IMFSurvey Magazine: Policy
Global monitoring report
Progress Toward MDGs Off Track, Report Warns
By IMF Survey online
April 8, 2008
- Halfway to target date, many countries, particularly in Africa, expected to fall short
- Climate change, high food, and oil prices complicate prospects
- But World Bank-IMF report notes significant progress on some fronts
A new World Bank-IMF report warns that most countries will fall short on the Millennium Development Goals (MDGs), a set of eight globally agreed development targets that the international community is aiming to achieve by 2015.
Though much of the world is set to cut extreme poverty in half by then, prospects are gravest for the goals of reducing child and maternal mortality, with serious shortfalls also likely in primary school completion, nutrition, and sanitation goals.
"Developing countries need more foreign aid and domestic resources to reach the MDGs. High economic growth and a stable macroeconomic environment remain essential for reducing poverty and increasing investment in health and education." said IMF Managing Director Dominique Strauss-Kahn.
Ties to climate change
The Global Monitoring Report: MDGs and the Environment—Agenda for Inclusive and Sustainable Development stresses the link between environment and development and calls for urgent action on climate change. The report warns that developing countries stand to suffer the most from climate change and the degradation of natural resources. To build on hard-won gains, developing countries need support to address the links between growth, development and environmental sustainability.
Progress toward the MDGs differs dramatically across countries, regions, and income groups, the report says. Sub-Saharan Africa lags on all counts, including the goal for poverty reduction, though many countries in the region are now experiencing improved growth performance. At the country level, most countries are off track to meet most MDGs, with those in fragile situations falling behind most seriously.
While most of the poverty reduction between 1990 and 2004 took place in East Asia and Pacific, South Asia would contribute the most to global poverty reduction in the next decade. However, South Asia is likely to fall seriously short in some areas, including primary education, gender parity in tertiary education, and child mortality goals. South Asia will likely not reach the goal of halving malnutrition rates. In fact, South Asia has the world's highest incidence of child malnutrition and the child malnutrition rate in India is double the African average.
"In this Year of Action on the MDGs, I am particularly concerned about the risks of failing to meet the goal of reducing hunger and malnutrition, the `forgotten MDG'," said Robert Zoellick, President of the World Bank. "As the report shows, reducing malnutrition has a `multiplier' effect, contributing to success in other MDGs including maternal health, infant mortality, and education."
With stronger efforts by the countries themselves and their development partners, most MDGs remain achievable for most countries, the report says. With this in mind, the report lays out an integrated six-point agenda, with strong, inclusive growth at the top. The agenda also calls for more effective aid; a successful outcome to the Doha round of trade talks; more emphasis on strengthening programs in health, education and nutrition; and financing and technology transfers to support climate change mitigation and adaptation.
"I want to reiterate the need for a renewed international effort to promote growth in Africa," said Mark Plant, Deputy Director of the IMF's Policy Development and Review Department. "Donors should scale up aid in line with their commitments at Monterrey and Gleneagles, and countries in sub-Saharan Africa should step up their efforts to eliminate the impediments to growth."
Zia Qureshi, lead author of the report concluded that: "This year's high level meetings in connection with the MDG halfway point provide an opportunity to agree on priorities for action and milestones for monitoring progress."
Key points in the report
• Though the overall aid landscape is expanding, official development assistance (ODA)—estimated at $103.7 billion in 2007—has stalled. To meet the promises by the Group of Eight (G8) advanced economies to increase aid by $50 billion by 2010, ODA must expand. Meanwhile, new donors like China and India are growing in size and importance.
• Growth momentum will have to be sustained and broadened in developing countries in the face of financial turmoil. The IMF projects global GDP growth will slow from 4.9 percent in 2007 to 3.7 percent in 2008. Developing countries' growth will ease to 6.7 percent, but persistent financial market turmoil and knock-on effects on growth pose significant downside risks.
• The number of people living on under $1 a day in the developing world declined by 278 million between 1990 and 2004, and a stunning 150 million in the last 5 years of that period.
• Rapid progress is possible. Vietnam reduced poverty from 58 percent in 1993 to 16 percent in 2006.
• Forty million more children are in school and gender disparity in primary and secondary schools has declined by 60 percent, but 75 million children remain out of school.
• Every year, 3 million more children survive, and 2 million lives are saved by immunization. But every week, 10,000 women still die from treatable complications of pregnancy and birth, and over 190,000 children under five are lost to disease. Two million people now receive AIDS treatment, but about the same number die every year of the disease, and over 33 million are infected with HIV.
• The economic burden of environmental health hazards is estimated at 1.5 to 4 percent of GDP. Worldwide, environmental risk factors play a role in 80 percent of diseases, including malaria, diarrhea, and respiratory infections. A child dies of malaria every 30 seconds.
• A billion people lack reasonable access to safe drinking water and 2.6 billion people (40 percent of the world population) do not have access to basic sanitation. Meeting the water and sanitation targets will require doubling the current annual investment to about $30 billion.
• The UN estimates that by 2030, developing countries will need $100 billion annually to finance mitigation and $28-$67 billion for adaptation.
• A third of the developing world's population—1.6 billion people—lack access to modern energy, and are forced to rely on carbon-emitting biomass and fossil-fuel energy.
• An area of forest equivalent to the size of Panama or Sierra Leone is lost every year to land use changes, with most of the loss concentrated in Latin America and Sub-Saharan Africa.
• In 2007, gross concessional flows from multilateral development banks crossed $12 billion, a 10.3 percent increase driven by the International Development Association (IDA). While Asia continued to receive almost half of these flows, Africa received 45 percent in 2007, up from 37 percent in 2000.
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