Policy Coherence, poverty reduction and sustainable

development Veena Jha

Why Policy Coherence?

Policy coherence desirable to promote global equity. Global equity at the heart of debate because:

• Staggering disparities are unacceptable on human terms.

• Greater equity would lead to sustainable development and peaceful prosperity for all.

• Greater equality of opportunities across countries would lead to more investment, higher and better growth, and faster poverty reduction, as well as provide greater security.

What is Required?

Achieving greater global equity:

• requires actions by governments and people in rich countries.

• by international institutions.

• reforms by national governments in developing countries.

What is Required?

Actions to foster global Equity : • need to go well beyond providing aid • to encompass reforms in the rules that govern

functioning of global and regional markets

• in the processes that set such rules, • processes in which international and regional

institutions can do much to enhance equity.

Actions Required

• One category of action involves transfers of public resources from developed to developing countries in various forms: aid, debt relief, financing global public goods.

• A second category of actions focuses on redressing asymmetries in the functioning of global markets for goods, capital, labor. These are likely to be more important for poverty reduction and equity

Actions Required

• A third category of actions focuses on making the processes whereby rules governing international interactions are set fairer and more transparent. This is where regionalism, governance and policy coherence comes in.

How do we define equity?

A key determinant of global equity should be that a person’s country of birth, should not determine their opportunities: people should face the same opportunities regardless of where they are born.

What can we do at the global level about equity?

• Expanding global public resources to support national action.

• Redressing asymmetries in global markets.

• Enhancing the fairness of rule-setting processes.

Expanding global resources

• While aid has increased marginally in this decade, aid flows remain small in relation to need. It was only 0.25 percent of donor countries' GNI.

• Agricultural subsidies, for instance, were almost five times larger than aid.

• Efficiency of aid debates have suggested moving aid away from the most needy to the most capable.

Expanding global resources

• Aid has to be additional to debt relief.

• Aid should be augmented by funding global research initiatives, particularly for agricultural technologies, energy-efficient technologies, diseases affecting poor countries, developing vaccines, and others.

• Proposals of an international tax.

Addressing Global Asymmetries

To the extent that global inequalities are a product of asymmetries in the way global markets work, there is a need for global public action that goes well beyond the provision of aid to encompass trade, migration and capital flows.

Addressing Global Asymmetries

Developing country producers• face obstacles in selling agricultural products,

manufactures and services because of tariff and nontariff barriers and subsidies in rich countries.

• Workers, who could earn higher returns in rich countries, face great hurdles in migrating.

• Entrepreneurs seeking financing for their projects often face difficulties obtaining funds from international market.

Addressing Global Asymmetries

• International migrants now send home an estimated $300 billion a year, six times as much as official development assistance.

• Overall gains from trade reforms are likely to be much greater than those from aid.

Global Governance

• In today’s international law, equity has not only an interstate dimension—it also has an intergenerational dimension, in the preservation of the environment and other global commons.

Global Governance

• This concept of international distributive justice has been applied to many areas: from financial assistance to needy countries to world food security, from the sharing of scientific benefits and the transfer of technology to the sovereignty over and management of natural resources, from the law of the sea and international waterways to the law of outer space and radio-frequency assignment.

Example of tensions in global governance

• in most global treaty negotiations, industrial nations have had greater power at the negotiating table. An imbalance of knowledge, a lack of adequate public support for the issues, and problems forming coalitions due to diverse interests have led to a lack of bargaining power for many developing countries.

• Some argue that industrial nations should have more power than developing nations because they are the ones obligated to act under Kyoto and to pay the cost of addressing this global challenge.

Example of tensions in global governance

• Others argue that this is irrelevant because the “common but differentiated” responsibilities under the agreement are based on historical responsibility for the problem and the ability to act.

• It could even be argued that developing nations should have more power, because they may be harmed disproportionately by the actual impacts of global climate change, such as more droughts, lower crop yields, rising sea levels, more violent storms and a wider range of tropical diseases.

Example of tensions in trade rule making

• Countries trade interests are determined by the underlying power imbalance between strong commercial interests on one side and the public interest—in both developed and developing countries—on the other. These are issues of national equity which is the jurisdiction of national governments.

• International inequity is higher in bilateral deals where the powerful countries clearly have stronger negotiating power.

Example of tensions in trade rule making

• For example, many bilateral trade agreements (such as the EPAs) include stronger intellectual property rights protection than required by TRIPs, such as the granting of patent extensions on pharmaceuticals.

• Specific types of protection on clinical trial data submitted for marketing approval (sometimes termed "TRIPs+").

• This is where commercial interest comes into conflict with global equity.

Implications for global policy

• To restore equity, trade policy especially towards developing countries needs to be cognizant of poverty and leave room for developing countries to have control over their resources.

• An unequal trade treaty cannot be compensated by aid even if it is in perpetuity.

Implications for global policy

• Global environmental policy should not have immiserising effects on poor countries, either through the transfer of polluting industries or through standards which lead to trade dislocation and exacerbate poverty.

• Environmental action should be cognizant of providing equal opportunities to poor countries as rich do through their massive environmental subsidies.

Action by Developing country governments

• Action by developing-country governments and coalitions of governments.

• Informed and self less leadership.

• Grassroots mobilization, analysis and policy research to inform alternatives and networks that disseminate it.

• Alliances with developed country NGOs and thinkers.