Third World in the West's rotten boroughs

EUROPEAN political leaders have belatedly become seriously worried about loss of jobs to the Far East - as the discussion at this week's summit has shown. There are already a handful of what, a generation ago, would have been considered developing countries - South Korea, Taiwan and the city states of Singapore and Hong Kong - which now have income levels higher than parts of Western Europe. These are now being joined by parts of mainland China, and there are pockets of development in India where highly sophisticated tasks - accounting, computer programming - are being carried out for Western companies.

It is not difficult to foresee a situation where the idea of there being an industrial world, a Communist world and a developing world becomes redundant. The Communist world has in effect disappeared, and as these pockets of development in Asia grow, it will become meaningless to think of India, for example, as a less developed country.

Most of it will remain poor, but parts will achieve quite a high level of development if they can use their talented, educated people to carry out 'white-collar' jobs for the West. In China the areas of development could become very large indeed.

Western leaders are aware of all this. Their instinctive response may be simply to pull up the drawbridge - witness the French proposal this week to tax Far East imports and use the money to support the unemployed workers of the EC. But at least they know there is a problem.

What has hardly begun to be considered is the opposite phenomenon: pockets of under-development in the middle of developed countries. The process is happening most quickly in the United States, which is becoming almost a mirror image of China: a developed country with large regions of under-development.

The best new information on this comes from the United Nations' Human Development Report, published last month. It takes as a measure of human development people's life expectancy, educational level and purchasing power, and ranks the US sixth, after Japan, Canada, Norway, Switzerland and Sweden. (Britain comes 10th, behind France but ahead of Germany.) If, however, one looks at the US in terms of racial groups, American whites come top, while African-Americans are 30th, just ahead of Trinidad and the Bahamas, and Hispanics are 34th, behind Korea and some way behind Uruguay.

In a way it is a pity that the UN makes the distinction in racial terms, for many African- Americans and Hispanics live standard 'middle class' American lives. The distinction should surely be made in cultural, rather than racial terms: that certain cultures in the US stand outside normal developed-country life, and a lot of these happen to be African- American or Hispanic.

Geographically, the inner city is where the Third World in the US exists. The most dramatic example of the extent to which parts of the inner cities have become economic wastelands is in Detroit. As reported last month in the Independent, the city ombudsman has suggested that whole areas be fenced off, the few remaining residents rehoused, services - water, power, police - withdrawn, and the land allowed to return to nature. If that controversial plan were adopted, the city would in effect be accepting that parts of the urban structure no longer had any economic function, and should therefore again be the wilderness they were 150 years ago.

In historical terms there is nothing new in the idea of a city being too big for its functions. It took the best part of 900 years for London to reoccupy the space inside the old Roman walls after the Romans left around 420, and the Black Death in 1348 left the city under-populated again until Tudor times. But it is new to us now to see areas close to city centres in dramatic decline, in close proximity to new boom towns on their periphery.

The growth of these new fringe cities, some larger than the old downtown area, has been brilliantly charted by the US journalist Joel Garreau in Edge City - Life on the New Frontier. He lists eight such cities on the outskirts of Detroit, but every large town in the US shows the same pattern. It is to these new cities, with their up- market housing estates, golf courses, riding schools and restaurants, that the middle classes have moved. A Third World economy - or rather some ghastly caricature of it, with very high crime, very high drug abuse - has moved into the areas that have been vacated.

The US has allowed these large areas of under-development to occur and the issue is how to contain them. They have sprung up despite the fact that the US economy is very good at creating low-skill service industry jobs: some people do not want to be part of that economy. Fencing off is not really a solution as such, merely an acceptance of defeat.

In Europe the problem is different both in its scale and its nature. There are areas in European cities where there is very little economic activity - few people have jobs and there are few services for residents, as retailers find it at best unprofitable, at worst physically dangerous, to operate there. But not only are these areas much smaller than in the US, they are usually Sixties housing estates on the fringe of cities, built and run by the state. These areas have never been an economic (or a social) success. The problem is housing that was ill-conceived and poorly managed, rather than whole neighbourhoods which functioned very well until the economy on which they were based walked away.

In other words, up to now the problem in Europe has been one of planning, urban design, and social policies. The danger for European countries is that a problem which is still manageable will develop into one which is not.

The question is: how can neighbourhoods teetering on the brink of decline be made nice enough and safe enough to keep their economic usefulness? We tend to think in terms of problem families and sink estates, rather than how boroughs might make themselves more attractive both to their in-work residents and their business base. Municipal governments all over Europe present themselves as providers of services (paid for by taxpayers' money) rather than managers of an economic entity. If they do not change they will simply find themselves running an area of the less developed world.

Maybe that will happen anyway. The qualities that give developed countries their standard of living are education and hard work. North Americans and Europeans must be at least as well-educated and work at least as hard as people in the Far East if they want to avoid bringing Third World conditions to their door.