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Francois Bourguignon, Mark Plant, and Mark Sundberg: Press Conference on the Global Monitoring Report 2007, April 13, 2007

Available in: العربية, Español, Français
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Ms. Tuck:   Good morning.  We will now go ahead with the press conference on the Global Monitoring Report.  We have on the panel this morning François Bourguignon, Mark Sundberg, Mark Plant, and myself, Merrell Tuck. 

 

Also, as in other press conferences, there is French and Spanish interpretation, but you have to use the headset.

 

This is embargoed until 12:30, and copies of the report and other related materials are all just outside the briefing room. 

 

So, without further ado, let me hand it over to Mr. Bourguignon.  

 

Mr. Bourguignon:  Thank you very much, Merrell, and good morning to all of you.

This is the fourth Global Monitoring Report since this series was initiated after the Monterrey Meetings in 2002.  It is prepared jointly with the IMF and with substantive inputs from other multilateral development banks  the African, the Asian, the Inter American Development Banks, the EBRD  and this year with input from the Islamic Development Bank.

 

The objective of the Global Monitoring Report (GMR) is to take stock of where we are with respect to the Millennium Development Goals and to identify pressing issues in need of greater attention from the international community.  It takes stock of how the different parties to the MDG agenda are performing.  They aim to advance the cause of the development and poverty reduction:  Rich countries; donors; international financial institutions, including, of course, the Fund and the Bank; and developing countries.  More generally, it is an annual stock taking on the state of development as seen through the lens of progress towards the MDGs.

 

The GMR also focuses on thematic issues, but it does so in a way that is quite different from other reports by the Bank.  It does not aim to do or present new research but to survey a broad range of questions in particular areas pertinent to the international community's efforts to advance the development goals we are all striving towards.  Under the guidance from the Development Committee and in consultation with the Management and the Board of Directors, the focus of the 2007 Global Monitoring Report is on gender equality and empowerment of women, and on fragile states.

On gender equality and empowerment of women, which is the third Millennium Development Goal (MDG3), we find that it is essential for reasons of fairness and social justice.  This goal is also important because gender equality and empowerment of women contributes to economic performances overall and the capacity of individual countries to meet the other MDGs.  Raising the status of women and girls is essential for improving nutrition, for reducing child mortality, for better education, and for access to infrastructure.  Reproductive health and access to modern contraceptive techniques are an important aspect of gender equality and empowerment, as well.  Access to family planning allows women to control their fertility; participate in the labor force; and engage in political life, if they choose to.

 

One message of the GMR is that we all need to do a better job of monitoring gender equality and empowerment of women, and we must use what we learn to inform policies and to mainstream gender equality into the programs and projects of bilateral donors and multilateral development agencies.

 

The crosscutting focus of the Report on Fragile States is a second key challenge facing the international community.  The greatest MDG deficit that is the largest gap in meeting the Millennium Development Goals is found in these fragile states characterized by weak governance and institutional capacity.  While constituting 10 percent of the developing world's population, they account for over one quarter of the extreme poor in the world.

Yet, they also pose the greatest challenge to the international community in providing support and scaling up services to meet the MDGs.  For precisely this reason, it is critical to give greater attention to support for fragile states and efforts to make assistance more effective, rapid, well targeted, and sustainable in order to support potential turnaround cases.

Both issues pose timely and important challenges to the international community, and we look forward to a productive discussion emerging from the Development Committee meetings of Ministers on Sunday.

 

Let me now turn to my colleague, Mark Plant, to provide some perspective from the Fund on these issues.

 

Mr. Plant:   Thank you, François. 

It is a pleasure for me to be here on behalf of the International Monetary Fund today to discuss with you this year's Global Monitoring Report.  Mark Sundberg will give you a run down on most of the detailed results in the report, but first I would like to speak about three issues in this year's report that are of particular importance to the IMF  growth, trade, and fragile states  and then I will have two quick comments about aid and gender issues.

 

First, on growth.  Some of the main messages regarding growth and poverty reduction issues report are key to continued development.  The world economy, as a whole, is growing at a pace not seen since the 1970s, and key macroeconomic indicators are favorable.  Inflation remained moderate in 2006, and average fiscal balances in low income countries have shifted into surplus.  It's all the more encouraging that growth in Sub Saharan Africa is high, as the GMR contains new evidence that growth could help reduce poverty, especially in low income countries.

