world commodity prices tumbled. Yet the cost of imported manufactures and foodstuffs remained high, and sub-Saharan Africa was badly hurt by the quadrupling of oil prices.⁶³

These blows increased Africa’s indebtedness in ways that were qualitatively new. Early, postcolonial borrowings were driven by the desire for modernization, as money was poured into cement works, steel plants, airports, harbors, national airlines, electrification schemes, and telephone networks. Much of it, encouraged from afar by international bodies like the World Bank, suffered from bureaucratic interference, a lack of skilled personnel, unrealistic planning, and inadequate basic facilities, and now lies half-finished or (where completed) suffers from lack of upkeep. But borrowing to pay for imported oil, or to feed half the nation’s population, means that indebtedness rises without any possible return on the borrowed funds. In consequence, Africa’s total debt expanded from $14 billion in 1973 to $125 billion in 1987, when its capacity to repay was dropping fast; by the mid-1980s, payments on loans consumed about half of Africa’s export earnings, a proportion even greater than for Latin American debtor nations. Following repeated debt reschedulings, Western bankers—never enthusiastic to begin with—virtually abandoned private loans to Africa.⁶⁴

As a result, Africa’s economy is in far worse condition now than at independence, apart from a few countries like Botswana and Mauritius. Perhaps the most startling illustration of its plight is the fact that “excluding South Africa, the nations of sub-Saharan Africa with their 450 million people have a total GDP less than that of Belgium’s 11 million people”; in fact, the entire continent generates roughly 1 percent of the world GDP.⁶⁵ Africa’s share of world markets has shriveled just as East Asia’s share has risen fast. Plans for modernization lie unrealized. Manufacturing still represents only 11 percent of Africa’s economic activity—scarcely up from the 9 percent share in 1965; and only 12 percent of the continent’s exports is composed of manufactures (compared with Korea’s 90 percent). There is a marked increase in the signs of decay: crumbling infrastructure, power failures, broken-down communications, abandoned projects, and everywhere the pressure of providing for increasing populations. Already Africa needs to import 15 million tons of maize a year to achieve minimal levels of food consumption, but with population increasing faster than agricultural output, that total could multiply over the next decade—implying an even greater diversion of funds from investment and infrastructure.⁶⁶

Two further characteristics worsen Africa’s condition. The first is the prevalence of wars, coups d’état</i>, and political instability. This is partly the legacy of the European “>Two further characteristics worsen Africa’s condition. The first is the prevalence of wars, coups d’état, and political instability. This is partly the legacy of the European “carve-up” of Africa, when colonial boundaries were drawn without regard for the differing tribes and ethnic groups,⁶⁷ or even of earlier conquests by successful tribes of neighboring lands and peoples; Ethiopia, for example, is said to contain 76 ethnic groups and 286 languages.⁶⁸ While it is generally accepted that those boundaries cannot be unscrambled, most of them are clearly artificial. In extreme cases like Somalia, the “state” has ceased to exist. And in most other African countries, governments do not attract the loyalty of citizens (except perhaps kinsmen of the group in power), and ethnic tensions have produced innumerable civil wars—from Biafra’s attempt to secede from Nigeria, to the conflict between Arab north and African south in the Sudan, to Eritrean struggles to escape from Ethiopia, to the Tutsi-Hutu struggle in Burundi, to clashes and suppressions and guerrilla campaigns from Uganda to the Western Sahara, from Angola to Mozambique.⁶⁹

These antagonisms have often been worsened by struggles over ideology and government authority. The rulers of many new African states rapidly switched either to a personal dictatorship, or single-party rule. They also embraced a Soviet or Maoist political economy, instituting price controls, production targets, forced industrialization, the takeover of private enterprises, and other features of “scientific socialism” that—unknown to them—were destroying the Soviet economy. Agriculture was neglected, while bureaucracy flourished. The result was the disappearance of agricultural surpluses, inattention to manufacturing for the world market, and the expansion of party and government bureaucracies, exacerbating the region’s problems.

