Sir Crispen Tickell's talk at the 2009 AGM

SAFAD Annual Seminar
Thursday 5 May 2009
The Economic Crisis and Development

At present we are preoccupied with the global crisis over money and credit; but beyond and behind it there is another global crisis of immensely greater proportions. This is the human impact on the planetary environment, and consequently the future of society as we know it.

Our greatest need is to think differently across the whole spectrum. This does not mean devising measures, as most now do, to correct obvious mistakes, blame the right people (bankers, regulators etc),and revert to making the past work better. It does mean putting together a wide combination of factors, including market forces, and working out new directions for our society and its future development.

We have to recognize that our current situation is unique. Other societies and civilizations have collapsed before, for environmental and other reasons, but the circumstances of today have not happened before. As the title of a recent book puts it: we have Something New Under the Sun. What is new? The broad effects of the industrial revolution some 250 years ago, the almost incredible increase in agricultural productivity since then, and the establishment of a particular mindset of “development”;among such effects is human proliferation:
one animal species – our own – is out of control;

• degradation of land, consumption of often irreplaceable resources, accumulation of wastes;
• dependence on energy from diminishing stocks of fossil fuels;
• growing shortages of fresh water, and pollution of both salt and fresh water;
• destruction of other species and damage to ecosystems with unknown results, especially on human health;
• destabilization of climate world wide, again with unknown results, including sea level rise and increasing food insecurity: current droughts and deluges (as in Australia and China);
• development of new technologies and increasing globalization often with the result of polarizing wealth and poverty

These factors, together and separately, affect everything we do, and above all why we do it. Our current mindset of “development” is built on the assumption that industrialization in one form or another is the model for all. Hence the much used, and essentially artificial, distinction between “developed”, “developing”, “under developed” and even “over developed” countries. This is now part of the international vocabulary, and has been at the basis of much economic thinking, and corresponding institutions, over the last half century. The consumer society, as we know it, is fundamentally unworkable. We need to think again.

What are my priorities? Above all we have to rethink a lot of economics: how we measure wealth, welfare and the health of the human condition. Definition of the aim is not easy, but here are
some past attempts at it:

• arete: goodness and fulfilment of purpose and potential (Greek);
• eudaimonia: wellbeing expressing our true nature (Greek and Roman);
• xiao kung: long term wellbeing andharmony over generations (Chinese).

None exactly fits the restless consumption of modern society.
at present we continue to fail to bring in externalities and true costs in our system of measurement. As has been well said, markets are marvellous at fixing prices but incapable of recognizing costs. The shortcomings of“growth”, GDP/GNP etc, are at last being recognized, notably in the Financial Times (29, 30 and 31 January 2009); and there arerenewed efforts to establish new systems of measurement: for example:

• the Human Development Index
• the work of the New Economics Foundation
• the new Commission established by President Sarkozy chaired by Joseph Stiglitz and Amatya Sen

More than 20 years ago I was the Permanent Secretary of the Overseas Development Administration, now the Department for International Development. My main job was to find ways of correcting the enormous and still growing disparities between rich and poor. Then as now the ghost of Malthus stalked the Earth.

• One way was to work out programmes of help for countries according to their specific geographical and other circumstances. The principle was to help them help themselves, and make best use of their own resources. We avoided any application of universal criteria. In other words we aimed for "appropriate" development.
• Another was to bring in environmental impact assessments of all projects to know what was feasible and beneficial over the long as well as short term.

I cannot over emphasize the importance of the environment in all progress, change and “development”. First we should recognize that the economy is a wholly owned subsidiary of the environment. Development has to take account of all the factors, singly and together, which I mentioned at the beginning. The damage we are now doing requires a change of mind not only among politicians but also in the business community. Already the message is coming through from market leaders with an enormous flow of funds into greenery (but beware of greenwash). Conferences all over the world now recognize the vital relationship between the economic crisis and the complex of environmental problems. In particular we have the Stern Review of November 2007 and subsequent work on the social and economic impacts of climate change, and Al Gore in his book and film “An Inconvenient Truth”. The President of the Royal Society has given our civilization only a 50% chance of surviving this century. There is no secret about the actions we now need to take to make sure it does survive. They range from respecting and preserving the natural capital of the Earth and its living systems to restraining human population increase, devising new energy policies, redesigning our cities, and understanding and conserving the other organisms on which our species wholly depends.

In conclusion I draw attention to a central point familiar to SAFAD. We need to be articulate and sometimes courageous in persuading people of the nature of the crises now facing us, and of the urgency of corrective action. I am sometimes asked: What’s in it for me, my country, my business, my society? The answer is simple:

Survival.