2007 Annual Report

Poor countries and people face daunting challenges, but their constraints have been defined and are to a great extent solvable. With national commitment and the support of the international community, they can achieve more equitable economic growth and achieve the human development goals broadly articulated in the MDGs.

Many developing countries, and particularly the LDCs, suffer from a lack of integration with the rest of the world that might otherwise help them progress. Over 80 percent of foreign direct investments in developing countries flows into about 12 better performing nations. Developing country economies heavily dependent on agricultural exports struggle with high tariffs that still protect rich countries. While more than half the people in high-income nations have access to the Internet, a basic tool of globalization, only eight of every 1,000 people in the LDCs enjoy the same access.

UNDP’s poverty reduction programmes are oriented around assisting developing countries strengthen capacities for designing and implementing strategies to achieve equitable growth and human development. Through services such as policy analysis, costing assessments and support to enlarge institutional capacities, UNDP supports countries to put in place national and local plans with targeted actions and resources. To make these sustainable and inclusive, UNDP works closely with national partners to uncover and address the sources of persistent social and economic disparities, especially one of the most endemic—discrimination against women. Broad-based participation in formulating development solutions includes reaching out to civil society, the private sector and other stakeholders.

Some specific areas of focus at UNDP involve linking poverty reduction with employment generation, the wider availability of financial services and access to modern technology. UNDP also assists countries on increasing their regional and global economic integration, such as through developing stronger capacities to negotiate trade regulations and manage development financing.

For instance, in Lesotho, UNDP supported a national process of consultation that brought together government officials and civil society groups around the formulation of the national poverty reduction strategy, including to discuss the integration of women’s rights and empowerment. The strategy now includes actions to reduce women’s vulnerabilities to HIV and AIDS, and to close gender gaps in education.

Malawi’s declining soil fertility, dependence on rain, and recurrent droughts and floods associated with global warming contribute to high rates of poverty. They also imperil food security and reinforce chronic malnutrition. In 2005, the Government proposed an input scheme of heavy subsidies for seed and fertilizer so that poor households would have the means to improve their livelihoods and food intake. An early supporter of the plan, UNDP helped the Government to bring together a range of other international development partners to provide concerted assistance. It aided the mobilization of additional resources and assisted with a national public information campaign for farmers, local officials and private sector suppliers about the scheme. In 2006 and 2007, along with ample rainfall, the input programme helped Malawi achieve record maize harvests, even as neighbouring countries continued to face shortfalls. UNDP is now working with the Government and other development partners to build on these gains by linking increased food security to economic growth, better nutrition and a reduction in Malawi’s vulnerability to climate change, such as through water harvesting and crop diversification.

In 2006, a regional initiative in Eastern Europe and the Commonwealth of Independent States helped those countries share knowledge about successful economic transition strategies. In Georgia, UNDP was instrumental in supporting the Government in developing policies explicitly linking economic growth and business development with employment generation. UNDP also helped the Department of Statistics develop capacities to measure Georgia’s substantial informal economy, as a step towards integrating this sector in overall economic planning. A partnership with the Ministry of Education has focused on connecting vocational training with the needs of the private sector. Other forms of assistance have aided the reform of public administration to update management practices, fight corruption and improve communication with the public.

To support the political and economic decentralization unfolding in many countries, UNDP also works directly within sub-national regions and local communities to introduce economic development strategies with proven track records, or to pilot new approaches likely to qualify for replication elsewhere. In Tajikistan, UNDP has been active for nearly a decade in providing micro-finance funds in 100 rural municipalities. These have proven an essential lifeline for people struggling to support themselves and their families in the wake of the collapse of the Soviet Union and the disastrous social and economic consequences of Tajikistan’s civil war. Almost 80,000 families have been able to lift themselves out of poverty by using loans for breeding livestock, cultivating vegetables and running sewing shops. Profits from the micro-finance funds support community development priorities such as systems for clean drinking water and the renovation of schools or health clinics. A similar project in neighbouring Kyrgyzstan has supported the formation of nearly 2,000 local self-help groups that pool collective savings and provide their own loans.

UNDP continues its concerted efforts to engage the private sector as the essential engine of dynamic and inclusive economies; UNDP worked with the private sector in 103 countries in 2006, 50 percent more than three years ago. UNDP plays a key role in bringing businesses into the Global Compact, launched by the UN in 2000 to involve businesses in solving the challenges of globalization. Over 3,000 companies from 100 countries now participate in the Compact, making it the world’s largest voluntary corporate citizenship initiative. Within individual countries, UNDP brings together different branches of the UN with business and political leaders to look at innovative business practices that benefit commerce and human development at large.

