EDITORIAL

Mounting Challenges to Reach the MDG Goal of Poverty Reduction:

A Regional Perspective

Economic growth is essential for sustained poverty reduction. There is, however, enormous challenge in operationalizing this axiom: how to accelerate and sustain growth while, at the same time, making growth broad-based enough to benefit the poor people and the disadvantaged communities. Devising a balanced policy package to pursue this objective involves significant tradeoffs. The sharing of experience in this development dynamic can be of enormous help in the development endeavours of countries. This is a role that the regional commissions have consistently tried to fulfill, now rendered additional significance in the context of implementation of the Millennium Development Goals (MDGs) and the regional follow-up to the global conferences and summits. Recent analytical work by the regional commissions, including this year's regional Economic and Social Surveys, reconfirms that the realization of the MDGs necessitates progress in all major areas, including poverty reduction and improvements in education, health, gender equality and environment, as well as the empowerment of the people, in particular, women and youth.

Meeting the primary MDG goal of reducing extreme poverty is becoming increasingly uncertain. According to the ESCWA Survey, the region now faces the highest global rate of new entrants into the labour market, the highest unemployment rate and, when calculated over the past two decades, the lowest global rate of per capita GDP growth. At the current trends, the number of people living in absolute poverty will increase in Africa from 380 million to 450 million by 2015. ECA’s Survey reveals that there has been significant increase in the dispersion of growth rates, with no less than seven African economies experiencing negative growth and deceleration in the aggregate economic performance in Sub-Saharan Africa. ECLAC estimates that in Latin America, the number of poor was 20 million more in 2003 than there were in 1997 and that the region's per capita GDP is still 1.2 percent lower than in 1997. And, if one looks beyond the number games of MDGs, ESCAP reveals that despite the overall improvements in the region's poverty situation, the incidents of rural poverty is higher in many of them.

As more and more developing countries adopt Poverty Reduction Strategies (PRSPs), there is a need to regularly adjust them to ensure a sharper focus to effectively address the poverty trap. PRSPs, which are linked to external financing, tend to be biased towards macroeconomic stability and growth, often neglecting pro-poor strategies. For example, landlessness, unemployment and the gender gap, which have been identified among the major causes of unrelenting poverty, are not always adequately reflected in PRSPs. Reviews conducted at the regional level suggest that the relationship between PRSPs and the MDGs is weak.

The single most glaring constraint hindering implementation of the MDGs has been that of resources. Even for Africa, despite the commitments in the Monterrey Conference in 2002, ODA flows to the continent are still below the 1990 peak level. The UN Secretary- General has long been pleading for doubling of ODA for the MDGs. Moreover, the long-term sustainability of the developing countries cannot be achieved without giving them an opportunity to trade through eliminating the variety of barriers in the developed countries, including trade distorting subsidies and protectionist farm policies. A breakthrough in those negotiations, therefore, remains a dire necessity.

Mervat Tallawy

Executive Secretary of ESCWA and

Current Coordinator of the Regional Commissions