U.S. Self-Interest in Third World

A new study has been completed to help Americans understand that their own economic well-being depends to a surprising degree on the improved economic health of Asian, African and Latin American nations. Developing less developed nations is not charity, not a give-away, but enlightened self-interest.

The study, “Growth, Exports and Jobs in a Changing World Economy,” is the work of the Overseas Development Council.

“Only the resumption of strong growth in the developing countries can create sufficient export opportunities for the United States to significantly improve its international economic position and to deal with its own domestic problems, without inducing U.S. recession or pushing this country further into debt,” John W. Sewell, ODC president, commented in presenting the report.

If developing nations resume the growth rates of the 1970s, there will be an opportunity for the United States to cut in half its current trade deficit by 1992, the study concludes. Without that growth, deficit reductions will be substantially less. The decline since 1980 in the economies of developing nations has resulted in the loss of 1.7 million American jobs related to those export markets, according to the study.

One of the most sobering portions of the study exposes the shortsightedness of the farm bloc in Congress, which has been active in trying to restrain help to the agricultural sectors of developing nations. This obstructionism has been based on fears that these nations will displace American farm exports. That is wrong, according to the research of Robert L. Paarlberg of Wellesley College and the Harvard University Center for International Affairs. Many of the developing nations that have been successful in expanding their own agricultural production have become major importers of farm products, including U.S. farm products, because domestic production in these nations has not been able to keep pace with the rising demands generated by growing prosperity. “With the proper policies in place, U.S. and developing-country agriculture can prosper at the same time,” Paarlberg concluded.

One of the most difficult and least defined challenges is helping Africa and Latin America to overcome the debt burdens that now throttle their development. Their staggering debts have been a factor in discouraging the flow of new moneyfor desperately needed investments, and the stagnation of their economies has brought sharp declines in imports. Among the hopeful signs identified in the report are the commitments by surplus nations to play a bigger role. It is noted,for example, that Japan is committed to doubling its aid program by 1992.

Beyond new resources, however, there is a continuing need for reorganization and restructuring within the developing nations to end wasteful policies and to increase incentives for more productivity--above all in agriculture. But one of the paradoxes of the present situation is that many nations, notably in sub-Saharan Africa, that have implemented at great cost the restructuring asked for by the United States now are not receiving the new investments that were expected.

The challenge is extremely complex, but, as the scholars who wrote the study make clear, the goals are attainable. And worth seeking. For, as Sewell commented in presenting the report, “more than ever, U.S. prosperity is inextricably linked to the achievement of global development.”