Commentary Magazine

Famine, Development & Foreign Aid

In recent years, American foreign-aid policies have been shaped increasingly by the argument that the many different problems facing the poor nations are inextricably interconnected, woven together into an all-encompassing “seamless fabric.” However pleasing this notion may seem to theoreticians, its practical implications are dangerously wrong. The problems facing poor nations can be distinguished from each other and treated separately—and must be. It is no act of charity to suspend the rules of policy analysis and problem-solving at the borders of the Third World.

Although current American policies often fail to distinguish among them, three separate purposes underlie our foreign-aid programs. The first is the humanitarian purpose of alleviating suffering and minimizing loss of life from the upheavals following sudden, unexpected catastrophe. The second is the developmental purpose of encouraging poor nations to find their best path to economic health, self-sustaining growth, and general prosperity. The third purpose is to promote the security of the United States and the Western order through military aid or security assistance to a foreign government.

Military aid to less developed countries is but a part of a larger, global American defense strategy. The aid the United States extends to nations which happen to be poor, moreover, is only a tiny fraction of the money it expends to preserve the security of Allied nations that are already rich—such as Japan and the NATO countries. Military aid to less developed countries, then, is not in any meaningful sense a Third World policy, even though it involves transfers of money and resources to nations in the Third World.

Humanitarian aid and development aid are quite different. These address, respectively, short-term exigencies and long-term prospects of poor nations, and are governed by an attention to poverty. To understand the best use of these different forms of aid, we must appreciate the problems each must address. Let us examine them separately.




Much of mankind continues to live under the shadow of life-imperiling disasters and upheavals. Floods, earthquakes, and storms still endanger millions of people every year, and the human cost of famine is even greater. Since the end of World War II it is believed that tens of millions of people have perished from famine in Asia alone.

To deal effectively with today’s natural disasters, we must begin by recognizing that there is very little that is natural about them. Acts of God cannot be prevented, but the quotient of human risk and suffering they exact can be vastly and systematically reduced. Current events underline the point. The United States and Japan happen to be more subject than most regions of the earth to sudden natural disturbances. The Japanese archipelago, after all, is an earthquake zone, buffeted by tropical storms and exposed to tsunami (tidal waves). The U.S. land mass is threatened by earthquakes, tropical storms, and tornadoes, and the country, in addition, has more active volcanoes than any other. Nevertheless, very few people in Japan or America die from these natural perils.

The African continent, by contrast, would appear to be comparatively well protected against sudden disasters. It is exposed only slightly to tropical storms and tidal waves, has only a small earthquake belt, few active volcanoes, and it experiences tornadoes only in South Africa. Despite these natural advantages, however, sub-Saharan Africa has been stricken by perennial disaster in the decade since decolonization was effectively completed. These disasters are believed to have cost hundreds of thousands of lives.

Western peoples have not always enjoyed their present protection against adverse acts of nature. In the first ten years of the 20th century, over 8,000 Americans died in hurricanes,1 as opposed to the 100 who died over the past ten years. What accounts for this almost 99-percent drop, despite a doubling of the population and a steady urbanization of the coasts where hurricanes most often strike? Affluence, as manifested in safer dwellings, explains part of the change; even more, however, is explained by those handmaidens of affluence, technical advance and government competence. Improvements in communications, transportation, weather tracking, emergency management, rescue operations, and relief capabilities have made it possible to reduce dramatically the human price exacted by even the worst hurricanes in the most populated areas. Purposeful private and governmental action can now substantially cut the toll from other natural disasters as well, even in the poorest nations.

Not all governments, however, work at minimizing the havoc which sudden disasters wreak upon their people—as the two most costly sudden disasters of the 1970’s attest. In 1970, East Pakistan, as it was then known, was devastated by a typhoon. The Pakistani government—seated in and dominated by West Pakistan—responded to the extreme distress in its Bengal territory with what might at best be described as reserve. As many as 100,000 Bengalis are thought to have perished in the aftermath of that typhoon.

