PRESS CONFERENCE TO LAUNCH 1997 HUMAN DEVELOPMENT REPORT

13 June 1997

Press Briefing

PRESS CONFERENCE TO LAUNCH 1997 HUMAN DEVELOPMENT REPORT

19970613 FOR INFORMATION OF UNITED NATIONS SECRETARIAT ONLY

Extreme poverty could be banished from the globe by early next century, according to the 1997 Human Development Report launched yesterday at Headquarters by the Associate Administrator of the United Nations Development Programme (UNDP), Rafeeuddin Ahmed. The report -- the eighth annual report in the series prepared by the UNDP -- was released simultaneously in cities around the world -- including Bonn, Capetown, Copenhagen, Brussels, Ottawa, Madrid and Washington, D.C.

The 245-page document analyses poverty (chapter I); progress and setbacks in human poverty (chapter II); resisting new forces of poverty (chapter III); globalization -- poor nations, poor people (chapter IV); the politics of poverty eradication (chapter V); and eradicating human poverty worldwide (chapter VI).

Mr. Ahmed said the Report demonstrated the urgency to act on a global compact for the eradication of poverty. It discussed successful country experiences -- such as Malaysia, Indonesia, China and India -- and proposed policy measures in a globalizing world economy. Based on earlier successes, it was evident that the international community had the resources and the skills to eliminate absolute poverty in 20 to 30 years. The report was a contribution to that great endeavour.

He said the six policy measures proposed in the Report to end absolute poverty in the span of a generation were: the empowerment of women and men by encouraging their participation in decisions that affected their lives and that enabled them to build their strengths and assets; gender equality as a part of each country's strategy for eradicating poverty, both as an end and as a means to eradicate other forms of human poverty; "pro-poor growth" in every country; and an accelerated growth in more than 100 developing countries and countries with economies in transition, where growth had been falling.

The Report also suggested that the forces of globalization should work for and not against poor people, Mr. Ahmed continued. The focus should be on better policies, fairer rules and fairer terms for poor countries to enter markets, especially for agricultural exports. At the same time, poor countries needed much stronger support from the international community through concessional assistance, debt relief and trade preferences. In addition, the Report states that an environment must be created in which State policies as well as market forces, civil activism and community mobilization contribute to the fullest possible extent to the eradication of poverty.

The last policy measure proposed in the Report stresses the need for special international support for special situations, he added. It called on the international community to do more.

Mr. Ahmed drew attention to two other areas of interest in the report: a new concept of human poverty; and a message of optimism, tempered with a note of warning.

He said the 1997 Report proposed a multidimensional measure of poverty: the Human Poverty Index. It was a composite index, calculated by looking at the percentage of people expected to die before age 40, the percentage of adults who are illiterate and a composite of three variables: lack of access to health services, to safe water and the percentage of malnourished children under five. Traditional ways of measuring poverty were not reliable because they focused on one symptom of poverty. Poverty was caused by poor health, low levels of education, the inability to find a meaningful job and lack of access to credit or land.

Mr. Ahmed said some countries had done better in reducing income poverty than human poverty, which refers to the number of people falling beneath a certain income poverty line. Other countries had reduced human poverty compared with the reduction in income poverty.

The good news and the note of optimism in the Report was that eradication of absolute poverty was within reach. "Great strides have been made in the war on poverty" because development works, Mr. Ahmed stressed. In the past 30 years, developing countries had succeeded in making as much progress as the industrial countries had managed in a century of progress. By the end of the twentieth century, some 3 to 4 billion of the world's people would have experienced substantial improvements in their standards of living, and about 4 to 5 billion would have access to basic education and health care.

However, in spite of the progress, "a backlog of poverty persists", unevenly spread across continents and within societies, Mr. Ahmed said. New forces were affecting societies worldwide, dragging entire countries back to levels of malnutrition, vulnerability and ignorance that had been left behind. Civil war, global pandemics, environmental degradation and failures of economic growth were the four forces pushing people back into the poverty trap, reversing the gains made in the war on poverty.

Mr. Ahmed was asked whether he saw the private sector playing a larger role in poverty eradication. He said the private sector -- entrepreneurship, encouragement of small medium-scaled enterprises, and micro-credit -- were all part of the strategy to fight against poverty. The fight against poverty had to begin at the lowest level of empowerment of the people. As an example, he referred to a UNDP project in Bangladesh which had been established as a result of a report of a commission on poverty set up by the Heads of State and Government of the South Asian Association for Regional Cooperation (SAARC).

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The key element of policy advice in the report was that focus should be on social mobilization towards poverty amelioration by the people themselves, he continued. In one of the projects, in Bangladesh, villagers had improved all aspects of their lives -- better poultry, livestock, family planning, immunization of children, schooling and better sanitary conditions. The project had brought about a change in attitude to life to the extent that the villagers had said that the project had "given us our dream back".

A correspondent asked whether the $1 per day referred to in the Report as the poverty income line was part of the new concept of poverty and how realistic it was. Mr. Ahmed said UNDP had used globally $1 for the poverty income measure, which had been in use for a number of years. However, different figures had been used for the various continents. For the United States it was $14.40 and $2 for Latin America. Each country had to decide its own poverty line. In Lithuania, for example, which was developing a strategy for poverty, the country would determine its own definition of what constituted poverty and what would be their poverty line in income terms. That line could not be universally imposed; $1 per day was like a rule of thumb -- "if you don't have at least that then you definitely are poor", he said.

