Transcript Document

Evolution of the MDGs:
Progress and Problems
Terry McKinley
Director, Centre for Development Policy & Research
School of Oriental and African Studies
Presentation at the LIDC Conference,
‘No Goals at Half-Time: What Next for the MDGs?’,
5 November 2008
1
Outline of Presentation
A Short History of the MDGs and their
Rationale
2. Progress on Goal 8, the Development
Partnership:
1.
A. ODA
B. Debt Relief
C. Trade and Development
3.
Current Challenges in light of the Financial
Crisis and Projected Economic Downturn
2
Some MDG Background
In September 2000, representatives of 189
countries (and 147 heads of state) met in New York
at the U.N. Millennium Summit
The agreed binding outcome of the Summit was the
Millennium Declaration
A U.N. working group later supplemented the
Declaration by devising a set of 8 Goals, which
were eventually formulated as 21 Targets, which
were measured by 60 Indicators
Although widely accepted and endorsed, the
targets are non-binding on UN member states
3
Some MDG Background
The MDGs are, in a sense, a Global Social
Compact, based on mutual accountability
Developing countries are held accountable for
outcomes, i.e., achievement of targets

So rich countries are motivated to provide more support
Rich countries are held accountable for
providing greater support, i.e., scaling up ODA,
providing more debt relief and allowing greater
access to their markets

So developing countries are motivated to adopt MDG
development strategies
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Advantages and Disadvantages
The MDG framework adopts a broad Human
Development approach: hunger, health,
education, gender equity, environmental
sustainability
It accords a greater role to the public sector and public
investment in particular (which had been lacking)
But ODA is emphasized as a part of a ‘Big Push’,
money-centric strategy of development
Some advocates regard global goals and targets as
uniformly nationally applicable (fostering ambition)
A tendency to adopt uniform interventions across
countries and stress ‘quick wins’ (e.g., bed nets)
5
Some Recent History
The U.N. Millennium Project, led by Jeffrey Sachs,
has been instrumental in the MDG campaign (the
Project is now part of UNDP)
It presented its report, Investing in Development, as
an input into the 2005 U.N. World Summit
 Countries agreed to adopt ‘comprehensive national
development strategies’ to achieve the MDGs
(superseding World Bank PRSPs)
 The dominant priority was to conduct a comprehensive
Needs Assessment or costing exercise (determining the
scale of additional resources needed to achieve the
MDG targets across each sector)
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Some Recent History
The Costing exercises have tended to
dominate early activities at the national level
Production of an aggregate ‘development
bill’ to attain the MDGs, which external
donors are expected to endorse.
 A tendency to underplay the importance of domestic
resource mobilisation (e.g., taxation, savings)
 Many low-income countries are assumed to be stuck
in a ‘poverty trap’ (thus, the need for an external ‘Big
Push’.
 Little real discussion of macroeconomic and
structural adjustment policies or posing of economic
policy options
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Are the MDGs Too Ambitious?
At the global level, they were not set to be
exceedingly ambitious
1) They cover a long 25-year period (from 1990 to
2015, not from 2000)
2) Targets were set to be realistic, since they were
based on trends prior to 1990
But as 2015 draws closer and progress in the 1990s
appears to have been too slow, targets do appear
to be increasingly ambitious
A sharp acceleration of progress is needed but a
global economic downturn appears imminent
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Progress on Goal #8:
The Global Partnership for Development
Few targets were set for Goal #8 (because they
would have obligated rich countries):

General Injunctions:
Give more generous ODA for countries
committed to poverty reduction: The ODA
benchmark of 0.7% of rich-country GNI has remained
prominent though not explicitly a target


