A Development Nightmare

What if poor nations actually caught up with rich ones?

Indulge in a dream scenario for a moment: Suppose the world awoke tomorrow and, miraculously, every country suddenly enjoyed the same per capita income as the United States, or roughly $40,000 per year. Global annual income would soar to $300 trillion, or some 10 times what it is now. And while we're at it, suppose also that international education levels, infant mortality rates, and life expectancies all converged to the levels in rich countries. In short, what if foreign aid worked and economic development happened overnight instead of over centuries?

A heretical thought, perhaps. But I wonder sometimes what voters in rich nations must be thinking when they reward their politicians for cutting already pathetic foreign-aid budgets. Is it possible that, deep down, the world's wealthy fear what will happen if the developing countries really did catch up, and if the advantages their own children enjoy were shared by all? Would the dream become a nightmare?

Consider whether today's wealthy would materially suffer under such a scenario. As things now stand, 290 million U.S. citizens already cause almost one fourth of world carbon dioxide emissions. What if 1.3 billion Chinese and 1.1 billion Indians suddenly all had cars and began churning out automobile exhaust at prodigious U.S. rates? While the sun might not turn black and the ozone layer might not vaporize overnight, the environmental possibilities are frightening. And what of the price of oil, which is already notoriously sensitive to small imbalances in demand and supply? Absent huge new discoveries or brilliant new inventions, oil could easily reach $200 per barrel, as consumption and depletion rates accelerate. The mighty U.S. dollar would become a boutique currency and the euro experiment a sideshow. Investors would clamor for Chinese yuan and Indian rupees. The world's youth would grow up thinking that "Hollywood" must be a wordplay on "Bollywood," and McDonald's hamburgers would be viewed a minor ethnic cuisine. And a country such as Canada would suddenly have the economic heft of Luxembourg, with much of its population reduced to serving once poor, now rich, international tourists.

Let's face it: The rich countries would no longer feel rich. Humans are social creatures; once we clear the hurdle of basic subsistence, wealth becomes a relative state of being. Even an optimist such as myself must concede that a world of equality between rich and poor nations would be shockingly different -- and that is even disregarding the impact on global power politics. Still, such rapid economic development offers a clear upside for today's rich countries. Greater diversity and knowledge spillovers can breed much faster productivity growth, the ultimate source of wealth for everyone. Once properly educated, fed, and plugged in, inventive geniuses from South Asia and Africa might speed the development of clean and safe hydrogen power by two generations. And whereas commercial medical researchers might start spending more energy combating tropical diseases, now privileged citizens in temperate climates would still enjoy countless technological spin-offs. Indeed, such gains of rapid economic development could fully offset the losses to the rich.

By highlighting latent insecurities in rich countries, I certainly do not mean to endorse or stoke them. But these underlying fears must be addressed. If globalization really works, then what is the endgame? What kind of political institutions are necessary to prepare -- socially as well as psychologically -- for success? It is easy for everyone to endorse the United Nations Millennium Development Goals (MDG), which aim to satisfy basic human needs by 2015. (Unfortunately, the specific objectives are so limited that MDG ought to stand for the Minimum Development Goals.) But how far are rich nations willing to take development? How much are we prepared to give?

Of course, no one has developed a magic formula for how to make countries grow, though economic researchers have identified a number of poisons. Corruption, overweening government intervention, and mountains of debt are contraindicated for countries attempting to develop (which is one reason most foreign aid should be recast as outright grants instead of loans). Though critics are correct to argue that foreign aid stymies growth by breeding corruption and stifling private enterprise, the empirical evidence suggests that aid can be productive when it supports good policies. Does trade help countries grow? Again, my read of the evidence says yes: If Europe and Japan gave up their outrageous farm protection and if the United States stopped competing with India for the title of anti-dumping champion of the world, poor countries would gain far more than if their aid inflows suddenly doubled. And, by the way, if poor countries gave up their own trade protectionism, their citizens would benefit by even more.

Even so, rich countries could easily afford to triple their aid budgets without running the remotest risk of the "nightmare" scenario coming true. They could channel money into health in Africa, into education, and into infrastructure and other necessities with little danger of any rapid catch-up. (Though why the World Bank still lends to China, with more than $350 billion in hard currency reserves and a space program to boot, is difficult to explain.) Gallons of aid money, such as what Northern Italy has poured into Southern Italy for almost 60 years, help assuage development's growing pains, but progress rarely occurs quickly. Growth economics suggests that poor regions have a hard time closing the income gap on rich countries at a rate greater than 2 percent per year, even under the best of circumstances. Catch-up -- when it happens at all -- takes generations.

Rich countries need not be ambivalent or stingy. Certainly, if sudden and rapid economic development were possible and actually materialized, many citizens in wealthy nations would feel jarred, even threatened. And some day, world income distribution will be radically different than it is today, but not anytime soon. Nightmare scenarios and fear of success need never stand in the way of sensible -- and generous -- development policies.


