In today’s column I shall start addressing the very last topic left in this extended series of discussions on the United Nations (UN) Post-2015 Development Agenda Summit and its related Sustainable Development Goals (SDGs). In last week’s column, I had labelled this last topic as, ‘operational and implementation concerns’, which I have about the SDGs implementation in Guyana, even though I remain fully supportive of them, as an effective framework for promoting long-term socio-economic and environmental development in Guyana, and the wider Caricom region. In that column, I had also raised particular concerns about the lethargic roles played by locally-based UN agencies, the lead line-ministries, and civil society organisations, in helping to design and frame the SDGs in the context of Guyana’s long-term development.
While the operational and implementation concerns that I have are varied, before I address these, let me first draw attention to long-term projections of the global economy to 2030, (which is the end date for the SDGs). The projections I shall refer to have been made in isolation of the probable impact of the SDGs on global development outcomes to 2030. And, importantly these projections have been made by the World Bank. I believe they reveal a pattern of global performance, which Guyana and Caricom can ill afford to ignore.
Global development horizons
Just prior to the commencement of the Open Working Group (OWG) process tasked with formulating the SDGs, the World Bank had produced in 2013, yet another edition of its famous Global Development Horizons Reports. The 2013 Report had projected that, by 2030, approximately one-half of the world’s capital stock, which the Report had estimated would be valued at US$158 trillion (2010 dollars) by 2030, would be located in the developing world! This compares with just about one-third today. East Asia, (as would be expected) and Latin America (surprisingly) are projected to hold the largest shares within the developing world.
Relatedly, the share of developing countries in global investment is projected to triple by 2030. If this occurs, such an increase would represent a rise in developing countries’ share of global investment, from about one-fifth (at the commencement of the 2000s) to approximately three-fifths by 2030. The two largest developing countries, (China and India), are projected to account for as much as 38 per cent of global gross investment by 2030.
In terms of global savings, the World Bank has also that developing countries as a group, would have saved about 34 per cent of their GDP back in 2010. (Recall, I have previously indicated, this amount represents more than double the rate of national savings in Guyana and Caricom). On average, the investment ratio in developing countries is also of the same order ̶ 32 per cent. Strikingly, both their current savings and investment rates are up significantly on those that prevailed back in 1970; (21 and 22 per cent respectively). Similarly, the developing countries as a group, presently account for about 46 per cent of global savings. This amount is nearly double what it was back in 2000 ̶ a decade and a half ago.
Youth bulge
It appears that, the most important consideration which would be driving these favourable projected outcomes for the developing countries, is what demographers’ term as the ‘youth bulge.’ Global population has been projected by the World Bank to rise from 7 billion persons in 1970, to 8.5 billion persons by 2030. Developed countries however, have predominantly ageing populations, while developing countries are blessed with the youth bulge. Indeed, the World Bank’s estimates show that developing countries’ population is expected to account for as much as 1.4 billion of the persons projected to account for the increase by 2030.
Significantly, this “demographic dividend” is projected to result, as early as 2020, in a situation where the world’s working age population will be overwhelmingly located in the developing countries. Further, the demographic dividend is also expected to bring the greatest benefit to the relatively younger regions of South Asia and sub-Saharan Africa.
Explanations
In its report titled: ‘Capital for the Future: Savings and Investment in an Interdependent World,’ the World Bank has indicated policies to promote the results projected above. As indicated below, most, if not all of these policies are embedded in the SDGs. Thus, for example they stress 1) productivity catch-up between developing and developed regions; 2) globalisation and increasing integration of economies into world markets; 3) sound macroeconomic policies that favour sustainable and stable markets, and price conditions favourable to economic growth; and 4) improved educational and health provisions.
Speed of convergence
For readers who are interested in pursuing these projections further, it should be observed that the World Bank had created two scenarios for its global projections. Both of these scenarios depend on the “speed of convergence” in per capita GDP and financial and institutional reforms between the developed and developing regions. In the case of rapid convergence, the developed regions are projected to grow their real per capita GDP at 3 per cent per annum, while the developing regions will grow theirs at 5.5 per cent. And, in the case of gradual convergence, the developed countries will grow at 2.6 per cent per annum, and the developing regions at 4.8 per cent.
It follows from these two scenarios that, if Guyana and the wider Caribbean were to follow their historic trajectories of low growth in real per capita GDP and national savings, the World Bank’s future global scenarios will leave their economies with little, if any space to drive their own expected outcomes. Whatever growth emerges would be in a real sense fortuitous, in that it would be essentially a by-product of economic initiatives taken elsewhere.
Next week I shall wrap up this discussion by focusing on the specific operational and implementation concerns, which I have. However, this is the ‘projected’ global context, in which those concerns will be raised as Guyana adapts to the Post-2015 SDGs framework.
