Acton Commentary

A Good Year for the Developing World


The World Bank recently published its Global EconomicProspects 2005 , which provides a summary ofthe global economy for 2004 along with a forecast for the coming years. The news, especially for the developingworld, is mostly good. Theforeword's opening sentence is quite remarkable: “This year--2004--is shaping up to be thehealthiest year for developing countries in the last three decades.”

In 2004, world trade increased 10.2 percent. Global economic growth was around 4percent. Developing countries “arenow growing faster than their average growth rates of the 1980s and 1990s.” Ifthese rates are sustained, the next 10 years will double the rate of increasein developing world economies. Theseseem like good numbers, but what do they mean for real human beings?

Economics, after all, is far more than charts, graphs, andnumbers. Broadly speaking, economics may be described as the study of theproduction, distribution, and consumption of scarce goods and services.Economists study how people satisfy the basic requirements for dailyliving. For people of faith, oneof the central concerns must be the status poorest of the poor. What is in these numbers for those whohave the least?

According to the study, if the growth rate of 6.1 percentcontinues for the next decade in a number of developing countries, the numberof people living in extreme poverty would be cut in half in thosecountries. Even if we removeChina, India and Russia (all technically listed as developing countries), thegrowth rate average in the rest of the nations is 5 percent for 2004. The debt to gross national incomeratio, while still a burden to many countries, is about half of what it was in1994. This kind of sustainedeconomic performance would cut in half the number of human beings living onless than $1 US per day and the number living on $1-$2 per day.

What is bringing about these changes? People who care about the poor shouldnot only celebrate these improving conditions, they should also be clear aboutwhat causes them. Furthermore, andultimately, they should firmly stand behind the forces that are bringing themabout so that more people can be lifted out of poverty.

The cause of the majority of this encouraging news is notcharity, important as it is in addressing human needs. It is not a developed-world heeding ofthe call of Bono and others to donate a great portion of their gross domesticproduct. The overwhelming answeris the free market along with its anchors of rule of law, private property,freedom, access to markets, and the lowering of barriers to trade.

But for all the good news, there are some troubling signsfor people who live in sub-Saharan Africa. According to the report, “Growth in the region will continueto lag behind the rest of the world by a significant margin.” This has to be a concern for all thosewho take seriously Christ's injunction, “What you do to the least of my people,you do to me.” Our first responsemust be to ask why it is the case that this region fails to improveadequately.

The usual answers are no answers at all. Sub-Saharan Africa has many moreresources than most of the developing world. So the proposition that it lacks natural resources must berejected. Another commonly heardanswer is the need for population control. For example, there are 10 million people living in Zambia. If there were only 5 million, theywould be twice as prosperous as they are now. Such math seems simple and deceives many people but it issimply not true. China and Russia,along with virtually all developed countries are far more densely populatedthan most African nations. Having fewerchildren isn't the answer to poverty.

So where does this leave us if our hearts are concernedabout the poverty of human beings, made in the image of God, living insub-Saharan Africa? People offaith, especially those who act as God's spokespeople, should be demanding thatthe benefits of the market be extended there. We should be calling for an end to corruption. We should be prophetically screamingfor private property rights and the removal of trade barriers. We should be speaking against variouskinds of government subsidies that give American and European Union farmers adistinct and unfair advantage over farmers in the developing world. It issimply a matter of justice backed by numbers that cannot be ignored.

Unfortunately, such empirical evidence is too oftenignored. The World Alliance ofReformed Churches, a group made up of denominations presenting 75 millionReformed Christians around the globe, seems to be oblivious to the reality ofpoverty and its chief causes. For some of this group's leaders, the free-marketsystem is condemned and is placed on par with the former apartheid policies ofSouth Africa. Such statements reveal that these religious leaders are misguidedand misdiagnose the core issues that cause hunger, premature death, illness,and outrageously high infant mortality rates.

Instead of pushing for the growth of the market and freetrade, they condemn the world's poorest citizens to desperation driven by theirown ideological perspectives rather than concern for the poor. They should be addressing governance issues,corruption, and arguing on behalf of property rights so that sub-SaharanAfricans could finally get out of poverty. But these false prophetic voices will ignore thenumbers. They will ignore thereality of poverty. They willignore the just demands of Africans who have the resources, minds, and abilityto provide for themselves but are not able to because the structures of therule of law do not exist where they live.

In the words of musician Don McLean,

“They will not listen,

They're not listening still

Perhaps they never will.“