In December 2013, David spoke at a session at the Houses of Parliament for the ‘Emerging Powers, International Development and Foreign Aid: What role for the UK?’ seminar series. This seminar addressed questions such as: what responses are needed in aid, trade, private sector engagement, climate change negotiations and diplomacy? Does the UK need to reframe its aid policies or foster new partnerships or identify policy lessons to transfer from the BRICs?
BWPI colleagues Armando Barrientos, Stephanie Barrientos and Kunal Sen also spoke at the Houses of Parliament event.
Emerging Powers and the Future of International Development: What Role for the UK?
1. Emerging Powers and the Future of
International Development: What Role for
the UK?
David Hulme
Brooks World Poverty Institute
2. The UK and International Development:
Looking Good
• Last 15 years have seen UK play a leading role
• Prominent with MDGs, Monterrey Consensus, Africa
Commission, post-2015 Agenda
• Increasing aid to 0.7% level –against the OECD trend
• Contributes to positive image of the UK: seen as
committed and very competent (DFID)
• Strong supporting institutions – Universities, NGOs,
faith groups and commercial advisory services
3. Official Development Assistance as % of
GNI
(UK 2002-2012)
(Germany 2002-2012)
(Netherlands 2002-2012)
(Japan 2002-2012) (United States 2002-2012)
KEY:
BLUE = DAC Total
RED = Country Total
(France 2002-2012)
4. International Development on the Move
• Significant improvements in economic and human
development indicators since 2000
• Complex patterns but all regions show
improvements – from Afro-pessimism to progress in
Africa (eg child mortality)
• But, global governance of development seen as
‘glass half full’ or ‘weak’ or ‘failing’
– Lack of progress with MDG Goal 8 (global
partnership)
– United Nations Development System and
bilateral aid remain uncoordinated
5. Child Mortality 1990 & 2012
(UNICEF, WHO, WB and UN-DESA, 2013: Levels and
Trends in Child Mortality Report)
6. The Changed Context
• From uni-polar to multi-polar world – ‘post-American
world’; no longer capitalism versus socialism but Anglo-
Saxon model or Chinese model or Brazilian model; rise
of G20
• Climate change steaming ahead 2oC guaranteed
• Population growth and demographic challenges
(ageing, migration, youth)
• Urbanisation and the urbanisation of poverty and
inequality
• Technological change – especially ICTs
• Security threats continue but are changing
7. International Development at Manchester
• UK’s biggest concentration of researchers and postgraduate
students on international development
• International centres of excellence
– Brooks World Poverty Institute
– Institute for Development Policy and Management
– Effective States and Inclusive Development Centre
– IRIBA (Brazil in Africa)
– Capturing the Gains
– Humanitarian and Conflict Response Institute
…and much more
8.
9. Today’s Focus – Emerging Powers
• Research at Manchester makes a number of distinct
contributions – focus on three issues today
1. BRICs beyond China – especially Brazil and
India’s influences
2. Beyond the BRICs – emergence of new middle
and regional powers: South Africa, Turkey,
Indonesia and others
3. Creating analytical frameworks that help
understand the greater choices developing
countries have on polices and models
10. An Analytical Framework for Understanding
these Changes
Ideas
Material
Capabilities Institutions
Robert Cox’s
Framework (2002)
11. Emerging Powers Impacting on Material
Capabilities
• Material Capabilities – technological and organizational
capabilities with productive or destructive potential
– China – manufacturing growth and demand for raw
materials
– India - affordable pharmaceuticals for developing
countries; software and ICTs
– Brazil – high productivity tropical agriculture;
aeronautics
– South Africa – agriculture; raw materials and
minerals; commercial conservation and hunting
– And others…
12. Emerging Powers Impacting on Ideas
Ideas – the concepts and narratives that explain what is
happening/should happen. These shape norms and
values. Often they are several and opposed.
– Turkish model of growth, democracy and moderate
Islam
– Brazil: national development banks for
infrastructural development; social protection and
conditional cash transfers
– India: rights-based approaches to development;
democracy with capitalism
– China: centralized authority is best for growth and
poverty reduction
– And others…
13. Emerging Powers Impacting on Institutions
– Institutions - amalgams of material resources and ideas usually
based on the power relations of their time of origin. They
commonly take an organizational form.
– China renegotiating capital contributions to World Bank and IMF
– South Africa means BRICS Bank will be small – less of a
challenge to World Bank and regional banks
– Brazil has put sustainable development goals on par with post-
MDGs at the UN
– South African retail models spreading across Africa
– India – notable for its failure to take a lead to initiate change in
international organizations
– OECD - Spanish as the emerging de facto second language
(Spain, Mexico and Chile)
14. Three Major Examples
• Today we focus on three examples of the impact of
emerging powers that are not given sufficient attention in
the UK
• The rise of India and the reshaping of international
development
(Kunal Sen)
• Is there a Brazilian model of development?
