Postcrisis growth and development: a development agenda for the G-20: papers presented at the Korea - World bank high level conference on post-crisis growth and development

The Korea-World Bank High Level Conference on Post-Crisis Growth and Development, held in June 2010, in Busan, Republic of Korea, successfully brought key development issues to the forefront, laid the groundwork for setting global development priorities, and advanced the discussion among the international community, the G20, and the non-G20 countries on development policy. This volume compiles the papers and proceedings presented at this conference, which was attended by a mix of delegations from international organizations, high-level government officials, and eminent academics and practitioners. The conference covered a number of areas that are critical to the global development agenda and central to the G20's mandate to foster "strong, sustainable, and balanced growth." The topics covered in the volume include both broad themes and specific sectors. The cross-cutting papers include: the emergence of multipolar growth in the post-crisis period led by structural reforms and rebalancing growth; an analysis of Korea's development experience that draws lessons on how to transform from a low-income country to an advanced economy in one generation; and the impact of the global crisis on achieving the Millennium Development Goals (MDGs) by 2015 and regaining momentum toward their completion. The sectoral papers include: promoting aid for trade, specifically in resisting protectionism and recommitting to the Doha agenda; supporting infrastructure and sustainable development; ensuring agriculture and food security; and advancing inclusive finance. The volume makes a strong case for integrating development into the G20 agenda and the need to bring non-G20 developing countries on board to ensure their participation in the global recovery and sustained growth and to enhance the legitimacy and credibility of the G20 process. Contents......Page 7 Foreword......Page 17 Acknowledgments......Page 21 About the Editors and Conference Presenters......Page 23 Abbreviations......Page 35 Postcrisis Growth and Development: A Development Agenda for the G-20: Overview......Page 37 1 Why Development Should Be a Priority Agenda for the G-20......Page 99 2 Why the G-20 Should Be Interested in the Development of the G-160......Page 103 3 A Global Economy with Multiple Growth Poles......Page 113 Comments by Ifzal Ali......Page 142 Comments by Jong-Wha Lee......Page 146 Comments by Tunde Lemo......Page 150 Chair’s Summary by Trevor Manuel......Page 152 4 The G-20 and Global Development......Page 155 Comments by Danny Leipziger......Page 188 Comments by Mahmoud Mohieldin......Page 191 Comments by Robert Vos......Page 196 Chair’s Summary by Graeme Wheeler......Page 205 5 Joint Discovery and Upgrading of Comparative Advantage: Lessons from Korea’s Development Experience......Page 209 Comments by Danny Leipziger......Page 263 Comments by Klaus Rohland......Page 268 Chair’s Summary by Yoon Je Cho......Page 271 6 Achieving the Millennium Development Goals in the Aftermath of the Global Economic Crisis......Page 275 Keeping the Promise......Page 277 The Millennium Development Goals after the Crisis......Page 289 Chair’s Summary by Shahrokh Fardoust......Page 305 7 Aid for Trade: Building on Progress Today for Tomorrow’s Future......Page 315 Comments by Arancha González......Page 352 Comments by Alan Winters......Page 357 Chair’s Summary by Ernesto Zedillo......Page 362 8 Infrastructure and Sustainable Development......Page 365 Comments by Kiyoshi Kodera......Page 409 Comments by Haeryong Kwon......Page 412 Comments by Helen Mountford......Page 414 9 Food Security: The Need for Multilateral Action......Page 419 Comments by David Nabarro......Page 462 Comments by Cheikh Sourang......Page 465 Comments by Joachim von Braun......Page 469 Chair’s Summary by Hak-Su Kim......Page 473 10 Toward Universal Access: Addressing the Global Challenge of Financial Inclusion......Page 475 Comments by Alfred Hannig......Page 528 Comments by Yongbeom Kim......Page 531 Chair’s Summary by Princess Máxima of the Netherlands......Page 535 Appendix A Matrix of Proposed Policy Actions: A Development Agenda for the G-20......Page 