Perspectives on Transition and Development

Opinion article by: David Ricardo Murcia Sánchez*

Analyst at the Trade, Investment and Development Observatory

Universidad EAFIT, Colombia

In this short column I aim to make some observations about the relationship between development and transitional process (war to peace) in societies. In the procedure, I’ll put the discussion to serve as interpretive remarks of the Colombia’s peace negotiations context.

The central hypothesis I’ll defend, states that the transitional process form war to peace in Colombia should be seen as an opportunity for development that goes beyond the conjuncture of the peace negotiations process with FARC guerrilla. Thus, beyond the reduction of the levels of violence (murder rates) in the social interactions. It should be taken, in stand, as a chance to strengthen the social capital and the formal institutions that bondage the people and the state.

First, it is necessary to make some notes on the subject of transitional justice. This academic area studies the organizational structure that the government and the society acquire to make a transition from either war to pace, dictatorship to democracy, or both. About it Ivan Orozco Abad (2005), a Colombian lawyer and political scientist, explain that in this field of research there are two streams of thinking. The first: human rights defenders, place their interest in the guard of justice as supreme value in the social life. In this sense, they make it necessary to implement some sort of law framework that reward or restore the affections taken by those who were damage during the conflict, for it is just. The second stream: peace builders, concern deeply about finding the possible ways in which the social capital in a society can be strengthen, thus permitting the stabilization of social relations outside the formal institutions: the government and the law. In this way, peace builders give concessions to social stability prior the satisfaction of grievances.

The possible opposition between peace builders and human rights defenders is based in the emphasis both of them make in the circumstances of the transition. The firsts consider the importance of having practical ways to facilitate a nation to make the transition, avoiding the reproduction of social conflicts in the head of retributive justice, which could let to violence. The second ones, in contrast, sustain that the transition need to be constructed as a way to pay back to society the damage inflicted; in this sense the human rights defenders place the exigence of justice as unavoidable to build a durable peace.

Although, it could be interpreted that these two ways of study are opposite, such an opposition could be false. As Orozco himself expose, there could be a mid-way where justice framework could be constructed in a fashion, it could not dissect society between victims and victimizers, breaking the bondages in society; but one that seek the normalization of the social institutions, both formal and informal (Orozco, 2005).

This initial approach to the discussions within the transitional justice, arose the necessity of having a process that give both, juridical guaranties to the grievances of the different social populations, and also studies the ways in which the unity of the political body can be sustain without the explosions of violence as a valid social dynamic. At the bottom of the argument, it is the question of constructing a better society.

Academy shows examples of good policies for development. One is the case of community-driven reconstruction (Cliffe, Guggenheim & Kostner, 2003; Kyamusugulwa, Hilhorst & van der Haar, 2014; Thorsell, 2013), where the government involves the social capital already active, in the programs to reconstruct the state in a bottom up direction. Although, the measure can be improved (Kyamusugulwa, Hilhorst & van der Haar, 2014), its basic argument can be defended. As the analysis of the irruption of violence after the firm of the pact shows, it is necessary to understand the institutional arrangements that societies have to make it easy and sustainable to control crime and violence (Archer & Gartner, 1976; Godnick, Muggah & Wasznik, 2002).

This approach to the process of transition leave some reflections on the nearby transitional process that Colombia would undergo after the definitive firm of a treaty of peace whit FARC. Thus, the governmental structure (McMichael, 2014), the media (Esser, 2014), and the society in general should focus their scope not only in the variation of aggregated data, like murder rates, or others indicators (Godfelow & Smith, 2013), for it could led to mistake the apparent change in indicators, with the change of the institutional arrangements that make it possible for the conflict to emerge.

If we accept that peace goes beyond statistics, we also have to accept that without them, peace wouldn’t be reachable, for them are indispensable methods to read social reality. The argument that I want to place is that it depends on the kind of data not being studied. The experience of the transitions in Central America shows that the attention put in crime records let to measures incapable to control crime. But in other cases, were the emphasis was put in the analysis of social capital, the resulting policies were more fruitful (Jütersonke, Muggah, Rodgers, 2009).

Transition, as it has being shown, represents to a nation an opportunity to enhance its social interaction, and construct a better path towards development. This perspective goes harmoniously whit the new global development agenda: the Objectives of Sustainable Development (ODS), especially number 16, that put forward the need of strengthen the social institutions as a step in development (PNUD, 2015). 

Concluding, it is necessary to open our view of the conjuncture that the peace process represent for Colombia, in attention of the development opportunity it offers.

References

• Archer, D., & Gartner, R. (1976). Violent acts and violent times: A comparative approach to postwar homicide rates. American Sociological Review, 41(6), 937-963.
• Cliffe, S., Guggenheim, S., & Kostner, M. (2003). Community-driven reconstruction as an instrument in war-to-peace transitions. World Bank, Conflict Prevention and Reconstruction Unit.
• Esser, D. E. (2014). Security scales: spectacular and endemic violence in post-invasion Kabul, Afghanistan. Environment and Urbanization, 26(2), 373-388.
• Godnick, W., Muggah, R., & Waszink, C. (2002). Stray Bullets: The Impact of Small Arms Misuse in Central America. Graduate Institute of International Studies-Small Arms Survey.
• Goodfellow, T., & Smith, A. (2013). From urban catastrophe to ‘model’city? Politics, security and development in post-conflict Kigali. Urban studies, 50(15), 3185-3202.
• Jütersonke, O., Muggah, R., & Rodgers, D. (2009). Gangs, urban violence, and security interventions in Central America. Security Dialogue, 40(4-5), 373-397.
• Kyamusugulwa, P. M., Hilhorst, D., & Van Der Haar, G. (2014). Capacity builders for governance: community-driven reconstruction in the eastern Democratic Republic of Congo. Development in Practice, 24(7), 812-826.
• McMichael, G. (2014). Rethinking access to land and violence in post-war cities: reflections from Juba, Southern Sudan. Environment and Urbanization, 26 (2), 389-400.
• Orozco, I. (2005). Sobre los límites de la conciencia humanitaria: dilemas de la paz y la justicia en América Latina. Bogotá: Editorial Temis y Universidad de los Andes.
• PUND. (2015). Post-2015: una nueva agenda de desarrollo sostenible. Available at: http://bit.ly/1aC7Frv.

