Food price volatility will continue to pose a threat to emerging economies, World Bank President Robert Zoellick predicted over the weekend. But, foreign aid can help create viable social institutions to deal with the ill effects, he added.
Zoellick spoke at the SID World Congress in Washington, D.C., where he highlighted the bank’s recent efforts to increase data transparency as a way to allow recipient countries to truly “own” their development.
The World Bank chief highlighted several avenues through which the international community can help developing countries tackle food security. First, industrialized countries should avoid export bans, since these cause markets to panic and reduce buying opportunities for humanitarian agencies like the World Food Program.
Second, creating safety nets for the most vulnerable - rather than trying to control prices - allows countries to achieve a free market while controlling against the human losses that food shortages lead to. States can lose a generation to food shortages unless they intervene strategically, Zoellick argued. He cited Mexico’s successful Opportunadas program, which addresses the bottom quintile of the population by providing cash transfers for recipients who get health care. The World Bank currently supports about 40 similar programs around the globe, he said, because they can improve maternal and child health.
The “democratization of development”
In a discussion with The Washington Post’s Michael Gerson, Zoellick argued that inclusive development paired with strategic policy interventions create the most sustainable systems for economic growth.
Zoellick said that the development community has replaced the old model of development, where donors delivered financial and technical expertise to recipients without a focus on stakeholder input, with a more horizontal model that emphasizes partnerships between states to find policy solutions for the common good. Now, he said, the challenge is to find ways to make information and resources available to those who need it.
He reiterated recent comments in which he argued that the most important thing he’s done at the World Bank is implementing the Open Data Initiative, as part of which 7,000 of the bank’s data sets have already been made available online at no charge. Practitioners and policymakers now, more than ever before, approach development using common sets of knowledge, allowing them to cooperate more closely, he said.
While the “democratization of development” has in many ways transformed the foreign aid system from a hierarchical one to one that is focused more on partnership, there are still challenges – as well as opportunities – for the development community to address, he noted.
Inclusive development is sustainable development
One main takeaway from Zoellick’s speech: Gender equality is smart economics. The World Banker underlined how women’s rights in a society lead to economic development, a frequent theme at this year’s SID World Congress, which focused on sustainability. Zoellick cited an incentive fund implemented under his watch to “build gender into the DNA” of World Bank projects, and strongly emphasized the economic benefits of development that targets women, which are shown to improve issues such as low levels of rural education, high infant mortality, poor maternal health, and limited property ownership.
Zoellick’s main point: Developing countries account for one half of global economic growth, so the global community has to engage with emerging markets differently. While offering strategic aid is important, it is equally important to build partnerships, share information, and create inclusive, sustainable policy solutions for social, political, and economic problems. Not only is this in the international community’s own best interests, because it provides a more stable environment for economic growth, but the multiplier effects of policies that last are felt by everyone in the global economy.
