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Another Dead End

By Ashok Khosla

Over the past fifty years, the governments of poor countries have been in hot pursuit of their
chimeric dreams of bringing development to their nations. Armed with an arsenal of
economic weapons borrowed from their friends in the North, they have lanced this way and
that, hoping to destroy the scourges of poverty: hunger, ignorance and early death. What
they, with a few exceptions, have got instead is more poverty, more pollution, and more
people. And, of course, a more peripheral place in the community of nations.
First, they borrowed the models – some from the western half of the North, others from the
eastern. With the 20/20 vision of hindsight, and speaking quite crudely, we can now say that
neither worked. The pure socialist path was too inefficient and the unfettered market was too
insensitive and thus too unfair. Even allowing that the choices were well intentioned and
perhaps even justified given the state of knowledge at that time, one could surely hope that
fifty years of experience might have led to some learning. It is not obvious that it has.
Whichever strategy was chosen, technology became the heavy artillery and money was the
ammunition. Never mind that both had to be borrowed from the outside at huge cost. The
poor could always be relied on to produce more for less. And there was always nature,
whose resources could be mined and soled to stay slightly ahead of the creditors.
Development was synonymous with big projects, large industries and toys for the rich.
When it became apparent that these do not produce the desired results, the debate among
development experts switched to the relative merits of export promotion and import
substitution, then to the desirability of structural adjustment and tighter monetary policies,
and more recently to the need for better governance and more effective management. The
underlying techno-economic model, however, remained the same. And so did the results.
Now, after perambulating through a whole range of development strategies, we have arrived
at globe trade as the proper medicine for the development malaise that besets us. Open the
doors and the technology and money will come flooding in. Raise cash crops, make cheap
goods and earn more foreign exchange.
The prime question is for what? And for whom? And at whose expense? Are growing
poverty, pervasive pollution, rising prices and an exploding population the necessary
prerequisites to make the trip to the twenty first century? Or will we end up back at square
zero? How will the money earned from all this trade reach those in whose name these
development strategies are pursued? It will trickle down, say today’s followers of Adam
Smith. Make the rich richer, and the poor will automatically get fat on the crumbs they leave
behind. More industries, rising exports, active trade are all supposed to lead to a better life
for all.
But does the rising tide actually raise all boats? It probably can raise many. Yet, what about
the innumerable ones anchored to the bottom: the poor, the dispossessed, the marginalised;
the landless, the women and the illiterate? And what does the rising tide dot the trees, the
animals, the soils and waters on which these people depend?
Most people would presumably prefer to live in a rich country than to exist in a poor one. At
least the opportunities for an individual to get out of poverty are usually better. On the other
hand, poverty is not simply a matter of absolutes. In the consumer society, which, after all, is
the ultimate aim of any globalisation effort, poverty is also a matter of perception – and
therefore of relatives as well.
No, the invisible hand that was supposed benignly to guide the market is becoming a
clenched fist, ready to punch a clear hole into the new millennium to make way for those who
can pay the passage. If it does, those who cannot afford the trip will just have to stay behind.
The market is clearly an effective, perhaps the most effective, mechanism to generate the
goods and services that people need. To the extent that liberalisation policies enable these
mechanisms to work, they must be welcomed. But left to themselves, they tend to seek what
economists call a “corner solution”, the extreme case where some get all and the others have
nothing. Any policy that does not, by pre-emptive design, minimise its negative distributional,
environmental or social impacts is bound to put us on a one-way road in the other direction –
to oblivion.