EFFORTS TO
IMPROVE HUMAN WELFARE STALL ON THE THRESHOLD OF THE NEW
MILLENNIUM
World Bank report offers new figures on poverty rates, life
expectancy, and Internet access
WASHINGTON, April 26, 1999 - After a
generation of declining poverty, longer lives, and better health
for millions of the worlds poorest people, efforts to improve
key areas of human development are in danger of stalling on the
threshold of the new Millennium. Faltering growth in Asia and
Latin America, uncertain prospects for the transition economies
in the former Soviet Union, and the continuing spread of HIV/AIDS
in Africa, will make it increasingly difficult for the
international community to achieve a series of key development
goals for the early 21st century, according to a new
report released today by the World Bank.
According to World Development Indicators 1999? an annual World Bank compilation
of significant development facts, figures, and analysis? developing countries, excluding the former
Soviet Union, grew at a rate of 5.3 percent from 1991-97,
encouraging expectations that living standards would continue to
rise in most regions of the world. However, the financial crisis,
which began in Asia in 1997, has now tempered those expectations
and could reverse the gains of many people who had previously
migrated from poverty to the ranks of the middle class in the
worst-affected crisis countries.
In Eastern Europe and the countries of the former Soviet Union
(FSU), millions of people have seen their living standards
deteriorate sharply during their difficult move towards
establishing modern market economies. In 1989, about 14 million
people in the transition economies of the FSU were living under a
poverty line of four dollars a day. By the mid-1990s, that
number was about 147 million, or about one-person-in- three.
In parts of Sub-Saharan Africa, hard-won increases in life
expectancy have been wiped out by HIV/AIDS, and from 1980-1996,
growth in the school-age population has consistently outpaced the
numbers of primary school enrollments. Furthermore, foreign aid
levels are at their lowest levels in almost 50 years.
A year ago we confidently predicted that the international
development goals of halving poverty, cutting infant and child
mortality by two-thirds, and enrolling all children in primary
education could be met, says James D. Wolfensohn,
President of the World Bank Group. Now those goals are
at risk, and we must draw on the lessons of recent experience to
help us reshape our strategies for the future.
The international crisis that began with over-extended private
banks in East Asia, and which has since roiled much of the
developing world, is more than just a financial crisis,
Wolfensohn writes in a foreward to the report . This has
been a crisis of institutions not robust enough to sustain the
forces of an increasingly global economy. This has also been a
crisis of governancefor which the cure must be found in a
strong legal system, a fair justice system, and transparent
public institutions that work together with the private sector
and civil society to produce equitable and sustainable growth.
Now in its third year, the World Development Indicators,
which is compiled in close partnership with national statistical
offices and international agencies such as the United Nations and
the OECD, offers one of the worlds most detailed portraits of
people, their economies, and their environment, and the health of
states and markets.
The broad scope of the data underpins World Bank President
James Wolfensohns campaign for a Comprehensive Development
Framework? a more holistic
approach to development that balances the social, economic,
institutional, and environmental needs of market economies in a
new effort to reduce poverty, and to improve peoples lives.
Some encouraging news
The report also offers some encouraging observations about the
state of the world. For example:
- India and China, which together account for 38 percent of
the worlds population, have largely avoided the
financial crisis that has shaken their Asian neighbors
- Botswana had the worlds fastest growing economy in the
period, 1965-97, with 11.4 percent average annual growth,
followed by Oman, 9.7 percent, China, 8.5 percent,
Singapore, 8.3 percent, and South Korea with 8.2 percent
annual growth respectively
- Girls enrollments have caught up with boys in most
high-income, Latin American, Caribbean, and Eastern
European countries
- World free trade continues to grow despite protectionist
pressures in some countries, and the continuing impact of
the financial crisis in emerging markets
- Latin America, Central Asia, the Middle East and North
Africa have the best access to personal computers in the
developing world, while Europe and Central Asia lead the
way with Internet access
Despite the problems of the past 18 months, there is
still some good news to report. Over the last 25 years we can see
how living standards have risen dramatically, says Joseph
E. Stiglitz, World Bank Chief Economist and Senior Vice
President. Since 1970, food production has outpaced the
population growth of nearly 2 billion; and 70 percent of adults
in the developing world can read today.. By bringing together
indicators that cover the full range of development issues,
World Development Indicators provides a yardstick for
measuring the results of our efforts in all regions and
challenging us to make good on our goals for the benefit of all
people.
People and their world? what the
numbers tell us
Poverty
All developing regions have lost momentum in achieving their
poverty reduction goals. During the period 1990-97, East and
South Asia were the only regions growing fast enough to reduce
poverty by half by 2015. Current forecasts for 1998-2001 suggest
that only South Asia and China will grow sufficiently quickly to
achieve this goal (page 9).
The most dramatic loss has been for East Asian countries.
Comparing their latest growth forecasts with those from just 12
months ago, the average number of years it will take to reduce
poverty by 50 percent, as required by the international
development goals agreed several years ago, has risen by roughly
two years for Indonesia. In the Philippines, where income growth
has historically been low, its slowdown in growth will increase
the time it takes to meet its poverty target by as much as 10
years.
