May 16, 2001
The United Nations is meeting in Brussels this week to discuss the prospects for the world's 49 poorest nations. Debt relief, trade, market access and sustainable development are all on the agenda. Last year, the United Nations Conference on Trade and Development (UNCTAD) called for a New Deal to help pull these countries out of poverty, not simply debt relief.
UN Secretary-General Kofi Annan has also urged developed countries to increase their donations of aid, which has dropped by 45% since 1990. "I urge all developed countries to meet the 0.7% target - and within that to allocate at least 0.15% of their gross national product to helping the LDCs, as they promised at the last LDC conference in Paris, ten years ago," Mr. Annan said.
Declining aid
The issue of how money from this "top tier" of countries can make its way to the least developed countries is a fraught one. In real per capita terms, aid to these countries has dropped by 45% since 1990 and is now back to the levels of the early 1970s.
World Bank president James Wolfensohn has urged leaders in high-income countries to increase official development assistance from the current level of 0.24% of GDP to 0.7% of GDP. This would make an extra $100bn a year available to developing countries. In 1999, only Denmark, the Netherlands, Norway and Sweden met this target. Net official development assistance per capita in donor countries has in fact fallen from $71 in 1994 to $66 in 1999.
Private investment too has fallen from levels seen prior to the Asian crisis in 1998. Capital spending flows to developing countries are still at only three quarters of their 1997 level.
There is an argument that private lending is inherently unstable and developing countries should rely more on their own efforts and government financial aid. But the World Bank, which argues that foreign direct investment has brought long-term benefits to developing countries, is confident that financial flows will again increase once the economic recovery begins.
A dollar a day
The measures discussed at this week's meetings should in theory affect one tenth of the world's population, many of whom live on less than $1 a day. They live in 49 countries ranging from Afghanistan to Liberia, all of which meet a set of pre-ordained criteria to join this club of the world's poorest countries, first recognized as a distinct category in 1971.
Economically vulnerable
Number crunching can give a much clearer idea of what it means to live in one of these countries rather than in a high-income OECD country. To be categorized as one of the world's poorest nations, gross national product per head has to be less than $900.
Issues such as nutrition, health, education and adult literacy are taken into account. Then a country is assessed as to how economically vulnerable it is. Many of the world's poorest countries fall way beneath even these criteria. Indeed, some, such as Myanmar, Liberia, Somalia and Afghanistan, have GNP of less than $100 per head.
High income advantages - The contrasts are stark.
In high-income countries, 21 mothers die for every 100,000 babies born. In developing countries, the average is 440 and in some cases, it may be as high as 1,000. While in developed countries, there are 580 vehicles for every 1,000 people, in developing countries, there are about ten vehicles for every 1,000 people.
On average a high-income country has 40 times as many computers as a country in sub Saharan Africa. By the year 2015, only eight of the world's poorest countries are on target to reach the United Nations goal of universal primary education.
Categorizing the nations
Economies are divided according to income per capita, calculated using the World Bank Atlas method. In World Bank reports, the term "developing economies" has been used to denote a set of low and middle income economies.
In low income economies, people have an income of $755 or less. For lower middle income economies, this is $756- $2,995 while an upper middle income is considered to be $2,996- $9,265. But the World Bank is keen to make the point that just because these economies are referred to as "developing", it does not in any way mean that progress is being made.
"It is not intended to imply that all economies in the group are experiencing similar development or that other economies have reached a preferred or final stage of development. Classification by income does not necessarily reflect development status," the Bank makes clear.
Linguistic differences
The classification or description of developing countries has long proved to be a minefield of political semantics. These countries were originally referred to as undeveloped. Next they became less developed.
Then in the 1970s, the Third World gained credence as it was seen as separate from the first capitalist world and the second world, behind the Iron Curtain. When the cold war ended, the phrase lost its currency. It also became clear that the phrase was too general to apply to a mass of countries that were quickly differentiating themselves from each other.
Newly-industrialized countries such as Korea were gaining a profile on world markets and it hardly seemed fitting to class them with other countries struggling to put war and disease behind them.
The world's major industrialized or "developed" countries generally enjoy membership of the OECD, the Organization for Economic Co-operation and Development. Its member countries include the 15 EU countries, plus the United States, Canada, Japan, Australia, New Zealand, Norway, Switzerland, Mexico, South Korea, Hungary, Poland, Turkey, the Czech Republic, the Slovak Republic, and Iceland.
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