GENEVA PRESS KIT
Below you will find the contents of the entire official press kit for the special session of the General Assembly taking place in Geneva from 26 to 30 June. The nine releases are presented here together in one easily printable format. All releases appear in the same format on the Media Section of the official website,www.un.org/socialsummit .
The materials below are published by the United Nations Department of Public Information. For further information, please contact: Mr. Dan Shepard, Development and Human Rights Section, Department of Public Information, Room S-1040, United Nations, New York, NY, 10017, U.S.A. Tel.: (212) 963-2191; fax: (212) 963-1186 E-mail: firstname.lastname@example.org .
GENEVA PRESS KIT – RELEASE 1 – DPI/2096
Social Summit+5: Advancing the Social Development Agenda
Amidst the heightened concern over such social issues as poverty, employment and worker rights in the age of globalization, the United Nations General Assembly will hold a special session from 26 to 30 June 2000, at the Palais des Nations in Geneva, Switzerland. Its aim is to advance the global social development agenda that was set at the 1995 World Summit for Social Development (Social Summit) in Copenhagen, Denmark.
After reviewing the progress and the obstacles encountered in implementing the outcome of the Social Summit, countries are expected to suggest and agree upon new initiatives that will enhance efforts to create jobs, reduce poverty and address a wide array of other social concerns.
United Nations Secretary-General Kofi Annan, who has warned of a backlash against globalization if the needs of people in developing countries are not addressed, will open the special session. General Assembly President Theo-Ben Gurirab will preside over the five-day meeting, which is expected to draw a number of heads of State or Government as well as other high-level officials.
A voice for civil society: Geneva 2000 Forum
To provide a voice for civil society, the Government of Switzerland will host the Geneva 2000 Forum at the nearby international Conference Centre of Geneva, which will promote dialogue between representatives of non-governmental organizations, industry, business, trade unions, professional organizations, parliamentarians and academics as well as intergovernmental organizations and governmental delegations. In addition, the Swiss Government will hold an international symposium on themes directly relating to the special session.
What was the Social Summit all about?
By 1995, the cold war had ended, the age of globalization was well under way and the opportunities for greater prosperity seemed endless. Yet more than a billion people were still living in extreme poverty, millions of people were unemployed, and a growing number of societies were breaking along racial, ethnic or social fault lines.
Against this backdrop, the United Nations convened the Social Summit to find global solutions to the problems of poverty, unemployment and social disintegration. The response was overwhelming. Meeting in Copenhagen, Denmark, representatives of 186 countries—including 117 heads of State or Government —agreed on an agenda to make social progress a priority issue at the international level. In particular, countries agreed to the Copenhagen Declaration containing 10 commitments to social development, and a 100-paragraph Programme of Action that set out strategies, goals and targets to improve the quality of life for people everywhere.
What was special about the outcome of the Social Summit?
The Social Summit focused on the most immediate and essential needs of individuals — livelihoods, income, health, education and personal security. By setting priorities, the Summit raised the global standard for achieving social progress. It also alerted the world’s major financial institutions that all economic plans must recognize their social implications.
While negotiators in Copenhagen realized that most implementation of the Programme of Action would take place at the national, or even local level, they also found that international efforts were necessary to help foster an environment that was conducive to social development. This included efforts ranging from the promotion of peace and security to the creation of an economic environment that allows all countries to share in the benefits of globalization, and an increase in official development assistance to the least developed countries.
The 10 Social Summit commitments include calls for the creation of an environment that is conducive to social development; the eradication of poverty; the promotion of full employment; the promotion of safe, stable and just societies; the promotion of equal rights for women; the promotion of universal education and high health standards for all; special consideration to help development in Africa and in the least developed countries; ensuring that structural adjustment programmes include social development goals; increasing the resources available for social development; and strengthened international cooperation, through the United Nations, to promote social development.
Why another meeting five years later?
With a sense of urgency and a desire to continue the momentum from Copenhagen, countries agreed at the Social Summit that the United Nations General Assembly should hold a special session to review implementation efforts after the Summit, and to suggest further initiatives that may be necessary.
All countries have agreed that the special session should not be an occasion to renegotiate the outcome of Copenhagen. Rather, there is a common feeling that the session should be an opportunity to remove the roadblocks that have prevented the full implementation of the Social Summit commitments.
John Langmore, Director of the United Nations Division for Social Policy and Development, said, “We’re trying to be very ambitious”. He said that countries had requested 25 short reports from a variety of international organizations on the progress of implementation, and that it was likely that a number of new proposals would emerge from their findings. In addition, he said a number of proposals for new initiatives have already come from both developed and developing countries. These include efforts for greater cooperation and coordination between the United Nations, including the United Nations Conference on Trade and Development (UNCTAD), and the World Bank, the International Monetary Fund (IMF) and the World Trade Organization.
Have there been improvements in social development since the Social Summit?
Five years is not much time to show definitive social progress. Since Copenhagen there have been several disturbing events — including financial crises and internal conflicts — that have reversed some of the progress made towards achieving the goals of the Summit.
The Asian financial crises of 1997 virtually wiped out in the course of a few months nearly all the gains of the last decade of development in East Asia, and the numbers of people living below the poverty line grew by millions. Although there are indications that the East Asian economies have since reversed the downward slide, the financial crises in Asia, and to some extent in Latin America, have served notice to the new international economic system that social safeguards must be built into the system.
In sub-Saharan Africa, where several internal conflicts continue to take their toll, over half of all people are believed to be living below the poverty line of $34 a month. And progress is threatened in Latin America, where the number of households living in poverty has declined from 41 per cent to 36 per cent, but where unemployment regularly exceeds more than 10 per cent.
The level of trade has grown over the last few years, but there has been a sustained overall decline in official development assistance to developing countries. Nevertheless, several developed countries, such as the United Kingdom and Canada, have increased their assistance for development.
A shift in policies
Many efforts have been made to implement the results of the Summit. More than 75 countries have adopted plans for poverty reduction since Copenhagen, and 38 countries have set specific targets for poverty reduction. Another 40 countries are in the process of developing anti-poverty plans and strategies.
In 1996, the members of the Development Assistance Committee of the Organization for Economic Cooperation and Development (OECD), taking their cue from the Social Summit, adopted a target date of 2015 for halving the number of people living in extreme poverty. The World Bank and the IMF have since adopted this target as well.
There have been major efforts to implement the results of the Social Summit within the United Nations system. Both the World Bank and the United Nations Development Programme have made poverty reduction an overriding goal. The International Labour Organization — whose new Director-General, Juan Somavia, had been the Chairman of the Social Summit — has made the creation of quality jobs a priority. And the World Health Organization is currently emphasizing the need to consider health — not just health services — as a necessary component of development plans.
Published by the United Nations Department of Public Information
GENEVA PRESS KIT – RELEASE 2 – DPI/2100
Social Summit Special Session Seeks Solutions to Globalization Woes
As the lightning-quick forces of globalization continue to move goods, information and money across borders with ever-increasing speed, and bring ever-greater profits to those who are in the loop, there is a growing realization that this prosperity train is passing by most of the world’s people.
In fact, the benefits of globalization have largely bypassed over half of the world’s population, 3 billion people who make do on less than US$ 2 a day. The gap between the world’s richest and poorest has widened, while financial crises in Asia and Latin America have threatened to wipe out years of growth and improvement.
“Despite all the talk of globalization, the bulk of the world remains largely untouched by it. It is estimated that half the world’s population has never even made, or received, a telephone call”, according to United Nations Secretary-General Kofi Annan.
Amidst a growing sense of human insecurity in an age of a new global economy, the United Nations convened the World Summit for Social Development in Copenhagen, Denmark, five years ago to direct global attention towards solutions to the world’s major social problems. The Summit, attended by representatives of 186 countries — including 117 heads of State or Government—resulted in a significant agreement that committed countries to working toward specific social development goals. In particular, they agreed to the Copenhagen Declaration on Social Development, which contained 10 definitive commitments to work harder to eradicate poverty, improve health and education, and work towards full employment. They also agreed to a 100-paragraph Programme of Action that set goals and targets for social development, and a plan to achieve those goals.
Social summit review
The 10 Social Summit commitments:
* Eradicate absolute poverty by a target date to be set by each country;
* Support full employment as a basic policy goal;
* Promote social integration based on the enhancement and protection of all human rights;
* Achieve equality and equity between women and men;
* Accelerate the development of Africa and the least developed countries;
* Ensure that structural adjustment programmes include social development goals;
* Increase resources allocated to social development;
* Create “an economic, political, social, cultural and legal environment that will enable people to achieve social development’’;
* Attain universal and equitable access to education and primary health care;
* Strengthen cooperation for social development through the United Nations.
To review progress since the Summit and to move the social development agenda forward, the General Assembly will hold a special session in Geneva from 26 to 30 June 2000. While there is a general feeling among country delegations that the goals and targets set in Copenhagen will be difficult to meet, most countries still maintain that they are committed to pursuing the Social Summit’s objectives, and believe that the Geneva meeting will help to remove the roadblocks that have prevented quicker progress.
The overarching theme of the review session is “to put social development at the heart of the global political agenda”, according to John Langmore, Director of the Social Policy Division of the United Nations Department of Economic and Social Affairs. “We have to maintain the political momentum by getting agreements on concrete actions and strategies.”
In particular, many see the Geneva meeting as an opportunity to engage Governments in setting the social development rules and standards that would guide the efforts of the other major international financial institutions, such as the World Bank and the International Monetary Fund.
Individual countries are responsible for setting their own domestic social agendas. Since the Summit, electorates in a number of countries have tried to find the right balance between “less government, less taxes and more efficiency” and a government that pursues equity and social justice. In many developing countries, the struggle has been to find resources for the social agenda without endangering economic reforms.
While not legally binding on any country, the Copenhagen outcome carries a strong moral and political weight, especially since it was an agreement reached by so many world leaders. Countries find that such a global consensus is useful because it can help to set universally recognized standards and goals for social development.
Fears about globalization provided a major impetus for convening the Social Summit in 1995. Since the Summit, the constantly accelerating pace of globalization, which has made deep inroads in the political, economic and social decisions of virtually all countries, has been singled out by most developing countries as the greatest obstacle to achieving social progress. This long-simmering anxiety over globalization boiled over when thousands of protesters converged at the ministerial meeting of the World Trade Organization, in Seattle, 30 November to 4 December 1995. These critics of globalization, hardly a monolithic group, have raised objections that the new global trading regime is damaging to the environment, worker rights, local interests and, above all, the needs of people.
Globalization has been a positive force that improves the standard of living of many and brings more opportunity. But, according to United Nations Secretary-General Kofi Annan, “Many experience globalization not as an agent of progress, but as a disruptive force, almost hurricane-like in its ability to destroy lives, jobs and traditions in the blink of an eye. For many, there is an urge to resist the process and take refuge in the comforts of the local. Globalization may be exacerbating inequality. It may also be disturbing cultural traditions and increasing our sense of spiritual disorientation.”
Many countries have expressed dismay over the new global economic direction—and its social consequences—particularly during recent discussions held in the United Nations General Assembly. Susanto Sutoya, Indonesian Deputy Permanent Representative to the United Nations in Geneva, told the General Assembly, “It is clear today that the onset of globalization and trade liberalization has not been to the benefit of all countries, and that many developing countries are ill prepared to meet the challenges and reap the rewards of a global economy.”
The prognosis for small players on the international scene is not good, according to Malaysian Prime Minister Mahathir bin Mohamad, who told the General Assembly that small independent countries faced a bleak future. A level playing field, he said, where capital, goods and services flow freely between countries, and where there are no discriminatory taxes, actually helps to destroy markets. He asked, “Can competition between giants and dwarfs be fair even if the playing field is level?” Using the huge profits made elsewhere, he contends that giant banks, corporations and industries from rich countries could afford to lose money in small countries. As small businesses closed or were forced to sell to giant foreign companies, markets would eventually be destroyed, resulting in a contraction of world trade. “The world would actually become poorer because of free trade.”
