The view from the limousine



By Martin Wolf

6th November, 2001.

The terrorist attack of September 11 was a well executed assault on focal symbols of western financial and military power - New York's tallest buildings and the Pentagon.

The attack, and its aftermath, taught us lessons about the fragility of relations between the west and the Islamic world and the impotence of power. But it also taught us something even more fundamental, by killing the post-cold-war delusion of effortless international harmony and risk-free introspection. It made the world palpably dangerous.

For moralists in the mode of Woodrow Wilson, this shock has created the opportunity to make the world a better place. Tony Blair, the prime minister, is such a man. But there is a darker perspective, brilliantly laid out by the American "realist" Robert Kaplan. For him, "the end of the cold war merely set the parameters for the next struggle for survival".*

Yet if moralists and realists disagree on the response, they must agree on the analysis of today's world. Mr Kaplan describes it as bifurcated. Think of a stretch limousine driving through an urban ghetto. Inside is the post-industrial world of western Europe, North America, Australasia, Japan and the emerging Pacific Rim. Outside are all the rest.

In Mr Kaplan's dark view, the combined stresses of population, urbanisation, environmental degradation and failed development are creating a world of gangster states and states eaten out by gangs, both with a terrifying capacity for anarchic violence. Where does Islam fit in? "Beyond its stark, clearly articulated message, Islam's very militancy makes it attractive to the downtrodden. It is the one religion that is prepared to fight."

This is a world in which the rising aspirations of billions of people are failing to meet an improving reality. Now, after September 11, those lucky enough to ride in the limousine need to try to understand the world in which they and their children will live.

Consider a few facts. In 1999, according to the World Bank, world average real income per head (at purchasing power parity) was $7,000. High-income countries, with a combined population of 900m, had average incomes of $26,000. In the developing world, 5.1bn people had average incomes of $3,500, 2.4bn of whom lived in low-income countries with average incomes of $1,900.

The high-income countries generated 79 per cent of world gross national income at market prices and 56 per cent of it at purchasing power parity. The US, Canada and the EU alone generated 59 per cent of income at market prices and 43 per cent of it at PPP.

Between 1965 and 1999, real incomes per head of those "in the limousine" rose at 2.4 per cent a year, against 1.6 per cent a year for the world as a whole. Average real incomes in sub-Saharan Africa fell, while those of the Middle East and north Africa stagnated. East Asia was the only developing region whose real gross domestic product per head rose faster than that of high-income countries.

The high-income countries consumed just over half of the world's total output of commercial energy in 1998. The US alone consumed 23 per cent. The ratio of commercial energy consumption per head in high-income countries to that in the rest of the world was 5½ to one. The ratio of US consumption per head to that in developing countries was eight to one.

Forty-seven per cent of all emissions of carbon dioxide in 1997 came from high-income countries. Their emissions per head were five times those of developing countries. US emissions per head were eight times those of developing countries, seven times China's and 18 times India's.

In short, the world's elite enjoys vastly superior incomes and absorbs a correspondingly disproportionate proportion of the world's resources. Its ability to do so is the fruit of the physical, human, social and intellectual capital accumulated by its forebears over centuries. These ancestors did a remarkable job in seizing their opportunities. But they also enjoyed a favourable environment and first-mover advantage in exploiting the world's resources, from the Americas to oil and the atmosphere.

Naturally, the elite has no intention of giving up what it has. Which elite ever has? The domestic politics of elite countries are about obtaining still more. It is no accident that the Kyoto targets for reduction in greenhouse gas emissions were virtually irrelevant to global warming or that redistribution of incomes within rich countries exceeds cross-border redistribution by up to two orders of magnitude.

Yet this pampered global elite is shrinking. In 1950, today's high-income countries had 32 per cent of world population. Today, this is just over 19 per cent. By 2050, according to the US Bureau of the Census, it will be down to 13 per cent. The share of western Europe in world population is forecast to shrink from 6.4 per cent today to 4.0 per cent in 2050, while Japan's is set to fall even more sharply, from 2.1 per cent to 1.1 per cent. Ninety nine per cent of the 3bn increase in world population forecast for the next 50 years is expected to be in the developing world.

The moralist responds by arguing that the task is to make the world a better place by promoting development in the world's poorest countries, sustaining a dynamic global economy and managing movements of people in a humane way.

This is no doubt right. But it is going to be frighteningly hard to achieve. China and India, for example, may be catching up on the living standards of the high-income countries. But more fragile countries will continue to stagnate. Two years ago, the ratio of average US incomes to those in Sierra Leone was 70 to one; on current trends, it will reach at least 120 to one by 2050.

Realists agree with this bleak prospect. They add that ahead also lies the challenge of China, of an outbreak of wars over resources - particularly water - and of the proliferation of nuclear weapons, some perhaps into terrorist hands. September 11 tells us that the position enjoyed by the elite may be more fragile and less easy to defend than many have, until recently, assumed.

On one point moralists and realists should agree. It is necessary to contemplate the risks and challenges that lie ahead with intellectual rigour and courage, not with the wishful thinking that marked the 1990s.

* The Coming Anarchy: Shattering the Dreams of the Post-Cold War, Random House