How are we to read the International Conference on Financing for Development, which recently concluded in Monterrey, Mexico? Just another United Nations talkathon? Or have the world’s rich societies put behind them their indifference to the poor majority of our planet? And has September 11 prompted a rethink of our shared responsibility for widespread poverty and deprivation? In short, does Monterrey represent an authentic break with the Washington consensus–the straitjacket used to confine development thinking since the Berlin wall fell and East-West tensions disappeared?
Yes, we now have the makings of a plan for increasing aid to developing nations. Even the Bush Administration agreed to increase its assistance budget by $5 billion each year over the next three years, to $15 billion–still a piddling sum but an improvement nonetheless. Developing countries are pledged to make needed economic and political reforms. “Monterrey lays out a big global bargain,” said Mark Malloch Brown, who heads the UN Development Program. “If it succeeds, it will put development at the heart of global politics.”
It’s pretty to think so, but note the conditional. Monterrey could turn out to be yet another defense of the Washington consensus itself–another exercise in neoliberalism with a human face. We’ve been there before, certainly. The 1990s began with the imposition of the neoliberal model here, there and everywhere. Economies were to be privatized and deregulated, the state reduced to janitorial status, capital markets flung incautiously open–all on the preposterous notion that what worked in one place (and where would that be, actually?) would work anywhere. Aid would have little place in the progress of underdeveloped economies; the markets would do the job. The elites in an embarrassing number of poor nations bought into this notion–which one can put down partly to the sad fact that too few any longer had much capacity to think for themselves and partly to the fact that there was no other game in town.
As the failures came in–notoriously in East Asia and Latin America–the ameliorating voices rose at the World Bank and the International Monetary Fund with promises of poverty alleviation programs, gender empowerment and all manner of politically correct ornaments. But the essential terms never changed. And that is where the world stood as representatives of 171 nations and 700 nongovernmental organizations gathered in Monterrey on March 18.
Now that the conference is over, we can conclude only that the possibility of success has survived it. Along with their new commitment to aid, advanced nations say they are now willing to accept aid recipients as partners in the process of recreating the world economy. Developing countries profess to have grasped their duty to create the institutions and policies that make development possible. Both rich and poor, it seems, are prepared to consider a redesign of our global economic machinery.
There are some admissions of failure implicit in this. Chief among them is that private capital-flows, deified during the 1990s to the point of silliness, have not lived up to the promise of the decade. Another has to do with structures: Political and policy frameworks have to be rethought if not reinvented. The preoccupation at Monterrey was with mechanisms: how to mobilize domestic resources among developing countries, how to enhance fixed investment and control short-term capital flows, how to make trade genuinely free and fair, how to get aid moving under conditions agreed by all with disinterest.