In 1976, the city of Tangshan in China was flattened by an earthquake. One of the Chinese government’s first responses to the disaster was to announce it would refuse all international offers of aid for the victims. Details about the actual rescue operations which China itself undertook remain obscure to this day. One of the few accounts of the disaster permitted in the Chinese press at the time was a front-page feature in the People’s Daily praising a peasant who let his own two children die as he rescued instead an aged party cadre; local and foreign readers came to their own conclusions about what this carefully placed article was intended to suggest. Since the rise of Deng Xiaoping, China’s media have severely criticized his predecessors’ handling of the Tangshan affair; they now state that almost a quarter-of-a-million people died in the disaster.



If government action can be consequential in limiting the suffering caused by sudden upheavals, it can be even more important in controlling or preventing famine. In the past, famines were typically related to regionalized crop failure. It is now possible to cushion the impact of crop failure in even the poorest regions of the earth. Concerned governments can monitor the progress of their nations’ harvests by following local markets, by direct on-site inspection, and by studying the data from worldwide aerial and meteorological surveillance services.

These early-warning systems can give governments valuable months in which to prepare against food shortfalls. Food grain may be purchased from the world market, which trades and transports over 200-million tons each year. If for some reason a government cannot finance its emergency food-grain needs, it may draw upon the 7-millionton reserve of concessional food aid which Western governments set aside each year. If a government lacks the administrative capacity to manage a far-reaching relief effort, it may request free assistance from the many impartial international organizations which have proved they can both supervise and staff effective relief operations on short notice and under difficult conditions. Almost twenty years ago, concerted American-Indian cooperation after a series of harvest failures saved millions of Indians from starvation, and even seems to have prevented death rates from rising in the afflicted provinces. Since then, the capabilities of both the world food system and international relief organizations have grown steadily. They now present even the most modest and least sophisticated government with an opportunity to control famine within its borders—if it wants to do so.

The terrible truth, however, is that many governments in the world today have demonstrated that they are not interested in seeing their people fed. Some have deliberately ignored signs of incipient crisis. Others have interfered with international relief for their stricken groups. Still others have actually created famine conditions through premeditated action. In every recent instance where a potential food shortfall has developed into a mass famine, the hand of the state has been prominently involved

Consider the great famines that have gripped the poor regions over the past quarter-century. In China, the Three Lean Years lasted from 1959 to 1962. Chinese officials now say that millions of people died during this famine, and Western demographers have recently suggested that “excess mortality” during this period may have been as much as thirty million. The Three Lean Years were a direct consequence of the Great Leap Forward, an awesomely ambitious social and economic experiment which resulted in a nationwide collapse of agriculture and a brief but virtually total destruction of the national food system. Even as their policies were causing millions of their citizens to starve, China’s leaders denied there was a crisis, refused all offers of international aid, and exported food.

In Nigeria, where perhaps a million ethnic Ibos died of famine in the late 1960’s and early 1970’s, the federal government deliberately encouraged starvation in that province, which had proclaimed its independence, in the hope that this would hasten its reconquest. In Ethiopia in the early 1970’s, the Haile Selassie regime consciously concealed a famine which was ravaging its minority peoples; it is now said that several hundred thousand people lost their lives as a result of this deception, although the exact cost will never be known. In the mid-1970’s, the Indonesian government attacked, occupied, and annexed the territory of East Timor; it used hunger as a weapon of conquest. It is believed by outside observers that over 100,000 Timorese starved to death before Indonesia allowed the island to be fed; in all, as much as a quarter of the Timorese population may have perished from famine. In the late 1970’s as many as two million Cambodians may have died as a result of hunger; they did so only because the Khmer Rouge government made the mass extermination of whole segments of the national population its official policy.



