GLOBAL DEVELOPMENT UNCERTAINTY OR OPPORTUNITY?

The United States have long presented itself as a leader in global development. It is the single largest donor  in humanitarian and development efforts, with sizable contributions to development banks like the World Bank and the Inter-American Development Bank.  Within the United Nations system, the U.S. remains the largest funder of the U.N. as a whole championing the urgency of meeting the United Nation’s Sustainable Development Goals.

The Trump Administration announced it would slash US contributions to the UN system, discontinue its contribution to the IDB Multilateral Investment Fund (MIF) that supports pilot development projects and withdraw from the Parris Climate Agreement.  That would have a major impact not in money but in ideas. 

The consequences of potential declines in U.S. contributions to global development regimes and exit from agreements could result in a lost of seats and influence at important international policy tables with emerging powers like China and the new UK free European block deciding to step up and replace the US as the lead funders and influencers on global development ideas.  In confronting scenarios like these, the U.S. needs to ask itself one foremost question: amid a period of rapid and unpredictable global change, how much responsibility does it want to take on in shaping the world’s new normal?

As some emerging countries like China, India and Brazil become more innovative, opportunities for new entrants to the development arena will be created.  Already we are seeing countries buffeting the global norms and institutions that underpin the globalized economy as they feel that the U.S. is no longer a reliable partner committed to upholding the liberal economic order as we have seen Germany tell the US it had the wrong address when the administration tried to open trade talks with Germany telling the US “trade policy is the responsibility of the European Union.”

Developing countries have not seriously begun to think through the consequences of Trump’s policies for global development but it is creating great opportunities in some parts of the world. Countries whose development interests clash with the United States may have opportunities to win gains at the policy tables while the United States, the global hegemon, is distracted. In other parts of the world, institutions are likely to recalibrate their behavior, and in particular their dependence on the United States. They will not want their development priorities to rely entirely on a country that pursues erratic policies and hence will start to hedge their bets. If the current U.S. administration has decided that it no longer needs to rely on international institutions as much as in the past, the influencers at those policy tables are deciding that they cannot rely on the United States anymore and will start to forge their own arrangements, which will diminish the U.S. ability to influence their actions and decisions.