The same correspondent asked for clarification of UNDP's position of the role of globalization while many countries were against the concept. Mr. Ahmed said globalization provided an opportunity but it also could provide a danger. "We have to be very conscious of how globalization is to be used." In mentioning globalization, he had referred to the need for fairer rules of trade, and greater access to markets for products and commodities. The agricultural sector was important because most of the countries in the third world still depended on agriculture. Debt relief was also required.

He went on to say that the reality of globalization could not be denied but the international community had to make it work for the poor as well as for the rich. The focus must be to provide an enabling environment for eradicating poverty, including macroeconomic policies within countries, as well as fiscal and monetary policies and the global context within which the countries were trying to fight poverty. That global context included trade and aid to facilitate growth, which were essential but which must be "pro- poor" and must provide a balance between growth and equity in the society.

A correspondent asked if it was realistic to expect debt relief. Mr. Ahmed said that debt relief had been on the United Nations agenda for a long time. Citing the negotiated conditions for debt relief such as through the Toronto terms, the Trinidad terms and the Paris club meetings, he said the terms and conditions had steadily improved.

As far as main commercial and government debt was concerned, it had steadily been dealt with by the rescheduling of debt as well as by other strategies, as those involving debt and the environment. More recently, there

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had been a move to tackle the debt owed to multilateral institutions. Uganda was a case in point. However, more needed to be done. The UNDP would pursue that even more, and in relation with their development partners.

Asked how much UNDP supported the process of industrialization in small countries, Mr. Ahmed said he did think that many small economies attached much importance to industrialization, which would demand markets. Some of those countries had opted for export-oriented growth and had tried to specialize in labour-intensive industries.

He added that UNDP worked as a partner with governments to find a niche to assist them in determining their own priorities. It assisted them in their programming with a clear enunciation of the countries priorities on which basis UNDP developed the country cooperation framework. That framework became the basis for the organization's technical cooperation to the country. If the priority was industry, UNDP would cooperate with other development partners and non-governmental organizations towards achieving those objectives. Such assistance would also be provided in other priority areas which governments' felt that UNDP had a comparative advantage or some value added to bring to the process of technical cooperation.

The same correspondent asked about the effect of the break-up of the Soviet Union on poverty in that region? Mr. Ahmed said the break-up had influenced an increase of poverty. Citing an experience in Estonia, he said the UNDP had been called on to assist countries within the region to find alternative markets and to develop tourism and other types of economic activity.

Almost all the countries that had been part of the Soviet bloc had a great shock as a result of the severance of their traditional ties, he continued. The widespread and coordinated system of production in the region had also been adversely affected and had left many production plants idle. That development had contributed to poverty in areas which were dependant on those industries.

He said the statistics that were available in the past for measuring poverty in that region had been unreliable. More recent data now being reviewed had revealed that the earlier figures which showed high income levels were no longer valid and could not be substantiated. As a result, compared to last year's report, a number of countries which were part of the former Soviet Union had suddenly plummeted in the Human Development Index. That was an indicator that better data was now being used and that the income levels in those countries were much less than previously reported.

The Programme Adviser of the UNDP's Human Development Report Office, Mourad Wahba, added that the cost of transition in eastern Europe and in the countries of the Commonwealth of Independent States (CIS) had led to budgetary restrictions, restrictions in social services and to substantial levels of

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unemployment. As a result, from a negligible proportion of income poor people in the 1980s, approximately 120 million people were now estimated to be income poor in eastern Europe and in the CIS countries. There was therefore a dramatic increase in poverty.

A correspondent asked for clarification on the proposal that poverty could be eradicated in a generation at a cost of about $40 billion per year for a period of time. She asked where the money would come from and what it would be spent on.

Mr. Ahmed said that amount should be used to provide basic social services such as health, education, sanitation and clean water to everyone. The money could come mainly from the countries themselves by the elaboration of the 20/20 concept -- 20 per cent of the budget in developing countries should be devoted to the social services and 20 per cent of the aid given to them should be devoted to social services. Such an approach would raise the level of resources, he said.

Asked if the poverty levels had changed within the last year, Mr. Ahmed said it had not changed from one year to the next. If one looked at statistics for the last 10 to 30 years, one would find that more than 100 countries now had far less resources.

He said UNDP was now looking to the future. They were taking into account that while the income had dropped, countries had maintained social services. It depended on how they had used their income. If proper use was made of the funds that were available, in addition to providing basic social services, poverty could be eradicated over the next 20 to 30 years. However, there were still 1.3 billion people who were under the poverty line. Most of then were in Asia. In south Asia alone, there were more than 500 million poor people. Resources had to be redeployed towards basic social needs. Growth was needed in parallel if those countries had to get a minimum level of income -- but it must be "pro-poor growth".

A correspondent asked for his opinion about the status of illegal immigrants in the United States who lived below the poverty line. Mr. Ahmed said he would agree that they were living below the poverty line because they did not have access to the social services that they would have if they were legal. However, it was a domestic matter of the United States.

Asked what would be UNDP's role under the Secretary-General's reform plan, Mr. Ahmed said that the Secretary-General had only announced the "first track" of his reform. The UNDP was the convener of the development operations committee. Its role was still under discussion in the context of the reform process.

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