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21st Bradford Development Lecture: Transforming Economies


Transforming economies through productive development policies: lecture by ILO Assistant Director General: Dr José Manuel Salazar-Xirinachs

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In our 20th lecture of the prestigious Bradford Development Lecture series, Ha-Joon Chang argued for a development discourse that takes production into the centre of development thought and practice. The 21st Bradford Development Lecture, held on the 18th of June 2015, is a particularly apt continuation of the tone set in past year’s lecture.

In this year’s lecture, José Manuel Salazar-Xirinachs has given an enriching presentation on how productive development policies are central to ‘inclusive growth’. This growth concept, admittedly somewhat intangible, diverges from the focus on GDP measurement. Instead of the narrow emphasis on GDP, this model is more long-term and combines “economic prosperity, social justice and environmental sustainability”. It is used as a guideline against which economic policies can be evaluated. In his lecture, Salazar-Xirinachs differentiates the notion of productive ‘structural transformation’ policies from neo-liberal structural adjustment policies; the former being regarded as more socially beneficial and advanced than the latter. He raises the notion of a ‘new invisible hand’. This ‘new invisible hand’ would take the shape of institutional arrangements based on engagement between the public and the private and stakeholder involvement. It is perhaps suitable to call the concept a hand that is invisible, as it also forms what Salazar-Xirinachs terms the ‘new frontier’ for research and practice: an area, which yet has to be explored and established. This ‘new frontier’ stands for the institutional challenges that exist and emerge through public-private co-operation, partnerships and stakeholder consultations, and a “rigorously analytical” process of fostering and examination of such.

The lecture was chaired by Vice-Chancellor, Professor Cantor. Given the timing of the lecture at the end of the teaching period, the lecture was visited by the main ‘core’ of individuals interested in international development and policy processes.

The Q&A session saw the clarification of the notion of productive development policies: post-financial crisis austerity measures in the Euro-Zone are an “exercise in financial programming” but do not fall under 'productive development', which infrastructural subsidies for roads and transport, etc, on the other hand, would. Yet, if a ‘magic bullet’ for youth unemployment was to be put forward, the dual-apprenticeship system prevalent e.g. in Germany, Austria and Switzerland, would come close to such. Another question, finely nuanced, sought Salzar-Xirinachs’ advice on economic development prospects if a country is impaired from going through the traditional stages of growth (from agriculture to manufacturing to services), because its manufacturing capacities are out priced by Chinese manufacturing, and service sector industries are not seen as having the capacity for sustained growth. In response to this Salazar-Xirinachs highlights a phenomenon of ‘premature deindustrialisation’ because of stronger import competition and technological advances reducing amounts of labour required. This somewhat bleak outlook can be mitigated by the argument that China would increasingly price itself out of the manufacturing sector, given a growing middle class, which opens an opportunity for African manufacturers. The advice would be the creation of a domestic climate that fosters investment from within or abroad to substitute products from the ‘global factory’: China. Further Salazar-Xirinachs mentions that a highly-quality service sector in fact can provide substantial income and growth, yet the division between sectors might be out-dated, as the reality nowadays sees the boundaries between agriculture, industry and services disappearing.

The Bradford Centre for International Development (BCID) is immensely grateful for this enriching lecture, which certainly will prove to be a very useful resource for present and future students of international development.

A video recording of the lecture can be found here:

For questions or comments on the lecture please contact Dr P.B. Anand.