ADVOCATING FOR GREATER SOCIAL JUSTICE
World Summit for Social Development:
Review 2000 and Beyond
The UN "Financing for Development 2001" Consultation
Position Paper of the Catholic Networks
CIDSE and Caritas Internationalis
CIDSE - Rue Stévin 16, B-1000 Brussels, Belgium
Caritas Internationalis – Piazza San Calisto 16, V-00120 Città del Vaticano
1. The Catholic vision of justice and social development 2
1.1 Solidarity, the basis for social justice 2
1.2 Ways of developing genuine social development 3
2. Copenhagen +5 Review 2000 and further initiatives 3
2.1 Reminder: promising commitments made at the Copenhagen Summit 3
An ongoing process 4
1.Despite the Copenhagen commitments, injustice and poverty are on the increase.
2.2.2 Current challenges and opportunities 6
The need for political solutions 8
2.3 The UN process "Financing for Development, 2001" 9
3. Practical proposals for combating poverty 10
3.1 Socio-economic policy measures 10
3.1.1 Implementation of international agreements related to poverty eradication 10
2. Taking account of human development indicators and conducting social impact assessments 12
3.2 Financial policy measures 15
3.2.1 Taxation and redistribution measures 15
3.2.2 Further debt relief for social development 17
4. Summary of recommendations 19
This paper was initiated by a working group of CIDSE "International Cooperation for Development and Solidarity", a network which brings together sixteen Catholic development organisations located in Europe, North America, and New Zealand, along with CI "Caritas Internationalis", a network of national relief, development, and social service organisations in 198 states and territories throughout the world.
CIDSE and Caritas Internationalis have been working together for several years on the issue of social justice. These networks believe that the question of social justice is closely linked to the respect for human rights and satisfaction of the basic needs of all. These conditions are essential for equitable and sustainable development. With regard to social development, our networks have decided to continue the work initiative launched in 1994 in preparation for the United Nations Summit on Social Development.
The purpose of this new approach is to ensure that the commitments made at the Copenhagen Summit in 1995 are fully implemented. It is possible to eradicate world poverty. CIDSE and Caritas Internationalis urge governments to take concrete actions based on the commitments they made at the Copenhagen Summit.
By working together, our Catholic networks, which represent large sectors of Christian civil society, intend to monitor decision-making processes and, in line with faith-based principles, promote an ethical approach to tackling socio-economic problems.
Thus, our networks aim to promote the idea of a ‘preferential option for the poor’, redistribution of wealth, and participation. These ideas are diametrically opposed to the prevailing ideology of the accumulation of individual material wealth, with competition benefiting the strongest and economic growth as the main tool for development. In order to correct the effects of the globalisation process, which is devoid of social and political control, our networks consider that good political governance is indispensable both at national and international levels. They aim to promote means of regulating the world economy at the political level.
In part one of this document, our networks reiterate their perception of social justice, based on the social doctrine of the Catholic Church and give a summary of the 10 Commitments made at the Copenhagen Summit (see Box 1 in para 2.2). Part two of the document gives information on the preparation processes relating to the United Nations Special Session "Copenhagen+5 Review", scheduled for 26 - 30 June 2000, and on the UN process "Financing for Development, 2001". The third part puts forward practical recommendations on how to enhance social justice in the run-up to the United Nations high-level "Consultation on Financing for Development" to be held in 2001.
1. The Catholic Vision of Social Justice and Development
1. Solidarity, the basis for social justice
In the face of persistent poverty, growing income gaps, and increasing discussion of economic issues, Christians are called to work for greater economic justice. A truly developed society is one which puts the dignity of the human person first. Catholic Social Teaching has evolved the concept of "integral human development", where economics serve human beings and not the other way round, and where social, cultural, political and spiritual concerns are fully taken into account.
The following principles are drawn from Catholic Social Teaching on economic life:
The economy exists for the person, not the person for the economy.
According to Pope John Paul II, the Catholic tradition calls for a "society of work, enterprise and participation" which "is not directed against the market, but demands that the market be appropriately controlled by the forces of society and by the state to assure that the basic needs of the whole society are satisfied" (Centesimus Annus, 35). All of economic life should recognise the fact that we are all God’s children and members of one human family, called to exercise a clear priority for ‘the least among us’."
1.2 Ways of developing genuine social development
At the international level, the issue of social development must be linked to analysis of current global economic mechanisms and the degree to which they have increased poverty and social exclusion. The Action Programme adopted in Copenhagen contains excellent recommendations for achieving genuine social development. However, they are likely to remain ineffective as long as there is no political resolve to correct the negative impact of an economic model that indeed generates wealth, but at the same time creates social exclusion.
In the view of the networks that have signed this document, the "driving force of social development" is not limited to the free market and economic and trade growth. It also includes the participation of civil society in the design of social, economic and political policies.
In the light of the Catholic Church's social doctrine, our networks believe that the achievement of the goals decided upon in Copenhagen involves the urgent implementation of public policies to promote job creation, and a just redistribution of resources. This also requires a definition of fairer worldwide trading rules and regulation of speculative operations on international capital currencies.