 

While the overall growth picture is favorable, there is significant variation across regions.  In addition to very positive performance on Sub Saharan Africa, a favorable trend is evident in low  and middle income countries in East Asia, South Asia, Eastern Europe, and Central Asia.  Growth in low  and middle income countries in Latin America and the Middle East and North Africa is more modest.

And there are some risks:  Increasing global price pressures, supply shocks, or volatile markets could knock the good global economy off its course, but we at the Fund view these risks as lower than they were six months ago.  And faster growth in low income countries will be needed if Millennium Development Goals are to be met, especially in Sub Saharan Africa.  Although the share of people living in Sub Saharan Africa has declined, it remains the only region that is off track from meeting the MDG target by halving poverty by 2015.

 

Secondly, on trade, the report notes that restrictions on trade have declined in recent years and global trade continues to expand.  Export growth in developing countries is particularly strong.  These are all encouraging signs.  While progress from unilateral trade reforms can, indeed, be helpful in the right circumstances, we need to move forward on multilateral trade negotiations, and that is where substantial gains to developing countries could come from.  Unfortunately, progress in the context of the Doha Round remains elusive, so we urge countries to work to make the Doha Round a success.

One piece of good news on this score was that there was progress made in 2006 in mobilizing so called "Aid for Trade."  This is aid help the developing countries make the adjustments necessary for reaping the benefits of participation in global markets, and will be an important adjunct to the success in trade negotiations.

 

Let me turn briefly to fragile states, one of the focuses of this year's report.  François noted that we all need to make sure that we making our best efforts to ensure that we are helping fragile states effectively, recognizing the unique circumstances each one of them faces.  The IMF continues in its support to fragile states; and particularly for those coming out of conflict, we have a special facility to get them financial and technical assistance in quick order.  But we realize there could be more to do be done.  So, consistent with the priorities identified in the Managing Director's medium term strategy, we are in the process of reviewing the Fund's support to, and experience in, fragile states, and we are examining the adequacy of existing Fund instruments to meet the specific requirements of fragile states.

I would be remiss in my duties if I didn't mention the other two areas briefly before turning the floor over to Mark.

 

First, on aid. The GMR makes it clear that the expansion of a global aid through 2006 has stalled.  Despite promises made at Gleneagles and elsewhere, actually disbursements have fallen.  These developments  or lack thereof  are discouraging.  At the Fund we stand prepared to advise low income countries on how to best manage their monetary, fiscal, and exchange rate policies to ensure that higher aid can, in fact, be effectively used, but that aid first has to come in.

Finally, let me say a few words about gender equality.  The Fund very much appreciates the very strong message that this report sends, and the importance of gender equality for accelerating progress towards the MDGs.  While the report finds evidence of progress in such areas as girls' schools enrollment, it remains clear that efforts in this regard need to be scaled up by developing countries and donors alike.

Thank you. 

 

Let me turn the floor over to Mark Sundberg.

 

Mr. Sundberg:  Okay.  Thank you very much, and thank you for this opportunity to highlight the key messages of the report. 

 

This report is about how we can, and indeed must, work together to change reality.  There are 10 million children who die each year of diseases that are easily and cheaply preventable.  30 percent of all people in the developing world lack adequate nutrition.  Nearly half of households lack access to sanitation.  This report, as François and Mark noted, monitors progress in these efforts, but also monitors how we are meeting our responsibilities to advance the MDGs, as donors, as developing countries, as development institutions.

 

Let me quickly highlight the key messages of the report.  First, between 1999 and 2004, the number of extreme poor, those living under $1 per day, fell by 135 million people, it's estimated, to under 1 billion.  This is extraordinary performance.  Globally, we are on track to meet the first Millennium Development Goal of halving extreme poverty.  Strong growth is one major reason, as Mark emphasized.  Globally it's been strong, but also in Sub Saharan Africa the last five years have seen the highest sustained growth for the last three decades.

 

But regionally, performance differs sharply.  The slide shows the contrast between East Asia and Sub Saharan Africa.  Whereas East Asia is already exceeding the target for 2015.  Sub Saharan Africa is seriously off track.  300 million people there remain in extreme poverty.  But here, too, there is encouraging evidence that the region may be turning a corner.  Since 1999, the share of people living in poverty has fallen by nearly 5 percent across the region.

