(>21) Having achieved political independence, developing
countries began systematically to pursue development efforts.
A few decades have since passed, yet hardly anywhere have the
high expectations at the time of independence been fulfilled.
These expectations, and development strategies, were based
on a number of assumptions - assumptions about time sequences
in economic development, about economic mechanisms and their
effects, and about what must be done and what would follow automatically.
Might it, then, not be useful to take a close look at some
of the more basic implicit assumptions on which the development
strategies pursued were based?
Four of these implicit assumptions were:
- migration to cities is a normal and harmless by-product of
- industry will absorb people made redundant in agriculture;
- imports of Northern technology will lead to international
competitiveness, so that production for export will allow most
needs to be met by imports; and
- increasing production is the alpha and omega of development.
Have these assumptions, which were based largely on Northern
economic theory, stood the test of time? And how will the validity
of these assumptions be affected by the structural and technological
changes presently taking place in the world?
Let us consider these assumptions in relation to the African
crisis, to recent economic history and to present trends.
Is rapid urbanization a harmless by-product of development?
The rate at which African cities are growing at present is
in the order of seven to ten per cent a year, with Nairobi leading
at about 13 per cent per annum. In fact, Africa's urbanization
is more rapid than that of any other region.
Here, the assumption was that migration from the rural areas
to the big cities is a normal, harmless, and - with some delay
- even positive process, leading to increased contributions to
the national economy and, for the individual migrants, to more
gainful employment, to availability to them of better facilities
and to their participation in other positive aspects of life.
(>22) In practice, however, this process of over-concentration
of people in a limited number of places has led to the appearance
of vast shantytowns, with hunger, poor health conditions and
growing crime rates. Neither city administrations nor national
governments are in a position to provide decent shelter or most
of the other facilities one expects to be available in cities.
Strictly speaking, the ongoing urban explosion is not a process
of urbanization. Migrants are not becoming integrated in a normal
urban way of life. What we are witnessing is rather a process
of 'quasi-ruralization' of cities, where survival is based on
informal production and exchange systems with even less resources
than in the countryside and on subsidized food prices - at insupportable
human and financial cost. At the same time, the countryside suffers
from losing many people at their most productive age, leaving
important tasks undone, households headed by women a widespread
phenomenon, etc. Contrary to the above-mentioned assumption,
mass migration to the cities is inhuman and harmful, and is a
by-product not of development, but of a distortion of the latter.
Since the process is one of a 'quasi-ruralization' of the
cities, since total costs of creating the basic facilities for
the migrants in towns, including shelter, are higher than in
the countryside, and since there are more productive resources
available in the countryside, why, then, not redirect the enormous
amounts of money which have to be spent on even the most rudimentary
urban facilities and on food subsidies towards development of
the rural areas?
Will industry absorb surplus labour?
Has industry absorbed population growth and people made redundant
in agriculture and other traditional occupations? And will it
do so in future?
According to the Economic Commission for Africa, in 1980 the
estimated share of the total labour force in developing Africa
working in industry did not exceed 15 per cent of the active
The overall trend in world development of technology for industry
is towards machinery producing ever more output with less and
less labour. It can be safely assumed that the breakthroughs
in automation, robotics and information technology will lead
to a further intensification of this trend. In consequence, the
share of the potentially active population working in industry
is likely to decrease in the highly industrialized societies.
Any economy, and especially economics as open as the African
ones, will find it difficult to halt the trend at their doorsteps.
Clearly, industrialization is important and industry will
absorb some additional manpower in the future. But data from
UNIDO show that more than 50 per cent - and often more than 75
per cent or even 100 per cent - of the intermediate products
used as inputs in present African industrial production come
from abroad, excessively limiting the manpower needs of manufacturing.
Even if this is corrected, as it must be, population growth rates
and technological trends will limit the absorptive capacity of
Thus, the assumption that industry will be able to absorb
most of the additions to the labour market cannot be upheld.
Will export-led development strategies pay for imports?
Some countries have based their strategies on the assumption
that imports of Northern technology would lead to international
competitiveness in industry. If one concentrated a large part
of the development effort on production for export, both in industry
and in agriculture, the proceeds would allow most of the inputs
required for production and consumption to be imported.
Lecturing at the Vienna Institute for Development, Professor
Abebayo Adedeji, Executive Secretary of the Economic Commission
for Africa, recently formulated the consequences as follows:
"Africans are today producing what they do not consume
and consuming what they do not produce. Africa is presently exporting
raw materials at low and declining prices in order to be able
to import semi-finished and finished products at high and rising
Recent economic history shows that economic growth in Europe
after World War II was not primarily due to scientific and technological
breakthroughs, nor even to the availability of cheap energy.
Of course, all that was important. But the real key to growth
was a constellation of social forces, of entrepreneurs and of
trade (>23) unions, which brought about the necessary investment
and - simultaneously - sufficient purchasing power to buy the
goods produced. In the North, even in the smaller countries,
production to supply national purchasing power and to satisfy
domestic demand forms the backbone of the national economics.
