As we approach the Millennium Development Goals (MDGs) deadline, there is a growing interest and debate on what might replace them. Specific proposals for new goals, targets and indicators have already emerged – including on income poverty, employment, education, health, environment and governance.
However, there has been far less attention on the key policy reforms that would be needed to fulfil those ambitions. This paper contributes to the post-2015 debate by presenting some arguments and proposals that could motivate the construction of an effective and progressive ‘global partnership for development’.
While economic and social progress ultimately depends on the implementation of appropriate domestic policies, the international environment can play a critical role in facilitating national development efforts. Therefore, this paper focuses on global economic policies – akin to MDG 8 – that have the potential to stimulate inclusive growth in developing countries.
Macroeconomic policy coordination, especially among large country-blocs, is vital to rebalance the world economy and address systemic crises – of finance, food and fuel. This is also crucial for poor developing countries, since they are particularly vulnerable to changes in the global economic context – e.g., global demand and international prices. A stable and vigorous world economy will greatly support national development efforts to create productive employment, promote structural transformation and sustainably increase living standards. This is likely to require the adoption of synchronised countercyclical fiscal and monetary policies, a new global reserve system, exchange rate coordination, and therefore improved institutional arrangements for coordinating global economic policy.
Moreover, a stronger focus should be placed on removing barriers to inclusive growth and structural transformation in developing countries. This could be achieved through development-minded reforms of the global trading and financial systems. In this regard, policy reforms should recognise the central role that productive employment plays in sustainably lifting people out of poverty and tackling deep-rooted inequities. We draw attention to finance-related policy measures to promote greater financial stability, increase the availability of development finance, and strengthen the impact of foreign investment on host countries. These include an international liquidity buffer, measures to tackle illicit capital flows, exploring alternative sources of development finance (e.g., global taxes and SDRs), and strengthening investment standards.
In terms of international trade, we argue that tariff and non-tariff barriers may constrain the ability of poor developing countries to build productive capacities and further integrate in the world trading system. We then call for measures to simplify rules of origin and technical standards, mitigate the impact of commodity shocks and enhance food security, reform intellectual property rights, and scale up aid-for-trade.
Download the paper: ‘Recasting MDG 8: global policies for inclusive growth’