The Truth About the “Great Surge”

Steven Radelet, Georgetown’s Donald F. McHenry Chair of Global Humansurge Development and former USAID chief economist, recently published a new book, The Great Surge: The Ascent of the Developing World, the gist of which is that life has actually gotten better for people in the Global South. Radelet credits this improvement to the effects of globalization and developmental aid programs. He also takes great issue with how international development has traditionally been portrayed pessimistically by scholars such as William Easterly and Dambisa Moyo, and with the general negative view of international development presented by the mass media.

Radelet belongs to the Jeffrey Sachs faction of the great international development debate, and the two have collaborated in the past. Sachs soared to great recognition and renown in recent decades, enlisting the support of celebrities like Angelina Jolie and Bono in his grandiose crusade to eradicate extreme poverty and advance the quality of life for the planet’s poorest people. However, Sach’s failure to achieve his ambitious goal and his hubristic character as chronicled in Nina Munk’s 2013 book The Idealist did much to diminish his star. Radelet went untarnished in Sach’s fall from grace, but his decision (or the decision of his publisher) to prominently feature Bono’s exultation of Radelet’s description of “humanity’s greatest hits” on his book’s back cover does him no favors. Somewhat tellingly, only one academic – Larry Diamond – features in the choir of admirers displayed on the rear flap, with the rest being political leaders (Liberian President Ellen Johnson Sirleaf, whom Radelet advises), establishment D.C. policy wonks and, of course, a celebrity philanthropist. To be fair, the book is not intended as a academic treatise, but more as an attempt to persuade the average person to be far more sanguine about the mission to develop the regions of the world judged to be “left behind.”

According to the Radelet, the good news is this: more and more people in the developing world are escaping poverty, incomes are on the rise, and basic needs like health care and access to education have improved. He ascribes these positive trends to increased economic growth, declining population growth rates and the advantages of individual freedoms ushered in by widespread transitions to liberal democratic systems. In other words, the status quo is working, and rather than getting worse, the developing world is witnessing the “great surge” that could see it catch up with its wealthy counterparts among the advanced industrialized nations. Granted, Radelet does not guarantee that this will happen, and conditions further success on “strong leadership” and greater “market integration.” He makes particularly good cases for rich nations to combat climate change (as higher temperatures and more frequent natural disasters will hit the Global South hardest) and for greater representation of the Global South in the international institutions that set development agendas.

Essentially, what Radelet writes is what the development community wants to hear. He picks and chooses anecdotes and statistics that, when taken in isolation, reassure those who want to believe the current programs and policies are working and doing good. He adopts the tactic of the policy memo: presenting facts and tidbits without context and circumstance, yet when listed all at once appear to convey a complete analysis of a subject or issue. Upon closer inspection, the proof Radelet offers read less like a list of “humanity’s greatest hits,” as Bono put it, and more a disturbing reflection of the Global South’s underdevelopment.

Let us first take the claim that millions of people are no longer impoverished and that incomes are on the upswing. On this front, thepoverty work of Jason Hickel, a lecturer at the London School of Economics, is very valuable. Hickel has demonstrated that how groups like the World Bank define poverty is very misleading, such as how the Bank has modified the International Poverty Line (IPL) from $1.02 per day to $1.08 per day to most recently $1.25 per day. Thanks to such shifting goalposts, millions of people have rendered “out” of poverty. However, if you take the view that $1.25 per day is not a high enough benchmark, and that a person requires at least $5 a day, then 80% of people in the world are living in poverty, according to the World Bank’s own World Development Indicators.

What, then, about the “success stories” among emerging markets, like the so-called “BRICS” countries (Brazil, Russia, India, China and South Africa)? The problematic history of that Goldman Sachs buzzword aside, the key point is that, even as those countries have undergone continuous stages of economic growth, the wealth created by that growth has not been distributed equally. Throughout OECD countries, the average income of the wealthiest 10% is approximately nine times that of the poorest 10% of the population. This is an increase of seven times from 25 years ago. Even in instances where income inequality has decreased, the most affluent members of society enjoy incomes 25 times greater than their poorest citizens. In other words, even if the poorest people in the developing world are getting more, what they are actually getting is the scraps falling through the rapacious hands of domestic upper classes.

What is more, it remains questionable just how viable “success stories” like the BRICS are in the long-term. It has become a common trend for a developing country or group of developing countries (the Asian Tigers, other economic “miracles”) to experience astonishing growth, only to eventually stutter, decline or implode. This is because, as scholars like Oswaldo de Rivero have noted, these periods of economic growth result from enormously capricious injections of foreign capital based on financial speculation. China, for example, may have become the assembly plant for the industrialized world, but it still lags behind in terms of being an innovative technological contributor to the global economy. Apple products may be assembled in Chinese factories, but the investment in research and development is firmly taking place in San Francisco. Additionally, most African and Latin American countries are still reliant on the minerals and raw exports that made them so desirable in the colonial period. If such countries were actually modernizing their exports and growing their high-tech industries, that would be far more indicative of a “great surge” in the developing world than the orthodox neoliberal panacea of growth alone.

