04 January 2010

Ten Predictions for 2010

Given the magnitude of Western debt and the need to pay it down at a rate that does not disrupt any signs of growth, 2010 may well be the most benign year for development between now and 2015. The big cuts will come in 2011 onwards. We need to make the most of 2010. Here are 10 “predictions” which may help.

1. China’s view will become the bellwether of all development agreements. As Copenhagen signalled, it will be impossible to have any agreement on any development issue without China’s blessing. In an increasingly G2 world, only one of the G’s has developing country bona fides, even if no-one really considers it to be one, and its voice will count the most in any development agreement.

2. “Minilateralism” is the wave of the future. Global governance is broken. To expect 193 countries to agree on anything that has teeth is unrealistic. Yet, the list of issues in global governance’s inbox is mounting. Until some alternative to the 193 is found, smaller clusterings of countries (coined as minilateralism by Moises Naim) will find ways to do business, with the membership and size of the clusters being issue-driven. As we saw in Copenhagen, these clusterings can breed distrust and scupper the potential for 193-country deals, but that may not be such a bad thing if it spurs some more creative forms of global governance.

3. Copenhagen will energise, not demoralise, those fighting for climate issues to be higher up the agenda. I have mentioned Copenhagen twice already. Climate change is a window into the future for so many issues – the relations between market and state, between private and public behaviours, and between the rich countries and the emerging ones—but what does it say about climate change as an issue? Whoever was to blame for the Copenhagen agreement, the outcome told us that negotiations as usual will not work. The rich countries want emerging countries like China and India to tie their growth to emissions (as in targets for reduced emissions). But China and India want emissions tied to growth (as in targets for the carbon intensity of any growth achieved). China and India are never going to limit their growth to meet emissions targets, but they are more likely to limit their emissions per unit of growth. The sooner the rich countries agree to this, the sooner we can get the global agreement we need. It’s time to reboot the negotiations using a different operating system, and I think the Copenhagen outcome will crystallise this for many people.

4. The Commonwealth will become more important in development. The Conservative Party’s Green Paper envisages a greater role for the Commonwealth in development. The Queen’s Christmas speech also highlighted the contributions the Commonwealth, now celebrating its sixtieth year, could make, emphasising the fact that over half of its 2 billion “members” are under 25 years of age. It is also interesting that Rwanda, a country with no British colonial past, applied and was admitted to the Commonwealth in November 2009. How the grouping of 54 countries will become more important for development remains to be seen, but in a world groping for mechanisms for collective action, don’t rule out this rather controversial institution.

5. USAID will become more relevant to international development. Diminished in the Reagan years, and never fully recovered, USAID is widely regarded at best as a sleeping giant, and at worst as an organisation more interested in bureaucracy than development. That is about to change. The new person in charge is Raj Shah. In his mid 30’s and is one of the youngest administrators in an already young Obama Administration, he comes without much State Department baggage. Based on his work at the Gates Foundation, he will make USAID more development focused, more outcome focused, and more people focused. I expect moderately extraordinary things.

6. Food and nutrition will slowly slip from the top table of the development agenda. Much as I hate to say it, I cannot see food and nutrition being the subject of a high level meeting in Number 10 any time soon. Of course, something could be prompted by another food price spike, but I have been disappointed by the international community’s response to the 2007-2008 food price increase and I would not expect anything different next time around. In the past 2 years there has been no serious recalibration of what is acceptable (Why is an increase in the number of hungry from 850 million to 1 billion a crisis? Why isn’t 850 million a crisis?), no re-think of the structural causes of hunger, no serious reform of the global infrastructure and no significant new resource flows (will the L’Aquila billions materialise? Will they be additional? And why only billions? One thing 2009 has given us is an understanding that governments can do trillions). We need much stronger civil society commitment mechanisms to change the dynamic. We need indices that monitor inaction on hunger that are as robust and noisy as those which monitor corruption.

7. Africa will get back onto the international agenda, briefly. 2010 is potentially a big year for international attention on African development. It is five years after the Gleneagles G8 commitments, the Commission for Africa, Live8 and the rest. It is also the year the World Cup debuts in Africa. African GDP has quietly grown in the past 12 months, giving some cause for optimism. Moyo’s 2009 book was in large part an unsubstantiated polemic, but it did give many pause for thought about the way the donors frame relationships with African countries. 2010 will be an opportunity to re-set donor relations with African countries, one in which there needs to be more talk of relationships beyond aid.

8. Economics will change, but only at the margins. Last year was a bad one for the economics profession. Core assumptions about the rationality, individuality and certainty of decision making came under fire--from economics Nobel Prize winners, no less. How will economics respond in the next year? A steady reformation was on-going before the fall of Lehman. The shift in production in the industrialised countries from commodities to knowledge-based services has accelerated the greater communion of economics and psychology. We also need some greater link up with history (Ha Joon Chang is leading the way on this front) and with politics (we need more Dani Rodrik’s please). But these are marginal shifts at the moment. We need the undergraduate text book writers to really take up the challenge of reinventing economics for the next generation of economists.

9. DFID will undergo evolution not revolution. Whichever party forms the next UK government, DFID will pay more attention to market-friendly mechanisms. We will see more attention given to the assessment of impact, to mechanisms to validate and organise evidence, to ways of signalling reputation, to innovative alliances, to methods for soliciting beneficiary feedback, and to new ways of engaging with UK taxpayers. All of this will be more valuable, but more difficult in fragile contexts. The key difference between the parties will probably be the pace of change rather than the direction.

10. People power in development will move into a new age. 2010 will mark the 5th birthday of YouTube. In 2004 YouTube did not exist, now it gets 1 billion views a day. In 2003 China and India had 100 million internet users. Today that number is 350 million. In most African countries the number of internet users has tripled or quadrupled in the past 5 years. In 2004, 2 in 10 households in the developing world had a mobile phone subscription while today it is 5 in 10. These trends will accelerate and we will find ever more uses for them in development. I feel we are now at the cusp of their greatly expanded use in development. I already see many applications: UNICEF in Malawi using mobile phones to monitoring infant nutrition status in real time, international NGOs using mobiles to monitor potential famines, the use of YouTube to connect organisations’ field and headquarter operations to promote the sharing of front line innovations, and the use of mobile video to monitor rights abuses. Will this new technology foster a profound new wave of participation in development and change? I think so.


AlexEvansUK said...

Really interesting list. I agree with most of the items on it, but am still unsure about the Commonwealth point. What do the Conservatives actually mean when they say they'll place more emphasis on it? DFID's bilateral programme is already relatively focused on Commonwealth countries - and it still looks like an international organisation in search of a role for itself (Rwanda notwithstanding).

Anonymous said...

Amazing predictions. On your 10th point, I believe a mention of mobile money transfer growth in developing countries (M-PESA in Kenya being a case in point) might be worth a mention.

Jorge lynch said...

I'm curious to know why you consider that Africa will only be back on the International Agenda "briefly"; otherwise found your predictions interesting, if not, thought-provoking.