What Does Development Mean

What does ‘development’ mean? From economic development to growth and happiness Francine Mestrum, PhD www.globalsocialjustice.com

Failing efforts in development cooperation have given rise to a now intensive debate on what ‘development’ should mean or should try to achieve. The next question then, is what ‘development cooperation’ should try to achieve? The answers to these questions are not easy, but the vagueness of some of the answers is not necessarily innocent. ‘Development’ is a highly controversial ideology. Three of the main reasons for this are obvious. The first reason is very clear. One can find it in the books of William Easterly or the recent success of Dambisa Moyo. Markets are much better instruments than States and solidarity is an unknown and useless concept. These market-oriented thinkers have good arguments to be against development cooperation. However, giving up solidarity in a world with huge inequalities does not seem to me to be acceptable. Secondly, some development actors think that the ‘road’ is more important than the ‘arrival’. ‘There is progress, but there is still a long way to go’. It means that one doesn’t know exactly where the road is going, that past efforts have been mainly unsuccessful, but that the few positive results are a reason for hope and continuous work. It is the answer of those who work in the aid industry and who cannot imagine, in spite of all the criticism, a world in which their presence becomes redundant. They prefer to continue and take a ‘leap in the dark’ as the secretary of one major NGO recently declared. The third reason can be found with those who, equally, cannot admit their failures but who constantly search for ‘new paradigms’. ‘We learn from our mistakes in the past’, they say, ‘from now on things will be better’. They introduce concepts as ‘participation’ and ‘ownership’ and ‘accountability’ or ‘governance’. They forget the concrete objectives of ‘development’ in the 60s – to close the gap between ‘underdeveloped’ and ‘industrialized’ nations – and now aim for poverty reduction. Whereas it is certainly possible to give approximate measures of individual income poverty, they prefer to talk of ‘multidimensionality’ which is hard to measure, and even of ‘wellbeing’ or ‘happiness’. For them, the perception of poverty is at least as important as the real hunger people are suffering from. It is this third phenomenon that I want to analyze in this article. I would like to explain how the ambitions of development cooperation are constantly downgraded and how the approach has become purely subjective. To-day, more

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and more people speak of ‘gross national happiness’. The question is: does it mean anything? Fifty years of independence In 2010 it will be fifty years since the decolonization process started. From 1960 onwards, African States became independent and became members of the United Nations. Thanks to Latin American countries – which had already more than one century of independence -, they knew that political independence was rather meaningless if there was no economic progress. An analysis of the UN-documents from the 50s, 60s and 70s tells us what was meant by ‘development’ at that time. Industrialization was a major demand since all rich countries were indeed industrialized. International trade was controversial, but there was an agreement to say that fair prices had to be paid for the commodities third world countries were exporting and that the terms of trade had to be improved. One possibility was to give the new states a fair part in the services sector (banks, transports, insurance …). The new States also wanted to have a say on the multinationals that worked in their countries in order to have some of the profits re-invested. They wanted a transfer of technology. And in order to fill the financing gap, the now famous objective of 0,7 % of GDP of rich countries was introduced. The new States wanted to fill the gap between ‘underdeveloped’ and ‘developed’ nations. ‘Development’ was a national process of economic modernization and collective emancipation. This generous development discourse did not last for long. It is difficult to say whether the rich nations have ever really been willing to give in to the demands of their former colonies. But it is clear that one major mistake was made – consciously or unconsciously - from the beginning. ‘Development’ was being considered as a consensus issue, as if everyone agreed that it necessarily had to happen and that everyone wanted it to happen. But development practice in North and South clearly pointed in another direction. Moreover, the 0,7 % of GDP was never realized. In 1970, the UN-resolution on the second ‘development decade’ was adopted and it was stated that the gap between rich and poor continued to grow. Today, the seventies are seen as the ‘decade of social development’, since poverty suddenly became an issue, as well as social protection, basic needs and the informal labor market. But beginning of the 70s, the US abandoned the Bretton Woods agreements whereas the oil exporting countries tripled the price of the commodity that had become so vital for the West. This was the beginning of an economic crisis that led, in the 80s, to neoliberalism which thirty years later led to the current financial and economic crisis. Development assistance never really got back on the right trail. Between 1975 and 1990 it never was more than 0.30 to 0.35 % of GDP. After the Wall of Berlin came down, it dropped to 0.20 %. To-day, it is rising again though the current crisis could put a spoke in the wheels. The most recent UN-report on the Millennium Development Goals speaks already of a certain decline. 2