Once again there is famine in Ethiopia. Though its ultimate toll is yet to be determined, its causes are already apparent. After seizing power in 1974, Ethiopia’s Marxist-Leninist Dergue (Armed Forces Coordinating Committee) launched a campaign against “capitalism” in the countryside, restricting and ultimately prohibiting the private sale and marketing of farm produce and agricultural implements. At the same time, a newly formed secret police executed thousands of students and skilled workers in this predominantly illiterate nation, imprisoned tens of thousands more, and caused even greater numbers to flee their homeland. With the encouragement of Soviet and Cuban advisers, the government used its foreign aid to underwrite military buildup and war.

In a country like Ethiopia, which has always been subject to drought, such policies insured that widespread famine would be only a matter of time. When famine finally did strike, moreover, the Dergue gave little priority to relief efforts. Although millions of its citizens were said to be directly affected by the food shortage, the regime concentrated on commemorating its tenth anniversary in power—in a celebration which is said to have cost the equivalent of over $100 million.

Relief operations do not seem to have begun in earnest until after an outcry in the West over the plight of the famine victims. Even then, the Ethiopian government continued to obstruct international efforts to alleviate its people’s distress. Instead of helping rescue workers reach famine victims in Tigre and Wollo—stricken regions where the Dergue is especially unpopular—the government began a program of mass deportations; 2.4 million of those areas’ most able-bodied (thus least endangered) people were scheduled for eventual removal. And in contravention of the two basic principles of humanitarian relief—impartiality and nondiscrimination—the Dergue forbade all relief for the territory of Eritrea. Half-a-million people were reported to be starving in Eritrea, but this did not stop the Ethiopian armed forces from attacking convoys suspected of bringing relief supplies into the afflicted region.

Ethiopia is not the only government currently contriving to foment mass starvation. The ongoing efforts of the Soviet Union in Afghanistan, for example, are often forgotten. Since the 1979 invasion, Soviet forces have carefully destroyed the food system in many resisting regions. In so doing, they have turned literally millions of Afghans into destitute refugees, no longer able to feed themselves in their own nation. Over two million of these people subsist today in refugee camps in Pakistan. They are kept alive by charity from the West.



The American architects of the postwar international order did not anticipate such problems. In 1943, as President Franklin D. Roosevelt laid the foundations for the broadest and most successful relief effort the world had ever seen, he explained that the new United Nations Relief and Rehabilitation Agency (UNRRA) would be operating only in “liberated areas.” He assured “liberated peoples” that “in victory or defeat, the United Nations have never deviated from adherence to the basic principles of freedom, tolerance, independence, and security.” President Roosevelt believed that preventing famine would be an eminently manageable task under governments which respected the sanctity of human life and upheld Western values, and he was right. With the spread in membership in the United Nations, moreover, it seemed that enlightened governance might eventually prevail across the entire globe. Today, however, only a handful of countries beyond the borders of the West embrace the values codified in the United Nations’ Charter and its Universal Declaration of Human Rights. Many member states now disregard these codes when they prove inconvenient. Others reject them out of principle, since they are inconsistent with their regimes’ totalitarian or anti-Western ideologies.

It is now almost forty years since our victory in World War II. Even so, very few of the world’s poorest and most vulnerable peoples live in what President Roosevelt would have considered “liberated areas.” It is this fact and not any other which accounts for the persistence of famine in the modern world. Nations can always share the West’s technical capacities to save people stricken by catastrophe, but regimes that do not share the West’s values cannot be counted on to put these capacities to use.




According to many leaders in the Third World and to some development organizations in the West, the principal obstacle to accelerating the pace of material progress in low-income nations today is the insufficiency of concessionary aid from Western countries. It is striking, and inadvertently revealing, that such criticisms of Western giving often neglect to discuss either the quality of the aid received or the ends that it achieves. Such thinking is worse than illogical. By dissociating development aid from measurable results, it reduces Western assistance from a practical policy to an aesthetic, possibly only a symbolic, gesture. To advocate massive new aid programs irrespective of their impact on the economic health of recipient nations would be expensive for the West, but could prove far more costly to the world’s poor.

