Environment, Development and Sustainability (2005) 7:95–115 ©c Springer 2005DOI 10.1007/s10668-003-4012-9

ECONOMIC UNDERDEVELOPMENT AND SUSTAINABLEDEVELOPMENT IN THE WORLD: CONDITIONING

FACTORS, PROBLEMS AND OPPORTUNITIES ∗

FRANCISCO J. AYALA-CARCEDO† andMANUEL REGUEIRO Y GONZALEZ-BARROS∗

Instituto Geologico y Minero de Espana (Ministerio de Ciencia y Tecnologıa(∗author for correspondence, e-mail: m.regueiro@igme.es)

(Received 10 March 2003; accepted 21 November 2003)

Abstract. This paper deals with the various factors that condition underdevelopment in the world. It suggestssome alternatives and points out the potential opportunities that both the developed and the underdeveloped worldwill have in the coming years to change the gloomy prospects that we see today. The present paper outlinesthe trends in historical priorities in development, changing as they pass from economic development to socialdevelopment to ecological conservation – the three pillars of Sustainable Development.

The paper analyses the importance of geography, a very relevant and often neglected conditioning factor.Also, it analyses the role of socio-economic conditioning factors like political immaturity, demographics, landownership and external debt.

Furthermore, the current opportunities for economic take-off are presented, from cash surpluses to low interestrates, from natural resource management to tourism or migration, from the Information Revolution to liberal-isation of agricultural markets. Current obstacles are also analysed. The paper, on the basis of current factsand figures, reaches the conclusion that there is a structural need for sustained development aid for most poorcountries, but it must be distributed in a more rational way.

Key words: conditioning factors, economic take-off, economic underdevelopment, geographical factor,globalisation, opportunities, sustainable development.

1. Introduction

As one of the scholars of development has said: ‘Underdevelopment is one of themost important problems of our times’ (Sylos, 1982). Today, 840 million sufferfamine and one-tenth of world’s population lives with less than 1 USD/day.

The problem of economic growth was analysed in depth by Colin Clark in1940 identifying the main cause in the increase of productivity. The problem ofunderdevelopment was widely treated during the period 1960–1975, with regardto the problems of de-colonised countries and underdevelopment’s economic andsocial bias (Amin, 1973; Bairoch, 1971; Cardoso and Faletto, 1967; Franck, 1966;Furtado, 1966; Kenwood and Lougheed, 1972; Prebish, 1968). Underdevelopment

∗ Readers should send their comments on this paper to: BhaskarNath@aol.com within 3 months of publication ofthis issue.

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Figure 1. The traditional socio-economic approach when integrating the ecological dimension has given way tothe new paradigm of the Sustainable Development (Ayala-Carcedo, 2000).

is not, by any means, a new subject in any way, except for the current emphasis onits relative dimensions and ecological impacts.

Since 1987, after the work carried out by the Bruntland Commission of theUnited Nations, the idea of Sustainable Development, resulting from evolutionand a historical need (Ayala-Carcedo, 2000), has started to be disseminated to alarger and larger extent through ever wider circles. This in turn has meant – in con-trast to the situation several decades ago where the focus was on the economic andsocial problem – that today the problem can only be dealt with from the perspec-tive of the Sustainable Development, integrating economic, social and ecologicalsustainability (Figure 1).

Much has been already written on these subjects and there is little can we addto further emphasise the deep contrasts between the conditions of daily life andthe opportunities available to those born in a developed country and those bornin an underdeveloped country (UDC), a circumstance none of us have any con-trol over. For Stylos (1982), ‘To study underdevelopment can be a way to studyman’s tragedy’; for Arnanz and Ardid (1996) ‘A huge amount of men and womenwho inhabit the Earth see their present and their most immediate future withno hope’.

Two indicators of the Human Development Index of United Nations, LifeExpectancy at birth, and Illiteracy Rate, as reflected in Figures 2 and 3, correlate

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Figure 2. For this group of 33 countries there is a clear correlation between one of the elements of the HumanDevelopment index of the UN, the life expectancy with the PCI. It can be observed that there is a first stretchof rapid rise with income up until 64 years with 1000 US$ followed by another up until 70 years for 3700 US$.Obtaining an average goal of 64 years for the LDC (<500 US$) would require a minimum of 20 years of growthat 3.5% annually per capita.

Figure 3. The adults illiteracy rate is another of the elements of the Human Development Index of the UN whichcorrelates clearly with the PCI. Obtaining a rate under 10% implies rising the PCI over 4000 US$. There are,though, wide differences for the same level of income. The higher rates generally correspond to Muslim countrieswith very high rates of women illiteracy due to the existing discrimination; the lower rates corresponds to currentor past socialist countries.

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significantly with per capita income (PCI). This points to a cause–effect relationship(in line with the fact that historically, economic development preceded socialdevelopment in developed countries), probably in a two-fold way, in the areasof social and economic development. Such correlations have been obtained fora group of 33 countries covering the whole spectrum of PCI and demographicsworldwide.

