- International Monetary Fund
- Published Date:
- April 2010
© 2010 The International Bank for Reconstruction and Development / The World Bank
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Cover image: “Escape Route,” by Iyke Okenyi, 2006, courtesy of the World Bank Art Program.
Cover design: Debra Naylor of Naylor Design.
Interior photographs: Yosef Hadar / World Bank (10), Curt Carnemark / World Bank (28), Ray Witlin / World Bank (68), Curt Carnemark / World Bank (96), Tran Thi Hoa / World Bank (120).
- Acronyms and Abbreviations
- Goals and Targets from the Millennium Declaration
- Overview: MDGs after the Crisis
- 1 Millennium Development Goals: Gains Were Significant before the Crisis
- 2 Lessons from Past Crises—and How the Current Crisis Differs
- 3 Growth Outlook and Macroeconomic Challenges in Emerging and Developing Countries
- 4 Outlook for Millennium Development Goals
- 5 The International Community and Development—Trade, Aid, and the International Financial Institutions
- Appendix: Classification of Economies by Region and Income, Fiscal 2010
- 2.1 Defining growth cycles in developing countries
- 2.2 Aggregate economic shocks and gender differences: A review of the evidence
- 2.3 Crises as opportunities for reform
- 2.4 Using safety nets to lower the cost of reducing poverty
- 2.5 Are external shocks becoming more important than internal shocks for developing countries?
- 2.6 Human development suffered severely during crises in developing countries
- 2.7 Gender differences in impacts of the crisis: Evidence from East Asia
- 3.1 Quality of macroeconomic policies in low-income countries
- 3.2 Mobilizing additional revenue in developing countries: Key issues for tax policy and revenue administration
- 3.3 A fiscal rule for commodity exporters: The cases of Chile and Nigeria
- 4.1 Uncertainty and risk in projecting attainment of the MDGs
- 4.2 Estimating the impact of growth on human development indicators
- 4.3 Assumptions for the archetype countries
- 4A.1 MAMS: A tool for country-level analysis of development strategies
- 5.1 Facilitating trade through logistics reforms
- 5.2 The allocation of aid from private sources
- 5.3 The IMF’s engagement with low-income countries
- 5.4 Gender equality as smart economics: A World Bank Group action plan
- 5.5 Crisis-related initiatives of the International Finance Corporation
- 5.6 Action Plan for Africa
- 1 Serious global shortfalls loom for the human development MDGs
- 2 Key indicators plummet from their overall mean during growth decelerations, all countries
- 3 The long-run effect of slower growth on selected MDGs is worrisome
- 1.1 But Africa’s poverty rate is falling
- 1.2 At the global level, serious shortfalls loom for the human development MDGs
- 1.3 Since the 1990s growth in developing countries has accelerated
- 1.4 Poverty reduction is substantial in all regions
- 1.5 Another view: Poverty rates and the number of poor people are falling rapidly
- 1.6 Net enrollment rates are rising in many countries
- 1.7 Gender parity is close in primary education
- 1.8 More people have improved sources of water
- 1.9 Progress lacking on ratio of employment to population
- 1.10 Female enrollment in tertiary education lags in Sub-Saharan Africa and South Asia, 2007
- 1.11 The contraceptive prevalence rate is low for low-income countries
- 1.12 HIV prevalence rates and estimated deaths are showing signs of decline
- 1.13 Improving access to antiretroviral treatment is still far from universal
- 1.14 Fragile states have made the least progress toward the MDGs
- 1.15 Progress in Sub-Saharan Africa is significant but still insufficient—partly because of low starting points
- 1.16 Many countries are falling short of most MDGs, 2009
- 1.17 Poverty responds less to growth when the initial poverty rate is high
- 2.1 Key human development and gender indicators plummet from their overall mean during growth decelerations, all countries
- 2.2 Key human development and gender indicators also fall below their overall means during growth decelerations in Sub-Saharan countries, if less so
- 2.3 During growth decelerations, economic and institutional indicators diverge far from the overall means
