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The new international context

The decade of the 1990s will hold as many surprises and shocks as that of the 1980s. A new and as yet fluid world order is in the making as we approach the transition to the twenty-first century, and in this volatile context extrapolation of past trends into the future is a risky enterprise. Predictions are less effective than attempts at mapping uncertainties and identifying desired outcomes, for the latter are likely to be brought about by the purposeful actions of governments, international institutions, private enterprises, non-governmental organizations, religious groups, research and academic institutions, and mass media, among a growing number of actors in the international and national scenes.

The uncertain world in which we live has many dimensions: a rapidly shifting political setting, changes in the patterns of world economic interdependence, growth and diversification of social demands, emergence of environmental concerns, and major transformations in the cultural landscape.

The political setting

The end of the Cold War has undermined the ideological, military, and political foundations of the international order that prevailed during the last half-century. The world is in transition to a "post-bipolar" political and economic order, whose nature is in the process of being defined but which will require a profound re-examination of the means for providing national, regional, and international security as a precondition for development. Some of the elements of this new order include the virtual elimination of the threat of an all-out nuclear war, an increase in the number and intensity of regional conflicts, the likelihood of a more cooperative approach to conflict resolution among key political and economic players, and a larger role for international institutions in fostering and maintaining international security.

The range of possible outcomes for these various elements of the emerging political order is wide. The demise of East-West rivalry has complex implications for national security in developing countries. Conflict and insurgency based on Cold War ideology, once generously financed by the superpowers, have all but vanished, as has the possibility of playing one camp against the other. But Soviet and American disengagement could encourage other countries to build and exercise military power, with the enthusiastic support of aggressive arms merchants.

Ethnic and religious tensions within countries have contributed to this possibility, since they can attract support from neighbouring states. New regional conflicts over natural resources such as water, oil, or tropical forests, and over environmental spillovers could also encourage military aggressiveness. These tensions and conflicts may be kept in check by concerted actions by the major military powers, by regional and international organizations, or a combination of both. So far, despite diminished global superpower rivalry, there is no evidence of a decline in regional disputes, or in organized violence by ethnic groups, secessionist movements, terrorists, or drug traffickers.

At the same time, states are becoming less important as political units in the sense of being able to control whatever phenomena - economic, social, environmental, or technological - take place in the world at present. This is hard to get used to, for political systems are geared to focus on states as the locus of power and decision-making and as the main unit of political, social, and economic analysis.

The pre-eminence and sovereignty of states is being eroded in many aspects of foreign and economic policy' as is highlighted by the renewed importance of the United Nations in conflict prevention and resolution, by the proliferation of regional trade and economic agreements, by the growing economic power of international corporations, and by the conditions established by international financial institutions for obtaining access to resources under their control. The movement towards supranational action is likely to proceed by fits and starts, with temporary reversals and renewed bouts of nationalism, but will probably gain momentum as the new century approaches.

Political pluralism, popular participation, and democratic movements are becoming a fact of life everywhere: East, West, North, and South. It is now almost unthinkable to accept - at least without outrage, loud protest, and international sanctions - any government's imposition of a repressive regime on its citizens. By the early 1990s eastern European countries had their first open elections in half a century, almost all of the countries of Latin America had democratic regimes, a military coup failed in Russia, the Central Asian states of the former Soviet Union were struggling to become modern nations, White rule was ebbing in South Africa, and there were pressures to abolish one-party rule in many countries of Africa. However, as the civil wars in the former Yugoslavia and in Somalia have shown, advances towards democracy and peaceful coexistence are by no means guaranteed.

As a consequence of these changes, the exercise of power and authority in the management of resources for development - usually referred to as "governance" - has become a legitimate subject of concern, particularly by international organizations and development cooperation agencies. In addition, non-governmental organizations of all types (trade unions, professional associations, environmental and human rights advocacy groups, grass-roots movements, church organizations) have also become extremely active and show that civil society is finding multiple ways of expressing itself at the local, national, regional, and international levels.

