Food Security and Climate Change

The relationship between food security and climate change is very complex. In fact, it could also have some positive impacts. I red a paper that summarize very well the issue. In fact, this is the paper that, as far as I know, better explain the link between food security and climate change:

Schmidhuber Josef and Tubiello Francesco N. , Global food security under climate change,
December 11, 2007, PNAS, vol. 104, no. 50, pp. 19703–19708.

Increasing food prices: what solutions to increase gains for rural poor and decrease risks for urban poor and developing countries?

Dani Rodrik comment in a very insightful post a statement made by Mr Zoellick that show how many decision-makers does not understand neither what is going on in agricultural markets nor what will be the impacts on development and poverty of high prices. In fact, they merge the old discourse (high agricultural prices = gains for developing countries) with a new one (high prices = problems for urban poor). Either discourse it is true but we need an analysis that take into account both and that provide some solutions.

To start, we should remember three elements:

• High food prices are caused by biofuels and emerging countries growing demand but also by speculation on commodities markets.

• 2/3 of the poor lives in rural areas and depends on agriculture and many of the urban poor are former peasants.

• Many developing countries, even if they are net importing countries, have still an important potential in expanding their agricultural production.
  

These elements mean that high agricultural prices are positive for most poor in developing countries but the risks are very high because urban poor uprising (caused by high food prices) can destabilize several developing countries.

This mean that we need to find solutions to reduce these risks and the adjustment costs. Developing countries need neither more food aid (which often create many problems) nor laissez-faire.

Developing countries need active rural development policies (founded also through Aid), which will increase their agricultural production (also by helping urban poor to come back to rural areas that they leaved) and some policies to decrease food prices in urban areas (notably by creating food stocks filled by national production). These policies need important resources that should be provided by bilateral and multilateral donors. The problem is that, even after the last World Development Report, I do not see an upward trend in Aid dealing with rural development and food policies in developing countries.

agriculture sustainable development WTO food prices

A proposal for a co-development contribution index: for an effective assessment on developed and emerging countries role in sustainable development

The Center for Global Development developed an interesting index to measure the developed countries commitment to development. It is based not only on aid but also on trade, investment, migration, environment, security and technology transfer contributions: it is truly comprehensive. This tool is very useful and innovative. It contributes to raising the pressure on developed countries and to advocate for an increasing contribution to development.

Nevertheless, I have some key elements that a development contribution ranking should imperatively include:

1. Considering their increasing role in the international economy and politics, such a ranking could take into consideration also the impact of emerging markets (including in their own development).
2. In order to improve the ranking, building index for every dimension is not very transparent and effective. I think it will be better to transform all contributions in monetary terms. The index will be based on monetary contribution on development calculated in percent of GDP.
3. Both positive and negative contributions will be taken into account.
   

This index will be very useful to understand the real impact of every developed and emerging country on development. It will pose number of methodological problems but it will be more effective for advocacy and more transparent.

To calculate this raking I propose the following elements (it is only a raw thought that need to be further developed) to be taken into account in the calculations:

• Aid Contribution = Aid flows – food aid negative impacts – debt interests – aid that does not contribute to development.
• Trade contribution = Trade opportunities used (notably for manufactured goods and advanced services) – losses due to protectionism – losses due to subsidies (both on world and developing countries markets) – negative externalities of liberalization measures promoted by developed countries (also through WTO, World Bank, IMF and other institutions).
• Investment contribution = Investment flows – negative impacts of Transnational Companies – developing countries money in foreign banks
• Migration contribution = remittances – losses due to emigration of skilled workers – losses due to death of emigrants (caused by developed countries restrictions) + gains of temporary workers + gains in term of skilled workers that return in their developing country.
• Environment contribution = aid for environmental goals (e.g. GEF) – cost of environmental degradations caused by rich countries and their transnational companies (e.g. pollution of companies and climate change) – cost of policies to protect the environment imposed by developed countries.
• Security contribution = aid to conflict resolution and prevention (included cost of military intervenction that contributed to avoid or stop a civil war) – exports of arms to developing countries – cost of wars against developing countries (included embargos).
• Technology transfer contribution = value of technology transferred – copyrights and licenses cost – cost of property right imposed to developing countries (including cost of implementaing IPR policies)– cost caused by developed countries policies that limit access to technology.
  