Public Private Partnerships ( PPPs ): the Challenge of Financing the United Nations Post 2015 Agenda for Sustainable Development

By: Juan Gonzalo Perez* (jperezg@eafit.edu.co)

*Analyst at the Trade, Investment and Development Observatory (Universidad EAFIT) and Specialist in Global Affairs 

Financing the Post 2015 Development Agenda challenges the traditional roles of the state, the private sector, and civil society. Since 2012 The United Nations (UN) and the international community have been working on the elaboration of a new framework to finance the sustainable development agenda

The task at hand is going to determine the future of humanity in the years to come. The Financing for Development Report states that, “financing a transformative development agenda will require that available resources be used more effectively and strategically to catalyze additional financing from official and private sector” (World Bank, 2014, p. 11). Evidence is presented in another report by the World Bank, where it is estimated that the cost of financing the expiring Millennium Development Goals were short $40 to $60 Billion dollars a year in extra foreign aid. (World Bank, 2012)

From March 23rd to 27th 2015, governments will meet again to negotiate the sustainable development goals and target before the adoption of the new development agenda during the United Nations Summit in September 25th 2015.With this in mind, the concept of Public Private Partnerships (PPPs) is presented as an instrument for financing the Post 2015 Agenda for Sustainable Development.

The concept Public Private Partnerships

The concept of Public Private Partnerships (PPPs) has been around for decades and there are more than a few ways of defining it. On the one hand Stadtler & Probst (2015) present the following definition, “International organizations partnership with businesses and actors from the public and civil society sectors to closely work together to solve a problem or issue of mutual concern that is identified with a public policy agenda item and agree to share risk, responsibilities, contributions and benefits”.

On the other hand, Tulder & Pfisrterer (2008) defined Public Private Partnerships “as a process in which partners commit to long-term, structural interaction based on a shared analysis that every actor suffers from a number of failures, consequently a shared vision of sustainability and a shared ambition that all partners should play a role in its achievement” (p.8). Public and private actors are driven to collaborate in order to raise awareness, set standards, provide services and products, use technology, get access and share knowledge (Stadtler & Probst, 2015).

For a long period of time governments, business and civil society have had their own unilateral agendas to tackle global development. However, issues like: the complexity of societal challenges, the restriction of resources, ongoing global processes and the rising power of companies and civil society, have questioned the effectiveness of actors working alone (Stadtler & Probst, 2015).

But, collaboration is not as simple as it sounds; there are weaknesses that have to be taken into consideration before jumping into new PPPs. For example: potential conflicts of interest and symmetric power relations, undermining organizations interest, exclusiveness, weak accountability and governance structures (Stadtler and Probst, 2015).

Let me exemplify this idea by saying that even with the risks involved, engaging in Public Private Partnerships can bring benefits for all the parties involve. The state has more access to resources while increasing leverage of actions. Business gains legitimacy, efficiency, stability and growth. Civil Society achieves direct support for the cause while gaining visibility and leverage. And last, Governments have access to additional resources and innovative approaches for dealing with development (Stadtler & Gilbert Probst, 2015).

Role of the United Nations

Many lessons were learned in the past years as the international community worked together towards achieving the Millennium Development Goals (MDGs). As stated by the UN Secretary General Ban Ki-moon in the Innovating for a Brighter Future Report (2010), “The MDGs have sparked a remarkable, global mobilization. Rarely have so many organizations—from the global to the grass roots—agreed on a common agenda. Rarely have so many individuals – citizens and CEOs, philanthropist and political leaders—found such common ground” (United Nations Global Compact, 2010, p.4).

MDGs are a set of eight ambitious international development goals that were adopted by UN members in the year 2000 during the Millennium Summit. 2015 was the year set to achieve the goals and spite of the efforts made by states some of the goals have not delivered the expected results, including number eight which is the development of a global partnership for development. According to the renewed global partnership for development report, MDG 8 had gaps and systematic shortcomings and it has perpetuated a donor- recipient type of relationship, which brings up the question of whether the partnership model did not take into consideration the importance of mobilizing development financing other than aid (UN System Task Team on the Post 2015 UN Development Agenda, 2013).

What we are mainly concern with here is that even though financial aid remains an important source of development finance, it usually does not increase the capacity for developing countries to mobilized domestic resources, incentivize good governance and implement strategies against capital flight (United Nations, 2013). Whereas there are grounds for believing that PPPs with clear purposes that incorporate market transactions frameworks with public policies for operation, advocacy and resource mobilization, knowledge transfer and accountably for transparent information can have long term effects in social and economic development.

In Public Private Partnerships, international organization like the United Nations should help create the rules, define the standards while acting as a partner, an initiator and a facilitator. (Stadtler & Probst, 2015).

One of the largest and most successful global partnership initiatives is the United Nations Global Compact. The two main objectives are: mainstreaming the UN Global Compact´s ten principles in business activities around the world and catalyzing actions in support of broader UN goals, including development goals. Furthermore, this initiative encourages responsible business practices based on the protection of human rights, labor, and the environment and also work to eliminate corruption (United Nations Global Compact, 2010).

The Global Compact initiative was launch in the year 2000 and currently has more than 12,000 participants; over 8,000 of them are businesses from approximately 145 countries around the world (Fundation for the Global Compact, 2015). Even though becoming part of the Global Compact is voluntary, members adapt these principals to the governance strategies in order to contribute to social and economic development.

Role of business

Businesses have the advantages of being closer to the people and working around local constrains in ways that government, and civil society cannot (United National Global Compact, 2010). Additionally, they have the knowledge for the production and marketing of goods and services (Stadtler & Probst, 2015). But simply doing business to earn the greatest possible profits in the shortest amount of time is not enough (United National Global Compact, 2010).

Corporate Social Responsibility (CSR) and the acknowledgment that business and development often overlap, has placed companies in the center of the challenge to raise living standards in developing economies. Businesses have the responsibility to incorporate new business models taking under consideration societal needs while generating long term sustainable investments.

A concept proposed by Harvard Professors Michael Porter and Mark Kramer (2011) known as Shared Value, states that if companies want to solve development problems through business models that create value for both the shareholders and society. They must re conceive products and markets by finding innovative ways to increase productivity in the value chain, making it more efficient in the use of resources, labor and suppliers and also, enabling local cluster development by setting PPPs in their business environment (Porter & Kramer 2011).

This concept attempts to go beyond the idea of social responsibility by connecting companies’ success with societal improvement, through a new approach to traditional capitalism (Porter & Kramer, 2011).

Role of Governments

National and local governments play a vital role in setting the right environment for financing sustainable development. According to the report Innovative Public Private Partnerships for Inclusive Development in Latin America, “(...) governments are responsible for designing, fostering and implementing social covenants, regulatory frameworks, incentives, policies and innovative partnerships with the private sector and civil society, the economy and the productive sector within rights based approach.” (World Economic Forum, 2014, p.12). In order to facilitate the exercise of citizenship in all its dimensions, a new agenda incorporates coherent economic and productive development policies while working towards universal employment with full rights, universal social protection and capacity building (WEF, 2014).

