Press Release No. 06/78

Press Release: Progress on Millennium Development Goals Suggests Global Effort Working, Says World Bank-IMF Report

April 20, 2006

Reduced child mortality, increased school enrolment, and lower poverty signal that better governance, increased aid, mutual accountability bearing fruit, says Global Monitoring Report on the MDGs

Evidence of reduced child deaths in nine out of 10 developing countries surveyed, rapid gains in primary school enrolment, and reduced HIV/AIDS infection rates in several countries suggest that strong economic growth, backed by improved policies in developing countries and increased aid, is delivering results in some countries.

This third annual Global Monitoring Report on the Millennium Development Goals (MDGs), subtitled Strengthening Mutual Accountability—Aid, Trade and Governance will be presented at the World Bank-IMF spring meetings this week. It highlights economic growth, more and better quality aid, and trade reforms, as well as governance as essential elements to achieve the MDGs.

The eight MDGs, which call for halving between 1990 and 2015 the proportion of the world's people living on less than $1 a day, and reducing child mortality and HIV/AIDS, among others, were approved by 189 world leaders in 2000. The Global Monitoring Report reviews progress on implementation of a compact between developed and developing countries in Monterrey in March 2002, in which developing countries agreed to improve their policies and governance, while developed countries pledged to increase and improve their aid, and provide developing countries with more access to their markets.

"Less than 10 years remain until 2015, the target year for the MDGs," said World Bank President Paul Wolfowitz. "We are making progress in many countries, and this shows that development efforts can deliver results. But with just a decade to achieve the goals, it's urgent for both developing countries and the donor community to improve governance to ensure we get the results we seek. This report proposes a framework that defines governance, and proposes tools for monitoring it."

The GMR highlights evidence of reduced child deaths in nine out of 10 developing countries surveyed, namely Madagascar, Indonesia, Philippines, Bolivia, Bangladesh, Burkina Faso, Morocco, Mozambique & Cameroon. It notes rapid gains in primary school enrolment, with 50 countries having achieved universal primary completion, up from 37 in 2000, and cites signs of the first decline in HIV/AIDS infection rates in high-prevalence countries such as Haiti, Uganda and Zimbabwe. But the advances "remain uneven", the report says. Many countries, especially in Africa and Latin America, are still not making strong inroads into poverty reduction, while progress on human development indicators in South Asia has been insufficient.

"The importance of growth to reaching the MDGs cannot be overestimated," said IMF Managing Director Rodrigo de Rato. "Fortunately, most regions have good long-term growth prospects and strong recent performance. In Sub-Saharan Africa, per capita GDP is now growing at around three percent annually. Improvements in macroeconomic stability in low and middle-income countries contributed to this success, with inflation rates declining, and fiscal and current account balances improving."

"Mutual accountability is critical to achieving progress on the MDGs," said François Bourguignon, the Bank's Chief Economist and Senior Vice President for Development Economics. "Rich and poor countries, and the international institutions, have made commitments to one another to increase, harmonize and raise the effectiveness of aid, while improving governance. Monitoring performance and progress on these commitments is essential to ensure that all the actors are accountable."

The GMR defines public sector governance as the way in which a country's government gains and exercises authority to manage public goods and services. Good governance requires more than simply technical skills and organizational capacities in the public sector. It also demands clear rules and expectations, transparent information to monitor performance, and incentives and enforcement mechanisms to reward success and address failure, the report says. To help achieve this, the report outlines a framework for monitoring, "the key actors in a governance system", namely political leaders, checks-and-balance institutions, the public bureaucracy, and citizens and firms.

"I have emphasized the need to fight corruption," Wolfowitz said. "This report shows how corruption is the result of failed governance. The best check against corruption is continuous improvements to governance by all the actors, sustained by regular monitoring."

More investment is needed to monitor aspects of governance such as public financial management, procurement practices, and institutions that provide checks and balances. This monitoring not only tracks progress on indicators relevant to achieving the MDGs, but it also generates greater accountability and increased demand for good governance.

The GMR also calls on countries and institutions providing aid to developing countries to deliver on the commitments they made in 2005 to increase transfers and debt relief, including an additional $25 billion per year in aid to Africa by 2010, and $50 billion more per year for all developing countries.

"Aid must become more predictable, less fragmented, more closely-aligned to countries' needs, and targeted to where it will be productively used to advance the MDGs," said Mark Sundberg, lead author of the GMR. "This includes allowing aid recipients to use aid to cover current expenditures, including teachers' and health workers' salaries, to accelerate and sustain progress on goals of increased school enrolment, child and maternal mortality, and HIV/AIDS."

The GMR also calls for redoubled efforts to speed up the Doha Development Round of trade talks at the World Trade Organization.