The Rise of the South: Human Progress in a Diverse World. Synthesis > novelty in a big new UN report.

Of the big reports that spew forth from the multilateral system, some break new ground in terms of research or narratives, while others usefully recap the latest thinking on a given issue. Last week’s 2013 Human Development Report, The Rise of the South: Human Progress in a Diverse World, falls into the latter category, pulling together the evidence for a tectonic North-South shift in global economic and political affairs, summarizing new thinking on inequality, South in the North etc and asking what happens next. If you’re currently sunk in the depths of Europessimism or US political stalemate, you may find such an upbeat story refreshing (or even disturbing). You can read the exec sum online, but it doesn’t seem to allow you to cut and paste (v annoying for lazy bloggers like me).

Some useful numbers to demonstrate the extent of the shift: From 1980 to now, developing countries’ share of global GDP rose from 33% to 45%, their share of world goods trade from 25% to 45%, and South-South trade as a % of the world total rose from 8% to 26%.

How has this happened and so what? The HDR’s approach is to learn from the success of 18 of the more than 40 countries in the developing world that have done better than expected in human development terms in recent decades, with their progress accelerating markedly over the past ten years. Not just China and India, but countries like Turkey, Ghana and Mauritius. Again, nothing new there – the Growth Commission had a go at that five years back – but still infinitely preferable to maths-led regression-tastic nonsense that ignores history and politics.

Compared to the Growth Commission, the HDR’s conclusions are more interventionist, and more political. The Report identifies 3 main drivers shared across the success stories:

1. A proactive developmental state

2. Tapping into global markets

3. Determined social policy innovation

On the role of the state, successful countries ‘share some key characteristics. Most were proactive “developmental states” that sought to take strategic advantage of opportunities offered by world trade. They also invested heavily in human capital through health and education programs and other essential social services. More important than getting prices right, a developmental state must get policy priorities right. They should be people-centred, promoting opportunities while protecting against downside risks.’

In case you missed it, that’s a not-very-subtle two fingers to the Washington Consensus and its preference for ‘getting the prices right’.

Oops, wrong South

The report points to some downside risks that threaten this progress: ‘short-sighted austerity measures, failures to address persistent inequalities, and a lack of opportunities for meaningful civic participation.’ But overall, as the South rises, the focus will shift to ‘long-term challenges shared by industrialized countries of the North’ – both commonly shared issues like ageing and jobs, and collective action problems like climate change.

Its recommendations for continuing this amazing progress include

1. Developing countries need to move their focus from ‘growth first’ to human development

2. Enhanced South-South learning and integration

3. Greater representation for civil society and the South in the international system. Global institutions have not yet caught up with this historic change (the international system’s loss rather than the BRICS’). China, with the world’s second largest economy and biggest foreign exchange reserves, has but a 3.3 percent share in the World Bank, less than France’s 4.3 percent. India, which will soon surpass China as the world’s most populous country, does not have a permanent seat on the UN Security Council. And Africa, with a billion people in 54 sovereign nations, is under-represented in almost all international institutions.

And in a nice table-turning touch, the report ‘urges the convening of a new “South Commission” where developing countries can take the lead in suggesting constructive new approaches to effective global governance.’

Nothing earth-shattering, but a useful exercise in synthesizing the evolving understanding of development and repositioning the multilaterals within it. So what have I missed?

And here’s the rather frenetic animated version

Brazil v South Africa: what can the BRICS tell us about overcoming inequality?

The blog’s inequality week here in South Africa continues with some thoughts on inequality and the BRICS. An edited version of this post appeared earlier this week on the FT’s Beyond BRICS blog

The acronym may have been cooked up in far-off New York, but the BRICS grouping of countries is starting to generate some interesting life of its own. Last week, I was in Durban, chairing a discussion between academics and activists from South Africa and Brazil ahead of the BRICS summit later this month. The topic? ‘Tackling inequality across BRICS’.

The starting point was Brazilian exceptionalism. Long held up as exhibit A in Latin America’s gross distortions of wealth, Brazil is now the only BRIC where inequality is falling (and fast – see chart). In the wider G20 group of leading economies, only 4 can boast falling inequality levels; three of them – Brazil, Argentina and Mexico – are Latin American.

