Statement by Mr. José Antonio Ocampo, Under-Secretary-General for Economic and Social Affairs to the International Forum on the Eradication of Poverty
New York, 15 November 2006

Excellencies, colleagues, friends,

Eradicating poverty is one of the greatest challenges of our times, and we know that we can only do it by working together. In a clear sign of multistakeholder commitment, this International Forum on the Eradication of Poverty has been organized by 13 different UN Departments, Funds, Programmes, and Agencies, in collaboration with civil society and with the support of GTZ. On behalf of the organizers, I am delighted to welcome you all.

The UN global Conferences and Summits since the 1990s have put the commitment to poverty eradication at the centre of national and international development efforts. At the 1995 World Summit for Social Development in Copenhagen, Governments committed to eradicating poverty as an ethical, social, political, and economic imperative. The Summit’s Programme of Action included a proposed Decade for the Eradication of Poverty, adopted shortly thereafter by the General Assembly. The International Year for the Eradication of Poverty, in 1996, helped lay the foundations for the Decade.

The Assembly’s 24th special session in 2000, urged Governments to build consensus with all relevant actors on policies and strategies to cut in half the proportion of people living in extreme poverty and hunger by 2015—a call that was soon echoed by the Millennium Summit. Showcasing that commitment as the first of the eight Millennium Development Goals has heightened global awareness and helped mobilize a concerted effort not only to reduce poverty and hunger, but also to confront closely related issues captured in the other MDGs and the call in MDG 8 for more ambitious development cooperation.

This Forum serves as the concluding event of the Decade for the Eradication of Poverty. It will look, during its main sessions as well as special events, at the central issues to tackle poverty effectively, at innovative approaches to poverty eradication, and at concrete initiatives to eradicate poverty, such as the Millennium Villages Project.

While we have certainly not met the Decade’s objective of eradicating extreme poverty, we have made some advances in reducing overall poverty, as well as in some other areas. Let me highlight four of them.

First, over the past ten years, our way of thinking about poverty and how best to fight it has evolved greatly. Today, in line with the vision of the Copenhagen Summit on Social Development, we firmly recognize poverty as a multidimensional problem, with an array of root causes that must be addressed.

Lack of education and employment opportunities and thus the need to resort to sheer survival strategies to make a living are the most important determinants of poverty’s perpetuation across generations, and we must break the poverty traps that they generate. We must also face poverty’s most blatant manifestation, hunger, and the health problems of poor communities, including those associated with the lack of access to clean water and sanitation, and the special problems generated by HIV/AIDS and malaria, particularly in sub-Saharan Africa. We must build upon the capacity of women to lift themselves and their families out of poverty. We must face the dialectical link between poverty and conflict, and also look for governance reforms that give the poor access to political influence and enable them to benefit from inclusive and participatory approaches to development.

Almost half the population of least developed countries (LDCs) lives in extreme poverty. To break the cycle of poverty, the economic, infrastructural, and environmental challenges that these countries face must be addressed. LDCs have been recognized as a distinct category in the international trading system, leading thus far to steps such as the European Union’s “Everything but Arms” initiative. This issue has also been at the centre of the now interrupted Doha WTO negotiations.

This brings me to a second area of advance: the emergence of an enhanced global partnership for development. Official development assistance (ODA) has been steadily increasing since the Monterrey Conference on Financing for Development. Some European countries already exceed the UN target of 0.7 per cent of GNI for development cooperation, and the rest have committed to achieve that target by 2015 or earlier. Pledges were also made to provide immediate support for “quick impact” initiatives to support anti-malaria efforts, education, and health care.

Beyond ODA, innovative sources of financing are enlarging the resources for financing development. Nineteen countries are implementing a Solidarity Levy on airline tickets to finance an international drug purchase facility (“UNITAID”), launched at the beginning of the current General Assembly. Another initiative, the International Finance Facility (IFF), was launched last week under a pilot project to fund immunization programs through the initial flotation of a US$1 billion five-year bond.

2005 also produced agreement to consider additional measures to ensure long-term debt sustainability through increased grant-based financing and a 100 per cent debt cancellation for heavily-indebted poor countries.

A third area of advance is the emergence of national development strategies, with poverty reduction at their centre. This has reflected a renewed emphasis on national ownership of development and the importance of capacity building to enable countries to design and implement poverty reduction and development strategies. At the 2005 World Summit, all UN Member States committed to devising comprehensive national development strategies to achieve all the MDGs and other development goals agreed to through the UN’s conference process. Poverty reduction strategies have also been considered by the Bretton Woods institutions since 1999 as a precondition for obtaining debt relief and concessional financing.

A fourth area of advance in our efforts to eradicate poverty is improved coordination within the UN system. The organizations of the UN system have made significant progress in integrating the MDGs and goals of the broader UN Development Agenda into their work programmes and in devising system-wide approaches to support country-level implementation. The 2005 Summit has put a powerfully reformed Economic and Social Council at the centre of efforts to monitor and advance implementation of the development goals, in a unified and coherent way. This Forum is a good example of the commitment of UN organizations to build on our individual strengths and work together to exploit synergies, all to ensure delivery of better development results for our member states and their peoples.

What I have quickly highlighted here are clearly all important gains. Yet, almost 20 per cent of all people continue to live in extreme poverty. So where have we fallen short?

