THE THIRD WORLD

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00275R000100140002-9
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 3
• Document Creation Date: December 20, 2016
• Document Release Date: November 2, 2007
• Sequence Number: 2
• Content Type: REPORT

Approved For Release 2007/11/02 : CIA-RDP85T00275R000100140002-9
THE THIRD WORLD
The economic growth prospects of the more than 120 Third World countries ILLEGIB
vary considerably. Even after excluding the NICs and oil-exporting countries,
these variations are striking. For example, the remaining group can be
subdivided as follows:
-- Countries that have been able to sustain rapid economic growth and
that have developed sufficient economic sophistication to become
NICs within a decade. This group includes Malaysia, Thailand and
the Philippines.
-- Countries that have been unable to sustain rapid economic growth
mainly because of political reasons but have sufficient economic
sophistication to become NICs within a decade. They include
Argentina, Chile, and Zimbabwe.
-- Countries that lack the critical mass of entrepreneurial talents,
skilled workers, and modern institutions needed to sustain rapid
economic growth.
Even in this latter group, there are major differences. Many of these
countries have abundant natural resources but lack the ability to harness them
(Zaire, Angola, etc.). Others lack both natural and skilled human resources
and thereby have essentially become dependent on outside assistance to
maintain even their meager standard of living (the countries of the Sahel).
More than 40 Third World countries have a population of less than a million,
a factor that prevents them from developing all but a very few competitive
industries and services (mainly tourism). At the other extreme is India, with
a population that is nearly five times that of the second largest LDC
(Indonesia). India has pockets of economic sophistication matching that of
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the NICs and has areas where the population is as destitute as the most
improverished Third World country.
Differences in economic strategy also vary considerably. Some countries,
such as the Ivory Coast or Malaysia, have a free market orientation; others,
such as Ethiopia or Angola, have a Marxist-Leninist orientation. Many Third
World states are governed by leaders who, educated in the West, are steeped in
the utopian socialist tradition of the British Fabians. Such leaders--Julius
Nyerere is a leading example--combine a naive faith in socialist-collectivist
policies with a contempt for Western democratic norms.
One other important distinction that should be made in gauging the
economic progress of Third World countries is the difference between growth
and development. Some countries such as Nigeria, Indonesia, Algeria, and
Libya have enjoyed rapid economic growth because they are blessed with
enormous reserves of petroleum. Despite the large amounts they have spent on
internal projects, they still have not developed the wherewithal to sustain
rapid growth in economic activity or in exports other than oil.
Despite enormous differences in size and natural resources, the more
successful Third World countries have a number of elements in common:
-- They have a populace that places considerable emphasis on
education, hard work and savings, and a labor force that is highly
skilled, disciplined, and well motivated. These factors have been
especially important in the striking success of the East Asian
NICs.
-- They have business and financial leaders who are highly
sophisticated in terms of world markets and in attracting needed
foreign capital.
-- Governments of these successful countries, although mostly
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authoritarian, allow their citizens considerable latitude in
pursuing economic ends. In fact, most often the government and the
business community in these countries work together closely in
supporting economic progress.
-- Their governments emphasize exports and the development of
industries that can compete effectively in world markets. Those
countries lacking natural resources, such as Hong Kong and South
Korea, have concentrated on manufactures while those with highly
productive agricultural regions, such as Malaysia and Ivory Coast,
have done exceptionally well by expanding their share of the world
market for farm products.
Some of the poorer Third World countries also have made significant
economic progress, even though it will be decades before they will have the
critical mass needed for broad-based economic development. For exaple, Kenya
and Malawi are in this category. In these cases, the important factors,
besides political stability, that have spurred growth include:
-- The encouragement of a small-scale, cash-oriented farm sector
through market incentives, co-ops and technical support.
-- The encouragement of traditional manufactures -- textiles, crafts,
etc.
-- The encouragement of foreign private investment needed to support
the above two endeavors.
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