The future face of development: building inclusive growth into a post-2015 framework

28 June 2012 15:00 - 16:30 GMT+01 (BST)
Public event
Streamed live online

Speakers:
Rolph van der Hoeven
 – Professor on Employment and Development Economics, International Institute of Social Studies (ISS)

Claire Melamed – Head of Growth, Poverty and Inequality Programme, ODI
Kate Raworth – Senior Researcher, Oxfam UK


Discussant:

William Day- Interim Chair and Trustee, ODI, Senior Associate of the University of Cambridge Programme for Industry, Chairman of Water and Sanitation for the Urban Poor (WSUP) and Sustainability Advisor to PwC 

Chair:
Andrew Norton
- Director of Research, ODI

Description

Debates on the future of development after 2015, when the current MDGs expire, are gaining increasing momentum. With the imperative for development policy to respond to the urgent need to generate more and better jobsin both the North and South, there is renewed interest in establishing a vision for development that will lead to economic growth that is both inclusive and sustainable. Ideas are starting to emerge on how growth and employment could be included in a new framework.

Growth, and particularly green growth, is also set to be central to discussions at the upcoming Rio+20 summit.  However despite the level of interest, there is still little clarity about how countries can actually achieve sustainable, inclusive growth, or what role international agreements can play in helping them to manage this. And there are important political and practical challenges to address – for instance the trade-offs, if any, between inclusive and sustainable growth; or how synergies between the two can be encouraged in economies at different stages of development. 

Two key questions will frame the debate:

·     What role do international agreements have in promoting inclusive and sustainable growth?

·     What are some of the practical and political challenges governments and businesses need to overcome to encourage a new type of growth? How could a new global agreement on development help address some of these challenges?

Building on recent ODI research, this meeting will bring together global experts engaged on the future development agenda. It will focus on the proposals emerging from Rio and recent post-2015 discussions, to identify opportunities and potential pitfalls to building a new type of growth into future development.

Andrew Norton introduced the event, noting that the outcome of the Rio+20 Conference, including further discussion of Sustainable Development Goals (SDGs), is likely to have a bearing on opportunities and challenges of getting inclusive sustainable growth into a post-2015 framework.

Kate Raworth focused on what inclusive and sustainable new goals for economic growth and development could look like post-2015. Despite high economic growth, many regions have seen increasing inequalities and vast environmental degradation. Development should deliver more than just growth, taking account of more than GDP, which focuses narrowly on monetary value by:

  1. Valuing the un-priced and non-monetised aspects of the economy: care services; clean natural ecosystem services, etc.  
  2. Valuing national assets and not just flows of goods and services: the value of natural, human, and social capital should be taken into account.
  3. A distributional lens is needed on incomes and assets: measuring how they are distributed across households and wealth quintiles is key to inclusive development.  

Kate proposes the ‘doughnut’ as a model for sustainable development post-2015. This would rely on new targets to decouple economic growth from resource use, and recouple it with jobs (especially for HICs). Economic development means ‘living within the doughnut’, i.e. within social and planetary boundaries – so as not to undermine our resource basis. This approach sees access to food, water, and sustainable development as human rights.

Rolph van der Hoeven notes the need for improved targeting post-2015, and a more inclusive process to formulate any new goals and targets (MDG design was very top-down).

A post-2015 framework should address 5 critical development issues:

  1. Changing geo-political landscape: Growth of MICs and new role for G20.
  2. Employment: Jobs are increasingly insecure and unequal; evidence that poor workers hit 3 times harder by crisis (did not share profits of growth, but hit by cuts).
  3. Inequality: of incomes and capital is inherent to current system, not a by-product. We need post-2015 inequality targets. Income /distributional inequalities increasing
  4. Sustainable development: was lacking in the MDGs. New SD indicators needed, and private sector must be involved in normative questions of who values what - options for implementing a ‘green wealth footprint’ are needed.
  5. Human rights: right to development for all. Emphasis on non-discrimination, participation, accountability – tackling inequality (a violation of human rights).

