Growth may no longer be the magic word in the world of international development. The current financial crisis has revealed, even to those most committed to a "rising tide" approach, that without some mechanisms ensuring equality, growth can lead to certain trouble. PNS commentator Lucy Komisar, who writes about international affairs, covered the recent annual meeting of the World Bank.

WASHINGTON, DC -- "A rising tide lifts all boats" has been accepted dogma among economists for years now -- yachts may rise first, the argument goes, but their swell affects skiffs and rowboats as well.

Now that the world financial crisis has thrown this theory into question, there is a growing consensus that we need a new anti-poverty strategy, one that focuses on equity as well as growth.

The issue is of more than passing interest to the 1.3 billion people who exist on less than $1 a day, which means that most are hungry.

International anti-poverty strategists had predicted cutting the number of poor people by half in East Asia and some other parts of the world by 2015. The "income generation" strategy did indeed lift incomes in places like South Korea and Indonesia. Factories were humming, workers were eating.

But the financial crash poked gaping holes in the fragile boats of the poor. It turned out money was not enough in a global system that could change the value of what that money could buy within the course of a day.

Michael Walton, the World Bank official who charts poverty levels, predicts a five or ten year setback -- after things start to get better. "We are hesitant about saying anything, because there's so much uncertainty."

At the recent World Bank/IMF annual meetings here, such talk came not only from non-governmental advocates for the poor, but from leaders such as President Clinton, who told delegates in the grand ballroom of the Marriott Hotel that people were not going to continue to support a global capitalist system that cuts them no piece of the pie. And World Bank President James Wolfensohn warned that development wouldn't last if countries marginalize the poor, women and indigenous minorities and fail to provide social safety nets.

He said, "If we do not have greater equity and social justice, there will be no political stability. And without political stability, no amount of money put together in financial packages will give us financial stability."

James Speth, head of the U.N. Development Program, said that with the poor paying the heaviest price for the mismanagement of global finance, globalization it self was "on trial."

The leaders now arguing that equity and honesty matter are motivated not from high-minded feelings of justice but from fear of instability and even (as might happen in Russia) the rejection of a market system.

Yet the big-bucks bailouts have helped the yachts, not the rowboats. For example, the recent Russia rescue package protected big banks, not people with small savings accounts or workers owed back wages.

Most austerity packages are designed to build confidence in a country's currency by paying back creditors -- helping them cancel the big risks that were supposed to justify the big profits they were realizing. But for millions of people, this crisis will not just be a setback but a sentence of death -- what the World Bank's Walton calls, using bookkeeping terms, "a permanent loss" for children who are malnourished, unschooled, forced into prostitution.

But decisions on how to divide resources between rich and poor are not simply bookkeeping, but political choices. For example, governments in some places supply water to rich people to fill their swimming pools at a tenth the price paid by people in the slums for water delivered from trucks.

The equity problem is exacerbated by corruption. Walton noted the Bank is now concerned in Indonesia "about the corruption in the delivery of services to the poor." He said the Bank found the way to deal with this was "to empower the communities, work with civil society, to increase the probability that the rural roads, schools or workfare to provide incomes actually get to the people who needed them." When people watch, they don't let officials steal.

But that is also a prescription for equity. Advocates of the "rising tide" theory are wont to say that development will bring democracy. As the current crisis threatens to roll back advances against poverty, it becomes clearer than ever that solid equitable development requires grass-roots, democratic participation.