Globalization meets the Millennium Development Goals

Key messages • The adoption of the Millennium Development Goals (MDGs) at the turn of the century represented the successful inauguration of an effort to expand the focus beyond economic growth so as to encompass human development. As a result of rapid economic expansion and improved social policies in many developing countries, the MDG target of halving extreme poverty by 2015 globally had been reached by 2010. • The growth momentum, however, proved to be unsustainable. Growth in the global economy was largely fuelled by strong consumer demand in the United States of America, as funded by easy credit. This pattern of growth led to mounting global imbalances and overleveraged financial institutions, businesses and households. In the absence of effective policy coordination mechanisms for securing an orderly unwinding of global imbalances, global growth proved unsustainable. • In response to the episodic financial crises of the 1990s and 2000s, developing countries increased foreign reserves significantly as a form of self-insurance, a factor that increased the net transfer of financial resources from South to North. • One of the central objectives of economic development policy is to facilitate the structural transformation of countries towards diversification of production and exports. This remains central to any strategy for achieving sustained economic growth in developing countries.