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MDG
8 - Report
of the UN SG National and International
Cooperation for Social Development
Introduction
The
Forty-first session of ECOSOC's Commission for Social Development
held at UN Headquarters NY in February 10-21, 2003 presented a
report of Secretary General, as a follow-up to the World Summit
for SOcial Development and the twenty-fourth special session of
the General Assembly on the priority theme: national and international
cooperation for social development.
The document below is a very good source of knowledge
and reflection in preparation for discussion of the MDG 8: Develop
a Global Partnership for Development.
We
would like to highlight the point II, item B, paragraph
nº 10 which is of vital importance in the context
of our discussions.
II.
Sharing of experiences and practices in social development
B.
Capacity-building
10. In
addition to encompassing physical infrastructure such as transportation,
communications, water supply and sanitation, housing and environmental
protection, capacity-building also addresses the capacity
of social institutions, including: the family and wider
social networks; the provision of services, such as education
and health care; and the legal system and public administration.
Changing values and norms, including a strong commitment to human
rights and gender equality, are also dependent on capacity-building.
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National
and international cooperation for social development
Report
of the Secretary-General..-
E/CN.5/2003/5
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Summary
The
present report has been prepared in response to Economic
and Social Council decision 2002/237, in which the Council
adopted the agenda of the Commission for Social Development
for its forty-first session and identified its priority
theme: National and international cooperation for social
development. The priority theme includes five sub-themes:
(a) sharing of experiences and practices in social development;
(b) forging partnerships for social development; (c) social
responsibility of the private sector; (d) impact of employment
strategies on social development; and (e) policies and
role of international financial institutions and their
effect on national social development strategies.
The
report provides an analysis of these sub-themes and includes
such issues as capacity-building for social development,
priority-setting and financing, information and evaluation,
lessons learned from recent experiences with social development
partnerships and approaches to the social responsibility
of the private sector. It also covers impact of employment
strategies on social development as well as providing
a critical appraisal of the activities and impact of international
financial institutions on national social development
strategies.
The
Commission’s attention is particularly drawn to
the policy recommendations contained in the present report,
which address various issues of concern at both the national
and international levels.
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Contents
I.
Introduction
II. Sharing of experiences and practices
in social development
...A. Framework of
cooperation
...B.
Capacity-building
...C.
Information and evaluation
...D.
Priority-setting and financing
...E.
Official cooperation for development
III. Forging partnerships for social development
...A. What is partnership?
...B. Partnerships
for social development at the domestic level: the public sector,
civil society and
...the private
sector
... ...1.
The public sector
... ...2.
Civil society
... ...3.
The private sector
...C. Partnerships
at the international level
... ...1.
United Nations partnerships
... ...2.
Towards transnational policy for social development: State to
State partnerships
...D. Practical aspects
of forming effective partnership
... ...1.
Some principles for successful partnerships
... ...2.
Lessons learned from recent experiences with social development
partnerships
...E. Caveats
IV. Social responsibility of the private
sector
...A. Approaches to
the social responsibility of the private sector
...B. Social responsibility
of the private sector and developing countries
...C. Socially responsible
investing
...D. The role of government
V. Impact of employment strategies on social
development
VI. Policies and role of the international
financial institutions and their effect on national social development
strategies
...A. Evolution of
the role of the international financial institutions
...B. Poverty reduction
strategy papers
VII. Policy recommendations
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I.
Introduction
1. The priority theme for the forty-first session of the Commission
for Social Development, National and international cooperation
for social development, was adopted by the Commission at its thirty-ninth
session (February 2001) as part of its multi-year programme of
work for 2002-2006.1 The priority theme includes five sub-themes:
(a) sharing of experiences and practices in social development;
(b) forging partnerships for social development; (c) social responsibility
of the private sector; (d) impact of employment strategies on
social development; and (e) policies and role of international
financial institutions and their effect on national
social development strategies. The present report is submitted
pursuant to Economic and Social Council decision 2002/237 of 24
July 2002, by which the Council adopted the agenda of the Commission
for Social Development for its forty-first session, including
the above priority theme and sub-themes.²
2. In exploring the various dimensions of the priority theme,
the Secretariat organized two expert group meetings. The first
meeting, which was held from 12 to 14 June 2002 in Havana, covered
“Sharing of experiences and practices in social development”.
The second meeting, which took place in Copenhagen, from 26 to
29 June 2002, addressed the themes, “Forging partnerships
for social development” and “The social responsibility
of the private sector”. Experts, who were invited in their
personal capacity, were not only requested to discuss the issues
at hand but, more importantly, to put forward recommendations
for consideration by the Commission for Social Development. This
report draws to a considerable extent on
the final outcome documents of those expert group meetings.
3. The crucial role of international cooperation in solving international
problems of an economic, social, cultural or humanitarian character
and in promoting and encouraging respect for human rights and
fundamental freedoms for all without distinction as to race, gender,
language, or religion is enshrined in the Charter of the United
Nations. In a broad political sense, it is one of the main purposes
of the Organization. The Copenhagen Declaration on Social Development,
which was adopted at the World Summit for Social Development in
1995,6 re-committed Governments to an improved and strengthened
framework for international, regional and subregional cooperation
for social development, in a spirit of partnership, through the
United Nations and other multilateral institutions. In the same
vein, the Millennium Declaration underscored a collective responsibility
to uphold the principles of human dignity, equality and equity
at the global level and a shared responsibility of Member States
for managing worldwide economic and social development.7 The priority
theme for the forty-first session of the Commission is thus a
further extension of the long-standing interest of the international
community in national and international cooperation for development.
4. The present report, in particular the discussion of the five
sub-themes, is organized along the structure approved by the Commission
for Social Development. The discussion of each sub-theme provides
a distinct dimension of national and international cooperation
for social development. At the same time, each sub-theme is quite
broad in and of itself, and not necessarily directly connected
to the others. With this in mind, every effort has been made to
present the main issues in a logical and succinct manner. The
Commission’s attention is drawn, in particular, to the report’s
policy recommendations, which address various issues of concern
at the national and international level.
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II.
Sharing of experiences and practices in social development
A.
Framework of cooperation
5. For
the purposes of the present report, cooperation involves collective
and collaborative efforts at the national and international
levels among partners/stakeholders for the realization of their
agreed social development objectives. In the face of deep-rooted
problems, including poverty, unemployment and social
exclusion, as well as many other social challenges, significant
joint actions are clearly needed.
6. At
both national and international levels, there are differences
in the approach of Governments and other stakeholders to agendas
and modalities of cooperative efforts in the social field, and
there are often substantial differences in expectations regarding
such cooperation, especially at the national level. Practices
of, and participation in, decision-making among the partners
may also take different forms, from consultation and information
sharing to actual control of resources directed at the problems.