In Moldova, as a result of signing the Global Compact, a group of leading companies formed a network in 2006 to promote corporate social responsibility, including through the adoption of principles protecting labour rights and the environment. Global Compact signatories in Trinidad and Tobago are collaborating on coordinating different corporate social responsibility initiatives, including by linking them more concretely to national development goals.

UNDP also works directly with national and multinational companies to reduce poverty and extend services to underdeveloped areas. In Kenya, under the aegis of its global Growing Sustainable Business initiative, UNDP has established 10 partnership projects to help improve businesses and livelihoods. One project works with Kevian, a juice manufacturer. Until recently, it imported all the concentrates for its mango juice from abroad. Kenya is an ample producer of mangoes, but many rot on the ground due to poor harvesting and marketing systems. The Growing Sustainable Business initiative has worked with local farmers on improved harvesting, marketing and pest management procedures, and linked them to Kevian. The farmers have an opportunity to improve their livelihoods; Kevian benefits from greater flexibility in its supplies and protection from foreign exchange rate fluctuations. Combined, Kenya’s 10 Growing Sustainable Business initiative projects are expected to generate over $70 million in additional revenues and create thousands of jobs, reaching an estimated 42,000 beneficiaries.

A partnership with ANZ Bank in Fiji has brought the first modern banking services to rural areas. By some estimates, 70 percent of people in the Pacific region have no access to banks. Through mobile banking units that travel to 250 designated rural villages, over 60,000 accounts had been established by the end of 2006, two years into the project. Customers can open checking and savings accounts, and once they’ve saved for six months can qualify for credit services. UNDP has now replicated the programme in the Solomon Islands and Tonga.

UNDP’s renowned series of national, sub-national and regional human development reports continued breaking new ground in 2006. Since the reports emphasize broad consultations to gather an array of perspectives, they often reveal development gaps that may have been poorly understood or overlooked. A report on the Asia-Pacific region, Trade on Human Terms: Transforming Trade for Human Development in Asia and the Pacific, flagged the fact that Asia’s embrace of freer trade has failed to automatically generate enough jobs for poorer citizens—the phenomenon of “jobless growth.” It presented eight recommendations, including for more equitable tax regimes, recalibrated interest rates to combat jobless growth, and slower but more productive negotiations on multilateral trade agreements. The report attracted extensive media coverage throughout the region and beyond, inspired public debate, and grabbed the attention of national policy makers, who requested translations in local languages so they could use it as an informational tool to guide policymaking.

In Nigeria, UNDP partnered with Shell Petroleum Development Company on a report about the oil-rich but troubled Niger Delta. Prepared through extensive consultations within the region and launched by the then Nigerian President Olusegun Obasanjo at a forum to discuss the region’s future, the report bluntly assessed the large development deficits in the region. It proposed a seven-point agenda for action, stressing peace and reconciliation, better governance and sustainable development. UNDP is now using the report as a basis for additional work with Shell and Norway’s Oil-for-Development Programme. These collaborations include initiatives to expand youth employment and to assist local governments in better managing oil revenues for local development.

Chile’s 2006 human development report concluded that the widespread use of modern technology will not automatically improve human development unless it fosters social inclusion, including through equitable access. The Government subsequently reformulated its strategy for the development of an information society to expand technology education in schools and to promote the use of technology among small businesses. SUBTEL, the Government’s telecommunications office, has integrated the report into its short and long-term work plans. This includes a strategic decision to focus less on opening new public telecentres and more on improving existing ones through stronger links to the communities in which they are located. Municipalities have used the report to frame local digital strategies that aim to increase the reach of telecommunications services and boost public participation through new municipal websites.

UNDP’s ongoing support for public policy research includes the International Poverty Centre in Brazil. The centre is a joint venture with the Institute for Applied Economic Research, a leading economic policy organization affiliated with the Brazilian Government. A hub for the exchange and generation of the latest ideas on policies and practices related to poverty, especially from developing countries, the centre offers lectures and fellowships, and produces research papers by top development practitioners and scholars.

For countries facing gaps in their own research capacities, UNDP’s detailed mapping and analysis support serves as a critical interim resource. In some cases, such as the national human development reports, UNDP fosters national partnerships that through the process of drafting the reports help expand capabilities as people work together and learn from each other. In the end, all of UNDP’s research work serves one purpose: to help countries expand capacities for development that is inclusive, and that advances people’s options to create better lives.