29 APRIL 1996

 Introduction

 A UNU Public Forum on Targets and Criteria for Viable Socio-Economic Development was held at United Nations headquarters in New York on 29 April 1996. The Forum focused on a recently initiated UNU project devoted to an analysis of major development indices and socio-economic development criteria. The project aims to build consensus on developmental criteria and reformulate internationally agreed development targets in an attempt to produce a "viable socio-economic development" strategy.

 The panel discussion was moderated by Dr. Jacques Fomerand, Director of the United Nations University Office at the United Nations, in New York (UNUONA). The project’s coordinator, Dr. Toru Yanagihara, a Visiting Scholar at the UNU’s headquarters in Tokyo and Professor of Economics at Hosei University, was the guest speaker. Three panelists participated in the discussion: Ambassador Samuel Insanally of the Permanent Mission of the Republic of Guyana to the United Nations; Ms. Sakiko Fukuda-Parr, Director of the United Nations Development Programme’s (UNDP) Human Development Report Office; and Mr. Leo Goldstone, Director of World Statistics, Ltd., and a consultant for UNDP.

 The UNU Project on Targets and Criteria for Viable Socio-Economic Development

 The UNU project is designed to span approximately two years. At the first phase of the project, thematic research groups will be organized to study economic development indices, social development indices and the interrelations between the two. Then, targets and criteria for viable socio-economic development will be explored. Finally, an action plan for development based upon these indices will be proposed at a symposium held towards the end of the first phase.

 The project’s second phase will be concerned with application and empirical studies in various regions in the developing world, including Africa, South Asia, East Asia, Latin America, the Middle East, and in the transition economies. Area study groups will use the indices proposed by the thematic research groups and critically review the past country-based data found in the reports of United Nations agencies and other international organizations. The second symposium will seek to present the empirical results of applying the proposed indices, with a view to examining their universal applicability and identifying issues for further investigation.

Dr. Toru Yanagihara began his presentation by observing that the more ultimate concerns of today tend to belong to what is commonly called the social development domain rather than the economic development domain. It therefore follows that targets and/or criteria for socio-economic development must better relate to sustainable social aspects of development. According to Dr. Yanagihara, economic growth alone cannot be taken as a meaningful target for socio-economic development. Furthermore, economic development should not be strictly viewed as an end, but as the means for softening and/or eliminating the constraints and obstacles to the attainment of human development.

Within the United Nations system, the typical phraseology related to development encompasses both economic and social development. For example, the three main goals articulated at the Social Summit in Copenhagen included the eradication of poverty, increased employment and social integration. The last goal, namely social integration, is particularly complex and challenging. Indeed, it presents great difficulties when attempting to identify meaningful targets or criteria, and formulate quantifiable, measurable indicators.

Drawing upon his experience as an economist, Dr. Yanagihara then turned his attention to the notion of viability. According to Dr. Yanagihara, when economists discuss policy issues, they are trained to put themselves in the shoes of an economic planner responsible for identifying national goals for development. They next attempt to find an optimal set of policy instruments to achieve the national goals that have been identified and design a set of proposals. This somewhat technocratic approach characterizes standard economic policy making of first setting economic targets and then designing economic policy measures to achieve those targets.

This approach, however, can be hindered by a number of reality checks: (1) the right policies are not always adopted (the reality of political feasibility); (2) policies are not necessarily implemented (the reality of bureaucratic capacity); and (3) if and when policies are adopted and implemented, the impacts and side effects are not always welcome. For example, if a policy is not socially acceptable, it can be abandoned. According to Dr. Yanagihara, this third point comes closest to addressing the issue of social viability.

What is the meaningful definition of viability when we discuss socio-economic development? How can we characterize the interactions between the economic and social aspects of development? How can we develop indices and conceptualize a sustainable approach to development? These are some of the issues that the UNU project seeks to examine.

Today a great deal of emphasis is being placed on civil society. For instance, the mandate of the Inter-American Development Bank is primarily aimed at the promotion of civil society. In order to have sound economic mechanisms and political conditions, we need to address issues related to society and civil capacity. In conclusion, Dr. Yanagihara called attention to the importance of understanding the broader social context in promoting economic development and noted that this emphasis should be reflected in the UNU project.

