Keys to poorer nations' prosperity
March 8, 2016
In seeking insights into general economic trends that drive or hinder demand for foods, globalization emerges as a more powerful force than might have been thought. In the not so distant past, globalization, meaning the spread of trade and accompanying knowledge, was seen as advantageous for developed nations engaged in making developing countries dependent markets. Now, it turns out that developing countries may have been equal if not superior partners in benefiting from these efforts. Results have transformed regions once regarded as facing hunger into places of rising prosperity, while complaints of income inequality are heard in developed nations.
Writing in Foreign Affairs on similar issues, Ronald Inglehart, professor of political science at the University of Michigan, said, “Globalization is enabling half of the world’s population to escape subsistence-level poverty but weakening the bargaining position of workers in developed countries.” That sentence is meant to explain the very different world that has emerged. According to Professor Inglehart, market forces are bolstering these very trends that will be changed only if politics in developed nations brings about changes not just in how globalization works to disadvantage the major share of their populations but to embrace income redistribution. The latter controversially would shift income from the richest sector, often the top 1 per cent, to improve income of the greater number.
Putting aside what might be done in the developed nations to shift incomes among various segments, it is remarkable to examine how what once was regarded as the awful plight of the poorest nations has improved. Indeed, the greatly better status of the world’s poorest nations largely has been overlooked in a world where news media focus primarily on setbacks in preference to forward steps.
Following is a summary of what has occurred since the start of the 1990s written by Steven Radelet, a senior fellow at the Brookings Institution:
“One billion people have escaped extreme poverty, average incomes have doubled, infant death rates have plummeted, millions more girls have enrolled in school, chronic hunger has been cut almost in half, deaths from malaria and other diseases have declined dramatically, democracy has spread far and wide, and the incidence of war has fallen by half.”
While every one of these changes has had a tremendous impact on demand for food, especially grain-based foods, it is rising prosperity that has driven the number of people living on less than $1.90 per day to fewer than one billion from more than two billion in the early 1990s. More than 60 nations reducing the shares of their populations counted as impoverished made this happen. Fast economic growth explains the rapidity of the change in the quality of life in many nations, which in turn has spurred the gains in per capita consumption of grain-based foods across many of the countries. Sure, China is the main factor behind this global transformation, but many other countries registered similar, if not superior, growth.
Whether the momentum of these changes has any chance of continuing is the primary question debated today. After all, there’s nothing to guarantee that forces similar to those accounting for the economic progress of the past several decades will repeat. Ending the Cold War is a force whose influence is waning in allowing nations once on one side or the other to exercise independence. Globalization, as noted, has created negatives for developed nations and thus may be reduced by political pressures to the detriment of poorer countries. New leaders, a third important force, often have focused on speeding economic progress. While new leaders have spurred past growth, the outlook for the future in this regard is far from certain.
It also is apparent that developed countries benefit from rapid economic progress by poorer nations, if for no reason other than that the newly prosperous make good political partners. The promise created for food demand is also a powerful positive that should remain an enduring force.