539 Appendix B G-20 and Non–G-20 Selected Economic and Social Indicators......Page 545 Index......Page 561 1. A Summary of the Roundtable Policy Discussion......Page 92 3.1. Examples of Knowledge Sharing for Export Development......Page 138 4.1. Infrastructure Investment Needs in Africa......Page 169 8.1. Estimating Infrastructure Expenditure Needs......Page 378 8.2. A Need for Better Data on Public Infrastructure Spending......Page 382 8.3. Some Suggestions for Reducing the Costs of PPPs......Page 387 8.4. Opportunities for Increasing Infrastructure Funding......Page 390 10.1. Mexico: An Example of Development Banks Kick-Starting Financial Services......Page 492 10.11. Remittance Cost across Selected Country Corridors......Page 497 10.13. Global Trends Shifting the Financial Inclusion Frontier Forward......Page 499 10.4. Mzansi Accounts......Page 502 10.5. Lack of Financial Capability in Practice......Page 507 10.6. Government-Led Initiatives in Data Collection in India......Page 512 10A.1. Microfinance amid the Financial Crisis......Page 518 10.1. Global Map of the Financially Included......Page 483 10.2. Recent Examples of Countries Advancing Full Financial Inclusion......Page 488 1. Key Pillars for Policy Action to Achieve Strong, Sustainable, and Balanced Growth......Page 40 2. Real GDP Growth in Developing and High-Income Countries, 1991–2010......Page 44 3. Contributions of Developing and High-Income Countries to World GDP Growth, 1991–2010......Page 45 5. Developing and High-Income Countries’ Share of World Exports, 1980–2008......Page 46 6. Developing and High-Income Countries’ Share of World Net FDI, 1980–2008......Page 47 7. Progress of the Nine G-20 Developing Countries toward the MDGs......Page 49 8. Effect of Growth Acceleration and Deceleration on Key Human Development and Gender Indicators in All countries, 1980–2008......Page 50 9. The G-20’s Approach to Development......Page 67 3.1. Industrial Production Index, 1993–2009......Page 116 3.2. Interest rates in the Euro Area and the United States, 1999–2010......Page 117 3.3. Gap in Growth Rates between Developing Regions and High-Income Countries, 2000–08......Page 121 3.4. G-20 Shares of Global Gross National Income......Page 122 3.5. Increasing Trade and Capital Flow Links......Page 123 3.6. Evolution of Net Capital Flows to Developing Countries......Page 127 3.7. Risk of Low Income Countries Debt Distress......Page 131 4.1. Growth Is Recovering, But Sustainability Will Depend on Supportive Policies......Page 157 4.2. Trend, but Not Cyclical, Growth Decoupling......Page 159 4.2. Outlook for Poverty in Developing Countries......Page 160 4.4. Impact of Slower Growth on Selected MDGs......Page 161 4.5. Progress of Developing-Country G-20 Members toward MDGs......Page 163 4.6. Increasing Fiscal Strains in Developing Countries......Page 164 4.7. Core Spending at Risk......Page 165 4.9. Developing Countries Are Leading Recovery in Trade......Page 167 4.11. Developing-Country Financing Gaps Will Remain Large......Page 171 4.12. Impact on Poverty of a 0.5 Percentage Point Decline in GDP Growth Rate......Page 172 4.13. Official Development Financing: ODA and Multilateral Lending......Page 175 4.14. Collapse and Recovery of World Trade: Current versus Past Crises......Page 180 4.15. Trade Measures Implemented Worldwide and by G-20, November 2008 –May 2010......Page 182 4.16. Combined G-20 Use of Antidumping, Countervailing Duties, and Safeguards......Page 183 4.17. Net Financial Transfers to Developing Countries, by Region, 2000–09......Page 199 4.18. Trade Shocks in Developing Countries by Product-Based Export Specialization, 2007–10......Page 202 4.19. Per Capita GDP Growth of Developing Countries by Dominant Technology-Content of Export Specialization, 1960–2000......Page 203 5.2. Sectoral Composition of Korea’s GDP......Page 210 5.3. Korea’s Exports, Imports, and Investment Relative to GDP......Page 211 5.4. Korea’s School Enrollment Rate......Page 222 5.5. Conceptual Diagram for the HCI Drive......Page 238 5.6. International Comparison of Revealed Comparative Advantage......Page 243 5.7. Korea’s Gross R&D Expenditure......Page 246 5.8. Korea’s Business R&D Expenditure: From Assimilation to Innovation......Page 247 5.9. Debt-Equity Ratio and Interest Coverage Ratio in Korea’s