Geneva, 9 June 2010 - Development specialists told the Trade and Development Board (TDB) this morning that the Millennium Development Goals (MDGs), including their poverty reduction targets, can best be accomplished by steps to empower the productive sectors of developing-country economies.
That way, experts said, jobs can be created and domestic businesses and markets can do the heavy work of raising living standards broadly throughout the world´s poorer populations. Moreover, they said, poverty reduction accomplished that way is more likely to last over the long term.
Today´s discussion was held to fine-tune UNCTAD´s contribution to a high-level review of the MDG campaign to be conducted by the United Nations General Assembly in September.
Led by UNCTAD Secretary-General Supachai Panitchpakdi, speakers said the approach taken so far to achieve the MDGs -- and the focus of development aid for the past 20 years -- has been skewed too far towards social and health concerns. Although vital, these components of well-being do not thrive sustainably without a firm economic underpinning, they said.
"We have to have a balanced treatment of economic and social concerns," Mr. Supachai said. "Growth is a means towards human development -- the purpose is not economic growth for its own sake, but you need it. You have to have coherence between these social, education, and economic goals."
The recent, recession-caused reversal of some countries´ progress towards the MDGs suggests that trying to reduce poverty without building a strong economic foundation makes it hard to sustain the gains achieved, speakers said. Developing countries were "innocent bystanders" of the world financial crisis, the Secretary-General said, yet were badly hurt by it. With stronger domestic economies and internal markets, they would be less vulnerable to global economic fluctuations.
Mr. Supachai stressed that decades of hard-won experience on what makes countries wealthy show that more has to be done to harness domestic resources and ensure that economic growth delivers fairly equal benefits to domestic populations. He said governments should strive to be "enabling States" that take active roles in their economies and steer investment and other resources towards broadening productive abilities, including increases in manufacturing. And he said the targeting of official aid to poor nations should be adjusted. The share of aid focused on economic services and production sectors over the past 20 years has declined, he noted.
Rob Davies, Minister of Trade and Industry of South Africa, told the meeting that his country´s new development strategy is to promote and accelerate domestic economic progress and diversification that generates new jobs, in the wake of an unemployment rate that has hovered for years between 22-and-25%. That requires "a purposeful government intervention in the industrial economy," he said. "Trade policy must support industrial development, employment growth, and exports of sophisticated value-added products" - that is, improvements to South Africa´s productive abilities.
Nila Moeloek, Special Envoy on the MDGs of the President of Indonesia, said there has been a "mixed level" of progress in the country. The first MDG -- halving extreme poverty -- already has been met. But challenges involved in reducing child mortality and improving maternal health have proved more difficult. The government has included strategies for meeting the MDGs in its medium- and long-term economic development plans, Prof. Moeloek said. Such plans include efforts to spur the development of small- and medium-sized firms - enterprises vital for broad economic growth and job creation, especially among the poor.
Philippe Egger, Deputy Director of the Office of the Director-General of the International Labour Office (ILO), said the ILO recommends "a re-thinking of the strategy" behind the MDGs. Countries that have made durable progress in reducing poverty have done so by rapidly increasing economic output; by spurring strong growth in labour-intensive sectors, especially agriculture and industry; and by strengthening programmes to improve such social factors as health and education, he said. A critical factor appears to be the creation of new jobs, especially jobs that result in more sophisticated products, as salaries for such work are higher. The strategy for achieving the MDGs should emphasize these elements, he said.
TDB President Jean Feyder told the meeting that broad domestic economic progress in poor countries requires that "the State should play an active, dynamic, and even vital role, especially in the establishment of productive capacities." Overall, he said, "progress towards the Millennium Development Goals has not really been very impressive."
A representative of Cuba, speaking on behalf of the Group of 77 and China, said it is vital to achieve the MDGs to enable "the bottom billion" to escape poverty. There is a need for more equitable and inclusive global economic relations, and the MDGs should be considered part of "a broader development objective" involving widespread economic growth and reductions "in global inequality in the distribution of wealth."
A representative of Egypt, speaking on behalf of the African Group, said there should be a "holistic approach" to development and economic growth, and the strategy for achieving the MDGs should reflect such an approach. Further steps should be taken to help developing countries, especially the least developed countries (LDCs), to compete in global markets, obtain useful technology, and reduce their dependence on both foreign debt and foreign aid over the long term.
A representative of Bangladesh, speaking on behalf of the Asian Group, said unless comprehensive progress is achieved in all economic and social sectors, any progress made in particular sectors will not be sustainable. The economic growth required throughout Africa, Asia, and Latin America to underpin progress towards the MDGs has not been accomplished. Poverty, especially among women and children, is still at unacceptable levels.
A representative of Costa Rica, speaking on behalf of the Group of Latin American and Caribbean Countries (GRULAC), said the global recession recently has reversed some of the gains made in the region towards the MDGs. South-South cooperation should be promoted to increase trade between developing countries and to spread useful technology. And countries in the region should strive to strengthen their tourism sectors to help boost their economies as the recession plays out.
A representative of Spain, speaking on behalf of the European Union and its member countries, said building developing countries´ productive capacities "is an important factor that contributes to a more sustainable basis for attaining the MDGs" and should help create employment. The representative said the Aid for Trade programme can play an important role "in supporting productive capacity-building" by helping developing countries increase international trade.
A representative of Nepal, speaking on behalf of the LDCs, said the MDG campaign so far has shown "that development is not attained through a disconnected process in one particular sector." Although some progress has been made, the number of people living in absolute poverty recently exceeded 1 billion for the first time. And advances in many LDCs have been fuelled by remittances from family members working overseas, rather than by domestic economic progress.
And a representative of Paraguay, speaking on behalf of the landlocked developing countries (LLDCs), said such countries´ "inherent geographical disadvantage" hinders their efforts to reduce poverty and meet the MDGs. The recent global economic crisis has cost many LLDCs "hard-won progress." Increased support from the international community is vital for helping them to reinvigorate efforts to achieve the MDGs.
At an afternoon panel discussion, David Nabarro, Special Representative of the United Nations Secretary-General on Food Security and Nutrition, said "all the MDGs can only be realized if people have sufficient food." Long-term solutions to the food crisis that erupted two years ago will require structural change in the world´s poorer countries, including significant long-term investment in agriculture. Governments need more "policy space" to take the steps needed, Mr. Nabarro said.
Talal Abu-Ghazaleh, Chairman of the UN Global Alliance for Information and Communication Technology and Development (GAID), said GAID´s new mandate is focused and simple - how to advance the achievement of the MDGs through information and communication technology (ICT). ICT can play a great role in development, including economic development, through its ability to spread knowledge and technology and provide borderless business opportunities, he said.
Martin Khor, Executive Director of the South Centre, said "the MDGs are a destination, but they´re not a road map to where we want to go." Economic growth and international factors affecting developing countries should be part of the road map, Mr. Khor added. There needs to be a mix between free markets and government participation in domestic economies to ensure sustainable rises in living standards.
Stress should be placed on improving productive capacities and creating jobs.
And Richard Kozul-Wright, Officer-in-charge of UNCTAD´s Unit for Economic Cooperation and Integration among Developing Countries, said the recent financial crisis "reconnects the developed world to the challenges facing developing countries: sovereign indebtedness, the challenge of diversifying into higher-value-added industries; and resisting the capture of the State by narrow (financial) interests." The way forward is similar for both categories of countries, he said, and "it is important that a forward-looking MDG agenda build on these shared challenges."