In order to achieve these goals, the Copenhagen decisions call for greater and broader participation of society, particularly the socially excluded, in the analysis of the causes of poverty and in all the phases of designing national development strategies.
In this regard, our networks are monitoring the new International Monetary Fund (IMF) and World Bank approach, which calls upon national governments to conduct open consultation with their citizens with a view to developing a national "Poverty Reduction Strategy" that will hopefully replace the unbalanced structural adjustment programmes. (see para 3.2.2)
Such participation must imperatively take account of the aspirations of ethnic minorities, religious organisations and social categories – women should be considered as full participants with equal status. Governments must protect or regain their ability to control their economic development. Finally, implementation of poverty reduction and social development strategies requires strengthening the capacity of the United Nations and its specialised agencies to fulfil their responsibilities in this process.
2. Copenhagen +5 Review and further initiatives
2.1 Reminder: Promising commit-ments of Copenhagen
At the Copenhagen Summit, 118 Heads of State and Government, as their ultimate goal, made commitments to fight poverty, create full employment and establish a world where stability, security and justice prevail. In their declaration, the Heads of State and Government emphasised the importance of "tackling both the root causes of the problems and their deplorable consequences, in order to reduce the uncertainty and insecurity which they generate in the lives of individuals".
Our networks welcome these commitments (see Box 1) made at the Copenhagen Summit and call for their full implementation. They also stress the importance of further recommendations to be made at the Copenhagen+5 Review in 2000.
Nonetheless, our networks consider that much more remains to be done: existing debt relief initiatives are far from achieving the cancellation of unpayable debts of poor countries. Concrete measures taken since the Copenhagen Summit to tackle the root causes of poverty have so far been insufficient.
Excessive financial speculation has turned out to be a risk and threat to many national economies. Furthermore, the financing of the Programme of Action is far from being secured.
2.2 An ongoing process
2.2.1 Despite the Copenhagen commitments, injustice and poverty are on the increase
Statistics indicate that the Copenhagen Summit took place at a time of worsening poverty in absolute and relative terms in the poorest countries of Latin America, Africa and South Asia. The World Bank states in its World Development Report (1999/2000): "Average per capita GDP (Gross Domestic Product) of the middle third has dropped (1970-1995) from 12.5 to 11.4 % of the richest third, and that of the poorest third of the global population from 3.1 to 1.9 %." For the Least Developed Countries LDCs, (see Box 2) the growth rate between 1975 and 1995 was even negative (i.e. -0.2 %, and -0.9 % for sub-Saharan Africa) whereas, over the same period of time, industrialised countries experienced a GNP growth rate of 1.9%.
Over the last two years, the number of countries with a negative per capita growth has increased from 18 in 1997 to 40 in 1998.
The marginalisation of large sections of the population (both in the South and in the North) continues to increase. In its 1999/2000 World Development Report, the World Bank states that the number of poor people in the world has risen worldwide due to population growth. In Latin America and sub-Saharan Africa the percentage of poor has also increased. The worldwide total of people living on $1 per day or less has risen from 1.2 billion in 1987 to 1.5 billion today, and if recent trends persist, will reach 1.9 billion by 2015.
The following figures demonstrate the high levels of inequality in the world: the assets of the three richest people in the world amount to more than the value of the GNP of all the least developed countries put together. A yearly contribution of 1% of the wealth of the 200 richest people could provide universal access to primary school education for all.
Pope John Paul II stated: "There is a ‘social mortgage’ on all private property, a concept which today must also be applied to ‘intellectual property’ and to ‘knowledge’. The law of profit alone cannot be applied to that which is essential for the fight against hunger, disease and poverty."
Social exclusion, for which poverty is a key indicator, has worsened and is being considered an inevitable consequence of the development of market economies. It is obvious that policies to stimulate growth do not automatically improve income distribution. Today, not only the countries in the South, but also those in the North and the East, are also experiencing growing social exclusion.
· National development strategies: social justice, the key to equitable development
As the former IMF Managing Director, Michel Camdessus, recently stated, "peace and development is also based on rapid, convincing progress in poverty reduction". Governments that invested in education and health, and that were able to implement social security and pension systems, have been able to decrease their countries’ poverty rate (East Asia [before the crisis], Costa Rica, etc.)
The same cannot be said of countries whose governments have not undertaken certain measures such as taxation, the fight against corruption, reduction in arms expenditure, etc. to ensure a transfer of wealth from the richest to the most destitute groups. This situation has ultimately led to a poorer quality of education and lower life expectancy rates as compared to countries with the same GDP (Guatemala, Morocco, Cameroon, Nigeria and most of the Middle Eastern oil-producing countries).
The recent financial crises, and ensuing recession in South East Asia and other regions, have not only damaged the previous economic success of the countries concerned, but has also adversely affected the most vulnerable groups, due to corruption among the elite, but also because the development models used have tended to focus on short-term profits and speculation (see para 3.2.1).
