Charting a different future for social protection: Kyrgyzstan’s opportunity

DEV-IN-TRANS-BANNER

By Alexander Pick , Fiscal economist, OECD Development Centre


This blog is part of an ongoing series evaluating various facets of Development in Transition. The 2019 “Perspectives on Global Development” on “Rethinking Development Strategies” will add to this discussion


Kyrgyzstan-woman-Radiokafka Shutterstock.com
Women in Kemin, Kyrgyzstan. Photo: Radiokafka/Shutterstock.com

A voice in Svetlana Alexievich’s Secondhand time, a chronicle of post-Communist disillusion in the former Soviet Union, declares that “the future is… not where it ought to be.” This despair at what constitutes progress neatly captures something we increasingly appreciate – that development is neither a linear process nor one with a clear end goal. Few countries understand this better than the former republics of the Soviet Union, where the geopolitical and economic aftershocks of the USSR’s fall continue to be felt today.

Kyrgyzstan embraced the move to a market economy quicker than any of them. Nonetheless, gross national income per capita in 2015 was below its level in 1990, and industry’s contribution to output and employment has shrunk dramatically. Moreover, large holes have appeared in the social safety net that once covered the entire population. This might be a surprise given that Kyrgyzstan spent 10.7% of gross domestic product (GDP) — a high rate for a country at its income level — on social protection in 2015, more than on health and education combined. In 1990, however, social protection spending was equivalent to 17% of GDP.
Continue reading

The Transition from Least Developed Country Status

DEV-IN-TRANS-BANNER

By Dr Jodie Keane, Economic Adviser, and Dr Howard Haughton, Quantitative Analyst, Commonwealth Secretariat[1]


This blog is part of an ongoing series evaluating various facets of Development in Transition. The 2019 “Perspectives on Global Development” on “Rethinking Development Strategies” will add to this discussion.

To learn more about countries’ strategies for economic transformation, including a session on Least Developed Countries (LDCs), follow the 10th Plenary Meeting and High-Level Meeting of the OECD Initiative for Policy Dialogue on Global Value Chains, Production Transformation and Development in Paris, France on 27-28 June 2018.


 

The Least Developed Countries (LDCs) are an internationally defined group of highly vulnerable and structurally constrained economies with extreme levels of poverty. The Committee for Development Policy (CDP) is a subsidiary body of the United Nations Economic and Social Council (ECOSOC). Every three years, the CDP advises ECOSOC and the United Nations (UN) General Assembly on which countries should either enter or leave the LDC category. Since the category was created in 1971, only five countries have graduated and the number of LDCs has doubled on the basis of selected indicators (income, human assets, economic vulnerability). And when countries graduate they lose international support measures provided by the international community.

Continue reading

Paradigm Lost

DEV-IN-TRANS-BANNER

By Helmut Reisen, Scientific Advisor to the Perspectives on Global Development 2019


This blog is part of an ongoing series evaluating various facets
of Development in Transition. The
2019 “Perspectives on Global Development” on “Rethinking Development Strategies” will add to this discussion


lost-paradigmEconomics has adopted an introspective mindset since the global financial crisis erupted ten years ago. The ´markets-work-wonders´ formula of the 1980s embraced such characteristics as state withdrawal from public services, curtailment of social benefits, deregulated and borderless finance, privatised pensions, and weakened workers’ bargaining rights. At times imprecisely dubbed ´neoliberalism´1 it had a bland aftertaste. Growth in advanced countries was slow, crisis prone and unjust, failing the bottom third. Today, absolute poverty by global standards hits more than 12 million people in the European Union and the United States alone.2

The free market paradigm had been oversold as the only way to achieve prosperity, resulting in liberal delusion. The ´End of History´3 — Western civilisation as the natural order of the modern world — didn´t materialise. Instead, we witness state-led prosperity in Asia, but backlash against globalisation and rising populism in market democracies4. Middle-income class concerns in advanced countries have identified bottlenecks, particularly with respect to research and development, upgrading, and skills development. Industrial and place-based regional policies are back on the table.

Continue reading

Normatively weak institutions can be functionally strong: A surprising lesson from China

DEV-IN-TRANS-BANNER

By Yuen Yuen Ang, Associate Professor of Political Science at the University of Michigan and the author of “How China Escaped the Poverty Trap


This blog is part of an ongoing series evaluating various facets
of
Development in Transition. The 2019 “Perspectives on Global Development” on “Rethinking Development Strategies” will add to this discussion


 

shutterstock_599175026.jpg
Guangzhou, China. Photo : shutterstock.com

For the past decades, policymakers and development practitioners have clung to the idea that “good governance” is the solution to poverty. If only poor countries could eradicate corruption, enforce laws, hold leaders accountable and achieve a checklist of best practices, their economic and social problems would be resolved.

This thinking, however, runs into a chicken-and-egg problem: in the first place, it’s hard for poor countries to quickly and meaningfully establish good governance. Indeed, if it were easy to achieve good governance, poor countries would have done it long ago.

But if insisting on one-size-fits all good governance is not the solution, then what is the alternative? My research on China’s development reveals a surprising lesson: normatively weak institutions can be functionally strong. Seen through first-world lenses, the norms and structures found in low-income, pre-industrialised countries are often regarded as “weak” or “backward,” that is, as impediments to development. In fact, these institutions can be creatively adapted or repurposed to kick-start development.
Continue reading

Development in transition

DEV-IN-TRANS-BANNER

By Alicia Barcena, Stefano Manservisi and Mario Pezzini


This blog is part of an ongoing series evaluating various facets
of
Development in Transition. The 2019 “Perspectives on Global Development” on “Rethinking Development Strategies” will add to this discussion


 

3Understanding and supporting the development trajectories of countries have long been the driving force behind all of our careers. If we, as a global community, are serious now about ensuring prosperity for all through the universal and comprehensive 2030 Agenda and its Sustainable Development Goals (SDGs), then we must close all remaining gaps. And this means changing the way we think about development policy.

We can all agree we should continue to focus primarily on those left the furthest behind. However pockets of fragility also remain in those economies that have succeeded in climbing the economic ladder. While income inequality between countries may have reduced, inequality within countries has in fact risen. More than 75% of people in developing countries are living in societies where inequalities are higher today than they were 25 years ago. In Namibia, for example, which is considered an upper middle-income country, just over a quarter of its poorest inhabitants are covered by social protections, whereas Malawi, considered a low-income country, covers over 40%.

Continue reading