We use cookies for site personalization, analytics and advertising. You can opt out of third party cookies. More info in our privacy policy.   Got it


Development (Aid)
Structural Adjustment

new internationalist
issue 200 - October 1989

[image, unknown]


What progress has the human family made towards
fulfilling the basic needs of its poorest members? Chris Brazier
reports on two decades of development.

'There are 1,500 million people on the planet without enough of the right kind of food to eat, or safe water to drink, or basic medical care. And this situation is getting worse. There are now more malnourished, sick, uneducated and unemployed people in the world than there were 10 years ago.'

That was how the first New Internationalist editorial began, back in March 1973, calling for a second front in rich countries that would help the people of the Third World in their war on poverty. It asked people to join 'a growing movement for action on the greatest issue of our times'. What has happened since?

For most of the world's people, the 20 years from 1970 to 1990 can be broadly divided into two halves - two pictures which tell very different stories.

The 1970s began still full of optimism and confidence about world development. The NI saw itself very clearly as part of a growing movement. Western societies were still in the throes of an idealistic phase during which radical change seemed possible and very real social progress on the cards, And there was much the same spirit abroad in the movement for world development. We had grasped the problem. With commitment and amounts of cash that seemed paltry when compared with government defence budgets, that problem could be solved.

The recession of the 1970s hit developing countries even harder than rich ones - the shockwaves that rock the world economy always crash against the poorer nations with most violence. And the gap between wealth and poverty was still alarmingly large. Nevertheless genuine progress continued to be made across the board: people continued to get healthier and more educated.

Quite unexpectedly, the 1980s has been different. The idealism about development is no longer there. But, much worse, as the decade comes to a close, the development process has actually gone into reverse for large parts of the world. In Asia there has been a semblance of continued progress. But in Latin America, people's incomes have actually gone down in the last few years and their health, education and nutrition have gone down with them. For Africa, meanwhile, the 1980s have been an almost unmitigated disaster.

There are three main reasons for this extraordinarily depressing decline: the debt crisis; the brutal 'adjustment' policies thrust upon poor countries by the financial institutions of the rich; and the appalling decline in the commodity prices on which the Third World depends.

Debt - the mountain above
Developing countries have been climbing hard throughout the 1980s, only to see the summit receding farther up beyond the clouds. In the 1970s they were eagerly offered loans by Western banks suddenly awash with oil riches; in the 1980s the debt collectors have come knocking. Put like that and you might think they had it coming. Margaret Thatcher, for example, would remember her lessons in the grocery shop at her father's knee and conclude that developing countries were foolish and irresponsible to live beyond their means and borrow so much money.

Together we can build a better world. A classic picture by Claude Sauvageot, whose photos graced the NI's pages from the beginning. But it's not that simple. In the first place developing countries accepted the loans that were thrust at them because they believed what the West was telling them - that it would be possible for them to industrialize, to develop their economies to the point where paying back the loan later on would be an easy matter. In that sense it was like any small business borrowing the capital it needs to expand and survive. Except that there was no way Third World countries could develop that fast: there was room for no more than a handful of South Koreas, ready to beat the West at its own game.

Some government leaders may have been irresponsible in wading deeper into debt - there is certainly no shortage of idiocy and corruption in Third World governments, any more than there is in those of the rich world (look at the catalogue of woe in Japan's ruling circles). But it is not the political elite which is now paying the price for any mistakes - it is the disease-ridden baby, the mother who starves herself to feed her children, the farmer without hope of land or work.

When the NI first began it had a series called Myth Exploders which challenged the popular misconceptions about the Third World and our relationship with it. If that series were up and running today, one of the widely held myths it would have to counter would be the one which holds that our 'generous' overseas aid means money is flowing from the rich world to the poor.

In fact aid grants and new bank loans have, since 1984, been far outweighed by the amount Third World countries have given to the rich nations in interest repayments.' The South is now transferring at least $20 billion a year to the North. If you add on the transfer of resources caused by rich countries paying much less for the poor world's raw materials, then the flow is more like $60 billion.2

There can be no moral basis for this. There can't even be any economic basis for it, since developing countries are so crippled by the weight of their debts that they are not going to offer the West the kind of expanding, healthy markets it craves unless that burden is lifted. The UN predicts that a reduction of 30 per cent in the commercial debts of the 15 most indebted developing nations would result in a 25-per-cent increase in their national incomes over the next five years.

