ABSTRACT
It is easy to be pessimistic about economic development. Three-quarters of the world’s population lives in a degree of poverty which rich countries have not known for generations, and the income gap has widened in spite of $80 billion of foreign aid. In the past twenty years, many panaceas have been suggested and found inadequate. Land reform, community development, planning, creation of social overhead capital, technical assistance, a take-off engendered by foreign aid, development of human resources and education, a ‘green revolution’ in agriculture have all inspired hope and enthusiasm. Each in turn has led to some degree of disillusionment. Since the mid 1960s, there has been a new wave of pessimism. India, which was so often regarded as a test case for the success of aid and development policy, has been in a mess. The harvests failed in 1965 and 1966 on a massive scale, and the country came close to famine. The balance of payments crisis was so severe that an important part of the industrial sector was left idle for lack of supplies. The investment rate dropped as the government diverted resources to military purposes. Faith in planning was shaken as a series of government inquiries, and ibrd reports showed the inefficiency of the control mechanism and of government enterprises. The Fourth Plan was three years late in appearing and is still very tentative. The whole of Indian economic policy is undergoing an agonizing reappraisal and the political system is showing dangerous cracks. Another disturbing feature is that nearly all the wars of the past twenty years have taken place in the developing world, and their incidence and violence has been particularly severe since 1965 in Vietnam, in the Middle East, in India, Pakistan and Nigeria. Rates of population growth have steadily increased and the Malthusian spectre of large-scale famine has claimed increasing public attention. Foreign aid appropriations have been cut substantially in the us and none of the ambitious aid targets of unctad has been met.
