There was a time when development economics was considered a standard non-communist approach to third world economic backwardness. Development economics contemplated state-guided planning and investment, tariff walls to protect nascent industries and labor-intensive economic activities (such as crafts and cottage industries), and strict control of foreign capital flows. By the 1980s, this approach, which got its wings in the early Post-War, was discredited. A crucial influence was the development of South Korea, Taiwan, and Singapore, whose example was followed by Indonesia, Malaysia, and Thailand. The alternative approach was to relax the state's grip on the economy, freer trade, and the attraction rather than the restriction of foreign investments. It was seen that under-developed countries could not pull themselves up by their bootstraps. The new development strategy was part of the trend known as globalization. 

Some twenty years later globalization is under attack and the postulates of development economics are again being bruited and defended. In an article, William Pesek Jr. quotes an UN economist, Satish Mishra, arguing that GDP growth per se is not enough and that the key to development is not "faster growth but better growth", the sort that creates jobs and decreases inequalities. At the opposite pole of this view is the magazine The Economist, which published what it considered the last word on the matter: GDP growth was good for everyone period. The article's evidence was indiscriminate and the conclusions were not as unassailable as all that. So who is right: those who are all for globalization and GDP growth as an object in itself or the sceptics who, like Mishra, point out the shanties subsisting behind the shopping malls? 

In hindsight, the economic development of South Korea, or Japan for that matter, did not occur under conditions of unimpeded globalization. But without globalization poor countries are like a sprinter on crutches. GDP growth, whatever the circumstances, is good. But globalization need not mean that nations must entirely surrender their economic sovereignty. There are ways and ways to keep capital flowing without letting it be a law unto itself. An economy can make itself attractive to investments, even when the state applies reasonable regulations, if law and order prevail, if the legislation is transparent, stable, and fairly applied, and if there exist the adequate human resources. The latter ranges from cheap labor to technical abilities.  

Pesek's article was titled "Asian economies have a gross domestic problem". This geographic generalization is unjustified. Perhaps the most striking instance of a "GDP problem" is Brazil, which is a developed nation in terms of size, industrialization, and productivity, yet still has a per capita GDP of $7,625, far below the threshold of what is often called "self-sustaining development". Since Brazil's economic development is self-sustaining, the problem must lie elsewhere.

To return to Asia, the Philippines has self-generated capital in abundance. Its banking system has yet to undergo a crisis. In Manila, even in the midst of a dismal real estate market, building goes on without pause on an impressively large scale. Investors appear capable of withstanding unpredictably long lean-year periods without flinching. The average age of the Philippines population must be in the order of 14-years or less, so high is the reproductive rate. The labor supply in the Philippines is so disproportionate to the demand that Filipinos are paid whatever employers determine.

In Brazil, it is possible to draw lines in the national map, and even in those of cities, where high development ceases and extreme poverty begins. Like many Latin American countries, Brazil refuses to recognize, let alone face, a social discrimination problem.  

There is no general "GDP problem" as such in developing countries. Some generalizations are of course possible. Many of Africa's nations have numerous social characteristics in common. But the economic development or underdevelopment of nations must be taken up on a case by case basis. Globalization is hardly in crisis. And development economics can be resuscitated only at a country's risk.