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Science-Based Economic Development edited by Susan Raymond
We live in a new era. One could almost talk about a new civilization emerging, the global market civilization. The global market has its own characteristics. It is being formed around a number of cities around the world, which provide the keyingredients: technology, finance, information, and people. Some two hundred million people are today living in or around the urban centers which dominate the new global economy. They belong to the groups of people that are the likely winners of globalization. At the same time, there is a great risk that strong market forces will marginalize parts of the world's population- those who are not integrated into this new global economy.
One salient feature of the new economy is the importance of knowledge. We have always lived in a knowledge society. The difference today is the revolutionary pace at which technologies change. In the early parts of this century it was estimated that the volume of knowledge in society doubled every fifty years. Today it happens in five years.
One important characteristic of the new technologies- particularly in combination- is the potential for wealth creation. Hence, we are already witnessing rapidly widening gaps in wealth and income between the "knowledge workers" and the rest of society. Knowledge is power, today more than ever before. The formidable challenge, as I see it, is to reach out to the poor, to the marginalized, all over the world and offer them the opportunity to learn.
A new divide is emerging between those with knowledge and those without. Money and wealth can be redistributed, at least in theory. That is not the case with knowledge. Knowledge must be acquired through one's own work and efforts. Consequently, development in the future will be different. Investments in physical infrastructure will still be important. But even more important will be investments in knowledge. Quite obviously this must have implications for all of us engaged in development and development cooperation.
Development cooperation has come under criticism in recent years. The reasons are many. Aid in the past was too often guided by political or security interests. Aid in the past was channeled almost entirely to governments, many of them undemocratic, corrupt, and inefficient. Aid in the past was too little concerned with the role of entrepreneurship, the role of markets, innovations, and technology. Even though, in retrospect, development cooperation has accomplished a great deal and will be much needed for many years to come, we do have to improve quality, and we have to rethink our objectives as well as our partners.
One argument often heard is that trade and private investments will do the trick. "Trade not aid" is a popular slogan. I do not disregard for a minute the role of private capital and trade. Foreign direct investment in developing countries has increased rapidly over the last couple of years. The problem, however, is that those investments are taking place in a small number or countries. The vast majority of developing countries-in particular the least developed countries (LDCs)-receive very little. The same holds with regard to their involvement in world trade.
Developing countries need all three: more trade, more private capital, and more aid. For the foreseeable future the poorest countries will be highly dependent on development cooperation. Such cooperation, however, should be treated more as a partnership and less as charity. It should be country-driven, not donor-driven. It should focus on capacity building and capacity retention.
Development cooperation for many people rests on moral commitment. This motive is worthy and, it is hoped, on the rise. However, there is another strong motive, and that is global security. Common interests and complementary needs of the North and South, of the rich and the poor, provide a compelling rationale for cooperation and partnership. Yesterday's threats very much had to do with national military security. Tomorrow's threats are social, economic, and environmental. Just as financial markets and trade are being globalized, so are poverty, drugs, diseases, pollution, terrorism, etc. These threats to human security need no passports to cross borders. If we don't raise the standard of living of the poor, if we do not protect the global commons, if we do not promote human rights, pluralism, and tolerance, the result will be increased tension and conflict within and among nations and a gradually degraded planet Earth.
Development in the past very much centered around production growth. We know today that growth is important but no guarantee for equity, no guarantee for poverty reduction. As a matter of fact, growth often results in increased marginalization of the poor and, with present production and consumption patterns, invariably results in environmental destruction. The great challenge is to bring about consistency between economic development, social development, and the environment. The goal should be development which is pro-poor, pro-jobs, pro-women and pro- environment-sustainable human development.
The knowledge revolution offers real opportunities for the enhancement of sustainable human development. Just image what could be done in terms of improved health and education for the poor as well as improved efficiency in how we use energy and materials, etc. But such developments will only come about if we are guided by a strong vision-a vision of a better world where we use technology to support the poor and the marginalized and to protect and regenerate the environment.
One of the characteristics of technology of today is the considerable gap between what technology could do (its potential) and what it does (its reality). We are all duly impressed by many new products and applications offered in the marketplace. But I believe we would be more satisfied if the new technologies more fully responded to some of the most burning needs of today: education, health, vaccines, sanitation, and clean water for the poor, environmentally sound energy and transportation-to name a few.
The role of markets is crucial in this context. One reason why there is not more interest in the problems mentioned is of course that the purely commercial aspects do not seem enticing to industry. The same can probably be said for the research community. The individual researcher is driven by curiosity, by dedication to solving a particular problem, but also by the prospective financial rewards.
