Debates concerning development are often sparked by the question of whether market-led growth is enough to tackle problems like poverty and global inequality reduction, or else, if more specific policies are needed to ensure that economic growth actually helps the poor.
International agencies like the IMF, the World Bank and the World Trade Organisation (WTO) continue to place their faith in economic liberalisation for providing the most effective means to help poor countries develop. Yet, the pursuit of development policies primarily aiming to accomplish economic growth has led to the pursuit of reliance on the already rich and increased inequality within developing countries.
Growing disparities have compelled the recognition for making growth more inclusive. Yet, reliance on market mechanisms to ensure growth, while at the same time, hoping that such growth remains inclusive rather than enabling the rich to further exploit the poor, is easier to rhetorically assert, than it is to actually achieve.
The United Nations Conference on Trade and Development (UNCTAD) has also highlighted the need for making growth more inclusive in its latest Least Developed Countries (LDC) Report. The 2013 report stresses the need for the 49 poorest countries in the world to make greater efforts to ensure that economic growth can help their poor. UNCTAD recommends that these countries must create well-paid jobs for the underemployed and under-remunerated, or else they risk increasing levels of social or political instability.
According to UNCTAD, a country is considered least developed when income per head is $992 a year. Most LDCs are in Africa. Several countries in Asia, such as Bhutan, Bangladesh and Afghanistan are also categorised as LDCs. Countries like Pakistan are, however, not far ahead and face very similar challenges in terms of achieving growth which can offer better opportunities to its deprived populace.
At least, UNCTAD admits that economic growth alone cannot create enough decent jobs in poorer countries and that such growth is not sustainable either. While international lending agencies like the IMF and the World Bank continue to envision a minimal role for the public sector, UNCTAD has pointed out that the public sector also needs to kick-start the growth process in LDCs. UNCTAD is further calling for more investment in social services, which are often cut when poor countries try to curb their spending under pressure from the World Bank or the IMF. Unlike the WTO, which considers trade the panacea for all woes, UNCTAD has acknowledged that the export growth model needs to be altered if more inclusive patterns of growth are to be achieved.
Besides emphasising how poor countries themselves should alter their economic policies, UNCTAD needs to try and exert more pressure on the WTO, the IMF and the World Bank, whose policy recommendations hold major influence in poor, loan-dependent countries. UNCTAD is a bit too optimistic in thinking that LDCs can strive and achieve value addition to better integrate into the global production process and even attract foreign direct investment which expands domestic industrial sectors instead of focusing on profit maximisation. In order for such a shift to take place, UNCTAD must acknowledge and aim to contend with the negative role played by rich and powerful countries in extracting resources from LDCs, which only benefit a handful of local elite willing to collude with a global production system that still thrives on inequalities and exploitation.
Published in The Express Tribune, November 29th, 2013.
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