Update on World Development

A Social Education feature

The last fifteen years have been a very difficult period for many developing regions. As Table 1 makes clear, overall per capita gross domestic product (GDP) between 1980 and 1995 diminished in Africa and West Asia (where the impact of oil price declines was felt across the region). In Latin America, there was some recovery in the 1990s after a decline of per capita GDP during the 1980s. In contrast, Southeast Asia and China have been the scenes of significant growth.
The bleak economic situation of a number of developing countries is likely to have shown some improvement this year, according to the United Nations World Economic and Social Survey, 1996. In Africa, the first overall increase in per capita income since the mid-1980s is expected to take place in 1996. The start of an economic recovery is predicted in Latin America. Growth in South and East Asia and China is expected to continue, albeit at a more moderate pace.

The underlying problems facing most developing countries are still extremely serious. One major problem is massive indebtedness. As Table 2 shows, the ratio of the external debt of countries to Gross National Product (GNP) is high, and the cost of servicing it eats into the benefits they would otherwise obtain from the value of exports. In 1995, the overall external debt of Latin America was almost 40 percent of the GNP of Latin American countries, and that of Africa was a stunning 65 percent (with Asian debt lower at about 27 percent).

The debt problem of developing countries comes at a time when foreign aid is increasingly hard to obtain. Despite the successes of past foreign aid (e.g., the Green Revolution), a very low proportion of the Gross National Product of economically developed countries is spent on development assistance. In 1993, only two countries (Denmark and Norway) allocated one percent or more of GNP to foreign aid. Only three others gave more than half of one percent: Sweden (0.98 percent); Netherlands (0.82 percent) and France (0.63 percent). (Source: United Nations, Statistical Yearbook, 1993. [New York: United Nations, 1995]: 799.)

Table 1
Rate of Growth of Per Capita GDP of Developing Economies, 1980-95
All developing economies1.02.9
Latin America-0.90.8
West Asia-5.3-0.6
Southeast Asia3.94.0

Source: United Nations, Department for Economic and Social Information and Policy Analysis, World Economic and Social Survey 1996 (New York: United Nations, 1996): 7.
Table 2
Debt and Debt Service for Developing Regions, 1995
Ratio of ExternalRatio of ExternalRatio of Debt
Debt to GNPDebt to ExportsService to Exports
Latin America39.6254.030.3

Source of estimate: United Nations Department for Economic and Social Information and Policy Analysis, World Economic and Social Survey 1996 (New York: United Nations, 1996): 348. Gross National Product (GNP) is closely related to Gross Domestic Product (GDP), but GNP takes account not only of domestic production, but also of income coming to the residents of a country from investments abroad and/or similar income going out of the country to residents of another country.

Table 3
GNP Growth in Selected Developing Countries

Country$GNP$GNP% ChangeSecondaryHigher ed% Pop.% of GDPInfantperperin GNPschoolgraduatesincrease spent onmortalitycap.cap.per cap.studentsper 10001970-domesticper 1000197019871970-87as % of agein age group1987investmentbirthsgroup 1970197019701970

Cote d'Ivoire970940-39.01300.922.5134.6

With the exception of the estimate of the ratio of graduates of higher education, the above estimates are taken from a publication prepared by the World Bank, World Tables 1988-89 (Baltimore and London: Johns Hopkins University Press, 1989). The GNP statistics are from the publication's general tables on pp. 20-21; they are retroactively adjusted to eliminate the effects of inflation, and both the 1970 and 1987 statistics are quoted in 1980 prices. Investment statistics are from pp. 63-64, and other statistics are taken from the tables for the individual countries on pp.196-98, 212-14, 284-86, 352-54, 384-86, and 436-38. Statistics for higher education graduation rates have been taken from UNESCO's Statistical Yearbook, 1973 (Paris: UNESCO, 1974), pp. 334-39, using estimates based on other years when no 1970 statistic was available. Infant mortality statistics are used because they are one indicator of the degree of a country's social modernization.

