Rapidly industrializing countries (RICs) face a dual challenge. If their development is to be sustainable, they need to manage the process of industrialization better than other industrial countries have. At the same time, they need to combat poverty and protect the natural resources that are still the primary base of their economies and a significant source of employment. These are immense challenges.
Rapidly industrializing countries are thus poised at a unique juncture. They have an unparalleled opportunity to find different paths to development and in so doing to provide models that other countries could follow. With the right policies, they can achieve rapid economic development and yet avoid creating environmental problems on the scale of those created by the United States, European countries, Japan, and others. Doing it right the first time--by installing clean, efficient technologies as well as developing the institutional capacity to enforce environmental regulations --could lead to "leapfrogging" the development process and building industrial economies that are both competitive and more sustainable than those of countries with an older industrial base. Thus, some of the policies discussed in Chapter 2 are relevant to RlCs.
At the same time, RICs would benefit from sharing the fruits of economic growth with all segments of their societies and from protecting their forests, soils, fisheries, and other productive natural resources. With the right policies, such countries can combat poverty, promote rural development, and build the skilled work force needed to support industrialization--while maintaining the jobs and revenues that natural resources provide and ensuring that future generations will also have access to them. Thus, some of the policies discussed in Chapter 3 are also relevant to RICs.
Although no officially sanctioned category of rapidly industrializing countries exists, this chapter uses as examples Brazil, Chile, and Mexico in Latin America and Indonesia, Malaysia, and Thailand in Asia. (The discussion applies, however, to many other countries that face similar challenges, including the rapidly industrializing regions within China and India.)
As described in Chapter 1, sustainable development means simultaneous progress toward broad-based economic development, increased human development and stable populations, a secure ecological base, and technology that is efficient and sparing of natural resources. Although by no means a homogeneous group, the RICs generally have made rapid economic progress. These six countries had gross national product (GNP) growth rates well above the world average in the 1970s. Some slipped during the economic stagnation of the 1980s, but all have productive natural resources and growing industrial sectors, including energy production, manufacturing, and transportation. Progress toward reducing absolute poverty and narrowing income inequality has been impressive but less even, with income inequality remaining a serious problem in some countries. The RICs have also made progress on human dimensions--improving health care and education and moving toward stable populations--but much remains to be done.
The RICs have been least successful along the ecological and technological dimensions of sustainable development. The RICs have abundant natural resources, but those riches--their forest and soil reserves, for example--are being rapidly depleted. These countries also face new environmental challenges from urbanization and industrial growth. They need to improve their energy efficiency, develop nonfossil energy resources where possible, clamp down on air and water pollution, and encourage new technologies that minimize or prevent pollution. The importance of these aspects of sustainable development--and the costs of ignoring them--are graphically illustrated by the environmental disasters that Central Europe now confronts. (See Chapter 5, "Regional Focus: Central European) In less dramatic form, the same lessons-- and others--emerge from the experience of the most recent group of countries to make the leap to industrial economies.
The NIC record is seriously flawed, however. The growth that these countries achieved came at the expense of severe environmental degradation, just as it had in the United States and Japan. Industrial air and water pollution in Taiwan, for example, has been so severe that it has damaged crop yields and poses risks to human health. In 1989, a group of environmentalists and academics released a major report on balancing Taiwan's economic growth and environmental protection. "Taiwan is now in a time of transition with respect to environmental management. In the 1950s, 1960s, and early 1970s economic growth was given priority over environmental issues almost without question ....lf we continue to allow the harmful by-products of advanced industrial production systems to penetrate every cell of the body of the island of Taiwan, complete recovery will be impossible, and partial recovery will entail very great cost" (4).
Virtually all rivers on the island are polluted in their lower reaches, with most of them heavily polluted (5). Less than 1 percent of human waste receives primary sewage treatment. Probably as a result, the island has the highest incidence of hepatitis B in the world (6).
Taiwan is one of the top users of pesticides and fertilizers per hectare in the world, and this load contributes to the contamination of surface water and groundwater (7). Emissions of nitrogen oxides from motor vehicles in Taiwan tripled between 1977 and 1985 and may double again by the end of this decade (8). Pollution is bad enough to make the air hazardous to breathe on 62 days a year (9); asthma cases among children have quadrupled in the last decade (10). Thus, even though access to health care has improved, health itself can be undermined by environmental degradation.
