Waylaid Dialectic

May 23, 2010


Filed under: Aid,Random Musings — terence @ 11:42 am

An old joke has it that the key achievement of economic forecasters to date has been to make the predictive powers of astrologers look respectable.

The same joke could probably be leveled at my own predictive powers vis a vis economic forecasters. But that’s not going to stop me here (after all, what’s a blog for if not being spectacularly wrong in a manner likely to be preserved for perpetuity).

And so, caveat lector, here’s my attempt at Owen’s megatrends. Things I think will have a major impact on development outcomes in the next 5 years.

1. The Global Financial Crisis – in its soft form (i.e. if things don’t get any worse) through shrinking global aid budgets. In its severe form (i.e. if the Eurozone derails properly) through decreased global aggregate demand.

2. Commodity prices – their rise was checked by the GFC but, assuming we don’t see a severe return of it, I think they are likely to continue their upward trend. This would be a disaster for a significant proportion of the world’s poor.

3. The environment (linked to 2). Not so much climate change, the worst effects of which will take longer than 5 years to be felt, but in the meantime, slowly but surely, unraveling ecosystems and waning bio-diversity will start to take their toll.

4. The United States. Anyone noticed that things have gotten just a little crazy over there recently? Either the Obama administration surmounts this (in which case he gets to go down history as one of the greatest ever US presidents) or they don’t, and the US gets President Palin, and the rest of the world starts yearning for the relative sanity of the Bush years.

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