Setting Targets and Criteria: International and National Perspectives

Ambassador Insanally began the panel discussion by calling attention to a recent visit he made to Tokyo to participate in an international conference on a new development strategy by the year 2000 and beyond. According to Ambassador Insanally, the conference produced a summary of important conclusions, including some relating to the issue of target setting which could serve as a guide for future UNU research in the area of development. Notwithstanding some reservations on the part of a few, the Tokyo conference accepted the desirability of setting development targets. While it was argued that failure to achieve specific goals may result in disillusion and eventually frustration among development partners, it could not be denied that when jointly and realistically set, targets can be a strong incentive to achievement. Furthermore, clear and understandable goals can serve to mobilize public opinion in support of their realization in both developing and developed countries. Target setting could therefore be seen as providing the vision to inspire development efforts.

For targets to be meaningful, however, it is generally felt that they should be premised on certain fundamental principles, including the following: (1) they should be a set of simple and clearly understood terms that can command public support in both developed and developing countries; (2) they should be realistic but at the same time challenging, impelling all partners to reach greater levels of cooperation; (3) they should be output- rather than input-oriented and measurable by very clear indicators; (4) they must be accompanied by clear strategies to ensure their attainment both at the global and national levels, particularly in the area of resource mobilization; and (5) they should be set by common accord by development partners and one set should be pursued actively by all.

The setting of targets and criteria therefore must be seen from both a national and international perspective. At the national level, we will have to find ways and means to encourage domestic savings, create an investor friendly climate based on sound macroeconomic policies, and address critical social concerns. At the international level, we must seek to build a consensus on a new development strategy and to harness the resources necessary for its implementation. Ambassador Insanally stated that we have reached a point where these two approaches are recognized as being complementary and mutually reinforcing so as to secure economic recovery and growth for developing countries.

Many are claiming that since private investment has increased from 33.8 percent of total development flows in 1986 to approximately 60.1 percent in 1994, while Overseas Development Assistance (ODA) has declined from 66.9 percent in 1986 to 38.2 percent in 1994, priority must now be given to private investment. Ambassador Insanally argued that since these investment flows are concentrated in only a few developing countries, and since their actual contribution to sustainable developing is yet to be fully understood, ODA remains to be a necessity for many developing countries.

On the issue of common development indices, there has been some progress towards the harmonization of views among development partners. There was a time when the UNDP’s Human Development Report, which attempts to measure development not only in pure economic terms but also by social standards, was deemed to be both arbitrary and divisive. Today the Report is being taken more seriously as a useful barometer of the development climate. However, certain aspects of the Report, such as the freedom index, remain somewhat controversial, since some countries still believe that the Report does not pay sufficient regard to the historical, cultural, and other forms of diversity which exist among nations. For that reason, it does not allow for easy conclusions on the issue of development.

A challenge that the UNU study could perhaps undertake is to reconcile the current thinking that exists on these fundamental ideas in an effort to promote general agreement on how we may advance the development agenda. Once we have established these basic foundations for a new development strategy, we can then proceed with undertaking empirical studies in various regions of the developing world. In this context, there may be great value in examining the comparative roles of the public and private sectors and of education and training in promoting development. Certainly the particularities of each region and indeed each country will complicate the evaluation, but certain common elements can be extracted for wider application. Ambassador Insanally expressed his support of the project’s region approach, but noted that he would like to see the addition of the Caribbean in the Latin America area.

The studies envisaged by the project can produce a valuable input to the Agenda for Development currently being elaborated by a Working Group of the General Assembly. Since it is expected that the Agenda should be finalized by the end of the fiftieth session of the General Assembly, the project’s conclusions may be too late to influence the discussions. However, it appears that the Agenda will be no more than a framework document requiring further construction through concrete ideas for implementation. The project therefore could provide the building material at a later stage of the discussion.

The work contemplated by the UNU could perhaps make a more timely input in relation to the start of the UN Decade on the Eradication of Poverty which begins in 1997. Poverty is arguably the most formidable challenge to human development in all of its dimensions and the establishment of internationally agreed targets and criteria for development must therefore address the question of poverty.

