Credit: Construction Review Online

By Jeffrey Moyo
HARARE, Zimbabwe, Nov 13 2015 (IPS)

The upcoming week for the Programme for Infrastructure Development in Africa (PIDA), which runs from November 13-17 in Abidjan, the capital city of Ivory Coast, is set to throw this continent into the full gear of infrastructural boom, development experts here say.

“If PIDA and what it all entails may be strictly followed by Africa and its leaders, yes, truly the underdeveloped continent may see itself emerging from the era of infrastructural underdevelopment and help the continent attract much needed foreign investors,” Zimbabwean independent economist, Kingston Nyakurukwa, told IPS.

For African nations, from the outset PIDA was meant to promote socio-economic development and poverty reduction through improved access to integrated regional and continental infrastructure networks and services.

Owing to the infrastructure deficit facing Africa, in July 2010, African leaders launched PIDA under the leadership of the African Union, New Partnership for Africa’s Development (NEPAD) and the African Development Bank (AfDB).

At its launch, PIDA’s presidency was initially assumed by South African President Jacob Zuma, thanks to his country’s successful organization of the World Cup in 2010, which inspired the entire continent.

Then Zuma said: “Africa’s time has come and without infrastructure, our dreams will never be realized. We cannot trade on the continent because of the lack of communication. The infrastructure that we want to create will provide new opportunities for our continent.”

With the African Development Bank Group being the executing agency, PIDA was designed as successor to the NEPAD Medium to Long Term Strategic Framework (MLTSF), which was meant to develop a vision and strategic framework for the development of regional and continental infrastructure.

For many development experts here, like Henry Kakonye, Africa has however lacked development in infrastructure over the years, impacting negatively on the continent’s economic growth.

“Lack of infrastructure development in Africa over the years has gradually affected productivity and resulted in rising production and transaction costs, subsequently derailing growth through slowing competitiveness of businesses and the ability of governments to chase economic and social development policies,” Kakonye told IPS.

According to the New Partnership for Africa’s Development (NEPAD), PIDA will also help the objectives for Sustainable Energy in Africa in line with the UN’s sustainable development goal to ensure access to affordable, reliable, sustainable and modern energy for all.

But in developing Africa’s infrastructure, NEPAD has also been on record saying the private sector cannot be left out.

“With support from the private sector, PIDA is expected to play a critical role in addressing the continent’s infrastructure problems,” said Adama Deen, head of Infrastructure Programmes and Projects at the NEAPAD Agency while speaking at a recent NEPAD forum in Johannesburg, South Africa.

“Infrastructure is essential for integrating regions, realising socio-economic potential and fast-tracking development in Africa,” Deen had added.

And based on NEPAD Division at the African Development Bank, the continent would require investment of about 360 billion dollars in infrastructure in order to be well connected to the rest of the world by 2040.

To this, PIDA, a joint initiative by the African Union, NEPAD and the AfDB, aims to develop a web of 37,200 km of highways, 30,200 km of railways and 16,500 km of interconnected power lines by 2040 while at the same time it plans to add 54,150 megawatts of hydroelectric power generation capacity and an extra 1.3-billion tons capacity at Africa’s ports, according to AfDB’s Ralph Olaye.

The South African Energy Ministry has also been on record saying no infrastructure programme could be successful if it is not linked to continental development objectives.

As such, according to the SA government, PIDA remains key to the Southern African region and the entire Africa to promote socio-economic development.

Chief Executive Officer of the NEPAD Agency, Dr Ibrahim Mayaki, during this year’s commemorations of the Africa Day agreed with the SA government.

“Bridging the gap in infrastructure is thus vital for economic advancement and sustainable development. However, this can only be achieved through regional and continental cooperation and solution finding,” Mayaki said then.

“In fact, now more than ever is the time for us all to live up to the courage of our convictions for an integrated, prosperous and peaceful Africa, driven by its own citizens – as is espoused by NEPAD. Leadership is no longer a top down issue,” Mayaki had added.

