ON DEVELOPMENT: Progress in the global war on poverty

February 18, 2016
csmonitor.com, by Steven Radelet, February 7, 2016, 13 min read, original

The headlines on any given day suggest a world under siege. War. Terrorism. Refugees. Disease. Recession. Famine. Climate change. But beneath these often very real problems, something remarkable has been happening, something on a more epochal level that has gone almost completely unnoticed.

Global poverty has fallen faster during the past 20 years than at any time in history. Around the world hunger, child death, and disease rates have all plummeted. More girls are getting into school. In fact, never before have so many people, in so many poor countries, made so much progress in reducing poverty, increasing incomes, improving health, reducing conflict and war, and spreading democracy.

Some of these gains – especially the declines in poverty and child mortality – rank among the greatest achievements in history. Yet few people are aware that they are even happening. Most people believe that, apart from a few special cases such as China and India, developing countries by and large remain hopelessly mired in poverty, stagnation, and dictatorship. Yet the reality is quite different: A major transformation is quietly under way, affecting the lives of hundreds of millions of people in nearly every corner of the world.

•     •     •

In 1993 almost 2 billion people around the world lived on the paltry sum of less than $1.90 a day (the World Bank’s definition of “extreme” poverty), or less than $10 a day for a family of five. Imagine, if you can, what that means: never enough food, a house made of mud and thatch that couldn’t possibly keep out the rain and the pests, no schooling for your children, and going through your entire life without ever having a single lightbulb in your home or seeing anyone resembling a doctor. For most of world history, the number of people living in this kind of poverty rose inextricably alongside world population. But in the early 1990s, for the first time, extreme poverty began to fall – fast. By 2012, just 1 billion people were living on less than $1.90 a day – half as many as two decades before (the $1.90 figure is calculated in constant prices, adjusting for inflation). By best estimates, the number was down to around 700 million in 2015, and falling. The change is widespread, going far beyond China and India to include countries as far-flung as Indonesia, Mozambique, Ghana, Brazil, El Salvador, and Mongolia. In all, more than 60 developing countries around the world have seen a decline in the number of extreme poor, despite continued population growth.

Meanwhile, millions more poor people have access to clean water and basic sanitation facilities. The share of people living in chronic hunger has been cut nearly in half, with better nutrition and lower rates of stunted growth in children. Prior to 1980 just half of girls in developing countries completed primary school; now 85 percent do. Less than 50 percent of adult females could read and write, but today global female literacy has passed 93 percent.

Perhaps most remarkable of all are the widespread improvements in basic health. Diarrhea killed 5 million children a year in 1990, but less than 1 million in 2014. Malaria deaths have been cut by half since 2000, and deaths from tuberculosis and HIV have both fallen by one-third. Because of better nutrition, greater access to immunizations, and success in fighting diseases, life expectancy at birth has increased from 50 years in 1960 to 65 years today.

The biggest health gains have been for children. In 1960, some 22 percent of children born in developing countries died before their fifth birthday, a horrifyingly high percentage. But today, less than 5 percent do. Remarkably, the improvements have been truly global: The rate of child death has declined in every country in the world since 1980 (at least where data are available). And, as fewer children die, parents are having fewer of them. Fertility rates have fallen from 5 children per adult woman in the 1960s to 2.5 today, and global population growth has slowed from 2 percent to 1.2 percent per year – still high, but headed in the right direction.

At the same time, economic growth has accelerated, and average incomes have risen. In the 1970s and ’80s, most developing countries stagnated in the midst of oil price shocks, the debt crises, the meddling of the cold-war superpowers, and mismanagement by incompetent despots. Economic growth per person averaged zero for nearly 20 years. But starting in the mid-1990s, growth rates began to rise. By 2015 average incomes in developing countries had almost doubled (after controlling for inflation), and that figure excludes China. Quite literally hundreds of millions of people – poor, middle-class, or wealthy – in dozens of developing countries have much higher incomes than they did 20 years ago. Importantly, the benefits of growth have been relatively widespread, and not just concentrated among the rich. Roughly speaking, inequality has worsened in about one-third of developing countries, remained about the same in another one-third, and improved somewhat in the other third.