- 2.4 Health spending growth rate is more volatile than its per capita level or GDP growth
- 2.5 Public education spending is less closely tied to GDP growth than is health spending
- 2.6 Aid to education and health does not appear to be closely related to GDP growth, 1998–2007
- 2.7 Despite intense fiscal pressures, Mexico’s federal funding for health and education is set to rise in 2009–10
- 2.8 Average pharmaceutical expenditures fall in Eastern Europe, especially in the Baltics, before beginning to rise again
- 2.9 Undisbursed HIV/AIDS grants from the Global Fund to Fight AIDS, Tuberculosis, and Malaria, Rounds 1–7
- 2.10 Food-related safety net programs are more common in Africa than elsewhere
- 2.11 Economic performance and MDG outcomes are better with good policy
- 2.12 Spending cutbacks in crisis-affected households are jeopardizing future welfare in Armenia, Montenegro, and Turkey
- 2.13 The crisis sharply reduced wage earnings in middle-income countries
- 2A.1 Projected Global Fund to Fight AIDS, Tuberculosis, and Malaria and U.S. PEPFAR HIV/AIDS grants as of April 2009
- 2A.2 Projected Global Fund to Fight AIDS, Tuberculosis, and Malaria and U.S. PEPFAR HIV/AIDS grants per AIDS patient as of April 2009
- 3.1 Short-term indicators of production and trade are recovering
- 3.2 Commodity price indexes rebounded strongly in 2009
- 3.3 Bond spreads have declined in emerging markets and developing countries
- 3.4 Share prices have recovered sharply
- 3.5 Exchange rates have been less volatile: Daily spot exchange rates
- 3.6 The cost of external debt financing has come down
- 3.7 The share of nonperforming loans to total loans has been rising
- 3.8 Bank financing to emerging markets dropped sharply in 2009
- 3.9 Changes in terms of trade have swung sharply since 2008
- 3.10 External imbalances have come down in emerging and developing countries
- 3.11 Almost all countries rebuilt their international reserves in 2009
- 3.12 Deteriorating terms of trade sometimes reinforce contraction in economic activity
- 3.13 Monetary policy conditions became more accommodating in 2009
- 3.14 Average year-on-year growth in money and the money gap in emerging markets
- 3.15 Fiscal deficits expanded in 2009
- 3.16 Growth in real primary spending, 2010 projections
- 3.17 Most countries responded with expansionary fiscal and monetary policy
- 3.18 After previous crises, low-income countries recovered more slowly than the world economy
- 3.19 Growth of terms of trade and external demand in low-income countries in past and current crises
- 3.20 Output losses are highly persistent, especially under external demand shocks
- 3.21 In Sub-Saharan Africa terms-of-trade shocks have larger and more persistent effects
- 3.22 In low-income countries, growth downbreaks are more associated with terms-of-trade shocks, giving hope for smoother recovery
- 4.1 Framework linking policies and actions with development outcomes
- 4.2 The long-run effect of slower growth on selected MDGs is worrisome
- 4.3 The long-run effect of slower growth is especially worrisome in Sub-Saharan Africa
- 4.4 Annual GDP growth for LIRP under four cases
- 4.5 Simulated MDG outcomes for the LIRP archetype under alternative cases
- 4.6 Simulated MDG outcomes for the LIRR archetype under alternative cases
- 5.1 Trade has bottomed out and started to recover
- 5.2 Baltic Dry Index points to a fragile rebound in shipping by sea
- 5.3 Short-term trade finance messages increased steadily from Jan. 2009 to Feb. 2010
- 5.4 Tariff rates fell except in upper-middle-income countries, 2008–09
- 5.5 About 350 trade-restrictive measures and 80 trade-liberalizing measures have been implemented or initiated since the onset of the crisis, but some have already been removed
- 5.6 Net official development assistance rose in real terms in 2008 and 2009
- 5.7 Significant amounts of official development assistance are in debt relief and humanitarian assistance
- 5.8 Trends in gross official development aid from bilateral donors, by type, 2000–08
- 5.9 Gross official development aid from bilateral donors, 2008
- 5.10 Fragile states received $21.3 billion net official development assistance in 2008
