Part 1 of 2 What Millennium Development Compact means

Part 1 of 2 What Millennium Development Compact means

Romeo Austria Reyes, Program Development Advisor UNDP Indonesia,
Jakarta

At the Millennium Summit in New York, in 2000, 147 world
leaders agreed to adopt the Millennium Development Goals (MDGs).
The goals range from eradicating extreme poverty and hunger to
forming a global partnership for development. Unlike UN
conventions in the past, whose goals were qualitative, seven of
the eight MDGs are translated into quantitative and time-bound
targets, thereby allowing periodic measurement and reporting of
progress.

Indicators that are objectively verifiable and internationally
comparable are suggested for each target. For poverty
eradication, for instance, the target is to halve the proportion
of people who live in poverty and the suggested indicator is the
proportion of population whose income is less than one US dollar
a day, based on the purchasing power parity.

UNDP's Human Development Report (HDR) 2003, entitled
Millennium Development Goals: A compact among nations to end
human poverty, analyzed and reported the progress of the world,
regions and specific countries, including Indonesia, towards
realization of the MDGs. The report also advanced the notion of
a Millennium Development Compact whereby poor countries will
mobilize and allocate domestic resources and apply democratic and
good governance principles for the realization of the MDGs while
rich countries will increase aid, provide debt relief and reduce
barriers to entry of exports from poor countries to their
markets.

The main message from HDR 2003 was that the MDGs are
attainable if resources and interventions are matched with the
magnitude of the targets. To attain those targets, domestic
financial resources will need to be supplemented by external
financing. Thus, unless rich countries deliver the financing they
pledged at the 2002 International Conference on Financing for
Development in Monterey, the report warned that the MDGs would
not be met. If current trends are to continue, the world is on
track toward achieving only two targets: halving poverty and
halving those without access to safe water.

Unfortunately, the proposed compact is everything but fair in
terms of reciprocity, joint responsibility and mutual
accountability. While poor countries are held responsible and
accountable for achieving quantitative and time-bound targets for
Goals 1 through 7, the targets for Goal 8, which rich countries
are responsible for are open ended and phrased as if they were to
be realized on a best effort basis.

Consider for instance the targets for eradication of hunger,
reduction of child mortality and improvement of maternal health:
halve, by 2015, the proportion of people who suffer from hunger;
reduce by two-thirds under-5 mortality rate and by three-quarters
maternal mortality rate. Consider, on the other hand, the targets
for Goal 8 relating to trade and debt: develop further an open,
rule-based, predictable, nondiscriminatory trading and financial
system; deal comprehensively with the debt problems of developing
countries in order to make debt sustainable in the long term.

If this global deal were to be compared to a bilateral trade
agreement, it would be like one country binding itself to
reducing tariffs on a set of specific commodities to 0-5 percent
by say 2005 and the other pledging to exert its best efforts to
reduce tariffs in the future! If it were to be compared to an
arms reduction treaty, one would be fully susceptible to
verification and the other not at all.

This lack of mutual accountability and susceptibility to
measurement and monitoring has prompted HDR 2003 to call on rich
countries to also set quantitative and time-bound targets for
aid, trade and debt relief. Heeding that call would remove doubt
on the seriousness with which rich countries are addressing the
global partnership embodied in Goal 8.

While there are no quantitative targets for aid, trade and
debt relief, there are indicators suggested by the UN that can be
measured and monitored, although they are not linked to Goal 8
targets as such. One of these indicators is Net Official
Development Assistance (ODA) as percentage of donors Gross
National Income (GNI).

Results from the recent analysis by UNDP on the progress of
MDG 8 with respect to aid are not encouraging. Aid from rich
countries measured in terms of ODA as a proportion of GNI fell by
one-third in the 1990s, from an average of 0.33 percent in 1990-
91 to an average of 0.22 percent in 2000-01; before increasing
slightly to 0.23 percent in 2002. Even less encouraging is the
low and falling ratio among G-7 members: from 0.31 per cent in
1990 to 0.18 percent in 2002, which is considerably lower than
the 0.7 percent reaffirmed at Monterrey. The above numbers
suggest that aid fatigue would likely persist despite calls for
more aid and more effective aid for the MDGs.

What about trade and debt relief? Once again, the numbers are
not very encouraging. HDR 2003 disclosed that tariffs imposed by
OECD member countries on manufactured goods from poor countries
are more than four times those on manufactured goods traded
between them. Rich countries are clearly opening their markets to
each other much more than they do to poor countries. In addition
to tariff discrimination, the report disclosed that rich
countries continue to grant generous subsidies to their farmers
amounting US$300 billion per year, which is nearly six times
their ODA.

Thus, even if farmers in poor countries become more efficient
and competitive in producing certain agricultural products, they
will not be able to penetrate the markets of rich countries due
to the huge subsidies enjoyed by farmers in rich countries.
Taking the dairy subsidy as an example, the annual subsidy per
cow in the EU (US$913) is higher than the per capita income in
Sub-Saharan Africa ($490).

The Doha round of trade talks is dubbed as a "development"
round because of the mandate to deal with phasing out of export
subsidies to farm products of rich countries, especially EU,
Japan and the U.S., that prevent poor countries from accessing
their markets. After more than a century of campaign to
liberalize farm trade, it appeared at first glance that a
breakthrough had been achieved on 26 June 2003 when the EU farm
ministers agreed to reform the EU's common agricultural policy
(CAP).