South African President Thabo Mbeki, noting that the process of globalization necessarily redefines the concept and practice of national sovereignty, said, “It becomes necessary that a compensatory movement takes place, towards the reinforcement of the impact of these countries on the system of global governance, through the democratization of the system of international relations”.
New efforts needed to give global markets a human face
“The fundamental philosophy of the Summit was to make development more people-centred”, according to Jagat Mehta, former Foreign Secretary of India. “In that philosophy, the underlying principle was of equity in access to livelihood, health, education and other social services in an enabling national and global order. However, what we have today, as we approach the next century, is a pattern of disabling inequities in the international macroeconomic environment, which goes to debilitate social and economic development in the developing world.”
While trade is now an essential component of international efforts to manage and regulate the process of globalization, there are other components that must be addressed as well. Following the 1997 financial crisis that decimated economies in Asia, there has been widespread agreement on the need to develop new international financial architecture to cope with upheavals in the world’s financial markets.
“The private sector, as vital and dynamic as it is, cannot by itself give global markets a human face or reach the millions on the margins”, said Kofi Annan. Building on the success of the United Nations in assisting countries to forge agreements covering a wide range of global problems, the Secretary-General has sought to gain support for consolidating the role of the United Nations in setting standards and guidelines to achieve social development.
An opportunity to advance new ideas
The Social Summit has already helped to raise the profile of social issues on the global agenda. Now, the special session presents an opportunity, in addition to assessing progress so far, to formulate new strategies to operationalize the goals of the Summit.
The need for new social strategies was demonstrated by the international response to the Asian financial crisis, where the international financial institutions were compelled to consider the social dimension of the situation.
Many believe that the new international challenges, such as fighting poverty, providing quality employment, protecting the environment and fighting the HIV/AIDS virus, call for a new system of international cooperation and new institutions to manage that cooperation.
Some believe there must be a change in the current mindset regarding social development issues. According to Inge Kaul, Director of the United Nations Development Programme, Office of Development Studies, the social development field has much to learn from economics. Instead of just small incremental changes, such as a little more education, a little more in health programmes, she argues that countries have to “get the social fundamentals right”, just as they must get the economic fundamentals right.
These fundamentals include, she said, the acceptance by countries that all people have the right to develop, to contribute to society, and to enjoy the right to a healthy life, education opportunities and productive employment. Furthermore, she says, Governments must subject all major policy decisions to a social development test to determine their social impacts.
Ms. Kaul said that countries must also learn to value the costs of neglecting social development. For example, the consequences of failing to invest in the education of girls far exceed the costs of actually investing in education for girls.
What will happen at the special session?
Although it will be a meeting of Governments, the special session will continue to provide an opportunity for Governments to enter into a dialogue with non-governmental organizations and representatives from business, parliaments, religious groups and other important players in civil society. In parallel to the special session, the Government of Switzerland is hosting the Geneva 2000 Forum, which will serve as a platform for launching new efforts to promote social development initiatives within civil society.
The General Assembly has urged countries to send representatives “at the highest possible level” in order to ensure that countries can enter into more concrete obligations. Further initiatives will be discussed throughout the preparatory process preceding the special session.
Countries have already started to negotiate the documents that will represent the outcome of the special session. A first preparatory meeting was held in May 1999, and informal talks were conducted in September. The result is a tentative text that outlines areas of agreement and disagreement. Negotiations resumed during the meting of the Commission on Social Development, held in New York from 8 to 17 February 2000, and again at a second preparatory meeting in April.
There are no real differences among countries over the Copenhagen objectives. They have agreed that they will not attempt to renegotiate aspects of the Summit’s outcome. Rather, the real disagreement among countries concerns why implementation of the Summit’s outcome has not gone as smoothly as planned.
Developing countries tend to stress the importance of international cooperation and the need for resources in order to implement the Summit’s Programme of Action. According to Sonia Elliot, First Secretary at the Guyana Mission to the United Nations, who negotiated on behalf of the Group of 77 during 1999 on social development issues, there is a feeling among developing countries that there should be an effort to implement what has not been implemented since Copenhagen before moving on to new issues.
“First we need to try to implement Copenhagen”, she said. “We need resources, a political commitment from donor countries, market access, investment flows, and consideration of the special situation of Africa. If we don’t have the resources, how are we going to achieve anything?”
Industrialized countries, while they do not deny the need for more international cooperation, put a premium on such issues as governance, human rights and gender equality to promote the social development agenda. The European Union, picking up on a proposal from the United Kingdom, has advanced an idea that the Social Summit review can help define a set of social principles for the World Bank and the International Monetary Fund.
General Assembly President Theo-Ben Gurirab, in summarizing the General Assembly’s discussions on the implementation of the Social Summit, said the major concerns of countries included globalization and the international financial crisis, the decline of official development assistance and debt relief initiatives, good governance, people-centred development, poverty eradication, creation of productive employment opportunities, basic social services and the role of civil society in decision-making and resource allocation, and development and human security.
With negotiations continuing over the role of global financial institutions and over the rules of trade in this age of globalization, President Gurirab said that the special session, with its attention on the social dimension, “should serve as the third pillar in the deliberations on the redesign of the global financial architecture”.
The Social Summit review session could also provide an alternative forum to discuss the social issues, such as labour rights, that caused serious disagreements at the World Trade Organization talks in Seattle. Other issues that may be considered are the social responsibilities of multinational corporations, new possibilities for raising resources for social development, and a global target to eradicate poverty.
Published by the United Nations Department of Public Information
GENEVA PRESS KIT – RELEASE 3 – DPI/2101
New Responsibilities Urged for Business in the Global Economy
With either a spark of conscience or just good business sense, more corporate insiders are now calling for new codes of social ethics for businesses as they confront the demands of the new global economy.
It could also be that the price of ignoring social or economic consequences is too high. Whether it is the Union Carbide gas leak in Bhopal that killed more than 6,000 people, or the Exxon Valdez, which spilled 11 billion barrels of oil into Alaska’s Prince William Sound, catastrophic industrial accidents are hard to hide. With the advent of e-mail and the Internet, other corporate transgressions, such as the use of child labour and exploitative working conditions, are becoming better known, often with accompanying adverse reactions to businesses.
Still, there are continuing reports of companies that mistreat indigenous populations, engage in the illegal transportation and disposal of toxic wastes, sell goods made with child labour, support governments that flaunt human rights law, and destroy the environment.
And many non-governmental organizations (NGOs) charge that the corporate world’s endorsement of voluntary codes of conduct is just a public relations tactic to help them ward off binding rules and enforceable international standards for business behaviour. In fact, the NGO Web site of “Corporate Watch” has expanded the definition of “greenwash” to include “the phenomenon of socially and environmentally destructive corporations attempting to preserve and expand their markets by posing as friends of the environment and leaders in the struggle to eradicate poverty”.
Many corporations are now going to greater pains to differentiate themselves from the dark force of globalization. John F. Smith, Chief Executive Officer of General Motors explained, “Global corporate growth has the potential to affect more people in more countries than any other force in the past”. But there are problems as well. For corporations, he said, “the global economy carries with it a series of obligations”.
Recognizing the new economic environment, Chevron CEO Kenneth Burr said, “When you respect diversity, help economies grow, help the environment and education in countries, you trigger a cycle of prosperity”. He added, “You would not have heard this discussion in years past. This is new.”
While there have always been companies that have understood that socially responsible practices—that may even go beyond what the law demands—are not incongruous with a good bottom line, a major part of the drive towards the adoption of codes of social responsibility stems from the growing inequalities that globalization has so far engendered.
Globalization has already brought prosperity to many, yet it has been a highly selective process excluding billions of people from sharing in the new wealth. As a result, globalization has widened the inequalities between developing and developed countries, and the rich and poor within countries. With the opportunities for corporations so big and the profits so hefty, there are growing demands, from inside and outside business, that corporations live by a set of universally recognized social standards.
Noting the dangers of this trend, Juan Somavia, Director-General of the International Labour Organization said, “Globalization has brought both prosperity and inequalities, which are testing the limits of collective responsibility. If we are to avoid a serious backlash against the process of globalization, concerted action is needed.”
Corporate responsibility now on the global agenda
The issue of corporate social responsibility is now squarely on the agenda for virtually every large corporation, and will also be on the agenda for the upcoming United Nations General Assembly special session to review the implementation of the outcome of the World Summit for Social Development, that will be held in Geneva, Switzerland, from 26 to 30 June 2000. There, countries will attempt to agree on further initiatives that will help eradicate poverty, promote full employment, promote access to social services, and ensure that everyone has a fair chance to fully participate in society.
For the first time, the United Nations Secretary-General issued a report on guidelines for corporate social responsibility. The report was made available to the Preparatory Committee meeting from 3 to 14 April and serves as the basis for a debate that could, ultimately, result in a single international standard for corporate conduct in the global economy.
The Social Summit, which was held in Copenhagen in 1995, resulted in an agreement that heavily focused on meeting the needs of individual people in a globalizing world. These included the needs for people to have an income, a job, and a sense that they will not be marginalized. While issues of economic growth, trade, and employment generation were heavily stressed by the Summit, the actual role and responsibilities of the private sector were not.
Among the proposals for the special session is a recommendation that the United Nations Commission on Social Development consider the issue of corporate social responsibility as a priority theme in 2002.
To many, the issue of corporate social responsibility appears ripe for an international consensus. Some believe that an agreement at the General Assembly special session on guidelines for corporate social responsibility which, though not legally binding, would constitute a universally recognized standard for business behaviour.
Limits to the bottom line
“Few trends could so thoroughly undermine the very foundations of our free society as the acceptance by corporate officials of a social responsibility other than to make as much money for their shareholders as possible”, admonished Nobel Peace Prize Economist Milton Friedman, an ardent advocate of free market solutions. But he also acknowledged that fair play was the one rule that businesses must abide by. He said the “one—and only one—social responsibility of business is to increase profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud”.
There have always been limits to the bottom line. Corporations, perhaps once stung by strong public criticism, have long found the need to establish solid public and community relations in the places where they operate. Whether it is funding a local hospital or a local charity, or sponsoring a parade, there has been a long tradition of businesspeople giving something back to the communities. In short, good community relations is simply good business.
The lessons of a human rights or environmental disaster for a corporation can be disastrous. The Bhopal tragedy caused Union Carbide to almost completely transform itself after the accident, as it saw its sales fall from $9.9 billion a year before the accident, to US$ 4.8 billion eight years after. And the cost of the Exxon Valdez spill added up to almost a billion dollars.
In both cases, the disasters have led to change. Since Bhopal, the chemical industry has started its own voluntary initiatives, such as “Responsible Care”, that are applicable to corporations wherever they may be operating. And since the Exxon Valdez, there has been a considerable tightening of laws and regulations concerning the transport of oil, such as measures that tankers will have to be double-hulled by 2015.
More recently, the sneakers manufacturers Nike and Reebok adopted new corporate codes of conduct after they were stung by criticism concerning the labour practices of some of their contractors in Asia. The Royal Dutch/Shell Group substantially revised its “Statement of General Business Principles” after protesters accused the company of environmental recklessness in the North Sea oilfields and in Nigeria, where critics charged that the military regime protected the company’s facilities in the face of sometimes violent local opposition to Shell’s operations.
It is not just public relations disasters that are driving the present campaign for corporate rules in the international arena. A growing number of investors are now demanding corporations to act in a socially responsible way, and are putting their money in companies that act responsibly. In the United States, there is US$1 trillion in assets in portfolios that use “screens” to determine whether a company is environmentally or socially responsible. These assets account for almost one-tenth of all invested assets in the country.
New demands from shareholders
And there are internal reasons for corporations to be more socially conscious as well. As corporations have become larger than many governments, the issue of corporate governance has become far more important. While corporations have always been answerable to their shareholders, there has been a movement toward greater emphasis on protecting shareholder rights, a move that requires greater fairness and transparency.
