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February 1970 (23rd year) - U. K. : 2/-stg - Canada : 40 cents - France : 1.20 F
The Pearson Report
A NEW STRATEGY FOR
DEVELOPMENT
TREASURES 'Big cat' of Stone-age Cyprus
This animal head, probably of a lion or panther, was hewn from basalt rock by a Stone-age
craftsman in Cyprus, almost 8,000 years ago when these fierce members of the cat family
OF roamed the island. A mere 11 cm (4 in.) long, it was unearthed at Khirokitia from the remains
of one of the early Neolithic villages brought to light by recent excavations. The inhabitants
of these settlements were farmers and hunters, but they also numbered craftsmen skilled
WORLD ART in working stone, fashioning bowls, dishes and tools as well as necklaces and amulets.
Photo © Gérard Souris Archaeoloçjia Viva. Cyprus Museum, Nicosia
O
Courier
FEBRUARY 1970
23RD YEAR
PUBLISHED IN
THIRTEEN EDITIONS
English Japanese 'PARTNERS IN DEVELOPMENT'
French Italian (I) A new global strategy
Spanish Hindi
Russian Tamil
10 (II) Tragic consequences tomorrow
German Hebrew
if fail to act today
Arabic Persian
By Lester B. Pearson
U.S.A.
Published monthly by UNESCO 15 THE STRATEGY IN A NUTSHELL
The United Nations
Educational, Scientific
and Cultural Organization
18 TAKING THE WIND BY THE ROOT
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28 THE RISING SPIRAL OF UNEMPLOYMENT
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TREASURES OF WORLD ART
Editorial Office
'Big-cat' of Stone-age Cyprus
Unesco, Place de Fontenoyj Paris-76, France
Editor-in-Chief
Sandy Koffler
Assistant Editor-in-Chief
René Caloz
Cover
Assistant to the Editor-in-Chief
Lucio Attinelli
Cover design by Rolf Ifaach - Unesco
International co-operation for
development over the last 20 years
Managing Editors has been of a nature and on a scale
English Edition: Ronald Fenton (Paris) new to history. Yet massive
French Edition: Jane Albert Hesse (Paris) aid and vast efforts by the
Spanish Edition: Arturo Despouey (Paris) developing countries have failed
Russian Edition: Georgi Stetsenko (Paris) to close the gap between the
German Edition : Hans Rieben (Berne) industrial nations and the rest of the
Arabic Edition: Abdel Moneim El Sawi (Cairo) world. What new global strategy
Japanese Edition: Takao Uchida (Tokyo) could close this gap and how soon?
Italian .Edition: Maria Remiddi (Rome) These are the questions examined
Hindi Edition: Annapuzha Chandrahasan (Delhi) in one of the most important
Tamil Edition: T.P. Meenakshi Sundaran (Madras) studies on development produced
Hebrew Edition: Alexander Peli (Jerusalem) in recent years the Pearson Report.
Persian Edition: Fereydoun Ardalan (Teheran) Our cover artist, Rolf Ibach,
has sought to symbolize the
Photo Editor: Olga Rodel
intercontinental facets of this world
Layout and Design: Robert Jacquemin problem, certainly one of the central
All correspondence should be addressed to the Editor-in-Chief issues of our time.THE This issue is devoted in major part to what has already come to be known
as the "Pearson Report", the most comprehensive analysis to date of economic
development. Entitled "Partners in Development", the report proposes a new
PEARSON basis for international co-operation and spells out the responsibilities of both
donor and recipient countries. Its proposals represent a far-reaching pro¬
REPORT gramme of action, a new global strategy that can transform the present aid
framework into one that fits the changing needs of the developing world
in the next two decades.
Two years ago, the crisis of confidence in the effectiveness of develop¬
ment aid led George Woods, then President of the World Bank, to suggest
a "grand assize" in which an international group "of stature and experience
would meet together, study the consequences of twenty years of develop¬
ment assistance, assess the results, clarify the errors and propose the policies
that will work better in the future."
In August 1968, the new President of the World Bank, Roberts. McNamara,
asked Lester B. Pearson, former Prime Minister of Canada and Nobel Peace
Prize winner, to form a Commission to undertake such a study. Three months
later, the Commission on International Development held its first meeting
in Mont Gabriel, Canada.
With Lester Pearson as its chairman, it comprised seven prominent inter¬
national figures: Sir Edward Boyle (U.K.), Roberto de Oliveira Campos
(Brazil), C. Douglas Dillon (U.S.), Wilfried Guth (Fed. Rep. of Germany),
Sir Arthur Lewis (Jamaica), Robert E. Marjolin (France), and Saburo Okita
(Japan). After 11 months of intensive investigations, including meetings
in Latin America, Africa, Asia and the Middle East at which some 70 govern¬
ments presented their views, the Commission drew up its findings and
recommendations in a 400-page report which has now been published (For
prices and other details see inside back cover).
The text below is the address Lester Pearson delivered in Washington
several weeks ago before the World Bank and the International Monetary
Fund, in which he summarized the major findings of this far-reaching study.
Other articles in this issue present excepts and summaries of the conclusions
and proposals in the Pearson Report.
A NEW STRATEGY
FOR GLOBAL DEVELOPMENT
by Lester B. Pearson Nobel Peace Prize, 1957
LESTER B. PEARSON. Prime Minister of
Nlot only is the question of brought peace, but an uneasy twilight
Canada from 1963 to 1968, was awarded the
development difficult and complex in zone darkened by the shadow of total
Nobel Peace Prize in 1957. Statesman and
diplomat, he was an adviser to the 1945 San itself ; but we have been examining it destruction. Concern for the rights
Francisco Conference that drew up the U.N. during a tense and difficult period in and dignity and freedom of all men
Charter. He also shared In planning that led
to the creation of the Food and Agriculture
human affairs. The tone of the times has not only sharpened conflict over
Organization and of UNRRA, which helped to is doubtful and discordant. A decade how to protect these essential values
restore the economies of war-ravaged coun¬
which began with the all but total but has revealed that there are multi¬
tries and cared for displaced persons. He
led successive delegations to the U.N. Gen¬ liquidation of the old colonial order tudes who still do not enjoy them.
eral Assembly, of which he was president In
has ended with man walking on the The implausible speed of techno¬
1952-53, and took a leading part in most of
the historic International events of the time. moon.
logical change has exposed and ren¬
4 In 1960,
chairman of
he became
the
International
Council on World
executive
Tensions. Goals reached often serve only to dered less tolerable the glacial pace of
His books Include 'Democracy in World Poli¬ social transformation. Unprecedented
illuminate the long, dangerous road
tics" (1955), "Diplomacy In the Nuclear Age"
(1959), "Peace in the Family of Man" (1968). ahead. The absence of war has not economic progress in many areas has
CONTINUED PAGE 6kC Xl
9
5Lester B. Pearson
(Canada)
The eight members of the World
Bank Commission on International
Development, headed by Lester B.