· Trends at international level
The fight against poverty can no longer be seen purely in terms of resource distribution within a country. For many countries, reimbursement of their foreign debt, combined with the low prices of raw materials, deprive them of the necessary resources to establish health and education systems that are affordable by the poor.
The 44 least developed countries’ (LDCs) share in international trade has fallen to below 1% of world trade. The World Bank states: "In fact, rich countries have been growing faster than poor countries… A recent estimate suggests that the ratio of per capita income between the richest and the poorest countries increased sixfold between 1970 and 1985. Such findings are of great concern because they show how difficult it is for poor countries to close the gap with their wealthier counterparts."
Between 1990 and 1997, the GDP per capita for LDCs fell in absolute terms from 277 USD to 245 USD, whereas over the same period of time, industrialised countries saw an increase from 17,618 USD to 19,283 USD.
· International cooperation: aid is decreasing
Despite growing inequality, the commitments made in Copenhagen are slow to take effect, and cooperative actions are all too seldom directed towards meeting the needs of the poorest. A worrying trend is that development aid budgets in some major donor countries have been reduced. The total Official Development Aid (ODA) of all Development Assistance Committee (DAC) countries in 1997 was 48.3 billion USD, i.e. an average of 0.22% of their Gross National Product (GNP). Only four countries, i.e. Denmark, Norway, The Netherlands and Sweden, have so far fulfilled their promise and committed even more than the internationally agreed 0.7% of their GNP to ODA. For sub-Saharan Africa the World Bank indicates a decline of ODA per capita from 40 USD in 1990 to 26 USD in 1997 due to urgent requirements of transitional countries. It wasn’t until 1998, that this trend finally stopped and total ODA seems to be rising again.
2.2.2 Current challenges and opportunities
· Financial resources
According to the UNDP, humankind has, for the first time in history, the means to eradicate world poverty in one generation. In Copenhagen, the cost of the absolute eradication of extreme poverty was estimated at USD 80 billion a year over a period of 20 years (compared to worldwide military spending that was nearly USD 800 billion in 1995). If all major donor countries had fulfilled their promise of committing 0.7% ODA of their GNP, the total amount could contribute enough to eradicate extreme poverty. But overall efforts to fulfil this agreed target are still far from achieving this goal.
Several countries have tried to solve their problems of providing basic health and education services through the introduction of user fees and cost-sharing programmes. But adverse equity consequences have been encountered: the poor are denied services because they cannot afford to pay even low fees to cover minor essential services.
In this regard, the new UN process on "Financing for Development 2001" promoted by Southern countries could mean a breakthrough, thereby offering the necessary resources to finally fulfil the commitments made at the Copenhagen Summit (see para 2.3). CIDSE and Caritas Internationalis urge governments to actively participate in this process and to increase both the quantity and quality of development aid.
· Tackling the socio-economic root causes of poverty
Mobilisation and reallocation of financial resources in the medium- or long-term would serve no purpose unless the economic, social and political conditions that systematically lead to poverty, social exclusion and unemployment are tackled.
The final document of the World Summit for Social Development in Copenhagen in 1995 highlights the fact that poverty exists in different forms. Among the most important are the following: lack of income and of the necessary economic resources to guarantee minimal living standards; hunger and malnutrition; lack of or limited access to education and other basic social services; morbidity and mortality increased by illnesses; lack of or inadequate housing; an unhealthy living environment; and social and cultural discrimination.
A general reduction in poverty can only be obtained through the economic participation of every individual, in the sense that everyone should have the opportunity to earn his or her own living. Yet, presently the ILO estimates that 25% to 30% of the three billion workers in the world are under-employed. Between 140 and 150 million people are totally unemployed. During the past five years the formal sector of employment has tended to become increasingly informal.
Our networks stress the dignity of the unemployed and the need for their empowerment. We stress the importance of redistributing employment among people, promoting labour-intensive production methods (social or local environmental projects), and addressing inequality caused by the growing wage differences between highly skilled and unskilled workers. Especially in the so-called informal sector, greater social protection and minimum standards of employment are necessary. Effective legislation, or other measures, should determine minimum wages. All countries that have not yet done so should ratify and implement the ILO Conventions on basic workers’ rights, as well as the new ILO Convention on the prohibition and immediate action for the elimination of the worst forms of child labour.
Comparative disadvantages of the poorest countries on the world market
In over hundred countries, which have no obvious comparative advantages, except their raw materials or exploitable workforce, the benefits of economic globalisation are still hypothetical. These countries are confronted with a paradox: either they join the world market (although their integration within it does not guarantee them prosperity), or they stay out (in which case they cannot benefit from economic, social and cultural exchange).
Instability and current decline in commodity export prices
Liberalisation and commodity market related risks have accelerated. Current statistics show that many developing countries are vulnerable to the instability of commodity prices that affects their food security and the livelihood of millions of people, especially in African countries. More than 50 developing countries depend on three, or fewer, primary commodities for more than half of their export earnings.