The proportion of poor people in developing countries living on less than one dollar a day declined from 27.9 to 19.4 per cent between 1990 and 2002. But this global picture masks important regional disparities. Global poverty reduction has been driven by the success of East Asia and the Pacific and of South Asia. All other regions have experienced little change or setbacks since 1990. Sub-Saharan Africa, in particular, has achieved little or no progress. And the reduction of poverty in the developing world, measured by the two-dollars-a day poverty line, shows a slower rate of improvement.

The eradication of poverty thus remains a major policy challenge as well as an intellectual one. We still do not know enough, nor have traditional approaches always been useful. We have a good handle on the human development dimensions of these challenges, and the multidimensionality involved. And some innovations in social policy have made important contributions, particularly the design of conditional targeted transfer programs for the poor, such as those making cash transfers conditional upon children attending school and mothers having regular health controls during pregnancy. Let me underscore, however, that these social safety nets are no substitute for integrated social protection systems, which have become all the more necessary given the growing risks faced by populations today.

We have also acquired a good understanding of some of the economic dimensions of poverty eradication, particularly the role of building productive capacities and providing access to financial services. When the poor enjoy the same rights extended to others, to own a bank account and to apply for credit, their assets are used more productively. This was recognized during the International Year of Microcredit and in the publication last year of our Blue Book, Building Inclusive Financial Sectors for Development. And the recent announcement of the Nobel Peace Prize to Professor Muhammad Yunus and the Grameen Bank has shined a spotlight on the important role that financial services play in the lives of millions of people.

But let me be blunt: our level of understanding drops way down when it comes to the exact link between economic growth and poverty reduction. The concept of “pro-poor growth” has ultimately helped little, given the lack of consensus on the elements of such growth or even on a definition of when growth actually is “pro-poor”. A recent IMF report evaluating the PRSP experience makes the point: “…knowledge of the links between policies and growth remains limited and understanding of the links between policies and poverty reduction even less so”. We do know, however, that strategies, to be effective, must take into account country-specific institutional and structural characteristics, which rules out any “one-size-fits-all” approaches or policy solutions. And let me refer to two dimensions that remain the most important challenges, and on which limited progress has been made: the need to generate adequate levels of quality employment and to address the broad-based trend towards income inequality.

In recent years, the importance of employment has been recognised at the highest level in the intergovernmental process. At the 2005 World Summit, leaders pledged to make full and productive employment and decent work for all a central objective of their national development strategies, and this commitment was ratified by ECOSOC. And all poverty reduction strategies should place employment generation as the major channel to poverty reduction. We have thus decided to dedicate our 2007 Report on the World Social Situation to this issue. As for growing inequality, this has been at the centre of our work in many parts of the United Nations and at the World Bank. It was the focus of our report The Inequality Predicament and of the World Bank’s Global Development Report last year. But inequality has not yet been recognized as a central issue of concern at the intergovernmental level.

Over the decade since the Social Summit, however, unemployment has risen, rather than fallen. According to the ILO, in 2005, the number of unemployed worldwide reached new heights—nearly 192 million people. At the same time, underemployment, characterized by low productivity and inadequate income, remains pervasive in the developing world, and is probably increasing. And the world as a whole seems to be experiencing a long-term trend loss in what people perceive as “secure employment”, whether in the private or public sectors. This trend, together with persistent calls for more labour flexibility, has generated a growing sense of economic and social insecurity.

We have also seen a broad-based trend towards widening inequality within countries. According to research undertaken by the United Nations University’s World Institute for Development Economic Research, 48 out of 73 countries for which such information is available experienced a deterioration of income distribution during the last three decades, and most of them in a substantial way. As those 48 countries contain 87.5 per cent of the population of the sample countries, this means that approximately nine out of ten citizens in the world live in countries where income distribution has deteriorated—a staggering figure. Indeed, as I have averred on other occasions, rising inequality has truly become a global pandemic. Many factors explain this: the growing gap in wages between skilled and unskilled workers, the rising share of profits, and, in some countries, growing regional or urban-rural disparities.

What all this means is that generating adequate levels of employment and reducing inequalities through “pro-poor” or “shared growth” strategies, will fundamentally require national level institutions that effectively mainstream employment generation and overcoming income and wealth inequality concerns into economic policymaking—that is, in the decisions of finance ministers, central banks, and production sector, technology, and trade ministers. And it requires, at the international level, that such matters as the global integration of financial markets, global trade negotiations, and intellectual property rights should be evaluated not only in terms of their economic merits but also in terms of their effects on the social dimensions that I have underscored.

These challenges are immense yet essential to put an end to poverty in our times and to build inclusive societies. And we must do this together, building on the different strengths enjoyed by international organizations, foundations, academia, civil society, and the private sector. And, above all, we need to work in partnership with people living in poverty who know their real needs much better than we do. Many of the NGOs present here today helped crystallize the commitments made over the past decade to poverty eradication. And I am certain that you will continue to hold Governments accountable to ensure that these commitments are met.

It is my hope that our discussions and exchanges over the next two days will enable all of us to together seize the momentum generated by this United Nations Decade for the Eradication of Poverty, its advances and shortcomings.

Let’s keep the promise and make it happen.