Entries tagged with “growth”.

Ah, that familiar refrain – a mix of love and derision provoked by the vagaries of life in my favorite West African country: the power cuts out randomly in the midst of a big soccer match, “Oh, Ghana!” The new road washes out because of inadequate culverts? “Oh, Ghana!” And now, the country’s economy grows 34% in the second quarter of 2011 – expanding the GDP by 3.4 percent in that quarter alone (h/t to Andy Sumner for pointing this out to me)?

Wait, isn’t that good news?

Well, on its face, yes – this surge in growth suggests there is a lot more money at play in Ghana, and that will hopefully result in new and better jobs, greater revenues for the state, and eventually better services for the population.  But there are two big caveats that really, really worry me here.

  1. The growth was driven mostly by growth in the mining and quarrying sector – of which oil has about a 2/3 share. So the economy has grown, but it is still commodity-dependent.  Admittedly, they now have oil on top of cocoa and gold, but these don’t exactly track independently of one another.  Building your whole economy on three commodities is not a path to a stable, sustainable future.
  2. Ghana does not seem to have a plan to spend all of this new revenue in a manner that will trigger the virtuous process I was describing above.  Without a plan, the possibility of misuse and redirection of funds into private accounts rises dramatically (h/t to Mark Weston).

Oh, Ghana!

Even the oddly good news – agricultural (economic) growth seems to be matching the growth of mining and quarrying – isn’t really that good.  At first glance, this news seems to suggest that ag production is increasing, or that more of that production is getting to market before spoiling, trends that would benefit much of the Ghanaian population.  Maybe not, though – Ghana’s light-crop cocoa crop doubled over the same period last year, suggesting this increase is largely pegged to cocoa.  Worse, a big chunk of this improvement is tied to good weather, which is difficult to gamble on year-to-year.

Oh, Ghana!

An interesting post at Blood and Milk yesterday led a commenter to note that we shouldn’t use the terms “international development” and “aid” interchangeably – that the “real big story about development is exactly that it is NOT all about aid, but about domestic elites establishing pro-growth rules.”

For me, this raises two issues – the first is about the relationship between aid and development, and the second about the character of development itself.  Alanna Shaikh, who writes the Blood and Milk blog, added a new post today that addressed the first.  In this post, Shaikh argues “You can, and do, get development without aid. I’m pretty sure you don’t get it without economic growth.”  Well, sort of.  I currently work in one of the world’s largest development/aid organizations.  I am the climate change coordinator for the Bureau most directly responsible for our aid activities (as opposed to our development activities).  This puts me in something of an odd position – I am a development/environment person tasked with thinking and program-building for the long-term in an aid organization that is often reactive in its programming and its mandate.  Why, then, did I take this position?  Because of the need to better connect aid to development (and vice versa).  Right now, aid and development exist in very different worlds – even in the same building, there is little communication or coordination between these two missions.  This galls people on both sides of the divide, from leadership down the line.  The vision of an agency like mine is that aid should transition to development, ideally seamlessly (though at this point we would take any sort of transition).  Adaptation to climate change is one area where such transitions can be created out of existing programs – our aid teams work on hydrometeorological disaster risk reduction (DRR), and our development side works on adaptation to climate change.  These are very similar areas of work, differentiated largely by timeframe.  One of my jobs over the next few years will be to better connect our hydromet DRR and adaptation programming to build one connection between aid and development – a thread that we might use to close other aid/development gulfs (such as in food aid and agricultural development).

Aid may not be the same thing as development, but it should not be seen completely separately from development – my Bureau sees its constituency as that component of the population that is largely left behind by economic growth programming.  Nobody debates that a significant percentage of the population slips through the cracks of economic development programming – our job is to ensure that those who slip through the cracks do not remain there, but have an opportunity to recover and participate in society, politics and the economy.  So, when I hear someone argue that there can be development without aid, I strongly disagree – at least at the national scale (communities are a different issue).  At the national scale, you cannot have socially or environmentally sustainable development that abandons a significant portion of society to its fate.  Aid is critical to development – or it should be, if only we could better coordinate aid and development efforts.

Second, I am deeply concerned by the continued connection of development to economic growth.  The linkages between human well-being and economic growth are shaky at best (most correlations can be readily challenged and dismantled) – largely because development, globalization and growth do not really work the way people seem to think they do (my book is an exploration of this point).  Further, economic growth cannot be eternal.  3% growth per year for everyone forever is simply beyond the physical capacity of the planet.  I’m pretty sure that development is going to have to detach itself from economic growth (ironically, this would mostly entail simply acknowledging the reality of what’s been happening around the world for the last 60 years) if it is ever to accomplish its end goal – the improvement of the human condition in this world.

Finally, a thought on the two metastories of development that Shaikh raises at the end of her post.  I agree that development is neither all success or all failure – it plays out differently in different places, and we have better understandings of why in some areas (health, for example) than in others (transportation development, for example).  I would argue that this is a symptom of a larger problem – we really don’t understand what is happening in the Global South most of the time, and as a result we are often measuring and analyzing the wrong things when we do project scoping or evaluation work.  Our assumptions about how the world works shape the way we frame our questions about the world, and the data we gather to answer those questions.  The problem, simply put, is that we are often asking the wrong question.  Sure, every once in a while our assumptions align with events on the ground, and a project works.  But the rest of the time, our assumptions do not align with reality, and we run into difficulty understanding what is happening in particular places, and why particular projects fail.  The end result?  A seeming random set of project outcomes, where things work in one place but not another for reasons that seem hard to discern.  There are more fundamental metanarratives of development out there than success or failure – they are narratives about how globalization works and how development works that shape our very ability to assess success or failure.  And those narratives actually misinform many of our best efforts.

