Less industrialized countries are those that are also sometimes called developing countries, and can include emerging economies and failed states. These terms have essentially replaced the older Third World or Global South labels, but there is no strict agreement on the right way to distinguish between the advanced and industrialized nations and the rest of the world. Every framework of vocabulary used for such distinctions presents its own problems, or develops certain connotations that fall out of favor.
The First, Second, And Third World
As the new world order came into focus in the years following World War II, economist Alfred Sauvy coined the term Third World—echoing the Tiers Etat (“Third Estate”), the French commoners who “had nothing and wanted to be something” in the days leading up to the French Revolution—to refer to those nations that were neither U.S.-allied (the First World) or Soviet-allied (the Second World). As the term came into common usage, it was sometimes criticized for a perceived implication that this “third” world was an afterthought, one less important than the first two— when in fact the use of “third” in the term reflected only Sauvy’s desire to compare those countries uninvolved with the Cold War to the politically active peasantry. A French writer writing in a French magazine (the August 14, 1952 issue of L’Observateur) for a French audience, he knew his meaning would be understood; as the phrase became adopted and used for decades outside the context of that essay, this “thirdness” came to seem less innocuous.
Though it was true that most of the countries that did not take sides in the Cold War—or at least had not done so in 1952—were less developed and less industrialized, than those of the First and Second World, Sauvy’s emphasis was on their political neutrality. In time, that underdevelopedness instead became the key characteristic of anything referred to as “Third World,” to such a degree that after the early 1960s, when Americans became aware of the devastating extent to which poverty had taken hold in parts of their own country, it became fashionable and politically expedient to refer to “Third World living conditions” when describing impoverished neighborhoods or social groups. While understandable, the usage further eroded the usefulness of the “Third World” category in discussions of global politics.
Attempts were made to rejigger the term, though. Hungarian-British economist Peter Bauer, wishing to update the term to reflect the conditions of the world around him in the 1980s, just as Sauvy had written of those conditions in 1952, defined the Third World not as a politically neutral segment of the globe or a political remainder, but as that part of the world that sought Western aid—regardless of the country’s political sympathies or economic policies.
The North-South Divide
Another schema sometimes used to discuss the world and its groups of industrialized and less industrialized countries is the “North-South divide,” which reflects the general tendency during the Cold War of the developed countries—the First World and much of the Second—being located in the Northern Hemisphere, while developing countries were in the Southern Hemisphere. This map only works if you ignore New Zealand and Australia, and the fall of the post-Soviet states has further muddied it, but for all its imperfections it is an interesting way to describe the world. Unlike the First/Second/Third World model, it describes not a political allegiance but a state of development.
It is true, even in the 21st century, that most of the countries with the highest scores on the Human Development Index are in the north; most of those with the lowest are in the south. Willy Brandt, the Chancellor of West Germany in the 1970s, proposed that the line dividing north from south was roughly 30 degrees north latitude, putting Africa and India in the south but dipping in order to include New Zealand and Australia in the north.
Developing Countries And The Human Development Index
The term developing country came into use to refer more or less to the same countries as the Third World did, those of the “global south,” and is used more or less synonymously with “less industrialized.” While “less industrialized” describes a current state, “developing” describes an ongoing process, as well as the implication that developing countries are in the process of becoming developed ones, and that those countries that are already developed represent a sort of goal or role model.
Development entails industrialization, stability, infrastructure, and a reasonable standard of living. Developing countries fall behind the curve in one or more of these areas. The United Nations developed the Human Development Index (HDI) as a way to measure development, by looking at education, gross domestic product per capita, literacy, and life expectancy and converting these into a single figure. The index has been used since 1990, and its prevalence has helped fuel the popularity of the “developed/developing” description of the world’s countries. It has been criticized from the start, though, for not really offering much information; it is debatable whether an HDI rating correlates strongly with a high quality of life, and if not, exactly what it reflects.
