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Quantum Leap in Resources and Equity Needed to Reach MDGs

25 August 2005

"If the targets are to be achieved by 2015, then poverty reduction strategies must make a quantum leap in imagination, particularly in terms of tax policies, trade reforms and financial sector liberalisation."

The Millennium Development Goals (MDGs) of poverty eradication and sustainable development require a huge leap in public investment, domestic resources mobilisation, external assistance and meaningful trade concessions.

Dr Jan Vandemoortele, Director of the Poverty Group at the United Nations Development Programme, makes this point in an article titled 'MDG Targets in the Commonwealth' featured in the newly published 'Commonwealth Ministers Reference Book 2005'.

He says that target-driven approaches will help to develop a momentum towards achievement of the MDGs. "If the targets are to be achieved by 2015, then poverty reduction strategies must make a quantum leap in imagination, particularly in terms of tax policies, trade reforms and financial sector liberalisation."

More ambitious and equitable tax systems are needed to finance public investment on a grander scale. "Pro-poor public investments are essential for meeting the challenge without causing growth-disrupting inflation, competitiveness-eroding currency appreciation, investment-dampening rises in interest rates or growth-inhibiting increases in disparities," he explains.

"The macroeconomic policy framework must balance targets for jobs and wages with those for inflation and fiscal deficits to make monetary policy consistent with MDG-based fiscal policies."

Dr Vandermoortele believes the MDG agenda "remains technically feasible and financially affordable", but notes that the targets for reducing human poverty cannot be met without a fundamental restructuring of the global trading system.

"Without fairer trade, steeper debt relief and more aid, most of the global targets will remain inspirational, not actionable. The 2015 targets for achievement of the MDGs will remain elusive without substantial increases in foreign aid from wealthier nations," he says.

"Apart from more Official Development Assistance, new disbursement mechanisms are needed to reduce the vulnerability of a country's anti-poverty programme to conditionalities, which frequently led to 'stop-go' programmes in the past. Proposals such as 'fixed and variable' tranches and the International Finance Facility will help in making aid flows less volatile, more predictable and better harmonised."

Better aid co-ordination and more donor harmonisation will support the absorptive capacity for higher levels of development assistance. Civil society participation is crucial to enhance the absorptive capacity for aid and to help shape policy reforms. Dr Vandemoortele stresses the importance of a global partnership based on the principles of shared responsibility and mutual accountability that will help further the efforts to realise the Goals. These partnerships would involve governments, private corporations and foundations, multilateral agencies and civil society organisations.

For more details on the 'Commonwealth Ministers Reference Book 2005' visit the website www.thecommonwealth.org/publications.

 

CNIS - Commonwealth News and Information Service Issue 249, 24 August 2005