The ethical dimension of this reality is obvious and is an inevitable conclusionfor any person with a minimum of humanity. It is also a motivation for solidarity,since aid and consciousness raising are always the starting point to change things.The tangible result of this solidarity can be estimated in the amount of developmentaid, which is∼0.3% of the GDP of the developed countries (a sixth of the agriculturalsubsidies disbursed in rich countries according to the World Bank, 2002), far fromthe 0.7% promised at the Rio Summit in 1992. Still, such a ratio is only a third of theamount dedicated by the colonial metropolis in 1960 (Bairoch, 1971). It is clear thatanethicalmentalityby itselfhassevere limitations infindingasolution to theproblemof underdevelopment. If the effort is not conducted so as to search for synergies witheconomical rationality, it will drive people in UDCs to frustration.

The reason probably lies in that economic reality, the ‘locus’ in which a sub-stantial part of the development process occurs, is a system driven by interest morethan by feeling, by money and not by goodwill, by everyday realities more thanby deeper motivations. Economic reality is closer to necessity than to liberty, tothe is than to the should be. Economic rationality lies in producing efficiently atcompetitive costs to satisfy an economic need. That is, a feasible need that canbe paid for, thus sustaining those producing work, capital, and nowadays, sincethe expansion of the idea of Sustainable Development, also those maintaining nat-ural resources and ecosystems, so that they continue producing, making the systemfeasible economically.

Although the business world, in order to accommodate itself to the reality of thecurrent social conscience, includes some elements of social and ecological ethics(Ayala-Carcedo, 2001a–c), its economic and operating principles are substantiallysimilar to those of 200 years ago: there is no survival or development if there is noeconomic survival and economic growth.

The problem embedded in the foundations of the deep contrasts that offend oursensibilities is that the needs of the underprivileged are human needs and not theeconomic ones we suffer from in developed countries since they lack our economicsolvency. The process of economic development in their societies has not yet reachedthat levels of excess production that allow the expansion of the Welfare State. Thiswas also the reality in today’s post-industrial countries 200 years ago. Then mostof the people lived on the edge of subsistence, whereas hereditary aristocrats livedin relative opulence as owners of the most precious productive good: land.

The lesson that a historical review of the genesis of the idea of Sustain-able Development transmits is precisely this: economic growth preceded socialdevelopment and this in turn preceded ecological sustainability, its three intercon-nected pillars (Ayala-Carcedo, 2000).

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The First Industrial Revolution (1765–1885), that of steam, coal, railway andtextile factories, did not achieve, except in its final stages, as a result of the rebellionof the working class against their extremely hard lives, the first rudiments of socialsustainability (Ayala-Carcedo, 2001b). The Welfare State became established onlyduring the Second Industrial Revolution (1885–1960), that of oil, electricity andthe automobile, and to a certain extent was an anticyclic strategy to expand theSociety of Mass Consumption to avoid another depression like that of 1929. Thegrowth of the third side of the tree pillars of Sustainable Development (ecologicalsustainability) belongs to the last 40 years: the current post-industrial phase.

Thus, although economic development is an essential requirement for Sustain-able Development, 80% of the underdeveloped world plays no part in it. There,the survival of ecological or cultural features – which seem advantageous from ourdeveloped urban logic – is part of something that is inevitably dying in a globalisedworld: the agricultural society. Such an understanding is not only fundamental fortheir future, it is also fundamental for the future of developed countries themselvessince the ecological and social priorities of the UDCs, which represent most of theworld, will always be subordinate to the economic priorities. The consequences ofthis reality do not need to be exaggerated, since we are all in the same boat: Earth.

Our planet is starting to show signs of a potential major ecological crisis, withclimate change, a crisis in fisheries, ever growing sea pollution, desertification/deforestation in dry climates and rainforests, water and soil pollution or socialcrises such as global terrorism, waves of migration, etc. and both crises result fromunderdevelopment. Such a situation is starting to erode developed democraciesparticularly after the terrorist attack of September 11, 2001.

Consequently, both from the ethical perspective and from the very ecologicaland social bases of development – we should not forget the ecological footprintleft in undeveloped countries by developed ones –, we should try to see how wecan overcome – as much as possible – the endemic economic underdevelopmentin which almost five-sixths of Humanity is living.

Toachieve thiswithin the frameworkofaGlobalisationacceleratedby informationtechnology and the abundance of capital, and the collapse of the state capitalism ofthe Soviet block, is probably the challenge of our time and of the 21st century. Aswill be shown in the coming sections of this paper, it is a very difficult challengethat will not be solved by joining the side that rejects antiglobalisation on merelyethical grounds (in despite as a critical conscience is necessary).

The underdeveloped world needs development more than charity (which mightbe necessary in cases of crisis but which, in the long run, creates a culture contraryto development and self-initiative).

2. Problems inhibiting economic take-off: the geographical factor

First, it must be noted that underdevelopment – a word coined by US presidentTruman in 1949 – is a very heterogeneous world; in fact, Rousset (1994) speaks of‘The Third Worlds’.

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In this sense, the term Third World seems inadequate. It was first used byAlfred Sauvy in 1952 to define the group of countries outside the two oppos-ing Cold War blocs (comparing it with the Third Estate that drove the FrenchRevolution of 1789). In fact this term was already unjustified after the collapsein 1989 of what Debray (1985) called rightfully the ‘blocked bloc’.

