An undiplomatic diplomat A myth in figures

Oswaldo de Rivero: debunking the myths of ‘development’ Interview by Araceli Ortiz de Urbina and Lucía Iglesias Kuntz, UNESCO Courier journalists

Oswaldo de Rivero Reality vs consumer dreams: in Pakistan, a man goes about his daily tasks, heedless of the advertising billboards above. These days, the future of many economies and national cultures is not decided in government ministries or parliaments but on the international financial markets Wrestling with poverty: Rocinha, one of the largest favelas in Rio de Janeiro, Brazil. Children of war in El Salvador. A Rocinha, l’une des plus grandes favelas de Rio de Janeiro, au Brésil. An undiplomatic diplomat “We must dare to think the unthinkable,” says Oswaldo de Rivero in his book El Mito del Desarrollo (“The Myth of Development”),1 which has had a big impact in Latin America and will soon be published in English. He argues that development does not exist, or at least not as we have understood it for the past half-century. De Rivero is a former Peruvian diplomat who was born in Lima in 1936. He is neither a university professor nor a government spokesman. His opinions are based on a profound knowledge of the international scene acquired during more than 20 years’ experience in a broad range of international forums. He has represented his country at the United Nations General Assembly and on the Security Council; he is a former ambassador to the United Kingdom and Russia, president of the Economic Commission of the Non-Aligned Countries’ summit, president of the Group of 77 countries and chairman of the council of the Latin American Economic System (SELA), a regional intergovernmental body set up to encourage co-operation and integration among Latin American and Caribbean countries. He has also been president of the World Conference on Nuclear Non-Proliferation and the United Nations Disarmament Conference and led the Peruvian delegation during the Uruguay Round of GATT world trade negotiations. A lawyer with a degree from the Catholic University of Lima, de Rivero abandoned his diplomatic career because of “a profound disagreement with the present Peruvian government”. Today he lives in Geneva, where he works as a United Nations consultant, contributes to the Peruvian daily newspaper La República, and is currently writing a new book. 1. Mosca Azul editores, Lima, 1998. A myth in figures “Some truths are unpleasant, but they’re still truths,” says Oswaldo de Rivero. Here are some of them, extracted from his book. World poverty. In the year 2020, there will be 3 billion poor people in the developing countries, of whom more than 800 million will be hungry and hundreds of millions will be unemployed or under-employed. Transnational companies. About 38,000 transnational firms and their subsidiaries account for two-thirds of world trade. The sales of the 86 most powerful transnationals exceed the value of the exports of almost every country in the world. Financial markets. The international financial market is a huge casino which handles a trillion dollars’ worth of transactions every day–nearly six times more than total direct foreign investment world-wide in one year. Inequalities. The annual income of the world’s 358 richest people is greater than the total income of 2.3 billion other people–that is, 45% of the world’s population. Food. Almost 800 million people in sub-Saharan Africa, South Asia, Central America and the Andean countries have no food security. Water. Half the population of the developing countries do not have enough water. Illnesses related to water pollution kill 25,000 people every day. Energy. Low per capita consumption of oil fuel plus population growth make a country economically non-viable. High per capita oil consumption in every country would make the civilization non-viable. Africa. A total of 162 structural adjustment programmes have been implemented in Africa (compared with 126 in the rest of the world) since 1982, reinforcing Africa’s role as an exporter of raw materials and basic products. After 20 years of this regime, Africa starts the next millennium with national economies which are severely handicapped in the world economic system. Raw materials. At the end of the century, the amount of raw material per unit of industrial production is two-fifths less than in 1930. Japan has reduced its consumption of raw materials by 40% compared with 1973. World demand for high tech products is growing by 15% every year, while the demand for raw materials is growing by less than 3%. In real terms, prices of raw materials will continue to fall at least until the middle of the next century.

