Special Report: Poor vs. Rich : A New Global Conflict

(4 of 11)

spokesmen for developing nations frequently point to Egypt; industries founded there in the early 19th century, when the country was autonomous although under loose Turkish sovereignty, were dismantled by the British after they occupied the country in 1882. Still, there is ample evidence that colonialism actually improved most societies. In 1962, for example, Algeria acquired railways, roads, ports, airfields, hospitals, schools, water supplies and power stations from the departing French—not to mention a thriving network of profitable farms that have since been all but ruined by heavyhanded socialist administration.

2) In the post-colonial period, the First World has rigged the international economic system to keep the poor dependent.

It is true that the First World has favored imports of LDC commodities rather than manufactured products. This may have discouraged the growth of industry in some of the developing nations and hindered economic diversification. The reliance on a single crop or mineral for export earnings painfully exposes many poor countries to erratic swings in the price of raw materials. Still, while trade relations are not always equitable, it is highly debatable whether the First World has really been using trade to exploit the developing countries. If that were so, notes British Economist P.T. Bauer, then nations like Taiwan, Singapore, Brazil and South Korea, which are the most involved in extensive foreign trade, would not have become the most prosperous LDCs. Bauer rightly points out that the poorest states are "those with the fewest or no external contacts."

3) Foreign aid has done little to help the poor, but has instead created enclaves of privileged elites addicted to First World luxuries and living standards.

Imported technology almost inevitably brings along elements of the civilization that created it, such as high consumption patterns. But poor nations have to accept that fact if they want to stimulate economic growth. Moreover, if the benefits of growth do not reach all segments of a developing country's population, the fault usually lies more with the aid recipient than with the donor. Hyperinflated bureaucracies and corrupt officials in a poor state, for instance, claim a large share of their nation's output, while widespread illiteracy limits access to new jobs stimulated by the economic development. While foreign investors may bring capital-intensive, labor-saving equipment into a country where there is massive unemployment, they frequently do so to offset the high wages that governments and trade unions would otherwise force them to pay urban workers.

4) Through aid programs, investments and exportation of culture, the First World—most notably the U.S.—has undermined the dignity and self-sufficiency of the underdeveloped states.

This is a romantical populist argument, reflecting a widespread and partly justifiable resentment against the corrosive impact of modernization on traditional values. It is a complaint, however, more properly leveled at the concepts of technology and progress rather than at the First World. After all, no aid donor forces a poor country to opt for economic growth. South Korea's Deputy Premier Nam Duck Woo recently noted what ought to be obvious to all underdeveloped countries: "As people get richer, their values become more materialistic,