According to Business for Social Responsibility, a US-based business organization dedicated to promoting social values, studies show that companies where stakeholder interests were balanced—such as between management, labour, and customers—showed four times the growth rate and eight times the employment generation rate than that of other companies. At the same time, the studies found that bad publicity about ethics could lower a company’s stock price for at least six months.
Among the benefits for socially responsible corporate practices are reduced operating costs, enhanced brand image and reputation, increased sales and customer loyalty and increased productivity and quality.
Filling the vacuum—new efforts
A global compact for business is inherently difficult to enforce. As a result, there has been a strenuous debate on whether corporations can adhere to voluntary codes of conduct, or whether binding laws and regulations are needed.
In the meantime, there have been many efforts, however, by business, public interest groups, regional organizations and some countries to fill the regulation vacuum caused by globalization.
At the World Economic Forum in Davos, Switzerland, in February 1999, United Nations Secretary-General Kofi Annan challenged business leaders to uphold human rights, and decent labour and environmental standards in the conduct of their own businesses when he proposed the “Global Compact” for business.
“You can use these universal values”, he said, “as the cement binding together your global corporations, since they are values people all over the world will recognize as their own”.
Drawn from already universally recognized agreements on human rights, labour, and the environment, the concise and straightforward Global Compact attempts to set down basic principles for good corporate citizenship. Neither a programme, a certification effort nor a document open to subscription, the Compact represents an attempt to sustain a commitment to open markets while at the same time meeting the social and economic needs of the world’s people.
The Secretary-General warned that without the active commitment and support of business “there is a danger that universal values will remain little more than fine words—documents whose anniversaries we can celebrate and make speeches about, but with limited impact on the lives of ordinary people. And unless those values are really seen to be taking hold, I fear we may find it increasingly difficult to make a persuasive case for the open global market.”
The Global Compact is composed of nine principles drawn from universally accepted documents, such as the Universal Declaration of Human Rights, the International Labour Organization Declaration on Fundamental Principles and Rights, the Social Summit, and the Rio Declaration from the 1992 Earth Summit.
The Reverend Leon H. Sullivan, who drafted an effective set of principles for corporations that were doing business in apartheid South Africa, has now drafted a set of global principles that several major corporations have adopted. By accepting the Global Sullivan Principles, companies agree that they will support universal human rights, respect the law, work with communities, governments and employees to achieve greater tolerance and better understanding among peoples, and advance the culture of peace.
Some major corporations have already signed on. The huge mining company Rio Tinto, General Motors, Colgate-Palmolive, Proctor & Gamble, Chevron, Shell, Sunoco, and the Tata Group are among the companies that have endorsed the principles.
Business and human rights
There is a strong link between the rule of law, human rights and business interests. The right to own property, the right to equal protection of the law, the right to privacy and to freedom of movement are all essential to business. Especially important to business in the present economic climate is respect for intellectual property to protect new scientific, technological, literary or artistic products.
In an address to business leaders, United Nations High Commissioner for Human Rights, Mary Robinson, said, “Some business leaders may think that the political and social environment of the country they are doing business in is none of their affair and that whether or not there are human rights abuses is irrelevant. That is a short-sighted attitude and one that is not borne out by experience.”
“The payoff for the observance of these rights is a stable business climate and a reliable workforce”, she continued. She argued that human rights violations, on the other hand, represented obstacles to business.
Enforcing global standards of corporate responsibility
Virtually all the efforts to promote global standards of corporate responsibility are voluntary initiatives. Many of the world’s largest business associations, such as the International Chamber of Commerce (ICC), have endorsed the Secretary-General’s Global Compact.
But the business community is hardly monolithic, and no one organization can claim to represent business, let alone enforce a code of conduct. ICC Secretary General Maria Livanos Cattaui argues that the best way to ensure that good business practices proliferate is to continue the process of globalization. “Robust economic growth and expanding trade and investment will give the Global Compact that Secretary-General Annan proposes a real opportunity to improve human rights, labour standards and environmental progress across the world.” She added, “The more business activities and markets become global, the more readily corporate best practice will spread. Competition will see to that.”
In the meantime, there are those who argue that government has a major role to play in promoting good business practices. Pierre Sané, Secretary- General of Amnesty International, said that while voluntary codes of conduct for business, such as the Sullivan Principles, are a good first step, it was governments that should adopt mechanisms to ensure the protection of human rights, including the rights of workers and the community. Mr. Sané rejected the notion that different cultures valued human rights differently, saying that they are indivisible. “Human rights are as much African as Asian”, he said. “They are about bread and freedom, now.”
Other efforts are continuing as well. The Organisation for Economic Cooperation and Development, which is comprised of the world’s richest countries, has updated its “Principles for Corporate Governance”. Although not binding on any country or corporation, the guidelines call for greater protection of stakeholder and shareholder rights, greater transparency, and greater accountability.
Published by the United Nations Department of Public Information
GENEVA PRESS KIT – RELEASE 4 – DPI/2099
Social Summit Seen as Starting Process of Change
Just as problems of poverty, unemployment and unsafe, unstable and unjust societies plagued much of the world before the 1995 World Summit for Social Development was held in Copenhagen, Denmark, these problems are still as troubling five years later. But since the Summit, there have been changes in the way social issues are viewed and they are now considered a much higher priority.
By the numbers, it is hard to detect much social progress since the Social Summit. Alarmingly, the number of people living in poverty has actually increased in the last five years, unemployment rates are still unacceptably high, and there are still too many internal conflicts raging around the world to say that the goals of social integration have been achieved.
As the pace of globalization has quickened, the growing gap between rich and poor, between and within countries, has grown. According to the 1999 Human Development Report published by the United Nations Development Programme, the assets of the three richest billionaires are valued as greater than the combined gross national product of all the least developed countries and their 600 million people. In 1960, the Report found that the income gap between the fifth of the world’s people living in the richest countries and the fifth in the poorest was 30 to 1. In 1997, that gap had climbed to 74 to 1.
Yet the Social Summit has heralded a major change in the way the world sees—and acts on—social issues, and has started a process that may well take a much longer time to measure results.
Before the Summit, social issues were generally regarded as subjects for each country’s domestic agenda. Since the Summit, these issues are squarely on the table as a priority for international consideration. According to Cristián Maquieira of Chile, Chairman of the Preparatory Committee for the General Assembly special session in Geneva, in June, to review progress since the Social Summit five years ago, “The Social Summit has initiated a political culture for social progress”.
There are several indications that the Summit has had an impact. According to United Nations Under-Secretary-General Nitin Desai, the international communities’ attention to the social dimension of the financial crisis in South and South East Asia is proof of the Summit’s impact.
Within the United Nations system, a major effort has been made during its ongoing reforms to support the implementation of the Social Summit. The World Bank and the International Monetary Fund, often criticized for concentrating on macroeconomic issues at the expense of social development, have now taken major steps to focus on social issues. The World Bank has adopted poverty reduction as its central goal. Its programmes include providing debt relief to the poorest countries as well as revising structural adjustment programmes in order to take into account the social needs of a country. The International Monetary Fund has renamed its facility that lends to the poorest countries the Poverty Reduction and Growth Facility.
One of the basic hopes of the organizers of the Social Summit was that the forum would result in commitments from every country to work towards eradicating poverty. That has happened. What has not yet happened, at least on a large scale, is the transformation of the ideas and commitments of the Summit into tangible results that have actually benefited people.
To provide an assessment on the progress of implementing the Summit’s goals, a report by the Secretary-General has been prepared for the review session’s Preparatory Committee, the Comprehensive Report on the Implementation of the Outcome of the World Summit for Social Development. On the basis of the submissions of 74 Member States, the report documents the progress and obstacles faced in promoting social development in the last five years. Unless otherwise noted here, the material presented herein is drawn from this report.
At the time of the Social Summit, there were, according to the Human Development Report published by the United Nations Development Programme, about 1.3 billion people living in absolute poverty, people basically living on less than US$ 370 a year. It was estimated that some 550 million people were going to sleep hungry each night, and that 1.5 billion lacked access to clean drinking water and proper sanitation.
Today those numbers remain basically unchanged, and may even be growing. Of the 4.4 billion people living in developing countries, a fifth end the day still hungry, a third have no access to clean water, a quarter do not have adequate housing and a fifth of all children do not attend school after the fifth grade.
In Africa, poverty reduction efforts have suffered as a result of chronically low economic growth, the devastation caused by HIV/AIDS and festering internal conflicts. In the formerly socialist countries of Eastern Europe and Central Asia, the universal social security systems have crumbled. Even in developed countries, continuing high unemployment, vastly unequal income distribution and changes in welfare policies have done little to reduce poverty.
Many developing countries have been caught in the no-win position of carrying out radical economic reforms to stabilize prices, change the nature of their economies and reduce the size of government—policies which have often conspired to increase unemployment and poverty.
The social implications of the East Asian financial crisis of 1997-1998 were devastating. In Indonesia, where the number of poor people dropped from 88 million to 22 million between 1970 and 1995, the crises dramatically increased the number of people living in poverty, to about 36 million people. The Republic of Korea and Thailand also saw major increases in poverty after the crises, while Malaysia and the Philippines faced reverses in their poverty reduction efforts. China, on the other hand, has been able to steer clear of the crisis and has continued to sustain its relatively high economic growth, which has helped reduce the number of the rural poor from 280 million in 1990 to 75 million in 1999.
Most of the countries in the region are now well on their way to recovery, helped along by a strong cultural emphasis on health and education that has helped people in these countries to weather the bad times. Government policies during the crisis also helped. By addressing the macroeconomic issues that made them vulnerable in the first place—such as governance, exchange rate policies, public and private debt, and corporate restructuring—these countries have helped themselves on the road to recovery.
The prognosis for social development is particularly bleak in Eastern Europe and Central Asia, where the old institutions of the centrally planned economies that formerly provided social protection for a lifetime have not easily given way to new institutions better suited to a free market. A drop in real wages, by as much as 77 per cent in Azerbaijan, for example, has led to an extreme rise in the poverty rates in these countries. From just 4 per cent of the population living in poverty in 1988, almost 32 per cent of the people in these areas are now living in poverty.
In Copenhagen, countries committed themselves to economic, social and human development in Africa, yet the results are not heartening. Poverty is still so pervasive in sub-Saharan Africa that about 42 per cent of all people in the region, or about 220 million people, lived on less than $1 a day in 1987. At the start of 2000, the number of African poor was expected to approach 300 million, according to World Bank officials.
Internal conflicts, the spread of HIV/AIDS and a heavy debt burden have severely constrained development in Africa. As a result, the continent has been increasingly marginalized in world commerce and commercial markets. Efforts imposed by the outside world have not helped. As a result of structural adjustment programmes, African bureaucracies have been substantially reduced, resulting in a public sector that is vastly inadequate to manage sustained growth and development. In 1996, only 1 per cent of African populations were civil servants, compared to 3 per cent in other developing countries and 7 per cent in industrialized countries.
South Asia, with 29 per cent of the world’s people, is also home to about 43 per cent of the world’s poor, or about 500 million people. While there has been progress in reducing poverty, the region’s extremely high population growth in poor rural areas has significantly contributed to the already huge numbers of poor people. Progress in education in the region has lagged well behind that in other regions.
In West Asia and North Africa, where the incidence of poverty is lower than in South Asia or sub-Saharan Africa but higher than in East Asia, there is little evidence that suggests a major trend in poverty reduction. In Latin America and the Caribbean, there are wide differences between and within countries. Poverty rates have fallen in Brazil, Chile and Panama but have worsened in El Salvador, Mexico and Venezuela.
Sustained economic growth is credited for helping most industrialized countries achieve progress towards meeting the Social Summit objectives. Rising incomes and falling unemployment have helped reduce poverty, although the five-year period since the Summit has also been marked by vastly unequal income distribution.
Slow progress on employment
Although many countries have adopted policies aimed at achieving full employment, in practice they have been overshadowed by such economic concerns as financial stabilization, fiscal austerity and budgetary balance.
