From aid to global justice

Development aid is becoming a hot topic. William Easterly and Dambisa Moyoalmost made us believe development aid was totally useless and should beabandoned. I am very grateful to the authors of the Dutch report of the ScientificCouncil for Government Policies to have combined a critical approach todevelopment policies with a positive solution for more and better solidarity. This is also the objective of a website I set up a couple of months ago on GlobalSocial Justice:www.globalsocialjustice.com. It is difficult indeed to uncriticallycontinue with the current aid policies or to simply abandon them. Easterly andMoyo have many good arguments but there are also many good reasons for astronger solidarity and most of them have been explained in the Dutch report. Asfor the MDG summit in September, I really do not see how one could, once again,lower the ambitions. We come from economic development in the 60s, to socialdevelopment in the 70s, to poverty eradication in the 90s and to halving extremepoverty in 2000… How low can you get?In this contribution, I want to briefly highlight two reasons that justify anotherapproach on development and cooperation. The first is globalization and

globalpublic finances

, the second is

sustainable development

.Whatever definition one has of

globalization

and whatever course globalizationpolicies may take in the near future, it is undeniable that we live today in oneglobal interdependent world. This does not mean that national states lost theirimportance. It does mean that states have to cooperate more than in the pastand that the borderlines between domestic and international issues areconstantly moving.One of these issues is linked to finances and taxes. Capital mobility makes itimpossible to tax goods and services, wages and profits in the same way as inthe past. People live in one country and work in another, transnational companieswork with transfer prices that allow to avoid taxes everywhere, profits areexpatriated from countries where taxes are considered to be too high. This hasserious consequences for the public revenues of national governments that aresupposed to deliver public investments, public services and social policies.Looking at public finances from an exclusive national vantage point is becomingan illusion. Poor developing countries have no power over capital movements andare severely restrained in their possibilities to pursue development policies.One solution can be to also look at global finances and global taxes. Thiscertainly does not solve all problems and even creates some new ones. But isdoes open a new horizon for mobilizing capital and for organizing a structuralglobal solidarity. Looking beyond the too limited poverty reduction policies, onecan imagine a global solidarity based on a global financial transaction tax inorder to fund a global social protection floor. This is not utopia but an idea basedon existing instruments (World Solidarity Fund at the UN) and existing proposalsof the UNDP on public finances and of the ILO on social protection. The Financial

Transaction Tax is currently discussed even at the IMF. In this way, the problemsof geopolitically-induced, donor-driven and highly fragmented development aidcould be solved. One could develop a system of global redistribution of incomes.

Sustainable development

is the second point I want to focus on. Much hasbeen said about the responsibility of the developed and industrialized countriesfor the deterioration of our environment. And much has been said on the growingincome inequalities between countries of the North and the South. There are onlytwo ways to reduce these inequalities: either by lifting poor people out of povertyand up to the income level of the rich countries, or be reducing incomes of people in the rich countries. The first solution is ecologically speakingunsustainable. The second solution is politically speaking impossible. The onlyway out is a limited rise of incomes in the South and a fundamentally differentdevelopment paradigm in the North.In other words, both the South and the North need development policies. In fact,one can think of globalization as being synonymous with development, if weunderstand these concepts as aimed to create one integrated world community.Both the North and the South will have to re-think their economic and socialpolicies. As the Dutch report rightly states, the South definitely needs growth inorder to give its peoples social protection, education and health services. TheNorth may have growth but will definitely have to reduce its ecological footprint. This probably comes down to a redistribution of economic activities. Innovativeeconomic policies can help the North to maintain a good standard of living, whilehelping the South to develop industrial activities.Again, this implies a global vantage point in a world where people can movefreely and where development is a shared ambition. These approaches are not compatible with so-called aid policies. There is not arich North that has to help a poor South. There is one interdependent world withlocal, national, regional and global political levels that have to complement eachother. Then, we not only need a global solidarity fund but also global financialresources to help these policies come about. It all points in the direction of i.a.global taxes, not only on financial transactions but also on transnationalcompanies.I realize that many political hurdles will have to be taken. However, extremepoverty and income inequality are unsustainable. Climate change is threateningus all and we do not have unlimited time.Maybe these ideas will never become reality. But they certainly should be part of any serious debate on the future of development and cooperation.Francine Mestrum, lecturer Université Libre de Bruxelles,www.globalsocialjustice.com