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Develop resilience to withstand shocks

The MDG goals expire next year and nations have a lot of work to do to ensure development gains made so far remain intact, writes Lise Grande.

ht view Updated: Jul 24, 2014 22:31 IST

This year’s Human Development Report, released in Tokyo on July 24, focuses on the unwelcome prospect that the gains that have been achieved in global human development will be reversed unless countries take steps to spread the benefits of growth and build their resilience to withstand shocks and disasters.

The United Nations Development Programme’s (UNDP’s) flagship report draws attention to sobering facts. Nearly 30% of the world’s population is multi-dimensionally poor, which means that they are poor not just in terms of their income, but also in education and health terms. Many people are at risk of slipping back into poverty because of something as simple as a single family illness or change in the market prices of the goods they are trying to sell. Half of all workers are in insecure employment, mostly in the informal sector, and a staggering 80% of people do not have social protection. Billions of people in the world, even those who are benefitting from the growth occurring today, are vulnerable, in many cases, highly so.

The report shows that people face different threats at different times in their life. People are at the greatest risk when they are young, entering the labour market for the first time or when they are leaving as pensioners. The report also shows that different groups of people are at higher risk because of structural factors and limited capabilities. Poor people are the most at risk, women suffer more than men, the elderly are highly vulnerable, people who are ill and poorly educated are less resilient and the disabled represent the largest category of at-risk people in the world.

The UNDP has carefully studied global experiences to see what can be done to overcome vulnerabilities and has found that there are a number of affordable, pragmatic measures that can be adopted.

First, it makes sense to put in place social protection nets. The benefits of these nets are immediate and clear, and they don’t cost very much. The UNDP estimates that providing basic social security benefits to the poor would cost less than 2% of global GDP — a social bargain by any measure. In the case of India, a comprehensive social protection net including old age and disability pensions, basic childcare benefits, universal access to essential health care, social assistance and the 100-day employment scheme would cost less than 4% of GDP.

Second, universalising social services is one of the best investments a country can make. The report shows that all countries can afford basic services, and, contrary to common belief, they don’t have to wait until their GDP reaches a certain level before expanding them.

Universalised basic services have a positive impact on the economy in general, and on productivity in particular.

Third, the time has come to move to a full employment model. The UNDP’s report makes a compelling argument to put full employment back on the global agenda, pointing out that countries committed to it have some of the best human development records in the world.

Fourth, investing in inclusion, preparing for disasters and supporting people during vulnerable times in their life-cycles helps countries to withstand shocks. Countries that help include excluded populations have better social cohesion and see faster improvements in aggregate social indicators.

This report comes a year before the Millennium Development Goals expire. Like many others around the world, the UNDP recognises that reforming global governance can no longer be put off. Whether the issue is climate change, conflict, social unrest or economic crisis, it is clear that global institutions must be more representative so they can better prevent shocks and manage global public goods more transparently and effectively. As the international community, we have to find ways to increase access to liquidity and reduce the volatility of financial flows; to minimise contagion across borders and change the rules governing trade in agriculture and services so that national governments have maximum room to put the right policies in place.

(Lise Grande is resident coordinator, the United Nations, and resident representative in India, the UNDP. The views expressed by the author are personal.)

First Published: Jul 24, 2014 22:26 IST