The global employment situation has not appreciably improved since the Summit, and within the last five years a new series of employment concerns have emerged. The International Labour Organization (ILO) estimates that 150 million people are unemployed around the world, and that almost 40 per cent of the unemployed are young workers. According to the ILO, many more people, perhaps over 750 million, are underemployed.
The ILO reports that employment has grown in the United States, while in Western Europe only some countries have been able to create jobs. In Central and Eastern Europe, those countries that have stabilized their economies and have had some economic growth have posted employment gains, while other countries have suffered setbacks. India appears to show improvement; the picture is mixed in China and South Asia. Africa and the Arab States, still dependent on commodity prices, are likely to see their employment picture worsen; and in Latin America, present economic conditions are not favourable for reducing unemployment.
While poorer countries had hoped to attract greater amounts of foreign investment because of cheaper labour markets, much of the increased investment has gone to only a handful of countries, notably China. Furthermore, new research and investment in new technologies have fuelled economic growth and employment in developed countries. These value-added activities have greatly contributed to the growing gap between rich and poor.
Other employment–related trends that have emerged since Copenhagen include the growth of the informal sector. Work in the informal sector generally fails to provide an adequate income necessary to sustain a decent standard of living. As a consequence, the growth of this sector has added to the ranks of the working poor. In some parts of the world, companies operating in the formal sector subcontract labour in order to avoid paying employment benefits. Once seen as only a transitory phenomenon, the shift towards the informal sector, which is happening in industrialized as well as developing countries, has highlighted the need for greater social protection and minimum standards of employment.
There has also been a growing separation between wages for skilled and unskilled work and between productive and unproductive labour. Among the issues that will be discussed at the Geneva special session are the need to provide skills training, as most quality jobs in a knowledge-based economy require advanced training; the design and extension of safety nets; support for people in the informal sector to assert their legal rights and obtain social protection and access to credit; and assistance for such vulnerable and disadvantaged groups as disabled workers, youth and migrant workers to obtain improved training and jobs.
Providing a fair chance for all
The global landscape has been littered with brutal conflicts since the end of the cold war. Almost always taking place within countries, these violent wars, often based on ethnicity or religion, have claimed millions of civilian lives and displaced many persons.
The root causes of these violent conflicts can often be traced, at least in part, to an accumulated and unresolved backlog of social problems. Conflicts that appear to be ethnically based are often driven, in fact, by poverty and a lack of employment opportunities.
Recognizing that peace and stability are fundamental for economic and social development, the Social Summit emphasized respect for human rights, the empowerment of the individual, and the full and fair participation of all people in society.
Countries have stepped up their efforts to ratify human rights treaties this decade, although they have been selective. Ratification of treaties against torture, inhuman treatment and punishment, or to protect the rights of migrant workers, has been slow.
While the number of countries holding democratic elections has grown in the last decade, many obstacles that prevent the full enforcement of human rights principles still persist. These obstacles range from the silent resistance of social groups with vested interests in discriminatory practices to the lack of the means and the resources to implement the necessary reforms.
Prompted by budgetary pressures to reduce fiscal deficits, there has been a growing shift away from universally and publicly provided forms of social protection in favour of specifically targeted assistance to the truly needy. In some countries social protection has been increasingly viewed as a cost to society and, consequently, the quest to ensure greater efficiency and responsibility has been achieved by transferring a growing percentage of these costs to the individual.
Economic trends affecting social progress
At the Summit, countries agreed that there would be greater international cooperation on social issues, not less. Nevertheless, despite a commitment by industrialized countries to increase their levels of official development assistance (ODA) to 0.7 per cent of their gross national product, official development assistance has continued to decline. Furthermore, an increasing share of this declining pool of resources has gone toward humanitarian needs arising from conflicts and natural disasters. These trends are continuing despite the significant role that ODA has played in financing health and education needs in developing countries, and despite the growing need for foreign assistance in developing countries today.
Efforts to relieve the enormous debt burden of developing countries have moved slowly, but have gained momentum in recent months. A World Bank initiative on debt relief has so far benefited five countries, but plans are underway to ease the qualifications and criteria for debt relief under a broader programme.
Published by the United Nations Department of Public Information
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Working for a Living Is Harder in the Global Economy
They hawk newspapers, cigarettes and assorted trinkets. They repair cars in back lot garages, they wait in restaurants, and they are domestics. They manufacture crafts and spare parts for distant markets and they produce computer programmes.
There are no records of the work they do. There are no tax receipts, no pension contributions, no health insurance. And there are more people in these types of jobs every day.
These are the working people who make up the informal economy. Often putting in long hours with little return, workers frequently use the informal sector as a last resort, a survival strategy, and generally implies a degree of poverty and social marginalization that puts them beyond the pale of any form of social or legal protection.
Globally, instead of withering away as development takes hold, the informal sector is growing, often faster than the formal sector. The informal sector was the primary job generator in Latin America during the last decade, and in Africa, it is estimated that urban informal employment accounts for 61 per cent of the urban labour force.
The informal sector has been accompanied by another phenomenon known as the casualization of employment. Often dominated by people who work at home, this labour force consists of independent contractors who receive no benefits and perform work that was formerly done by regular employees. The result is that more people than ever, in developing and developed countries, have less job security than ever, and have less recourse to assistance if their work, or their health, disappears.
Full employment was one of the major goals of the 1995 World Summit for Social Development held in Copenhagen. In pursuing a strategy toward full employment, there is a new emphasis on the quality of the work, on whether a job is productive and performed in conditions of freedom, security and dignity and can allow a person to earn a decent living. The International Labour Organization (ILO) calls this “decent work”.
The United Nations General Assembly is holding a special session from 26 to 30 June in Geneva to evaluate the progress countries have made since the Social Summit, and will suggest further initiatives to promote the social development agenda in areas where progress has not been satisfactory. Employment issues will be high on the agenda at the special session.
In preparations for the special session, countries have already recognized the need to develop a coherent and coordinated international strategy on employment that would increase people’s opportunities to find jobs that pay a liveable wage. While it remains to be seen how this initiative will develop, countries have endorsed an ILO initiative to convene a World Employment Forum next year to explore how international and national policies could be reoriented to generate more, and better, jobs.
While employment is the key for creating wealth, and is the main instrument for distributing the wealth equitably, the ILO’s report to the preparatory committee for the special session found that globalization has failed to deliver a steadily increasing number of productive jobs throughout the world. Instead, financial crises have had a devastating effect on employment in affected countries, and a growing sense of insecurity has fueled protectionist tendencies in some developed countries.
Employment Policies at the Center of Global Disagreement
Unemployment and labour issues have always loomed large in politics at the national level, and in many countries, one of the largest parties is often the “labour party”. Now, as globalization progresses, employment issues have been propelled to the front and center of public debate, and were most vividly on display during the World Trade Organization (WTO) talks in Seattle last December.
According to Cristián Maquieira, Chairman of the Preparatory Committee for the special session, the special session should be the basic response of the international community to the failed negotiations that took place at the WTO. Those talks failed, in part, due to deep divisions over the trade implications of employment and environmental standards.
While it is often argued that trade boosts economic growth and that economic growth leads to more jobs, keen competition has also caused the loss of many good paying jobs in developed countries. As a result, many trade unions have protested that globalization has precipitated a “race to the bottom”, as countries lower their enforcement of labour standards in order to attract business.
John J. Sweeney, President of the AFL-CIO, the major labour movement in the United States, argues that until now, it has been the global corporations that have defined the global market and dominate it. “They enlisted governments to slash regulations, free up capital, open up markets, guarantee investments. They made the rules and they cut the deals.”
In a speech shortly before the WTO talks, Sweeney said, “Working families have suffered most, because indebted countries have little choice but to compete by lowering their own standards, establish export processing zones, outlaw worker organizing, waive environmental laws, ignore food safety and public health regulations, and slash social spending.”
The United States led a push for a working group on labour within the WTO to ensure that core labour standards should eventually become part of trade agreement. US President Bill Clinton said, “Ultimately, I would favour a system in which sanctions would come for violating any provision of a trade agreement. But we’ve got to do this in steps.”
Developing countries, fearful that they would become the targets of such sanctions, were quick to oppose the US initiative. Mohammed Benaissa, Minister for Foreign Affairs and Cooperation of Morocco, speaking for the Group of 77 in Seattle, said developing countries are unanimous in recognizing the importance of labour standards and the welfare of workers in general throughout the world. However, he stated that developing countries “are firmly opposed to any linkage between labour standards and trade” and said it had already been decided the 1997 WTO meeting in Singapore that the ILO is the competent body to set and deal with these standards. He also pointed out that it was already agreed that the comparative advantage of countries, particularly low-wage developing countries, must in no way be put into question.
Asmat Kamaludin, Secretary-General, Ministry of International Trade and Industry of India said, “Attempts to discuss labour in the WTO are a cause for concern to us. We believe such discussion in the WTO would ultimately lead to calls for changes in WTO rules that would permit trade measures to be used to force compliance of labour standards.”
Employment at the Social Summit
In addition to promoting the goal of full employment, one of the most important outcomes of the Social Summit was a commitment, endorsed by 117 world leaders, to promote ratification of seven key ILO conventions dealing with the prohibition of forced and child labour, the freedom of association, the right to organize and bargain collectively, and the principle of non-discrimination. The issue of employment, which has major economic and social ramifications, was one of the three central themes of the Social Summit, the other being poverty eradication and social integration.
In Copenhagen, countries agreed that job creation, the reduction of unemployment and the promotion of decent paying jobs should be at the center of government strategies and policies. Countries committed themselves to promoting respect for workers’ rights, and agreed that special attention should be given to the problems of long-term unemployment and underemployment of youth, women, people with disabilities, and all other disadvantaged groups and individuals. Countries also agreed that measures should be taken to prevent the exploitation of migrant workers.
The Employment Situation Since the Summit
A less than rosy economic picture in most parts of the world since the Summit has led to higher unemployment and greater poverty in many places. The Asian financial crisis and its fallout in Russia and Latin America, as well as the deepening of the Japanese recession, are among the factors that have made it harder to find and keep a job in the last five years.
It is not just a problem in developing countries. Secure employment in wealthier countries has also become more uncertain. Increased global competition has led to job losses as industry looks for cheaper labour, and a redeployment of these displaced workers has been slower than anticipated. At the same time, governments have been shedding many of their social protection benefits.
“The hard reality is that the benefits of globalization, as it is currently unfolding, are not reaching enough people”, according to Juan Somavia, ILO Director-General. “We know that the global economy is not creating enough jobs, and especially not jobs that meet people’s aspiration for a decent life. The failure to improve both the quantity and quality of employment worldwide is making working families afraid of a race to the bottom.”
According to the ILO, globalization has not delivered the promised benefits to most people. Instead, it found that evidence was accumulating that showed globalization had an effect on widening inequalities between industrialized and developing countries. In a report prepared for the Preparatory Committee for the special session, the ILO found that while globalization had created the extraordinary new opportunities for businesses and consumers that have been driving much of the growth in the global economy, the growing inequalities have been just as extraordinary.
Since Copenhagen, the membership of the ILO has followed up on the international community’s endorsement of basic labour standards by adopting the Declaration on Fundamental Principles and Rights at Work in 1998. This Declaration, which forms the cornerstone of the decent work agenda, requires all members of the ILO to promote the core standards even if they have not ratified the specific conventions. But it also recognizes that there are countries that require ILO assistance to promote ratification of the pertinent conventions, and it calls for the ILO to help countries create a climate for economic and social development. It emphatically states that “labour standards should not be used for protectionist trade purposes” and that “the comparative advantage of any country should in no way be called into question.”
Employment Insecurity On the Rise
Employment security is rapidly becoming a thing of the past as more workers are being thrust into more tenuous employment situations to meet the needs of corporations in this post-Cold War environment, according to Guy Standing, Director of the ILO’s Socio-Economic Security Programme.
Standing said that in the past, the two major competing ideologies—state socialism and welfare state capitalism—provided income and employment support for people. However, with the collapse of state socialism and the fading of welfare state capitalism, these supports have been removed, leaving more people than ever to fend for themselves.