Social and Educational Factors in Development

The question is often posed: how can countries develop their economies more rapidly? The answers are complex and depend on a combination of factors. There are well-established economic reasons why some countries are able to grow more quickly than others, such as greater natural resources, available capital for investment, and productive capabilities that allow the development of profitable industries. A developing country also benefits greatly if it has a government whose members are both supportive of national economic development and knowledgeable about how to foster the institutions that can bring it about. In addition to these factors, it is important to be aware of social and educational attributes that are conducive to economic growth.Consider the six countries in Table 3: Cote d'Ivoire (Ivory Coast), Guatemala, Malaysia, Republic of Korea (South Korea), Colombia and Nigeria. In 1970, they were relatively close to each other in terms of per capita Gross National Product (GNP). The poorest country among them, Nigeria, had GNP per capita of $770 (adjusted retrospectively for inflation between 1970 and 1987), while the richest, Cote d'Ivoire, had GNP per capita of $970.In 1970, the Republic of Korea had the fourth highest GNP per capita of the six countries: $890 in real terms. At the same time, Korea had an extensive commitment to secondary and higher education, enabling its economy to benefit in subsequent years from a well-educated and skilled labor force. As the Table shows, a higher proportion of the population of secondary school age was studying in secondary schools in Korea than elsewhere, and a much higher proportion of the age group old enough for higher education was graduating from higher education establishments in Korea than in the other countries. Korea also had a lower population growth rate, allowing the benefits of national economic growth to be greater per person. Other favorable features were that Korea had benefited from U.S. aid; it had a government that strongly supported economic development; and it made a significant investment in rapidly growing manufacturing industries that gave it a diversified and internationally competitive economic base not found in developing countries that are dependent on the export of major crops or minerals.Between 1970 and 1987, Korea's GNP trebled in real terms (i.e., after taking account of inflation). In contrast, the countries in the Table with lowest educational commitments and highest population growth rates did not change their per capita GNP much in 17 years. In two cases, Cote d'Ivoire and Guatemala, per capita GNP declined in real terms. nPoint of View

U.S. Aid to Developing Countries

Charles F. Dambach

According to the United Nations Development Programme, "the world has seen spectacular economic advance for some countries-and unprecedented decline for others." Since 1980, some 15 countries with 1.5 billion people have enjoyed substantial growth, but "economic decline or stagnation has affected 100 countries, reducing incomes of 1.6 billion people." Most of the growth has been in China, India and other Asian countries. Most of the stagnation and decline has been in the sub-Saharan African nations.
In 1965, the United States invested 1 percent of its gross national product in foreign aid. By 1980, the investment had declined to 0.4 percent. However, thanks in part to early U.S. investment, much of the developing world realized substantial economic growth. Only about 200 million people saw their standard of living decline.

Throughout the 1980s and 1990s, however, U.S. aid dropped all the way to about 0.1 percent of the gross national product. The consequences are dreadful. Many people left without access to health care, to education, to jobs, or other opportunities resort to violence. It could get worse.

The budgets presented by the President and the Congress for the next six years will cut our aid programs even more. Many other countries follow the United States' lead, and we are leading a race to the bottom. Fortunately, Japan, France, Germany and a few other nations have been willing to maintain their commitments to the developing nations.

We are the wealthiest and strongest nation on the globe. Our military budget nearly equals that of the rest of the world combined. But we ignore 35,000 children who die every day of malnutrition and related diseases. And we do it under the guise of a moral imperative to shrink the size of government.

Excerpted by permission from the September 1996 issue of The Advocate, a publication of the National Peace Corps Association.

Charles Dambach is President of the National Peace Corps Association (NPCA), a non-profit membership association independent of the federal agency, the Peace Corps. NPCA was formerly known as the National Council of Returning Peace Corps Volunteers. The National Peace Corps Association sponsors Global TeachNet, a global education project with a national information network for K-12 teachers. While many of the current members are returned Peace Corps Volunteers with overseas experience to bring into the classroom, all interested educators are invited to join. The objective of Global TeachNet is to bring into the classroom a first-hand understanding of the world and the interdependency of its people. Teachers will be able to communicate with each other through a bimonthly newsletter, web site (www.rpcv.org/globaled), conferences and a listserv. Starting in 1997, Global TeachNet will offer small incentive grants to teachers who have developed successful global education curricula.

For information, contact TeachNet Project Director Anne Baker, National Peace Corps Association, 1900 L Street, N.W., Suite 205, Washington, DC 20036. Tel.: 202-293-7728; fax: 202-293-7554.