Neoliberalism After the external debt crisis began in 1982 in almost all developing countries, the World Bank and the International Monetary Fund were ready to help. New loans were given to settle the old ones and in return the indebted countries had to accept ‘structural adjustments’. The history of these is amply documented and we know that it has brought a certain macro-economic stability and a lot of human suffering. According to the UNDP, the social indicators in many countries, as well as the human development fell back. There was massive unemployment, women came to the informal labor market, schools and health centers were closed. In 1990 the World Bank re-invented ‘poverty reduction’. It had done so before in the 70s though it never really put it into practice. At that time, poverty was still related to social protection. The poverty discourse that emerged in the 90s was very different. Social security was now seen as serving ‘vested interests’, minimum wages were said to be contrary to the needs of the poor and with the exception of the social funds that were supposed to help some of the extremely poor people, the main solution for poverty was said to be the market. Poverty, so one can read in all major documents, is mainly a consequence of discrimination and limited access to markets. Nothing in the first poverty programs of the 90s was different from the structural adjustments. Even after 1999, when the IMF joined the poverty efforts and poor countries were asked to introduce PRSPs (poverty reduction strategy papers), the IMF and the WB continued to impose their conditions, mainly the liberalization of trade and of capital accounts and the liberalization and privatization of the economy, including public services. The development agenda of the 60s and 70s had totally disappeared. Priority was now given to poverty reduction though it should be clear this can only be the consequence of an economic development process. All neoliberal reforms that were imposed were said to be – in the long term – in the interest of poor people. The market would promote growth and growth is for the poor. Today, we know – once again - this did not happen. It became obvious that once again, the ambitions of rich countries had been seriously downsized. Closing the gap had totally disappeared from their discourse. ‘Redistribution’ became unmentionable. Agriculture was neglected. A new poverty discourse In 2000 the World Bank published its second major poverty report. In 1990 poverty was considered to be a question of lack of education and of health care. In 2000 the definition was broadened. Poverty, the report states, is vulnerability, lack of empowerment and lack of voice. Poverty, then, was definitely ‘multidimensional’. The poor will rarely speak about income. This is how the World Bank interprets the poor’s discourse, though other interpretations are certainly possible. In fact, it means that another important and dangerous step is being taken. After downsizing the ambitions in the 1990s, the next step was to forget the 3