Interaction, reciprocity and mutual influence among the partners
are crucial elements of effective cooperation at all stages,
from the framing of problems to the setting of objectives, or
the implementation of a project or a policy. When partners are
unequal, such mutuality will, however, be elusive. When the
strategy of cooperation is well conceived, properly implemented
and managed, and is based on mutual respect, transparency and
realism, it enhances the chances of successful results. It also
contributes to building trust among partners, thus facilitating
the achievement of agreed objectives.
7. National
public policy frameworks vary, reflecting as they do a mixture
of goals and means. They are influenced by such factors as the
private-public mix in the administration, provision and funding
of social programmes and services, community participation and
ownership and attention to the principles of universality, solidarity,
equity and efficiency. Attention to these matters often determines
the relative importance of social ministries in the national
governance structure. Approaches differ along a continuum that
ranges from free market “fundamentalism” and trickle-down
distribution, to full government responsibility for the provision
of social services. Governments have the flexibility to make
choices along this continuum. It is notable, however, that neither
extreme has proved to be free of inefficiencies and inequities,
and that serious attention to social development often requires
profound institutional reforms as well as considerable upgrading
of operational and administrative aspects of programmes. Capacity-building,
which is especially important in this respect, is a topic to
which the present report will turn (see paras. 10-16 below).
8. At
the international level, the patterns of cooperation and collaboration
include both bilateral and multilateral efforts. Common socio-economic
problems of Member States are dealt with in a variety of ways,
both binding and non-binding. Negotiations resulting in binding
international agreements coexist with the adoption of non-binding
resolutions, declarations and recommendations intended to enhance
various forms of cooperation among countries. Furthermore, the
United Nations promotes the establishment of specific programmes
of assistance to Governments and, by implication, to their peoples
as well as collecting and disseminating information on socio-economic
issues and developments.
9. With
the impact of social development policies and programmes often
taking many years, even decades, to materialize, a considerable
strain is placed on maintaining cooperation and collaboration
at all levels. Furthermore, social development requires not
only multidimensional and integrated approaches, but also consistency
among policies and priorities and adequate financing. Many social
development programmes result in important public goods, including
education, health, security, solidarity and a sense of equity
and justice. The role of government is thus crucial to effective
policy formulation and implementation, oversight and regulation.
The commitment of the State is fundamental to the fulfilment
of the above-mentioned principles of universality and equity.
This also means that Governments should take primary responsibility
for the financing and provision of social services and programmes.
Taking the provision of public goods to its logical conclusion,
it can be argued that social development may be considered a
global public good in itself, with the inescapable corollary
that the international community should be fully committed to
promoting such development everywhere. Viewed this way, donor
Governments, multilateral agencies, development foundations
and other international non-governmental organizations (NGOs)
have a key role in providing financial and non-financial resources
to support the social development agenda of nations and regions,
a view that is, at least implicitly, embodied in the Millennium
development goals, with their international commitment and responsibility
to deliver substantial improvements in the world’s social
agenda, as first spelled out at the World Social Summit in 1995.
B.
Capacity-building
10. In
addition to encompassing physical infrastructure such as transportation,
communications, water supply and sanitation, housing and environmental
protection, capacity-building also addresses the capacity of
social institutions, including: the family and wider social
networks; the provision of services, such as education and health
care; and the legal system and public administration. Changing
values and norms, including a strong commitment to human rights
and gender equality, are also dependent on capacity-building.
11. Furthermore,
strengthening domestic financial institutions and regulatory
agencies and promoting transparency, appropriate supervision,
oversight and accountability in the processes of economic policy-making
and public finance can also help to reduce macroeconomic vulnerability
while securing financing for social development.
12. In
building capacities, the processes involved should be open,
participatory and directly linked to grass-roots experience.
Transparency and the full involvement of stakeholders at all
levels contributes to building an informed citizenry, promoting
a sense of fairness and increasing public acceptance and support,
all of which are prerequisites for effective policies and programmes.
These considerations apply not only to government agencies but
also to national and international NGOs.
13. In
promoting the social components of capacity-building such as
knowledge, skills, institutions and systems of management, policies
and programmes at the national level often focus on two important
objectives of development: education and justice. Improving
opportunities and raising the level of educational
performance, often seen as a gateway to future economic prosperity,
requires fostering broad-based participation in scientific and
technological transformations and in the benefits they bring.
It also requires constitutional structures and governance that
guarantee fundamental rights and freedoms.
14. Capacity-building
combined with decentralization can considerably enhance transparency
and face-to-face accountability. Many of the best examples of
effective action by citizens in calling their politicians and
public officials to account have taken place at the level of
local government.10 Soliciting citizens’ views on government
services and building local capacity to design and conduct such
programmes, for example, public opinion surveys, have become
instruments of accountability at the local level. National experiences
vividly demonstrate that encouraging more active citizen participation,
bringing citizens into the political arena and making local
governments accountable to those they govern not only enhances
national capacity to deal with social issues but also brings
desired empowerment to women and minorities. Programmes aimed
at promoting democratization at the local level have often struck
a sympathetic chord with the donor community, leading to increased
funding.
15. Because
capacity-building is increasingly seen as key to development,
it has become one of the fundamental pursuits of the United
Nations system’s operational activities. It has evolved
significantly over time and continues to do so, especially with
the adoption of the Millennium Declaration, which implies that
all countries should have, or should acquire, the capacity to
achieve the development goals contained in it.
16. It
is clear that the role of Government in social development is
crucial. Each country must design its own policies to develop
on the basis of its own unique circumstances. It is also clear,
however, that countries where the chances of lasting social
development are best are those that strive to create a democratic
society with broad popular participation, fulfil human rights,
pursue economic policies to reduce poverty and have sufficient
capacity to implement such policies.
C.
Information and evaluation
17. Adequate,
timely and accurate information is essential for the formulation
of meaningful policies and effective programme management. Quality
information assists not only in identifying and testing alternative
approaches but in evaluating the suitability of policies and
their effectiveness and efficiency in programme implementation.
Information and evaluation also provide a foundation for accountability.
Regular feedback from programme operations can guide directions
for change.
18. The
utility of information is a function of its fairness, objectivity
and independence. Those groups of the population most affected
by the impact of policies and programmes should be engaged in
their evaluation. Carefully designed quantitative and qualitative
surveys of statistically adequate samples and participatory
processes are preferable to relying on the observations of officials
in charge and conversations with selected beneficiaries. Scientifically
designed and conducted surveys are more costly, but far more
reliable and useful. Making the results of these evaluations
public contributes greatly to transparency and public trust.
19. Commitments
by Governments to specific targets and goals and a willingness
to publicly disclose progress towards achieving them is becoming
increasingly common at the national level, despite the associated
political risks. From the citizen’s point of view, such
a strategy provides a framework both for calling Governments
to account and for judging whether the entitlements being offered
are legitimate and acceptable.
D.
Priority-setting and financing
20. While
cooperation, capacity-building and information and evaluation
are all necessary conditions for successful social development,
the many dimensions of social development also require sustained
and adequate financing. In the face of perennial resource constraints,
particularly in developing countries, priorities should be carefully
set.
