Development Policy Review, 2011, 29 (1): 75-90

© The Author 2011. Development Policy Review © 2011 Overseas Development Institute.

Published by Blackwell Publishing, Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA 02148, USA.

The Millennium Development Goals: Key Current Issues and Challenges

Michael Chibba∗ The current global financial and economic crisis has severely impaired social and economic progress throughout the world. Does this mean the end of the Millennium Development Goals (MDGs)? This article addresses this question, considering selected theoretical and strategic issues, including new and incremental approaches, the role of governmental leadership and operational integrity and the underlying question of appropriate development paradigms. It concludes that scaling-up of current MDG efforts is imperative, as is the adoption of new and incremental approaches. Key words: Millennium Development Goals, financial and economic crisis, development paradigms

1 Introduction The millennium development goals (MDGs or the goals) were adopted with enthusiasm in the year 2000 by United Nations members in the hope of tackling some of the core issues of international development, such as poverty and hunger. Today, a decade later, and with about four years left in which to accomplish them, they appear to be in danger of being both dated and operationally unrealistic and unachievable. Does the global financial crisis, which resulted in a global economic crisis – hence I use the term ‘dual crisis’ – mean the end of the MDGs? This article begins by outlining the MDGs and their raison d’être, and highlights both the pre-crisis situation and the implications of the crisis for MDG progress. Next, the question of whether the targets are unrealistic and unachievable is discussed, following which selected theoretical and strategic issues are considered. The subsequent section outlines matters of governmental leadership and operational integrity in the struggle to accomplish the MDGs. The underlying questions of appropriate development paradigms and channels of transmission are then outlined before concluding remarks are made. 2 The MDGs and the dual crisis With 1990 serving as the base year for the measurement of progress, the MDGs are a set of eight global goals to be accomplished by 2015 (Millennium Declaration, 2000;

∗Managing Director and Board Member, International Centre for Development Effectiveness and Poverty Reduction, PO Box 1379, Toronto K, Ontario M4P 3J4, and Head and Chief Economist, Next Paradigm, Canada (mikechibba@yahoo.com).

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Millennium Project, 2006): 1: to reduce extreme poverty and hunger by half; 2: universal primary education (100% coverage by 2015); 3: gender equality in primary and secondary education (in terms of achieving an equal ratio of boys to girls); 4: to reduce child mortality by two-thirds; 5: improvement of maternal health by reducing mortality by two-thirds; 6: to combat HIV/AIDS, TB and malaria; 7: to reduce the proportion of the population without clean water by half; and 8: to develop a global partnership for development.

These goals were designed and adopted as an advocacy tool for economic and social development within what was ostensibly a three-fold context: political (i.e. the United Nations, its members, and the politics of development), economic and operational (i.e. decision-making at the intersection of economics, management and development) and ideological (i.e. the neoliberal and alternative ideologies). Therefore, for planning, programming, implementation and related purposes, the goals are being actively pursued at the national level.

In its September 2008 update on progress on the MDGs, the Global Monitoring Report noted that ‘assessment of the MDGs at midpoint presents a mixed picture of significant progress and formidable challenges’ (World Bank, 2008). For instance, with reference to the first goal’s target of halving absolute poverty, progress is most prominent in Asia and Latin America, while in sub-Saharan Africa only a few countries are on track to accomplish the target. Nonetheless, despite regional and country-level disparities, the target was forecast to be met at the global level by 2015 – an assessment which soon became dated as the dual crisis started to unfold in late 2008. It is now common knowledge that the financial crisis rapidly became a global economic crisis in both nature and scope – for a related discussion, see Chibba (2010a and b) – and hardly any country has been spared its negative impact in terms of, for example, slower economic growth and even ‘negative growth rates’ in several developing countries in 2009, though this has certainly not been uniform across the globe and several nations have weathered the storm extremely well. However, with the exception of large emerging market economies (EMEs) and a few relatively small states (such as Kenya and Uganda), the crisis has resulted in many developing countries experiencing significantly reduced access to finance, decreased foreign direct investment, higher unemployment rates, lower or ‘frozen’ levels of foreign assistance, and reduced levels of remittances from workers overseas. Indeed, the perceived successes, failures, strengths and weaknesses in the pursuit of the MDGs have worsened in many developing countries. According to recent estimates of the growth of the global economy (which had expanded annually by 4-5% during 2005-7), there was a sharp contraction due to the dual crisis, and 2009 is estimated to show a world GDP with ‘negative growth’ of -1% to -2% (The Economist, 2009a, 2010a). The World Bank (2009a) has estimated that ‘the crisis-related growth slowdown in developing countries implies that there are an estimated 55 to 90 million more extremely poor people in 2009 – living on less than $1.25 a day – than expected before the crisis ...’.