 

The report also notes that there is evidence that growth alone is not sufficient. Growth that generates good jobs that reaches the poor is critical.  Some countries have done well in this.  China, Burkina Faso, Brazil have seen poverty outpace growth, but other countries are doing much more poorly.  It is important to provide attention to the quality of growth and distribution.

 

The second set of issues is over performance and human development dimensions of the MDGs.  Since 2000, there have been 34 million additional children that have gone through primary school, and there is more encouraging evidence of progress in these goals.  550 million have been vaccinated against measles.  The incidence of death from measles has fallen by 75 percent in Sub Saharan Africa.  Individual countries show considerable progress as well.  In Timor Lest, for example, child mortality, which in 2000 was over one in 10, has been halved.  In Eritrea the same progress has been achieved since 1990. This is due, in part, to the doubling of external aid and expenditures for health and education.

 

But we still have a long ways to go to meet the Millennium Development Goals in the human development area.  All regions remain off track to meet the child mortality goal, and as I mentioned, 10 million children die annually of diseases that are readily and cheaply preventable.  One third of all children in the developing world are stunted or underweight.  Nearly half of households lack access to adequate sanitation.

 

The chart here shows one area that is highlighted in the report regarding the quality of outcomes.  Progress with enrollment and primary completion is often not translating into the skills and the requisite abilities that children need to get ahead.  In many Sub Saharan African countries, less than half the children completing sixth grade, as highlighted here, have minimum reading skills.  There is not an inherent trade off between these.   In fact, historically, quality and quantity in these areas have proceeded in tandem, but the report recommends that there needs to be better monitoring and more attention paid to quality, development of international standards or national standards to benchmark and track performance, and greater efforts to address incentives for better service delivery.

The largest gap in meeting the MDGs is found in the fragile states, those countries which have the weakest institutions, weak governance, and are often found in conflict.  This is an enormous problem.  Nearly one half billion people living in these countries.  They represent 9 percent of the developing world's population, but over a quarter of the extreme poor, and increasingly, poverty and the problems of development are concentrated in these countries.

 

Nearly one third of child deaths are found in these countries, and nearly a third of children not completing primary school are in fragile states.  Often there are costly cross border issues that arise through diseases, refugee movements, and through conflict that spills across borders.

Fragile states pose a dilemma for the international community.  These are the countries with the weakest capacity, but also the greatest needs.  The report argues that we require new approaches and instruments to quickly help and take advantage of turnaround opportunities to stabilize and reduce conflict.  We, donors and international institutions, need to implement recently approved reforms in organization, staffing, and rapid response procedures.  Strengthening of partnerships of other institutions is also needed.

Turning to the thematic focus of this year's report on gender equality and the empowerment upon of women  that is the third Millennium Development Goal  we must work to change the disadvantages and rights, resources, and voice that face women.  Why is this important?  As François noted, it's not only a question of fairness, but also of smart economics.  Gender equality yields a more skilled labor force, it yields higher productivity, and better growth.

Equally importantly, it advances the other Millennium Development Goals.  Educated women lead to healthier children.  Greater control over resources by women leads to more spending on health and education. 

 

How are we doing?  The report looks at progress across countries and regions.  In some cases, we are doing very well, as this chart highlights at the top.  The arrows in red show progress towards meeting the goal of gender parity in education.  Here, secondary education is shown.  83 of 106 countries for which we have data have when already met the target for 2005, and it demonstrates that where there is concerted action and concerted effort, real progress can be achieved.

On the other hand, in many other dimensions, progress towards gender equality and empowerment of women is lagging.  The chart shows at the bottom representation in national parliaments.  In no region does this exceed 25 percent, and it has barely moved in the last 15 years.

 

The report suggests several ways to improve on monitoring of gender equality using supplemental indicators to deepen and make more relevant the coverage.  It also looks at adding indicators that will strengthen the monitoring of gender equality to inform policy.  The message for donors and development institutions is that we need to do a better job of integrating gender equality into the operations and work that we carry out.  There need to be realistic and identifiable goals, strong leadership to mainstream this in the institutions, and better financing.