Least Developed Countries And The Fourth World
The French Revolution etymological origins of Sauvy’s Third World coinage were completely shorn off when the term Fourth World came into currency in the 1970s, though the original usage did stay consistent with his use of Third World. As originally coined, the Fourth World consists of stateless nations: those nations, peoples, and ethnic groups that have no autonomy but exist under the thumb of other nations. Native Americans were the notable example in the 1970s, a time when the success of the civil rights movement had led to activism for improved rights and living conditions for the Indian reservations in the United States, and other reforms in the government’s dealings with native tribes. Indigenous and aboriginal peoples in other countries may also be included, as well as the Palestinians displaced by the creation of Israel, and the Roma.
In time, the Fourth World usage was extended by some to include the Least Developed Countries, a United Nations designation for those countries that suffer from significantly low income ($900 per capita), profound economic vulnerability in the form of instability or other problems, and weak human resources as indicated by poor average health, nutrition, and education. Only two countries classified as Least Developed have ever graduated from the list— Botswana in 1994 and Cape Verde in 2007—a testament to the difficulty of escaping pronounced poverty with insufficient resources. A decision on the graduation of Samoa has, as of 2009, been pending for several years.
The Least Developed Countries often have some special vulnerability that has been holding them back and prevents or slows what those in developed countries would consider the normal pace of development. Political corruption can have extensive consequences in this area, for instance, and easily becomes an institution that the “man on the street” is so accustomed to that he no longer objects to it to a degree proportionate with the real harm it causes. The type of government may be hostile to development, particularly in the case of dictatorships or rule by warlords, a condition that still persists in much of sub-Saharan
Africa. Unresolved civil wars and prolonged ethnic fighting are similarly destabilizing. Often many of these conditions are simultaneously true, in addition to extreme poverty, special challenges because of the physical conditions of the country, and a poverty of natural resources.
Currently the 49 Least Developed Countries are: Afghanistan, Angola, Bangladesh, Benin, Bhutan, Burkina Faso, Burundi, Cambodia, the Central African Republic, Chad, Comoros, the Democratic Republic of the Congo, Djibouti, Equatorial Guinea, Eritrea, Ethiopia, Gambia, Guinea, Guinea-Bissau, Haiti, Kiribati, the Lao People’s Democratic Republic, Lesotho, Liberia, Madagascar, Malawi, Maldives, Mali, Mauritania, Mozambique, Myanmar, Nepal, Niger, Rwanda, Samoa, São Tomé and Príncipe, Senegal, Sierra Leone, the Solomon Islands, Somalia, the Sudan, Tanzania, Timor-Leste, Togo, Tuvalu, Uganda, Vanuatu, Yemen, and Zambia.
Landlocked Developing Countries And Small Island Developing States
The United Nations recognizes two special categories of less industrialized countries, classes of countries that face special challenges: the Landlocked Developing Countries (LLDCs) and Small Island Developing States (SIDS). Because of their lack of access to the sea, the high cost of transportation, and their resulting isolation from the world, LLDCs are more constrained in their options than other developing countries. They must move their goods through other countries just to reach a port—still a critical trading concern even in the age of the airplane and the automobile. Sixteen of the 30 LLDCs, just over half, are also on the Least Developed Countries list. In many cases, the route to the sea is perilous and unreliable, for reasons of terrain, banditry, or both. LLDCs spend twice as much of their export revenues on transport as other developing countries (on average), and three times as much as developed countries. It does not help that most LLDCs—as opposed to the landlocked countries of Europe—are surrounded by other developing countries, and thus the transportation infrastructure in use to reach the sea is resource-intensive and inefficient.
SIDS face the opposite problem. As islands, their access to resources is narrow, and their transportation costs extremely high, putting the benefits of economies of scale out of reach and making import goods prohibitively expensive while simultaneously making it difficult to offer competitive prices on export goods. Because of import costs, it is especially difficult for SIDS to export manufactured goods that require nondomestic components. The cost of energy and basic infrastructure is also high, and most islands are especially vulnerable to natural disasters. SIDS tend to experience more economic growth volatility than other countries, and are highly reliant on the public sector.