(End)

The inclusive and sustainable industrial development (ISID) initiative of the U.N. Industrial Development Organisation to promote industrial development for poverty reduction, inclusive globalisation and environmental sustainability is gaining momentum in the countries of the African, Caribbean and Pacific (ACP) group. 

A concrete sign of this trend came on the occasion of last week’s ACP Council of Ministers meeting in the Belgian capital where UNIDO Director-General Li Yong met with ACP representatives to explore how to further promote inclusive and sustainable industrialisation in their countries and possible ways of scaling up investment in developing countries.

UNIDO Director-General Li Yong at the !00th ACP Council of Ministers meeting in Brussels, where he explored how to further promote inclusive and sustainable industrialisation in ACP countries. Credit: Courtesy of ACP

During the opening session of the ministers’ meeting, outgoing ACP Secretary-General Alhaji Muhammad Mumuni had already highlighted the key role of the ISID programme in promoting investment and stimulating competitive industries in African, Caribbean and Pacific countries.

In December last year in Lima, Peru, the 172 countries belonging to UNIDO – including ACP countries – unanimously approved the Lima Declaration calling for “inclusive and sustainable industrial development”.

The Lima Declaration clearly acknowledged that industrialisation is an important landmark on the global agenda and, for the first time, the spectacular industrial successes of several countries in the last 40 years, particularly in Asia, was globally recognised.

According to UNIDO statistics, industrialised countries add 70% of value to their products and recent research by the organisation shows how industrial development is intrinsically correlated with improvements in sectors such as poverty reduction, health, education and food security.“We need to move away from traditional models of industrialisation, which have had serious effects on the environment and the health of people” – UNIDO Director-General Li Yong

One major issue that the concept of ISID addresses is the environmental sustainability of industrial development. “We need to move away from traditional models of industrialisation, which have had serious effects on the environment and the health of people,” said Li.

Economic growth objectives should be pursued while protecting the environment and health, and by making business more environmentally sustainable, they become more profitable and societies more resilient.

ISID in the Post-2015 Agenda

“For ISID to be achieved,” said Li, “appropriate policies are essential as well as partnerships among all stakeholders involved.” This highlights the importance of including ISID in major development frameworks, particularly in the post-2015 development agenda that will guide international development in the coming decades.

With strong and solid support from the ACP countries, ISID has already been recognised as one of the 17 Sustainable Development Goals (SDGs) proposed by the U.N. Open Working Group on SDGs – to take the place of the Millennium Development Goals (MDGs) whose deadline is December 2015 – and confirmed last week by U.N. Secretary-General Ban Ki-moon in ‘The Road to Dignity By 2030’, his synthesis report on the post-2015 agenda.

In fact, goal 9 is specifically devoted to “building resilient infrastructure, promoting inclusive and sustainable industrialisation and fostering innovation.”

In this context, Mumuni told the Brussels meeting of ACP ministers that “in building the competitiveness of our industries and facilitating the access of ACP brands to regional and international markets, UNIDO is regarded by ACP Secretariat as a strategic ally.”

ACP-UNIDO – A Strategic Partnership

A Memorandum of Understanding approved in March 2011 and a Relationship Agreement signed in November 2011 represent the solid strategic framework underlying the strategic partnership between ACP and UNIDO, and highlight how the two partners can work together to support the implementation of ISID in ACP countries.

Key is the establishment and reinforcement of the capacity of the public and private sectors in ACP countries and regions for the development of inclusive, competitive, transparent and environmentally-friendly industries in line with national and regional development strategies.

On the basis of these agreements, ACP and UNIDO have intensified their policy dialogue and concrete cooperation. One example reported during the ministers’ meeting was the development of a pilot programme entitled “Investment Monitoring Platform” (IMP), funded under the intra-ACP envelope of the 9th European Development Fund (EDF) with the support of other donors.

This programme is aimed at managing the impact of foreign direct investments (FDI) on development, combining investment promotion with private sector development, designing and reforming policies that attract quality investment, and enhancing coordination between the public and private sector, among others.