improvement of material wellbeing. Poverty, in any market economy, is necessarily a matter of income. The poor need money in order to send their children to school, in order to see a doctor, in order to have a roof over their head, in order to buy food. One needs money to buy clothes and to go to the market. Clearly, trying to eliminate this income deficit may need a multidimensional approach, it may need to give people vocational training, social capital, empowerment, etc. But the objective should always remain to help people to satisfy their basic material needs. In other words, poverty reduction policies may be or need to be multidimensional, but poverty basically is an income deficit. The concept of multidimensionality – that is also used in rich countries – can be a dangerous step to hide the income poverty that one does not want to see and to solve. Even if poor people find access to the labor market, it usually is with jobs that are not well paid and leave the poor in their misery. More than half of the working population in developing countries earns less than 2 $ a day. ‘Workfare’ programs may help people to survive, but they keep living in poverty. In other words, ‘multidimensional poverty’ creates an impression of a ‘holistic’ approach that allows to see the poor as human beings. In reality, all human and psychological aspects of poverty are being considered, without giving the poor a possibility to really solve their income poverty. Income, according to the World Bank, is a ‘stochastic phenomenon’, it depends on numerous elements and the responsibility of the poor themselves has to be taken into account. Income generation cannot be a public responsibility. The ‘empowered’ poor who can ‘participate’ and who has ‘voice’ can reduce his/her vulnerability thanks to training or health care. It means that he/she should be able to earn an income. Unfortunately, we know, here and in the South, that reality is somewhat more resistant. Multidimensionality hides the real material aspects of income poverty that no one wants to solve. The millennium development goals In the meantime, poverty reduction policies had also been seriously downsized. The worldwide consensus on the priority for poverty reduction in development cooperation policies came about at the UN-summit on social development, Copenhagen, 1995. The action platform consists of three equivalent chapters on poverty, employment and social integration. These two last chapters have, unfortunately, been forgotten. The text on poverty shows the lack of clarity – or willingness? – to eradicate it. The ‘eradication’ of poverty became the ‘eradication of extreme poverty ‘ and later ‘poverty reduction’. All the same, the document does mention several elements that led to hope that social protection could be one of the issues to tackle. However, in 1996, one year later, the OECD published a new agenda for development cooperation: “Shaping the 21st Century”. It consists of a short series of ‘international development goals’ that seriously diminish the ambitions of the different action platforms that had been adopted at the UN conferences of the 1990s. In 2000, when the WWSD+5 conference took place in Geneva in order to check the implementation of the Copenhagen agenda, the OECD, the WB and the 4

UN published a common document in order to promote these ‘international development goals’. Together with other goals for human rights, they will be mentioned in the Millennium Declaration that was adopted at the UN-Millennium summit of September 2000. Later, eight ‘Millennium Development Goals’ will be distilled from this Declaration. This whole exercise once more allowed for downsizing the development agenda. Firstly, a whole serious of objectives in terms of human rights, that were mentioned in the Millennium Declaration, disappear from the agenda. Secondly, the action platforms of the different UN-conferences of the 90s are forgotten. Thirdly, the objectives for poverty reduction as well are lowered. The MDGs do not mention the number of extremely poor people but only the proportion of the poor in the developing countries (and no longer in the whole world). The year of reference becomes 1990 instead of 2000. In this way, the number of extremely poor people will only minimally be diminished instead of being halved, that is, in the (unlikely) hypothesis that the MDGs will be met by 2015. However, extreme poverty, according to the Secretary-general of the UN, is poverty that kills. What about the statistics? It should be clear that one cannot be against poverty reduction. However, the question that has to be answered is if it is possible at all to fight poverty at the global level and in the absence of comprehensive economic and social development programs. It is striking to see that in 1990, when the World Bank put poverty back on the international political agenda, there were no statistics on world poverty. The World Bank did starts its research, but the results are highly questionable. This does not mean that the experts of the World Bank do not work properly, but that there are serious methodological problems and that the efforts are too biased and limited. Let me give some examples. In 1985 the World Bank’s estimates about the number of extremely poor people in the world amounted to 633 million, a drop of 167 million compared to 1980. In the 1990s the methodology was changed, the purchasing power parities were adapted and the poverty line put higher. With this new approach the World Bank estimated that there were 1482 million extremely poor people in 1980, almost double the first number! In 2007 a similar thing happened. It was stated that the purchasing power parities for China and India were completely wrong (with 40 and 25 % respectively!). A new poverty line of 1.25 $ was introduced (instead of 1 $ a day) and this led to a new estimate of 1913,3 million extremely poor people in 1981, three times as much as the estimated number for 1985. In percentage, this is in fact a good result, because it shows that extreme poverty has decreased from 50,2 % in 1981 to 25,7 % in 2005! This is precisely what the Millennium Development Goals aim to realize: halving the proportional extreme poverty in 25 years… But many of these number are still based on estimates and extrapolations. According to the UNDP, 67 countries still lack statistics for the MDG indicators. 95 countries do not have trend data. This puts all these numbers in a different light. And we have to confess - even the World Bank does it now and then -, that we 5