The second weakness was the wholly inadequate investment in human resources and in developing a culture of entrepreneurship, scientific inquiry, and technical prowess. According to one survey, Africa has been spending less than $1 each year on research and development per head of population, whereas the United States was spending $200 per head. Consequently, Africa’s scientific population has always trailed the rest of the world:

NUMBER OF SCIENTISTS AND ENGINEERS PER MILLION OF POPULATION ⁷⁰

In many African countries—Malawi, Zambia, Lesotho—government spending on education has fallen, so that, after some decades of advance, a smaller share of children are now in school. While there is a hunger for learning, it cannot be satisfied beyond the secondary level except for a small minority. Angola, for example, had 2.4 million pupils in primary schools in 1982–1983, but only 153,000 in secondary schools and a mere 4,700 in higher education.⁷¹ By contrast, Sweden, with a slightly smaller total population, had 570,000 in secondary education and 179,000 in higher education.⁷²

Despite these relative weaknesses, some observers claim to have detected signs of a turnaround. With the exception of intransigent African socialists,<a name=”>Despite these relative weaknesses, some observers claim to have detected signs of a turnaround. With the exception of intransigent African socialists,⁷³ many leaders are now attempting to institute reforms. In return for “structural adjustments,” that is, measures to encourage free enterprise, certain African societies have secured additional loans from Western nations and the World Bank. The latter organization has identified past errors (many of them urged on African governments and funded by itself), and encouraged economic reforms. Mozambique, Ghana, and Zambia have all claimed recent successes in reversing negative growth, albeit at considerable social cost.

Democratic principles are also returning to the continent: the dismantling of apartheid in South Africa, the cease-fire in Angola, the independence of Namibia, the success of Botswana’s record of democracy and prosperity, the cries for reforms in Gabon, Kenya, and Zaire, the rising awareness among African intellectuals of the transformations in East Asia, may all help—so the argument goes—to change attitudes, which is the prerequisite for recovery.⁷⁴ Moreover, there are local examples of economic self-improvement, cooperative ventures to halt erosion and improve yields, and village-based schemes of improvement.⁷⁵ This is, after all, a continent of enormous agricultural and mineral resources, provided they can be sensibly exploited.

Despite such signs of promise, conditions are likely to stay poor. Population increases countered only by the growing toll of AIDS victims, the diminution of grazing lands and food supplies, the burdens of indebtedness, the decay of infrastructures and reduced spending on health care and education, the residual strength of animist religions and traditional belief-systems, the powerful hold of corrupt bureaucracies and ethnic loyalties…all those tilt against the relatively few African political leaders, educators, scientists, and economists who perceive the need for changes.

What does this mean for Africa’s future? As the Somalian disaster unfolds, some observers suggest that parts of the continent may be taken over and administered from the outside, rather like the post–1919 League of Nations mandates. By contrast, other experts argue that disengagement by developed countries might have the positive effect of compelling Africans to begin a self-driven recovery, as well as ending the misuse of aid monies.⁷⁶ Still others feel that Africa cannot live without the West, although its leaders and people will have to abandon existing habits, and development aid must be more intelligently applied.⁷⁷ Whichever view is correct, the coming decade will be critical for Africa. Even a partial recovery would give grounds for hope; on the other hand, a second decade of decline, together with a further surge in population, would result in catastrophe.

5.

From the above, it is clear that the developing countries’ response to the broad forces for global change is going to be uneven. The signs are that the gap between success and failure will widen; one group enjoys interacting beneficial trends, while others suffer from linked weaknesses and deficiencies.⁷⁸

This is most clearly the case with respect to demography. As noted earlier, the commitment of the East Asian trading states to education, manufacturing, and export-led growth produced a steady rise in living standards, and allowed those societies to make the demographic transition to smaller family sizes. This was in marked contrast to sub-Saharan Africa where, because of different cultural attitudes and social structures, improved health care and rising incomes led, not to a drop in population growth, but to the opposite. Just before independence in 1960, for example, the average Kenyan woman had 6.2 children, whereas by 1980 she had 8.2⁷⁹—and that in a period when Africa’s economic prospects were fading.

In Africa’s case the “global trend” which drives all others is, clearly, the demographic explosion. It spills into every domain—overgrazing, local conflicts over water and wood supplies, extensive unplanned urbanization, strains upon the educational and social structures, reliance upon imported food supplies (at the cost of increasing indebtedness), ethnic tensions, domestic unrest, border wars. Only belatedly are some African governments working to persuade families to limit their size as people become aware that access to family planning, plus improved educational opportunities for women, produce significant declines in birth rates. Against such promising indications stand the many cultural, gender-related, and economic forces described above that encourage large families. This resistance to change is aided by Africa’s general lack of resources. Raising Somalia’s female literacy rate (6 percent) to South Korea’s (88 percent) to produce a demographic transition sounds fine until one considers how so ambitious a reform could be implemented and paid for. Unfortunately, as noted above, the projections suggest that, as Africa’s population almost trebles over the next few decades, the only development curtailing it could be the rapid growth of AIDS.⁸⁰