Hence the need for public-private partnerships. In many areas such partnerships seem absolutely critical if we want to resolve many of the social and environmental problems of today. Here development cooperation agencies could play an important role in promoting such partnerships by identifying problem areas, by providing seed money, and by promoting links between public agencies and private companies. Such partnerships are particularly important in the areas of health, the urban environment, water, and energy, to name a few. Within the United Nations Development Programme we are actively pursuing the partnership concept with a focus in the short-term on urban environment issues.
What, then, are the key areas to which we should dedicate ourselves, the areas in which our efforts will have the greatest impact in developing countries? Our over riding concern no doubt must be to safeguard global political stability and peace. Issues like poverty reduction and stabilizing population are critical, as well as the protection of the global commons. The role of the UN is central in these endeavors. The link between peace and development is embodied in the UN Charter. The major UN conferences in recent years have all focused on these issues and the UN has been given a clear mandate in the follow-up to these conferences. We are short of financial means to do all this, and in many areas, we are still struggling to develop the right kind of strategies. But the mandate is clear and concise. What we are con fronted with here is research, analysis, and advocacy at the global level as well as concrete action at the local level.
The overall macroeconomic framework is critical. Markets are good at many things, but they do not offer solutions to many of the most burning issues facing us. Profit-led markets have no efficient means of responding to problems of social deprivation, hunger and illiteracy, depletion of natural resources, and growing structural unemployment. The presumption of a conflict between the state and the market is false. We need markets but we also need wise politics to address the kind of problems just mentioned. The great challenge today is to develop the right kind of political institutions on global, regional, and local levels and to develop the necessary strategies. (One area of special importance, where the UN has an important role, is to develop further social and environmental indicators. Our tools today to assess poverty as well as environmental sustainability are extremely poor.)
Poverty reduction must be a top priority for all development cooperation. Our aim must be to assist countries in developing strategies for poverty reduction and eradication. We know that poverty will be reduced only as a result of targeted policies. Here the international community could do a lot in giving support to governments in developing the right kind of policy framework for poverty reduction (as well as environmental protection) and in allocating their own aid budgets in favor of poverty reduction. Governance issues are important, as well as social services, and, of course, support to income-generating activities. It should be stressed that traditional labor policies are not enough. The majority of the poor live outside the formal economy. Hence the need to support efforts aiming at self-employment, small credit schemes, small-scale entrepreneurship, etc. Special attention must be given to the "feminization" of poverty. More than seventy percent of the absolute poor are women. Women workers predominate in low-paid and highly exploitative jobs.
Globalization and technology change offer opportunities. At the same time there is a considerable risk that many LDCs will be excluded from the new technologies. Strategies must be developed to support LDCs in their efforts to participate actively in the scientific and technological developments. Information technology and telecommunications are key in this context, and efforts should be made to help the least developed countries have access to modern telecommunications- a key entry-point to information, databanks, distance education, telemedicine, etc. Another strategic area would be to "leap-frog" in terms of education and training. Modern, interactive educational techniques offer fantastic opportunities to provide millions of marginalized children and adolescents with learning skills.
The progress of poor countries will depend largely on their capacity to generate and make use of knowledge. Economic and social advancement will be accomplished by tapping the global system of science and technology and transferring that knowledge into action. It should be stressed that this is no one-way process. Developing countries have a lot to offer the rest of the world, e.g., in the form of biodiversity. One prerequisite for the proper use of plants and species would be to radically change the concept of intellectual property. Naturally occurring organisms that are not products of breeding programs or genetic manipulation are not patentable. One important objective would be to assist developing countries in building scientific capacity in areas related to biodiversity and intellectual property rights, thereby enabling them to better utilize existing conventions but also to develop them further.
Other important areas where interventions should be worthwhile are food security, environment, technologies, energy, health, and productivity and competitiveness.
The manufacturing and services sectors offer the best opportunities for developing countries to use modern technologies to launch themselves into regional and global markets. For such efforts to succeed, firms, must be competitive in terms of quality and price. Low-cost labor, which used to be the chief comparative advantage of developing countries, will mean less in the future. A moderately low-wage yet trained work force may represent a competitive advantage.