- 5.11 Net official development assistance from all sources, by income group, 2000–08
- 5.12 Net ODA varies widely as a share of GNI in Sub-Saharan Africa
- 5.13 Debt stock of heavily indebted poor countries is expected to come down by 80 percent in end-2009 NPV
- 5.14 Multilateral development banks substantially increased their disbursements, 2000–09
- 1.1 Africa is the only region with high extreme poverty
- 1.2 Proportion of population living with HIV is still high but declining in Sub-Saharan Africa, 1990, 2001, and 2007
- 2.1 Around 9 million young children die before their fifth birthday
- 2.2 An infant in a developing country is ten times more likely to die than a newborn in a developed country
- 3.1 How the crisis undermined GDP growth in 2009
- 3.2 Across the world, 884 million people lack access to safe water—84 percent of them in rural areas
- 4.1 In 2007, 72 million children worldwide were denied access to education
- 4.2 Tuberculosis kills around 1.3 million people a year, or 3,500 a day
- 5.1 Each year of a girl’s education reduces, by 10 percent, the risk of her children dying before age five
- 5.2 Emissions in high-income countries overwhelm those in developing countries
- 1 Global output
- 2 Poverty in developing countries, alternative scenarios, 1990–2020
- 1.1 Poverty reduction is more difficult in poor countries
- 1.2 Poverty reduction is several times more difficult in Sub-Saharan Africa
- 1.3 Poverty gaps and ratio of mean income of the poor to the $1.25-a-day poverty line are worse for low-income regions or countries, 2005
- 2.1 Correlation coefficients between growth acceleration and deceleration and human development indicators
- 2.2 Frequency of growth acceleration and deceleration, growth rates, and GDP per capita, 1980–2008
- 2.3 Correlation coefficients between economic cycles and economic and institutional indicators
- 2.4 World Bank lending for safety nets before and since the food, fuel, and financial crises, 2006–11
- 2.5 World Bank portfolio allocations to social safety nets, by region, 2009–10
- 2A.1 Differences between sample averages: Human development and gender indicators
- 2A.2 Differences between sample averages: Sub-Saharan Africa
- 2A.3 Differences between sample averages: Economic and institutional indicators
- 3.1 Global output
- 3.2 Net financial flows
- 3.3 Inflows of international remittances
- 3.4 Growth regression results
- 4.1 Poverty in developing countries, alternative scenarios, 1990–2020
- 4.2 Trends for other MDG human development indicators by region and alternative economic scenarios
- 4A.1 Alternate scenarios for poverty reduction, based on a poverty line of $1.25 a day, by region
- 4A.2 Alternate scenarios for poverty reduction, based on a poverty line of $2.00 a day, by region
- 4A.3 Detailed data for archetypes
- 5.1 World Bank Group trade-related activities, 2007 and 2008
- 5.2 Distribution of debt distress by country group, end-July 2009
- 5.3 Gross commitments by IFIs, 2007–09
The world is five years from the target date for the Millennium Development Goals (MDGs). We are still recovering from a historic financial and economic crisis. The recovery is uncertain and likely to be uneven. We know from past crises that the harms to human development during bad times cut far deeper than the gains during upswings.
Under these conditions, it is especially important to consider actions to achieve the MDGs by the 2015 deadline. We need to learn lessons from MDG experiences to date. This 2010 Global Monitoring Report can contribute to that assessment, as part of an MDG review led by the United Nations.
How has the world performed in overcoming poverty and fostering human development since the onset of the crisis? This year’s report, The MDGs after the Crisis, aims to answer this and other critical questions. It highlights lessons from the crisis and presents forecasts about poverty and other key indicators.
We learned from the 1990s crises that macroeconomic stabilization is not enough. If strong safety nets are not in place when crises hit, malnutrition and school dropouts increase, potentially leading to the loss of an entire generation.
