Agenda

Millennium Summit & Forum

Freedom from Fear of Poverty

by
Hedvig Nenzen

The United Nations Agenda for Development states that a person who lives in poverty endures “hunger and malnutrition, ill-health, lack of access to safe drinking water, low access to education and other public services and resources, exclusion, lack of participation and violence.” “With that kind of deprivation comes pain, powerlessness, despair and lack of fundamental freedoms - all of which, in turn, perpetuate poverty.”

Global statistics concerning poverty show that the development situation has improved over the last decades. The Human Development Index, the index by which the UN measures poverty, climbed from 0.392 in the 1960’s to 0.706 in 1997. However, gaps between countries and between people have widened. The already threatened position for the most vulnerable nations is getting worse. For example, the population in the richest fifth of the world’s nations today has 74 times the income of the poorest fifth. In 1990 the difference was 60, and in the 1970’s only 30 times. This is mainly due to recent technological and economic developments in the developed nations and globalization. “Imbalances and uncertainties continue to exist in the global economy which affect all countries but in particular the interests of developing countries.”

Why does poverty exist where it does?
Some people believe the reason behind the geographical spread of poverty is primarily historical. By colonizing certain areas ‘the North’ added to its affluence by importing resources from ‘the South’ creating a relationship of dependency. This relationship still exists. The Colonies gained their independence in the 1960s, but without a sound infrastructure and good governance, they have remained less developed.

Developing countries main source of earnings is the export of primary commodities/cash crops (e.g. rubber, cocoa and coffee). When the prices for such commodities fell in the 1970s, they were forced to borrow money to avoid collapse. This is one of the reasons why they owe $350 billion internationally. The repayments in many cases are larger than the total export earnings of a country, limiting the government’s capacity to spend on welfare and combat poverty.

The History of Development Assistance
Developing countries need assistance -- the active redirection of money, technology, products, help or knowledge -- either directly from governments, organizations or institutions (bilateral) or through international organizations (multilateral). Bilateral aid in the form of money has been popular with certain developing countries since it permitted them to use the money however they wanted, for weapons or private use. Often, especially during the Cold War period, such aid had strings attached to it. Such aid often helped in the short-term but did nothing for the long term self-sufficiency of developing nations.

To avoid collapse when export earnings fell, money was borrowed, first from nations, but later, when the borrowers could not finance the debt repayment, from the World Bank and the International Monetary Fund (the Bretton Woods institutions).

The World Bank loans funds to nations for large development projects, often to improve infrastructure. The IMF was created as a last resort lender to keep debtor countries from collapsing by providing longer term loans at lower rates. To be accepted to such a program the country has to follow a Structural Adjustment Program which reforms the economy by lifting trade barriers, privatizing public enterprises and cutting social spending.

The structure and weighted voting system of these organizations has given developed countries a dominant voice in Bretton Woods policy-making. Developing countries have sought a reform of the voting process since the 1960s. The “Group of 77,” which represents developing nations (now 136), has called for stabilized and increased prices for commodities, relief of the debt burden, increased foreign aid, and reform of the IMF and World Bank. Most terms have not been accepted by the North and these issues remain part of the ongoing debate in the UN.

However, in response to internal evaluations, and external criticism, the Bretton Woods institutions have been changing their focus since the 80’s to “integrate the objectives of poverty reduction and growth.” The Structural Adjustment Programmes were replaced in 1999 by the Poverty Reduction and Growth Facility, to increasingly involve “civil society organizations, NGOs, the private sector, community based organizations and the poor themselves.” In addition, new programmes now pay greater attention to environmental concerns and sustainable development.

The Role of the United Nations in Development
Many people believe that the United Nations, “because of its unique universal character, impartiality, and physical presence in many parts of the world can play a central role in promoting International Development Cooperation.” At the creation of the United Nations, it was recognized in the Charter that the organization should play a role in the economic growth and social improvements of the world’s nations, especially the poor. The development policies and operational activities fall under the auspices of the Economic and Social Council which coordinates economic and social issues among UN programmes and funds (e.g. UNDP, UNICEF, UNFPA, WFP) and specialized agencies. The United Nations Development Programme (UNDP) is the UN’s main development arm and largest multilateral source of aid. Since 1990 it has produced the annual UN Human Development Report, and is the co-sponsor of National Human Development Reports prepared by national authorities.

UNDP analyzes country situations through the Common Country Assessment (CCA) and carries out field operations, called “Direct Support Initiatives.” They either focus on pursuing income-generation for the poor through better access to or better use of productive resources (land, labor, physical capital and infrastructures, finance, technology, or environmental resources) or aim at increasing access to basic social services through safety net or employment generation programmes, establishment of micro-enterprises, village-based development initiatives and the promotion of basic social services through expenditure programmes.

Their success, according to the Secretary-General’s report, is dependent upon many factors, among them good governance, gender-mainstreaming, capacity building and a participatory and community-based approach. Good governance, includes the rule of law, effective state institutions, transparency and accountability in the management of public affairs, and respect for Human Rights. For example, UNDP has assisted with elections in 45 countries. Also winning new ground is the view that “poverty alleviation requires the full participation of all components of the national society [...] civil society, government and the private sector in the fight against poverty.”

However, many other organizations also assist in development, making coordination a problem. Some developing countries have to administer dozens of programs per year. Coordination has been the focus of recent debates, and has led to the creation of the Administrative Committee on Coordination, Resident Coordinators, Country Strategy Notes and the United Nations Development Group. Hindering the reform of the system is the recent lack and unpredictability of funding. “Its financial fragility has serious implications for the UN system as a whole given UNDP’s special role, and even more importantly, for the developing countries.” While UNDP core resources are declining, the organization is holding funding sessions, establishing target percentages for nations’ GNPs and anticipating the future.

Conclusion
Everyone agrees that the eradication of poverty is a primary goal for the international community, but they do not agree on the methods of implementation. While developing nations demand more aid, debt-forgiveness and better trade agreements, developed nations talk about the importance of good governance, human rights, democracy and equality. As an organization, the UN spends $4.8 billion per year on economic and social development; at the same time, the World’s Governments spend over $800 billion on military expenditures. Since the resources clearly exist, the question is whether the richer nations will choose to use them for the development of other nations and the common good of the world?

Questions for further consideration:
1) How can cooperation be increased between UNDP and the Bretton Woods institutions? 
2) How can the civil society be incorporated into the ongoing war against poverty? 
3) How can we ensure that aid in recipient countries go to those most in need while maintaining a government’s right to determine its own economic policies? 
4) How can the guidelines and restrictions for debt forgiveness be restructured to promote national economic stability? 
5) How can cooperation between UN agencies and other international organizations be improved to eliminate overlap and widen the coverage of aid?