In a recent book El mito del desarrollo (‘The Myth of Development’), Peruvian diplomat Oswaldo de Rivero warns that many national economies will become non-viable in the 21st century and analyses the failure of current development theories which, he says, are taking the world down a blind alley. You say that the development model which has been proposed as a panacea for more than half a century is leading nowhere. Why? Economic development is one of the great myths of the 20th century. In the 1970s, people firmly believed Brazil would conquer poverty and become a world power. The same thing was said about India, Mexico and many other countries. But the fact is that on the eve of the 21st century, more than 100 countries have not developed, and only three have managed to make a breakthrough–South Korea, Taiwan and Singapore, representing less than 2 per cent of the population of the so-called “developing world”. Development in general, which has been tried through socialism and is now being tried through capitalism, has not happened. For the poor countries, the choice is no longer about how to develop but about how to simply survive the challenges of the technological revolution and darwinist global competition. But some world indicators, e.g. for life expectancy and infant mortality, are improving. . . The fact is that in the year 2000 about 1.5 billion people will be living in poverty on less than a dollar a day and 2.3 billion on less than two dollars a day, and that in nearly 100 countries real per capita income has not increased for 15 years. The World Bank’s dollar-a-day poverty line and the UN Development Programme’s Human Development Index show the enormous extent of poverty in the inappropriately-named developing world. The existence of vast numbers of people living in a state of deprivation with such low purchasing power means that their countries are “quasi-nations”, unable to carry out any national project and to be part of the global economy. You think many countries are or will soon be “non-viable national economies” or, even worse, “ungovernable chaotic entities”. Why? Most of these countries suffer from what I call “the virus of economic non-viability”–explosive urban population growth and production which is focused on raw materials at a time when the technological revolution needs less and less of them. The convergence of these two trends dramatically hinders development and creates a structural deadlock which leads countries so afflicted to “stabilize” the non-viability of their economies. Not all non-viable economies collapse. Countries with the strongest population growth and the least ability to survive are the ones that break down into “ungovernable chaotic entities” (UCEs). What are these UCEs like? Basically the government loses control over large segments of its territory and population. In such economically non-viable countries, poor income distribution, spiralling population growth and technological backwardness lead to social exclusion, which in turn stirs up ethnic, ideological and religious animosity. Large areas of the country fall under the control of warlords, drug traffickers, ideologically motivated guerrillas or a mixture of all three. So chaos grows, civil society virtually disappears and the population becomes dependent on the Red Cross or Doctors without Borders. The country is in a state of permanent destabilization. This what I call an “ungovernable chaotic entity”. Could you give us some examples? UCEs are in a constant state of internal violence, where fighting alternates with truces, as, regrettably, we have seen in Angola, Sierra Leone, Afghanistan, Somalia, Liberia, Cambodia, Rwanda, Burundi, Bosnia, Chechnya, Haiti, Albania and Colombia. Does this only happen in the countries of the South? There are policies which create exclusion in some rich countries of the North. In several U.S. cities, there are neighbourhoods which seem as if they’ve been transplanted from the Third World. There’s also exclusion in France. But these countries don’t become UCEs because the state hasn’t lost control of the territory. Right now, Russia is the only country that can be called developed–because it belongs to the G8 group of countries–where there are signs that the central government is disintegrating. Apart from their economies, does anything else make countries of the South non-viable? Yes, and this is something I want to look at in a future book. I think non-development and non-viability also stem from a cultural problem. In these countries–and I’ll talk about Latin America because that’s what I know best–personal relationships are more important than the rational approach to problems which you find in Europe. Also, Latin America’s a traditional society, without a capitalist spirit of enterprise or an inventive scientific community. Its culture is not based on science, but on literature, painting and music. That can be an advantage, but development cannot take place in a capitalist economy without a scientific inclination and Latin America doesn’t have that. In Brazil, Argentina and Peru, liberalizing the economy won’t automatically sprout a lot of inventors and managers like Bill Gates. These countries must find other ways to develop. They’re not going to manage it by adopting the U.S. model because they don’t have the same cultural roots. You say the coincidence of the technological revolution and the urban explosion is one of the main reasons why development is impossible. Why? Today’s technological revolution triggers off a process of natural selection which leaves by the wayside thousands of unskilled people and tons of raw materials at the very moment when an urban demographic explosion is occurring in most poor countries. The United Nations and the International Labour Organisation (ILO) reckon that if the population of these nations keeps on growing, about a billion new jobs will be needed at the beginning of the next century. How can jobs be found for so many people with the new technologies? The technological revolution and the urban explosion are therefore on a collision course. But these two phenomena are virtually inevitable. So what can be done? I don’t think there’s an easy remedy and that’s what shocks people about my book. You’re not going to get a solution while the urban population keeps growing in the world’s developing countries. In the