HUMAN DEVELOPMENT REPORT 2005

1
(No Transcript)
2
Human Development Reports

• Annual report since 1990, created by Mahbub ul
  Haq with Amartya Sen, among others
• Addressing emerging development challenges from
  the human development perspective
• Using new measurement indicators
• Elaborating new dimensions
• Advocating new policies
• Independent report commissioned by UNDP, but not
  a statement of UNDP policy
• National reports since 1992 regional
  reportssince 1994

3
Agenda

• The argument
• Tracking past progress and mapping the future
• Inequality a navigation tool to guide policy
• Reshaping international cooperation
• Aid
• Trade
• Conflict

4
The world is at a crossroads but it can change
track

• On the eve of the World Summit, this years
  Report
• Reviews progress in human development over the
  past decade
• Highlights the human costs of missing the MDGs
• Identifies inequality as a brake on human
  development
• Focuses on three pillars of international
  cooperation aid, trade and security

5
Why international cooperation must take a
different path

• Without effective national policies there can be
  little progress
• But good national policies alone are insufficient
• New direction in international cooperation is
  vital for accelerated progress towards the MDGs
• Systemic advance, not piecemeal reform
• Aid progress with problems
• Trade problems with no progress at Doha
• Conflict tackling the barrier to human
  development

6
Agenda

• The argument
• Tracking past progress and mapping the future
• Inequality a navigation tool to guide policy
• Reshaping international cooperation
• Aid
• Trade
• Conflict

7
Human development has improved in most regions
8
But the human development record of the 1990s is
mixed
18 countries with 460m people had a decline in
their HDI in the 1990s
9
Income poverty reduction continuing but slowly in
the 1990s

• Poverty in the past decade fell at one-fifth the
  1980-96 rate
• Sub-Saharan Africa
• 100m people more people living on less than 1 a
  day in 2001 than in 1990
• Average incomes lower today than in 1990
• Central and Eastern Europe and the CIS
• Proportion of people on less than 2 a day
  increased from 5 in 1990 to 20 in 2001
• Since 1990 real per capita incomes fell by over
  10 in Kyrgyzstan, Russia, Ukraine over 40 in
  Georgia, Moldova and Tajikistan
• But recent economy recovery helped Russia halve
  poverty during 1999-2002

10
Life expectancy the great reversal

• Since 1960 life expectancy in developing
  countries increased by 16 years
• But most of the advance occurred before 1990
• Asia, Latin America and Middle East have been
  converging to rich country levels
• South Asia increased life expectancy by a decade
  in the last 20 years
• But SSA experienced reversals
• Gap between SSA and rich countries increased from
  24 years to 33 years in last two decades
• Life expectancy also fell in the CIS
• Russian males surviving up to 59 years today, on
  average, compared with 70 years in mid-1980s

11
Place of birth determines life-chances
12
The demographic shock of AIDS exceeds that of the
first World War
13
China and India Globalisations success stories
fail their children
14
We live in an unequal world the champagne glass
effect
Global income distribution is severely skewed

• Annual income flows of the richest 500 people
  exceeds that of the poorest 416 million
• Cost of ending extreme poverty 300 billion
  less than 2 of the income of the richest 10 of
  the worlds population

15
Child mortality the human cost
On current trends, the world will overshoot the
MDG target by 4.4 million additional and
preventable child deaths in 2015
16
The human cost of a world on auto-pilot
scenario 2015

• Compared with meeting the MDGs, in 2015 the
  world will have
• 4.4m additional child deaths
• 210m fewer people with access to water
• 380m more people living on 1 a day
• 47m children still out of school

17
Agenda

• The argument
• Tracking past progress and mapping the future
• Inequality a navigation tool to guide policy
• Reshaping international cooperation
• Aid
• Trade
• Conflict

18
Why inequality matters

• Social justice
• No society can be flourishing and happy if a
  greater part of its members are poor and
  miserable Adam Smith
• Focusing on the welfare of the poor
• Growth and efficiency
• Political legitimacy
• Accelerating progress towards the MDGs

19
Average income matters, but so does inequality
20
Inequality matters for poverty reduction

• If the income of the poorest 20 grew at twice
  the national average, it would shorten the time
  it takes the median household to escape poverty
  by
• 19 years in Brazil
• 15 years in Mexico
• Kenya
• If per capita income grew by 1 each year, it
  would not halve poverty until 2030
• Doubling the share of the poor in future growth
  could halve poverty by 2013

21
Chains of disadvantage - income inequality
affects human development for the poor
22
Health inequalities counteract wealth advantages
23
Human development inequalities in the fastest
growing economy - China
24
The two worlds of Mexican education
25
Women are often left behind - Pakistan
26
Focusing on inequalities can help prioritise
public policy

