ASEAN millennium development

ASEAN millennium development

Romeo Austria Reyes, Jakarta

Drawing inspiration from the global Millennium Development
Compact proposed in the 2003 Human Development Report (HDR),
participants in a Regional Workshop on "ASEAN Cooperation on
Poverty Reduction and Millennium Development Goals (MDGs)" agreed
to initiate a process leading to the adoption of an ASEAN
Millennium Development Compact (AMDC). The workshop was held in
Jakarta on Aug. 1-2, right before the Asia Pacific Ministerial
Meeting on MDGs on Aug. 3-5.

The 2003 HDR advanced the notion of a global compact among
nations, especially between the poor and the rich, whereby the
former will mobilize and allocate domestic resources and apply
good governance principles to realize the MDGs while the latter
will provide more aid and debt relief and open up its market to
exports from poor countries.

The 10 targets relating to poverty reduction and other MDGs
(Goals 1 through 7) are quantitative, time-bound, measurable,
internationally comparable and monitorable. Unfortunately, the
same can not be said for the 8 targets under Goal 8 -- Develop a
global partnership for development -- particularly those relating
to aid, debt relief and free trade.

In the absence of quantitative targets, it is as if they were
to be realized on a best effort basis. One wonders then how
progress towards realization of Goal 8 (G-8) is to be assessed at
the Asia Pacific ministerial meeting in Jakarta and at the
forthcoming summit in New York in September 2005.

While a number of poor ASEAN Member Countries (AMCs) still
receive considerable aid from rich countries, the extent to which
it could be used to directly support MDGs is limited by the
conditions attached to its disbursement. It is heartening that G-
8 countries recently announced debt forgiveness for poor
countries amounting to US$40 billion.

But much to the chagrin of Asians, eligibility is confined to
African countries. With respect to trade, markets for exports of
poor countries remain highly protected by the huge agriculture
subsidies provided by rich countries to their farmers. And the
prospects of concluding the so-called Doha Development Round of
multilateral trade liberalization in Hong Kong by the end of the
year remain dim.

Instead of market opening, the opposite seems to be happening,
given the reaction of rich countries, particularly the U.S and EU
to the "surge" of Chinese exports following termination of the
global quota arrangement. This reaction is particularly
disturbing as the rich countries were the original proponents of
free trade.

They put pressure on poor countries to liberalize trade regime
through loan conditionality imposed by multilateral financial
institutions as early as the 1960s. Unilateral trade
liberalization by poor countries started with substitution of
tariff to quotas, otherwise known as "tarrification", followed by
tariff simplification, and then tariff reduction.

It was known to every country well in advance that the quota
arrangement was expiring. There was adequate time therefore to
make the necessary domestic adjustments in anticipation of
removal of this impediment to free trade. Under a free trade
regime, exports of countries like China with a comparative
advantage in labor-intensive products covered by the quota
arrangement would naturally increase in a big way if and when the
quota is lifted. While the protectionist reaction of rich
countries through imposition of quota to the surge in Chinese
exports may be legal in the context of WTO rules, one wonders
whether it is fair.

Southeast Asia as a sub-region was assessed by the UN
Millennium Project to be on track with respect to poverty
reduction and many other MDGs. However, the huge development gap
across and within AMCs that persists in terms of poverty
incidence, per capita GDP, and other human development indicators
was noted by the workshop participants. At one extreme are Brunei
and Singapore, which have joined the high human development
league. These two countries do not even have a definition of
poverty.

By non-definition, they have no poor people, although
Singapore concedes that it has a number of programs to help the
"needy". At the other extreme are the least developed CLMV
countries. At the upper middle are Malaysia and Thailand, which
have already met most of the targets and are referred to as MDG+
countries. At the lower middle are Indonesia and the Philippines
with a national poverty incidence rate still as high as 18 and 30
percent, respectively.

Disparity in poverty incidence is even more serious within a
number of AMCs, particularly between the capital and the rest of
the country. For instance, poverty incidence is already at single
digit level in Bangkok, Jakarta and Metro-Manila, but it is as
high as 26, 42, and 66 in Pattani (Thailand), Papua, and the
Mindanao.

Given the uncertainties relating to aid, debt relief, and
trade, along with the socio-economic disparities constraining
ASEAN economic integration, it seems logical for AMCs to rely
more on each other than on rich countries from the northern
hemisphere in realizing their MDG targets.

A broad AMDC framework was adopted by the workshop
participants as a starting point for elaboration into a fully
documented compact. The long-term objective of the compact would
be to help narrow the development gap across and within AMCs. The
need to narrow this gap was seen as urgent both as an end in
itself and to facilitate integration of ASEAN into a single
market and production base. The intention is to use the MDGs as
planning framework for reducing the development gap. The
compact's guiding principle and strategy would be for AMCs to
support each other as members of one family of nations to realize
their localized MDG targets.

The cooperation modalities would go beyond the usual sharing
of experiences, learning and good practices on various aspects of
MDG processes. They would look into the possibility of sharing
expertise and resources as well.

The writer is former senior adviser, ASEAN-UNDP Partnership
Facility.