Industry Overview

International Development: Background and Practice Areas

Published on: June 24, 2009 | Post a Comment

The modern institutions that comprise the development industry mostly came into existence in the mid- 20th century, largely in response to major geo-political events, including World War II and the Cold War. In particular, the Marshall Plan to rebuild Western Europe after the physical, social and economic devastation of World War II is widely considered the catalyst for organized international development led by wealthy donor countries.

Similarly, the Cold War served to raise the visibility of developing countries and contributed to idea of global stability through development. The fear that developing countries in Asia and the Americas were being influenced politically by financial and policy support from the USSR directly contributed to increased spending on development assistance from the United States. Clearly much of this money was not supporting international development as we understand it today, but it did have the effect of showing the links between the welfare of developing and developed countries.

Globalization has been another significant force in international development. Greater interconnectivity among world populations and economies has strengthened relationships among countries and raised awareness of development issues. It has also contributed greatly to economic development through foreign direct investment and remittances.

Many additional trends have also helped promote the ideals of international development. The advent of mass media and the incredible improvements in global travel, in particular, have made it possible for citizens of developed countries to see, firsthand or through their TVs and newspapers, the conditions that people in poorer countries live in every day. This not only raises money for development, but also galvanizes public support for government spending on international development assistance. For example, in the week following the

December 26, 2004 Asian Tsunami, the United Nations received an unprecedented $1.5 billion in relief donations. The massive coverage of the event, including everything from traditional media to blogs and camera-phone videos, helped spread awareness of the disaster and make it easy for people, organizations, and governments to donate to the relief efforts.

Key dates in the recent history of international development

1944: The Bretton Woods Agreement is signed, setting the foundation for an international financial system. The agreement establishes theInternational Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD), now part of the World BankGroup.

1945: The Charter of the United Nations is drafted and ratified by 51 original member states.

1950: The role of international nongovernmental organizations in development is enshrined by the Economic and Social Council of the United Nations.

1959: The Inter-American Development Bank is established.

1961: President John F. Kennedy establishes the U.S. Agency for International Development (USAID), explicitly separating international economic and social development from military and political activities.

1964: The African Development Bank is established.

1966: The Asian Development Bank is established.

1970: In a General Assembly Resolution, the world’s wealthy countries agree to set a target of 0.7 percent of each country’s GNP for official development assistance. Sixteen countries have agreed to meet this goal by 2015.

1974: The European Management Symposium invites political leaders to its annual meeting for the first time. In 1987, the EMS becomesthe World Economic Forum, and the organization’s annual meeting in Davos, Switzerland, attracts leading social, business, and political leaders from around the world.

1979: Official development assistance (ODA) surpasses $20 billion to reach $23.1 billion.

1990: ODA surpasses $50 billion to reach $57.2 billion.

2001: The first meeting of the World Social Forum is held to coincide with the World Economic Forum, highlighting the need for social development in addition to economic growth. The Millennium Development Goals are adopted by the United Nations, targeting eight specific goals for international development.

2005: ODA surpasses $100 billion to reach $119.8 billion.

Millennium Development Goals

The following are the eight principles of the Millennium Development Goals, along with select targets for each. For complete targets and more information, refer to www.un.org/millenniumgoals.

1. Eradicate extreme poverty and hunger.

Halve, between 1990 and 2015, the proportion of people whose income is less than $1 a day. Halve, between 1990 and 2015, the proportion of people who suffer from hunger.

2. Achieve universal primary education.

Ensure that, by 2015, children everywhere, boys and girls alike, will be able to complete a full course of primary schooling.

3. Promote gender equality and empower women.

Eliminate gender disparity in primary and secondary education, preferably by 2005, and at all levels by 2015.

4. Reduce child mortality.

Reduce by two-thirds, between 1990 and 2015, the under-five mortality rate.

5. Improve maternal health.

Reduce by three-quarters, between 1990 and 2015, the maternal mortality ratio.

6. Combat HIV/AIDS, malaria and other diseases.

Have halted by 2015, and begin to reverse the spread of HIV/AIDS. Have halted by 2015, and begin to reverse the incidence of malaria and other major diseases.

7. Ensure environmental sustainability.

Integrate the principles of sustainable development into country policies and programs; reverse loss of environmental resources. Halve, by 2015, the proportion of people without sustainable access to safe drinking water and basic sanitation (for more information see the entry on water supply).

PRACTICE AREAS

While virtually every industry has areas related to international development, there are a handful of practice areas accounting for the majority of development projects. These are the areas that developed countries support through ODA. Practice areas in development are commonly split between economic development and social development, with an understanding that nearly every area of development is highly interdisciplinary, and most projects address both economic and social issues. In addition, health and environmental projects are sometimes included in a third category in recognition of their importance as a foundation for all social and economic development. The most common practice areas in development include:

Economic development

• Private sector development is a general term for a wide range of activities focused on strengthening the private sector of developing countries. These projects may include improving access to finance, basic business training, improving the business environment, supporting business associations, and strengthening export industries.

