Transcript Lec 9.ppt

1. Re-Distribution with Growth (RWG)
2. Millennium Development Goals (MDGs)
Lecture 9
Re-Distribution with Growth (RWG):
The reports of ILO, World Bank and other international
agencies promoted this view that along with economic
growth there should be a fairer distribution of incomes.
Therefore, the economists present a set of four theories to
attain the combination of economic growth and fairer
distribution of wealth.
By following them individually or collectively the incomes of
lower classes can be increased.
However, how such methods will be implemented depends
upon the social and economic conditions of a country. 2
Theories or Methods of Income Distribution:
(1) To enhance the growth of GNP by raising the savings, and
allocate the resources in a better way so that all the
sections of the economy could be equally benefited.
(2) To take steps to get education, loans and other public
services for the poorest sections of the society.
(3) The fiscal systems of the countries be devised in such a
way that the distribution of income could move in favor of
the poor class.
(4) The existing assets of the countries be mobilized in favor
of the poorest class as the case of taking up Land Reforms.
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Components of RWG:
(1) As far as growth of GNP is concerned it is a necessary
condition to remove the poverty, but it is not a sufficient
condition.
Just depending upon growth it will require a greater time on
the part of the poor people to increase their incomes.
As there exists a weaker relationship between the incomes of
the poor people and the remaining economy, therefore, the
incomes of the poor class will always lag behind the overall
growth of the economy.
No doubt, the poor class will also be benefited as compared
with no rise in GNP, yet, to avail the better benefits due to
the strategy of growth of GNP, some package of
redistribution will have to be implemented.
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(2) As far as the matter of raising of the incomes of the poor is
concerned, govts. should invest in 'Human Resource
Development'.
No doubt, such investment in Man may have the effect of
decreasing the outputs for sometime and such investments
will not yield the quicker results, yet it will lead to increase
the productivity and incomes of the poor class in long run.
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(3) The redistributional policies will be consisting of taxing the
rich and exempting the poor from taxes.
Moreover, the poor class be provided with the subsidies in
consumption. This will improve the efficiency of the poor
class.
But in case of so many UDCs the income levels are poor and
they cannot be redistributed.
Moreover, taxing the rich for re-shuffling of income and
wealth may have a negative effect on savings and
investment.
Again, the rich in a country are a few, but they are very much
influential they would never allow to shift the resources
towards the poor.
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(4) As far as shifting the existing assets towards the poor is
concerned (through progressive system of taxation and
land reforms) they will also have the effect of bringing an
equality in the distribution of income. Particularly the land
reforms will provide protection to the tenants.
Consequently, their productivity and income will increase.
So many economists has criticized the RWG because it
stresses upon to follow an evolutionary path rather a
revolutionary way.
Moreover, this approach does not consider the political
change which is something very necessary for
'Redistribution', Again, this approach does not pay
attention over that resistance which will be displayed by
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the Rich Segments of the society.
Experience with Growth and Distribution:
Kuznets Curve or U-Shaped Curve: Regarding 'Growth and
Distribution' Simon Kuznets (1955) gave the following
views:
In the initial stage of economic development the issue of
distribution of income gets worsened.
But later on it is improved. On the basis of statistical data
Kuznets obtained an inverted 'U-shaped' curve.
Later on after Kuznets in 1976 Ahluwalia improved inverted
U-shaped curve on the basis of statistical data of 50 to 60
poor countries.
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Kuznets says that in the initial stage of economic
development the unequal income distribution is something
imperative.
It is so because that the population shifts from a stagnant
agri. sector to higher income modern sector.
The modern sector gives lower wages in the initial stage
because of the increased supplies of labor.
But with the passage of time when the population falls short
in agri. and backward sector the supply of labor decreases.
Now the industrial sector will be forced to pay them higher
wages.
Thus in the beginning the distribution of income becomes
unfavorable for the poor class, but later on it becomes
favorable for the poor class.
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Mexico and Brazil which heavily depended upon capital
intensive technology which did not absorb the labor who
migrated from agri. sector.
As a result, the growth in these economies (and even in
Pakistan during 1960's) led to concentration of wealth in a
few hands.