Pearson, who drew up the far-ranging
study, "Partners in Development" .
Sir Edward Boyle
(U.K.)
GLOBAL STRATEGY (Continued)
Doubts, cynicism and disillusions
thrown into sharp relief the depriva¬ areas, and the costs of exploration makes development co-operation more
tions and flagging hopes of the less are as high as the results are uncertain. difficult. Too many in both developed
fortunate. Some social and economic enterprises, and developing countries are becoming
often experimental, will yield high cynical, not only about the effective¬
The circumstances in which the
returns; others will not, and will be ness of the aid effort, but about the
developing nations have tried to
pushed aside by more promising the validity of the very concept of aid.
modernize their societies present new
endeavours.
and unprecedented obstacles to the Because some donor countries have
effort. The results they have achieved It was not the task of our commis¬ attempted to seek political influence
can only be properly analyzed and sion to go into all the ramifications or direct economic gain from aid. sens¬
appreciated against the background of of the development process; but rather itive leaders in governments of some
these obstacles. to enquire whether the international developing countries see in such
co-operative effort, derived from this policies even if they are designated
Development is an ancient concept
"aid" a form of neo-colonial inter¬
new feeling of commitment, and dedica¬
but one which, in our modern age,
ted to promoting the growth of low- vention ; not an expression of genuine
has acquired new meaning and pur¬
income areas, warrants continued international co-operation, or an
pose. Its pursuit unites two strands
heavy expenditures of energy and authentic expression of international
of human thought : the belief in pro¬
resources on the part of the richer, interdépendance or human solidarity.
gress and the conviction that man
developed countries; and, if so, how In some donor countries, there is
can master his destiny.
the effort can be strengthened and growing opposition or indifference to
The roots of modern progress reach improved by steps on both sides. aid for development as costly, waste¬
back to the origin of human civilization,
ful, ineffective and unnecessary. We
but its acceleration since the industrial
try to deal with these objections in
revolution has had an uneven impact
our report.
and has created serious strains. This E are convinced that co¬
is true inside the industrialized
operation for development is not only There are others, however, who
countries themselves where whole would wholeheartedly support a
practicable but is of essential im¬
regions are left behind in the surge portance. Our study of the experience genuine policy of co-operation and aid
of rising prosperity. Above all, it has of the last two decades has confirmed for development, who do not find this
produced a wide gap between the that belief. The flow of public and in the current aid policies of some
industrialized countries and the rest
private resources from developed to developed countries which they feel
of the world.
developing countries, with the results to be too closely linked with narrow
achieved, represents an example of political and commercial interests of
In an attempt to bridge this gap and
foresight too rarely in evidence in the donor; or as something too closely
to repair centuries of neglect and
world affairs. It would be tragic if we tied to a wrong foreign policy.
stagnation, nations untouched by the
now turned our backs on this effort. The fact is that we are reaching
technological revolution have mobilized
their resources while the international a point of decision, even of crisis,
Nevertheless, doubts and fears now
community has helped in an unprec¬ in the history of this novel and
afflict the development effort. Too
edented manner by a massive transfer noble adventure in international co¬
often, particularly in the larger donor
of resources. operation.
countries, the prevalent attitude is one
of weariness, disillusion, and even To cope with it, we must face up
6 It
operation
is the
for
nature of
development
international
that
co¬
it rejection. Recipient countries also to, and try to answer, the basic
should have a tentative, groping have increasing doubts about some question: why should countries, strong
quality. These are largely uncharted aspects of foreign assistance, which and affluent it is true, but beset bySaburo Okita
(Japan)
Robert E. Marjolin
(France)
many agonizingly complex domestic, National self-interest is a rational We have learned in the last twenty
economic and social problems, be basis for policy in aid and anything years that this vision can only be
concerned to do anything about the else but only if it is enlightened and realized if the wealthy countries join
plight of the poor countries? In short: farsighted and looks beyond its own in a sustained effort to help the de¬
why aid at all? boundaries. veloping countries to help themselves.
The first response to this question The establishment of a good econo¬ We no longer ask why rich people
is, of course, the moral one. Every mic and political relationship through or rich regions of our homeland are
accepted system of values in the co-operation for development is a to be taxed to help reduce and remove
world proclaims the duty of the rich worthy objective and could be a re¬ poverty in underdeveloped areas. We
and the privileged to help the poor warding one. Certainly there will be recognize such commitments as the
and the deprived. more development and progress in the natural obligations of community. The
richer industrialized countries if the time has come for a similar national
Every religion, every article of poorer countries with two-thirds of the commitment of assistance to those
humanistic faith, reminds the fortunate world's population can develop. developing countries who are them¬
of the responsibility which attends selves willing and able to expend the
good fortune. The growth and spread effort necessary to achieve the eco¬
of civilization, the building of the
communities which we have come to I HE reverse is also true. It
nomic and social progress which the
new technology now makes possible.
call nations, the common rule of indiv¬ becomes more apparent with every
Let us be in no doubt about the
idual and national behaviour which passing day that the interests of each
intention of these developing countries.
makes possible our continued exist¬ nation and each man are inseparable
For them, development is no longer
ence in a nuclear age, all these re¬ from those of all others. It is now
an option; it is an imperative. They
inforce the proposition that it is the almost without reason to ask where
do not intend to slumber for more cen¬
duty of those who have resources and one nation will be twenty-five years
turies. Development is part of their
skills to share them with those who from now without at the same time
have not.
unfinished revolution: another stage in
asking where the world will be.
their struggle for freedom.
