Regional Training Workshop – Pro Poor Macroeconomic Policies Beijing China – 24 October 2005

Manoj Basnyat, Deputy Regional Manager, UNDP RCC, Colombo

Introduction:
　　I take this opportunity to greet all the participants from Governments and Country Offices of UNDP on behalf of the Regional Centre in Colombo. This regional training workshop on pro poor macroeconomic policies is part of our service to bring together policy makers and practitioners from our partner governments and country offices as a community to continuously decrease poverty.
　　The Regional Center established by UNDP in Colombo provides specialized know-how and support to the UNDP country offices and governments in the Asia and Pacific Region in the area of poverty reduction and HIV AIDS. Pro-poor policies and local initiatives is core part of our work on poverty reduction. Others are related to trade and investments, millennium development goals, human development and gender equity. Demand for formulation or transformation of key national pro poor policies and innovative local practices to reduce poverty continue to be high from our country offices and partner governments; and also the key area that has potential of reducing poverty in the region.
Poverty Context:
　　Poverty is a complex social, economic and institutional phenomenon, a consequence of lack of growth and inequality. Effective anti-poverty policies/strategies require technical and empirical understanding of poverty. Few decades ago, economists identified three broad concepts of poverty that seem to encompass most of the difficulties associated with poverty analysis: subsistence, inequality, and externality.

• Subsistence is concerned with “minimum of provisions needed to maintain health and working capacity” (capabilities).
• Inequality is concerned with the “relative position of income groups to each other.” Hence, the concept of poverty must be seen in the context of society as a whole. Poverty cannot be fully understood by isolating the poor and focusing on their behaviour as a special group. It is equally important to understand the behaviour of the rest of society especially the richer segment and the rich economies.
• Externality is concerned with the “social consequences of poverty for the rest of society rather than in terms of the needs of the poor. It is not so much the misery and plight of the poor but the discomfort and cost to the non-poor part of the community which is crucial to this view of poverty.” This latter view provides the political and social dimension of policies dealing with poverty.

　　The conceptualization of poverty has advanced since then, especially its macroeconomic linkages with distribution and growth. Recent advances in this direction have been helpful in elucidating poverty-related policies and strategies.
　　Each of the concepts presents numerous conceptual, definitional, and measurement problems. Some continue to be part of the active research on the subject. It is not evident, for example, whether “the international poverty line measures the same degree of need or deprivation across countries”. The same is true for comparing poverty measures within countries, e.g., rural-urban comparisons. In an attempt to bring together four basic dimensions of human deprivation, the Human Development Report (1999) developed a multidimensional Human Poverty Index (HPI) based on health status, knowledge, economic provisioning, and social inclusion. The HPI provides useful cross-sectional and temporal international comparisons.
Poverty - Challenges and Opportunities
　　Over half the world's 6.3 billion people live lives of substantial deprivation, living on incomes that amount to $2 dollars a day or less.

• Over one-fifths of world’s population still living on incomes less than 1-dollar a day
• More than 110 million primary-school age children in developing countries do not attend school, and for many who do, the quality of the education is in question.
• There has been progress in all regions on infant mortality, yet poor people still suffer from far higher infant-mortality rates. Some countries have made progress: the poorest 20 per cent in Brazil have a lower infant mortality rate than the richest 20 per cent in Ghana or Pakistan.
• People in developing countries are living longer: the average life expectancy went from 55 years in 1970 to 65 years in 2003. The average for the industrialized countries in the recent years was 79 years.
• HIV/AIDS is shortening life spans, mostly in developing countries. In 33 developing countries, life expectancy has declined due to the epidemic.
• Natural disasters and civil conflicts have severely limited opportunities for improvement in many countries.

