Olav Kjørven: The Political Economy of Transition - Analysis for Change
UNDP – NOREF Conference Oslo, Norway, 8-9 November 2012
Olav Kjørven, Director of the Bureau for Development Policy United Nations Development Programme
Opening Statement (16 minutes/2,200 words)
State Secretary Larsen, Minister Kan Zaw, Mr. Aguirre, Heba, distinguished participants, and colleagues.
It is my great pleasure to welcome you to my home country of Norway for this unique forum on the Political Economy of Transitions, jointly organized by UNDP and the Norwegian Peacebuilding Centre.
UNDP is very pleased to count the Norwegian Government and NOREF as our close partners, and we look forward to deepening our collaborative efforts.
Over the past year, we have seen political transformations in places where, only a few years ago, change would have been hard to imagine.
At certain moments, this change took place in relative peace;
At other moments -- like those so many of you have lived through -- change has come at the expense of ‘relative’ peace, dismantling a status quo that hid injustice and disparity.
Some transitions, not least the “Arab Spring”, have been ignited by an unprecedented manifestation of popular discontent with deep political and economic fractures and unbearable societal inequality.
Other transitions have been initiated and implemented by regimes themselves, awakening to the voices of their people and the political economy of a changing global landscape.
Whatever the circumstances, democratic transitions bring the opportunity -- and the obligation -- to renew the social contract between a nations’ people and its government. Without this, the legitimacy of transition will be in question.
The importance of policy space.
Political change can come quickly, but lasting societal change takes time. Lasting change requires a long-term perspective, despite immediate pressures that may be felt to ‘restart’ economic growth in transitioning economies.
Countries will invariably go through phases of deliberation, progress and setbacks in their political and economic decision-making and development. Contexts and stakeholders will shift and evolve.
All the more important, therefore, to create as much space as possible in the early stages of transition to access and deliberate inclusive policy options, such that nations have what they need -- and all the key players are involved -- to set a path for inclusive, sustainable and comprehensive reform.
I say this not least in my role as Director of Policy at the United Nations Development Programme, strongly recognizing the responsibility of the international community in coming together to support countries with policy options, and convening around best practices and lessons learnt.
We have the opportunity today and tomorrow to deliberate such lessons with a unique gathering of people -- from the development and international community, from academic and political life, from the military and civil society.
I would like to particularly welcome participants from Brazil, Chile, Egypt, Indonesia, Myanmar and Tunisia, representing countries living through and driving transition, and those who have lived through this before.
As such, there is a wealth of experience to exchange on how to navigate transition with an eye towards sustainable human development.
This experience is also highly relevant for other countries such as those in Africa still in the process of strengthening young democracies and transitioning to a more sustainable political economy.
Here in Norway, as State Secretary Larsen will I’m sure attest, we have our own historical experience of transition, in which today’s society is firmly grounded. In Norway, we had the luxury, or bad luck depending on who you were or when you happened to be around, of moving forward very gradually, over more than a century. Ours was a very traditional society, slowly modernizing. We took on the challenges one at a time, although each time it took struggle and sacrifice to make progress. We emerged from being a province under Denmark to getting our own Constitution, but in union with Sweden, in 1814. A Parliamentary system of government came only in 1884. Universal voting rights for men was granted in 1898, and finally for women in 1913. Likewise, economic and social rights expanded gradually during roughly the same period, and thereafter. The emergence of a labor movement in conjunction with industrialization was a critical driver of progress. Today's world, and conditions in most countries, are very different. People's expectations are different. Leaders of today's transitions, while thinking both long and short term, cannot wait a hundred years before granting universal voting rights or put in place a social safety net. But one key common denominator is just as relevant now as then: namely courageous leadership. We were lucky to have courageous leaders emerging as we went along.
Transitions are about choices.
I would like to set out one thing which will certainly be at the forefront of my mind for the coming two days: Transitions are about choices.
There are many ways in which one can ‘slice’ this discussion, but for the sake of clarity and expedience, I will take a moment to reflect on 1) economic choices and 2) political choices, and then to leave you with some questions to ruminate over the course of these days on each.
If transitions are to succeed in the long-run, growth needs to be inclusive and sustainable. But the links between equity, growth and environmental sustainability are often complex and entail or are perceived to entail trade-offs that touch at the very heart of the social contract.
Many transition countries are heavily dependent on natural resources, for example. The efficient, judicious and responsible use of natural resources necessarily plays a central role in promoting sustainable development, which we define as "meeting the needs of this generation - without compromising the ability of future generations to meet theirs”.
History shows us how many countries can use natural resources to jump start their economies and invest in the infrastructure, institutions, and quality public services needed to translate growth into human development. Experiences from Chile and Norway, for example, illustrate how nations have succeeded in managing the revenues from their mineral riches in an efficient, transparent and accountable manner.
But this is not straightforward, with many studies suggesting that countries endowed with natural resources actually - on average - grow more slowly than countries without such resources.
This is not least as a result of widespread corruption, illicit financial flows and patronage, with capital flight from oil-rich countries in Africa five times higher than from the non-resource rich countries, for example.
It is also associated with weak capacity to add value to natural resources exploitation and create a wider production base for growth, create jobs and impact poverty.
Indeed, in our experience as UNDP, we have seen that natural resources – both access to them and how they are managed - play an essential role in supporting the livelihoods of the majority of the world’s poor.
Natural resources management -- or mis-management -- can have huge repercussion on ecosystems and the environment that the poorest people heavily rely on, as well as a country’s potential to meet the Millennium Development Goals. Their use can translate into important sustainable human development benefits if effective policies, accountability frameworks, and governance systems are in place.
This will require a transparent and principle-based environment where citizens are legally empowered with rights to resources and access to justice, and which legislates disclosure of assets for those in public office, for example.