The term South seems unsuitable as well, since, although it maintains a morethan evident geographical logic, it tempts some to find certain genetic explanationsfor the problem, a position we will comment on later.

In our opinion, the right designation, in order to analyse both symptoms andproblems as well as the potential remedies, is UDC (those with an annual PCIunder 5000 US$). The UDC can then be further subdivided into two subgroups:less developed countries (LDC) and developing countries (DC). The latter containsa subgroup of countries with a PCI over 3000 US$, called advanced developingcountries (ADC), on the brink of economic expansion. Within the first group ofUDC, that is the LDC, we can include those with PCI under 500 US$. These showgeneralised obstacles for growth in the Rostowian sense (Rostow, 1960), that is,they face geographical, sociocultural and economic obstacles. The DC show oneor several problems for development, but they possess some factors in their favour(Figure 4).

Sometimes, in a sociological reductionism, there is a tendency to think thatthe primary reasons for problems always lie in cultural or religious factors. Forexample, Weber (1922) claimed that the key factor in the emergence of thecapitalism was Protestantism. Likewise, the common Western prejudice about

Figure 4. Both the variety of problems and opportunities, as well as the rigidity of the possibilities of actingagainst them, reveal the complexity of the problem of the take-off towards development.

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underdevelopment in the Islamic world shows a lack of knowledge that historyeasily refutes (Ayala-Carcedo, 2001b). Obviously, reality is usually more complex.Historically, nature does not provide the same opportunities for all in terms of theland available for every community.

Cipolla (1962) pointed out the strong geoecological conditioning of agriculturalsocieties – which in fact was a general trend in Europe far into the 19th century –by means of the influence of these factors on the food productivity and animalenergy. Huntington (1924) showed the relation between climate and civilisation.In 1975, Gill Carter and Dale, in Topsoil and Civilisation, showed the influenceof soils – resulting from the interaction between climate and rocks – on historicalevolution.

Hassan (1981) showed the dependence of optimum productivity in the mainecosystems – maximum limit of the food and energy availability – on annual rain-fall. Lamb (1995) has shown the effect of natural climatic changes on the historicalevolution of several cultures and civilisations such as the Saharan, Mesopotamian,Indian and European during the Little Ice Age, a subject that Huttington hadalready dealt with in relation with the decline of the Mayan Culture.

Diamond (1998) has shown the almost decisive role of favourable ecologicalconditions (presence of wild agricultural vegetables and domesticated animals, anda not an overly arid climate) in the emergence of agriculture and cattle raising inthe Neolithic and the early transition to civilisation in the Bronze age.

Already Harris (1968) and others had pointed out what a severe handicap thelack of domesticated animals as suppliers of meat, milk, organic fertiliser andenergy was for Africa, America and Australia, with respect to the rest of thecontinents. This handicap resulted from biogeographical and bioclimatic barri-ers, plagues and availability of aloctonous fauna. They also pointed out the factthat European agriculture depended on rains, impossible to control centrally; thenfavoured feudalism. Wittfogel (1957) outlined the role of the combination ofbig rivers and arid climates in the rise of the first great hydraulic civilisations:Egypt, Mesopotamia and the Indus Valley. Then, irrigation favoured centralisedand theocratic regimes: the Asian Despotism. None of these regimes passed tocapitalism. Thus, this difference would favour in mild climates the appearance anddevelopment of capitalism through feudalism.

The comparatively lower fertility of dry farming in the Mediterranean countriesrelative to those of the wet Europe, the total or relative lack of cheap coal, togetherwith orography and the peripheral character of the Mediterranean with regard tothe European core, has been important in the differential delay in Spanish andMediterranean development (Ayala-Carcedo, 1997).

It cannot be an accident that most of the developed countries are located inmedium latitudes with mild climates, possibly explaining the expansion of someother countries, such as the Scandinavian countries or Switzerland, as a result ofthe development of their neighbours and thanks to favourable natural conditions.Abundant hydraulic energy and wood for paper pulp in the Northern countries and

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a strategic location in the case of Switzerland aided their development (Landeset al., 1988).

Nor can it be accidental that to speak of the group of developed countries is tospeak of the North. The reason is that the size of emerged lands on Earth is greaterin the Northern hemisphere, where, as Diamond has pointed out, the longitudinaldimension is higher than in the Southern continents, and the climatic barriers whichhave prevented or impeded the diffusion of species and crops is much lower. Wecannot forget that up until 150 years ago the economic base of most of the worldpopulation was agrarian and this fact defined the initial conditions for growth anda society’s ability to obtain the consecutive developing advantages that history hasshown to be decisive. This factor, and not racial or cultural reasons, is the mainand necessary primary cause of Euro-American economic, political and culturalhegemony.