Due to fluctuations in prices, producers (mostly small farmers) are exposed to unpredictable revenue from their crops. This makes it difficult for farmers to plan for planting, allocate resources, obtain credit for inputs, and even simply recover costs. "The international trade system today frequently discriminates against the products of the young industries in developing countries and discourages producers of raw materials," noted Pope John Paul II.
A new initiative has been undertaken by the World Bank to establish risk management instruments in developing countries. A market-based commodity price insurance, which would guarantee a price floor for small producers and exporters and a price ceiling for consumers and importers, has been proposed. If implemented, this initiative could prove to be a useful tool for small-scale farmers in reducing the uncertainty associated with price instability, although it does not guarantee revenue (e.g. in the case of crop failure).
Nevertheless, the major factors contributing to the competitive disadvantage of poor countries (LDCs) remain unsolved. Prices of raw materials have in general fallen. A sharp drop in commodity prices over the last two years makes this situation worse due, inter alia, to the recent financial crisis in various parts of the world. Consequently, these countries have to export more than twice as much in quantity today in order to import the same volume of products.
In the view of our networks, there is a need to define additional measures necessary for the agricultural, industrial and commercial development of LDCs. They include: "duty-free access" for LDCs, support for production diversification, subsidies and appropriate special and differential treatment (more time and technical assistance) by the WTO, in favour of the development of the poorest countries. In particular, the application of special and differential treatment under WTO rules should take due account of the human development needs and capacity of the poorest countries. Human development indicators are increasingly being recognised as important in the formulation and implementation of debt policies. Likewise, they should be recognised as such in relation to trade policies (see para 3.1.2).
Global liberalisation that does not take account of the historical, economic and social constraints of LDCs leads to unfair competition where these countries are bound to lose. Liberalisation should, therefore, not be imposed on sectors where developing countries are unable to compete.
With regard to the anti-competition conduct of multinational companies, the Pontifical Council Justice & Peace stated in November 1999 that: "A multilateral framework on some core principles on competition policy could provide more stability and transparency in international trade… As a first step towards the establishment of a set of international rules on competition, developing countries should be provided with legal and administrative advice, in order to develop… their own competition policy at national or, in some cases more effectively, regional level."
2.2.3 The need for political solutions
Due to economic liberalisation, recent years have been marked by the decreasing role of government and the declining importance of the public sector. A lack of strong and transparent public institutions and regulations is among the contributory factors to growing inequality. The enabling environment called for in Commitment 1 of the Copenhagen Declaration has consequently suffered.
The recent financial crisis has demonstrated the dangers of liberalisation taking place without a regulatory environment, and also shown the growing need for strengthened public institutions at national and international level.
At the same time as the international donor community is advocating good governance at the country level and local ownership of policies, international institutions must be reformed. Recognising that there are benefits from increased trade, investment and other flows, for poor countries and communities as well, these countries must be able to fully participate in decision-making forums and have their voices heard.
The new policies of international institutions such as the IMF, World Bank and WTO must be implemented effectively both in terms of actually making poverty reduction a central objective of all policies and in terms of ensuring that national governments and civil societies of poor countries are able to design national economic and social programmes to overcome poverty and to promote sustainable development. (see para 3.2.2).
The growth of inequity has raised awareness of the need to strengthen redistributive mechanisms at national and international level.
2.3 The UN process "Financing for Development 2001"
The Review processes of the United Nations Conferences held in Rio da Janeiro, Cairo and Copenhagen stated one major obstacle to development that raised the question: How can the financial resources necessary for attaining the goals agreed on by the UN Conferences be mobilised?
At the same time, the international community was deeply concerned by the severity of the Asian financial crisis that began in 1997. The global economy deprived many poor countries of significant resources in 1998 through unusually acute declines in commodity export prices (see para 2.2.2). On top of that, the total amount of official development assistance is still far from reaching the agreed goal of 0.7% of GNP. Mobilising resources for social development is a perpetual struggle.
As a result, in 1997, the UN General Assembly set a process in motion to prepare an inter-governmental meeting on Financing for Development to be held in 2001. A procedure of informal consultation has been taking place since 1998. The formal preparatory process will start in early 2000.
The UN working group (see Box 3) recommended the involvement of the World Bank and the International Monetary Fund (IMF) as active partners in both the preparatory process and the final event. The participation of civil society and the private sector has also been decided upon.
2.3.2 The UN event in 2001
In order for the 2001 meeting to be successful there must be a collaborative effort by foreign, finance, and other ministries at national level, and by the United Nations and Bretton Woods institutions at international level.
The rationale behind this "Financing for Development" process is a growing recognition that the world is in a phase of transition towards a new economic order that is not yet completely formed or understood. The UN Working Group expressed its vision by declaring that: "We have an opportunity to begin the new millennium with a historic and goal-oriented collective political gesture of global solidarity for development and practical commitment to achieving it".