The impact of the crisis is also severe with respect to tackling hunger (the other part of Goal 1). Indeed, a number of organisations, such as the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP, 2009), and some observers, including Chibba (2009a), as well as others such as Addison et al. (2010), are referring to food-malnutrition-hunger problems of developing countries as the ‘third

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crisis’. The global economic slowdown is also having a negative impact on all the other MDGs (see, for example, United Nations, 2009a, b; Commission of the European Communities, 2009; IMF, 2009a, b; Sanchez and Vos, 2009; Asian Development Bank, 2010). The current situation thus prompts one to inquire if the crisis means the end of the MDGs, a broad and open-ended question to which I shall now turn.

3 Does the dual crisis mean the end of the MDGs? To address this question, I shall focus on three key issues or challenges. (i) Are the MDG targets unrealistic and unachievable? (ii) What is the significance of selected theoretical and strategic matters? And (iii) with respect to what the developing countries can and/or should do for themselves in the pursuit of the goals, are matters of governmental leadership and operational integrity important factors for success? 3.1 Unrealistic and unachievable MDG targets?

No one should pretend that they care about our nations more than we do; or assume that they know what is good for us better than we do ourselves. They should, in fact, respect us for wanting to decide our own fate … (Senior developing-country official quoted in World Bank, 2009b)

As the dual crisis is expected to last for at least the short-to-medium term, appropriate action needs to be taken by decision-makers, pundits, governments, the United Nations and other international organisations, to address the new challenges that international development faces. On the one hand, much has been, and is being done, especially in terms of economic stimulus packages, and the leading EMEs have increased their assistance to the poorer nations (te Velde et al., 2010). On the other hand, insulating developing countries from regulatory and macroeconomic failures (for example, see Stiglitz’s presentation, summary available at UNU-WIDER, 2009) is lagging. However, what is sorely missing is focused attention to the MDGs. Beyond sustaining the relevance of the goals in terms of their politico-economic constraints, and with due regard to state capacity and capability, the existing MDG targets perhaps need to be both readjusted and realistic, for no arbitrary timetable can adequately address what are de facto some of the most fundamental issues facing international development as embodied therein. In addition, there are several substantive reasons to call for appropriate and focused action on them.

First, the poor and the marginalised people in developing countries have been hit hard by the recent (now almost forgotten) food crisis and the on-going energy and environmental crises, as well as by rising inflation. The dual crisis is the direct result of the pursuit of a neo-liberal ideology and its laissez-faire doctrine that encouraged loose credit, financial wizardry, deregulation and poor corporate governance, and facilitated the creation and expansion of global imbalances. The eventual outcome of this doctrine was market failure. The free-market system relied on, among other things, an ‘invisible hand’ – a term used by Adam Smith to suggest that the pursuit of self-interest (by individuals and firms) will promote the overall good of society. The role of the state

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was viewed at best as being a peripheral matter: indeed, interference by the state had to be kept to an absolute minimum (Smith, 1776: Book 1, Ch. 8). One thing is now certain: there is no ‘invisible hand’ to address the MDGs and other core issues of the social and economic progress of nations. The state’s role (along with that of the private sector) is now of pivotal importance to all economies. And for the vast majority of developing countries, the current global economic downturn is yet another setback in their plans and programmes for national progress and tackling, inter alia, issues such as poverty, hunger and the other MDGs. As outlined above, large numbers of poor and other marginalised populations in many developing countries are already feeling the impact of the global economic crisis through slower economic growth and fewer opportunities for making a living and improving livelihoods. Put differently, while progress in many developing countries – and hence also progress in successfully addressing the MDGs – rests to a large extent on the full scope of the developmental context at the country level and its accompanying challenges and opportunities, the crisis has nevertheless exacerbated the economic, human, institutional and social problems. Renewed and progressive action on several fronts is now necessary for continued progress, as well as for related matters such as governmental leadership, operational validity, appropriate paradigms and development assistance.

