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Development and Poverty – In Search of a New Paradigm

Logo_Brasile_2011_rid2Panel 2 "Development and Poverty", May 27, 2011. We report the entire presentation by Dr.Lorna Gold, Trocaire, Ireland

Development and Poverty – In Search of a New Paradigm

By Lorna Gold, Trócaire, Ireland

110527_Ginetta_Lorna01_ridRecently, I was at a conference in Dublin on the impact of climate change. A woman from some islands in the South Pacific gave a powerful account of how climate change is affecting their community. Already, one of the main islands has been split in two by rising sea levels and the communities have been forced to move to another bigger island to avoid the sea. Nobody wants to move – and no-one can understand what is happening to their islands, which it is estimated will no longer exist within a decade.

 

This example really brought home to me the global crisis we are facing in terms of development and poverty. It is a crisis which could be defined as one of ‘environmental sustainability’ – but ultimately, it is a human crisis: one which has many facets, but which is very quickly forcing us to radically rethink the concepts which underpin our understanding of poverty, development and economics. It is a crisis which means that unless there is a radical shift in thinking and policy direction, far from meeting the Millennium Development Goals by 2015, the next decade could see profound reversals in terms of the gains in human development.

 

Global Trends

In a recent piece of ‘horizon scanning’ research carried out by Trócaire, we asked 100 leading experts from around the world what they regarded as the biggest challenges in terms of addressing development and poverty and what needs to be done to address those challenges.

1.    Climate Change

According to the research we did, climate change can no longer be considered a development issue, but the Key Context that will shape development. Those living in poverty are disproportionately affected by climate change and least able to adapt to it. Countries trying to cope with a high level of poverty often have a lower level of adaptive capacity due to lack of infrastructure services and weak governance. By 2020, between 75 and 250 million people in Africa are projected to be exposed to increased water stress, and in some countries yields from rain-fed agriculture could be reduced by up to 50%.  There will be more humanitarian crises, linked to increased migrations, instability and conflict. A key issue will be reaching a global agreement on adaptation and mitigation, including finance mechanisms.

2.    Shifting Geopolitics

The second trend shaping global poverty and development is the shifting global balance of power. The G8 has replaced the G20 as the de facto forum for global economic governance. We may be entering into either a ‘multilateral’ or ‘G2’ world where the US and China are essential for all global agreements. Currently, the BRICs combined GDP equals 15 per cent of world output, and their central banks are sitting on 40 per cent of the world’s hard currency reserves.  Growth projections for the BRICs indicate they will collectively match the original G-7’s share of global GDP by 2040-2050. The research highlights that the growing power of the BRICs may force a change in the model of development, but not necessarily one which would lead to a more sustainable future. The emerging countries are seen to push a ‘no-nonsense’ model of development, where you build the hardware first, and deal with the social dimensions later.

3.    Shifting demographics

The third trend highlighted in the research is the dramatic shifts taking place in global population. Population growth, migration and urbanisation are all set to become increasingly more significant. In sub-Saharan Africa, population is projected to double by 2050, Global population is projected to increase by roughly a third by 2050, to 9.2 billion and, significantly, this growth will not be uniform across regions. It is projected that largely stable, aging populations in the North will contrast with continued growth in the global South: of the projected 2.3 billion increase in population between now and 2050, 2.25 billion will be accounted for in countries now part of the Global South. In 2008, for the first time more than half the world’s population lived in urban areas and by 2050 it is likely that 70% of the world’s population will live in urban areas. Migration has been linked with benefits such as increased remittances, however it is also linked to so-called ‘brain drain.’

