Comune > Olimpiadi 2006 > Meeting Peace > Young Words > Initiative
Development and the struggle against poverty: macroecnomic policy, foreign direct investment and the interventions of large international institutions (UN, IMF, WB, WTO) vs bottom-up planning, micro-credit schemes and local initiatives.
At the end of the Second World War, “rich” countries recognized the need to assume responsibility for the underdeveloped condition of so-called “third world countries”. For over 40 years the predominant development model was based on socio-economic interventions originating from highly centralized institutions (the World Bank and IMF, for example) capable of attracting foreign investment for the exploitation of the natural resources of recipient countries.
The institutions determined the realization of large infrastructure projects and distributed incentives intended to accelerate the process of capital accumulation, creating a virtuous cycle which was supposed to allow poor countries to reach adequate levels of development. This was referred to as the “theory of induced development.”
The critique of the “top-down” model took shape early on, holding that far from creating virtuous and autonomous cycles, this model increased the dependence of the recipient countries on the industrialized ones, and even more so on multi-national corporations. Poor countries saw their natural resources being extracted and acquired at ever lower prices, while local industry failed to grow and foreign goods supplanted local ones. As a result, the gap between North and South continued to widen.
To the critics, the “Washington consensus” responded with other
data such as the general growth of GDP in these countries and some particularly
successful cases such as that of Korea.
Over roughly the last 15 years, however, we have seen the experimentation
of an alternative path to development that requires minimal involvement
of a distant centralized authority. The model engages the cooperation of
local and non-local actors (NGO’s) that limit their actions to a homogenous
territory and to sustainable and inclusive projects.
Today, the two models coexist side by side. Top-down development projects generally result in large infrastructure projects (dams, energy plants, pipelines, etc.) whose efficiency in eliminating poverty is questioned by many, and whose social and environmental costs are widely denounced. Other initiatives manifest themselves as “structural adjustment” of the local economy, imposed on recipient states by international institutions such as the World Bank and the International Monetary Fund as necessary conditions to obtain funding.
Bottom-up interventions, on the other hand, are critiqued by those who hold them to be too limited in scale to effectively resolve the severe problems they purport to address.
What are the causes of poverty and wealth accumulation, that is, of the
enormous gap between the global north and south? Who’s responsible
and who is to blame?
What is meant by the term “development”: increase in wealth
(GDP growth) or increase in quality of life? Is it a purely western concept
or is it possible to conceive a new definition that reflects the convergence
of values belonging to diverse cultures?
Whose development and for whom? How can we guarantee that the wealth produced
by any development initiative benefits the populations of developing countries?
Is it possible to maintain western life-styles and at the same time eliminate
poverty?
How can we explain the clear failure of development policy to this day?
Are there “genetic deficiencies” in developing countries that
prevent advanced development (cultural resources, debt)?
What policies today may eliminate poverty and guarantee everyone a dignified
quality of life: private partnerships (privatization, commerce, foreign
direct investment) or public partnerships (protectionism, internal demand,
and development of local resources)?
Is it necessary to focus on North/South development or should we facilitate
the interchange between developing countries (South/South development)?
What are the roles and which are the strengths of the various players: large
international organizations, NGO’s, government, local populations,
corporations?
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