On the other hand Taiwan and Korea which depended upon
labor intensive technologies the growth led to distribute
the benefits to common man.
The inequality in income distribution in the initial stages of
development is also attributed to this fact that the demand
for skilled labor increased more than unskilled labor.
In this way, their wages increased more than unskilled labor.
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Again, in the initial stages of development for creation of
infrastructure etc., govts., have to spend more in the urban
areas.
This also led to raise the incomes of those residing in urban
areas In this way, the income inequalities grew between
the classes in the UDCs.
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Kuznets and other economists got the following results on
the basis of data regarding growth and distribution.
(i) The growth biased economies came into being like Mexico
and Brazil.
(ii) Sri Lanka which experienced a low growth rate but here
the distribution of income became fairer.
(iii) In case of Korea, Taiwan and former Yugoslavia the
higher growth rate was accompanied with fairer
distribution of income. In addition to Korea and Taiwan,
Israel, Singapore, Malaysia, Indonesia and Hong Kong are
also included in this group.
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The marvelous and remarkable performance of East Asian
Countries is attributed to the followings:
(i) The saving rates heavily increased due to better policies.
(ii) The labor force of these countries was found highly
efficient, dutiful and hardworking.
(iii) The govts. of these countries left no stone unturned to
encourage the entrepreneurs.
(iv) These countries laid heavy stress upon boosting their
exports.
(v) These countries did not hesitate in importing technologies
and knowledge etc.
(vi) These economies altered themselves in the purview of
world circumstances.
(vii) They attempted to maintain macro economic stability.13
MILLENIUM DEVELOPMENT GOALS
(MDGs)
A global agenda for development
MDG FRAMEWORK
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COMMITS INTERNATIONAL COMMUNITY TO AN EXPANDED VISION OF DEVELOPMENT
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PROMOTES HUMAN DEVELOPMENT AS KEY TO SOCIAL AND ECONOMIC PROGRESS
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CREATES GLOBAL PARTNERSHIP FOR DEVELOPMENT
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―
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CONSOLIDATES TARGETS ESTABLISHED BY INTERNATIONAL CONFERENCES INTO EIGTH
ESSENTIAL GOALS
FIRST SEVEN MUTUALLY REINFORCING, AIMED AT REDUCING POVERTY IN ALL FORMS
EIGTH GOAL – GLOBAL PARTNERSHIP FOR DEVELOPMENT – IS ABOUT MEANS TO ACHIEVE
FIRST SEVEN – “A GRAND BARGAIN”
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The Millennium Development Goals
Goals and Targets
(from the Millennium Declaration)
Indicators for monitoring progress
Goal 1: Eradicate extreme poverty and hunger
Target 1.A: Halve, between 1990 and 2015,
the proportion of people whose income is less
than one dollar a day
1. Proportion of population below $1 (PPP) per day[i]
Target 1.B: Achieve full and productive
employment and decent work for all,
including women and young people
1. Growth rate of GDP per person employed
2. Poverty gap ratio
3. Share of poorest quintile in national consumption
2. Employment-to-population ratio
3. Proportion of employed people living below $1 (PPP)
per day
4. Proportion of own-account and contributing family
workers in total employment
[i]
Target 1.C: Halve, between 1990 and 2015,
the proportion of
1. Prevalence of underweight children under-five years
of age
people who suffer from hunger
2. Proportion of population below minimum level of
dietary energy consumption
For monitoring country poverty trends, indicators based on national poverty lines should be used, where available.
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The Millennium Development Goals (cont.)
Goals and Targets
(from the Millennium Declaration)
Indicators for monitoring progress
Goal 2: Achieve universal primary education
Target 2.A: Ensure that, by 2015, children
everywhere, boys and girls alike, will be able
to complete a full course of primary
schooling
1.
Net enrolment ratio in primary education
2.
Proportion of pupils starting grade 1 who reach last
grade of primary
3.
Literacy rate of 15-24 year-olds, women and men
Goal 3: Promote gender equality and empower women
Target 3.A: Eliminate gender disparity in
primary and secondary education, preferably
by 2005, and in all levels of education no
later than 2015
1.