The stats, captured in a new Oxfam briefing, published in conjunction with Rio’s BRICS Policy Center, are striking. Over the last decade, the incomes of the poorest Brazilians have risen more than five times faster than those of the richest (but both are rising – no zero sum games here). In the words of Brazilian poverty guru Ricardo Paes de Barros, “the incomes of individuals in the lowest decile of the income distribution is growing at Chinese rates, while the income of the richest decile grows at German rates”.

Even though GDP growth is sluggish, two weeks ago President Dilma Rousseff was able to announce the end of ‘registered extreme poverty’ – note her careful choice of words. Some Brazilian academics put this historic turnaround on a par with the New Deal in the US, or Britain’s post war creation of its welfare state.

The fine grain is just as encouraging: women’s incomes are rising faster than men’s; black people’s faster than whites’; the impoverished North-east faster than the rich South-east. Hunger is ‘largely dealt with’ according to Oxfam’s country director Simon Ticehurst, speaking in Durban, although food insecurity continues to plague communities in the northeast of Brazil. Near full employment is transforming lives, as people move from a day to day scrabble for survival into the better paid, more stable world of the formal economy. Brazil’s middle classes complain bitterly about having to pay more for maids, and even give them days off, as labour markets tighten.

Not that Brazil has become some kind of development nirvana: the quality of state education remains poor, large scale agriculture sucks up state subsidies on a far greater scale than those going to poor farmers; and despite the progress, the country is still in the world’s top 15 most unequal countries, twice as unequal as the OECD average.

Caveats aside, how did Brazil pull this off? Ticehurst and Adriana Erthal Abdenur of the BRICS Policy Center both stressed that such a transformation is complex and multi-tiered, involving all parts of state and society. This is most definitely not a magic bullet story of Brazil’s famous ‘Bolsa Familia’ social protection system, a programme of cash transfers to women in return for getting their kids vaccinated and keeping them in school, which has won admirers and imitators as far afield as New York City. UNDP estimates that such spending programmes account for under a fifth of the fall in inequality. Ticehurst argued that other critical factors include:

-          The transition from military rule to democracy, which bequeathed a constitution and political process attuned to the importance of basic rights, such as the right to food

-          The election of a centre-left government, led by Lula, committed to tackling poverty and inequality

-          Major increases in the minimum wage, the introduction of a universal pension (particularly important in deprived rural households)

-          An integrated and more effective public administration, working tightly across ministries and between the different levels of a federal, decentralized political system.

-          A high level of public participation, for example in holding 19 different ministries to account on Brazil’s ‘zero hunger’ effort to achieve universal access to food, through a virtuous circle of linking poor family farms to government procurement for school feeding programmes that in turn feed poor children.

-          Political and economic stability throughout the period of reforms.

In terms of economy and politics, Brazil is probably closer to South Africa than the other BRICS (commodity producer, democracy, transition from autocracy, centre left government) and the discussion inevitably centred on why South Africa has failed to emulate such successes. While there has been substantial progress since the end of Apartheid on access to health, education and housing, inequality remains obstinately high and rising.

The two elements of Brazil’s success that South Africa seems to be missing (by a mile) are full employment and more competent administration. Patronage and corruption exist in both countries, but their extent in South Africa is undermining the state’s ability to implement policies, however well designed. Brazil, with its more diversified economy and public investments, seems able to generate jobs in a way that remains a distant dream in South Africa, which remains dependent on agribusiness and mining, neither of which generate the employment the country needs. Substantial land redistribution seems essential to tackling the jobs crisis, yet has been systematically postponed by the government in the interests of stability. Even those who manage to navigate the dilapidated education system and emerge with a degree still find it difficult to find jobs. Alarm bells are ringing, with observers warning of anything from a slow meltdown of the ANC government to an Arab Spring style uprising led by educated, jobless youth.

While all sides stressed that merely trying to transfer policies from one country to another seldom works, this kind of South-South exchange holds huge potential for helping the BRICS develop their own solutions to some of the problems such as inequality that continue to plague the old guard of the G8.