These developments, he said, have been accompanied by the reduced role of trade unions and a greater emphasis on individual, rather than collective, action. Labour policy is increasingly being undercut by labour market deregulation coupled with the adoption of safety nets for those not able to succeed in the prevailing “winner takes all” economic system. “Employment security is now a minority privilege in all societies.”
Need for a New Employment Strategy
According to Somavia, there is little point in debating whether the process of globalization should be halted or reversed. Rather, he argues that unless policies are adjusted or changed to reflect the needs of people, there will be a lack of “social legitimacy”.
Consequently, the tripartite ILO—which consists of representatives of governments, labour, and employers—has decided that the overriding goal of the organization over the next decade must be to promote opportunities for people to obtain decent and productive work in conditions of freedom, equity, security and human dignity.
The long-term objective, Somavia said, is to promote decent work in a sustainable manner, while the immediate objective is “to put in place a social floor for the global economy in ways that meet the concerns of developing countries and working families.”
What is needed, according to the ILO, is an integrated approach to employment issues that fully incorporates economic and social concerns. According to the ILO report, the sectoral approach of the institutions of the international community has not, and will not, be able to tackle the need to address sustainable economic growth and social development. “In the fundamental area of integrated thinking, the multilateral system of international organizations is underperforming.”
The ILO is developing a comprehensive strategy aimed at promoting job creation, the promotion of basic worker rights, increased social protection and the establishment of a social dialogue. According to Maria Ducci, ILO Director of External Relations, the goal is to “allow people to earn a living, get an education, to be productive in conditions of freedom, security and dignity”. Thresholds, or standards for employment must be set in an evolving way, and be sensitive to cultural differences.
An endorsement of these key goals by the special session could have far-reaching effects on national employment strategies, as well as on the policies of international institutions such as the World Bank and International Monetary Fund. The special session has already endorsed the ILO’s World Employment Forum, which will held next year, and proposals to hold a conference on the informal economy are also under consideration.
Earning a Living in the Global Economy
Many job creation opportunities are directly linked to over-all economic conditions, including the health of the global economy. But there are many things governments can do to promote employment opportunities while simultaneously ensuring a decent standard of living. In many cases, the actions of local governments, even at the municipal level, can have a major impact on employment.
Better infrastructure and improved services, for example, can help people in the informal sector, as well as the formal sector, work more efficiently and productively to earn a better salary. A stronger emphasis on small and medium-sized enterprises often results in greater employment opportunities, according to the ILO, and special attention must be made to the development of skill and competancies. Investment policies can also direct resources to sectors that promote more employment, including through the adoption of labour intensive approaches.
The ILO also hopes that the special session can generate additional momentum that will lead to the universal ratification of conventions that form the core labour standards, as well as the more recently adopted Worst Form of Child Labour Convention. While critics have charged that the ILO is “toothless” in its ability to enforce compliance with these conventions, Somavia suggests that there are other effective and agreed upon methods to promote adherence to international standards.
Since Copenhagen endorsed the core labour standards, Somavia argues that these minimum worker rights are now a common objective of the whole international community, and therefore all parts of the international system must help to promote them.
During the negotiations for the special session, countries have endorsed the ILO’s comprehensive programme of decent work, recognizing that improving the employment situation requires a multi-faceted approach. Countries have also agreed to invite the ILO to coordinate an exchange of best practices in employment policies to expand job creation possibilities, reduce unemployment, enhance the quality of work and improve labour market and employment services.
Published by the United Nations Department of Public Information
GENEVA PRESS KIT – RELEASE 6 – DPI/2116
Progress Slow in Meeting Health and Education Goals
When representatives of 186 countries, including 117 world leaders, adopted a plan at the 1995 World Summit for Social Development in Copenhagen to eradicate poverty, reduce unemployment and foster social integration, they included a number of health and education targets to help motivate global action on social development concerns.
The year 2000 was the target date for achieving many of those goals which include:
* Universal access to basic education and completion of primary school for at least 80 per cent of school age children, with equal access for girls and boys to primary school.
* Reducing by a third the 1990 infant mortality rates and reducing maternal mortality rates to half the 1990 level.
* Reducing malaria mortality and morbidity by 20 per cent of 1995 levels.
* Reducing by half the 1990 malnutrition levels among children under 5 years old.
* Primary health care for all.
* Raising life expectancy everywhere to over 60 years.
* Reducing illiteracy by at least half of 1990 levels.
* Eliminating the gender gap in literacy.
* Safe drinking water and sanitation for all.
Five years later, with the General Assembly holding a special session to review the follow-up of the Social Summit, it is clear that many of these goals have not be met. “It is clear that progress in fulfilling the commitments made in 1995 has not been what was hoped for”, according to a report by the World Health Organization (WHO) on health developments since the Summit.
In education, there has been considerable progress toward achieving some of the goals of the Social Summit. Yet, according to the United Nations Edcuational, Scientific and Cultural Organization (UNESCO), the targets will not be met. Svein Osttveit, Executive Secretary of the International Consultative Forum on Education for All, warned that there are over 100 million primary school age children unable to attend school and almost 900 million adults who are unable to read danger warnings, or sign their name. Millions more in both industrialized and developing countries have serious problems reading a document or filling in job application forms. On top of that, many of the children in school today are not receiving a quality education, and too many repeat classes and finally drop out before they can read or write.
According to Social Watch, a coalition of non-governmental organizations that has been monitoring progress on the commitments made at the Social Summit, the main social development indicators show that there has been “astonishing” progress during the last decade. Nevertheless, it found that the world is far from achieving the goals set for 2000. Robert Bissio, Managing Editor of the Social Watch Report, said the goals were “not unrealistic, and indeed, in several cases they were extremely modest”. He added that the United Nations General Assembly, when it meets in Geneva in June, “must clearly recognize that efforts have been insufficient”, adding that concrete initiatives were needed to make up the backlog.
Health Gains Still Elude Over 1 Billion People
There have been major gains in human health, and the last three decades have been marked by an almost 50 per cent drop in infant mortality rates, a rise in life expectancy, and a growth in per capita income. The world can soon be rid of poliomyelitis and it is expected that there will soon be no new cases of leprosy or deaths from guinea worm.
Yet over one billion people have not benefited from these advances in health and, instead, face shorter lives marked with greater misery due to poverty. In all societies, WHO has found that the health of poor people is consistently worse than that of their more well-to-do counterparts. Children born into absolute poverty are five times more likely to die before reaching the age of five years and people in absolute poverty are two and a half times more likely to die between the ages of 15 and 59. In addition, deadly infectious diseases, such as HIV/AIDS, malaria, tuberculosis and diarrhoeal diseases, disproportionately affect poor people.
There are over 33 million people living with HIV, a number that is growing by about 10 per cent a year. More than 95 per cent of these people live in developing countries and more than 70 per cent live in sub-Saharan Africa. Since the start of the epidemic, 83 per cent of all AIDS deaths have been in sub-Saharan Africa. Still, developing countries receive only about 12 percent of global spending on HIV/AIDS care, research and prevention.
Where there are social and environmental crises, where there are weak health systems and disadvantaged communities, malaria flourishes, striking almost 300 million people a year and killing almost a million of them. Almost 90 per cent of the victims live in sub-Saharan Africa, and young children are the most affected group.
Almost one third of all people suffer from some form of malnutrition, according to the WHO report, and malnutrition accounts for 15.9 per cent of the global disease burden. Malnutrition is associated with about half of the 10 million deaths among children under the age of five years.
Several initiatives have been launched to combat the spread of these diseases, including a UN system-wide programme on AIDS and WHO’s Roll Back Malaria and Stop TB initiatives. The WHO, together with the United Nations Population Fund and the United Nations Children’s Fund (UNICEF) have joined forces to reduce maternal mortality. Nevertheless, with limited resources, it has been an uphill battle. On several fronts, such as immunization, progress has been reversed in some African countries, due to civil strife and crumbling, under-funded health systems.
Efforts to implement the Social Summit’s call for universal access to basic health services are not what was hoped for, according to the WHO report. In particular, it found growing, and striking, inequities in access to health care services within and between countries since the Copenhagen Summit.
For example, in any one developed country, WHO found there may be one nurse for every 130 people and a pharmacist for every 2,000-3,000 people. A full treatment to cure pneumonia costs the equivalent of about two to three hours of wages, and a one-year treatment for HIV infection costs the equivalent of from four to six months of wages. The majority of drug costs are reimbursed.
In developing countries, the report found that there may be only one nurse for every 5,000 people and a pharmacist for every million people. Pneumonia antibiotics may cost a full month’s wages, while a full year of HIV treatment would consume the equivalent of 30 years income. And the majority of medicines are paid for out-of-pocket.
The WHO found that in most countries, the distribution of services is highly skewed toward the better-off, and that resource allocation, by default, hurts poor people. There are more health personnel in the cities, while most of the poor live in rural areas. The delivery of health care was also found to be “profoundly anti-poor” with poor people forced to face far longer waiting times before receiving medical attention.
Health concerns are generally absent from poverty reduction programmes, the WHO report found, with health authorities often limiting their responsibility to the production of publicly funded health services while the architects of poverty reduction programmes often neglect the idea that health is a major factor for developing sustainable livelihoods.
Health as a Development Issue
In the eyes of the most budget-conscious everywhere, the costs of health care are staggering. An adequate public health care system, with an infrastructure that includes everything from well-run rural clinics to city hospitals, drains even the deepest treasuries.
In a world more finely attuned to the real costs and benefits of any public good or service, there is a growing realization that while the costs of providing health services may be onerous, it may be far more expensive—in terms of the economic well-being of a country—to have an unhealthy or an uneducated population.
In fact, the costs of poor health are enormous. According to the WHO, poor health and disease eat away a substantial portion of the economic output of a country. Between 7 and 8 per cent of the gross domestic product (GDP) of China is lost due to the effects of air pollution. In India, that figure stands at about 4 per cent. The impact of HIV/AIDS on households is devastating. Surveys in Africa and Asia indicate that the disease leads to income reductions of 40 to 60 per cent.
Health has long been viewed by development experts, finance officials and economists as a consumption rather than an investment cost. This is changing, according to WHO Director-General Gro Harlem Brundtland, who said, “Health may be far more central to poverty reduction than our macroeconomist colleagues have previously thought”.
She stated, “Poverty breeds ill-health—that is nothing new. But we now know much more about how ill-health also breeds poverty, triggers a vicious cycle, hampering economic and social development and contributing to unsustainable resource depletion and environmental degradation. The persistent problem of malnutrition and the unfolding AIDS crisis in Africa tells this story in its most stark form.”
Speaking of the impact of HIV/AIDS on development, Dumisani Kumalo, South Africa’s Permanent Representative to the United Nations, said, “The devastating impact of HIV/AIDS undermines social progress and further exacerbates inequality and poverty. The combination of poverty and HIV/AIDS creates forms of powerlessness and social dislocation beyond the capacity of individual countries to deal with.” He called for a global agenda to respond to the urgency of the problem.
Special Session Could Spur New Health Agenda
With the General Assembly holding a five-year review on the follow-up to the Social Summit at a special session in Geneva, from 26 to 30 June, some health officials want countries to take another look at the issue.
“Why put money into health services when you don’t treat the causes?” asked John Martin, of the WHO’s Department of Health in Sustainable Development. Instead of continuing to narrowly focus on health services, the WHO is now calling on countries to use the five-year review of the Social Summit as an opportunity to set future development policy that recognizes good health as one of the most important assets of the poor.
In its report to the special session’s Preparatory Committee, the WHO spells out a programme that includes a global policy for social development, the integration of health dimensions into social and economic policy, and the development of health systems that can meet the needs of poor and vulnerable populations.
According to Cristián Maquieira, Chairman of the Preparatory Committee for the special session, the final outcome of the meeting must address the international health situation. Among the issues that he believes should be addressed are the HIV/AIDS pandemic, methods to use advanced medications and research in developing countries at costs far below those of developed countries, and a programme to encourage pharmaceutical companies to do research on illnesses that solely affect developing countries.