This is a deep and durable reason The revolution in transportation, in
The question is not whether develop¬
for support of development and for communications, in production meth¬
ment will happen. It will. Rather, the
development aid. Too often, in our ods, and in so many other aspects
choice is between slow, halting growth
day-to-day struggle for national or per¬ of life and society has ended forever
in an environment of desperation with
sonal interest, we forget the simple the day when individual countries can
declining levels of assistance and em¬
power of this instinct; even though gain lasting advantage through the
bittered international relations, or
we know how dehumanizing the con¬ defeat or decay of their neighbours.
growth as part of a positive, concerted
sequences would be if we were ever
Recognition of these facts has led campaign to accelerate and smooth the
finally to ignore it. However, humanita¬ to a new concept of national self- absorption of the technological revolu¬
rian and moral concern for others does
interest, which is not the less impres¬ tion in the poorer countries, with a
not by any means exhaust the case sive because it is so often honoured reasonable chance that the spirit of
for aid.
in the breach. Basically, it asserts that shared concern and effort will reduce
Of equal to some people of greater the paramount, long-term interest of the frictions and the dangers, and
importance are the requirements,
all nations, rich and poor, is in the facilitate and expedite positive results.
creation of a world in which all the
indeed the compulsions , of an in¬ If the developing countries have no
creasingly close and interdependent world's resources, human and physical, choice, developed countries have. But
world community. These requirements are put to the greatest possible use. do they realize how a choice for dis¬
do not dismiss national interest as the This is the vision which should in¬ engagement would affect their own "7
basis of policy but they insist that it spire all who look beyond the anxieties societies? /
must include considerations that are of today to the opportunities of to¬ The notion of the basic rights of
extra-national. morrow. man is of the essence in all the civiliz-
CONTINUED NEXT PAGEGLOBAL STRATEGY (Continued)
An uneasy twilight zone
ed societies of the world. It shapes I realize that governments and citi¬ that there is a weakening of the poli¬
and informs the values by which these zens feel a special responsibility to¬ tical will to carry on with the commit¬
societies govern themselves. ward their countrymen. But the world ment in some, including the richest,
is now too small to confine that res¬ of the developed countries. Some rea¬
Can the denial of these rights in
ponsibility within national boundaries. sons for this weariness and weakness
the economic and social sphere which
of will I have mentioned. Others stem
is what we are now dealing with to If the nation-state cannot meet this
from expecting too much too soon;
two-thirds of the people of the world test, if it cannot co-operate with other
from forgetting there is no such thing
be ignored without damage to the prin¬ states to ensure certain basic social and
as instant development.
ciple and interests of the fortunate economic conditions as the minimum
few? I think not. Still others are traceable to wrong
entitlement of all men, it may dis¬
appear and it will deserve to do so. impressions of how much aid has been
If the rich and the strong of this
Humanity is quite ruthless in dealing provided for development, as distinct
world were to succeed in ignoring the
with social and political forms and from shorter term political and military
weak and the poor, they would do
institutions which have outlived their objectives. It is no more sensible to
well to examine what they themselves
usefulness. criticize aid provided in support of
had become.
immediate political or military goals on
These are not new truths. We have
The division, the disparity, the gap, the grounds that it has not resulted
between the two worlds is widening recognized them for years and have in development than it is to criticize
and becoming more critical. From this, accepted, in principle, their implica¬ shipments of instruments of war for
tragic conclusions are drawn and tions. Indeed, there has been nothing the same failure.
frightening results are predicted. Of more encouraging since the end of the
last war, than the growing acceptance To these things must be added a
course, comparative statistics can often
of a commitment to help in this historic great misunderstanding about what
make the situation worse than it is,
task of world development. Are we has, in fact, happened in developing
and give a misleading impression.
to abandon it now? countries; about what has been achiev¬
It does not make sense, for instance, ed and what can be achieved in the
to suggest that a ratio of 15 to 1 in It could be for the evidence grows future if there is the will to sustain
the "per capita" income of two
countries means that the citizens of
one country are living fifteen times as ' .;* \v^-/^.-
well as those of the other. There is
much more to the quality of life than
a rising income.
I .CONOMIC statistics alone
do not give a true comparison between
the living standards and satisfactions
of a tenant in a high-rise housing
>
development in a packed and polluted
ï
megalopolis and those of a village Z
0)
in sunny Ceylon.
Nevertheless, after making all these
allowances, it is a frightening prospect,
and could be a tragic one, if a small
minority of the nations of the world
march into the space age, exploiting its
potential and at least having the oppor¬
tunity of solving its problems, while the
great majority are denied entrance to
this new world or find such entrance
intolerably delayed.
Of course, none of this argues that
we must now have or should have,
world government and that the nation-
state should disappear. On the con¬
trary, it is clear that the nation-state
has particularly vital functions at this
juncture in history.
What it does mean is that there
must be a great concern in all nations
for the fate of all other nations, and
8 that this must reflect itself in more
effective co-operation, including co¬
operation for development.the development effort. Look at the not confined to any geographical area, cance in countries which began with
record of growth in Gross National topography, race, religion, or popula¬ the enormous backlog of poverty,
Product. This is not by any means a tion size. They are equally divided bet¬ illiteracy, inefficiency and instability
complete measure, for development is ween Africa, Latin America and Asia, which characterized so many of the
much more than G.N. P. As Gunnar and they include some of the largest developing countries.
Myrdal says, "development is the countries as well as some of the
Those who doubted the possibility
movement of the whole social system smallest.
of progress were wrong. Under¬
upwards".
