Fragile economic and development outlook
Helen Clark, Administrator United Nations Development Programme and Chair of the UN Development Group
Washington, D.C. September 24th, 2011
The world economy is at a critical point. Economic growth has remained relatively robust in many developing countries, particularly in emerging economies. Economic uncertainty, sustained economic imbalances, and continued financial sector fragility in developed countries, however, pose serious risks for global economic recovery and growth.
Current pressures indicate the need for more effective macroeconomic policy co-ordination at the international level.
Volatility in commodity markets complicates macroeconomic policy-making and investment decisions. As well, there are the ongoing significant development challenges posed by climate change, natural disasters, insecurity, and conflict.
The Horn of Africa has been experiencing its worst food security crisis in over twenty years, and in the case of Somalia, the first famine of the 21st century. Over thirteen million people are estimated to be in need of humanitarian assistance, with children being disproportionately affected and child mortality reaching alarming levels.
More international support is needed to deal with the humanitarian crisis. Over and above meeting those immediate needs, it is critical to address the root-causes of recurrent hunger crises by investing in longer term measures which help build the resilience of affected populations. This means, for example, supporting agricultural development, fighting land degradation, clarifying land tenure, improving rural infrastructure, and ending armed conflict and insecurity.
Strengthening resilience through inclusive growth and democratic governance
Despite the setbacks caused by the 2008-2009 global economic crisis and the surges in food and energy prices which preceded the crisis and have recently recurred, the developing world as a whole is likely to reach many of the MDG targets. Progress, however, remains uneven between and within countries and regions, and the absolute numbers of people living in extreme poverty remain significant.
To change that, economic growth needs to become more resilient, inclusive, and equitable.
That requires growth to occur in the sectors where the world’s poor are trying to make their living, like agriculture, and the promotion of decent work. Where people can participate in and share the benefits of growth, communities become more resilient.
Growth-enhancing economic policies need to be combined with effective social protection as a key part of building resilience to the worst effects of economic and other shocks and setbacks. Many developing countries have implemented successful cash transfer and public employment programmes, with positive impacts on poverty reduction, access to healthcare, school attendance, and improved job skills.
It is critical that governments take into account the human development impacts when implementing fiscal consolidation strategies, including the impact on job recovery. The importance of governments’ commitment to full employment cannot be emphasized strongly enough.
Uprisings in the Arab States region this year remind us of the importance of political as well as economic inclusion. At great personal risk, and with the loss of many lives, people have called for dignity, opportunity, a meaningful say in decision-making, and an end to corruption, injustice, and repression.
Democratic governance strengthens resilience and reinforces development progress, by establishing the transparency and predictability needed to attract investment and grow the economy, and by making resource allocation and service delivery more responsive to the needs of people.
Committed efforts at the national level need to be accompanied by strengthened global partnerships for development. At this time official development assistance continues to fall short of commitments made. As well, the political will has yet to be mustered to conclude the long running WTO Doha Development Round.
The Fourth High Level Forum on Aid Effectiveness in Busan is an important opportunity to renew commitments to aid quality and results, within the context of a fast changing development co-operation landscape.
Gender equality and women’s empowerment are critical
The promotion of women’s empowerment and gender equality is intrinsic to the pursuit of inclusive growth and democratic governance. While progress has been made in closing gender gaps in education and health, commensurate gains are not being seen in the level of participation of women in the economic sphere and in political decision-making, or in freedom from gender-based violence.
Economically and politically empowered women break poverty cycles for themselves, and for their families, communities and countries. Policy needs to focus on economic opportunity, including through access to decent work and credit; improving legal status and rights, including through equal rights to property and inheritance; and the promotion of women’s voice, inclusion, and participation in decision-making.
The World Bank is to be commended for dedicating its landmark publication, the World Development Report 2012, to gender equality. The Report’s three key findings resonate with the United Nations’ own analysis: (i) despite real advances in gender equality, gaps remain in many parts of the world; (ii) gender equality is a core development objective and is also smart economics and; (iii) focused domestic public policies remain key for strengthening gender equality.
The United Nations and its partners are contributing to reducing the persistent gender inequalities which prevent women and girls from participating in and benefiting fully from wealth creation, inclusive growth, and sustainable development. The establishment of UN Women has been an important step. We welcome the opportunity to work collaboratively with the Bretton Woods Institutions on gender issues.
Inclusive global economic governance
Inclusiveness also extends to global economic governance. The need for more inclusive, effective, and coherent multilateral approaches to managing global challenges is now well recognized by the international community.
It is important to move forward on reform of global economic governance, including through the reform and strengthening of the UN Economic and Social Council. The Bretton Woods institutions have recently undertaken reforms to enhance the voice and participation of developing countries in their governance structures, but more needs to be done. As well, measures to strengthen the collaboration between the UN system, the G20, and other multilateral channels need to be considered.
No resilience without sustainability
Development progress cannot be sustained if the ecosystems on which our very existence on this planet depends are irreparably damaged. Development which is truly sustainable for present and future generations will safeguard ecosystems and their services while also enabling economic and social progress.
The 2012 UN Conference on Sustainable Development in Rio (Rio +20) presents an historic opportunity to address that balance.
With the world’s growing population, pronounced inequalities, threatened natural resources, and the continuing set of human-induced and natural shocks, a successful outcome at Rio+20 is needed.
That outcome should guide us all to integrate decision making better across the economic, social, and environmental pillars, and to make the pursuit of sustainable development the normal approach, rather than one which is occasional or sporadic. The UN development system is actively engaged in supporting the preparations for Rio+20.
A three-pronged approach to sustainable development is required at the international level whereby: (1) developed countries take the lead in changing their production and consumption patterns; (2) developing countries maintain their development goals while adopting more sustainable approaches to development, and; (3) developed countries enable and support sustainable development in the developing world through appropriate forms of finance and technology transfer and reforms to global financial and economic structures.
A strong outcome on energy in particular is needed at Rio. Providing access to clean energy is critical for achieving green growth, sustainable human development, and women’s empowerment. It also accelerates progress on the MDGs. The UN Secretary General has set out an ambitious agenda to achieve sustainable energy for all, with three goals to be reached by 2030: 1) ensuring universal access to modern energy services; 2) doubling the rate of improvement in energy efficiency; and 3) doubling the share of renewable energy in the global energy mix.
The United Nations system has a critical role to play in supporting transitions towards low-emission development pathways, and helping to safeguard the environmental resources and eco-system services which are critical for livelihoods today and development prospects tomorrow. We look forward to working with all partners to ensure that Rio+20 delivers on a vision for sustainable development in which equity, sustainability, and inclusiveness are secured for all.
Looking beyond 2015
Promoting inclusive growth and democratic governance, building resilience, and advancing sustainable development will help countries to meet their development goals, including the MDGs. Investing in the needs of women and girls will be critical to these efforts.
The international community must remain resolute in its commitment to meet the MDGs by 2015. While efforts must be stepped-up in the four remaining years, there is also a need to start our collective thinking about how to shape the post-2015 development agenda.