Deal comprehensively with the debt problems
of developing countries
Develop an open, non-discriminatory trading
and financial system
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Official Development Assistance
Goal of 0.7% of GNI: only Denmark,
Luxembourg, the Netherlands, Norway & Sweden
The weighted average of the 22 member
countries of the DAC of the OECD: 0.28%
Only Belgium, Ireland and the UK give at
least 0.15-20% of their GNI to Least
Developed Countries
Aid flows climbed steadily after 1997, a low
point, until 2005, but dropped in 2006 & 2007
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Recent Declines in ODA
Total ODA Trends
140
$130.0
120
$107.1
$104.4
$103.7
2005
2006
2007
US $ in Billion
100
80
60
40
20
0
2010
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Commitments on Raising ODA
The 2002 World Summit on Sustainable Development
and the International Conference on Financing for
Development called for ‘concrete efforts towards the
target of 0.7% of GNI’
G8 leaders at the 2005 Gleneagles Summit
committed to 1) providing an extra $50 billion in ODA
by 2010 (compared to 2004) and 2) doubling ODA to
Africa from $25 billion to $50 billion.
 US net ODA in real terms fell by almost 10% in 2007, Japan net
ODA fell by about 30% and EU-15 net ODA fell by about 6%
 In 2005-2006 Net ODA remained higher because of debt-relief
initiatives for Iraq and Nigeria.
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Commitments on Raising ODA
The combined pledges of ODA implied an
increase from $80 billion in 2004 to $130
billion in 2010.
But during 2004-2007 net ODA from DAC members
increased annually by half of that amount.
So DAC net ODA would have to increase by at least
$13 billion a year until 2010 to compensate for early
shortfalls (measured in constant 2004 $).
Net ODA to Africa would have to increase by over $6
billion a year in order to double by 2010.
One positive sign: non-DAC members increased
ODA from $1.5 billion in 2000 to $5.1 billion in 2006
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Progress on Debt Relief
Important progress has been made on debt
relief:
 23 of the 41 Heavily Indebted Poor Countries (HIPC) had
reached the completion point by mid 2008 and 10 others had
reached the decision point
 The average debt-service to export ratio fell from 13% in 2000
to 6.6% in 2006.
 This has been due, in part, to debt
cancellation:
 HIPC mandated debt reduction to sustainable levels.
 It had provided about $48 billion debt relief by 2006
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Progress on Debt Relief
 The G-8 Multilateral Debt Relief Initiative in 2005
(World Bank, IMF, ADB and IDB): Provided full debt
relief for eligible countries – about $21 billion in
relief by 2006
 Debt reduction has also been due to an export boom
in commodities and increased global growth.
But 21 Heavily Indebted Poor Countries are
still considered to be at moderate-to-high
risk of falling back into debt distress
This risk is being heightened by the financial
crisis, falling commodity prices and
projected falling exports to rich countries
15
Improved Market Access for
Developing-Country Exports
There has been little progress on broadening market
access
The collapse of the WTO Doha Round on Trade and
Development
 The share of rich-country imports from developing countries admitted
duty-free increased only marginally between 2000 and 2006
 Average tariffs on agricultural products imported into rich countries
remained virtually unchanged
 One factor alleged to be behind the food crisis affecting developing
countries has been domestic agricultural subsidies and tariff
protection in rich countries
 Rich-country support to domestic agriculture stood
at $372 billion in 2006—more than three times the
ODA that they provided to developing countries
16
Total ODA versus
Total Agricultural Support
Total ODA
Total agricultural support
450
388
400
350
372
323
300
250
200
150
104
100
79
54
50
0
2000
2004
2006
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Confronting Financial Crisis
and Recession
Assuming a recession in the US and
other OECD countries:



1.
What will be the effect on developing-country
growth, human development and poverty?
Example: earlier this year we modelled an
imminent US recession and continuing expensive
oil and made projections until 2015
The Results for 2008-2015:
US yearly growth was -0.2%, W. Europe’s
1.4%, and Japan’s 2.2%
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Confronting Financial Crisis
and Recession
2. China’s growth was 4.6%, India’s 3%
and the rest of developing Asia 4.7%
3. Latin America’s growth was 2.1%, the
CIS’s (Russia’s) 2.5% and the Middle
East’s 0.7%
4. S. Africa’s growth was 2.9%, lowincome African oil exporters 1.5% and
low-income African oil importers a
negative 1.2%
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Confronting Financial Crisis
and Recession
Hypotheses:
 Asia will maintain some growth momentum
 Regions tied closely to the US or reliant on
oil exporting will grow much slower (they will
also lose most in relative terms)
 Low-income Africa will suffer the most:
negative growth and rising poverty and
human deprivation
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Maintaining Momentum
Against Poverty
A campaign to prevent the financial crisis
from being used as an excuse to break
promises on reducing global poverty
On October 17-19, across the globe almost 117
million people in over 2,000 events supported the
campaign ‘Stand Up and Take Action against
Poverty and for the MDGs’
In response to the ‘bail-out’ of financial
institutions, a more redistributive focus is gaining
broad support: protect low-income households
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Maintaining Momentum
Against Poverty
The focus should remain on sub-Saharan
Africa, where deprivation will be most severe
Confronting the ‘trade-offs’ in allocating
tighter budgetary resources:
 Giving the MDGs the highest budget priority
 Safeguarding gains on health and education
 Accelerating debt relief
 Reducing rich-country agricultural support,
which would benefit low-income countries
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Maintaining Momentum
Against Poverty
Making ODA more effective:
ODA remains greatly fragmented and sectoral
The need for more coordination and
harmonisation
The need for more cross-sectoral, integrated
initiatives, which will create synergies and
externalities
This highlights the potential contribution of
LIDC’s work
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