Ambassador Insanally noted that the project does not encompass research on the strategies needed for financing any eventual agenda for development. Without adequate financing, whatever agreements we forge are likely to run the risk of eventual collapse. There is no lack of proposals for financing; what is needed is the testing of their feasibility. In the aspect of financing, the UNU may suitably collate work that is being done elsewhere and put forward both new and already existing ideas. The project can yield the common elements which may form the basis of a consensus among the developed and developing countries which is badly needed at this stage.

The Role of Global Conferences in Development

Ms. Fukuda Parr commented on the timeliness of the project’s focus. Today we are approaching the end of a series of international conferences which began in Rio and is set to end in Istanbul this June. These conferences have been attempting to define an agenda for the future in all the diverse aspects of development — environment, population, gender equality, social development, urbanization, etc. According to Ms. Fukuda-Parr, it is important to remind ourselves that this series of international dialogue provides a valuable backdrop for the work of the UNU. These international conferences reflect the results of a broad dialogue. In addition, the NGO dialogue that has gone on behind these conferences has been tremendously influential in defining and setting objectives and goals.

Conferences are essentially a forum for developing international norms, targets and consensus about common global goals for development. This is perhaps one of the most important tasks the United Nations undertakes in the development field. In many areas of development, specific targets have already been agreed. For example, a target for universal primary education was set at the Copenhagen conference which called for universal access to basic education and completion of primary education by at least 80 percent of primary school-age children by the year 2015. It was also agreed that efforts would be made to reduce adult illiteracy to at least half of the 1990 levels. There are also other targets which seek to reduce the male-female gap in literacy, as well as infant mortality rates. Thus, we can find an existing series of targets which have already been internationally agreed.

Ms. Fukuda-Parr turned her attention to what she described as two gaps in the area of targets and development. First, in many cases, targets that have been set often are left to sit on the back burner in the minds of policymakers. A great deal of effort is devoted to forging agreement. However, inadequate attention and political focus is devoted to implementation and monitoring of these agreements. The UNU project can serve to place greater focus on the actions that are needed for effectively monitoring targets by formulating measurements and making them available for widespread use. There is a need in the area of measurement and indicators for an effort at basic data collection and reporting. Timely and accurate collection of data is necessary in order to have indicators for global measurement. The UNU project should therefore address the deficits that can be found in the area of data collection and reporting.

The second gap lies between the political recognition of a problem and action to collect data. For example, it was not until the 1970s that national statistical offices began collecting data that was gender disaggregated. The impact of conferences, such as the one held in Nairobi, has been quite significant in this area. Today we have more reliable statistics on gender disparities. The same kind of recognition and concern about other aspects of developmental goals has not yet been established. Many of these UN conferences have set targets but they tend to be in the area of basic social indicators, such as education and health. There are many other aspects of sustainable human development or socially viable development that need to be explored, including basic social aspects, basic economic indicators, the gender dimension, the environment, human security and governance. It should be noted that there is very little agreement on measures for quantitative monitoring of governance and freedom. These are areas where we are witnessing the beginning of some progress. However, there is very little consensus on specific goals that can be measured or can be susceptible to measurement. This is the type of intellectual challenge upon which the academic community, including the UNU, should focus.

The Human Development Index (HDI) is the only index that combines both economic and social indicators and perhaps this is the reason for its relative robustness and acceptability. We do not see the world divided between the economic and social domains; it is instead viewed as being centered around people. Of course, the HDI does not cover all of the dimensions of development, such as peace and democracy. It could certainly be enhanced by these additional dimensions, but so far significant progress has not been made. Ms. Fukuda-Parr called upon the UNU project to provide some new insights into how this could be accomplished.

Information, Statistics and the Role of Targets

Mr. Goldstone began with recommendations concerning the project’s scope and objectives. Specifically, he suggested that the project be limited to a more realistic level. Furthermore, he recommended that the UNU project begin by reviewing whatever political processes and decisions related to development are taking place, and then acting upon them to see how they could be measured, combined and monitored.

By definition targets are generally not achieved. Their primary purpose is to help finance programmes which seek to improve and reduce the gap between the present situation and target points, and also to make countries more aware of existing problems. The great danger of focusing too much attention on goals and targets is that it can have a distorting effect on the way a country develops its programmes. Many countries will narrowly focus their resources on the targets and criteria set and supported by international conferences and/or agencies. For example, as a result of the campaign for universal primary education put forth at the Nairobi conference, a number of African countries spent far too much time and effort on primary education because it was part of the target. Consequently, secondary technical education, which is sorely needed to develop the economies of these countries, was severely neglected because it was not identified as part of the target.

