Although human development remains a severe challenge for poor coun-
tries, variations in levels occur between developing countries regardless of
wealth. For example, Vietnam has achieved more in human development
than Pakistan, despite similar levels of per capita GDP. Variations also occur
within developing (and developed) countries between regions, classes,
ethnic groups, men and women, and urban compared with rural areas.
One of the factors holding back human development in the fourth quarter
of the twentieth century was mounting debt. During the 1970s the volume of
international bank lending increased by nearly 800 per cent to reach $800
billion. The scale of indebtedness reached crisis proportions in the early
1980s when a combination of high interest rates, adverse trade balances and
a world recession caused severe debt servicing problems for many Third
World countries. With a total external debt of US$2.6 trillion in 1999, the
cost to developing countries of debt servicing was the equivalent of 5.8 per
cent of GDP. This limits the resources available for human development (as
well as discouraging economic growth), so that most poor countries spend
more on debt servicing than on basic social services, including basic educa-
tion and health care, safe water, sanitation, family planning and nutrition. For
example, African governments spend less on health and education combined
than on debt payments (UNDP, 1999, p. 14).
Human development is increasingly being thought of as encompassing
political factors, such as the level of democratization and the protection
afforded to human rights. In 1987 roughly three-fifths of the developing
world’s governments were not democratic. However, in the late 1980s pres-
sures towards democratization and the rule of law built up from a number of
factors acting in unison. One was the economic failure of authoritarianism.
Another was the highly political consequence of the structural adjustment
programmes demanded by multilateral and unilateral aid donors.
The structural adjustment programmes required of many developing
countries as a condition for receiving assistance from international develop-
ment agencies such as the World Bank and IMF have had far-reaching polit-
ical consequences for the governments concerned. Public enterprise
reforms and privatization have usually meant substantial job losses.
Devaluation and increases in agricultural prices can increase food prices
and malnutrition. Public expenditure cuts usually mean a decline in social
spending – particularly health and education – per capita. These conse-
quences and their distributional effects can cause social unrest, and have
done so in a number of Third World countries. Structural adjustment also
limits the scope for political patronage (Herbst, 1990). When it became
clear to aid donors and international agencies that successful adjustment
8 Understanding Third World Politics