This programme has already reinforced the capacity of investment promotion agencies and statistical offices in more than 20 African countries, which have been trained on methodologies to assess the private sector at country level.

Implementing ISID in ACP Countries

In Africa, the strategy for the Accelerated Industrial Development of Africa (AIDA) prepared with UNIDO expertise, is a key priority of Agenda 2063  – a “global strategy to optimise use of Africa’s resources for the benefit of all Africans” – and of the Joint Africa-European Union Strategy.

In the Caribbean, high priority is being given to private sector development, climate change, renewable energy and energy efficiency, and value addition in agri-business value chains, trade and tourism.

The CARIFORUM-EU Business Forum in London in 2013 clearly articulated the need for more innovation, reliable markets and private sector information, access to markets through quality and the improvement of agro-processing and creative industries.

In the Pacific, the 2nd Pacific-EU Business Forum held in Vanuatu in June this year called for stronger engagement in supporting the private sector and ensuring that innovation would produce tangible socio-economic benefits.

Finally, in all three ACP regions, interventions related to quality and value chain development are being backed in view of supporting the private sector and commodity strategies.

(Edited by Phil Harris)

UNDP Administrator Helen Clark addresses the audience at an event on the MDGs. Credit: UN Photo/Rick Bajornas

By Thalif Deen
UNITED NATIONS, May 30 2014 (IPS)

The United Nations Development Programme (UNDP), one of the largest U.N. agencies with an estimated average annual budget of more than five billion dollars, is undergoing major structural changes – triggering large-scale staff layoffs, demotions, salary reductions and downgrading and abolition of existing senior-level jobs.

“If implemented as envisaged, it will be one of the largest mass-scale U.N. firings in living memory,” a senior U.N. staffer told IPS.

“We never had it so bad because all those staffers who lose their jobs and their G-4 visas will have to go back to their home countries,” he added.

Barbara Tavora-Jainchill, president of the U.N. Staff Union, told IPS her union, which oversees the interests of staffers in the U.N. secretariat and field operations, is concerned about the “structural review” currently being undertaken by the UNDP administration.

“We understand, this may cause demotions as well as the loss of at least 30 percent of jobs in their New York Headquarters and, we just heard, several security-related posts in the field, as well,” she said.

“We are still learning details about this exercise and wonder whether there is any legal basis for the UNDP administration’s actions.”

She said her own staff union will “fully support our UNDP counterparts and will help them in any way we can.”

In anticipation of strong negative reactions, UNDP Administrator Helen Clark said in a letter to staffers last week: “Our services will be much more focused in the regions and we will be leaner.”

“We will have significantly fewer D grade (director level) positions relative to other professional and general services grades.”

This means that many people’s jobs are affected, “and we will be embarking on a realignment process aimed at being as fair and transparent as possible to fill the new positions.”

She also said: “I understand, however, that some staff may wish to take the opportunity to leave UNDP, rather than compete for new positions.”

“To facilitate this, we will be making available a limited number of voluntary separation packages,” said Clark, a former prime minister of New Zealand and head of the U.N. Development Group.

Currently, the U.N. Secretariat has a staff of over 11,700 based in New York, and the UNDP’s total staff is estimated around 6,400 (with over 1,100 in New York and about 5,300 in field operations), according to the 2012 U.N. System Human Resources Statistics.

"If implemented as envisaged, it will be one of the largest mass-scale U.N. firings in living memory." -- Senior U.N. staffer
The New York-based UNDP also has offices in 170 countries and territories and is the lead U.N. body overseas, headed by a Resident Representative (ResRep) in each country.

Playing a crucial role in social and economic development, one of the key mandates of the United Nations, the UNDP focuses on four main areas: poverty reduction and achievement of the Millennium Development Goals (MDGs); democratic governance; crisis prevention and recovery; and environment and energy for sustainable development.

In all its activities, UNDP says it encourages the protection of human rights and the empowerment of women, minorities and the poorest and most vulnerable.

