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What Is Development?

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  • 1. What is development?
    Anthony Scaletta November 3, 2009
  • 2. Development theory and practice timeline
    Post WWII- The Beginning of the Development Era
    WWII aftermath created a level of global consciousness that had not previously existed
    Formation of UN: An IGO created to promote peace & facilitate global stability
    Universal Deceleration of Human Rights (UNDHR) December 1948
    Recognizes the “inherent dignity and equal and inalienable rights of all members of the human family” and doing so forms the foundation of freedom, justice, and peace in the world
    Declaring “Human Rights” laid the groundwork for the idea that development should promote the rights of the individual
    Modernization Theory (1950s-1960s)
    Suggested that LDC’s needed to modernize as much as possible and become more similar to MDCs
    Focused on economic output as primary indicator of development
    “Experts” telling LDCs what to do: Led to proliferation of monocrop specialization
    Cold War- Bipolarization of world impeded development practice
    2
  • 3. Development theory and practice timeline
    Dependency Theory (1970s- South America)
    Critique of Modernization Theory – Belief that it created uneven economic growth
    Suggests Disassociation from global market: To break the cycle of exporting raw goods and importing finished goods
    Largely unsuccessful
    Basic Needs Theory (1970s)
    Response to Dependency Theory
    1st time to look at indicators other than economic growth
    Promoted development of the poor by addressing “Basic Needs” such as hunger and literacy
    3
  • 4. Development theory and practice timeline
    Neo-Liberalism /Washington Consensus (1980s)
    Viewed US & UK models of capitalism & democracy as best to follow
    Promoted Individual Freedoms by calling for less government in an attempt to increase the market through a global push for more free trade
    Obstacle: Lack of universal business practices
    Outcome: Massive Explosion of NGOs
    Today: 1000s founded every month
    Stepping in and providing rights that have traditionally been guaranteed by the state
    (e.g.) Access to Water or Health Care
    Wiggle Room
    Popular: Seen as a solution, but it is very difficult to measure NGO’s effectiveness compared to that of Gov’t interactions
    UN’s Human Development Index (HDI) (1990s)
    No single measure of development
    Uses Life Expectancy, Literacy, Per Capita Income, & Infant Mortality Rate to better understand global development
    Still used today
    4
  • 5. Development theory and practice timeline
    Development as Freedom (1990s)
    Economist Amartya Sen suggests that we take a more holistic view of development
    People & Communities have options: They should be able to access these options in the context of a world that is sensitive to cultural differences
    Post-Modernism (1990s)
    Skeptical PM: There are no universal truths. All truths are culturally and temporally bound- No universal development Model
    Affirmative PM: Some universal truths but most are specific and change over time
    * Shift from State-Focused Development Individual-Focused Development
    5
  • 6. Development theory and practice timeline
    Contemporary Development Theory
    Development as Human Rights
    Philosophy that each person must hold their individual human rights in order for development to occur
    Human Security
    An emerging paradigm for understanding global vulnerabilities in relation to security
    A local to regional to global approach looking at human security as key to stability
    7 Levels of Security: Economic, Food, Heath, Environmental, Personal, Community, & Political
    Former UN Secretary General Kofi Annan: “There will be no development without security, and no security without development.”
    * People -Centered Approach
    • From State-Focused Development to Individual-Focused Development
    Development is the process of ensuring that each individual has full access to their human rights
    Sustainability is Key!
    6
  • 7. Jeffrey Sachs
    Harvard Trained Economist
    Director of The Earth Institute @ Columbia University
    The End of Poverty
    Blueprint for ending all extreme poverty by 2015
    Top-Down Approach: Key to ending poverty is the use of foreign aid from the world’s affluent countries
    “Big Five” Development Interventions
    Agricultural Inputs, Investments in Basic Health Care, Investments in Education, Investments in Infrastructure, & Access to Safe Drinking Water and Sanitation
    “Clinical Economics” – newly proposed method for development economics
    It is akin to clinical medicine = Good economic practices must be rooted in a sound, clinical medicine-style approach
    Use of “differential diagnosis” to determine “treatment regimen”
    Use of a Seven-Part Check list
    Key assessment: Physical Geography as a Handicap
    Sub-Saharan Africa: Physical ecology creates a prime environment for disease and drought
    Geographic Isolation: Lack of infrastructure (Africa has 15 landlocked countries )
    Forms basis for the Millennium Development Goals (MDGs)
    7
  • 8. The UN’s Millennium Development Goals (MDGs)
    189 world leaders signed the Millennium Declaration @ 2000 UN Millennium Summit
    Intention: “Free our fellow men, women and children from the abject and dehumanizing conditions of extreme poverty.”