meantime, there’ll have to be social welfare subsidies and programmes to fight poverty and create jobs. This isn’t going to solve the problem, but at least it will limit the damage. Will this situation last forever? It doesn’t matter if it lasts 100 years. Things will only change when the world’s birthrate falls, which is expected to happen sometime around 2050, but until then there’ll be tremendous social and political upheavals in the world. Human beings only learn through experiencing disaster, not through reason or theories. People feel compassion about Third World poverty, but they don’t realize the damage that’s being done. When serious disturbances break out, not just ecological ones but political and social disturbances which also affect rich countries, then maybe we’ll start thinking about a new system of co-operation. You say that if globalization closes the gap between rich and poor countries, the result will be ecological disaster. So is there any way out at all? The model of consumption in rich countries isn’t viable for them either in the long term. Yet they’re trying to pass on the pattern of consumption of about a billion people to almost five billion inhabitants of underdeveloped countries. The irony is that unemployment, poverty and exclusion prevent such patterns from being adopted. If they were adopted, five billion credit cards would soon destroy the planet’s biosphere. There won’t be any solution until all humanity reduces its level of consumption and income is better shared out by a system of international co-operation. In your view, the structural adjustment programmes of the World Bank and the International Monetary Fund have not worked. Has the cure been worse than the disease? In the long term, yes. In the short term, they’ve managed to stabilize the macro-economy and curb inflation. But they’ve failed in the long term because they haven’t laid the foundations for capitalist development in those countries. They adjusted production but didn’t modernize it. The neo-liberal development theory says once countries have liberalized their economies, they must produce goods on the basis of the comparative advantages they enjoy on the world market. But the only comparative advantage these countries have is their raw materials. The world economy is demanding more and more goods and services with high technological content, but the underdeveloped economies are still exporting relatively untransformed raw materials and products with low technological input. Why has this failure been so resounding in Africa? African economies have specialized in exporting bananas, cocoa, minerals and tropical products which, together with the population explosion, is a deadly trap. The continent is the best example of what I call the conjunction of two “viruses of non-development”–the population explosion and the production of raw materials. IMF and World Bank officials are obsessed with the complete deregulation of the economy, when the real problem of underdeveloped countries is historical and cultural: their lack of a capitalist spirit and a scientific tradition to modernize their production. Do you see any chance of African countries being able to reverse this trend? For the moment, no, none at all. You regard development aid as a kind of “Mother Teresa policy”. What do you propose in its place? International aid is, paradoxically, the most striking indication of non-development. It won’t solve the problem. But at least we have to set up systems of international co-operation and not treat countries as equals when they’re not. Ghana, for example, can’t compete with the United States in the global market. Special rules must be set up for developing countries. Such rules used to exist, but they’ve all been dismantled. You propose setting up a transnational ecological system. What would it be like? Ecological problems will sooner or later put a brake on the expansion of high-consumption capitalism which is using nature as a raw material and slowly eating it up. The United Nations isn’t tackling the problem very well because it can’t do so without the help of the transnational companies, for it is they who are doing the producing and developing both dirty technologies and green technologies. These firms must be represented in a tripartite international body in which governments, transnationals and civil society are represented. A solution can only be based on negotiations between the real players. How powerful are the transnationals? The rationale of globalization has spawned a new faceless non-governmental economic aristocracy–the transnationals. These days, the future of many economies and national cultures is not decided in government ministries or parliaments but on the international financial markets. Only 10 industrialized countries export more than the world’s 10 richest companies. Yet the World Trade Organization discusses international trade problems without these companies. At the Rio Earth Summit, countless plans and measures to protect the environment were put forward, none of which have come to fruition because the companies responsible for the environmental damage made no commitment to them. The trouble is that the transnationals have more and more power but no global responsibility. How can we get them to assume these responsibilities? It’s clear that international institutions no longer reflect the new world power structure. We can’t go on having diplomatic get-togethers between representatives of governments without any real power to alter global economic and ecological trends. Let’s start by giving the transnationals a place and a vote in international bodies, because nothing can be done without them. This doesn’t guarantee they’ll change their attitude. It won’t be easy to change their policies since the transnationals are very shrewd and choosy about how and where they invest. What might change their attitude is the fact that if globalization continues to create exclusion, they’ll have to start investing in poor countries to create markets there. But they’ve already got an enormous potential market anyway. The opening up of the Chinese economy brings the transnationals 300 million consumers, the equivalent of the American market. India brings in another 150 million people with real purchasing power. So there are still new markets to be won. . . . And so the process will be a long