The Economic Analysis

Most countries have achieved the landmark UN Millennium Development Goals (MDGs).World leaders agreed on these goals 15 years ago in order to tackle poverty and climate change and to pave the way towards a more gender equal global society.

The new Sustainable Development Goals (SDGs) have been accepted by the world as the way forward to resolve the world’s most pressing issues by 2030. Achieving growth with equity and all inclusive growth are among the foremost goals that pose serious challenges to achieving globally and in Sri Lanka.

Gamani Corea foundation lecture

Sir Richard Jolly, former Deputy Executive Director of UNICEF, Special Adviser to the Administrator of the United Nations Development Programme (1996 to 2000) and Principal Coordinator of the widely-acclaimed Human Development Report addressed issues regarding the MDGs and SDGs in his Gamani Corea foundation lecture on “Development: Can Sri Lanka be a model for implementing the SDGs?” on September 28 at the BMICH.

MDGs

There was significant progress in meeting the MDG targets. Global poverty was halved; ninety per cent of children in developing countries now enjoy primary education; the number of people lacking access to improved drinking water has halved; and the fight against malaria and tuberculosis has shown significant results.

Nonetheless, numerous challenges persist. About 73 million young people in the world are looking for work and many more are trapped in exploitative jobs. As many as two and a half million more children in affluent countries fell into poverty in recent years, bringing the total number of poverty stricken children above 76 million.

Furthermore an estimated 805 million people worldwide are chronically undernourished. Since many persons with disabilities live in absolute poverty, these two large populations overlap to a considerable extent, making food security of utmost importance.

Momentous shift

Richard Jolly said that the momentous shift was that while the MDGs had established an initial consensus on what the development goals for the 21st century should be, the SDGs remained fundamentally and strategically different. The SDGs are expanding the MDGs and reframing the agendas and policies for the next decade and a half. The SDGs are universal. “Instead of the North speaking to the South, we’re now really recognizing that all countries need to take action for all peoples”.

He stressed that the North and the South have similar problems. They must learn from each other. Most important is the fundamental shift of the SDGs to integrate sustainability and climate change into the goals.

Development strategies

Professor Jolly advocated development strategies that did not enhance income inequality. He suggested that development strategies should not try to achieve high growth and distribute the gains more equitably, but adopt growth strategies that ensure growth with income equality.

The goal of the SDGs is to achieve more equitable growth: Growth with equity. He stressed that Sri Lanka has the potential to produce a model of sustainable development in which a high quality of life can be achieved without pursuing the goals of ever-increasing consumption and growth. He inquired whether it would be possible to base the country’s economic growth strategy on Buddhist values.

Sri Lanka’s HDI

Sir Richard highlighted Sri Lanka’s achievement of the MDGs well ahead of time and the country’s high placement on the Human Development Index (HDI) that was much above some countries, such as Turkey that had much higher per capita incomes. He pointed out that the country’s early social policies had much to do with these achievements.

Serious challenges

Despite these achievements he said Sri Lanka had serious challenges ahead in meeting the SDG goals of inclusive growth and income equity. Peaceful conditions, harmony among the diverse communities and religions and the garnering of adequate revenue to invest in education and health were preconditions for achieving the SDGs.

Quoting Mick Moore’s study on taxation, he said, Sri Lanka held the world record for the steepest decline in government revenue. Much more than the current 13 per cent of GDP is required to adequately fund education and health that are key drivers of human development.

Inequality

Sir Richard pointed out that one of the important problems the world over both in the North and the South was the growing inequality of incomes. In Sri Lanka too the increase in per capita incomes has been accompanied by the Gini coefficient, which measures inequality, showing higher income inequality.

There were however countries in Latin America that have succeeded in reducing their historic high inequality, unlike most other countries in the world where inequality of incomes has increased in tandem with economic growth. This lessening of inequality in Latin America that is a reversal in their long term trend was an achievement worth emulating.

Inclusive growth

Sri Lanka faces the momentous challenge of inclusive growth after a near thirty years civil war. How all communities are brought together in a united country would be a serious challenge. His understanding was that the government was making a steadfast effort to achieve unity among all communities and enable growth and development among all communities.

The second challenge is in finding the fiscal space to promote growth. The current revenue of about 13 per cent was quite inadequate to pursue economic policies that ensure growth with equity. Expenditure on health and education and other social services especially caring for the country’s growing number of elderly is vital. Financing these require a much higher revenue collection.

Research agenda

Professor Jolly, who was the second Director of the Institute of Development Studies of the University of Sussex was here at the invitation of the Gamani Corea Foundation. He briefly reviewed the research agenda of the Foundation, endorsing its main thrust. He said that the elements of the research agenda of the Foundation to understand the critical human development issues and develop an economic strategy that enhances human development with economic growth and equity was in the right direction. It was in conformity with Dr. Gamani Corea’s vision of global development: development with equity.