 

Let me turn to the responsibilities and performance of donors.  Every monitoring report looks at aid and at trade in debt relief.  As was emphasized by both François and Mark, recent aid trends are not encouraging.  The chart shows that in 2006, real aid fell and that the prospects for meeting the targets for doubling aid, the commitments made at Gleneagles in 2005, are growing dimmer.  This is in spite of the fact that for most developing countries, the prospects for using aid well and effectively are improving.  Macro performance is improving, as Mark mentioned.  There is evidence that governance is improving, and the investment climate shows signs of improvement.

 

There are also serious problems with the quality of aid.  There is a low share of flexible aid, the aid that is required to hire the teachers and hire healthcare workers that are needed to meet the MDGs.  There is a lack of predictability of aid.  Few donors can commit to more than one or two years out on aid, and it's very difficult to scale up services under those circumstances.  Fragmentation of aid, the proliferation of channels, poor coordination and earmarking is decreasing the effectiveness of aid.

The good news is that there is also greater awareness of these problems, and the Paris process is yielding some successes, but problems with scaling up aid is too slow.  Seven years after the Millennium Summit, five years after the Monterrey consensus, there are still no country cases of scaled-up aid to meet the Millennium Development Goal targets.  There is a collective responsibility for doing better on this.  More and better quality of aid is needed; sound, sequenced, medium term programs for scaling up are needed; and better technical assistance from both of our institutions to preparing those programs is also needed.

 

I won't discuss trade reform.  That was discussed earlier by Mark, but we can return to that if there are further questions.

 

Finally, let me add a note on the changing responsibilities and the financing concerns of the international financial institutions.  The chart here looks at lending trends of the multilateral development banks, and it shows that demand for loans from the middle income countries increased in 2006, whereas supply of concessional assistance is flat or has even declined in recent years.

More broadly, there is a trend towards a declining share of the multilateral development banks in overall aid since the early 1990’s.  This raises a key question about their future ability to bring greater coherence and leadership to the international aid architecture, and it makes renewal of financing for IDA 15 this year particularly important.

 

Let me end on a hopeful note.  There is clear evidence of areas of great improvement and problems being solved.  Extreme poverty is falling.  Measles incidence is declining, gender parity in education is stronger, expanding access to anti retroviral treatments for people with HIV/AIDS is increasing.  Concerted effort can yield results, and we also know that developing countries are better prepared to use this aid.  The challenge now is to double our efforts and accelerate progress to addressing these remaining challenges.

Thank you.

 

Ms. Tuck:   Thank you, Mark, and thank you, François and Mark Plant.

I want to go ahead and open this up for questions.  I would ask that you identify your news organization, and we will try to keep most of the questions to the subject of the Global Monitoring Report, but fire away.

 

Question:   Teressa Bouza with Spain's news agency.

For Mr. Bourguignon, I wonder if you could comment on what are the main challenges Latin America is facing, and also in the report you mentioned the importance of access to quality services.  I would like to see if you could tell me how is the situation in the region. 

Thank you.

 

Mr. Bourguignon:  Thank you very much. 

This is a very hard question, and I would like very much to be able to tell you this is the problem that Latin America is facing, and these are the solutions.  Maybe Mark Plant can help me on this.  But let me simply say a few words about this.

 

What is really quite striking is the fact that in Latin America, despite considerable advantages in several areas, in particular human capital, in natural resources, and in others, is not growing as fast as other middle income countries, in particular as Asian countries.

So the problem is to know where this is coming from, where there is lack of dynamics.  One possible explanation is the fact that Latin America may have less comparative advantage in manufacturing, in mass manufacturing than in Asian countries, and this is really the sector which has been booming over the last decades.

 

The comparative advantage of Latin America might well be more in some natural resources, but there may be some reflection to be had on the way in which those resources must be exploited.  Chile, for example, is a very good example of a country where the natural resource, which is the good climate, has been exploited to produce booming sectors in wine, of course, but also in the fish.  Fisheries, but not artificial fisheries.  I'm sorry, I don't have the word in English.  I have it in French.  Cultivating, I mean aquaculture.

 

So, this, I think, would be a good example that should inspire other countries.

And then, of course, there is a strong hypothesis that one of the problems that Latin America is facing is the problem of a very inequitable society where many initiatives cannot be materialized, where people cannot realize all their economic potential simply because of a lack of opportunities.  This is true at the bottom of the distribution of resources for poor people, but it is also true for  very often for middle class, which cannot access sectors or cannot undertake investments which are privately and socially profitable, and I think that there is more and more emphasis in the analysis that we make of the factors which are slowing down Latin American progress in this area.