In many parts of Latin America, the demographic explosion will also affect the capacity to handle globally driven forces for change. While wide differences in total fertility rates exist between the moderate-climate countries and those in the tropics, the overall picture is that Latin America’s population, which was roughly equal to that of United States and Canada in 1960, is increasing so swiftly that it will be more than double the latter in 2025.<a name=”>In many parts of Latin America, the demographic explosion will also affect the capacity to handle globally driven forces for change. While wide differences in total fertility rates exist between the moderate-climate countries and those in the tropics, the overall picture is that Latin America’s population, which was roughly equal to that of United States and Canada in 1960, is increasing so swiftly that it will be more than double the latter in 2025.⁸¹ Even if birth-rates are now declining in the larger countries, there will still be enormous increases: Mexico’s population will leap to 150 million by 2025 and Brazil’s to 245 million.⁸² This implies a very high incidence of child poverty and malnutrition, further strain upon already inadequate health-care and educational services, the crowding of millions of human beings into a dozen or more “mega-cities,” pollution, the degradation of grazing land, forests, and other natural resources. In Mexico, for example, 44 million people are without sewers and 21 million without potable water, which means that when disease (e.g., cholera) strikes, it spreads swiftly.⁸³ These are not strong foundations upon which to improve the region’s relative standing in an increasingly competitive international economic order.

In this regard, many Muslim states are in a similar or worse position; in no Arab country is the population increasing by less than 2 percent a year,⁸⁴ and in most the rate is considerably higher. The region’s total population of more than 200 million will double in less than twenty-five years and city populations are growing twice as fast as national averages. This puts enormous pressures upon scarce food, water, and land resources, and produces unbalanced populations. Already, in most Arab countries at least four out of every ten people are under the age of fifteen—the classic recipe for subsequent social unrest and political revolution. One in five Egyptian workers is jobless, as is one in four Algerian workers.⁸⁵ In what is widely regarded as the most turbulent part of the world, therefore, demography is contributing to the prospects of future unrest year by year. Even the Israeli-Palestine quarrel has become an issue of demography, with the influx of Soviet Jews seen as countering the greater fertility of the Palestinians

There is, moreover, little likelihood that population growth will fall in the near future. Since infant mortality rates in many Muslim countries are still high, further improvements in prenatal care will produce rises in the numbers surviving, as is happening in the Gulf States and Saudi Arabia:

COMPARATIVE INFANT MORTALITY RATES⁸⁶

As elsewhere, politics intrudes; many regimes are deliberately encouraging women to have large families, arguing that this adds to the country’s military strength. “Bear a child,” posters in Iraq proclaim, “and you pierce an arrow in the enemy’s eye.”⁸⁷ Countries such as Iraq and Libya offer many incentives for larger families, as do the Gulf States and Saudi Arabia, anxious to fill their oil-rich lands with native-born rather than foreign workers. Only in Egypt are propaganda campaigns launched to curb family size, but even if that is successful—despite resistance from the Muslim Brotherhood—present numbers are disturbing. With a current population of over 55 million Egyptians, six out of ten of whom are under twenty, and with an additional one million being born every eight months, the country is in danger of bursting at the seams during the next few decades.

6.

For much the same reasons, we ought to expect a differentiated success rate among developing countries in handling environmental challenges, with the newly industrializing East Asian economies way ahead of the others. This is not to ignore significant local schemes to improve the ecology that are springing up in Africa and the interesting proposals for “sustainable development” elsewhere in the developing world,⁸⁸ or to forget that industrialization has caused environmental damage in East Asia, from choked roads to diminished forests. Yet the fact is that nations with lots of resources (capital, scientists, engineers, technology, a per capita GNP of over US $4,000) are better able to deal with environmental threats than those without money, tools, or personnel. By contrast, it is the poorer societies (Egypt, Bangladesh, Ethiopia) that, lacking financial and personnel resources, find it difficult to respond to cyclones, floods, drought, and other natural disasters—with their devastated populations augmenting the millions of refugees and migrants. Should global warming produce sea-level rises and heightened storm surges, teeming island populations from the Caribbean to the Pacific are in danger of being washed away.⁸⁹

Finally, it is the population explosion in Latin America and South Asia and Africa that is the major cause for the overgrazing, soil erosion, salinization, and clearing of the tropical rain forests, which, while contributing to global warming, also hurts the local populations and exacerbates regional struggles for power. Elsewhere, in the Middle East for example, supplies of water are the greatest concern, especially in view of growing demographic pressures. The average Jordanian now uses only one third the amount of domestic water consumed in Israel and has little hope of increasing the supply, yet Jordan’s population, which is now roughly equal to Israel’s, is expected to double during the next twenty years.⁹⁰

