2009: Will a crisis turn into an opportunity?

In a recent television interview, former Microsoft boss Bill Gates identified two priorities for the US administration of President-elect Barack Obama, as it prepares to face the biggest global economic crisis in recent history.

The first was to maintain funding to tackle developing countries’ needs. Although Obama has promised to double US spending on foreign aid, there are understandable fears that acute domestic financial pressures will push development assistance down the political agenda.

The second was to continue investing in scientific research and technological innovations, which, argued Gates, provide the foundations for future economic growth and social progress.

As the developing world braces itself to meet the stormy times ahead, sustaining an emphasis on these two themes — and maintaining the links between them — will be a key challenge for 2009.

Sacrificing foreign aid spending would undermine the chances of achieving the global economic stability needed to emerge from the current crisis. So, too, would any move to sideline the potential contribution of science-based innovation and evidence-based policymaking to achieving sustainable development. Two pressing issues highlight these concerns — the collapse in commodity prices resulting from the slowdown in industrial demand, particularly in countries such as China and India; and the increasingly urgent need to combat climate change.

Commodity collapse

In recent years, a boom in commodity prices has led to impressive levels of economic growth in many parts of the developing world. This is especially true in Africa, where abundant oil and mineral resources are bitterly fought over.

But, as the UN Conference on Trade and Development has pointed out, relying on high demand, and so high prices, for commodities is an unstable basis for social development. (And there is no guarantee that the income from such commodities will be invested where it is needed, rather than pocketed by the politically powerful — see ‘Don’t let price rises blow development off course‘).

The only way to avoid vulnerability to rapidly fluctuating commodity prices is to build mechanisms to ensure endogenous economic growth and wide dispersal of its benefits. And the key is supporting innovation-based enterprises.

Climate challenge

Climate change presents a different set of challenges. Even before the current crisis erupted, it was clear that 2009 would be a critical year for reaching international agreement on efforts to tackle climate change. These are expected to come to a head in December, when signatories to the UN Climate Change Convention meet in Copenhagen.

The good news is that the new US administration has already signalled a sea-change in Washington’s attitude towards international negotiations for a robust new agreement on climate change, once the Kyoto protocol runs out in 2012.

The problem is that effective action will inevitably require massive investments of public funds (including subsidies for clean technology investments in the developing world). Squeezing these out of cash-strapped governments is going to be much more difficult than it was even a year ago.

Research-based strategies are essential. Whether seeking to refine our understanding of climate change, or to propose fresh ways of mitigating its impact, scientists have a crucial role in presenting both politicians and the wider community with cost-effective solutions.

A fresh start

The biggest challenge, however, is not developing science and technology to wean developing countries off commodity exports or fossil fuels. It is creating the social and political institutions that foster broad patterns of economically- and environmentally-sustainable growth.

Already, there are widespread discussions about how to redesign global financial bodies, such as the International Monetary Fund, to better meet the needs of the 21st century. A political debate on governments’ role in preventing the financial market failures that led to the current crisis are at the heart of these discussions.

This same debate must also embrace discussions on how to simultaneously promote and control science and technology so it can be harnessed for sustainable development, driven by social need rather than private greed.

The climate change debate provides an excellent framework in which these discussions can take place. The forthcoming Copenhagen meeting — indeed 2009 in general — will provide ample occasion to explore the Chinese proverb that every crisis can also be seen as an opportunity.

David Dickson
Director, SciDev.Net