The Economic Record

Recently, the development record of the 90 countries that were seen as presenting the most difficult development challenges in the 1960s was reviewed based on World Bank statistics. Development cooperation efforts have largely concentrated on these nations over the last 30 years. These 90 countries now account for over 3 billion people.

How do these nations stand today? The progress of these nations can be viewed as falling into four broad groupings that offer very useful insight into the state of development today.

The first group of 25 countries, accounting for almost 700 million people, is made up of nations whose progress has been so substantial that they are no longer considered developing countries. As recently as the late 1970s, most of these nations received substantial amounts of foreign assistance. Now, some of these nations are even new aid donors themselves, including Portugal, Greece, Korea, Taiwan, Thailand and Singapore. In many instances, the public has forgotten that these countries were major aid recipients in the past. (See map.)

The second group - 15 countries accounting for roughly 400 million people - has reached middle-income status. These nations still receive some concessional aid, but most of them should no longer need assistance over the next decade. This group includes countries such as the Philippines, Morocco, Jordan, Peru, Guatemala, Ecuador, Jamaica, El Salvador and South Africa.

The average economic growth rate for these first two groups of countries was about 3 percent annually during the 30-year period.

The second trend demonstrates that social indicators show more stability than economic indicators. Social indicators do not deteriorate simply because of a recession. Again, this is consistent with the notion that the transmission of knowledge and education do not disappear simply because of an economic downturn.

A third group of 10 countries, accounting for approximately 1.3 billion people, is still poor but has made clear, steady progress over the past decade. Each of the countries in this category has achieved growth in per capita income averaging at least 1.5 percent annually. This group includes countries such as India, Bangladesh, Sri Lanka, Nepal, Bolivia, Uganda, Mozambique and Ghana. The prospects for continued growth are good in these countries but, in many instances, tenuous. Continued progress in this group would mean major reductions in global poverty. It is abundantly clear from the first three categories of countries that remarkable development progress has been made around the world over the last three decades.

Some 40 countries, accounting for 600 million people, mainly in sub-Saharan Africa, continue to preoccupy the development community. Even here the story is not entirely negative. Development progress has been intermittent and uneven, but assistance has made these difficult situations better. In this group of countries, there have been very significant reductions in infant mortality and major improvements in literacy, sanitation and life expectancy. However, a number of nations in this category, including Afghanistan, Somalia, Sudan, Liberia and Rwanda, have seen their development progress stalled or badly reversed by longstanding civil conflicts.

On balance, the last 30 years reflect a period of remarkable progress and achievement in economic growth in the developing world. Improvements in economic growth have been accompanied by historic numbers of nations embracing democracy and widespread improvements in living standards for billions of people. Foreign assistance programs have played a modest, but crucial, catalytic role in these developments.