Conversely, infertile soils inhospitable to agriculture are located in UDCs. Thesecountries have most of the dry land – inhospitable for agriculture – as the arabicor jungle areas over old geologic shields, such as the South American, lackingfertility due to the agricultural poverty of their soils, a result of the climate, withscarce nutrients and high vulnerability to water erosion by intense rains and hostileto man and cattle due to plagues and endemic epidemics. Whenever present indeveloped countries, as is the case of the North American or Australian deserts,the regions are today demographically completely emptied.

On the other hand there are factors favouring transport and commerce such asproximity to coasts, measurable using the rate between coasts length and surface.Western Europe (in fact the huge peninsula of Eurasia with coasts where thereare abundant shears that form coastal inlets) the Mediterranean, the AmericanGreat Lakes zone and maritime countries such as Japan, Italy or Chile have sub-stantial geographical advantages over continental countries such as Russia, theCentral African countries or the interior of Australia.

The same can be said of the advantages of navigable rivers, which Spain lacksdue to climatic reasons, or the abundance of mountains, an adverse factor for com-merce which together with a interior continental location and dryness explain theisolation and poverty of Afghanisthan and its political immaturity: feudalism andwar lords.

In the last few years, new empirical research carried out by the Center forInternational Development at Harvard University has confirmed all the above men-tioned information. As its director, Jeffrey D. Sachs, stated in 2000 ‘Most recentcross-country analysis of economic growth has neglected physical geography asa determinant of economic growth’. Gallup et al. (1999) concluded that ‘loca-tion and climate have large effects on income levels and income growth, throughtheir effects on transport costs, disease burdens and agricultural productivity’.Mellinger et al. (1999) using a global analysis with a Geographical InformationSystem has concluded that ‘GDP per capita and the spatial density of economicactivity measured as GDP per km2 are high in temperate ecozones and in regionsproximate to the sea’. Voortman et al. (2000) proved that the usual approach of

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exclusively blaming socio-economic factors for the failure of a large part of Africaduring the Green Revolution is not adequate since it forgets the disadvantageousedaphic factors of tropical soils.

Certainly these are not conditions that can explain everything, and they arenot decisive factors, but they are strong conditioning factors and not taking theminto consideration obscures the lack of comparative opportunities of many coun-tries which are today at the back of underdevelopment line, and tends to fallinto the trap of racists’ or pseudo-psychological pseudo-explanations such as thealleged indolence congenital to Latin races – rulers of the greatest empires of the15–18th centuries – or to colour – even though dark-skinned Egyptian pharaohsreigned when in Europe there were not yet even States. As Bairoch (1971) haspointed, the most frequent model of industrialisation, the British model, had aessential forerunner: the Agricultural Revolution, which freed up part of the labourforce by substantially increasing yield and productivity (before the work of two-thirds of the population was needed to feed everyone). The Agricultural Revolution– a techno-economic change with high social impacts – also increased the pur-chasing power of the land owners. But the group of features needed, that is, thesuppression of fallow lands and the annual rest of fields, was not then possi-ble in the Mediterranean climates due to climatic reasons and soil poverty. Thiswas one of the most powerful reasons for the later development of countries likeSpain (Ayala-Carcedo, 1997). On the other hand, the omission of the geoecologicalfactors has resulted in failures like the Green Revolution in Africa.

Figure 5. Less economic development means higher weight of the agriculture in the GDP. Up until 2000 US$ theweight drops sharply and very slowly from the take-off which can be located at around 5000 US$. Consideringthe weight of agriculture in the LDC (<500 US$) its incidence in the growth is very important turning it in astrategic sector for development and at the same time contributing decisively to solving the hunger problem.

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As shown in Figure 5, the lower the PCI, the greater the weight of agriculture inthe GDP. Since fertile land is a condition for development, its lack is an obstaclefor UDC which condemns them to a vicious circle of underdevelopment.

All this emphasises the need to give priority to agricultural development, asmany experiences – such as those of Taiwan or South Korea (Rousselet, 1994) –have already shown, and the importance of liberalising agricultural markets, par-ticularly those of the EU and the USA, which are heavily subsidised. This is muchmore important than the development aid itself. The positive role of FAO in thistask, limited by the scarce budget, must be enhanced.

We must also take into consideration the nature’s gifts in the form of mineralresources. While there is a lack of coal in the Mediterranean, it is abundant inthe UK, Germany and the Netherlands. The coal, oil and pristine territories in theUSA, help to explain many things. Andrews (1991) has shown the importance ofnatural resources in the historical differential development in Europe.

It is obvious that Argentina and Chile have more opportunities for productiveagriculture than Tanzania or the Muslim countries which are located in the aridzones of Eurasia and Africa.

The existence of those objective geographical factors in underdevelopmentis and has been a difficult handicap for an economic take-off. These objec-tive factors outweigh and negate the possible benefits of well-intentionedvoluntarism.

3. Problems inhibiting economic take-off: socio-economic problems

3.1. POLITICAL IMMATURITY

Another factor that severely conditions growth possibilities, and is closely relatedwith the geographic factor is political immaturity, very relevant in de-colonisedcountries in the 20th century that had not developed into territorial states beforecolonisation, or that grouped different people according to the colonial distributionon 19th century maps. Many post-colonial wars, particularly African, have takenadvantage or resulted from this fact; one need only think of Biafra, Ethiopia orRuanda.