　　Overall, there have been improvements, as more people are living longer lives, more people are attending school than ever before, and more people have access to health care. Still, far more must be done. In particular, the results are so uneven and gains in some parts of the world have been offset by deteriorating conditions in others.
　　Poverty on such a scale is unacceptable. Fortunately, for the first time in the history of development cooperation, there is an international consensus on the objectives – i.e., achieving the MDGs by 2015. The MDGs will guide our work for a better world for all during the coming years. All of us are now facing the task of translating the MDGs into systematic action including preparation of MDG based national development strategies and identifying innovative financing modalities to achieve the MDGs. Regional Centres challenge will be to support the Asia-Pacific countries in achieving the agreed targets. Poverty reduction is the first one of the MDGs. The UNDP has during the past years put major efforts into developing guidelines for poverty reduction to support its member countries in facing the global challenge. A growing number of governments and aid organisations have identified poverty reduction as their primary objective. In UNDP, for example, we have emphasised poverty reduction as a key objective of development cooperation policies in the recent decades. Last month, our Governments met in New York and made further emphasis on poverty reduction as the main objective and committed to systematically operationalising it in our development planning/ strategies. In this context it was also highlighted that to attain this objective, the promotion of MDG based development strategies, pro-poor growth, gender equality and addressing HIV/AIDS must be accorded a central role in all strategies. It goes without saying that we will also be held accountable by both our political constituencies and the taxpayers, for progress made in poverty reduction and other MDGs.
Poverty characterised by inequality:
　　Achieving the first MDG of halving the proportion of people living in extreme poverty by 2015 will not be possible by only reducing poverty in the LDC countries. Middle-income countries such as China are in the forefront of this fight as well. Success in Asia-Pacific is crucial for the final outcome. Poverty and inequality are historically closely linked in Asia. An analysis of aggregates (income, human and social development etc.) hides the reality. The main problem in some of the Asia-Pacific countries is not lack of resources, assets or information, but the extremely unfair distribution and access, often particularly evident for women. Compared with our other developing regions in the world, for instance in Sub-Saharan Africa, economies of Asia-Pacific are clearly less poor. But there are still far too many poor people – women, marginalized ethnic groups and minorities.
Globalisation and Political Will
　　Globalization has been heralded as a major force that could be harnessed to push the poverty eradication agenda. Globalization has helped make the world increasingly interdependent, and has presented many new opportunities, yet only those countries--generally those with a highly educated and skilled labour force--have been able to benefit from the global economy. Most developing countries, and the least developing countries in particular, continue to be left largely untouched by the globalization process.
　　It should be also noted that globalization must mean more than creating bigger markets, and experience confirms that growth alone cannot reduce poverty and income inequality. Economic policy must be combined with effective social policies aimed at education for all, health for all and gender equality. This is essential if globalization is to work for meeting the goal of halving poverty by the year 2015. This is an ambitious goal, but it is neither utopian nor impossible. We have the knowledge and the means with which to achieve it. What is missing is the will. In the developed world, that means the will to provide meaningful debt relief, to remove protectionist barriers against exports from the poorest countries, and to spend more than just a negligible fraction of income on development assistance. In many developing countries, it means the will to fight corruption, to put an end to persistent conflict, and to build a platform of good governance.
Conclusion:
　　Reducing and making poverty history in the Asia and Pacific is our mission. We are very glad that this regional training is happening with policy makers and practitioners and we hope this forum will continue to the community of partners to make the difference. The Regional Centre will continue focussing in three areas: (1) policy change and development; (2) program development and advisory assistance and (3) capacity building for institutional changes and development.
IPRCC
　　We highly appreciate this opportunity of working with International Poverty Reduction Centre in China. This partnership has been in the dialogue between my colleagues and UNDP-China/IPRCC already for some time. I myself have had an opportunity of discussing and encouraging such partnerships.
Workshop:
　　I encourage all of us to an open, candid and at the same time constructive dialogue. Let’s use the time that is available for identifying concrete and practical policy issues/options on pro-poor growth that will lead to a first set of conclusions that can guide us in an ongoing process. We can achieve this together by formulating focused questions, by listening carefully and by learning together.
　　This regional training is also happening on an auspicious occasion – the UN Day. In this spirit, I wish you all the best.