The international economy

The major transformations taking place in the patterns of world economic interdependence include the rapid growth and globalization of financial markets, changes in trade patterns, and new situations in key countries that affect the world economy. International financial markets now comprise a tight web of transactions involving global securities trading, arbitrage in multiple markets and currencies, portfolio investments through a bewildering array of international funds, and massive transborder capital movements. Financial transactions have acquired a life of their own and are becoming uncoupled from the production and distributions of goods and services: in 1989 the combined daily average of trade in the foreign exchange markets of Japan, the United States? and the United Kingdom reached US$430 billion? six times the 1979 level and 50 times the average daily volume of international trade in goods and services [4].

After a decade of rapid and substantial increases in commercial bank lending to developing regions during the 1970s, the debt crisis that started in the early 1980s reduced private bank flows to zero by the end of that decade: of the approximately US$60 billion of net debt-related flows to developing countries in 1980 US$32 billion came from commercial banks. In contrast, by 1990 total net flows fell to about US$20 billion, and the amount obtained from commercial banks fell to near zero. As a consequence? direct foreign investment acquired much greater importance as a channel for resource transfers to developing countries [22].

However, not all developing countries have been able to benefit from the rapidly expanding flows of foreign direct investment, and towards the end of the 1980s, only five developing economies accounted for about 80 per cent of foreign direct investment flows China (24 per cent), Brazil (18 per cent), Mexico (17 per cent), and Egypt and Malaysia (10 per cent each). The reasons why most of the poor countries in Africa, Asia, Latin America, and the Middle East have not been able to attract direct foreign investment are many and varied and include their remote geographic location in relation to the main export markets, the relatively small size of their domestic markets, deficiencies in physical and institutional infrastructure? lack of a skilled workforce, and inadequate investment incentive regimes. An indirect result has been the inability to benefit from the transfer of technology, marketing, and managerial capabilities that are associated with direct foreign investment.

There have also been changes in the direction and content of international trade, such as the emergence of the North Pacific as the world's largest trading area (with the North Atlantic taking second place), the halting movement towards worldwide trade liberalization (best exemplified by the on-again off-again GATT negotiations), the rise of regional trading blocs (Europe after 1992 and the North American Free Trade Agreement), and the shift in the content of international trade against primary commodities (exported primarily by developing countries) and in favour of high technology services and manufactured products (typically industrialized country exports). A new web of commercial linkages between transnational corporations - covering manufacturing, finance, trade, and services - has now emerged, of which strategic alliances in pre-competitive research and development are a prime example.

In addition, we have seen completely new situations in several key countries and regions that affect the world economy significantly. During the 1980s, for the first time in recent history, the United States became a net debtor; Japan has become a dominant economic and financial actor on the international scene; Europe is rapidly moving towards economic, and maybe some form of political, unity; the USSR has dissolved and its republics are undergoing a painful transition towards market economies, a path followed earlier by central and eastern European countries; Latin America has weathered the debt crisis of the 1980s, initiated policy reforms, and appears poised for renewed economic growth after a decade of stagnation; the worsening situation in Africa has reversed the precarious gains of the preceding three decades; continuous instability and strife plague countries in the Middle East; and in Asia a few newly industrialized economies continue to grow rapidly, India and China are experimenting with economic policy reform and liberalization, while other countries in the region begin a difficult process of reconstruction after decades of war.

The range and diversity of possible outcomes in practically all aspects of the international economy appear much larger during the 1990s than at any time during the last three decades. Growing interdependence has created an international economic environment that transmits disturbances and magnifies disruptions. Technological advances in telecommunications and information sciences have contributed to this (witness the impact of computer trading in stock markets), while the absence of effective international rules and institutions to regulate financial and trade flows - and the limitations of economic policy coordination among the world's leading economies - have helped to increase uncertainty.

Social demands

The explosive growth in social demands in the developing regions has been largely triggered by population increases during the last 30 years. Coupled with a significant slow-down in population growth in the industrialized nations, this has led to a highly skewed worldwide distribution of social needs and of the capabilities to satisfy them.