Few people in the West appreciate the magnitude of current resource flows from Western societies to the Third World. Such flows are, in fact, extremely difficult to measure, not only because of the inevitable delays between commitments and disbursals, but because of the complexities of tracking and accounting for funds in a world financial system which is at once open and closed. Nevertheless, the Organization for Economic Cooperation and Development (OECD) attempts to measure these flows, and its computations are instructive.2 In 1982, the most recent year for which OECD has made estimates, the net total for what it labels “overseas development assistance” provided directly by Western nations to Third World countries was about $18 billion.

But there was more. Multilateral development banks and multilateral development agencies, underwritten overwhelmingly by Western donations, provided an additional sum whose 1982 net OECD put at about $8 billion. And there was still more. Western nations were also providing finance capital to less developed countries under a variety of arrangements, including bank lending, government-to-government loans, export credits, and direct private investment. All told, OECD placed the total net transfer of financial resources from Western nations to Third World countries at almost $80 billion in 1982. This, it must be emphasized, is supposed to be the net total: the residual after financial withdrawals, profit repatriation, and loan repayments have been taken into account.

Of course, 1982 is but a single year. OECD estimates of financial flows to developing countries extend back to 1956. According to these computations, the net transfer of financial resources (both concessional and commercial) from Western nations to less developed countries between 1956 and 1982 exceeded $670 billion. This figure, however, seriously understates the true magnitude of the transfer, since it is denominated in current rather than inflation-adjusted dollars. Adjusting for intervening inflation, we find that the OECD estimate would be valued today at over $1,500 billion—that is, over $1.5 trillion.

Even this figure, however, understates the total postwar transfer of resources from the West to the Third World. It does not, for example, seem to measure either concessional grants or commercial loans for military matters, even though these play a prominent role in the finances of many developing countries. And it obviously cannot measure the net flow of resources in either the first half of the 1950’s or the years since 1982. Taking everything into account, it seems quite possible that the total net transfer of capital from the West to the Third World since the beginning of the postwar international order may have already exceeded $2 trillion at today’s prices. Although the complexities of international financial accounting and the unavoidable inexactitudes of adjusting for inflation and international fluctuations in exchange rates prevent us from arriving at a more precise figure, $2 trillion will probably do as the nearest round number to describe the magnitude of the net financial transfer from the West to the poor nations in the postwar era.

Large figures tend to seem abstract, and $2 trillion is an especially large figure. One way to appreciate its size is to consider what it could buy. Think of the entire U.S. farm system. Now think of all the industries listed on the New York Stock Exchange. At their current market values, $2 trillion would pay for both.



What has been the impact on the societies which have received this extraordinary transfer of Western wealth? The answer is obviously different in every case. Even so, broad and unmistakable patterns arise, some of which can be glimpsed in the composition of the transfers themselves. Less than one-quarter of the inflation-adjusted total for the years 1956 to 1982, for example, appears to have accrued from direct (and voluntary) overseas private investment. That fraction, moreover, has steadily diminished over time. Whereas in the late 1950’s direct private investment accounted for almost two-fifths of the net financial flows to the less developed countries, in the last five years for which OECD has published figures, the fraction has dropped to below one-sixth.

One of the original arguments for foreign aid was that development assistance would increase the capacities of poor nations to make productive use of international-investment resources. The record seems to suggest that precisely the opposite has happened. Despite hundreds of billions of dollars of Western development assistance, and a generation of economic growth in the meantime, the less developed countries, taken as a group, obtain a far smaller fraction of their foreign resources from direct private investment today than they did a quarter of a century ago. This must mean either that Third World nations, taken as a group, have grown more hostile to direct private investments, or that they have become less capable of attracting such investment, or both.

The eclipse of direct private investment from the West was made possible in no small part by the ascension of an alternative medium of capital transfer, commercial lending. Unlike direct private investment, bank loans to less developed countries accrue principally to governments and state-owned public corporations. Such lending effectively severed the connection between the provision of capital and the right to manage it. The responsibility for determining the use of these funds, and of repaying them, fell squarely on the state. It was not long before dozens of nations in the Third World announced that they would be unable to repay their commercial obligations to their Western creditors on schedule.

