From growth to wellbeing: Rethinking development for a digital, green, and just transformation

by Markus Engels, Secretary General of the Global Solutions Initiative

The following transcript is from a speech written for the GIZ Future Forum 2022, held on September 13-14, 2022.  


Today I will talk about 1) how we should re-imagine development to help foster a digital, green, and just transformation in terms of recoupling; and 2) the four main implications of using this concept. But first, let’s take a step back and look at the big picture.

The terms “Rethinking Development” and “Just Transformation” require a direction. They need a goal, a guiding star. At the Global Solutions Initiative, we call that goal “recoupling.” Recoupling calls for real wellbeing, by recoupling material growth with social and ecological progress.

As we have seen over the last few decades, material growth alone does not necessarily reduce poverty or hunger; in fact, inequality is rising as global wealth becomes more concentrated in the hands of the few. The situation has worsened with the Covid crisis and in the digital age, as growth often benefits the few at the cost of social and ecological sustainability.

Recoupling takes a different approach.

The fundamental idea of recoupling is that human wellbeing is not only a matter of material gain. Instead, using a more a holistic approach on wealth and progress, it takes account of key factors like a healthy environment, a good neighborhood, personal empowerment, and reliable relationships.

The recoupling dashboard, which has been developed as an alternative to the GDP, measures criteria like solidarity in and between societies, personal empowerment and agency, material gain, and a sustainable environment. Solidarity, Agency, Gain and Environment – in short: SAGE.

The recoupling dashboard also questions whether globalization is beneficial if it breaks up communities and disempowers people. Obviously, it poses a challenge to the so-called neoliberal narrative, which has brought much harm into the world.

Now, for my first takeaways: First, if you agree with our approach for measuring wealth and progress, then you might also agree that concepts like the homo economicus and invisible hand are fairy tales. More importantly, if you use the concept of recoupling then it will have major implications for your work.

Today I will focus on four main implications. I will try to be as brief as possible:

  1. Keep international institutions alive, especially those with a fair set-up of the so-called Global South.

I know from personal conversations how difficult it is now to sit together in international institutions: The war in Ukraine overshadows everything, and it is difficult to conduct negotiations on basic infrastructure when infrastructure halfway around the world is being bombed. I am also aware that the war is viewed as a European problem in many regions. The war has not just hampered the work of international institutions and caused poverty and hunger, but also divides public opinion around the world.

But we have to remember one thing: Ending international cooperations and hindering international institutions that fairly represent the Global South would be a major setback for a sustainable and resilient world. It would be a resignation, surrender. It would imply the end of initiatives like the recent alliance for food security, for sustainable infrastructure or arms control and the Paris Climate Agreement. After all, climate change is a global problem and can only be solved globally. That is why we need to maintain multilateralism. And one word of advice: Don’t believe anyone calling for plurilateralism, which I translate as a battle of everybody against everybody.

  1. It is not one size fits all! You know better than me that the regional situation matters.

I recently read a study1 about the economy at the Libyan-Egyptian border. Some positive impacts of what is called “smuggling” were described. Traditional trade routes that have existed for centuries were disrupted by arbitrary borders. But these trade routes still play a role in fighting poverty and unemployment in the region. After reading the study, I wondered why we use the term “smugglers,” and not “entrepreneurs,” or “businesspeople active in the informal sector.” Consider the magnitude of the informal sector: In some countries it accounts for up to 60% of the economy. Furthermore, it is often interwoven with the formal sector, making it impossible to distinguish between them. Thus, a just transition is only possible if we include the informal and the horizontal-, the urban- and the rural-levels.

Multilateralism needs to also take account of regional and local experiences and take them seriously. For that, international institutions need to manage challenges that arise due to the urban-rural divide. Urban engagement groups should be established to understand needs and gaps at the grassroots level. As you may know, right now the Urban Federal Ministers of the G7 are conducting negotiations on the just transition, including fighting climate change, just two miles away. This calls for the GIZ to spring into action; to collect, report, and discuss your local-level insights from the work you’ve been engaged in around the world, across a variety of projects. There is a critical role for the GIZ to play in enabling more informed and localized policymaking in development cooperation.

  1. Just transformation is a transformation towards future technologies, which means they are renewable, sustainable, and resilient.

Of course, the current need to diversify energy sources due to the war in Ukraine is understandable. Despite the current European demand for gas, however, we should not think that fossil fuels provide a future model for sustainable economies. Just transformation is a transformation towards future technologies, which means being renewable.

Current investments to upgrade the fossil-based energy industry, especially from the EU, are neither sustainable nor resilient. Instead, we need a long-term strategy in order to foster the transition to sustainable societies. Investments in fossil fuels can endanger the success of this year’s COP 27 Conference in Sharm El-Sheik. To continue on the road towards net-zero – including in war times – is crucial. Let’s not prioritize short-term, growth-oriented thinking at the expensive of the fundamental ecological transformation.

One important tool to achieve net-zero is a circular economy. The urban level, the transport-sector, energy, agriculture, etc., are all needed to achieve decarbonization. Numerous projects do exist on the ground and the GIZ is involved in many.

On the macro-level, there is a need for a new understanding of the purpose of the economy, which must be translated into a new economic paradigm that supports the just transformation. Think tanks all over the world are working exactly on this.

Especially in developing economies, the impact of circularity can be huge. Therefore, I ask all of us to keep an eye on the G20-presidencies: This year it is Indonesia, followed by India, Brazil, and South Africa. If we help to transform those economies, it will be a major opportunity to save the planet.

  1. Education and training

Obviously, all I have said has an impact on education, learning, and training. We need to train ourselves and partners about the new thinking on just transformation, sustainability, resilience, and a recoupling narrative. We need to overcome a silo mentality and see challenges as interconnected and holistic. We need to recruit and employ people with different backgrounds, qualifications and experiences. Diversity in all respect brings progress.

It means nothing less than shifting away from an attitude, where one person is the teacher and the other’s job is to learn. My understanding is of a shared learning endeavor, one that allows us to lead by example and inspire change in others.

 

Footnote

1 Hüsken, Thomas, “Tribal politics in the borderland of Egypt and Libya”, 2019,  https://link.springer.com/book/10.1007/978-3-319-92342-0

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