know very little about world income poverty. We know, because we see it, that many people are extremely poor and that many people – mainly women and children – die from poverty related diseases. Would it help us to have precise numbers? I do not think so. The knowledge that there are one hundred million poor people less or more will not influence the policies, because statistics and policies are not related. Today, ‘poverty reduction’ is the umbrella that allows to hide the neoliberal reforms and no one really cares to know how many extremely poor people are trying to survive. International poverty reduction policies are very difficult to put into place. Even in Europe, we do not succeed in eradicating poverty. How would it be possible to reach this objective at the global level? If insufficient resources are transferred to the poor countries and if poor countries themselves are not allowed to develop policies to really fight poverty? If economic development is left to the market? The existing social protection is still being dismantled since it is said to be inappropriate. The PRSPs, the poverty strategies that poor countries are now obliged to introduce, are in their third generation but still do not mention how incomes can be generated for poor people. Today, more and more people begin to realize that ‘poverty reduction’ was an excellent tool to keep the fire of development cooperation burning and at the same time to continue with neoliberal policies. We act as if we were ‘developing’ others. Some call this ‘the SIBD-syndrome’: something is being done. Wellbeing and happiness Now that it becomes clear that poverty reduction policies and the Millennium Development Goals are failing as well, a new discourse is being prepared. It has to be analyzed in the context of the growing awareness of an equally important ecological crisis. We have to ‘re-think’ development, we cannot strive any longer for the material welfare of people, we should look for their wellbeing and happiness. We need a ‘post-MDG’ agenda, according to many. It means: the MDG agenda have failed, we now continue with a new agenda that is even less ambitious and all the more ‘holistic’. But this new agenda is far from new. In fact, it is clearly linked to the postdevelopment thinking and this is why it risks to be positively evaluated by some progressive people. ‘Post-development’ is an intellectual movement that criticizes the concept of development, interpreting it mainly as discourse and totally ignoring the material basic needs of people and nations in the South. It wants to restore local traditions and social relations and attaches much importance to culture. Universal values are believed to be irrelevant and emancipation can be realized by stepping back into the past. One of the major arguments, especially with some indigenous groups in Latin America, is a rejection of everything that comes from ‘the West’. The emergence of this new development agenda can, once again, partially be attributed to the OECD. There is a long research history that is looking for the 6

relationship between wellbeing, prosperity and happiness. In 2007 a major conference was organized in Istanbul on the measurement of ‘the progress of societies’. ‘Business as usual’ is no longer possible, it was stated, we have to look at what poor people themselves see as problematic and at the qualitative and psychological aspects of wellbeing. A positive message will have to be sent out, based on what people can do and can be. Is it a coincidence that one of the conference’s conclusions was the statement that income inequality, economic growth and social security play no role whatsoever in the ‘happiness’ of people? In Western Europe, these ideas are being promoted by some greens who find their inspiration in a recent report from the New Economics Foundation. It shows that more material progress is not synonymous with more happiness. People who can more than satisfy their basic needs, may tend to agree with this statement, though it is certainly naïve to think that material goods can never mean more happiness or that wealthy people cannot be happy. ‘Riches alone make no man happy’ is certainly correct, though some money can certainly help. The advocates of this wellbeing approach often refer to Bhutan, where an enlightened king has introduced a measurement of ‘Gross National Happiness’ and seeks to measure every two years a total of 72 indicators. He hopes to discover how well his country and its people are doing. A real problem in this context is indeed the point of indicators. The GDP (Gross Domestic Product) has been criticized for a very long time, since it measures all activities that lead to the production of goods in our society. However, not all goods also contribute to our wellbeing. Traffic accidents or funerals are or contribute to economic activities that do not make us happy. Moreover, certain material goods will even cause ecological damage or will lead to more stress. GDP does not tell us anything on the non-paid labor of mainly women. A new indicator that can take into account all those elements is certainly welcome and there are already many examples. Some countries have introduced the ISEW – indicator for sustainable economic welfare – and use it in parallel with the GDP. But how should we assess this approach in poor countries? Alternative indicators, such as the Human Development Index of the UNDP, are certainly welcome. Taking into account the environment and women’s labor is very important. But can we not agree to say that poor nations and poor people need in the very first place more material prosperity? More food, more housing, more jobs, more income, more public services? Again, it is no coincidence that many poor countries started to introduce cash transfer programmes, like the ‘Bolsa familia’ in Brazil. A very small amount is paid weekly or monthly to poor families and the success in poverty reduction is huge, better than all ‘multidimensional’ poverty approaches taken together. ‘Development’ brings no happiness There are many reasons to be extremely skeptical of this new approach in development thinking.