Adjustment - turning the screw
What is politely and euphemistically called 'adjustment' is the next piece in the jigsaw of a declining Third World. This refers to the shock treatment applied by Western-dominated financial institutions like the International Monetary Fund (IMF) to the economies of developing countries so as to make them more efficient. This sounds all very sensible until you realize what it means in human terms.

The IMF's 'medicine' involves wholesale cuts in public expenditure. As many as 70 countries are currently 'adjusting' their economies in this way. Many of them needed some kind of kick up the financial backside. But the people who suffer, again, are the poor - the shantytown dwellers who can afford less food because the subsidy has disappeared overnight; the rural villagers whose primary health posts stands empty: the children who emulate the illiteracy and ignorance of their grandparents rather than their better educated parents.

We have grown used to some kind of safety net, extending beneath us in western countries, even if some of the holes seem to be getting bigger by the day. But imagine what it is to live in a country where there is no safety net, just a rubber mat to break your fall, and then even that is pulled out of the way. This tumble is not just breaking limbs - it is breaking the spirit.

Commodities - the price of pain
The third presence in this Unholy Trinity of forces pulling the Third World downhill is the catastrophic decline in commodity prices during the 1980s. The poor countries of the South have always depended on selling raw materials - anything from palm oil to iron ore - to the industrialized North. This has left them at the mercy of the manic fluctuations of commodity prices on the world market.

When the NI began, non-oil commodity prices were actually at a rare high: they reached a post-war peak in 1974. But they tumbled the following year, crashing by 31 per cent when measured against the price of manufactured goods. These peaks and troughs made it impossible for developing countries to plan ahead. But worse was yet to come, since from the late 1970s onwards commodity prices have steadily declined, reaching their lowest level for 50 years in the middle of 1987. Since then they have recovered - but only slightly, standing 30 per cent lower than they did in 1979.4

Imagine how you would feel if your income had shrunk each year to the point where you could now buy little more than half what you could in 1970. When Peter Adamson wrote the NI's first editorial back in 1973 he would have found it hard to believe that things could get much worse in the field of trade - but they have.

This Unholy Trinity of debt, adjustment and worsening terms of trade has started to reverse the progress made in Africa, Latin America and, to a much lesser extent, in Asia. And it is attacking what we might call the Holy Trinity of development: health; education; and food.

Health - children betrayed
Seen over the whole period from 1960 to 1989 the human family has become significantly healthier. The length of life we can expect to enjoy has gone up markedly over that period and the number of children who die before the age of five in developing countries has been reduced by half. This is a great achievement.

Of course the difference between rich and poor worlds in this respect is still enormous and obscene: at the extremes, 30 children in every hundred born in the West African country of Mali will die before the age of five, compared to just one in a hundred in Australia, Canada and the UK.5 But the broad trend has been for this gap between the experience of rich and poor worlds to narrow.

The tragedy is, though, that this improvement is faltering badly. Overall the rates are still coming down - but much more slowly in the late 1980s than in the decades before. This is the Unholy Trinity at work again. The overall world statistics always lag behind by two or three years but surveys of particular countries in Africa and Latin America are now showing clearly that the numbers of children who are malnourished or born with a dangerously low birth weight are increasing. So too, in some cases, is the average weight per age of children under three.

Put like that, it is difficult to comprehend what a disaster this is, But the development of a child's body and mind in the first three years of life is absolutely vital - any stunting of growth in these years cannot be made up for in later life, This is the very last thing that should ever suffer in a time of recession when people's belts have to tighten. Instead it has been one of the very first things to suffer - and that is the scandal of our age.

At a time when food and money are shorter, there is all the more need for adequate health care. The NI has campaigned consistently over the years for more emphasis to be placed on primary health care than on expensive technological options - in other words for local people to be trained to combat the most basic diseases, as in China's revolutionary 'barefoot doctor' system.

