fighting poverty: employment, productivity, socioeconomic security
DESCRIPTION
Fighting Poverty: Employment, Productivity, Socioeconomic Security. REPOA Annual Research Workshop, White Sands Hotel, Dar es Salaam Thursday, 30th March, 2011. MDG 1: Halve Poverty, Hunger. Progress on poverty reduction uneven , threatened, but achievable - PowerPoint PPT PresentationTRANSCRIPT
Fighting Poverty:Employment, Productivity,
Socioeconomic SecurityREPOA Annual Research Workshop, White Sands Hotel,
Dar es Salaam Thursday, 30th March, 2011
MDG 1: Halve Poverty, HungerProgress on poverty reduction uneven, threatened, but achievable
•WB’s $1/day poverty line: 1.4bn people living in extreme poverty in 2005,
down from 1.8bn in 1990•But without China, no. of poor actually
went up over 1990-2005 by @ 36m •92m more poor in SSA over 1990-2005
2
But hunger increasing!
•% of world’s hungry increasing since 1990
•Still >1bn hungry people•>2bn deficient in micronutrients•129m children underweight•195m <5yr stunted
3
•Highest share of poor changed from E Asia to S Asia + SS Africa
57% of world’s extreme poor lived in E Asia in 1981, 23% in 2005
S Asia share increased from 29% in 1981, up to 43% in 2005
SS Africa share more than doubled from 11% (1981) to 28% (2005)
Where are the poor?
Poverty without China?
Africa: % with <US$1/day
SSA poverty rate (1993 PPP)
77
77
47
25
23
20
% living on < $2/day in
2001
106
134
-252
3
19
70
-9
2
-23
-3
2
15
South Asia
Sub-Saharan Africa
East Asia + Pacific
L America + Caribbean
Middle East + N Africa
East Europe + C Asia
53 81-8World
Change in proportion and number of poor people
between 1981-2001
% millions
Source: UN Millennium Project (Sachs Report)
Africa poverty rise, 1981-2001
All but SSA poverty rates drop
Percentage of population below poverty line, 1981-2004"1 PPP $ a day"
1981 1984 1987 1990 1993 1996 1999 2002 2004
By geographical regionEast Asia and Pacific 57.7% 39.0% 28.2% 29.8% 25.2% 16.1% 15.4% 12.3% 8.9%Europe and Central Asia 0.7% 0.5% 0.4% 0.5% 3.6% 4.2% 3.6% 1.3% 1.0%Latin America and the Caribbean 10.8% 13.1% 12.1% 10.2% 8.4% 8.9% 9.6% 9.1% 8.7%Middle East and North Africa 5.1% 3.8% 3.1% 2.3% 2.1% 2.2% 2.1% 1.7% 1.5%South Asia 49.6% 45.4% 45.1% 43.1% 36.9% 36.1% 35.0% 33.4% 31.1%Sub-Saharan Africa 42.4% 46.3% 47.5% 46.8% 45.7% 48.0% 46.1% 42.6% 41.1%
By income level Low income 48.7% 46.1% 45.9% 43.8% 38.6% 38.7% 37.3% 35.0% 33.0%Lower middle income 44.2% 30.3% 21.9% 23.5% 20.2% 13.3% 13.1% 10.6% 8.0%Upper middle income 3.2% 3.6% 3.9% 2.1% 4.3% 4.8% 4.2% 3.7% 2.9%
Source: World Bank PovcalNet, see http://iresearch.worldbank.org/PovcalNet/
SSA informal employment highestShare of informal workers in non-
agricultural workforce by region North Africa: 48% Latin America & Caribbean:
51% Asia: 65% Sub-Saharan Africa (excl. South Africa) 78%
More than 80% of African PRSPs lacked employment strategy!
SSA contraction povertyGDP per capita continued to decline until 1994Per capita income in 1998 < in 1980Despite some growth since 1993, per capita income in 2005 < in 1980Poverty in 2002 greater than in 1981
despite better macroeconomics
GDP per capita, 1960-2008
GDP per capita in constant 2000 US$1960 1970 1980 1990 2000
Annual average compound growth rates to 1969 to 1979 to 1989 to 1999 to 2008
World 3.4% 2.1% 1.4% 1.2% 1.7%East Asia & Pacific 1.3% 4.4% 6.1% 7.1% 8.0%Europe & Central Asia -2.0% 5.8%Latin America & Caribbean 2.4% 3.1% -0.8% 1.5% 2.3%Middle East & North Africa 2.8% -0.4% 1.8% 2.7%South Asia 1.8% 0.3% 3.2% 3.3% 5.4%Sub-Saharan Africa 2.0% 0.7% -1.0% -0.5% 2.4%
Averages per decade
World 2806 3659 4177 4780 5585East Asia & Pacific 140 210 358 696 1299Europe & Central Asia 2296 1847 2496Latin America & Caribbean 2277 3099 3446 3643 4197Middle East & North Africa 923 1295 1372 1464 1687South Asia 201 224 274 373 545Sub-Saharan Africa 475 577 552 504 553
Source: World Development Indicators, World Bank and author's calculations
SSA industrialization reversed
1970 1980 1990 2000Averages of percentage shares in GDP to 1989 to 2008
Sub-Saharan Africa excluding South Africa Agriculture, hunting, forestry, fishing 69% 43% 30% 28%Industry 15% 25% 29% 33%Mining, Manufacturing, Utilities 12% 22% 25% 29%Manufacturing 7% 12% 11% 8%Construction 2% 3% 4% 4%Services 17% 32% 41% 38%
All developing economiesAgriculture, hunting, forestry, fishing 29% 18% 12% 10%Industry 34% 38% 35% 38%Mining, Manufacturing, Utilities 29% 32% 29% 32%Manufacturing 19% 21% 22% 23%Construction 5% 6% 6% 5%Services 37% 44% 52% 52%
Source: UNCTAD Handbook of Statistics and author's calculations
to 1979 to 1999
SSA SAPs slowed growth958 SAPs during 1980-98 in Africa average annual 0.3% decline in real per capita income over 1991-5Typical policy conditionalities in Africa:Cuts in public spending, credit restraints, higher interest rates, elimination of subsidies
