The collapse of Lehman Brothers investment bank in the United States in 2008 signalled what has arguably become the world’s deepest recession since the Wall Street crash of 1929. And this has been a truly global economic downturn, with rich as well as poor countries, facing into a headwind of austerity and unemployment. For instance, the International Labour Organisation (ILO) has just released a report which found that unemployment has risen in two-thirds of European countries since 2010 as growth has flat-lined and employment opportunities dried up.
The economic slowdown has arguably been most pronounced in Western economies tied to strident forms of neoliberalism that have asserted the power of markets to generate growth and ‘raise all ships’ in a general sea of prosperity. No Western European country embraced the neo-liberal model more than Ireland, which from the late 1990s to 2007, was lauded as an economic tyro dubbed the ‘Celtic Tiger’. The Celtic Tiger was driven by inward investment by multinational corporations, mostly from the US, engaged in production for export markets in growth sectors like information technology. However, a combination of lax regulation of the financial sector, a low tax regime for investors, a credit bubble in the housing market and a corrupt political class in league with bankers, speculators and builders saw Ireland’s economic miracle turn to dust. Ireland’s worst economic fears were realised when, in 2010, it agreed an €85 billion loan from the International Monetary Fund and European Central Bank to recapitalise its banks. What was once the ‘poster child for neo-liberalism’ was recently described by David Begg, General Secretary of the Irish Congress of Trade Unions, as the ‘poster child for austerity’.
The question for development educators raised by the global recession is what contribution can we make toward creating a more sustainable model of development and economic growth? As a form of education driven by social justice and equality, development education (DE) should be at the heart of this debate so, how should we respond to the financial crisis? Well firstly, as a sector we should be asking the question! There has been limited discourse on this issue to date in DE and yet there appears to be a public appetite for debate on alternatives to neo-liberalism judging by the anger and vociferousness of protests on this issue across the world. Second, development educators should play to their strengths and use their knowledge of, and partnerships with civil society groups in the global South, to inform the debate on debt and how it has been used to cut public services in poor countries. This model is set to be replicated in the global North.
Third, development education’s considerable expertise in training and resource production makes it well positioned to enhance economic literacy by introducing new courses and seminars on the economic recession again drawing upon the sector’s local and global connections. Fourth, the development education and wider international development sectors need to get more engaged with local decision-making processes in which we can effectively intervene. As the recent Trócaire report, Leading Edge 20:20 suggested, international non-governmental organisations (INGOs) ‘need to develop a stronger relationship with their home societies and deal with the needs of home-based supporters, as well as adding value to their own societies’. In other words we need to get political on domestic issues not yet policies impacting on the global South.
Fifthly and finally, we need to de-mystify markets and prioritise developmental needs over the financial sector rather than capital dictating the terms of human development. The financial sector, in tandem with the mainstream media and politicians, is continually and obsessively consumed with placating and ensuring the wellbeing of ‘the markets’. They are described in terms approximating the ethereal and treated accordingly with god-like reverence demanding financial (and thereby human) sacrifice, never fully satiated. The NGO sector needs to make clear that a human hand controls how we use capital and human needs should drive how we expend capital. This should be a central plank of development education’s response to the financial crisis.
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