The UN’s list of LLDCs is: Afghanistan, Armenia, Azerbaijan, Bhutan, Bolivia, Botswana, Burkina Faso, Burundi, the Central African Republic, Chad, Ethiopia, Kazakhstan, Kyrgystan, the Lao People’s Democratic Republic, Lesotho, Macedonia, Malawi, Mali, Moldova, Mongolia, Nepal, Niger, Paraguay, Rwanda, Swaziland, Tajikistan, Turkmenistan, Uganda, Uzbekistan, Zambia, and Zimbabwe. Until the graduation of Botswana, Swaziland was the only African LLDC which was not also a Least Developed Country. The list of SIDS is American Samoa, Anguilla, Antigua and Barbuda, Aruba, the Bahamas, Bahrain, Barbados, Belize, the British Virgin Islands, Cape Verde, the Commonwealth of Northern Marianas, Comoros, the Cook Islands, Cuba, Dominica, the Dominican Republic, Fiji, French Polynesia, Grenada, Guam, Guinea-Bissau, Guyana, Haiti, Jamaica, Kiribati, Maldives, the Marshall Islands, Micronesia, Mauritius, Montserrat, Nauru, the Netherlands Antilles, New Caledonia, Niue, Palau, Papua New Guinea, Puerto Rico, Samoa, São Tomé and Príncipe, Singapore, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, Seychelles, the Solomon Islands, Suriname, Timor-Leste, Tonga, Trinidad and Tobago, Tuvalu, the U.S. Virgin Islands, and Vanuatu.
Heavily Indebted Poor Countries
The International Monetary Fund and the World Bank have since 1996 maintained a Heavily Indebted Poor Countries program that makes low-interest loans available to countries with unsustainable levels of external debt. To be eligible for the program, a country must be in a situation of unsustainable external debt and have an established track record of poverty reform.
As of 2009, the program recognizes 41 countries as “potentially eligible” based on their debt situation. Of those, 23 are at the completion point: Benin, Bolivia, Burkina Faso, Cameroon, Ethiopia, Gambia, Ghana, Guyana, Honduras, Madagascar, Malawi, Mali, Mauritania, Mozambique, Nicaragua, Niger, Rwanda, São Tomé and Príncipe, Senegal, Sierra Leone, Tanzania, Uganda, and Zambia. Eleven are at the decision point: Afghanistan, Burundi, the Central African Republic, Chad, the Democratic Republic of Congo, the Republic of Congo, Guinea, Guinea-Bissau, Haiti, Liberia, and Togo. Seven are pre-decision point: Comoros, Eritrea, the Ivory Coast, the Kyrgyz Republic, Nepal, Somalia, and the Sudan. These “points” refer to the stages the program takes a country through. Predecision point countries are not yet ready to enter the program but have the potential to become eligible if they initiate a system of legal, economic, and financial reforms. Decision point countries receive debt relief funding while carrying out those reforms, which they must do satisfactorily while maintaining economic stability, in order to reach the completion point, at which point benefits extended to the countries become permanent.
The program has been criticized for adopting too arbitrary a definition of “unsustainable”—at inception, it was defined as debt which exceeded 200 percent the amount of the country’s exports or 280 percent of the government’s revenues (later changed to 150 percent and 250 percent respectively). Originally intended as a six-year program of two three year phases, it quickly became clear that not enough time had been allotted to get these countries back on track. The international organizations’ expectations may have been too heavily informed by the administrators’ own experiences as citizens of wealthier, healthier nations. Impoverished countries, like impoverished people, do not easily spring back from debt, especially when the conditions that necessitated the debt persist.
Further, even low-interest loans can continue to contribute to the “poverty trap.” As discussed at length by Columbia University economist Jeffrey Sachs, the poverty trap occurs when an entity reaches a certain level of poverty at which sustainable economic growth is impossible. Though potentially true of people, it is especially useful to describe the condition of significantly impoverished countries, in which sustainable economic growth is impossible both within that country—the poor remain poor, because no programs exist to improve their station in a meaningful way or such programs are too corrupt or inefficient—and for the country as a whole. Such countries are unable to effectively provide health care, education, or basic social services, and typically have economies that are unfavorable to foreign investment.