The attitudes which led to this generalized debt crisis were highlighted in the subsequent rescheduling negotiations in which many Third World governments requested debt relief. Such proposals would have converted a substantal portion of their obligations into a retroactive and unintended gift from the West. This view of Western capital suggested not only that it would be appropriate to convert commercial funds into concessional bequests without warning, but, no less significantly, that there was no reason to expect concessional bequests to earn productive returns.

Within the diverse and disparate amalgam of nations that goes by the name Third World there has been a dramatic and general improvement in material living standards during the era of Western transfers. This fact should be neither ignored nor belittled. Life expectancy for the people of “developing regions,” according to the World Health Organization, rose by over 50 percent between the late 1930’s and the late 1960’s, and has risen still further since then.3 Although no great confidence can be placed in economic estimates for the less developed regions, the World Bank says that per-capita GNP has more than doubled between 1960 and 1980 for the billion people living in what it terms “middle-income economies.”4 According to the same source, per-capita GNP rose by over 30 percent in India during this period. Even that most troubled category of states, the “other low-income economies” of Africa and Asia, are said to have experienced a 20 percent increase in per-capita GNP during these two decades alone.

But while the peoples of the less developed countries have seen far-reaching material advances in their societies, their economies have also typically undergone strange and troublesome transformations. In a great many countries of the Third World it has proved possible to finance the ambitious and comprehensive recasting of the national economy in ways not unlike the mobilizations of societies preparing for protracted and total war. These exercises in economic conversion have left the structures of some less developed countries grotesquely distorted, unnecessarily incapable of meeting either the social needs or the commercial demands of their people. They have left many others in a curious state of economic imbalance: richer than ever before, yet less capable than ever of pursuing self-sustaining growth.

In the Western nations, agricultural development proved to be a key factor in overall economic development. In the era of Western transfer, many governments in Africa, Asia, and Latin America have attempted to bypass agricultural development in their rush to industrialize. They have pursued policies systematically prejudicial to the interests of their rural populations: overtaxing farmers, underpricing their produce, and diverting resources so that the growth of cities and factories may be sustained at a forced pace. Neglect and exploitation have left many poor nations with unnaturally small agricultural sectors in relation to their people’s needs or their development potential. Imitating the style of development without capturing its substance, such efforts at development planning have, by and large, succeeded in replicating the structure of the industrialized economies while leaving the populace in poverty.

Some of the resulting distortions may be illustrated by international economic comparisons. (The estimates for poor nations, which come from the World Bank, should not necessarily be treated as reliable or even meaningful, but they are the most commonly used figures in such exercises.) For Peru and Mexico in the early 1980’s, the proportion of agriculture in overall GNP was put at roughly 8 percent. This is only half the share that Germany devoted to agriculture in the 1930’s, even though Germany then was much more prosperous than Peru or Mexico today by almost any economic measure. By the same token, the share of agriculture in Ecuador’s GNP today is apparently smaller than Holland’s was in 1950. Bolivia’s ratio of agriculture to GNP is lower today than that of Greece, although by any other measure it is Greece which should be considered the more industrialized society. Present-day Nigeria and the Denmark of the early 1950’s show roughly equal ratios of agriculture to GNP. Senegal, a nation affected by the Sahelian food crisis, has managed to reduce its current ratio of agriculture to national output down to the level that characterized Japan in the early 1950’s. The relation of agriculture to output in Pakistan and India is about the same as in prewar Italy, and is only slightly higher in Bangladesh today than it was in Italy at the turn of the century.5



The same policies which produce industrialization without prosperity have created an equally paradoxical phenomenon in many less developed countries: investment without growth. By the estimates of the World Bank, in the early 1960’s the ratio of gross domestic investment to GNP in Jamaica, Mauritania, Liberia, and what is now the People’s Republic of the Congo was equal to or higher than that of Japan in the early 1950’s, at the start of its remarkable boom. Yet over the course of the 1960’s and 1970’s, while Japan was quadrupling its per-capita output, Mauritania and Liberia are said to have raised theirs by less than 40 percent; the People’s Republic of the Congo, by the World Bank tally, registered a rise of less than 20 percent; and Jamaica apparently increased its per-capita output by a mere 13 percent. It is worth considering the scale of economic mismanagement necessary to achieve such results. We might also wonder how a poor government could maintain such strikingly high rates of capital accumulation in the face of indisputable and continuing economic mismanagement.