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Firstly because, at any rate, development remains a collective project for a nation, a region or for peoples. Wellbeing and happiness on the other hand, are purely individual values. Even if some academics try to present this wellbeing as a social concept, it is clear that many divergent individual visions of wellbeing exist. In order to reveal what it really means and in order to try and improve it, governments need to strongly intervene in people’s individual lives. One can wonder whether this is feasible and/or desirable? Is the World Bank able to determine how to offer more ‘wellbeing’ to people? Is this not another way to impose our vision of ‘wellbeing’ to others? Secondly, development will always need an important economic dimension and preferably, this will have to be coupled to a social dimension. They can mutually reinforce each other by offering security on the one hand and creating purchasing power on the other hand. ‘Wellbeing’ and ‘happiness’ may be the results of these policies but they will never by identical. Wellbeing and ‘happiness’ will always involve more than need satisfaction and are difficult to measure in an objective way. They are more comprehensive than any socialeconomic approach and also involve a psychological dimension. Can one ask or expect a government to be responsible for it? Thirdly, one has to make a distinction between ‘wellbeing’ and ‘happiness’. A government that wants to improve the wellbeing of its people can be praised, even if one has to realize that it will never be able to really deliver. ‘Happiness’ on the other hand is a totally subjective value that completely falls outside the action field of governments and that has nothing to do with prosperity or with welfare. Everyone will know poor people that are happy and wealthy people that feel unhappy. A.K. Sen has repeatedly warned us that many deprivations and discriminations are interiorized and that many people do not even realize that another kind of life is possible. It means that there is a risk that a small farmer who happened to reap a decent harvest will say to be happy, even if he remains extremely poor. But being ‘happy’ will exclude him from the list of problematic cases. In this way, one can totally ignore the real misery of people, a tendency that is already present in the ‘multidimensional’ approach. Finally, this approach totally hides the income inequality and the lacking (global) redistribution of wealth. Nothing is left, then, from the old concept of ‘development’. It is not a coincidence that one rarely finds a definition of economic development nowadays. This is the way to prepare a new content for ‘development’ that will hide what is really happening: a new focus on philanthropy – every village and every wealthy family its own project -and a new focus on security – a new priority that is now being prepared. The new holistic development, then, is purely subjective, while policies prepare a new colonization. The poor should be worried. And social movements should care. A recurrent theme In the French Declaration on Human Rights of 1793 ‘happiness’ was mentioned as a social objective. Later texts do not mention ‘happiness’ anymore. In the 18th century the objective was to make poor people ‘happy’ in order to keep them 8

where they should always remain, on the lowest treads of the social ladder. It is mainly to them that the message is repeatedly given that ‘wealth does not bring happiness’ or that money can have corruptive effects. It is the solution to try and prevent the poor from seeking more prosperity. Today, a new variant of this old anthem is emerging in a context in which poor and rich nations find no agreement on climate change. It is clear that wellbeing can have a place next to prosperity and can become a political objective, at least if one accepts that governments can only create the enabling conditions for this wellbeing. Creating prosperity is one of the main conditions. Trying to change the unsustainable consumption patterns of those at the top of the social ladder is also a very positive step in this emerging ecological crisis. New indicators can help to measure the real progress of societies and to see in what way the environment is being protected. However, poor people, here and in poor countries, need more material prosperity. They need more economic growth. What is currently being prepared in an unholy alliance of indigenous people, development ‘experts’, greens and neoliberals, is totally contradictory to this objective. Once again, the objectives of development cooperation are begin downsized and become more and more subjective. The poor people of this world should not accept it.

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