“It’s not just about cures for balding, or viagra”, he said. “We have to look at the bigger issues and we have to find solutions beyond just health services.”
Education Key to Success in Era of Globalization
Many of the education goals set by the Social Summit were originally adopted at the Jomtien Conference on Education for All, held in Thailand in 1990. Underlining the importance of “meeting basic learning needs”, the conference launched a process to increase access to education while improving the quality of learning.
According to UNESCO’s new Director-General, Koïchiro Matsuura, “The fact that all the Education For All targets set in 1990 have not been met does not in any way affect the vision and principles of Jomtien. They were, and remain, entirely valid.”
He added, “We see clearly the successes and the failures of the past decade, but above all — and this is most encouraging — we see that today, ten years after Jomtien, education is universally understood to be the key to all development: individual development, social development, sustainable economic development.”
To meet the demand for highly technical skills in not only the manufacturing sector but in the service sector as well, countries are finding that they have to provide training and education to a much broader segment of the population than before.
Limited education budgets have conspired to limit access to education and many countries have slapped user fees on students, or have resorted to other cost-sharing methods. This represents a marked departure from an earlier consensus where countries agreed that the state should finance education as a public good. According to Mary Lou Kearney, of UNESCO’s Unit on the World Conference on Higher Education, there was a need for the economic sector to invest more in training and research, as they ended up as the greatest beneficiaries of the training. “A lot of negotiating has to be done”, she said.
To provide basic education for all, a UNICEF report cites estimates that indicate that $8 billion a year are needed for the next 10 years. The resources, it says, could be found in the budgets of many governments and development agencies, as well as in the private sector. It is a question of priorities, according to UNICEF, that pits resources for education against, for example, spending on arms or on subsidized programmes that benefit only the few.
And while there is a desperate need for high-tech learning, most people in developing countries lack access to the Internet, let alone even access to telephone service. “Chalk-based methods are not off the agenda”, Kearney said.
High Technology Still Domain of the Educated
The widely heralded information revolution is still basically confined to a few developed countries. According to the 1999 Human Development Report, just 55 countries account for 99 per cent of all global spending on information technology and the United States has more computers than the rest of the world combined.
Even if the Internet infrastructure and access did exist for developing countries, they would still need a literate and computer-trained population to benefit from the Internet. In Benin, for example, where more than 60 per cent of the population is illiterate, a major investment in education is necessary before Internet use could be expanded beyond the 2,000 people who now use it there.
According to global surveys, Internet users tend to be more affluent and better educated. Over 30 per cent of all Internet users have at least one university degree. Users with a degree reach 50 per cent in the United Kingdom, 60 per cent in China, 67 per cent in Mexico and almost 70 per cent in Ireland.
The good news, according to Kearney, is that overall the number of children attending school is up and the gender gap between boys and girls in literacy is closing. Southeast Asia has posted the largest gains, but significantly, she said, girls’ access to education has greatly improved in the Arab countries, especially the Gulf States. The education picture for Africa has not measurably improved for sub-Saharan Africa.
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Social Guidelines Proposed for Global Financial Institutions
Buffeted by the cross-currents of the rapidly globalizing market economy, United Nations members are debating whether to develop a set of global “social principles”, so that financial and economic decisions consider peoples’ needs in addition to strictly budgetary concerns.
The issue has gained a new sense of urgency since the Asian financial crisis highlighted the pitfalls of ignoring social concerns when setting economic policy. The social upheaval caused by the crisis, such as that in Indonesia, spurred discussion in international financial institutions, and now the debate has moved to the United Nations. The issue is one element of negotiations for the General Assembly’s special session to review the follow-up of the Social Summit, which will be held in Geneva this 26-30 June.
Proponents for establishing social principles insist that such guidelines could put pressure on wealthy nations and international financial institutions to consider how economic policies affect the lives of people in developing countries. In the recent past, donor countries and international financial institutions have come under harsh criticism for their complicity in sustaining the debt burden of developing countries, and for pushing structural adjustment programmes that have often had ruinous impacts on the social fabric of developing countries.
The subject of “social principles” has become controversial. Some developing countries fear that a campaign to establish social principles could backfire on them. For example, wealthier nations might use the fact that impoverished countries cannot meet environmental or labour standards, as an excuse to invoke “protectionist” measures.
There is also suspicion, particularly on the part of developing countries. They feel that this effort could result in an attempt to force new conditions that diminish their sovereignty and will make it more difficult for them to borrow money from the international lending institutions.
In an unprecedented move, the development committee of the World Bank and the International Monetary Fund (IMF) has asked the United Nations to pursue the development of basic social principles that will guide the Bank and the Fund’s work. The move suggests a greater willingness of the Bank, Fund and the UN to acknowledge the relative strengths of each institution. World Bank President James Wolfensohn told finance ministers attending a session of the UN Economic and Social Council that “I see no distinction between the UN setting goals and the World Bank carrying them out”.
Social Principles Still a Work in Progress
The idea for the sound social principles initiative has emerged as one of the key areas of discussion for the Geneva special session, although there are widely differing views on what exactly they should be, and what form they should take, if any.
Then there are a set of questions relating to how the principles would operate. Who would they apply to? How binding would they be? Would the principles have a built-in urban bias? Who would pay to implement the principles? How would they be applied in the industrial world, especially to key market players? And finally, who would monitor the implementation of the principles?
While the concept for social policy principles originated within the context of the East Asia crisis, there has been some criticism. Some believe that the new principles may attempt to address the conditions in countries that have already achieved some degree of economic success and, therefore, may not apply to other circumstances, such as those in the least developed countries.
Consequently, there has been a growing consensus that the initiative should be broadened to apply to all countries, developing and developed, and at all times, not only in times of crisis. There may also be movement towards an agreement to incorporate these social principles in the World Bank and IMF’s approach to dealing with issues such as debt, structural adjustment and crisis situations, without making them necessarily conditional on developing countries themselves.
Speaking at the World Bank and IMF Annual Meeting in October 1998, United Kingdom Chancellor of the Exchequer, Gordon Brown, proposed “new rules of the game” to help deliver stability and prosperity in the modern global economy. Among these rules, he proposed new codes of conduct for fiscal policy, monetary and financial policy, corporate standards and social policy. He later explained that these principles should provide not only minimum standards for countries in times of change, but should also help to equip people to make the most of the new opportunities that globalization engenders.
As a result, the Development Committee of the World Bank and the IMF decided to ask the United Nations to address the issue, within the context of the negotiations for the five-year follow-up to the Social Summit. In addition, the Development Committee asked the World Bank to develop best practices on social policy.
When the issue was proposed by the European Union at the first preparatory meeting for the special session, in May 1999, it was greeted with suspicion by representatives of the Group of 77, which represents 132 developing countries in United Nations negotiations. After struggling with the conditions imposed by the financial institutions over the last decade in the form of structural adjustments, many were loathe to join any process that could create new conditions. In fact, the proposal on social principles became enmeshed with a G-77 proposal to consider measures that could be taken to alleviate the negative impact of economic sanctions on social development.
Developing Countries Wary of New Borrowing Conditions
There are many reasons for caution on developing social principles. Some delegates maintain that these principles have already been drafted and agreed to, and exist in the form of the Social Summit’s Copenhagen Declaration and Programme of Action. They believe it would be totally unnecessary to redraft a new document. Others, however, are not worried over creating a set of social principles, but rather about how they will be used.
As a group, developing countries have not yet agreed upon a common position, but according to Sonia Elliot of Guyana, who was one of the lead negotiators for the Group during negotiations last year, “Some G-77 members don’t want it. “They see it as a potential condition for aid.”
It is not that developing countries don’t care about social principles, she stated, only they were wary of certain principles being “set in stone”. “Many of these social objectives are already goals that developing countries are striving for”, she said.
With limited resources to spend on health, education and other social programmes, developing countries still find that financing from the World Bank and the IMF remains essential, and anything that could prevent or place conditions on a loan should be avoided.
Noting that developing countries already have a relatively uneasy relationship with the international financial institutions, Ms. Elliot asked, “How can there be a guarantee that these principles will not be conditions?”
In the United Nations, each country has a single vote in the General Assembly, but in the World Bank and IMF, voting is weighted by financial contributions, giving the richer countries far more leverage.
“There is a limit to what we can negotiate with the Bretton Woods institutions”, she said, adding that, ultimately, “the World Bank will set the principles and we will not have an input”.
Refining the Idea
Since its initial rocky reception, there have been numerous discussions between various delegations to refine the proposal. Developing countries, while convinced that the issue may not be ripe for any resolution in Geneva, have warmed to the idea that the intentions behind the initiative may be worthwhile to pursue.
While the original idea was to provide social principles for the World Bank and the IMF, there is now a growing consensus that any principles that are developed should be much broader, and should be universally applicable to both developing and developed countries. There also appears to be agreement that the principles should be used at all times, not only in times of crisis or for structural adjustment programmes.
Rosalind Eyben, Chief Social Development Adviser for the United Kingdom Department for International Development, emphasized this point, saying that the G-7 countries have already signed up to the concept of principles and said “rich countries, as well as poor, must ensure their programmes and policies reflect these principles”.
She further explained that a “Code of Good Conduct for Social Policy” should not be interpreted in a legalistic sense and should not be seen as “a doctrinaire blueprint”. Rather, she said, the idea was to develop a “useful set of guiding principles to help all countries sustain economic development combined with equality of opportunity, social cohesion and an investment in the future of society” .
“We definitely do not see this as a search for boycotts nor the imposition of conditionality”, Ms. Eyben said. “For example”, she explained, “we all want to see an end to exploitative child labour and secure adherence to core labour standards across the world. But trade sanctions—the remedy some propose—would make the situation worse, not better.”
Providing guarantees that the principles will not be conditional is difficult, however. While there is agreement among delegates who informally discussed the issue that the principles should not be conditional, Judith Edstrom, the Sector Manager of the Social Development Department at the World Bank, acknowledged that if the principles were to be binding on the Bank, they would become binding on the Bank’s actions with its clients, the developing countries. But she said the real benefit of the principles, which should include access to basic social services, decent working standards, social protection and social integration, however, would be to generate demands for accountability within nations from civil society.
Other ideas have also been suggested. UN Under-Secretary-General for Economic and Social Affairs, Nitin Desai, suggested that the social principles that are developed should resemble some of the useful principles on sustainable development. that emerged from the Earth Summit. Some of these principles, such as the “polluter pays principle” or the “precautionary principle” are now well entrenched in environmental policy-making.
Various Positions Staked Out So Far
It is still unclear what form these principles might take, or even how they will be discussed. Although the original idea was to negotiate them within the context of the Social Summit + 5 process, it now appears that there will be insufficient time for the task. Another possibility includes using the Geneva special session to launch a process that will result in these principles.
Various positions have been staked out in the negotiations so far. One proposal calls on the United Nations Secretary-General, in conjunction with the funds and agencies of the United Nations system, to prepare proposals on social principles for consideration by the General Assembly. The United States asked that the Secretary-General prepare proposals in consultation with the international financial institutions, and said that national governments should adopt and implement these principles. And the European Union called for the Secretary-General to prepare proposals that build on the work done by the Bretton Woods institutions, and urged that these institutions should adopt a framework of principles as a basis for constructive dialogue in designing structural adjustment, as well as other programmes.
At the end of the second preparatory negotiations for Geneva, the proposal under consideration was to establish an expert working group to develop guidelines on sound principles and good practices in social policy to promote the goals of the Social Summit. It calls for these principles to be used in the social and economic policies of national governments, international financial institutions and other relevant international institution?
Part of the problem has been attributed to the lack of time representatives of developing countries had to consider the Development Committee’s proposal. A letter from Gordon Brown and Clare Short, the United Kingdom Secretary of State for International Development, to finance and social sector ministers in developing countries, acknowledged that there was “little time for reflection” and that many delegations were “without instructions” on the issue. They wrote, “We believe that development of principles of this sort in the Copenhagen Plus Five process would significantly help entrench good practice in the international financial institutions.”
