The situation.

Only about 20% of the world's people live as affluently as we do in rich countries like Australia. Our average per capita income is more than 70 times that of the poorest half of the world's people, which is under $2 per day. The poorest one third of the world's people live in terrible conditions. About 1.2 billion might be malnourished. Around 1.5 billion do not have safe water to drink. This severe deprivation causes the deaths of more than 30,000 children every day.

The gap between the rich and poor nations is getting bigger. In per capita income terms it has trebled since 1950. The UN's Human Development Report for 1996 emphasised that the poorest one third of the world's people are getting poorer each year.

Over the last 50 years large reductions in infant mortality and improvements in literacy and longevity have occurred. However it is glaringly obvious that satisfactory development is not being taking place in the Third World. A great deal of development has taken place, but it has not benefited most people much, and in fact it has further impoverished large numbers of people. In other words it has not been appropriate development. It has been mostly development that has benefited the rich. The reasons for this are obvious when we look at how the global economy works.

The Causes.

The poverty of most Third World people is not due to any lack of resources like land. (There is more farm land per person in the Third World than in Europe!) It is due to the unequal and unjust distributions of available resources. Most Third World land for instance is owned by a few local rich people or by foreign corporations.

Most of the Third World's problems, most of the deprivation and poverty and the unsatisfactory development, is simply due to the fact that the global economy is a market economy. In a market goods go to those who can pay most for them. That means that richer people can take them and poorer people can't get them. For example most of the world's oil is sold to people in rich countries. One of the most disturbing results is that while 1.2 billion people do not get sufficient food, one third of the world's grain production is fed to animals in rich countries.

Similarly when production is determined by what is most profitable in the market the inevitable result is that the wrong industries are developed. The most profitable industries are developed and these are never the industries that will produce what most poor people need. Foreign investors who go into the Third World never produce to meet the most urgent needs there. Production is of items that the urban rich will buy, and goods to export to rich countries. As a result in many very poor countries like the Philippines half the best land grows crops to export to rich countries. This is what you must expect when the market is allowed to determine production and development.

Conventional development has therefore taken the productive capacity the poor once had and geared much of it to serving the interests of the rich. Their land and labour now work to produce coffee etc. for export and from this process they only receive very low wages. (Shirt makers in Bangladesh are paid 15c per hour.) It would be far better for Third World people if they were able to put their labour and land into developing and producing for themselves the things they urgently need, especially into building highly self-sufficient community economies. The global economy prevents this. It enables most of the world's people and productive capacity to be forced into producing for the benefit of the rich few. The beneficiaries of the system are the tiny elite classes in the Third World, the transnational corporations who own most of the big plantations and factories, and the people in rich countries who can shop at supermarkets.

We in rich countries could not have our high "living standards" if the global economy was fair and satisfactory. We can only have them because we are getting far more than our fair share of the world's resources, and this is the inevitable consequence of an economy driven by market forces and profit. Such an economy only produces development in the interests of the rich. The global economy is massively unjust, but we in rich countries could not live affluently if it did not do these things.

Growth and trickle down.

Conventional development is based on the assumption that the goal of development is to get more investment, production, consumption, sales and trade going; i.e., that economic growth is development, or at least the key to it. It is clearly understood that this will enrich the already rich few, but the claim is that in time the increased wealth generated when those with capital invest to make more profits will in time trickle down to enrich all.

It is glaringly obvious that in conventional development very little ever trickles down, and indeed more often the wealth poor people had gets taken from them by the rich. Even if there was significant trickle down it would be an extremely inefficient way of solving the most urgent problems, i.e., of improving the real living conditions of the majority. The best way to do that is to enable them to use the existing productive capacity in their locality, especially the land, to produce necessities for themselves. The present economy will not allow this to happen.

Development as plunder.

For these reasons conventional development is increasingly being seen as a form of plunder. It is a process which enables the rich to take most of the valuable resources in the world, to take resources that poor people once had, to take the markets they once had, and to gear their productive capacity to producing for the rich at minuscule return to the poor people who work in the plantations and factories. The resources and the productive capacity they once had has literally been taken from them, but not by military force. It has been taken by the normal working of the free market or capitalist economy which allows a few to own most capital and to develop only those things that will maximise their profits, and which allows resources to go to those who can pay most for them. It is by nature and inevitably a massively unjust economic system. It cannot be reformed; if we changed it so that it didn't have these effects it would then be a totally different system.

Globalisation.

Globalisation is now rapidly worsening these effects, because it involves increasing the freedom of corporations to do what they like. Governments have decreasing capacity to regulate their economies to ensure that the right things are developed. Development now involves little more than the development that it suits transnational corporations to carry out. Governments have to minimise their "interference with the freedom of market forces."

Globalisation is a stunningly successful grab by the very rich. It is enabling them to take even more of the world's income, resources and markets because it involves the elimination of the protection that people, economies and ecosystems once had. The goal now is to establish via the WTO etc new rules for trade and investment which give the corporations and banks the right to go where they like and do what they like without interference from governments. Inequality is increasing rapidly as the rich benefit from globalisation while the poor majority are further impoverished.

It should be obvious that satisfactory development is totally impossible without a great deal of regulation contrary to market forces, to make sure that the rich and the corporations do not grab all the wealth and distort development from doing what is needed. (This does not have to mean big-state socialism.)

Conventional development is only capitalist development.

Conventional economists give us the impression that there can only be one way to develop, which involves encouraging those who have capital to invest, increase production, goods, sales, jobs incomes etc. It is very important to realise that this conventional approach to development is only capitalist development, and that this is only one form that development can take.
So what we have had in the Third World has only been an approach whereby those with capital are allowed to develop what will maximise their profits. In general there is a world of difference between developing what will maximise profits and developing what is best for people, their society and their ecosystems. In general capitalist or free market development is now resulting in immense and accelerating damage to people, societies and ecosystems.

Conventional development is impossible anyway!

The development literature almost totally overlooks the fact that conventional development for the Third World is not possible because there are nowhere near enough resources for all people to rise to the levels of resource consumption the rich countries have. In fact it will not even be possible for the rich countries to sustain these levels for very long. (See ebsite,The limits to Growth analysis.)

Conclusion.

Satisfactory development for the Third World is impossible in the present global economy, and it is impossible unless rich countries stop hogging most of the world's resources. Globalisation, coming scarcities (See Website,The Petroleum Situation) and ecological problems are very likely to bring increasingly serious poverty and breakdown of social order to the Third World in coming years..