Ratios of girls to boys in primary, secondary and
tertiary education
2.
Share of women in wage employment in the nonagricultural sector
3.
Proportion of seats held by women in national
parliament
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The Millennium Development Goals
Goals and Targets
(from the Millennium
Declaration)
(cont.)
Indicators for monitoring progress
Goal 4: Reduce child mortality
Target 4.A: Reduce by two-thirds, between
1990 and 2015, the under-five mortality
rate
1. Under-five mortality rate
2. Infant mortality rate
3. Proportion of 1 year-old children immunised against
measles
Goal 5: Improve maternal health
Target 5.A: Reduce by three quarters,
between 1990 and 2015, the maternal
mortality ratio
1. Maternal mortality ratio
Target 5.B: Achieve, by 2015, universal
access to reproductive health
1. Contraceptive prevalence rate
2. Proportion of births attended by skilled health
personnel
2. Adolescent birth rate
3. Antenatal care coverage (at least one visit and at
least four visits)
4. Unmet need for family planning
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The Millennium Development Goals (cont.)
Goals and Targets
(from the Millennium Declaration)
Indicators for monitoring progress
Goal 6: Combat HIV/AIDS, malaria and other diseases
Target 6.A: Have halted by 2015 and begun
to reverse the spread of HIV/AIDS
1. HIV prevalence among population aged 15-24 years
2. Proportion of population aged 15-24 years with
comprehensive correct knowledge of HIV/AIDS
3. Ratio of school attendance of orphans to school
attendance of non-orphans aged 10-14 years
Target 6.B: Achieve, by 2010, universal
access to treatment for HIV/AIDS for all
those who need it
1. Proportion of population with advanced HIV infection
with access to drugs
Target 6.C: Have halted by 2015 and begun
to reverse the incidence of malaria and other
major diseases
1. Incidence and death rates associated with malaria
2. Proportion of children under 5 sleeping under
insecticide-treated bednets
3. Proportion of children under 5 with fever who are
treated with appropriate anti-malarial drugs
4. Incidence, prevalence and death rates associated
with tuberculosis
5. Proportion of tuberculosis cases detected and cured
under directly observed treatment short course
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The Millennium Development Goals (cont.)
Goals and Targets
(from the Millennium Declaration)
Indicators for monitoring progress
Goal 7: Ensure environmental sustainability
Target 7.A: Integrate the principles of
sustainable development into country
policies and programmes and reverse the
loss of environmental resources
Target 7.B: Reduce biodiversity loss,
achieving, by 2010, a significant reduction
in the rate of loss
1.
2.
3.
4.
5.
6.
7.
Proportion of land area covered by forest
CO2 emissions, total, per capita and per $1 GDP (PPP)
Consumption of ozone-depleting substances
Proportion of fish stocks within safe biological limits
Proportion of total water resources used
Proportion of terrestrial and marine areas protected
Proportion of species threatened with extinction
Target 7.C: Halve, by 2015, the proportion of
people without sustainable access to safe
drinking water and basic sanitation
8.
Target 7.D: By 2020, to have achieved a
significant improvement in the lives of at
least 100 million slum dwellers
10. Proportion of urban population living in slums[i]
9.
Proportion of population using an improved drinking
water source
Proportion of population using an improved sanitation
facility
The actual proportion of people living in slums is measured by a proxy, represented by the urban population living in households with at least one of the four characteristics: (a)
lack of access to improved water supply; (b) lack of access to improved sanitation; (c) overcrowding (3 or more persons per room); and (d) dwellings made of non-durable material.
[i]
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The Millennium Development Goals (cont.)
Goals and Targets
(from the Millennium Declaration)
Indicators for monitoring progress
Goal 8: Develop a global partnership for development
Some of the indicators listed below are monitored
separately for the least developed countries (LDCs),
Africa, landlocked developing countries and small island
Includes a commitment to good governance, developing States.