    Global compact by all the world’s countries and all the world’s leading development institutions to meet the needs of the world’s poor
    Poorer countries pledged to improve policies and governance and increase accountability to their own citizens
    Wealthy countries pledged to provide the resources
    Time-bound Goals are Rigorously monitored through use of MDG National Reports
    Showcase national progress on each of the MDGs
    Over 140 Countries
    Source: http://mbaswithoutborders.org/files/2008/09/mdg_goals.gif
  • 9. William Easterly
    Professor of Economics at New York University
    The Ideology of Development & The Poor Man’s Burden
    Critical of State-led development and Foreign Aid
    Grassroots Approach – Individualism & Decentralized Markets
    Developmentalism: Development as an Ideology is Dangerous!
    Problematic- Suggests there is only one correct answer, a general theory that can be applied universally
    “One Correct Answer” = Free markets = IMF & World Bank telling countries what to do
    International Aid Bureaucracy: The “Self-appointed Priesthood of Development”
    IMF and World Bank’s SAPs of the 1980s (e.g.) These laid the groundwork for Evo Morales to come into power in Bolivia
    This thinking favors collective goals over the aspirations of individuals
    (e.g.) Millennium Development Goals
    Opposite of ideology = Freedom = Let people be free to find their own solutions
    The ability of societies to be unchained from foreign control
    The only “answer” to poverty reduction is freedom from being told the answer
    Let the individual learn from their mistakes : “History proves just how much good can come from individuals who both bear the costs and reap the benefits of their own choices when they are free to make them.”
    Americans in 1776 had the same income level as the average African today,
    The US wasn’t being “structurally adjusted and meddled with while it was developing
    Individualism & decentralized markets produced the Automobile
    9
  • 10. William Easterly
    The “4 Unfortunate Lasting Consequences” of Early Development Practice
    Belief that granting extensive powers to the state is the surest path to progress
    Loss of faith in spontaneous bottom-up economic development preferring instead development “consciously achieved through state planning”
    The propagation of an economic philosophy that stresses the volume of investment over the efficiency of using those resources
    A widespread skepticism about using international trade as an engine of growth
    The 4 Ways to Avoid the Top-Down Way of Approaching Economic Development
    Avoid the trap of protectionism
    Keep the market open by keeping the state-led financial regulations to a minimum
    Slash away at the enormous red tape that is left over from previous harebrained attempts at state direction of the economy
    Don’t look to economists to create “development strategies,” and don’t back up such experts with external coercion like IMF and World Bank conditions on loans.
    History proves that imposing a rigid statist development ideology on the world’s poor has failed miserably
    The Easterly Solution: Pragmatic use of time-tested economic ideas by individuals, firms, governments, and societies as they find their own success
    “Revolution from Below”
    (e.g.) Chung Ju-yung : The son of North Korean peasant farmers that built the Hyundai car company from the ground up
    Easterly: “It is the ‘Chungs’ of the world that will end poverty.”