But, maybe Mark wants to add something on the more macro part.

 

Mr. Plant:  Thank you, François. 

I would just refer you, there was just before this press conference a release of the regional economic outlook for Latin America that the Fund has that I think details, if you will, our Latin America's experts' views on the macro side of this.  So, I would refer you to that rather than try to opine myself. 

Thank you.

 

Ms. Tuck:   Mark, I don't know if you wanted to add anything on Latin America.

 

Mr. Sundberg:  No.

 

Ms. Tuck:   I would also encourage journalists, on the way out we have prepared regional highlights for every one of the five developing regions which assesses where every region stands on the Millennium Development Goals, and I think that will give you a nice snapshot of specific questions related to Latin America and the eight Millennium Development Goals, and that will be right outside.

I also should have mentioned at the start of this that we do have the overview in Spanish and French of the Global Monitoring Reports.

Yes.  Deanna.

 

Question:   Yes, this is Diana Gregg with DNA. 

When it says that in 2006 aid increased but it was mostly due to higher debt relief and in  I'm sorry, in 2005 it was up, but it was due to debt relief, and last year it actually declined.

Was the decline kind of across the board, or were more countries responsible for the decline than others?  The decline in ODA last year?

 

Mr. Sundberg:   I can try answering that.  Although I don't have the statistics in front of me, there is certainly differential performance across the main donors.  I believe that the declines were more from Japan and the United States, and that better performance  maybe one of my staff members or colleagues in the audience can help me out, if that's not correct  but the Northern European donors and Britain have been leaders in scaling up aid and have performed better, and I believe in 2006 it's more the U.S. and Japan that has seen less growth, but I'm sure that there are other countries that have been on both sides of that as well.

 

Ms. Tuck:   I don't know if others have anything to add.  I would point people as well to the  and François may want to add something.  There are new numbers out from the OECD DAC on the various flows from different countries and breaking down bilateral debt relief as well.

But I'm sorry, François, go ahead.

 

Mr. Bourguignon:  No, I mean, I wanted to say that one explanation of the drop in the debt relief between 2005 and 2006 is the link to the identity of the countries which benefited from the debt relief, which were Iraq and Nigeria, and a huge amount of debt was written off in 2005, and a little less in 2006.  We note that there will still be some writing off of the same debt in 2007, but again, it will be much lower.

 

So, what we observe in terms of the drop in overall debt is more of overall aid, and the debt relief is more an issue of sequencing and timing and the fact that in 2005 there was this kind of exceptional operations on Iraq and Nigeria.

 

Mr. Plant:   Let me just note one more thing, which is that if you look at nondebt relief aid, say, to Africa, you have seen that it has been pretty much stagnant for quite a few years now, that there is not a lot more going to Africa.

 

Mr. Sundberg:  May I add one more?

 

Ms. Tuck:  Yes, please.

Mr. Sundberg:   One point that I made in the presentation is about the quality of aid; and if you were to look at the level of aid that is what we term as flexible aid for programs and projects, the aid that can actually be used to build schools or expand health service delivery, et cetera, that is the aid that is not in the form of debt relief or emergency assistance or technical assistance, but rather this flexible aid.  That has been also stagnant.  Flexible aid has not been increasing, and that's what I think you really need to look at to measure the commitments to aid available for scaling up to meet these development targets. 

Thank you.

 

Ms. Tuck:  Other questions? 

Yes, toward the back there. 

 

Question:  From Reuters News Agency.

Your report mentions that China has emerged as an  aid from China has been growing, particularly to Africa.  I was just wondering how do you evaluate the quality of this aid?  There's a perception that there is not often any conditionality attached to this.  So, that's my question.

Thanks.

 

Mr. Sundberg:   I will take that now, Merrell.

 

Ms. Tuck:  Okay, go ahead.

 

Mr. Sundberg:  We don't evaluate the quality of the aid from China or from other emerging donors largely because the data needed to do an evaluation is simply not there.  It's difficult to track in the same way that we are able to look at the OECD Development Assistance Committee data on aid covering the major donors; that emerging donors simply are not reporting through  most of them are not reporting through these channels--and we don't have detailed information.

We do have some sense that more of this aid is going into infrastructure and less of it into social sectors, and that may be quite welcome in many countries and quite important.  At the same time, there are also concerns about whether this aid is partly loans  it's in concessional lending, and is it consistent with the need to maintain stable and sustainable levels of debt moving forward.  This is another issue about quality that we hope to gain more insight into as better information is available.

