Pre-crisis growth path, higher ODA pushed to meet dev’t goals

THERE IS need to regain the pre-crisis growth momentum and increase aid especially for developing countries to meet poverty reduction goals, two international organizations said days before a high-level summit to assess progress in achieving the Millennium Development Goals (MDGs).

The International Monetary Fund, in a background note, quoted its economists as saying that the global economic crisis two years ago has derailed the momentum to reach the MDGs, and the effort can only be regained by restoring “strong and sustained global economic growth.”

The multinational institutions noted that growth in developing countries, including the Philippines, must be seen in improved living conditions of the poor.

The aim is to make the poor “more resilient from future shocks, countries will need to rebuild the ‘policy buffers’ that served them so well in the past,” John Lipsky, IMF first deputy managing director, was quoted as telling a panel discussing the background note on Sept. at IMF headquarters in Washington, D. C.

For its part, the United Nations, which is sponsoring the MDG summit in New York on Sept. 20-22, cautioned that shortfalls in curbing poverty and improving living standards are “jeopardizing” efforts to meet the MDGs.

The goals set by 189 nations in 2000 seek to reduce poverty, hunger, maternal and child deaths, disease, inadequate shelter, gender inequality and environmental degradation by 2015.

In a new report entitled “The Global Partnership for Development at a Critical Juncture,” the UN cited “serious gaps” in realizing commitments set to achieve the goals in 15 years.

The report noted a shortfall of about $20 billion in the annual level of official development assistance (ODA) agreed upon five years ago by the Group of Eight.

This, the UN noted, is despite aid flows at an all-time high of $120 billion in 20009.

For the Philippines, Cleofe S,. Pastrana, social development staff assistant director at the National Economic and Development Authority (NEDA), told BusinessWorld in an interview on Friday: “Although the Philippines did not feel a lot of its [financial crisis] effects, we cannot deny that we [experienced] a setback especially in accessing basic social services.”

The Philippines is rushing to achieve three of the eight goals into the next five years — halving poverty, universal primary education, and maternal and child health.

“There must be efforts from all countries to sustain economic growth. This way, we will be able to address the MDG targets by 2015,” Ms. Pastrana said.

For his part, Cid L. Terosa, an economist at the University of Asia and the Pacific, said in a separate interview that “without the rich countries doing well, the poor countries will also not do well… The poor countries get their income/output to funds their MDG-related programs from the performance of rich countries in things such as trade.”

For the Philippines, total net commitment for the 106 ODA loans for calendar year 2009 amounted to $9.367 billion, according to the NEDA Web site. Cumulative grant for 417 projects amounted to $1.06 billion.

ODA in 2009 was lower than the 2008 level of $10.04 billion, while grant-assisted projects in the same year amounted to $1.289 billion.

Meanwhile, the Philippines may have regained its pre-crisis growth momentum called for by the IMF to achieve the MDGs.

The country posted a growth of 7.3% in 2007, 3.8% during the crisis year of 2008, and a lower 0.9% in 2009.

The first quarter of 2010 saw an unexpected growth spike at 7.3% and another surprise of 7.9% for the second quarter.

The official full-year estimate is 5%-6%, with officials mulling an upward revision due to the growth surge in the first half. — with inputs from Mary Joy Katrina R. Contreras, Businessworld