The dynamics of population growth strongly condition the demand for food, education, employment, housing, and other social goods [6]. Food and nutrition demands have multiplied many times over, particularly in the poorest countries, and although world aggregate food production is sufficient to provide each and every human being with adequate nourishment, existing political, social, and institutional arrangements - at both the national and international levels - have proven incapable of doing so. Armed conflicts, droughts, and natural disasters have conspired to make it even more difficult to ensure access to food in many developing countries.

Demand for basic health care and elementary education expanded at a rapid pace during the last three decades, as developing countries made efforts to improve the provision of these services to growing populations. Migration and accelerated urbanization created huge demands for housing, sanitation, transportation, and energy supply - a situation that adds unmet urban needs and widespread urban poverty to the deprivation that characterizes rural populations throughout the developing world.

Unemployment has emerged as perhaps the most troublesome and persistent problem in developing countries. This is also a growing issue in industrialized countries, where technological change seems now to depend so heavily on capital that unemployment appears to have become one of the new structural characteristics of economic growth for the foreseeable future, if not forever. If there are reasons to be anxious about the outlook for employment in the industrialized countries, there are few grounds for optimism about most developing countries. Here the jobs created by the new technical system are generated against a background of non-employment, and the promises of a production system that will be more and more based upon robots and fully automated factories may increasingly conflict, in view of demographic trends, with the job expectations in developing countries. The spread of the new technologies is already transforming the very nature of work and leisure, creating jobs that are less and less like traditional tasks, although it is precisely these traditional tasks that still offer the highest number of employment opportunities in developing countries. The inability of the modern sectors of their economies to absorb new entrants into the labour force has led to a variety of "informal" arrangements for workers to earn their means of subsistence. Developing countries face the difficult challenge of raising labour productivity while at the same time absorbing the growing number of entrants into the labour force.

A significant drop in the population growth rate of industrialized countries is to be expected during the 1990s, from an average 0.5 per cent per year in the 1980s to only 0.3 per cent in the 1990s. This implies a rapid rise in the number of elderly people (particularly in Japan and Germany), a significant increase in the ratio of dependents (children and old people) to workers, and a further shift in the balance of world population. Ageing in industrialized nations will have a major impact on the demand for social services, as well as important consequences for the patterns of consumption, employment, and savings and for the direction of technical progress.

In developing countries the rapid pace of population growth is expected to continue through the 1990s, although at a moderately slower pace than in the 1980s - from the present rate (i.e. 1992) of 2.0 per cent per year to 1.8 per cent per year during the next decade. As a consequence, youth will remain by far the largest segment of the population in most of these countries, whose economies must expand at rates significantly above those of population in order to satisfy the growing demand for work.

Population imbalances could pose the problem of uncontrolled mass migration from developing to industrialized countries, threatening social cohesion and international solidarity. In some western European countries there is already a backlash against "foreigners," although the fear of massive inflows of workers from the east has failed - as yet - to materialize. In Asia, migration pressures are likely to build up as a result of the growing demographic imbalance between Japan and the poorer, overpopulated countries of the region. Despite the increased participation of women in the labour market, Japan will experience a decline in the labour force after 2000, and labour shortages will be compounded by moves to reduce the number of working hours [11].

The role of human capital and technological capabilities will become even more important as a major determinant of long-term growth in the developing countries in the 1990s. The level and quality of investments in human resources will have to rise significantly during this period in order to deal with the rapid rise in the number of young people, and also to enable the labour force of developing countries to utilize new technologies that increase productivity.

Environmental concerns

During the 1970s and 1980s environmental concerns have risen to the top of the international public policy agenda. There is now greater awareness of the limits that the regenerative capacity of natural ecosystems imposes on human activities, as well as of the dangers of the uncontrolled exploitation of natural resources (the sea, forests, land, rivers) and from overloading the capacity of the earth to absorb waste (air and water pollution, acid rain, toxic and nuclear wastes). The 1980s witnessed the emergence of truly global environmental problems, such as depletion of the ozone layer and global warming, that underscored the possibility that unforeseen ecological instabilities could cause irreversible environmental damage.