Meanwhile, there has been a big shift from dictatorship to democracy. In 1983, only 17 developing countries were democracies; by 2013, that number had tripled to 56 (and this figure excludes many other countries with populations of less than a million). The generals that once ruled across Latin America are gone, replaced by democratically elected governments. The same is true for dictators such as Ferdinand Marcos in the Philippines, Suharto in Indonesia, Gen. Park Chung-hee in South Korea, and many others. The end of apartheid in South Africa ushered in a slow but steady sweep of democracy across about half the countries of Africa. Recent elections in both Myanmar (Burma) and Nigeria hold out the hope for continued gains. Taiwan elected its first female president in January. Yes, these new democracies are imperfect and have many problems, as is true of any democracy, especially young ones. But today, power is far more likely to be transferred through the ballot box than through violence, coups and countercoups are much less common, and individual freedoms and rights are honored and enforced to a much greater degree. Never before have so many poor countries been so democratic.

As incomes have risen and democracy has spread, conflict, war, and violence have fallen sharply. This fact surprises anyone reading the daily news about Syria, Yemen, or Afghanistan. While I do not want to trivialize these conflicts, we tend to forget just how violent the world was in the 1980s and early ’90s, when all of Central America was engaged in bloody civil wars, most of Southern Africa was in flames during the height of apartheid, West Africa was in chaos, and Southeast Asia was reeling in the aftermath of the Vietnam War and the Killing Fields of Cambodia. While far too much conflict still exists, there is much less of it. The number of civil wars over the past decades is only half as many as there were in the 1980s, and deaths from war have fallen by nearly three-quarters.

The fight against extreme poverty is far from over. Not all developing countries are making progress, and even in those that are, not everyone is moving forward. There are still 700 million people living in extreme poverty. Every year, 6 million children die of preventable diseases. Many countries, especially the poorest, remain vulnerable to calamities such as the Ebola outbreak that swept through West Africa in 2014. Too few women and girls get the opportunities they deserve. Nevertheless, the changes over the past two decades are a big start – the strongest and most promising start ever – in improving the well-being of millions of people in many of the world’s poorest countries.

•     •     •

What sparked these changes? Why did so many developing countries begin to move forward on so many fronts in the early 1990s? Three major forces were at work. First, the end of the cold war, the demise of communism, and the collapse of the Soviet Union dramatically improved the global environment for sustained and peaceful development. The United States and the Soviet Union stopped propping up some of the world’s nastiest dictators. Proxy wars and political violence associated with the cold war came to an end in Central America, Southeast Asia, Southern Africa, and elsewhere. Countries in Eastern Europe and Central Asia gained their freedom. Perhaps most powerfully, economic and political ideologies shifted substantially. Communism and strong state control lost credibility. A new consensus began to form around more market-based economic systems and – at least in many countries – more accountable and democratic governance, along with greater respect for basic freedoms and rights. Developing countries around the world introduced major economic and political reforms and began to build institutions more conducive to growth and social progress.

Second, globalization and international access to new technologies brought more trade and finance and a far greater exchange of ideas and information. Exports from developing countries are five times as large today as they were just 20 years ago, and financial flows are 12 times as large, creating many more economic opportunities. With deeper global integration came technologies that spurred progress: vaccines, medicines, new seed varieties, mobile phones, the Internet, and faster and cheaper air travel. To be sure, globalization has brought challenges, risks, and volatility, not least the 2007 food and 2008 financial crises. But it has also brought investment, jobs, ideas, and markets, all of which stimulated progress.

Third, while global changes mattered, the countries that began to move forward did so primarily because of strong leadership and courageous actions by the people in those countries themselves. Where new leaders at all levels of society stepped forward to forge change, progress ensued; where old dictators stayed in place, or new tyrants stepped in to replace the old, political and economic systems remained rigged. New national leaders such as Nelson Mandela of South Africa, Corazon Aquino of the Philippines, Óscar Arias of Costa Rica, Lech Walesa of Poland, Ellen Johnson Sirleaf of Liberia, and many others worked to build new and more inclusive political systems while introducing stronger economic management, working alongside civil society and religious leaders such as Rigoberta Menchú Tum of Guatemala, Desmond Tutu of South Africa, Muhammad Yunus of Bangladesh, Jaime Sin of the Philippines, and Wangari Maathai of Kenya. Less-famous local leaders opened schools, clinics, microfinance organizations, and businesses to support the turnaround.

