Comparing and Contrasting Millennium Development Goals and Sustainable Development Goals - Assignment Example

Question One: Comparing and Contrasting Millennium Development Goals (MDG) and Sustainable Development Goals (SDG)

The international development debate has been characterised by two trends that seem at first to be going to the same direction in the past twenty years. However, a closer analysis reveals that hey vary with respect to their underlying philosophies and focus. On one side, there is the agenda of reduction of poverty, especially in LDCs that is enshrined in the Millennium Development Goals (MDGs) (Costanza et al., 2015). On the other hand, there is an idea of sustainability that was central during the Earth Summit in Rio de Janeiro in 1922 and at Rio+20 Summit in 2012 that conflicted the two agendas (Griggs et al., 2013).

Both MDGs and SDGs have a lot in common, but in sharp contrast to MDGs, the pro-SGDs regard poverty as merely one of a number of the global issues that should be addressed, which in this case makes the pro-MDGs to be afraid that the poverty reduction agenda will become secondary in the SGDs agenda. On the other side, the proponents of the SGDs criticise the MDGs for the narrow concept of the development and giving immediate preference over the ecologically, socially and economically sustainable ones (Costanza et al., 2015). However, both concerns are valid ones and vital solutions should take place to put both of them into account. Additionally, the majority of the MDGs refer to the improvements wellbeing of the individuals, such as human development, clean water access, education needs, health awareness, among others) that should be evaluated on the micro-level (Griggs et al., 2013). The SDGs agenda, on the other hand, involves such goals as biodiversity, habitable environment, among others.

Similar to the MDGs, the eradication of the extreme poverty also lies at the heart of the SDGs. While each of the 17 proposed goals for the SDGs have their own agendas, they collectively address the various facets that are linked to the global poverty. Additionally, at their core, the MDGs and SDGs share the same target-elimination of poverty (Littlefield, Morduch and Hashemi, 2003). However, the new SDGs seeks to incorporate the more extensive platform as compared to the MDGs.

Conversely, while the MDGs mainly focuses on ways in which developed nations can finance improvements in LDCs, the SGDs, on the other hand, consider poverty both countries (Sachs, and McArthur, 2005). The other differences stem from the context of rich donors helping poor recipients” while SDGSs are applicable to every country; the SDGs are more comprehensive compared to MDGs, the MDGs were created through the “top-down process” whereas SGDs were created in an inclusive participatory process; the MDGs were largely funded through aid flows whereas SDGs will be funded through revenue generation capabilities of various states. Finally, while the MDGs focuses on quantity of education (such as the high enrolment rates), SDGs focus on quality of education and the role of education in an achievement of a more humane world.

Some of the lessons that SDGs can draw from the MDGs include

• Countries are more likely to be successful in the international goals whereby there is still the existence of the priority. The political contentious agendas such as climate change will require more efforts (Kamepalli, and Pattanayak, 2015).
• The monitoring agencies should be more pragmatic regarding how long it will be before the progress of the SDGs become visible.
• The national priorities are sometimes at odds to the needs of the local areas.
• The middle income states (MICs) and the low income states (LICs) have varied motivations for the adoption of the goals. For instance, the MICs engagement was mainly to further the strategic regional interests while the LICs adherence to the process and language of the MDGs is related to the overseas direct aid.
• There is inadequate research on the international implementation of the MDGs, making analysis to be difficult.

Question Two: Comparing and Contrasting Demographic Transformation Process Happening Currently in Developing Countries with its Counterpart Happening at the Beginning of Industrial Revolution in 17th and 18th Century in Present Developed Countries

The basic description of the demographic transformation is based on the observations from the West. The general trend for the demographic transformation is based on the falling death rate followed by later the decline in the birth rate. The transition in the developed countries took around 100 years and it is classically attributed to the improvement in the social-economic conditions that has changed the child survival rate and the fertility preferences (Strulik, and Vollmer, 2015).

