There is probably no area in the development field
which has changed so profoundly and rapidly in the
last ten years, in its conception, its substance,
its scope, and in the skills and methodologies which
it has to offer, as the area of management and
public administration. These changes were the result
of the realization that in the setting of the Third
World there were distinct limits to the
transferability of the American experience both in
the management of private business and in the field
of public administration. More profoundly, however,
these changes were the result of a fundamental shift
in the perception and understanding of the
development process itself as well as of its
dynamics. My purpose to-night is to reflect with you
on those aspects of these changes which are
especially significant for large, populous
developing countries, and their implications for
management training.
 
It is now a commonly accepted view that colonial
rule and the preceding period of feudalism have left
the newly independent nations which emerged after
World War II with a dysfunctional social structure,
with a lopsided enclave economy which was also
characterized by great social desparities, of great
significance especially in culturally, ethically and
religiously pluralistic societies. There were
serious imbalances of a structural nature between
the centre and the periphery, between different
provinces between town and country side, between
ethnic groups, between the modern sector and the
traditional, and between the foreign and the
domestic sector. It can be said that, cumulatively,
these imbalances constituted the social structure of
inequity. It was the base line from which the
development effort of many newly independent
developing countries started. It became the common
experience especially of the large populous
countries among them, that under these conditions
economic growth did not reduce these imbalances but
tended to aggravate them, thereby causing serious
strains on political cohesion and social harmony.
This led to the realization of the need for
structural change to redress these imbalances and
towards greater distributive justice. This called
for deliberate efforts to transform the colonial
enclave economy into a national growth economy, as
well as for an emphasis on regional development, and
the growth of a multi-ethnic entrepreneurial middle
class. In some cases it made a period of reverse
discrimination necessary. Together with appropriate
fiscal policies, and in some cases a redistribution
of productive assets, this amounted to the adoption
of equity as a development goal co-equal with
economic growth.
 
Apart from a better understanding of the structural
imbalances obstructing and distorting the
development effort, the other factor accounting for
the shift in perception and understanding of the
development process have been the incapacity of
central bureaucracies to reach the poorest and
weakest segments of the population with the
effective supply of social services, aimed at
overcoming their condition of absolute poverty and
at improving the quality of their living condition.
It turned out that the package of services and
policies addressed to the lowest 40% income group,
covering food, nutrition, health, education and
housing as well as family planning, and employment
and income generating activities, remained
ineffective, unless they became an integral part of
the selforganisation and self-management capacity of
the rural and urban poor, and the communities they
live in. But it is with this revitalisation of the
country side and the informal sector in the cities
that the modernizing bureaucratic state has the
greatest difficulty. It has proven to be extremely
difficult to reverse the trends towards over
bureaucratisation of the countryside in favour of an
essentially hands-off policy, which allows, with or
without the help of non-governmental voluntary
organisation, grassroots organisations to develop,
for co-operative effort in the marketing of
agricultural produce, the purchase of fertilisers
and pesticides and other needed commodities, in
water management, in developing and running credit
unions and building associations, or
non-agricultural commercial enterprises. It takes a
while for the rural bureaucracy to realise that
accountability to their members, of the leaders
elected to hold formal positions in such
organisations, constitute the greatest educational
and socially self-corrective mechanism, and the
greatest force towards rural emancipation.
 
It also takes time for a traditionally paternalistic
bureaucracy to realise the crucial importance of
decentralisation. Also that it should not feel
threatened by a growing capacity for
self-organisation and self-management of the
traditionally socially weak segments of the
population, and that the security risks perceived
are outweighed by the developmental dynamics
released in this way. It opens the way towards
village autonomy and active village participation in
development planning and implementation.
 
It should in this connection be realized, that many
governmental programmes towards increase in food
production and the supply of credit facilities,
aimed at income and employment generation, are
directed towards individual villagers.
 
This tends to further atomise the village, rather
than to stimulate organisation. They also tend to
ignore existing patterns of social stratification,
and the desirability for the poorest villagers to
organise themselves separately, as an essential step
towards improving their local bargaining position in
the defence, or the promotion of their own specific
interests.  For even community participation,
experience has shown, does not ensure participation
by the poorest among them. Often the relevant
information about new facilities or opportunities
does not reach them.
 