A key lesson from this financial crisis is that the economic and social impact of the downturn would have been far worse if not for the effective—and often extraordinary—policy responses adopted by many advanced, emerging, and developing countries, as well as the swift and sizable assistance provided by international financial institutions and multilateral development banks. Policy responses and international cooperation have been better than in previous crises.
The postcrisis MDG scorecard is still being tallied. Numbers can only be gathered with time-lags and are often incomplete. It is therefore difficult to take a sharp snapshot of the developing world and to analyze the effectiveness of international aid in real time.
Despite these measurement challenges, we will certainly see significant harm to education, health, nutrition, and poverty indicators, especially in low-income countries. This is not a time for complacency. It is a time for exceptional efforts. For example, timely and well-designed conditional cash transfer programs not only increase household incomes, but also help children—boys and girls—stay in school and learn. To beat major diseases and reduce maternal mortality, we need to work on health systems in a holistic manner. This means addressing issues ranging from financing, service delivery systems, regulation, to governance of the systems. To mitigate the damaging effects of the crisis, we must ensure inclusive and sustainable global growth, maintain and expand an open international trade and financial system, deliver on aid commitments, and encourage the private sector.
To meet the MDGs, the developing world must revive its growth and reinforce its resilience to shocks. Countries that sowed in times of plenty were able to reap in times of loss. Fiscal policy buffers must therefore be rebuilt to allow for future countercyclical responses. Effective and efficient social safety nets—the first line of defense against adverse shocks to the poor—must be strengthened.
Progress on Goal 1—halving extreme poverty and hunger—is advancing in fits and starts. Poverty rates are forecast to continue falling in the wake of the crisis, but will do so more slowly. The global rate for extreme poverty is projected to be 15 percent in 2015, down significantly from 42 percent in 1990. Much of the progress in reducing extreme poverty has taken place in East Asia, where poverty dropped from 55 percent in 1990 to 17 percent in 2005. If this report’s baseline projection for a recovery holds, the developing world will reach the poverty reduction goal by 2015.
However, the crisis has harmed many people. By the end of this year, we estimate that an additional 64 million people will fall into extreme poverty due to the crisis. And by 2015, 53 million fewer people will have escaped poverty. We estimate the poverty rate for Sub-Saharan Africa will be 38 percent by 2015, rather than the 36 percent it would have been without the crisis. The continent will therefore fall short of Goal 1.
Goal 1 also encompasses the aim of halving the proportion of people who suffer from hunger. The developing world is off track to meet this goal. Reducing malnutrition deserves more attention, because nutrition has a multiplier effect on the success of other MDGs, including infant mortality, maternal mortality, and education. Child malnutrition accounts for more than a third of the disease burden of children under five. And malnutrition during pregnancy accounts for more than 20 percent of maternal mortality.
We will likely meet the Goal 3 target of achieving gender parity in primary and secondary education by 2015. More girls than ever in history complete primary school. Almost two-thirds of developing countries reached gender parity at the primary school level by 2005. However, at higher levels of schooling, female enrollment lags seriously. And the quality of secondary and tertiary education needs significant improvement.
Progress in reducing maternal mortality is advancing more quickly than we had estimated earlier. This report includes the new findings just reported in The Lancet that the maternal death toll worldwide dropped from 526,300 in 1980 to around 342,900 in 2008, far below the latest UN estimates of some 500,000 for the same year. These signs of improvement are encouraging. But the progress is fragile and we are still far from reaching the global target of a 75-percent reduction in maternal deaths by 2015 from the ratio that prevailed in 1990. As we emerge from the crisis, we must also renew our efforts to achieve universal access to reproductive health.
The World Bank Group and the International Monetary Fund have stepped up to the challenge posed by the crisis. We have taken numerous initiatives to limit the slide in global economic growth and avert the collapse of the banking and private sectors in many countries. We have also provided financing to governments and the private sector, helping to soften the impact of the crisis on the poor. And we have scaled up our support for social safety nets.
