Millennium Development Goals unlikely to be met by ABC News 9:32am 26th Apr, 2004   April 26, 2004.    Development promises will be broken: World Bank, IMF    The world is poised to break a series of promises to ease the plight of the poor, IMF and World Bank policymakers warned on Sunday.    At the United Nations in 2000, 189 countries adopted the "Millennium Development Goals", including halving poverty rates by 2015, cutting child mortality, turning the tide of AIDS and educating all children.    "We are very concerned that, based on current trends, most of Millennium Development Goals will not be met by most developing countries, particularly in sub-Saharan Africa," said a statement by the policymaking development committee of the World Bank and International Monetary Fund (IMF).    "All parties, developing and developed countries and the international institutions, must urgently enhance concerted action to accelerate progress towards these goals."    A World Bank study found the proportion of people living in dire poverty was nearly halved in the two decades to 2001 but progress was strikingly uneven, with millions in Africa and Latin America left out of dramatic gains seen in Asia.    Thanks to spectacular victories by China and India against extreme poverty, defined as existence on less than $US1 a day, the world is on track to securing a reduction by half in the 1990 global poverty rate - 28 per cent - by 2015.    In a stark contrast to East and South Asia, poverty in the 20 year period under study deepened in sub-Saharan Africa.    The number of people making do on less than $US1 a day shot up from 164 million - 42 per cent of the population - to 314 million, or 47 per cent.    In Latin America and the Caribbean, according to the World Bank, there was only marginal progress against poverty.    The proportion of poor in the region in 2001 was about the same as in 1981, 10 per cent.    The meeting of the committee provided a grim to conclusion to a generally self-congratulatory weekend of discussions among the Group of Seven industrialised nations, and the 18 -member World Bank and IMF.    "The global economic recovery continued to strengthen and broaden since we met in February," said finance ministers and central bank governors from the Group of Seven industrialised countries - Britain, Canada, France, Germany, Italy, Japan and the United States - after a meeting on Saturday.    "Prospects are favourable and although risks remain, such as energy prices, overall the balance of risks to the outlook has improved."    The same prognosis was repeated by the broader financial community in weekend meetings of the World Bank and IMF, which expects world growth to speed from 3.9 per cent last year to 4.6 per cent in 2004 - the fastest since 2000 - and 4.4 per cent in 2005.    "This meeting takes place at a time of great opportunity for the global community, as we witness an improvement of economic growth and stability," US Treasury John Snow told the committee.    "Nonetheless, there remain considerable challenges, particularly with regard to the need to undertake the actions necessary to achieve lasting growth and poverty reduction in areas such as sub-Saharan Africa."    --AFP    April 27, 2004    Ending global poverty is the most important issue of all. Our efforts are insufficient, writes Tim Colebatch.    James Wolfensohn is puzzled. Why, he asks, do governments spend $1250 billion a year to defend themselves against potential enemies, yet just $80 billion a year in development aid so that other countries become partners, not enemies?    Wolfensohn sounds not just puzzled, but a bit frazzled. In nine years as head of the World Bank he has travelled the world endlessly, cajoling, persuading, arguing and pleading with ministers to re-order priorities, to lift foreign aid, and create a world in which countries no longer need to spend $1250 billion a year to feel secure.    He has had some success. In 2000 he and the bank helped get governments to adopt eight "millennium development goals" drawn up by the bank, the UN and the International Monetary Fund as benchmarks for development: such as halving the rate of global poverty, and dramatically lifting measures of social wellbeing in developing countries by 2015.    To achieve this, the bank urged governments to double their foreign aid budgets: in effect, lifting aid by $70 billion a year, from 0.22 per cent of the West's income to 0.44 per cent. And most Western governments, including the Bush Administration, have responded by pledging large increases.    Two weeks ago an OECD report spelt out the gains. The long slide in the share of income that rich countries devote to development aid has stopped, and "modestly" reversed. In 2002 and 2003 the real volume of foreign aid grew by 11 per cent, and the pledges so far imply a further rise of 25 per cent by 2006.    This is big money and, in some countries, a big shift in priorities. In two years President George Bush has lifted real US foreign aid by almost a third. This is off a low base, and tilted towards strategic partners, but still a big increase in funds tackling global poverty, and it does not include the $A4 billion a year his Administration is spending to take on AIDS in the developing world.    With a significant jump in aid from Belgium, France, Ireland, Italy, Norway and Switzerland, that has already meant an extra $8 billion a year for education, health, infrastructure and other support to developing countries, with a further $20 billion in the pipeline.    And that's not all. As last weekend's spring meeting of the World Bank and the IMF in Washington revealed, there is a lot of good news on that most important of all issues, ending global poverty.    First, the target of halving global poverty by 2015 is likely to be reached, the bank and the IMF say. The reason is the rapid growth of China and India, which in a decade has cut the proportion of people in developing countries living in extreme poverty from 28 to 21 per cent.    Second, foreign investment in developing countries is rebounding. Investment is still flooding primarily into China, and is still outweighed by the perverse flow from developing countries investing in the West. But the interest rates developing countries pay are falling sharply, inflows are rising, and the IMF says much of it is long term, not speculative.    Third, since 1999 developing countries' annual output per head has risen on average by 4 per cent: twice the rate in the West, and spread across every area except Latin America. Even Africa, where the numbers living in poverty doubled in the '90s, is now seeing rising growth.    And fourth, one of the reasons all this is happening is that developing countries are, unevenly but surely, improving their policies and quality of government. The bank and other donors are increasingly targeting aid at governments that show the capacity to use it well. Less aid is being wasted, and more is yielding big social and economic returns.    So why does Jim Wolfensohn, the suave Australian-American merchant banker turned global conscience, sound frazzled?    Essentially, because he knows this is not enough. His time as bank president is almost up. He has tried everything he can to get governments to give global development the resources it needs - and it is not enough.    The pledges so far would take the bank only a third of the way to its targets. In 2000 in poor countries, it says, one in every 16 mothers died in childbirth, one in nine children died before the age of five, one child in four did not complete primary school and one in four was malnourished.    But the response of many donors has been half-hearted or indifferent. Wolfensohn's native Australia has made no promise of more aid. The OECD says that while Australia's aid has risen 7 per cent since 2001, it is still at an all-time low of 0.25 per cent of national income.    In an interview with the French financial daily Les Echos last week, Wolfensohn did not hide his frustration. He questioned whether the increase in aid was apparent or real, noting that only half of all aid was actually in cash for projects, and noting that the donors were refusing to give the World Bank itself more capital, hence allowing it to increase its lending.    While world leaders were well aware of the need to fight global poverty, he said, "their current priorities are their own growth rates, their budget deficits, especially in Europe, and immigration and terrorism. In such a context, development aid is the lowest of their priorities."    I don't see why it has to be like this in Australia. We're rich and growing richer, well aware of our interdependence with the region around us, and often prepared to reach out, such as the Government's welcome move to share the tab for maintaining PNG's main road, the Highlands Highway. I know there are no votes in foreign aid. But that's not a good enough reason to sit on our hands.    (Tim Colebatch is economics editor of The Age Newspaper in Melbourne, Australia).
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