Beginning the 17th century, remarkable thing happened: decline in the death rates. This was due to the invention of the new technologies in production and agriculture, and the advancements in sanitation and health. As such there was notable increase in population for the developed countries. This can be compared to the present rapid population growth in the developing countries owing to the technological advancements, improvement in health and among others. The demographic transitions in Asia, Africa, and Latin America started later and it is still underway. For instance, in 2005, the continent of Asia had 3.94 billion people representing more than a half the total world population, and its population is expected to hit 5.27 billion by 2050 (Korotayev, Goldstone, and Zinkina, 2015). This is in sharp contrast to the developed countries whereby the population growth is almost constant.

By 17th and S18th, the mortality rate had fallen to about half its pre-modern rate in the developed countries. The birth rate, however, remained higher and by 18th century it was as twice as the death rate. For the rest of the century, both rates fell dramatically maintaining the gap. Compared to the developing countries presently and developed countries, the latter started in 100 years at a much lower economic level. But while the developed have quadrupled their population over the last 200 years (17th and 18th century), the developing countries are still growing their population as much as ten times in a much shorter period and they are still growing at a faster rate (Korotayev, Goldstone, and Zinkina, 2015).

The demographic transformation process has occurred as a much faster rate in the developing countries that it did in the developed countries in the 17th and 18th centuries. In the 18th century for instance, life expectancy at birth in majority of the developed countries was about 38 years for both the sexes combined, presently the life expectancy is generally around 47 years (Varvarigos, 2013). Over the same period in developing countries, there is rapid mortality decline that can be attributed partly to the technology adoption from the developed countries accompanied by the little or no decline in terms of fertility (Zecchini, 2013). Unlike in Europe, the rapid fertility decline is mostly followed within just a few decades. The major difference between the demographic transformation process in the developing countries presently and the developed countries dating back to the 17th and 18th century can be attributed to the speed of the mortality decline and the speed of the fertility decline, and it has received a lot of attention both then and now, the population growth rate (Galor, 2012). For instance, unlike in developing countries, in the developed countries it’s rare to see the population doubling.

Question Three: Comparing and Contrasting the Role of Human Capital versus Physical Capital in the Process of Economic Growth

Both the physical and the human capital directly impact on the productivity of the economy. However, more of the human capital can affect the growth of the physical capital. The investment in the human and physical capital is the precondition of the economic development (Piketty, 2014). For instance, an advanced production technology can be obtained through the increased investment in the physical capital whereas the investment in health (human capital) can enhance the confidence of the people and the human capital. Human capital refers to the experience, training, skills, knowledge, education, competences, and the know-how contributed by the human beings to the business. The physical capital on the other hand refers to the assets that have been manufactured and they are used for the purposes of the production of the other goods and services.

Both human and physical capital are important ingredients to the economic development. For instance, there is a quantitative relationship between the investment in the training and education (human capital) and the level of the GDP. There is generally a positive relationship between the GDP growth and the amount of the human and physical capital. Thus researchers agree that poor countries can boost their economic growth if the level of the human capital per person is higher in relation to their level of the per capita GDP, but not the other way round (Robinson, 2013). This shows that human and physical capital are both vital ingredients to the economic growth.

One of the similarity between the human and physical capital in relation to the economic growth is the fact that both of them are the types of the capital resources that are fundamental to the economic development. However, whereas the human capital refers to the skills, training, knowledge, among others that are fundamental for the economic development, the physical capital refers to the assets that are essential for the manufacture of the other goods and services (Leamer, and Storper, 2014). Both the human and physical capital are complement to one another in relation to the economic growth. For instance, the increasing of the human capital will lead to the increase in the rate of the physical capital return and consequently the improvement of the economy.

The framework for the aggregate production function shows that the growth of both human and physical capital is both the condition and the consequence of the economic growth (Machlup, 2014). They both involve activities that affect all the factors of the production. In fact, both the human and physical capital lead to the generation of the worldwide economic growth regardless of its geographic locus. Contrary to what some scholars suggest, the economic growth cannot be eliminated by the growth of the population (human capital). This is because temporal and spatial patterns of the “demographic transition” and the increase in the physical capital seem to be congruent with the economic growth (Heckman, and Yi, 2012). As such, both the human and physical capital are links which enters both the effects and the causes of the economic growth.

