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A Good Year for the Developing World

Rev. Gerald Zandstra

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The World Bank recently published its Global Economic Prospects 2005, which provides a summary of the global economy for 2004 along with a forecast for the coming years. The news, especially for the developing world, is mostly good. The foreword's opening sentence is quite remarkable: "This year--2004--is shaping up to be the healthiest year for developing countries in the last three decades."

In 2004, world trade increased 10.2 percent. Global economic growth was around 4 percent. Developing countries "are now growing faster than their average growth rates of the 1980s and 1990s." If these rates are sustained, the next 10 years will double the rate of increase in developing world economies. These seem like good numbers, but what do they mean for real human beings?

Economics, after all, is far more than charts, graphs, and numbers. Broadly speaking, economics may be described as the study of the production, distribution, and consumption of scarce goods and services. Economists study how people satisfy the basic requirements for daily living. For people of faith, one of the central concerns must be the status poorest of the poor. What is in these numbers for those who have the least?

According to the study, if the growth rate of 6.1 percent continues for the next decade in a number of developing countries, the number of people living in extreme poverty would be cut in half in those countries. Even if we remove China, India and Russia (all technically listed as developing countries), the growth rate average in the rest of the nations is 5 percent for 2004. The debt to gross national income ratio, while still a burden to many countries, is about half of what it was in 1994. This kind of sustained economic performance would cut in half the number of human beings living on less than $1 US per day and the number living on $1-$2 per day.

What is bringing about these changes? People who care about the poor should not only celebrate these improving conditions, they should also be clear about what causes them. Furthermore, and ultimately, they should firmly stand behind the forces that are bringing them about so that more people can be lifted out of poverty.

The cause of the majority of this encouraging news is not charity, important as it is in addressing human needs. It is not a developed-world heeding of the call of Bono and others to donate a great portion of their gross domestic product. The overwhelming answer is the free market along with its anchors of rule of law, private property, freedom, access to markets, and the lowering of barriers to trade.

But for all the good news, there are some troubling signs for people who live in sub-Saharan Africa. According to the report, "Growth in the region will continue to lag behind the rest of the world by a significant margin." This has to be a concern for all those who take seriously Christ's injunction, "What you do to the least of my people, you do to me." Our first response must be to ask why it is the case that this region fails to improve adequately.

The usual answers are no answers at all. Sub-Saharan Africa has many more resources than most of the developing world. So the proposition that it lacks natural resources must be rejected. Another commonly heard answer is the need for population control. For example, there are 10 million people living in Zambia. If there were only 5 million, they would be twice as prosperous as they are now. Such math seems simple and deceives many people but it is simply not true. China and Russia, along with virtually all developed countries are far more densely populated than most African nations. Having fewer children isn't the answer to poverty.

So where does this leave us if our hearts are concerned about the poverty of human beings, made in the image of God, living in sub-Saharan Africa? People of faith, especially those who act as God's spokespeople, should be demanding that the benefits of the market be extended there. We should be calling for an end to corruption. We should be prophetically screaming for private property rights and the removal of trade barriers. We should be speaking against various kinds of government subsidies that give American and European Union farmers a distinct and unfair advantage over farmers in the developing world. It is simply a matter of justice backed by numbers that cannot be ignored.

Unfortunately, such empirical evidence is too often ignored. The World Alliance of Reformed Churches, a group made up of denominations presenting 75 million Reformed Christians around the globe, seems to be oblivious to the reality of poverty and its chief causes. For some of this group's leaders, the free-market system is condemned and is placed on par with the former apartheid policies of South Africa. Such statements reveal that these religious leaders are misguided and misdiagnose the core issues that cause hunger, premature death, illness, and outrageously high infant mortality rates.

Instead of pushing for the growth of the market and free trade, they condemn the world's poorest citizens to desperation driven by their own ideological perspectives rather than concern for the poor. They should be addressing governance issues, corruption, and arguing on behalf of property rights so that sub-Saharan Africans could finally get out of poverty. But these false prophetic voices will ignore the numbers. They will ignore the reality of poverty. They will ignore the just demands of Africans who have the resources, minds, and ability to provide for themselves but are not able to because the structures of the rule of law do not exist where they live.

In the words of musician Don McLean,

"They will not listen,

They're not listening still

Perhaps they never will."

Rev. Gerald Zandstra, an ordained pastor in the Christian Reformed Church in North America, is director of the Center for Entrepreneurial Stewardship at the Acton Institute.

Read this article on the Acton Institute website (new window will open). Reprinted with permission.

Posted: 19-Feb-05



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