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 45, 6

7 & 89 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