25-11-2008

TOWARDS DOHA: WHAT DEVELOPMENT IN TIMES OF CRISIS? Statement by the Observatory in view of the upcoming UN Conference on Development Financing.

Towards Doha:

what development in times of crisis?

Statement by the  Cardinal Van Thuân Observatory

on the Social Doctrine of the Church

in view of the upcoming UN Conference on Development Financing,

Doha, Qatar

 (27 November – 2 December 2008)

The upcoming UN conference to be held in Doha will take place at a very particular moment in the international economy, which is dominated by a crisis whose confines have yet to become entirely clear. Do what extent will the crisis reopen discussion on the development goals? Will the already slow progress towards those goals slow down ever more?

The crisis now underway is bringing to the surface some deeply rooted problems that more than a few observers have been decrying for some time, but which have been systematically ignored in the processes regulating the international economy.

People refer to the progressive disjunction between finance and real economy, which is now being “dragged downwards” by the financial crisis. In fact, created as accessories to the markets of goods and services on which companies could find resources to invest in physical, technical and human capital, the financial markets have been uplifted to the level of autonomous creators of wealth, albeit entirely virtual in nature. The crisis on said markets runs the risk of turning into a collapse of the international financial system, withdrawing monetary resources for real investments by companies and consumer purchases by families.

Secondly, the crisis manifests how governments – in some cases as powerless observers, and in other cases, mostly in developing countries, as complacent observers – witness phenomena of planetary tax evasion, that drive enormous amounts of capital towards tax havens, thereby reducing the resources available to national governments for public investments.

Lastly, coming to the surface is the lack of world governance regulators: supranational organizations are weak, far from neutral, not representative, and in any case incapable of giving shape and form to resolute and courageous measures to resolve the problems of the world economy. Moreover, there can be a blatant conflict of interest among diverse organizations, as illustrated by the contemporary nature of the UN conference in Doha and the meeting of the so-called G20. Such conflicts are rendered all the more evident by the inability of the major industrial countries to reach agreement on sensitive issues such as the environment. And even less apparent on the horizon are clear policies regarding the issue of development!

The crisis, therefore, most certainly represents a risk not to be disregarded with respect to development financing, but may also represent an excellent opportunity for people on all levels – transnational organizations, governments, financial institutions, corporations, scholars and public opinion – to become aware of the limits of the idea of development that has assumed pride of place in international economic policies over the last few decades, and the need to surmount those limits in a courageous and coherent manner.

The Social Doctrine of the Church makes its voice heard on this in world debate, and particularly so on the following points:

1)      The recovery of the anthropological dimension of the economy: it just isn’t possible to think about a reform of the world financial system without keeping in mind that the system in question is nothing more than a “servant” to a productive economy centered on man. In other words, economic circuits have to be restructured on the requirements of man, the needs of peoples, so there may be a shift from a rationale of booming wealth to a development of widespread wellness. This recentering of the paradigms used to interpret the economy must take place on various levels: on the institutional level by having governments once again consider the common good as the primary goal; on the entrepreneurial level by once again taking into consideration the rational and harmonious use of resources; and on the level of individual responsibility through the redemption of gratuitousness as an integral value of labor.

2)     The reintroduction of ethically grounded systems of regulation and governance: the justice of global governance processes – provided there is peaceful coexistence among peoples and nations – must be based on representative, transparent and impartial international institutions guided by an ethical vision and endowed with effective powers to provide guidance for the actions undertaken by individual governments.

3)     The rationale of subsidiarity as the principle inspiring future local and world development policies: globalization manipulated from on high means that local economic structures – especially the weakest ones – are not able at present to discover within themselves the forces or the values for their own renewal.

If the system of world decision-makers  is able to tackle these challenges, take on these instances, and once again lend an ear to its own critical voices, it will be possible to overcome the crisis and the processes of real human development will get back on track. Otherwise that system will have to resign itself to its own state of atrophy and isolation within the four walls of its own problems.

Filed under: Economic Policy, Social Doctrine