• MDGs are largely distribution neutral - they
  focus on national averages
• Therefore, the poor often disproportionately
  account for human development lags
• Child mortality rates among the poorest 20 are
  falling at half the average rate of decline
• Using the inequality lens can accelerate progress
  towards MDGs

27
The human development potential of pro-poor growth
28
Some effective steps for pro-poor growth

• Education for all increases efficiency and growth
• Reducing health inequalities increases
  productivity
• Income, employment and incentive-based fiscal
  transfers
• Land reform
• Public investment in rural infrastructure

29
Agenda

• The argument
• Tracking past progress and mapping the future
• Inequality a navigation tool to guide policy
• Reshaping international cooperation
• Aid
• Trade
• Conflict

30
The need to make aid more effective

• There was real progress at the Gleneagles Summit,
  but
• Too little aid is given
• Donors need to deliver on their pledges
• And they need to provide resources upfront
• Too much aid is poorly targeted
• And much is wasted through inefficient delivery

31
Richer but less generous
32
but performance varies
33
The aid donor league
34
Aid is not always given to the poorest countries
35
Debt diverts government resources
Debt as a share of revenue
36
Aid quality leaves much to be desired

• Predictability and volatility
• During 2001-03 the gap between commitments and
  disbursements exceeded 2 of GNI for 35 countries
  
• Conditionality
• Coordination
• On average, a country in SSA dealt with more than
  30 donors in 2002
• In 2002 Senegal hosted over 50 World Bank
  missions
• In 2003 Zambia hosted 120 donor missions
• Tied aid imposes a tax

37
The aid tax costs of tying aid
38
Can more aid be absorbed?

• Research suggests diminishing returns set in only
  at around 20 of GNI
• Large aid flows dont necessarily mean lower
  revenue generating capacity (Ethiopia)
• Dutch disease can be avoided if aid used for
  infrastructure, agricultural productivity and
  human capital (Ghana, Mozambique)

39
Effective aid for human development

• Reducing financing constraints for meeting MDGs
• Increasing economic growth
• Improving access to primary education (Tanzania
  and Kenya) and primary health (Uganda)
• Extending social insurance (Zambia)
• Supporting reconstruction (Timor-Leste, Sierra
  Leone)
• Combating global heath challenges with vaccines

40
Unlocking the potential in international trade

• Global interdependence a mixed report on human
  development
• Unfair rules favour developed countries
• Unlike aid, little progress in the Doha Round
• Beyond the rules commodities and supermarkets
• Capacity building for whom?

41
Developing countries exports have grown faster
42
but growth is largely concentrated in East Asia
43
Lowering tariffs is no magic bullet for growth
44
Trade can be a means to human development, but
results vary
Refers to national poverty lines
45
Perverse graduation in tariffs against the
poorest countries
46
Agriculture subsidies are the flashpoint in trade
negotiations
47
Subsidies welfare support for rich producers

• Three-quarters of CAP support goes to the biggest
  10 of subsidy recipients
• Richest 5 of US subsidy recipients get half the
  total subsidy

48
Subsidies hit where it hurts most

• Subsidised EU sugar exports lower prices by a
  third
• Losses for Brazil (494m), South Africa (151m)
  and Thailand (60m)
• In 2001 U.S. cotton subsidies cost Burkina Faso
  and Mali 1-3 of their GDP
• Fall in cotton prices increased Benins poverty
  rate from 37 to 59 in 2001-02

49
The policy space for developing countries is
shrinking

• Industrial policy rules are constrained
• Bilateral and regional agreements are pushing
  TRIPS-plus provisions in intellectual property
• Services negotiations have seen little progress
  on temporary movement of labour

50
Challenges beyond the rules

• The commodity crisis is threatening livelihoods
• Coffee retail sales increased from 30b in 1990
  to 80b in 2003, but coffee exporters recovered
  only 5.5b compared to 12b in 1990
• For every 2 in aid received by Ethiopia in 2003,
  1 was lost through lower coffee prices
• Supermarkets are the gatekeepers to developed
  country markets
• 30 chains account for one-third of global grocery
  sales
• But concentration of buying power influences
  prices
• Building capacity at the WTO and beyond
• Technical assistance suffers from donor-driven
  priorities, biased advice, underfunding, weak
  links to development strategies

51
How trade can deliver for the MDGs

• Lower peak tariffs to no more than twice the
  average tariff
• Give duty-free and quota-free access to SSA
  exports and other LDCs
• Relax rules of origin
• Prohibit export subsidies and limit production
  subsidies to 10 of the value of production
• Relax constraints on policies industrial policy,
  intellectual property legislation and mobility of
  labour
• Establish trade adjustment compensation fund
  providing 500m a year until 2015