Of course, exports, production for export and income from
export, are important. But - with the exception of a very limited
number of countries - exports cannot form the backbone of the
The backbone of any economy consists of nationally integrated
resource-production-consumption chains. Where the resources-production-consumption
chain of a given product is fully within a country, so too will
be both value added and multiplier effects. Strengthening the
backbone of the economy means adding such chains, one by one,
by concentrating on producing goods for national consumption
on the basis of locally available human, agricultural and other
material resources. That is what reducing economic dependence
is all about. Exports must be an addition to, not a replacement
for nationally integrated economic circuits.
Is increasing production a sufficient focus of development
Increasing production has been seen as the main focus of development.
"If only we succeed in producing more, the standard of living
of our people will improve." Today this remains the basis
of most national development plans, of most sectoral development
strategies and of most development projects.
But has this assumption really stood the test of time? Why
do millions of people still go hungry? Why is it that so many
people have to fight for survival with incomes way below the
absolute poverty line?
Increased production of goods and services is certainly a
necessary condition for improving living standards and satisfying
people's needs. But it is not a sufficient one.
Decades of development efforts have proved that increasing
production in large-scale agricultural enterprises or capital-intensive
industry, with less and less labour, does not create the income
needed to buy the additional goods produced. In consequence,
production also lags, and the needs of the population remain
Thinking of development only in terms of production implicitly
assumes that, somehow, people will have access to the goods thus
produced. It was this implicit assumption that proved a fallacy.
Thinking of development only in terms of the supply side, i.e.
in terms of production, has made us forget that a person's living
standards will only improve if some of the additional production
becomes available to him.
The one-sided focus on production has made us forget that
one has to ensure access to goods and services, that one has
to think of the demand side, i.e. in terms of the income - in
cash or in kind - of those whose living standards one wants to
Thus, the assumption that "development is increasing
production" is only a half-truth. The other half of the
truth should be "development is increasing the income of
the people". Development strategies will reach their objectives
only if both these objectives are consciously pursued, at the
same time and with equal vigour.
There will not be much objection to a general statement of
this kind. But such a statement is not enough. What is needed
is the drawing of consequences, and a rethinking of development
strategies and actions with this double objective in mind. And
this, in practice, means a considerable re-orientation. For example,
national agricultural strategies and food plans presently focus
on production - if one wants to prevent hunger and malnutrition
equal stress must be put on improving opportunities for the people
affected to provide themselves with food or to generate income
Development by and for the people
The facts speak for themselves: there are more than 230m smallholders
in Africa. Smallholders are the backbone of the African economy.
They are the major sources of food supply, of export earnings
(in the non-mineral exporting countries) and of raw materials
for domestic industry.
Without regular increases in the production and income of
smallholders in the rural areas one cannot conceive of stable
recovery and development in African countries - either in the
agricultural sector or in the overall economy.
(>33) But smallholders are often very poor. World Bank
data show that absolute poverty per capita income levels in rural
areas vary widely across countries in each region - in sub-Saharan
Africa between $49 and $253. They also show a wide variation
in the percentage of the rural population living on less than
the absolute poverty income - in sub-Saharan Africa, from a low
of 12 per cent in Mauritius to a high of 85 per cent in Burundi
Of all people living in rural areas in ten of the 13 sub-Saharan
countries for which data are available, 50 per cent or more have
per capita incomes below the absolute poverty line.
If rapid urbanization is costly and under-productive, if industry
will be unable to absorb the people made redundant because of
present agricultural policies, if Africa is presently not producing
what the population consumes owing to over-stressing production
for export and if, despite their poverty, the smallholders are
the backbone of the African economy, an IFAD-type policy must
become by far the most important component of African development
Concentrating on development in the rural areas, focusing
on the rural poor and helping to make Africa's 230m smallholders
more productive, thus increasing their income in cash or in kind,
holds the key to a prosperous future for Africa.
Following an IFAD-type strategy will do more to bring about
stable recovery and development in Africa than development strategies
based on assumptions which have been found wanting.
Adebayo Adedeji, »The African Economic Crisis and the
International Community«, Lecture at the Vienna Institute
for Development. Vienna, August 1st, 1985.
Lawrence S. Eagleburger and Donald F. McHenry, (Co-Chairmen),
»Compact for African Development«, Report of the
Committee on African Strategies. Washington DC, December 1985.
Economic Commission for Africa, »Survey of Economic
and Social Conditions in Africa, 1983-84«, Addis Ababa,
International Fund for Agricultural Development, »Annual
Report«, Rome, various years.
UNIDO, »Industrial Development - Trends and Policy Options«,
Vienna, May 1985.
the time of writing, Dr. Arne Haselbach was Director of the Vienna
Institute for Development.
following article was published as: Arne Haselbach »Development
strategies: challenging assumptions«, in: OPEC Bulletin,
Vol. XVII, No 2, March 1986, pp. 21-33..