Inclusive Development: The Path to Common Prosperity

From: English Edition of Qiushi Journal Updated: 2011-12-29 14:47
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 The annual conference of the Boao Forum for Asia (BFA) was held in Hainan Province, China, with the theme “Inclusive Development: Common Agenda and New Challenges” in April, 2011. The idea of “inclusive development” gained wide recognition among attending nations at the event due to its ideological depth and close integration with reality. As a responsible, large country, the approach that China takes towards inclusive development will have a major bearing on efforts to intensify cooperation and achieve common prosperity around the world, and particularly in Asia.

 I. “Inclusiveness” of development: a new topic for the era of economic globalization

 At a time when all countries are pursuing development, inclusive development has emerged as an important idea and development approach for the stimulation of international cooperation. In the age of economic globalization, the economic policies and patterns of development of any one country are bound to have profound effects on the development of other countries. Therefore, a major topic confronting all countries is the question of how developmental opportunities can be shared for mutual benefit. This is the essence of inclusive development. In view of the current circumstances, there is a common desire among all countries for the establishment of a more rational development pattern and for the restoration of balance in the world economy following the global financial crisis, so as to avoid the repeat of a global disaster caused by modes of development such as the financial bubble of the US economy. For this reason, the policies and strategies of different countries need to be mutually inclusive.  

 A press conference is held after the Boao Forum for Asia Annual Conference 2011, which drew to a close on April 16, 2011. The theme of this year’s annual conference was “Inclusive Development: Common Agendas and New Challenges.” / Photo by Xinhua reporter Guo Cheng

 Although Asia is spearheading global economic growth, most Asian countries are now being confronted with the issue of development coordination and cooperation at the regional level. At present, many Asian countries are engaged in relatively fierce competition with one another, a result of the high priority their governments give to development. Thus, the achievement of common prosperity through inclusive development has become a common requirement for regional cooperation. In fact, the final selection of “Inclusive Development” from the 15 themes proposed for the BFA is testament to the extensive recognition and high level of attention that inclusive development has won.

 As stated by Zeng Peiyan, the Vice Chairman of the BFA, inclusive development is a development pattern for different countries, nations and citizens to enjoy common development, participate equally, and share the fruits of development. In contrast to traditional modes of development, inclusive development boasts openness, universality, and sustainability. It can mitigate imbalances in development caused by traditional inequalities in development opportunities, and eventually lead to universal development by realizing equal rights, equal opportunities, transparent rules, and rational distribution. Inclusive development is also an important means of achieving the United Nations Millennium Development Goals. By eliminating the obstacles brought about by historical, cultural, religious and social differences, it paves the way for joint efforts to be made in response to global challenges, such as food security, energy security, climate change and natural disasters, thereby promoting mutual benefit between countries, inclusiveness between cultures, and harmony between nature and human society.

 II. Achieving inclusive development: a new dimension in international economic cooperation

 A key aspect of inclusive development lies in international economic cooperation. This not only involves the coordination of domestic development strategies and policies between different countries, but also the establishment of mechanisms and the development of systems for international cooperation. The aim of inclusive development is to establish a pattern of development in which all countries can enjoy equal opportunities and gain mutual benefit through cooperation. Unlike traditional modes of cooperation, which focused purely on open markets and international competition, inclusive development lays greater emphasis on the compatibility of development mechanisms, the sharing of development progress, and the sustainability of development conditions.

 The development path of most developed countries was far from inclusive. During the process of their industrialization, these countries not only exploited the resources of developing countries in a destructive manner, but also caused serious environmental pollution due to the emission and discharge of industrial pollutants. In fact, this damage is still having an adverse effect on the development of developing countries to this very day. The industrialization of numerous countries over recent decades has given rise to a series of daunting global issues, such as over-capacity in traditional industries, the over-consumption of resources, cut-throat competition, and serious environmental pollution. This is, above all else, due to the trend of industry transfer during the process of globalization. Developed countries have been able to optimize their economic structures and improve environmental conditions by investing overseas, while developing countries have been afflicted by pollution and high energy consumption after accommodating industries from abroad. While both sides have achieved development under this arrangement, issues such as energy consumption and environmental pollution have failed to be addressed on a global scale. Therefore, modes of development founded on industry transfer are not inclusive. From a historical perspective, inclusive development is a joint responsibility shared between countries that outsource domestic industries and those that accommodate overseas industries. Developing countries should place a greater focus on technological advances as they accommodate foreign industries; while developed countries should provide developing countries with technological assistance instead of simply relocating their industries to the latter.

 Asian economies should pay special attention to inclusive development. Asia’s development is characterized by fierce competition for markets, capital and resources, which is due to the emphasis that Asian countries place on foreign markets. At the same time, there is also a general need for Asian countries to upgrade their industrial structures on the basis of traditional industrialization. Therefore, by moving beyond cultural differences, Asian countries must use regional cooperation as a means of deepening the division of labor and reducing friction, thereby establishing mechanisms to ensure cooperation and common development. Strategic upgrading, regional cooperation, and economic integration, together with policy coordination on this basis, are the fundamental means of achieving inclusive development at the regional level.

