Many will recall the suffering wrought by the structural adjustment programs (SAPs) prescribed by the International Monetary Fund (IMF) and the World Bank, of which it is understandable if they may not hold the twin Bretton Woods institutions with much fondness.
Introduced in the early 1980s, the SAPs involve an imposition of a set of economic policies as a condition for offering a loan to countries experiencing an economic crisis.
This has often meant measures such as withdrawal or reduction of government expenditures on essential social services and basic needs, including in the health, agriculture and education sectors.
While the SAPs are intended to improve the economy in the long run, some have argued against them for their often harsh fiscal measures that have only served to deepen poverty and suffering.
For this reason, it raised not a few cynical eyebrows by some local observers that, running through this year’s theme at the joint meeting by the twin institutions in Nusa Dua, Bali, Indonesia, there appeared to be a particular emphasis on enhancing human capital.
As defined by the World Bank, human capital consists of the knowledge, skills, and health that people accumulate throughout their lives, enabling them to realize their potential as productive members of society.
It, therefore, is implicit that building human capital should entail “investing in people through nutrition, health care, quality education, jobs and skills.”
The cynicism was, therefore, not exactly misplaced to the sceptical at the seemingly sudden emphasis on the human aspect.
Yet, there’s every reason to believe in the human capital initiative.
From informed analysis as should be expected, Jim Yong Kim, the World Bank president, articulated the need to accelerate progress toward twin goals of ending extreme poverty by 2030 and boosting shared prosperity among the poorest 40 per cent around the world.
Noting the pace of poverty reduction is slowing, he spoke of three pillars to achieve the twin goals.
The first is to drive inclusive, sustainable economic growth by “crowding in” private sector investment; the second is to build resilience to shocks and threats by taking urgent action on climate change; and the third “to help countries invest more – and more effectively – in their people to prepare for what is certain to be a more digitally-demanding future.”
The promise for this undertaking was in tandem with the IMF, of which Christine Lagarde, its managing director, was more expressive.
In solidarity, she explained in a pithy sum up, is self-interest.
Self-interest demands inclusiveness as implied in the idea of solidarity, and in what she calls the “new multilateralism” that necessitates global cooperation.
After explaining the challenges in our “more familiar” of two dimensions that include the monetary, fiscal, and financial layers of our economic interactions, it was clear that she and her colleague at the World Bank might have been reading from the same script – only that she put it better.
She launched into the second “more challenging” dimension in which she weaves inequality, technology and sustainability into a development tapestry under the “new multilateralism”.
Less inequality, she points out in her speech, is associated with stronger, more sustainable growth, while excessive inequality is associated with marginalized people, damaged communities, and eroded trust.
Tackling inequality, even if only to lessen it, requires inclusivity and partnership.
On technology, she reminds us that the digital revolution presents both great promise and great peril. Biotech, robotics, and artificial intelligence will create new industries and jobs. This is bearing in mind that the transition will also disrupt and disenfranchise. And since digital means global, this, too, will require a multilateral effort.
It is now clear to many of us that weather patterns do not appear what they used to be. Thus, on sustainability, addressing the increasingly negative effects of climate change is a common priority that can only be met through common action.
The same applies, says Lagarde, to the broader agenda of the Sustainable Development Goals (SDGs), which are a statement to our common aspiration for a better world for all.
These call for partnership in every sector, which is integral to the new multilateralism, and which should undergird the efforts towards enhanced human capital.
On his part, Jim Yong Kim also spoke of 28 countries, among them Rwanda, that have thus far signed on as early adopters of the Human Capital Project.
The project is expected to help create the political space for national leaders to prioritize transformational human capital investments.
The objective includes rapid progress towards a world in which all children arrive in school well-nourished and ready to learn, can expect to attain real learning in the classroom, and are able to enter the job market as healthy, skilled, and productive adults.
More of our governments should consider taking up with the project – not least because, as emphasised at the meeting, learning should be a life-long process to sustain the human capital as the digital landscape takes hold.
Sustaining relevant human capital and how to go about it is detailed in the 2019 World Development Report launched at the Bali meeting. The report’s title is as anticipatory as it is self-explanatory: The Changing Nature of Work.
The views expressed in this article are of the author.Follow https://twitter.com/gituram