The UN process "Financing for Development 2001" is an important instrument for raising the necessary resources for development in the 21st century. Governments (Ministries of Finance and Foreign Affairs) should actively participate in this process and fully implement the decisions made i.e. increase both the quantity and quality of development aid. At the same time, it is important to bear in mind that the impact of any financial commitments will also be affected by the policy context in which they are made. Special attention should therefore be given to such issues as liberalisation and development, durable solutions to the external debt problem, and stabilisation of the international financial system.
In assessing development aid the recent World Bank Development Report states that distributed aid to countries with pro-poor policies has much greater impact than broad aid flows. Such an approach should also be applied to donor aid policies since the same amount of resources for development can have vastly differing benefits, as current reforms in trade and structural adjustment programmes demonstrate. (see Resources: CIDSE Position paper on Biopatenting and the Threat to Food Security – a Christian and Development Perspective).
3. Practical proposals for combating poverty
3.1. Socio-economic policy measures
3.1.1 Implementation of international agreements related to poverty eradication
CIDSE and Caritas Internationalis believe that the Christian tradition supports the notion of the universality of human rights. This universality has been confirmed by the states participating in the United Nations Conference on Human Rights / Vienna, 1993 (see Box 4).
The Universal Declaration of Human Rights, adopted by the General Assembly of the United Nations on 10 December 1948, has been translated into international law through two important conventions: the International Convention on Civil and Political Rights, and the International Convention on Economic, Social and Cultural Rights. These instruments led to the definition of global human rights standards and inspired over 50 additional UN human rights conventions, declarations and international minimum rules, or other universally accepted principles.
Existing international agreements constitute the legal framework for ensuring protection of the rights of individuals and peoples, a necessary prerequisite for sustainable social development. However, in practice, many of these conventions or treaties have either not yet been ratified by some of the UN member states, or are not fully implemented by those who have. Therefore, action should be taken at national and international level to ensure their effectiveness.
Considering that civil and political rights have been consistently kept high on the international community’s agenda, and that social, economic and cultural rights have only recently been given proper attention, our networks have decided to focus on the latter. It is also a fact that they encompass most of the basic rights, namely the right to personal safety, food, shelter, health care, education and employment. These rights need to be restored before poverty, or at least the worst forms of this major violation of human dignity, can be eradicated.
The CIDSE Task Group on Social Justice has already been closely involved in the work carried out in 1998 by the European Justice and Peace Commissions to monitor and protect social rights within the UN system. It resulted in the review of existing international legal instruments available in the field of social rights and in concrete proposals for enforcing the signing, accession, or ratification and implementation, at the national level. It also clearly indicates various ways in which NGOs could monitor, or even contribute to, the provisions of a convention or treaty.
Our networks plan to build on this work and to identify areas where innovative measures could be useful for engendering decisive breakthroughs in eradicating all forms of poverty.
This is the case, for instance, with regard to addressing the concern recently expressed by the Pontifical Council for Justice and Peace that "the right to food security and to healthy and quality nutrition should always be put before commercial targets."
Consequently, our networks strongly call for international support for proposals aimed at reducing the uncertainty caused by the instability of food prices and other commodity prices affecting the food security of millions of people in the poorest countries. The adoption of the new "risk management" initiative for developing countries, recently proposed by an international task force under the leadership of the World Bank (see para 2.2.2), could be a small first step towards starting the process.
CIDSE and Caritas Internationalis request all countries that have not yet done so to ratify and implement existing agreements on social and economic rights, in particular those relating to poverty eradication, ILO Conventions on basic workers’ rights, as well as the new ILO Convention on the prohibition and immediate action for the elimination of the worst forms of child labour. We also call for support for innovative measures enhancing the protection of human rights at national, regional and international levels (i.e. guarantee of food security, social protection to the informal sector, and legislation to determine minimum wages) see paras 2.2.2 and 3.1.2.
3.1.2 Taking account of human development indicators
In November 1999, the UN Under-Secretary-General for Economic and Social Affairs, Nitin Desai, stated that: "We have accepted a goal of halving absolute poverty by the year 2015. Studies show very clearly that with historical rates of growth of 3-4%, there is no way we are going to achieve this target within this time-frame… If we really want to halve absolute poverty by 2015, then we need not just growth but growth that includes the concerns of equity and social justice in its strategy. If we do that, if we can orient our efforts towards reducing inequalities, then… we could achieve the target even before 2015… Our strategy must focus not just on growth but also on pro-poor growth."
Such type of growth should aim for more equitable distribution, poverty reduction, job creation and participation. To this end, CIDSE and Caritas Internationalis welcome recent UN activities in collaboration with the World Bank and OECD on development indicators and encourage further efforts of the international community towards establishing appropriate indicators to measure and monitor economic and social development progress throughout the world.
Special attention should be given to the "working set of core indicators" discussed in detail at a major meeting held in Paris (February 1998), with participants from donor and developing countries, on the basis of the development goals set out in OECD: "Shaping the 21st century: The Contribution of Development Cooperation".
This "working set of indicators", a selection of which is shown in Box 5, aims at:
· helping to integrate strategies and efforts throughout the international development system;
· providing a standard and compact information tool for improving public understanding of development challenges and progress.