The above should come through a global social contract; the first element would be to establish a Global Social Floor. Calculations indicate all countries (except poorest LICs) could afford this; it is a question of political will. Global governance will be key – a global coordination council. We should move away from supply side approach of MDGs; acknowledge national policy space, so countries /citizens can work with own policies.

Claire Melamed discussed how post-2015 ideas (economic growth is one of many) might fit with the political process. Distinct regional positions are emerging: 1.Europe and USA: conversation on returning to growth through traditional means; 2. Africa: Focus on jobs more than on growth; making growth employment intensive; 3. (East) Asia: Have achieved growth, jobs; but concerns on environment, inequality. The politics of a global conversation on growth post-2015 will vary /depend on where countries are positioned in regional debates.

Two parallel international processes have been established to work on future global development policy, both starting work in September and reporting to the UN General Assembly within a year:

  1. Post-2015:High Level Panel chaired by David Cameron and presidents of Liberia and Indonesia. The terms of reference of the panel have not been fully laid out yet.
  2. Sustainable Development Goals (SDGs): Rio mandated a process to drive SDGs through a 30 UN member state panel, constituted equally by region. Proposals to date for SDGs go beyond environment and also cover broader human development issues e.g. jobs, gender equity.

So there is a high degree of overlap between these panels. This sets the scene for a ‘car crash’, or for the panels to be mutually reinforcing if they work out a division of labour.  There are three possible (not mutually exclusive) outcomes of a post-2015 agreement: 1. Norms (e.g. Global consensus on inclusive growth): for gradual behaviour change; 2. Partnerships (targets to unlock global issues, e.g. on trade and migration); 3. National level incentives (to drive national policy attention /resources).

Much uncertainty still surrounds where the SDGs are headed, with questions of whether they will focus on ends (e.g. resource use targets) or means(e.g. sustainable energy for all). A post-2015 agreement could take on all the issues (‘Christmas tree’ approach); or look at global objectives like climate change alongside specific poverty and development objectives (‘Jigsaw’ approach) – this is what the SDGs so far seem to be following; or look at singular goals (the ‘bullseye’ approach) e.g. a goal to end income poverty. Positive outcomes could flow from the ‘jigsaw’ or ‘bullseye’; but any outcome will be dependent on the politics of the process.

Will Day discussed some of the points raised by the speakers. He highlighted that the current economic model is broken, and businesses want to succeed in a new model.  Do SDGs/post-2015 MDGs offer a chance to encourage inclusive, sustainable, growth? The pace of ‘decoupling’ growth from resource use to make it more sustainable has so far been too slow; and the pace really needed – that dictated by science – may be politically unpalatable. Further, inequalities are growing and have been highlighted by the World Economic Forum (WEF) as the most impactful risk in 2012. He also stressed that development and poverty were often seen as the remit of aid agencies; although still important, there is a need for a whole new set of conversations including emerging economies (given global power shifts), but also thinking about new ways of engaging other actors, such as businesses.

In the Q&A session some participants stressed that low income countries may be concerned that a new paradigm emphasising green growth could leave poverty aside; green growth may mean different things for countries at different stages of development. In response, it was suggested that dialogue is needed in different fora so that these different views are heard. There were also questions about what the UK could do to influence this debate, as a member of the High-Level Panel and as it will be holding the G8 Presidency in 2013. Suggestions included working towards finishing the job that the MDGs started (i.e. taking a ‘Getting to Zero’ approach and end poverty, end hunger by X), and pushing for a shift/change in paradigm that takes into account economic, social and environmental pillars.

Members of the audience also asked what issues should be included a new framework, and whether governance, particularly taking into account fragile states context, should be considered. Jobs were among the issues highlighted by speakers to be included in a post-2015 framework, as this is one of the issues that people mostly care about. A distinction was also made between ends and means. The current targets focus on ends while means are country-specific. Issues such as growth and governance relate to discussions on means rather than ends, and as such they may require national level conversations.