one. So what can the worst-off countries be offered? Many countries which only produce raw materials and have a rapidly-growing urban population are having to wrestle with shortages of water, energy and food. To cope with these problems, what I call a “national survival pact” is needed, because without water, food and energy there can be no state or civilized life and no society that can develop. This is the situation in countries like Guatemala, Peru and Bolivia in Latin America, and Bangladesh, India and even China, in Asia. What does this “survival pact” involve? A minimum level of development is impossible without energy, water and food. How can you educate a child who hasn’t been properly fed, how can you industrialize a city without water, how can public utilities work without electricity? A national survival pact involves seeking secure supplies of energy, water and food because without them no development plan can work. But these days there are no development plans, there’s only the market. It is thought, absurdly, that the market will produce development. But that has never happened. All the developed countries emerged thanks to protectionist trade policies. It’s impossible for a country to switch from exporting cotton to producing computer chips as a result of the invisible hand of the market. Such a country will need to have an industrialization policy and take protectionist measures, at least temporarily, in order to develop. Is there anything constructive about globalization? The globalization of communications is good for the cultural exchanges and contacts it makes possible and because it fosters a global awareness of human problems and suffering. It’s also positive at a political level–here I’m thinking particularly of how these days we keep track of governments that violate human rights. But in economic matters, globalization imposes a monolithic doctrine. It sells us a development model that is non-viable. Instead of creating a “global village”, it creates a worldwide collection of gated communities of wealthy, elegant people who share the same lifestyle and pattern of consumption, and destroy the environment. Behind these ghettos, there are shanty-towns, slums and suburbs where water, energy and food are scarce, and crime, unemployment, violence and pollution are rife. Why do you think your book made such an impact in Latin America? I think it was successful because a new awareness is emerging. A large part of Latin America’s political class has supported the single neo-liberal development model, but people are starting to have doubts about it. The book came out just after the big economic crises in Asia, Russia and Brazil. If it had come out before, I would have been called pessimistic or crazy. When I had finished the book, people asked me how I was going to publish it when Buenos Aires is full of Mercedes cars and there are dozens of shopping centres in Santiago de Chile and Lima. But all that’s just a façade. Of course, if you go to Caracas, Buenos Aires or Rio and stay in the hotel where World Bank officials stay, you’ll get the false impression everything’s fine. But if you venture just a short distance away, you’ll see there are really two countries in one. So do we have to give up the idea of development because it’s a kind of suspect ideology? I’m not against the market economy and I don’t say that capitalist development shouldn’t exist. But the laws of the market are not natural laws. The market can be regulated and geared to making people happy. We can’t use it like the law of gravity and say that those who stumble should fall, that those who aren’t competitive should die. That’s economic darwinism. What’s missing really is a moral revolution. The problem is ethical, profoundly ethical and cultural. We’ve had a technological revolution, but we haven’t had an ethical revolution. What would you say to a 20-year-old living in a developing country? It depends on which social class they belong to. If they’re from a rich family, they’ll have no problems, except the risk of being kidnapped. If they’re middle class, they’ll have to be realistic and stop thinking that when they graduate from university they’re going to find a job, start a family and live well. I wouldn’t dare to say anything to a poor person, because in underdeveloped countries the poor live in hell, the middle class in purgatory and a group surrounded by bodyguards lives in the paradise of global consumption. But at what cost and with what burden of fear? A society can neither live like this nor go forward. Sooner or later, that youth of 20 will have to get down to the business of changing the world’s only system of development because it works against him. And to a young person in an industrialized country, what would you say? The consumer society inoculates people against compassion. I’d tell those young people to get “dis-inoculated” because the way the world’s going, their children and grandchildren are going to suffer. A predatory attitude has been encouraged in human beings, that the strongest win, consume and then forget. I think lots of young people are aware of this problem. But most of them live a life of instant gratification in a sort of moral vacuum and don’t see any connection between their own well-being and people dying in Africa. Isn’t your attitude over-pessimistic? I think we have to see things straight. That’s why I talked about a national survival pact. Development technocrats have come up with highly complex plans, from education to steel production, but the basics have been forgotten: population growth, lack of food, energy and water. Big countries with nuclear weapons, like India, Pakistan and China, have serious water supply problems and have to import food and energy. They’re giants with feet of clay. That isn’t development. I am sending out an alarm signal to alert the poor countries against being hypnotized by a mirage–the mirage of the technological development that exists in the United States and Europe and is virtually impossible for them to achieve. These countries must take survival measures, because otherwise there will be no stable societies. You can’t have health without water, production without energy, or life without food. My book is an appeal for the poor countries to concentrate on these essentials. This is what must be done and done properly. The UNESCO Courier