What is more difficult to remedy, however. is that
many of them are tied up, every day, for the whole
day and part of the night, with all the members of
the family who are old enough to work, in very low
paying, very unproductive work, simply in order to
ensure their continued subsistence. They have no
time to spare to go to the village health post, or
to participate in any voluntary type of community
activity, nor can they afford to take the risks
involved in any new opportunities which are opened
by a variety of government programmes in rural
development or food production. Only assured higher
income, from work or from welfare support, would
enable them to abandon the mere survival strategy
which they have had to adopt to stay alive.
 
We know, in fact, very little about the dynamics of
the survival strategy which enables the absolutely
poor and their families to survive after a fashion.
We do know how totally dependent they are on the
fluctuations of wages and food prices. They cannot
afford to reject any wages offered, however low, nor
to postpone purchase of food stuff when prices are
high. But we really do not know enough about the
social structure and the culture of absolute
poverty, to enable us to break the pattern of
powerlessness, of exploitation and permanent
indebtedness that keeps them in a state of
dependency bordering on slavery. Still, this has to
be done, if the larger amount of external resources
made available to them is not to flow back to people
in the city, or their richer fellow villagers. We
often also do not know enough about the geography of
poverty; where the absolutely poor are exactly; nor
do we know enough about the specific causes of each
particular situation.
 
Often the absolutely poor are to be found in small
isolated islands, or in remote mountain valleys,
where history has passed them by. But sometimes they
live close by, in places not too far removed from
more developed areas, but isolated by the poverty of
their natural resource endowment. They are also,
generally in quite large numbers, to be found among
the landless in the countryside, many of them women.
They live with their destitution unrecognised,
because of the persistence of the myths about
village life among the urban elite, in which social
harmony, mutual help and a spirit of shared poverty
is assumed to prevail, while in reality sharp
distinctions in social stratification have
developed, and traditional mutual obligations have
been replaced by contractual monetary relationships.
And there are of course, the very poor in shanty
towns and city slums, and those who sleep on the
sidewalks and under the bridges.
 
Each situation requires different ways of reaching
them. In many cases breaking the isolation through
linkage with the wider transportation and
communication network will be enough to activate
them. In other cases the key lies in breaking the
pattern of exploitation and dependency, through
releasing people from their indebtedness, while at
the same time providing them with alternative, and
less exploitative ways, of financing their
activities, or through opening alternative
employment opportunities.
 
But quite often too, the land on which they live is
so poor and so remote, and the resignation of its
people so great, that no obvious solutions present
themselves. It will require specific concentrated
efforts and the application of the best minds of the
country, from the universities, from the voluntary
associations, or from the business world, applying
their entrepreneurial eyes, in order to find the
less obvious solutions that are still within the
reach of these people. And as a last resort, there
is, of course the possibility of resettlement.
 
The attempt to reach and help the absolutely poor,
therefore, requires the breaking up of traditional
social structures that keep them in a state of
permanent indebtedness and dependency, through
integrated rural development which also includes
structural reform. This means land reform, improved
land tenure practices, and the consolidation of
fragmented mini-holdings towards the establishment
of higher yielding farm systems through group and
cooperative organisations.  Also, it calls for price
policies which stimulate food production and
increase rural income, while at the same time
ensuring improved calorie and protein intake among
the urban poor and rural landless labour. More
generally, the economic revitalisation of the
countryside also needs changing the terms of trade
between the urban and the rural sector, to the
advantage of the latter, through realignment of
import and export duties, and, where relevant, a
review of the exchange rate in order to change the
relative valuation of labour against capital in
favour of labour.
 
Trying to come to grips with poverty also requires
industrial policies giving priority to labour
intensive industries and labour intensive production
processes that are compatible with the requirements
of efficiency; policies favouring capital intensive
industries serving small rural enterprises (e.g.
processing plants, cold storage facilities,
motorized fishing boats, owned, or destined to be
owned, by cooperatives of primary producers);
locational policies ensuring proper geographical
distribution of industries throughout the rural
areas, and where possible with forward and backward
linkages to local production and services
capabilities. Also policies which prevent modern
sector enterprises to compete unduly with local
enterprises in the rural areas, using local
materials. And finally, policies directing new
investments in the modern sector in support of these
policies. Ultimately, there has to be an increase of
the number of non-exploitative linkages between the
modern and the rural sector, once rural institutions
and capabilities have become strong enough.  There
is also the need to develop a network of
agricultural support services, road systems and
transportation facilities.
 
