By the Year 2020

Problems to solve as the developing world booms

Two cheers for the future. The World Bank's economists have just peered ahead to the year 2020 and sent us a sizable dose of good news. What was once just the American Miracle or the Asian Miracle is spreading more rapidly than most specialists calculated. It is in the process of becoming a modest world miracle. That means that billions among the world's poor and middle classes are likely to see some improvement in their lives.

Item: Developing lands will likely double their portion of world output of goods and services - producing about one-third of the total by 2020.

Item: The Big Five "super-developing nations" (China, India, Indonesia, Russia, Brazil) will lead this growth. If they continue to reform their economies, their output and their share of world trade could double from its current 8-to 10 percent.

Item: Growth rates in the faster modernizing nations of the developing world should reach 5.6 percent - the best in 20 years. But even states at the poorer end of the spectrum are benefitting. Growth in sub-Saharan Africa has reached about 4 percent in the past two years, more than two points better than in the previous decade.

With all this heartening news, why give only two cheers?

To begin with, there's the perennial uncertainty about extrapolations that involve so many variables over a quarter century. But a more serious reason to withhold the final cheer concerns two big problems to be dealt with if this long-overdue spreading of prosperity to more of the human race is not to create losers as well as winners.

Problem No. 1: environment. Common sense (not to mention common humanity) argues that raising the living standards of billions of impoverished fellow members of the human race is desirable. We're not talking skybox frills here. Just plain food, decent housing, a basic job, and useful education. That aspiration shames the "growth is bad" argument.

But if growth fouls the planetary nest, it defeats its own gains. So industry leaders, governments, and researchers have to find and adopt new low-pollution production technologies. That means manufacturing, transportation, resource extraction, and recycling methods that ensure all the new growth pouring forth to feed, clothe, move, and house people must be carried out by processes that either don't pollute or that neutralize their own pollutants as much as possible.

Population restraint will be needed. Here, the experience of the Big Five - especially India and China - is not heartening. But two factors have been helping to slow world population growth: (1) It's widely accepted that better educated and economically secure societies tend to have reduced birth rates. (2) The richer nations of Europe, North America, and east Asia are already "graying." Some, like Japan, tend to have excess savings that provide capital for growth in developing countries.

If job security in developing lands helps slow population growth, it also helps retard environmental damage in another way. It steers homeless, jobless millions away from despoiling forests in a desperate search for subsistence farmland.

Problem No. 2: trade and jobs. The Big Five developing nations are home to about half the world labor pool. Currently they provide only 9 percent of global exports. Rocked by the Japan-US trade gap (soon to be dwarfed by the China-US gap), Americans worry about an even more giant world-trade gap - a world full of cheap-labor sorcerer's apprentices pouring forth too many goods.

Fortunately, such a dark downside to the World Bank's sunny forecast is not likely. Even at the bank's predicted average growth rate, the Big Five share of world production will rise only from 8 percent to 16 percent. That's not enough to threaten workers in already-rich nations. They will still control 71 percent of world production. And their combination of fewer workers (the graying of the north) and more high-tech jobs should cushion the coming change.

Freeing ingenuity: The world of 2020 may not, in the end, fit the template cut by World Bank economists. But if it comes even close, it is likely to be better for more people than today's world.

Remember the travail Europe, Japan, and China went through after World War II. Consider the tragic false starts Africa endured under post-colonial strongmen who practiced limos-for-me-and mine socialism. Remember the juntas, guerrillas, and military command economies prevalent in Latin America.

Much of the world has already vastly benefitted from expanded trade, freer capital movement, more enterprise, less government ownership, and better educated citizens. If the World Bank is even half correct, that progress will speed and spread. Now the ingenuity that produced growth must turn to solving the big population and environment problems. There's no reason it can't succeed.

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