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In search of a truly global partnership on development, post-2015

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The following blog post is an excerpt of a speech delivered by Pascal Lamy at the ‘Conference on International Cooperation in 2020’, held in The Hague on 7 March 2013.
 
The current Millennium Development Goals (MDGs) have roughly a thousand days to go before their end-2015 target date. The significance of the MDGs lies first and foremost in the fact that they gave the world a shared development agenda. They identified a set of shared goals around which we could collectively mobilize and they established time-bound goalposts for progress, many with quantifiable targets, against which we could measure our performance.

But beyond these targets and goals, the MDGs placed poverty reduction at the top of the global agenda. In doing so, they reshaped policy priorities, galvanizing the attention and interest of governments, international organizations, the private sector, and individuals.

The World Trade Organization (WTO) has embraced this role by remaining intimately involved in ensuring delivery on MDG 8 on the Global Partnership for Development including through using its leadership on the Aid for Trade (AfT) agenda to create a platform for inter-agency coherence.

Economic growth and trade — as a driver of growth — deserve a prominent place in the development agenda. We need an agenda that integrates economic growth with social inclusion and with environmental protection. We need a transformational agenda which creates jobs, develops infrastructures, raises productivity, improves competitiveness and promotes sustainable production and consumption'. Strengthening international co-operation in the area of trade is an important element in achieving this agenda.

This is supported by the evidence. Virtually all cases of large-scale human development and poverty reduction have been marked by a high average rate of economic growth sustained over a long period. And every country that has achieved this kind of sustained high growth has participated actively in international trade. In addition, diversified productive capacity is essential for growth to be resilient. Therefore, growth, trade, and productive capacity must be part of any long-term global development effort.
But growth is not an end in itself. Rather growth is an important factor in enabling individuals and societies to realize their potential and pursue their dreams. As Mike Spence’s Commission on Growth and Development put it, “growth can spare people en masse from poverty and drudgery. Nothing else ever has.”

“A prominent place for growth in the post-2015 development agenda” — Lamy

A pragmatic take on the trade-growth relationship comes from the Growth Commission, based on decades' worth of empirical evidence. It has found that the open global economy served as a source of demand far greater than that offered by many home markets, but also as a source of ideas, technology, and knowhow. It enabled countries to specialize, boost value-addition, and increase output many times over. A list of ingredients is not the same as a recipe but nevertheless, in the past two decades, many developing countries have embarked on a path to higher growth supported by trade which has contributed to the attainment of many MDG targets.

Today, the rise of value chains provides important new avenues for trade, growth, and diversification. For developing countries in particular, regional and global value chains lower the bar for entry into the global economy. Smaller countries and small and medium enterprises no longer need to have a full-fledged vertically integrated industry producing finished products to participate meaningfully in international trade. And this is why the WTO's 4th Global Review of Aid for Trade in July 2013 will focus on how to support developing countries connect to value chains.

Improving the broad economic and policy environment in which developing countries produce and trade is an area in which global co-operation has to keep playing a constructive role. And I think this is where the efforts to conclude a WTO deal on trade facilitation come into play.

Trade facilitation, a key issue that WTO Members are working to deliver for the 9th WTO Ministerial in Bali in December, can help reduce the thickness of borders i.e. time, red-tape, and cost of transit and customs clearance. Predictability and efficiency in importing and exporting is essential for inclusion in value chains. And its gains could be impressive: A Trade Facilitation agreement at the WTO could bring down the cost of moving trade today from roughly 10 per cent [of trade value] to 5 per cent. Globally, removing these barriers could stimulate the $22 trillion world economy by more than $1 trillion. Simply reducing this red tape by half would have the same economic effect as removing all remaining tariffs.

But it is clear that many poor countries will require help to implement this agreement. And this is where the deal being negotiated in Geneva is smart: it links for the first time “implementing rules” to “receiving assistance”. It is not a deal with exceptions or exclusions. It will be a deal empowering countries based on a thorough, tailor made assessment of their needs.

Catalyzing efforts such as trade facilitation would prove particularly advantageous over the next few years as more trade-led growth could create virtuous circles with other priorities as we look post-2015. There is clear symbiosis between growth, sustainable development and poverty reduction and the growing recognition that a holistic approach is the best way to achieve progress is to be encouraged.

The world post-2015 will be different in some dramatic ways to the world of 2000 when the MDGs were born. And we need a narrative that effectively captures this. The poles of economic growth have changed; there are new and emerging actors on the trade and development landscape that may have the means and indeed the desire to contribute more to shared global prosperity. These new actors — the emerging countries, the private sector, and philanthropic organizations — must be active partners. We are in search of a truly global partnership for development.

The crisis is also impacting on ODA levels. Despite a potential flat landscape for ODA in the near future, I contend that placing growth and trade on the post-2015 development agenda could catalyze new resources and attention towards these objectives.

Collectively we must plan for a common destination for the post-2015 development agenda. We need a compass that has countries converging around the same destination. ‘Convergence’ must be an overarching principle. At the same time we need to allow for differences in the pace and rhythm of getting there. And we must make special efforts towards the poorest and weakest. These are in my view the three basic ingredients for a post-2015 development agenda.