We have hardly been alone in this. Since the 1978 UN Conference on Health at Alma Ata it has become a universal wisdom that it is much more effective to build a primary health care network than to spend the same money on a few prestige hospitals which could only ever be used by an urban elite. As a result there have been real achievements: hundreds of thousands of workers have been trained to work in rural areas and attack fatal conditions like dehydration from diarrhoea (still the main killer of children worldwide) with the simplest and cheapest remedies.

But since 1985 governments have cut down drastically on the amount they are spending on health. Clinics have closed down, essential drugs haven't been bought or distributed, health workers have been unpaid and had to revert to other ways of earning a living. There are certainly fewer trained health workers in the field now than in 1985. A classic case of a country with the wrong priorities in health is Congo. There they had to cope with an IMF programme which involved savage public-spending cuts. That was not their fault. But they chose to implement these cuts by destroying the primary health care programme while devoting almost 90 per cent of the health budget to just one high-tech hospital in the capital.

Governments all over the world have advocated primary health care without taking it seriously. They have treated it as a cheap option for the poor, while in the high-tech hospitals for the better-off it's been business as usual.

So the 1980s has seen a betrayal of primary health care at the very same time as more and more lip-service has been paid to the idea. And thousands of people are dying as you read this as a result.

Education - a faltering crusade
The expansion in education in the 1960s and 1970s was phenomenal. There were all kinds of problems: overcrowded classrooms, high drop-out rates, not enough girls going to school. But overall the picture was fantastically encouraging. Even in the poorest countries of all, there was a dramatic surge in the proportion of children receiving primary schooling: from just 30 per cent of boys and 14 per cent of girls in 1960 to 68 per cent of boys and 43 per cent of girls in the mid-1980s.6

This encouraging trend arose from a tremendous idealism about education in the 1960s and early 1970s. There was a real feeling that this was the key to development - this was the great crusade that was going to spirit newly independent Third World countries towards their prosperous destiny.

The steam has completely gone out of that. You meet nothing but apathy about education now, whether in the governments of the Third World or the aid-givers. Partly that is because the people in power are primarily interested in the high-quality urban schools that their own children attend - and the best schools in Delhi or Nairobi are now the equal of any in the West. But it is also because people tn the Third World have realized that there are very few jobs available in which their children can use an education. Back in the time of idealism it all seemed to connect: you trained more young people and the 'educated' sector of the economy would expand as a result. But it hasn't happened.

So the impetus has gone, and with it the cash, And when the bankers and the IMF come knocking, the education budget is one of the first to be hit. According to the Director-General of UNESCO, Federico Mayor, in roughly one in five developing countries primary student numbers have actually started declining while in two out of every three developing countries expenditure per student has declined in real terms since l980.7 And that is disastrous. Because education isn't only useful for those countries chasing an impossible dream of Western industrial development. It gives peasants more control through literacy; teaches women about family planning and child nutrition. It saves lives.

Food - seeds of hope
In the area of food, at least, there has been some improvement: both Asia and Latin America now have food surpluses where before there were deficits. India is the classic case of transformation in food production over the last two decades. Back in the 1960s. India was considered to be ripe for ruin. Its population was expanding so fast that it seemed impossible that food production could keep pace with it.

Instead there has been a miraculous turnaround. India in the 1980s has been exporting food. Not only that but a drought in Maharashtra in 1987 and 1988, probably the most severe of the century in the subcontinent, has caused barely a ripple of news interest in the world. The reason? India coped with the resultant food shortage itself, without recourse to international food aid. In the past there would have been a major famine; now they have simply called on their own 30-million-ton reserve of wheat.

This extra food production is the result of the Green Revolution, which has transformed agriculture in Asia and Latin America in the last 20 years. The NI has always been concerned to point out what is wrong with the Green Revolution: that it favours richer farmers who can afford its high-yield seeds and extra fertilizer; that its ecological impact is worrying.

But we have probably not emphasized enough the obvious benefits it has brought about. The food that India produces does not find its way to the people who need it as efficiently as it did in the Maharashtra drought. Too often it is exported for foreign exchange while poor people without the money to buy it or the land to grow it go hungry: South Asia still contains the majority of the world's 'absolute poor'. But at least the food is there in a crisis - and is also there ready and waiting for a government which is serious about getting food through to the poorest.

