Sixty-fourth General Assembly

Second Committee

Panel Discussion (AM)

Job Creation ‘a Key Element’ for Effective, Comprehensive Poverty Reduction,

 

Assistant Secretary-General Tells Second Committee Discussion

 

Moderating Panel, He Criticises ‘Lip Service’,

‘Magic Bullets’ as Delegates Debate Merits of Various Measurement Benchmarks

In efforts towards meeting the Millennium Development Goals by 2015, it would be impossible to tackle poverty effectively and comprehensively without both understanding its multidimensional nature and creating decent employment opportunities for all, the Assistant Secretary-General for Economic Development in the Department of Economic and Social Affairs told the Second Committee (Economic and Financial) today.

Moderating the Committee’s panel discussion on “Follow-up to the outcome of the High-level Plenary Meeting relating to Millennium Development Goal 1, and an introduction to the Multidimensional Poverty Index”,Assistant Secretary-General Jomo Kwame Sundaram said poverty had been given mere “lip service” within national poverty-reduction strategies, as very few highlighted the creation of decent employment as a key element.  He therefore welcomed the United Nations system’s emphasis on the need to create decent jobs, noting that a universal and integrated approach was needed to sustain the necessary political support.

He said the international community must formulate macroeconomic policies that would prioritize sustainable development and employment, promote decent work, and ensure a social protection floor for all in order to eliminate poverty.  Targeted programmes to help the poor were often expensive, politically unsustainable, he said, adding that they overlooked many of the most deserving.  “Jobless growth” — which predated the global financial and economic crisis — had now led to a jobless recovery, and there was often a lag between output and employment recovery.  Moreover, reduced fiscal and policy space, combined with growing income inequality and reduced social provisioning, held adverse implications, particularly for the fight against poverty.

Too much emphasis had been placed thus far on policy measures centred on poverty “magic bullets”, he said, citing good governance, microcredit, property rights and “bottom of the pyramid” marketing techniques for the world’s poorest.  Such prescription had only modestly impacted poverty and employment creation, he noted, adding that good governance was not a prerequisite for development.  It was more important to focus on eliminating bottlenecks to development and poverty reduction.

He went on to note that, according to Report on the World Social Situation 2010: Rethinking Poverty, flagship publication of the Department of Economic and Social Affairs, South Asia and sub-Saharan Africa were home to the highest share of the world’s poor, based on 2005 data.  While poverty rates had decreased since the 1990s, worldwide hunger rates had increased rapidly.  The newest poverty estimates by the International Comparison Programme showed that the number of poor around the globe had fallen from 1.9 billion in 1981 to 1.4 billion in 2005, a number significantly higher than the 2004 estimates of 980 million, based on the $1.08 a day poverty line from 1998.

Such a variance underscored the need for sensitivity with regard to defining and measuring the poverty threshold, he said, noting that the $1 a day line used by the International Comparison Programme might underestimate the actual extent of poverty.  The issue of poverty was a multidimensional one, tangibly linked to the other Millennium Development Goals, and there had been many efforts to capture those different dimensions, including through the Human Development Index, he said.  However, the international community must make considerable progress towards understanding poverty’s multidimensional nature without becoming bogged down in attempts to agree on a single poverty index.

Reinforcing that point, James Foster, Professor of Economics and International Affairs at the Elliot School of International Affairs, George Washington University in Washington, D.C., said available poverty data were “very basic”, which made a qualitative assessment of the various levels of poverty very difficult.  The Multidimensional Poverty Index — a new measure introduced by Oxford University’s Poverty and Human Development Initiative and the United Nations Development Programme (UNDP) — sought to build upon the success of income-based approaches while incorporating additional indicators.

He said the Index was a benchmark measuring both the frequency and intensity of poverty, and it could be used to identify those most deprived while tracking present and future progress towards eradicating poverty.  It included 10 indicators across the three dimensions of poverty:  health; education; and living standards.  Others, such as nutrition, years of schooling, and access to water, sanitation and electricity, helped provide a fuller picture of the overall breadth of multiple deprivations suffered by the world’s poor, he said.

Thus far, feedback on the Index had been largely positive, he said, noting however, that criticisms focused mainly on the use of available data sources for countries, as well as on the weight given to each of the three dimensions.  Ultimately, the Index should be seen as a tool to help Governments, civil society, and other institutions identify the connections among deprivations and allocate resources effectively to target those with the greatest intensity of poverty, he said.

Azita Berar-Awad, Director of the Employment Policy Department of the International Labour Organization (ILO),said a renewed emphasis must be given to macroeconomic policy frameworks, which would deliver better employment and reduce poverty.  There was a need for both policy convergence and strong political will at the international level.  ILO research across 25 countries over the last decade showed that restoring macroeconomic stability alone was not sufficient for rapid, self-sustaining growth and broad-based employment creation.

She noted that such a restoration had led to a residual approach to fiscal policy, which created a disconnect between countries’ compliance with macroeconomic parameters and their commitments to internationally-agreed development goals, including the Millennium Goals.  In the move towards a new “pro-employment, pro-poor” framework, fiscal policy must aim to raise public investment in infrastructure to about 7 per cent of gross domestic product (GDP) and identify sustainable domestic and external resources to meet international goals on health, education and social protection for all, she said.

In the ensuing discussion, delegates stressed the need for inclusive growth, with one representative noting that the international community must make a choice between “job-poor” and “job-rich” growth.  Development delivered by both national Governments and communities were another “magic bullet” that must be considered in fighting poverty.  In addition, speakers agreed that several other factors should be taken into account when measuring poverty other than the income-related variety.

Several speakers asked how the Multidimensional Poverty Index differed from the Human Development Index currently used as an indicator of progress towards meeting Millennium Goal 1.  Could the former replace the latter?  Could it be modified to reflect the gender dimension?  If the Index were widely adopted as a post-2015 indicator, what would the implications be for national statistical systems?  Would it be costly to collect the kind of data needed to support it?

Responding to those interventions, Mr. Foster said the Multidimensional Poverty Index was a great complement to the Human Development Index, which was an indicator of society’s overall well-being.  National statistical systems would have to shift towards gathering additional data all in one household survey; however, it would be difficult to incorporate a gender dimension into the Index using available data, he cautioned.

Ms. Berar-Awad replied that universal coverage and a social protection floor were key factors of growth distribution, and there was a need to look into wage- and income-led growth.  New policy approaches must not aim to restore pre-crisis conditions as the economic context had changed over the years.  It was now a question of learning from new policy innovations and mainstreaming them into growth patterns, she said.

Mr. Jomo pointed out that the purpose of today’s discussion was to remind States that a focus on a particular measure of poverty was subject to controversy.  It would therefore be inappropriate to replace the Human Development Index as an indicator amidst poverty-eradication efforts.  Member States had shown at the recent Millennium Development Goals summit that they were looking beyond 2015, he said, emphasizing that the Multidimensional Poverty Index was extremely relevant.

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For information media • not an official record