Today’s developed countries, particularly the European ones, needed manycenturies – the Middle Ages – to pass from the feudal state to national states. Inmany cases, like Spain or France for example, their reference was the unity of theseven centuries long Roman colonial period that joined city–states and territoriespreviously under a gentilician regime. It was a period that, in later colonisationsafter the discovery of America or those of the 19th century, would bequeathlanguage, laws, religion, urbanism and infrastructures, as well as centralisedadministration.

Such political immaturity – another factor of heterogeneity in the underdevel-oped world – notably impedes the action of the state to favour development, gives

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way to endemic corruption that absorbs most of the developing aid channelled bythe state, encourages capital flight and often favours the entrance of multinationalcompanies with unsustainable social and ecological practices.

3.2. THE DEMOGRAPHIC FACTOR

The third factor then seriously impedes economic take-off is the demographicfactor.

Until child mortality was reduced thanks to biomedical discoveries, particularlyantibiotics in the decade of 1940s, population, natural resources and develop-ment conditioned agricultural societies with the same mechanisms that drive theevolution of animal societies.

As Paul Ehrlich predicted as early as 1968 in his Population Bomb, the demo-graphic explosion in UDCs, which have seen a population increase of about3000 million since 1960, has shattered the millenary equilibrium.

Beyond moral statements or rationalisations arguing that a high birth rate stim-ulates development (often using insufficient empirical evidence, as is the case withSimon (1980) or Chesnais (1987)), objectively speaking, a high birth rate is –together with the expansion of consumerism in DC – the key to the acceleration ofthe use, exploitation and degradation of natural resources and the advance of deser-tification on a global scale, specially in arid and semiarid regions as the Sahel. It isalso clearly associated with poverty (Panayotou, 2000a) while development, in theend, improves the ecological indicators on a country level (Panayotou, 2000b).

On the other hand the cost of health care and education of the huge youth pop-ulation that characterises the demographic pyramids of UDCs consumes most ofthe public resources. Also, the production system is unable to provide work for thetremendous contingents of working age young people. This fact generates chronicunemployment and marginality such as that seen in the Magreb and Muslim coun-tries. This marginality and unemployment, together with the Palestinian problem,become a true cultural medium for global terrorism. The huge labour pool leads tovery low salaries that in turn lead to a lack of stimuli for technological innovation(Kenwood and Lougheed, 1972) and reduce the possibility of forming an internalmarket above the mere subsistence level.

Bloom et al. (1999) have shown how ‘The demographic transition can act bothas a catalyst and as an accelerating mechanism (of economic growth), and thatdemographic effects can explain most of East Asia’s economic “miracle” ’.

As an example of a opposing situation, one could point to the demographicgrowth achieved during the First Industrial Revolution (1765–1885) – the age ofproletarians – which did not stop development in Europe. Today the situation is notthe same because the development process in the 19th century – labour intensivedue to the level of technological development, as opposed to current developmentlevels – and the possibilities opened up by migration by the colonisation of newlands (in Spain from 1880 to 1914 one-fifth of the total population migrated toAmerica) which were able to absorb most of the new contingents.

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y = 117,42xy = 117,42x-0,2404-0,2404

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Figure 6. Up until ∼1500 US$ of PCI there is a potential inverse correlation of the birth rate with the PCI stronglydecreasing with the increase of income. The higher birth rates of the LDC result from the lack of developmentthrough cultural paths such as securing the old age or the lack of modern family planning. Reconducting thedemographic boom implies the development of the less favoured countries.

As Figure 6 shows, the PCI and the birth rate are inversely related. This isanother of the Gordian knots of economic growth.

We can only deduce that the solution to the problem of the demographicboom appear over the course of the development process and that an effectivedevelopment policy is the best solution to the demographic problem.

3.3. LAND PROPERTY

Another social factor that continues to condition the possibility of a take-off inother countries, particularly Latin-American ones, is the concentration of landproperty in the hands of a few.

This is one of the causes of the impoverishment generated by the wars thathave ravaged or are ravaging in countries like Guatemala, Salvador, Nicaragua,Colombia. These conflicts were caused by a combination of the demographic boomand the concentration of land property in just a few hands. Land property concen-tration also means a handicap for the creation of an internal market, one of theprerequisites for economic take-off.

Agricultural Reform is not only many times an act of justice, but a conditionfor development and peace. Nevertheless, if ecological characteristics and socio-economic factors not taken into account, agricultural modernisation might fail(Sachs, 2000).

Landowner economies, like the Spanish economy up until well into the20th century, or the Southern US states, or that which was left by the colonialSpanish and Portuguese presence in America, in contrast with the farmers of the

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American East Coast, did not favour economic growth, but quite the opposite beingthe case (Kenwood and Lougheed, 1972). The reason lies in landowners’ defenceof the free trade (raw materials and agricultural products in exchange for manufac-tured goods) and the maintenance of very low salaries in expanding demographiccontexts such as that of the 19th century. These factors hamper the creation ofan internal mass market. The struggle between two opposing development mod-els regarding the future of the West was at the heart of the North American CivilWar between the free trading Southern landowners and the protectionist Northernindustrialists and farmers. If the South had triumphed, today the USA might onlybe slightly ahead of Brazil in terms of development.

