What’s the path to sustainable development?


By Mario Pezzini, former Director, OECD Development Centre, and Special Advisor to the OECD Secretary-General on Development

This blog is part of an ongoing series evaluating
various facets of Development in Transition.
Perspectives on Global Development 2019: Rethinking Development Strategies
adds to this discussion

Cover-PGD_2019What’s the path to sustainable development? In this era of the Sustainable Development Goals (SDGs) — when all countries face both new challenges and new opportunities for improving the lives of their citizens in inclusive, holistic and environmentally sustainable ways – the question remains as relevant as ever.

Some may think the question was answered in the 2000s when we witnessed the transformation of the global economic geography. Whereas only 12 developing countries in the 1990s managed to double the OECD per-capita growth rates, 83 developing countries managed to do so a decade later. By 2008, developing and emerging economies made up 50% of the global economy for the first time. And the 15-fold surge in South-South trade linkages from 1990 to 2016 and the jump in development finance from USD 3.2 billion in 2003 go USD 15.6 billion in 2012 provided by large emerging economies, notably China, are clear proof points of this new economic geography.

Yet, this upswing in global economic growth masks two underlying issues that we cannot ignore on the road to sustainable development.

First, development challenges persist. We see economic growth not necessarily yielding improvements in well-being. In fact, many emerging economies are struggling now to convert faster GDP growth into substantive and lasting improvements in well-being for their citizens. At the same time that China, India, Indonesia, Russia and Brazil, for example, experienced unprecedented economic growth, some well-being indicators globally did not fare so well. For example, an estimated 641 million people worldwide were still living below the extreme poverty line of USD 1.90 per day in July 2018. Half of the world continues to lack access to adequate health services. In 2015, more than 300 000 women in low- and middle-income countries died due to maternal causes, representing 99% of the worldwide total. 15 000 children died before reaching their fifth birthday in 2016.1

We see a number of paradoxes in development, with the reality falling short of our expectations. Consider that resource-rich countries in Africa grew faster than resource-rich countries in other regions since the start of the 21st century, with such resources accounting for 80% of GDP in 28 resource-rich economies in sub-Saharan Africa. Still, of the 38 countries with low human development status on the Human Development Index, 32 are African countries.2 Consider also the fast adoption of new technologies in all parts of the world at the same time we see a widening productivity gap between developing and OECD countries or that 60% of the world’s population is still offline.

We see countries caught in development traps, like the institutional trap, for example, some in Latin America are experiencing. As citizen aspirations for better public services rise, governments’ responses fall short. Citizens consequently see little value in meeting their social obligations, which translates into an unwillingness to pay their taxes or to support public education by choosing to send their children to private schools instead. And without sufficient tax revenues, governments, in turn, are limited in the broader public services they can finance and deliver. This perpetuates a vicious circle of distrust and disengagement, breaking the fundamental social contract between governments and their people necessary for sustainable development.

And second, as if these existing economic, social and political challenges were not enough, new ones have surfaced to confront development. First, new technologies are creatively disrupting the way we do things; 10% of global GDP is projected to be stored on blockchain by 2017, for example. Second, urbanisation continues and is expected to reach 60% by 2050. Africa is urbanising twice as fast as Europe did. Third, the implications of climate change cannot be ignored, including on agricultural production and migration patterns. Climate change could lead to a 40% drop in the production of such a staple crop as maize in Africa by 2040, for instance. All of this while navigating new rules, such as those set out by the World Trade Organization, the World Intellectual Property Organization and the Conference of the Parties (COP) on environmental standards.

In this context of old and new challenges, we need to get serious about rethinking policies if we are serious about achieving sustainable development. Challenging longstanding notions about development and charting a course towards it to reflect today’s realities are at the heart of the OECD Development Centre’s latest Perspectives on Global Development 2019: Rethinking Development Strategies. This involves at least three fundamental changes:  

A change in how we measure development: What we know for sure is that GDP as an indicator of development has its limits. What we also know is that alternatives already exist, and now we need to test, adjust, apply and implement them in how we make policies for development.

A change in domestic policies for development: In the majority of instances, countries have no plans in place that fully understand the trade-offs, synergies and appropriate sequencing of policies for development that are specific to their national contexts. They lack the strategic vision and policy coordination functions. Though well-intentioned, most national development plans that do exist today are ill-defined and ill-equipped to deal with the emergence of new global rules, the changing economic geography, increasing interdependence amongst countries, unprecedented population booms, environmental constraints, more competition, the high mobility of people or fast technological change.

Some countries, however, are adapting their policies to respond better. Illustrating a plurality of possible development pathways, we see countries pursue development by harnessing the potential of new technologies, broadening high-tech education, enhancing South-South co-operation, investing in secondary cities, tapping the productivity of the informally employed, or expanding new forms of social protection to cover the poor and hard-to-reach. We see China, for example, invest in a low-carbon future, with a 30% drop in carbon intensity from 2000 to 2014. We see an increasing number of countries explicitly adopt strategy documents with the intention of linking migration to development.

And the third necessary change is in how we approach international co-operation for development. We need a functioning and transparent international system for co-operation that is inclusive of all. A system fit for purpose supports countries with the tools, practices and policies they need to affect change in the face of new and existing challenges. Thus, given the complex context in which countries operate today, tables for policy dialogue and exchanges have become more critical. Solely transactional relations between countries – where some give and others receive — have a different relevance than interactions amongst equals that gather to genuinely discuss and debate solutions to common problems based on their specific experiences.

Ultimately, as countries at all levels of development share their policy and practical experiences, we can better understand what it will take to tackle today’s complexities and change the lives of people in meaningful ways. Smart 21st century development strategies need to be designed and implemented holistically. These strategies must be multisectoral. They must be participatory. They must be location-specific. They must be embedded in a multilateral framework. In short, the path to sustainable development embraces development’s multidimensional process and requires a new vision for global co-operation to make progress inclusive and lasting for all.

1. WHO statistics.

2. Brookings: 7 surprising findings about resource-rich sub-Saharan Africa; Human Development Index.