Because the population increases so quickly, a country that is significantly impoverished will experience a decline of per-capita resources with each successive generation; debt relief and other foreign aid that is insufficient to counterbalance this has little long-term effect on a country’s poverty and external indebtedness, and the lack of apparent improvement resulting from such aid can discourage organizations from extending further aid, since they can feel they are throwing money down a well. While charities rightly say that “every little bit helps,” on a macroeconomic level, countries in need of aid that receive only a “little bit” will simply have their poverty prolonged rather than repaired. Citizens of wealthy nations tend to be intuitively unaware of this, in part because the poor of their own countries have access to significantly greater resources and there is more opportunity for economic mobility.
Sachs’s solution to this is to make sure foreign aid is spent in specific, sustainability-focused, ways: on public health and nutrition, education, infrastructure (sanitation, water and power, roads), and “institutional capital” (to fight corruption in the government, judicial system, and law enforcement administrations). The HIPC program admits that it cannot guarantee sustainability and avoid the poverty trap, and puts the burden of doing so on the countries the program serves.
Failed States
A special type of developing country, the failed state is one which has ceased to develop or has significantly retarded development because of some critical failure of responsibility on the part of its government. Often this means an inability to participate as a member of the international community, either because of the distractions of internal strife or a simple unwillingness. Basic public services may not be provided by the government, or it may have become unable to make or enforce collective decisions. It may have lost control of its territory to paramilitary groups, civil war, bandits or warlords, or other forces.
At the end of 2008, the list of failed states maintained by the American think tank the Fund for Peace included 177 countries in some state of failure or at risk of failure. The twenty worst (in increasing order of severity of failure) were Sri Lanka, Nigeria, Lebanon, Ethiopia, Uganda, North Korea, Haiti, Myanmar, Bangladesh, Guinea, the Central African Republic, Pakistan, the Ivory Coast, Afghanistan, the Democratic Republic of Congo, Iraq, Chad, Zimbabwe, the Sudan, and Somalia. All of these except Sri Lanka and Lebanon had been in the 20 worst the previous year, and in most cases had been at the top of the list since its inception in 2005.
Millennium Development Goals
In 2001, the United Nations adopted eight goals of international development (with specific targets) which had been established at the Millennium Summit the previous year:
- To eradicate extreme poverty and hunger, halving between 1990 and 2015 the number of people who earn less than a dollar a day or who suffer from hunger; and achieving full employment levels for all.
- To achieve universal primary education by 2015.
- To promote gender equality, and eliminate gender disparity at all levels of education by 2015.
- To reduce child mortality, reducing mortality by two-thirds between 1990 and 2015 among children under 5 (such mortality in many parts of the world stemming from malnutrition and treatable illnesses).
- To improve maternal health, by ensuring universal access to reproductive health care by 2015 and reducing by three quarters between 1990 and 2015 the number of women who die in childbirth or while pregnant.
- To combat HIV, malaria, and other major diseases, by halting their spread by 2015.
- To ensure environmental sustainability.
- To develop a global partnership for development, a goal that should inform the design of the worldwide trade and financial system, and which should result in special assistance for the least developed countries.
192 United Nations member states and a score of international organizations made the pledge to pursue these goals.
Bibliography:
- Peter Bauer, Equality, the Third World and Economic Delusion (Harvard University Press, 1981);
- Sarah Burd-Sharps, Kristen Lewis, and Eduardo Borges, The Measure of America: American Human Development Report, 2008–2009 (Columbia University Press, 2008);
- Harinder Kohli, Growth and Development in Emerging Market Economies: International Private Capital Flows, Financial Markets and Globalization (Sage, 2008);
- Oliver S. Kratz, Frontier Emerging Equity Markets Securities Price Behavior and Valuation (Springer US, 1999);
- Michael Pettis, The Volatility Machine (Oxford University Press, 2001);
- Ken Pomeranz, The Great Divergence: China, Europe, and the Making of the Modern World Economy (Princeton University Press, 2001);
- Jeffrey D. Sachs, The End of Poverty: Economic Possibilities For Our Time (Penguin, 2005);
- United Nations Development Program, Human Development Report 2007/2008: Fighting Climate Change: Human Solidarity in a Divided World (United Nations Development Program, 2008);
- World Bank, World Development Report 2009: Reshaping Economic Geography (World Bank Publications, 2009).
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