Vital Systems Security

Today the World Bank issued a statement advocating the formation of what they are calling a “Vulnerability Fund” for developing countries hit particularly hard by the economic crisis. The Bank says that the purpose of the Fund would be to “help developing countries that can’t afford bailouts and deficits.” The resources in the fund would go to classic stimulus measures: infrastructure projects, safety net, and finance for small and medium sized businesses. 

There are a number of notable elements in this proposal. One, of course, is simply the name: Vulnerability Fund. At one level, there is absolutely nothing new or interesting about the structure of this project. Many programs that were meant to respond to financial crisis also included this kind of spending — even the earliest structural adjustment programs had emergency social spending in them (including the infamous programs in Bolivia, where Jeffrey Sachs first came crashing onto the international scene). And yet, it seems to me that there is something new here. As I have written in my book on Russia, the initial problematization of structural adjustment was very much oriented to the idea that, yes, in the short term, there is a need for emergency financing for countries that have been buffeted by external shocks. But the fundamental problem was thought to be structural rigidities in the institutions of these countries themselves. Curiously, that does not seem to be part of the current discussion. “Vulnerability” really just designates fiscal incapacity — the inability to raise emergency funds — not structural problems with the organization of the economy. Whether that is the product of short term crisis or a longer term shift in problematization will be interesting to watch.

One other note: A student of mine at the New School has been working on the emergence of vulnerability as a classification for small island nations trying to qualify for development aid in the United Nations. Previously, country qualifications were based purely on current levels of socio-economic development (poverty rates, education rates, etc.). But these countries — which are vulnerable to both natural disasters and economic shocks — are arguing that vulnerability should be a separate qualifying criterion. In any case, another corner of international development practice in which vulnerability seems to be gaining significance.