Quatrième révolution industrielle et migrations : comment assurer la transition dans les pays d’origine et de destination ?

Par Jason Gagnon, Économiste du développement et Catherine Gagnon, Stagiaire, Centre de développement de l’OCDE

Read this blog in English

Avec l’arrivée de nouvelles technologies qui brouillent les frontières entre sphères physique, numérique et biologique, un changement spectaculaire dans la façon dont nos économies et nos sociétés interagissent, produisent et communiquent est en cours. Et comme nos économies sont aujourd’hui plus que jamais interconnectées, cette révolution industrielle a lieu dans pratiquement tous les coins du monde. Parallèlement, les migrations internationales n’ont jamais été aussi nombreuses.

Ces deux mégatendances ont une forte interaction qui va considérablement modifier la mondialisation telle que nous la connaissons. Les pays du Conseil de coopération du Golfe (CCG) en sont une belle illustration : à la fois tournés vers un nouveau modèle économique, ils restent très dépendants de la main-d’œuvre migrante, notamment d’origine d’Asie du Sud et du Sud-Est. Des mesures politiques concrètes doivent donc être mises en place dans ces pays d’origine et de destination pour permettre une transition plus fluide au niveau mondial.

Continue reading

The fourth industrial revolution and migration: how to ensure a smooth transition?

By Jason Gagnon, Development economist and Catherine Gagnon, Intern, OECD Development Centre

Lire ce blog en français

A dramatic change in the way our economies and societies interact, produce and communicate is underway as a fusion of technologies blurs the lines between the physical, digital, and biological spheres. And with our economies more globally interlinked today than ever, this industrial revolution extends to practically every corner of the world. Meanwhile another sweeping trend is gaining traction: international migration is at an all-time high as new host countries, routes and freshly skilled workers multiply, and as a young population eager to make a mark on the world continues to grow.

The two megatrends of technology and international migration have the potential to significantly change globalisation as we know it. The Gulf countries offer an illustration of the especially pronounced interaction between both trends. On one hand, Gulf Cooperation Council (GCC) countries have made it a priority to usher in this new economic era. On the other, GCC countries are some of the world’s most dependent countries on migrant labour. How can GCC countries ensure a smooth labour market transition as they shift to this new economic model? And how can the primary migrant countries of origin to the GCC – mostly in South and Southeast Asia – navigate the changes they will face in the main destinations for their labour migrants?

Continue reading

The growing role of the private sector in development co-operation: challenges for global governance

By André de Mello e Souza, Researcher, Institute for Applied Economic Research (IPEA), Brazil

Global development is increasingly being seen as reliant on the private sector, both for its financing and project implementation1. As Development Assistance Committee (DAC) members attempt to redistribute the burden of sponsoring initiatives abroad, they tend to shift this burden to profit-seeking corporations, while counting the funds provided to trigger investments by such corporations as part of their conceded Official Development Assistance (ODA)2. In so doing, they are also responding to the perceived dearth of resources from multilateral sources, especially the UN. Additionally, by engaging the private sector they enable and incentivise their own corporations to compete with those from China in developing countries where Chinese economic presence is deeply felt. 

However, the engagement of the private sector in development co-operation efforts and its treatment as an integral sponsor of such co-operation overseas is not limited to traditional donors, but can also be seen among Southern providers, especially those from Asia. Most notably, the concept of ‘Development Compact’, championed by India, grants the private sector a privileged position in international development co-operation across five different levels, namely, trade and investment; technology; skills upgrade; lines of credit and grants.

Continue reading

COVID-19 pandemic: threats to SMEs in poorest nations require swift policy action

By Frank Hartwich and Jenny Larsen, United Nations Industrial Development Organization (UNIDO)

Factories around the world roared into action again in the second half of 2020, following the COVID-19-related slump that brought large parts of industrial production to a standstill in early 2020. The bounce back, led by Europe, China and other parts of Asia, has been faster than expected, with most of the losses felt in the first half of 2020 recovered by early 2021, although there are big differences between regions and sectors.

Using the limited data available, it appears that manufacturing in selected LDCs has also staged a recovery. UNIDO’s Index of Industrial Production (IIP) – only available for four of the 46 LDCs – showed a dramatic drop in the early part of 2020, followed by a sharp rise in early 2021, although a closer look at the data reveals a nuanced picture. Mozambique and Senegal saw little impact from the pandemic whereas in Bangladesh and Rwanda the effects were much stronger. In general, within low-tech industries which predominate in LDCs, the food industry benefitted from the pandemic while other sectors such as textiles, clothing and leather were hit particularly hard.

