The MDGs in the Financial Crisis: Time for a Reality Check?

Sure, a financial crisis should not give rich countries reason to throw up their hands and abandon the struggle for poverty eradication. But as 2015 edges closer, it might be time to reassess how much sense it makes to use the

as realistic benchmarks.

At a March 11 luncheon hosted by the

, Anita Sharma, North American coordinator for the

, discussed the state of the MDGs in the wake of the financial crisis.

As members of Washington's internationalist community dined on couscous, Sharma offered a sobering account of the effect of the crisis on developing nations, estimating that 94 out of the 116 countries in the developing world have experienced an economic slowdown.

According to Sharma, the Keynesian "paradox of thrift" in the developed world is a major culprit. As Western consumers save more and spend less, the decreased demand for raw materials and consumer goods hits export-dependent economies of the developing world especially hard. She pointed out that 300,000 copper miners have been laid off in the

, and 10 percent of India's garment workers have lost their jobs.

Not only does the dire state of the global economy threaten to forestall progress on achieving the MDGs, Sharma said, we might actually end up sliding backwards.

"This crisis threatens to wipe away many of the achievements that have been made with the MDGs," she said.

Sharma stated that sharp declines in capital flows from rich countries severely exacerbate the problem. As unemployment rises in the developed world, transplanted workers from developing nations are unable to send remittances to their families back home and are often forced to return to their country of origin where job prospects are not much better. Meanwhile, private international development charities struggle with a shortfall of donations and rich governments seem ever more reticent to raise foreign aid levels to 0.7 percent of their gross domestic product as they initially pledged at the 2002

.

Sharma believes that now more than ever, rich countries need to make development a priority. She urged the development community to lobby hard to raise the profile of the MDGs.

"The financial crisis need not be an excuse for rich countries to go back on their promises," she said.

While it is certainly important to remain upbeat, one has to wonder at what point relying on the MDGs might actually hinder the case for development aid. As Sharma readily conceded, even before the crisis hit we were already behind in many areas. Unless remarkable progress is made in the next couple of years, the prospect of actually achieving the MDGs may go from remote to ridiculous. If that happens, aid skeptics will seize on the failure of the MDGs as a case in point as to why the U.N. is incompetent and foreign assistance efforts are doomed to failure.

In times like these, it may be important for the aid community to pick its battles, particularly in the U.S. where calls for more overseas assistance often fall on deaf ears. Considering all the controversy over the domestic pet projects contained in the first draft of the 2009 U.S. economic stimulus package, imagine the outcry that would have erupted had the bill included foreign aid, as Sharma advocated. Fortunately, there was not too much opposition to the foreign assistance provisions of the fiscal 2009 omnibus appropriations bill, but several development advocates in Washington are gearing up for a fight for the aid components of the

It has become a cliché to stress that with crisis comes great opportunity, or "crisi-tunity" as Sharma puts it. But rather than pressing for more aid, it may be a better time for the development community to play defensive and focus on reforming foreign assistance. By ensuring that the aid that is already allocated is put to more effective use, we will be better poised to lobby against budget cuts in the near term. Only then will we stand a shot at raising foreign aid levels in the future.

So, what should be done about the MDGs? At this point, the drastic measure of scrapping them altogether seems premature and tragic, considering the formidable achievements that have already been made. Another option would be to revise or postpone the MDGs to make them more realistic and therefore more achievable.

Even Sharma hesitantly conceded that re-evaluating the MDGs is not off the table.

"We'll cross that bridge when it becomes 2012," she said. "If we start talking about failure it's a self-fulfilling prophecy."

So far, she may be right. In an era when stock markets tumble at the mere mention of certain ideas by policymakers, we cannot discount the importance of staying on message. But if this crisis deepens with time and the MDGs become less and less achievable, the development community may need to consider a contingency plan.

About the author

  • Ryan Weddle

    Ryan Weddle served as Devex international development correspondent in Washington in 2008-2009 before joining the U.S. foreign service. He has worked in India for a business process outsourcing firm, and in Kazakhstan on U.S.-funded urban development initiatives. Ryan holds a bachelor's in Asian studies from the University of British Columbia and a master's in international studies from the National University of Singapore, where his research focused on aid effectiveness.