In fact, that the developing world is still contingent on the attitudes of foreign investors is evidenced by the recent news that emerging marketsMcol_money_bag.svg have underwent the most significant case of capital flight since the 1980s due to the declining value of raw materials. The Financial Times reported last year that the Institute of International Finance predicted foreign investment to emerging markets to drop to rates beneath those observed after the 2008 financial crisis, with total capital outflows reaching $540 billion. Countries like Brazil have attempted to mitigate the damage of such outflows by encouraging domestic producers through lowering interest rates and cutting public sector salaries. In the end, however, private businesses have repeatedly chosen more profit over more production, engaging in currency gambling and other forms of financial speculation. Consequently, the once dynamic Chinese economy is on the downturn, while Brazil is headed to its worst economic crisis since 1901.

So not everything is rosy for the developing world in terms of economic development. What about Radelet’s claims about betterments in human development? This may have less to do with ability of poor states to provide more services for their people than it does with the boom in non-government agencies (NGOs) filling a void created by the West in these states. In much of the developing world, Western-based international institutions like the International Monetary Fund (IMF) have conditioned loans to struggling developing countries on the adoption of Structural Adjustment Programs (SAPs), which are basically neoliberal policy prescriptions: less economic regulation, privatization of public utilities, and cuts to social spending. As the states in these countries shrink, NGOs enter the scene, essentially replacing the state as providers of social goods. If there have been increases in literacy rates and drops in child mortality, we have to wonder if this is because developing countries are increasing their capacity to care for their citizens or if NGOs, backed by powerful charitable foundations, have been effective in hiving off welfare responsibilities that are, in the West, considered to be state duties.

Some might say that the question is irrelevant; a literate and healthy child is still a literate and healthy child, regardless of how he or she becomes that way. Besides, as Radelet points out, declining child mortality means families in developing countries have less children, which in turn means less of a burden on those countries in terms of food and energy consumption. In addition, human rights and democracy advocacy NGOs act as “watchdogs” on behalf of the people they serve, working to battle corruption and expose abuses of power, discrimination, torture and so on. For those whom only results matter, there should be little problem with this reliance on NGOs to make lives better for long-suffering populations.

We should ask ourselves, however, about the implications of NGOs, “civil society” and other “third sector” groups taking up the role of the state in providing social services, and who really benefits from this operation. Thengos answer is obvious: multinational corporations and neoliberal ideologues who believe that states should concentrate on maximizing profits and growth, not on taking care of the neediest and most vulnerable elements of society. NGOs and “civil society” treat poverty, malnourishment and illiteracy as problems in and of themselves, when the reality is that these things are the product of a larger system where a few prosper and the masses suffer. In other words, they work to heal the symptoms, but not to cure the disease. Of course, such work is better than nothing, in the same way a food drive or homeless shelter has value; but much more valuable is devising the means to reform the system so that hunger and homelessness are abolished entirely. In that respect, the work done by NGOs and “civil society” groups is important, but not nearly sufficient for real change.

In fact, John Harriss in Depoliticizing Development illustrates how NGOs effectively dampen or remove the grievances that would otherwise birth and foster social movements that could lead to long-term, far-reaching reforms and even revolutions. People in developing countries who would otherwise be protesting or taking up arms about the failures of their leaders to provide for them are depoliticized, made docile and accepting of their conditions. This is in stark contrast to what happened in most of the West during the Industrial Revolution, where the brutal condition of the working classes led to the blooming of highly efficient trade union movements, general strikes and political campaigns for everything from universal suffrage to universal health care to safer working conditions. The fact that the vast majority of the developed world (except the U.S.) has socialized medicine is not a testament to the altruism of Western leaders; universal health care had to be fought for, won and protected. In the developing world, however, social services are becoming “social enterprises” – with local “entrepreneurs” taught that health care and education are not public goods to be championed for all, but lucrative businesses with fellow citizens regarded as clients and consumers.

Who needs revolutions, though, when democracy is on the rise in the developing world? Radelet argues that, since the end of the Cold War, the United States and the Soviet Union are no longer fighting proxy wars,320px-Election_MG_3455.JPG propping up dictators like Mobutu and Pinochet, so once suppressed pro-democracy movements are being allowed to flourish. Radelet notes that not all countries that call themselves “democratic” actually are so; he concedes that just because Robert Mugabe permits elections and signs “power-sharing” agreements does not make Zimbabwe a true democracy. Instead, he relies on democracy indices like Freedom House and Polity IV, groups that measure things like checks on executive power, competitive legislatures, civil rights and personal freedoms. They then ascribe them scores based on those measures. Radelet admits that the ratings of countries in the developing world are imperfect, that there have been flawed elections and scandals, but he argues that developed countries have also seen their fair share of governmental gridlock and indignities.