I do not claim, of course, that this development is not necessarily a vi¬
But figures for G.N. P. do indicate the achievement can simply be laid at the cious circle; it is an evil that man
progress which has been made. The door of foreign aid and technical assis¬ has the power to eradicate. To use
average annual rate of G.N. P. for all tance. Of course not. At least 85 per Professor Arthur Lewis' pungent phrase,
developing countries between 1950 and cent of the whole investment effort has underdevelopment is "a lickable pro¬
1968 has been a remarkable 4.8 per been achieved by the developing position". But to "lick" it, a greater
cent. Taking the 1960s alone it now people themselves. Aid in capital and and better managed effort for interna¬
appears that the United Nations expertise has often been a catalyst tional co-operative assistance is re¬
development target of five per cent of local action. As a source of scarce quired and we won't have a hundred
per year will be met. foreign exchange, it has frequently years to do it.
been indispensable.
Even if we take income per head, The record is all the more Impressive
the record is still historically impres¬ But the hard grinding work and if we recollect that over sixty new
sive. Some forty-one developing saving that underlie development, par¬ countries gained formal independence
countries have, since 1955, managed ticularly in countries with desperately in the twenty years following the
average growth in income "per capita" low standards of living this has been, Second World War. They have added
of two per cent or more for a ten-year as it must be, accomplished by the their voices to a clamorous protest
period. This is roughly what the people themselves. against the inequity of human con¬
developed countries of Western Europe ditions.
It is not easy to cast our minds
and North America achieved in the
back twenty years. It reminds us of Which of us, knowing the conflict¬
century starting in 1850.
too many of our mistakes. But it is ing political, tribal and cultural pres¬
It is even more encouraging that worth recalling that doubt was wide¬ sures, as well as the economic weak¬
these forty-one countries, about a third spread in the mid-40s whether there ness and lack of political experience
of all the developing countries, are could be any development of signifi which afflicted new developing coun-
CONTINUED NEXT PAGE
*
*£S m\GLOBAL STRATEGY (Continued)
tries, would have dared to predict that
they would pass through the crucial Tragic consequences will surely
early stages of political independence
with, on the whole, only limited, though follow tomorrow our failure to
highly publicized, turmoil and with
strengthened political frameworks? It
took great faith and great foresight in act today'
the new countries to do this. Fortu¬
nately, there were also men of the
same foresight and faith who were
prepared to help them by a massive
W.E strongly believe that measurable progress should now be
development must, in the future even possible and should be the basis for
transfer of resources, material and
human.
more than it has in the past be an self-sustaining growth as well as for
active and a genuine partnership bet¬ the social progress which must not be
Those qualities are now to be tested ween rich nations and poor. It is separated from it.
once more, for we stand at a critical futile to hope for the day when either Additional aid, in short, should be
point in the development effort. side can stand off at a distance and
aimed at a clear and tangible objec¬
provide or receive large quantities of tive and allocated according to explicit
The figures indicating progress are
aid without fully understanding and criteria wh^ph emphasize, above all,
encouraging. They show what can be
participating in the process by which the economic performance of the reci¬
done. But against the needs and the
their allocation and use is decided.
pient but do not ignore social change.
magnitude of the problem and against
the present mood of disengagement No country has the right to intervene We feel that the over-all target for
they give little ground for optimism and in another's policy-making, but any the 1970s should be an average annual
none whatever for complacency. country or agency which transfers rate of growth of 6 per cent for the
resources to another country does developed world as a whole...
have a right to be heard and to be We understand and accept that this
informed about decisions which basic¬
D ESPITE great over-all pro¬ ally affect the development it is helping
will be an average rate of growth, and
that some countries will do better and
gress, the impact made on the poverty to support. some worse. Nevertheless, we believe
of individuals comprising nearly two- This partnership, which must be that this global target could be of great
thirds of the world's population is still use in establishing a bench-mark by
separated as much as possible from
pitifully small. Living conditions in the vagaries of day-to-day politics, is which progress can be measured and
most developing areas remain well basic to a sustained relationship
success defined.
below the standard of Europe before We also strongly believe that a
centred upon long-term development
the industrial revolution. Well over
objectives which is the only proper simple growth rate and a global target
half of the citizens of developing coun¬ is not enough. To be satisfactory to
basis for a systematic approach to the
tries still must survive on average
problem. It must cover not only the both developed and developing coun¬
annual incomes below $100 a year. tries, aid must be planned to help an
official resource flows, which are the
Many of these countries, including responsibility of governments and economy reach the point where growth
some of the largest and poorest, have which, strictly speaking, are alone is self-sustaining, and can be main¬
fallen considerably below the average entitled to be called "aid"; it must also tained without foreign financing on
include policies with respect to trade concessional terms...
rate of growth. With the rapid rise in
population the improvement in income and private capital flows which can be
per head is often
People live longer, but often not any
imperceptible. equally important to the growth of the
developing countries.
s,I OME of the machinery ne¬
better.
cessary for this purpose is already in
These private flows, of course (they
existence. We are encouraged by the
Many more children are in school, make up now nearly half the total flow
work of the consortia, of the consulta¬
but the education they are receiving of financial resources to developing
tive groups, and of regional organiza¬
is often irrelevant to their surroundings countries) are no burden on the tax¬
tions, which combine donors and
and their country's needs. There are payer. They may be a risk as well as
recipients in a regular forum in which
immense problems of uncontrolled a profit for the investor, but the
both past performance and future aid
urban migration and unemployment. burden after allowing for the very
requirements are reviewed.
Even the encouraging results of the real development value of the loan is
We believe that this sort of system
"green revolution" in agriculture have on those who have to do the repaying.
should come into being in those count¬
created new problems as well as re¬ That burden is now heavy in certain
ries and regions where it is not now
moved old ones. developing countries and is increasing
the rule. To this end we recommend
in some to the point where debt ser¬
These are but a few of the problems that the World Bank and the regional
vicing is exceeding new lending.
ahead. Yet, we now have the one banks not only take the lead in
Second, it is clear that official aid strengthening these institutions where
indispensable element with which
should increasingly be directed to they exist, but also in helping to create
policy-makers in the 1940s were not
economic development, as opposed to new ones where they are needed.
blessed. We know, as they did not
the many shorter term objectives to There must be greater co-ordination
know, that development programmes
which it has been so often directed in and broader consultation on all aspects
can work, that development can, in
the past. of the development process espe¬
fact, be induced where but only where
there is the will and the work. We There are, of course, countries where cially in the field if the aid relationship
must now ask how we can use this rapid development must await basic is to be effective and satisfactory.