The indicators focus on two main aspects:
Economic well-being: reducing extreme poverty.
These indicators are inter-related and should be seen as a whole. It is important to note that they reflect a wide consensus of the international community on development priorities.
In addition to the above-mentioned indicators, the following aspect should be taken into account as well: participation of the poor in decision-making concerning civil, social and cultural life. It is, therefore, important to define indicators that could make evaluation of the development of the above-mentioned factors possible.
· Gender equality
It is widely acknowledged today that gender-related aspects are of special concern. Analysis of the different roles played in society by women and men reflects the essential contribution by women to the proper functioning of society.
However, it will be very difficult for the socially excluded to rejoin society. In the last 30 years, there has been considerable
development with regard to gender, especially in the education sector. Nevertheless, inequalities are still evident in both industrialised and Southern countries.
The inequalities are still linked to both social aspects (education, health) and to the full participation of women in civil, political and economic life.
Since 1995, the UNDP has developed gender-specific indicators that ought to be adopted (see Box 6).
Food security is a complex and multidimensional issue that has an impact on sustainable human development (in a cultural, economic, environmental and political context), poverty and agriculture. It also aims to ensure the availability, access to, and utilisation of quality food for a productive and healthy life.
According to the FAO: "Food security exists when all people, at all times have physical and economic access to sufficient, safe and nutritious food to meet their dietary needs and food preferences for an active and healthy life" .
However, it is also important to guarantee food sovereignty, which integrates the social and political dimension that enables a nation to choose and develop its own agricultural model. Farmers as the main actors in the fight against food insecurity should be given the right to control and defend their own type of agriculture (for details see Box 7).
Indicators relating to the measurement of internationally agreed 2005/2015 targets for reducing extreme poverty, universal primary education, gender equality, maternal and infant mortality should be promoted for explicit endorsement at the Copenhagen+5 Conference. They should also form the basis for the upcoming UN high level "Consultation on Financing for Development" in 2001. Human development indicators should be recognised in relation to trade policies under WTO rules. Much more action needs to be taken to reach the agreed time-bound targets.
· Conducting social impact assessments
It was agreed at the Social Summit in 1995 that social development goals should be included in the design of structural adjustment programmes (see para 2.2). Therefore, our networks monitor the new IMF and World Bank approach presented at their Annual Meeting in September 1999 in response to the G-8 Summit held in Cologne. This approach finally links debt relief to poverty reduction and calls upon national governments to conduct open consultation with their citizens with a view to developing a national "Poverty Reduction Strategy."
Our networks stress the importance of this new strategy as stated by the IMF and World Bank committees: "We agree that Poverty Reduction Strategies should be country-driven, and be developed transparently with the broad participation of civil society, key donors and regional development banks. These strategies should be clearly linked with the agreed international development goals, and with measurable indicators to monitor progress."
Furthermore, our networks aim to monitor the implementation of the ensuing decisions as stated in the Communiqué of the IMF Interim Committee in September 1999: "Social and sectoral programmes aimed at poverty reduction will be taken fully into account in the design of economic policies for promoting faster sustainable growth".
CIDSE and Caritas Internationalis hope that this new approach, if fully implemented, will result in a real change in the previous policies conducted by the IMF. Furthermore, the importance of common human development indicators, and the need to measure the social impact of adjustment policies, remains to be addressed.
The Special Session should adopt a decision requesting national governments to conduct social impact assessment studies before, during and after implementation of "Poverty Reduction and Growth Facilities" (the former Structural Adjustment Programmes). This new approach will require closer collaboration of the IMF and the World Bank with the UN and its specialised agencies. Poverty reduction strategies and social impact assessments should be carried out with the participation of civil society using international technical expertise. Special attention needs to be given to financing and organising the broad participation of civil society in poor countries.
3.2 Financial policy measures
3.2.1 Taxation and redistribution measures
Taxation is the main source of income for funding social development (education, health and other public services). At the regional level it is through taxation that states finance their actions with a view to reducing inequalities between countries. It is through progressive tax mechanisms that countries achieve the aims of reducing income inequalities and promoting social equity. However, in many countries, the wealth distribution system through taxation and duties is still non-existent or ineffective.
At the international level, various sources of income linked to financial activities are not always taxed, and yet they generate considerable profit for institutions and businesses.
The UNDP 1999 Human Development Report proposes several ways of generating additional resources to be invested in poor countries i.e.:
· "Revenues raised from levies on global pollution;
· The social impact of financial crises
The worldwide liberalisation of international capital flows increases the risk of currency destabilisation. This has facilitated global financial speculative behaviour: large sums of money can move around the world largely uncontrolled - and untaxed - in search of the highest possible return in the shortest period of time.
Among economists it is clear today, that short-term, often speculative, capital does not have the same potential as long-term investment in contributing to development. In countries where financial market institutions are not well developed, in particular "short-term investment can be disastrous creating macro-economic imbalances, overvaluation of currency, reduction of international competitiveness, and serious destabilisation of domestic banking systems."
