Select Committee on International Development Fifth Report



I. INTRODUCTION: TOWARDS A GLOBAL NEW DEAL?

  1. One in five of the world's population live in extreme poverty, surviving on less than US$1 per day; nearly half of the world lives on less than US$2 per day.[1] At the United Nations (UN) Millennium Summit in September 2000, the international community—represented by the largest ever gathering of heads of state and government—committed itself to achieving the Millennium Development Goals (MDGs), promising that, "we will spare no effort to free our fellow men, women, and children from the abject and dehumanizing conditions of extreme poverty to which more than a billion of them are currently subjected".[2] The Prime Minister has made international development, especially in Africa, the poorest continent, a foreign policy priority for the Parliament. He described the state of Africa as "a scar on the conscience of the world" and, supporting the New Partnership for Africa's Development (NEPAD), pledged, "on our side: provide more aid, untied to trade; write off debt; help with good governance and infrastructure; training to the soldiers, with UN blessing, in conflict resolution; encouraging investment; and access to our markets so that we practice the free trade we are so fond of preaching."[3] There is indeed a cross-party consensus on these issues. The Chancellor of the Exchequer, Gordon Brown, reiterated the UK's commitment to the MDGs, stating that the aim was to "build a virtuous circle of debt relief, poverty reduction and sustainable development, in order that no country genuinely committed to good governance, economic development and poverty reduction, and to the opening up of trade and investment, is denied the chance to achieve the 2015 goals through lack of resources".[4] It is vital that the Chancellor, the Government, and the international community, translate these fine words into action, and soon.
  2. The MDGs crystallise commitments made at a series of UN conferences, and encompass specific time-bound targets—for instance, to halve, between 1990 and 2015, the proportion of people whose income is less than US$1 per day—and measurable indicators to assess progress.[5] The MDGs provide the focus for concerted international efforts to eliminate poverty and facilitate development, a focus around which a consensus has been built, a consensus which is unprecedented and vital if there is to be any chance of reaching the MDG targets.
  3. In contrast to promises made at many global summits, the Millennium Declaration recognised financing for development as a key component of achieving the development targets, and highlighted the need to mobilise substantial financial resources. The cost of achieving the MDG targets—an achievement which would still leave nearly a billion people living on under US$1 per day—has been estimated at around US$50 billion of additional development assistance per year every year from 2001 to 2015, a figure which takes no account of the pressing needs for humanitarian assistance (US$3-4 billion extra per year), or for global public goods such as peacekeeping, action to combat HIV/AIDS, agricultural research, measures to reduce greenhouse gases and to preserve biodiversity (US$15 billion extra per year).[6] An additional US$50 billion per year equates to a doubling of current aid[7] levels, an increase in the aid given by the OECD donor countries from 0.22 percent to 0.44 percent of their Gross National Income (GNI).[8] The African Development Bank estimates that an extra US$20-25 billion per year would be needed to enable those African countries which it judges to be in a position to use aid effectively, to reach the MDGs.[9] Most of the MDG targets have deadlines of 2015, a mere 13 years away. On current trends, there will be a massive shortfall of resources and, especially in Africa,[10] the targets will not be met. Avoidable poverty, ill-health, and death will be the consequences for hundreds of millions of the world's poor.[11] More resources, and more effective use of resources, must be priorities. If the international community does not act now, it will be too late.
  4. The UN Conference on Financing for Development—the "Monterrey Summit"—took place from 18 to 22 March 2002, in Monterrey, Mexico. The aim of the conference, as expressed in the Monterrey Consensus, was to mobilise, and to increase the effective use of financial resources in order to meet the MDG targets.[12] These dual aims—more resources and more effective use of resources—reflect the emerging framework for international cooperation to eliminate poverty. This framework is one of global partnership, or, as the Chancellor described it, a "global new deal" establishing a new relationship between developed and developing countries.[13] The deal is that, "in return for developing countries pursuing corruption-free, pro-stability, pro-investment and pro-trade policies, developed countries should substantially increase the development aid they are prepared to offer in the run-up to 2015".[14] As the United Nations Development Programme (UNDP) put it in their written evidence, the "MDGs provide a benchmark against which the performance of development partners can be measured, and progress towards the achievement of internationally agreed targets of development cooperation assessed".[15]
  5. This report examines Financing for Development—the conference process, the conference outcomes, and a range of issues and proposals which came up during the Financing for Development process—as a key component of an emerging global new deal. In chapter two we examine the Financing for Development conference itself, from the preparatory processes to the Monterrey Consensus and the conference outcomes. In chapter three we describe the big picture of international resource flows, setting the scene for subsequent chapters with their specific foci. In chapter four our attention turns to proposals for innovative sources of finance, including Currency Transactions Taxes, Special Drawing Rights, and the Chancellor's proposal for an International Development Trust Fund, before we examine aid—a more traditional source of development finance—in chapters five and six. Our focus is on aid volumes in chapter five, and on aid effectiveness in chapter six. International development partnerships and burden-sharing are addressed in chapter seven. In conclusion, we emphasise the importance of political leadership in making the case for aid and for international development both domestically and internationally.