Also, a political legitimized state is capable of achieving long term goals and the coordination of economic and social agents (WEF, 2014). In order to gain political legitimacy governments are responsible for being transparent while implementing strategies for good governance.

Good governance is a concept that applies to all agents participating in PPPs. Governments should take citizens demands into account when formulating new policies, provide goods and services efficiently and effectively, should not let those who are providing the services pocket the money, and last but not least, it should regulate the outcomes and enforce its laws and decisions fairly, efficiently and without bias and favor (Griffin, 2015). All these aspects are fundamental in order to develop new PPPs for financing development.

Role of Civil Society

In recent years Civil Society actors have become important stakeholders in the analysis and debate of financing sustainable development, the environment and the rights of the most vulnerable sector of society. Through data and information access these actors have become better informed, organized and relevant in formulating and implementing concrete initiatives addressing economic, social and cultural rights based issues (WEF, 2014).

Civil society is responsible for the inclusion of social concerns on the public national and international agenda, to advocate for transparency, good governance and responsible practices by both governments and business (Griffin, 2015). “Civil society should also be in charge of the development of strong partnerships with academia and donor institutions, hence reflecting the growing awareness of citizens and societies as a whole of their rights and responsibilities regarding sustainable development” (World Economic Forum, 2014, pg.12).

Case studies from NGO´s like AVINA in South America, suggest that organized communities can be empowered and are demanding to the lead in both the design and implementation of programs and potential PPPs. AVINA works towards the objective of creating favorable conditions for diverse actors to join forces in contributing to the common good. They select their opportunities based on their relevance for sustainable development, their potential for the regional and global scalability (AVINA, 2015).

To sum up, joint efforts from the United Nations, business, states and civil society are fundamental for developing strategies that contribute to effective long lasting Public Private Partnerships to tackle the challenge of financing the United Nations Post 2015 Sustainable Development Agenda. There has been important advancements and lessons learned from the outcomes of partnerships developed to achieve the Millennium Development Goals. However, the future development challenges that we face require dynamic and committed actors that can come up new innovative ways to develop PPPs that go beyond their own interest but that at the same can benefit their stakeholders.

International organizations like the United Nations have the role of bringing parties together and foster collaborative approaches that include universal commitments calling for actions from all actors according to their capabilities.

Businesses are now at the center of the debate as the traditional profit oriented models of production are being questioned. They must understand that their contribution to development is fundamental and is not only good for the people in their communities but also for them, in order words if there is prosperity in the communities in which they operate, it is likely their business and shareholders will also benefit from it.

Governments must create and enable the right environment for financing development taking into consideration multi stake holder partnerships and creating strategies for mutual accountability and good governance. Also, setting up policy frameworks for PPPs in order to increase the effectiveness and efficiency of development assistance and go beyond traditional donors. This will allow developing countries to build capacity and to find other means of mobilizing domestic resources.

Civil society should continue to oversee the processes of the agents involve in PPPs while contributing to national and local agendas for development. Their role is essential when it comes to identifying bad governance and corruption within institutions.

In the end, we are all accountable for the global challenges that we face, and if we work together and implement innovative strategies to renew public private partnership, it is reasonable to think that financing the United Nations Post 2015 Sustainable Development Agenda is possible.

References

• AVINA. (2015). Fundación AVINA. Retrive from http://www.avina.net/esp/
• Fundation for the Global Compact. (2015). United Nations Global Compact. Retrive from https://www.unglobalcompact.org/ParticipantsandStakeholders/index.html
• Griffiths, R. (2015). Video lecture # 5: Govenance. Retrived from Coursera Challenges in Global Affairs Specialization Course. 
• Michael, P., & Kramer, M. (2011). Creating Shared Value. Harvard Business Review, 2-15. Stadtler, L. & Probst, G. (2015) Video lecture # 1: why and how do International  organizations engage in public-private partnerships?. Retrived from Coursera Challenges in Global Affairs Specialization Course. 
• Stadtler, L. & Probst, G. (2015) Video lecture # 2: what are the challenges and opportunities in PPPs?. Retrived from Coursera Challenges in Global Affairs Specialization Course. 
• Stadtler, L. & Probst, G. (2015) Video lecture # 4: What does partnering in PPPs imply forthe International Organization?. Retrived from Coursera Challenges in Global Affairs Specialization Course. 
• Tulder, T. & Pfisterer, S. (2008). From Idea to Partnership: Reviewing the Effectiveness
• Development Partnerships in Zambia, Colombia and Ghana. Expert Centre for Sustainable Business & Development Cooperation. Retrieved from file:///C:/Users/USUARIO/Downloads/from-idea-to-partnership-reviewing-effectiveness-development-partnerships%20(1).pdf
• United National Global Compact. (2010). Innovating for a Brighter Future- The Role of Business in Achieving the MDGs. New York: UN Global Compact Office and Dlaberg Global Development Advisors.
• United Nations. (2013). A Renewed Global Partnership for Development. New York: UN.
• United Nations Task Team on the Post 2015 UN Development Agenda. (2013). Financing for sustainable development in the global partnership beyond 2015. New York: UN.
• World Bank. (2012). The cost of attaining the Millennium Development Goals. Washington D.C.: Work Bank Group.
• World Bank. (2013). Financing for Development Post - 2015. Washington D.C.: Work Bank Group.
• World Economic Forum. (2014). Creating New Models: Innovative Public- Private Partnerships for Inclusive Development in Latin America. Geneva, Switzerland: World Economic Forum.

Country brands: A paradigm change towards development

By: Carolina Herrera Cano (caroherca@gmail.com)

Universidad EAFIT

The promotion of countries through marketing strategies has become an important awareness of national governments; vital economic interests depend on the effectiveness of these initiatives. It is notable that commercial concerns of promoting products, places, and institutions are nowadays greater. In this sense, the creation of a country brand is an increasing practice within governments; it is undeniable that the use of commercial diplomacy is well established. The evaluation of country brands performance has always been from a commercial approach; it is easily identifiable in how country brands have been evaluated thorough the years. Although, there has been a paradigm change in how country brands are perceived (and evaluated), they are becoming a useful tool to promote a better quality of life within the country, and not only a way to increase tourism, investment, and exports.

The country brands are defined as governmental strategies implemented to capitalize the nation reputation of a given country in the international markets. Many authors recognize the importance of the country brands as a soft power tool used by governmental institutions to increase their influence in the international context, and consequently, to develop higher levels of competitiveness, institutional stability, and legal certainty (Lacouture, 2009). Since decades, this strategy has been used by many countries with the main purpose of economic growth, and international trade promotion (Echeverri, Estay-Niculcar, & Rosker, 2012). Nowadays, these objectives are usually undertaken through three specific dimensions, usually supported by the Ministries of Commerce: tourism attraction, foreign direct investment improvement, and exports promotion (Colombia Marca País, 2013). This results in a deliberate objective of communicating a country positive image abroad. Consequently, country brands work as a marketing strategy that serves fundamentally to the national commercial interests.

