The Great Surge

The Ascent of the Developing World

Steven Radelet

• Publisher: Simon & Schuster
• Year: 2015
• Print ISBN: 9781476764795
• eBook ISBN: 9781476764801
• Topic: Economics
• Subtopic: Development Economics
• Index: Economics

The untold story of the global poor: “Powerful, lucid, and revelatory, The Great Surge…offers indispensable prescriptions about sustaining global economic progress into the future” (George Soros, chairman of Soros Fund Management).

We live today at a time of great progress for the global poor. Never before have so many people, in so many developing countries, made so much progress, in so short a time in reducing poverty, increasing incomes, improving health, reducing conflict and war, and spreading democracy.

Most people believe the opposite: that with a few exceptions like China and India, the majority of developing countries are hopelessly mired in deep poverty, led by inept dictators, and have little hope for change. But a major transformation is underway—and has been for two decades now. Since the early 1990s more than 700 million people have been lifted out of extreme poverty, six million fewer children die every year from disease, tens of millions more girls are in school, millions more people have access to clean water, and democracy—often fragile and imperfect—has become the norm in developing countries around the world.

“A terrific book” (Nick Kristof, The New York Times), The Great Surge chronicles this unprecedented economic, social, and political transformation. It shows how the end of the Cold War, the development of new technologies, globalization, and courageous local leadership have combined to improve the fate of hundreds of millions of people in poor countries around the world. Most importantly, The Great Surge reveals how we can accelerate the progress.

PART ONE

THE SURGE

ONE

A GREAT TRANSFORMATION

What is happening in Liberia is but a microcosm of the transformation that is sweeping across many countries. Dictators are being replaced by democracy. Authoritarianism is giving way to accountability. Economic stagnation is turning to resurgence. And most important, despair is being replaced by hope—hope that people can live in peace with their neighbors, that parents can provide for their families, that children can go to school and receive decent health care, and that people can speak their minds without fear.

—Ellen Johnson Sirleaf, president of the Republic of Liberia

WE LIVE AT A TIME of the Greatest Development Progress among the Global poor in the history of the world. Never before have so many people, in so many developing countries, made so much progress in so short a time in reducing poverty, increasing incomes, improving health, reducing conflict and war, and spreading democracy.

If you find that hard to believe, you are not alone. Most people believe the opposite: that with a few exceptions such as China and India, the majority of developing countries are stuck in deep poverty, led by inept dictators, and living with pervasive famine, widespread disease, constant violence, and little hope for progress.

The old story is no longer true. A major transformation is under way—and has been for two decades now—in the majority of the world’s poorest countries, largely unnoticed by much of the world. Since the early 1990s, 1 billion people have been lifted out of extreme poverty. The average income for hundreds of millions of people in dozens of poor countries has more than doubled, 6 million fewer children die every year from disease, war and violence have declined significantly, average life expectancy has increased by six years, tens of millions more girls are in school, the share of people living in chronic hunger has been cut nearly in half, millions more people have access to clean water, and democracy—often fragile and imperfect—has become the norm rather than the exception in developing countries around the world.

To be sure, the surge of progress in health, income, poverty, education, and governance has not reached everyone: many poor countries remain mired in poverty and conflict, and even in the countries moving forward, millions of people are still left behind, even if their numbers are shrinking. Rapid progress has brought new challenges, especially around urbanization, environmental degradation, and climate change, that raise critical questions about long-term sustainability. Nevertheless, the majority of poor countries—and hundreds of millions of individual people living in those countries—are now making greater progress in a wider range of development indicators than ever before.

This book tells the story of this remarkable economic, social, and political transformation among the global poor. The pages that follow show how the end of the Cold War, the demise of Communism, groundbreaking new technologies, increased global integration, local action, courageous leadership, and in some cases, good fortune, have combined to improve the fate of hundreds of millions of people in poor countries around the world. How did these extraordinary changes come about? Why have some countries moved forward, while others have remained behind? What do these changes mean for the rest of the world? And most important, can the gains continue? Or will climate change, resource demand, demographic pressures, economic and political mismanagement, or possible war conspire to derail the great surge in development progress?

• • •

The story of the dramatic progress in developing countries begins in the 1960s. In the immediate post–World War II era, several countries in East and Southeast Asia (alongside a few others like Botswana and Mauritius) began to make remarkable advances that continue today. China began its rapid resurgence in 1980, in many ways setting the stage for the broader transformation that followed in other countries. Some other developing countries started to move forward, only to see progress halt in the late 1970s and 1980s following the global oil shocks and subsequent debt crises. However, most developing countries made little headway—that is, until the early 1990s, when progress accelerated and dozens of developing countries around the world began to move forward.