21. Setting
priorities for social development implies joint consideration
of policies affecting economic opportunities, investment in
human capital and social protection schemes. This requires close
coordination and cooperation among the finance and social ministries
(including social security, labour, health and education). Once
the importance of integrated approaches to economic and social
policy is recognized, priority-setting by policy makers will
become more informed. Such an approach will lead to a paradigm
change, from a “sequential” (or so-called “growth-first”)
model of development to a “synergistic” one, in
which socio-economic development is seen as both a means and
an end rather than as a by-product or outcome of the attainment
of certain economic goals.
22. Priority-setting
should not overlook broader goals of empowerment of partners
and participatory collaboration, including involvement of groups
most affected by proposed policies, projects or schemes. Gender
mainstreaming must be taken into account in any type of collaboration.
The need to sequence and time programmes as well as to balance
the interests of various segments of the population and different
generations is especially important in priority-setting for
social development.
23. The
importance of sustained and adequate financing for social development
cannot be overemphasized. Whether such financing should primarily
occur at the national level or be decentralized is open to debate.
Whatever financing mechanisms are chosen, they should ensure
the provision of services as well as fiscal coherence while
maintaining macroeconomic balance. If decentralized governance
is considered desirable, it is important that the transfer of
concomitant mandates be fully financed at each stage in the
process and that local governments should simultaneously seek
to increase their fiscal revenues from local resources. In general,
a suitable regulatory and supervisory framework has to be developed
within a decentralized structure encompassing the central, intermediate
and local levels. It is also important that centralized and
decentralized offices avoid overlap or competition for power
or authority.
24. The
social services financing is often threatened by economic and
financial instability, which should and can be reduced by adopting
prudent macroeconomic policies and establishing an effective
system of information and economic analysis. Overcoming economic
and financial instability, and the structural adjustment measures
this often requires, can, however, have severe adverse implications
for the financing of social sectors. Thus, policy makers are
confronted with a conundrum in which instability negatively
affects social services financing and overcoming such instability
does not necessarily lead to an improvement in such financing.
A World Bank working paper examining the experience of Argentina
in the 1980s and 1990s shows that although pro-poor social spending
is especially needed during times of fiscal austerity, the actual
budget cuts fell particularly hard on social spending targeted
at the poor. It is thus important for policy makers to safeguard
social spending in general and spending targeted at the poor
in particular during periods of economic downturn and fiscal
retrenchment. This emphasis does not preclude pursuing sound
macroeconomic policies, including achieving lower inflation
targets.
25. Besides
public finance, there are examples of innovative financing for
social development, particularly in private financial markets.
These range from the development of microcredit facilities to
the introduction of increasingly sophisticated financial instruments
and markets. Although not a panacea, the success of microcredit
regimes in many developing countries in reducing poverty, promoting
education and health programmes and creating economic opportunities
for women is well recognized.
E.
Official cooperation for development
26. Poverty
eradication has been the core theme of the major United Nations
conferences and summit meetings convened during the past decade.
Combating poverty has become one of the major declared priorities
of the donor community, often entailing internal reorganization
and changes in methods of delivering
assistance. The growing importance of the “social component”
in the overall distribution of development assistance has been
demonstrated by the increasing share of aid directed towards
social services (14 per cent of official development assistance
in 2000 compared to 8 per cent in 1990).14 At the same time,
drawing a line between “economic” and “social”
goals is often unrealistic, as the “social” goals
are an integral part of development efforts such as rural development
or infrastructure building, while the achievement of many “economic”
goals may also bring about better “social” outcomes.
For example, enhanced levels of investment and/or economic growth
as a result of international cooperation is an important factor
in increasing the welfare of a population, including a reduction
of poverty and better provision of social services.
27. While
the primary responsibility for the achievement of the Millennium
development goals lies with the Governments of developing countries
and the bulk of resources will come from their budgets, in many
low-income countries the narrow resource base is unlikely to
permit the achievement of these goals without additional external
resources. The attainment of the goals requires universal access
to social services such as basic health care and education,
reproductive health and safe drinking water and sanitation,
access which has been sorely missing in many developing countries.
Official development assistance will be an important source
in supplementing the lack of domestic resources.
28. While
official development assistance represents only one element
of a much broader international cooperation effort, the mobilization
of resources for social development through this mechanism has
been an important part of international cooperation. Overall,
striving for the fulfilment of the agreed donor target of 0.7
per cent of gross national product for official development
assistance, and increasing the share of funding for social development
programmes commensurate with the scope and scale of activities
required to achieve the internationally agreed upon development
goals has been an important objective of the international community.
However, despite the renewed commitment of the donor countries
to meet the agreed target, official development assistance has
continued to decline. In 2001, official development assistance
from the member countries of the Development Assistance Committee
of the Organisation for Economic Cooperation and Development
(OECD) declined again to $51.4 billion from $53.7 in 2000. In
March 2002, however, prospects for reversing that decline improved
following the holding of the International Conference on Financing
for Development in Monterrey, Mexico, where some major donors
(United States of America, European Union and Canada, among
the others) pledged substantial increases in official development
assistance to developing countries.
29. It
has been widely recognized that mobilization of additional resources
is required to bridge the gap between current levels of official
development assistance and the estimated funding needed to achieve
the Millennium development goals. The scale of donor assistance
to specific social sectors in recipient countries
inevitably varies, reflecting numerous trade-offs and different
priorities of partners. One good example of the magnitude of
the current funding problem, against the background of the existing
needs, is official development assistance for health and population
programmes in developing countries: at the end of the 1990s,
donor assistance averaged $2.55 billion per year (or just 0.01
per cent of donor GNP), while the desirable level was estimated
to be at least $27 billion per year. Even if this hypothetical
increase materializes by 2007, as proposed by the Commission
on Macroeconomics and Health, the total bilateral flows in this
area would amount to only 0.1 per cent of the GNP at the respective
donors, or one penny for every $10 of donor GNP compared to
one penny for every $100 of donor GNP now.
30. The
case for development assistance rests, in the broadest sense,
on grounds of morality, politics and self-interest. Moral and
ethical considerations are often used to make a case for both
corrective and distributive justice through international cooperation.
The rectification of past wrongs coexists with calls for the
redistribution of wealth or income according to criteria of
either need or merit. The assumption is that international or
national economic interdependence creates benefits and costs
that are unevenly distributed, calling for corrective action.
Humanitarian or charitable considerations are particularly important
in development cooperation in the face of various crises where
human life is at risk.
31. The
rights-based approach to development can be seen not only as
a moral but also as a political justification for international
cooperation. People throughout the world are seen to have certain
inalienable rights and Governments have an obligation to facilitate
the enjoyment of these rights and to work towards the
creation of appropriate domestic and international environments
and conditions that will lead to their realization. In this
view, there is a simultaneous relationship between development
and human rights: lack of development is a denial of human rights,
but lack of human rights makes it very difficult for development
to take place.
