Introductory paper to 'New Development Options' conference

01 February 1995

I accepted the Vegard Bye's invitation to facilitate [prepare and chair] this conference - one of the last I've attended on matters pertaining to 'Development'. The participants were of a very high level and a good chunk of the final declaration - which the late and much regretted Erskine Childers and I sat up half the night writing - was incoporated into the NGO declaration of the UN Conference on Social Development held in Copenhagen the following month. Aside from that, however, at least as far as I know, no other follow-up resulted. A shame, but nearly always the case with conferences.

The Norwegian Forum for Environment and Development, with the help and encouragement of the Royal Norwegian Foreign Ministry, has devised a bold and original concept for an international conference. At their invitation, six nations and one state of the Federal Republic of India, Kerala, have accepted to send representatives at the ministerial level to meet with a small group of international development experts in the hope and the belief that all have something to learn from the experience of the others and, perhaps, something new to say to the world, together.

Over the past several decades, the six countries to be represented in Oslo - Cuba, Eritrea, Haiti, Palestine, South Africa, Vietnam - have all been subjected to immense hardships, including war waged primarily against civilian populations; foreign occupations or blockades, and/or internal repression, and massive denial of human rights at the hands of a ruthless ruling class. For progressive people throughout the world, all these countries have been, and often remain, symbols of resistance and of bravery in the face of adversity. They symbolise humankind's unquenchable thirst for freedom, independence and the right to determine one's own destiny. It is a privilege and an honour to have the representatives of such peoples present at a single conference.

Today, however, all the countries sending representatives to Oslo face enormous challenges. Although their populations constitute a rich resource base, these countries have emerged from their different experiences, on the whole poor, ravaged and struggling to develop. Furthermore, they confront these challenges at a historical moment which is far from propitious.

One characteristic of this moment is the 'New Indifference', brought about by the end of the Cold War. In the absence of superpower rivalry, these countries are in general of far less interest to the West than they once were, for the simple reason that they can no longer represent 'the threat of a good example' (as used to be said of Nicaragua), nor can they act as real or imagined outposts for a defunct Socialist bloc.

In the context of the post-Cold War political order, external development aid is also dwindling and will undoubtedly be further reduced as Northern countries introduce measures downgrading redistributive (welfare) payments to their own citizens. In such circumstances, 'development aid' is an attractive target (cf. the new Republican Congress in the United States but also the development cooperation budgets of several European countries).

In spite of the 'New Indifference' to their fate, these countries must also, paradoxically, defend their political independence which is threatened by new types of interventions. These interventions are neither military nor of the nineteenth-century colonialist variety and they cannot be countered by traditional means. During the Cold War, the foreign policy alignment of 'third world' countries was the determining factor for the West, which consequently tolerated some variety and flexibility in their choices of development models. Today such countries are judged far more on the basis of their economic policies and they are expected to conform to development models designed by others and imposed from outside.

Since the beginning of the 1980s, international economic and political institutions (transnational corporations, the Bretton Woods Institutions, GATT or the World Trade Organisation, the G7) have become stronger and better organised. The debt crisis of 1982 ushered in a new era in which the public and private sectors, dominated by the creditor countries, learned to work closely together (private banks, the Federal Reserve and the US Treasury, central banks of the OECD countries, the IMF, etc.). Their common goal was to discipline the third world (and to make it pay for their own mistakes). To that end these institutions promoted the liberal, market-oriented, orthodox ideology based on the '3Ds' - deflation, devaluation, deregulation - plus privatisation and export orientation in which the world market becomes the ultimate arbiter. This ideology is today not merely dominant but triumphant.

A government which attempts to set political, economic and social targets at variance with this ideology will have to make choices that are particularly difficult at a time when global market forces are widely believed to hold the only key to national success and to optimum development. In the present international context, the powerful actors mentioned above (TNCs, the Bretton Woods Institutions, etc.) are in a position to incite individual governments to limit their activity largely to creating the 'enabling environment' in which these market forces can operate with maximum freedom and, it is assumed, efficiency.