At its headquarters in New York, the UNDP has bureaus for development policy; crisis prevention and recovery; management; and external relations and advocacy.

It also has regional bureaus overseeing Africa, Arab States, Asia and the Pacific, Europe and Commonwealth of Independent States (CIS) and Latin America and the Caribbean.

UNDP’s regular resources come entirely from voluntary contributions by a range of partners, including member states, and multilateral and other organisations.

These contributions, UNDP says, are provided as either regular budget resources or as other resources earmarked by contributors.

A total of 50 countries contributed to regular resources in 2012, which totalled 846.1 million dollars.

The figure for “other resources” was about 3.79 billion dollars in 2012.

And local resources provided by programme countries increased by 5.3 percent in 2012 over 2011, while multilateral contributions rose to over 1.5 billion dollars.

Clark said the structural change was the brainchild of the UNDP executive board, comprising 36 member states, represented on a regional basis.

Last year, the board approved “a new Strategic Plan for UNDP”, and since then the whole organisation has been making the changes necessary to fully implement that plan.

One of the three pillars of that plan was improving institutional effectiveness.

To that end, Clark told staffers, the organisation has conducted significant reviews of its performance and “we have all been involved in planning and implementing changes.”

At the country office level, there has been a “financial sustainability exercise” which has led to many changes.

Also, over recent months, there has been an ongoing structural change exercise at the headquarters and regional levels to achieve a number of efficiency gains, she pointed out.

“We committed to moving more of our policy and support services to the regional level so that we are closer to our country offices.”

This, she said, includes removing unnecessary duplication between bureaus; ensuring functions are properly aligned through the organisation to improve accountability and professional standards; and improving “our span of control so that we have better career paths for younger staff.”

She said plans “to reduce our spending on staff salaries were meant to stay within the integrated budget limits set by the executive board in September.”

In conclusion, Clark said: “Let me say to you all that I recognise that this is not an easy time for staff.”

“I also know that we can be a stronger, more effective development organisation which can make real differences in millions of people’s lives.”

By demonstrating that to the world, “I have no doubt that there are many exciting opportunities out there for UNDP to build on.”

(END)

A recent U.S. court ruling over a fight between Argentina and its creditors on Wall Street will increase global poverty by making it easier for “vulture funds” to seize the assets of indebted nations, according to anti-debt campaigners who are urging the U.S. government to overturn the decision.

In 2001, Argentina suffered an extreme economic crisis that led it to default on nearly 100 billion dollars in debt. Since then the country has settled with 93 percent of its creditors on a plan to pay back about a third of what was originally owed.

The seven percent who are holding out, however, insist that Argentina must pay the full value of its defaulted bonds, despite the fact that many of those now holding those bonds never paid the full value themselves, having purchased the debt in the immediate wake of the 2001 crisis for a fraction of what they are now demanding.

The International Monetary Fund (IMF) has argued that a victory for Argentina’s holdout bondholders would undermine efforts to renegotiate debt held by other nations while also risking another major debt default in Argentina, which could have major consequences for global financial markets."[The case against Argentina] will set a precedent that will just have huge repercussions in terms of global poverty."
-- Eric LeCompte

In a Jul. 23 statement, the IMF said it was “deeply concerned about the broad systemic implications” of the case. The administration of U.S. President Barack Obama has similarly argued that how Argentina handles its debt is a matter of national sovereignty. However, the administration cancelled an IMF plan to side with Argentina in the U.S. legal system, maintaining that such support was premature.

That excuse may no longer hold. On Aug. 23, the U.S. Court of Appeals for the Second Circuit  – the last step before the Supreme Court – upheld an earlier decision that Argentina must pay its bondholders in full, to the tune of 1.3 billion dollars, rejecting claims of negative impacts on global financial markets as “speculative” and “hyperbolic”.

“We believe that the interest – one widely shared in the financial community – in maintaining New York’s status as one of the foremost commercial centres is advanced by requiring debtors, including foreign debtors, to pay their debts,” the court ruled.