4.    Pressure on natural resources

Another critical trend connected to the above is the additional pressure on water, food, air and energy in the next ten years. The presence of natural resources in countries with weak governance structures will continue to exacerbate the likelihood of conflict. This problem is being exacerbated by new industries such as bio-fuels which are growing to address the environmental crisis. Pressure will increase on natural resources, which will lead to access and control of these resources becoming central to geopolitics. African countries will be disproportionately affected. The next ten years will see a significant increase in land grabs. The demand for land has been growing, particularly since the 2008 food crisis. Land grabs are predicted to become much more common, as will the practice of industrialised countries increasingly renting large tracts of land from developing countries. There are many ethical issues linked to this which will become increasingly problematic.

5.    Growing inequality

Finally, the persistence of global, regional and national inequality will be a major issue in the coming decade. Greater focus is being placed on inequality within countries. It can take 3 x the amount of economic growth to reduce poverty in countries with high levels of inequality than in countries with low levels of inequality. The relationship between economic growth and inequality, however, is highly complex. Many countries that are now Middle Income Countries have less access to development funding, but still host large numbers of people living in poverty.

Global inequality may need to focus more on the overconsumption of the north than the poverty of the south. Better economic governance at a global level, particularly in the area of trade, will be essential if underlying global inequalities are to be addressed. The trading system needs reform but since the stalling of the Doha round no progress has been made. The problems associated with inequality will increase, particularly in middle income countries. As highly unequal countries become ‘middle income,’ their aid will reduce and development agencies will increasingly be faced with a dilemma: what should their relationship with these countries be?

Inadequate Response

What emerges from this research, is the strong sense that all of the trends are deeply inter-connected and mutually re-enforcing. They point to serious deficiencies in the underlying conceptual and practical models of development which are being applied globally. Whilst poverty may be tackled at a local level, without changes to the overarching model of globalisation, and the assumptions underpinning it, these efforts, no matter how inspiring, are under serious threat. It is a serious possibility that not only will the Millennium Development Goal not be met in 2015, but by 2020, as a result of the interlocking trends, they could be in reverse.

The research points to the prospect of serious divisions in terms of the global direction in the coming decade. The rise of middle income countries and new powers is accelerating the sense of a divide in global politics. Within some countries there is a growing movement towards greater social and environmental sustainability – and a sense that this is critical to the future. In other countries, there is a sense that embracing such goals is secondary to the primary objectives of consumer driven economic growth.

There are no easy solutions to the global problems outlined above and to fall into a kind of over simplistic ‘anti-development’ approach. One of the big challenges in addressing this is how to distinguish between the negative impacts of consumerist based economies, whilst appreciating the indisputable positive impacts which such development can bring. For example, within the most developed countries, technological advance has brought clear benefits in terms of basic human needs: access to medical advances, adequate housing, better nutrition. This is clearly evident in the Human Development Index for those countries. Whilst recognising the negative environmental and social consequences of affluence, it is important not to romanticise the economic and political failure which forces nearly two billion people to live in extreme poverty.

In search of a new paradigm

There is a growing recognition in some quarters that new concepts are essential if there is to be a shift towards a more socially equitable and environmentally sustainable future. The fact that over 1000 economists recently signed on to a petition towards the G20 calling for the institution of a Tobin Tax is one sign that things may be shifting. Other important concepts are now emerging which would offer some way forward in finding a new paradigm. These include ideas such as global public goods, steady state economics and the economics of enough.

So how does the EOC help us to find solutions to these interconnected problems? In order to answer this we need to step away from traditional economics and open our minds to a whole new vocabulary. It is a vocabulary which could seem strange – but it was the great scientist Albert Einstein who said that in order to solve any of the big problems of the world we need to move to a higher level of reasoning.
I would like to reflect briefly on three words which for me capture the essence of the EOC in these first 20 years and can provide a light for this difficult moment of globalisation. These words are faith, hope, and love.

