Lesson of 28 November 2006
annual meeting of the G20, an informal group of Finance Ministers and
Reserve Bank Governors from 20 major industrial and emerging nations
from around the world, was held in Melbourne last weekend.
Member nations include Argentina, Australia, Brazil, Canada,
China, France Germany, India, Indonesia, Italy, Japan, South Korea,
Mexico, Russia, Saudi Arabia, South Africa, Turkey, UK, USA and the
European Union. The IMF and
the World Bank also participated. Between
them the members include 80% of world trade, 85% of global GDP and 2
thirds of the world’s population.
theme of the meeting was “Building and Sustaining Prosperity”.
This is very much an economic theme.
It is part of what is called Development Economics.
IS IT ?
Economics is the branch of economics that studies developing countries,
by which is meant relatively poor countries or those with a low standard
of living. Since it is
often said that development in such context means enabling the
inhabitants of a country to lead happy, healthy, creative and fulfilling
lives it is more than just a question of economics.
That is to say, development is more than a matter of income
growth, including such things as cultural integrity, equality and
political freedom. Economics however clearly has a major role to play in
relatively poor countries are found in one of 3 regions; Sub-Saharan
Africa, South Asia and Latin America.
However poor countries are found everywhere and relatively rich
ones in the 3 regions.
the modern context, Development is largely a post WW 2 phenomenon, its
beginnings coinciding with the large-scale decolonisation that followed
such event. It arose
initially from a world divided into 3; firstly the Free World, largely
comprising the developed countries of the so-called West, secondly the
Soviet bloc and thirdly the rest, or the countries of the Third World.
Terminology has tended to vary over the years and has included
the under- or less- developed world, the South or less developed
counties [LDCs], all of which are essentially synonymous.
is big business. This is
reflected in the size and significance of the large number of
institutions, departments and organisations international, national and
private that are dedicated to or involved with it.
They include for example the World Bank, the Asian Development
Bank, the African Development Bank, the Food and Agricultural
Organisation [FAO], USAID, AusAid and Oxfam.
It is estimated that in the last 50 years the so-called West [or
North] has expended US $ 2.3 trillion by way of foreign aid.
are a large number of economists involved in the study of development
economics including a number of Nobel Laureates such as Gunnar Myrdal
and Amartya Sen. Each year
thousands of articles and a large number of books are published on the
subject. It involves major themes such as globalisation, foreign aid
and central planning. In 2006 a Nobel Prize [the Peace rather than the
Economics] was awarded to Professor Muhammed Yunus and his Grammeen Bank
of Bangladesh, an institute aiming to provide effective small scale
lending to individual development and the reduction of poverty.
the economics profession itself there is much disagreement about the
theories and methods of development economics.
Some challenge the idea that separate or unique theories of
economic development exist at all outside of the ambit of mainstream
economics. There is often
considerable acrimony between some of the leading proponents of
development economics such as Professor Jeffrey Sachs, who emphasis
geography as a leading cause of ongoing poverty and urges increased aid
and foreign aid sceptics such as William Easterly or Peter Bauer.
Other major areas of dispute include the role in economic
development of population control and the need or efficacy therein of
large-scale debt forgiveness or reduction.