10 knowledge for a new, accepted, and
more systematic approach to the
and long-term improvements in social
conditions, but for the great majority
Both the concept of partnership em¬
bracing all relevant resource flows, and
development problems of the 1970s of countries a concerted effort at the allocation of additional aid princi¬
and beyond. development which produces clear and pally according to agreed standards of
CONTINUED PAGE 12The production of electric power has multiplied by seven In Asia, five in Africa, and four in Latin America in the last twenty years. Although in many parts of the developing world demand still runs ahead of supply, power production has met the needs of rapidly growing industries, provided irrigation for agriculture and a vastly improved service for urban consumers, and has made possible a start on rural electrification.
Aid from the World Bank and Its associated
organizations for African development has increased
considerably in recent years. By March 1969,
loans, credits and investments totalled over
$2,000 million. They have helped to build roads,
railways and pipelines, to construct hydro-electric
installations, to improve and expand schooling
and technical training, and to develop industrial
production and mining. Photo shows huge mounds
of manganese ore in Gabon, where mining of
rich deposits has been extensively developed.
GLOBAL STRATEGY (Continued)
Is l*yo of G.N. P. too much
to ask the rich countries?
performance, underline the need for visualize for them, they must be effi¬ leadership in the effort to establish
a much larger multilateral element in cient in organization and administra¬ criteria for the allocation of aid which
the international aid system. The pre¬ tion. emphasize economic performance,
sent flow of concessional finance from rather than the political relationships
This does not mean, of course, that
multilateral institutions comprises only and historical accidents which bear
there should be any diminution in
about 11 per cent of the total flow bilateral aid. Indeed, our recommenda¬ little or no relation to development
of official development aid. We be¬ tions would result in two-thirds of the needs or performance. We also be¬
lieve that, by 1975, it should make lieve that I.D.A. can be central to the
increased flow going through bilateral
up at least 20 per cent. channels. establishment of new co-ordinated
machinery designed to pull bilateral
Multilateral agencies enjoy special We particularly suggest a stronger
and multilateral instruments together
advantages for conducting an objective role for the International Develop¬
into a more coherent and regularized
assessment of both feasibility and per¬ ment Association (I.D.A.). We believe
administrative system.
formance, as well as the allocation of that among existing organizations,
aid, but, to play the bigger role we I.D.A. is in the best position to exert With progress and improvement in
the allocation and organization of aid,
we recommend a substantial increase
FINANCING DEVELOPMENT
in its volume. Specifically, we believe
Financing development is the business of three international organizations that that the already agreed objective of
form the World Bank Group the World Bank, the International Finance Corporation public and private transfer from de¬
and the International Development Association and of the United Nations Develop¬
veloped to developing countries of
ment Programme.
1 per cent of Gross National Product
THE WORLD BANK (International Bank for Reconstruction and Development) has
should be confirmed.
acquired a formidable experience of development finance since it made its first loan
in 1947. From early support of power and transport projects, it has diversified its We do not believe, however, that
operations to include financing of agriculture, industry and education. The Bank it is realistic to assume that all
(110 member countries) also helps member states to draw up development programmes,
advises on economic policy, assists in planning projects and studies development countries can reach the 1 per cent
problems. target at once even though they have
THE INTERNATIONAL FINANCE CORPORATION (IFC), established in 1956, assists accepted it in principle. For some
member countries (today 91) to develop the private sector of their economies by loans the distance to be covered is too large
and investments not secured by government guarantee. From financing mining and and the sequence of appropriation,
manufacturing, IFC has entered new fields: food-processing, distribution services and
tourism. commitment and expenditure too long.
THE INTERNATIONAL DEVELOPMENT ASSOCIATION (IDA), set up in 1960, We believe, however, that it is both
supplies capital on especially favourable terms to the least prosperous countries. Its possible and necessary to reach or
funds come mainly from contributions by 18 more prosperous governments of its
exceed this goal by 1975. All develop¬
102 member countries and from the World Bank's own net earnings.
During the past ten years, the World Bank Group has invested about $1,000 million ed countries should accept this dead¬
a year in development. line; announce the steps they intend
THE UNITED NATIONS DEVELOPMENT PROGRAMME (UNDP) was set up in 1965 to take to achieve it, and report
by a merger of two existing U.N. development operations the Expanded Programme of periodically on the progress made.
Technical Assistance and the Special Fund to enable the entire U.N. family to respond
more effectively to the needs of the low-income countries. The world's largest multi¬ Perhaps even more important, we
national source of pre-investment assistance and technical co-operation, UNDP opens believe that the flow of official develop¬
12 the way for large-scale capital investment: more than $1,900 million in development
ment aid, the only kind which really
investment has followed 37 major UNDP projects undertaken at a total cost of only
$43 million. involves a burden on the taxpayer,
should reach 0.7 per cent of the GrossNational Product by 1975. The addi¬ ment effort but the entire world that
tional average annual amount, about no aid-providing agency can ignore
$1,500 million, required to reach this performance in this area any more than
target is modest enough in relation it can ignore performance in any other.
to the annual increase of Gross Natio¬
We are aware that economic and
nal Product in the developed countries,
social progress is in the long run the
which will be about $120,000 million,
best way of stabilizing population
but we recognize that it may cause
growth. But we haven't a long run
difficulty for some countries. Never¬
any longer. There is a population
theless, we firmly believe that no
explosion and immediate action is
smaller transfers can secure the inter¬
The vital importance of trade for needed.
national development objective which development is also underlined in our
all seek.