Continue reading

The debt burden: why ex-post intervention shouldn’t be the default option

By Rodrigo Olivares-Caminal, Professor of Banking and Finance Law at the Centre for Commercial Law Studies, Queen Mary University of London, and Paola Subacchi, Professor of International Economics, Global Policy Institute, Queen Mary University of London

The financial response to the COVID-19 crisis has driven debt building at an unprecedented speed, which has increased the risk of debt distress and the odds of a new debt crisis cycle. Emerging markets and developing economies are most at risk. When the COVID-19 crisis began in February 2020, it demanded extraordinary policy measures to protect lives and provide support to those who had lost their livelihoods. The public debt vulnerabilities for many countries, especially the poorest ones, were already significant at that time, but the subsequent collapse of many economic activities exacerbated the situation. As of 30 April 2021, 29 countries were at high risk of debt distress, and 7 low-income countries had already succumbed to it. Somalia, for example, is currently in debt distress and needs to secure relief to restore debt sustainability.

Emerging markets and developing economies are most at risk because of their exposure to international capital flows and the fact that portions of their debt are issued in hard currencies, namely the US dollar. This leaves them vulnerable to changes in US monetary policy, and so to sudden outflows when risk aversion and international financial volatility are high. Some countries have learned lessons from previous debt crisis cycles – as is evident, for example, in the development of local-currency securities markets which mitigate the risk of foreign-currency borrowing – but such resilience is patchy and far from being systemic.

Continue reading

Enjeux et défis du financement du développement dans la zone de l’Union économique et monétaire ouest-africaine post-COVID-19

Par Alain Tchibozo, Chef Economiste, Banque Ouest Africaine de Développement – BOAD

Endettement accru par les dépenses liées à la Covid-19

Le recours à l’endettement pour financer les plans de riposte et de relance économique explique principalement le fait que le déficit budgétaire des pays de l’Union Économique et Monétaire Ouest Africaine (UEMOA) se soit accru. Au plan des finances publiques, même en tenant compte d’un redémarrage de l’activité autour de 5.5% cette année (contre 1,5% en 2020), le déficit budgétaire global représenterait en 2021 près de 5,0% du PIB, après 5,4% en 2020. L’accumulation de déficits publics liés au financement de dépenses de fonctionnement des États apparaît de fait comme le principal facteur d’endettement public. Or la détérioration des finances publiques restreint l’accès futur des États à de nouveaux financements. En 2021, le service de la dette intérieure (paiement des intérêts et amortissement du principal) représentera plus de 50% du service total de la dette dans sept des huit États membres de l’UEMOA. En outre, la part des recettes publiques consacrée au service de la dette représente depuis 2020 plus d’1/3 des recettes totales dans sept États. Aussi, la question de la soutenabilité de la dette sera un enjeu crucial pour les États de la zone ces prochaines années.

Continue reading

What is Development in Transition? A blog compilation

A country’s level of development and its level of income are often seen as synonymous. Many, thus, understand development as poorer countries “catching up” with richer ones. Once the poorer countries catch up, they cease to be “developing” and become “developed”. A closer look, however, reveals a different story. First, development is more complex than getting from A to B: it is a continuous and never-ending process that is even reversible. It follows a wide diversity of pathways depending on a country’s specific geography and history. Second, the emergence of the Sustainable Development Goals (SDGs) reflects the fact that development has multiple economic, social and environmental dimensions, beyond income. Moreover, and as the COVID-19 crisis has illustrated all too well, shocks have become increasingly global in our hyper-connected world, reflecting the interdependence amongst national, regional and international levels.

Click to read more..

International co-operation practices and frameworks have not always recognised the multidimensional nature of development and the changing global context. We need a new approach to international co-operation and development, within a multilateral system that is able to take on increasingly shared global challenges whilst accounting for countries’ domestic realities and citizens demands. The global community must also support the design of national development strategies that are aligned with global goals and respond to the origins of increasing discontent. For several years now, the Development Centre has been pushing this paradigm shift forward through its work on Development in Transition (DiT), gathering countries at all levels of development around the same table and across a diverse range of policy communities, recognising the multidimensional and complex nature of development. A central premise of our work is that economic growth is not a good measure of human wellbeing and development. We need multidimensional indicators that enable us to measure what we treasure – people’s wellbeing and the health of our planet – beyond GDP.

The pandemic has exacerbated pre-existing inequalities and vulnerabilities among and within countries, exposing the flaws of a multilateral system that had already failed to address these issues after the global financial crisis of 2007-2008. We need a new model consisting in strategies and reforms that go beyond reconstruction and rebuilding, focusing instead on transforming globalisation and renewing the efforts and tools of our multilateral system to benefit the many rather than the few. We need to fundamentally rethink how countries – at all levels of development – interact with one another to design better policies, practices and partnerships adapted to the changing global landscape.