32. In
addition to moral and political reasons, there are numerous
economic arguments underpinning the need for international development
cooperation. In an increasingly integrated world economy, and
in the face of numerous cross-border challenges, the provision
of “global public goods” is vital for the achievement
of positive outcomes, including the reduction of negative external
factors. Some challenges, including environmental degradation,
drug trafficking and the spread of diseases such as HIV/AIDS,
have become global in nature. The cooperation of all interested/affected
parties in addressing these challenges is indispensable for
the achievement of immediate results, as well as for the maintenance
of global stability and peace. Furthermore, some temporarily
localized threats (e.g., a looming food crisis or ongoing conflicts
at the local/regional level) may have the potential to “spill
over” and affect other countries. Under such conditions,
cooperation at both the national and international level becomes
a factor of paramount importance for mutual social and economic
well-being.
33. The
case for national and international cooperation is also supported
by considerations of self-interest. In the final analysis, nations
pursue policies in their own interest, especially in such areas
as efficiency of resource allocation. Pursuing such self-interest
does not necessarily lead to a zero-sum game. For example, there
are many areas where international cooperation leads to a more
efficient allocation of global resources or to the expansion
of the global market. This has advantages for all countries,
as higher levels of economic growth and per capita income increase
demand for goods and services, creating a “virtuous circle”
in the long run.
34. In
view of the various arguments above, it is not surprising that
the task of making official development assistance a more effective
instrument for the improvement of human well-being has long
been on the agenda of national aid agencies. Many of these institutions,
responding to calls from domestic constituents to increase the
effectiveness of assistance and facing reappraisal of their
mandates, have widened the scope of their operations from macroeconomic
stability and/or economic growth to areas such as employment
promotion, poverty reduction, gender equality and good governance.
Mutual responsibility of donors and recipients has
become an integral part of aid provision. While efficient utilization
of official development assistance by recipient countries is
seen as essential by the donors, it is also recognized that
donors should pursue consistent and coherent policies, especially
in the areas of trade and aid. Competent delivery of assistance
is as important as competent use of such aid. Consequently,
the main challenge faced by donors is not simply selecting countries
that should receive their aid, but rather to select those who,
within the recipient countries, should receive aid, and what
policy objectives the donors should support.
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III.
Forging partnerships for social development
A. What is a partnership?
35. Increasingly, partnerships among various actors are part of
national and international cooperation for social development.
As a result of the rising popularity of partnerships, there has
been a tendency to use the concept fairly loosely to refer to
almost any type of cooperation or collaborative relationship between
all kinds of actors. To address this imprecision, various organizations
have developed definitions of partnerships. For example, a partnership
between the United Nations and non-State actors has been defined
as:
… a voluntary and collaborative agreement between
one or more parts of the United Nations system and non-State
actors, in which all participants agree to work together to
achieve a common purpose or undertake a specific task and to
share risks, responsibilities, resources, competencies and benefits.
Partnerships between or among Governments, the private sector,
civil society and international organizations can be defined in
a similar way.
36.
The key features of such definitions often include aspects such
as mutual dependency in sharing risks, responsibilities, resources,
competencies and benefits; working together under a shared process
of decision-making and joint problemsolving; voluntary partnership
formation based on choice, not on regulation or coercion; joining
of forces where the sum of the results of the partners working
together is greater than the sum of the partners working individually;
and sharing competencies and resources.
37. Social partnerships can take on different forms at different
times. However, successful partnerships for social development,
at any level, have a minimum number of “musts”. These
usually include answering basic questions such as: What is the
advantage of forming a partnership compared to other mechanisms,
such as contracting, purchasing or public sector provision?; Who
is the target group and who are the partners?; Why is the partnership
being formed?; What is the purpose of the partnership and what
are its priority objectives?; What is expected of each partner,
and what does each partner expect to get out of the partnership?;
How will the partnership activity be carried out?; Is it working?
Making the partnership work often requires strong leadership,
positive interorganizational dynamics and effective conflict management
skills.
B. Partnerships for social development
at the domestic level: the public sector, civil society and the
private sector
1. The public sector
38. Owing to increasing recognition that centralized social policy
and programmes are not always optimal, Governments have decentralized
and “de-bureaucratized” many public sector programmes
and have begun to look for partners in these fields. In cases
where Governments are democratic, corruption-free and transparent,
a foundation is in place for building successful partnerships.
Without these fundamental characteristics, successful public sector
partnerships with other actors in social development are less
likely.
39. Although acting alone is increasingly seen as a non-viable
option, the public sector remains of vital importance in promoting
innovations in social policies and programmes, which it can bring
about by providing seed money and by stimulating and supporting
social research and pilot projects. Public sector partnerships
with civil society and the private sector can play an important
role in these innovations. Like successful business enterprises,
successful Governments invest in new ideas and technologies. In
the area of social development, in most countries only the public
sector has the resources, the wherewithal and the commitment to
carry out initiatives on a large scale.
2. Civil society
40. The most common form of partnership in social development
has been between the public sector and civil society, especially
the public funding of NGOs. Through a wide range of projects,
public funding goes to civil society for implementation and management
of social programmes and community development projects. With
50 per cent or more of the resources at the disposal of civil
society currently coming from public budgets in many countries,
public sector and civil society partnerships are likely to remain
the most important form of social development partnership for
the foreseeable future.
41. Because of its interests, commitment, local knowledge and
creativity, civil society is often a fount of social innovation
and can be seen as taking on a role of “social entrepreneur”,
thereby making this sector extremely valuable for advancing social
development. Civil society often looks for ways to engage the
public and private sectors in expanding innovations to a larger
scale.
42. Civil society varies greatly in scope and influence from country
to country. Strengths of civil society include local legitimacy,
responsiveness to local conditions and flexibility. Weaknesses
may include limited resources and lack of harmonized or professional
standards. The civil society sector can by itself be very effective
in small, local projects, but not necessarily in large projects
because it often lacks large independent resources. Thus, civil
society organizations typically seek partnerships with Governments
and the private sector to obtain those resources.
3.
The private sector
43. Compared to partnerships between the public sector and civil
society and with the exception of the important partnerships between
the private sector and trade unions, social development partnerships
between the private and public sectors or with civil society entities
have been, by and large, less common, smaller in scope and of
shorter duration. The private sector is still very poorly represented
in partnerships for social development for several reasons, including
lack of information, poor recognition of the importance of its
role as a partner and doubts, mainly from the social sector side,
as to the added value of networking with the private sector. While
interest and experience in partnerships with the private sector
have grown substantially, there is still a lack of analysis of
the opportunities and risks involved.
44. In general, partnerships with the private sector have involved
donations and engagement in particular projects rather than sustained
engagement and long-term commitment. A typical corporation spends
only a very small fraction of its profits on community projects
and philanthropy. While such spending is not unimportant, to date
the total resources committed have been limited. Since the first
responsibility of business is to generate profits for its owners
and investors, it is unrealistic to expect the private sector
donations to replace the resources or activities of the public
sector and civil society to any large extent.