Just as agricultural sectors in the Third World have been artificially restricted and diminished by national policies, so what is termed investment has been artificially swollen. According to the World Bank, the region of the world with the lowest overall investment rate today is the West. In the “middle-income economies,” overall rates of gross domestic investment are said to be just short of the historically extraordinary levels Japan achieved at the start of its growth spurt in the 1950’s. For the “low-income economies,” overall rates of gross domestic investment are higher today than they ever were in the United States or the fastest-growing nations of Western Europe.

But these patterns of investment cannot be taken as a sign of economic promise. In many countries, they have already proved to be manifestly unsustainable—the “debt crisis” affecting so many poor nations is only a formal recognition in extremis of this fact. To a distressing degree, the capital build-up to which so many Third World governments have committed themselves over the past three decades was guided not by economic logic but by the political imperative of maximizing the resources and power in the hands of the state. The misuse of resources, always costly, is especially hard on the populace of poor societies. It is poor people, after all, who can least easily forgo consumption today, and investment is by definition forgone consumption.

The postwar transfer of resources from Western nations to the less developed countries, as it has been conducted, appears to have accorded with neither of the two original premises for extending “development assistance”: it has not improved the climate for productive international investment and it has not contributed generally to self-sustaining economic growth. Ironically, financial transfer from the West may actually have made it possible for many nations to avoid participating more fully in the world economy. Under the best of circumstances, financial aid increases the local money supply, and thus stimulates inflation and reduces international competitiveness unless offsetting measures are enacted. Many regimes have demonstrated that they are not interested in enacting such measures. After all, overvaluing the local currency makes imports cheap, and to the extent that foreign finance is available, exports are unnecessary.



The justification for “development assistance” which has been voiced increasingly since the early 1970’s is the need to “build human capital.” There should be no mistaking the crucial importance of human capital in economic growth. Health, education, knowledge, skills, and other immutably human factors determine the maximum pace at which development may proceed. But returns from human capital, as from any other potentially productive resource, depend upon the environment in which they are put to use. Where physical capital is mismanaged and depleted, it would seem unrealistic to expect human capital to be carefully preserved, augmented, and utilized.

Human capital is much more difficult to measure and evaluate than physical capital—a fact that may not have escaped advocates of new spending programs in this area. Nevertheless, it is possible to make some tentative assessments of the effectiveness of some of the human-capital programs Western aid has helped sponsor. Consider education. As a very rough rule of thumb, the literacy rate in a poor society today should be similar to its primary-school enrollment ratio twenty years earlier. The rule holds in many developing nations, but not in all. According to the World Bank, for example, 47 percent of Bangladesh children were enrolled in primary schools in 1960 but the nation’s literacy rate in 1980 was only 26 percent. In Togo, the enrollment ratio was 44 percent in 1960, but literacy is put at 18 percent today. In Zaire, the enrollment ratio was 60 percent in 1960, and the literacy rate today may be as low as 15 percent.6

Literacy, of course, is notoriously difficult to measure. Such radical discrepancies, however, appear to speak to something more fundamental than inexact definitions. They suggest that spending in the name of human capital can be wasted, and often has been. The irony is that such wastage seems most likely to occur as governments restrict their societies’ contact with the world economy—preventing them from participating in the learning process which has so demonstrably enhanced the productivity of nations at all economic levels in modern times.

