Tackle Inequalities for Rapid Progress on Millennium Goals, Says HDR 2005

07 Sep 2005

New Delhi, 07 September 2005 - Economic take-off in India has created the potential for accelerated poverty reduction. India must now show the same level of dynamism and innovation in tackling basic health and education inequalities as it has displayed in global technology markets to rapidly get on track for achieving the Millennium Development Goals targets. This is stated in the Human Development Report (HDR) 2005. The United Nations Development Programme (UNDP)-commissioned Report was released by the UNDP Resident Representative and UN Resident Coordinator, Dr. Maxine Olson, in the presence of an eminent panel including Dr. Syeda S. Hamid and Prof. Abhijit Sen, Members of Planning Commission and Mr. Jairam Ramesh, Member of Parliament, here today. The release coincides with the Global Launch of the Report in New York by the new UNDP Administrator Mr. Kemal Dervis.

The Report, released just a week ahead of the World Summit convened by the United Nations in New York to review progress towards the Millennium development Goals (MDGs), shows that while there has been overall progress globally, many individual countries are not making the progress needed to achieve the MDGs by 2015.The Human Development Report 2005 argues that extreme inequality, existing both between and within countries, is a brake on progress towards the MDGs and wider human development goals. The Report warns that some of the most highly visible globalization ‘success stories’ including China and India are failing to convert wealth creation and rising incomes into more rapid progress on the social indicators. If India closed the gender gap in mortality between girls and boys ages 1-5, that would save an estimated 130,000 lives, the Report says. Reducing gender inequality would have a catalytic effect on reducing gaps in primary education between girls and boys. That effect, the Report notes, could be especially pronounced in South Asia, where gender inequality is most deeply entrenched. Eliminating gender inequality could reduce the underweight rate among children less than three years old by 13 percentage points in South Asia, equal to 13.4 million fewer malnourished children. The Report points out that at a lower level of income and with far lower growth, Bangladesh has overtaken India in its progress on some of the critical MDGs. Had India matched Bangladesh’s rate of reduction in child mortality over the past decade, 732,000 fewer children would die this year.

India made progress on the Human Development Index (HDI) value that has gone up from .595 in last year's Report to .602 in HDR 2005. On HDI ranking, India is again ranked at 127 this year against a total of 177 countries comprising the universe for which data is available this year. India's rank on the Human Poverty Index (HPI-1) is 58 in a universe of 103 developing countries. On the Gender Development Index (GDI) India's rank is 98 in a universe of 140 countries.Speaking on the occasion of the India release of the HDR 2005, Dr. Olson said the Report draws attention to the fact that without the required investment and political will, there is every chance that the MDGs will not be met by 2015. She said the Report calls for a comprehensive overview of international development assistance, looking at both its quantity and quality. The Report describes international assistance as an investment and a moral imperative, Dr. Olson added. The Report warns against complacency while pointing to positive developments since the 2002 Monterrey Conference on financing for development, culminating in the July 2005 G-8 Gleneagles pledge to increase aid by $50 billion over last year’s levels.

Education is a crucial human development goal in its own right and a key to progress in other areas. The report warns that if current trends continue the promise to get every child into school and to close gender gaps in education will not be met. The MDG targets for gender parity in primary and secondary enrolment were supposed to be met by 2005. Had that target been achieved, there would be 14 million more girls in primary school today, 6 million of them in India and Pakistan.While pointing out the magnitude of the work required to achieve the MDGs, the Report takes note of some of the recent social investment initiatives launched by the Government of India including the $1.5 billion National Rural Health Mission, a programme targeting some 300,000 villages and the commitment to raise public health spending from 0.9 per cent of national income to 2.3 per cent; increased allocations to education and ambitious public investment programmes for provision of drinking water, energy and roads.

The Report cites the three year pilot project in Maharashtra covering 39 villages extended basic antenatal care programmes through home-based care provision and simple clinical interventions costing $ 5 per person covered. The infant mortality rate fell from 75 deaths per 1,000 live births in the same baseline period (1993-95) to 39 three years later. The mortality rate in an adjacent district declined only from 77 deaths per 1,000 live births to 75 over the same period.Calling for strong pro-poor policies and job-led growth to spur progress on the MDGs, the HDR 2005 notes that for India a tax to revenue ratio of only 10 per cent constrains the Government’s fiscal capacity to redistribute to the poor the benefits of higher growth.On the role of international trade in accelerating progress on the human development agenda, the Report calls for fairer trade rules in favour of developing countries and for a cut in agricultural subsidies by developed countries. For the authors, the problem at the heart of the Doha Round negotiations can be summarized in three words: rich country subsidies. The Report says price distortions from export subsidies have a direct impact on smaller producers. Between 2002 and 2003, rice grown in the United States at a cost of $ 415 a tonne was exported at $ 275 a tonne. Suffering from this ‘perverse taxation’, rival rice exporters such as Thailand and Vietnam have to adjust to this unfair competition.

The Report highlights the critical role of industry and technology policy in enabling countries to climb into higher value-added areas of world trade. The HDR 2005 acknowledges the benefits of import liberalization as part of a wider strategy for poverty reduction and increased growth. It, however, provides new evidence challenging the claim that openness in itself is always good for growth. The Report cites the example of India emerging as a global force in the auto components sector, with output at $4.2 billion in 2001 and exports worth $ 800 million. A combination of rules for higher domestic content in manufacturing and high import barriers created an incentive for foreign investors to locate in India and build alliances with local firms, the Report notes. The report observes that in addition to facing high barriers in developed countries, developing countries impose high trade barriers on each other. Average tariffs on low-and-middle-income countries exporting to South Asia are more than 20 per cent, says the Report. (ends).