Growth with resilience : perspectives from the Commonwealth and the Francophone and recommendations to the G20

Abstract

This paper presents a brief description the role of the Commonwealth and the Francophonie, in addressing the challenges of building resilient growth among its developing country members. The experience of these two organisations has shown that there are extraordinary challenges in building resilient growth and has highlighted the fact that solutions are complex, require human, institutional and financial resources, political will and international support, if these efforts are to succeed. The paper briefly describes the efforts of the two organisations and in particular the conceptual framework for growth with resilience which has been developed by the Commonwealth Secretariat in collaboration with the University of Malta. This framework identifies the key challenges these countries experience in achieving resilient growth in the context of internal instability and exogenous shocks; and puts forward proposals as to how these countries can better address their growth and resilience challenges. The resilience framework is extensive and as the paper illustrates, has elements which have universal applicability and may be useful for the G20 DWG in pursuing its work on Growth with Resilience. The resilience framework also offers the G20 DWG the opportunity to foster a better understanding of the challenges faced by these countries in pursuing growth and resilience strategies. Basing on the resilience framework, the paper outlines a set of practical steps which the G20 DWG can consider taking forward, to integrate this framework within its own approach to building growth with resilience; and suggests a series of further practical actions which the G20 DWG may be able to pursue towards this objective. The paper also presents a series of measures which the Commonwealth and the Francophonie can collectively take, both to support their members and to support global efforts, including those being pursued and promoted by the G20 DWG to strengthen growth with resilience in the worlds‟ PSMV countries. The paper recommends two actions of major importance under the “growth with resilience” pillar. 1. An initiative to expand the country-focused Vulnerability and Resilience Profiling exercise launched by the Commonwealth; and 2. An initiative to finance programmes in these countries which foster resilient growth, through the creation of a Growth with Resilience Trust Fund (GRTF) Own-country Vulnerability and Resilience Profiling exercises, conducted with the support of the Commonwealth Secretariat since 2008 have provided countries with detailed countryspecific information on their key vulnerabilities; and has revealed key gaps in their resilience building efforts. The G20 DWG can strengthen efforts to build resilient growth in the world‟s poorest, smallest and most vulnerable countries through an initiative to progressively expand this tool, enabling developing countries to conduct own-profiling with regard to economic vulnerability and resilience. Such profiling would lead to assessments that could enable the countries profiled to (1) identify the causes and manifestations of economic vulnerability and (2) to assess and evaluate their policy frameworks in order to identify gaps in the countries ability to withstand external shocks. A practical guide as to how the vulnerability/resilience profiling exercise can be carried out has been developed by the Commonwealth Secretariat in collaboration with the University of Malta (Briguglio et al, 2010). Such an exercise, and the reports that would be derived as a result of country profiling, can be adopted as part of the

toolkit in an expanded profiling initiative; and can also serve as a valuable mechanism for the sharing of best practices in resilience building. The Growth with Resilience Trust Fund (GRTF) could be managed by an appropriate IFI or another institution, with contributions from G20 members. The objective of the fund should be to encourage the poorest, smallest and most vulnerable countries to integrate further into the global economy, while at the same time taking measures to build their resilience against external and internal shocks. The Fund would focus on improving economic governance rather than humanitarian support or to correct for export shortfalls; and would therefore have a strong bias towards institutional and social development. The Fund would assist developing countries through grants and concessionary lending, as well as debt and interest forgiveness schemes. The Fund would related to building resilience relating to external and internal shocks and to natural hazards. The paper also proposes that the CS and OIF can help the G20 operationalise its growth with resilience objective by developing an implementable policy framework aimed at promoting sustainable growth in PSMV countries, with particular emphasis on: ● trade stimulation and facilitation; ● human development in general and encouragement of entrepreneurship in particular ● improvement in market efficiency ● technology transfer; ● infrastructural development and management; ● institutional capacity building. The objectives of the components of the proposed policy framework have been explained above. Trade stimulation and facilitation should enable PSMV countries to participate more effectively and profitably in world trade. The Growth Commission (2008) identified an outward orientation as a major ingredient for growth. The other components of the proposed framework are essential human and physical requirements for economic growth. Human development and encouragement of entrepreneurship are required for the development of a vibrant private sector, while speed in market adjustment is an important requisite for counteraction and absorbing shocks. Technology transfer would enhance the productive efficiency of PSMV countries, improving their chance to compete effectively in world trade. The upgrading of the physical infrastructure and the institutional frameworks in PSMV countries is needed to support a sustainable growth strategy. A further recommendation to the G20 DWG focuses on encouraging a strong process of G20 DWG outreach in respect of its work on Growth with Resilience. In the context of the extensive analytical, research, consensus-building and advocacy work already being conducted by the Commonwealth and the Francophonie, in the interests of their developing country members, the G20 DWG could consider developing an outreach initiative to coordinate the Growth with Resilience initiatives of the Commonwealth and the Francophonie, with the ongoing Growth with Resilience pillar of DWG work. This could allow for regular contributions by the two associations to the G20 DWG discussions on Growth with Resilience and would enable the views of PSMV countries to be conveyed to the G20 in a structured manner. In addition this would allow the three organisations to further develop the country resilience profiling methodology described in this paper and piloted by the Commonwealth Secretariat. In this initiative, the Commonwealth and the Francophonie can contribute by working together to facilitate the integration of their growth with resilience initiatives with those supported by the G20.