Question 4: Assessing Disadvantages of Free International Trade for Economic Development of Developing Countries

The idea of free global trade has received much accolade and criticism in equal measure from different scholars, economists and policy makers globally, especially concerning its impact on developing countries. Some of the disadvantages that have been highlighted include the following.

Competition

Hills (2008) argues that free international trade exposes infant industries in developing countries to stiff competition from established multinational firms due to lack of short-term governmental protection policies. Therefore, these firms struggle against competition since they are relatively young and do not enjoy economies of scale that many multinationals enjoy. Moreover, international markets do not provide a level playing field for firms to play. Free international trade can facilitate dumping of surplus goods from developed countries, which are relatively cheaper than those from developing countries. Thus, this will create unfavourable conditions for goods from developing countries for a long time and, hence make it difficult for local firms to maintain sustainable production levels for both the local and global markets (Surowiecki, 2008). This will eventually affect the gross domestic product of the developing countries, thus resulting in retarded economic growth rates.

Structural Unemployment

The effects of unsustainable production for local industries as a result of dumping in international market can result in short-term unemployment in developing countries. Moreover, due to flow of FDI into developing countries by multinationals, domestic production can be substituted and, hence cause unemployment. Therefore, these effects can reduce the amount of income available for household consumptions resulting in the decline in demand for goods and services in developing countries (Surowiecki, 2008). This has a significant effect of reducing the gross domestic product these countries; hence resulting in decline in economic growth rate and development, especially due to decline in living standards of people (Sexton, 2008).

Increased Domestic Instability

The dependence on global international markets for good and services from developing countries can result in decline in economic activity due to international trade cycles a was evidenced by the 1998 Asian economic crisis (Hill, 2008).

Standardisation of products

Free international trade often initiates the need for global standardisation of products, especially in regard to ISO, CQI and GMP (Hill, 2008). Therefore, in such a situation, developing countries can get disadvantaged due to lack of technological and human capabilities (Hill, 2008). Thus, this will limit their ability to participate in international markets, which consequently can impact negatively on their balance of payments (Thirlwall, 2006).

Environmental

Creation of free international trade can result in environmental damage since developing countries can exploit raw material for export; hence damaging the ecosystem (Wade, 2003). Moreover, some countries with lax legislation on environmental pollution can export their goods to developing countries and this will negatively damage the environment since these companies do not incorporate costs of environmental damage in the prices of goods. Moreover, this can create competition for locally produced goods, thus resulting in slowdown in economic activity in the LDCs (Wade, 2003).

Question 5: Motives and Role of International Financial Assistance to Developing Countries

Economic Motives

Foreign aid is a concept that is widely accepted and used to refer to the flow of resources of finance from developed nation to less developed countries (LDCs) with aim of stimulating development. Eroğlu and Yavuz (2009) postulate that foreign aid a necessary component for promoting and accelerating economic development in LDCs to levels where satisfactory growth rates can be achieved to allow for self-sustainability. Therefore, foreign aid is a positive incentive, which is provided to LDCs to enable them to achieve maximum national effort to accelerate economic development and growth (Alesina and Dollar, 2000).

Conversely, Todaro (1989) argues that developing countries accept foreign aid purely economic development. He gives examples of successful cases such as Taiwan, Israel and South Korea that have economically developed from foreign aid. Moreover, foreign aid is intended to stimulate national income grow rates in LDCs by increasing the demand for goods and services in these countries and the developed countries. Therefore, from these perspective it can be argue that developed countries provide foreign aid to LDCs for mutual benefit.

Empirical evidence also indicates that developed countries provide LDCs with aid to stimulate economic development as a way of empowering citizens of this country to alleviate poverty and improve the living standards of people (Easterly, 2008). Research postulates that empowerment of people of people in LDCs is the only way these countries can be helped to achieve self-sustainability, which is critical to stimulating economic development to meet the millennium development goals (Easterly, 2008).

