Governments - as their interventions during the global recession have shown - need to play pragmatic roles in supporting development, said speakers at UNCTAD's second Public Symposium.
Public-private partnerships, steps to reduce debt, and academic research into the behaviour of multinational corporations were among the ideas offered at the debate entitled "Alternative Development Strategies: Towards More Inclusive and Sustainable Development Paths".
But what speakers at UNCTAD's second Public Symposium for Civil Society called for most often was a larger government role in development, especially as compared to the 1980s and 1990s when neoliberal economic approaches contended that States should not interfere with market forces.
"The recent crisis has confirmed for us that markets can fail, and they can fail in a very big way," UNCTAD economist Richard Kozul-Wright said as he started off the meeting. Mr. Kozul-Wright, who is Officer-in-Charge of UNCTAD's Unit for Economic Cooperation and Integration among Developing Countries, went on to say that the crisis "has reminded us that governments, despite all their failings, remain the only institutions we have that can stave off catastrophic threats."
He and others recommended that developing countries take government-supported measures to broaden their economies' abilities to produce a variety of goods and services, and to produce goods and services of greater sophistication. This process, called "enhancing productive capacity", leaves nations less vulnerable to international economic upheavals such as the current recession, they said.
Similarly, there were calls for States to keep speculative financial activities from disrupting prices and distorting what was referred to as "real" economic activity. A representative of Safe Observer International told the meeting that: "Speculators have gotten the upper hand over the real economy. The financial sector now dominates the real economy. Governments and people are losing control."
A spokesman for the Global Trade Conference said that partnerships between governments and private-sector firms had proved useful in equipping developing nations with infrastructure - meaning such facilities as electricity, roads, ports and bridges - that can support lasting economic growth. Often, he said, less wealthy governments cannot afford such projects on their own. But he cautioned that: "These 'pragmatic' or 'alternative' strategies that everyone is talking about should be implementable on the ground, rather than in this room."
Another representative said that "new economic measurements" should be devised, "taking into account the well-being of populations" as opposed simply to measuring economic growth. "That will reinforce social and economic policies so that they support each other."
And a representative of the International Economic Relations Institute decried what he said was a dearth of academic research into "actors in the real economy" and into such issues as the behaviour of financial elites, behaviour in corporate boardrooms, and fraud. "Universities have not been studying the role played by powerful economic actors in influencing markets," he said. "Market manipulations appropriate vast amounts of money at the expense of poorer persons."