Helen Clark: Building resilience to crises: inclusive growth and development

09 Oct 2010

Written Statement by Rt. Hon. Helen Clark
Administrator of the United Nations Development Programme and
Chair of the United Nations Development Group
At the Development Committee Eighty-Second Meeting
Washington, D.C. – October 9, 2010

A focus of attention at this meeting of the International Monetary Fund-World Bank Development Committee is to examine how resilient developing countries have been during the global crisis. The catalytic role which the IMF and the World Bank have been playing in assisting developing countries to build resilience through stepped up lending and policy advice should be commended. The United Nations development system has also been working on this issue as a priority.  

The United Nations development system has pooled its multiple assets to assist developing countries and vulnerable populations in addressing the impacts of the downturn, building resilience to future crises, and promoting more inclusive growth. For instance, the United Nations Environment Programme’s Green Economy Initiative, the International Labour Organisation’s Global Jobs Pact, and the United Nations’ Social Protection Floor Initiative all aim to build a fair and inclusive globalization which enables sustainable development for all.

The United Nations has also been developing a new system, Global Pulse, to monitor the early impacts of global crises on vulnerable populations. Decision makers usually face an information gap on what is happening on the ground when crafting policies to cushion the impacts of crises and build resilience. Global Pulse will fuse traditional statistical data drawn from the existing systems with new real-time information collected from mobile phones, social networks, and online media to develop a manageable set of Core Vulnerability Indicators.

Whereas both the Bretton Woods Institutions and the United Nations development system have made significant contributions to building developing countries’ resilience, more work needs to be done in collaboration on key development challenges.

The latest global economic crisis reminds us how vulnerable countries can be to external shocks.  Increased poverty, enlarging income inequality, and deteriorating health, nutrition, and education outcomes reflect the human costs of the economic downturn, especially for the poorest and most vulnerable in developing countries. Such challenges have to be tackled through strengthening developing economies’ resilience to crises. Strategies for achieving strong and sustained economic growth, reinforcing macroeconomic policy buffers, and building more effective social safety nets are vital, but on their own are not enough.

Economic growth needs to be inclusive and equitable to enhance developing countries’ resilience to crises, by creating job and income opportunities and enabling all to participate and benefit. More progress will be made on poverty reduction if growth is more inclusive and income distribution is fairer.

Economic inclusion also broadens opportunities in other areas such as access to education and health care, which in turn will contribute to inclusive growth in the future.

The United Nations development system and the Bretton Woods Institutions need to strengthen collaboration on helping developing countries to promote economic and social policies which are inclusive and do benefit the poorest.

Millennium Development Goals: Delivering on results by turning evidence into practice

Efforts to promote the economic recovery and achieve the Millennium Development Goals (MDGs) should complement each other. Meeting the MDGs has undoubtedly become harder in this era of multiple global crises, devastating natural disasters, and ongoing conflicts.  Yet, in the last decade, many countries – including the poorest – have made significant progress on a range of MDGs. Progress, however, has been uneven across the Goals, and across and within regions and nations.  

At the United Nations Summit on the MDGs in September, world leaders reaffirmed their commitment to the Goals. The Summit concluded with the adoption of an outcome document – Keeping the Promise: United to Achieve the Millennium Development Goals – which spells out specific steps to be taken by all stakeholders to accelerate progress on the MDGs, based on examples of success and lessons learned over the last ten years.

The message of the UN development system at the Summit was that the MDGs can be achieved. There is a wide range of proven policies which, adapted to national context, can ensure progress –where there is strong political leadership, an absence of conflict, good policy, sufficient capacity, and adequate and predictable funding for development.

In June 2010, the United Nations Development Programme released an International Assessment of what it will take to achieve the MDGs by 2015. Drawing on evidence of what has worked, the report provides an eight-point MDG action agenda to accelerate and sustain development progress over the next five years.

The eight points focus on inclusive growth; supporting nationally-owned and participatory development; targeted investments in social services like health and education; expanding opportunities for women and girls; social protection initiatives; enhancing access to energy; improving domestic resource mobilization; and stronger global partnerships for development.

A new tool, the MDG Acceleration Framework (MAF), has been designed, through which UN Country Teams can work with programme country governments to identify and overcome barriers to MDG achievement. The MAF was piloted in ten countries prior to the MDG Summit. Each of them chose particular off-track targets as their main focus area, and identified the constraints to faster progress, practical solutions to address them, and partners to implement those solutions.

Togo, one of the pilot countries, identified the lack of access to fertilisers improved seeds, and support to farmers as major obstacles to progress towards the poverty reduction MDG. The Government brought together a range of partners to identify the best solutions from within Togo and other countries facing similar challenges. They included introducing revolving loans and vouchers to help small farmers buy fertilisers and improved seeds, and increasing support, such as skills training, to small farmers, especially women.

The broader development community, including the United Nations, the World Bank and the International Monetary Fund, has embraced the MDG agenda. In supporting countries to turn the evidence of what works into actions which will accelerate MDG progress, the United Nations development system and the Bretton Woods Institutions should work together, each bringing their comparative advantage to where it will have the greatest impact across all the Goals. In this regard, the close collaboration between the United Nations and the World Bank on country level MDG acceleration and sustainability over the next five years will be of crucial importance.

Global economic governance reforms

The outcome of the United Nations Summit on the MDGs stressed the need for further reform and modernization of the international financial institutions to enable them to respond more effectively to and prevent financial and economic crises, promote development, and better serve the needs of Member States. World leaders reaffirmed the importance of enhancing the voice and representation of developing countries in the World Bank and the International Monetary Fund, and noted the progress being made on reform.

It is noted that governance reforms are underway at the World Bank to bring the share of developing countries at the International Bank for Reconstruction and Development (IBRD) to 47.19 per cent, representing a step in the right direction. At the International Monetary Fund, the ongoing reform, with a shift in quota share to under-represented countries of at least 5 per cent, is set to be achieved by January 2011. Governance reforms at the IMF also encompass changes at the International Monetary and Finance Committee, the Executive Board and in the management selection process.

The United Nations system should also consider how it might reform itself to play more effective roles in preventing and responding to global economic crises. The overall co-ordination role of the Economic and Social Council of the United Nations could be strengthened. The United Nations development system is being continually challenged to co-ordinate its efforts better across agencies in support of nationally-led and demand-driven development programmes.

While reform processes in the multilateral institutions are taking place, the G20 is evolving. It played a critical role in stabilising the world economy at a time of crisis, but needs to link more consistently with the formal multilateral institutions on tackling the highly interconnected, cross-border, and complex economic, social, and environmental challenges we face. These challenges require swift collective action and policy making from both developed and developing countries.