 

Mr. Bourguignon:  Maybe an additional point on this, which is not really on the aid given by China but the role of China in Africa.  I think that this is something which is extremely important.  The presence of China in Africa has increased enormously and is offering some possibilities to Africa which didn't exist before.  China is growing very quickly, and there is a huge demand for several products, in particular, of course, natural resources which can be found in Africa, and this is a new opportunity for Africa.

So, when evaluating, if you want, the role of China in African development, I think that this part should not be underestimated.

 

Ms. Tuck:   Thank you. 

Yes, Barry.

 

Question:   I arrived late, so if some of these elements have been expressed, forgive me.

When you speak about the quality of aid in Africa, could you address some of the critique that's leveled at the Bank in particular by, say, Mr. Easterly, in terms of all of this aid that has gone in over the past quarter century as not being particularly useful.

And when you look at the aid flows to Africa, how does that correspond to this reduction in poverty that you mentioned of down 4.7 percent in Africa?  And the economic performance, which has been improving so significantly in the past five years, why is it improving?  Why is poverty down?  Is it simply good policies or is it aid?

 

Ms. Tuck:  François, you want to start?

 

Mr. Bourguignon:   Let me start.

How do we react or what is our view on the mysteries, critique of aid saying that all that aid has been completely ineffective because poverty in Africa has not gone down?

  I think that this is a statement which is too strong in the sense that it is very difficult to know, to imagine what would have happened without this aid.

 

So, first, it is possible that in many countries the situation today would be much worse than what is observed because aid has permitted to compensate for several shocks or several evolutions which were negative in those countries.  So, this is something on which I don't think that we will be ever able to get any kind of evidence because the counterfactual is simply missing.

 

Another point I think that we have to take into account is that aid is often not only directed toward the economic development.  Aid is also directed towards social development; and what we observe in Africa, as in many other regions, we observe over the last three decades fantastic progress on the human development front.  We have very substantial progress in education.  We have very substantial progress in health, even though still today was very far from the goals that we set for ourselves in 2015.

 

So, because of that, I don't think that it is possible to conclude so directly and so quickly that aid has been completely ineffective.  We know we have examples of aid which has been completely misdirected in the past.  Everybody has in mind the huge amount of aid which was given to Mobuto's Zaire back in the 1970's that we know that has been completely wasted.  We also know why aid was given in those days to these countries, and we know that this was because of geopolitical reasons.

Now, I think that the big progress that we observe today in the world is that much less of the total aid is, indeed, allocated for geopolitical reasons, and the poverty motive is definitely becoming the most important one.

 

On the second question, why is it okay that Africa seems to be doing better in the last few years, than it was the case before.  Is it because of aid, or is it because of something else?

First point is that not all countries are doing much better in Africa.  Mark gave a figure a little earlier.  We know that when we look at the last 10 years, there are 17 countries out of 53 which are  which have been able to grow to more than 4 percent a year over the last 10 years.  And there are 11 countries which have been able to grow at more than 5 percent over the last year, over the last 10 years.

 

So, these are good achievements.  We know that some of these countries have been benefited from midyear aid flows.  In the 11 countries that I just mentioned, the level of aid was, on average, something like 15 percent of, or 12 percent--sorry--of GDP.

But we also know that among the countries which have not performed that well, some of them were also receiving aid.

 

But what you have to appreciate is the fact that aid may be given for different motives.  It may be given in a very constructive ways for countries which are faring rather well with rather satisfactory governance and institutions, and aid may be given for the appropriate reason, because of negative or bad performances on the economic front because of governance issues, and we cannot expect that this aid given to the fragile states that are being dealt with in the Global Monitoring Report will produce very substantial progress in growth.

 

So, it is all this that we have to take into account to appreciate what is the role of aid, but I think that it is very, very important to keep in mind that there are good examples of countries in Africa which have done well at the same time as they were receiving a very important flow of aid.

 

Ms. Tuck:   Thank you.

Mark, quickly, please, because I think we have a couple more questions.