45. There is nonetheless a vast and untapped potential for social
development partnerships with the private sector, and ways to
create more partnerships are being explored, including by the
private sector itself. To promote social development partnerships
with the private sector, and to tap its strength, the public sector
may use a number of possible tools, including norms, laws and
regulations, financial incentives and targeted spending.
46. The private sector can engage in social partnerships through
the provision of goods and services directly related to social
development, such as housing, financial development and services,
health, education and training and environmental protection. Many
social development projects are small-scale and are struggling
for financial support. In opening up social development to more
investment from the private sector, a large potential may be tapped,
allowing businesses to respond to existing markets and to achieve
gains by scaling-up.
47. There are, however, considerable risks involved in introducing
market mechanisms in areas such as health, education and training,
especially with respect to goals of equity, quality and cost containment.
Since the aims of the public and private sectors are usually quite
different, the public sector needs to analyse the
costs and benefits of such partnerships in the wider context of
public interest, public social goals and the integrity of public
policy and the public sector. The advantages and disadvantages
of engaging in partnerships with the private sector, including
the safeguards needed to ensure public sector integrity, should
be compared to other mechanisms, including contracting, purchasing
and public sector provision.
C. Partnerships at the international
level
1. United Nations partnerships
48. The United Nations has been engaged in exploring and initiating
partnerships, in particular with the private sector. The United
Nations Fund for International Partnerships (UNFIP), set up in
1998 as the operational arm of the Secretary-General’s partnership
with the United Nations Foundation (UNF), a public charity responsible
for administering Robert E. Turner’s $1 billion contribution
in support of United Nations causes, is a pertinent example.28
The mission of UNFIP comprises two major tasks: to serve as the
interface between the United Nations Foundation and the United
Nations system; and to promote new United Nations partnerships
and alliances with a variety of sources, including companies and
foundations, as well as bilateral and multilateral donors, in
furtherance of the Millennium development goals. The Foundation
and the Fund support projects in four priority areas: children’s
health; population and women; the environment; and peace security
and human rights. As of December 2001, both the Fund and the Foundation
have allocated over $420 million for a total of 223 projects distributed
in 124 countries and implemented by more than 30 United Nations
entities.
49. Another example of a recent United Nations partnership is
the Information and Communication Technologies Task Force, established
by the Secretary-General in November 2001 in response to a request
by the Economic and Social Council. The purpose of the Task Force
is to provide leadership in formulating strategies for the development
of information and communications technologies at the service
of development with the aim of bridging the digital divide. The
Task Force is a strategic partnership between the United Nations
system, private industry and financing trusts and foundations,
donors, programme countries and other relevant stakeholders in
accordance with relevant United Nations resolutions. The Task
Force is the first body created by an intergovernmental decision
of the United Nations, by means of a Ministerial Declaration of
the Economic and Social Council in July 2000,29 in which all members,
representing Governments, the private sector, civil society (including
not-for-profit foundations, NGOs and academia) and organizations
of the United Nations system, have equal decision-making power.
2. Towards transnational policy
for social development: State to State partnerships
50. Until recently, the pursuit of social policies has been almost
exclusively national. However, the European Union, perhaps more
than any other grouping, has begun to wrestle with the enormous
challenges of integrating social protection and provision among
nation States.
51. In addition to the long-standing endeavours in the European
Union, one prominent example of a recent partnership among Governments
is the New Partnership for Africa’s Development (NEPAD),
which was adopted by the Assembly of Heads of State and Government
of the Organization of African Unity (OAU) meeting in July 2001
and launched one year later. This is an African-led, -owned and
-managed partnership initiative among African Governments, which
sets out a continent-wide development programme, including several
provisions for social development. The stated long-term objectives
of the New Partnership are to: “eradicate poverty in
Africa and to place African countries, both individually and collectively,
on a path of sustainable growth and development and thus halt
the marginalization of Africa in the globalization process”;
and to “promote the role of women in all activities”.
Through NEPAD, African government leaders have agreed to take
joint responsibility, inter alia, for: strengthening mechanisms
for conflict prevention, management and resolution; promoting
and protecting democracy and human rights; restoring and maintaining
macroeconomic stability; as well as taking action to strengthen
legal frameworks and working to achieve the international development
goals. NEPAD recognizes that there have been past attempts to
set out continent-wide development programmes that have been less
than successful, but it also argues that today there is a new
set of circumstances conducive to integrated practical implementation,
a key feature of which is Africa’s willingness to be the
lead agent in its own transformation rather than the passive object
of concern to the international community.
D. Practical aspects of forming effective
partnership
1. Some principles for successful
partnerships
52. Experience has shown there are some principles that can be
used for forging successful partnerships. These include: finding
a catalyst (someone to initiate and set in motion the process
of partnership); emphasizing areas of convergence or congruence;
making the differences of opinion explicit; decisions, recommendations,
proposals and programmes; and addressing the importance of the
process by which a partnership is formed.
2. Lessons learned from recent experiences
with social development partnerships
53. In many areas and for many organizations, partnerships for
social development are relatively new and evolving. Some lessons
can be learned even at this early stage of recently forged partnerships.
At the time of writing the present report, the following six lessons
stand out.
54. Partnerships challenge the partners to think and interact
in new and different ways. A significant aspect of partnership
is understanding each other and responding creatively to problems
and changes within society in a concerted way. In the most successful
partnerships, the partners agree on how to effectively make use
of their differences in organizational approaches to meet a common
set of objectives. Such partnerships may promote new, unconventional
forms of participation, contribution and sharing of responsibility.
55. Partnership gains may not always be easily quantifiable. While
partners need to agree on how to measure the success of their
partnership, some aspects and gains cannot be easily measured.
When assessing partnerships for social development, it is important
to keep in mind the long-term objectives and desired impacts.
The partnership process can be compared to a business entrepreneur
who fails several times in the short-term, but each time gains
valuable knowledge, using the experience of failure to generate
success. An overall assessment of partnership arrangements should,
therefore, include a long-term view that goes beyond shortterm
financial gains. The potential benefits and costs need to be analysed,
within the time frame involved, in terms of both public interest
and potential societal gains.
56. There is no one-size-fits-all partnership model. Different
socio-economic, cultural and political challenges require different
responses. Partnerships should be flexible enough to take into
account the cultural aspects, needs and desires of the partners
and beneficiaries.
57. Social partnerships can emerge either in response to, or in
anticipation of, social challenges. Many partnerships have arisen
as a consequence of shortcomings or failures in social support
systems. For example, partnership initiatives have emerged to
address local social problems, such as the exclusion of marginalized
groups from the labour market. Others have been undertaken to
ensure that problems of social exclusion do not occur. For example,
partnerships have been created among local governments, NGOs and
the private sector to avoid the emergence of racist attitudes
towards newly arrived immigrants. Others have sought out a potential
new workforce among specific groups in the community who are not
necessarily conventional job seekers. In both cases, these partnerships
introduced prospects for change that went a long way in achieving
desirable outcomes.
