Supporting MDGs through Growth-Driven Poverty Reduction
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Transcript of Supporting MDGs through Growth-Driven Poverty Reduction
Supporting MDGs through Growth-Driven Poverty Red
uction
Japan’s ODA and Asia
October 9, 2002 Izumi Ohno
National Graduate Institute for Policy Studies
Background• Ongoing global poverty reduction
partnership– World Bank’s CDF/PRSP(1998/99- )– UN’s Millennium Development Goals
(2000/01-)– Poverty-terrorism nexus (2001.9.11)
• EU and US pledge to increase ODA• Japan’s policy silence (and ODA cut)
– But, new engagement is beginning
MDGs: Significance
• Reaffirming the shared goals among development partners – “Symbolic” significance
• Containing “aid fatigue”
• Unresolved tasks (on substance)– How to operationalize MDGs/PRSP?
Japan and MDGs/PRSP• Opportunity for reshaping Japan’s
ODA policy• Opportunity for promoting Japan’s
engagement in global development agenda
• Japan’s crucial role in Asia’s development– Leading donor, more than 60% of
bilateral ODA directed to Asia – Various aid schemes (grants, loans, TA)
Donor Composition
Vietnam: Major Donors1998-2000 Average
IDA13.5%
ADB12.0%
Germany3.6%
Japan46.3%
Denmark2.8%
France4.6%
Others17.2%
Donor Composition
Uganda: Major Donors1998-2000 Average
UK20.3%
IDA14.1%
Denmark9.2%EU
7.4%USA6.9%
Netherland5.0%
Others38.0%
Tanzania: Major Donors1998-2000 Average
UK13.2%
Japan12.4%
Denmark7.2%
Germany7.0%
Others41.0%
IDA12.2%
Netherland8.0%
ODA Composition: Grants vs. Loans
0% 20% 40% 60% 80% 100%
Tanzania
Uganda
Bolivia
Vietnam
Grants
Loans
MDGs/PRSP: Issues for Asia
• Coverage mismatch– MDGs (global) > PRSP (limited to IDA c
ountries): China, India?
• Even for PRSP countries, slow start in Asia (except for Vietnam)– Importance to reflect the lessons from ear
ly PRSP countries (e.g., Africa, LAC)– Opportunity to improve the current appr
oach by incorporating Asia’s development experiences
Regional Distribution: Population in Extreme Poverty
ECA 1%MENA 1%
South Asia42% (490)
Sub-SaharanAfrica 26%
(300)
East Asiaand Pacific
23% (260)
Total: 1,151millionsSouce: World Bank
Latin American andCaribbean 7% (77)
PRPS Countries by Progress (Aug. 2002)
4
1
1
1
11
1
7
1
3
17
2
3
2
7
No. of countries
Full- PRSP
Interim- PRSP
before Interim- PRSP
Africa (35)
East Asia (6)
South Asia (4)
Europe &Central Asia (10)
Middle East & North Africa (2)
Latin America &Caribbean (4)
Asian Perspectives
• Differences from early PRSPs– Linkage with HIPC debt relief
– Stages of development, relationship with int’l financial community
– History of aid coordination (e.g., role of new aid modality, existing development plan)
PRSP Countries by HIPC Status (Aug. 2002)
1
5
3
17
1
7 2
1
1
10
4
4
1
4
No. of Countries
HIPC Completion Points reached
HIPC Decision Points reached
HIPC Decision Points not yet reached
HIPC Sustainable Cases
Non-HIPC
Africa (35)
East Asia (6)
South Asia (4)
Europe & Central Asia (10)
Middle East &North Africa (2)
Latin America &Caribbean (4)
Asian Perspectives• Growth-driven poverty reduction--particularly i
n East Asia:– Halving income poverty in 90s
(--key target already achieved before MDGs launch)
– Development driven by trade & investment– Participation in regional/global production networ
k through int’l division of labor
• Beyond MDGs/PRSP– Narrow “poverty reduction” approach, not enough
East Asia Reduced Poverty Despite Currency Crisis
27.6
47.7
16.8
44.0
15.114.2
36.9
46.7
0.0
10.0
20.0
30.0
40.0
50.0
60.0
East Asia andPacific
Latin Americanand Caribbean
South Asia Sub-SaharanAfrica
1990
1999
Population in Extreme Poverty (%)(%)
Source: World Bank
Share in World Export
0
2
4
6
8
10
12
14
16
18
60s 70s 80s 90s
(%)
Per Capita GNP Growth
0
1
2
3
4
5
6
7
60s 70s 80s 90s
(%)
East Asia
Sub Saharan Africa
Source: Ministry of Economy, Trade and Industry, White Paper on International Trade 2001, p.78.
East Asia
Sub Saharan Africa
Vietnam’s Experience
• Asia’s first CDF/PRSP pilot country– Full PRSP completed in May 2002
– Establishment of localized VDTs
• Recognized internationally as “good practice”: strong country ownership
– Building on the existing development vision (i.e., 10-Year Strategy, 5-Year Plan)
Vietnam’s Experience
• Growth orientation: PRSP renamed to “Comprehensive Poverty Reduction & Growth Strategy” (CPRGS)– East Asia’s aspiration for catch-up – National goal: “Modernization &
Industrialization” by 2020– Growth and equity– Sustainability of poverty-reduction
efforts
New Trend? (Post-Monterrey)
• WSSD (Johannesburg Summit) – Expressed interest by African leaders in
East Asian development experiences (IDEA: Foreign Minister Kawaguchi)
– Prof. Jeffrey Sachs: importance of trade & investment in African development (METI seminar)
• IMF/World Bank Annual Meetings– Trade as a vital engine for poverty-
reducing growth
New Trend? (Post-Monterrey)
• Relevance not just in Asia….
• Move for the next generation of PRSP beginning in African countries– From “PRSP” to “PRS”
– Adding growth agenda (“scaling up”)
• Forthcoming int’l conferences– SPA, TICAD 3 etc.
Likely Future Developments• Emerging consensus: growth-driven pov
erty reduction• Remaining unresolved issues:
– “Framework vs. ingredient” approach (Prof. Yanagihara): Japan’s real-sector concern, not just framework
– The role of government in industrial support in the age of globalization
• Revival of policy debates in the early 90s? (e.g., East Asian Miracle 1993)
Implications for Japan’s ODA
• Excellent opportunity for active engagement in improving the current MDGs/PRSP approach
• To this end, however, Japan’s ODA needs reform:– Stronger country-focus– Partnership approach, particularly in deep
ening growth agenda in the multilateral framework
Implications for Japan’s ODA
– Field delegation
– Reinforcing intellectual network
– Focusing on “core competence” and positively participating in aid modality discussions, etc.
• Importance to take advantage of the ongoing ODA reform momentum
Recommendations
• Starting from Asia…– Full-fledged PRSP implementation
expected in Asia (e.g., Indonesia, Cambodia, Lao PDR, Bangladesh…)
– Country Assistance Program to be revised/formulated (Vietnam, Sri Lanka)
• Building on the recently initiated Japan’s efforts (particularly on external initiatives)– IDEA, TICAD3 (MOFA)
Recommendations– Efforts to reinforce Japan’s relationship
with World Bank (MOF)– Study on East Asia’s development & coo
peration, “Asian Dynamism” (METI)
… THE ENDFor our support to ODA reform, please see websi
te of GRIPS Development Forum:http://www.grips.ac.jp/forum/ (Japanese)
http://www.grips.ac.jp/forum-e/(English)