In order to determine the real advantages that the creation of a nation brand strategy has had in the international presence of a country, its position in the international markets is examined. The Country Brand Index, developed by Future Brand, the strategic consultant from Interpublic Group, analyzes the performance of the country brands around the world. The Country Brand Index uses quantitative research, opinions from experts, and massive digital surveys in order to create a ranking of the most effective strategies, and to identify which are the main challenges that each country brand has. Country brands have been evaluated only under almost the same indexes of any other commercial brand: levels of knowledge, familiarity, preference, considerations, number of recommendations, and active decisions to actually interact or visit the given country (Future Brand, 2013a).

The current commercial approach that governments have implemented regarding their relations with other countries responds to the necessity of guaranteeing certain levels of investment, tourism, and exports. Competition between country brands reflects competition between countries; in an increasing globalized world, with a constant danger of economic crisis, a strong nation brand strategy could represent the difference between visiting, investing or buying in a given country; despite competition between commercial brands does not have to be a zero-sum game (Frost, 2004). The question here is that despite the importance of commercial interests that every country has, country brands are not longer sources of capital flows.

The awareness over the use of country brands not only as promoters of tourism, invest, and exports, but as a way to improve quality of life, represents a change in the paradigm of how country brands were perceived. This perspective has also been promoted by the evaluation process developed by Future Brand. To this index, in terms of country brands performance, the most important aspect that should be taken into account today is their ability to improve the quality of life of its citizens (Future Brand, 2013b). In this way, figures regarding products’ demand abroad, number of foreign visitors, and money invested are not an end in its self, but a strategy to create better social conditions within the country.

That is why this index also takes into account the impact of country brands in aspects like: values system, quality of life, business culture, heritage and culture, and tourism which are not only fundamental to the commercial interests of the country, but also to the social conditions of nationals. As a matter of fact, the Country Brand Index measures the strength of a country brand base on its capacity to foster open discussion, individual rights, civil liberties, and social values. In this order of ideas, country brands increasingly pursue better social conditions, and not only commercial interests (Future Brand, 2013b).

This internal concern can also be seen in how country image is perceived today. Country reputation is a key concept that determines the strategies that implemented in the nation brand strategy. Although, during the last years, countries have noticed that reputation is not only a foreign. In this sense, the country brands are becoming increasingly important for national governments as a way to promote products, institutions, and even citizens both nationally, and internationally. Today, countries are conscious about the importance of making the country brand not only an international communication strategy, but a national effort towards an internal sense of belonging. These types of strategies improve security (which ultimately promotes also internal tourism), increase internal demand, and create institutional trust, also resulting in better social conditions concern (Echeverri, Estay-Niculcar,  & Rosker, 2012).

The effectiveness of country brands has eminently been a commercial concern; economic conditions make country relations a constant competition over tourism, investment, and exports. In this way, countries have understood that the effectiveness of country brands can be used to increase international capital flows. Nevertheless, during the last years governments have seen this strategy as a way to foster social and economic development within their countries. Through this strategy, and thanks to the new paradigms in country brands evaluations, governmental institutions can now access to the benefits of having a better position of their nation brand strategy in the international market, promoting an internal sense of belonging, and consequently improving development.

References

Colombia Marca País. (2013). Available online: http://www.colombia.co/. Accessed: May 5th, 2014.

Echeverri, L., Estay-Niculcar, C. A., & Rosker, E. (2012). Estrategias y experiencias en la construcción de marca país en América del Sur. Estudios Y Perspectivas En Turismo, 21(2), 288-305.

Frost, R. (2004). Maping a Country’s Future. BrandChannel.com. Available online: http://www.brandchannel.com/features_effect.asp?pf_id=206 . Retrieved: May 28th, 2014.

Future Brand. (2013a). Country Brand Index 2012-13. Available online: http://mouriz.files.wordpress.com/2013/02/cbi-futurebrand-2012-13.pdf. Accessed: May 5th, 2014.

Future Brand. (2013b). Country Brand Index Latinoamérica 2013. Available online: http://www.futurebrand.com/images/uploads/studies/cbi/CBI_Latinoamerica_2013.pdf. Accessed: May 5th, 2014.

Lacouture, M. C. (2009). Colombia es pasión, porque la mejor materia prima que tiene el país es la pasión de los colombianos. Latin Trade (Spanish), 17(2), 59-60.

Inversión privada en innovación para el desarrollo

Artículo de opinión por: Laura Jaramillo Echeverri (*)
Estudiante de Derecho, Universidad EAFIT, Colombia

Se ha planteado como una realidad en la actualidad que la innovación y la promoción del aprendizaje tecnológico son los dos estímulos mas grandes para el cambio estructural de una economía en desarrollo, pues significa mejorar la competitividad de las empresas, generar crecimiento y empleo.

La innovación suele requerir inversiones considerables de capital, y normalmente la falta de financiación suele ser un obstáculo en materia de innovación para las empresas. Esta falta de financiación se genera por que representa un riesgo de incertidumbre para quien invierte, por que solo es posible apropiarse de una parte de los resultados por parte de quien invierte. 

Estudios de UNCTAD han demostrado que la tasa de rentabilidad social en la inversión publica de investigación y desarrollo puede ser varias veces superior a la de la inversión privada. De esta manera el WIR 2014 publicado por UNCTAD sostuvo que para poder cumplir los objetivos de desarrollo sostenible post 2015 se requiere de inversión privada, para que de la mano de las políticas de los gobiernos se logre un desarrollo a largo plazo y de manera sostenible. Es por esto que se debe hacer énfasis en la investigación y desarrollo, pues a través de la innovación se genera crecimiento en la economía, a través de las empresas y emprendedores. 

Se han planteado unos instrumentos para financiar la innovación, que comprenden financiación directa e indirecta. La financiación directa esta compuesta por financiación privada y financiación publica, en el presente articulo nos vamos a enfocar en la financiación privada, explicando los instrumentos de esta financiación, en la innovación para luego relacionarlos con los instrumentos de la inversión publica. 