By adding up these elements, we can find the value of a country contribution to development. I guess that many countries will have a negative score. This index will be difficult to calculate but it will be very useful to better understand both why asymmetries exist and how we can reduce them.

Sustainable Development Index ODA trade and development

South-South Regional Integration: 11 Potential Positive Consequences for Sustainable Development

« The myriad of forces that are present in “globalization” generate uneven impacts and opportunities both within and between states. One reaction to such unevenness is to advance regionalism to both contain and exploit globalization ».
Boas, Marchand and Shaw (1)

Regional integration becomes very popular among developing countries since the second half of the 90s. This surge of regional agreements, often related to trade, revived a debate on their impact that started with the creation of the today European Union. The surge of regionalism among developing countries it is very important, notably because it contribute to change the geography of trade, growth and power at the global level.

I will focus on South-South regionalism because North-South FTA and RTA pose a number of problems that I will deepen in another post.

The general debate on regionalism was unfortunately hijacked by mainstream economist that they use their standard econometric models (that oversimplify the reality) to find out if such agreements had a positive or negative static welfare impact at the global level. More precisely, they try to understand if regionalism was a stumbling or a building block for multilateralism and to implement free trade globally. This debate was started and driven by Bhagwati (2).

This debate was really partial for the following reasons:

• It assesses the impact of regionalism only against multilateralism. Nevertheless, multilateralism and free trade are not goals per se. They are tools to improve living conditions of people around the world. We need to assess regionalism considering if it can help to reach sustainable development goals.
• It takes into consideration only economic and, more precisely, trade dimensions of regionalism. In spite of that, reality tells us that regionalism phenomenon is more complex. In fact, it includes political, social and environmental goals that we will further develop in this post.
• It uses very imprecise methods to assess regional integration processes. In fact, mainstream economists use econometric tools that can only assess static economic output. Yet, we now that dynamic outcomes are more important and, what is more, we need to take into account both economic and political process to effectively assess an issue.

Nowadays, this old style debate it is still alive. However, new studies with a more interdisciplinary assessment methods and a focus on sustainable development were published the last couple of years. You can find some references at the end of this post.

Before starting to assess regionalism impacts we need to define it in a more precise and realistic way than mainstream economists do (they define it basically as the relationships among countries that are linked by trade agreements both bilateral and plurilateral). I propose the following definition inspired by De Senarclens and Ariffin (3):

Regional integration (or regionalism) is a process in which countries, with a contiguous territory (4), understand their economic, political and social interdependencies and set up political mechanisms to achieve different goals at the national, regional and global levels.

Regionalism adds a governance level. This can be an advantage for developing countries that can negotiate to solve important issues not only at the global or national level but also regionally. The problem is that this can induce them to use less effectively their often poor human resources.

New interdisciplinary studies as well as my personal experience and thinking allow me to underline the following consequences of South-South regionalism that can be valuable to achieve sustainable development goals even if it pose some challenges and risk that should be further assessed. I will synthesize these elements in the following points (that maybe I will develop in other posts).

Political dimension

1. Reinforcing regionally pacific relationships among countries. Nevertheless, there is a risk that regional blocks by competing with each other will enter in a conflict. This risk is not demonstrated and it does not seem more likely than conflicts among countries.
2. Embed national public policies in regional rules. This will avoid sudden changes in public policies that reduce the stability of the national system and can have negative impacts on economic growth.
3. Secure and improve control on boarder regions that often (e.g. Afghanistan-Pakistan boarder) are a refuge for illegal activities.
4. Improve cooperation on many issues that require a regional action (environmental pollution, disease control, etc.) or that it is impossible to deal in global negotiations (liberalization of trade, social and environmental standards, etc.).
5. By taking collective actions with other countries, developing countries, especially LDC, can improve their sovereignty, i.e. they can have more power to manage globalization in order to reduce risks and maximize opportunities. For LDC, however, achieving a regional integration project with a more powerful country can be also negative. In fact, the country that is hegemonic in a regional agreement can reproduce the asymetrical relationships that exist between developed and developing countries.
6. Regional integration can help countries to defend more effectively, as a group, their interests in the international negotiations, both at the multilateral level and at the bilateral level. By adding their resources and their international weight, they can increase their influence in the processes that shape global governance. This could be positive also for multilateralism's effectiveness. In fact, it is more easy to negotiate between e.g. around ten regional blocks than among 190 countries.

