Developing Countries: More Than Economic Rivals and Terror Threats

Developing a new framework for assessing the post-Cold War, post-9/11 world

Eric Fischer/Flickr

The cocktail circuit in Washington has a new vision of the developing world—home to six out of seven people on the planet. In some ways, the vision is more advanced than it used to be. During the Cold War, the prevailing image featured a Third World morass of peasant economies run by a small elite who could be bought off and kept out of the Soviet orbit with aid and weapons. Today, there is a new, bifurcated view. On the one hand are failed states and hopeless cases like Afghanistan and Haiti, breeding grounds for instability and terror. On the other are newly rich countries like China, competitors for our jobs and power.

The three worlds used to be capitalist, communist, and the rest. Now they are the West, the failed states, and the emerging challengers. But that's still too simple a view. A small and declining number of developing countries are charity cases. And none are competitors with us in a zero-sum game. Rather than dividing most of the planet into two threatening classes, we need to see states of the developing world as vital partners—both in strengthening the global economy and in preserving the global environment.

For most of the Cold War, and for all the soaring rhetoric about democracy and rights, the U.S. was happy to support pretty much any regime or rebel group that declared itself anti-communist. It was the continuation of a policy summed up by Franklin Roosevelt’s likely apocryphal quote about the Nicaraguan dictator Anastasio Somoza García: “He may be a son of a bitch, but he’s our son of a bitch.” The sons of bitches treated as family thanks to their opposition to communism included the apartheid regime in South Africa, the kleptocratic dictatorship of Mobutu Sese Seko in Zaire, the Taliban in Afghanistan, the obscenely violent Contras in Nicaragua, and Ferdinand Marcos, whose family made billions from his rule under martial law in the Philippines.

Aid and economic development in the Third World was seen as part of the Cold War fight. In the 1950s, the economist W.W. Rostow penned The Stages of Economic Growth, subtitled “A Non-Communist Manifesto.” It was a riposte to the dependency theory of global underdevelopment, which suggested, based on solid Leninist principles, that the richer West was a cause of the poorer Rest. According to the Dependencias, the Western powers kept all of the manufacturing for themselves, leaving a reserve army laboring unproductively on the smallholder farms of South America, Africa, and Asia. The Stages of Economic Growth was a book about how developing countries could get rich through Western-style capitalism. At that time, in the post-Sputnik era, the Soviet model still looked very attractive as a get-rich quick scheme, and free markets needed some good publicity behind the alternative. On the basis of that book and work with the Eisenhower and Kennedy administrations, Rostow became Lyndon Johnson’s national security advisor, where he pushed the idea that U.S. aid could be a powerful tool in winning the Cold War.

The fall of the Berlin Wall undermined the Cold War frame for thinking about Africa, Asia, and Latin America. But two subsequent events helped to cement a new framework. First, the terror attacks of 2001 created a growing fear of failed states, fragile states, rogue states, and (even) evil states. Added to the ever-present charitable impulse to help countries facing humanitarian crises thanks to war, famine, or natural disaster was a new national security case: countries festering in poverty and poor governance would breed terror and instability. Financial assistance gained a new role as a result: U.S. aid could be used to support “money as a weapons system” in counterinsurgency operations from Iraq to Afghanistan.

The second event—or series of events—that reframed U.S. thinking about developing countries was the phenomenal economic success of Asian countries, many of which had been helped along the way by earlier U.S. support. First Japan, then South Korea and Taiwan, then countries from Thailand to China entered explosive periods of economic growth. Between 1982 and 1991, South Korea’s annual growth rate was 8.4 percent. China averaged 8.6 percent between 1991 and 2012. Once viewed as allies against the Soviet threat (or at least our enemy’s enemy in the case of China), these nations came to be seen as economic adversaries—not least in the fight for jobs and technological leadership. In the 1990s, Michael Crichton made good money writing a mediocre novel, Rising Sun, about Japan’s impending economic dominance of America. More recently, the fear has been that America is “Becoming China’s Bitch,” according to the bestselling book by Peter Kiernan.

For these reasons, developing countries are now sorted into two groups: charity-case terror threats and emerging economic threats. Africa is usually lumped firmly in the charity-case category, a designation constantly reinforced by television news. According to analysis by Yusuf Kalyango, Jr. and Uche Onyebadi of the University of Missouri, of all of the stories on NBC, CBS, and ABC evening news broadcasts over the period 1980 to 2010, 900 were stories on war, health crises, natural disasters, and terrorism in Africa, compared with 125 on business or economic topics in the region. Between 2002 and 2010, about a quarter of the three networks’ Africa-focused stories mentioned U.S. civilian aid programs, another 14 percent mentioned U.S. military aid or bases, and 13 percent mentioned U.S. celebrities (think Oprah, Madonna, and Angelina). Compare that with the 1 percent that focused on U.S. business or investment relations with a country in the region.