La financiación para actividades emergentes normalmente resulta mas problemático en el caso de las pymes y las micro empresas, frente a lo que resulta para las grandes empresas. Cuando se trata de financiación privada para un proyecto innovador lo que primero que se considera son ahorros personales y recursos de familiares o endeudamiento personal, el ahorro personal de los socios, las utilidades de periodos anteriores (cuando son empresas ya constituidas), ángeles inversionistas, siendo este un tipo de financiación muy novedoso pues son personas que aportan capital en la fase de gestión y de crecimiento inicial de la empresa, pero además de aportar fondos, aportan conocimientos técnicos, administrativos y empresariales que resultan muy útiles para los emprendedores. Otro instrumento es el capital de riesgo, pues se trata de una forma de financiación mediante participación al margen de mercados bursátiles, esto es que los inversores invierten, normalmente en las fases de crecimiento inicial o de expansión por un período de tiempo mas largo que el de los ángeles inversionistas aprovechando el elevando potencial de crecimiento de las empresas que ya han iniciado sus operaciones. Además están los prestamos de bancos comerciales, que son la fuente más tradicional y la más importante forma de financiación de las empresas, pero en muchos países en vía de desarrollo las pymes tienen dificultades para obtener prestamos bancarios con interés asequibles, lo que genera que la innovación empresarial se frene en países menos desarrollados. Así mismo esta el microcrédito, el cual, consiste en financiación crediticia a pequeña escala que surgen normalmente de ONG o por ayuda del gobierno. Finalmente vemos como instrumento para financiar la innovación, la micro financiación colectiva, que resulta como un fenómeno reciente donde los empresarios entran en contacto con los inversores a través de internet estableciendo plataformas que hacen coincidir a los inversores y a las empresas que buscan financiación. 

Con base en estos instrumentos es que el sector privado debe enfocarse en la inversión, por medio de ángeles inversionistas creando redes de ángeles en todo el mundo y estableciendo asociaciones o federaciones nacionales de inversores, para ayudar al desarrollo no solo local sino global impulsando las nuevas empresas con proyectos innovadores. Frente a los fondos de capital de riesgo, estos puede ser privados o públicos, pero la mayoría pertenecen al sector privado, por lo tanto el sector publico por medio de sus políticas de investigación y desarrollo debe fomentar la inversión con este instrumento que genera un gana-gana para ambas partes. Finalmente la micro financiación colectiva siendo el instrumento mas reciente que podría crecer mas rápidamente necesita de la elaboración de normas y mecanismos de adecuación para garantizar la confianza en los inversores a través de internet, pero aun así resulta siendo un instrumento muy eficiente donde las partes se encuentran para proponer sus propuestas de financiación para así impulsar la innovación. 

Referencias 

UNCTAD (2013) Inversión, en innovación y tecnología para el desarrollo. Publicación de las Naciones Unidas, Nº de venta: TD.B.C.II.21, Ginebra

50th Birthday of UNCTAD

By: Verónica Velásquez Zuluaga * (vvelasq5@eafit.edu.co)
Law student at Universidad EAFIT, Colombia

In its half-century, UNCTAD has made a book about its history. As we know, this organ of the UN was created after the Second World War because an international rebuilding in the economy was a necessity, and the spirit that motivated the group that worked at that attempt of changing the world was a sense of devotion which was very enhancing of the quality of relationships and the quality of the work itself, that’s why it builds something, UNCTAD.

For the creation of this organ, they have to perform many meetings to organize and decide how was going to work. At this time, 1964, there were 120 countries that decided to join the organization, then they establish some rules and 3 central elements that Raul Prebisch, the executive secretary at that time, laid out for UNCTAD. There were: general framework for international commodity agreements, new forms of financing – supplementary and the demand for temporary preferences for the industrial exports that developing countries exported to developed country markets.

The Trade and Development Report have maintained a continuing focus on the interaction of the international economic environment with the development prospects of developing countries. Its policies have been implemented by other institutions that want follow the same principles. UNCTAD became a new international order for the economy and trade.

Nowadays, besides others function that UNCTAD has, it is responsible manly for design policies for international trade and development of the economy. In this globalized world where we live, this organ has a very important role in the trade and development: it looks for increasing the opportunities for the developing countries and integrate them to the world trade. UNCTAD has already constructed a new investment policy framework, and its technical assistance capacity is already strong through the Investment Policy Review mechanism. Other international bodies recognize its expertise on investment, trade and development.

Bibliography

Toye, John (2014) Unctad at 50: A Short History. Available online at: http://vi.unctad.org/resources-mainmenu-64/digital-library?i=VI&op=all&q=UNCTAD+at+50%3A+A+short+history&act=search&option=com_gslink

New challenges for the Colombian economy

Opinion article by: Catalina Tamayo Posada (catalinatamayop1@gmail.com)
Economics student at Universidad EAFIT, Medellin, Colombia.

“… Poor countries are poor because those who have power make choices that create poverty.” 

― Daron Acemoğlu, Why Nations Fail: The Origins of Power, Prosperity, and Poverty

Only two days have passed since the second round of presidential elections where Juan Manuel Santos resulted reelected beating Oscar Ivan Zuluaga, who was Alvaro Uribe’s candidate. The whole country ended up being completely divided by these two candidates which focused their campaigns mainly in the peace process that is being completed in La Habana, Cuba. The peace process between the Colombian Government and the FARC (Fuerzas Armadas Revolucionarias de Colombia, by its Spanish initials) started in 2012 and has not ended up yet. Many issues are under conversations amongst the two parties, but the Colombian people still have too many questions about what is being discussed there because the agreements have been kept in secret. However, one thing can be stated, in case of having a successful process in La Habana, the Colombian economy would be extremely beneficiated. The GDP could grow an additional 2% as a result of the “end of the conflict” (Oficina del Alto Comisionado, 2014). This increase would be translated into greater social investment as well as more employment opportunities, reducing the unemployment rate down to 7% (El País.com.co).

Additionally, the share of the national budget which is currently destined to national defense could be reinvested in education, health, infrastructure, etc. Furthermore, the lands that could not be worked on because of the conflict would be returned to the owners and would be made productive, incentivizing the agricultural sector which needs to be highly reinforced.

Although the peace process appears to have a great impact on Colombian economics, it is not the only issue that deserves attention.

In the last years, Colombia has had an economic model based on the extractive sector. Even though this sector represents a big share of Colombian exports and therefore more royalties, it’s a sector that signifies a huge damage for the environment and makes the economy extremely vulnerable to changes in the global demand for commodities. According to Leonardo Villar, director of Fedesarrollo, “We are approaching to the end of the boom of commodities’ prices”. In other words, the growth of Colombian GDP because of exports of commodities would fall. The challenge here is how to prevent the economy of having a crisis and how to make it grow despite the fact of this inevitable coming drop of international prices of commodities.

The extractive sector shouldn’t be left aside but it clearly shouldn’t be the only motor of the economy. Innovation is, as Joseph Schumpeter would say, “an essential driver of competitiveness and economic dynamics.” Investing in research for innovation should be a priority for the upcoming government. The greatest benefit of innovation is that it can be applied to every sector of the economy: to make more technical the crops, to add value to our own production, to construct highways in less time with more technology, even to make more efficient the governmental institutions. And well, if institutions can actually become more efficient and less bureaucratic with all the processes, maybe our economy could become more competitive and resources could be distributed in more equitable way.