Humanitarian Motives

Different motives exist as to why developed countries provide foreign aid to developing countries. Fuchs & Vadlamannati (2013) argue that foreign aid is provided to LDCs on humanitarian grounds since developed nations have a moral obligation of promoting social welfare in LDCs to minimise the disparity that exist between developed nations and LDCs. The researchers go ahead to state that, it is for this reason that donors provide emergency relief programmes of food to assist the poor people in developing countries as part of their humanitarian assistance programs. Moreover, developed countries feel obligated to provide aid to LDCs a way of compensating them for past colonisation and exploitation.

Political Motives

Radelet (2006) argues that the primary motive of providing foreign aid to LDCs is more political rather than humanitarian. Eroğlu and Yavuz (2009) also states that countries such as Egypt, Greek and Turkey are geopolitically significant to the US, and this explains why they receive more foreign aid than most other LDCs. The researchers go on to state that developed countries provide foreign aid to spread their aspirations such as democracy to LDCs. Moreover, bilateral aid to LDCs aims to advance the political and military objectives of the donor country a symbolisation of transfer of power politics through economic aid (Eroğlu and Yavuz, 2009).

It is evident there exist different motives as to why developed nations provide foreign aid to developing countries as demonstrated above. Some of the reasons are aimed at benefiting both countries while others stem from moral social obligations with the aim of stimulating economic development and alleviating poverty.

Question 6: Role of Microcredit in the Poverty Reduction in Developing Countries

Microcredit programs were established to provide alternative avenues for sourcing small amount of loans by nontraditional economic sectors. The programs were aimed at overcoming the inadequacies of the regular institutions of financing that had stringent repayment interests and procedures that locked out individuals in traditional non-lucrative businesses from accessing loan facilities (Chowdhury, 2009). However, with the advent of microcredit programs these groups, especially women have been able to access small amounts of money that has significantly contributed to alleviation of poverty as evidenced by many successes in remote areas and villages in developing countries (Chowdhury, 2009).

Khandker (1998) argues that access to microfinance in developing countries helps alleviate poverty by increasing per capita income of individuals and families. He goes on to argue through his study in Bangladesh that was based on consumption patterns that microcredit programs enabled individuals and families to move out of poverty by borrowing from microfinance institutions. In his study, the researcher also noted that microcredit programs smoothened out consumption of individuals and families and seasonality of supply of labour by improving nutritional status of both adults and children. Moreover, microcredit programs advanced to women were found to have a positive impact on schooling for children, especially among the male population.

Microcredit programs enable households to significantly increase their asset accumulation capabilities compared to those without access to microcredit, which enable them to gain resources for personal investment and safety net against misadventures (Versluysen, 1999). The researcher further states that this improves the probability of poor families transitioning from poverty status to viable commercial status where they are able to meet credit requirements of banks such as saving services, money management advice, insurance and financial planning. Versluysen (1999) argues that individuals from BRI countries that have access to microcredit have achieved upward social mobility that has enabled them to rise above poverty levels to an extent that they are able to employ others.

According to Zaman (2000), microcredit programs helps to alleviate poverty in developing countries by contributing to women empowerment, reducing vulnerability by smoothing out consumption, facilitating accumulation of wealth and provision of credit or assistance during emergencies. Moreover, a research on BRAC that is one of the largest microcredit institutions in Bangladesh revealed that access to microcredit enabled individual and families to diversify their income earning sources and build up assets, and this contributed significantly to poverty reduction.

Many actively developing countries have been experiencing a strong upsurge for microcredit services in both savings and credit (Robinson, 2001). These services have fundamentally improved living standards of low income earners, their enterprise management skills, smoothened their consumption costs and income flows, improved their productivity levels as well as enlarged and diversified their microbusinesses, which has resulted in improved incomes. Therefore, it is undeniable that microcredit programs in developing countries continues to play a fundamental role in alleviating poverty levels by improving the per capital incomes of individuals and families, which has led to improved living standards.