By Rita Da Costa, Senior Counsellor and Head of Development in Transition, Adriana Caicedo, Policy Analyst and Martina Lejtreger, External Consultant, OECD Development Centre
Deepening economic disparity, inequalities and social injustice have been at the heart of the mass demonstrations that have multiplied in Latin America and the Caribbean (LAC) since late 2019. This trend is likely to intensify in the wake of the COVID-19 pandemic. While the number of people in poverty has increased by 22 million since the start of the COVID-19 crisis and inequalities continue to rise, the stock of wealth held by billionaires in LAC has risen by more than 40%. The current context opens a window of opportunity for LAC to exit the crisis by establishing a new social contract, but this will require a step change in international co-operation.
By Gerardo Bracho, International Co-operation Expert and Member of the Mexican Foreign Service
We still do not have all the details on the “World Plan for Fraternity and Well-Being” that Mexican President Andrés Manuel López Obrador recently proposed at the UN. What is clear, however, is its ambition to pull our present paradigm of international co-operation for development out of the doldrums.
By Philani Mthembu, Executive Director at Institute for Global Dialogue
The COVID-19 pandemic exposed the lack of a regional alternative to access goods and services once global value chains had been disrupted. Such a situation can only be remedied by encouraging the development of more robust regional value chains that feed into existing global value chains, boosting resilience to future pandemics or crises. Regional co-operation and integration are the missing link to ensure greater alignment and coordination between national plans and international development goals.
By Ambassador Dr Mohan Kumar, Chairman, RIS, Dean/Professor, Jindal Global University, Sonipat, India, Former Indian Ambassador to France1
It is a truism that the European Union (EU) welcomes, prefers and supports a multipolar world; a strategic world view that is fully shared by its partners like India. More fundamentally, it is in the interest of the EU and its like-minded partners to ensure that the international order is not underpinned by a G2 system of government where the rules are essentially shaped by the US and China. This, however, entails the EU being strong enough to occupy an independent pole in the multipolar system. The EU is not quite there yet, but its friends and partners will certainly wish this to occur, sooner rather than later.
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.
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
By Pierre Jacquet, President, Global Development Network
Beyond the short term costs and challenges of the COVID-19 pandemic for developing countries, this post takes a more long-term view, starting from a less discussed lesson of COVID-19, namely, how it has revealed a deficient culture of dealing with uncertainty and the role of science in society. The pandemic has shown both that ignoring science endangers lives and that scientists typically disagree on the best course of action. Science reveals true knowledge, but knowledge always remains incomplete: it therefore cannot deliver a blueprint for action, but it informs decisions under uncertainty and risk mitigation. The real potential of scientific knowledge is in interpretation and judgment. This has important implications for the knowledge-for-development agenda.
By José Antonio Sanahuja, Director, Fundación Carolina, Spain, Special Advisor for Latin America and the Caribbean to the High Representative of the European Union for Foreign Affairs and Security Policy
The response to COVID-19, the ecological transition and strategic autonomy are the three driving forces of the European Union’s (EU) broad transformative programme. This programme involves deep changes in its own social and economic development model and in its relationship with the world. It is a short-term reaction to a pandemic that has fast become a systemic crisis. But it is also the EU’s long-term response to an international context of globalisation in crisis and challenges to the international order. The future of EU-Latin America relations will be deeply affected by these transformations.
By Mustafizur Rahman, Distinguished Fellow, Centre for Policy Dialogue (CPD)
The world’s largest trading bloc, the Regional Comprehensive Economic Partnership (RCEP), was signed in November 2020, counting 15 Asian member countries. Should the excluded countries, more specifically the low income and least developed countries (LDCs) of Asia, be worried about this development?
By Otaviano Canuto, Senior Fellow at the Policy Centre for the New South, Non-Resident Senior Fellow at Brookings Institution, and Former Vice President at the World Bank; Matheus Cavallari, Senior Advisor and Tiago Ribeiro dos Santos, Advisor at the Board of Executive Directors of the World Bank Group. Opinions here are their own.The authors wrote chapter 12 of the recent book: Alonso, J.A. & Ocampo, J.A. (eds.), Trapped in the Middle? Developmental Challenges for Middle-Income Countries, Oxford University Press, 2020