We would hope that the trend which
report. A continued vigorous expan¬
has already appeared and seems to
sion of world trade is a basic condition
It is not enough that there be more be gathering force in developing
aid. It must also be better aid, more for rapid international development.
countries toward more concern with
Many developing countries must be¬
effectively organized and administered. family planning will gain even more
It must be suited to the needs of sound¬ come more outward looking and com¬
momentum in the years ahead.
petitive, but the developed countries
ly conceived development plans,
also must review their trade policies These, then, are some of the basic
whether this will require project or
to remove obstacles to the expansion ideas of our report. In them, we have
non-project financing. It must be in¬
of the trade of the developing countries. tried to balance the goal of self-
creasingly untied so that the admini¬
sustained development in the low-
strative and economic evils of tying The ideas I have suggested are
income world by the end of this cen¬
are no longer visited upon the reci¬ heavily dependent on the success of
tury, with co-operative policy and action
pients. It must be accompanied more another effort; that to control the rapid
for aid based on a genuine partnership.
and more with integrated technical growth in population. This growth is
assistance which provides the know¬ To those who have grasped the vision
largely due to the fact that the death
ledge and skill necessary to make use of balanced development in a world
rate has gone down not that the birth
of the funds provided. Our report community, with all that this holds for
rate has gone up. Nevertheless, it is
contains many recommendations on the future, but do not appreciate the
increasingly clear that nothing we do
this matter of quality and I cannot over practical difficulties now in the way,
in the development field in low-income
emphasize its importance. the immediate steps suggested in our
countries will be of lasting significance
unless and until there is a substantial report will appear too timid.
This emphasis on official aid in no
slowing of the rate of population growth Those who do not accept our assess¬
way means that we minimize the im¬
which now threatens in many countries ment of the problem may find them
portance of private flows. On the
to overwhelm all other progress. unrealistic and unnecessary. We, our¬
contrary, we feel that private foreign
investment and the transfer of know-
selves, believe that these recommen¬
Population is still not an easy subject
dations are practicable and attainable
how are important and need to be to discuss though there has been much
stimulated. We make recommenda¬ more candour in talk about it in recent if and I know how big an "if'can be
there is the will to that end; a will
tions to this end for improving the years. It remains, in our view, a matter
climate that will take into account the of family and national decision in which which will be shown on both sides of 1 Q
the development front. IU
legitimate interests of both the foreign no outside authority ought to inter¬
investors and the preoccupations of vene. However, it is so important We are not so presumptuous as to
the recipient country. to the future of not only the develop assume that our investigation and our
CONTINUED NEXT PAGEGLOBAL STRATEGY (Continued)
report reveals new truths. Our hope is
more modest. It is that our findings
may provoke the world-wide reconsi¬
deration we believe the subject now
needs; that, in the words of Mr. McNa-
mara, it may "stimulate discussion and
debate and prompt action on the
issues in the widest possible forum;
among governments, among interna¬
tional agencies, among public and pri¬
vate organizations of every size and
description which are concerned with
what I believe history will regard as
the most crucial task that confronted
our century: the orderly development
of mankind itself in an era of revolu¬
tionary technological change."
We are encouraged by Mr. McNa-
mara's pledge given "to undertake a
careful analysis of each of the com¬
mission's recommendations which in
any way bears upon the (Bank's) work
and to submit these analyses to the
Bank's directors with recommendations
for appropriate action."
In the policies and action to meet
what is, in fact, a crisis in International
development, .indifference rather than
opposition is the greatest obstacle to
progress.
T, HE time has come for all
men of good will to recognize that
this indifference, or the kind of mild
support that gives development assis¬
tance a very low priority, is not good
enough to meet the challenge. Aid
for development must be given a high
priority even in the company of guns,
butter and outer space. History leaves
no choice, in the coming decade, to
developed and developing countries
alike, but to face together with honesty
and energy the difficult, frustrating,
but vitally important problems that are
caused by the grossly uneven pattern
of world growth.
Basically, what we have to offer
as a rationale for action to change this
pattern is our vision of a world com¬
munity in which all peoples can parti¬
cipate with dignity and self-respect;
in which the deprived and disadvan¬
taged will join the mainstream of tech¬
nological and social progress.
We can only ask those who do not
share this vision to look ahead for
25 years and try to determine what
the world will look like then, if the
division into the rich and the poor, the
developed and the stagnant societies
continues and widens, as it will cer¬
tainly do if we do not work together
to prevent it. Then think back to the
14 measures we could have
thereby have avoided the tragic con¬
taken, and
sequences that will surely follow to¬
morrow our failure to act today.THE STRATEG
IN A NUTSH ELL
The following are the 30 major goals and
recommendations of the Pearson Commission Report
on international development:
IN THE FIELD
OF TRADE Vigorous expansion of world trade is needed for rapid inter¬
national development, with developing countries becoming
more outward-looking and competitive.
Developed countries should abolish import duties and excessive
excise taxes on primary commodities produced exclusively by
the developing nations. Developing countries should be assured
of an increasing share of markets for their agricultural products
which may also be produced in the developed countries.
Financing should be available to help poor countries meet short¬
falls in export earnings.
Quantitative restrictions on manufactured imports from
developing countries should be abolished during the 1970s.
Trade between the developing countries themselves must be
greatly expanded, partly through new mutual tariff concession
agreements.
Regional development banks should be more strongly supported
and they should extend export credits to developing countries.
International organizations should study the need for inter¬
national payments arrangements to facilitate trade among
developing countries, and they should negotiate mutual and
wide-ranging tariff concessions.
Financial support is needed for stores of agricultural products
to meet periods of lean years and to stabilize prices.
FOREIGN Developing countries should remove impediments to foreign
INVESTMENT investment and assure stability and improved administrative
procedures affecting foreign firms.
Foreign investors in developing countries should contribute
to manpower training, local industry and national growth.
Developing countries should not grant foreign investors
excessive protection and tax concessions.
CONTINUED NEXT PAGESTRATEGY IN A NUTSHELL (Continued)
International organizations and creditor governments should
set up an "early warning system" to let developing countries
know they are nearing the danger zone of excessive debt
burden.
Private foreign investment is not an alternative to public aid.
Official aid to finance roads, schools and hospitals is a
prerequisite to private investment.
ECONOMIC Increases in aid should be clearly aimed at helping the develop¬
GROWTH
ing countries to reach a path of sustained growth. The target
of the 1970s is to increase average annual GNP at least 6 per
cent per year. Countries that reach this level should be self-
reliant by the end of the century.