With the deadline for the MDGs fast approaching, we must recognize and overcome obstacles in reaching the targets for tackling extreme poverty, hunger, and disease. Business as usual will not work. At a time of uncertainty, we need to extend our limited resources further. We must build upon the progress made in improving gender equality, education, and environmental sustainability. The actions we take today will shape future opportunities and challenges.
Robert B. Zoellick
The World Bank Group
International Monetary Fund
This report has been prepared jointly by the World Bank and the International Monetary Fund (IMF). In preparing the report, staff also consulted and collaborated with the African Development Bank (AfDB), the Asian Development Bank (ADB), the European Bank for Reconstruction and Development (EBRD), and the Inter-American Development Bank (IDB). The cooperation and support of staffs of these institutions are gratefully acknowledged.
Delfin S. Go was the lead author and manager of the report. Richard Harmsen led the team from the IMF. Principal authors of the various parts of the report included Jorge Arbache, Jean-Pierre Christophe Chauffour, Ste-fano Curto, John Elder, Vijdan Korman, Maureen Lewis, and Hans Lofgren (World Bank); Andrew Berg, Chris Papageorgiou, Catherine Pattillo, and Jarkko Turunen (IMF); Malvina Pollock, Karen Thierfelder, Sherman Robinson, and William Shaw (consultants). Sachin Shahria and Song Song were key members of the core team and assisted with the overall preparation and coordination of the report.
The work was carried out under the general guidance of Justin Lin, Senior Vice President and Chief Economist, and Hans Timmer, Director, DEC Prospects Group, both of the World Bank. The circle of advisers included Shantayanan Devarajan, Shahrokh Fardoust, Deon Filmer, Ariel Fiszbein, Ann Harrison, Mohammad Zia Qureshi, Martin Ravallion, Augusto de la Torre, and Dominique van der Mensbrugghe.
Several staff members also made valuable contributions, including the following from the World Bank: Luca Bandiera, Uranbileg Batjargal, Shaohua Chen, Julien Gourdon, Lire Ersado, Mariem Malouche, Andrew Mason, Claudio Enrique Raddtz Kiefer, Prem San-graula, Nistha Sinha, Carolyn Turk, Marijn Verhoeven, and Hassan Zaman.
Other contributors from the IMF included John Brondolo and Mario Mansour; research assistance was provided by Emmanuel Hife and Ioana Niculcea.
Contributors from other institutions included Gaston Gohou and Timothy Turnere (AfDB); Indu Bhushan, Valerie Reppelin-Hill, Gina Marie Umali, and Edeena Pike (ADB); Yannis Arvanitis, Gary Bond, and James Ear-wicker (EBRD); and Susana Sitja Rubio and Luis F. Diaz (IDB).
Guidance received from the Executive Directors of the World Bank and the IMF and their staffs during discussions of the draft report is gratefully acknowledged. The report also benefited from many useful comments and suggestions received from the Bank and IMF management and staff in the course of its preparation and review. Additional information and data, including background papers, are available on the dedicated Web site, www.worldbank.org/gmr2010. The multilingual Web sites accompanying the report were produced by Roula Yazigi, Rebecca Ong, Swati Priyadarshini Mishra, and Mohamed Hassan. Rebecca Ong and Merrell Tuck-Primdahl managed the dissemination activities. The translation process was coordinated by Sheila Keane and Jorge del Rosario.
Bruce Ross-Larson was the principal editor. Martha Gottron did the final copyediting. From the World Bank’s Office of the Publisher, Stephen McGroarty, Susan Graham, and Denise Bergeron managed the design, production, printing, and distribution of the report.
