The world has changed in terms of both growth and international cooperation. The objective of development has also changed largely. So, it is time to accommodate changes for a better world in near future.
Dr Mario Pezzini, director of Paris-based OECD Development Centre, made these observations while talking to the FE in Dhaka last week.
"In the past, emphasis of development cooperation was almost exclusively on fighting extreme poverty which has remained a crucial objective of cooperation. But today we are working on context of so-called Sustainable Development Goals (SDGs) approved by everybody," he said.
Dr Pezzini added: "The objective [of development cooperation] has changed, actors have changed, consequence of growth has changed and modalities of cooperation have also changed."
He explained that from traditional donor-recipient bilateral relationship, now triangular or multilateral approach of cooperation emerges.
"Today we have China, India, Brazil and South Africa. They are new development partners. South Korea becomes a new actor. We need to bring them and other actors to discuss the future of cooperation."
He said, "In spite of this changing scenario, international cooperation system remains concentrated on categories and criterions of past and one of which is GDP."
According to Dr Pezzini, Gross Domestic Product or GDP is not necessarily sufficient and it is not a means of distribution. "It measures growth, not distribution of resources and it is not the end of development."
The development expert argued that due to extraordinary growth in GDP, many countries have graduated from low-income to middle-income and some countries like Chile graduated from middle-income to high-income level.
"It is like you visit a doctor and he only measures your weight to figure out your health condition," he added.
Dr Pezzini also argued that there is United Nations (UN) Human Development Index (HDI) which provides better picture of development than GDP growth. There is also OECD's Better Life Index which has 11 variables.
It is to be noted that Organisation for Economic Cooperation and Development (OECD) is an intergovernmental organisation having 36 developed countries as its members. The international organisation supports development activities across the world.
OECD Development Centre is a wing of OECD where both developed and developing (non-OECD) countries are members. Currently, there are 57 members of which 30 are non-OECD countries.
When asked about immediate challenges for Bangladesh immediately after graduating from the Least Developed Country (LDC) status by 2024, Dr Pezzini said: "You will receive less monetary aid and you will lose preferential market access. But these are not only challenges. There are some other challenges related to international development cooperation."
He explained that importance of aid is a system to finance public policies.
"Largely, first source of financing public policies is taxes, followed by remittance and foreign direct investment (FDI). After that aid and philanthropy come," he added.
He was of the view that real emphasis should be put on fiscal efforts, an appropriate stature of public finance.
"Effort to channel remittance of migrants and figure out how to attract FDI and make them multiplied are two other challenges," he added. "Foreign aid comes only afterward."
When asked how the rise of populism may affect international development cooperation, Dr Pezzini said populism is raising both developed and developing countries.
"Populism is going to affect not only international cooperation but also all public policies of the countries."
Regarding the future of the World Trade Organisation (WTO), as its dispute settlement body turned dysfunctional due to non-appointment of judges to appellate body, the director of OECD Development Centre opined that multilateral effort is crucial to enhancing trade growth and it is better if it is within the WTO.
He also mentioned that historically global trade growth use will be higher than global economic growth and so, trade growth contributed significantly to global growth.