52
Violent conflict Bringing the real threat into
focus

• Countries worst off on human development have
  also recently experienced violent conflict
• The challenge of conflict-prone states
• Regulating enabling factors natural resources
  and small arms
• Building regional capacity
• Supporting reconstruction with improved aid and
  institutions

53
Fewer conflicts since 1991
54
but security risks have shifted towards poor
countries

• Low income developing countries accounted for
  just over a third of all conflicts in 1946-89
• Over 1990-2003 low income countries accounted for
  more than half of all conflicts
• Africas share has increased

55
Violent conflict is a significant barrier to
human development

• Some of the worst human development performers
  have experienced conflict at some point since
  1990
• 22 out of 32 countries with a low HDI ranking
• 9 out of the 10 lowest HDI countries
• 7 out the 10 countries at the bottom of GDP per
  capita tables
• 5 out of the 10 countries with the lowest life
  expectancy
• 9 out of 10 countries with the highest infant and
  under-five mortality rates
• 8 out of the 10 countries with the lowestprimary
  enrolment ratio
• 9 out of the 18 countries that had a decline in
  their HDI in the 1990s

56
Beyond the bullets conflict has many costs

• Assets, income and growth
• In southern Sudan 40 of households lost all
  their cattle in the 20-year civil war
• The poverty rate in the Occupied Palestinian
  Territories jumped from 20 before September 2000
  to 55 in 2003
• Lost opportunities in education
• Half of all primary schools were destroyed in
  Mozambique during 1976-92
• Low-income countries that had conflict since
  1990 spent one-fifth less on education than
  their non-conflict counterparts

57
Beyond the bullets adverse consequences for
public health

• Diseases like AIDS spread more rapidly
• Health infrastructure destroyed
• Low-HDI countries in conflict in 2002 spent on
  average 3.7 of GDP on their militaries but only
  2.4 on health

58
Beyond the bullets displacement, insecurity and
crime

• Half of Chechnya's population is internally
  displaced
• Half of all women in Sierra Leone reportedly
  faced sexual violence during the civil war
• 250,000 child soldiers worldwide
• Colombia averaged 61 homicide victims annually
  per 100,000 people during 1998-2001 the United
  States averaged 5.7 homicide victims

59
The challenge of conflict-prone states

• Security gap
• Capacity gap
• Legitimacy gap
• About 46 fragile states around the world 35 of
  them were in conflict at some point since 1990

Conflict affected regions
60
Horizontal inequalities can create conflict

• Social and regional inequalities in Nepal
• Economic and political exclusion in Cote
  DIvoire
• Skewed development in oil-rich Aceh, Indonesia

61
Natural resources have fueled conflicts in many
countries
62
Regulating natural resource exploitation is a
priority

• Extend certification schemes beyond diamonds to
  oil and timber
• Make transparency directives mandatory
• Prioritise transparent budgeting
• Prosecute corrupt practices abroad by
  multinationals in their home countries

63
Controlling the small arms trade is another
priority

• 639m small arms worldwide kill 500,000 people a
  year one a minute
• The United States, Russia and China dominate
  production
• There is a need to extend the scope of
  sub-regional moratorium agreements
• Use the 2006 UN Small Arms Review Conference to
  establish an international arms trade treaty
  with binding commitmentson arms brokering and
  common standards of enforcement

64
Improved regional capacity means quicker response
to crisis

• In 2004 only 300 AU soldiers were deployed to
  protect 1.5m displaced people in Darfur
• Nigeria had to foot 90 of the costs of the
  ECOWAS intervention in Liberia 1.2b while
  other countries withdrew due to financial
  constraints
• The UKs intervention in Sierra Leone is
  estimated to yield benefits 8 times the
  investment over 10 years
• Donors must support the creation of a 15,000
  strong African Union standby force by 2010
  follow up on commitments made at the G-8 summit
• Regional early warning mechanisms will also be
  crucial to contain risks

65
Aid for post-conflict reconstruction politics
over need
66
Reconstruction needs long-haul commitments plus
delivery

• Match aid to need and make over the horizon
  commitments
• Use aid to promote conflict-sensitive development
  that reduces inequalities
• Establish a 250m peace-building fund to support
  short term reconstruction
• Repair infrastructure and provide credit for
  private sector recovery

67
Three simple messages from HDR 2005

• If we are serious about meeting the MDGs, a world
  on auto-pilot will not get us there
• We have to use inequality indicators as the
  navigation tools to prioritise public policy at
  the national level
• Beyond country-level policies, the three pillars
  of international cooperation aid, trade and
  security are interlinked
• Half measures will not work the world is at a
  crossroad to make that choice

68
Thank youhttp//hdr.undp.org