It seems to me that one of the more interesting debates to be had around global environmental change and development is that of the nature of growth in the modern world.  There are those that argue (or at least implicitly argue) that growth is effectively unlimited by the biophysical world – the real barriers to growth around the world are capacity, governance, etc.  Operating from this assumption (or something near to it), the logical decision is to foster growth everywhere in the world, and to assume that the absence of growth is a symptom of problems with human capacity, attitudes and institutions that can and should be rectified.  At another pole are those that argue that our growth is fundamentally pinned to the biophysical world – this is the implicit assumption behind ecological footprint calculators, that we draw upon natural resource for growth in a manner that is fixed and measurable -and the measurements suggest, rather strongly, that growth is highly constrained by the biophysical world.

Like most people, I exist somewhere in the middle of this continuum.  Ecological footprint calculators, imperfect though they may be (for example, converting our resource use into acres of land is a problematic and weak process/proxy), demonstrate rather clearly that if we are to get everyone in the world up to the average standard of living in the United States, we would need the natural resources from around three Earths.  Many of the arguments about future policy built on these footprint calculations end up discussing rather steep resource and wealth redistribution curves if we want to see a more equal world.  However, there is a significant flaw in this reasoning – these measures (let’s just assume that they are reasonably accurate for the purposes of this argument) and the resultant policy prescriptions assume the per capita intensity of use to be a constant going forward into the future.  This discounts future technological developments that will, no doubt, lower the per capita resource use of those in the advanced economies, such as the US.

On the other hand, the news here isn’t all good – while the intensity of use might decrease over time, such decreases typically translate into the market in the form of reduced prices, which tend to spur increased production.  Put another way, 5 years in the future we may only use 75% of the resources we do today to make a shirt, thus lowering the footprint of that shirt and the person who buys that shirt.  However, the price of that shirt will likely decrease to remain competitive in the market, encouraging consumers to buy more shirts than they used to.  If the price drop of the shirt is such that the consumer who typically buys four shirts a year decides to buy five, we’ve already lost the decreased footprint created by increased efficiency to a larger footprint created by greater consumption.  In other words, improved resource efficiency related to growth won’t do us much good if it spurs the growth of consumption such that the per capita resource uptake remains constant or rises.

There is another bit of bad news here – even if those of us living in the advanced economies decided to freeze our amount of consumption, locking in our current standard of living while allowing increased resource use efficiency to translate into greater availability of goods and services in the Global South, I don’t see a point any time in the near future where these benefits will be of a scope that will allow for a real closing of the gap in the material standard of living between the developing and the developed.  We’re looking at differences of orders of magnitude right now, accrued over several centuries of differential political economic activity when the Earth’s population and total resource uptake was much, much smaller.  So if we want a truly equal world, those of us in the advanced economies are going to have to give something up.

While I am an indefatigable optimist (hey, I am writing this post but I still work in development), this doesn’t absolve me from a serious consideration of reality – so maybe I am a constrained optimist.  The size of the global population today, coupled with our current regimes of resource use, have taken most, if not all of the slack out of the global resource/growth equation.  No, we are not yet at a zero-sum world where growth in China means loss somewhere else, like the US – it is still possible to see growth in multiple sites, as technological advances create a bit more space for growth via increased efficiency.  But there will come a day where we will cross this curve – where our inability to make things more efficient as quickly as our increased demand on resources rises will finally come to a point where the resources themselves become the restrictor plate on growth – the world will effectively become a zero-sum economy.

In my work on the Millennium Ecosystem Assessment, I saw trends that make the math above a lot more pressing.  The rates of resource degradation around the world are astonishing.  Not everything is getting worse, of course – temperate forests, for example, are doing pretty well – but an astonishing percentage of the resources we rely upon for our standard of living are under threat right now, not in some distant future.  So our current use of the environment (much of this use in the name of growth, incidentally), with its various impacts, is hastening the day when we cross the curve into a zero-sum economy.  Some might argue (or hope?) that we will generate enough wealth and capacity between now and then as to come up with some sort of a solution for this – or to put back the damage that we have done to our environment, thus uncrossing the curve for a while longer.  This strikes me as a hell of a gamble*, where the stakes on a bad bet are getting larger and larger.  Meanwhile, the nature of this bet has been shifting from betting one’s house on red to betting one’s house on red 16 . . .

No, we are not there yet.  But, barring a remarkable revolution in our ability to generate energy and food (I won’t rule these out, but the sort of revolution we need is on the order of fusion, which isn’t all that close right now), zero-sum is coming.  But what should we call this not-quite-zero-sum world we are living in?  Surely someone has a name for this already . . .

*in the case of extinctions, this is a pointless gamble – there is no putting back extinct, and anything that goes extinct will have effects (some obvious, others difficult to discern) throughout ecosystems . . . and often there will be one or more impact parts of that ecosystem that humans see as useful. or necessary.