What’s needed to make the 2015 goals a reality?

The past week has been a time of reflection and calls for action in the world of global economic development. The IMF released its bi-annual assessment on the prospects for the global economy, which predicts moderate and uneven growth for the year ahead, with advanced economies doing a bit better (on average) and emerging markets, notably China, continuing to weaken. In other words there is still no expectation of a return to the heady days of brisk growth we saw before the global financial crisis struck, and the emerging economy engines of growth of the past decade can no longer be counted on to propel the global economy forward. This provided the backdrop and some urgency behind the discussions among development experts and leading economic policymakers who converged on Washington DC for the activities around the World Bank and IMF Spring Meetings over the week.

The Spring Meetings are a place to take stock of the global economic situation, push forward with workstreams and map out plans for the future. The World Bank efforts focused for the most part on encouraging economic progress in developing countries, for example through reducing corruption, increasing financial inclusion, and encouraging infrastructure investment, while managing the effects of climate change. IMF discussions were more focused on how to make the overarching financial system more stable including through traditional and non-traditional monetary policies as well as through more recent macroprudential policy efforts, such as more stringent bank capital requirements. The impact of the slowdown in China’s growth on one hand, and the Greek crisis and its effect on the Eurozone on the other hand, were understandably high on the agenda.

Although specific areas of focus thus ranged from the micro-specific to the very macro, and on advanced versus emerging and developing economies, a unifying principle throughout the days of discussion was how critical the year 2015 is for economic development – an opportunity all agreed the world simply cannot afford to miss. A number of key international gatherings this year are being held that will set the development agenda for the decades ahead. The three most notable are the financing for development conference in Addis Ababa in July, the UN summit to adopt the post-2015 Sustainable Development Goals (SDGs) in New York in September, and COP21, the latest global meeting aimed at addressing climate change, to be held in Paris in December.

The question all of these meetings must address is what kind of future we want to build as a global community, and how to ensure we get there. Equally important is who needs to be part of the solution. Regardless of whether we are reflecting on advanced or developing economies, three aspects that will be critical for moving forward over the longer term are: ensuring multistakeholder involvement, driving through structural reforms at the national level, and in so doing learning from the mistakes of the past in the growth process.

First, it is clear that government cannot make the necessary adjustments alone: business and civil society must be part of the solution. Whether ensuring greater access to finance, increasing productivity or building critical infrastructure, government has neither all the necessary know-how nor the required resources to make the transitions alone. Business, government and civil society must each have their seat at the table and all must step up to take responsibility for our collective future.

Second, while it is important to articulate through such international conferences our collective responsibility for the future of our planet and societies, national reform processes must be pursued in earnest to drive national growth and prosperity. This includes improvements to health and education systems, increasing the sustainability of pensions and social security, and fostering labour market efficiency. The 2015 gatherings will be instrumental in setting the tone: experts and international leaders must help to map out the path forward.

Yet it is clear is that the place where the good ideas will translate into higher and more sustainable living standards is where the rubber hits the proverbial road: within countries. This is where the real work will take place and where strong political will must confront vested interests that will rally against change. As Christine Lagarde reminded us during the spring meeting, in reference to Greece but applicable to most economies in their own way: we need to get to the “tedious” work of reforms.

Third, 2015 is an important moment to take stock of what has – and has not – worked well in the growth process to date. The ways that advanced economies have attained their prosperity levels are in many ways not sustainable or desirable. Ensuring that the world grows in a way that does not add to the pressure on the climate is an obvious area of learning. In addition, many countries are today facing high and rising income inequality, with stagnating wages, in some cases even leading to societal unrest and political upheaval. This is slowing the economic recovery process globally, including the United States, not least by constraining consumption. Reforms must take stock of what we have learned in order to ensure inclusive and sustainable growth.

2015 is a critical year for economic development. But whether the high-level discussions from this year actually translate into a brighter and more prosperous future will depend on whether we manage to take a long term perspective and carry out smart reforms in the places where the world’s citizens actually live and where policies are made.

Author: Jennifer Blanke is Chief Economist at the World Economic Forum.

Image: Germany’s Finance Minister Wolfgang Schaeuble (L) makes remarks as IMF Managing Director Christine Lagarde (C) and British Finance Minister George Osborne listen during a discussion of Catastrophe Containment and Relief Trust, at the IMF and World Bank’s 2015 Annual Spring Meetings, in Washington, April 16, 2015. REUTERS/Mike Theiler