Aid increases in the future should be closely linked to the
economic objectives and development performance of the
countries receiving aid. In return, poor countries should expect
commitments of support from rich countries.
VOLUME
The U.N. target of foreign aid by wealthier nations equalling
OF AID
1 per cent of their gross national product should be reached
by 1975 at the latest. Public or government aid in the form of
grants or low or interest-free loans should make up 0.70 per cent
of the gross national product by 1975 and in no case later than
1980.
Food aid programmes will have to be replaced by other forms
of aid as developing countries become more self-reliant in
food production.
DEBT RELIEF Debt relief should be recognized as a legitimate form of aid.
To avoid future debt crises, aid terms should be more lenient
and uniform among donor groups.
AID ADMIN Foreign aid donors and receiving countries should meet this
ISTRATION
year to cut through administrative red tape and set up three-
year programmes instead of annual budgets.
There should be less strings attached to aid-giving obliging
developing countries to buy goods in donor countries. Donor
nations should grant more leeway allowing their funds to be
used for buying in other developing countries.
TECHNICAL Rapid growth during the 1960s of more than 10 per cent a
ASSISTANCE year has created shortcomings in this form of aid. It has often
failed to meet actual requirements of developing countries,
especially in agriculture and education, and has not been
16 adequately integrated with capital assistance.National and international corps of technical assistants should
be able to make a career of their work, with help from both
donor countries and private institutions.
»OPULATION Family planning should be available to all. No child shoul
CONTROL be born unwanted. Birth rate control must be stressed by
both donors and recipients when planning aid programmes.
A Commissioner for Population should be appointed by the
United Nations to help direct population control programmes
in the various U.N. agencies.
The World Bank in consultation with the World Health Orga¬
nization should launch an international programme for the
mobilization of research resources in this field.
HD TO Greater resources should be made available for educationa
EDUCATION
research and experimentation in new teaching methods in
AND
developing countries to increase their capacity to absorb,
RESEARCH
adapt and develop scientific and technical knowledge.
A share of research and development resources in indus¬
trialized countries should be oriented towards problems in
developing countries. Rich countries should help in setting
up international and regional centres for research and develop¬
ment in fields such as tropical agriculture, extension techniques,
education, and urban planning.
MULTI¬ International organizations must exert greater leadership and
LATERAL AID direction to make development assistance a genuinely inter¬
national effort.
The share of multilateral aid should be increased from the
present 10 per cent of official public aid to 20 per cent by 1975.
The International Development Association (IDA), the World
Bank's easy-loan financing agency, should become a pivotal
organization in multilateral aid efforts.
IDA should almost quadruple its work by 1975 with national
contributions reaching a total of $1,500 million compared with
a level of $400 million at present. Regional development banks
must also receive increased support.
The president of the World Bank should call a conference during
1970 of all U.N. and other international, multilateral and bilateral
agencies to work toward co-ordinating their efforts, now
lacking direction, so as to create a coherent international aid
system. | 1JTAKING THE WIND BY THE ROOT
WMV^MMl In regions where soil is shallow and vulnerable to erosion by wind and floods, tree roots, like friendly hands, help to sustain and stabilize the topsoil. When forests are cut down indiscriminatingly the soil is swept away, leaving a bare eroded landscape. Over the centuries this has happened in Algeria to the detriment of farming and also of dams which are quickly filled with silt carried in by flood waters. To halt the devastation of its arable land, Algeria, with aid from FAO, has launched a big reafforestation programme in which young men and women will help to restore the country's vanished forests. Above, ploughing up land near Batna, Algeria, where foresters will plant new trees (above left). Left, ranks of newly planted trees stand guard on the edge of scarred, eroded land. Right, nursery for young trees where millions of pines and eucalyptus saplings are raised for reafforestation projects.
Kaleidoscope
of the
Third World
l HE phrase "less developed As political consciousness increases reliance on foreign trade, but also a
countries" is used to refer to almost and economic power is diversified, few, like India, which depend only
100 nations, poor in money income but traditional values give way to new marginally on trade. Such countries
diverse in culture, economic condition, patterns of behaviour, reflected in an as Zambia and Venezuela have large
and social and political structure. even richer kaleidoscope of political mineral sectors; a few, such as Hong
Consequently, the first implication of patterns and economic policies. Kong and Mexico, have substantial
concern for their development is industrial sectors; but the great
The diversity among value systems
recognition of their immense diversity. majority are overwhelmingly dependent
in low-income countries is at least as
For example: on agriculture.
great as in the industrialized world.
Low-income countries include India Some societies are as old as the There are equally sharp differences
with 530 million people, South Korea Mexican or Indian; some were only in patterns of ownership and income
with 30 million, Costa Rica with recently freed from colonialism; some distribution. Economic potential is, of
1.5 million, and Gabon with 500,000. are committed to rapid industrialization course, difficult to assess accurately;
India has 17 states, the largest with while others have yet to chart a clear discoveries of oil reserves, gas fields,
more people than any European economic course; some societies have or new uses for old metals continue to
country; Gabon has fewer people than no choice but to devote most of their prove earlier forecasts fallacious.
a single borough of London. energies to composing racial and Still, given our present knowledge,
tribal differences to achieve viable Turkey is reasonably well endowed
Large size entails complex problems
statehood. Neither the acquisition of with raw materials and a temperate
of administration and political cohesion climate Chad is not. India has all
wealth nor the regimentation of the
as well as large markets and potential
machine are universally admired or the physical resources of a great
economies of scale; small countries
accepted. power some countries hardly seem
often present a significantly different
to have the basic requisites for
picture, with problems centering on The capacity to absorb political and national survival.
limited markets, shortages of skills, economic change also varies widely,
and weak bargaining power. with the social flexibility, the colonial Thus development problems are
history, the reservoir of skilled vastly different from country to
Population is growing rapidly in country. National objectives are
manpower, and a host of other
most of the developing countries, but determined by past experiences and
variables. The administrative capacity
there are great differences in social by cultural and political history, filtered
essential for coping with change is
and economic problems where there perhaps imperfectly through the rulers'
greater in Latin America and Asia than
are 1,200 people per square mile, as desires.