The problems of environmental sustainability and resource use are closely related to population growth and poverty in the developing countries, and to the often wasteful consumption habits of rich nations. Major changes in lifestyles will be essential in both groups of countries to address successfully the problem of environmental sustainability in the transition to the twenty-first century. According to the World Bank,

the most immediate environmental problems facing developing countries unsafe water, inadequate sanitation, soil depletion, indoor smoke from cooking fires, and outdoor smoke from coal burning - are different from and more immediately life-threatening than those associated with the affluence of rich countries, such as carbon dioxide emissions, depletion of stratospheric ozone, photochemical smog, acid rain and hazardous wastes [22, pp. 2-3]

The Earth Summit in Rio de Janeiro endorsed "Agenda 21," a wide-ranging world programme of action to promote sustainable development, but the negotiations exposed the divergence of perspectives between industrialized and developing nations on approaches to sustainable development [21]. Questions of lifestyles, national sovereignty, barriers to trade and financial assistance, in addition to access to less-polluting technologies, are now at the centre of the debate on sustainable development (see the contribution of Ignacy Sachs in this volume).

As a consequence of the greater importance of environmental concerns, access to development assistance during the 1990s will be increasingly linked to the attainment of environmental objectives. Another result is that some industrialized countries - notably Japan and Germany - are positioning themselves to compete in what will be one of the most dynamic markets of the future: that of environmentally sound technologies. Being able to deliver "green" technologies could soon become a source of competitive advantage in the global search for new markets.

Cultural transformations

Three powerful cultural forces are shaping the international scene in the transition to the twenty-first century: the growing importance of religious values and the rise of fundamentalism as a main driving force of economic and political actions in many parts of the world; the tensions between cultural homogenization pressures brought about by the pervasive influence of mass media and the desire to preserve cultural identity; and the emergence of moral and ethical issues at the forefront of choices about inter- and intra-generational equity, particularly in relation to the environment, income distribution, and poverty reduction, and the new biomedical technologies. It is not a coincidence if, in most industrialized and in some developing countries, special commissions have been instituted, often at the level of the legislative branch but also in the framework of advisory bodies independent from the executive, in order to anticipate and assess the impact of technical change and sometimes even that of scientific discoveries: offices of technology assessment, commissions on biomedical ethics, on freedom and information sciences, on the prevention of technological risks, etc. An increasing number of fields call for mechanisms of regulation so as to correct, limit, and if possible avoid the negative or unanticipated effects of scientific and technological activities. These institutional innovations on the political scene reflect a change of values in societal reactions, at the national and international level, to progress.

The revival of religious and spiritual concerns has been a characteristic of the 1980s and 1990s, which have witnessed the renaissance of Islamic values in North Africa, the Middle East, and Central Asia; a revival of the Orthodox Church in eastern Europe and the former Soviet Union; the spread of evangelical churches in Latin America and other developing regions; a surge of popularity of the Pope; the growing influence of Christian fundamentalism in US political life; and the renewed interest in mysticism and Oriental religions, often associated with "New Age" movements that eschew rationality. This revival points to the fact that, because of the overriding concern with improving material well-being and standards of living, the spiritual dimensions of human development have been neglected during the period after the Second World War.

As a consequence of the globalization and pervasive influence of mass media - a direct result of technological advances in communications during the 1970s and 1980s - two contradictory cultural forces can now be seen at play: pressures towards the standardization of aspirations and cultural values throughout the world, and the desire to reassert individuality and preserve cultural identity. These two contradictory forces create cultural tensions and emotional stresses, particularly in developing countries, where the images of affluence brought by television programmer from industrialized nations contrast sharply with the harsh reality of mass poverty - and with the fact that those worlds of plenty are simply unattainable for the vast majority of the population.