(Armando Barrientos)
• South Africa: Emerging Power or African Power?
(Stephanie Barrientos)
15. The Rise of India and the Re-shaping of
International Development
Kunal Sen
Institute of Development Policy and Management
(IDPM)
Brooks World Poverty Institute
16. India’s Rise
• The emergence of India
along with China as major
forces in the global economy
has been one of the most
significant economic
developments in the past
quarter century.
• Rapid convergence to living
standards of advanced
market economies, halving of
the GDP per capita gap in
1990-2009.
17. Living Standards (Per Capita Income)
0
100
200
300
400
500
600
GDP per capita in
PPP (1990=100)
Brazil
China
India
Indonesia
South Africa
Turkey
18. Changes in Poverty and Inequality, early
1990s to mid/late 2000s
-50 -40 -30 -20 -10 0 10 20
Brazil
China
India
Indonesia
South Africa
Turkey
Percentage Point Change
Poverty ($1.25 a day)
Inequality (Gini)
19. A Different Growth Model in Asia
• All successful Asian countries moved from the import
substituting phase of economic development to an
export-oriented development strategy, with a strong
growth in the labour intensive segment of the
manufacturing sector.
• Surplus labour pulled in massive amounts from less
productive agriculture to the more productive
manufacturing sector.
• This did not happen in India.
• Economic growth was mostly due to a export-oriented
services sector (information technology), not due to
manufacturing.
• Very little shift of labour out of agriculture, and lack of
labour-intensive growth.
20. Material Capabilities
• Private sector led development model.
• Generic drug exporter to the world, increasing in
importance as patents for many best-selling medicines
come to an end.
• Outward oriented entrepreneurs (e.g. large business
groups such as Tata, Essar, and Reliance), not exporting
goods as much, but business models, technology,
management.
• And a ‘Look East’ policy of greater integration with East
and SE Asia that is slowly taking shape, that has the
potential to take South Asia closer to the growth poles of
East Asia.
21. Ideas
• Democracy and Capitalism intertwined.
• A ‘liberal’ counterweight to an authoritarian China?
• A ‘laboratory’ for a rights based approach to
development: understanding the potential and the
limitations.
22. Institutions
• A gradual shift towards more impersonal ‘rule of law’
institutions that check discretionary use of power (e.g.
anti-corruption agencies, the Supreme Court).
• Greater accountability of the state and the private sector,
with a vigorous free press and an active civil society.
• Market institutions now firmly embedded, with economic
dynamism that bridges the large-small divide.
23. India in Africa
• Increasing presence in Africa, through telecoms,
services, horticulture, …
• “The commerce between India and Africa will be of ideas
and services, not of manufactured goods against raw
materials after the fashion of Western exploiters.” (M.K.
Gandhi).
• A different terms of engagement in Africa? Or more of
the same?
• A more feasible model of economic growth for Africa
than the classic East Asian developmental state?
24. India’s Role in the Re-shaping of
International Development
• No clear strategic focus on foreign policy.
• Ideas vs Incentives: neither one nor the other,
somewhere in the ‘fuzzy middle’.
• An international leadership role that it does not want to
assume.
• A rising India would need to take on responsibilities
commensurate with its power.
25. Implications for UK Development Policy
• A greater presence/influence in Asia through a stronger
partnership with India.
• Beyond aid: closer trade links with the EU, e.g. moving
on the stalled EU-India Free Trade Agreement
negotiations.
• Movement of people and ideas: not closing down the
borders to either.
26. Is there a Brazilian ‘Model’ of
Development?
Armando Barrientos
Brooks World Poverty Institute
International Research Initiative on Brazil and Africa (IRIBA)
a.barrientos@manchester.ac.uk
27. Brazil’s emergence as a superpower
6th largest economy, leading role in the G20
Brazil growing engagement in South-South trade and technical assistance
Marked improvement in economic and social indicators
Economic growth, although not at China’s levels
Public finances: stable macroeconomic policies and high tax/GDP ratio
Poverty: large reductions in poverty
Inequality: significant reduction in income inequality
…is there a ‘new development model’ in Brazil?
Opinion is divided on several issues
When? Is there a break point?
What, if any, are the main components of this ‘model’?
How are Brazil’s achievements to be sustained?