Given that much of the world only makes headlines when it is in the midst of a humanitarian crisis and U.S. assistance is on the way, it isn’t surprising that the average American thinks things are going to hell in a handbasket: a recent survey of Americans found that two thirds believe extreme poverty worldwide has doubled over the past 20 years. The truth is that it has more than halved. This might also explain why Americans think that 28 percent of the federal budget goes to foreign aid—more than 28 times the actual share.

According to the World Bank, the developing world as a whole has seen average incomes rise from $1,000 in 1980 to $2,300 in 2011. Life expectancy at birth has increased from 60 to 69 years over that same time, and college enrollment has climbed from 6 to 23 percent of the college-age population. Progress is happening everywhere, including Africa: Six of the world’s 10 fastest-growing economies over the past decade are in Africa. There were no inter-state conflicts in the world in 2013 and, despite tragic violence in countries including Syria and Afghanistan, the number of ongoing civil wars has dropped considerably over the last three decades. Emerging markets themselves are also playing an ever-expanding role in ensuring global security. The developing world is the major source for blue-helmeted UN peacekeepers, who are ending wars and preserving stability in 16 different operations worldwide. The 20 biggest contributors of police and military personnel to the UN’s 96,887 peacekeepers are developing countries.

But that brings us to the other part of the developing world—the part that is supposedly doing too well for America’s own good. According to a 2012 Chicago Council Survey, 40 percent of Americans view China’s economy growing as large as America’s as a “mostly negative” occurrence, compared with 9 percent who view it as mostly positive. In concordance with the popular mood, U.S. politicians are now using some of the same arguments against China that Third World leaders unimpressed by Rostow’s books and Washington’s ideology used to employ for why they were poor and America was rich. The reason Americans are poorer according to the new narrative is because China is taking all of the manufacturing jobs. Even the policies U.S. leaders demand are the same as the ones dependency theorists used to call for, including trade and investment barriers.

It is fairly simple to demonstrate that greater trade is not the cause of America’s economic woes. Of the 29 high-income OECD countries with 2012 data from the World Bank, the United States imports the second-least as a proportion of GDP. But its unemployment rate is the ninth-highest out of those same countries. Trade brings cheaper inputs to American businesses, allowing them to make more and hire more, and cheaper goods to American consumers, allowing them to buy more. That is why efforts to restrict imports tend to cost jobs. The U.S. government’s recent decision to slap a tariff on tires from China may have created a few positions in the domestic tire industry, but it cost far more because of indirect impacts ranging from higher transport costs to weaker demand for other products. The Peterson Institute’s Gary Hufbauer estimated the net effect of the tariff on the U.S. labor market as 2,500 lost jobs.

More broadly, a wealthier, healthier, more peaceful, and better educated planet increases U.S. security, provides a growing market for U.S. exports (already, 60 percent are destined for developing countries), creates new products that Americans will benefit from using, invests in U.S. industries, serves as a destination for American investors seeking high returns, and provides labor in industries from construction to high-tech computing, which an aging domestic U.S. population cannot fill alone. And even if we remain mistrustful of China and India and Brazil, their growing economic clout means partnership over global issues is a simple necessity. Not least, developing economies now account for one half of the world’s output of greenhouse gasses, so any agreement to slow climate change has to involve them.

For all it may add to the complexity of climate negotiations, we should be delighted that we live in an age where fewer and fewer of our fellow humans live in conditions of Hobbesian poverty. First off, we should be delighted because that’s great news for them. But second, we should be delighted because it is great news for us. That more of the world than ever is comparatively peaceful, stable, and productive reduces the threat of war and terror, while creating immense opportunities to trade goods, finance, ideas, and people to mutual benefit.

Viewing states that are home to the vast bulk of humanity as a threat cuts us off from those opportunities: We build walls on the southern border, we impose ridiculous visa regulations on visitors, we turn away foreign investors and the jobs they bring, we spend scarce government resources on building ever-more baroque planes and fighters, and we sacrifice hard-won liberties to overweening intelligence agencies. It is time for a more accurate view of the state of the developing world, and the greater openness and engagement that would bring.

This post is adapted from The Upside of Down: Why the Rise of the Rest is Great for the West.