3.4. OTHER FACTORS

Another factor that progressively impedes economic take-off is the overexploita-tion and degradation of natural resources, actions which are closely relatedwith the previous factor (Ehrlich, 1968; Campbell, 1983). The advance ofdesertification – the process of degradation of land fertility resulting from defor-estation, erosion, increased salinity, overexploitation of groundwater and theongoing climatic change itself – is a real worry in dry countries and, togetherwith the demographic explosion (which has led to progressively lower ratios oflabour land per capita) and the semidepletion of the Green Revolution, paints agrim panorama for those UDCs, mainly African, with the dimmest prospects fordevelopment.

The last backlogging factor is underdevelopment itself, a reality that leadsto something similar to what Franck (1966) called the development ofunderdevelopment.

Today things are quite different from the situation in the last quarter of the19th century. At that time economic nationalism was linked to the construction ofthe first national markets, thanks to the telegraph, the railway and to a growing pro-tectionism (which was the predominant phenomenon among the countries whichhad taken the road to the industrial development) and had qualitatively similardegrees of development.

The techno-economic imbalance existing today between developed and UDCs,the amount of which varies among the developing globalised countries (DPGCs),is huge, and protectionism, at a level similar to that of the 1890–1939 period, todayis unviable and negative. It is not really that, structurally, the continuity of develop-ment needs to keep most of the world’s population in a state of underdevelopment,simply the situation is radically different – and much more severely adverse – forthose countries which would like to spur development.

It is the world market itself – with Adam Smith’s idea of an ‘invisible hand’ whosetotal substitution or elimination nobody would dare to propose (although it mightbe adjusted to cover by the State goods or services not produced by the market) –and dissimilar development, which is in charge of prolonging this state of affairs.

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Related with this subject is the way part of the UDC incorporate themselves intothe world market: hyper-specialisation, the monoculture of export products oftenpushed by multinationals with headquarters in the DC. This fact – the monocultureof bananas, soy, peanuts or some mineral – makes these raw materials producingeconomies very vulnerable to a fall in prices, as cocoa or peanut in WesternAfrica.

We must point out that high cash reserves in DC is a favourable factor. Butdue to the unfeasibility of many of the projects generally considered sapped byendemic corruption in politically immature countries, this advantage has become,in many cases, a trap ensnaring their potential in external debt. In 2000, the annualpayments to service debt were 0.25 billion euros; the annual aid to developmentwas 0.05 billion euros.

On the other hand the current international economic environment, with theUSA, the EU and Japan simultaneously immersed in a crisis for the first time sinceWorld War II and facing the very real possibility of deflation (Stiglitz, 2002), it isnot the best environment for the poor countries. The relative failure of the 2002Johannesburg and Monterrey Summits on Sustainable Development to financedevelopment only confirm this prognosis.

The possibilities of building a ‘peace economy’ based on the huge expendituresin weapons theoretically freed up by the end of the Cold War in 1990, have com-pletely vanished, because of the September 2001 New York terrorist attack, theconsequent new war problems in Middle East and the cancer of the long conflictin Palestine. Today the USA’s wars and post-war rebuilding in Afghanistan andIraq make a financial development model based on a reduction on the militaryexpenditure a less and less likely possibility; Samuelson (2003) has pointed outthat strong deterioration in the US balance of trade under the Bush Administra-tion (from 191 billion USD in 1996 to 485 USD billion in 2002), mainly causedby these wars may trigger a catastrophic contraction in world trade. A new ‘peaceeconomy’ had open the possibility to supply budgets for a general plan in the UCagainst famine and for education, health, water supply – a basic component for anew agriculture, more productive – and infrastructures for transports and informa-tion, all basic needs for the take-off. But USA has chosen the war and the EuropeanUnion has chosen itself.

4. Opportunities for and obstacles to an economic take-offin a globalised world

In today’s relatively globalised world, that is, with a relatively liberalised flow ofgoods – except agricultural – services and capital, the latter will tend to move look-ing for the best opportunities, which could be where the other production factors(land, natural resources and work) provide more opportunities for profit. A reviewof the growth rate of the GPD/inhabitant in the last four decades shows a declinein that rate in DCs, whilst in DPGCs (mostly ADC) that rate grows. In particular,

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these are countries which have opened their economies and have an interchangepotential, the so-called globalised countries, using the terminology of the WorldBank (Dollar and Kray, 2001). This liberal economic approach to the problemmust be balanced with the possible negative effects at social or environmental level(Bermejo, 1998).

