Message of the United Nations Secretary-General, Kofi Annan
on the International Day for the Eradication of Poverty

17 October 2000

Almost half the world's population lives on less than two dollars a day, yet even this statistic fails to capture the humiliation, powerlessness and brutal hardship that is the daily lot of the world's poor.

Poverty on such a scale is unacceptable, not least because globalization has opened up vast avenues of wealth creation. Globalization can be a strong force in the fight against poverty. But globalization must mean more than creating bigger markets, and experience confirms that growth alone cannot reduce poverty and income inequality. Economic policy must be combined with effective social policies aimed at education for all, health for all and gender equality. This is essential if globalization is to work for all the world's peoples, and if we are to meet the goal of halving, by the year 2015, the proportion of people living in extreme poverty.

This is an ambitious goal, but it is neither utopian nor impossible. We have the knowledge and the means with which to achieve it. What is missing is the will. In the developed world, that means the will to provide meaningful debt relief, to remove protectionist barriers against exports from the poorest countries, and to spend more than just a negligible fraction of income on development assistance. In many developing countries, it means the will to fight corruption, to put an end to persistent conflict, and to build a platform of good governance.

In the Declaration they adopted at last month's Millennium Summit, world leaders recognized the need to "spare no effort to free our fellow men, women and children from the abject and dehumanizing conditions of extreme poverty." The International Day for the Eradication of Poverty is a reminder of the global responsibility that exists to work for a more equitable world economy, where all countries have a fair chance to compete, and where those who have more will do more for those who have less.

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People and Poverty 2000:
Globalization has yet to benefit the poor

NEW YORK, 17 October--Efforts to reduce poverty have improved living conditions for millions of people around the world, but the results are so uneven and gains in some parts of the world have been offset by deteriorating conditions in others, according to the Secretary-General's report on the implementation of the first United Nations decade for the eradication of poverty, which runs through 2006.

Over half the world's six billion people live lives of substantial deprivation, living on incomes that amount to $2 dollars a day or less. There have been improvements, as more people are living longer lives, in developing as well as developed countries, more people are attending school than ever before, and more people have access to health care. Still, far more must be done.

Globalization has been heralded as a major force that could be harnessed to push the poverty eradication agenda. Globalization has helped make the world increasingly interdependent, and has presented many new opportunities, yet only those countries--generally those with a highly educated and skilled labor force--have been able to benefit from the global economy. Most developing countries, and the least developing countries in particular, continue to be left largely untouched by the globalization process.

In the last five years:

• The percentage of people living in extreme poverty--on less that $1 a day--has declined substantially.
• The Asian financial crisis has led to an increase in the numbers of people living in poverty.
• The greatest decline in the number of people living in poverty took place in China.
• In Sub-Saharan Africa, the proportion of people living in poverty went down, yet more people are now living in poverty.
• More people are living in poverty in Latin America. In countries with economies in transition, poverty rates and numbers have gone up sharply, with far more people living in poverty than before 1989.

Some poverty indicators:

• More than 110 million primary-school age children in developing countries do not attend school, and for many who do, the quality of the education is in question.
• There has been progress in all regions on infant mortality, yet poor people still suffer from far higher infant-mortality rates. Some countries have made progress: the poorest 20 per cent in Brazil have a lower infant mortality rate than the richest 20 per cent in Ghana or Pakistan.
• People in developing countries are living longer: the average life expectancy went from 55 years in 1970 to 65 years in 1997. The average for the industrialized countries in 1997 was 78 years.
• HIV/AIDS is shortening life spans, mostly in developing countries. In 33 developing countries, life expectancy has declined due to the epidemic.
• Natural disasters and civil conflicts have severely limited opportunities for improvement in many countries.

Globalization has not helped everyone

There are growing inequalities between and within countries:

• The fifth of the world's people living in the highest income countries accounts for 86 per cent of the world's GDP, 82 per cent of the world's export markets, 69 per cent of foreign direct investment, and 74 per cent of the world's telephone lines.
• In contrast, the poorest fifth of the world's population contributes to less than 1.5 per cent of the GDP, export markets, foreign direct investment, or phone lines.
• Foreign direct investment, which exceeded $644 billion in 1998, has not gone to the poorest countries. The 48 least developed countries attracted less than $3 billion in 1998, or 0.4 per cent of the total. The United States received about a third.
• Foreign direct investment was concentrated in about 20 middle income countries in South East Asia and Latin America, as well as to some transition economies.
• Employment growth in developing countries has been slight, and the quality of employment generated by globalization has been questioned.
• Labor standards have eroded due to increased competition for export markets and foreign investment.

Setting targets for progress

Fighting poverty and promoting development is a prime United Nations objectives--on an equal basis with its mission to promote peace. The UN works with its 189 Member States to set policies and programmes that have a direct impact on poverty reduction. In addition, the UN has sought out other partners, such as non-governmental organizations, private businesses and corporations, the international financial institutions, religious organizations, and members of national parliaments to help bring about a concerted effort to help people improve their living conditions.

The United Nations convened the World Summit on Social Development in 1995 in Copenhagen, Denmark, where representatives of 186 countries--including 117 world leaders--agreed to make poverty reduction efforts a governmental priority. The goals and objectives of the Social Summit were recently reaffirmed at a special session of the General Assembly, held in Geneva in June, where countries adopted even further-reaching proposals to assist poverty-fighting efforts.

