HUMAN DEVELOPMENT REPORT 2005

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The argument

• The human costs of missing the MDGs
• Inequality is a brake on human development
• Three pillars of international cooperation
• Aid progress with problems
• Trade problems with no progress at Doha
• Conflict tackling the barrier to human
  development

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Place of birth determines life-chances
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The demographic shock of AIDS exceeds that of the
first World War
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China and India Globalisations success stories
fail their children
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Child mortality the human cost
On current trends, the world will overshoot the
MDG target by 4.4 million additional and
preventable child deaths in 2015
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The human cost of a world on auto-pilot
scenario 2015

• Compared with meeting the MDGs, in 2015 the
  world will have
• 4.4m additional child deaths
• 210m fewer people with access to water
• 380m more people living on 1 a day
• 47m children still out of school

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We live in an unequal world the champagne glass
effect
Global income distribution is severely skewed

• Annual income flows of the richest 500 people
  exceeds that of the poorest 416 million
• Cost of ending extreme poverty 300 billion
  less than 2 of the income of the richest 10 of
  the worlds population

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Health inequalities counteract wealth advantages
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Human development inequalities in the fastest
growing economy - China
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The human development potential of pro-poor growth
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International cooperation - systemic not
piecemeal reform

• Growth insufficient when inequalities are rising
• Aid can help target these inequalities
• But trade barriers limit the potential for growth
  and development
• Conflicts increase poverty but also destabilise
  entire regions

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Richer but less generous
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The aid donor league
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The aid tax costs of tying aid
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Unlocking the potential in international trade

• Global interdependence a mixed report on human
  development
• Unfair rules favour developed countries
• Unlike aid, little progress in the Doha Round
• Beyond the rules commodities and supermarkets
• Capacity building for whom?

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Export growth is largely concentrated in East Asia
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Trade can be a means to human development, but
results vary
Refers to national poverty lines
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Perverse graduation in tariffs against the
poorest countries
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Agriculture subsidies are the flashpoint in trade
negotiations
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Subsidies welfare support for rich producers

• Three-quarters of CAP support goes to the biggest
  10 of subsidy recipients
• Richest 5 of US subsidy recipients get half the
  total subsidy

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Subsidies hit where it hurts most

• Two-thirds of people living under a 1 a day are
  small farmers or agricultural workers
• Subsidised EU sugar exports lower prices by a
  third
• Losses for Brazil (494m), South Africa (151m)
  and Thailand (60m)
• In 2001 U.S. cotton subsidies cost Burkina Faso
  and Mali 1-3 of their GDP
• Fall in cotton prices increased Benins poverty
  rate from 37 to 59 in 2001-02

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The policy space for developing countries is
shrinking

• Industrial policy rules are constrained
• Bilateral and regional agreements are pushing
  TRIPS-plus provisions in intellectual property
• Services negotiations have seen little progress
  on temporary movement of labour
• Declining tariffs and declining revenue

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Challenges beyond the rules

• The commodity crisis is threatening livelihoods
• Supermarkets are the gatekeepers to developed
  country markets
• 30 chains account for one-third of global grocery
  sales
• Building capacity at the WTO and beyond

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How trade can deliver for the MDGs

• Lower peak tariffs to no more than twice the
  average tariff
• Give duty-free and quota-free access to SSA
  exports and other LDCs
• Relax rules of origin
• Prohibit export subsidies and limit production
  subsidies to 10 of the value of production
• Relax constraints on policies industrial policy,
  intellectual property legislation and mobility of
  labour
• Establish trade adjustment compensation fund
  providing 500m a year until 2015

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Violent conflict Bringing the real threat into
focus

• Some of the worst human development performers
  have experienced conflict at some point since
  1990
• 22 out of 32 countries with a low HDI ranking
• 7 out the 10 countries at the bottom of GDP per
  capita tables
• 9 out of 10 countries with the highest infant and
  under-five mortality rates
• 8 out of the 10 countries with the lowestprimary
  enrolment ratio

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Horizontal inequalities can create conflict

• Social and regional inequalities in Nepal
• Economic and political exclusion in Cote
  DIvoire
• Skewed development in oil-rich Aceh, Indonesia

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Aid for post-conflict reconstruction politics
over need
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Conflict prevention can start now

• Conflict-sensitive development
• Certification schemes for oil and timber
• Prosecute corrupt practices
• International arms trade treaty
• Regional capacity
• Peace-building fund over the horizon
  commitments

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Three simple messages from HDR 2005

• A world on auto-pilot will result in catastrophic
  human losses
• Inequality indicators must serve as the
  navigation tools to prioritise public policy
• Beyond country-level policies, progress on aid,
  trade and security must be systemic, not
  piecemeal
• Half measures will not work the world is at a
  crossroad to make that choice

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Thank youhttp//hdr.undp.org