And here’s a 25m video summary of the Durban event

‘Bricifying’ international NGOs is hard work: the challenges facing Oxfam India

I spent last week trying to understand an intriguing experiment. About five years ago, Oxfam GB’s ‘white men in shorts’ left India, alongwith all the other Oxfam affiliates, and a new, completely Indian-run Oxfam India took over. All part of ‘Bricification’ within the Oxfam family (there’s an Oxfam Brazil in the pipeline too).

So what’s changed? After a period of reflection Oxfam India has opted for a strategy combining programming with increased levels of advocacy in areas such as smallholder agriculture & climate change, natural resource management, right to education and health, violence against women and women’s empowerment, along with a hefty dose of emergencies work and disaster risk reduction. Its two ‘emerging themes’ are urban poverty and ‘India and the World’ – for example the impact of Indian investment in Africa, or India’s role in the G20.

But it hasn’t been easy. The apparently unanswerable political logic of ‘Indianizing Oxfam’ has faced some pretty steep challenges, as I found out in a consultation with partners from Indian civil society. These come in two broad areas: political and financial.

Financially, Oxfam is struggling to crack how to fundraise from India’s rising middle class. Many Indians prefer to give via their religious affiliation, or to more old school NGO activities such as child sponsorship, which we avoid.

Politically, there is real concern that Oxfam India will take up space from other organizations, especially grassroots ones. Does its dual role of funder and activist give it undue influence? Is it importing a foreign model of advocacy (eg an individualist online campaigning

model, dominated by paid activists, project cycles that abandon communities after 3 years, private sector models such as independent boards – as one activist half-joked ‘if Gandhiji had had a board, we’d probably still be waiting for independence’). Is the rise of professional NGOs leading to a ‘Gatesization’ that is alien to Indian traditions?

And what does Oxfam add, given the enormous size, experience and sophistication of Indian CSOs? International links are as often a liability as an asset in India, allowing you to be caricatured as a foreign meddler in internal affairs.

On a more mundane level, will the indianisation of INGOs distort the domestic scene via a brain drain and pressure on salary structures? Oxfam isn’t the only one doing this, by the way: other INGOs including Plan, Care and ActionAid are all trying to position themselves in India, seeking different locations on the service delivery-to-grassroots campaigning spectrum.

Now I think a pinch of salt is warranted here. Most of the large networks in the room already have their boards, most of them follow project cycles, they hire staff who do activism, maybe on lesser salaries, but hire nonetheless. And many of them are far ahead of Oxfam in doing online individual campaigning via Facebook and e petitions. Their anxiety may be less about Oxfam India somehow changing the rules than ‘we have struggled for years to become ‘professionals’ like you and now you want to muscle in and become Indian to take that space’.

It’s also worth noting that this was very much the national conversation in Delhi – at state level in Uttar Pradesh, things seemed less problematic, with Oxfam more confident of its role and partners less concerned.

What to do? I know even less about fundraising than I do about everything else, but I did wonder if we are falling into the trap of trying to import Western approaches, rather than exploring how these things work in India. Rather than sponsored walks and standing orders, why not start from where Indians are at? If they give money to temples or mosques, we could either campaign to make sure that money is well-used (code of conduct, transparency, best and worst practices, league tables and the rest), or even work with religious institutions to help improve the effectiveness of their charitable work (although that would need to be sensitively managed in a religiously polarised context like India).

On the political side, it all comes down to what Oxfam India can add to the country’s vibrant civil society sector. Several suggestions, most of them tricky:

• Bringing in campaigns and programming expertise on ‘new issues’ such as climate change
• I suspect we might have something to add on research for advocacy, eg in terms of communications, killer facts and the rest, or in including India in cross-country research programmes like our food volatility work
• Given the level of hostility among Indian CSOs to working with other sectors, we could specialize in convening ‘vertical alliances’ of unusual suspects – progressive fractions of the middle class, religious institutions, private sector etc, although that might well further complicate our relationships with CSOs who ‘don’t talk to the enemy’.
• Be a critical friend of Indian CSOs, raising issues of eg their own levels of internal representation of minorities such as tribals and dalits (again, not likely to win us many friends)
• The India in the world area is only going to get bigger, definitely an ideal place for Oxfam to engage.

Any other suggestions?

It will be interesting to see how many of these conversations are replicated in Brazil or Mexico (where Oxfam has also gone local).

How are China, Saudi Arabia and other non-traditional donors doing on aid?

