This is a background paper to the DFID Conference on international development ‘Eliminating World Poverty: Building Our Common Future’. It does not seek to set out proposed responses but aims to provoke thought on the emerging challenges faced by developing countries and the rest of the world, and sets out a series of questions to address the priority issues.

In the most simple case, the global recession would prove to be sharp but short, and will leave untroubled a development model which has been strongly focused on the benefits of rapid globalization. International systems and policy frameworks will prove to be consistent with plans to tackle conflict and state fragility, climate change and other long term challenges. Business-as-usual may need to be modified slightly but will resume in fairly short order.

However, this outcome seems unlikely. An alternative response will likely be needed, one that is principled in its approach to policy; based on sound analytics; and robust in the face of uncertainty. The demands of the current crisis will be considered in this alternative, alongside the long term business of achieving inclusive and sustainable development. To be successful, the alternative will need to engage the public in both North and South, and offer a development ‘story’ with new resonance and new ambition.

The paper is organised into four parts. Part one briefly reviews recent progress in developing countries. Part two sets out the emerging challenges, both immediate and longer term. Part three sets out a series of questions for consideration in priority policy areas in response to the emerging challenges.

Overseas Development Institute and the Department for International Development