The enforcement of such a world political and ideological order requires that the range of available policy choices be restricted. Each individual government is judged on its willingness to integrate the national economy into the global one, to privatise public services, and to abandon most of its regulatory and redistributive functions. The World Bank and the International Monetary Fund have placed their considerable weight behind macro-economic formulas like structural adjustment (while maintaining a vague and largely rhetorical commitment to 'sustainable poverty reduction'). The state is thus voluntarily, and necessarily, downgraded (and with it, the notion of the citizen).

The outcome of nearly a decade and a half of structural adjustment in Latin America, Africa, much of Asia and more recently in the former Eastern European Socialist bloc, is the emergence of two-tier societies. Greater wealth and privilege are apparent at the top, but there is also more entrenched poverty and deprivation than ever before. This process can be observed within nations and also between them. Internally, whole new classes may be created (e.g. the new-rich 'consuming classes' in Russia, more or less linked to criminal elements, coupled with immiseration unknown under socialism). On the world scale as well, the rich are increasingly differentiated from the poor. Transnational corporations are investing more than ever before in the South, yes, but 85% of their investment is concentrated in just a dozen countries.

Although these investments are calculated to have created 12 million jobs, transnationals generally account for less than one percent of all employment. Fully half these 12 million jobs have gone to a single country - China. With greater economic integration comes greater discrimination as well: the often-announced economic 'interdependence' that was supposed to link all nations has turned out to be an illusion - some countries, indeed entire regions, are being forcibly delinked because, in the words of the editor of New Perspectives Quarterly, 'they can't buy what we sell; we don't need what they have'. For them, membership in the 'interdependence' club is an unattainable prize.

The prevailing ideology extols the 'winners' - individuals, classes, countries - and holds them up as shining examples, but has no place or plans for the 'losers' (unless it is to encourage them to have fewer children). Within countries and between them, increasingly there is an inner circle and an outer one. Or, to use a different geometric metaphor, the international elites are at the top of the pyramid. Below them are the more or less secure, more or less satisfied middle-classes. At the bottom are those for whom the prevailing world system offers no solutions.

Concretely, this leads to grotesque and virtually incomprehensible inequalities. In July 1994, Forbes magazine's annual list of the world's billionaires cited 358 individuals whose accumulated wealth is more than a thousand million dollars. Their total 'value' came to $760 billion. According to World Bank figures, average GNP for 3.1 billion people living in poor countries (China and India included) is an annual $390. If we compare the net worth of the billionaires to this average worth of the inhabitants of the poorest countries, then the 358 are 'worth' nearly 2 billion people, or about a third of the world's population. Even in rich, OECD countries, these extremes are spiralling: in the United States before Reagan, the family incomes of the top 1% of Americans were 'only' 60 times as great as those of the bottom 10%. By the end of the 1980s, the richest 1% had incomes 115 times those of the poorest 10%. Worldwide, the top 20% of the world's population garners 85% of its wealth (compared to 70% in 1960). One could multiply the examples of disparity, national and international, to which unleashed market forces are directly linked.

The point is no longer - if it ever was - to 'close the gap' between the rich and the poor but to keep the new and growing national and global underclasses under control. Providing such control is one of the few remaining functions of the third world State. During the 1980s, because of socially insupportable austerity measures, several dozen riots erupted in debt-stricken countries. These austerity measures were almost exclusively devised by outside institutions (primarily the Bretton Woods Institutions) which determined monetary, macro-economic and social policies. The repressive forces used to control the rioters were, however, entirely local.

In this ongoing process of economic and political globalisation, it is not just individual States which have been weakened, although this has been a major consequence of structural adjustment policies and the rise of the market as principle arbiter in the new international order. The collective will and capacity of the South to make its voice heard has also suffered a severe decline. This may be partly because third world elites have themselves become globalised - exactly like the economy which assigns them their privileged position - and are no longer easily distinguishable from those of the rest of the international system. In any event, the Non-Aligned Movement, the Group of 77, even OPEC, no longer carry much political weight. Despite the human factor these countries represent - at least three quarters of the world's population - the economic and political characteristics of the world system are determined elsewhere. Michael Manley, former Prime Minister of Jamaica, tells how the 1981 Cancún summit marked the swan-song of the New International Economic Order as it had been conceived by southern leaders from the mid-1960s. 'Ronald Reagan killed it with a smile. He smiled at Julius Nyrere, he smiled at the President of Mexico, he smiled at all of us and just said "No"'.