Economic dimension

1. Increasing intra-regional trade. This could be positive because often developing countries can export products, usually more transformed (more positive for their development), that are different from those that they exported to developed countries. What is more, usually also other countries take advantage of this increase of trade flows. In fact, according to Ornelas, «trade creation has been the rule, and trade diversion the exception» (5).
2. Improving competitiveness of companies. Exporting in the regional market will increase the competition. They can adapt to this competition, less rude, before to enter in international markets. Furthermore, a bigger market can help these companies to reduce their costs (economies of scale). This was also a development path proposed by List.
3. By increasing the market size, they can become more attractive for foreign investment.

Environmental dimension

1. Improving environmental competition among countries. Cooperation will be probably more effective because governments will be less scared to lose their competitiveness against other countries. What is more, according to Cosbey, «environmental protection often requires regional cooperation, as with the problems encountered by states that share river basins, that border common seas, that co-host migratory species or that have shared air quality concerns. Regional or bilateral cooperation on trade matters, by creating the foundation of institutional cooperation, yields an opportunity to make related progress on issues of shared environmental concern» (6). Nevertheless, if regionalism succeeds to improve economic development there will be negative impacts on environment.
2. Regional agreements are also potential examples to be further scaled up at the international level. Regions are spaces to test new ways to solve environmental issues.

In conclusion, South-South regional integration can bring many positive impacts for sustainable development in developing countries. Nevertheless, there is also a number of risks and of problems that have already appeared that I have not deepen in this post. This does not mean that I am not critic on regionalism. I think only that regionalism it is not the evil that mainstream economist show us. Furthermore, regionalism is here to stay. This means that we need to analyze these processes and find solutions to materialize their opportunities and minimize their risks.


Footnotes

(1) Boas M., Marchand M.H. and Shaw T.M., The Political Economy of Region and Regionalism, New York, Palgrave Macmillan, International Political Economy Series, 2005
(2) For a recent book on this topic cf. Bhagwati, Jagdish N. and Arvind Panagariya, eds. 1996. The Economics of Preferential Trade Agreements, College Park : Center for International Economics, University of Maryland.
(3) Senarclens P. De and Ariffin Y., La politique internationale. Théories et enjeux contemporains, Armand Colin (Cursus), 2006, p. 165.
(4) This is an important element because “the imagined region is an example of an imagined community and can form the basis for a construct of the public or common good and of shared responsibility that go beyond the state. Regions can evoke a sense of belonging, which may stimulate people and policy-makers to act in concert” (Boas, Marchand and Shaw, op. cit., p. 173).
(5) Ornelas E., Trade creating free trade areas and the undermining of multilateralism, European Economic Review, 49, 2005, p. 1718.
(6) Cosbey A., Sober Reflection: Considering the Rush to Regionalism, IISD, 2004, p. 10.


Resources for this topic

Boas M., Marchand M.H. and Shaw T.M., The Political Economy of Region and Regionalism, New York, Palgrave Macmillan, International Political Economy Series, 2005

Brown O. et al., Regional Trade Agreements: Promoting Conflict or Building Peace, IISD, 2005

Fugazza M. and Vanzetti D., A South-South Survival Strategy. The potential for trade among developing countries, UNTAD, December 2005

Cosbey A., Sober Reflection: Considering the Rush to Regionalism, IISD, 2004

UNCTAD, Trade and Development Report, Regional Cooperation for Development, 2007

regionalism rta fta free trade agreements trade and development sustainable development

Sustainable Development beyond developed countries neo-colonialism: sequencing and co-development

Sustainable development comprehends two important elements:

1. The importance of meeting today's needs without compromising future generations’ needs.
2. Three dimensions are crucial: economic development, social equity and the preservation of the environment.