    10
  • 11. Personal Experiences w/ Development in East Africa
    11
    Family Alliance for Development and Cooperation (FADECO)
    • Joseph Sekiku, Founder & Director
    Ashoka Fellows in Africa Award: “Driver of social change”
    • Grassroots Sustainable Development: Small projects w/ Big Impacts
    • 12. Working to alleviate poverty and improve standards of living in the Karagwe District for all people
    Radio FADECO
    Main Objective: Support the implementation of the national poverty eradication strategies
    DEVELOPMENT MOUTH PIECE
    To be used by the development community in Karagwe to effect sustainable rural socio-economic development
    Access to information is one of the limiting factors in implementing development programs
    Reaches 4 Million People
    The Eden Centre for Appropriate Technologies
    • Focus Areas: Agricultural Extension & Participatory Technology Development with rural farmers
    • 13. Promotes renewable energy technologies
    Solar Fruit Drying
    Wind & Solar
    • Objective: Develop, demonstrate and transfer new appropriate technologies and
    skills in rural Tanzania
    • Practical Education
    • 14. Empowerment through Information & Education
    "Give a Man a Fish, Feed Him For a Day. Teach a Man to Fish, Feed Him For a Lifetime.” (Lao Tzu)
  • 15. Personal Experiences w/ Development in East Africa
    WOMEN EMANCIPATION AND DEVELOPMENT AGENCY (WOMEDA)
    Human Rights and Sustainable Development based Grassroots NGO working toward establishing Equality in the Region
    Promotes the status of marginalized groups by creating & strengthening Equal Opportunities for Women, Men, & Children
    Provider of:
    Socioeconomic and Legal Counseling to Women
    Community Education
    Child Protection
    Bedding, School Supplies & Uniforms
    20 Miles = The Average Distance Walked to Obtain Services
    Rain Water Harvesting Systems Project
    Identify families affected by HIV/AIDS to lessen burden
    Goal: Extending Lives through ensuring availability of one of mankind’s most basic resources, Water
    Sustainable Solution
    Empowerment
    Lack of Capital = Poverty Trap
    12
  • 16. Microfinance: A piece of the puzzle
    Definition: Supply of small loans, small savings, and other basic financial services to the poor
    Addresses a Market Failure: Formal financial institutions were designed to help those who already have financial assets
    Does Not require definitive assets or collateral that the bank can seize
    Gives Credit to those who otherwise couldn’t get it
    Community-Based: Terms of payback are negotiated by the community members
    Money is distributed by Savings and Credit Cooperatives or Money Sharing Groups: Owned and Operated by the community members/villagers
    Group Lending: Held accountable by neighbors
    "Peer pressure" from other members of the group helps to ensure that the loan is repaid
    Currently Very Popular: Seen as a panacea in for development woes
    Blend of Sachs and Easterly
    Criticisms
    Created a hyper-pluralization of small businesses in communities: How many fruit stands can you have?
    Some Microlending Organizations don’t require a business plan and the money gets misused
    Doesn’t reach the poorest of the poor
    UN Capital Development Fund’s Comprehensive Impact Studies on Microfinance
    Helps very poor households meet basic needs and protect against risks
    Associated with improvements in household economic welfare and enterprise stability and growth
    By supporting women's economic participation, microfinance helps to empower women, thus promoting gender-equity and improving household well-being
    Development Economics Studies have shown: Women are much better spenders and they invest the money in their family and their home
    Women: Typically in charge of the cooperative and distribution of funds
    (e.g.) KADERAS – Governing Board has a minimum requirement that 30% of its members are Female
    13
    "The power of putting capital in the hands of poor people enables them to create their own wealth and invest in their children." - Maria Otero, president of ACCION International
  • 17. Dr. Muhammad Yunus
    Father of Modern Microfinance
    2006 Nobel Peace Prize Winner
    Grameen Bank
    One of the 1st major microcredit institutions
    Founded in 1974 in Bangladesh, while Yunus was studying the lives of poor entrepreneurs during a famine
    He began by loaning to groups of women, and his program soon proved that small loans could not only quickly improve lives but were paid back with interest and on time
    Since 1974
    The Grameen Bank has loaned $5.7 Billion
    $5.1 billion of that has been repaid
    Recovery Rate = ~ 98.9 %
    It has made more than 950,000 loans and has 6.7 million members,
    ~ 96 % are Women
    Norwegian Nobel Committee:
    “Ending poverty in the world cannot be realized by means of microcredit alone. But Muhammad Yunus and Grameen Bank have shown that microcredit must play a major part."
    World Bank
    Estimates: + 7,000 Microfinance Institutions in operation all over the world
    14
  • 18. San Francisco-based, one-of-a-kind microlending organization
    Has developed a global lending platform using the Web to connect individual lenders w/ individual borrowers in developing countries
    Kiva’s Mission
    To connect people through lending for the sake of alleviating poverty
    Providing access to a brand new source of debt capital
    Loans of as little as $25 made by ordinary individuals through its Web site @ kiva.org
    15
    http://www.pbs.org/frontlineworld/stories/uganda601/video_index.html
  • 19. Conclusions
    Defining Development is difficult because it is a complex issue
    Hopefully this presentation has helped to shed some light on the issue
    Development can most accurately be defined as:
    The process of ensuring that each individual has full access to their human rights
    There is no single solution
    Large International Aid Organizations have their limitations: Bureaucracy
    Many NGOs doing good work
    Empowerment and Education are better than handouts
    Grassroots-based initiatives have proven effective
    Sustainability is the key to future development practice
    Essay Questions
    If development is a process of ensuring that each individual has full access to their human rights, how have the various theories, authors, and organizations that we have discussed contributed to or hindered development?
    Discuss microfinance and whether or not it is a solution for sustainable development in developing countries?
    16