 Inclusive development calls for the improvement of global governance. Since the end of the Second World War, the international community has placed emphasis on the creation of interests through open markets and competition. While it is true that the development of individual countries has ushered in common development, the fact remains that development founded on pure competition is unable to ensure that all countries reach their goals for economic and social development. Although the international community has created favorable conditions for the development of backward countries, especially with the provision of development assistance, the inherent mechanisms that various countries rely on for their economic development are yet to become mutually inclusive. Unlike general international negotiations, whose core lies in the exchange and balance of interests, the establishment of global governance involves concerted efforts to address and resolve the problems faced by human society, especially those concerning the survival of the human race. Therefore, the significance of global governance lies in the achievement of inclusive development. Through cooperation in global governance, the countries of the world should seek to identify common ground between their own development needs and the common interests of human society.

 III. Promoting inclusive development: the strategic proposal of a responsible, large country

 Inclusive development is an important manifestation of Chinese culture. This is because being inclusive and tolerant is an important feature of the Chinese humanistic spirit. China has undergone a profound transformation from a planned economy to a socialist market economy, and from a closed and semi-closed economy to an open economy since the beginning of the reform and opening up drive more than 30 years ago. This transformation demonstrates the idea of inclusive development. During recent years, China has made a number of adjustments to its economic and social development strategies. Of these changes, China’s efforts to transform its pattern of economic development have become an important manifestation of the country’s inclusive development. After the outbreak of the global financial crisis, China promptly implemented a strategy of boosting domestic demand, which not only ensured the stable development of its own economy, but also relieved the pressure on other countries. Moreover, China has actively implemented a strategy of “going global,” a basic requirement of which is to achieve the common development of all countries. China is also an active participant in global governance. Acting as a responsible, large country, China is working with other countries to develop new institutions and mechanisms in response to new issues that have emerged amidst the rapid progression of economic globalization. Moreover, China’s economic growth, which is currently driven by investment and external demand, will become significantly more oriented towards consumption and domestic demand in the future, and especially within the next five years. This change will enable foreign countries, and especially other Asian countries, to acquire more international capital and access larger commodity markets.

 It is therefore clear that inclusive development is an objective requirement of the Scientific Outlook on Development, which is the guiding principle of development in contemporary China. The Scientific Outlook on Development lays emphasis on balancing the pace and scale of development with the social and economic effects that development brings about. It focuses on structural rationality, and gives particular emphasis to the reduction of energy consumption during the course of development in order to avoid damage to the environment. China’s economic and social development is guided by the Scientific Outlook on Development. On this basis, China is striving to develop a resource-conserving and environmentally friendly society. This is not only conducive to the sustainability of China’s own development, but also to the common and sustainable development of all countries. Therefore, it is clear that the idea of inclusive development is fully compatible with the approaches, theories and strategies already introduced and practiced by China, such as the path of peaceful development, the theory of developing a harmonious world, and the open strategy of mutual benefit.

 For this reason, China has clearly expressed its willingness to actively promote inclusive global development in the course of its future development, and will strengthen exchanges and cooperation with other countries in order to address common challenges and promote common development. China has put forward several constructive propositions for inclusive development as follows:

 —Inclusive development primarily requires inclusive tolerance towards the different development paths adhered to by different countries. We need to respect the cultural diversity of different countries; respect the development paths that they have chosen; and respect the attempts that they have made in their economic and social development. This should be the basis on which international cooperation is promoted. The diversity of cultures and development paths should be utilized as a driving force for the deepening of cooperation.

 —Inclusive development calls for all countries to transform their pattern of development by developing the green economy and achieving structural upgrading through advances in science and technology. Inclusive development requires various countries to balance out and coordinate all aspects of their economic and social development. This includes the parallel development of the real economy and the virtual economy, the balanced development of the domestic market and foreign markets, and coordination between economic and social development.

 —Through inclusive development, different countries should not only be able to share development opportunities, but should also come together to address common development challenges. Economic reliance between different countries has been deepened by globalization and regional integration, making the coordination of economic policies between countries all the more important. Instead of making policy choices that benefit one’s own country at the expense of neighboring countries, all countries should work to help one another, so that all members of the international community can share the fruits of globalization and integration. When large countries assist small countries, and rich countries assist poor countries, the lives of people from different countries will be improved.

 —In order to achieve inclusive development, different countries will be required to ensure common security by seeking common ground while putting aside differences. Contemporary global security should be established on the basis of common security, which requires mutual trust, mutual benefit, equality, and coordination. Conflicts between nations should be resolved through dialogue and negotiation rather than confrontation. This will help to promote security cooperation and peaceful development.

 —Inclusive development also requires that the development of individual regions is tolerant towards the development of other regions. Open regionalism should be practiced in the regional cooperation of Asia. In addition to emphasizing cooperation within Asia, we should attach importance to cooperation with non-Asian countries and international organizations. By respecting the interests of non-Asian countries in Asia, we will be able to promote the prosperity and stability of Asia, as well as the common development of all countries and regions in the world. 

(Originally appeared in Qiushi Journal, Chinese edition, No.11, 2011)

Author: Director of the Institute of World Economy, Shanghai Academy of Social Science

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