New approaches to development In an ideal world, there would be no need for development assistance, as countries move far enough along the development path to sustain their own continuing growth. But for that to happen, developing country governments themselves must be in a position to manage their own road to success. There are four key elements to focus on to deliver better policies for better lives at all levels of society: using innovative and sustainable sources For development to become of growth, mobilising self-sustainable, developing domestic resources, country governments will creating a framework need to tackle many of of good governance, the issues that emerging and being able to measure progress. economies have had to
deal with in recent years, from social inequality to governance
All these elements go hand in hand. Corruption, lack of transparency and poorly functioning tax systems are major barriers to long-term growth in many developing countries. As the events in the Middle East and North Africa region in 2011 showed, it is vitally important for governments to demonstrate high standards in making policies, managing public finances and delivering public services. Taxes are a crucial element in mobilising domestic resources since governments need to raise revenue to ensure sustainable financing for public services and to build infrastructure, such as roads, ports and transport systems. But developing countries often fall short; in subSaharan Africa, for example, tax accounts for just 15% of GDP, compared to 35% in OECD states. People are generally willing to pay taxes if they believe the system is fair and they can see results such as new schools and hospitals. But governments need to create the systems and institutions to assess and collect taxes, ensure they are used effectively, and combat corruption, as Chris Lenon explains. A good governance framework will also help to build trust and attract foreign investment. This is important not just at the level of major infrastructure projects and big business, but also to enable microfinance to flourish. And women need more access to finance, says Cherie Blair. Since much of this depends on direct person-toperson lending to small businesses through a clearing house, generally online, trust in the system is essential for it to work. Jacques Attali argues that there is room for microfinance to play a larger role.
In 2011, the OECD started working on a new strategy for development to help achieve sustainable and inclusive growth for as many countries as possible. But none of this can be achieved by OECD countries alone. One major change in recent years is the increasing role of emerging economies in development—and the lessons that they can share with countries hoping to follow them out of poverty. And the most important element of all is a country’s own development policy.
Food security All of these actors need to work together to have any chance of finding sustainable solutions to major global challenges. Take food security. Food prices are literally a matter of life and death, especially for the poorest of the poor, who already spend up to 90% of their income on food. For them, a small increase in the price of bread or rice means the family goes hungry, as witnessed by the social unrest triggered by high food prices in some areas during the crisis. Food prices have dropped below the 2007 crisis peak but there are still 900 million people without enough to eat, and the problem will not go away any time soon. Global food prices are expected to average 20-30% higher in the next decade than in the past ten years. If supply cannot keep pace, prices will come under pressure again. Recognising the importance of this challenge, the G20, drawing on a report from the OECD and other international organisations, has agreed to a number of measures to improve food security and dampen food price volatility. A key element is the new Agricultural Markets Information Feeding the world’s 9 billion System to collect inhabitants in 2050 will and provide timely, require the doubling of reliable information agricultural production in on four key crops (wheat, maize, rice developing countries and soybeans) and to give an early alert on any problems or price surges. But the real test of such commitments is implementation, argues Jeremy Hobbs. Behind all of this is the need to increase food production. Feeding the world’s 9 billion inhabitants in 2050 will require the doubling of agricultural production in developing countries. This is a tall order, and substantial further investment will be needed to increase productivity to meet the rising demand in future.
Policy coherence A key element for development is a coherent strategy OECD Yearbook 2012 © OECD 2012
2012 OECD Yearbook