How does faith relate to the EOC? Over the past 20 years we have reflected long and hard about the relationship between the EOC and its ‘faith roots’. At some points we have diverted towards trying to explain the EOC in layman’s terms. It has proved very hard to do! This is because at the most fundamental level, what the EOC offers is not really a vision of the economy or globalisation – but a new vision of the human person in their multi-dimensional reality, including economic relationships. It is no surprise that the first book on the EOC back in the mid-1990s was called ‘towards a multi-dimensional economics’. It is this Trinitarian vision of the human person, shaped by a profound faith in the Gospel, which gives the EOC its distinctive character. It is the DNA of the project. As the project has matured, this faith dimension has come more to the fore. It provides the solid foundation which many other policy prescriptions lack.

Importantly in today’s world, however, faith and the EOC does not represent something fundamentalist or exclusionary. Being true to the faith underpinnings of the EOC is the springboard for a profound dialogue based on a quest for shared values. It is the springboard which enables those in the frontline to build bridges with others of good will, whilst treasuring what is specific to the project. This faith dimension is deeply significant in today’s globalised world, fragmented by religious division.

The second aspect I would like to mention is hope. The existence and resilience of the EOC gives us hope that another way is possible. One of the common reactions to the challenges I outlined is a sense of deep despair and as a result, a tendency to fall back on ‘business as usual’. The EOC, as a communal experience provides us with an example of hope. It is a hope which is deep rooted – and gives the power to overcome many obstacles. It is a hope which is not dependent on whether individual business ventures succeed or fail. It comes from being part of a bigger project. This deep rooted hope finds expression in the myriad experiences of all those engaged in the EOC in their daily lives: whether it is in the transformation of the lives of those living in poverty through receiving help from the profits or in the reaction of clients to a new line of products. This enables them to overcome great difficulties.

The EOC, moreover, is a profoundly 21st century idea. I would argue that it is only coming of age now. It is said that this is the era of people power as opposed to organisations. It is not an organisation as such – it is a networked community of people who together build and share meaning. We should not underestimate the transformative power of hope. It is only hope that can begin to build the political will to make the major policy changes necessary to halt the unsustainable economic patterns.

And so to the final word: love. Since the outset the EOC has also been described as the ‘economy of love’. It is a word which has sat uncomfortably with the terminology of economics, but is one which is really at the very heart of the project and without it the project would make no sense. Without love, the EOC would never have come into existence in the first place! So how does love offer an answer to the major problems I outlined above? Over the past 20 years, the EOC has shown that being an economy of love brings about an explosion of new ways of thinking and behaving in the economic sphere. This has opened up the space for concepts which have been long since forgotten in the world of economics (or better, they were always there but never put in relief). Concepts such as happiness, gratuity, solidarity and sharing are really at the heart of a new way of being which enriches economics and has the power to also transform the policies governing the economy.

In particular, the practice of sharing (which we know as communion at its most profound level) has the capacity to radically transform the economy. Our entire economic system is based around the idea of individual private property and scarcity of finite resources. The fact that something is defined as mine excludes you. But we know from the experience of the EOC – rooted in living communities – that the ‘finite’ nature of resources is often something that exists in our heads. Chiara Lubich once said: “why can’t yours and mine become ours?” This very simple thought which is lived out every day in the EOC has the power to release millions from poverty. Once you begin to think of resources as something which can be shared freely, ‘held in common’, they tend to multiply. Not only, but the power of sharing has the potential to also overcome many environmental problems where it is connected to the fundamental assumption of increasing private consumption.

Conclusion

In this intervention tried to give an overview of the problems currently associated with globalisation. Overall, the picture painted by the research is quite negative. It seems in many ways that despite the advances, the current crisis is an intensification of the issues highlighted in the Commission for Sustainable Development, and at the Earth Summit in Rio in 1992.

In the face of this crisis, the EOC can give us great hope for the future. Over the past 20 years the foundations of the project have matured and now we can see with clarity that other economic models will pass. Like the fall of the Berlin Wall in 1989, the current crisis will give way to other paradigms and as St.Paul says: “Only these three things will remain: faith, hope and love. And the greatest of these is love.”

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