This compilation gathers a selection of blogs contributing to the Development in Transition framework since its emergence to lessons that we can begin to draw from the pandemic. The first blog sets the foundations of the approach, outlining the new metrics, partnerships and tools to shift from top-down, donor-recipient ties to inclusive co-operation among equals, reflecting the current global landscape. The second part of this compilation looks at the issue of graduation, demonstrating that the trajectories of developing countries are far from guaranteed linear paths. As countries are sometimes “rushed to graduate” from aid based on their GDP per capita, and despite still facing significant vulnerabilities, they are confronted with an array of challenges that can erode and even reverse hard-won development gains. The authors depict these challenges and offer solutions – through both national efforts and international support – to prevent countries from falling into the so-called “middle-income trap”. In the third part, the authors focus on the COVID-19 crisis, and its catalyst effect, exposing the failures of the multilateral system to respond to a crisis on a planetary scale and accelerating the need to reform and shift towards new sustainable and inclusive development models that strengthen
countries’ and communities’ resilience against systemic shocks, driven by principles of solidarity and co-responsibility among and between developed and developing countries.

Mario Pezzini
Director of the OECD Development Centre & Special Advisor to the OECD Secretary General on Development

Continue reading

COVID-19 is a developing country pandemic

By Indermit Gill, Nonresident Senior Fellow at Brookings and Philip Schellekens, Senior Economic Advisor at International Finance Corporation (World Bank Group)

“Has global health been subverted?” This question was asked exactly a year ago in The Lancet. At the time, the pandemic had already spread across the globe, but mortality remained concentrated in richer economies. Richard Cash and Vikram Patel declared that “for the first time in the post-war history of epidemics, there is a reversal of which countries are most heavily affected by a disease pandemic.”

What a difference a year makes. We know now that this is actually a developing-country pandemic—and has been that for a long time. In this blog, we review the officially published data and contrast them with brand new estimates on excess mortality (kindly provided by the folks at the Economist). We will argue that global health has not been subverted. In fact, compared to rich countries, the developing world appears to be facing very similar—if not higher—mortality rates. Its demographic advantage of a younger population may have been entirely offset by higher infection prevalence and age-specific infection fatality.

Continue reading

The role of foundations in supporting sustainable peace

By Sandra Breka, Member of the Board of Management, Robert Bosch Stiftung

The level of peace around the world in 2020 declined for the ninth time in twelve years. The coronavirus pandemic has led to a decrease in overall conflict levels, but roughly 120,000 people were killed by political violence and 45.7 million were internally displaced in 2020. Violent conflict has a profound impact on economies and impedes the reduction of poverty and hunger. Violence cost the world $14.5 trillion in economic activity in 2019 according to the Institute for Economics and Peace. 

The effects of violent conflict are devastating – and remain neglected by philanthropy. In 2020, only one percent of philanthropic funding supported peace and security, according to the non-profit sector tracker Candid. The share is even smaller according to OECD data, with only 0.11% of total philanthropic funding in 2019 dedicated explicitly to conflict, peace and security in developing countries.

There are multiple reasons for this: private foundations considered peacebuilding too political, too short on hard evidence on successes and too difficult to measure, according to Candid. Despite the persistent call for multi-stakeholder approaches to global issues, many philanthropic organisations also perceived it as an area reserved to governments and other official donors, and beyond the mandate and means of private foundations or civil society groups.

Continue reading

The morning after

By Pablo Ferreri, Public Accountant and former Vice Minister of Economy and Finance of Uruguay

Today, more than a year into the pandemic, we are still witnessing a humanitarian drama on a global scale. Mass vaccination offers a glimmer of hope at the end of the tunnel; however, that light is much further away for developing countries. While we see developed countries moving closer to herd immunity, we also see huge lags in the rest of the world. Moreover, beyond the health drama, the ensuing social and economic crisis will persist for a long time to come. We must focus on “the morning after”, as the health crisis recedes and as vaccination progresses. The morning after the pandemic ends, we will be left with an impoverished and, above all, much more unequal global economy.

Recovery to pre-pandemic levels of global gross domestic product can probably be achieved relatively quickly, but the effects on inequality will be much more long lasting. There will be clear losers in each society, with the poorest being hardest hit. Developing countries will suffer the most severe consequences, as their ability to return to pre-COVID levels of activity and wealth will be severely limited. To get an idea of the magnitude of this crisis, it is enough to recall a recent UN report calling it the worst recession in 90 years, resulting in the loss of 114 million jobs and pushing some 120 million people into extreme poverty. Moreover, by the time the market is in a position to reabsorb many of those who have lost their jobs, their skills will be outdated.

Continue reading