Abbreviations and Acronyms
Asian Development Bank
African Development Bank
acquired immune deficiency syndrome
African Development Fund
Asian Development Fund
Commonwealth of Independent States
Country Policy and Institutional Assessment
Development Assistance Committee
European Bank for Reconstruction and Development
foreign direct investment
Group of Eight
Group of Twenty
gross domestic product
gross national income
heavily indebted poor country/countries
human immunodeficiency virus
International Bank for Reconstruction and Development
International Development Association (World Bank Group)
Inter-American Development Bank
International Finance Corporation (World Bank Group)
international financial institution
International Monetary Fund
Monetary Conditions Index
Millennium Development Goals
Multilateral Investment Guarantee Agency (World Bank Group)
official development assistance
Organisation for Economic Co-operation and Development
Organization of the Petroleum Exporting Countries
President’s Emergency Plan for AIDS Relief
purchasing power parity
special drawing rights
World Trade Organization
Goals and Targets from the Millennium Declaration
|GOAL 1||ERADICATE EXTREME POVERTY AND HUNGER|
|TARGET 1.A||Halve, between 1990 and 2015, the proportion of people whose income is less than $1.25 a day|
|TARGET 1.B||Achieve full and productive employment and decent work for all, including women and young people|
|TARGET 1.C||Halve, between 1990 and 2015, the proportion of people who suffer from hunger|
|GOAL 2||ACHIEVE UNIVERSAL PRIMARY EDUCATION|
|TARGET 2.A||Ensure that by 2015, children everywhere, boys and girls alike, will be able to complete a full course of primary schooling|
|GOAL 3||PROMOTE GENDER EQUALITY AND EMPOWER WOMEN|
|TARGET 3.A||Eliminate gender disparity in primary and secondary education, preferably by 2005, and at all levels of education no later than 2015|
|GOAL 4||REDUCE CHILD MORTALITY|
|TARGET 4.A||Reduce by two-thirds, between 1990 and 2015, the under-five mortality rate|
|GOAL 5||IMPROVE MATERNAL HEALTH|
|TARGET 5.A||Reduce by three-quarters, between 1990 and 2015, the maternal mortality ratio|
|TARGET 5.B||Achieve by 2015 universal access to reproductive health|
|GOAL 6||COMBAT HIV/AIDS, MALARIA, AND OTHER DISEASES|
|TARGET 6.A||Have halted by 2015 and begun to reverse the spread of HIV/AIDS|
|TARGET 6.B||Achieve by 2010 universal access to treatment for HIV/AIDS for all those who need it|
|TARGET 6.C||Have halted by 2015 and begun to reverse the incidence of malaria and other major diseases|
|GOAL 7||ENSURE ENVIRONMENTAL SUSTAINABILITY|
|TARGET 7.A||Integrate the principles of sustainable development into country policies and programs and reverse the loss of environmental resources|
|TARGET 7.B||Reduce biodiversity loss, achieving by 2010 a significant reduction in the rate of loss|
|TARGET 7.C||Halve by 2015 the proportion of people without sustainable access to safe drinking water and basic sanitation|
|TARGET 7.D||Have achieved a significant improvement by 2020 in the lives of at least 100 million slum dwellers|
|GOAL 8||DEVELOP A GLOBAL PARTNERSHIP FOR DEVELOPMENT|
|TARGET 8.A||Develop further an open, rule-based, predictable, nondiscriminatory trading and financial system (including a commitment to good governance, development, and poverty reduction, nationally and internationally)|
|TARGET 8.B||Address the special needs of the least-developed countries (including tariff- and quota-free access for exports of the least-developed countries; enhanced debt relief for heavily indebted poor countries and cancellation of official bilateral debt; and more generous official development assistance for countries committed to reducing poverty)|
|TARGET 8.C||Address the special needs of landlocked countries and small island developing states (through the Programme of Action for the Sustainable Development of Small Island Developing States and the outcome of the 22nd special session of the General Assembly)|
|TARGET 8.D||Deal comprehensively with the debt problems of developing countries through national and international measures to make debt sustainable in the long term|
|TARGET 8.E||In cooperation with pharmaceutical companies, provide access to affordable, essential drugs in developing countries|
|TARGET 8.F||In cooperation with the private sector, make available the benefits of new technologies, especially information and communications|