28. Brazil’s growth performance improved in the 2000s
-3
-2
-1
0
1
2
3
4
5
6
7
8
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Brazil - GDP (% growth p.a) 3-year average
GDP (% growth p.a)
IPEA Data
29. But, what is impressive is the quality of growth:
Inclusive, pro-poor growth
Cumulativegrowthinincomeper-capita(%)
Growth incidence curves for Brazil, 2003–2011
60
50
49.00
40
30
19.66
20
10 9.98
0
5 8 11 14 17 20 23 26 29 32 35 38 41 44 47 50 53 56 59 62 65 68 71 74 77 80 83 86 89 92 95
Growth incidence curve. Growth rate in mean.Data Source Bianchi et al
30. Improvement in public finances
29.61
26.96
26.49
27.03
27.72
28.79
30.29
31.00
32.30
31.68
32.28
33.54 33.52
34.22 34.30
33.8234.07
24.08
21.66
20.96
21.63
22.24
23.58
24.80
25.54
26.51
25.89 26.25
27.21 27.11
27.66 27.67
26.8427.04
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Brazil - Improvement in Public Finances 1994-2010
Al Govt. revenues/GDP Tax/GDP ratio
Data Source: Base
CIAT-BID
34. What are the main components of a Brazilian ‘Model’?
Political consensus across parties focused on incremental and inclusive reform
leading to stable macroeconomic and fiscal policy
F. Henrique Cardoso [1994–2002]; Lula [2002-2010] and Roussef [2010-?]
Continuity of state planning capacity and pragmatic interventionism
Market reform in early 1990s privatised State Owned Enterprises
Combination of liberal reform-driven incentives and persistence of state
strategic planning and investment (e.g. National Development Bank
BNDES)
Comparatively successful leveraging of inward FDI to realise improvements
in competitiveness
Investment in social policy – Education, health but primarily poverty reduction
Favourable external conditions, especially rising commodity
35. How are Brazil’s achievements to be sustained?
45.8
12.7
6.2
54.2
87.3
93.8
0
10
20
30
40
50
60
70
80
90
100
Brazil 2007 World 2005 OECD 2005
Domestic Energy Supply - Renewable vs non-renewables
Renewables Non-renewables
From Uribaci Sennes an Narciso [2009]
Green energy policy
36. In conclusion
Marked improvement in economic and social indicators in Brazil
Due to a combination of macroeconomic and financial stability; investment in
social policies; and favourable external conditions
If there is a ‘model’, it lies in Brazil’s capacity to respond to globalisation on its
own terms
INTERNATIONAL
RESEARCH INITIATIVE
ON BRAZIL AND AFRICA
37. South Africa: Emerging Power or African
Power?
Stephanie Barrientos
Institute of Development Policy and Management
(IDPM)
Brooks World Poverty Institute
s.barrientos@manchester.ac.uk
38. South Africa Context
• S. Africa emerging middle power
– World GDP: Brazil 3%; India 2.5%; S. Africa 0.5%
• Economic & Social Challenges:
– Strong links to EU (affected by euro crisis)
– Unrest in mining sector (50% exports) – Marikana
– High Inequality and poverty levels
– Unemployment (25%), skills shortages
– Addressing legacy of apartheid
• ZA largest African economy (30% Africa GDP)
39. Africa: ‘The New Growth Frontier’
• Rates of GDP Growth 5% Sub-Saharan Africa (WB 2012)
• Nigeria - 6.6%
• Kenya - 4.6%
• South Africa – 2.5%
• Consumer growth within Africa (Accenture 2012)
– Consumer growth SSA 4% p.a. 2000-2012
– 9 countries key to est. $1 trillion consumer spending 2020
Country 2010 Spend 2020 Est. Spend
Nigeria $ 115 bn $167 bn
Kenya $ 23 bn $ 37 bn
South Africa $ 215 bn $ 315 bn
40. Shifting Markets
South Africa Fresh Fruit - Export Destination (% export value)
Region 2001 2011
Africa 4.7 7.3
Asia& Middle East 19.9 31.0
EU 27 (ex UK) 47.7 35.8
UK 22.1 15.9
Source: ITC trade database 2012
43. Climbing Value Chain Ladder
Product:
Domestic
Supermarkt
Standards
Product &
Process:
Regional
Supermarket
Standards
Product,
Process,
Environ &
Social: Global
Supermarket
Standards
44. Implications for UK Retailers &
Development Policy
• UK Retail
– "Africa is really important to Sainsbury's and our customers …
because we source a wide variety of products from this vast
continent. Judith Batchelar, Director, Sainsbury's Brand.“
• Aid for Trade (WTO, EU and UK)
– At the border, behind the border…. Beyond the border (value
chain)
– Donors – e.g. DFID Trade and Global Value Chain Initiative
• Building & Supporting African Alliances
– Regional/trade organisations
– Governments
– Private Sector
– Civil Society
45. Implications for UK Policies
• Points to significance of BRICs beyond China. Opportunities to
partner Brazil or India?
• Points to significance of emerging middle powers for
international development – South Africa, Turkey, Indonesia,
others?
• Recognising that Turkey is more than an EU membership issue
– major implications for international development. In isolation or
in partnership with UK?
• Policy focus needed on ideas and institutional influences as
much as financial and resource flows