The abundance of natural resources in some UDCs is thus one of the pos-sibilities. Whether they are fishing resources (Chile, Morocco, Namibia), agri-cultural resources (Argentina), wood (Brazil, Thailand, Indonesia), oil and gas(Gulf countries, Indonesia, Venezuela, Russia) or minerals (Chile, South Africa,China, Russia), the possibilities presented by both trough exports – particu-larly if transformed – or their usage by the production system, are undeniable.Nevertheless, the fragility of the natural ecosystems, many times strained, or thedate of depletion of the mineral resources, might end up representing excessivecosts or real traps or obstacles – similar to the monocultures commented above –to agriculture that produces more than internal demand requires, which as seen inmany occasions is essential for economic take-off. Abramovitz (1996) has pointedout the negative ecological impacts of large dams. Wellmer and Becker-Platen(2002) have analysed the conditions for sustainability in the exploitation of mineraland energy resources.

The land use for toxic and hazardous wastes coming from DC in countries with apoor environmental legislation is a false opportunity. Some countries like Russia –with the most damaging nuclear accident, Chernobyl – has to offer its land forradioactive wastes reservoirs. WTO might develop clear controls in internationaltransfer to avoid environmental dumping.

The low price of another production factor, labour, fruit of the underdevelop-ment itself, is another element of opportunity, although from the point of viewof national production might be – as stated before – a handicap for technologicalinnovation. Textile manufacture, carried out today mostly in UDCs – some timesusing children as the labour force – or electronic components assembly, are twoexamples of the influence of this factor, as is the transfer of some car assemblyplants from Western to Eastern Europe. Nevertheless, the qualification of the workfactor is very uneven in the underdeveloped world.

Figure 7 suggests a poor relationship between the unemployment rate and theeconomic level. Although it is true that unemployment has grown substantiallyin European countries, underground unemployment or subemployment seems tobe significantly lower than in the LDC. Unemployment grew in the EU due tothe technological reconversion of the last decades and lacking of interest in lowwages works, and in the Eastern European countries due to the collapse of theoverprotected systems which characterised State capitalism.

Linked to this fact and to the demographic boom is the role played by emigrationto the DC. Although it deprives UDC of good workers – many times the bestworkers – which in many instances would be unemployed, and entails undoubtedsocial costs, it is also a source of income for the families that stimulates UDCs

110 F.J. AYALA-CARCEDO AND M.R. Y GONZALEZ-BARROS

Figure 7. The unemployment rate shows a poor inverse correlation with the PCI, existing a wide span for thesame income, higher – in any case – than that existing in developed countries. The correlation might probablyimprove once corrected with the undercover unemployment as this is very important in the hyper-sized servicessector in UDCs.

by means of the amounts sent by emigrants and the corresponding foreign cur-rency income. This factor had an important influence on the Spanish take-off ofthe 1960s, thanks to two million (more than 10% of the work force) emigrants(Tamames, 1986). Foreign currency allowed the acquisition of industrial equip-ment. In Mexico, emigration today comprises 1.7% of the GDP and in Morocco isthe main source of foreign currency. On the other hand, emigration also means –because of the emigrants that return temporarily or permanently home – a flowof new ideas of all sorts that might help in the economic, social and politicaltransformation.

With regard to autochthonous development, there is an abundance of cashin the DCs that can form a pool of capital for enterprises. Low interest rates(1.25% in the USA and 2% in the EU at the end of 2003) is a clear indicatorof this fact. As the lack of capital might be the main obstacle for the take-off, itsimportance should not be minimised.

The lack of transport infrastructures might be somehow substituted by one ofthe possibilities that the information society opens up: the substitution of thetransportation of people and goods by the instant transportation of information,which is much cheaper. It is for this reason that one of the priorities of any eco-nomic development initiative in the underdeveloped world should be the creationof infrastructures and digital networks with their corresponding PCs. A task thatcould be handled by Non-Government Organisations by recycling used PCs fromDCs. We must point out in this sense the huge inequality existing between UDCsand DCs and the facilities offered to good computer experts to emigrate. However,

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the success of countries like India with the digital city of Bangalore, which sup-plies software to the most advanced countries, is notable. Nevertheless the needfor literacy in computers, when there are still huge pockets of traditional illiteracy,represents a difficult challenge to overcome for the poorest countries and a newfactor that will increase internal and external inequality. One of the main problemsfor UC in this way is the high cost of software with copyright. From Brazil andinformatic-NGOs is now promoted a movement for the use of free software likeLinux by government and individuals.

One of the natural/cultural resources that today represents a real opportunity inseveral countries is land. Land, sometimes with virgin areas, is an opportunity forthe development of tourism – as it was and still is in Spain – whose volume doesnot stop growing in DCs (in Spain today it represents 9% of the family expendi-ture and the tourism sector is 13% GDP, the second industry after cars), and it ismore and more oriented to places previously considered exotic. Its importance forthe Caribbean, Brazil, North Africa, Egypt, India or the Far East is obvious. Thisopportunity needs a sustained effort in the UDC for natural and cultural heritageconservation, an effort in the way of sustainable development. The evolution of thisopportunity will depend nonetheless on the economic recovery of the rich coun-tries and enhance the need for UDCs to conserve natural resources, an opportunityfor Sustainable Development.

