Helen Clark: "Achieving Sustainable Human Development"
Helen Clark, UNDP Administrator
"Achieving Sustainable Human Development"
Opening Speech at Fifth Ministerial Forum for Development
Convened by UNDP's Regional Bureaux for Latin America and the Caribbean and for Africa.
3.30pm, Tuesday 29 May 2012
UNDP is pleased to be convening this Fifth Ministerial Forum for Development. For a number of years now, the Forum has brought together social policy ministers from across Latin America.
This year’s Forum breaks new ground in bringing ministers from this region together with ministers from the Caribbean and Africa for what promises to be a very useful South-South exchange of experiences and ideas about the interaction between fiscal and social policy.
We are therefore honoured to have with us today Brazil's Minister of Finance and Brazil's Minister of Social Development and the Fight Against Hunger. Brazil's own success in turning the tide on both poverty and inequality provides inspiration to policy-makers around the world who are seeking to meet national development goals and the Millennium Development Goals too.
In Clarissa Hardy's excellent concept note prepared for this Forum, titled "Fiscal Policies for Social Sector Development", it is argued that a major strategic debate should be had on the types of social policies which are needed, and how they link up with economic policy which underpins the defeat of poverty. Fiscal policy, through which governments make choices about what to spend on and how much, also has a significant impact on social policy outcomes.
But there is also a third dimension of the fight against poverty and inequality which bears mention at this time in the run up to the Rio+20 United Nations Conference on Sustainable Development which Brazil will host next month - that of environmental sustainability.
Last year UNDP devoted its annual global Human Development Report to the twin themes and linked objectives of achieving greater equity and sustainability, arguing that one objective cannot be achieved without progress on the other.
If the way in which both rich and poor nations develop is destructive of the very ecosystems on which life on this planet depends, then the burden will fall disproportionately on the poorest and most vulnerable people who depend the most on healthy ecosystems for their survival and have the least means to adapt to the challenges brought by environmental degradation.
Witness, for example, the increasing frequency and intensity of drought in the Sahel, or the extreme wet weather events seen not only in Asia and Latin America, but in Africa too.
These environmental pressures make it even harder to reduce poverty and inequality, and call for major responses from governments and development partners which will help build resilience and create the basis for sustained development.
The 2011 global Human Development Report looked at scenarios of what our world could look like in 2050. The "base case" scenario assumes limited changes in inequality and environmental threats and risks. It anticipates that the global HDI could be nineteen per cent higher by 2050 than it is today. That would represent a rate of progress in lifting human development similar to that achieved between 1990 and 2010.
Then an “environmental challenges" scenario was constructed, taking into account, among other things, the impact of global warming on agricultural production; challenges related to water, sanitation, and pollution; and growing inequality and its consequences - such as a higher probability of intrastate conflict. Under this scenario, the increase in the global HDI was predicted to be eight percentage points lower than in the "base case" scenario and twelve percentage points lower in South Asia and Sub-Saharan Africa.
Under an even more adverse "environmental disaster” scenario which amplified the magnitude of the impacts modeled, the global HDI would be fifteen percentage points below the "base case" scenario in 2050. The most dramatic impact of that would be on Sub-Saharan Africa which would fall 24 percentage points below the “base case" scenario, and on South Asia which would fall 22 percentage points below.
Overall this worst case scenario sees human development progress slow to a crawl, and actually regress in Sub-Saharan Africa and South Asia. There is surely a compelling need for action at every level to prevent this scenario materialising.
The insights gained from these scenarios and from decades of work alongside developing countries have encouraged UNDP to promote what we call "triple win" policies which simultaneously advance economic, social, and environmental objectives. We argue that it is not a question of either/or, but rather of how to move forward on all fronts.
We have been encouraged in our advocacy by the words of President Dilma Rousseff at the World Social Forum in Porto Alegre, when she said: "Not only is it possible to grow and to include, protect, and conserve at the same time, but also truly equitable and sustainable human development requires that we do so."
We have also been inspired by countless examples of innovative triple win policies around the world, whereby governments have carefully designed sets of policies which meet objectives across the strands of sustainable development. Those examples include:
- Brazil's own Bolsa Verde (or Green Grant) programme, creating income transfers, targeted specifically for families in extreme poverty, which promote environmental conservation in areas where they live and work.
- Ethiopia's Productive Safety Net Programme which, to date, has provided income and predictable food supply to more than eight million beneficiaries in 300 food-insecure districts. Those participating in the scheme work on environmental conservation, water management, and terracing, building greater resilience to climate extremes for the future.
- India's Mahatma Gandhi National Rural Employment Guarantee Act, which has delivered a minimum of one hundred days’ work a year to eligible rural poor, with a quota for women's participation, on projects determined by village councils with a focus on environmental rehabilitation and water conservation. This scheme now benefits upwards of 46 million households.