58. Partnerships often involve change. Partnerships involve understanding
and reflecting upon the ability to act in accordance with changes
within society and/or organizations, or to catalyse changes to
existing circumstances or conditions deemed unsatisfactory. In
the abstract, partnerships can be thought of as catalysts, arrangements
for experimentation that allow different resources, skills and
ideas to be exchanged among the partners. On a more practical
level, however, such change can be difficult.
59. The institutionalization of partnerships is not a precondition
for their success. Notwithstanding UNFIP, the Global Compact or
the Information and Communication Technologies Task Force, partnerships
do not have to be based upon, or become, formalized institutions
or permanent arrangements in order to be successful. The most
important issue is whether the partnership attains its agreed
upon objectives. Successful partnerships can be temporary and/or
dynamic, with new partners joining and others leaving. As problems
evolve, or as the understanding of the situation deepens, the
focus of partnerships and their implementation may shift accordingly.
Successful partnership activities may or may not be converted
into institutionalized forms of operation.
E. Caveats
60. Partnerships for social development present many opportunities.
They allow different sectors of society to have access to the
comparative advantages of their partners. But partnerships are
not a “master key”, opening any door and providing
solutions to all challenges. Nor should they be considered a replacement
for
multilateral efforts in social development. Successful partnerships
require: a detailed understanding of mutual expectations; resources;
organizational structure; and an agreed upon distribution of power
and responsibility. A number of caveats should be borne in mind.
61. One important caveat is the legal and constitutional aspect
of close or informal relations between the public and private
sectors, particularly in terms of public regulation. Special consideration
must be given to how a partnership may affect the public sector
regulatory framework and the enforcement by the public sector
of regulations governing the private sector. It is also important
that public scrutiny, transparency and accountability be maintained
in public/private partnership arrangements.
62. Another caveat is that partnerships often exact large costs
in time and energy, otherwise known as high transaction costs.
Productive partnerships require a shared process of design and
decision-making, which is often time-consuming. Given the importance
and desirability of forging partnerships in a transparent and
democratic manner, high transaction costs are often unavoidable.
As it is not feasible for entities to engage in every possible
partnership, when engaging with potential partners, decisions
must be taken with respect to benefits and costs, short-term versus
longterm implications and potential impact on social development.
63. In addition, there is the caveat that not all of the partners
have equal power and influence. There are the dangers for civil
society organizations in losing autonomy by being controlled or
bought off by the public sector or by a private sector company,
whereby independent organizations can become quasi-governmental
or serve business interests. If this occurs, they may represent
local interests less successfully and play less of an advocacy
role.
64. Finally, there is the caveat that, as new social development
partnerships emerge, the partnerships between government and the
private sector should not necessarily imply privatization. The
sometimes difficult processes that have accompanied privatization
policies in recent years have often not resulted in increased
levels of social development. While the private sector has a vital
role to play in invigorating economies, privatization without
due care for social imperatives can have a negative impact on
social services, particularly for poor people. Clearly, the private
sector cannot be expected to replace other key actors in social
development, most notably the State. Each sector brings unique
strengths that, in combination, can lead to creative and effective
strategies.
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IV.
Social responsibility of the private sector
65. The
private sector has been approached for its cooperation in promoting
and implementing measures for social development. Concerns surrounding
issues such as the impact of the private sector on public policy,
the environment and working conditions in export-related industries
of countries hosting transnational corporations have led to
demands for greater transparency, accountability and acceptance
of responsibility by the private sector. In response, there
is a growing interest within the private sector in contributing
to social development and environmental sustainability. Many
decision makers in the private sector also recognize that the
benefits to their companies of assuming responsibilities in
these areas exceed the costs.
66. National
and international cooperation from the private sector has also
been encouraged and required because of what has been referred
to as government and institutional deficits. This can occur
at the national level because of lack of information as well
as lack of government capacity or resources. It is also argued
that there is a governance deficit at the international level,
as there is no international government to deal with international
problems, but rather a series of conventions, treaties and agreements,
the implementation and regulation of which remain at the national
level. These deficits can make it difficult for Governments
to effectively address existing social problems or to promote
broad-based development.
67. As
a result, the social responsibility borne by the private sector
is now seen as an important element of a more cohesive society
geared to eradicating poverty and combating social exclusion.
A private sector that sees itself as having a broader social
responsibility, whether represented by large companies or by
small and
medium-sized enterprises, can make an important contribution
to social progress and the resolution of social problems.
A.
Approaches to the social responsibility of the private sector
68. Corporate
social responsibility is a widely used concept to describe specific
decision-making policies of the business community that are:
linked to ethical values; in full compliance with existing legal
requirements; and show respect for people and the priorities
of local communities, including environmental protection. This
social responsibility, combined with corporate responsibility
to a range of stakeholders, notably consumers, employees and
their representatives, investors and shareholders, is assessed
in terms of meeting a growing range of standards.
69. Corporate
citizenship entails a similar approach, and is often used interchangeably
with corporate social responsibility, although, it is potentially
wider in scope, implying an active role for private sector entities
as “citizens”, having both rights and responsibilities.
In addition to adopting the business policies and practices
of corporate social responsibility, corporate citizenship is
geared, in particular, to maximizing private sector contributions
to social development without undermining sound business practices.
The concept of corporate citizenship goes beyond focusing on
compliance, responding to external scrutiny or simply minimizing
negative impacts, thereby engaging the private sector in a more
proactive way to actively search out and pursue ways to promote
social development.
70. While
there is a growing awareness of and participation in these approaches
by the private sector, the number of businesses throughout the
world that are fully integrating and implementing them remains
relatively small. Many managers and shareholders have yet to
be convinced that these approaches are more than a question
of corporate image or that fully integrating policies on social
involvement into corporate policies will not hurt profits or
shareholder value. One of the key challenges is to find common
ground between high standards of social responsibility and accountability
on the part of businesses on the one hand, and business
competitiveness and profitability on the other.
71. There
has also been, particularly during the 1990s, a proliferation
of voluntary corporate codes of conduct, ranging from vague
declarations of business principles applicable to their international
operations, to more direct efforts at self-regulation, focusing
on social conditions and the environment. The drafting of these
codes has brought together a wide range of stakeholders likely
to be affected by their adoption. In many cases, implementation
of these codes remains relatively limited. There is also the
risk that these codes may be seen as something more than what
they really are, thus deflecting criticism and reducing the
impetus for external regulation. It is thus particularly important
in the formulation of development strategies to ensure that
codes complement, but do not substitute for, appropriate government
legislation.