In addition, foreign aid played a supporting role in bolstering progress. Although aid is far from a silver bullet, and not all of it works well, much of it has been effective in saving lives, building schools, and achieving other goals. The bulk of the research evidence on aid shows a moderate positive effect on development progress. Aid has been particularly helpful in improving health, fighting disease, mitigating the impacts of natural disasters and humanitarian crises, and helping to jump-start turnarounds from war in countries such as Mozambique and Liberia. Aid programs have helped save millions of lives by fighting malaria, tuberculosis, HIV/AIDS, and diarrhea, and by immunizing children around the world. Aid is not the most important driver of development, but it has played an important secondary role in the development surge over the past two decades.

•     •     •

The huge gains in global development over the past two decades are unprecedented. Never before have so many millions of poor people made so much progress in so many dimensions of human life. These advances are obviously good for the global poor, but they are good for richer countries like the US as well. Broad-based gains in development and reductions in poverty enhance global security; build states’ capacities to fight drug trafficking, terrorism, and pandemic disease; and help the US economy by providing new markets and consumers for American products. Development helps build like-minded allies that can work with the US to solve major global challenges, helping citizens in each country. Perhaps most important, development helps spread and deepen values that Americans hold dear: openness, economic opportunity, democracy, and freedom.

Yet few people are aware of this great transformation. A 2013 survey asked Americans what they thought had happened to the share of the world’s population living in extreme poverty over the past two decades. Sixty-six percent of respondents said they thought it had doubled, and another 29 percent said that it hadn’t changed. That is, 95 percent of Americans got it completely wrong. Only 5 percent knew (or guessed) the truth: that the share of people living in extreme poverty had fallen by more than half.

Why are these changes not more widely recognized? In part it reflects our penchant for bad news. We can’t get enough of scandal, corruption, disaster, and conflict, but we ignore tales of steady progress or a job well done. Stories of flawed elections with violence in Africa are on the front page; peaceful and successful ones go unnoticed. At the same time, news travels much faster, and there is much more of it. In the past when outbreaks of disease or violent protests occurred, we may never have heard about it, whereas today it hits the Internet almost instantly.

Partly it reflects the tendency of researchers to specialize narrowly in one area of expertise, while learning much less about others. Health experts recognize the huge decline in infant mortality but know little of the spread of democracy; poverty experts know all about the gains of the extreme poor but are unaware of the decline in conflict. Academic research rewards specialization, not big connections across disciplines.

It is also partly about poor memory: We romanticize the past (the “good old days”) and focus on today’s problems rather than on what is going well. When we read about today’s wars and conclude the world is in bad shape we are forgetting how much worse it was in so many ways just a few decades ago. But for whatever reason, some of the greatest gains in history are happening right in front of our eyes, yet we fail to recognize them.

•     •     •

The real question is whether the progress of the global poor can continue in the future. So far, the transformation is incomplete: While the fates of hundreds of millions of people are improving, many other people have been left behind. There are big opportunities to continue progress stemming from technological breakthroughs in energy, agriculture, and medicine; increased trade among emerging markets; and a much greater exchange of ideas. But there are also huge challenges, including population pressures, climate change, demand for resources, changing demographics, threats of disease, and tensions from the rise of China and India. There are at least three broad future scenarios, any one of which is possible.

One is that the development transformation continues: Sustained economic growth, smart investments and policy choices, continued advances in technology and ideas, stronger health and education systems, and deepening democracy will lead to growing prosperity and improved welfare in the coming decades. China, India, Brazil, and other middle-income countries continue their ascendancy (with gradually slowing growth), followed by Turkey, Indonesia, Thailand, South Africa, Ghana, and many others. Trade among developing countries grows, mobile phones expand their reach, and the Internet extends to more people in poor countries. New technologies lead to increased agricultural productivity, cleaner and more efficient energy sources, reduced environmental damage, and further advances in health. Although progress does not reach everywhere and some countries stagnate or face tragic setbacks, others, such as Myanmar and Cuba, eventually join the widening circle of development. Democracy spreads farther and deeper, perhaps in different forms and new variations, with more countries embracing accountability, transparency, and good governance. The number of people living in extreme poverty falls quickly.

