José Luis MachineaJosé Luis MachineaEXECUTIVE SECRETARYEXECUTIVE SECRETARY

Economic Commission for Latin America and the Caribbean Economic Commission for Latin America and the Caribbean (ECLAC)(ECLAC)

Geneva, 6 July 2007Geneva, 6 July 2007

REGIONAL DIMENSION OF REGIONAL DIMENSION OF STRENTHENING EFFORTS TO STRENTHENING EFFORTS TO

ERADICATE POVERTY AND HUNGER, ERADICATE POVERTY AND HUNGER, INCLUDING THROUGH THE GLOBAL INCLUDING THROUGH THE GLOBAL

PARTNHERSHIP FOR DEVELOPMENT PARTNHERSHIP FOR DEVELOPMENT

Dialogue of the Executive Secretaries with the

Economic and Social Council

Projections of the extreme poverty rate up to 2006 indicate that the region is back on track towards the first target of the

Millennium Development Goals (actual progress is greater than the time elapsed)

14.43.4

15.831.6

14.5

40.510.8

50.930.9

18.3

15.96.6

17.1

3.610.3

33.18.4

14.7

60 50 40 30 20 10 0Extreme poverty rate, 2006

LATIN AMERICA (17 COUNTRIES): LEVELS AND PERCENTAGES OF PROGRESS IN REDUCING EXTREME POVERTY BETWEEN 1990 AND 2006 a/

3

-1

73

19

73

42

85

32

52

68

79

66

69

100

100

32

-6

69

-20 -10 0 10 20 30 40 50 60 70 80 90 100

Venezuela (B.R.)

Uruguay b/

Peru

Paraguay

Panama

Nicaragua

Mexico

Honduras

Guatemala

El Salvador

Ecuador b/

Costa Rica

Colombia

Chile

Brazil

Bolivia

Argentina b/

Latin America

Percentage of progress between 1990 and 2006

Expected progress,

2006(64%)

Source: ECLAC, on the basis of special tabulations of data from national household surveys and projections on the basis of official information from the countries.a/ The percentage of progress is calculated by dividing the reduction (or increase) in the rate of extreme poverty in percentage points observed during the period by half of the 1990 extreme poverty rate. The red line represents the percentage of progress expected in 2006 (64%).b/ Urban areas.

Progress in reducing undernourishment, but there are considerable disparities among

countries

Source: Food and Agriculture Organization of the United Nations (FAO); The State of Food Insecurity in the World 2004, Rome, 2004. b/ Urban sector

Latin America and the Caribbean (32 countries): progress toward undernourishment target

(in percentages, by 2000-2002)

-200

-150

-100

-50

0

50

100

150

LAC

Latin

Am

eric

a

Car

ibbe

an

Dom

inic

a

Vene

zuel

a (B

oliv

aria

n R

ep.)

Gua

tem

ala

Pana

má

Arg

entin

a b/

Mex

ico

Dom

inic

an R

epub

lic

Hon

dura

s

El S

alva

dor

Nic

arag

ua

Net

herla

nds

Ant

illes

Sain

t Kitt

s an

d N

evis

Trin

idad

and

Tob

ago

Para

guay

Col

ombi

a

Bol

ivia

The

Bah

amas

Gra

nada

Surin

am

Hai

ti

Bel

ice

Jam

aica

Bra

zil

Cos

ta R

ica

Ecua

dor

Sain

t Luc

ia

Sain

t Vin

cent

and

the

Gre

nadi

nes

Chi

le

Uru

guay

b/

Guy

ana

Peru

Cub

a

Target for 2015 Target for 2015 (100%)(100%)

Progress needed by 2002 Progress needed by 2002 (48%)(48%)

The Global partnership for development

Latin American must continue its efforts to improve growth performance, income distribution and increase the efficiency and financing of social policies to achieve the MDG targets.

0%

5%

10%

15%

20%

25%

30%

35%

40%

Arg

entin

a

Boliv

ia

Bra

zil

Chile

Colo

mbia

Cost

a R

ica

Ecu

ador

El S

alv

ador

Guate

mala

Haiti

Hondura

s

Mexi

co

Nic

ara

gua

Panam

a

Para

guay

Peru

Dom

inic

an R

ep.

Uru

guay

c/

Venezu

ela

(B

.R.)

Tax revenue Social security contributions Other revenues Capital income

The tax burden is too small, but differs sharply across countries

TAX REVENUES (% GDP, 2005)

Tax rev. + SS: 17.9%

Total: 21.9%Caribbean w/o SS (5 countries): 25.5%

The tax burden in the Caribbean is higher, however

The Global partnership for development

Latin American must continue its efforts to improve growth performance, income distribution and increase the efficiency and financing of social policies to achieve the MDG targets.