References

El País.com.co. Analistas sostienen que la paz significaría un fortalecimiento económico del país. Obtenido en: http://www.elpais.com.co/elpais/judicial/noticias/analistas-sostienen-firmar-paz-significaria-fuerte-aumento-crecimiento-economico-p

Oficina del Alto Comisionado-Colombia, ONU. Conflicto cuesta $12 billones al año; en Paz, PIB crecería hasta 2%. Obtenido en: http://www.hchr.org.co/acnudh/index.php?option=com_content&view=article&id=4841:conflicto-cuesta--12-billones-al-ano-en-paz-pib-creceria-hasta-2-&catid=121:proceso-de-paz&Itemid=91

Revista Dinero. Lo que está en juego. Edición N° 445 página 37.

Śledzik, Karol. Schumpeter’s view on innovation and entrepeunership. Obtenido en: http://www.academia.edu/5396861/SCHUMPETERS_VIEW_ON_INNOVATION_AND_ENTREPRENEURSHIP

Ports, and Logistics in Colombian Development

By: David Ricardo Murcia

Political Sciences student at Universidad EAFIT, Colombia

When one is willing to analyse and explore the topic of development, several areas of study comes to mind. Among them: chain value participation, market analysis, and state support to some productive sectors through public policy. These are subjects that have previously been studied in the different articles of this Observatory, but I am willing to undertake a new one –maybe a very important one- in this concise dissertation. No further introduction, I will explore the logistic infrastructure, more specifically, the port administration of Colombia, and its consequences in international trade.

All the firstly appointed subjects in the above paragraph concentrate in the production capacity of a certain State and its participation in the international market, and, as it has been the goal of most of previous posts, the revenue in it. Although, the consideration of the commercial logistics has a crucial influence in the competitiveness of a national market as it can change the value of a product according to the connectivity and storage capacity that the infrastructure can provide to possible investors (DNP, 2008). Nevertheless, that opens a wide range of problems that cannot be discussed in this brief writing, such as the variety of intervention levels that the National Logistic Policy of Colombia contain (Vid. BID, 2011). Now, this text will focus on a specific area of the preceding policy: the port administration.

Colombia has a long history of reforms attempting to make its ports more competitive in the Latin American region. This was especially evident since the promulgation of the 1991 1st law that liberalised the sector, by permitting private capital to administrate the national infrastructure through concession. Before the remarked law, the Colombian ports were managed by the State, and had little competitiveness in the international market. But this was not a huge problem, as the Colombian market was a highly close by that time, even though the nation started a slow opening process since de 1950’s (Vid. Estrada, 2004).

The liberalization process of the Colombian State concentrated their efforts in attracting foreign direct investment, by making a lax legal control on inversion. Those arrangements set aside the preoccupation over logistics, and consequently national plans did not have significant budget to come into reality. An example of this situation is the constant desire to build a train transport system, which came especially since the presidency of Carlos Lleras Restrepo (1966 – 1970).

Although, since 1991 with a new constitution and a package of laws, the government made bigger efforts to increase its participation in international markets. The problem began after the first five years of the 2000’s that brought a rapid growth in the nation’s foreign trade, due to the poor effects that the 1rst law of 1991 for improving the efficiency of the port sector had (DNP, 2009; DNP, 2013). Then, the ports problems started being taken as important issues, mainly with the port expansion plans of 2009 and 2013 (Conpes 3611 of 2009 and 3744 of 2013). But unfortunately, the impact capacities of the 2009 plan were reduced because the importance that arose in 2005 benefited only the traditional ports, and left the strategic ones with nothing more than a bunch of plans in paper with no funding, as it is the case of de Urabá or the Morrosquillo Gulf ports in the West Caribbean Coast of Colombia or the Tribugá port in the Northern Pacific Coast.

As a conclusion, the previous dissertation developed a discussion over the repercussions that logistics have in the country capacities of improving its participation in a global market. More importantly, it is presented the lack of preoccupation that the government has put in the port sector and the collateral consequences that they have in the costs of trade.

References

BID. (2011). BID apoya Política Nacional Logística de Colombia. BID. Available at: http://www.iadb.org/es/noticias/comunicados-de-prensa/2011-06-29/politica-nacional-logistica-de-colombia,9445.html

DNP. (2008). Conpes 3547. Bogotá: DNP.

DNP. (2009). Documento CONPES 3611. Bogotá: DNP.

DNP. (2013). Documento CONPES 3744. Bogotá: DNP.

Estrada Álvarez, J. (2004). Construcción del modelo neoliberal en Colombia 1970-2004. Bogotá: Ediciones Aurora.

Biodiversity and Access to Sustainable Development

Opinion article by: Marcela Marin Mira* (mmarin@eafit.edu.co ) 

International Business student at Universidad EAFIT, Colombia

The United Nations Conference on Trade and Development - UNCTAD's Division on International Trade and Commodities, which seeks the promotion of inclusive and sustainable development in international trade, launched the BioTrade Initiative in 1996. This Initiative, being the longest running United Nations initiative on business and biodiversity, has focused its efforts on supporting the Convention on Biological Diversity (CBD) and has developed programs for different regions and countries to enhance the sustainable bio-resources management, product development, value adding processing and marketing.

As stated by the CBD, “Biodiversity is the source of many products and services utilized by society and its sustainable use is thus fundamental for long-term sustainable development”, and that is why it is of great importance to work on the integration of groups of businesses and communities, governments, universities, trade promotion organizations, chamber of commerce and regional and international organizations in order to meet the BioTrade Target, achieving a significant reduction of the rate of biodiversity loss, as this goal has failed to be achieved in the past without counting on effective and rapid responses.

Leading BioTrade to businesses is not only about ensuring the conservation of the environment but also mitigating the negative impacts on the populations, particularly those disadvantaged populations into the world economy.

The Millennium Ecosystem Assessment (MA - initiated in 2001) that has the goal of assessing the current condition and trends in the ecosystems and the services they provide (such as food, clean water, forest products, flood control and natural resources) to give options looking forward its restoration, conservation, sustainable usage and contribution to human well-being has conclude, in one of its reports, that 60% of the world’s ecosystems are degraded or unsustainably used and are directly impacting the livelihoods of the populations that depend on these resources.

The above reasons have moved many countries to implement sustainable management plans and legal frameworks. To mention we have Bolivia which has succeed by using the basis of a land-use planning model in cooperation with the European Commission that promotes sustainable development, protecting the rights of indigenous peoples living in affected areas. In Southern Africa, the concentration on the development of products derived from native biodiversity has benefited many producers. In the Peruvian Amazon, a big amount of rural families participate in the extraction of Camu-camu (native tree). In Namibia, Marula to harvest trees is very easy and is a means of opportunity for rural women.

