How To Save 'Failed States'.(leaders of the global economy meet to discuss policies for alleviating poverty)(Brief Article)(Statistical Data Included)

The grand panjandrums of global capitalism are gathering in Davos this week, where, in between sessions of cerebral hockey, social skating and downhill skiing, they will undertake an annual assessment of the world economy. The conference's loftily twinned theme of "sustaining growth and bridging the divide" raises the expectation that the supermonied class will work toward alleviating the travails of the have-nots, the 3 billion of the world's 6.1 billion people whose daily income is less than the equivalent of a dollar. But what can the rich realistically do to help the very poor?

Poor countries are clamoring for more funds to fix domestic economic problems often of their own leaders' making. High-level corruption, plundering of state treasuries and the disintegration of institutions of law and order have disabled growth mechanisms in almost half of the world's 189 nations. Since last year's Davos meeting of the World Economic Forum, the cohort of the hopelessly poor has sharply increased, from 1 billion to 1.5 billion. Declining aid from donor countries--the figure for 2000 was barely $40 billion, a 15 percent drop from 1999--and declining foreign investment in the world's 133 poor countries has meant that developing countries have less than benefited from globalization.

Compounding the problem is the fact that the number of "failed states"- -those with collapsing internal political and social systems, and with no hope whatsoever of attracting any fresh aid or investment--has remained at around 40 over the past few years. This despite the international emphasis these past few years on democratization, free markets and good governance. Algeria, Angola, Chad, Indonesia, Nepal, Pakistan, Rwanda, Sri Lanka and Yemen are some of these failed states. Last week, with the assassination of President Laurent Kabila, Congo confirmed its membership in the failed-states club.

In other countries--such as the Philippines and India--the social order and economic stability in specific regions are collapsing because of ethnic or political turmoil, making those regions unsalvageable sinkholes. For example, in Kashmir, what was once a $300 million annual tourism and carpet-export business has dwindled to almost nothing. Anyone who imagines that the ethnic tensions between indigenous Muslims and Hindus can be ameliorated is probably hallucinating.

Notwithstanding the good will of the Davos summiters, the signals of a downturn in many industrialized economies means that domestic political support for extending assistance to the overseas poor may be softening. The big international multilateral institutions such as the World Bank and the U.N. Development Programme aren't in a position to enhance their annual lending or technical assistance. "The great danger from extreme poverty has yet to ...