Inclusive global growth: a framework to think about the post-2015 agenda

Transcription

1 Inclusive global growth: a framework to think about the post-215 agenda François Bourguignon Paris School of Economics Angus Maddison Lecture, Oecd, Paris, April 213 1

2 Outline 1) Inclusion and exclusion in global growth: past and present 2) Sub-Saharan African development as the key for future inclusive global growth 3) Global and national policies for inclusion 4) Some implications for the post-215 agenda 2

3 1) Inclusion and exclusion in global growth: the evolution of global inequality Measuring the global inequality of living standards i. Statistical unit World citizens ii. Standards of living National mean = GDP per capita (USD, corrected for purchasing power parity, WDI) Within country distribution: disposable income per consumption unit in national household surveys Population size (UN) iii. Global inequality = inequality between countries + inequality within countries 3

4 Per cents (Gini) Trend reversal in global inequality Figure 1. Evolution of global inequality : (various measures) 8 75 Historical series Gini Coefficient Top 1% to bottom 1% income Income ratio

5 Per cents (Gini) Trend reversal in global inequality Figure 1. Evolution of global inequality : (various measures) 8 75 Historical series Recent period Gini Coefficient Top 1% to bottom 1% income Income ratio 35 P9/P1 quantile ratio

6 Per cents The drop in extreme poverty : MDG1 will be reached 6 Evolution of global extreme poverty (1.25$ ppp a day): Number of poor people (right axis) Proportion of poor people (left axis) Year Source: World Bank 6

7 Per cents Trend reversal in national inequality 4 Share of top 5% income in total income: , selected developed countries 35 USA 3 25 UK Japan France 2 15 Sweden Year 7

8 Trend reversal in national inequality Change in the Gini coefficient : mid 198s to mid 2s, developed countries Finland Portugal New Zealand United Kingdom Norway Italy Germany United States Netherlands Sweden Austria Canada Belgium Luxembourg Japan Denmark Korea, Rep. Australia Greece France Ireland Spain Source: OECD Percentage points 8

9 Trend reversal in national inequality Change in the Gini coefficient : mid 198s to mid 2s, Other emerging and developing countries China urban Poland Kyrgyz Republic Ghana Botswana China rural Albania Philippines Indonesia Slovenia Mozambique Vietnam Tajikistan India urban Morocco Tunisia India rural Slovak Republic Madagascar Hungary Mongolia Moldova South Africa Yemen, Rep. Panama Pakistan Lesotho Algeria Iran, Islamic Rep. Malaysia Kenya Source: World Bank, Povcal 9

10 2) Sub-Saharan African development as the key for future inclusive global growth Catching-up by emerging countries likely to continue, (but not necessarily in an inclusive way) Concern about growing gap between emerging countries and poor countries i.e. Sub-Saharan Africa SSA growth as the main challenge for the continuing inclusiveness of global growth Will SSA growth continue at the present pace? Could it accelerate? 1

11 Governance? Mean CPIA for 4 clusters: Sub-Saharan Africa, Economic management Macroeconomic policy Property rights Structural policies

12 2= 1 per cent or terms of trade? Sub-Saharan Africa: Terms of trade and GDP per capita growth, Terms of trade (arithmetic mean) GDP pc regional growth rate

13 2= 1 per cent or terms of trade? Sub-Saharan Africa: Terms of trade and GDP per capita growth, Terms of trade (arithmetic mean) Real commodity price index: agriculture GDP pc regional growth rate Real commodity price index: energy

14 Per cents SSA's lack of industrialization 6 Sub-Saharan Africa: Sector shares of GDP, (arithmetic means across countries) Agriculture Industry (excl. Manuf.) Manufacturing Services Year 14

15 Commodity exports as a long-run development engine for SSA countries? Commodity prices will not increase forever Fast population growth will make it difficult to rely exclusively on commodity rents In terms of GDP per capita In terms of employment Imperative need to diversify activity but how? Trade with developed and emerging countries Regional integration within custom unions 15

16 GDP growth does not always imply (immediate) poverty reduction Poverty headcount 7 1 Poverty headcount GDP per capita (PPP $, 25) GDP per capita (PPP $, 25) UGANDA 1 NIGERIA

17 3) Global and national policies for inclusion Global level International 'redistribution' from rich and emerging to the poorest countries: Official Development Assistance Cutting trade restrictions (along AGOA lines for more products) Helping regional integration within custom unions (limitations of EPAs) Encouraging capital flows (FDI) outside extractive industries Investing in region-specific technological progress (agriculture, health) 17

18 Promoting inclusion at national level Global forces towards more inequality within nations unlikely to disappear Inclusive global growth requires containing inequality within countries, including fast-growing emerging countries where very much global poverty still concentrates Growth is not necessarily inclusive (doubts about the Kuznets- Lewis model) Pro-poor growth strategies: macro level (trade, subsidized credit to specific sectors, infrastructure policy, etc.. or micro level 18

19 The key role of redistribution policies Equalizing opportunities enhances both inclusion and economic efficiency: Human capital policies (Education, health care, social protection..) Taxing bequests Fighting discrimination Taxation: Needed to finance growth and opportunity equalizing policies Make it as progressive as possible in view of potential disincentives Broad scope for progressive taxation in emerging countries as financial development makes it easier to monitor individual incomes 19

20 Some implications for the post-215 agenda In retrospect, the MDG agenda has promoted: Global inclusiveness through enhanced ODA National inclusiveness by promoting anti-poverty goals and opportunity equalizing expenditures ( education, health) The MDG initiative has been reasonably successful, but: Many countries still lag behind the goals despite the acceleration of growth in developing countries Achievement of quantitative goals often hide qualitative weaknesses (education, health) Most importantly, many of the constraints on inclusive global growth analyzed above are simply absent from the MDGs (inequality, employment, trade, FDIs, ) An increasing number of developing countries will graduate from development assistance and the MDG framework 2

21 Some features of a post-215 agenda No reason to stop the pursuit of the MDGs where they will not have been reached Be more ambitious in terms of poverty (from 1.25 $ to 2 $) and other goals (e.g. secondary education) Include qualitative elements in the evaluation of the goals Expand the dimensions of the whole strategy: By monitoring other aspects of development within developing countries (inequality, employment, infrastructure, governance) By including other instruments than aid in development assistance (trade in particular), possibly within a policy development coherence framework By including emerging countries with the development assistance system These are not new 'goals' but a more complete framework to monitor inclusive global growth. Do we need more? 21

22 Thank you 22