 

Mr. Sundberg:   I wanted to say that I think the Easterly critique is a bit of a straw man.  As François pointed out, it's clear that a lot of aid in the past has been directed to nondevelopmental purposes.  But if you look at the trends in how this has changed over time: the quality of aid and the awareness amongst donors and recognition of the need to harmonize and to align aid better with country strategies, the quality of domestic governance and macro policies, etc. is clearly improving.

The work of the international financial institutions in efforts to evaluate outcomes in their projects also shows an upward trend, and this I think points to something that is tracked in the report, and that is increasing selectivity of aid; that aid is flowing more to countries with a good policy environment and to countries that have greater need.  Selectivity on both of these dimensions is higher and it's particularly higher amongst multilateral banks, less so amongst bilaterals, but the trend is towards improvement that speaks well for increasing aid effectiveness. 

 

Ms. Tuck:   Thank you.

Sir.

 

Question:  Good morning.  David from AFP.

Mr. Bourguignon, do you think the World Bank can still conduct its policy in Africa with all the critics flowing against its President, including from the NGO this morning?  

 

Mr. Bourguignon:   Yes.  I don't think this is an issue that we should discuss here.

I think what is really very important is the fact that the Bank is an institution, has the reputation, has shown that it was able to do good work, and to provide, as we just said, aid in a very effective way in African countries.  And as far as I know, what is being discussed these days in the media and elsewhere and here in the Bank makes no difference to the efficacy of that mission.

I mean, I think that the institution has a reputation which is going beyond what may happen to one member of the institution; and for the moment, this is not something on which we can comment because simply we don't know what will be the outcome of the discussions which are taking place these days in various instances.

 

Question:  Thank you.  Roberto Gonzalez with "La Hora" in Mexico.

Could you comment specifically on Mexico.  Is Mexico on track to achieving the development goals, and what are, in your opinion, the causes of the inequality in the Mexican society? 

Thank you.

 

Mr. Bourguignon:   On whether Mexico is on track to achieve the Millennium Development Goals, I don't have in mind exactly the performance of Mexico on each of the goals.  The only thing I know is that in the goal of infant mortality, they are apparently behind.  You know that the goal is reduction of two thirds of infant mortality, and what we know, we know that it is more difficult to reach this kind of goal where you are already low at the beginning.

I mean, this is  infant mortality is this kind of goal, the cost of which is becoming higher and higher as you are getting toward the goal.

 

So, I know that.  I know that Mexico certainly will achieve the education of the Millennium Development Goals with universal primary enrollment by 2015; and on poverty the problem is the way in which poverty has been defined.  If it is defined with the international $1 a day limit over that is defined using the Mexican poverty line.  And on the $1 a day, there is little doubt that they will achieve the goal.  I don't remember exactly what happens with the Mexican poverty limit.

Now, about what are the causes of inequality in Mexico, there are many of them.  I mean, for a very long time, simply the fact that many poor people didn't have access to human development facilities, would not have access to infrastructure which would permit them to, as I said saying before, express their economic potential has produced over time, not only inequality in the distribution of income, but has produced over time slower growth than it would have been possible.

But another dimension of inequality in Mexico, which is very much discussed these days, is the inequality that is taking place at the other end of the distribution basically by the existence of monopoly positions by some people or by some groups of people, by some corporations, and we know that this monopolistic competitions are contributing again both to slowing the process of growth and to generate inequality.

 

And we had a conference last November organized by the World Bank and by Harvard University with the Mexican Government, and this was on the role of monopolies in slowing down growth in Mexico.  This was a very successful conference where Mexicans presented their papers explaining the role of monopolies, and I'm very happy to see that the new administration is taking this very seriously since Mr. Calderon announced a few weeks ago that trying to regulate in a more effective way monopolies and to introduce competition in sectors which are under monopolies would be a priority of his administration.

 

Ms. Tuck:  Thank you.

Do we have any other questions?  We may if there is one more question; otherwise, we might wrap up the press conference.

No?

And I would remind people that there are regional highlights at the back and so there is one on Latin America, and there will be some data on in there on Mexico that may be helpful to you, and please do keep in mind the embargo for 12:30.

And I would be remiss if I didn't mention the World Bank Group's Gender Action Plan, which is one of the programs that has been designed to fill some of the gender gaps that exist that have been identified in the Global Monitoring Report, and I have one of the experts  a couple of expert colleagues on gender here, so if people have follow up questions, they can ask, and there are copies of this also outside the press conference, so thank you very much.

 

 

 

 

 




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