There are many other such examples of policies which set out to target poverty, inequality, and environmental degradation simultaneously. Taken to scale, they have the power to transform the lives and prospects, of people, communities, and nations. It is to be hoped that Rio+20 will be a showcase for these innovative policies, and that post-Rio we will see knowledge sharing about and capacity building for such policies get a big boost.
The objective here is sustainable human development: how to create the conditions for every person on this earth to have a life free of hunger and want, to be able to be educated, have decent shelter and work, access to health services, and the genuine freedom to choose to live lives which they value.
This broader definition of human development is about far more than GDP per capita - that tells us remarkably little about the state of a society, particularly where gross inequity prevails. UNDP's Human Development Index was devised to provide an alternative to the tyranny of measurement of progress by GDP alone, and thus incorporates indicators for health and education alongside that for income.
Even so, we are now challenged to incorporate the element of environmental sustainability in the Index - appreciating the relationship between human development and the ecosystem in which it occurs. Just as the Human Development Index has been able to be adjusted for equity and for gender equity, so it must be possible to adjust it for environmental sustainability. Debate around the issue of how to measure sustainable development will be the focus of UNDP's major side event at Rio+20.
At the core of our approach is the belief that environmental unsustainability holds back the reduction of poverty and inequality. We also argue that the persistence of inequality at high levels in many developing countries has made it more difficult to reduce poverty.
A major essay on "Income Inequality and the Conditions of Chronic Poverty" in a recent UNDP publication ("Towards Human Resilience: Sustaining MDG Progress in an Age of Economic Uncertainty", UNDP, New York, September 2011) brings together evidence for that proposition, asserting that "High and rising inequality also reduces the likelihood that economic and social policies fostering inclusive growth and human development will be delivered and implemented. For instance richer groups may secure economically inefficient advantages such as regressive taxes or an allocation of public funds for their own interest rather than for that of the country."
Yet locking in high and rising levels of inequality in this way is to condemn communities and nations to higher levels of crime, disease, poverty, and even conflict than would otherwise occur. It is also linked to weak growth and to stalled progress on reaching development goals overall.
Our report further asserts that 'for countries with chronic and extensive poverty and long-term anaemic growth, policies that address poverty reduction at the margins will be grossly inadequate. If growth is unable to generate domestic resources or make a dent in poverty, the prospects for MDG progress will be very uncertain. Further low growth is unlikely to generate the resources needed for measures which can protect economies against the effects of external or domestic shocks".
That brings us back to the core question before this forum: how to link the social policy objectives of reducing poverty and inequality to the design of economic and fiscal policy. UNDP's proposals for doing that fall into three categories and I will comment on each of them briefly.
(1) Inclusive growth and the expansion of productive employment.
Specific policy measures will need to:
- identify new sources of growth and employment- intensive investments;
- bring the poor and excluded into the economy through employment schemes - such as the "triple win” examples I gave earlier; and
- invest in human capital, through education and skills training, health services, and nutrition.
(2) Redistribution of Income and Assets.
Special measures could include:
- investment in social protection, because of its huge potential benefits in providing an income floor, access to opportunity and security, reducing inequality, and building resilience to shock; and
- supporting asset building and protection and the provision of micro finance services. Social protection and employment schemes can open the door to financial inclusion of the poor - especially if the income transfers use the banking system or variations of it. Financial inclusion helps smooth incomes and facilitates savings.
(3) Pro-poor Macro-economic Policies
UNDP argues that:
- monetary policy could pay more attention to growth and employment without jeopardising macro-economic stability;
- careful steps should be taken to insulate countries from the contagion effects of financial crises elsewhere; and
- tax systems should be progressive and public spending should be pro-poor - as for example on social protection, employment generation, health, and education.
Taken together, these sets of policies offer the prospect of broadening the base of the economy, thereby including more people more actively in it and spreading the benefits of growth more widely. That not only reduces poverty; it also reduces inequality.
To drive such policies successfully, the capacity of state institutions and their responsiveness are critical. Strengthening national policy-making, delivery, and accountability mechanisms is central to UNDP's work around the world.
Over the next 48 hours, there will be many opportunities for ministers and other participants in this forum to exchange experiences on such issues. This is a South-South exchange, recognising that the best practice of and lessons learned by peers in the South may often be the most relevant for nations seeking policy solutions.
At UNDP we are dedicated to supporting South-South co-operation. This forum is but one of countless examples of our work to link people, ideas, innovation, and best practice across the Global South. We hope that the forum will be an enriching and a learning experience for all present, and that we will all leave with fresh insights into how to assemble the mix of policies and capacities to advance sustainable human development.