Moral and ethical questions, once the province of academics and religious activists, are finding their way into public debates on the rights of future generations in relation to sustainable development and on issues such as racism, abortion, corruption, crime, and drugs. A renewed concern with human rights throughout the world has led to a questioning of the principle of non-intervention in the internal affairs of states where governments do not respect basic human rights. Finally, reversing the trend that prevailed during the 1980s, equity considerations are finding their way onto the political agenda of many industrialized and developing countries, at the same time that the moral and ethical aspects of technological change and economic behaviour have begun to receive greater attention.

Against this background of fundamental changes in the international context, North-South cooperation is likely to remain a peripheral concern of industrialized countries, especially as they focus their attention on their own internal problems, on coordinating economic policies, on improving competitiveness, and on easing the transition of the former Soviet Union and of eastern Europe towards market economies.

As prospects for greater resource flows to developing countries appear doubtful, policy reform, structural adjustment, and the mobilization of science and technology for development objectives will take place in a resource-constrained environment. This will test the political will of governments to embark in the uncertain and long-term enterprise of building science and technology capabilities, particularly when facing a multiplicity of urgent short-term needs.

Modernity and the uncertain quest

In 1963, C.P. Snow [19] wrote an essay on the "two cultures," calling attention to the differences that exist between scientists and literary intellectuals, deploring the lack of communication and understanding between them, and making a strong plea for the emergence of a more integrated culture in which the humanities and the sciences would contribute equally and grow through mutual interaction. However important the differences and lack of communication between Snow's "two cultures" which may indeed have increased as a function of the growing impact of scientific methods and activities on all societies - they have been overshadowed by the even more profound and disturbing material differences between the rich and the poor nations of the world. Indeed, Snow made reference to these glaring inequalities and attributed their existence in part to the inability of the West, with its divided culture, to grasp their magnitude and to understand the need for urgent and profound structural transformations of a social, economic, political, and cultural character.

It is obvious that the end of the twentieth century and a great part of the new one will be dominated by the growing gulf between the industrialized and the developing countries, in so far as one can speak of "two civilizations" rather than of several worlds. The concept of the third world emerged as both a third element and a buffer more or less manipulated by and manipulative of the two rival blocs, communism and capitalism, that confronted each other after the Second World War. Now that communism has admitted defeat, the notion of the third world is all the more meaningless in that most of the former communist countries have created a new category, that of industrialized countries that have become in their turn newly developing countries. Moreover, developing countries do not constitute a homogeneous category, and the need to distinguish various levels of development and even underdevelopment is more pertinent than ever.

The world is still divided into two civilizations that interact strongly, although the interaction is one-sided: the second civilization is dependent and deeply affected by the first and lacks the capacity of influencing it to the same degree. The first civilization is based on the growth of science as the main knowledge-generating activity, the rapid evolution of science-related technologies, the incorporation of these technologies into productive and social processes, and on the emergence of new forms of working and living deeply influenced by the Weltanschauung of modern science and science-related technologies. The second civilization is characterized by the lack of a capacity to generate scientific knowledge on a large scale and by a passive acceptance of scientific results generated in the first; by a technological base that comprises a substantive component of traditional technologies and a veneer of imported ones; by a productive system whose modern segment is dependent on the expansion of production in Western industrialized nations and on the absorption of imported technology and whose traditional segment vegetates and is based on an often stagnant traditional technological infrastructure; and by the coexistence of disjointed and even contradictory cultures.

The first civilization, corresponding to the developed, or highly industrialized, countries, has an endogenous scientific and technological base. This base is still present, in spite of its current difficulties and disruptions, in the former communist countries of eastern Europe, and one of the most important agreements signed in 1992 between the United States, the European Community, and Japan was intended to help these countries to keep this base alive. This comes down to helping somebody not to sink when he or she already knows how to swim. The second civilization is not swimming, but struggling to stay afloat, with the exception of a handful of countries that have recently succeeded in catching up with some of the best swimmers in the first civilization. The great majority of the countries in the second civilization are not only lagging behind but lack, above all, most of the basic ingredients - in terms of resources, institutions, manpower, and cultural background - indispensable if they are to benefit from scientific knowledge and new technological innovations. The historical reasons for this situation deserve to be carefully studied in these countries by local scholars and should be made a part of science studies and research programmes, which would help policy makers and society at large become more aware of the internal and external conditions that have jeopardized - and still jeopardize the development, if not the emergence, of a scientific and technological capacity. It is hoped this sourcebook will contribute to a better understanding and thus a greater mastery of all these conditions.