Second, on the development-assistance front, there is also an urgent need for increased and focused assistance to many developing countries, and, especially so for low-income countries, small states and post-conflict states. Indeed, organisations such as ESCAP have called for ‘a channel for countries affected by the crises to receive budget financing assistance especially for Millennium Development Goals-related activities’ (ESCAP, 2009: 2). The prospects, however, are not bright for significantly increased aid and financial assistance, as reported by the OECD (2009). Moreover, and with few exceptions, donor nations have historically failed to come even remotely close to allocating 0.7% of their GDP to aid; (this is the UN target that was set in the late 1960s and has been reaffirmed many times over during the past four decades). Meanwhile, the donor nations have their hands full in addressing their own economic, financial, and social problems. Assistance from traditional donors – both multilateral and bilateral – will continue, but there will likely be no significant change in overall aid over the next few years, and there might even be a decline in official development assistance (ODA). In addition, foreign and domestic investment, as well as remittances from the diaspora – which surpass aid flows in certain countries, such as Ghana – were in decline in 2009 as a direct result of the crisis, and a rapid recovery is not expected for many countries. According to a recent study by te Velde et al. (2010), the gaps in assistance and financing are being partially filled by Brazil, Russia, India and China (BRIC) through foreign direct investment, loans, and grants to poorer nations.

Third, the EMEs are indeed a special case. The governments of China, India and Brazil, for example, currently already have an appropriate strategy, with supporting interventions, to tackle poverty (and the other MDGs). As noted earlier, this strategy rests on inclusive development. While these countries are using their own specific mix of policies and strategies in the pursuit of inclusive development, the overall goal is the same – to spread the fruits of economic progress to all segments of society, including the poor. In particular, inclusive growth and ‘growth-plus’ policies, strategies and programmes seek to achieve income distribution from sustainable high growth by

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creating opportunities (economic and social) and by broadening access to goods and services for the poor and disadvantaged. Spending on infrastructure and enhancing access to finance and social services are two key channels of transmission of this strategy. For example, a broad spread of financial inclusion programmes – including microfinance, financial literacy, private-sector (financial and non-financial) development, and public-sector support and leadership – are being implemented by these EMEs as part of inclusive development agendas (see Chibba, 2009a for details). And other developing countries, such as Nepal, are also seeking to embark on inclusive development strategies with the help of international development institutions such as the UK Department for International Development (DFID, 2009).

However, within this context, each developing country’s preferred or selected approach to addressing the MDGs is tempered to the prevailing national circumstances in terms of the full scope of the developmental status quo or ‘contextuality’ (Chibba, 2008a, 2010a). South Africa serves as a case in point. Because of its apartheid history, inclusive development and pursuit of the MDGs are advanced in South Africa through initiatives under the Black Economic Empowerment programme, which encompasses selected key sectors (mining and finance, in particular). In addition, other complementary initiatives – notably, social grants, public works programmes, and decentralisation – are also being implemented. Furthermore, as the IMF has concluded, prudent macroeconomic policies, structural reforms to remove barriers to growth and employment, and the creation of conditions for private-sector development have helped to mitigate the impact of South Africa’s first recession since 1992 (IMF, 2009c). In other words, it was not theoretical and methodological considerations in the pursuit of the MDGs that have been a significant factor in South Africa’s development but prudent and effective economic, regulatory and related policies, strategies and programmes. To be sure, South Africa nevertheless continues to face tremendous challenges on the poverty-inequality-unemployment front, due in part to the legacy of the apartheid era that endures to this day in many respects in a broad range of areas.

A related point is that, even though sustainable high growth in the EMEs (especially in the large EMEs) is partially due to the globalisation of their economies, the slowdown in growth has been brief and inclusive development policies and programmes have not been affected. There are many factors behind this phenomenon. Prominent among these for the leading EMEs are high levels of consumer savings and consumption, robust (and increasing) levels of South-South trade and co-operation, healthy foreign-exchange reserves, national development plans and public spending that have been reinforced by stimuli, and financial systems and banking that are prudent and significantly different from those found in the US and Europe. In addition, the world today is better prepared to take fast and appropriate action, as well as to pursue concerted efforts through global co-operation. Admittedly, there is nevertheless a threat of protectionism at such times of crisis, but (fortunately) it has not materialised. In the final analysis, however, despite the fact that the MDG targets for 2015 have been compromised by the cumulative impact of various crises (financial and economic, food, energy, and environmental), the overall mission and the raison d’être of the MDGs remain fundamentally relevant. Indeed, some of the goals, such as that addressing poverty and hunger, have been around for centuries and will remain relevant as long as societies have significantly large numbers (or a high proportion) of poor and disadvantaged citizens.

