Nov. 12, 2010
The Group of 20 nations have agreed to a South Korean plan for a business-focused approach to boosting the developing world. If successful, the “shared growth” strategy could change the way foreign aid is channelled and spent. It could also vault the G20, with its mix of 20th-century powers and developing-world champions, into the position of global agenda setter.
Anti-G20 activists clash with police The ideas aren’t entirely new, but what’s novel – and gives the Seoul consensus a better outlook than past efforts – is the authority behind it. One of the most striking examples of bootstrapped development, South Korea, has used its position as conference host to advance the development agenda.
Agreement on economic issues has been elusive at this gathering of the sometimes fractious G20, which combines the G8 countries of Europe, Canada and the U.S. with powerhouses like China, India and Brazil, along with major economies from around the world. Divisions over monetary and fiscal measures have dominated headlines at the conference, but a quiet consensus has emerged that touts infrastructure, education and skills training, access to finance and private-sector involvement as ways to share the global wealth.
“An enduring and meaningful reduction in poverty cannot be achieved without inclusion, sustainability and resilient growth,” states a draft communiqué of the summit, dated Nov. 3 and obtained by The Globe. “We recognize the unique role of the private sector to create jobs and growth.”
The notion that the rich world’s efforts must shift to creating private-sector jobs and away from traditional foreign aid is hardly new. And the plan’s emphasis on inclusion and tailoring initiatives to nations’ individual circumstances rather than imposing Western economic dogma is a concept that has been paid lip service before, too. But this time around the country pushing the proposal is the leading example of how a poor country can become a wealthy one.
Devastated by war and poverty half a century ago, a government focus on education, technology and manufacturing turned South Korea from an aid recipient to a donor.
Former prime minister Paul Martin met with Korean officials about their initiative a few weeks ago. “The real strength here is that, in terms of economic development, no country can speak with the credibility that Korea brings to this issue, because of what they have done over the last 40 years,” Mr. Martin said in an interview Thursday. “That makes me feel very optimistic about it.”
The Seoul consensus includes an opening statement of principles and then a larger, multi-year action plan. The plan envisions a larger role for development banks to encourage more investment for small businesses and more infrastructure spending by governments.
“This is really going to change the way in which we address development,” Angel Gurria, secretary-general of the Organization for Economic Co-operation and Development, told reporters. “The great leap forward here is that this is no longer a question of aid. It’s a question of development.”
Aid groups welcomed the focus on development but noted there were no indications the G20 would announce new funds when the final communiqué is released Friday.
“We need to see money,” said Jeremy Hobbs, a spokesman for Oxfam International.
Mark Fried of Oxfam International said he agrees economic growth is key to development. “But whether that will reduce poverty depends on how they go about it,” he said.
There is some concern among NGOs that the focus on infrastructure and economic growth will be used to scale back aid budgets.
“We’re concerned about how they define development,” said Michael Switow of Global Call to Action Against Poverty. “Development is not just infrastructure.”
John Kirton, the co-director of the G20 research group at the University of Toronto who is attending the Seoul summit, said the deal represents a clear achievement for the South Koreans. However, he said the G20 still has far to go if it wants to match the accomplishments of the billions spent by the G8 on aid.
“From what we know now,” he said of the G20, “they couldn’t raise a dime from the group.”
http://www.theglobeandmail.com/news/politics/g20-nations-agree-to-business-focused-plan-to-fight-poverty/article1795472/
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