The Millennium Development Goals (MDGs) are a set of development targets agreed by the international community, which center on halving poverty and improving the welfare of the world’s poorest by 2015. The IMF contributes to this effort through its advice, technical assistance, and lending to countries, as well as its role in mobilizing donor support. Together with the World Bank, it assesses progress toward the MDGs through an annual Global Monitoring Report.
In September 2000, at the United Nations Millennium Summit, world leaders agreed to eight specific and measurable development goals—now called the Millennium Development Goals (MDGs)—to be achieved by 2015. The first seven goals focus on eradicating extreme poverty and hunger; achieving universal primary education; promoting gender equality and empowering women; reducing child mortality; improving maternal health; combating HIV/AIDS, malaria and other diseases; and ensuring environmental sustainability. The eighth goal calls for the creation of a global partnership for development, with targets for aid, trade, and debt relief. A significant step toward meeting the MDGs was taken in Monterrey, Mexico, in March 2002, when the international community adopted a two-pillar strategy, whereby sustained pursuit of sound policies and good governance by the low-income countries is to be matched by larger and more effective international support, as well as an enabling international economic and trade environment for development.
Achieving the MDGs
There are many ways in which the IMF helps poor countries achieve the sustained high levels of growth that establish the basis for poverty reduction—including through policy advice, technical assistance, financial support, and debt relief. It also tries to ensure that developed countries’ policies are supportive of low-income countries’ development efforts, by advocating for increased foreign aid, the opening of markets to developing countries’ exports, and the maintenance of a healthy, enabling international economic climate.
As part of these efforts, the IMF rapidly and substantially increased its financing to low-income countries during the global crisis, thereby helping these countries implement a counter-cyclical response and, in particular, protect social and other priority spending. The IMF also made its concessional financing instruments more flexible to better meet the needs of its low-income-country members. The reform also provides exceptional interest relief (for example, zero interest payments on concessional loans through end-2014) and permanently higher concessionality.
The pressures to meet the MDGs by 2015 have further focused the IMF’s efforts on helping countries assess the macroeconomic consequences of scaling up both their own policy efforts and external financial support. In this context, the IMF encourages countries to develop and analyze alternative frameworks for achieving the MDGs, and to make these underpin their poverty reduction strategies. Typically, one scenario might include a realistic projection that assumes good policy implementation and continued donor support at a level based on current trends and expectations. Another more ambitious projection would take account of absorptive and administrative constraints and try to identify policies to alleviate them so as to put the country on a higher growth path. This can help countries use the MDGs to design their policies, and guide donors in assessing the capacity of a country to absorb increased levels of aid and put it to effective use.
Increasingly, it is recognized that macroeconomic stability and growth depend heavily on structural and institutional factors. Therefore, in contributing to the achievement of the MDGs, the Fund works closely with partner agencies, especially the World Bank, but also other multilateral and bilateral providers of aid and financing.
The Global Monitoring Report (GMR) is anGlobal Monitoring Report annual report that aims to assess how the world is doing in implementing the policies and actions needed to achieve the MDGs and related outcomes. It is produced jointly by the World Bank and the IMF, in collaboration with other international partners. The GMR outlines prospects for the attainment of the MDGs and assesses the support of the international community.
The 2013 Global Monitoring Report, the tenth in the annual series,confirms that the important goal of cutting extreme income poverty in half by 2015 was met ahead of time in 2010. The goal of halving the proportion of people without access to clean water, and the goal of achieving a significant improvement in the lives of at least 100 million slum dwellers by 2020, were also achieved ahead of time in 2010. The goal of eliminating gender disparity in primary education was accomplished in 2010.There has been global progress on eliminating gender disparity both in primary and secondary education. Similarly, clear progress has been made toward the goal of achieving universal primary education. However, overall global progress on health-related targets has been less than stellar, with many countries likely to miss the MDGs on child and maternal mortality, and on access to sanitation. Accelerating progress toward the attainment of these MDGs is not only desirable, but would also generate positive spillovers. Moreover, the 2013 GMR shows that there are rural-urban disparities in development and, as urban centers continue their inexorable growth over the next two decades, an integrated strategy to better manage the planning-connecting-financing formula of urbanization can better help achieve the MDGs.
Regional progress toward achieving the MDGs is more diverse. At one end of the spectrum, the East Asia and Pacific region is on target to meet most of the MDGs except for the goal of 100 percent primary education completion rate. At the other end, sub-Saharan Africa is off target on most of its MDGs. However, it should be noted that given their difficult starting points, delays in policy reforms and growth, and fragile conditions, these countries have made significant progress in absolute terms. This is particularly true of those MDGs that the world as a whole is struggling to meet.