72. The
voluntary approach to codes of conduct has evolved in recent
years and has assumed new forms that attempt to overcome some
of the limitations of older codes and other self-regulatory
initiatives. One approach involves the emergence of “multi-stakeholder
initiatives”, whereby NGOs, multilateral and other organizations
encourage companies to participate in schemes that set corporate
social and environmental standards, monitor compliance, promote
social and environmental reporting and auditing, certify good
practice and encourage stakeholder dialogue and an awareness
of social impact.
73. Given
the complexity of multi-stakeholder initiatives in terms of
reporting, auditing, monitoring and certification, other approaches
continue to evolve, such as “complaints-based systems”,
under which there are procedures and institutions to detect
breaches of agreed standards. Such systems can assume numerous
institutional forms involving, for example, judicial procedures,
global collective agreements between companies and trade unions
and NGOs that attempt to “name and shame” companies
responsible for specific abuses. Several multilateral organizations,
such as the World Bank, the International Labour Organization
(ILO), the Organisation for Economic Cooperation and Development
(OECD) and the secretariat of the North American Free Trade
Agreement, have established complaints procedures. In practice,
however, these tend to be rather weak. While there are no complaints-based
procedures within the United Nations system, some have argued
that there may be scope for developing one via the United Nations
human rights machinery.
74. The
United Nations has been involved in the area of the social responsibility
of the private sector in other ways, the most prominent of which
is the United Nations Global Compact. The Global Compact is
a voluntary corporate citizenship initiative based on nine principles
derived from a universal consensus based on the Universal Declaration
of Human Rights, the ILO Declaration on Fundamental Principles
and Rights at Work and the Rio Declaration on Environment and
Development. The nine principles state that businesses should:
(a) support and respect the protection of internationally proclaimed
human rights within their sphere of influence; (b) make sure
that they are not complicit in human rights abuses; (c) uphold
freedom of association and the effective recognition of the
right to collective bargaining; (d) uphold the elimination of
all forms of forced and compulsory labour; (e) uphold the effective
abolition of child labour; (f) eliminate discrimination in respect
of employment and occupation; (g) support a precautionary approach
to environmental challenges; (h) undertake initiatives to promote
greater environmental responsibility; and (i) encourage the
development and diffusion of environmentally friendly technologies.
75. For
a company to be considered a participant in the Global Compact,
it must: (a) send a letter from its chief executive officer
to the Secretary-General expressing support for the Global Compact
and its nine principles; and (b) provide, once a year, a concrete
example of how the company is internalizing one or more of the
nine principles into management practices and policies. Companies
have the added opportunity of participating in a number of initiatives
and programmes sponsored by the Global Compact. While NGOs and
other non-business participants are not required to submit an
example annually, they are asked to participate in other modes
of engagement, including partnership projects and global policy
dialogues. Since its official launch in July 2000, the Global
Compact has evolved into a multistakeholder network composed
of United Nations agencies, the private sector (both companies
and business associations), trade unions, NGOs and academic
institutions.
B.
Social responsibility of the private sector and developing countries
76. Discussions
about private sector social responsibility are often framed
in the context of developed countries or the behaviour of corporations
based in developed countries. Because of this, and because of
the pressing needs of poverty eradication, employment creation
and the delivery of social services, the view of many in developing
countries is that the theme of the social responsibility of
the private sector is an “issue of the affluent”,
or of the “rich North” rather than of the “poor
South”. There is also concern that the use of social responsibility
principles and policies could be used against developing countries
as a type of disguised
protectionism, for example through increased labour or environmental
standards, hence raising the cost of doing business in their
respective countries and making their exports less competitive
and their countries less attractive for foreign investment.
77. Notwithstanding
the above, the social responsibility of the private sector is
a universal notion applicable to all countries, including developing
countries, especially in view of its importance and large potential
for social development. It is important, therefore, that, in
discussing the social responsibility of the private sector,
consideration be given to country-specific circumstances, including
particular economic, institutional, cultural and other conditions.
Following such considerations and assessments, firms would be
expected to move towards best attainable practices in their
line of business, taking into account the specific circumstances
in their country and/or the context of the geographical region
in which they operate.
78. In
developing countries, private sector social responsibility is
largely concerned with community development projects or corporate
social investment, and many companies are still learning about
and examining the implications of such concepts as corporate
social responsibility and corporate citizenship. In addition,
in order for corporate social investment to be relevant, investments
should be consistent with local and national development programmes
and should result in development projects that are sustainable,
serve community goals and transfer skills to the community.
Partnership and ownership roles have to be clarified so that
partnership projects are not driven solely by company goals.
79. The
urgency of resolving economic and social development issues
and problems in developing countries requires that debates about
public and private sector roles be focused on the building of
effective partnerships between these two sectors. This is the
case with social protection, in particular, where there has
been a continuing debate about the role of the private sector,
especially in the financing of delivery of social protection
and the provision of social services. Major social problems
that demand concerted action and may benefit from public/private
partnerships include, but are not limited to, reducing high
levels of illiteracy, promoting employment and training activities,
preventing crime, violence and drug trafficking and combating
the HIV/AIDS pandemic.
C.
Socially responsible investing
80. Defined
as the integration of social, ethical and environmental values
into investment decisions for the purposes of bringing about
positive social and environmental change, socially responsible
investing is based on the same values that underlie the United
Nations Declaration on Human Rights, the ILO Declaration on
Fundamental Principles and Rights at Work, the United Nations
Global Compact, the Convention on Biological Diversity, Agenda
21 and the OECD Guidelines for Multinational Organizations.
This type of investing is carried out by investors who seek
to influence corporations to perform in a socially, ethically
and environmentally responsible manner.
81. One
way that socially responsible investing seeks to influence corporations
is through portfolio screening, which evaluates investment decisions
on the basis of criteria such as employee relations and records
of community involvement and environmental impacts. Corporations
that meet the screening criteria are rewarded by attracting
investment in their stocks and by an enhanced corporate image
among both investors and consumers. This type of investing also
seeks to influence corporations through shareholder advocacy,
which involves exercising the full rights of stockowners to
influence how a company is run by engaging management in a dialogue
on issues of concern as well as by filing, co-filing and voting
on shareholder resolutions in order to direct companies towards
socially and environmentally responsible practices.
82. Socially
responsible investing can entail community investing as well,
that is, generating resources and opportunities for economically
disadvantaged people in communities under-served by traditional
financial institutions. Community investors make it possible
for organizations to create jobs, to provide financial services
to low-income individuals, to supply capital to small businesses
and to provide affordable housing and community services.
83. While
small compared to the traditional investment market in developed
market economies, where the majority of socially responsible
investing is carried out, this form of investment has been growing
rapidly, both in overall assets and in the number of investment
choices available. Socially responsible investing also
continues to evolve, both in terms of the number and types of
portfolio screenings used as well as in terms of the impact
of shareholder advocacy. There is increasing evidence that social,
ethical and environmental screening of investment portfolio
decisions does not have a negative impact on the financial performance
of companies. Research is also being conducted to determine
whether screened portfolios outperform unscreened portfolios
over the longer term. As awareness of socially responsible investing
practices has increased and has gained recognition and popularity,
the attitudes of companies have changed, resulting in more room
for dialogue between management and investment managers and
investors who use such practices.