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Having said this, there is one major change that is taking place globally that is also noteworthy. As highlighted earlier, global growth is now multi-polar. The dynamics of development are changing and the increasingly significant role of the BRIC cannot be overlooked. In comparison, most of the small developing countries – including, for instance, several African, Caribbean and Pacific island nations – are re-examining their development paradigms in the face of a downturn in their economies. Thus, one important lesson in the pursuit of the MDGs is that the goals and targets must be realistic and innovative in terms of strategy and planning, implementation and stakeholder participation, and national capacity and developmental context. The preferred approach to tackle the MDGs should therefore be determined and pursued at the developing-country level, and not be largely donor-driven, apart from many small states, post-conflict states, and countries undergoing a period of civil unrest, political instability, and/or institutional deterioration. Nevertheless, for many developing countries it appears that the MDGs are now unachievable by 2015; indeed, a look at progress at the national and regional levels confirms this fear, as more countries than before the crisis have fallen behind in reaching the targets (United Nations, 2008, 2009b). These countries that are being left behind for one reason or another need sustainable assistance – developmental, financial and other – to overcome the current and long-term hurdles that they confront.

In sum, while the dual crisis has had an unprecedented impact on all countries, for several countries – especially the EMEs – the challenges have not been insurmountable. For others, including small and low-income countries, the goals appear to be beyond reach. But the current situation also presents an opportunity to move forward to scale-up efforts, that will nonetheless make a difference. Thus, the important question is not whether the targets are unrealistic or unachievable, but what difference the struggle to achieve them is making and will make in the coming years.

3.2 Selected theoretical and strategic considerations Potential theoretical and methodological issues have emerged in the pursuit of the MDGs and in the employment of related strategies, policies and interventions. The following four are highlighted here: the alleged methodological weaknesses of the goals; the inequality-growth-poverty reduction nexus; (what is known among development and management experts as) Managing for Development Results (MfDR); and the emerging new economics.

Criticism focusing solely on alleged methodological weaknesses of the MDGs has recently been made by a few observers and analysts, notably by Easterly (2009) who alleges that the goals are unfair to Africa in terms of the setting of targets and in measuring performance. The MDGs are arbitrary and arcane, he argues. As an example of this, he alleges that the poverty-reduction goal poses a much more arduous (and therefore, unfair) development problem for Africa because, in 1990, it had the lowest per capita income in the world, whereas the comparable starting point was much better for other regions. His case also rests on the argument that the MDG targets and the choices available for measurement of their progress must be consistent, fair, and methodologically robust across regions with respect to considerations such as absolute versus percentage changes and other issues that affect the evaluation of progress.

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There are, however, numerous lacunae in Easterly’s thesis. First, the poverty data he uses are questionable and misleading. If a $1.25 per day standard (rather than the dollar per day standard selected by Easterly) is employed, the percentage of people in sub-Saharan Africa (SSA) living on less than that in 1990 is similar to the rate for South Asia for that year. Moreover, according to data reported by the World Bank and the Economist (2009b), the poverty rate is consistently worse in South Asia as compared with SSA if a $2 standard is used for the past two or three decades. Thus, Easterly’s conclusion that ‘the bias against Africa in the first MDG comes from penalising it for its high initial poverty rate …’ appears to have been selected simply to serve his thesis, and it is both outdated and misleading. The second weakness in his thesis is that there is no counterfactual. We do not know what would have happened in the absence of the MDGs. Focusing strictly on performance methodology in a box, as if it were a purely scientific case, and without giving due consideration to counterfactuals, is a fundamental flaw. Third, measuring performance in different cultural and socio-economic settings is subject to bias if culture is assumed to be a ‘constant’ factor. Culture and developmental contextuality (Chibba, 2008a, 2010a) are pivotal factors in the pursuit of economic and social goals, and Easterly ignores these fundamental aspects of development with his underlying assumptions on statistics and conventional economics. He also fails to offer any real-world solutions. In doing so, he overlooks the fact that development and national progress are multidimensional and depend on economic, political, administrative, ideological and cultural matters.

Admittedly, there is support, however limited, for Easterly’s thesis. A recent article by Vandemoortele (2009) concurs with his lament while also arguing that the MDGs are dominated by ‘a money-metric and donor-centric view of development’. Regrettably, an additional overarching flaw is that Easterly and Vandemoortele move away from the raison d’être of the MDGs to press their viewpoints on largely theoretical grounds. In doing so, each of them merely glosses over reality. For example, Vandemoortele (2009: 359) states that ‘the good news is that the majority of countries have tailored the global targets to their national context’. Yet he prefers to state in the next paragraph that ‘in sum, a dichotomy has developed between the way in which the MDG agenda is being implemented at the country level and the way in which the global MDG canon interprets them as one-size-fits-all targets’. This is an incorrect inference, as the raison d’être of the MDGs is to serve as an advocacy tool and not as a methodological one.

