“FOUR critical lessons,” distilled from development experience of the past 50 years, could help the Philippines and other countries chart their way, in a turbulent 21st century through interlocking trends of localization and globalization.

The World Bank documents this theme in the millennium edition of its annual development report: Emerging Into the 21st Century.

“An increasing proportion of economic value will be weightless - transmitted over fiber-optic cable rather than transported in a container ship,” as globalization spreads, the Bank notes.

A wave of “localization” is simultaneously pushing “national governments to reach down to regions and cities, as the best way to manage changes.”

“Fifty years of development experience,” the Bank claims, “yielded four critical lessons.” These are:
1. “Macroeconomic stability is an essential prerequisite for achieving the growth needed for development.
2. “Growth does not trickle down. Development must address human needs directly.
3. “No one policy will trigger development. A comprehensive approach is needed.
4. “Institutions matter. Sustained development should be rooted in processes that are socially inclusive. (They must be also) responsive to challenging circumstances.

These lessons could help in cobbling “new rules and structures to serve as foundation for development policy in the 21st century,” the report notes.

“The message of this report is: new institutional responses are needed in a globalizing and localizing world.... To capture the benefits of growth in the 21st century,” all countries must engage in twin-track institution building.
 The 20th century search for “a magic formula that will inspire development in all times and places” has proved futile. “Mainstream development thinking is seeking instead “broad pragmatism.”

What policies worked in 1960s or 1980s were specific to time and place. “Nor are they likely to be appropriate in the opening decades of the 21st century.”

Development policies are interdependent, the Bank notes. Countries need institutional environments that reward performance.

Despite the welcome growth of people’s organizations, governments play a vital role. But government tends to be inefficient. “There is no simple set of rules that tell them what to do.”

“Rule-based processes increase the transparency of policies.” A sound legal framework helps all on “building firms rather than looting them.” A well-run civil service and an independent judiciary are prerequisites for efficient programs.

“Contours of the new landscape” include issues of poverty, water scarcity to implosion of cities, cultural loss and environmental decay.

This (call) for urgent action because “burgeoning population, combined with the relatively slow growth in the productivity of food grains in the 1900s is, once again, raising fears of food shortages,” the report adds.

The gap in per capita income between the rich and poor countries widened six-fold between 1870 and 1985.  In fact, only East Asia saw incomes converge towards those of the industrial regions.  “They show how difficult it is to close the gap.”

The Philippines will have to set up safety nets for workers displaced by trade and whiplash financial flows, as well use more effectively World Trade Organization mechanisms.  It must reinforce the capacity of local governments.

“If managed well, these forces could revolutionize the prospects for human welfare,” the report notes.  “The same forces are also capable of generating instability and human suffering.”* (DEPTHNews)
 

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