ABSTRACT
The current international economic system emphasises free markets, open trade and foreign investment. Originally, development was equated with economic growth and modernisation. The meaning of development can be cast in the context of promoting human well-being, one of the most important conditions for realising peace. As a result of modernisation, more specialised and complex political and economic institutions have replaced the council of elders in tribal cultures. Rationalisation of authority is made with the legitimisation of institutions run by trained bureaucracies assigned to specific functions and roles. Growth oriented models have not brought about improvement in nutrition, health, water, sanitation, housing and education in many resource depleted Third World countries. Trade deficits and capital outflows cause economic imbalance and consequently put strain on living standards for the poor. Development should respect the needs of a certain group of people with their own cultural values.