Other observers, such as Tabatabai (2007) of the International Poverty Centre, have noted, with reference to the ultimate purpose of the MDGs and related actions taken by developing countries, that ‘the real yardstick for judging performance and effort is whether they have done the best they could under the circumstances’ (and not, by implication, whether the MDGs are theoretically sound). In short, both Easterly and Vandemoortele fail to be convincing in arguing that the MDGs were poorly conceived and are misunderstood, and that their theoretical interpretation is more important than advocacy and successful policy and practice. In fact, the MDG campaign and its implementation are in line with the spirit and intent of the goals, and the Millennium Promise (www.millenniumpromise.org), for example, and the UN-supported MDG Monitor (www.mdgmonitor.org) bear testimony to this conclusion. The problems in the campaign and implementation at the national level manifest themselves not as purely

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theoretical challenges but, instead, in the real-world context, as issues of leadership, operational validity, and related matters (including institutional, budgetary and contextual aspects).

To be sure, arguably the main reason why we have theory to begin with is to address real-world problems, and theory can therefore be potentially useful in the pursuit of the MDGs. For example, there are a number of promising, productive and cutting-edge research centres throughout the world that do more than provide theory for theory’s sake, through attempts to forge a link between theory, policy and practice. Development economists at the United Nations University–World Institute for Development Economic Research (UNU-WIDER), are one such exception. Fosu, for instance, in his study of the inequality-growth-poverty nexus in SSA, notes the following:

… the findings of the current study suggest that the growth impact is likely to differ by country in SSA, depending primarily on the inequality attributes of countries. For example, the poverty reduction efficacy of a given rate of growth acceleration in Ethiopia would be more than twice that in Namibia, thanks to the much higher level of inequality in the latter country. Similarly, the degree of responsiveness of Botswana’s poverty rate is estimated to be only slightly higher than that in Namibia, which might explain the minimal rate of poverty reduction in Botswana, with the headcount poverty rate for instance falling by only 5 percentage points in a decade, despite the tremendous growth in that country. In contrast, in Ghana where the income-growth elasticity is about twice that of Namibia, the headcount poverty rate declined substantially, by about 10 percentage points within a decade, in spite of the relatively modest growth. (2009: 738) Hence, Fosu’s advice in tackling poverty (and inequality) is that integrating the

inequality-generating characteristics of individual countries in the planning and formulation of poverty-reduction approaches can be an effective strategy. The drawbacks to this thesis include the fact that bringing fruition to such an approach in policy and in practice is ostensibly a medium-to-long-term undertaking. And there are numerous pitfalls and considerations – including cost, funding, reliability of data, and absorptive capacity of a given system – in translating theory into tangible action. However, these are not insurmountable.

Fast-tracking the strategy-policy-practice link can also make a huge difference in some countries. For example, Brazil’s Fome Zero (or Zero Hunger) initiative, which is a comprehensive strategy and programme, has shown that poverty rates can be reduced if inequality is addressed head-on. Importantly, such real-world programmes (that involve a redistribution of resources) offer an alternative inclusive development approach to tackle the MDGs and related social and economic development challenges. This strategy and development-policy solution involve an innovative departure from the preoccupation of the development economist or the public policy decision-maker with strategies and interventions that are largely based on economic-growth theories.

Another possible theory and methodology in the pursuit of the MDGs focus on results. A priori and ex-post evaluation and overall planning and implementation tied to

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MDG programmes and projects are supported by MfDR, a management strategy and tool which draw on the theories of development change and change management. MfDR is goal-oriented and has at its core the concept of causality – popularly referred to in development circles as the ‘results chain’, which involves inputs and activities that are logically and strategically designed and managed to achieve the expected outputs, outcomes and impact. It also involves continuous improvement in terms of periodically measuring results that provide the basis for adjustment to keep interventions on track and to maximise results. The downside of MfDR includes the fact that it is donor-driven, not easily implementable, requires a trained and dedicated cadre of professionals to be sustainable and successful, and is not always user-friendly to the government apparatus and conditions found in many developing countries. MfDR can also be expensive (and impractical, especially for small states and the poorest countries) and it can potentially ‘crowd out’ other development efforts. Ultimately, it is especially academia and large international organisations that are well placed to take advantage of MfDR, and conceivably certain EMEs as well.