This concept also means that not only developing countries try to follow a path that led to development. In fact, also developed countries try to achieve economic, social and environmental goals, even in a different situation and with different constraints. This is also the idea defended by Anthony Payne (1). The importance for both developing and developed countries of the concept means that, in order to achieve sustainable development, the international system should allow and enable both categories of countries to achieve their development goals. This is the idea of co-development.

Currently sustainable development is the only principle that, in its two dimensions ,can be shared by all the people across the world. For this reason, sustainable development should be considered the principle which should drive actions and decisions at the national, regional as well as global levels. This is far to be achieved because international economy and politics continue to be the realm of power relationships. Furthermore, there is not a real consensus on how to define and how to operationalize it.

What is more, the concept is often used by developed countries to “kick away the ladder” needed to an effective development strategy. For example, by imposing to developing countries free trade ideologically (2) or by constraining to respect some environmental norms. These constraints imposed by developed countries take often the form of a kind of neocolonialism.
Developed countries underline too much the importance of environmental protection in developing countries. However, even if achieving the three dimensions of sustainable development is a crucial goal, a developing country, that by definition is characterized by a lack of resources, both human and financial, should prioritize the goals. In fact, decision-makers and society should achieve hierarchically three fundamental goals.

The first and more important goal is to ensure that a society is creating the wealth needed to reach acceptable living conditions. To reach this goal, in the current historical situation, there is a need to find a path to economic growth (3). Only with this precondition a society can obtain the resources needed to improve or, for developed countries, maintain the level of wellbeing.

Nevertheless, achieving this first goal is not enough to ensure the welfare of a society. In fact, a society should reach a level of social equity too. It matters not only for a normative reason but also to ensure the stability of the society: a precondition to maintain growth and to increase the welfare.

This second goal is not enough to ensure that the well-being of the population will continue to increase. In fact, usually (4) growth creates an important number of environmental issues. These damages are borne by citizens when the main objective is to lift out people of poverty. However, when the level of welfare is enough high, the environmental cost become less bearable by citizens. Is at this moment that a society should invest resources to find solutions to environmental issues.

Of course, it will be better to achieve all these goals together, but due to lack of human and financial resources, this is simply impossible for developing countries. A sequencing is needed. In fact, if we look at the history, developed countries get closer to sustainable development through three stages:

1. Second half of the 19th century – beginning of the 20th century: industrial revolution with “wild” growth;
2. Beginning 20th century – 1970: Set up of the welfare state;
3. 1970 – today: increasing attention to environmental problems.
   

What I want to say is not that developing countries should not care about environment. In fact, for example, if there is win-win situations between environmental and economic goals, developing countries should adopt such public policies. A developing country should simply avoid environmental policies that limit growth.

This, of course, poses a number of problems for developed countries, particularly the European Union, that really want to achieve number of environmental goals. In order to achieve the co-development objective, developing countries should be allowed and enabled by the international system to follow their path to increase their economic growth and, beyond a level of development, improve social equity. Considering also their historical responsibility, developed countries should do more to preserve environment both in their countries and in developing countries through development cooperation programs and technology transfer that will not limit developing countries’ economic growth. There is some steps in this direction (notably the GEF) but these efforts are far to be enough.

Footnotes

(1) Payne Anthony (2005), The Global Politics of Unequal Development, New York, Palgrave Macmillan.
(2) I will handle the trade and development issue in another post.
(3) For an interesting analysis of the elements that explain how a country can start and maintain growth see Rodrik Dani (2007), One economics Many Recipes. Globalization, Institutions and Economic Growth, Princeton, Princeton University Press.
(4) Because usually growth start with some industrialization. However, a growth path based on advanced services will have a smaller environmental impact.

codevelopment economics environement sustainable development