A second future is that the rate of progress diminishes significantly: China’s rapid economic expansion decelerates quickly, the US and European economies remain sluggish, and economic growth and job creation slow across many developing countries. Rich and poor countries alike fail to make critical investments in infrastructure, education, health, and technology. Resource mismanagement and environmental degradation begin to undermine progress. Advancements in health continue, but at a much slower pace as antimicrobial resistance expands and new epidemics strike, as with the Ebola virus in West Africa. A backlash against democracy takes shape, opening doors to authoritarianism, and more nations follow Thailand and Venezuela in reversing democracy. Poverty continues to decline, but much more slowly.

A third scenario is that development progress is derailed: Population pressures, demand for resources, climate change, environmental degradation, and growing conflict and war combine to halt, and in some countries reverse, development progress. Rising populations and increasing incomes cause growing shortages of water, food, energy, and minerals, while climate change significantly destabilizes food production and worsens health conditions. Both rich and poor countries fail to take the actions necessary to slow climate change, increase food supplies, and develop new energy sources. Growing tensions from an ascendant Asia and a declining West – coupled with greater competition over scarce resources, or growing global religious and ideological hostilities – spark greater conflict. Western countries increasingly turn inward, creating a global leadership void that allows security threats to grow as trade and investment suffer. International organizations lose legitimacy and effectiveness. Democracy is seen as an unsuccessful experiment, and dictators rise again. Economic growth decelerates sharply, much as it did in the 1970s and ’80s, and the declines in global poverty slow considerably. Development progress largely ends, and some countries go backward.

None of these futures are inevitable or etched in stone; any of them (or shades between them) are possible. It is easy to be pessimistic and to conclude that the obstacles to continued progress are just too great and that progress will falter. For hundreds of years, people have predicted at one point or another that global progress would halt. But they have always underestimated the world’s growing abilities – even with many setbacks along the way – to work cooperatively, meet new challenges, and expand global prosperity and basic freedoms. While we can picture many of the future difficulties facing developing countries, it is much harder for us to envision the new ideas, innovations, technologies, governance structures, and leadership that will emerge to tackle them.

•     •     •

Continued progress in fighting poverty will not happen automatically. It will depend on human choices, sacrifice, cooperation, leadership, and action, both in the world’s leading countries (like the US) and in developing countries around the world. The right question is not which of these scenarios is more likely, but rather, how can we continue to achieve rapid progress for the global poor?

Getting there will require action in several crucial areas. One, for instance, is global leadership. The US and other leading countries must take steps to strengthen their own economic and political systems – not just for their own benefit, but to establish a global environment in which other countries can prosper. The rich countries must also lead efforts to improve the effectiveness and legitimacy of international organizations such as the United Nations, the International Monetary Fund, the World Trade Organization, and the World Bank. Perhaps most important, the US and others must lead by example with respect to democracy. We are not, at the moment, a very good model. Democracy will not continue to spread in developing countries if the leading countries are poor examples.

At the same time, as has been the case for 200 years, continued progress will require sizable investments in new technologies and innovations. By 2050, global food production must increase by around 70 percent, freshwater requirements will grow by 50 percent, and the demand for energy in developing countries will double. Technology alone will not solve these problems, but these challenges cannot be met without robust investments in new technologies.

Within developing countries themselves, effective leadership will be the major driving force for continued advancement. Lasting progress will require good governance and state institutions that can deliver sustained – and inclusive – economic growth with good jobs, alongside continued advancements in education and health.

Delivering on this ambitious agenda will not be easy. But all of it is possible with effective leadership, cooperation both within and across countries, the right kinds of policy choices and investments, and concerted action. The stakes are high, for developing countries and rich ones alike. But the opportunity is within our grasp for the next two decades to become the greatest era of progress for the world’s poor in human history.

Steven Radelet is the Donald F. McHenry Chair in Global Human Development at Georgetown University and a nonresident senior fellow at the Brookings Institution. He is the author of “The Great Surge: The Ascent of the Developing World” (Simon & Schuster, 2015), from which this essay is adapted.

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