Already, in 1987, Pope John Paul II expressed his concern about the global financial system: "The monetary and financial system is marked by an excessive fluctuation of exchange rates … to the detriment of the balance of payments and the debt situation of the poor countries."
Ten years later, the financial turmoil in East Asia in 1997-99 clearly demonstrated the risks of global financial markets. Net capital inflows to Indonesia, Korea, Malaysia, the Philippines and Thailand reached 93 billion USD in 1996. As turmoil hit market after market, these flows reversed overnight – with an outflow of 12 billion USD in 1997.
Two lessons were learned from this experience:
1. The human impacts are severe and are likely to persist long after economic recovery. More than 13 million people lost their jobs. Prices rose but wages fell sharply by about 40-60%.
Our agencies see an urgent need for regulating excessive financial speculation, with particular attention to the impact on impoverished populations.
Some technical solutions have already been implemented (fiscal systems and capital controls in certain countries, e.g. Malaysia and Chile). It is, however, important that effective mechanisms are developed in order to regulate excessive financial speculation that is driven by individual short-term profit. It is not only essential from an economic viewpoint, but especially from a social justice perspective.
According to financial experts, a transaction levy on financial flows, levied as a national tax but introduced through an international agreement, could indeed be effective, as it would discourage undesired speculative behaviour. This tax would not prevent the positive effects of the functioning of the market mechanism. In September 1999, the IMF Economic Issues series stated: "By taxing short-term capital inflows (as, for example, Chile has done), hedge funds and others could be discouraged from taking long positions that they might wish to close out suddenly. Hedge fund managers, who emphasise the importance they attach to being able to put on and take off positions with a minimum of transaction costs, would be particularly sensitive to such measures."
At the same time, the revenue of such a levy could offer a basis for meeting global challenges and finance social development. (Figures range from tens to hundreds of billions of US dollars).
As the Pontifical Council for Justice and Peace states, it is crucial to contribute to the "search for new ways of strengthening a rules-based world system, in which trade and development are placed at the service of the global human community, especially in the fight against poverty."
Implementation of regulatory systems, based on principles of social justice, would contribute to the achievement of the goals of the Social Summit and support the UN process "Financing for Development 2001".
Responsible international organisations should issue concrete recommendations as to how to establish a "New Financial Architecture", and how to curb excessive financial speculation (e.g. through mechanisms such as a currency transaction tax).
3.2.2 Further debt relief for social development
Many Southern countries have reached an unpayable level of external debt. The debt of the 41 highly indebted poor countries (HIPC) (see Box 8) amounted to USD 201.12 billion in 1997 (as compared with 19.97 billion in 1975), i.e. more than twice their total annual export earnings. In most cases, reimbursement charges on these debts (interest and capital) exceeds 20% of the debtors’ export revenue.
Our networks acknowledge that some progress has been made to solve the debt crisis of Southern countries, e.g. the "Highly Indebted Poor Countries" (HIPC) initiative; and decisions taken at the G8 Summit in June 1999. The IMF and the World Bank decided at their Annual Meetings in September 1999 to start an enhanced Highly indebted countries initiative. So, there is hope that more countries will qualify for assistance under the initiative to be granted further debt relief by the end of 2000.
While this outcome is a step forward, much more needs to be done so that the full cancellation of the unpayable debts of highly indebted poor countries can be achieved.
Pope, John Paul II encouraged the Jubilee campaign by saying that: "Debt relief is, however, urgent. It is, in many ways, a precondition for the poorest countries to make progress in their fight against poverty… It is the poor who pay the cost of indecision and delay. I appeal to all those involved, especially the most powerful nations, not to let this opportunity of the Jubilee Year pass, without taking a decisive step towards definitively resolving the debt crisis. It is widely recognised that this can be done."
Our networks refer to the CIDSE/Caritas Internationalis position papers "Putting Life before Debt" and "Proclaim Jubilee". We welcome the Heavily Indebted Poor Countries Debt (HIPC) Initiative, the Cologne debt initiative launched in June 1999, as well as the decisions of the IMF and the World Bank at their Annual Meetings in September 1999. Despite this progress, there is still a
need for new and additional resources to provide broader and faster debt relief, including a human development approach to debt sustainability and the establishment of an international bankruptcy procedure, that realistically contributes to achieving durable solutions and allow these countries to release their financial resources for primary public services, such as education and health.
4. Summary of recommendations
CIDSE and Caritas member organisations are advocating the implementation of the commitments made in Copenhagen since 1995 and regret that little progress has been made so far. Therefore, we call on governments to actively participate in the Copenhagen+5 Review in 2000 as well as in the UN Consultation "Financing for Development" in 2001. Further initiatives should be adopted to eradicate extreme poverty and prevent social exclusion. Our networks put forward the following proposals:
1. Implementation of international agreements related to poverty eradication
CIDSE and Caritas Internationalis request all countries that have not yet done so to ratify and implement existing agreements on social and economical rights, in particular those relating to poverty eradication, ILO Conventions on basic workers’ rights, as well as the new ILO Convention on the prohibition and immediate action for the elimination of the worst forms of child labour. We also call for support for innovative measures to enhance the protection of human rights at national, regional and international levels (i.e. guarantee of food security, social protection to the informal sector and legislation to determine minimum wages).
