A new IGTN Working Paper by Mariama Williams, IGTN Research Associate

This paper seeks to lay out, for further exploration and contemplation, the issues, especially as they relate to trade and finance, which are of critical importance to economic development in the global south.

But since the ultimate outcome of such processes are both propositional and conditional on what happens in the global economy, by necessity, there will be spillover to the nature and conditions of policy making in the global economy. The debate and discussion is both necessary and timely given the grave questions that face all nations - rich or poor, as well as, the overall global community in now the twilight of the first decade of the third millennium.

We are in the midst of a global war on terrorism that is, at best, benignly neglectful of human rights and, at worst, is having a chill effect on the spaces for political activism on many fronts. At the same time, we have an economic crisis of global proportions capable of transforming the essential markers in the global economy for the foreseeable future. We are also experiencing a serious food crisis, variously described as a ‘global developmental crisis of unprecedented scale', a ‘silent tsunami' and a ‘perfect storm,' which is interlinked with the growing HIV-AIDS pandemic that threatens the lives of millions of boys, girls, women and men in many developing countries. Of the over six billion people who live in the world,

about 963 million are hungry and over 40 million people joined the rank of the under nourished in 2008.

This hunger is directly linked to poverty and lack of access to affordable food. HIV-AIDS is drastically reducing life expectancy (now dropping to 20 and 30 years) in some Sub Saharan African countries as opposed to what it should have been (70 years or so by 2010). It is also wiping out teachers, health care workers and parents and leaving a wave of orphans in its wake.

Coupled with this is the challenge of the long term rise in the average temperature of the earth's surface (and the consequential climate variability) which is contribute dramatically to frequent and extreme weather events such as extended droughts, floods and storm surges in many countries. The Intergovernmental Panel on Climate Change (IPCC) in its Fourth Assessment Report (2007) highlights that floods and heat are linked to death, injuries, infectious diseases, the toxic containment of water. Storm surges severely injury or cause many men and women to drown. More severe and frequent droughts cause water scarcity, the salinisation of agricultural lands and the destruction of crops thus contributing to nutritional deficiencies and food insecurity.

Climate change and its variability is an exogenous shock that poses potential challenges for developing countries infrastructural systems and economic growth path (Ackerman 2009). The Global Humanitarian Forum reports that every year climate change and climate variability leave over 300,000 people dead, seriously affect another 325 million people and create economic losses totaling $125 billion (GHF 2009).

Thus at a time when the global community should be focusing its attention on poverty eradication and economic development in the Global South, most all rich governments are pre-occupied with their own, if mature, economic development issues as the survival of the ‘market', the standard of living and the lifestyles of their citizens are at stake. This has not been the case since the great depression of the 1930s, the recovery from which markedly changed the terrain and contours of the global political economy on all levels.

Both developed and developing countries must also be concerned about taking climate protection measures such as transforming their economies to low carbon trajectories. This implies significant costs at all levels of the economies. Both the financial and climate crisis therefore presents budgetary challenges for poor and middle income developing countries to adapt and mitigate climate change.

There are both challenges and opportunities to this new and emerging reality. Challenges exist in the likelihood of declining resources and inattention to the critical issues of poverty, gender inequality and human development. Opportunities, with regard to the financial crisis, lie in the fact that the strangle-hold of belief in the primacy and supremacy of ‘the market' has at last, if not been broken, been greatly ruptured. At the optimistic end, we can find great relief in the broad based recognition that the widely acclaimed report of the death of the state was not only premature, but was patently false and tantamount to wishful thinking on the part of ardent free-market promoters. Opportunities with regard to the climate challenge to forcing a more methodological and systematic approach to development in terms of national development and industrial planning are making a comeback in many developing countries. Unfortunately, in many of these countries especially in sub-Saharan Africa and the Caribbean, development planning had been shunted to the back burner as unnecessary and anachronistic. They were instead replaced by poverty reduction strategy papers and medium term frameworks. Hopefully, in the wake of the financial crisis and the proactive attention to building adaptative and mitigative capacity across sectors and industries, there will be more systematic attention to rigorous development planning.

Given that both the financial and climate crises are serious outcomes of market failure, it can only be hoped that in their preoccupation with the urgent needs of their own economic debacle, the rich countries, in the first place, may have greater humility about the limitations of their understanding of their own economic dynamics, the interactions of actions driven by greed and self interest and with the lack of careful and deliberative governmental regulation. This is evident by the high degree of confusion, fumbling and ineffective responses to the ever tightening credit market and the near collapse of the private economy - from the financial sector to the productive sector - in the US. This spread quickly to many countries, as is evidenced by rising, discontent and unrest in Greece, Spain, Denmark, Italy, France, and Germany.

It is indeed an interesting time when the highest of the high priests of economics are perplexed by their own creation, when with regard to economies that they know much less about, they act with the certitude of oracles. Now, hopefully, they will demonstrate more willingness to release the strictures of their hitherto fore fanaticism with market liberalization and budget austerity.

Undeniably, triumphantilist market fundamentalism has destructively characterized the last twenty years of global macro economic policy. Now that bedrock beliefs such as perfect information and self regulating markets have come unglued, it would be sensible that in their pre-occupation with themselves, the rich countries desist from their obsession with micro managing Southern countries' economies, leaving these governments the breathing room and own recognizance to forward their own internally driven development trajectories.

In any case, the issue of where we go from here is an important and relevant question. The first part of this paper flags, for introspection and retrospection, the amalgam of factors, situations, events and circumstances in which we find ourselves - their inter linkages, meaning and implications. The second part focus on the key topic of this intervention which is the question of economic development in the global South: what is it, who is it for and how best to secure it. The third and final section looks at the debates around alternatives. There is a set of accompanying appendices which contains some of the more technical and arcane issues that are flagged within the broader narrative.

Read Mariama William's full paper.