The government of Argentina has appealed the case to the Supreme Court. Its creditors, meanwhile, have spent millions of dollars on a lobbying and public relations campaign aimed at increasing the political cost to the Obama administration of siding with Argentina before the high court.

Paul Singer – the billionaire CEO of Elliot Management and a major Republican donor whose subsidiary NML Capital is the lead plaintiff in the legal fight against Argentina – has singlehandedly spent millions of dollars funding right-wing think tanks, pundits and politicians who have painted Buenos Aires as an increasingly lawless ally of Iran, as previously reported by IPS.

The campaign has included position papers and letters from Singer-supported members of Congress suggesting Argentina may even be helping the Islamic Republic develop nuclear weapons.

A victory for Singer and Argentina’s other creditors could make Singer hundreds of millions of dollars. It could also have devastating consequences for the world’s poor.

Increasing profits and poverty

The hedge funds pursuing legal action against Argentina “are profiting off the backs of the poorest people in the world,” Eric LeCompte, executive director of Jubilee USA, told IPS. Wealthy by global standards, those suing Argentina also hold the debt of the some of the world’s poorest nations – and the case against Argentina is crucial to their long-term business strategy.

“Essentially, it will set a precedent that will just have huge repercussions in terms of global poverty,” LeCompte said. Representing a coalition that includes organised labour and hundreds of religious groups and anti-debt campaigners, LeCompte said his group is urging the Obama administration to maintain its support for Argentina in the U.S. legal system while also pursuing a legislative solution in Congress.

If the hedge funds prevail, “poor countries will have less access to credit, and it will be much more difficult to restructure debt,” LeCompte said. If Argentine bondholders successfully hold out for the full value of their bonds, that could encourage the holders of other defaulted debt to do the same, miring indebted nations in poverty.

Even if a nation in default has already renegotiated its debt payments with the vast majority of its creditors, as has Argentina, all it takes is one firm to hold a nation hostage. Instead of funding domestic priorities such as education and health care, developing countries and others facing economic distress could be stuck paying off foreign creditors for a generation or more. The cost of credit for these countries will rise as financial institutions balk at the increased risk of lending.

This has happened before. In countries such as Zambia and the Democratic Republic of Congo, U.S. hedge funds used courts around the world to seize assets of poor nations they claimed owed them money. They are planning to do the same elsewhere.

“These vulture funds have been buying up distressed debt across Eastern Europe, in Greece, in developing countries, waiting for the precedent of this case being set,” said LeCompte. He hoped the Obama administration would not be cowed by the public relations campaign against Argentina and would continue to stand up for the right of sovereign nations to renegotiate their debt, before the Supreme Court and elsewhere.

“If the Supreme Court doesn’t take the case or takes the case and rules against Argentina,” said LeCompte, “we would hope the Obama administration would take executive action to protect the international financial system from this reckless behaviour.”

Participants in Ellas Hacen share their experiences in the programme. Courtesy of Social Income with Work Programme in Morón

By Marcela Valente
BUENOS AIRES, Aug 12 2013 (IPS)

A new social programme launched by the Argentine government to fight hard-core poverty is providing unemployed mothers who are heads of households with education, training, work and an income.

“I told my oldest kids that they have to help me now because every morning I have to go to ‘Ellas Hacen’,” said Isabel Hernández, whose five children range in age from six to 16.

Ellas Hacen is the name of the latest Social Income with Work Programme implemented by the Ministry of Social Development. It specifically targets low-income unemployed women with at least three children, or a disabled child, who live in the poorest neighbourhoods.

Although she is taking part in the programme, Hernández still continues to collect used clothing to dress her children or to sell at low prices in her neighbourhood. But now she only does it on the weekends, because she is busy Monday through Friday in Ellas Hacen.

Up to now Hernández, who lives in a poor section of Don Torcuato, a neighbourhood on the outskirts of Buenos Aires, has been doing odd jobs in the informal economy, while drawing the Universal Child Allowance (AUH).

