TAILOR THE DEVELOPMENT APPROACH TO LOCAL CONDITIONS

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ISTANBUL, Aug 9 2007 (IPS) - The one-size-fits-all formula for development is clearly a mistake. To begin with, today\’s developed countries used a broad range of economic approaches in their own development strategies, writes Benjamin Mkapa, former President of Tanzania (1995-2005) and President of the South Center, an Inter-Governmental Organization based in Geneva, Switzerland. In this article, Mkapa writes a government should design and implement a national development policy that takes into account its country\’s unique conditions and characteristics. The developing countries that disregarded orthodox economic policy advice to combat financial crises were the ones that managed to get over the crises early and in good shape. Globalisation should not require the replication in the developing world of the political and institutional structures of governance of the US and Western Europe. Nor should cultural and social values across the developing world be recreated in the image of western life styles and role models. A fair globalisation requires that the process respect diversity of culture, religion, and political and social opinion while fully respecting universal principles.

To begin with, today’s developed countries used a broad range of economic approaches in their own development strategies. Moreover, the current success of China, India, Brazil, and certain other developing countries is due to the fact that they chose national strategies appropriate to their own conditions rather than economic policies prescribed by those who drive today’s globalisation model.

A government should design and implement a national development policy that takes into account its country’s unique conditions and characteristics. The state’s continuing role in supporting sustained capital formation and productivity increases, in providing appropriate incentives to the private sector, improving public infrastructure, providing basic social services such as public education and health, must be recognised rather than being left to the vagaries of the free market.

One cannot speak of globalisation and its impact on development prospects without also speaking about the role of the international financial architecture in allowing its worst effects to strike developing countries and the least developed countries (LDCs).

Since the mid-1990s, the impact of financial crises on output growth, employment, and real income has caused severe setbacks in economic development, reduced the scope for public investment in health and education, and increased poverty in the affected developing countries.

It is important to note that while countries from Asia, Africa, and Latin America were severely affected by the financial crises of the late 1990s and the early part of this decade, the economies of the developed countries were barely affected. In fact, the shocks dealt by the various financial crises to developing countries allowed Northern governments and corporations greater access to many of our economies as domestic Southern companies failed and developing country governments ran short of financial resources.

It should also be noted that those developing countries that disregarded orthodox economic policy advice to combat financial crises were the ones that managed to get over the crises early and in good shape.

Global interdependence needs to be fostered in the context of a global co-operative governance framework. For far too long, since the 1980s, co-operative multilateral governance for economic development has been sidelined in favour of approaches that institutionalise the economic dominance of developed countries. Public institutions controlled by developed countries, like the World Bank, IMF, OECD, and WTO became the preferred sources for international economic policy advice and control, while the core global economic governance institution with universal membership, the United Nations, became increasingly marginalised. The UN must be supported in once again becoming the core global economic governance institution.

In addition, it must be emphatically stated that reform of national policy and institutions is critical to their beneficial integration into a fair globalisation process. There must be good national political governance based on a democratic political system, respect for human rights, the rule of law, and social equity.

This is a decisive moment for LDCs — indeed all developing countries — to commit themselves to a strategy of depending on themselves to reduce poverty by scaling-up their own efforts and maximising the efficient and effective use of their own resources. In particular, this requires the integration their various Diasporas into resource mobilisation plans, implementation of programmes that liberate the poor through property rights reform, and the formation of new links with other nations of the South, particularly the newly industrialising economies like India, China, and Turkey. As Malawian conventional wisdom states: He who splits his own firewood warms himself twice!

LDC governments need to focus on learning more from those whose history and developmental experiences most closely resemble their own, Asia in particular, and the reforms in the investment climate that have transformed India and China into today’s economic powerhouses.

LDCs must redirect resources to build infrastructure, integrate markets, and promote regional trade. Intra-African trade for, example, is only 12% of total trade, the lowest of all regions of the world.

LDCs must invest in agriculture and aggressively support small and medium scale-entrepreneurs — vital creators of wealth and employment and a key target for poverty reduction.

Some of the imbalances of globalisation and challenges of development are better addressed in a regional context. Regional integration should therefore be pursued as an agent of fair global economic integration. Additionally, strong regional policies and institutions are important elements in improving governance of the global economy. How can we not learn from the power of the European Union in determining the course of international economic relations?

One of the findings of the South Centre, a Geneva-based inter-governmental organisation, is that South-South trade barriers are very high. Trade liberalisation among Southern countries would lend them clout in the struggle for a better globalisation. LDCs have a responsibility to form a unified front to present alternative solutions and build a more equal world. There is pressing need to strengthen the foundations that have been laid for South-South cooperation such as the G77, the Non-Aligned Movement, and the G15.

Globalisation should not require the replication in the developing world of political and institutional structures of governance of the US and Western Europe. Nor should cultural and social values across the developing world be recreated in the image of western life styles and role models. A fair globalisation requires that the process respect diversity of culture, religion, and political and social opinion while fully respecting universal principles. (END/COPYRIGHT IPS/South Centre)