Globalisation Trends: Challenges for Policy Globalisation Trends: Challenges for Policy Coherence

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Text of Globalisation Trends: Challenges for Policy Globalisation Trends: Challenges for Policy Coherence

  • John Humphrey

    OECD Workshop: More Coherent Policies for More

    Inclusive Growth and Development

    Paris, November 2007

    Globalisation Trends: Challenges for Policy Coherence

  • “the pursuit of development objectives through

    the systematic promotion of mutually reinforcing

    policy actions on the part of both OECD and

    developing countries” OECD Development Centre, Policy Brief 26, “Migration, aid and trade

    Globalisation and the consequences of increasing

    global regulation and global harmonisation

    New policy actors in the global economy: China

    and India

  • The Basel Committee on Banking

    Supervision: Banking Regulation and Finance

    for Development

    What is the Basel Committee and what are

    Basel 1 and 2 all about?

  • The Basel Committee on Banking

    Supervision: Banking Regulation and Finance

    for Development

    Impact

    1. Makes lending more pro-

    cyclical.

    2. Could inhibit banking

    finance to developing

    countries

    3. Could reduce lending to

    small and medium

    enterprises

    Conflicts with

    1. Smooth capital flows

    2. Finance for development

    3. Promote SMEs and

    finance for SMEs

  • Year Event Country

    1987/1988 Beef hormone scare Italy/EU

    1988 Poultry salmonella outbreak/scandal UK

    1989 Growth regulator (alar) scare for apples United States

    1993 E. coli outbreak in fast-food hamburgers United States

    1996 BSE links to human brain disease UK

    1996/1997 Microbiological contamination, berries United States,

    Canada

    1995-1997 Avian flu spreads to humans Hong Kong, Taiwan

    Province of China

    1999 Dioxins in animal feed Belgium

    2000 Large-scale food poisoning, dairy Japan

    2001 Contaminated olive oil Spain

    Source: Jaffee, Food Safety and Agricultural Health Standards: Challenge and Opportunities for Developing Country Exports, World Bank, PREM, 2005, p. 16

    Food safety, trade and livelihoods

  • The EU Response to Food Safety Scares:

    Direct Effects in Developing Countries

    Tighten up on product safety

     Lower maximum pesticides residue levels in fruit

    and vegetables

     Tighter controls on antibiotic residues

     Many substances banned

    European Food Safety Law – new philosophy

     Equivalent national food safety systems in

    exporting countries – Competent Authority must

    be competent

  • The EU Response to Food Safety Scares:

    Indirect Effects in Developing Countries

    Whole chain approach to food safety

    Risk-based approach – control processes at source

    Food Business Operators “primary legal

    responsibility” for food safety

    Defensive strategies by food businesses –

    particularly supermarkets in Northern Europe.

     EurepGAP

     Farm-level controls through certification, audit,

    paper trails

  • Stages in Production of Produce Covered by EUREPGAP CPCC

    Produce

    Seed,

    Nursery

    Site

    Selection

    Crop

    Production

    Harvest

    and

    Transport

    Environment, Waste & Pollution, Operator Health, Safety and Welfare

    Documentation, Traceability and Quality System Requirements

    Additional Quality Management Systems required for Farmer Groups

    Crop

    Storage,

    Washing,

    Treatment

    N/A answers

    allowed when

    no Produce

    Handled

    3 4 5, 6

    7 & 8 9 10

    11. 12

    & 13

    1. 2

    & 14

  • New Global Actors:

    China and India

    Policy coherence

    “the pursuit of development objectives through

    the systematic promotion of mutually reinforcing

    policy actions on the part of both OECD and

    developing countries.” OECD Development Centre, Policy Brief 26, “Migration, aid and

    trade

  • 0 5 10 15 20 25 30 35 40 45

    US $ Trillions at 2003 Prices)

    China

    India

    United States

    Japan

    Germany

    GDP Projections, 2050

    Source: Wilson, D. and Purushothaman, R. (2003) Dreaming with BRICs: The Path to 2050,

    Global Economics Paper 99: Goldman Sachs Financial Workbench

  • Distribution of Increase in Glohbal

    GDP, 1990-2005, by Region/Country

    (PPP, %)

    USA

    China

    India

    Rest of Developing Asia

    Japan

    Other OECD

    MENA

    LAC

    ECA

    Source: David Dollar, presentation to GDN, Beijing,Jan 2007

    USA

    China

    India

    Rest of

    Dev Asia

  • Challenge for OECD Countries

    China and India as economic powers

     trade and investment

    Working with China and India: global public goods

     financial stability

     trade reform

     climate change

     health, security, etc.

    Working towards the MDGs: new powers’ policies

    matter

     As a model for other countries

     Through trade investment and migration

     As aid donors

  • Controversial Role of China for OECD

    Countries

    Richard Manning, DAC, on non-DAC donors

     inappropriate lending ➙ debt

     low conditionality, slows reform

     unproductive investment

    Western anxieties and anger about new donors.

     “Rogue aid”. Bad stories. Zimbabwe, Sudan, Myanmar.

    India, too, increasing involvement in Africa:

     targeting trade expansion

     looking for oil, including in the Sudan

     investment in agriculture and manufacturing

  • Policy coherence challenges

    New donors and new priorities

    Conflicting advice

     what is considered to work

     how relationships are managed

     the donors’ own strategic objectives

  • The policy coherence burden on developing

    countries

    Difficult to bring incorporate new donors into existing

    donor coordination mechanisms

    Differences on broader development-related policies

    Two challenges for developing countries:

     managing potential policy conflicts

     developing mechanisms for dialogue with the

    new global powers

  • Challenges will increase

    Range and complexity of issues

    Increasing interaction with regional governance

     behind the border issues

     harmonisation of standards to facilitate deep

    integration

    New actors at multiple levels: clamour for “voice”

    Seen in public and private sectors

    Actors will be held to account for their decisions