reduce aggregate demand, income, output
recessionSSA trade balances did not improve over adjustment period despite severe costs
Market liberalization?•Economic liberalization since 1980s
- slowed growth, poverty reduction - increased inequality,
vulnerability, volatility in most countries
•Slower growth (except 2003-2008) •Reduced policy space •Less growth + revenue -- due to
liberalization, tax competition -- have reduced fiscal means
•Reduced fiscal + policy space adverse effects for growth, poverty, destitution
Africa’s falling terms of trade
1980-81 1996-97Terms of trade 100 64.7Volume of exports 100
125.0Source: Eric Toussaint
Productivity gains important, but such gains – e.g. by small producers without market power -- can be lost through falling terms of trade
Productivity gains lost by worse terms of trade
Tariff bias against Africa•Imports between developed countries average 1%
•Tariffs on agricultural products from developing countries as high as 20%
•Tariffs on textiles from developing countries can be as high as 9%
•African preference erosion with trade liberalization
Agricultural trade liberalization:
No net gains • Food security undermined• From net food exporters (’80s) to importers
(2000s)• (Most) food importing African countries worse
off without subsidized food Ms• Mainly benefits main agricultural exporters,
i.e. Cairns Group• 20th century decline of ToT for
primary commodities [vs manufactures], tropical [versus temperate] agriculture
• Agricultural share of SSA-RSA Xs fell from 27.9% (1995-2000) to 18.5% (2001-06)
Trade liberalization
deindustrializationAfrican industries prematurely exposed to global competition by trade liberalization
Share of manufacturing in GDP has fallen in most African countries, from 22% in 1980-89 to 9% in 2000-06 in SSA-RSA!
Rates of growth of manufacturing value added have fallen continuously from 1970s, and contracted by an annual average of 1% during 1990-97
In 10 industrial branches in 38 African countries, labour productivity declined by 7% during 1990-95, attributable to de-industrialization (UNIDO)
Financial flows to Africa?•Aid flows improved after
Monterrey, but well short of 2005 Gleneagles’ promises
•Net transfers modest after deducting for debt servicing
•FDI rose during mid-2000s– mainly for minerals, in few countries
•Debt sustainable? – HIPC, MDRI, debt workouts (e.g. Nigeria) reasonable progress
•Remittances growing with brain drain
•More than offset by capital flight
Capital flight from SSADespite impression of net flows to SSA40% of private African wealth invested
outside Africa in 1990 (Mkandawire 2002)
K flight from SSA estimated at $193 bn ($285 bn with imputed interest) in 1970-96 (Boyce & Ndikumana 2000) compared to combined debt ($178 bn in 1996; higher now) (Mkandawire 2002)
K flight from Africa largely debt-financed (Ndikumana & Boyce 2002)
Aid trends mixed• Aid flows volatile, unreliable• Aid ‘quality’ problematic, limited improvement • Actual flows declined in 1990s, esp. after 1996• Much recent aid for debt relief, servicing, i.e.
less net aid transfers• 2005 G8 Gleneagles’ promises huge shortfalls• ODA to Africa from G8 < from Nordics• Recent ODA mainly for MDGs, not economic• Recent BRIC increase of South-South aid to
Africa, mainly to productive sectors
Poverty magic bulletsPoor evidence of IFI/donor favoured special poverty programs significantly reducing poverty without sustained growth + job creation, e.g.
-- good governance -- micro-credit-- property rights (e.g. land titling)-- ‘bottom of the pyramid’ marketing
Financial crisis, African poor• Limited financial integration insulated
SSA from contagion• New funds for LDCs through IMF
allocations, refinancing regional development banks
• Donor countries aid cuts, mixed trends• Continued pessimism regarding SSA
achieving MDG poverty goal of halving population share living < $1/day
• Though Africa growing fast again, due to mineral wealth, rewards uneven
Jobs essential to cut poverty•‘Jobless growth’ before crisis•Jobless recovery •Employment lag long after output recovery
•Unemployment rate for youth worldwide much higher
now26
Employment, socio-economic security effortsMacroeconomic policies should
prioritize sustainable developmentPromote decent work Protecting and augmenting social
expenditures, especially for health care + education
Social protection floor comprising basic social provisioning
package, e.g. job guarantees, cash transfers 27
28
Thank youReport on the World Social Situation 2010Please also visit UN-DESA esa.un.org/United Nations Development Agenda National Development Strategies Policy Notes World Economic and Social Survey DESA
working papersAlso see: G24 website: www.g24.org IDEAs website: www.ideaswebsite.org