LONDON – While Europeans debate their economic sclerosis and the Americans their growing deficits most of the rest of the world is moving forward and upward, especially so if we are talking about numbers of people not of countries.
Every time I come to Turkey I have to blink. Not that long ago the big cities were overridden with shantytowns and poverty stalked every village. Now, if not truly European as the Turks so earnestly want, the country makes a good attempt at emulating European standards- few shanty towns, fast roads all over the place, handsome bridges, well dressed children, a fast rising growth rate, a highly successful manufacturing export sector, rapidly improving heath and educational services and a remarkably obvious presence of educated woman in positions of responsibility.
But Turkey, while an exception in the Middle Eastern Muslim world in that it both lacks oil and distributes the wealth it generates reasonably fairly, is not atypical of much of the rest of the Third World. Over the last three decades developing countries have recorded more rapid average real income growth than the developed, already industrialized, countries. During the 1980s developed and developing countries grew at a pace of 3.1% and 3.7% a year respectively. During the 1990s economic growth in the developed countries slowed down to 2.4%, but in the developing countries it accelerated to 4.8%. And during the first five years of this decade the pace has picked up further: average real income growth has been more than double that in the developed world.
One only has to re-read the great classics of the 1960s, John Gunther’s “Inside Asia” and Gunnar Myrdal’s “Asian Drama”, to be reminded that it wasn’t so long ago that the prevailing wisdom was that this part of the world was a basket case, weighted down by millennia of tradition- “The Hindu growth rate” and “Confucian somnolence” were the catchwords of many observers. Even today, despite the example of Turkey, Malaysia, Pakistan and Indonesia, we often hear argued the bizarre notion that Islamic culture is simply not conducive to capitalist development.
Admittedly, most of this remarkable surge has been concentrated in China, India and South East Asia. But they account for two fifths of the world’s population, which is why I say don’t count countries or one falls into the trap of much UN reporting that sees its statistics always skewed by its need to respect the scores of small countries that make up the bulk of its membership.
Even with that caveat, the fact is the good news is spreading. After suffering what was called “the lost decade” in the 1980s followed by an indifferent decade in the 90s most of Latin America is now doing rather well. Africa, whose images of starvation can still overwhelm us, most recently in Niger and the Sudan, is overall doing better than it has ever done. Last year Africa averaged a growth rate of 4.5% which means that many countries, not so long ago languishing in the trough of despond, are now doing remarkably well, with growth rates approaching or even exceeding 6%.
I wish I could show you the graph that I have in front of me of developing country exports to developed countries of “technology-intensive manufactures”, just published by the UN’s Conference on Trade and Development (Unctad). But if I describe it as a line rising steadily since 1985 and becoming almost, if not quite, vertical from 1997 onwards I don’t think I’ll be reprimanded for misrepresentation.
This is one of the core reasons for the remarkable growth of the developing countries. Not textiles and not agriculture. It is humdrum manufactured products, followed by electronics. Of course, liberalising agriculture and controlling the Chinese ability with textiles to out-compete other smaller and poorer countries by sheer volume is important for the likes of Africa and Central America, but is also once again an example of a couple of items of bad news crowding out the many examples of good news.
There is also one other important reason for this success- it is the remarkable take off in South-South trade, between the poorer countries themselves. They are not just taking in each other’s dirty washing. These exports have become an important part of their strategies for growth, as with Brazil’s large-scale sales of soya to China and Turkey’s exports of engineering products around the Middle East.
Poverty, the scourge of centuries, could be effectively abolished this century. Totalitarian China may be going backwards on this, particularly in its rural areas and among new urban migrants, despite its tremendous growth. But democratic India and Turkey are showing what economic growth should be all about. India, even though millions are still unspeakably poor, now has a better distribution of income than the United States. And so does Turkey.