A direct attack on poverty, therefore, calls for
institutional reform at the national level and for
macro-economic policies that are supportive of it.
Without them, any achievement in rural development
will eventually be wiped out again.
 
All this requires a combination of legislation on
the national and regional level.  Community
organisations and activities should in addition have
access to relevant information in sufficient
quantity, and should become part of an informational
universe at the local and regional level. The amount
and kinds of information usually dispensed through
extension workers or the village headman, simply
will not be enough to provide the mental stimulation
and the awareness of opportunities that the
revitalisation of the poor requires. This includes
access to information, as well as to information
channels, and also shared control over information
channels. The decentralisation of information
networks, and the democratisation of their control
would be essential preconditions for success.
 
Once absolute poverty is overcome, and the physical
and mental debilities that go with it, a great deal
of developmental energy among the poor may be
released. In those regions in India, for instance,
where this has happened, we are witnessing major
shifts in the distribution of economic as well as
political power between the lower and the higher
castes, amounting to a quiet social revolution.
Because it is almost an autonomous process, it is
accompanied by a great deal of rural violence.
Nevertheless, it is an ongoing process which
undoubtedly will profoundly change both Indian
politics and culture. As the Indian experience
shows, the emergence of the poor into the political
and economic life of the country is a process that
is uneven, very much dependent on the local
coincidence of protective and stimulating political
leadership and aptitudes, drives and organising
capacity among the poor.
 
The prevalence of massive, endemic, structural
poverty in large populous low income countries
forces upon these countries a strategy of
development from below, which emphasises the
revitalisation of the countryside and the urban
poor, and the development of social infrastructures,
like voluntary associations, cooperatives, credit
unions, school and health societies, and building
associations, either through the adjustment and
redirection to new goals of traditional institutions
or traditional informal organisations, or the
establishment of new ones. The development of such
organisations, however, cannot be achieved by
governmental fiat. It has to grow from the bottom
up, by allowing the people concerned to organise
themselves, to choose their own leaders, to make
their own mistakes and to learn to redress them
themselves. This implies on the part of the
government bureaucracy a shift from its traditional
paternalistic attitude towards the people it is
supposed to serve, to an emancipatory one; a policy
of self restraint and the willingness not to
interfere, or regulate prematurely, before these
organisations have sorted out their own internal
problems and have shown themselves to be viable and
capable to grow. The problem here is that social
development has its own internal rhythm which
conflicts with the time pressures and needs of the
bureaucratic centre. At the same time, social
infrastructure -development also requires
decentralisation, both of the central bureaucracy
and of the planning and development effort, which in
itself takes considerable time and effort, with many
risks. The heart of the management problem in the
development effort however, is located in the
difficulty of conciliating the needs of the centre
for the most rational and efficient allocation of
scarce developmental resources with the requirement
of development from below, in terms of autonomy and
self reliance. No developing country so far,
whatever its political system or ideological
orientation, including China, Tanzania, Peru and
Brazil, has to my knowledge, satisfactorily resolved
this essential contradiction. It is this
contradiction which constitutes a major paradox in
the development process, and which poses a major
challenge to the management of the development
effort.
 
We should, therefore, try to take a closer look at
the implications for development management of the
shift in emphasis for the large, populous low income
countries towards equity and the eradication of
absolute poverty. It is obvious then that the
management needs of developing countries are not
limited to the modern sector, i.e. to the needs of
private and public corporations, and of regulatory
agencies at various levels. Even here it has proven
to be impossible to consider business corporations
and activities in isolation from the social and
cultural environment in which they operate. Modes of
operation, of control and of decision making have
shown themselves to be greatly influenced by
different attitudes towards authority, by different
motivations and expectations, by different patterns
of conflict-avoidance and of loyalty, in various
cultures, even within a single nation. It has forced
management institutions to consider in their
research and training programmes the various forms
of interaction between modern business firms and
their environment, as well as the role of national
business enterprises in the wider stream of national
aspirations. This has already led to a broadening of
training opportunities provided to small enterprises
in most institutions.
 