But the Green Revolution has not reached Africa and what were high hopes for that continent in the 1960s have now dissipated in both a series of chronic famines and a general food shortage. There are all kinds of reasons for Africa's food problems - rich and precious land being used for cash crops instead of to grow food for local people; a much smaller proportion of land fertile enough for cultivation than is the case in Asia or Europe; women farmers being neglected and ignored. And the world is all too prone to assuming that a scientific solution can work a miracle. Nevertheless if they were handled properly the high-yielding seeds of African maize, upland rice and cassava which are on the way could make a real difference.

Zimbabwe provides the model - and the lesson that Green Revolution techniques work best when they are part of a total package that includes radical social reform alongside the free-market measures. After independence in 1980, Zimbabwe's government placed a new priority on the three quarters of a million black farmers who had hitherto been neglected. There was some land reform, redistributing large white estates among these black small-holders - though not by any means as much as might have been expected. Loans to small farmers were increased 25 times over: research and investment went into new seeds and fertilizers specially designed for the needs (and the purses) of the small farmer; and maize prices went up by 129 per cent so as to provide an incentive. It is a total package, well thought out and administered - and it has paid dividends. Zimbabwe has quadrupled its food production in the last decade and has proved not only that small farmers are vastly more effective than large landowners but also that Green-Revolution techniques can be harnessed to help the poor - provided the political will is there.

Asia's rice bowls are being filled - at a price.
Photo: Hannes Wallrafen

Looking at the story of food in Africa over the last two decades is a depressing business. But Zimbabwe's example, together with the new seeds that might make a difference to humid parts of the continent in the first half of the 1990s (and to the Sahel in the second half of the decade), at least give us some hope.

The overall picture is clear. Development in the Third World has stalled, ground down by the relentless wheels of the global economic machine. The 1990s could be different. Western governments, and the populations that vote for them, have to be persuaded that it is in their own interests, quite apart from any considerations of common humanity, to start the reconstruction of the developing world.

The Unholy Trinity must be dismantled. Realistically world leaders are not going to accept this, still less act on it. But they might be forced to accept a reconstruction package by another route. The NI has always been sceptical about the value of government-to-government overseas aid, which too easily finds its way into the pockets of an elite or is wasted on the wrong kind of project. Aid is generally better given through voluntary agencies which are more sensitive to local needs.

But given those provisos a massive transfer of cash from rich to poor is still vitally necessary. The closest moral and practical precedent for what is needed is the Marshall Plan by which the US helped to restore Europe in the years after the Second World War. Then the US gave as much as two per cent of its gross national product every year to Europe. Today, when US wealth is two-and-a-half times greater, it gives only 0.22 per cent of its gross national product in overseas aid. If all industrialized countries were to increase their overseas aid to the 0.7 per cent of GNP recommended by the United Nations, it would cost an extra $50 billion a year. That is a huge sum. About as much as is spent on the military by those same countries every four weeks.

That is one of the NI's most famous phrases, which would be well worth updating and remembering every year. The numbers change but the plight of the poor in the Third World is still the greatest issue of our times.

1 World Bank, World Debt Tables.
UNICEF The State of the World's Children Report 1989.
UNCTAD Trade and Development Report 1988
World Bank World Development Report 1989; UNICEF op cit.
UNICEF op cit.
Defined as the 33 countries with the highest child mortality rate in UNICEF, op cit.
Speech to UNICEF's Board, 1989.

previous page choose a different magazine go to the contents page go to the NI home page next page

New Internationalist issue 200 magazine cover This article is from the October 1989 issue of New Internationalist.
You can access the entire archive of over 500 issues with a digital subscription. Subscribe today »


Help us produce more like this

Editor Portrait Patreon is a platform that enables us to offer more to our readership. With a new podcast, eBooks, tote bags and magazine subscriptions on offer, as well as early access to video and articles, we’re very excited about our Patreon! If you’re not on board yet then check it out here.

Support us »

Subscribe   Ethical Shop