269. Briefing Memorandum From Richard Feinberg of the Policy Planning Staff to Secretary of State Vance 1

Basic Human Needs Strategy: Some Caveats

At CIEC and the OECD, you supported a development strategy emphasizing the basic human needs of the world’s poor majority.2 While such an approach commands wide support, it also faces many pitfalls. The purpose of this memo is to alert you to these potential problems before they become real. Some will be resolved through further study, and others can probably be finessed. None needs prove fatal.

IDENTIFYING NEEDS: Needs have a strong subjective component and vary culturally. The mud hut which maintains moderate temperatures year-round may seem less impressive than a more modern (and more expensive) brick home with a pre-fab aluminum-sheet roofing—which boils in the summer and fails to insulate in the winter. Nutritional needs, even for the same sex, age and activity, vary among different people and different environments. Whatever programs are developed must be clearly designed as situation-specific.

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IDENTIFYING THE POOR: This task is not as easy as might appear at first glance. Because the poor often inhabit a non-monetary, non-recorded world, their exact living conditions are not known. Secondly, poverty is relative: a person with a $500 income in the slums of Rio may feel poorer than someone with a $75 income in rural India. Cross-cultural definitions of poverty must be viewed skeptically. It will be essential to involve local organizations that are in close touch with—if not composed of—people from poverty backgrounds; such groups can help identify the needy and assist social scientists in devising surveys to reflect indigenous concerns.

THE MONETARY COST: Developmentalists now cite specific estimates for the budgetary costs of boosting global living standards beyond a minimum level—one common figure is $125 billion in foreign assistance (IFI’s plus OECD bilateral), to be disbursed to the poor countries over a ten-to-fifteen-year period. The models these figures are derived from are so crude as to be considered worthless by many. Starting at the individual country level in order to calculate the amount of resources required to satisfy basic human needs is a more promising approach, since one at least can take into account specific political and cultural factors, and an economic environment can be posited.

DELIVERING SERVICES: In most LDC’s the benefits accruing from social services flow to the privileged groups, as does the distribution of income. One cannot assume that aid programs categorized as, say, health, agriculture, or education necessarily benefit the poor. Continued vigilance will be necessary to “audit” the strategy.

PROGRAM DEVELOPMENT: Designing—and implementing—programs that will reach the poor are relatively untried tasks. Progress, therefore, will have to proceed at a modest pace, and those hoping for the quick fix will be disappointed. The ultimate impact of a particular program may not be apparent. For example, raising the price of food produced by the rural poor can result in pressure for higher urban wages which are passed on in higher prices for industrial products, including those purchased by the poor farmers: the net income effect may be negligible. Higher wages may benefit some workers but prevent others from being hired. Projects cannot be implemented in isolation: their side effects must be carefully traced through the individual country’s economic and institutional structures.

RAISING PRODUCTIVITY: The peasant cannot be productive without land, nor can the industrial worker produce without a job. Social restraints on productivity are often monumental. The basic-human-needs agenda, therefore, raises the tough issues of land reform, insufficient land and uneconomic holdings in the country, and restrictive union practices, massive educated unemployment and social inhibitions on manual labor by the educated in the cities. The Alliance for [Page 820]Progress initially pressed hard for land reform, only to beat a hasty political retreat. A combination of caste, insufficient land and local political pressures are pervasive restraints in India. Moreover, even land-reform advocates must admit that, in the short run, the productivity of the new land-owners often drops, and they often sell their land off quickly. Productivity gains must be viewed from a long-run perspective.

INTERDEPENDENCE OF BASIC HUMAN NEEDS: Good health depends on good nutrition, potable water, adequate housing, and education, not only on access to medical facilities. This means a level of planning and coordination that outdistances the administrative capability of many LDCs. Delivery procedures must be developed that eliminate red tape, perhaps through decentralization or increased decision-making by the poor themselves.

POLITICAL CONSTRAINTS: Some leading analysts, including the World Bank, argue that in some LDCs a major restructuring of political and economic power relations has to be a pre-requisite to serious implementation of a basic human needs strategy. The implication is that, for governments such as those in Chile or Uruguay, not only must they be pressured to halt torture and summary executions, but they must abandon their “trickle-down” model of development. This is tantamount to asking for their abdications: in these two countries, as in others, the military seized power in order to crush political forces favoring more equitable income distribution. In other countries with more democratic structures, such as India, the tenacity of conservative social forces makes an effective grass-roots restructuring of political and economic power extremely difficult, given the local pressures. Many southern elites will view the basic human needs strategy as a Machiavellian maneuver to divert attention away from the international distribution of income, and will cry “interventionism”+1p. Even further, they may perceive it as a way of inhibiting them from “catching up” with the West technologically. These negative reactions can be diluted by our being reasonably forthcoming on development assistance and other NIEO issues.

SELECTION CRITERIA: If the aid agencies decide to concentrate on governments indicating a serious commitment to basic human needs, what criteria will be used as proof of this commitment? Statements of intent are only words. The existing income distribution might have evolved in spite of, rather than because of, government policies. Moreover, income distribution figures are notoriously inadequate. (Even in the US they have been found wanting and are currently being revised to take into account, for example, non-market items like home-grown foods as well as corporation “perks”.) Whatever criteria are chosen, those countries that are de-selected will raise a political [Page 821]storm. Nevertheless, such disaffections will be outweighed by the higher rate of return that aid will produce in those countries in agreement with the donor’s objectives.

US DOMESTIC OPPOSITION: The AFL–CIO would raise eyebrows over a development scenario that, in effect, advocates allocating labor-intensive industries to the LDCs. And capital goods industries prefer that the IFIs continue to finance their exports. While the products of some multinationals fit neatly into a basic human needs strategy, others do not: a strategy emphasizing the basic needs of the poor is implicitly critical of stimulation, through advertizing or demonstration, of non-basic needs. Finally, there may of necessity be implied criticism of traditional allies who are less concerned with meeting the basic human needs of their population. We will have to make a persuasive case that the US will be well served by a successful basic human needs approach.

None of these problems means that a basic human needs approach will not work. We believe it can and that it is right. But awareness of the potential difficulties—as we also examine the benefits—will help us minimize them.

  1. Source: National Archives, RG 59, Office of the Secretariat Staff, Official Working Papers of S/P Director Anthony Lake, 1977–January 1981, Lot 82D298, Box 2, S/P-Lake Papers—6/16–30/77. No classification marking. Drafted by Feinberg on June 29. Sent through Lake.
  2. Regarding Vance’s May 30 address at the CIEC Ministerial meeting, see Document 265. The OECD met at the Ministerial level in Paris June 23–24; for the text of Vance’s intervention at the meeting, see the Department of State Bulletin, July 25, 1977, pp. 105–109.