With all governments in the region striving to boost agricultural output and highly sensitive to famine and unrest among their peasant farmers, the search for secure water influences domestic politics, international relations, and spending priorities. Egypt worries that either the Sudan or Ethiopia might dam the Nile in order to increase irrigation. Syria and Iraq have taken alarm at Turkey’s new Ataturk dam, which can interrupt the flow of the Euphrates. Jordan, Syria, and Israel quarrel over water rights in the Litani, Yarmuk, and Jordan river valleys, as do Arabs and Jews over well supplies in the occupied West Bank. Saudi Arabia’s ambition to grow wheat is draining its aquifers, and the same will occur with Libya’s gigantic scheme to tap water from under the Sahara.⁹¹ As more and more people struggle for the same—or diminishing—amounts of water, grand ideas about preparing for the twenty-first century look increasingly irrelevant; surviving this century becomes the order of the day.

What are the implications for these societies of the new technologies being developed by Western scientists? The revolution in biotech farming, for example, is of great relevance to developing countries, even if the consequences will be mixed. Improved strains of plants and more sophisticated pesticides and fertilizers could, potentially, enhance yields in the developing world, reduce pressures upon marginal lands, restore agricultural self-sufficiency, improve the balance of payments, and raise standards of living. Since much biotech does not involve expensive enterprise, we could witness farmers’ groups experimenting with new seeds, improved breeding techniques, cultivation of gene tissue, regional gene-banks, and other developments.</p>

Yet it is also possible that giant pharmaceutical and agro-chemical firms in the “>What are the implications for these societies of the new technologies being developed by Western scientists? The revolution in biotech farming, for example, is of great relevance to developing countries, even if the consequences will be mixed. Improved strains of plants and more sophisticated pesticides and fertilizers could, potentially, enhance yields in the developing world, reduce pressures upon marginal lands, restore agricultural self-sufficiency, improve the balance of payments, and raise standards of living. Since much biotech does not involve expensive enterprise, we could witness farmers’ groups experimenting with new seeds, improved breeding techniques, cultivation of gene tissue, regional gene-banks, and other developments.

Yet it is also possible that giant pharmaceutical and agro-chemical firms in the “first” world may monopolize much of the knowledge—and the profits—that this transformation implies. Surpluses in global food-stuffs caused by the biotech revolution could be used to counter malnutrition. They could also undermine commodity prices and hurt societies in which most inhabitants were employed in agriculture. Removing food production from the farm to the laboratory—which is what is implied by recent breakthroughs in biotech agriculture—would undercut agrarian societies, which is why some biotech experts in the development field call for serious planning in “agricultural conversion,” that is, conversion into other economic activities.⁹²

While the uses of biotechnology are relatively diverse, that is not the case with robotics and automated manufacture. The requirements for an indigenous robotics industry—capital, an advanced electronics sector, design engineers, a dearth of skilled labor—suggest that countries like Taiwan and Korea may follow Japan’s example out of concern that Japan’s automation will make their own products uncompetitive. On the other hand, automated factories assembling goods more swiftly, regularly, and economically than human beings pose a challenge to middle-income economies (Malaysia, Mexico), whose comparative advantage would be undercut. As for countries without a manufacturing base, it is difficult to see how the robotics revolution would have any meaning—except to further devalue the resource which they possess in abundance, masses of impoverished and under-educated human beings.

Finally, the global financial and communications revolution, and the emergence of multinational corporations, threatens to increase the gap between richer and poorer countries, even in the developing world. The industrial conglomerates of Korea are now positioning themselves to become multinational, and the East Asian NIEs in general are able to exploit the world economy (as can be seen in their trade balances, stock-markets, electronics industries, strategic marketing alliances, and so on). Furthermore, if the increasingly borderless world rewards en-trepreneurs, designers, brokers, patent-owners, lawyers, and dealers in high value-added services, then East Asia’s commitment to education, science, and technology can only increase its lead over other developing economies.

By contrast, the relative lack of capital, high-technology, scientists, skilled workers, and export industries in the poorer countries makes it difficult for them to take part in the communications and financial revolution, although several countries (Brazil, India) clearly hope to do so. Some grimmer forecasts suggest the poorer parts of the developing world may become more marginalized, partly because of the reduced economic importance of labor, raw materials, and foodstuffs, partly because the advanced economies may concentrate upon greater knowledge-based commerce among themselves.

7.

Is there any way of turning these trends around? Obviously, a society strongly influenced by fundamentalist mullahs with a dislike of “modernization” is unlikely to join the international economy; and it does not have to enter the borderless world if its people believe that it would be healthier, spiritually if not economically, to remain outside. Nor ought we to expect that countries dominated by selfish, authoritarian elites bent upon enhancing their military power—developing world countries spent almost $150 billion on weapons and armies in 1988 alone—will rush to imitate Japan and Singapore.