It will require the capacity of the institutions to negotiate contracts, levy and collect taxes, monitor and oversee integrity, which is the kind of work UNDP supports in countries such as Liberia and Afghanistan with the spectrum of institutions relevant to management and oversight. This includes national planning authorities, ministries of finance, budget departments, parliaments and public accounts committees.
Two questions around economic choices to keep in mind during the course of these days, therefore, are as follows:
How can transition nations create the space for due reflection on such inclusive economic policy choices in the moments following transition, when the pressure is understandably high to ‘restart’ economy growth?
What do transition countries need by way of support to advance ‘triple-win’ decision-making with economic, social and environmental dividends, rather than focusing on ‘trade-offs’, not least in the area of natural resource managment.
Economic and political choices are intertwined. Brazil, which has struggled with some of the world’s worst inequality, has made huge progress on citizen partipipation in budgeting and national planning – influencing policy and resources - since the adoption of a new constitution in 1988.
In 1990 in Chile, after almost seventeen years of military dictatorship, the ruling center-left coalition led a successful transition and brokered important bipartisan agreements on key economic and governance issues.
More generically, experience has indicated that a new political order cannot be successfully constructed without at the same time addressing economic and social injustice.
Evidence shows that building equal opportunities for women into a new political order, for example, can impact the trajectory of economic growth and of social policy.
The lack of economic opportunity and growth as well as lack of voice and political participation trigger the societal change that many transition countries have witnessed. Hence people’s call for “bread, freedom, dignity” in Egypt’s Tahrir Square.
And as we saw in Tahrir Square, political change can – if rarely - happen almost overnight. Political rights and human rights, however, do not automatically follow.
First amongst the political choices necessary in a transition, therefore, is to choose inclusion.
Elections are often cited as the way for people to express themselves politically, and they are fundamental. Voting on Election Day combined with broader involvement in the electoral cycle goes a long way, but it will not provide scope for the dialogue necessary for a society’s healthy development.
There must be additional, sustained channels.
What is necessary is norm-based, social dialogue between government authorities, other power elites, such as the military and business community, and the people, with clearly defined rights and obligations. This is an essential component of a revised social contract.
Brazil and Chile’s experiences -- and those of other countries -- show that new socio-economic agreements achieved through intermediary civil society groups help legitimize emerging democracies, for example.
This is done through institutionalizing representation rights and bargaining mechanisms to enhance the role of organized intermediaries, such as political parties, trade unions workers, farmers’ associations, women's groups, and youth organizations, in economic and social policymaking.
Equally, the role of the military and of business elites in democratic transitions cannot be neglected, as the success of the transition may indeed depend on the stance of such actors. Strengthening the collaborative capacity of all stakeholders to work towards inclusive dialogue will be fundamental to lasting and legitimate transition.
Second, leaders will face the political choice to establish, or re-establish, the primacy of rule of law, including pursing transitional justice and advancing legal empowerment, as a way to heal the rifts in society.
As the background paper jointly produced by UNDP and NOREF for this forum conveys, the rule of law is generally undermined in authoritarian situations, where law enforcement and related institutions can be a means of repression rather than mechanism for justice.
The alternative is illustrated by the work Indonesia is pursuing on legal empowerment, for example, in partnership with UNDP and with the support of Norway, Sweden and the Netherlands.
It is working to expand access to justice for all, particularly the poor and marginalized. They are working to increase the poor people’s awareness of their legal rights while strengthening the government’s own capacity to serve and protect the interests of the people they serve.
Third, leaders face a political choice on how to measure progress.
Measurement is inherently political, and it is said that ‘statistics can be used to prove anything’. What is crucial, therefore, is to determine a common, fair, starting point or baseline.
With a baseline, targets and indicators can be set through inclusive dialogue, so that all actors can measure progress against the same set of ‘rules’.
Knowing whether policies are on the right track requires knowing what is it is exactly they’re designed to achieve. With that comes the capacity to prototype, to test and as necessary to fail with grace while the cost of doing so is still low, so the policy direction can be revisited, bottlenecks to progress identified and addressed. For this reason, investing in national and local analytical capacity through think tanks and research facilities is very important.
An example of this in practice is Indonesia’s work around participatory governance assessments in the context of REDD+, which UNDP supports.
Questions on political choices to keep in mind, therefore, during the course of these days are as follows: How can popular protest be channelled into inclusive dialogue and desicion-making?
How can trust – the heart of a social contract – be best established or reestablished through a focus on the rule of law?
How can you measure progress, with a clear baseline, targets and indicators, so that ultimately, leaders can be held accountable?
The speed at which transitions can occur, particularly true over the past two years, can allow little time for analysis and learning. It can press on instincts to react rather than reflect on context, collaboration and options.
This time here today and tomorrow is, therefore, most welcome, because there is a wealth of knowledge and experience to share.
This is can be the start of deeper dialogue, which I hope can then:
Explore new ways to support dialogue among national and local stakeholders around the political and economic policy choices in transition;
Support multi-stakeholder analysis and assessment, not least at the country level. This is work our Oslo Governance Centre and Democratic Governance expertise more widely in UNDP, for example, is advancing, with increased focus on governance assessements and methodologies for institutional and context analysis.
And help us work better together as the international community in supporting transitions, working together across our areas of expertise to deliver timely support where its most needed.
Democratic transitions are -- to paraphrase Reverend Dr. Martin Luther King and the American theologian Theodore Parker before him -- “a creative force”. It is our collective role to help “make a way out of no way” recognizing that “the arc of the moral universe is long but it bends toward justice”.
I hope that this forum, in its own very small way, can help.
With that, I would like to warmly welcome State Secretary Larsen to speak.