World Economic and Social Survey 2010: Retooling Global Development

This year’s World Economic and Social Survey (WESS 2010), launched on 29 June, focuses on “Retooling global development.” It takes stock of development challenges and identifies deficiencies and gaps in global economic governance mechanisms. It also puts forth new initiatives for economic development and provides ideas on how the international community can achieve more balanced and sustainable globalization.

According to the report, the global economic crisis of 2008-09 exposed systemic failures in the workings of financial markets and major deficiencies at the core of economic policy making. The economic and financial crisis came on top of several other crises. “Skyrocketing but highly volatile world food and energy prices reflected a decades-long neglect of food agriculture and failure to reign in increasingly speculative energy markets. Climate change is already a clear and present danger whose consequences are being felt in many parts of the world in the form of more frequent and severe droughts and excessive rainfall; its effects are compounding the other crises.”

Noting that “a remarkable spirit of multilateralism has prevailed in the responses to this upheaval,” UN Secretary-General Ban Ki-moon, in his preface to the report, warns that the global food and financial crises have caused significant setbacks in efforts to achieve the Millennium Development Goals, and “have been a painful reminder that a stable global economic environment is a critical precondition for human progress.” Other factors set to influence the global economic environment include demographic changes, such as migration and population ageing, which will further reshape the patterns of global development. Recent trends, such as the rapid growth in developing Asia is altering the balance of the global economic powers. The global number of poor living on less than US$1.25 a day has decreased to 1.4 billion in 2005 however this reduction has been mainly seen in China, while sub-Saharan Africa and South Asia are struggling and experiencing inverse outcomes. The Survey warns that this global economic divergence can potentially raise tension and insecurity.

“While the strong desire for quick economic recovery is understandable, getting ‘back on track’ would mean returning to an unsustainable path of global development,” WESS 2010 cautions. Sustained and widespread future prosperity will require major reforms in global economic governance and new thinking about global economic development.

With “Retooling global development” as the main theme of WESS 2010, a central concern of the new thinking will be the need for a focus on sustainable development – entailing an approach that would “balance material wealth improvements with protection of the natural environment and ensure social equity and justice – rather than a focus narrowly concentrated on economic growth and private wealth generation based on market incentives.”

The reports suggests that global solutions will be required for global problems and, given the interdependence of these problems, policy responses will need to be highly coherent at various levels if the international community is to achieve the multiple objectives associated with fair and sustainable global development. Because of the complexity of global challenges, pursuit of these solutions will not be easy: “it will require a new kind of thinking and the striking of a new balance between decision-making processes at the national level and those at the global level.”

WESS 2010 presents ideas for a more coherent “toolbox” design to guide development policies and international cooperation. It points out promising directions for reform, including:

• strengthening government capacities for formulating and implementing national development strategies;

• doing more to ensure that official development assistance is aligned with national priorities;

• strengthening the international trade and financial systems so that countries with limited capabilities can successfully integrate into the global economy; and

• creating new mechanisms for dealing with deficiencies, such as specialized multilateral frameworks through which to govern international migration and labour mobility, international financial regulation, multinational corporations and global value chains regulation, as well as sovereign debt workouts.

The global crisis has also provided opportunities to re-examine the system of global governance including reform of international aid and trade processes to enable governments to experiment with feasible local solutions, as well as international regulation of capital flows to create a stable, long-term financing for developing countries’ needs. The report urges that a new international agency to coordinate financial regulation is necessary along with deep reform of the global reserve system. WESS 2010 further stresses that equity in income, assets and access to education and health is necessary for sustainable and accelerated growth, together with strengthening government capacities to formulate and implement national development strategies.

The full report is available online.

Click here for the press release:

The overview of WESS 2010 is available in other languages.

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