Helen Clark: Statement to the Development Committee

16 Apr 2011

Helen Clark, Administrator of the United Nations Development Programme (UNDP) and Chair of the UN Development Group
Statement to the Development Committee
Washington, D.C.

The uneven global recovery and associated development challenges

Recent indicators suggest that the recovery from the global economic crisis remains fragile and uneven. High public debt levels have pressured many developed countries into abrupt policy shifts towards fiscal austerity. Unemployment and job insecurity are a concern in all parts of the world, particularly for young people. The financial sectors of a number of developed countries remain fragile with continued strains on credit availability.

These factors not only put economic recovery in developed countries at risk, but also negatively affect the prospects for sustained progress in developing countries. In particular, the renewed rise and greater volatility in food prices are making the world’s poorest people acutely vulnerable.

As well:

  • high levels of political and criminal violence are affecting stability and growth prospects within countries and across regions, and
  • the climate change challenge reminds us that human development can only be sustained if our planet’s natural limits are respected.

Despite this difficult context, the international community’s commitment to help countries achieve the Millennium Development Goals by 2015 should remain resolute. A more just and equitable world will also be a more stable and secure world. While it is encouraging to see that aid flows from donor countries increased to their highest levels in 2010, looking ahead there is cause for concern as aid flows are projected to increase at a much reduced pace.

Inclusive growth for development

In the outcome document from last year’s MDG Summit at the UN General Assembly, the importance of inclusive growth was recognized by Member States. High rates of economic growth per se do not always serve to reduce poverty. To be inclusive, growth and its distributional impact need to be more broadly based.

A response to the food price crisis of 2007-2008 was renewed recognition of the need to re-invest in agriculture and the rural sector, which is crucial since 2.5 billion people in developing countries depend on agriculture for their livelihood. That would certainly promote inclusive growth. Now, however, prices for a range of food commodities are approaching the peak levels of 2008 with serious implications for consumers. Wheat, maize, soybean oil, and sugar prices, for example, have increased markedly since mid-2010, although fortunately there has been a shallower rise in the price of rice.

With higher food prices, many poor families are faced with tough and life-threatening choices around the most basic of human necessities. The fundamental right to be free from hunger is being breached for many.

The combined effects of earlier food price increases and the global economic crisis led to the number of chronically hungry people in the world surpassing one billion in 2009 according to FAO estimates. The FAO forecast for 2010 was for 925 million people living in chronic hunger.

Meanwhile, the World Bank has calculated that 44 million more people were pushed into extreme poverty because of the renewed surge in food prices from June to December 2010. Although the impacts are felt most in low-income countries, the greatest number of people being pushed into poverty by higher food prices live in middle-income countries.

Through the Secretary General’s High Level Task Force on the Global Food Security Crisis, the combined strengths of the UN system and the BWIs have been brought together to look at how best to address these problems.

More needs to be done to reduce undue pressure and volatility in global food markets, and in helping countries and populations to cope. Empowering small farmers through improved rural infrastructure and access to tenure rights, technology, and credit also helps ensure greater food security, lowers pressure on food prices, and underpins the living standards of the rural poor.

While the need for action in these areas was recognized at the 2008 High Level Conference on the Food Crisis in Rome and the 2009 G8 Summit in L’Aquila, there has been slow delivery on the pledges made to provide $10 billion per year more in official development assistance for fighting hunger and $20 billion for improving food security in a sustainable manner. The rise in poverty and the social unrest caused by higher food prices is a reminder that delivery on these pledges is important.

Fortunately there is renewed interest in social protection as a means of cushioning the blows from crises, with many countries in the South having experiences to share. Cash transfer programmes, such as those in Brazil, Colombia, Mexico, and Turkey, have variously helped to reduce poverty, improved access to healthcare, and/or encouraged families to keep children in school. Public employment schemes – such as the National Rural Employment Guarantee Scheme in India – have helped to ensure a minimum floor of wellbeing, which is so important for social cohesion and inclusion.

Investments in health, education, and infrastructure will also enable more inclusive growth. Those infrastructure investments should target the building of both hard networks for transport, power and communications and the soft infrastructure of institutions and capacities.

Economic co-operation and integration, and the commitments which countries have made on Aid for Trade, can help build productive capacities for sustained and inclusive growth. These issues will be before the Fourth UN Conference on Least Developed Countries (LDC IV) to be held in Istanbul in May.

Inclusive governance and overcoming fragility

Recent events in the Arab states remind us that economic and political exclusion can be a combustible combination. More inclusive approaches are needed to foster the long term peace and stability needed for sustained development.

The 2011 World Development Report (WDR) focuses on the importance of stability and security for development. It challenges us all to revisit and strengthen our responses to fragility and recurrent conflict.

Justice and the rule of law are highlighted in the WDR as critical to those responses. The WDR also focuses on the importance of generating employment in the immediate aftermath of crisis and conflict.

In 2008, the UN adopted its Global Policy on Post-Conflict Employment Creation, Income Generation, and Reintegration. It provides a good basis for strengthening UN response capacities, in particular on emergency employment activities, such as “cash for work”, in close co-operation with government partners and other development partners, including the WB.

The WDR’s emphasis on the importance of strong co-operation between the UN and the World Bank is welcome. The UN also appreciated being involved during the preparation of the report. The existing Partnership Framework from 2008 provides a good basis for our co-operation, but it has yet to be implemented in the way originally envisaged. The WDR challenges us both to review and reinvigorate this partnership.

As developing countries integrate further into the global economy so they also seek fair representation in systems of global governance. The ongoing governance reforms of the World Bank and the IMF are to be welcomed. It will be important for the G20 to continue to interact with the broader multilateral system to ensure that the interests of those beyond its ranks are not excluded from consideration. The universal membership and legitimacy of the United Nations gives it an important role to play in this regard.

Sustainable human development

Sustainable human development seeks to ensure people’s right to enjoy a decent standard of living while also respecting our planet’s natural limits. The 2012 UN Conference on Sustainable Development (UNCSD), or Rio+20, provides an opportunity to discuss how the world community can achieve that equilibrium.

That will require a transition to cleaner, low-carbon, and more climate-resilient economies, which can support growth, contribute to poverty reduction, and enlarge people’s choices and freedoms. Both North and South need to commit to such a transition. Developing countries will need support in their efforts to meet this challenge.

The multilateral system can facilitate access to the knowledge, technologies, and funding which will make the transition to greater sustainability feasible for developing countries. A good example of co-operation can be found in the partnership between the UN-REDD consortium of agencies and the World Bank in implementing the REDD+ agenda.

Conclusion

Even with impressive development progress over the last decade, many people have been left behind. Global crises have resulted in set-backs. The current hike in and volatility of food prices add to the vulnerability of those living on the frontline of poverty.

These challenges, however, should not lower our ambition to support developing countries to achieve the Millennium Development Goals. By supporting the promotion of more inclusive societies, economies, and governance systems, and by respecting the earth’s natural limits, we can bring about the transformational change so urgently needed for those Goals to be met.