Development is an uncertain quest in which the seekers rely heavily on science and technology. The quest is uncertain not only because there is no prior guarantee of success (nor that it will be lasting), but above all because it raises questions about the price of modernity: the benefits that a country can expect to derive from it, in political, economic, social, and cultural terms, as well as the sacrifices that it is prepared to make on its behalf. Development is not a neutral process with no impact on the social structures that are involved; science and technology do not always bring about improvements to those areas that they affect. In short, despite what was promised by the rationalism of the Enlightenment and even more by the positivism of the nineteenth century, scientific and technical progress does not necessarily coincide with social or moral progress.

Since the beginning of the Industrial Revolution, economic progress has meant upheavals. Schumpeter agreed with Marx at least in this regard, and stressed the "revolutionary character" of industrial capitalism, which leads to the obsolescence, destruction, and renewal of economic and social structures. This is what is involved in innovation, and now that innovation is worshipped as the driving force of international competitiveness, it is important to recognize that it always has a price attached: technical change is accompanied by social change. As Schumpeter rightly said, "No matter how many more stagecoaches you have, you will not thereby acquire railways," and he emphasized that economic growth is a process of change that is constantly revolutionizing economic institutions from within, destroying the parts that are out-of-date and creating new ones in their place. What happens is not that more stagecoaches are added to the existing stock, but they are replaced with railways in a process of "creative destruction" [18].

Economic development has growth (i.e. a sustained increase in national income) as a corollary, but growth in quantitative terms does not necessarily mean development. From the start of the Industrial Revolution, and especially since the pace of technical change has quickened thanks to the growing cross-fertilization of science and technology, people in the industrialized countries have been pondering the gap between wisdom and strength. The issue of how to bridge that gap is constantly raised by modernity, and the economic implications naturally have philosophical dimensions. There has to be choice at least regarding the importance attached to tradition, to its structures, hierarchies, codes and rites, as against rationalization, with its constraints, order and disorder, its capacity to transform and destroy. As Alain Touraine [20] has pointed out, scientific and technical thinking threatens to reduce human beings to purely instrumental rationality, while attacks on rationality from the viewpoint of particular faiths, traditions, or communities threaten to retard or even prevent any change by searching for compensations for the present in a mythical past. To bring together the economic vision and the cultural one involves the same difficulties as making a bridge between the particular and the universal, or between facts and values.

The developing world has forced the industrialized countries to recognize not only that their cultures are extremely diverse, but that that diversity is perfectly legitimate. Both sides have learned, too, that development cannot take place without dialogue between cultural heritage and instrumental rationality, even if the two cannot be entirely reconciled. In the upheavals marking the end of the twentieth century, especially after the collapse of totalitarian ideologies and regimes, the whole world is in quest of new paths and alternatives leading to a better social order. And just as the developing countries are having to take on board some of the aspects of modernity that they used to criticize, so the industrialized countries are having to restore some aspects of tradition that they used to challenge. No society, clearly, can ever again impose its own values or development model on any other. Science and technology can contribute a great deal to development, but they cannot do everything, and above all they do not offer a ready-made solution to the problem of values that is raised by the clash between tradition and modernity. Modern societies have realized that they can no longer place their trust in progress as people thought in the Enlightenment. But while nobody can believe any longer that growth necessarily brings with it greater democracy and happiness, everybody knows now that development requires growth and a certain degree of rationality: not any longer confidently relying on technical or administrative efficiency alone, but rather on an awareness and a mastery of the consequences of scientific and technical change.


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22 World Bank. Global Economic Prospects and the Developing Countries -1992. Washington, D.C.: World Bank, 1992.

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