in Africa. However, even when there
in East Pakistan, as opposed to where CONTINUED PAGE 22
is good administrative capacity, as in
there are 26, as in Brazil. Where new
the Asian subcontinent, it may prove
lands can be opened up, at whatever unable to move from traditional law
cost, the psychology is not the same
and order functions to promotion of Latin America's income per head has
as where fixed amounts of land are
change without loss of efficiency. grown substantially since 1945, slightly
subdivided into ever less adequate exceeding the average growth rates
parcels. There are also great variations in for Africa and South Asia.
income level and economic potential. Manufacturing has been the most
The political systems of the rapidly growing sector, expanding
Argentina has an income of more than
developing countries range from fully by an annual average of 6 per cent for
$780 per head, India about $90 and
participatory democracy through one- several countries less than $60. Most
the region as a whole. Right, nylon
party systems to dictatorships. The processing plant in Colombia's largest
of the people in some countries live
private sector is heavily relied upon in synthetic fibre producing factory
on the brink of subsistence, while in which recently launched a $10.2 million
some economies, and the public
others the minimum amenities are, or project to raise production by 70 per
sector in others, with a majority of
can be, assured. cent. The International Finance
20 economies somewhere in between,
Corporation, the World Bank affiliate that
except for public utilities and heavy There are similarly vast differences invests In private enterprise in
industries which are usually owned by in economic structure. There are developing countries, has provided
the state. many economies which place heavy $1.2 million for the project.KALEIDOSCOPE OF UNDERDEVELOPMENT (Continued)
The role of governments may be ingredient of national planning and GROWTH IN GROSS NAT
widespread or minimal. They may income redistribution; and most gener¬
inherit extensive or negligible infra¬ ally ignored the importance to growth
structure and administrative skills; of increases in general productivity.
their people may be politically unstable
Economic development was often PER CAPITA INCOME
or mature; they may have a tradition
of thrift and industriousness, or they
seen at first as something undertaken
may still need to build these traits.
by the elite for the masses; the need (1967)
to engage the energies of the people
Despite this diversity, a common was hardly considered important even
purpose emerges in nearly every where in theory their participation was
country: to reduce poverty; to ensure considered desirable. Market forces,
minimum levels of education, health,
private ownership, and profit were
housing, and food to every citizen; to
increase control over nature by the
often distrusted in part because they
were associated with the spread of
under $100
nation and the individual; to broaden
colonialism, in part because the ruling
the opportunity for choice.
groups came from the military or
The balance of the past has administrative elite. Those who were
been upset in many ways by new concerned to distribute income more
desires, reduced mortality rates, new equitably had no experience of
technology and the material objectives taxation, public expenditures, and
find new expressions as they merge
with old and varied cultures. One
generalized incentives as instruments
of policy.
under $200
would not expect the ascendancy of
The role of government in promoting
new aspirations to be a smooth or
development was often misinterpreted.
silent process, and it has not been.
Particularly in the former colonial
In most countries development has areas it was seen as an extension of
resulted only through constant struggle the centralized, control-oriented colo¬
between modernizing and traditional nial rule. Few fully appreciated the
elements. human resources needed for rapid under $300
growth, the growing pressure for
social services, particularly in towns,
the importance of more and better
LESS
than twenty years
education and better health facilities.
ago, much technology, some patience, The donor countries also exhibited
and a great deal of money were thought imperfect understanding of these
to combine all the ingredients for over¬
coming poverty. Most colonial powers
problems.
continued
The former colonial powers
financial and technical under $500
believed that their colonies for many assistance to the newly independent
developing countries were not yet states, and some assistance began to
independent would need decades flow from other donors, but develop¬
of assistance before they had the ment did not become an important
economic and administrative capacity focus of assistance until the latter part
for statehood. Talk of rapid progress of the 1950s.
after independence was considered
Initially, it was assumed that
visionary. technical assistance to transfer skills
other
In the developing countries, on the
hand, elimination of colonial
and technology and commercial types over $500
of financing was adequate. Even
rule was almost everywhere seen as where soft loans or grants were
opening the way to early prosperity. available, e.g., from the United States,
The nature of the obstacles that there was little understanding of the
colonialism imposed were, naturally, scale of problem being addressed, the
seen differently in different countries. magnitude of the necessary social and
To some it was a system that kept political change, or the time it would
Source : World Bank
them producing agricultural products take. Nor were the impact of trade
and minerals while denying them the policy or the terms of assistance given
benefits of industrialization; to others much thought.
its most objectionable element was
its protection of foreign industrial social policies which he pursues.
undertakings, which could, after These policies have other goals
independence, be nationalized or e.g., equality of personal or regional
compelled by regulations to conform u NDERSTANDING of de¬ income distribution, or investment in
to national interests. education and social services which
velopment and its effect on the total
Of course, concern about un¬ economy and society has gradually sometimes must be met at the expense
improved, but only in this decade has of a lower rate of growth. There also
favourable conditions of foreign
demand for traditional agricultural the improved understanding found is an increasing understanding that aid
products was not limited to newly expression in policy. The process is flows may be offset, or growth limited,
still far from complete. by unfavourable international trade
independent developing countries, nor
were there no similarities between and monetary policies.
These oversimplifications led both
the general postures of low-income industrial and low-income countries to Past approaches are gradually being
countries on matters of economic modified by the experience of two
overemphasize aid flows and per
policy. decades.
capita GNP (Gross National Product)
Most such countries emphasized growth, a habit which is only slowly Many developing countries now
domestic, import-substituting industry giving way to the realization that the recognize that the economy must be
22 as both politically necessary and impact of aid flows on GNP depends more outward-looking; that export
economically desirable; most believed largely on the efficiency with which earnings, not aid, must be the principal
In direct governmental action and the recipient uses domestic resources source of foreign exchange.
ownership of industry as an essential and on the over-all economic and It is also increasingly clear that theYou can also read
