Development, trade, and democracy: with international trade and aid reform stalled, the next President will have his hands full. There is a way, but is there a will?

• Author: Antholis, William

The world's economic powers--the United States, European Union, and Japan--keep saying that they have three shared goals: promoting global development, advancing the global trading system, and strengthening democracy. They have actually sketched a straightforward policy route to advance all three goals. The roadmap for advancing development, trade, and democracy is in place.

Yet while they have drawn the roadmap, they have not yet chosen to start the engine, let alone step on the accelerator. If things do not change soon, they will probably need a tow.

What is missing? The political will to get moving. The Doha Round of world trade talks, launched in 2001 with its promising "Development Agenda," is on the verge of collapse. Sizeable increases in foreign assistance, promised in 2002 at the United Nations' Monterrey Summit, are also unlikely to be fulfilled. And without any progress on either of these two, the economic powers are not likely to get developing country buy-in for the political reforms that are needed to ensure that trade and assistance are used effectively.

Regardless of the 2004 American presidential election, political will is not likely to come from political leaders. Support is fading for trade, aid, and real democratic reforms. Since these three policy challenges are increasingly interrelated, new coalitions across all three areas are needed.

THE NEW ROADMAP: TRADE, AID AND POLITICAL REFORM

A decade ago, it appeared that rich countries had a common policy paradigm for development. A Washington Consensus--urged by the international Monetary Fund and the World Bank--pushed for by developing countries to balance their budgets and adopt more open trade policies. Countries would be "open for business": ready to engage the global economy, and ready to allow market disciplines of foreign competition and lower prices to improve efficiency and productivity. The Asian Tigers--Korea, Thailand, Indonesia, and the Philippines--embraced these policies and demonstrated that double digit growth could be achieved.

The 1997 global financial crisis crippled the Washington Consensus. The Thai bhat infirmity quickly spread to Korea and Indonesia and then jumped oceans, hitting Brazil and eventually Russia. International investors began to find disturbing economic decisions based on political cronyism. They discovered that shaky local banks were filled with non-performing loans. "Sure bets" became large liabilities. And beyond financial spreadsheets, outsiders discovered threadbare social safety nets, as newly formed middle classes quickly crumbled into poverty.

Industrial country policymakers began to understand that the road out of poverty required new policy and institutional milestones. These included solid regulatory environments and transparent accounting systems. They "also included social policies: vibrant education and health systems, homeownership, and clean and efficient energy and transportation systems.

A three-part strategy began to emerge among policymakers in wealthy democracies.

First, fighting global poverty should be a top shared priority. In 2000, these governments launched the Millennium Development Goals a list of priority benchmarks for improving the conditions of the 1.2 billion people who live on less than $1 per day. Two years later, at a UN Summit in Monterrey, Mexico, they pledged to double development assistance to meet these goals--promising to increase total donor assistance from just above $50 billion to over $100 billion.

Second, they looked again at trade policy--but this time they were forced to focus on barriers to their own markets that directly hurt export-ready developing countries. Since the late 1990s, industrial democracies had called for a new Millennium Round of global trade talks. Their first attempt to launch such a round failed miserably at Seattle. The colorful and eventually violent street protests made "Seattle" a code-word for antiglobalization efforts. But that effort failed largely because rich countries did not have a sense of how angry developing countries had become.

Aware of these concerns, the United States and Europe tried again--this time successfully. In 2001, at the World Trade Organization ministerial in Doha, they agreed to a "Development Agenda" for world trade talks...