The Next Steps on Nonproliferation

How the United States is working to prevent the spread of nuclear weapons, promote disarmament, and facilitate the peaceful use of nuclear energy.

In an age of pressing global challenges, none threatens our nation or our world as urgently as the possible spread of nuclear weapons. The United States has a special responsibility to meet this challenge, and under President Obama, we seek to lead the international community in minimizing these dangers and reinvigorating the nuclear nonproliferation regime.

Recent developments underscore the threat. The international community failed to prevent North Korea from developing nuclear weapons. Iran continues to ignore resolutions from the U.N. Security Council demanding that it suspend its enrichment activities and live up to its international obligations. Too much of the world's nuclear material remains vulnerable to theft or diversion, even as illicit state and nonstate networks engage in sensitive nuclear trade. And as we saw with the failure to detect Iran's covert enrichment plant and Syria's reactor project, the International Atomic Energy Agency (IAEA) doesn't have the tools to carry out its verification mission effectively.

If we do not reverse this trend and strengthen the international nonproliferation regime, we will find ourselves in a world with a steadily growing number of nuclear-armed states, and an increasing likelihood of terrorists getting their hands on nuclear weapons.

No nation is safe from the threat of nuclear proliferation, and no nation can meet this challenge alone. In the early days of the atomic age, a handful of powerful countries could effectively set nonproliferation strategy. But in today's changing world, with information and technology leaping across borders, industrial capacity more widely distributed, and nonstate actors wielding increasing influence, it will require unprecedented international cooperation.

That is why the United States has launched a major diplomatic effort to forge a renewed international consensus on nonproliferation that is based on the shared interest of meeting a common threat and on the requirement that all nations understand and abide by their rights and responsibilities.

Last month, President Obama chaired a historic U.N. Security Council session that unanimously adopted a resolution outlining a framework for action in the years ahead. This resolution should serve as a guide for the international community as we work to strengthen the nonproliferation regime, including through the Nuclear Non-proliferation Treaty (NPT) Review Conference next spring. As we have done for four decades, we must build on the NPT's solid foundation with measures designed to tackle evolving challenges.

We seek to strengthen each of the three mutually reinforcing pillars of global nonproliferation -- preventing the spread of nuclear weapons, promoting disarmament, and facilitating the peaceful use of nuclear energy. And to those three pillars, we should add a fourth: preventing nuclear terrorism.

The most effective way to reduce the threat of nuclear terrorism is to ensure that nuclear materials that can be used to build weapons are well protected against theft or seizure. That is why the United States has proposed a plan to secure all vulnerable nuclear material worldwide within four years -- a plan that has now won the endorsement of the U.N. Security Council.

We will use financial and legal tools to better disrupt illicit proliferation networks, including by tightening controls on transshipment, a key source of illicit trade. We will seek to strengthen Nuclear Suppliers Group restrictions on transfers of enrichment and reprocessing technology. And we will also promote multilateral nuclear fuel supply and spent fuel arrangements so that states embarking on or expanding nuclear power programs can pursue their civil nuclear plans without going to the great expense and difficulty of building their own enrichment or reprocessing plants.

To be effective, the international nonproliferation regime must have teeth. The United States supports enhancing the IAEA's verification authorities and resources so it can perform its mission effectively. And we should consider automatic penalties for violations of safeguards agreements, such as suspending all IAEA technical cooperation until compliance has been restored. Potential violators must know full well that they will be caught and that they will pay a high price for failing to live up to their obligations.

To improve our standing to build broad international support for pursuing these means of strengthening the nonproliferation regime, the United States and the other nuclear-armed powers should fulfill their own obligation to reduce their nuclear stockpiles.

We are negotiating an agreement with the Russians to succeed the soon-to-expire START Treaty, significantly reducing the nuclear forces of both sides, paving the way for deeper cuts in the future, and providing for inspections and other confidence-boosting mechanisms. Step by step, we are transforming a relationship that was once defined by the shadow of mutually assured destruction into one that is based on mutual respect.

We are also seeking ratification of the Comprehensive Test Ban Treaty and negotiation of a Fissile Material Cutoff Treaty. These steps will strengthen our national security and global credibility, while moving us closer to President Obama's goal of a world without nuclear weapons.

In the meantime, we will maintain a safe, secure and reliable nuclear deterrent. We are undertaking an important review of the role of nuclear weapons in the United States' defense posture -- and will sustain our nation's nuclear arsenal and supporting infrastructure with the necessary resources.

This is an ambitious agenda. As the president has acknowledged, we might not achieve the dream of a world without nuclear weapons in our lifetime. But by making the reduction of nuclear threats one of our highest national priorities and by reaching out to a diverse group of international partners, we can help build and lead a unified international effort that will make us safer and stronger.

As President Obama said in Prague, the United States "cannot succeed in this endeavor alone, but we can lead it, we can start it." Today, we have started, we are leading, and we remain committed to meeting this gravest of challenges.

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