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Rethinking Sustainable Development

Nemat Shafik's picture

As the 2015 deadline for achieving the Millennium Development Goals approaches, much thought is being devoted to what should succeed that framework for measuring global progress against hunger, disease, and poverty. Any successor framework must reflect global aspirations and arise from a rich consultative process. I believe that the new framework must embrace a broader understanding of development — one that is relevant for all countries, rich as well as poor.

The world today looks very different from a few years ago. Many countries have high levels of debt that could make it difficult to undertake spending initiatives for many years. Financial sector incentives and regulation may have to be rethought, existing growth models refined to deliver sufficient new employment opportunities, and the functioning of the international monetary system revisited.

The MDGs focused attention on the need to reduce absolute poverty. And while significant gaps remain relative to the targets set out in the Millennium Declaration, the achievements are remarkable. Let’s not forget, for instance, that the incidence of extreme poverty in the world has been halved since 2000.

But the global economic crisis was a huge setback — one from which the world economy has still not fully recovered. Europe continues to battle its debt crisis, with Japan and the United States also in need of fiscal reform. The Middle East and North Africa region is undergoing a historic transition: hopes for a brighter, more democratic future rest crucially on the economic transformation that sustains high and equitable growth. And then there is the challenge of ensuring that rapidly rising incomes in other emerging market and developing economies continue, but in a manner that is socially and environmentally sustainable.

Consider these developments: Income inequality has widened; chronic unemployment and pervasive underemployment have escalated; populations are growing unevenly; and climate change is worsening.

All these problems are intertwined and cannot be solved in isolation. That’s why the post-2015 global development agenda must go beyond our traditional understanding of development — that is, helping less developed countries catch up with those that are more advanced. The agenda must also address the various imbalances in the global economy, including spillovers that ultimately affect the poor and vulnerable everywhere.

A new agenda needs to be truly global in scope, relevant to all in its goals, and realistic in how it assigns responsibilities — to advanced, emerging market, and developing economies. Safeguarding the well-being of future generations is a joint responsibility of all members of the international community, but we must also distribute fairly the burden that responsibility entails, given the enormous differences in capabilities among countries.

Increased interconnectedness calls for greater policy coordination. We need effective global leadership, and we need it fast. With its global membership, the United Nations should continue to play a leading role in fostering effective international cooperation. But multilateral coordination needs to become more effective. To put it bluntly, we cannot afford to waste time on endless discussions among countries, only to arrive at the lowest common denominator. We need a bold yet realistic approach, one that allows us to move quickly from words to implementation.

The International Monetary Fund (IMF) has a key role to play in strengthening global stability; supporting countries in downturns; building crisis firewalls; making growth more inclusive; and designing policies for the green economy.

A collective response to the faltering global recovery is the most immediate priority. Global vulnerabilities in an increasingly interlinked world make this a must. Fostering sound economic and financial management is the most important contribution the IMF can make to sustainable development. It lays a foundation for economic growth that creates jobs, generates resources to protect the poor and the environment, and ultimately sows the seeds of peace and stability. We stand ready to work with our member countries and with other international organizations to take the global agenda to the next level.

This post has been adapted from an article which appeared in the IMF’s Finance & Development magazine. To read the full article, click here.