3. Second Development Decade 1970 - 1980

In the second development decade these concepts were further developed. The ILO presented an employment-oriented development strategy in its World Employment Programme. It sent missions to various countries to explore the possibilities of expanding employment. Under the quantitative aspect, they had little success. It was ascertained that most of the people already had an occupation. One cannot live on unemployment. However, the findings of these missions led to numerous new points of view. The problem at hand was not at all unemployment but a general employment problem involving several aspects. Sometimes, it was a problem of time when someone did not have enough work. However, many people worked hard and over a long period at a low salary so that it was not a problem of time but of income. Others did not find the work they wanted in the place they wished, and many worked at a low productivity because the complementary factors of production were not available. Each of these circumstances calls for a different policy.

Thus, it is not so much the volume of work available that is important but the earned income. A rich man does not complain about too little work. As the emphasis was laid on income, poverty became the main term in the discussion. Seers (35) was one of the first to question the increase in the gross national product as objective and criterion. It was perceived that the success of growth did not trickle down to the poor. It also became particularly evident that industry could not absorb the increasing number of workers. This was caused not so much by deficiencies in the labour market as by deficiencies on other markets, e. g., credit subsidies, overvaluation of currency and other circumstances encouraging high capital intensity.

McNamara's (22) famous address, made in 1973, drew attention to the neglected 40 % of the poorest in the world and, since these live mostly in rural areas, agriculture again enjoyed greater consideration. Food prices are, indeed, the most important factor for the poor people's real income, and the low agricultural productivity was considered to be the main cause of poverty.

As a result, attention once more turned to the conditions of agricultural development. Myrdal (26) in 1970 hat already emphasized the importance of adjusting the institutional framework conditions as the prerequisite for a successful rural development. In 1971, Ruttan and Hayami (10) submitted their concept of an induced agricultural development. According to that concept the countries, whose resources in production factors vary, have different effective technological ways of achieving growth, and factor prices help in selecting the optimal way.

In 1974. Johnston and Kilby (15) analysed the interaction between agricultural development and the expansion of the non-agricultural sector. They arrived at the result that numerous small farms had a greater stimulating influence on industrial development than a few large farms.

The opening of China has, undoubtedly, also helped to put a stronger emphasis on income distribution in development policy. China's recent history shows a development concept which aims at avoiding an increase of income inequality. The attractiveness of this model, for Asia in particular, led to more efforts in the development policies of industrial countries to fight inequality (,,growth with equity", Chenery, 4).

All these trains of thought of the early seventies led to a concise concept which Mellor (24) submitted in 1976, as an ,,employment-oriented strategy of rural development". This concept takes into consideration the interdependance between agricultural and non-agricultural development, the necessity of growth and distribution, and the emphasis on production increase as distribution basis. According to Mellor the starting points of development are the labour-intensive economic sectors, namely agriculture and the small industries established in the rural areas, both of which produce consumer goods that are in demand. An increased food production —especially cereals —supplies food, employment in processing sectors and, due to the increasing agricultural income, a greater demand for labor-intensive industrial products. This strategy should be supported by reorganizing foreign trade so that labour-intensive products are exported.

At the same time, at the international level, dissatisfaction with the results of the development efforts was again on the increase. The poverty-stricken rural population migrated more and more to the towns. They were not motivated by the difference between income in the rural areas and real urban income, but by the difference between their income at the time and the expected income in town (Todaro, 38).

It is true that the success of rural development in a few countries had globally mitigated the problem of food supply, but all the measures taken hitherto had been of little help to the poor people in the world. In this situation, a moral appeal to the whole world population was made. McNamara (23) declared in 1977, that an equal income distribution called for changes in industrial as well as in developing countries. These changes are levelled at the personal interests of the privileged, influential minorities in all countries. In 1976, Tinbergen (37) demanded a ,,new world economic order".

At the same time ILO, Jolly and the Overseas Development Institute of Sussex drew up the strategy of ..basic needs" (13). The disadvantaged people in the world are not helped by mammoth projects but by a change in the structure of production, distribution and consumption. Measures aimed at satisfying basic needs such as food, clothing, housing and health help those standing in the background of the development process. At about the same time it was tried, on the basis of the concept of integrated rural development, to implement these ideas and to combine production increase and social improvements in the same project whose target groups were the poor people. Thereby, the emphasis was laid on the participation of the poor. At any rate, this approach, taking up ideas which played a role in the community development policy of the fifties already, turned out to be very complex and difficult to implement. In particular, it meant more influence on the part of the government due to the requirements for integration and thus showed a tendency to divert attention from self-help activities.

Uma Lele (20) obtained negative results when conducting a survey on the success of this concept, especially since the local institutions could not be sufficiently activated and since the available knowledge of the local technological possibilities was scanty. The administrative costs turned out to be considerable and, therefore, the projects could not be multiplied. In 1980 the World Bank started to discontinue support of this approach. It had been recognized that the emphasis on the basic needs indeed brings about an increase in welfare but that, unless an economic basis is created simultaneously, investments into social services are not possible at long term. The poor benefit more from a reinforcement of the development basis than from mere redistribution measures, if an appropriate policy guarantees that the results do not bypass them.