Manufacturing Sector......Page 249 6.1. Production Loss from Trade Shocks in Sub-Saharan Africa......Page 292 6.2. Median Government Fiscal Balance......Page 294 6.3. Progress on the MDGs......Page 295 6.4. Net Enrollment Rates in Primary Education, Selected Countries......Page 297 6.5. Effects of Growth Accelerations and Decelerations on Key Human Development and Gender Indicators, All Countries......Page 298 7.1. ODA Commitments to Aid for Trade, 1995–2008......Page 321 7.2. Aid for Trade by Recipient Group, Bilateral vs. Multilateral Donors......Page 322 7.3. Trends in World Bank Trade Lending, 2001–09......Page 323 7.4. Matching Demand with Supply of Aid for Trade, 2005......Page 326 7.5. Services Trade Restrictiveness Index......Page 333 7.6. Developing Countries Account for an Increasing Share of World Trade......Page 336 7.7. Southern Countries Still Export Fewer Varieties Than Northern Ones......Page 337 8.1. Impact of Infrastructure Quantity and Quality on Growth......Page 371 8.2. Impact of Infrastructure Quantity and Quality on Income Inequality......Page 372 8.4. Average SO2 Emissions Related to Electricity Production, by Region, 2000......Page 373 8.5. Average CO2 Emissions Related to Electricity Production, by Region, 2006......Page 374 8.7. Electricity-Generating Capacity per Person in Developing and High-Income Countries, 2007......Page 377 8.2. Infrastructure Spending Needs and the Funding Gap in Africa......Page 380 8.9. Investment Commitments to PPI Projects Reaching Closure in Developing Countries, 1990–2008......Page 383 8.10. PPI Infrastructure Projects by Sector......Page 384 8.12. Change in Importance of PPI by Region......Page 385 8.13. Distribution of PPI by Income Group......Page 386 8.14. The Balance of Infrastructure Financing and Funding......Page 388 9.1. Global Undernourishment Incidence Trend......Page 425 9.2. Real Domestic and International Rice Prices, India, 1965–2004......Page 429 9.3. Declining Food Prices Amid Rising Stocks......Page 432 9.4. Grain Stock Destocking after 1983 and 1997......Page 433 9.5. Food and Grain Prices, 2000–10......Page 434 9.6. Slowing Growth Rates of Yields for Major Cereals, Developing Countries......Page 445 9.7. Local Grain Price Volatility in Ethiopia......Page 448 9.8. The Distribution of Safety Net Programs......Page 452 10.1. Labor Force in Developing Countries......Page 477 10.2. Collaborative Diamond Model for Financial Inclusion: Generation 1.0 (1990s–2010)......Page 478 10.3. Collaborative Diamond Model for Financial Inclusion: Generation 2.0 (2010–2020s)......Page 479 10.4. Reaching the Financial Inclusion Target: Key Pillars......Page 480 10.5. Defining Financial Inclusion......Page 481 10.6. High Turnover in Financial Instruments: Rural and Urban......Page 482 10.7. Access and Payment Transactions Gaps......Page 484 10.8. Seven Benefits of Financial Inclusion......Page 485 10.9. Access to Finance and Millennium Development Goals......Page 486 10.10. Current and Potential Impact of Financial Infrastructure......Page 493 10.12. Supply vs. Gap for Financial Products......Page 498 10.14. Three Dimensions of Responsible Finance......Page 505 10.15. Measuring Financial Access: Key Existing Reports......Page 509 1. Percentage of Poverty in Developing Countries, 1981 and 2005......Page 48 3.1. G-20 Shares of Global Gross National Income and Global Exports......Page 120 3.2. Share in Global GDP Growth......Page 124 4.1. Base-Case Growth Outlook for Developing Countries......Page 158 5.1. Comparative Growth Experience, 1960–2004......Page 221 5.2. Investment and Savings in Korea, 1962 –1981......Page 228 5.3. Targets for the HCI Drive......Page 236 5.4. Investment Requirement Estimates for the HCI Drive......Page 237 5.6. Technical High School Management System......Page 240 5.7. Korea’s Top Ten Exports......Page 248 8.1. Household Access to Infrastructure in Developing Countries......Page 376 9.1. Countries with the Largest Increase in Domestic Price of Main Staples......Page 443 10.1. Current Measurement of the Unbanked......Page 476 10A.1. Microfinance at a Glance, 2008......Page 515 B1. G-20 and Non–G-20 Countries at a Glance, 2008......Page 546 B2. Share in the World Economy......Page 548 B3. Economic Growth......Page 550 B4. Integration with the Global Economy......Page 552 B5. Population Size and Child Mortality......Page 554 B6. Participation in Education......Page 556 B7. Science, Technology, Communications, and Trade......Page 558 B8. Poverty Rates......Page 560