Figure 1: The Millennium Development Goals, including targets and indicators

Goals and Targets

Indicators

Goal 1: Eradicate extreme poverty and hunger

Target 1: Halve, between 1990 and 2015, the proportion of people whose income is less than one dollar a day

1. Proportion of population below $1 per day

2. Poverty gap ratio

3. Share of poorest quintile in national consumption

Target 2: Halve, between 1990 and 2015, the proportion of people who suffer from hunger

4. Prevalence of underweight children (under-five years of age)

5. Proportion of population below minimum level of dietary energy consumption

Goal 2: Achieve universal primary education

Target 3: Ensure that, by 2015, children everywhere will be able to complete a full course of primary schooling

6. Net enrolment ratio in primary education

7. Proportion of pupils starting grade 1 who reach grade 5

8. Literacy rate of 15-24 year olds

Goal 3: Promote gender equality and empower women

Target 4: Eliminate gender disparity in primary and secondary education preferably by 2005 and to all levels of education no later than 2015

9. Ratio of girls to boys in primary, secondary and tertiary education

10. Ratio of literate females to males of 15-24 year olds

11. Share of women in wage employment in the nonagricultural sector

12. Proportion of seats held by women in national parliament

Goal 4: Reduce child mortality

Target 5: Reduce by two-thirds, between 1990 and 2015, the under-five mortality rate

13. Under-five mortality rate

14. Infant mortality rate

15. Proportion of 1 year olds immunised against measles

Goal 5: Improve maternal health

Target 6: Reduce by 75%, between 1990 and 2015, the maternal mortality ratio

16. Maternal mortality ratio

17. Proportion of births attended by skilled health personnel

Goal 6: Combat HIV/AIDS, malaria and other diseases

Target 7: Have halted by 2015, and begun to reverse, the spread of HIV/AIDS

18. HIV prevalence among 15-24 year old pregnant women

19. Contraceptive prevalence rate

20. Number of children orphaned by HIV/AIDS

Target 8: Have halted by 2015, and begun to reverse, the incidence of malaria and other major diseases

21. Prevalence and death rates associated with malaria

22. Proportion of population in malaria risk areas using effective malaria prevention and treatment measures

23. Prevalence and death rates associated with tuberculosis

24. Proportion of TB cases detected and cured under DOTS (Directly Observed Treatment Short Course)

Goal 7: Ensure environmental sustainability

Target 9: Integrate the principles of sustainable development into country policies and programmes and reverse the loss of environmental resources

25. Proportion of land area covered by forest

26. Land area protected to maintain biological diversity

27. GDP per unit of energy use (as proxy for energy efficiency)

28. Carbon dioxide emissions (per capita)

Target 10: Halve, by 2015, the proportion of people without sustainable access to safe drinking water

29. Proportion of population with sustainable access to an improved water source

Target 11: By 2020, to have achieved a significant improvement in the lives of at least 100 million slum dwellers