The problem is that democracy means different things to different people. Freedom House, for example, is known for prioritizing rights and freedoms, including instances of “economic liberty” – the ease of doing business in a country, for example. It is therefore possible that a country an arguably too-powerful executive that nevertheless adopts a laissez-faire attitude – including when it comes to markets – could be seen as making progress in transitioning to democracy. Indeed, studies have shown that Freedom House rankings of countries have tended to correspond to neoliberal narratives concerning democratization. Other measures of democracy highlight phenomena like political participation and contestation, but these rubrics are problematic too. Just because two or three political parties rotate in and out of government, how much room is there to implement actual change and to challenge vested interests? If most voters stay home during elections, is that a sign of freedom of choice, or an indication that democracy is failing because engagement is low?

An even bigger problem arises in the shift from a minimalist, election-oriented and process-focused definition of democracy and move to a more comprehensive definition that includes facets of social and economic justice. If we accept that (arguably token) representation is not enough, that elections are meaningless unless real change is possible, and that there should be a general commitment to limiting and even eliminating social ills, then the standards for democracy are raised significantly, and the scores of (ostensibly) democratic countries drop – across the board, admittedly. However, the question must be asked: why not push all countries to aspire toward the highest measures of economic and human development, such as that of the Nordic model? We answer this question by posing the same question mentioned before: Who benefits? To whose advantage is it to keep the metrics for democratization minimal?

The inherent promise of neoliberalism once the Cold War ended was that unfettered markets and greater openness would bring peace and prosperity, especially to those nations that had been outside “the free world” and the U.S. sphere of influence. There has thus been a strong incentive to show that promise is being delivered on. The U.S. model, the Washington Consensus, and World Bank and IMF prescriptions are the “truths” that must be proven and reinforced. Setting a low bar for democratization belies the fact that, globally, democracy is essentially the “only game in town,” much in the same way monarchy and autocracy were the governmental norms before World War I. Fascism and Soviet-style communism simply lack the capital they had in the 1920s and 1930s. Granted, China practices one-party rule, “socialism with Chinese characteristics,” but China lacks both the desire and the means to project its model in the same manner as the U.S. and its allies did during the Cold War and after. The international discourse from 1945 on, from the Western perspective, is that elections and personal liberties (primarily of the negative liberty variety) are the appropriate systems for states.

For the most part, countries in the developing world have been willing to go through the motions, which is precisely why we have such an abundance of “hybrid regimes” – countries that persist in showing how flawed indices that purport to measure democracy are. Elites know that if they have (mostly) fair elections, if they ease business regulations, if they allow a squabbling and likely ineffective parliament to form, they will receive a largely arbitrary ranking (what exactly is the difference between a “4” and a “5” in a democracy index, anyway?). They then get an influx of aid and support from the U.S. and its allies as a potential “success story.”

More and more academics have been looking less at cases of overall democratic transition and more at surveys inquiring about democratic satisfaction in developing countries. Unsurprisingly, many people in these countries like the idea of democracy, but do not believe that the democratic system is working properly in their country. Some scholars argue that a high level of democratic dissatisfaction is positive, because it demonstrates that such people are “critical citizens” who will aggressively and assertively fight to make their governments more transparent and accountable. The problem with this theory is that there is little indication that dissatisfied democracy advocates are more politically active than others; they are not so much a vanguard of democratic activists than representative of a growing concern that, for all the steps toward the democracy promoted by the West, the advantages they have come to expect are not manifesting. The neoliberal promise appears broken.

Admittedly, all this being said, it does not appear as though Maoist revolutions are brewing across the developing world (events in Nepal and Angry_mob_of_fourIndia notwithstanding). Even if the sunny alternative Radelet offers to the so-called “doom-and-gloom” view of development is wrong, it would also be mistaken to claim that the Global South is on the cusp of an extensive rebellion against the neoliberal West. However, there are plentiful signs of unrest to be observed. The “pink tide” that swept over Latin America in past decades, as well as the Chiapas conflict in Mexico, indicate that for many people in those countries, especially among the indigenous populations, there are stark injustices that still need to be addressed. The current phenomena of the Islamic State is rooted not so much in Sunni-Shia tensions as it is a long-standing political Islamism that seeks to challenge the hegemonic integration of the Islamic world. In Africa, there is spreading concern that not only will the continent continue to suffer from continued dependency on Western markets (with a major debt crisis on the way), but also there is now a new “scramble for Africa” – this time on the part of the “successful” emerging markets. Meanwhile, in the industrialized world, popular anger and anxieties are even more evident, from the rise of racist nationalists (Svoboda, Golden Dawn, Trump) to left-wing radicals (Syriza, Podemos, Corbyn). If the argument behind international development has always been “a rising tide lifts all boats,” the world at present seems not so much like a buoyant ocean than an angry and boisterous tempest, a storm of rage and apprehension.

The truth is that Radelet is not wrong about a “great surge” having occurred, but it is not the ascent of the developing world, as he claims. Instead, it is the ongoing and deepening stratification of the world system, with globalization and the neoliberal agenda having further consolidated the gap between the extremely wealthy and the impoverished masses. His book is not an accurate representation of the world as it is, but instead the latest creation of an industry that profits on selling the idea that the status quo is not broken or corrupt, but on the contrary, is working as intended. Unfortunately, it is the assessment of a realist, not a pessimist, that from the developing world to the developed world, things have gotten worse.