The question of 'development' cannot be examined outside this constraining political and ideological context. The number, the quality and the achievement of 'New Development Options', bravely set forth in the title of the Oslo conference, will depend entirely on the degree to which this context can be adapted to, modified, ignored or overthrown.

Although far from identical, all the countries whose representatives will attend the Oslo conference confront similar problems:

  • Politically, they need to safeguard their hard-won independence and maintain their capacity to make their own development choices.
  • Economically and socially, they must try to guarantee a decent life and a decent livelihood to their entire populations.

These two objectives were, after all, at the heart of their patriotic struggles; the essence of what they fought for all those years. Political, economic and social objectives are, of course, linked. Nearly everywhere, however, the dominant development model, which places economic growth above the political capacity to achieve one's self-defined objectives, has become so ingrained in the mentality of most of the third world's leadership that they no longer even perceive its foreign roots or the interests it serves.

There is no doubt that this model (partly financed by foreign aid) has increased overall wealth but it has also been criticised for concentrating most of this wealth at the top of the pyramid while excluding the majority from the benefits of growth. In a similar vein, development based on GNP growth is widely seen to have contributed to environmental destruction (deforestation, wipe-out of biodiversity, soil erosion, biological and chemical pollution, urban concentration and the like).

As the case of Kerala shows, however, the political capacity of a government to set and to pursue social goals is more important than the total wealth generated in a given country through the process of 'development'. In Kerala, social development indicators (infant mortality, life-expectancy, literacy, etc.) are far more favourable than in other Indian states, whereas annual per capita incomes in Kerala are not significantly different from those in other parts of India, and are sometimes lower.

Implications for the Oslo conference

The Oslo conference seeks to cater to the needs of the ministers attending as well as to learn from them. Also present at the conference will be an invited group of international experts and an expert group of representative Norwegians who are engaged in the current national debate on development cooperation policy. Our Norwegian hosts are also mindful of the interests and the needs of their NGO community. In an attempt to accomodate all categories of participants and to allow for a discussion which is as free and as uninhibited as possible, a mixed format has been adopted. The opening morning and closing afternoon sessions will be open to the public, the other four sessions will be closed. The content and the objectives of the closed sessions as presently foreseen by the facilitator and the Norwegian organisers are outlined below. It should, however, be kept in mind that the participating ministers are the final arbiters of the agenda and they are encouraged to make sure that it meets their needs.

What are the objectives of the conference? These, too, depend mostly on the ministers present, but one can make an attempt to distinguish between two possible models which could lead to different outcomes - with the understanding that the frontiers between the two are not hard and fast but blurred.

The first model is more conventional, perhaps more 'technical' in nature but can still prove extremely valuable. It would involve examining 'New Development Options' in a range of areas - from natural resource management to national security - as presented in greater detail below. This format would make maximum use of the invited experts' specific knowledge, it might usefully feed into the current Norwegian policy debate and it would allow for detailed exchanges of views on a variety of subjects among the ministers themselves.

If this format is adopted, the facilitator asks that all the participants take particular care not merely to reproduce the descriptive and prescriptive conclusions of many other conferences which, over the years, have dwelt on the inadequacies and the detrimental nature of the dominant development model and on the need to change or go beyond it. We can assume a significant level of information among the participants and we should not spend much time describing current conditions (except for those specific to the participating countries). In particular, prescriptive statements as to what 'we' must do, or what 'must' or 'ought to' occur, with no definition of the forces expected to undertake this or that task and without reference to external realities, are to be avoided at all costs!