At the Millennium Summit, 150 world leaders agreed to a number of steps to help people escape the misery of poverty. These include:

• By 2015, halving the proportion of people living on less than a dollar a day.
• By 2015, halving the proportion of people who suffer from hunger.
• By 2015, halving the proportion of people who are unable to obtain safe drinking water.
• By 2015, providing primary education to all girls and boys, on an equal basis.
• By 2015, have halted--or even reversed--the spread of HIV/AIDS and the scourge of malaria.
• By 2015, reducing maternal mortality by three-quarters and child mortality by two thirds.
• By 2020, improvement in the lives of at least 100 million slum dwellers.

What should be done?

Eradicating poverty is a complicated process, requiring the cooperation of many actors--in communities, towns, national governments and in international institutions. There is no quick fix for poverty. Globalization can help, but it must benefit everyone. The following measures can help.

• Create new trading opportunities for developing countries.
• Reduce tariffs on goods from developing countries.
• Establish a mechanism to stabilize commodity prices.
• Establish more education and job training opportunities in developing countries.
• Improve various channels to promote greater transfer of technology to developing countries.
• Strengthen the international financial system to reduce the negative impacts of financial turbulence and crises.
• Speed up action on debt relief to ensure that the benefits can accrue to people in developing countries as quickly as possible.
• Develop the private sector within developing countries while at the same time, encouraging corporate social responsibility

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UN points to agriculture as an escape from the "poverty trap"

(NEW YORK, October 2000) Agriculture -- often given short shrift in development planning -- can play a key and even a leading role in breaking out of the vicious cycles in which many poor countries are trapped, the authors of the UN World Economic and Social Survey 2000 contend.

The strategic importance of agriculture is often overlooked in development circles, because it was wrongly assumed that agriculture was, and would remain, a low productivity activity. But increasing productivity in agriculture is possible and offers a number of strategic advantages, this year's Survey says, in a comprehensive analysis of how countries can escape from what is known in development circles as "poverty traps".

Growth experience of the past half century

An overview of economic growth rates in the developing countries 1950-1999 -- abstracted from the World Economic and Social Survey 2000.

• In the 1980s -- known as "the lost decade" in development circles -- gross domestic product (GDP) per capita fell by a total of 6 per cent in Africa, 3 per cent in Latin America and 51 per cent in West Asia. But combined GDP per capita increased by 65 per cent in Eastern and Southern Asia during the same decade.
• The overall 1980s growth of developing countries of 0.1 per cent in the 1980s improved in the 1990s to 2.3 per cent.
• The experience of the last half century shows how hard it is to sustain uninterrupted growth. No developing country achieved an annual growth rate exceeding 3 per cent for 24 consecutive years -- which is the number of years required to double GDP per capita at such a growth rate.
• Nevertheless, years of consistently higher economic growth have allowed some economies to double their GDP per capita in a period of 10 to 13 years: Brazil (1965-74), Indonesia (1968-80), Mauritius (1984-97), the Republic of Korea (1963-74, 1975-86 and 1987-96) and Taiwan Province of China (1963-72, 1973-84, 1985-95).
• For the majority of countries, economic growth is a slow or elusive process. Out of 95 developing countries monitored by the UN Department of Economic and Social Affairs (DESA), 28 suffered an overall decline in per capita GDP between 1964 and 1999.
• GDP per capita doubles in 35 years if it grows at an annual average of 2 per cent. Out of the 95 countries monitored by DESA, 74 failed to achieve this benchmark over the last 35-year period. Moreover, 39 of the 74 have per capita GDP below $1,000 (in 1995 dollars) in 1999, and 38 of these were in the same situation in 1964.

First of all, agriculture is where the poor people are -- between 70 to 95 per cent of the labour force in most developing countries works in agriculture, according to the Survey, and in general poverty rates tend to be higher in rural than in urban areas.

Additionally, a strengthened farm sector can bring down food prices and improve nutrition and labour productivity in the entire country; generate employment and heighten demand for manufactured goods and services; channel labour and capital into the development of other sectors; and earn foreign exchange.

Thus, a situation in which manufacturing operates with economies of scale is likely to lead to a poverty trap, because farmers' incomes are too low to create a demand for manufactured goods and services, the Survey says. But if technology and/or land reform stimulate farm production, the added value spurs national manufacturing and urban sectors.

Other chapters in the second part of the Survey cover the potential of institution building, education and technology, respectively, to accelerate economic and social development in the poor countries.

(The first part of this year's Survey was released in July.)

WORLD ECONOMIC AND SOCIAL SURVEY 2000 is available for $55.00 (Sales No. E.00.II.C.1, ISBN 92-1-109136-5) from United Nations Publications, Two UN Plaza, Room DC2-853, Dept. PRES, New York NY 10017 USA, Tel.800-253-9646 or 212-963-8302, Fax.212-963-3489, E-mail: publications@un.org; or Palais des Nations, CH-1211 Geneva 10, Switzerland, Tel.41-22-917-2614, Fax.41-22-917-0027, E-mail: unpubli@unog.ch;