CIDSE and Caritas Internationalis welcome recent UN activities in collaboration with the World Bank and OECD on establishing and harmonising development indicators. Indicators relating to the measurement of internationally agreed 2005/2015 targets for reducing extreme poverty and maternal and infant mortality, and for universal primary education and gender equality, should be promoted for explicit endorsement at the Copenhagen+5 Conference. They should also form the basis for the upcoming UN high level "Consultation on Financing for Development" in 2001. Human development indicators should be recognised in relation to trade policies under WTO rules. Much more needs to be done to reach the agreed time-bound targets.
The Special Session should adopt a decision requesting national governments to conduct social impact assessment studies before, during and after implementing "Poverty Reduction and Growth Facilities" (the former IMF Structural Adjustment Programmes). This new approach will require closer collaboration of the IMF and the World Bank with the UN and its specialised agencies. Poverty reduction strategies and social impact assessments should be carried out with the participation of civil society, using international technical expertise. Special attention needs to be given to financing and organising the broad participation of civil society in poor countries.
At national level, taxation is the main source of income for funding social development (education, health and other public services). It is through progressive tax mechanisms that countries achieve the aims of reducing income inequalities and promoting social equity.
At international level, CIDSE and Caritas Internationalis see an urgent need for regulating excessive financial speculation with particular attention to the impact on impoverished populations. Responsible international organisations should issue concrete recommendations as to how to establish a "New Financial Architecture" and how to curb excessive financial speculation (e.g. through mechanisms such as a currency transaction tax).
Our networks refer to the CIDSE/Caritas Internationalis position papers "Putting Life before Debt" and "Proclaim Jubilee". We welcome the Heavily Indebted Poor Countries Debt (HIPC) Initiative, the Cologne debt initiative launched in June 1999 as well as the decisions of the IMF and the World Bank at their Annual Meetings in September 1999. Despite this progress, there is still a need for new and additional resources to provide broader and faster debt relief, including a human development approach to debt sustainability and the establishment of an international bankruptcy procedure that realistically contributes to achieving durable solutions and allows these countries to release their financial resources for primary public services, such as education and health.
The UN "Financing for Development 2001" process is an important instrument for raising the necessary resources for development in the 21st century.
Governments (Ministries of Finance and Foreign Affairs) should actively participate in this process and fully implement the decisions made, i.e. increase both the quantity and quality of development aid. At the same time, it is important to bear in mind that the impact of any financial commitments will also be affected by the policy context in which they are made. Special attention should therefore be given to such issues as liberalisation and development, durable solutions to the external debt problem and stabilisation of the international financial system.
In his Comprehensive Report on the Implementation of the World Summit for Social Development the Secretary General of the PrepCom stated:
"Successful implementation of the Copenhagen commitments will necessitate combining renewed political will with the ability to translate commitment into action, and with the courage to reach beyond one’s own constituency towards integrated partnership for social development. …
The challenge facing the General Assembly is therefore rather to develop the political will, the policies, concrete strategies and practical tools necessary to put commitments into practice."
· CIDSE, Biopatenting and the Threat to Food Security – a Christian and Development Perspective. CIDSE Task Group on EU, Trade and Food Security, Brussels, February 2000.
· CIDSE/ CARITAS INTERNATIONALIS, Putting Life Before Debt, CIDSE/CI, Brussels, 1998.
· CIDSE/CI in collaboration with Center of Concern, Policy in response to the draft Declaration and the draft Action Programme in view of the United Nations World Summit for Social Development, CIDSE/CI, Brussels, July 1994.
· CIDSE Position Paper, EU-Africa, CIDSE, Brussels, (forthcoming).
· CRS- Catholic Relief Service, Summary of Social Teaching, CRS, Baltimore, August 1997.
· EUROSTEP: Review of the World Summit for Social Development and Further Initiatives. Brussels 1999.
· Hinnekens J., After the World Summit on Social Development, Wanting Justice and Peace, working paper, July 1997.
· OXFAM International, Growth with Equity, an Agenda for Poverty Reduction, OXFAM International, September 1997.
· Pontifical Council for Justice and Peace Vatican City, Trade, Development and the Fight against Poverty, Vatican City, 1999.
· Social Watch, Annual Report of Social Watch – 1997, Instituto del Tercer Mundo, Uruguay, 1997.
· United Nations, Copenhagen Declaration and Programme of Action, World Summit on Social Development, UN, New York, 6-12 March 1995.
· United Nations, World Economic and Social Survey 1999, Trends and Policies in the World Economy, United Nations, New York, 1999.
· United Nations Development Programme, Human Development Report 1999, UNDP, New York, 1999.
· World Bank, Entering the 21st Century, World Development Report 1999/2000, World Bank-Oxford University Press, New York, August 1999.