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CONTRIBUTOR > The rise of the South, as seen from Eastern Europe and Central Asia

Khalid Malik / Cihan Sultanoğlu

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The world is in the midst of profound changes, and the countries of Eastern Europe and Central Asia are very much a part of this historic transformation. Many developing countries on all continents are now driving global economic growth and – more important – raising living standards for billions of people.

We are witnessing the emergence of a huge new global middle class: People throughout the developing world who are increasingly educated, who can confidently expect long and productive lives and who are increasingly interconnected globally, through trade, travel and the latest communications tools.

Their expectations are high, and they are placing greater demands on national and international institutions – but they are also ready to contribute new energy, resources and ideas. Collectively, they can accelerate human development progress on an unprecedented scale for decades to come.

This is the future foreseen by the 2013 Human Development Report – “The Rise of the South: Human Progress in a Diverse World” – which is being launched regionally in Astana, Kazakhstan on Monday, April 8, 2013.

In Eastern Europe and Central Asia, the rapid transformation of global dynamics driven by the fast-rising powers of the developing world will bring new opportunities for human development progress as well as new development partnerships, within the region and beyond.

In many important respects, Eastern European and Central Asian countries are well prepared for the challenges of the 21st century, the report shows. The 2013 Report looks at more than 40 developing countries that have made especially impressive human development advances in the past two decades, and its data demonstrates the crucial importance in all these success stories of sustained public investment in education. Kazakhstan, ranked in the “high human development” category in the 2013 Report’s Human Development Index, is one such example, with higher levels of education – the average Kazakh child entering primary school can expect to stay in school for 15 years – than most countries of similar income levels. This pattern of high educational achievement is common throughout the region, and is arguably its greatest asset.

Effective state leadership in social and economic policy is also a common denominator of most successful developing countries. Their hallmark has been pragmatism – pursuing what works based on national experience, not rigid ideologies – and a willingness to recognize and address continued challenges. An engaged civil society and a technologically competitive and public-spirited private sector are essential partners in this process.

Open engagement with the outside world, in particular, is a critical contributor to sustained development progress. The report shows that the share of economic activity generated by trade in the most successful countries has risen in parallel with human development improvement. This engagement has typically been carefully strategic, focused on maximizing job creation and national competitive advantages, for the long-term benefit of the entire population, without closing doors to products and technologies from abroad. The key to tapping fully into the development potential of international trade and investment is to invest first and foremost in one’s own people, through education, health, essential social services and better public infrastructure.

One relevant policy lesson from two decades of political and economic transition in this region is the state’s role in fostering conditions for sustained, inclusive growth, the report notes. “Abruptly abandoning areas of responsibility by the state or insisting on rapid privatization of all state-owned companies may prove very costly for societies in the long run,” the 2013 Report says.

The 2013 Report also spotlights the role of creative new social policy initiatives in countries that have advanced notably in human development. Turkey is one such case: Under its 10-year-old conditional cash transfer program, more than a million children have received health care benefits for the first time, and more than 2 million benefited from expanded education aid, by government estimates.

The report notes that the rise of South is shaking up existing global institutions, creating useful regional mechanisms, and showing new ways that countries and regions can work together. The report argues that the South needs a greater voice in global governance, but in reformed and re-imagined international institutions. The emergence of the Group of 20 is an important step, as are the recent BRICS development initiatives, but the South still needs more equitable representation in the Bretton Woods institutions, the United Nations and other established international bodies.

In one sign of this changing global development landscape, many countries of the region – such as Kazakhstan, the Russian Federation and Turkey – have become increasingly important aid donors in their own right, with disbursements exceeding $3 billion.

This is not just about financing: These emerging donors are also offering their own hard-won policy expertise to other developing nations. In recent years Romania has provided counsel on election management to Egypt and Tunisia; Poland has helped Iraq with small business development; the Czech Republic has cooperated with Azerbaijan on environmental assessments; and Slovakia has assisted Moldova and Montenegro in public finance management.

As the South faces shared challenges – aging, environmental risks, inequality, job creation – countries need increasingly to look at other relevant national examples for their own domestic policy initiatives. The countries of Eastern Europe and Central America have both a lot to offer and much to gain from this global exploration of innovative new policy approaches.

Similarly, so do the countries of Western Europe and elsewhere in the developed North, which can also find useful policy models in the South – and which benefit from continuing economic dynamism and rising living standards in the developing world. As the report correctly concludes, “The South still needs the North, but, increasingly, the North also needs the South.”

By Mr Khalid Malik, Human Development Report Office, UNDP and Ms Cihan Sultanoğlu, assistant administrator and director of the Regional Bureau for Europe and the Commonwealth of Independent States, UNDP.

April/15/2013

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