A final point on theory is that, despite the good work of development economists, tackling the core issues of development that are embodied in the MDGs also requires a departure from conventional economics. To illustrate this point, two examples should suffice. The first refers to Mohamed Yunus, a Nobel Laureate and former professor of economics, who found that traditional economic theory was lacking in finding appropriate and successful ways to tackle poverty in developing countries (Yunus, 2007). This compelled him to employ microcredit as a new and unconventional way of looking at economics and finance at the village and community levels to address poverty. Anecdotes abound on the success of microfinance in alleviating poverty. In recent years, empirical evidence, though limited in scope and applicability, is increasingly surfacing from field research with promising results (see, for example, Karlan and Zinman, 2007). There is also some evidence that microfinance is contributing to progress towards the achievement of all of the MDGs (Setboonsarng and Parpiev, 2008).

The second example is drawn from the recent failures of economics that have been accentuated as a result of the dual crisis and that have provided momentum to the emerging new economics (Chibba, 2010a). Numerous and diverse weaknesses in economics emanate from the role of ideology, oversimplification of reality, and the failure to consider culture and governance matters. In addition, tackling poverty and inequality is highly problematic and continues arguably to be a failure (despite advances on the poverty front over the past two decades). Other areas, including fundamental assumptions regarding rational decision-making and the lack of a robust linkage between the micro and the macro, leave much to be desired as well. And these ‘fault lines’ have had an impact on the depth and quality of economics, as is evident in the dire straits the discipline finds itself in today in some respects. Rising from this heap is the emerging new economics to address these fault lines. Within this context, several new and incremental approaches need to be adopted that are relevant to the pursuit of the MDGs and that are complementary to the innovative and new development paradigms developing countries are now seeking for the post-crisis period. The range of possible new approaches and interventions in this regard focuses on culture,

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governance, poverty, inequality, behavioral economics and enhanced information and statistics (see Chibba, 2010a).

3.3 Governmental leadership and operational integrity The establishing of international development goals that are driven by economics and politics, ideology and management, and related perspectives, is just a first step. However, pursuing the MDGs brings to the fore numerous factors that are fundamental to development, including governmental leadership and operational integrity. While this issue is certainly not new to the development field, the current crisis has heightened its fundamental role in the absence of clear, meaningful and credible solutions or alternatives to advance the national development agendas of many developing countries. With donor nations currently preoccupied with their own economic and social problems, and the foreign aid agenda experiencing either a freeze in budgetary allocations or a temporary setback, the pressure is greater on developing countries to pursue developmental challenges successfully and creatively (especially through improved planning and implementation, with spearheading of the MDG campaign dependent to a large extent on effective leadership, including good management and co-ordination, at both the national and sub-national levels). Another related challenge is to ensure operational integrity of the MDGs within development action plans (national and local) with adequate budgetary allocations, a competent and dedicated cadre of professionals, and appropriate social, economic and institutional policies and programmes. The types of relevant questions to ask in this regard are the following. What new and holistic approaches can serve the country well? What programmes and interventions should be supported in pursuit of the MDGs? What budgetary allocations should be made to support MDG activities? In what areas are capacity-building and institutional strengthening required? What partnerships can be forged with BRIC to support developmental efforts? What are the expected results (at the programme and project levels)? What lessons can be learnt and applied to facilitate effective and enhanced implementation of MDG initiatives?

Again, the EMEs offer suitable cases and lessons learned. In India, for example, the inclusive development strategy is a national priority and is being implemented with broad-based support, since strong governmental leadership and conditions for operational validity already exist, including national plans, regulatory and legislative support, requisite budgetary allocations, implementable projects and programmes, and public-private partnerships (see Chibba, 2008a, 2009a, c). And to return to the Brazil example, since 2003 its (now former) President, Luiz Inacio Lula da Silva, has placed the tackling of hunger and poverty at the forefront of government action. Fome Zero is a comprehensive strategy and programme that incorporates diverse but mutually reinforcing policy objectives and programme components that focus on poverty, inequality, hunger and opportunities to address inclusive development challenges. The scope of interventions includes enhanced access to food and nutrition, education and health care, conditional cash transfers, family agriculture, decentralised administration and partnerships (with the private sector and civil society). And, as effective leadership and competent public administration are of fundamental importance in strategies and programmes, Rocha’s findings on this initiative are noteworthy:

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High expectations led, however, to huge disappointment. In its first year Fome Zero was not able to capitalise on its significant political clout. An ambitious programme, it mobilised Brazilian society without having a good plan of what to do with it. Many of those in charge of the programme were inexperienced politicians, with little or no administrative past. That first year Fome Zero demonstrated why good intentions are not enough for good policy. It is to the government’s credit that it quickly regrouped in the following year. (Rocha, 2009: 52) The first MDG is fully integrated into Brazil’s public-sector planning and

implementation, including adequate budgetary allocations and strong leadership, and it is supported by the required modus operandi and qualified staff, as well as by decentralised and popular participation at the local level. The results have been impressive thus far, as the first goal has already been accomplished by Brazil: poverty and hunger have been halved. According to MDG Monitor, Brazil is ‘on target’ to meet all of the MDGs (United Nations, 2009b).