Finding a Middle Ground
Last year, United Nations Deputy Secretary-General Louise Frechette told a meeting of delegates, “While renouncing the extraordinary benefits of market forces is unthinkable, tolerating their worse side-effects into the next century seems equally unacceptable. We cannot choose between growth and social justice. What we must do is find the best possible balance between the individual and the social good, freedom and regulation, risk and security.”
Calling the moment an “opportunity”, the Deputy Secretary-General said the way the issue was handled could make a big difference in how the United Nations is perceived. “We now have an opportunity to help shape the approach of those key institutions to the problems of development and economic management. We also have an opportunity to change the widespread perception that the United Nations is not sufficiently connected to the ‘real world’, and to forge a solid partnership with the Bretton Woods institutions.”
Ms. Eyben also contends that the development of social principles would help the United Nations. She argues that producing social principles would allow the United Nations to maintain its leadership in social policy, while ensuring that there is broad ownership of the principles by all member countries.
According to Richard Jolly, Principal Coordinator of the team that produces the Human Development Report published by the United Nations Development Programme, there is some justification to the concerns of developing countries about whether these social principles would mean conditionality and the imposition of the rich countries views on the international agenda, or whether it was just another form of hidden protectionism.
Nevertheless, he maintains that social principles are necessary for an evolving system of global governance. “With the World Trade Organization and the World Intellectual Property Organization surging ahead very fast, we need an independent set of social principles that are embodied in this system of governance. I think that this is the vision for the 21st century.”
A good set of principles, Mr. Jolly said, could serve as a sort of shorthand. If ideas on which there is consensus can be summarized in a “nice phrase”, he said, it could save a lot of time and speed up the debate.
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Statistical Snapshot of Social Development
Social development is hard to pin down. It inherently covers intangible measures, such as hope, opportunity for human betterment, a decent standard of living, and justice. While some broad measures can be used for gauging social conditions, such as economic well-being and life expectancy, there are as yet no indicators for happiness, self-fulfillment and a sense of belonging to society.
Nevertheless, at the 1995 World Summit for Social Development, 186 countries took note of certain statistics while developing a Programme of Action to help them embark on an agenda of social progress:
* More than a billion people in the world live in abject poverty.
* The global wealth of nations had multiplied seven-fold in the last 50 years.
* Over 120 million people worldwide are officially unemployed.
* More than one in ten people have a disability.
Five years is not much time to measure statistical change in the world’s social situation, as countries generally conduct censuses every ten years. This is an attempt, nevertheless, to provide a statistical snapshot of the world situation as it is now. The following statistics have been gleaned from a number of sources within the United Nations system, such as the reports prepared for the negotiations on the special session on the Social Summit follow-up, Charting the Progress of Populations, a publication produced by the Population Division of the United Nations Department of Economic and Social Affairs, as well as the UNDP’s Human Development Report and the World Bank’s World Development Report.
The world’s population reached six billion in 1999, growing at the rate of 1.3 per cent, with an average annual addition of 78 million people. The population is expected to reach 7.2 billion by 2015, and 98 per cent of the global increase will take place in the less developed regions.
* There are 1.2 billion people living in absolute poverty, or living on an income of $1 a day or less, a figure that has remained basically stable over the last decade. There has been a slight decrease in the proportion of people living in poverty in developing and transition economies, from 28 per cent in 1987 to 24 per cent in 1998. This decrease has been offset by population gains.
* The number of people living on $2 a day or less is estimated at about 3 billion people, or about half the world’s population. However, if China is excluded, the number of people living in absolute poverty has actually grown, from 880 million to 980 million.
* The only region that has seen a real decline in poverty is East Asia and the Pacific, where the number of people living on $1 a day or less fell from 418 million in 1987 to 278 million people in 1998, a 15 per cent drop.
* Over the same period, the number of people in Sub-Saharan Africa living on $1 a day has increased from 220 million to over 290 million people. There are 48 million more people living in poverty in South Asia, 23 million more in Eastern Europe and Central Asia, and 14 million more people in Latin America and the Caribbean.
* According to present World Bank predictions, there will still be about 1.2 billion people living in poverty in 2008. Poverty is still expected to rise in Sub-Saharan Africa in this time, by about 40 million people, and using the $2 a day standard, by over 90 million.
Inequality—Within and Between Countries
* More than 80 countries still have per capita incomes lower than they were a decade or more ago. While 40 countries have sustained average per capita income growth of more than 3 per cent a year since 1990, 55 countries, mostly in Sub-Saharan Africa and Eastern Europe and the Commonwealth of Independent States (CIS), have had declining per capita incomes.
* Inequality has been rising in many countries since the early 1980s. In China, disparities are widening between the export-oriented regions of the coast and the interior, the human poverty index is just under 20 per cent in coastal provinces, but more than 50 per cent in inland Guizhou. The countries of Eastern Europe and the CIS have registered some of the largest increases ever in the gini coefficient, a measure of income inequality. Countries of the Organization for Economic Cooperation and Development (OECD) also registered big increases in inequality after the 1980s—especially Sweden, the United Kingdom and the United States.
* Inequality between countries has also increased. The income gap between the fifth of the world’s people living in the richest countries and the fifth in the poorest was 74 to 1 (people were 74 times richer) in 1997, up from 60 to 1 in 1990 and 30 to 1 in 1960. In the nineteenth century, inequality also grew rapidly during the last three decades, an era of rapid global integration, the income gap between the top and bottom countries increased from 3 to 1 in 1820 to 7 to 1 in 1870 and 11 to 1 in 1913.
By the late 1990s the fifth of the world’s people living in the highest-income countries had:
* 86 per cent of world GDP—the bottom fifth just 1 per cent.
* 82 per cent of world export markets—the bottom fifth just 1 per cent.
* 68 per cent of foreign direct investment—the bottom fifth just 1 per cent.
* 74 per cent of world telephone lines, today’s basic means of communication—the bottom fifth just 1.5 per cent.
* OECD countries, with 19 per cent of the global population, have 71 per cent of global trade in goods and services, 58 per cent of foreign direct investment and 91 per cent of all Internet users.
* The world’s 200 richest people more than doubled their net worth in the four years to 1998, to more than $1 trillion. The assets of the top three billionaires are more than the combined GNP of all least developed countries and their 600 million people.
* The recent wave of mergers and acquisitions is concentrating industrial power in mega-corporations—at the risk of eroding competition. By 1998 the top 10 companies in pesticides controlled 85 per cent of a $31 billion global market—and the top 10 in telecommunications, 86 per cent of a $262 billion market.
* In 1993 just 10 countries accounted for 84 per cent of global research and development expenditures and controlled 95 per cent of US patents of the past two decades. Moreover, more than 80 per cent of patents granted in developing countries belong to residents of industrial countries.
* Consumption per capita has increased steadily in industrial countries (about 2.3 per cent annually) over the past 25 years, spectacularly in East Asia (6.1 per cent) and at a rising rate in South Asia (2.0 per cent). Yet these developing regions are far from catching up to levels of industrial countries, and consumption growth has been slow or stagnant in others. The average African household today consumes 20 per cent less than it did 25 years ago.
* There are more than 150 million unemployed people in the world and more than 750 million underemployed people.
* More than 250 million children are working as child labourers.
* More than 40 per cent of the unemployed and underemployed are young workers.
* 1.2 million people die annually of work-related accidents and diseases.
* Informal employment has been rising steadily in recent years in the large economies of Latin America such as Brazil and Argentina, where it accounts for over 40 per cent of all wage work.
* Most new jobs are created in small firms — figures vary from 70 per cent to 100 per cent in different parts of the world, but the quality of those jobs is uneven.
* Nearly 70 per cent of the African workforce is concentrated in agriculture. Some 40 per cent of all children between the ages of five and 14 are forced to work.
* In Finland, the unionization level was as high as 81.9 per cent, while in the United States a mere 5.8 per cent of wholesale and 5.2 per cent of retail workers were union members in 1998.
* An estimated 760,000 jobs have already been created by the Internet in the United States.
* In 1997, 84 countries enjoyed a life expectancy at birth of more than 70 years, up from 55 countries in 1990.
* In nearly 40 per cent of African countries, over half the population does not have access to health services or to safe water.
* Between 1990 and 1997 the infant mortality rate was reduced from 76 per 1,000 live births to 58.
* Despite rapid population growth, food production per capita increased by nearly 25 per cent during 1990–97.
* The per capita daily supply of calories rose from less than 2,500 to 2,750, and that of protein from 71 grams to 76.
* The proportion of one-year-olds immunized increased from 70 to 89 per cent during 1990–97.
* Around 1.5 billion people are not expected to survive to age 60.
* More than 880 million people lack access to health services and 2.6 billion access to basic sanitation.
* About 840 million people are malnourished, including nearly 160 million children.
* Every year nearly three million people die from air pollution—more than 80 per cent of them from indoor air pollution—and more than five million die from diarrhoeal diseases caused by water contamination.
* In Latin America and the Caribbean, more than 140 million people, a third of the total population, do not have permanent access to health services.
* During 1990–97 the number of people infected with HIV/AIDS more than doubled, from less than 15 million to more than 33 million.
* 95 per cent of the world’s HIV/AIDS population lives in developing countries
* 70 per cent of the world’s HIV-positive people live in sub-Saharan Africa
* 32.4 million adults and 1.2 million children live with HIV/AIDS.
* 5.6 million people have been infected with HIV during 1999 and 2.6 million people died from AIDS in 1999.
* 11.2 million children have been orphaned by AIDS.
* Between 100 and 125 million school-age children do not attend primary school.
* Between 1990 and 1997, the adult literacy rate rose from 64 per cent to 76 per cent.
* During 1990–97, the gross primary and secondary enrolment ratio increased from 74 per cent to 81 per cent.
* During 1990–97, the net secondary enrolment ratio for girls increased from 36 per cent to 61 per cent.
* In 1997 more than 850 million adults were illiterate. In industrial countries more than 100 million people were functionally illiterate.
Table 1.1 Top corporations had sales totalling more than the GDP of many countries in 1997
|Country or corporation||GDP, or sales, US$ billion|
|Mitsui & Co.||145|
|Royal Dutch/Shell Group||128|
|Wal Mart Stores||105|
From the Human Development Report, 1999; (Source: Forbes Magazine, 1998)
* $1.5 trillion is now exchanged in the world’s currency markets each day.
* Nearly a fifth of the goods and services produced each year are traded.
* Foreign Direct Investment topped $400 billion in 1997, seven times the level in real terms in the 1970s. Portfolio and other short-term capital flows grew substantially, and now total more than $2 trillion in gross terms, almost three times those in the 1980s.
* The daily turnover in foreign exchange markets increased from around $10 to 20 billion in the 1970s to $1.5 trillion in 1998.
* Between 1983 and 1993 cross-border sales and purchases of US Treasury bonds increased from $30 billion a year to $500 billion.
* International bank lending grew from $265 billion in 1975 to $4.2 trillion in 1994.
* People travel more—with tourism more than doubling between 1980 and 1996, from 260 million to 590 million travelers a year.
* Despite the tight restrictions, international migration continues to grow. So have workers’ remittances, reaching $58 billion in 1996.
* Time spent on international telephone calls rocketed from 33 billion minutes in 1990 to 70 billion minutes in 1996.
The Debt Burden
* In 1997, the total debt burden of developing countries reached almost $2.2 trillion.
* Of the 41 most heavily indebted poor countries(HIPCs), 33 are in Africa.
* Since 1980, the debt of the HIPCs has more than tripled Two thirds of this is the result of arrears unpaid or earlier debt.
* Only five countries have benefited from the HIPC initiative so far.
* Nearly 340 million women are not expected to survive to age 40.
* Between 1990 and 1997, women’s economic activity rate rose from 34 per cent to nearly 40 per cent.