We may not have yet eradicated poverty, but the world today is a better place for many more billions of people than it was in 2000 when the MDGs were launched. For sure, absolute poverty reduction has not reduced inequalities which have grown, during the same period, within many countries. We should learn from this experience, from what we did right and what could have been done better to build a common post-2015 development agenda for the benefit of all citizens.

Full speech

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Submitted by Suren Ladd on

All That We Can Leave Behind
The HLP report released in May, urges that the post-2015 development agenda should move a holistic vision to tackle global issues which includes - leaving no one behind, putting sustainable development at the core, transforming economies for jobs and inclusive growth, building peace and effective open/accountable institutions for all, and finally forging a new global partnership.

This new vision appears bold yet has a focus on reality and transformation. The MDG’s which were forged in 2000 has created an impact and the world appears to have accomplished some of the goals set out. Whilst the performance of the MDG’s in partner countries vary, their advent has been quite useful as the MDG’s set out a minimum set of aspirations that various development stakeholders in the world could buy in to.

The post-2015 development agenda takes a holistic view of the need to have goals to deal with the holistic approach to achieve the vision expressed in the HLP report. Pascal Lamy has correctly expressed that ‘There is clear symbiosis between growth, sustainable development and poverty reduction and the growing recognition that a holistic approach is the best way to achieve progress is to be encouraged’. Pascal Lamy recognizes that ‘new actors — the emerging countries, the private sector, and philanthropic organizations — must be active partners. We are in search of a truly global partnership for development’
The new vision is bold and seeks to draw out a holistic, transformative approach. What shape or form will this ‘new global partnership’ take? How will it aid development and what are the challenges that stakeholders would face. The vision espoused in the report will count to a great degree on participation and partnerships across all sectors and spheres, be it the private, public or non-governmental or social enterprise sector.

The final pillar in the vision for the post-2015 agenda stresses the need to forge a New Global Partnership, where there is a new spirit of solidarity, cooperation, and mutual accountability.
Let’s put the ‘current global partnership’ to the test, Pascal Lamy describes that ‘the rise of value chains provides important new avenues for trade, growth, and diversification. For developing countries in particular, regional and global value chains lower the bar for entry into the global economy’. There is no doubt that growth through economic development is the great leveler in society and poverty would reduce. In the recent Rana Plaza factory building collapse near Dhaka (24th April), the authorities say 2,500 people were injured in the accident and 2,437 people were rescued, over a 1000 people lost their lives. In Late June this year The US has suspended trade privileges for Bangladesh until it improves workers' safety conditions in the clothing industry. The EU is also considered taking action to improve standards. Some points to ponder in the current development partnership. One would logically assume that the main actors in such business ventures would be the overseas fashion retailers (or buyers), the local garment manufacturing companies, the local Bangladeshi government, workers unions and other related stakeholders.

Firstly, economic development is a necessity, people need jobs to use their abilities and chart their own progress in life. However, where is the dignity in losing your life in the quest to support your family? The US has suspended trading privileges (after a 12 month review in to work practices) but that is tantamount to ‘shutting the stable door after the horse has bolted’.

Secondly, there is importance in ‘value chains’ in creating employment and increasing trading opportunities. One has to ask question of the retailer’s up-stream in the value chain trying to source low cost output from third world. Thirdly, the partnership has clearly not worked the retailers are either naive of all the international labour standards, work safety and welfare. It is their duty to source from local business that ensures a minimum set of working conditions and practices for its workers. Fourthly, the Bangladeshi government has appeared to have failed in its duty of providing a minimum set of rules and guidelines for building safety and standards.

Finally, the Bangladesh government has criticised Washington's decision to suspend trade privileges over concerns about unsafe working environments and labour rights. It must be noted that no one can predict such events and it is a tragedy, but there at least on the surface appears a trail of failures on the part of key stakeholders in this business partnership. Not much has been reported of the view and position of the up-stream retailers.
It appears that the key stakeholders in the venture has not been talking to each other, one could assume mutual lethargy, greed and most of all a lack of care for basic human dignity. Has the voices of the poor garment factory workers been heard, there were reports of them informing the owners of unsafe conditions of the building. They were ordered to continue working and then the rest unfolded.

If this is the state of a 21st century business ventures then what would happen to partnerships for development in the post-2015 landscape. It is my view that the transformational shifts the HLP report envisions would also require a new culture and way of thinking by us all, to part with ‘all the things we can leave behind’ that hamper the development agenda - corruption, lack of respect for human dignity, inequality, the seeking and influence of power over the weak, disregard for indigenous knowledge and voices. Failure to protect human rights and the list goes on. If some or most of these are not discarded from the agenda, then the post-2015 vision will most likely hit the target in terms of achieving numerical targets, but would totally miss the point of bringing about tangible transformational changes in the world.

BBC.com.uk (10 May 2013), Bangladesh factory collapse toll passes 1,000, http://www.bbc.co.uk/news/world-asia-22476774

BBC. Com.uk (27 Jun 2013), US downgrades Bangladesh trade ties, http://www.bbc.co.uk/news/world-asia-23086366

BBC.com.uk ( 28 Jun 2013), Bangladesh anger at US trade privilege suspension, http://www.bbc.co.uk/news/world-asia-23094082

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