On the other hand, the developed world must be ready to assist all developing countries, not only the least developed ones, in achieving the Internationally Agreed Development Goals.

Since Monterrey, ODA flows have increased …

0

20000

40000

60000

80000

100000

120000

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

US

$

bill

ion

s

Years

Monterrey Consensus

0.2

0.4

0.6

0.8

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

OD

A

as

a p

erc

en

tag

e o

f d

on

or

GN

I

…but are still far below the target

Projected

Source: OECD data base (2007)

Monterrey target (0.7% of GNI)

Recent developments ODA flows have increased but still

fall far short of the Monterrey targets.

Channelling ODA towards low-income countries and focusing on social spending.

Channeling ODA to low-income countries and …..

0

10

20

30

40

50

60

Pe

rce

nta

ge

s

.

1970-1980 1981-1990 1991-2000 2001-2005

Low-income countries Lower-middle-income countries Upper-middle-income countries

N.B: Does not include Iraq, which accounted for 33% of total ODA in 2005.

ODA, 1970-2005(Averages)

…focusing on social spending

0

10

20

30

40

50

60

1973-1980 1981-1990 1991-2000 2001-2005

Social sectors Production sectors Finances Infrastructure Government institutions

Source: ECLAC, on the basis of OECD (2007). Government institutions include budget support, emergency assistance and external debt operations.

ODA TO PRODUCTIVE SECTORS, 1973-2005 (Percentages)

Recent developments

ODA flows have increased but still fall far short of the Monterrey targets.

Channelling official assistance towards lower-income countries and focusing on social spending.

Latin America and the Caribbean have lost ground in terms of their relative share (from 12.5% in 1990 to 9% in 2005).

Recent developments ODA flows have increased but still

fall far short of the Monterrey targets.

Channelling official assistance towards lower-income countries and focusing on social spending.

Latin America and the Caribbean have lost ground in terms of their relative share.

Lack of clearly defined objectives, strategies and instruments to support middle-income countries.

There are a number of reasons why the importance of ODA for middle-income countries, particularly those in the region, should not be

underestimated: From a national perspective:

• Slow and volatile growth makes it necessary to guard against economic and social setbacks.

• Most countries’ financial and trade linkages with the global economy are vulnerable.

• Countries do not exhibit an equal capacity to access the international financial system.

• Institutional weaknesses hinder the implementation of economic and social policies and are an obstacle to social cohesion.

• Difficulties in building up technological capacities and productive development.

• Poverty is widespread (60% of the poor and 50% of indigents live in upper-middle-income countries).

From a more global viewpoint:• Stability and growth in those countries

produce significant externalities for the other economies of the region or subregion.

• Countries can support the provision of global or regional public goods: diffusion of knowledge, trade integration, environmental sustainability.

• These countries are part of the international aid and cooperation system, and their role as recipients and donors should be strengthened.

There are a number of reasons why the importance of ODA for middle-income countries, particularly those in the region, should not be

underestimated:

In addition to benefiting from ODA, middle-income countries should also contribute to the cooperation

system

Direct ODA donors: Brazil has forgiven debts totalling about US$ 1.15 billion.

New financing mechanisms such as global taxes (Brazil and Chile).

South-South cooperation:• Macroeconomic coordination.• Mechanisms to support liquidity in times of

crisis.• Development financing through regional

and subregional development banks.• Technical cooperation.

The ways in which middle-income countries are integrated into the global

economy are important in terms of leveraging ODA

Improved access and regulatory frameworks in the international economic system• Trade• Finance • Technology

Strengthened representation in global economic institutions.

The Global partnership for development

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

José Luis MachineaJosé Luis MachineaEXECUTIVE SECRETARYEXECUTIVE SECRETARY

Economic Commission for Latin America and the Caribbean Economic Commission for Latin America and the Caribbean (ECLAC)(ECLAC)

Palacio do ItamaratayPalacio do ItamaratayBrasilia, 17-18 May 2007Brasilia, 17-18 May 2007

OFFICIAL DEVELOPMENT OFFICIAL DEVELOPMENT ASSISTANCE AND THE FIGHT ASSISTANCE AND THE FIGHT

AGAINST POVERTY AND HUNGER IN AGAINST POVERTY AND HUNGER IN LATIN AMERICA AND THE CARIBBEAN LATIN AMERICA AND THE CARIBBEAN

Regional Consultations on the Economic and Social Council Annual Ministerial Review

Ministry of Foreign Affairs of Brazil