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Foreign aid has often been more effective than most of the poor are willing to admit. Dotting the developing countries are new dams, low-rent public housing, irrigation systems, power plants and canals. These projects have significantly contributed to the impressive 5.5% annual G.N.P. increase logged by the LDCs as a group during the 1960s, and the nearly 6% annual rise from 1970 to 1974. These gains, of course, were not evenly distributed; a dozen or so nations, such as Brazil, South Korea and Taiwan, developed much more quickly than most of the others, while a few, including Southern Yemen and Niger, have actually had a negative rate of growth. In many underdeveloped countries, moreover, programs that have achieved targeted rates of growth have failed to raise living standards or generate savings because the gains have been offset by population growth. Swiss Economist Paul Bairoch points out that the pace of agricultural growth in the developing world has compared favorably with that of the First World in its period of economic takeoff during the 19th century. "The real difference between the performance of the two," stresses Bairoch, "is caused by the growth of population." During its industrial revolution, the West's population grew about .5% annually; the poor countries today are expanding at a yearly rate of'2.6%.
What Can Be Done for Them
Clearly, First World nations can do much to improve the effectiveness of their aid to the developing countries. Among the principal steps recommended by economists:
> Channel a greater portion of financial assistance through international agencies, such as the World Bank, which would provide fiscal supervision of projects and also defuse criticism by the poor that the aid is politically motivated. The bank, in fact, is already a major source of development money; this year it has committed $1.5 billion in low-interest loans.
> Provide more aid aimed at increasing food output. Britain has already adopted a "rural strategy" for its overseas-aid program, and Secretary of State Henry Kissinger has endorsed the establishment of an International Fund for Agricultural Development to research new techniques for cultivating land. The World Bank has currently earmarked $1 billion for projects to aid the rural poor. The First World could also underwrite the cost of bringing new lands under the plow. Huge areas of Africa are suitable for livestock ranching but cannot be developed until money is available to eliminate diseases that attack both cattle and herders. Also badly needed: improved food-storage systems to prevent the massive destruction of grains by rot, insects, rodents and monkeys. In Calcutta, in fact, up to 30% of the stored grain is devoured by mice and other pests.
> Help stabilize the export earnings of the Fourth and Fifth World countries to enable them to reduce the wild price fluctuations of the commodity markets and develop a realistic strategy for economic growth. The Common Market, for example, recently inaugurated its Stabex plan, which establishes a $450 million fund to be used