Furthermore, the information needed to properly measure a target is often not adequate or even available, and an enormous effort is devoted to a rather weak statistical system designed to measure a few items put forth as an international conference target. As a result, there is no effort to build up the system as a whole with the capacity of producing information that is fairly reliable on many subjects. This can thus lead to a distortion in the statistical system of a given country.

Mr. Goldstone agreed with Ms. Fukuda-Parr’s concern relating to the importance of properly monitoring targets. In order to do this effectively, fairly reliable information for measurement is imperative. In monitoring targets it is important to look at broad issues. However, this is a difficult task to accomplish when so many statistical offices throughout the world are weak. Even the capacities of statistical offices in rich countries are decreasing due to downsizing and budget cuts. Needless to say, the monitoring capacities of statistical offices in poorer countries are extremely limited.

There is widespread agreement that universal primary education is an essential development objective for any given country. Based upon enrollment data, an indicator known as an enrollment ratio is created. This immediately presents the following problem: In most developing countries the children that are enrolled often begin at a late age, they repeat grade levels and, as a result, complete their primary education at a relatively older age. We therefore cannot expect to find a very realistic relationship between the number of children in school and the number of children in the overall population. For example, an education report for Namibia states that 150 percent of Namibia’s primary-aged children are in school. Mr. Goldstone explained that this is referred to as a gross enrollment ratio because it includes all over- and under-aged children. When we encounter this sort of problem, the obvious thing to do is to design a ratio that takes into account what is called a net enrollment ratio which limits the relationship between the children of primary school age in school to the children of primary school age in the country. However, here we encounter another problem: Approximately 75 countries do not have a net enrollment ratio more recent than five to six years old, and an even greater number of countries do not have a gross enrollment ratio dated later than 1993. This is a basic indicator that should be easy to collect since it is taken from the registration system which all schools are required to maintain. Mr. Goldstone explained that he presented this illustration to caution against expending too much intellectual energy on creating a set of complex or subtle indicators for which it will be difficult or impossible to collect any data.

Mr. Goldstone concluded his comments by stating that in the area of statistics, there is a critical limitation on what one can do. It would be unwise to put too much effort into theory if you are not going to be able to improve the statistical systems of countries. It would also be unwise to pursue a programme whose coverage is too wide. Instead, efforts should be focused on finding a few basic indicators and then providing recommendations on the ways and means countries can build up their systems to produce a new index.

Questions and Comments

Following the panel discussion, the floor was opened to audience questions and comments. The first comment related to the dilemma facing ODA and its future prospects. In response, Ambassador Insanally expressed his concern about the diminishing of ODA. He noted that given the end of the Cold War, the outlay of ODA simply is no longer strategically driven. In addition, the ever-increasing emphasis on the market and private investment has also served to lessen the perceived need for ODA. Ambassador Insanally pointed out that there are countries that are not yet at a stage in their development where they can rely on private investment, and therefore ODA is essential to help these countries achieve a certain level of pre-investment. In this way, ODA can be viewed as a catalyst to reach that takeoff point. Mrs. Fukuda-Parr added that although private sector flows in developing countries have increased dramatically, much of it is concentrated in three or four different countries, primarily in Asia, while only two percent goes to sub-Saharan Africa. In light of this fact, she agreed that ODA is still an important channel for resource transfers and investments in developing countries.

Another audience member called attention to the importance of supporting countries to provide the basic statistics upon which indicators are constructed. In the period immediately following the Cold War, there was a great deal of optimism about the United Nations in the area of information and social and economic data collecting. Work was undertaken to help developing countries build up their national capacities to provide an ongoing flow of economic and social data. It appears, however, that this is no longer the case. Today we see that this form of technical cooperation with countries has greatly diminished or no longer exists. Renewed attention should be focused on this issue and agreement on a common set of indicators and measures which are used and re-used should be pursued. What is the role of the United Nations in supporting countries to make data available for their own needs as well as for international purposes?