30. Proportion of people with access to improved sanitation

31. Proportion of people with access to secure tenure

Goal 8: Develop a Global Partnership for Development

Target 12: Develop further an open, rule-based, predictable, non-discriminatory trading and financial system

Target 13: Address the Special Needs of the Least Developed Countries Includes: tariff and quota free access for LDC exports; enhanced programme of debt relief for HIPC and cancellation of official bilateral debt; and more generous ODA for countries committed to poverty reduction

Target 14: Address the Special Needs of landlocked countries and small island developing states (through Barbados Programme and 22nd General Assembly provisions)

Target 15: Deal comprehensively with the debt problems of developing countries

through national and international measures in order to make debt sustainable in the long term

Official Development Assistance

32. Net ODA as percentage of DAC donors' GNI [targets of 0.7% in total and 0.15% for LDCs]

33. Proportion of ODA to basic social services

34. Proportion of ODA that is untied

35. Proportion of ODA for environment in small island

developing states

36. Proportion of ODA for transport sector in land-locked countries

Market Access

37. Proportion of exports (by value and excluding arms) admitted free of duties and quotas

38. Average tariffs and quotas on agricultural products and textiles and clothing

39. Domestic & export agricultural subsidies in OECD countries

40. Proportion of ODA provided to help build trade capacity

Debt Sustainability

41. Proportion of official bilateral HIPC debt cancelled

42. Debt service as a % of exports of goods and services

43. Proportion of ODA provided as debt relief

44. Number of countries reaching HIPC decision and

completion points

Target 16: In co-operation with developing countries, develop and implement strategies for decent and productive work for youth

45. Unemployment rate of 15-24 year olds

Target 17: Cooperating with pharmaceutical companies, provide access to affordable, essential drugs in developing countries

46. Proportion of population with access to affordable essential drugs on a sustainable basis

Target 18: In co-operation with the private sector, make available the benefits of new

technologies, especially information and

communications

47. Telephone lines per 1000 people

48. Personal computers per 1000 people

Source: United Nations Development Programme.

 


1   These World Bank measures are based on 1993 Purchasing Power Parity terms. This allows cross-country comparisons to be made, and progress to be charted over time. Back

2   United Nations Millennium Declaration, September 2000. Back

3   Prime Minister's speech to the Labour Party Conference, September 2001. Back

4   Q99 Back

5   See-http://www.developmentgoals.org/ Back

6   These are the estimates cited in the Zedillo Report, a report of the UN high-level panel on Financing for Development. See-http://www.un.org/esa/ffd/a55-1000.pdf. The World Bank's estimate of the cost of meeting the MDG targets is US$40-60 billion; Oxfam's estimate is US$100 billion. Back

7   "Aid" refers to Official Development Assistance (ODA) to developing countries as defined by the OECD donors' Development Assistance Committee (DAC). Back

8   If the OECD/ DAC donors had, in 2000, reached the 32 year-old UN-endorsed target of contributing 0.7 percent of their gross national income to aid, official development assistance would have been US$168.6 billion. Back

9   Achieving the MDGs in Africa: Progress, prospects, and policy implications, African Development Bank, June 2002. See http://www.afdb.org/knowledge/publications/pdf/global_poverty_report_jun2002.pdf Back

10  The MDGs in Africa: Promises and progress, UNDP and UNICEF, June 2002. See-http://www.undp.org/mdg/mdgreportinafrica.pdf Back

11   Last chance in Monterrey: Meeting the challenge of poverty reduction, Oxfam Briefing Paper no. 17, 13 March 2002. See-http://www.oxfam.org.uk/policy/papers/monterrey/monterrey.pdf Back

12  UN Conference on Financing for Development, Monterrey Consensus Document. See--http://www.un.org/esa/ffd/0302finalMonterreyConsensus.pdf Back

13   Q130; and, Tackling poverty: A global new deal-A modern Marshall plan for the developing world, HM Treasury, February 2002. See-http://www.hm-treasury.gov.uk/mediastore/otherfiles/ACF711.pdf Back

14   Q99 Back

15   Ev 109 Back

 
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Prepared 24 July 2002