Another opportunity, currently more theoretical than real, only for several coun-tries with competitive agriculture, especially after the failure of the 2003 WorldTrade Organisation (WTO) summit in Cancun – with the permanent support ofDPGCs and the World Bank, is the potential liberalisation of the agrarian market,promoted by the WTO, particularly in Europe, one of the less liberalised tradezones. The new protectionist impulse in agriculture of the Bush Administration inthe USA does not offer a favourable forecast in the short term. In the EU, the latest

Figure 8. The forecasted evolution of the world population, characterised – as a whole – by the demographicboom, higher with less development, seems to suggest a drop that will contribute to a more balanced growth,particularly in LDC which in turn will see their development problems reduced.

112 F.J. AYALA-CARCEDO AND M.R. Y GONZALEZ-BARROS

proposals of President Prodi to reduce in a substantial way the weight of agricul-ture in the Union budget is a hope for UCs. But the current size of this opportunityis limited because today 45% of international trade of agricultural commoditiesis the internal trade of multinational enterprises. For many poor countries, theachievement of subsistence agriculture is a more important target to eradicatefamine.

There is general agreement about the repeated failures of WTO summits sincethe 1999 Seattle meeting. The possible temptations of a return from multilateraltrade agreements to bilateral trade may be a big threat to world development.

In any event, the demographic forecasts for the current century, as shown inFigure 8, point to a slowdown in growth and to UDCs entering more frequentlyinto demographic transitions (Livi-Bacci, 1989), which will probably translate intoan improvement in the economic growth (Bloom et al., 1999).

The evolution of the UN Index of Poverty shows, at a world level, a slightdecrease from 1987 (28.3%) to 1998 (24%), but the economic gap between therichest countries and the poorest is today two times greater than 40 years ago.This fact suggests improvement is not homogeneous, and the relative problemof poorest countries is growing. Therefore, the Development Aid coming frommore developed countries and international institutions is completely necessaryfor the poorest countries but is less important with respect to the liberalisation ofthe agrarian markets or freights for somewhat more developed countries.

Figure 9 suggests that the expectation that Development Aid is being sent to thepoorest countries not be borne out in reality and, rather, aid decisions may be madeon the basis of factors of a cultural nature – same language – or to relations with

Figure 9. The poor correlation between PCI and official aid to development suggest the unclear rationality ofsuch aid with regard to objective distribution criteria.

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former metropolis or areas of geopolitical influence, which interfere with develop-ment priorities and suggest that there should be more UN intervention for a morejust allocation of aid: more for poorest countries.

To summarise, a very important part of the opportunities are currently blockedfor many countries, in part by the current economic situation, in part by the fail-ure of hopes about a new ‘peace economy’, in part by structural reasons. This isnegative for the hopes of a progressively bigger part of the human population andfor the protection of the environment in poorest countries. These opportunities willprobably be not enough for many of the poorest countries with severe obstacles togrowth; therefore, a sustained program of international aid rationally distributedwill be necessary.

5. Conclusions

At a world level, underdevelopment is the 21st century’s main challenge and themain cause of geopolitical problems.

Probably, history’s main development problem is that economic developmentpreceded social development, and this in turn preceded ecological sustainabil-ity. Today things are quite different from the situation in the last quarter of the19th century.

Underdevelopment is a very heterogeneous world and there is not a generalmodel for development.

The ecological and social priorities of the UDCs, which represent most of theworld, will be subordinate in practice to economic priorities.

Nature, in terms of the land available for every community, does not provide,historically, the same opportunities for all. For example, favourable ecologicalconditions (presence of wild agricultural vegetables and domesticated animals, anot too arid climate) played an almost decisive role in the earliest emergence ofagriculture and cattle.

Until 150 years ago the economic base of most of the world’s population wasagrarian and that fact defined the initial conditions for economic take-off, andto obtain consecutive developing advantages that history has been decisive. Thisand not a racial or cultural reason is the main and necessary primary cause ofthe Euro American economic, political and cultural hegemony. In this way, it isnecessary to give priority to agricultural development.

Empirical studies show GDP per capita and the spatial density of economicactivity measured as GDP per km2 are high in temperate ecozones, regions withmineral resources and in regions close to the sea or navigable rivers.

The main socio-economic internal problems for growth are political imma-turity, the demographic factor, land property concentrated in a few hands andthe socio-economic vulnerability coming from ‘monoculture’ of agricultural ormineral resources and the external debt.

114 F.J. AYALA-CARCEDO AND M.R. Y GONZALEZ-BARROS

The main socio-economic external problems might be the deflation possibili-ties in developed countries, the temptations of a return to bilateral trade after therepeated failure of WTO summits and the expansion of the USA’s wars that maytrigger a catastrophic contraction in world trade.

The main opportunities for take-off in a globalised world, very differentaccording to the different countries, may come from the general trend towardsliberalisation, the abundance of natural resources, the possibilities for the devel-opment of tourism, the availability of cash at low interest rates in the DCs thatmight mean capital for enterprises, the increasing possibilities for emigration toDCs, the low price of another production factor, labour, the possibilities thatthe information society provides: the substitution of the transportation of peo-ple and goods by the much cheaper instant transportation of information. Theseopportunities are probably not enough for many of the poorest countries withsevere obstacles to economic take-off; therefore, a sustained program of rationallydistributed international aid will be necessary: more per capita aid for poorestcountries.

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