Uncertainty rules as we head into 2012
If you go in for such things, there’s a Chinese proverb that says ‘To be uncertain is to be uncomfortable, but to be certain is to be ridiculous’.
I’m not sure I agree with the ridiculous part, but there’s no question that dealing with the discomfort of uncertainty will be a key feature of life in 2012, and possibly a defining feature of the way we think about development in the coming years.
Uncertainty is nothing new. The uncertainty of everyday life and livelihood, and lacking the means to mitigate uncertainty, are often central characteristics of what it means to be poor. But when the normal distribution of everyday uncertainty is paired with more powerful and exogenous shocks, this is when life really changes – and often for the worse. We’ve seen in 2011 the devastating effects of natural disasters across the globe, from the Japanese earthquake and tsunami, to the tornadoes in North America, the floods in Thailand and, most recently, tropical storm Washi in the Philippines. In fact, 2011 was another record year for extreme weather events, underscoring the timeliness of the IPCC Special Report on managing the risks of extreme events and disasters, of which ODI’s Tom Mitchell was a coordinating lead author.
But shocks are more than just natural phenomenon and, as events since 2008 demonstrate, they are increasingly systemic – transcending boundaries between different geographies, markets and polities. As the world becomes ever more interdependent, shocks (and the uncertainties that underlie them) are quickly amplified – exposing many and insulating few. The consequence is that, today, few of the challenges of development can be neatly contained by locality, market or by sector; instead they are hyperlinked across multiple domains. And this presents new challenges for public and private sector actors who need to be more agile and able to experiment with different development solutions in the face of rising complexity and uncertainty.
While uncertainty rules, there are some obvious trends that will shape the optics for global development in 2012 and demand stronger leadership to overcome inevitable challenges.
The first trend involves the wave of people protest that is dominating the news. Some analysts predict that these ‘movements’ will spread in 2012, creating an expanding arc of political uncertainty linking Africa, the Middle East and possibly Europe. The trajectory of such movements is unclear and, as Alina Rocha-Menocal has argued in the Egyptian context, the facade of democratic change is not all that it seems. The mood for 2012 suggests more political volatility as these events multiply and unfold.
The second trend is the ailing economic fortunes of some of the major regional economic blocs. The likely effects on developing countries of fiscal tightening and further economic contraction in the eurozone are relatively knowable, as highlighted by ODI’s Isabella Massa, Jodie Keane and Jane Kennan in late 2011. But the combination of continued anaemic growth in the US, a possible slowing down in China and a less bullish picture in India, plus continued volatility in global energy and food prices, amounts to a heady brew for low- and lower-middle income countries to digest. While much of sub-Saharan Africa continues to grow strongly for now, the main challenge lies in creating the conditions for sustainable economic transformation, as highlighted in the UNECA’s Africa Report 2011. With the global economic outlook remaining flat in 2012, and the attention of global-facing OECD nations turning increasingly inward, this must pose a concern for policy-makers on the continent looking to create new opportunities for lasting structural change.
The third trend relates to the growing challenges of international cooperation and leadership. As is commonly quipped these days, the more the world needs global solutions the less it seems able to agree on what they should be. But this may not be entirely fair. There was a decent amount of cooperative behaviour on display at the High Level Forum on Aid Effectiveness in Busan, South Korea in late 2011 (albeit drawn very differently from previous meetings). And in Durban also, the EU, despite political and economic crises at home, managed to prod the global conference on climate change to agree on the need for a road map for more legally binding emissions reductions by the world’s major economies, rich and poor, by 2015 (although not coming in to force until 2020).
One or even two swallows does not make a summer, however. Part of the problem is that so many of the global challenges today need speed and, arguably, innovation, rather than muscle to solve them. And speed is rarely a feature of the inter-governmental processes that have defined global collective action to date. Finding new ways to solve global problems in a technologically disrupted world is critical. But the great uncertainty is the absence of a new leadership to take this forward. Economic and political power may be shifting in the world, but real leadership (at the international level) remains in serious short supply.
Finally, there are the existing hot spots that may get hotter during 2012 and contribute to repeat and protracted humanitarian crises, from Somalia, to South Sudan, the Democratic Republic of Congo, Afghanistan, Pakistan and possibly Nigeria, where sporadic rebel attacks are now beginning to form a worrying pattern. These protracted crises point to the critical importance of prevention (and protection), as well as the more conventional humanitarian response. The UK government is increasingly focusing its resources on prevention, and is looking to concentrate a third of its aid portfolio in fragile and conflict affected contexts. This is an important signal of intent but the risks and uncertainties of operating in these environments are also considerable. A business as usual approach is potentially damaging, as noted by Leni Wild in her blog on the operational implications of the World Bank’s 2011 World Development Report on Conflict, Security and Development.
What these trends point to (and there are of course other important ones) is the systemic nature of uncertainty and our need to think differently about strategies for dealing with it. They also point to a resurgence of questions about the role, capabilities and limits of the state, the importance of effective leadership, and the need for more innovative ways of undertaking collective action. Complexity and uncertainty demand more innovative policy solutions to the shared problems of development and more innovative alliances to deliver them. The G20, in particular, needs a breath of new life in 2012, while multilateral institutions have to do better in representing a pluralist, non-polar world. Increasingly, policy will have to work across the domains of economics, politics, environment and society if it is to stay ahead in this hyperlinked world. Public and private sector actors will also have to find new ways to combine their interests and capacities if we are to continue to aspire to better outcomes for all.