World Bank: World Hunger
L NI MACAW arlr
By NICHOLAS DAVENPORT
rrHE World Bank—its proper title: the Inter- I national Bank for Reconstruction and Development—has just issued its twentieth annual report and I am afraid that it arouses as much interest among the British public as a report on the poor law administration. Perhaps less so at the moment, for the poor among the developing nations are apt to become rude and offensive towards the richer nations dispensing aid, making them feel that they are swine to have so much money and to be so parsimonious in its disposal. This well-known psychological fact may even have begun to affect the free flow of international aid. Last year, for example, the prosperous industrial nations were certainly less forthcoming. The ratio of official aid to their gross national income has dropped from 0.8 per cent in 1961 to 0.6 per cent in spite of the fact that in these four years their total GNP increased by 32 per cent. The target figure for official aid in this 'develop- ment decade' was 1 per cent.
There were, of course, certain difficulties last year. Some members of the capital-exporting club ran into balance of payments trouble and budgetary limitations on aid were imposed in both the USA and the UK. The common practice of tying aid to purchases in the donor country was therefore accentuated and this tended to reduce the value of aid by limiting the degree of competi- tion among the suppliers of manufactured goods. But the truth is that with the worsening of political relations the industrial powers were not in such 'a giving mood' in 1965. When war actually broke out between India and Pakistan—the two largest aid-consuming and aid-demanding nations—it made all the donor countries think twice about increasing aid to the unsettled parts of the world.
And there is another disturbing fact in the development-aid business. Many under-developed nations are increasing their population at a faster rate than they are increasing their wealth, so that the more aid that is pumped into their economies, the poorer they become! This is glossed over in the Bank's annual report but it is frankly dis- cussed in the special 'aid' number of the OECD Observer. By the end of this century there will be twice as many people in' the world as there are today. In the under-developed continents the increase will be even greater than 100 per cent.
It is a horrifying thought. The upsurge in population is due to the fact that a sharp decline in mortality (for which aid is partly responsible) has not been followed by any decline in the traditional level of fertility. Families in the under- developed countries are on average twice as large as they are in the developed, partly because they are not educated (not having a mass-communica- tion medium like television), partly because they lack cheap and effective contraceptives. Aid is now being given for clinics and for all the educational paraphernalia needed for family control but it is shameful to record that up to recently this service was entirely provided by private philanthropic institutions. Even so, the World Health Organisa- tion, though empowered last year to help its members in population policy, is still not allowed to participate in direct birth control operations. Yet, as President Johnson told the United Nations
Assembly in June: 'Less than five dollars invested in population control is worth a hundred dollars invested in economic growth.'
The population explosion brings the threat of famine in those developing countries where efforts to increase farm yields have been least successful. A generation ago these nations were net exporters of food but now they are becoming increasingly dependent on food imports from the developed countries. The World Bank has lent millions for agriculture in the past—for irrigation works, flood control, soil preservation, etc—and last year sent 115 missions to member countries for such developments, but it is clear that a still greater emphasis must be given to domestic food production in the aid programmes and that these projects must be linked up with family planning. The need for it is urgent. India (483 million), Pakistan (103 million), Indonesia (102 million), and Nigeria (56 million) are all in the lowest income range—under $100 per head per annum— and account for nearly 50 per cent of the non- Communist under-developed world. India is the test case whether the aid-assisted increase in food production, plus food imports, can get ahead of the population growth before famine takes over.
Another danger is the growing indebtedness of the aid-receiving countries. The debt burden has become heavier with the rise in world interest rates. In February this year the World Bank raised its interest rate on new loans from 5-1 per cent to 6 per cent and Mr George Woods, its president, has spoken of a further rise coming. Some donor countries have softened the loan terms to meet hard cases (notably Canada and Great Britain, which has granted interest-free loans on occasion) but the alarming fact emerges from the World Bank report that although the rate of accumulation of new debt has slowed down from 15 per cent to 10 per cent the rate of growth in export earnings has only risen from 4.3 per cent to 7 per cent. In Latin America the debt service absorbed one-sixth of export earnings in 1965. The whole design of financial aid to the poor nations is frustrated if the debt repayment terms actually retard the growth of repayment capacity. Before long, in my opinion, the donor countries will be forced either to agree to a moratorium for the debt service or to double the period for loan repayments.
But I must not end on too depressing a note. Perhaps the greatest asset the World Bank has is the skill, experience and integrity of its expert executive staff and the confidence which the developing nations have in the scientific teams which it sends to their countries for surveys, tech- nical assistance and advice. What the under- developed world would have been like without its help I dare not think. In twenty years it has lent over $9,500 million—close on $11,000 million if the affiliates are included—and it is now dispens- ing aid at the rate of over $1,000 million a year. To the World Bank most of the developing coun- tries owe their roads, railways and power systems which have made their economies viable. The income and national product of the aid-receiving nations have doubled in these twenty years and even if growth has been slow a few traditionally poor countries are now nearing the goal of 'self- sustaining economic growth.' It is an achievement to be proud of but some desperate action will have to be taken in the next twelve months to prevent a tragedy in the poor countries afflicted by excessive population growth. The World Bank's maxim should now be: 'Fertilise the lands: de-fertilise the tillers.'
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