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José Luis Machinea EXECUTIVE SECRETARY

REGIONAL DIMENSION OF STRENTHENING EFFORTS TO ERADICATE POVERTY AND HUNGER, INCLUDING THROUGH THE GLOBAL PARTNHERSHIP FOR DEVELOPMENT Dialogue of the Executive Secretaries with the Economic and Social Council. José Luis Machinea EXECUTIVE SECRETARY

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José Luis Machinea EXECUTIVE SECRETARY

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  1. REGIONAL DIMENSION OF STRENTHENING EFFORTS TO ERADICATE POVERTY AND HUNGER, INCLUDING THROUGH THE GLOBAL PARTNHERSHIP FOR DEVELOPMENT Dialogue of the Executive Secretaries with the Economic and Social Council José Luis Machinea EXECUTIVE SECRETARY Economic Commission for Latin America and the Caribbean (ECLAC) Geneva, 6 July 2007

  2. Projections of the extreme poverty rate up to 2006 indicate that the region is back on track towards the first target of the Millennium Development Goals (actual progress is greater than the time elapsed) LATIN AMERICA (17 COUNTRIES): LEVELS AND PERCENTAGES OF PROGRESS IN REDUCING EXTREME POVERTY BETWEEN 1990 AND 2006 a/ Source: ECLAC, on the basis of special tabulations of data from national household surveys and projections on the basis of official information from the countries. a/ The percentage of progress is calculated by dividing the reduction (or increase) in the rate of extreme poverty in percentage points observed during the period by half of the 1990 extreme poverty rate. The red line represents the percentage of progress expected in 2006 (64%). b/ Urban areas.

  3. Progress in reducing undernourishment, but there are considerable disparities among countries Latin America and the Caribbean (32 countries): progress toward undernourishment target (in percentages, by 2000-2002) Target for 2015 (100%) Progress needed by 2002 (48%) Source: Food and Agriculture Organization of the United Nations (FAO); The State of Food Insecurity in the World 2004, Rome, 2004. b/ Urban sector

  4. The Global partnership for development • Latin American must continue its efforts to improve growth performance, income distribution and increase the efficiency and financing of social policies to achieve the MDG targets.

  5. Caribbean w/o SS (5 countries): 25.5% Total: 21.9% Tax rev. + SS: 17.9% The tax burden is too small, but differs sharply across countries TAX REVENUES (% GDP, 2005) The tax burden in the Caribbean is higher, however

  6. The Global partnership for development • Latin American must continue its efforts to improve growth performance, income distribution and increase the efficiency and financing of social policies to achieve the MDG targets. • On the other hand, the developed world must be ready to assist all developing countries, not only the least developed ones, in achieving the Internationally Agreed Development Goals.

  7. Monterrey Consensus US$ billions Years Since Monterrey, ODA flows have increased …

  8. Monterrey target (0.7% of GNI) ODA as a percentage of donor GNI Projected …but are still far below the target Source: OECD data base (2007)

  9. Recent developments • ODA flows have increased but still fall far short of the Monterrey targets. • Channelling ODA towards low-income countries and focusing on social spending.

  10. Channeling ODA to low-income countries and ….. ODA, 1970-2005(Averages) N.B: Does not include Iraq, which accounted for 33% of total ODA in 2005.

  11. …focusing on social spending ODA TO PRODUCTIVE SECTORS, 1973-2005 (Percentages) Source: ECLAC, on the basis of OECD (2007). Government institutions include budget support, emergency assistance and external debt operations.

  12. Recent developments • ODA flows have increased but still fall far short of the Monterrey targets. • Channelling official assistance towards lower-income countries and focusing on social spending. • Latin America and the Caribbean have lost ground in terms of their relative share (from 12.5% in 1990 to 9% in 2005).

  13. Recent developments • ODA flows have increased but still fall far short of the Monterrey targets. • Channelling official assistance towards lower-income countries and focusing on social spending. • Latin America and the Caribbean have lost ground in terms of their relative share. • Lack of clearly defined objectives, strategies and instruments to support middle-income countries.

  14. There are a number of reasons why the importance of ODA for middle-income countries, particularly those in the region, should not be underestimated: • From a national perspective: • Slow and volatile growth makes it necessary to guard against economic and social setbacks. • Most countries’ financial and trade linkages with the global economy are vulnerable. • Countries do not exhibit an equal capacity to access the international financial system. • Institutional weaknesses hinder the implementation of economic and social policies and are an obstacle to social cohesion. • Difficulties in building up technological capacities and productive development. • Poverty is widespread (60% of the poor and 50% of indigents live in upper-middle-income countries).

  15. There are a number of reasons why the importance of ODA for middle-income countries, particularly those in the region, should not be underestimated: • From a more global viewpoint: • Stability and growth in those countries produce significant externalities for the other economies of the region or subregion. • Countries can support the provision of global or regional public goods: diffusion of knowledge, trade integration, environmental sustainability. • These countries are part of the international aid and cooperation system, and their role as recipients and donors should be strengthened.

  16. In addition to benefiting from ODA, middle-income countries should also contribute to the cooperation system • Direct ODA donors: Brazil has forgiven debts totalling about US$ 1.15 billion. • New financing mechanisms such as global taxes (Brazil and Chile). • South-South cooperation: • Macroeconomic coordination. • Mechanisms to support liquidity in times of crisis. • Development financing through regional and subregional development banks. • Technical cooperation.

  17. The ways in which middle-income countries are integrated into the global economy are important in terms of leveraging ODA • Improved access and regulatory frameworks in the international economic system • Trade • Finance • Technology • Strengthened representation in global economic institutions.

  18. The Global partnership for development • For Latin America and the Caribbean, a region made up primarily of Middle Income Countries, prospects for economic growth ride largely on lowering trade barriers in the industrialized countries and fostering a fair global trading system.

  19. OFFICIAL DEVELOPMENT ASSISTANCE AND THE FIGHT AGAINST POVERTY AND HUNGER IN LATIN AMERICA AND THE CARIBBEAN Regional Consultations on the Economic and Social Council Annual Ministerial ReviewMinistry of Foreign Affairs of Brazil José Luis Machinea EXECUTIVE SECRETARY Economic Commission for Latin America and the Caribbean (ECLAC) Palacio do Itamaratay Brasilia, 17-18 May 2007

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