The AUH is a cash transfer to parents who are unemployed or work in the informal sector of the economy. The allowance is conditional on school attendance and keeping up-to-date on vaccines and medical checkups. The programme, introduced by President Cristina Fernández in 2009, expanded the child allowance already received by formal sector workers.

The AUH currently amounts to 460 pesos (83 dollars) a month per child under 18 and 1,500 pesos (272 dollars) per disabled son or daughter of any age. Expectant mothers also receive the allowance, starting in the third month of pregnancy.

But the AUH programme, which now benefits 3.5 million poor children and adolescents in this country of 41 million people, is little more than a palliative in the case of mothers raising several children on their own, with no other source of income and unable to find a job because of a lack of formal education and training.

Ellas Hacen was launched in the middle of this year to reach these women, estimated to number around 100,000 across the country.

The beneficiaries receive 2,000 pesos (363 dollars) a month, on top of the AUH allowance that makes sure their children stay in school.

By registering in Ellas Hacen, the women become part of the social security system and payments are made towards a future pension. In addition, they and their families have the right to medical insurance known as “obra social” – a pay-as-you-go system based on compulsory payments by both employers and employees.

Thanks to the AUH and Ellas Hacen, the Hernández family is now above the poverty line.

The latest figures from the National Statistics and Census Institute indicate that 5.4 percent of the population is living in poverty and 1.5 percent in extreme poverty. But independent sources put the figure higher. The private Catholic University, for instance, estimated the poverty rate at 15.5 percent in July.

In exchange for the new income – Hernández has already received one paycheck – the women must attend daily literacy courses and finish primary or secondary school, depending on each specific case.

The programme also provides training for jobs in urban infrastructure works in shantytowns, the installation of water pipes and tanks, house painting, trash collection and separation, and the care of green spaces.

“We are also organising workshops on gender violence, and we are going to put a strong emphasis on the question of sexual and reproductive health and the care of children,” said Diego Landechea, social-labour director of the Social Income with Work Programme in Morón, another neighbourhood on the outskirts of the capital.

Landechea told IPS that 755 women between the ages of 18 and 62 had registered for Ellas Hacen so far in that neighbourhood, and that 70 percent already receive the AUH.

The others meet different eligibility criteria. For example, over 200 of them are victims of gender violence, while 15 have at least one disabled child, he added.

The group that registered in Morón includes five illiterate women, 80 who did not complete primary school, and 190 who did not finish their secondary studies.

“They never managed to enter the labour market, for different reasons,” said Landechea.

“Without a doubt, raising several children on their own is a fundamental factor in their exclusion from the formal market,” he said, although he also mentioned a lack of formal studies or training.

A census is carried out among the women who register, and commissions are created according to the most pressing needs found.

The first priority is to finish their studies. To that end, courses are offered at different times of day, to make it possible for them to attend class. Attendance is important: if they miss more than a certain number of classes, 350 of the 2,000 pesos (363 dollars) are discounted.

Hernández told IPS that she had finished primary school, and is now starting secondary school, through the programme. She knows she’ll have to get organised, because while she’s gone, the younger children will be left in the care of her 16-year-old son.

“The first thing I did when I got the 2,000 pesos was pay 900 that I owed in the local grocery shop and give my oldest son 300 pesos so he could buy some pants,” she said, adding that the idea was to encourage her son to give her a hand.

Up to now, the Social Income with Work Programme benefited 500,000 people who learned skills and trades and joined cooperatives, where they earn 2,000 pesos a month from the state until the cooperative becomes independent.

But although the programme was not exclusively for men, it has mainly served them because it has failed to take into account specific hurdles faced by mothers who are on their own, raising at least three young children, in slum neighbourhoods.

The social programmes that began to appear after the late Néstor Kirchner (1950-2010) took office in 2003 and that were continued by his widow, President Fernández, have drawn criticism from opposition political and labour leaders.

One of them is Hugo Moyano, the head of the Confederación General del Trabajo, Argentina’s largest trade union confederation, who quipped that the programmes were “take it easy plans” rather than work plans.

