As UN development council opens session, Annan says growth not enough

Kofi Annan

29 June 2005 – As the United Nations' main forum for development issues opened its policy session today, Secretary-General Kofi Annan said that economic growth alone is not enough to improve the living conditions of the world's poor, even if the current robust economic growth rates in developing regions, including sub-Saharan Africa, continue.

"Our biggest challenge is still with us: to translate growth into development for all," Mr. Annan said as the 2005 session of the Economic and Social Council (ECOSOC) opened its three-day high-level segment and considered the UN's mid-year economic review, the UN World Economic Situation and Prospects as of mid-2005.

The review shows that, despite indications that the total world economy is slowing after the strongest and broadest growth since 2000, economies of developing countries surged at a 6.6 per cent growth rate in 2004, and appear to be set for still-strong growth in 2005 and 2006.

In South Asia, 2004 growth of 7 per cent is likely to be replicated in 2005 and 2006. Sub-Saharan African economies, which grew at 5.5 per cent last year, could expand even faster during this year and the next – although population growth of more than 3 per cent per year absorbs much of the positive impact. Economies in transition of Eastern Europe are set to grow by 6 per cent this year, down from 7.6 per cent in 2004.

Unfortunately, such growth is not always reflected in the lives of ordinary people, the Secretary-General said.

"In most developing countries, we continue to see high rates of unemployment and under-employment. In Africa, the current and even projected rate of growth is just not enough to achieve the Millennium Development Goals(MDGs)," he added, referring to the set of ambitious targets, ranging from halving extreme poverty, to halting the spread of HIV/AIDS and to providing universal primary education, all by 2015.

Clearly, he said, economic growth is vital, but not sufficient by itself to achieving those goals. Smarter policies, more resources and closer partnerships were also needed, with the full participation of both developed and developing countries. In addition, there must be simultaneous progress in human security, human rights and development.

"Only then will the global economy bring people in from the margins," he said. "Only then will the benefits of globalization reach all people, including those who need it most."

As a central body for articulating development policy and ensuring policy coherence, ECOSOC is well placed, he said, to promote such an integrated approach to development, since it is the only organ mandated to coordinate the activities of the UN system and to engage with non-governmental organizations(NGOs). It is also a vital contributor to the 2005 World Summit in September, in which progress toward development goals will be reviewed and the efficacy of the UN in achieving those goals assessed.

Also opening today's session, Munir Akram of Pakistan, ECOSOC President, said that the mixed signals of the world economy, the significant trade and financial imbalances between the major economies, and the accompanying rise in protectionist voices, were disheartening signals in the struggle for development. Yet, finally, the political will was being generated to succeed in meeting the challenge of redressing extreme poverty, hunger and disease.

Following the opening statements of Mr. Annan and Mr. Akram, experts and heads of UN agencies addressed the session. Nobel Prize laureate in economics Joseph Stiglitz pointed to a need for a fairer trade regime, global financial stability and innovative financing in meeting the MDGs. Juan Somavia, Director-General of the UN International Labour Organization (ILO) said that the current global job crisis required a global response.

António Guterres, UN High Commissioner for Refugees (UNHCR) said that many of the poorest people lived in countries in conflict or just emerging from it, but that little attention had been given to the relationship between conflict and the MDGs. That was why the Secretary-General had stressed the indivisibility between security, development and human rights.

In conjunction with the ECOSOC session, at the press launch of the mid-year economic report, UN Under-Secretary-General for Economic and Social Affairs José Antonio Ocampo said that the high rate of growth since 2004 helps to make up for some difficult years for developing economies at the beginning of the century.

"It also opens a window of opportunity for moving ahead faster on the goals set at global conferences in the 1990s and at the Millennium Summit in 2000," he added. "In a faster-growth environment, it is easier for developing nations to invest in health, education and infrastructure. Aid programmes from overseas have a better chance of making permanent gains on underlying problems."

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