Traditional aid donors share information and work together in the Development Assistance Committee of the OECD, known as the DAC. But what about non-DAC countries? Development Initiatives has a typically useful update on non-usual suspect aid donors like the Arab countries (led by Saudi Arabia) and rising powers like the BRICs, whose growing international clout is bringing in its wake an increased role in the aid business (as of last week, Brazil had given more to the UN appeal on the Horn than Germany and France combined). As its name suggests ‘Non-DAC donors and Humanitarian Aid’ focuses on emergencies, but takes in long-term development aid along the way.

Total aid: “Between 2005 and 2009 foreign assistance from non-DAC donors more than doubled from US$4.6 billion to US$10.4 billion” (see graph – Middle East countries seem to be very volatile aid donors)…… Foreign assistance from the BRICS grew nominally from US$1.5 billion in 2005 to US$3.7 billion in 2009.

Humanitarian Aid: “2010 saw humanitarian aid from non-DAC donors increase by US$67.2 million to US$622.5 million. Saudi Arabia was the largest non-DAC donor, contributing US$255.9 million. Pakistan and Haiti were the largest recipients, receiving US$356.3 million and US$170.5 million respectively.”

Non-DAC donors are moving away from traditional bilateral government funding and supporting the multilateral system instead:

“The top two donor governments contributing to the Haiti emergency response fund were non-DAC donors – Saudi Arabia, with US$50 million, and Brazil, with US$8 million.”

South-South cooperation is on the rise: “In 2011 the Poverty and Hunger Alleviation Fund was established through trilateral agreements between India, Brazil and South Africa (IBSA) and offered alternative financing for Southern partners. On 21 April 2011 China released its ‘White Paper on Foreign Aid’, which makes a clear commitment to South–South cooperation.”

Over time, the non-DAC countries could opt to joint the existing aid structures and adopt the policies and institutions of the traditional aid donors, or they could go their own way, for example blurring the boundaries between aid and investment, or between public and private delivery channels. My money’s on the latter course.

I’d appreciate links to any other good overviews of the nature of non-DAC aid, especially China’s.

Update: oops, this wasn’t supposed to go up til tomorrow – will make tomorrow a blog free day out of consideration to info overload……..

What can the BRICS teach us about reducing poverty?

An excellent new paper from the prolific Martin Ravallion, head of the World Bank’s research department, compares the successes in poverty reduction in three of the biggest beasts of the developing world: China, India and Brazil.

Between them, these countries are home to a bit less than half the world’s poor people, but it used to be a lot more. Each has combined market-oriented reforms with different kinds of social policy, producing different combinations of growth, inequality and poverty reduction that hold lessons for each other, and for other developing countries seeking their own paths out of poverty. Some highlights:

‘Brazil, China and India have seen falling poverty in their reform periods, but to varying degrees and for different reasons. History left China with favorable initial conditions for rapid poverty reduction through market-led economic growth; at the outset of the reform process there were ample distortions to remove and relatively low inequality in access to the opportunities so created, though inequality has risen markedly since.

By concentrating such opportunities in the hands of the better off, prior inequalities in various dimensions handicapped poverty reduction in both Brazil and India. Brazil’s recent success in complementing market-oriented reforms with progressive social policies has helped it achieve more rapid poverty reduction than India, although Brazil has been less successful in terms of economic growth.

In the wake of its steep rise in inequality, China might learn from Brazil’s success with such policies. India needs to do more to assure that poor people are able to participate in both the country’s growth process and its social policies; here there are lessons from both China and Brazil. All three countries have learned how important macroeconomic stability is to poverty reduction.’

Similarly this week’s Economist has an excellent 14 page special report on Brazil:

‘The country is enjoying probably its best moment since a group of Portuguese sailors (looking for India) washed up on its shores in 1500. Brazil has been democratic before, it has had economic growth before and it has had low inflation before. But it has never before sustained all three at the same time. If current trends hold (which is a big if), Brazil, with a population of 192m and growing fast, could be one of the world’s five biggest economies by the middle of this century, along with China, America, India and Japan.’

And long before then, if it continues on its current path, it will have become less unequal than the US (see graph). See here for previous blog on Brazil’s achievements on inequality.