Global Debt

Topics: Development, Millennium Development Goals, Poverty reduction Pages: 77 (13758 words) Published: March 26, 2013
hdr03-10 chapter 8 052003.qxd



Side 145


Policy, not charity: what rich countries can do
to help achieve the Goals

This chapter analyses the role of rich countries in the international compact to achieve the Millennium Development Goals, a compact
that leverages the global commitments to
reducing poverty by building on mutual responsibilities between poor and rich countries. Poor countries must improve governance to
mobilize and manage resources more effectively and equitably. Rich countries must increase aid, debt relief, market access and technology transfers.
The UN Millennium Declaration and the
Monterrey Consensus (the result of the March
2002 International Conference on Financing
for Development in Monterrey, Mexico) make
it clear that poor countries are primarily responsible for achieving Goals 1–7. But these frameworks also reflect a new approach, with
rich countries basing their support for poor
countries more on performance—and seeing it
less as an entitlement. Thus rich countries will
increase assistance for poor countries that
demonstrate good-faith efforts to mobilize domestic resources, undertake policy reforms, strengthen institutions and tackle corruption
and other aspects of weak governance.
The commitments made by rich countries
in the Millennium Declaration are spelled out
in Goal 8 (box 8.1). These commitments have
since been reaffirmed in various forums:
• The Monterrey Consensus recognized the
need for a substantial increase in aid, urging
donor countries to make concrete efforts to
reach the aid target of 0.7% of gross national income set in 1970—and to vigorously pursue debt relief for countries that take steps to
strengthen governance.
• The Doha ministerial declaration, issued at
the 2001 meeting of the World Trade Organization (WTO) in Doha, Qatar, affirmed poverty reduction goals and committed to making the
interests of poor countries central to the future

work of the trade ministers. The declaration
also committed to the objective of duty-free,
quota-free market access for products from the
least developed countries.
• The September 2002 World Summit on
Sustainable Development in Johannesburg,
South Africa, reaffirmed the need to increase aid,
urging donors to work towards the 0.7% target
and to reduce unsustainable debt for countries
that demonstrate efforts to strengthen governance. It also called on WTO members to fulfil their commitments on market access. If Goal 8 is ignored, it is hard to imagine the
poorest countries achieving Goals 1–7. This
Report shows what is needed to accelerate
progress towards the Goals: Allocating sufficient
funds to social spending. Restoring crumbling
health infrastructure. Hiring more female teachers to encourage more girls to go to school. Removing inequities in public spending on water supply. Securing women’s rights to land. Investing in agricultural research. Seeking new export markets. Taking a multitude of other

practical steps to change policies, improve institutions and increase investments. Governments of poor countries must lead
the way in taking these steps, but they cannot
take them on their own. Indeed, as the Millennium Development Compact argues, countries that have the steepest slopes to climb—the top priority and high priority countries—will
need large injections of donor financing to invest much more heavily in health, education, agriculture, water, sanitation and key infrastructure. They cannot wait until economic growth generates enough domestic savings

and raises household incomes. Indeed, these
core investments lay the foundation for economic growth.
In addition, poor countries face constraints
that can only be eased through policy changes
in rich countries. They often face barriers to


BOX 8.1

Development Goal 8
By 2015 all 189 United Nations
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