Drawing on domestic efforts and international support, these countries need to accelerate growth and buttress a virtuous circle of development through good economic policies, stronger institutions, and improved infrastructure.
In addition to assessing progress in achieving the MDGs, the 2014 Global Monitoring Report—to be launched in October 2014—will focus on policies and actions aimed at ending poverty and enhancing shared prosperity in the post-2015 period.
Post-2015 development agenda
The debate about the post-2015 agenda at the UN and beyond is progressing with multiple tracks of intergovernmental processes that will culminate in formal negotiations among UN member states, starting toward the end of 2014. A report by the UN Secretary General, to be completed by October-November 2014, will form the basis of those negotiations. A UN summit in September 2015 is expected to bring this debate to a conclusion, and start the transition to the post-MDG era. In this context, an Open Working Group of UN member countries has recently submitted a set of 17 proposed sustainable development goals for consideration by the General Assembly. At the same time, an intergovernmental committee of experts on sustainable development financing has completed its report to the General Assembly with options for financing the implementation of sustainable development goals. The latter will also serve as input into the third International Conference on Financing for Development (FfD) in July 2015 in Ethiopia. Its outcome will be a key pillar for the implementation of the post-2015 agenda. The Fund, as a major institutional stakeholder in the FfD process since the first conference in Monterrey in 2002 (“Monterrey Consensus”), will be closely involved in the new conference and its preparations. As member of a UN system task team, the IMF has continued to provide analytical inputs and technical support to all the abovementioned processes. One key document, which has met with strong positive resonance worldwide, has been a report by the UN Secretary General’s High Level Panel of Eminent Persons issued in May 2013. A joint letter by heads of multilateral development banks, the World Bank, and the IMF to the Secretary General welcomed in particular the panel’s overarching call for a universal agenda with five big transformative shifts:
- To leave no one behind and complete the MDGs, moving from reducing to ending extreme poverty in all its forms;
- To put sustainable development at the core by integrating the social, economic, and environmental dimensions of sustainability;
- To foster a profound economic transformation that will generate a quantum leap forward in economic opportunities, job creation, and inclusive growth;
- To build peaceful, effective, open, and accountable institutions for all but also recognize that peace and good governance are core elements of the development process; and
- To forge a new global partnership, in which the international community goes beyond an aid agenda: including reductions in corruption, illicit financial flows, and tax evasion; fighting climate change; championing free and fair trade, technology innovation, transfer and diffusion; and promoting financial stability.
Accelerating Progress toward the MDGs: A Six-Point Agenda
Sustain and broaden the growth momentum
• Strong and inclusive growth must be at the center of the strategy to achieve the MDGs.
• Need for concerted efforts to spur growth in lagging countries in Africa and fragile states.
• A sound macroeconomy, a conducive private investment climate (regulatory environment, infrastructure), and good governance are key ingredients of strong and inclusive growth.
• Need for careful monitoring of and responsiveness to risks to developing country growth arising from ongoing tensions in international financial markets and high oil and food prices.
Achieve better results in human development
• Increased public spending on education and health is not the sole answer; quality and equity of spending are equally important.
• Policies and interventions must factor in strong linkages between health and education outcomes and child nutrition and environmental risk factors—water and sanitation, pollution, climate change.
Integrate development and environmental sustainability
• Environmental sustainability must be integrated into core development work, maximizing synergies.
• For natural resource-dependent countries, sound resource management is critical for sustainable growth.
• Developing countries will suffer most from climate change and are least able to adapt. For them the best way to adapt is to develop.
• Mitigation of carbon emissions will require financing and technology transfer to developing countries. Such support should not divert resources from other development programs.
Scale up aid and increase its effectiveness
• Notwithstanding current domestic fiscal pressures, traditional donors must expedite aid delivery in line with commitments, particularly to low-income and fragile countries that offer promising scaling-up opportunities.
• The changing aid architecture promises more resources and innovation but also poses new challenges for aid effectiveness and coherence across an increasingly diverse donor community.
Harness trade for strong, inclusive, and sustainable growth
• Conclude the Doha trade round expeditiously.
• Aid-for-trade to strengthen trade logistics, supported by services liberalization, is important for poor countries’ competitiveness and ability to benefit from trade opportunities.
Leverage international financial institutions' support
International financial institutions’ declining relative financing role does not imply less relevance. Their impact through leverage remains key in achieving collective action on development (MDGs and related outcomes) and the increasingly important global and regional public goods such as climate change.
- Adaptation of strategy to increasing client differentiation and global change initiated by several international financial institutions is important and timely.