Southern Renewal

It is almost impossible to comprehend how devastating the last decade has been for people living in the Third World. Statistic piles on top of anecdote on top of statistic to create a mind- numbing array of facts, figures and stories describing mass impoverishment and misery.

"For many in the South, the hope has faded; the prospects have become gloomier than they were perceived to be only a decade ago," concludes the South Commission, a committee chaired by former Tanzanian President Julius Nyerere and made up of leading Third World academics and politicians.

The Challenge to the South, a report prepared by the South Commission, aims to diagnose the causes of the economic catastrophe which beset the Third World in the last decade and to prescribe solutions to put the South on a path of sustainable growth.

In the post-World War II period, up through the 1970s, the Third World experienced relatively rapid growth and gradual poverty alleviation. But the South Commission argues that the seeds of the misery of the 1980s and 1990s were sown during that time.

In most nascent Third World economies, governments were the main actors, often out of necessity. But, according to the South Commission, anti-democratic structures led to inefficiency. State efforts at planning were over-centralized; corruption drained state treasuries and interfered with the advancement of the national interest; and dictatorships or military-dominated governments siphoned off money to build up huge armies and stockpile weaponry.

The growth that did take place in the Third World was often not self-sustaining, as the developing countries remained dependent on industrialized countries. Third World countries industrialized slowly, or not at all; they did not develop scientific and technical institutes or a cultural emphasis on the importance of science; and they maintained dependence on Northern markets, in agricultural goods and natural resources.

Most importantly, economic growth did not automatically translate into shrinking poverty or lessened inequality in the Third World. As the South Commission notes, "The undoubted economic growth in the South rarely removed the structural inequalities and cleavages; despite the emergence of a middle class, in many countries the gap between rich and poor became wider."

Yet, states the Commission, "it is arguable that, for all its flaws, the development experience of the South until the end of the 1970s could have provided a base for improved living standards and human development." The sudden changes of the 1980s, "leading to a development crisis of unprecedented severity," made it impossible to know whether this could have been possible, however.

The largest burden on the countries of the South was the exponential growth of their international debt. With debt- related payments consuming an ever-greater share of export earnings and the International Monetary Fund and World Bank pushing draconian austerity plans, national economies virtually collapsed. A chronic decline in commodity prices exacerbated the economic crisis. The greatest suffering, as usual, was borne by the poor.

Meanwhile, the Northern countries, led by Reagan and Bush's United States, became increasingly hostile to Southern calls for measures to reduce international disparities in wealth. The Group of 7, made up of the world's leading industrialized countries, sought to coordinate the world economic order without the participation of the rest of the world. Industrialized countries progressively shaped the General Agreement on Tariffs and Trade (GATT) into a tool to promote the interests of Northern multinational companies at the expense of the Third World.

The Challenge to the South puts forth a series of recommendations about how Third World countries should respond to this onslaught. It puts greatest emphasis on the need to establish some sort of international arrangement which, recognizing that the Third World debt will never be repaid in full, offers relief to debtor countries.

Yet the South Commission does not focus most of its attention on North-South relations. This grouping of prominent Third World representatives deserves credit for its willingness to openly criticize developing country governments and policies and to suggest far-reaching changes.

To correct the problems of the post-World War II development model, the Commission calls for: resources to be shifted from military to non-military programs; democratization; and an end to corruption. It also recommends: that more attention be paid to the needs of rural communities and the agricultural sectors of Third World economies; that the state play a narrower economic role, focused on spurring capital formation; and that more resources be devoted to scientific and technical programs.

Underlying its laundry list of suggestions is a concern that the Third World become self-reliant, especially in feeding itself. "The economic domination now experienced by the countries of the South in varying degrees can begin to be overcome only through ... determined, self-reliant action," the report states.

The Challenge to the South also emphasizes the importance of collective action on the part of the South. Its most concrete suggestions are for the formation of institutions such as a South Bank, a South Secretariat and a debtors' forum. The South Bank would focus above all on promoting trade between Third World countries. The South Secretariat would provide technical assistance to Third World countries in their negotiations with Northern countries in forums such as GATT and in their efforts to increase South-South cooperation. And the debtors' forum would bring the world's debtor countries together to share information and to strengthen their collective hand in negotiating with private and public creditors.

Although these are valuable suggestions, The Challenge to the South's emphasis on collective action and South-South relations leads it to highlight the commonalities of the Southern countries at the expense of recognizing differences between and within countries. Internal class differences are largely overlooked; they are not significantly considered in the South Commission's diagnosis, and the Commission's prescriptions, for the most part, do not focus on solutions to the problems of the lower classes. Since wealth inequalities within Third World countries are actually more severe than those between the North and South, this failure to focus on internal class differences is a serious problem.

Parts of the book do discuss land reform and meeting the basic needs, including health and education, of poor people. But these proposals are not emphasized, and the South Commission does not call on governments to make them a top priority. Because the book has a written-by-committee style and because it makes an enormous number of suggestions, those points that are not emphasized tend to get lost.

The recommendations dealing with the need for the South to improve its scientific base, on the other hand, are over- emphasized. The Third World is undoubtedly hurt by its technological dependence on the North, but it is arguable to what extent technology, rather than political will, is necessary to alleviate extreme poverty in the South. By privileging technological advancement and calling for Third World countries to adopt environmentally and socially unsound technologies, The Challenge to the South falls short in its mission to outline a sustainable development policy for the Third World. It urges the establishment of an independent Southern expertise in nuclear power, but does not mention the importance of less glamorous--as well as cheaper and decentralized--energy efficiency technologies. It also endorses=-albeit with a few cautionary caveats--the Green Revolution, which promoted chemical-intensive and capital-intensive farming and is alleged to have increased food production in India and other countries. But it does not sufficiently note the severe environmental problems that this skyrocketing use of pesticides and fertilizers caused or the costs of losing biological diversity due to the introduction of uniform varieties of seeds. And it does not even mention the devastating harm that the Green Revolution inflicted on small, poor farmers who could not afford expensive inputs like fertilizer and pesticides.

Its failure to analyze internal class differences and its overconfidence in technology do not take away from the importance of this book, however. There is no question that the central message of the South Commission--"to get ahead, the South must rely primarily on itself"--is correct. With the Soviet counterweight a thing of the past, the IMF and the World Bank unremittingly forcing Third World countries to adopt austerity measures and the industrialized countries demanding in the GATT negotiations that Third World countries tear down their few remaining protective barriers, there is no where else for the South to turn.

The first step must be a thorough discussion of the problems and alternatives facing the Third World. The Challenge to the South, a serious attempt to sketch out an economic program for the Third World, is a good beginning.