My central focus is on four critical dimensions of development progress: poverty, income, health and education, and democracy and governance (although I will touch on many others). Global poverty is falling—fast. In 1993 almost 2 billion people around the world lived in extreme poverty on less than $1.25 per day.^I Then, for the first time in history, the number began to fall. Astonishingly, in just eighteen years, the number was cut by almost half: by 2011, it was down to just over 1 billion, meaning that almost 1 billion fewer people were living in extreme poverty. The proportion of the population of developing countries living in extreme poverty has fallen even faster, from 42 percent in 1993 to just 17 percent in 2011. The opening of China accounts for a large share of the change, but the fall in extreme poverty goes well beyond China and includes dozens of countries in every region of the world, including many in sub-Saharan Africa.

At the same time, incomes have been rising. People living in developing countries today have incomes that are nearly double those of their parents from two decades ago, on average (in “real” terms, after controlling for inflation). This improvement is remarkable, especially when one considers that in the previous generation, there had been essentially zero change in average incomes in the majority of developing countries. The acceleration in growth has been relatively widespread. Whereas in the 1980s only around 20 developing countries were achieving even modest growth, since the mid-1990s, 70 developing countries (out of 109) have done so. The surge in growth reaches far beyond China and India to countries in every region of the world, including Mozambique, Ghana, Rwanda, Bangladesh, Indonesia, Mongolia, Brazil, Chile, the Dominican Republic, Moldova, Macedonia, Turkey, Morocco, and many others. New markets are emerging, businesses are opening, trade and investment are soaring, and jobs with better wages are more plentiful.

Meanwhile, health and education have improved dramatically. In 1960, twenty-two out of every hundred children born in developing countries died before their fifth birthday; today it’s only five. Out of one hundred children born, seventeen more live today who would have died just a few decades ago. In 1990 almost 13 million children died from preventable diseases; by 2013, it was down to 6.3 million (and falling). Because of both the reduction in child deaths and progress in fighting a range of diseases (such as malaria), life expectancy is now much longer. Whereas in 1960 the typical person born in a developing country could expect to live around fifty years, today his or her grandchildren will live sixty-six years. People born in developing countries live fully one-third longer, on average, than they did two generations ago. More children are enrolling in and completing primary education, especially girls. In 1980 only half of all girls in developing countries completed primary school; today four out of five do so. More people than ever before have access to clean water, basic sanitation, and some electricity.

The changes go further, and include personal freedoms and political systems. Around the world, dictatorships have been replaced by democracies. There are fewer wars and less violence, and basic rights and liberties are far more likely to be upheld. In 1983 seventeen developing countries were democracies; by 2013, the number had more than tripled to fifty-six (excluding many more developing countries with populations less than 1 million, which I do not count here). Meanwhile, there are far fewer dictatorships and autocracies. While the spread of democracy has slowed in recent years and even reversed in some countries, the difference from the 1980s to today is astonishing. This change is not just about perfunctory elections: it includes improvements in basic political rights and personal freedoms, stronger legislatures, more robust civil-society organizations, and other institutions of democracy alongside more free and fair elections. Many of the new democracies are imperfect and fragile, but the change is unmistakable. Equally remarkable, violence is declining sharply. Since the 1980s, the incidence of civil war in developing countries has been cut in half, and battle deaths in war have fallen by more than 75 percent.

The dramatic shift in political systems has upended some old ideas about democracy and development. Until recently, most people believed that the best way to make progress in poor countries was to put a benign dictator in charge. The East Asian “miracle” countries seemed to provide the evidence, with Singapore’s former prime minister Lee Kuan Yew as the prime example. But since the end of the Cold War, the pattern has changed: in most cases the improvements in economic well-being have gone together with a shift toward democracy. While there are important exceptions such as China, Ethiopia, Rwanda, and Vietnam, increasingly they are exactly that—exceptions. India, South Korea, Indonesia, Mongolia, the Philippines, Brazil, Costa Rica, Chile, the Dominican Republic, Bulgaria, Hungary, Moldova, Turkey, Tunisia, Botswana, Ghana, Liberia, Senegal, South Africa, and dozens of other developing countries are showing that democracy has become the new norm, and that it complements and supports economic and social progress.

What is remarkable about these changes is not so much the progress in any one area but the dramatic improvements in all of these areas at the same time. The simultaneous improvement in so many aspects of development in so many of the world’s poorest countries in such a short period of time is unprecedented. There have been spurts of economic growth in developing countries before (such as in the 1960s and early 1970s), and there have been improvements in global health for several decades. But never before have we seen such substantial improvement in income, poverty, health, education, and governance at the same time.

