Meet the 'Seoul Consensus' (Enough DC & Beijing)

♠ Posted by Emmanuel in , at 11/12/2010 05:49:00 PM
So we've heard all about the now much-disparaged Washington Consensus. There's also been much discussion of a so-called Beijing Consensus [1, 2]. But, in the wake of the G-20, we now have--get this--the South Koreans coming up with their own shtick, the "Seoul Development Consensus for Shared Growth." This consensus is the offshoot of South Korea's aim to make a mark as G-20 chair by emphasizing development.

Already, there are complaints that the Seoul Consensus sounds awfully reminiscent of the Washington Consensus in not speaking about heterodox measures such as loosening intellectual property regulations or using tariffs to promote infant industries. In other words, the Seoul Consensus isn't very reminiscent of how South Korea actually developed according to its critics. In the Koreans' defence, note that the text mentions there is no "one-size-fits all" approach to development. Ha-Joon Chang discusses a number of these points.

I myself would note that there was not much if any observable consensus among G-20 participants to speak of. At any rate, here is the full text for your consideration:

Seoul Development Consensus for Shared Growth

In the wake of the most severe economic shock in recent history, the G20 has the
opportunity to contribute to the reconstruction of the world economy in a form conducive to strong, sustainable, inclusive and resilient growth. Through the Seoul Development Consensus for Shared Growth, we seek to add value to and complement existing development commitments, particularly those made at the recent High-Level Plenary Meeting on the Millennium Development Goals, and in other fora.

Why Growth Must be Shared

At Pittsburgh we agreed to work together in an unprecedented process of mutual assessment to ensure our individual economic policies collectively achieved an outcome of strong, sustainable and balanced growth. This Framework was borne of a recognition that for the world to enjoy continuing levels of prosperity it must find new drivers of aggregate demand and more enduring sources of global growth. We recognize as a crucial part of this exercise that we need to enhance the role of developing countries and low income countries (LICs) in particular, for the following reasons:

· First, because for prosperity to be sustained it must be shared.

· Second, because we acknowledge that the impact of the recent crisis demonstrated a global interconnectedness that is disproportionately affecting the most vulnerable in the poorest countries. It has been estimated that, as a result of the recent crisis, an additional 64 million people will be living in extreme poverty (i.e., living on less than USD 1.25 a day) by the end of 2010. We therefore have a responsibility to fulfill.

· Third, as the premier forum for our international economic cooperation, because the G20 has a role to play, complementing the efforts of aid donors, the UN system, multilateral development banks (MDBs) and other agencies, in assisting developing countries, particularly LICs, achieve the Millennium Development Goals (MDGs). Our role must relate to our mandate on global economic cooperation and recognize that consistently high levels of inclusive growth in developing countries, and LICs in particular, are critically necessary, if not sufficient, for the eradication of extreme poverty.

· Fourth, because the rest of the global economy, in its quest for diversifying the sources of global demand and destinations for investing surpluses, needs developing countries and LICs to become new poles of global growth – just as fast growing emerging markets have become in the recent past.

Our overarching objective of helping LICs improve and maintain the levels and quality of growth, thereby reducing poverty, improving human rights and creating decent jobs, requires strengthening the relationships among high, middle and low income countries. This entails promoting sustainable economic, social and environmental development; honoring equity in the partnerships that exist; building stronger and more effective partnerships among advanced countries, emerging countries and LICs; engaging the private sector and civil society; and refocusing our priorities and efforts to remove the bottlenecks for LIC growth. We further believe there is no “one-size-fits-all” formula for development success and that developing countries must take the lead in designing and implementing development strategies tailored to their individual needs and circumstances.

G20 Development Principles

We therefore commit ourselves to a Multi-Year Action Plan to achieve these objectives. This Plan will be based on the following principles, intended to capture the key characteristics of our actions and policies:

1. Focus on economic growth. Be economic-growth oriented and consistent with the
G20 Framework for Strong, Sustainable and Balanced Growth, which requires
narrowing of the development gap. More robust and sustainable economic growth in
LICs will also go hand-in-hand with their capacity to achieve the MDGs. Actions and
policies should have the capacity to significantly improve the prospects for inclusive, sustainable and resilient growth above business as usual.

2. Global development partnership. Engage developing countries, particularly LICs, as equal partners, respecting their national ownership and recognizing that the most important determinant of successful development is a country’s own development
policy. Ensure that actions foster strong, responsible, accountable and transparent
development partnerships between the G20 and LICs.

3. Global or regional systemic issues. Prioritize actions that tackle global or regional systemic issues such as regional integration where the G20 can help to catalyze action by drawing attention to key challenges and calling on international institutions, such as MDBs, to respond. Focus on systemic issues where there is a need for collective and coordinated action, including through South-South and triangular cooperation, to create synergies for maximum development impact.

4. Private sector participation. Promote private sector involvement and innovation, recognizing the unique role of the private sector as a rich source of development knowledge, technology and job creation. Encourage specific ways to stimulate and leverage the flows of private capital for development, including by reducing risks and improving the investment climate and market size.

5. Complementarity. Differentiate, yet complement existing development efforts,
avoiding duplication, and strategically focus on areas where the G20 has a comparative advantage and can add value focusing on its core mandate as the premier forum for international economic cooperation.

6. Outcome orientation. Focus on feasible, practical and accountable measures to address clearly articulated problems that are serious blockages to significantly improving growth prospects for developing countries. Such measures should have the potential to provide tangible outcomes and be significant in impact. Implementation
of G20 action on development should be monitored through an adequate accountability framework.

In close consultation with our developing country and LIC partners, as well as relevant international and regional organizations with development expertise, we have also identified nine areas, or “key pillars,” where we believe action and reform are most critical to ensure inclusive and sustainable economic growth and resilience in developing countries and LICs. These areas are: infrastructure, private investment and job creation, human resource development, trade, financial inclusion, growth with resilience, food security, domestic resource mobilization and knowledge sharing. Creating optimal conditions for strong, sustainable and resilient economic growth in developing countries will require reform and transformation across each of these interlinked and mutually reinforcing key pillars.

Guided by our development principles and oriented around the key pillars, we have developed the following Multi-Year Action Plan on Development. We believe these action plans address some of the most critical bottlenecks to strong and sustainable economic growth and resilience in developing countries, in particular LICs, and have high potential for transformative, game-changing impact on people’s lives, helping to narrow the development gap, improve human rights and promote gender equality. We commit to full, timely and effective implementation of these action plans and, to this end, will continue to closely monitor their progress, in synergy with other processes, including preparations for the Fourth High-Level Forum on Aid Effectiveness to be held in Korea in late 2011.