In comparison, in Botswana (a small EME), most of the MDGs are currently in danger of becoming unachievable. To look briefly at this case. Botswana is currently ranked as a ‘middle-income’ country by the IMF, and it is one of the few developing countries to have experienced high sustainable growth (7% or more annually) for over a quarter of a century. Yet, in this country of less than 2 million inhabitants, absolute poverty is widespread, affecting roughly 30% of the population; and inequality is severe in terms of the Gini co-efficient (of 0.63) as determined by the IMF (2008). Moreover, Botswana has one of the highest HIV/AIDS rates in the world. Despite a stellar economic record, it continues to suffer from deplorable socio-economic conditions and social ills, in part because it has never pursued a meaningful and successful inclusive development strategy, and leadership of the MDG campaign, as well as programming, co-ordination and implementation in support of the MDGs, is weak (my personal observation during field research in 2006-7). However, as the economic downturn in Botswana continues to be severe and highly problematic – its economy is forecast to have shrunk by over 10% in 2009 according to the IMF (2009b) – and it continues to rely on its old model of dependence on essentially a single industry (diamonds), its prospects for the future are not bright unless it pursues a new and sustainable development paradigm (that includes diversification of the economy). The pursuit of the MDGs within this context requires strong leadership of the MDG campaign and operational integrity, especially in terms of scaled-up budgetary allocations and a competent cadre of professionals to support implementation. Moreover, beyond stimulus packages to tackle the economic downturn, one possible incremental option (should its mineral sector rebound in the interim) is to adopt the inclusive growth approach being pursued by the Asian EMEs, by emulating or adjusting the inclusive growth strategy to fit local conditions. Both China and India, for example, are on track to meet many of the MDGs (United Nations, 2009b), in part due to their ‘growth plus’ and inclusive development strategies. In addition to Asian countries and Brazil, South Africa (highlighted earlier and discussed further below) also offers useful lessons to Botswana to address the MDGs.

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In sum, any new and sustainable development strategy and scaling-up of efforts have to be rendered operational within national development plans with effective leadership, an able cadre of professionals, adequate spending allocations, and good governance supported by concrete programmes and implementation measures.

4 Appropriate development paradigms and transmission

channels What the above scope of discussion also suggests is that the current situation does not mean the end of the MDGs. Instead, a ‘re-think’ and scaling-up of efforts are required for both current and future development goals. On the whole, the preferred approach and methodology to implement the MDGs should rest with each developing country, and it should not be a largely donor-driven exercise. This is not to say that aid has no role to play in addressing the MDGs. On the contrary, aid has an important role to play, as alluded to earlier, and especially so for poor countries, small states, and failed states.

The current situation also begs the question of the most appropriate development paradigms in the pursuit of economic and social progress. Meanwhile, a profound shift in the global dynamics of trade, finance and investment has also taken place. The engines of global economic growth are now found in both the West and the East, and a number of regional growth poles are also emerging.

Furthermore, the export-led growth models of the recent past (notably with reliance on the West) are no longer entirely valid as a growth strategy for the EMEs. Even China will (sooner rather than later) have to adjust its model as it is increasingly coming under pressure to significantly appreciate its ‘deliberately’ undervalued exchange rate which is designed to support its export-led growth (through cheap exports, as the United States alleges – see The Economist, 2010b; Globe and Mail, 2010). Nonetheless, despite this controversy, China’s growth-led model has lessons to offer many developing countries, and its revised development paradigm is being keenly awaited by many observers. Importantly, mixed economies everywhere – but especially the exemplary EMEs that have experienced sustained and relatively robust economic growth and are pursuing inclusive development – now offer their own emerging paradigms for successful governance and economic policy management for social and economic development (for more on this, see Chibba, 2008a, b, 2009b, c). What is also remarkable is that the innovative and successful approaches – including sector charters, ‘growth plus’ and redistribution programmes as well as popular participation programmes – emanated from developing countries themselves.

