Globalization has assisted development defined in conventional terms as raising the incomes of the five billion people who live in “developing” countries. The growth of China, India, and many other developing countries during the past decade has surely been facilitated by international trade, and notably by the breakthrough into manufactured exports. World poverty, as measured by the number of people below some threshold level of income, is already falling and will continue to fall, probably at an accelerating rate.
But such a measure will increasingly mischaracterize the development problem. Today the core development challenge is no longer posed by raising incomes among the five billion. The countries at the bottom of the international rankings, containing around a billion people, are not just falling behind, they are falling apart. They are not merely diverging from the majority of mankind, they are in absolute decline.
The processes of globalization can claim some credit for the success of the majority of developing countries, but equally they must take some responsibility for this marginalization of the poorest. In particular, globalization tends to accentuate a country’s comparative advantage. For much of Africa, domestic policies and institutions have ruled out manufactured exports, leaving exports dependent upon natural resource extraction with its attendant problems. Worse, the internationalization of crime has made Africa’s weak governance commercially valuable, creating powerful lobbies for the further erosion of the rule of law.
The marginalization of the bottom billion is already creating problems for the international community. Quite aside from the evident humanitarian disaster for the billion people themselves, as countries fall apart they generate externalities of crime, drugs, disease, and safe havens for terrorism for other parts of the world. Adopting polices to accelerate catch-up for the four billion people living in the converging developing countries would be a generous gesture on the part of the already rich. Reversing absolute decline in the bottom billion would not be so much a generous gesture as a matter of common prudence.
This is a serious priority and the problem is how to accomplish it. I have suggested that what is required goes way beyond expanded aid programs, and indeed that aid is unlikely to be the most potent instrument in these environments. Thus policy coherence in rich countries needs to be rethought to move beyond trade policy, taking in military interventions to improve security, and legislative interventions and public-private partnerships to improve governance, in the poorest countries. If globalization is to bring success to the bottom billion, it will come through increased willingness to build on actions such as the sending of British troops to Sierra Leone, the willingness of oil companies and the World Bank to strengthen the scrutiny by civil society of oil revenues in Chad, and the partnership between De Beers and NGOs that produced the impetus for the Kimberley process in the diamond trade. It will require the international financial institutions to refocus their financial resources to solve the problem of the extreme exposure of the poorest countries to destabilizing external shocks.
The fact that such initiatives are happening suggests that at some level the need for them is recognized. Unfortunately, the impetus to quantify the success of development efforts—exemplified by the Millennium DevelopmentGoals and the increasing sophistication of measures of the absolute numbers of people in poverty—risks entrenching at the heart of development policy an increasingly irrelevant conception of the core development problem. Globalization will indeed help to deliver prosperity for a majority of the five billion people in “developing” countries. But by 2015, ordinary people will be worrying about a completely different and far less tractable problem.
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