Target 8.A: Develop further an open, rulebased, predictable, non-discriminatory trading
and financial system
development and poverty reduction – both
nationally and internationally
Target 8.B: Address the special needs of the
least developed countries
Includes: tariff and quota free access for the
least developed countries' exports; enhanced
programme of debt relief for heavily indebted
poor countries (HIPC) and cancellation of
official bilateral debt; and more generous
ODA for countries committed to poverty
reduction
Official development assistance (ODA)
1. Net ODA, total and to the least developed countries,
as percentage of OECD/DAC donors’ gross national
income
2. Proportion of total bilateral, sector-allocable ODA of
OECD/DAC donors to basic social services (basic
education, primary health care, nutrition, safe water
and sanitation)
3. Proportion of bilateral official development assistance
of OECD/DAC donors that is untied
4. ODA received in landlocked developing countries as a
proportion of their gross national incomes
5. ODA received in small island developing States as a
proportion of their gross national incomes
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The Millennium Development Goals (cont.)
Goals and Targets
(from the Millennium Declaration)
Indicators for monitoring progress
Goal 8: Develop a global partnership for development (cont.)
Target 8.C: Address the special needs of
landlocked developing countries and small
island developing States (through the
Programme of Action for the Sustainable
Development of Small Island Developing
States and the outcome of the twenty-second
special session of the General Assembly)
Target 8.D: Deal comprehensively with the
debt problems of developing countries through
national and international measures in order to
make debt sustainable in the long term
Market access
6. Proportion of total developed country imports (by
value and excluding arms) from developing countries
and least developed countries, admitted free of duty
7. Average tariffs imposed by developed countries on
agricultural products and textiles and clothing from
developing countries
8. Agricultural support estimate for OECD countries as a
percentage of their gross domestic product
9. Proportion of ODA provided to help build trade
capacity )
Debt sustainability
10.Total number of countries that have reached their
HIPC decision points and number that have reached
their HIPC completion points (cumulative)
11.Debt relief
Initiatives
committed
under
HIPC
and
MDRI
12.Debt service as a percentage of exports of goods and
services
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The Millennium Development Goals (cont.)
Goals and Targets
(from the Millennium
Declaration)
Indicators for monitoring progress
Goal 8: Develop a global partnership for development (cont.)
Target
8.E:
In
cooperation
with
pharmaceutical companies, provide access
to affordable essential drugs in developing
countries
13. Proportion of population with access to affordable
essential drugs on a sustainable basis
Target 8.F: In cooperation with the private
sector, make available the benefits of new
technologies, especially information and
communications
14. Telephone lines per 100 population
15. Cellular subscribers per 100 population
16. Internet users per 100 population
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PROGRESS ACHIEVED
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HALVING EXTREME POVERTY REMAINS (ED) WITHIN REACH
LARGELY DUE TO EXTRAORDINARY SUCCESS IN MOST OF ASIA. BUT SOME IN
SOUTH ASIA AND SUBSAHARIAN AFRICA REMAINS OFF TARGETS
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GLOBAL ECONOMIC CRISIS COULD ENDANGER GAINS
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PROGRESS ACHIEVED (CONT.)
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OTHER SOCIAL GOALS – SOME PROMISE
 PRIMARY SCHOOL ENROLMENT
 90% REACHED IN EIGTH OUT OF TEN REGION
 GENDER PARITY 95% IN SCHOOL IN SIX OF TEN REGIONS
 DEATH FROM MEASLES CUT ONE THIRD 2000-2006
 VACCINATION RATE 80% FOR CHILDREN IN DEVELOPING WORLD
 1.5 BILLION PEOPLE GAINED ACCESS TO CLEAN DRINKING WATER
 ACCESS TO MEDICINES SPREADING
 THANKS TO DEBT WRITE OFFS AND REDUCED DEBT SERVICE, SOCIAL SERVICES SPENDING
UP
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CONTINUING CHALLENGES
―
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SOCIAL GOALS REMAIN IN JEOPARDY
MATERNAL MORTALITY STILL WAY HIGH (1/2 MILLION MOTHERS DIE EVERY YEAR AT
CHILD BIRTH)
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ONE QUARTER OF CHILDREN IN DEVELOPING COUNTRIES UNDERNOURISHED
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HALF DEVELOPING WORLD POPULATION STILL LACK IMPROVED SANITATION
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OVER ONE THIRD LIVE IN URBAN SLUMS
AND ON AND ON
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