A related point is that development paradigms require the implementation of policies and interventions through suitable transmission channels. There are numerous channels that can facilitate such work. As I have expounded elsewhere (see, for example, Chibba, 2009a), the key channels are of the following types: (i) sector charter – as in the case of South Africa; (ii) public sector – for example, infrastructure spending as part of the inclusive development and ‘growth-plus’ strategies of India, and the Zero Hunger strategy and programme in Brazil; (iii) private sector – especially, financial inclusion and technology-based interventions; (iv) NGO/non-profit sector – microfinance in particular; and (v) international organisations – the World Bank,

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regional development banks, the IMF and certain bilateral aid agencies. And these channels, as well as hybrids, are applicable to the pursuit of the MDGs. But, as with appropriate development paradigms, the channels of transmission are also in a state of flux with respect to what is appropriate, what is effective, and what is the best mix for social and economic progress in each developing country, as the EME cases outlined above amply illustrate.

With respect to aid, it has an important role to play in promoting growth and development over the medium-to-long term, and especially so (as emphasised earlier) in the case of the poorest countries, small states, failed states, and post-conflict situations. Indeed, as part of the aid-growth debate, multilateral and bilateral institutions and a number of scholars support the role of aid in tackling poverty and in promoting economic growth. Jeffrey Sachs is perhaps the best known proponent of this viewpoint, but many others, for example Arndt et al. (2009), also take this stance. On the other hand, there are also several researchers who argue that poverty responds more to income distribution than to growth (for example, see Ali and Thorbecke, 2000), and several scholars are critics of Sachs’ work on aid’s role in development (including William Easterly, Daron Acemoglu and Amir Attaran, among others). Nonetheless, regardless of one’s position in this debate, the critical issue for many developing countries is access to aid, while for many other countries it is not aid per se but finding workable and real-world solutions to address both poverty and inequality (and the other MDGs).

The emerging new economics that integrates matters of culture and governance to address poverty and inequality issues, and hence also addresses the inherent weaknesses of conventional economics (including unrealistic assumptions about rational behaviour), offers complementary approaches to tackle development problems (see Chibba, 2010a for details). To a great extent, however, the work towards achievement of the MDGs requires inclusive development and related real-world strategies (such as financial inclusion and participatory development strategies), and we can learn a lot by including the emerging new economics in addressing strategic development problems. For example, based on my field research (Chibba, 2007, 2008c, 2010a), one fundamental development problem in Botswana that has existed for more than a decade is that its monetary policy has not only been unsuccessful in achieving its core goal of a low and predictable rate of inflation, but has also exacerbated any attempts to tackle poverty and inequality by excluding consideration of culture and governance matters. As such, the emerging new economics can be employed to support development paradigms through new and incremental tools (Chibba, 2010a), including enhanced data and statistics to assist in economic and social policy-making. Specific examples include the Consumer Price Index, the business expectations surveys, and the need for a revised basket of goods and services to better capture the spending patterns of the poor to assist in public policy analysis and decision-making.

5 Concluding remarks First, while the dual crisis has resulted in a major setback in the work towards achieving the MDGs by 2015, the principles behind the MDGs are fundamentally indisputable and thus the goals are perhaps even more imperative today than before the crisis or at any other time since the Second World War. The current situation certainly does not mean

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an end of the MDGs. There is still much that can be done over the next four years to work towards the targets. The important question is not whether the targets are unachievable but what difference the struggle to achieve them is making. Second, with respect to alleged methodological weaknesses in the formulation of specific MDG targets, the rationale and arguments offered are flawed since they are based on limited data, lack of a counterfactual, and failure to give due consideration to culture and the full developmental context. There are, however, other theoretical considerations that can play a helpful role in MDG work at the national level. Fast-tracking the strategy-policy-practice link is making a huge difference in some countries (especially in the EMEs). Third, a new development paradigm is required by many developing countries to address the magnitude and depth of new challenges to social and economic development. The exemplary cases of Brazil and India that are highlighted in this article bear testimony to the fact that the MDGs are not a lost cause and that the approaches pursued by the successful EMEs offer much hope, as the solutions involved can be emulated or adapted by other developing countries in the final push to accomplish the goals by 2015. In addition, the emerging new economics offers promising opportunities to integrate culture and governance matters in the formulation and implementation of new paradigms and in the pursuit of the MDGs.

To recapitulate, while the MDGs and action towards achieving them have been severely compromised by the dual crisis, the current situation does nevertheless present an opportunity to move forward on two fronts: first, to scale-up action; and second, to adopt new approaches that offer real-world solutions – that is, in terms of appropriate development paradigms, transmission channels, effective leadership, and institutional and operational integrity, and through the contributory role of the emerging new economics.

first submitted March 2010 final revision accepted September 2010

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