On the other hand, we have the formulation and implementation of policies such as the EU Novel Foods Regulation that ensures a high level of human health and consumers’ protection.

After the Second World War the human-being started to think the environment as an important issue for an integral development, but it was in the period from 1972 to 1992 where this concern had the greatest expansion, because the countries around the world began to consider it as part of a juridical framework. After 1992, when the Rio Declaration on Environment and Development (includes 27 environmental principles) took place, we have noticed some advancement on this matter, but not as influential as it should be in the International Law.

Unless biodiversity is still an emerging trend, it is expected to accelerate in the years to come, because producers and consumers are, increasingly, understanding what biodiversity is and valuing its importance.

References

CBD (2014). Obtenido de Convention on Biological Diversity: http://www.cbd.int/gbo3/

Escobar, E. (23 de Marzo de 2012). A magazine on Business and Biodiversity. Obtenido de BioTrade Initiative: http://www.biotrade.org/privatesector4.asp

International Trade and Commodities. (s.f.). Obtenido de UNCTAD: http://unctad.org/en/pages/DITC/DITC.aspx

Millenium Assessment (2014). Obtenido de Millennium Ecosystem Assessment: http://www.millenniumassessment.org/en/About.html#1

UNCTAD's Study Tour 2014: Call for Participants

UNCTAD Virtual Institute Study Tour to Geneva (Switzerland).
Trade, Investment and Development

17-21 November 2014

The Virtual Institute of the United Nations Conference on Trade and Development (Vi UNCTAD) and the Universidad EAFIT are pleased to announce its sixth Vi UNCTAD Study Tour to Geneva (Switzerland) for Colombian Vi Network member universities.

Training successful and experienced trade policy makers, practitioners and negotiators cannot be done in the classroom alone. To accelerate students’ experience of the trade policy environment and familiarize them with some of the people, questions, data and tools they may potentially be dealing with in the future, the study tour includes lectures and activities at the most important Geneva-based international institutions.

Universidad EAFIT will select up to (5) five participants for this “Academic Mission” to Geneva.

Undergraduate and Master’s students and egresados who want to be considered as possible candidates are required to send the following documents latest by the 30th of May 2014 to:

Maria Alejandra Gonzalez-Perez (mgonza40@eafit.edu.co ):

• Motivation letter addressing the question: “Why trade and investment are important for development”?
• Study plan with its grades,
• Letter of support by the head of the academic program

The pre-selection process will be followed by interviews with the coordinator, and the head of the academic programs of the students (i.e. International Business, Economics, Political Sciences, Law, Business Management, etc.).

Please note that each participant has to cover the respective travel expenses that include: flight ticket, hotel, Schengen visa for Switzerland, travel/health insurance, food and domestic transportation.

The total approximated costs are (excluding travel to Bogota for Visa application): Col$ 4.500.000

Please remember that the application for the Swiss visa needs to be done personally at the Swiss Embassy in Bogota (reference letters are provided by the United Nations Office in Geneva).

For additional information regarding the agenda and travel logistics, please contact:

Maria Alejandra Gonzalez-Perez
Coordinadora de la red colombiana de instituto virtual de la UNCTAD
Correo: mgonza40@eafit.edu.co

Agriculture; the "new economic relief" for developing countries

Opinion article by: Nathalia Rios Ballesteros*(nriosba@eafit.edu.co) 
*Economics and International Business student at Universidad EAFIT, Colombia.

In recent decades, the emergence of global phenomena including globalization, integrated value chains, technological and institutional innovations, environmental restrictions and the growing demand of agricultural goods -which has raised the price of commodities and has expanded the agricultural global market- have positioned agriculture, once again, as a main topic on the global agenda, while providing it with a renewed role in the development process of countries worldwide.

This new role recognizes agriculture’s ability to exert multiple functions towards reaching integral development by stimulating economic growth, environmental sustainability, reduction of poverty and hunger, and achieving higher levels of equity and food security within societies. Likewise, this sector does not only contribute to the food and raw materials production process, but also seeks for the nutrition and healthcare of people. Finally, it is important to mention that different factors such as the new agribusiness trends along with the strengthening of this activity have stimulated interest in the sector as the basic engine for sustainable development and poverty reduction in emerging economies.

For this reason, agriculture has acquired a new perspective in which this activity is considered as a set of linkages and relationships through which societies can foster and raise its standards of living while offering better and wider opportunities to its citizens, thus generating public recognition of this activity as a ‘profitable getaway’ for developing nations.

In this context, it is necessary for emerging economies to define and structure strategic, modern, and comprehensive policies that recognize the multiplicity of social, economic and natural phenomena surrounding agriculture; to promote and strengthen the development of this sector and the rural areas, so that a full and sustainable use of natural resources is achieved, while a dynamic growth of agriculture along with equal social development is ensured. All of the above supported and guided by the promotion of institutional innovation, which allows the development of a variety of organizational arrangements for better mechanisms of public private cooperation, which facilitates agricultural production and growth.

Moreover, present circumstances and future expectations about the course of agricultural production have generated the revaluation of natural resources with agricultural potential which has a positive impact and a special significance for a country like Colombia, which has, along with a small number of nations, abundance in endowment of agricultural resources, not yet fully exploited. This is why, considering the growth prospects of the global food demand by 2050 (FAO, 2012) and the role of agriculture today and for the future, it is estimated that in the exporting countries of agricultural goods, agriculture could become a central pillar of economic growth and development (Fedesarrollo, 2013)

References:

FAO. Food and Agriculture Organization of the United Nations. (Junio de 2012). World agriculture towards 2030/2050: the 2012 revision. Recuperado el 07 de 02 de 2014, de http://www.fao.org/fileadmin/templates/esa/Global_persepctives/world_ag_2030_50_2012_rev.pdf

Fedesarrollo. Fundación para la Educación Superior y el Desarrollo (Fedesarrollo). (2013). Políticas para el desarrollo de la agricultura en Colombia. Recuperado el 7 de 02 de 2014, de http://www.fedesarrollo.org.co/wp-content/uploads/2013/07/Libro-SAC_Web.pdf

Global solidarity for sustainable and inclusive development

Por: Carolina Herrera Cano (caroherca@gmail.com )
Estudiante de Negocios Internacionales, Universidad EAFIT, Colombia

The beginning of a new year comes with different analysis about a variety of perspectives that will, to a certain degree, define the way in which decisions will be made during the year. The optimistic perspective about how global economy will be during 2014 has been discussed since last year, as economic indexes get better. The different symptoms that prove this recovery are very good news for the international economy, but there are some risks that must be faced if a sustainable, and inclusive growth is to be achieved.