By this point, you’re probably thinking, Wait a minute. It can’t be that good. Just about everything in the newspapers is bad news. What about Afghanistan, Iraq, and Syria, all entangled in major conflict? Or Somalia, which has not had a functioning government for several decades? How about Sudan and its unconscionable treatment of its own people in Darfur? Or Haiti, where weak leadership and deep corruption made the country both more vulnerable to the deep destruction of the 2010 earthquake and unable to respond effectively in its aftermath? Or the ineptness in North Korea? What about despots like Robert Mugabe in Zimbabwe and Islam Karimov of Uzbekistan?

All true. Unfortunately, not all developing countries are making progress. Some countries remain stuck in conflict, dictatorship, and stagnation, just as in the old days. However, while they still capture the headlines, they have become the minority, and their numbers continue to shrink. In the 1980s, there were more than sixty developing countries that had both authoritarian governments and little or no economic growth, accounting for well more than half of all developing countries. Today that group is down to around twenty, accounting for less than one-fifth of developing countries. They are the exceptions, while most developing countries are now on the move.

Nor do I argue that the progress that has been achieved so far is enough, that it is guaranteed to continue, or that all is well in developing countries. Such claims would be misleading and naïve. There are still 1 billion people living in extreme poverty, and even those whose incomes now exceed that basic standard of $1.25 a day are hardly well off. Every year, 6 million children still die of preventable disease. Many countries, especially the poorest, remain vulnerable to the effects of devastating shocks, such as the sharp rise in global food prices in 2007 or the Ebola outbreak that swept through West Africa in 2014. There is still a long way to go in creating well-functioning democracies in which basic rights are respected and leaders are held accountable. In many countries, especially India and China, rapid economic growth has come with a high price in terms of environmental degradation, air and water pollution, and biodiversity loss (as it has for much longer in today’s rich countries). Rising greenhouse gas emissions and accelerating climate change are serious threats. These issues are central to the prospects for both sustaining and spreading the recent progress in developing countries. Nevertheless, the changes over the last two decades are a big start—the strongest and most promising start ever—in improving the well-being of millions of people in many of the world’s poorest countries.

Throughout this book, my analysis will focus on a core group of 109 developing countries. A list is provided in the appendix. There is no standard definition of a developing country, but this group includes all countries in which per capita incomes were below $3,000 (in constant US dollars from the year 2000) at some point between 1960 and 2013. This income line corresponds roughly with the World Bank’s classification of low- and lower-middle-income countries, although its income definitions change each year. The group includes countries such as Panama, Botswana, and Thailand, where incomes now exceed the $3,000 benchmark, since they were below the threshold for most of the period (the alternative of excluding these countries would eliminate developing countries that have been successful in achieving sustained growth). The group excludes several countries for which there are insufficient data, such as Myanmar, North Korea, Somalia, and Afghanistan. I also exclude all countries with populations less than 1 million people. Since many small countries have achieved economic progress and become democracies during the last two decades, by excluding them I am erring on the side of understating the actual number of countries in transition, and avoiding including a large number of countries that contain a relatively small number of people. Also, throughout the book, all data are drawn from the World Development Indicators (the World Bank’s primary public database), except where noted otherwise.

PERVASIVE PESSIMISM

The transformation in the world’s developing countries during the last two decades is difficult for many people to believe. Stories of poor countries are typically tales of gloom and doom. Newspapers, television, and movies are filled with war, violence, disease, corruption, and failure. The emphasis on the negative reflects human nature: for whatever reason, we are drawn to stories of tragedy and failure. What most people around the world know about developing countries is what they see in the media: war in Afghanistan, famine in Darfur, stolen elections in Zimbabwe, earthquake destruction in Haiti, terrorist bombings in Indonesia, Ebola in West Africa, and so on. Charitable organizations don’t help when they emphasize tragedy and deprivation as a means of soliciting donations.

Of course, war, disease, and famine are all critical issues that should receive serious attention. But our strong attraction to them creates a deep pessimism about the potential for progress, and their domination in the media overshadows the larger truths about human advancement. Steady gains do not make for good copy. World Bank reports showing the largest decline in poverty in history hardly get mentioned. Suc...

Table of contents

• Cover
• Dedication
• Prologue: November 9, 1989
• Part One: The Surge
• Part Two: The Catalysts
• Part Three: The Future
• Appendix
• Acknowledgments
• About Steven Radelet
• Notes
• Index
• Copyright