According to World Development Indicators 1999, these
forecasts assume that inequality remains stationary. But crises
usually produce rising inequality, unless governments adopt
social safety nets and other measures to protect the poor from
the worst effects of economic shock.
Growing inequality
Inequality has increased most rapidly in Eastern Europe and
the countries of the former Soviet Union since the collapse of
Communism. In Russia, the number of people living in poverty
(less then $4 per day) soared from about 2 million in 1987 to 66
millionfour out of ten Russiansby 1995. (p.7)
During the past decade, inequality has also increased in
countries as diverse as Brazil, Bangladesh, China, Malaysia and
Thailand. In 34 developing countriesincluding Jordan,
Malaysia, Russia, Peru, South Africa, Ukraine, Venezuela, and
Zambia,the richest 20 percent of the population receives more
than half the countrys income, while the poorest 20 percent
gets less than 5 percent.
Education
Many developing countries continue to make strides towards
ensuring universal primary education and equal access to
secondary education for girls as well as boys. However, some
regions and countries are better than others. In Morocco,
Pakistan and India, for example, the difference in years of
schooling completed by children from the poorest and richest
families varied from eight to ten years. But in Kenya, Ghana, the
Philippines and Egypt the gap was only two to three years.
Enrollments by female students are catching up with those of
boys in some regions but continue to lag in others. Intensive
promotion of education over the past decade has significantly
increased primary school enrollments. In East Asia, Latin
America, and Eastern Europe, girls are now as likely as boys to
attend primary school, and to go onto secondary school. But in
the Middle East and North Africa, in South Asia, and in
Sub-Saharan Africa girls enrollments continue to lag behind
boys (Table2.12).
Environment
Global per capita water supplies are declining and are now 30
percent lower than they were 25 years ago. Further increases in
population and economic activity are expected to boost demand for
water, exposing many countries to chronic and widespread water
shortages. By 2050, as much as 42% of the worlds population
will live in countries with insufficient fresh water stocks to
meet the combined needs of agriculture, industry and domestic use
(p. 118).
Four countriesthe U.S., China, Russia and Japanaccounted
for more than 40% of commercial energy use (basically, all energy
use except for home use of firewood and other biomass).
Commercial energy use has been growing rapidly in low- and
middle-income countries, but high-income countries still use
almost seven times as much on a per capita basis (Table 3.7).
Health
Adult mortality rates have increased in many countries in
Sub-Saharan Africa, due to HIV/AIDS. Furthermore, HIV infection
rates in the region are among the worlds highest. For example,
29 percent of Zimbabwes population aged 15-49 is infected with
the virus, followed by Botswana, 25 percent, and Zambia, 19
percent. Eight other African countries have infection rates of
more than 10 percent of their adult populations (Table 2.17).
Adult mortality has also increased in Eastern Europe and the
countries of the former Soviet Union, due to factors such as
smoking, high-fat diet, excessive alcohol use, and the stressful
psychological conditions of economic transition (Table 2.18).
Technology? the digital age expands
its reach
According to World Development Indicators 1999, the
communications and computer revolutions are greatly expanding the
reach of global knowledge. Indeed, they can allow developing
countries to leapfrog old technologies that still hold sway in
industrial countries. For example, the ratio of cellular to total
mainframe telephone use is much higher in the Philippines and Sri
Lanka than in Belgium or France (see tables 5.10 and 5.11).
Worldwide, Finland has the greatest number of cellular phones
per 1,000 people with 417; followed by Norway with 381; Sweden
with 358; Japan with 303; and Israel with 283.
The report also shows that Sub-Saharan Africa countries such
as Botswana, Djibouti, and Ghana have 100 percent digital
telephone networks, compared with the OECD average of less than
70 percent.
Although the Internet continues to reach millions of new
subscribers each year in both developed and developing countries,
the report shows that industrial countries, and particularly
those in Scandinavia, continue to have the greatest access to
cyberspace. Once again, as with cellular technology, Finland also
has the worlds largest number of Internet hosts per 10,000
people with 996; followed by the United States with 976; Norway
with 705; New Zealand with 468; and Sweden with 430.
Looking ahead
World Development Indicators shows that
international development efforts over the last 25 years have
clearly achieved tremendous gains, but that the financial crisis
that has gripped developing countries and those in transition,
has slowed efforts to maintain and improve living standards for
the worlds poorest people. As Shaida Badiee, Director
of the World Banks Data Group which produces the report,
puts it, having authoritative and up-to-date development
information available is crucial to safeguarding the human gains
of previous years, finding the means to weather the current
crisis, and charting a new, more hopeful future in the
post-crisis era.
This year we report on the prospects for developing
countries in the aftermath of the financial crisis that swept
much of the world. It is too soon to draw conclusions? indeed, we are only beginning to measure
the effects. What is clear is that the world cannot afford
another lost decade like the one Latin America endured after the
debt crisis of the 1980s. Such a setback would put all our
goals out of reach and leave millions in still greater
distress.
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