• Agriculture is the main livelihood for approximately 2.5 billion people in the world, making it a critical area for economic and social development. NGOs work in agriculture to improve technologies, increase sales, improve environmental conditions, increase access to finance for agriculture, promote workers’ rights, and diversify family income sources.

• Finance remains a key constraint to entrepreneurial activity in much of the world. In most places, small business owners have very limited access to loans from traditional sources of finance and are forced to borrow money from family members or get loans at very high interest rates. Microfinance is the flagship product of this practice area, but other projects are focusing on housing finance, educational finance, and agricultural finance.

Social development

• Education is a component of nearly all development projects, but also a unique practice area. Most development projects in the education field are focused on improving the human and physical infrastructure of education. Key project activities include teacher training, curriculum development, financing for educational institutions, and upgrades to schools and classrooms.

• Governance is another large area of international development that deals with the rule of law, transparency and corruption, democracy, civil society and media. Governance projects work to make governments more transparent and accountable, while ensuring that laws are upheld in a fair and consistent manner, and that citizens have a voice in government. These projects utilize outreach and awareness, legal reforms, and capacity-building to strengthen the quality of governance.

• Human rights projects address fundamental issues of equality under the law and adherence to international standards of human rights. Some common areas within human rights include gender equality, displaced populations, post-conflict development and governmental abuses of power.

Interdisciplinary

• Health is one of the largest practice areas within international development, and one of the most interdisciplinary since health is so strongly correlated to education, environmental, and economic issues. As a result, virtually every large donor funds health projects and many foundations, most notably the Bill & Melinda Gates Foundation, have large health portfolios. There are many different kinds of health projects, ranging from community education to modernization of hospitals. Most projects focus on raising the awareness of safe practices, such as washing hands or wearing condoms or using a mosquito net, building the capacity of local health care providers, and improving access to health care through public and private sector initiatives. Currently one of the main areas of interdisciplinary focus is water. Access to clean water is one of the leading indicators of development and without access to clean water, health and economic development are much harder to accomplish.

• Environment, like health, is a key interdisciplinary area, and a prerequisite to most economic and social development. Environmental projects focus on management of natural resources, conservation, access to resources, city planning, and preservation of protected areas and species. Some environmental projects also focus on disaster preparedness by helping communities plan for disasters and develop strategies to mitigate the consequences when they do happen.

International development is a highly interconnected field, and all of these practice areas overlap each other. When an issue is included across several practice areas, it is referred to as a “cross cutting theme.” Common examples of cross cutting themes include rule of law, gender, environment, transparency and education. For example, an economic development project focused on training entrepreneurs in

basic business skills might include a gender component to train a certain percentage of woman-headed businesses or to develop a training module focused on specific business issues that more commonly affect women.

Other types of international development

While the most inclusive definition of international development would contain any activities that contributed to the economic or social advancement of a community, this definition is so broad that it becomes impossible to talk about an industry, or even a unifying body of knowledge. For that reason, most definitions of international development distinguish between direct assistance and development, and between activities carried out explicitly for development and those carried out primarily for other reasons. Because of this, certain activities are not universally considered to be international development. Some of these include:

• Humanitarian assistance and disaster relief are often considered a unique subset of international development or a related field. They are unique from standard international development because the focus of the activities is on direct assistance rather than long-term sustainable development. However, it is important to note that many organizations that carry out humanitarian assistance are also heavily engaged in international development, and even link the two areas. For example, a humanitarian assistance project to deliver food supplies to drought-stricken regions of Africa might also use its project resources to provide training and supplies for small-plot farming. This project would thus have both humanitarian relief and development components.

• Development assistance provided by a religious organization is a highly debated topic. There are thousands of NGOs that were founded as religious charities and retain their religious foundations, but don’t include religion in their development activities. Most people would consider these true development organizations. There are also many NGOs that have an explicate goal of spreading a religious message with their international development activities. An inclusive definition of international development would “count” these organizations within international development but their activities generally remain controversial.

• Development assistance provided by multinational corporations is similarly controversial because the assistance usually relates to company’s activities, raising potential conflict of interest issues. For example, a mining company that builds a new road and funds water sanitation projects in the community near its mine has clearly contributed to development, but might not meet the goals of long-term sustainable development. Some likely concerns would be whether the company used the assistance as a marketing tool or if there was an implicit agreement that the community support the mining activities. Finally, the long-term sustainability of the activities would also be an issue, particularly weighed against the environmental damage likely caused by the mining.