In the final analysis, the economic impact of Western financial transfers on the nations of Asia, Africa, and Latin America seems to depend very largely on the attitudes and inclinations of the recipient government. Taiwan and South Korea were both major beneficiaries of foreign aid in the 1950’s and early 1960’s, and South Korea has been a major borrower of international capital in the 1970’s and the early 1980’s. Both countries have used these resources in ways that have enchanced their overall economic productivity, improved their international competitiveness, and increased their ability to take advantage of the growing opportunities afforded by world markets. But easy credit and free aid need not be put to economically constructive purposes. They may also be used for quite different goals—even to underwrite practices so injurious that they could not otherwise be afforded.




If opinion surveys are correct, the American people are troubled by our present policies to relieve distress and promote prosperity in the poorer regions of the earth. They are right to be so. As they are currently conducted, American foreign-aid policies cannot be relied upon to encourage economic health or self-sustaining growth in low-income nations; indeed, they may actually subsidize practices that perpetuate or even generate poverty in certain places. Such programs betray the wish of the American people to extend their help to the world’s least fortunate groups and dangerously compromise America’s moral role in the world.

In the decades since they were initiated, the official development policies of the United States have undergone a progressive divorce from their original purposes and principles. To judge by the results of current foreign-aid programs, the United States government has become comfortable with the idea of conducting a special, separate foreign policy toward the world’s poor—a policy whose principles and goals are distinct from, even opposite to, those by which we guide ourselves in the rest of the world. Pursued to their logical conclusion, America’s current aid policies would leave poor nations ever less capable of self-sustaining growth, and increasingly dependent on foreign largesse to maintain or improve national standards of living. These same aid policies appear to be indifferent to the politically induced suffering which so many poor peoples must endure at the hands of irresponsible or actively mischievous governments. Would we ever think of guiding our relations with another Western people by such rules?

The terrible irony of this situation is that the United States created a new global order at the end of World War II precisely to eliminate the sorts of suffering we now seem to be inadvertently underwriting in different poor nations. The economic pillars of this new order were an International Monetary Fund, a World Bank, and a generalized arrangement for the promotion of international trade; the political framework for this order was to be the United Nations. The liberal international economic system which was built on those foundations has proved to be the greatest engine of material advance the world has ever known; it has demonstrated its ability to contribute to prosperity in any and all nations willing to avail themselves of its opportunities. The values we impressed upon the original documents of the United Nations not only laid down the guidelines for decent and humane governance, but suggested the approach to policy most likely to relieve suffering and promote general prosperity. These postwar arrangements, which the United States struggled to produce, have created the greatest opportunities for satisfying the wants and needs of mankind that history has yet seen.

A generation of divisive rhetoric and drift has taken its toll on the United States. What is often easy for Americans to forget is that our divisive rhetoric and drift take an even greater toll on other peoples. The fact is that the United States—as a nation, a power, and an idea—is the greatest hope that the world’s poor and unprotected peoples have. It is the American people’s unmistakable preference that the peoples of the poorer regions of the earth should eventually be liberated—in the true meaning of that word. The United States can do much to help these peoples in their liberation. But we will not be true to our own preferences, or the promise of our system, if we divorce our policies toward the world’s poor from the values, institutions, and international economic arrangements which we cherish for ourselves.




1 Cited in Anders Wijkman and Lloyd Timberlake, Natural Disasters: Acts of God or Acts of Man?, London and Washington, Earthscan, 1984.

2 Geographical Distribution of Financial Flows to Developing Nations, Paris, OECD, 1984. The calculations here are based on this volume and its predecessor series.

3 World Health Organization, “Mortality Trends and Prospects,” in WHO Chronicle, 1974, Vol. 28.

4 World Bank, World Development Report, 1982, Oxford University Press, 1982.

5 Data for “developing countries” come from various issues of the World Bank's World Development Report. Historical figures for Western nations are from Simon S. Kuznets, Modern Economic Growth (Yale University Press, 1966) and The Economic Growth of Nations (Harvard University Press, 1971).

6 World Development Report, 1982 and 1983. The World Bank did not publish literacy estimates in the 1984 edition of its report.

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