* A quarter to a half of all women have suffered physical abuse by an intimate partner.
* Between two-thirds and three-quarters of the people in developing countries live under relatively pluralist and democratic regimes.
* At the end of 1997, there were nearly 12 million refugees
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Footing the Bill for Social Development
These are heady days for global entrepreneurs who have cashed in on countless opportunities created by the forces of trade liberalization and a simultaneous revolution in technology and information. Falling tariffs and other trade integration measures have propelled many people to fortunes, and stock market rises have bestowed riches on the many who have been able to participate.
But most people in the world are not able to participate and for large swaths of the globe that remain untouched by the whirlwinds of investment flows and cash transfers, people remain poor, without much hope that they will be able improve their lives—even through persistence and hard work.
The demonstrations that overwhelmed the World Trade Organization (WTO) talks in Seattle in December and recent protests at the World Bank and International Monetary Fund meeting in Washington, D.C., have shown that resource issues often lie at the heart of international political and economic discussions.
Resource issues will be central to the United Nations General Assembly (GA) special session to follow-up on the results of the World Summit for Social Development, to be held in Geneva from 26 to 30 June. A meeting with long-term, rather than immediate implications, the session is not likely to produce instant debt relief, trade breakthroughs, or pledges of large new grants of assistance. Nevertheless, the results of the session can have far-reaching implications for the operations of the World Bank and the International Monetary Fund and on how national governments approach social development issues. A General Assembly meeting on financing for development in 2001 will zero in on resource issues.
Money, Money, Everywhere…
The world is awash with resources, yet they are mostly private resources and tend to be concentrated in the hands of a few. Private resources have, by far, played the major role in spearheading global economic growth during the last decade, and countries that have made themselves attractive to private capital have enjoyed better than average growth.
In a quest for profits, however, private capital does not venture where there is little to gain, and therefore does little to deliver global public goods, such as universal education, health care and disease prevention, or a clean environment. These needs are generally left to the seriously underfunded public sector. There are, then, basically two resource issues. One concerns the promotion of the private sector, and the other with financing national and international institutions to provide the services that serve as the foundation of free, fair, and safe societies. As a result, many of the proposals before the special session relate to the interdependence between economic and social policy, and the balance between the state and the market.
Although there is abounding rhetoric about “leveling the playing field” and creating an equal opportunity for everyone to participate in the global economy, the facts show otherwise. Inequality is growing, terms of trade are still stacked against developing countries, and poor people and poor governments have little opportunity to elbow in on the global economic party.
Resources, at the individual and government level, are clearly needed to promote social programmes and to invest in health and education. The United Nations Children’s Fund (UNICEF) estimates that it would take about $80 billion a year—less than a third of one per cent of global income, to ensure than all children can achieve a minimum standard of living. This includes access to adequate food, safe water and sanitation, primary health care and basic education.
There is, by and large, little agreement on who should foot the bill. The issue is a flashpoint for conflicting views between developing countries—who contend that developed countries have a historical and moral duty to help advance development in their countries—and developed countries.
Developed countries, while not denying an obligation to help their less wealthy counterparts, have gone through a period of disillusionment with the results of foreign assistance programmes. They have insisted that developing countries should rely more on private investment flows, which are far more abundant, for generating the necessary resources, while also insisting, as a condition for foreign assistance, on better governance, greater accountability and more safeguards to ensure that assistance programmes benefit their intended targets.
But it is not just free hand-outs that are at issue. Resource issues include hotly contested trade questions. These include the continuation of high tariffs in developed countries against exports from developing countries and issues of technological assistance to help emerging economies leap-frog over the mistakes of the already industrialized world.
Social Summit Urged Resources for Human Development
At the 1995 World Summit for Social Development held in Copenhagen, governments, recognizing their declining power in the new global economy, agreed to place people at the centre of development and direct their economies to meet human needs more effectively. Specifically, it called upon governments to act at both the national and international level to mobilize resources to meet the demands of advancing the social development agenda.
The Social Summit addressed a wide range of resource concerns, involving both the public and private sectors. Sound economic growth, it was generally agreed, provided the best method of increasing resources, although there are substantial disagreements over the best prescription for promoting such growth, particularly in the poorest countries.
There were agreements to make structural adjustment programmes—programmes ostensibly aimed at stabilizing a country’s financial balance sheet—more people friendly. A number of innovative resource proposals were discussed, and some, such as a proposal to increase donor and recipient country social spending, were cautiously embraced. Countries agreed that greater efforts were needed to mobilize domestic spending through progressive, fair and efficient tax collection systems. There was agreement that countries, where appropriate, should cut military spending in favor of social spending.
Trade and Development
Trade has emerged as a leading issue in the resource debate and divergent views between developing and developed countries, as well as between developed countries, helped scuttle the launching of a new trade round at the WTO talks in Seattle last December.
More than $1.5 trillion is exchanged every day on the world’s currency markets and nearly a fifth of the world’s goods and services are traded. Foreign direct investment amounted to more than $400 billion at the end of the century.
Yet developing countries, especially the least developed countries, have largely been by-passed by the new trade and financial investment routes. Of the $400 billion in foreign direct investment in 1997. Some 58 per cent went to industrialized countries, 37 per cent to developing countries, and 5 per cent to the transition countries in Eastern Europe and Central Asia. More than 80 per cent of foreign direct investment to developing countries or countries in transition ended up in just 20 countries, with China alone receiving the lion’s share.
Despite a WTO agreement on agriculture that requires countries to lower tariffs, convert quotas to tariffs, and reduce subsidies to their agricultural sectors, developing countries contend that industrialized countries are still using tariff and non-tariff measures to limit imports. This is a move that hurts developing countries to the tune of $700 billion a year. Agricultural subsidies, in 1995, still amounted to $6 billion a year.
While some developing countries have seen their exports increase dramatically, such as China, Botswana, and the Republic of Korea, most have not. Manufacturing exports from developing countries rose in the 1980s and 1990s, from 9 to 22 per cent, yet just a dozen countries accounted for all of the increase.
In the negotiations for the GA special session, countries have already agreed that there should be “greater universality” of the multilateral trading system, and also that the process of admitting more developing countries and countries in transition into the WTO should be accelerated. Developing countries have pushed for an agreement to increase and improve access for the products of developing countries, especially for Africa and the least developed countries, by eliminating trade barriers and other protectionist measures. Developing countries have also called for new initiatives to stabilize commodity prices, which they are dependent on, in order to stabilize their budgets.
Regulation and Tax Reform
Most tax systems in place today were developed when the economies of many countries were relatively closed, when few people traveled extensively. Now, with trade and financial liberalization, the Internet, and the era of instantaneous communications, money moves around the world on an unprecedented scale. Governments are under considerable pressure to keep taxes low, while more goods and services appear to avoid taxation altogether.
“Now, if you begin to tax capital, it will move somewhere else,” according to Vito Tanzi, Director of the IMF’s Fiscal Affairs Department. And by using creative accounting, multi-nationals can shift the tax burden among jurisdictions where they operate to where tax rates are lower. “This is eating at the base of the tax system”, Tanzi said, who also noted that offshore tax havens offer refuge for between $5-8 trillion a year.
With a growth of derivatives and hedge funds, Tanzi said, it is becoming difficult to determine when and where income has been earned. Nevertheless, he said that with time, solutions may emerge.
Taxation is as important to developing countries, where weak tax collection systems are unable to collect revenues that could foster social development. “Developing countries do not have the machinery for tax collection,” according to Ambassador Arthur Mbanefo, Permanent Representative of Nigeria to the United Nations and Chairman of the Group of 77. “Taxation is very important—there is no way you can play it down. We have to realize that the 0.7 per cent comes from developed countries’ taxation of their own nationals.”
While tax issues have long been considered a hallmark of each country’s sovereignty, countries have shown a willingness to discuss tax initiatives at the special session. For many revenue-related issues, the session is tantamount to a first public hearing. Although agreement may not be reached in Geneva, on these issues, they will be firmly set on the international agenda for future consideration.
Countries have already agreed to promote an equitable and progressive broadening of the tax base, improving the efficiency of tax administration and tax collection. Countries have agreed to seek new sources of revenue that could also discourage “public bads”, such as pollution.
There are a host of proposals still under consideration. These include tax evasion, removing tax allowances for bribes paid to foreign public officials, developing international cooperation in tax matters and exploring methods for dividing the liability of multi-national corporations to pay taxes on profits in different jurisdictions. There are also proposals to limit the use of tax shelters and tax havens and a proposal to study the feasibility of a currency transaction tax.
The currency transaction tax, sometimes known as the “Tobin Tax” has drawn considerable attention in recent years. As part of the search for mobilizing new resources, Canada has proposed “further study of the feasibility of a currency transaction tax”. Many believe that such a tax could have limited the massive capital flows that caused the Asian financial crisis. However, there is still major disagreement on the need for the tax and even larger questions over who would collect the tax and where the proceeds would go. Some members of the United States Congress have vociferously denounced the proposal.
Official Development Assistance (ODA)
In Copenhagen, donor countries—with the exception of the United States—recommitted themselves to strive to meet the previously agreed upon official development target of 0.7 per cent of gross national product. Yet at the time of the Summit, ODA levels had already begun to tumble since the historic high earlier in the decade, and this trend has continued to the present time. ODA spending is now at an all-time low, with ODA constituting only 0.22 per cent of developed countries GNP’s.
Only four countries—Denmark, the Netherlands, Norway, and Sweden—have exceeded the 0.7 per cent target, but even in these countries, levels of ODA have declined, in real terms. Assistance from the United Kingdom and Canada has increased dramatically over the last few years.
According to Ambassador Mbanefo, the drop in ODA has hurt many developing countries. “They look forward to getting this aid from the international community, and they are not getting it.” The drop in ODA, he said, can be directly traced to the collapse of the Cold War competition between the superpowers.
Ambassador Mbanefo said that better use should be made of “what little resources” come from ODA, and indicated that there should be a pooling of these resources, bilateral or multilateral, so they can be used where they are needed most.
But Ambassador Mbanefo said the G-77 position was more than just about “handouts.” Rather, he stressed that what developing countries need most is an enabling environment “to mobilize our own resources.” While hardly dismissing the importance of ODA, Mbanefo said better ways must be found to generate resources. “ODA alone is not going to do it for them.”
Another idea to increase spending on social programmes that the GA special session will likely encourage is the 20/20 proposal, which was initially agreed to in Copenhagen. The proposal urges donor countries to ensure that 20 per cent of their ODA should be earmarked for social programmes, while developing countries are urged to allocate at least 20 per cent of their national budgets for social development. Although the idea has not been widely adopted, countries have agreed to pursue the proposal at the special session.
According to UNICEF officials, developing countries now tend to spend about 15 per cent of their budgets on social programmes, while donors devote only 10 per cent to the social sector.
Calls for debt relief, long pushed by a movement of non-governmental organizations that coalesced into a group known as Jubilee 2000, gathered considerable momentum in Copenhagen. Countries agreed there that the international financial institutions and creditor nations should consider innovative measures to relieve the debt burden of developing countries, particularly highly indebted low-income countries.
The World Bank and the International Monetary Fund started a debt relief programme for the Highly Indebted Poor Countries (HIPCs) in 1996, but few countries have been able to benefit. As a result, a broader initiative was begun in 1999, that is expected to relieve debt in 36 countries, 29 of which of these 29 are sub-Saharan African countries. To date, however, only five countries, Uganda, Bolivia, Mauritania, Tanzania and Mozambique, have begun to receive debt relief.
The “crushing burden of debt interest on interest” eats up almost one-third of Nigeria’s resources, according to Ambassador Mbanefo, who added that the resources going to repay loans were not going for schools and teachers’ salaries.
Many proposals under consideration at the special session concern the debt issue. There are proposals that creditor countries and institutions move more quickly towards “faster, broader and deeper debt relief” and provide developing countries with a “permanent exit” from the loan rescheduling process.
Published by the United Nations Department of Public Information
For further information, please contact:
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