Moyano, who represents the faction of the labour movement most critical of the centre-left Fernández administration, made that comment in a July rally, where he called for the elimination of income tax, which affects the middle and upper classes.

The leaders of the Confederación Nacional de Cooperativas de Trabajo (CNCT), the national confederation of workers’ cooperatives, which was created under the Social Income with Work Programme, issued a statement accusing Moyano of slander.

The CNCT pointed out that in the past few years, the programme that has now incorporated women has enabled tens of thousands of people who were out of work to receive training and improve the living conditions in their communities.

The CNCT said the new cooperative members who organised thanks initially to public subsidies are now working in areas like public works, the textile industry, carpentry, transport, gastronomy and communication.

According to the government’s definition, many people living in favelas or shantytowns in Brazil are “middle-class”. Credit: Fabíola Ortiz/IPS

By Jim Yong Kim
WASHINGTON, Jul 2 2013 (IPS)

Latin America has had a good decade. Over the last 10 years, economic growth averaged 4.2 percent, and 70 million people escaped poverty. Macroeconomic stability, open trade policies and pro-business investment climates have supported and will continue to support strong growth in the years to come.

Crucially, economic gains are being broadly shared. A recent World Bank report found that the middle class in Latin America grew by 50 million people between 2003 and 2009, an increase of 50 percent. For a region long driven by wealth inequality, this is a remarkable achievement.

I see a region that has come a long way from the “lost decade” of the 1980s and is emerging as a driver of global growth. But we have much more to do to ensure that Latin America’s people share in their region’s growing prosperity.

Although inequality is declining, Latin America remains the world’s most unequal region. From 2008 to 2010, Latin America was home to eight out of 10 countries with the world’s highest rates of income inequality, as measured by the Gini coefficient.

Intergenerational mobility also remains limited: a young person’s parents’ economic and social background, as well as whether they were born in a rural or urban area, still largely determines that person’s economic future.

And, in countries that have benefited from the commodity boom of the last decade, the benefits of natural resource wealth have failed to reach all members of society, fueling social tensions among those who feel left behind.

If unaddressed, inequity will continue to stoke volatility across the region.

But striving for shared growth isn’t just the right thing to do from a social and political perspective; it’s an economic imperative. World Bank research suggests that when poverty levels increase by 10 percent, growth decreases by one percent and investment falls by up to eight percent of gross domestic product (GDP).

Delivering on the promise of growth will require Latin American policymakers, along with their partners in the development community, including the World Bank, to ensure that economic gains benefit all citizens. Some countries are showing how this can be done.

In Brazil, policy reforms have helped equalise educational attainment. In 1993, the child of a father with no formal education completed four years of schooling on average. Today, Brazilian students complete between nine and 11 years of schooling, regardless of their parents’ education.

Conditional cash transfer programmes have also played a role in leveling Latin America’s economic playing field. In the 1990s, Mexico and Brazil pioneered these programmes, which provide cash payments to the poor in return for productive activities, such as enroling children in school, and mothers going for medical check-ups. Similar programmes have sprung up across the region.

We know that overcoming the region’s history of economic inequality is possible. But what will it take to achieve shared prosperity for all?

First, governments must ensure that the market doesn’t leave people behind. Latin America’s strong gains in poverty reduction in the past decade resulted from increased wages and better-targeted social policies. This trend must continue.

Second, policymakers should do more to provide disadvantaged children with quality education. Doing so would raise their productive capacity and enhance social inclusion by empowering poor children to participate more fully in their economies.

Finally, leaders must improve their ability to deliver services to the poor. Without improved capacity for quality delivery, even the best policies will mean little to their intended beneficiaries. The World Bank will provide support in this area, by helping Latin American governments take a more scientific, evidence-based approach to the delivery of development services.

Latin America has made tremendous progress in recent years. But more needs to be done. When I visit the region, I look forward to learning what it will take to ensure that opportunity and prosperity extend to all of Latin America’s people.

(END/COPYRIGHT IPS)

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