But what about those societies that wish to improve themselves yet find that they are hampered by circumstances? There are, after all, many developing countries, the vast majority of which depend upon exporting food and raw materials. With dozens of poor countries seeking desperately to sell their cane sugar or bananas or timber or coffee in the global market, prices fall and they are made more desperate.⁹³ Moreover, although much international aid goes to the developing world, in fact far more money flows out of impoverished countries of Africa, Asia, and Latin America and into the richer economies of Europe, North America, and Japan—to the tune of at least $43 billion each year.⁹⁴ This outward flow of interest repayments, repatriated profits, capital flight, royalties, fees for patents and information services, makes it difficult for poorer countries to get to their feet; and even if they were able to increase their industrial output, the result might be a large rise in “the costs of technological dependence.”⁹⁵ Like their increasing reliance upon Northern suppliers for food and medical aid, this has created another dependency relationship for poorer nations.

In sum, as we move into the next century the developed economies appear to have all the trump cards in their hands—capital, technology, control of communications, surplus foodstuffs, powerful multinational companies<a name=”>In sum, as we move into the next century the developed economies appear to have all the trump cards in their hands—capital, technology, control of communications, surplus foodstuffs, powerful multinational companies⁹⁶—and, if anything, their advantages are growing because technology is eroding the value of labor and materials, the chief assets of developing countries. Although nominally independent since decolonization, these countries are probably more dependent upon Europe and the United States than they were a century ago.

Ironically, three or four decades of efforts by developing countries to gain control of their own destinies—nationalizing Western companies, setting up commodity-exporting cartels, subsidizing indigenous manufacturing to achieve import substitution, campaigning for a new world order based upon redistribution of the existing imbalances of wealth—have all failed. The “market,” backed by governments of the developed economies, has proved too strong, and the struggle against it has weakened developing economies still further—except those (like Korea and Taiwan) which decided to join.

While the gap between rich and poor in today’s world is disturbing, those who have argued that this gap is unjust have all too often supported heavy-handed state interventionism and a retreat from open competition, which preserved indigenous production in the short term but rendered it less efficient against those stimulated by market forces. “Scientific socialism for Africa” may still appeal to some intellectuals,⁹⁷ but by encouraging societies to look inward it made them less well equipped to move to newer technologies in order to make goods of greater sophistication and value. And a new “world communications order,” as proposed a few years ago by UNESCO to balance the West’s dominance, sounds superficially attractive but would in all likelihood become the pawn of bureaucratic and ideological interests rather than function as an objective source of news reporting.

On the other hand, the advocates of free market forces often ignore the vast political difficulties which governments in developing countries would encounter in abolishing price controls, selling off national industries, and reducing food subsidies. They also forget that the spectacular commercial expansion of Japan and the East Asian NIEs was carried out by strong states which eschewed laissez faire. Instead of copying either socialist or free market systems, therefore, the developing countries might imitate East Asia’s “mixed strategies” which combine official controls and private enterprise. ⁹⁸

Although the idea of a mixed strategy is intriguing, how can West or Central African countries imitate East Asia without a “strong state” apparatus, and while having a weak tradition of cooperation between government and firms, far lower educational achievements, and a different set of cultural attitudes toward family size or international economics? With the global scene less welcoming to industrializing newcomers, how likely are they to achieve the same degree of success as the East Asian NIEs did, when they “took off” a quarter-century ago?⁹⁹ Even if, by an economic miracle, the world’s poorest fifty nations did adopt the Korean style of export-led growth in manufactures, would they not create the same crisis of overproduction as exists in the commodity markets today?

How many developing nations will be able to follow East Asia’s growth is impossible to tell. The latest World Development Report optimistically forecast significant progress across the globe, provided that poorer nations adopted “market friendly” policies and richer nations eschewed protectionism.¹⁰⁰ Were Taiwan and Korea to be followed by the larger states of Southeast Asia such as Malaysia and Thailand, then by South Asia and a number of Latin American countries, that would blur the North-South divide and make international economic alignments altogether more variegated. Moreover, sustained manufacturing success among developing countries outside East Asia might stimulate imitation elsewhere.

At the moment, however, the usual cluster of factors influencing relative economic performance—cultural attitudes, education, political stability, capacity to carry out long-term plans—suggests that while a small but growing number of countries is moving from a “have-not” to a “have” status, many more remain behind. The story of winners and losers in history will continue, therefore, only this time modern communications will remind us all of the growing disparity among the world’s nations and regions.

(This is the first of two articles.)