Missing link in America's new world order

I HAVE a confession to make. I actually enjoy political campaign literature. So I recently perused some of the Republican and Democratic party handouts. My particular interest was what they might say about developing countries.

The interest is not merely professional. It is an interest we all share. By 2030, barely a generation from today, the population of our planet will probably have doubled to more than 10 billion, with around 90 per cent of these additional human beings born into the developing world.

Despite great advances, more than a billion people live on less than a dollar a day, and the ranks of the poor are expected to swell. In an age of unprecedented productive power, such poverty is morally offensive. It is also an economic waste and a source of social unrest. In the long run, the rich can no more expect to insulate themselves internationally than they can domestically.

Unfortunately, America's two leading political parties do not have a lot to say about this in their campaigns. There are warnings about not rewarding undeserving tyrants and not allowing North-South conflict to replace East-West conflict. There are commitments to support democracy and recognition that America's future is bound up with the rest of the world. There are important ideas and decent sentiments. But they scarcely match the extraordinary transformation through which the world is passing.

Comparison with Britain is instructive. If you are eccentric enough to share my weakness for campaign literature, you probably noticed during this year's general election that the party manifestos vied with each other for the title of Most Generous and Enlightened Donor of Overseas Aid.

Moreover, the competition was not merely rhetorical. The commitments to more than double British assistance to developing countries to 0.7 per cent of GNP and thereafter to 1 per cent, were specific.

There seems little danger of similar competition breaking out in America. Aid to developing countries is probably more unpopular in the US than it has ever been, and while many on Capitol Hill understand the importance of US overseas assistance, the wiser part of political valour is to keep quiet. The unpopularity of the issue in Peoria is reflected in the amount of US overseas assistance. During the Eighties, all overseas development assistance (ODA) from rich countries stagnated in real terms at around dollars 50bn a year. American ODA, in real 1989 dollars, was dollars 9bn in 1979-80 and dollars 9.3bn in 1989-90. As a result, it fell as a share of GNP from 0.23 per cent in 1980-91 to 0.18 per cent in 1989-90 - the lowest percentage of any industrial country and well below the rich countries' 1990 average of 0.36 per cent.

In contrast, Japan's ODA tripled in current prices from the equivalent of dollars 3.35bn in 1980 to match US aid at dollars 9bn a decade later. To some extent, this was the result of the ever-rising yen. Measured in yen, Japanese ODA grew more slowly. At the end of the decade, as a percentage of GNP it was 0.31 per cent, almost the same as at the beginning.

My point is not that Britain has much to boast about. Its commitment also stagnated in the Eighties. It reached pounds 1.5bn (dollars 2.6bn) in 1990, little different in real terms from pounds 800m a decade earlier. Italy became a bigger donor of overseas aid than Britain during the Eighties; Scandinavian countries gave about 1 per cent of GNP.

Rather, the comparison is instructive because it raises the question of leadership. While remaining just about the biggest donor, the US lacks domestic political support for taking the lead in development. Countries which do enjoy domestic support are simply not big enough to provide international leadership.

A further complication is regionalism. The recent agreement between Canada, Mexico and the US on a North American Free Trade Area has raised concerns about a 'Fortress North America' to match the supposed 'Fortress Europe' of the EC. Talk is rife in the Far East about a rival free trade area anchored by Japan.

Trade is far more important to developing countries than aid. If developing countries enjoyed unrestricted access to industrial-country markets, their exports would increase by about dollars 55bn. So the possible division of the world into three parts could have serious consequences for development.

Absence of leadership is especially frustrating because the international community has the machinery to help promote development in the post-Cold War world. Indeed, so many organisations are involved in trade, aid, lending and technical assistance that the watchword, increasingly, is 'co-ordination'. But co-ordination should be for a purpose, and establishing a purpose requires leadership.

So who will take the lead in development? The attempted transformation of Eastern Europe and the former Soviet Union sharpens the question. Most countries recognise that our common future will critically depend on sustainable development that combines poverty reduction with environmental protection. But no single country or group of countries is clearly leading at the moment.

I fear I shall be combing the campaign literature for some time to come.

The author is senior editorial counsellor at the World Bank. The views expressed here are his own.