As an economist, I always thought that sustained growth over many years was the key to reduce poverty and promote development. Now I know, that while growth is important, it is a particular type of growth, the one that is inclusive, that is key for sustained development to take place.
As policy makers we are now focusing all our efforts in identifying and promoting policies targeted at boosting the incomes of the bottom 40 percent of the population. We need to ensure that growth provides benefits to those that are in the lowest deciles of the income distribution.
Ending poverty and achieving shared prosperity will require more than economic growth. It will require pro-poor policies to be sustainable.
The recently released Global Monitoring Report 2014/2015 focuses on the importance of sustainability as a means to enable countries to reach out to their poorest people over the medium term (to 2030) and long term (beyond 2030).
In our messy, multipolar world, daunting problems like responding to climate change, feeding a growing population, and fostering viable states in the wake of conflict were among the topics covered in yesterday’s conversation between Madeleine Albright and Kaushik Basu at the World Bank. Adding levity, the former US secretary of state also spoke of Kim Jong Il’s elevator shoes and bouffant hair, her role in lifting a ban on Iranian caviar, carpets and pistachios, and the byzantine math of the UN Security Council.
Kaushik held up an interesting mirror for Albright, given his own multidisciplinary perspective as a former economic policy advisor for India (a big cacophonous democracy), as a professor keen to ignite young minds to think creatively about the world, and as a big thinker at an international institution. Most fascinating to me were his questions about the moral imperatives that guided her decisions in the Balkans as well as her ability to grapple with everything from nuclear negotiations to sanctions to a tenuous mission to Pyongyang in October 2000.
Last week I attended the Gaidar Forum in Moscow. Yegor Gaidar was an economist who became the architect of the Russian market economy as deputy prime minister of the Russian Federation in 1992. Like Leszek Balcerowitz in Poland and Vaclav Klaus in Czechoslovakia, Gaidar was a pioneer of the shock therapy: rapid liberalization of prices; opening up of borders to allow free international trade; and privatization of capital. Gaidar died in 2009 at an age of 53. In his memory the Gaidar Forum was organized for the first time in 2010. This was the fifth time the Russian Presidential Academy of National Economy and Public Administration organized this annual conference that brings together ministers, academics, and business people.
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.