In South Korea, the situation is not much better. In August 1989, government investigators discovered that a significant portion of the tap water in the country is unfit to drink--contaminated with heavy metals and other pollutants, a problem that will require $5.3 billion to fix (11). Only one quarter of the country's sewage is treated (12). With some industrial complexes discharging effluents directly into the ocean, fishing grounds have also suffered: by the early 1980s, Masan Bay was off limits for fishing and shellfishing, and Inchon Harbor had been closed to commercial fishing (13).
Groundwater is being polluted with pesticide and fertilizer runoff, because South Korea, like Taiwan, is one of the heaviest users of these agricultural inputs per hectare in the world (14).
Air pollution from the industrial and commercial sectors and from motor vehicles has earned Seoul fourth place on the World Health Organization's list of major cities with the worst sulfur dioxide ratings. Crop yields on farms near factories have also been reduced by air pollution, and several industries in one area were ordered to compensate nearby farmers for their losses (15).
In addition, like the rest of the industrial world, the NICs for a long time paid scant attention to the need for more efficient use of energy and other natural resources. In Singapore and South Korea, commercial energy consumption per dollar of GNP is among the highest in the world. In 1989, for example, South Korea consumed 18 megajoules of commercial energy per dollar of GNP, higher than the U.S. Ievel of 15 megajoules per dollar and nowhere near as efficient as Japan's 5 megajoules. (See Chapter 21, "Energy and Materials," Table 21.2.) And Hong Kong's air quality has deteriorated with industrial growth and increasing energy use. A 1988 World Health Organization study of 33 major cities showed Hong Kong to be one of only six cities in which sulfur dioxide levels were increasing (16)
The NICs are therefore not a model of sustainable development, even though they are often cited as a model of economic development. Yet they have done well in stabilizing their populations, in spreading education and access to health care, in improving income distribution, and (in South Korea and Taiwan) in land reform--that is, in the human and economic dimensions of sustainable development that are beyond the narrow measure of economic growth. It is in these areas that their experience does indeed hold important lessons for other developing countries concerned with stimulating economic growth and achieving a more sustainable development path.
Attention in the NICs was directed early to education and health care. In South Korea, for example, the literacy rate rose from 30 percent in 1953 to 80 percent in 1963. By 1965, the nation was spending more on human resource development than the average for countries with GNPs three times as large (17), creating a relatively well educated and healthy work force that served as the foundation for industrialization. Reflecting in part this high level of investment in human resources, South Korea's population growth rate declined from 3.04 percent in 1955-60 (18) to 0.95 percent in 1985-90. (See Chapter 16, "Population and Human Development," Table 16.1.)
The successes of the two NICs that are not city-states were preceded by extensive land reform in the late 1940s and 1950s. In Taiwan during the late 1940s, the government imposed ceilings on landholdings and purchased excess land at below-market prices, eliminating Taiwan's landed elite (19). Between 1949 and 1953, one quarter of the privately held farmland changed hands; the share of families owning some or all of the land they worked rose to 88 percent (20). In South Korea, the land reform that had been promised in the late 1940s was finally carried out under prodding from the U.S. Government after the outbreak of the Korean War in the summer of 1950. Although more than 40 percent of the land scheduled for redistribution stayed in former owners' hands, the percentage of farm families that were tenants dropped from 86 percent in 1945 to 26 percent 1960 (21). These reforms laid the basis for better income distribution in both countries, roughly equalizing rural and urban incomes (22). Equitable income distribution helped strengthen domestic markets. In Taiwan, this created a decentralized pattern of industrialization (23). Countless small-to medium-size industries sprang up to serve the needs of the rural population, including provision of agricultural inputs and processing. By 1961, only 16 percent of industrial jobs were located in Taipei, the capital.
The NICs, by laying an adequate foundation with investments in human development and with improved sharing of the benefits of economic growth, did increase the welfare of current generations. Environmental problems, however, could hinder their ability to meet the needs of future generations.
If the RICs are to match the economic successes of the Asian dragons, they need to invest heavily in human development and in broad-based economic development. If they are to avoid the problems of the NICs (and of other industrial countries before them), they also need to protect their ecological base and invest in more efficient technology.