The second possibility is the more hazardous but also (at least in the facilitator's view) the more exciting one: to aim for a more manifestly political conference. If it is true, as briefly outlined above, that various external forces are engaged in a concerted and largely successful effort to weaken the capacity of individual States and of the South as a whole to set and to pursue their own objectives independently, beyond the confines of the present ideological consensus; then there is a case to be made for a different scenario. This second format would involve examining what a small, but exceptional, group of countries with some common features has to say to the rest of the South and to the rest of the world - not just about development options but about the political conditions necessary to achieve them.

Forty years ago, representatives of 29 third world countries met for a week in Bandoeng, Indonesia to inaugurate a policy of mutual economic, cultural and social cooperation and to define a common anti-colonialist stance. This event was the point of departure for a great many similar initiatives which gained much ground and influence in the 1960s and 1970s, only to be (temporarily?) defeated in Cancún.

Naturally, the political circumstances in 1995 are completely different from those of 1955. The Socialist bloc has collapsed, the Bretton Woods Institutions exert much more influence on behalf of the powerful countries of the North and the ideological context has shifted to the point where many, if not most, Third World leaders proclaim the doctrine of 'TINA' - i.e. 'There Is No Alternative'. For that matter, the 'Third World', in the absence of the Second one, no longer exists. Rarely has such apparent unanimity reigned on the international scene.

On the other hand, the consequences of these consensus policies have, after several years, become manifest: market orthodoxy dictates not just economic but political choices and greater social polarisation is the predictable result. If the ministers present believe that the time has come to reassert the rights of all peoples - and of all members of society - to development; if they believe that the remedies promoted by the Privatisation-Globalisation-World Competition scenario are inoperative or harmful, then they can take it upon themselves to define the elements of a new philosophy and a new political stance stressing greater independence and an increased range of choice.

Recalling that, as mentioned above, the frontiers between the two models are not hard and fast, the proposed agenda is set forth below. (The public introductory and closing sessions of the conference would be identical in the two scenarios).

Day One: Wednesday 1 February: Open session, 10:00-13:30

Following the official welcoming speeches by the Director of the Norwegian Forum for Environment and Development, Vegard Bye, and the Norwegian Minister of Development Cooperation, Kari Nordheim Larsen, we shall attempt to guarantee that everyone present is working with a similar level of information. It is thus proposed that the first morning be devoted to remarks by, and questions to, the invited ministers. The suggested format is a statement by each minister (maximum 15 minutes) briefly outlining the major problems faced by his country and the strategies envisaged to deal with them. Each statement will be followed by a short question period (a maximum of 2-3 questions to each minister) giving priority to the Norwegian participants who will not be attending the closed sessions

This morning session will be open to about 150 invited guests (government officials, NGO delegates and other representatives of Norwegian civil society). It is hoped that in spite of the semi-public nature of the gathering, the ministers will feel that they can speak and respond to questions frankly and freely. They will speak in alphabetical order:

- 10:30-10:50 Cuba: The Hon. José Luis Rodriguez, Minister of Finance

- 10:50-11:10 Eritrea: The Hon. Haile Woldense, Minister of Finance and Development

- 11:10-11:30 Haiti: The Hon. Francois Severin, Minister of Agriculture, Natural Resources and Rural Development

Break: 20 minutes

- 11:50-12:10 Kerala: The Hon. Mohamed Basheer, Minister of Education

- 12:10-12:30 Palestine: The Hon. Abu Ala, Responsible for the Economy, Palestine National Authority

- 12:30-12:50 South Africa: The Hon Sibusisu Bengu, Minister of Education

- 12:50-13:10 Vietnam: The Hon. Nguyen Xuan Oanh, Political Advisor to the Prime Minister

(A further 20 minutes of questions if the schedule has been respected and time remains)

Lunch 13:30-14:30

Scenario One: Economic and technical aspects of development options

Day One: Wednesday 1 February 15:00-18:00

First closed session

Natural capital, natural resources, the environment

It is proposed to place 'natural capital' aspects ahead of macro-economic considerations because the former are more and more recognised as constraints to whatever economic strategy a country chooses to adopt. When reading various documents on the countries represented at the conference, the facilitator listed keywords which seemed to sum up the problems faced by each one. Again and again, expressed in different ways for different national contexts, the problems of the physical environment surfaced. Words like: land, water, water shortages, deforestation, natural resources, energy options, fishing & other coastal activities, agriculture, rural development, etc. were prominent. Although in the final analysis all wars may perhaps be considered 'resource wars', some states now face major conflicts with neighbours over water or other vital resources. Thus the environment has become a national security issue as well.