The Managing Director of the IMF, Christine Lagarde, presented an overview of the way in which international economy will function through 2014. In her speech, Chistine Lagarde talks about the possible end of the “seven miserable years”, which came after the financial and economic crisis of 2008. Perspectives for most of the economies are better: the United States is showing an increase in its economic growth due to the private demand, the Euro Area is getting back from the recession, and the emerging markets will keep on presenting positive economic indicators.

Even if the emergence of a new positive scenario cannot be denied, it is important to note that it is also creating some risks that arise from the imbalances in social, and economic development. The IMF highlights some that jeopardize the global stability: the first one is related with the disparity between economic growth, and an actual job, the second one is the deceleration that emerging markets are facing, and the third one is the volatility of the capital flows; growth is still “low, fragile, and uneven”.

In this sense, despite the good perspective, international economy should remain vigilant; the shift from the “seven miserable years” to the “strong years” can only be reached through the acceleration of reforms that boost the labor market participation, and enhance competitiveness around the world: the . The recommendation that Christine Lagarde presents is that international institutions serve not only as a discussion forum, but as a support for a collective response to crisis. Although, this can only be possible with the effective coordination, and cooperation between countries: global solidarity for sustainable and inclusive development.

References:

IMF's Lagarde on The Global Economy in 2014, January 15, 2014. Available in: http://www.imf.org/external/mmedia/view.aspx?vid=3059557762001

Latin America’s paradox: Development

Opinion Article by: Estefanía Tirado* (etirado2@eafit.edu.co)
*Economics and International Business Student at Universidad EAFIT, Colombia.


For the last couple of decades the world has seen Latin American economies, such as Mexico, Chile, Brazil, Panama and Costa Rica, emerge not only trough a major involvement in global trade, but also in the establishment of a national industry, what under a superficial judgment would be considered as an increase on the entire population’s welfare. 

Despite the rapid economic growth, about 80 million people are still living in extreme poverty - half of them in Brazil and Mexico - while a further 40% are at risk of returning to poverty in the event of an economic crisis or because of the effects of climate change in the region (World Bank, 2013). Taking this into account, there is clear evidence that development has not been inclusive and there is a huge portion of the population that does not perceive the benefits of the modern and global economy. 

One of the main causes of this trend of exclusive development has been the extremely low rate of capital accumulation and productivity that has characterized most of the countries in the region. The low rate of accumulation is explained by the misallocation of the resources gained by the growth countries have had until now. There has been a huge portion of these gains directed to consumption, what has made productivity to suffer, employment to decline, and moreover has not strengthened the industrial capacity of the economies. 

In order to recover the rate of capital accumulation and therefore generate a future economic growth that would actually benefit a large portion of society, as more jobs and technology would be available, it is necessary to reduce the rate of consumption, and although making this reduction is the most feasible solution, as it involves no debt, carrying it out has huge social and political challenges. In a context of such a great level of inequality it would be very hard to determine which social groups will have to participate more intensely, and as in Latin American democracies private interests have great influence on political decisions, and applying the policy to the most marginalized portion of society would elevate even more the difference in life quality, there is a conflict of interests goverments have to face and overcome by thinking what would generate the most welfare for the entire society. 

To sum up, it is time for Latin American countries to start thinking about the future and tackle long-term challenges to overcome the paradox and make development a positive process for the entire population. 

References

World Bank (2013). Cae la desigualdad en América Latina, aunque persisten desafíos para lograr una prosperidad compartida. Available online at:  http://www.bancomundial.org/es/news/feature/2013/06/14/latin-america-inequality-shared-prosperity

Prebisch, Raul(1981). Raul Prebisch on Latin American Development. Available online at:http://www.jstor.org/stable/1972587 .

International Institutions in a structural crisis

Opinion article by: Carolina Herrera Cano* (caroherca@gmail.com)
International Business student at Universidad EAFIT

The development concept is one that has drastically changed through the years, different social movements and regulations have shaped its meaning and the way in which governments act in its favor. Raúl Prebisch, founder Secretary General to the UNCTAD defined a structural crisis the global economy was facing in 1981 as a result from the accelerated growth in production that created inequality, poverty, and pollution (Prebisch, 1981). The political and economic scenario has changed since the Cold War period, as the bipolar balance of power was reconsidered, but even if some of the development dynamics remain: the disadvantaged conditions of developing countries (what he calls periphery), and its contrast with the levels of consumption in developed nations suggests the existence of a structural crisis, the emergence of some international actors that are modifying how the global system functions is undeniable.

The context of the 2008 Great Recession is an evidence of this structural problem, the market imperfections that created the financial and economic crisis were described by Prebisch about twenty years before the depression: “Two centuries of belief in the regulatory virtues of the forces of the market have caused us to lose sight of the ethics of development...” (Prebisch, 1981, 568). But as it was mentioned before, there are some actors that have become more important no matter the system stagnation. This is the case of the international institutions that respond to the need of collective decision construction at the national and international levels, also proposed by Raúl Prebisch (Prebisch, 1981).

The emergence of international organisms has created an institutional framework legitimated by different countries because of its capacity for action. The role of the WTO (founded in 1995) is an evidence of this trend, in its Report of the Panel on Defining the Future of Trade convened by Pascal Lamy, Director-General, it is highlighted “the role of trade in contributing to sustainable development, growth, jobs and poverty alleviation”(WTO, 2013). And it also agrees with Prebisch’s proposal: “the challenge is to construct coherent national and international policy frameworks that deliver inclusive growth” (Prebisch, 1981).

At a national level, Colombian government has lately organized its development agenda in an international basis. Last month the OECD Council accepted the roadmap for the accession of Colombia to the OECD Convention; this organism promotes good practices towards a better society, and has evaluated Colombia in areas of health, education, environment, trade, investment and fight against corruption (Correa C, 2013). This is a great possibility for Colombia to be part of those international actors that seek a better global system. Despite the criticism about the actual effectiveness of these organisms, it is important to highlight the increasing power they are gaining in the global context, the gap between developed and developing countries is truly a structural problem, but a joint development agenda is an effort to increase possibilities for the least developed nations.

References

Correa C, J. (2013). En un mes comienza la adhesión de Colombia a Ocde. Available in: http://www.portafolio.co/economia/adhesion-colombia-la-ocde. [October 10th, 2013].

Presbisch, R. (1981). Raúl Presbisch on Latin American development. On Population and Development Review, 7, 3, 563-568.

World Trade Organization. (2013). The future of trade: The Challenges of Convergence, Report of the Panel on Defining the Future of Trade. Geneva: OMC.