One area however, which deserves a great deal more
attention and effort from the management institutes
is the development of a greater capacity to turn
small traders and enterpreneurs of family businesses
in the informal sector, in the cities, and in the
countryside, into modern businessmen.  The
developmental potential of these traditional
peddlers, artisans, and small enterpreneurs, is
often overlooked in the more conventional pursuit of
economic growth. A development strategy which aims
at breaking out of the mold of an enclave economy,
and at moving towards social justice by overcoming
structural imbalances, as well as by broadening the
social base of development, cannot afford to
overlook this potential resource. Regional and rural
employment creating development may in this respect
also become an important factor in the development
of such a middle class. It is quite unlikely that
the need to provide productive employment to the
vast numbers of young people which enter the labour
market every year, can be met in any other way.
 
Even more important than the widening of the reach
of management institutions in this direction, has
been their turning towards the management problems
and needs in rural, urban and, especially, in social
development. It became soon quite obvious that in
addressing these problems, the experience in
unproving management capacity in the business sector
was of little relevance to the skills called for in
the management of community based,
development-oriented and decentralised,
participative social programmes, which characterise
social development. It turned out that the
establishment of new institutions at the village
level or in the informal urban sphere, the
improvement and reinvigoration of existing ones, or
the adjustment of traditional institutions and
organisations to modern requirements and
opportunities, called for different sensitivities,
different types of knowledge, different
methodologies and the development of new, often
culture and region specific social technology. It
also involves the management of turning a government
bureaucracy to effectuating deliberate changes in
its environment, and to the pursuit of development
objectives that lie way beyond its traditional task
of systems maintenance.
 
The brief experience in the management of social
development has already shown the need for
decentralisation, both in terms of planning and of
implementation. It has also brought out the need for
decentralisation to be accompanied by
democratisation.  Without the building of
countervailing forces and new balances of power,
through organising the poor and the weak,
decentralisation would very likely lead to local
abuse of power.
 
What has also become clear is the need in social
development for external inputs, in terms of
resources and technology. But experiences has also
shown the importance of some degree of local
political protection in the early stages. There is
also evidence that the more vertical and horizontal
linkages can be developed, the greater the chances
of success seem to be for a new social development
programme.
 
Finally, it should be realised that social
development, or development from below, leading to
the dynamization of local communities, also leads to
great self assertion, and tends to higher level of
conflicts. Social development, therefore, also calls
for the stimulation of a greater capacity for
conflict management at the local level.
 
All this shows the importance of taking the teaching
of public administration out of the level of
improvement of bureaucratic practices, and beyond
the efforts mainly to improve efficiency and
effectiveness.
 
The capacity to manage development systems
therefore, should, in addition to the sensitivities
and capabilities described here, also include the
skill to relate to people in the communities of the
rural and urban poor. It should include a political
sensitivity to the important factors in the
environment in which social development programmes
have to be implemented, and the persuasive power to
win political support for these programmes from
among these factors. lt requires a capacity to
handle complex systems which contain autonomous
sub-systems, which are not, and should not be, fully
within the span of control; it requires a capacity
to handle simultaneously hierarchical and
co-archical relationships as a prequisite for
inter-institutional programme management.
 
The effort on the part of large, populous low income
countries to come to grip with the structural
elements that underlie the problems of inequity and
poverty, may well lead these countries into new,
alternative development trajectories, requiring new,
and different responses to technological and moral
choice, which involve the basic values of these
societies. In terms of management such an
alternative strategy opens the question of how best
a nation could organise itself for the attainment of
its development and other national objectives. This
opens up a level of management problems and actions
which turn around the influencing of structural
variables, especially organisation, information
systems and reward systems, as well as generally,
the influencing of problem solving processes within
the system, rather than attempting to find solutions
to problems on behalf of the system. Management
institutions in the developing world will have to do
a great more capacity building to handle public
sector problems at this level of meta-management as
well. There is of course another way of getting at
this level of meta-management problems. Our
discussion so far has shown that a development
strategy aiming at economic growth and equity, as
well as at the rapid eradication of absolute
poverty, is not possible without increasing the
degree of participatory democracy. As 1 have tried
to show elsewhere*, the democratisation of the
modernising bureaucratic state requires careful
management. All development in fact is destabilising
and as very recent history has shown us, rapid
development is bound to be even more destabilizing.
Structural change in general engenders great
anxieties and fears of a very primordial nature. The
history of several countries in Latin America have
shown the magnitude of these fears, and the violence
that this evokes in the attempts of these countries
to shift from a growth to an equity development
model. The basic question here is how much
instability a society can absorb without
polarisation and resort to violence, resulting in
societal co]lapse. If, on the one hand, development
is by its very nature destablising on the other
hand, without a sufficient degree of order and
stability, development would not be possible at all.
At the same time without development and change, no
stability would be possible either at the prevailing
levels of poverty. Order is based both on the freely
given consent of the governed and the coercive
powers of the state. However, the balance between
coercion and freedom is to a large extent determined
by the extent to which the prevailing order is
perceived as just by society at large. Of course,
each society encompasses a wide variety of concepts
of what is just, but at the same time a society's
cohesiveness and viability depend on some unspoken
consensus of the limits to acceptable inequality and
injustice. Once the limits are transgressed, the
legitimacy of the accepted order is eroded, and can
only be maintained by the coercive powers of the
state. It should also be noted that in rapidly
changing societies these perceptions of social
justice keep on changing, as situations change in
conjunction with the development process.
 
