HD IN INCLUSIVE GROWTHEXAMPLES OF ESW IN EAP

Xiaoqing Yu (EASHS) and Jehan Arulpragasam (MDI)

Human Development Unit, EAP

The inclusiveness of growth has been an increasing concern among EAP countries

Concerns Phenomenal growth and accumulation of wealth

Rising inequality in various dimensions

Need to sustain growth and remain competitive

Concerns over social cohesion and the changing societies – ageing, mobility, information

Interests China, Philippines, Thailand, Malaysia, …

Human development is an integral part of the inclusive growth story

Tackling the remaining challenges in absolute deprivation – social protection

Equal opportunities to prepare for future – education and skills development, health provision and protection, basic social services

Equal opportunities to participate in and benefit from economic growth – labor market, land and natural resources, financial market, private sector development

Equal chance to participate in the development process –transparency, governance, decision making

Context China’s most prosperous province – 12% of China’s national output; 18th

largest economy in the world (similar to the size of Turkey and Indonesia) China most populous province – 79 mln residents + 31 mln migrants Pioneer of China’s opening-up and economic reform; Closely integrated with

the world.

Issues and diagnostics Persistent poverty in parts of the province; rising inequality not only between

rural and urban, between Pearl River Delta and other remote areas, but substantially within Pearl River Delta;

Alarming level of disparities in income and wealth largely due to unequal opportunities – access to basic education and health services; lack of access to finance and land protection; barriers to migration and skills acquisition

Recent reforms in HD have profound positive impacts in moving towards a more balanced, human centered, more inclusive growth model, but they need to be taken further…

SHARED GROWTH IN CHINATHE STORY OF GUANGDONG

The study Initiated by senior leadership of the government during Mr. Zoellick’s

first visit as WB President

A collaborative effort with the government: close involvement of the Government, a government funded Guangdong research team, and a multi-sectoral Bank team (HD, PSD, FPD, RD)

The study covers areas of poverty and inequality, social assistance, spatial transformation of industries, labor market, rural finance, land reform, basic education, skills development, and rural health.

Substantial knowledge sharing during the process – workshops, technical comments provided by the Bank team, use of other Bank products (e.g. WDRs)

Recommendations disseminated to entire provincial leadership; used as inputs to provincial economic planning and strategy documents

SHARED GROWTH IN CHINATHE STORY OF GUANGDONG

FOSTERING MORE INCLUSIVE GROWTH

THE STORY OF THE PHILIPPINES

Context and Issues Slow growth a long-standing problem for slow

progress in poverty reduction. But even with acceleration in growth between

2000-2007, poverty did not decline – actually increased from 30 to 32.9 percent between 2003 and 2006.

Diagnostics Analysis shows deterioration in income distribution with growth due to:

Unequal sectoral distribution of growth Unequal pattern of regional development Decline in relative price of labor of the poor Unequal distribution of human capital and access to social services

Recommendations Specific recommendations around a broad strategy for Inclusive Growth

Enhancing income opportunities (e.g. fiscal, agriculture, labor market, financial sector and competition policy reforms)

Assisting households to participate in markets (e.g. health, education/skills, social protection policy reforms)

FOSTERING MORE INCLUSIVE GROWTH THE STORY OF THE PHILIPPINES

The study Set-up as part of AAA cluster led by HD and multi-sectoral

programmatic AAA (FY08-FY10) led by HD and PREM, with collaboration of SDN and EXT.

ESW informed early engagement with new administration (elections May 2010) Provided multi-sectoral analytical input into other flagship ESW, Philippines

Discussion Notes for the Incoming Government. Formed the basis of Inclusive Growth Forum with several key Cabinet

Secretaries and attended by development partners and civil society. Input into the Medium Term Philippines Development Plan (2010-2016) now

entitled Inclusive Growth and Poverty Reduction Government acting on key recommendations regarding labor, health,

education and social protection; considering recommendations in agriculture.

Study also informed development of CAS and Bank program.

INCLUSIVE GROWTH AND HDCONCLUSIONS

Fostering growth with equity a key issue for client countries (and esp. for MICs).

Human Development is a critical component of this agenda.

The HD Network is well-placed to work cross-sectorally with other networks to address these issues – both on issues that directly fall under HD remit (e.g. health, education/skills, labor market) – and broader topics such as poverty and vulnerability, governance and service delivery, and access to opportunities.