Poorest Nations Still Languish

Author of new report says developing nations can progress only with free flow of trade. THIRD-WORLD POVERTY

LED by the United States, two dozen wealthy industrial nations reached deep into their pockets again this year for money to help third-world countries cope with poverty. At $54 billion, their total contribution was equal to the combined Gross National Product of the world's 44 poorest nations.

But despite this massive transfusion of foreign aid, the gap between rich and poor countries is widening at a faster rate than ever before, according to a report issued today by the United Nations Development Program (UNDP). Unless foreign aid is matched by economic opportunities, the report says, the disparity will grow wider and more dangerous still.

"Developing countries can graduate out of foreign assistance in the 21st century and take their chances in the international market," says Mahbub ul Haq, former finance minister of Pakistan and principal author of the report. "But they can only do so if global markets are open - if capital, labor, and goods are allowed to flow freely around the world." Rich-Poor Disparity

Thirty years ago the 20 percent of the world's population that lived in nations with the highest per capita incomes were 30 times better off than the bottom 20 percent, according to UNDP's third annual report. Today that disparity has nearly doubled.

Comparing individual rather than national averages, the income of the 1 billion richest people in the world is now 150 times that of the poorest 1 billion.

Much of the blame for the disparity lies with the developing countries themselves, where military spending, inefficient command economies, corruption, and capital flight have stunted economic growth.

But the policies of rich nations have added to the "staggering level of human deprivation" that now exists in the developing world, the 1992 Human Development Report says.

One example: Forty percent of international foreign aid is in the form of military rather than economic assistance. Of the remainder, most flows to the richer tier of developing countries, with only one quarter designated for the 10 countries containing three- fourths of the world's poorest. Basic needs not met

A mere 7 percent of the total meets basic needs for education, primary health care, and nutrition programs. "The world needs a new ODA [official development assistance] system that is progressive, predictable and equitable," says the report.

Another reason the gap between rich and poor nations is widening is that, with their export prices low and debt payments high, developing countries actually end up giving the rich industrialized nations more each year than they get in return.

The UNDP report says developing countries are also penalized by barriers to the entry of foreign workers, at a cost of $1 trillion by the end of the decade. Those who are permitted to immigrate to economically advanced nations are usually the most skilled and best trained, contributing to a brain drain that, in Sudan alone, has cost 17 percent of its doctors, 20 percent of its university teachers, and 30 percent of its engineers. "If the international community does not have the foresight to create econo mic opportunities where they are needed most, then the world may witness unprecedented international migration in the 21st century," Dr. ul Haq warns.

"All told, developing countries are being denied $500 billion of market opportunities every year - 10 times what they receive in foreign assistance," the report concludes. But the consequences are not felt in poor nations alone. By keeping barriers to the import of labor and goods high, developed countries are intensifying the economic hardship that exacerbates global problems that affect them directly as well.

"If they don't have enough development, growth, and options, [developing countries] are going to continue to pollute, cut down forests, and deplete the world's oxygen reserves," says ul Haq.

Poverty is also the main reason tens of millions of people now cross international borders each year in search of jobs, with socially disruptive consequences in many developed countries.

"If opportunities do not travel towards people, people will start traveling towards opportunities," notes the report.

In addition to opening up global markets, the report calls for sweeping measures to rectify the growing imbalance between rich and poor nations.

One is a major write-down of third-world debt, which has spiraled from $100 billion 20 years ago to more than $1.3 trillion today. The report also calls for 3 percent annual reductions in world military expenditures through the 1990s to create a $1.5 trillion peace dividend.

UNDP calls for a global "compact" between North and South backed by a global central bank and a strengthened UN system. Resistance expected

Such changes are likely to be resisted by developing countries. But given the enormity of global change at the end of the cold war, ul Haq says, world leaders will have to demonstrate the kind of imagination and foresight that characterized policymaking at the beginning of the cold war.

"After World War II there was tremendous creativity: the Marshall Plan, the World Bank, the UN, the idea of the single European market. But where are the sources of creativity now?" asks ul Haq. "In the last five years we've seen events unfold that one could only have dreamed about a few years ago. Who's thinking about the 21st century?"

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