Experts Discuss Global Development Beyond the Financial Crisis at Pardee Seminar

Shahrukh Khan, William Grimes and Michael Walton

On Friday, October 9, 2009, The Frederick S. Pardee Center for the Study of the Longer-Range Future held a lunch seminar on ‘Future Challenges: Global Development Beyond the Financial Crisis. The seminar featured Shahrukh Rafi Khan, William Grimes and Michael Walton, and was moderated by Prof. Adil Najam, Director, Pardee Center.

Prof. Shahrukh Rafi Khan is currently a visiting professor of economics at Mount Holyoke College. He has formerly been executive director of SDPI, and taught at the University of Utah and Vassar College. Prof. Khan compared the responses and effects of the current global financial crisis to Asia’s response to the Asian Financial Crisis more than a decade ago. He focused on how international institutions – especially the International Monetary Fund (IMF) have reacted to the crisis and the impacts this would have on developing countries. He pointed out that a number of significant changes are taking place in the institutions, including, for example, the emergence of the G-20 as a replacement for the G-8. He doubted, however, that the G-20 will be much different from addressing the needs of low-income countries from the G-8. He stressed that low income countries will require alternate development models that focus on structural transformation. He also anticipated an increased capital scarcity because of the measures being taken as a result of the 2007 and on going financial crisis, and that will further shrink policy space for low income countries to make choices regarding alternative development models.

Prof. William Grimes is Associate Professor of International Relations and director of the BU Center for the Study of Asia at Boston University.  In his opening remarks, Prof. Grimes noted the relative success of East Asian countries in coping with the current financial crisis and pointed out that the worst effects were cushioned by their strong fiscal and foreign reserve positions, which allowed them to enact significant fiscal stimulus programs and to reinforce their social safety nets. In looking at the long term effects of the current Global Financial Crisis on Asia, Prof. Grimes raised the following questions, 1) Can Asia achieve balanced growth? 2) Is there an alternative to massive foreign accumulation? And 3) Is a dollar-decentered world a better world?

Prof. Michael Walton is Lecturer in International Development at the Harvard Kennedy School, Senior Visiting Fellow at the Centre for Policy Research, Delhi and V.K.R.V. Rao Chair Professor, Institute of Social and Economic Change, Bangalore for 2008 and 2009. He has experience working at the World Bank, including extended periods on Indonesia and Zimbabwe. Prof. Walton began by noting the relative rise of Asia, including India, and saw the Financial Crisis as a problem with the management of capitalism and not a fundamental crisis in capitalism. He discussed elements that would lead to successful moderate transformation for developing countries, including  the development of international systems for the collective management of financial systems and the soft landing of multiple transitions.  He also laid out several reasons that could lead to the failure of a smooth transition.

Following the presentations the audience engaged in a lively discussion with the panelists. Some of the issues discussed included lessons fromm the Asia’s response to its earlier financial crisis and the limitations of the G20. The panelists concluded with notes of cautious optimism that the climate for global international development in the post-crisis periods, especially because the financial crisis has highlighted the need for better international coordination and cooperation.

The video of the seminar will be made available at the Pardee Center’s multimedia webpage.