Another reason to begin with these questions is that the traditional development paradigm has given relatively short shrift to environmental questions. Most major official development institutions still assign 'natural capital' a value of zero in the development equation (cf. the critical work of the economist Herman Daly, formerly with the World Bank). Clearly, however, just as a firm that exhausts its financial capital will go bankrupt, so no country can outstrip or draw down indefinitely its own natural base. The use of natural capital, like finance capital, must be paid for.

It would be particularly important to discuss the real costs to society of the wrong environmental choices - costs generally dismissed as 'externalities' in conventional development theory - and to ask which options (e.g. in the area of energy) guarantee the greatest national independence and the optimum social distribution of scarce resources. How can 'New Development Options' help the participating countries move directly into the 21st century without going via the 19th (i.e. following the destructive and costly environmental pattern of the industrialised West)?

N.B.: None of the closed sessions is limited to any particular experts but some will participate more naturally in some areas than in others. Contributions to this session requested particularly from Jeremy Leggett, Manfred Max-Neef, Stein Hansen, Roy Prosterman, Adebayo Adedeji, Peggy Antrobus.

19:30 Reception hosted by the Norwegian government

Day Two: Thursday 2 February

9:30-12:30: Second closed session

The macro-economic environment

This is the area where external political constraints are most obvious. Issues participants may want to focus on most include: DEBT: How much does external debt weigh upon the options open to each government? Should a government necessarily undertake to pay, in the name of the continuity of the State, the foreign debts of its predecessors? 'STRUCTURAL ADJUSTMENT': this policy package, to which debt opened the doors and with or without the formal direction of the Bretton Woods Institutions, is the order of the day. Whose needs (which classes) do present adjustment policies serve and can they be improved in order better to serve the needs of society as a whole? TRADE and WORLD MARKET ORIENTATION: Is export-led growth, and consequent concentration of productive resources in the export sectors, the answer for every country? Is protectionism in some areas (e.g. agriculture) justified or should all countries subscribe unreservedly to the 'free trade' model? LARGE, DANGEROUS ANIMALS: What are the advantages/disadvantages of the Asian Dragon/Tiger Model? Is it a viable and desirable option for everyone? EXTERNAL CAPITAL AND EXPERTISE: What should be the role of foreign investment and of external aid? What attitude to adopt vis à vis foreign investment (i.e. transnational corporations)? How can the State use diminishing foreign aid to best advantage and with minimum conditionality? Can the agencies of the United Nations make a positive contribution?

Contributions requested particularly from Erskine Childers, Xabier Gorostiaga, Adebayo Adedeji and Claes Brundenius. (The facilitator would also like to act as a participant in this session).

Day Two Thursday 2 February

Third closed session, 14:00-17:30

Popular participation, employment creation, the 'basic needs' scenario and self-reliance revisited

The majority of the people in the countries concerned still derive their livelihood from agriculture so one of their prime concerns is certainly NATIONAL FOOD SECURITY. How can people be productively employed in the countryside (directly or indirectly in agriculture) so as not to become migrants to the cities, with all the attendant problems for governments? 'BASIC NEEDS': How best to insure proper health, nutrition and education (especially basic literacy) for all citizens? Which historical 'basic needs' models have succeeded and which have failed? Should some prices (e.g. for certain foodstuffs or energy) be imposed and administered by the State? CREDIT AND SELF-EMPLOYMENT: What is the role of credit in helping people to create their own employment? How can one best encourage a spirit of entrepreneurship without simultaneously creating extremes of wealth and poverty? How can poor people best undertake to supply not just their own jobs but their own housing and their own community self-help structures with minimum financial input and monitoring from the State?

Contributions requested particularly from Dr. Basheer (Kerala), Mohammed Yunus, Roy Prosterman, Xabier Gorostiaga, Peggy Antrobus, Manfred Max-Neef.