It might, therefore, be said then that the viability
of a society in rapid transition depends in large
measure on the state's capacity to maintain a
dynamic equilibrium between change and development,
order and stability, and the changing perceptions of
social justice. It is this triangular equilibrium
that will determine at which point freedom and
coercion are balanced. Because of the variety and
magnitude of the structural changes at the national
as well as the local level, which in poor, large
developing countries with large populations and
severe social imbalances, the development effort
calls for, it is no exaggeration to state that the
management, and especially the humane management of
social transformation through the careful
manipulation of the triangular relationship between
change and development on the one hand, order and
stability on the other, and social justice at the
third end, constitutes the crucible that will
determine the continued viability and development
momentum of most of these societies. The capacity to
manage this triangular relationship is of course in
part, but not entirely, a function of the political
wisdom of a nation's leadership. But it is also, to
a large extent, a function of the development
management capacity of the society at large. It is
here that the role of management institutions, like
the Malaysian Institute of Management, properly
conceived, may be crucial for the future well-being
of our nations.
 
For the sake of all of us, and of our children, we
should wish them well.
 
BIBLIOGRAPHY
 
Population and Social Development Management: A
Challenge for Management Schools.  Edited by David
C. Korten, published by the Population and Social
Development Management Center (Institute de Estudios
Superiores de Administration-IESA) Caracas,
Venezuela, 1979.
 
 
Development Administration in the Middle East, A
Syllabus. Edited by Delwin A. Roy.  American
University of Beirut, 1975.
 
 
Management Development Needs in West Malaysia by
Norman C. Hunt and Bryony M.  Conway. University of
Edinburgh, November 1972.
 
 
European Contributions to Organization Theory.
Edited by Geert Hofstede and M. Sami Kassem.
Koninklijke van Gorcum & Comp. B. V., Assen, The
Netherlands, 1976.
 
 
The Management of Change, by Douglas C. Basil and
Curtis W. Cook. McGraw-Hill Book Company (UK)
Limited, 1974.
 
 
Education and Training for Public Sector Management
in Developing Countries. Edited by Laurence D.
Stifel, James S. Colernan, Joseph E. Black.
Published by the Rockefeller Foundation, March 1977.
 
 
Redistribution with Growth, by Hollis Chenery,
Montek S. Ahluwalia, C. L. G. Bell, John H.  Duloy
and Richard Jolly. Oxford University Press, London
1975.
 
 
Class Structure and Economic Growth/India and
Pakistan Since the Moghuls, by Angus Maddison, W. W.
Norton & Company, Inc., New York, 1971.
 
 
The Structural Context of Rural Poverty in Mexico: A
Cross"State Comparison, by Frank W. Young, Donald K.
Freebairn, and Reuben Snipper, in: Economic
Development and Cultural Change XVII (July), 1979.
pp. 669-686.
 
 
Conference Papers & Proceedings of AAMO Sixth
International Management Conference.  Published by
the Singapore Institute of Management, Singapore
1978.
 
 
Special Reports on Major Business Problems Business
Week Executive Portfolio, McGrawHill Publication.
 
 
Food Problems, Unemployment, and The Green
Revolation in Rural Java, by William L.  Collier.
Prisma, January 1978.