In sharp contrast to the abundance and variety of food available in the U.S. and Europe is the chronic scarcity that characterizes the food supply in many parts of the world. In this age of affluence, 800 million people go to sleep hungry every night. The main problem today is not lack of food but lack of income. Food security thus is a key concern. In the longer term, however, supply will be critical. At its projected growth rate world population will require increases in crop and livestock production greater than 100 percent over the next decades. As most appropriate land is already under cultivation, these increases will have to come from gains in yield per hectare on the scale of the Green Revolution of the 1960s. Averting this potential Malthusian crisis will require both a change in consumption patterns, particularly in the North, and the development and dissemination of new agricultural technologies. The key challenge will be getting the new technologies into the hands of poor farmers.
Preventing the destruction of the environment will require the development of new environmental and energy technologies. Reducing emissions and cleaning up the damage already wrought by industrial waste is key, as is the development of clean production methods. It ought to be possible to greatly enhance the efficiency by which we use energy and materials. Developing countries should be able to "leap frog," i.e. bypass many of the polluting technologies that industrial societies went through. But again, this is only possible if we are guided by a clear vision and the necessary financial resources are mobilized.
Ever since the first oil crisis, politicians and business leaders in the North have adopted the rhetoric of energy conservation, advocating a shift to renewable energy. Yet today almost 90 percent of all commercial energy is based on fossil fuels- and no wonder, with oil cheaper today then twenty years ago. More disturbing is the fact that 90 percent of global financial resources allocated for research in this field goes to support the very forms of energy, nuclear energy and fossil fuels, that involve great risks and are the least sustainable. Less than 7 percent is allocated for research on conservation and renewable energy sources, such as the sun and wind. Resources are clearly better spent preventing pollution than dealing with its ill effects on the environment, on health, and on the quality of life.
Because of the importance of energy- from both economic and environmental points of view- I would suggest a special global partnership for research into and development of environmentally sound energy alternatives. The Consultative Group on International Agricultural Research (GCIAR) could stand as a model. It is indeed ironic that the only joint effort from the international community so far in the field of energy is the International Atomic Energy Agency (IAEA).
As already mentioned, scientific research has spurred the greatest technological advances of our time. However, they have been very much determined by the needs and wants of the North and by the market forces operating there. Health is a particularly good example. There is presently a gross mismatch between the burden of illness, which is predominantly in the developing world, and investments in health research, which overwhelmingly focus on health problems of industrialized countries. Worldwide, 95 percent of health research is aimed at illnesses in the north. most of them illness of excess, affluence, and inaction. People in the South are more often killed by childhood diseases that inexpensive immunizations would prevent, from malaria, and from infectious diseases resulting from unsanitary conditions. We must find ways by which to mobilize more resources as well as attention to the health problems of the poor.
I have attempted to touch upon a number of complex interrelated issues and the role of official development assistance (ODA) in harnessing the power of science and technology to further the development process in the world. In the process I fear I have raised more questions than answers! What I would like to stress is that ultimately the central task of ODA is to improve the quality of life in developing countries, particularly for the 1.3 billion most destitute, those living on less than $1 per day. Similarly, it is also my firm belief that the only morally defensible role for science and technology in today's world of spiraling inequality is the betterment of the human condition; therefore, in your practice of science, I would ask that you keep in mind the words of Mahatma Ghandi:
Recall the face of the poorest and the weakest person whom you may have seen and ask yourself if the step you contemplate is going to be of any use to her. Will he gain anything by it? Will it restore her to a control over her own life and destiny? In other words will it lead to self-reliance for the hungry and spiritually starving millions? Then you will find your doubts and your self melting away.
This conference has focused on the role of science and technology. By stressing the technology factor I do not think anyone contends that the problems of poverty, of inequity, of gender imbalance or environmental degradation could be easily solved through some "technical fixes." On the contrary, what is lacking is political will as well as a capacity for social innovation. What is also lacking is ethics.
There is enormous wealth in this world. The problem we face is how to tap at least part of this wealth in support of development. It is a fact that the social costs- the spill-over- of economic growth are internalized neither in the cost of production, nor in the prices we pay as consumers.
What we have to do is to continue working on the ethical questions, in order to convince decision makers as well as the public at large about the importance of intragenerational as well as intergenerational equity. Parallel to that we have to explore innovative sources of financing to respond to the negative sides of globalization- poverty, diseases, pollution, etc. And we have to continue working on developing strategies for sustainable human development, development which goes beyond material consumption, bringing about consistency between production growth, social development, and gender as well as environmental concerns.
There is an inherent conflict in society between the long-term and the short-term. Ours is a culture of instant gratification. To come to grips with this problem is first and foremost an ethical imperative. To meet that challenge, the role of the scientific community is essential. The role of science is to bring to the fore the consequences of the strong tendency in society to neglect the long-term aspects of development. I believe science could do much more in this context.
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