Day Three: Friday 3 February

Fourth closed session 9:30-12:30

National security, democracy and the politics of civil society

NATIONAL SECURITY: Without the Army (or in some cases less formal forces of national resistance) which played a vital role in gaining independence, there would be fewer participants in the Oslo meeting, but the maintenance of the military in time of peace is known to be costly and armies are rarely economically productive. What is the role of the military when formal independence is achieved? Is the Costa Rican model (police forces but no army) a viable option? Does the State still have external enemies and what level of military force is needed to guarantee its independence? Should international guarantees be sought and are they worth anything? DEMOCRACY: In the area of political democracy, are the States represented at the conference self-confident enough to promise regular legitimation of their authority through elections or some other means? Will they guarantee a free press, an independent judiciary and checks-and-balances on executive power? CIVIL SOCIETY: How can they contribute to strengthening the capacities of their own civil societies, and how can they best arbitrate between competing groups? Is multi-partism a diversion or a necessity for democracy? Is 'cultural invasion' a danger? One frequent observation is that the knowledge of 'ordinary' people is rarely used by the governing elites. How can local savoir-faire contribute to the general welfare?

Contributions requested particularly from Dan Smith, Erskine Childers, William Lafferty, Yash Tandon.

Day Three, afternoon 14:30-16:30

Open session

Brief closing statements (assessments?) from the participating ministers,

Speeches by Rubén Zamora and Kari Nordheim Larsen

A resume of the current Norwegian debate on foreign aid may be added to this part of the programme.

16:30-17:30: Press conference

Scenario Two: A Conference with more manifestly political objectives: The governments represented have something new to say to the South and to the world

If the second option of a more political conference is preferred, then some (though probably not all) of the same subjects could be examined, but with a view to reaching common attitudes to them and to showing how these attitudes represent a departure from the current consensus. This option would require both a national and an international dimension.

At the national level, for each participating country, and whichever topics were examined, the point would be to determine under what conditions greater independence and freedom of choice could be achieved. The basic assumption would be that local institutions should take precedence over foreign ones; that the state is more legitimate with regard to its own people than international agencies, however powerful and prestigious.

The question thus becomes: how can a country strengthen its own institutions in a hostile ideological context? 'Institutions' is meant here to include local knowledge systems such as farmers' savoir-faire and empirical research (e.g. on biodiversity), family structures, traditional patterns of conflict resolution, ways of avoiding the commodification and consequent marketing of human labour, land and other natural resources traditionally considered as common property; environmental maintenance and protection and the like. How can a country reduce to a maximum its dependency on the good will of outsiders through its (apparently) 'technical' choices like energy options, foreign borrowing, etc.

As to the international dimension, participants would need to examine the stated or unstated assumptions of the dominant development model and the global market-oriented society and express their agreement or disagreement with those assumptions. In the area of constraints to political action, they would need to devote more time to macro-economic constraints devised by the Bretton Woods Institutions. They would break with the dominant model's unstated assumption that 'natural capital is worth zero'. They could attempt to establish a common list of political priorities and they could examine the possibility of mutual aid, the sharing of local low-cost knowledge technologies and even, perhaps, the pooling of external assistance for cost-effective purchases, economies of scale and the like.

Politically, the point would be to create a small core group of countries of the South which refuse to recognise the legitimacy of outsiders to determine the destiny of their own people.

They could make a start by drafting 'The Oslo Declaration', a kind of latter-day Declaration of Independence. Granted, there would not be as many participants as in Bandoeng, but surely that fire has not been completely extinguished?

Such a scenario may, of course, be utterly utopian. The ministers present may not be able to speak (or at least not immediately) for their entire government just as their governments may hesitate to show any signs of dissent from the international consensus at a particularly difficult juncture in their history. All this is understood. On the other hand, there is a desperate need for new thinking on national priorities which would be legitimised by the support of governments whose defense of certain principles is a matter of historical record. If the Oslo meeting could make a start towards breaking the liberal ideological consensus, it would be a great service to humanity in general and to the South in particular.