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Briefing Papers Tackling Poverty
Briefing Papers Tackling Poverty | Tackling Poverty |
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This papers explains the maesures used by the UK Government to help global poverty and there impact in the region.
The All Party Parliamentary Group on the Great Lakes Region and Genocide Prevention – PARLIAMENTARY BRIEFING Tackling Poverty: A Global New Deal The treasury has released plans to address the causes of global poverty. The statement summarised here was released on February 8th, and is based on the Marshall Plan. The Marshall Plan transferred 1% of national income from America to Europe every year, for four years. The four steps for a more equal global economy are outlined below, based on the premise that addressing the causes of poverty is central to long term security and peace, but also a moral imperative, an economic necessity and a social duty. The paper builds on previous initiatives, such as the White Paper on Globalisation and the International Development Targets . Due to globalisation life expectancy in developed countries has increased by nearly 10 years, and the numbers of extreme poor have fallen by nearly 20 million. Tragically, income disparities have become more acute: one in five children never attend school. In sub-Saharan Africa the HIV/AIDs pandemic could cut national incomes by over 20%. There are 4 building blocks to the Global New Deal: 1. Improvement in the terms on which the poorest countries participate in the global economy, and actively increasing their capacity to do so. Developing countries must adopt clearer, more transparent procedures in economic decisions. This will create macro-economic stability and increase investment. The South must be willing to be monitored and to meet international codes and standards. In return, the international community should offer direct assistance and transitional help to support the early adoption of such codes. Codes must be enforced by rigorous surveillance, effective early warning procedures and more consistent engagement by the private sector. A Financial Stability Forum could be created for this task, bringing together the IMF and other key regulators. With improved transparency and surveillance the international community would be better placed to demand increased responsibilities by the private sector, including clearer presumptions about the role of official sectors at times of crisis. This could involve working to find voluntary solutions to payments problems and clearer presumptions against supporting unsustainable policy frameworks. Poverty Reduction Strategies (PRSPs), are worked out between developing countries, the IMF and World Bank, and have been successful in designing pro-poor budgets and policies, and directing government spending towards the social sectors. This feeds into the Heavily Indebted Poor Countries Initiative (HIPC). The Bretton Woods Institutions must continue streamlining conditionality, and increasing transparency and effectiveness. 2. Business to adopt high corporate standards for engagement as reliable and consistent partners. Investment in poor countries ($35 per head) lags behind developed countries ($805 per head). Domestically generated savings are also low. Many aspects of the old structural adjustment policies are sound, such as investment in infrastructure, sound legal processes and creation of a healthy and educated workforce. Regional forums (made up of private and public sector representatives) could discuss challenging the current barriers to investment. The international community also must act to facilitate cross border trade, as recommended by the New Economic Partnership for African Development (NEPAD). Multinationals have responsibilities not to engage in anti-competitive behavior, even when legal regulation is lax. The OECD’s standards of practice for multi-national companies must be more rigorously enforced. The UN’s Global Reporting Initiative should be strengthened. 3. An improved trade regime. The countries that trade more in the world economy see faster growth rates. The World Trade Organisation (WTO) will launch a new trade round to further the current commitments (from Doha) to make progress in areas and to create major gains for developing countries. The trade rules on public health crises are now clearer, but more still needs to be done. Steps are being taken to address concerns over implementation of existing WTO agreements. The WTO itself must continue to improve transparency and accountability of decision-making and to increase links between informal consultations and general council meetings. With ¾ of the world’s poor living in rural areas, opening up agricultural markets offers the best and quickest route to reduce poverty. The current subsidies to Europe are huge. At the last WTO talks it was agreed to be open up agriculture trade. We should also build capacity for countries to participate in the global trading system. The British government will invest £45m in technical and capacity assistance over the next three years. 4. Substantial transfer of resources from the richest to the poorest countries. For development financing is necessary. More progress on debt relief is a crucial first step. If all eligible countries (including those in conflict) became part of HIPC, $100bn of debt would be cancelled. HIPC relief must be enforced faster, particularly for post-conflict countries. Britain will lobby for the IMF to change their policies to take more account of the current global climate, and to consider progress towards achievement of the Millennium Development goals when they update debt sustainability analysis. A report prepared by Mexico’s former president Ernesto Zedillo for the UN Financing for Development Conference in March 2001 has concluded that if we are to succeed in achieving the Millennium Development Goals the international community requires an extra $50bn in aid per year. $20bn is needed for Poverty Reduction, $10bn for education and over 10$bn for health). Increased development assistance is essential to match the gains from liberalising trade. The international community must be prepared to match their commitment to the Millennium Development Goals. Resources could come from a Tobin or Arms Tax. Also, the government’s of developed countries can commit extra resources for aid. This aid should be used for increasing the capacity and long-term growth rate of developing countries, distributed via an International Development Trust Fund, and overseen by the IMF and World Bank. Grants could be given to the very poorest and most vulnerable countries, with other low-income countries being offered interest-free loans for development. Financial assistance must be targeted more effectively. Current aid patterns are skewed towards the Middle East and North Africa. Aid should be refocused to support institutional and policy changes to promote private sector activity and improve public service delivery. When possible aid should be transmitted directly to budgets and concentrated on countries with the largest numbers in extreme poverty. European aid needs to be delivered faster, and the EU must invest resources in building the social and physical infrastructure necessary for growth in poor countries. Overall, focus must shift from providing short-term aid to compensate for the effects of poverty to aid as a long-term investment. In return, developing countries will have to tackle corruption, pursue stability and ensure that all resources are used effectively to fight poverty. A Global New Deal? The world has often set targets like the Millennium Development Goals and been unable to meet them. The documents aims to set out practical steps so that developed and developing countries, international institutions, the private sector and non-government organisations can work towards a global new deal. Developed countries must move forward on debt relief, negotiate reductions in agricultural subsidies at the next trade round, untie aid, and substantially increase the existing aid effort. Developing countries should adopt new codes for transparent management of their fiscal systems, strengthen the capacity of their public management systems, develop their Poverty Reduction Strategies, and establish attractive business environments. International Institutions need to offer help with implementation of codes and standards, to provide an early warning system for crises, and crisis management. They must also put more focus on achieving the Millennium Development Goals, and continue strengthening the participation of developing countries in the decision-making processes. The Private Sector must increase investment and participate actively in regional and national investment forums. Cross border accountability must be improved. Non governmental organisations need to hold the international community accountable for progress on the Millenium Development Goals, to raise public awareness of issues such as poverty, debt, trade and social justice. Conclusion The Marshall plan successfully increased prosperity and employment and helped to create a more stable world peace. Greater engagement and investment for the advancement of social justice on a global scale will create an inter-dependent world sharing in prosperity. For the plan to be successful poorer countries need to pursue transparent, corruption-free policies for stability and attraction of private investment. |
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