This volume consists of papers presented at the Korea-World Bank High Level Conference on Post-Crisis Growth and Development.The volume is organized as follows. In chapters one and two, II SaKong, chairman of the Presidential Committee for the Group of Twenty (G-20) Seoul Summit, and Ngozi Okonjo-Iweala, managing director of the World Bank, provide convincing arguments on the importance of integrating development into the G-20 agenda, the need to give voice to non-G-20 developing countries, and the key role Korea can play as a bridge between developed and developing countries. Chapters' three to six cover broad development themes. Justin Yifu Lin's paper (chapter three) examines the emergence of multipolar growth in the postcrisis period and the reforms needed to support regional spillovers; Zia Qureshi's paper (chapter four) argues for including development issues in the G-20 growth framework and mutual assessment process and therefore more systematically into G-20 policy discussions; Wonhyuk Lim (chapter five) provides an in-depth analysis of Korea's development experience that illustrates how a low-income country can transform itself into an advanced economy; and the papers by Delfin Go and Hans Timmer and by Jomo Kwame Sundaram (chapter six) provide differing but complementary views on the impact of the global crisis on achieving the Millennium Development Goals (MDGs) by 2015 and what it will take to regain momentum toward their completion. Chapters' seven to ten review specific sectoral policies and actions needed to achieve strong, sustainable, and balanced growth. Chapter seven by Bernard Hoekman and John Wilson discusses aid for trade and recommitting to the Doha agenda; chapter eight by Marianne Fay, Michael Toman, and co-authors looks at infrastructure and sustainable development; chapter nine by Christopher Delgado and co-authors argues for multilateral action on agriculture and food security. Finally, chapter ten by Peer Stein, Bikki Randhawa, and Nina Bilandzic advances inclusive finance as a topic for the G-20 agenda. The volume concludes with a matrix of policy actions summarizing the main action points presented in the sectoral papers (appendix A) and data tables of selected economic and social indicators for both G-20 and non-G-20 countries (appendix B).

Postcrisis growth and development : a development agenda for the G-20 : an overview / Shahrokh Fardoust, Yongbeorn Kim, and Claudia Sep lveda -- Why development should be a priority agenda for the G-2 / Il SaKong -- Why the G-20 should be interested in the development of the G-160 / Ngozi Okonjo-Iweala -- A global economy with multiple growth poles / Justin Yiful Lin ; comments by Ifzal Ali, Jong-Wha Lee, Tunde Lemo ; chair's summary by Trevor Manuel -- The G-20 and global development / Zia Qureshi ; comments by Danny Leipziger, Mahmoud Mohieldin, Robert Vos ; chair's summary by Graeme Wheeler -- Joint discovery and upgrading of comparative advantage : lessons from Korea's development experience / Wonhyuk Lim ; comments by Danny Leipziger, Klaus Rohland ; chair's summary by Yoon Je Cho -- Achieving the millennium development goals in the aftermath of the global economic crisis. Keeping the promise / Jomo Kwame Sundaram ; The millennium development goals after the crisis / Delfin Go and Hans Timmer ; chair's summary by Shahrokh Fardoust -- Aid for trade : building on progress today for tomorrow's future / Bernard Hoekman and John S. Wilson ; comments by Arancha Gonz lez, Alan Winters ; chair's summary by Ernesto Zedillo -- Infrastructure and sustainable development / Marianne Fay . [and others] ; comments by Kiyoshi Kodera, Haeryong Kwon, Helen Mountford -- Food security : the need for multilateral action / Christopher Delgado . [and others] ; comments by David Nabarro, Cheikh Sourang, Joachim von Braun ; chair's summary by Hak-Su Kim -- Toward universal access : addressing the global challenge of financial inclusion / Peer Stein, Bikki Randhawa and Nina Bilandzic ; comments by Alfred Hannig, Yongbeom Kim ; chair's summary by Princess M xima of the Netherlands