D.
The role of government
84. Increased
involvement of the private sector in social development does
not, of course, absolve the State from its responsibilities.
Private sector social responsibility is not a substitute for
effective government and a well-functioning public sector; it
should be seen as a potentially useful complement. While the
private sector has comparative advantages in the private sphere,
it cannot claim the legitimacy or authority of a democratically
elected government. Neither can it assume the broader scope
of responsibility of Governments, since its fiduciary obligations
are to its shareholders.
85. Thus,
while social responsibility of the private sector offers much
promise for social development, it is not a panacea. In the
final analysis, business is motivated by profit. The challenge
is to reconcile the high standards of social responsibility
and accountability on the part of businesses with their interest
in competitiveness and profitability.
86. Both
the public and private sectors are in agreement on the need
for government involvement and effective governance. The role
of the State in creating an appropriate enabling environment
is especially important in the promotion of social responsibility
of the private sector.
87. The
creation of an appropriate enabling environment entails addressing
the role of the State vis-à-vis markets and privatization.
The increased reliance on market forces and the privatization
of State assets has paradoxically made the role of the State
more, rather than less, important. Relying on market forces
and embracing privatization require strong oversight and institutional
support by the State. Its role is essential in policy formulation,
creating institutional frameworks, enacting legislation, adopting
tax incentives and disseminating public information, in particular
if it wants to promote greater participation of the private
sector in contributing to social development. Reviewing existing
regulations or institutions and how they need to be changed
or adapted to new circumstances, as well as identifying missing
regulations and justifying their introduction, are some of the
crucial tasks faced by the State.
88. Governments
also have a role to play as facilitator, including the creation
of conditions to make self-regulation viable, effective and
robust. For example, public policy can influence and help shape
market processes and voluntary action in ways that enhance the
social responsibilities of the private sector. This is particularly
so in the context of a governance deficit, in cases where there
is no Government, such as at the international level, or where
government at the local or national level is, for whatever reason,
weak and ineffectual. In this regard, globalization has had
a profound impact on the relationship between government and
business, as government is constrained in its ability to handle
all the complex issues of corporate regulation, including laws
promoting competition, without recourse to international and
intergovernmental institutions.
89. Finally,
in the field of policy-making, there is a need to identify the
most desirable and decisive policies that maximize their intended
effect while minimizing and mitigating any negative consequences.
In this context, policy makers and policy advisers need to be
aware and informed of the timing and sequencing of policy implementation.
Recommending or attempting to implement too many policies at
once, or regulating too soon or too late with respect to the
actual conditions, can lead to a loss of credibility or much
weaker than desired results.
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V.
Impact of employment strategies on social development
90. National employment strategies should include a number of
key elements that can improve the functioning of the labour market
and the economy as well as promote productivity, employment and
output growth. While a successful national employment strategy
can contribute to macroeconomic growth, growing integration of
the world economy has both reduced the autonomy and increased
the importance of macroeconomic policy choices by Governments.
The basis for higher economic growth must be macroeconomic stability,
since price and exchange-rate stability and low interest rates
are essential for creating a healthy investment climate, which
is in turn vital for employment growth. However, in pursuit of
macroeconomic stability, cutbacks in public expenditures on which
future growth and social development depend, including health
care and education, should be avoided. In particular, in countries
with slow economic growth, endemic poverty and high unemployment,
fiscal and monetary targets should be linked, as far as possible,
to targets for employment growth and poverty reduction.
91. Given the extent to which most developing countries rely on
external trade and sources of financing, international policies
that influence capital flows, access by developing countries to
the markets of developed economies and terms of trade will have
significant impact on the domestic economies of those nations.
In general, greater international coordination of economic policies
is needed: in a world in which policies of major economies can
have serious spillover effects on other economies, irrespective
of how sound their macroeconomic management is, solutions must
come from both the national and international levels. International
cooperation is needed to address, for example, the problems of
the volatility of financial markets and the promotion of macroeconomic
stability through development aid, debt relief and trade.
92. Globalization has led to an increase in migration of workers
in recent years. Conservative estimates place today’s migrant
worker population at between 100 to 120 million people, as more
States admit foreign labour to augment their human capital and
to compensate for the ageing of their populations. Immigration
policies in developed countries increasingly favour skilled workers,
a fact which has resulted in a favourable global labour market
for the highly skilled. This trend has serious implications for
social development in “donor” and “recipient”
countries. While “recipient” countries grapple with
the problems associated with the full economic, social and political
integration of their immigrant communities, “donor”
countries have to deal with a “brain drain” of their
skilled work force, as well as a host of other associated problems
which bedevil their efforts at economic and social development.
There is clearly an urgent need for international cooperation
to ensure that national employment strategies are not derailed
by labour movement at the global level.
93. The way an employment strategy is designed and implemented
can have a profound effect on how rapidly and in what manner social
development proceeds. An assessment of the impact of employment
strategies on social development needs to go beyond evaluating
the direct contribution to individual or household income, to
include the type, nature, quality and distribution of employment
generated. 94. In developing countries, it is particularly important
that such strategies recognize that employment is central to poverty
reduction and that employment policies should assist the working
poor more directly. In this regard, initiatives that increase
the productivity and income-generating capacity of the working
poor, particularly in the informal economy, are important components
of an employment strategy. For instance, the extent to which an
employment strategy generates skilled or unskilled jobs can affect
the sustainability of employment and its potential impact on social
development.
95. In order to promote broad-based social development, there
is a strong case to be made for ensuring that job creation is
targeted. Most new jobs are not created for women, young people,
older persons or persons belonging to vulnerable groups. Employment
strategies that target equality of opportunity in employment for
women are especially important, as are employment strategies that
take into consideration the regional distribution of employment,
as well as the division of jobs between rural and urban areas,
as these can be important determinants of poverty reduction and
social development.
96. In this regard, the elimination of all forms of discrimination
in the labour market is a key element of any employment strategy.
Discrimination that restricts access to education, the labour
market, choice of occupation or credit undermines output and productivity
growth by preventing the most productive job matches from occurring.
Discrimination that induces severe income inequality can lead
to slower economic growth. Experience shows that reducing or ending
discrimination in education against women, for example, tends
to lead to higher female earnings, greater investment in healthier
and better-educated children and a lower rate of population growth.
97. Another important element of an employment strategy is to
promote employability and adaptability in the labour force. Education
increases productivity and the ease with which new technologies
can be absorbed. Investing in people, especially women, and encouraging
people to invest in their own education and job skills can not
only increase the rate of economic growth but also expand the
opportunities of workers beyond the narrow range of occupational
choices they now face. This, in turn, facilitates people’s
ability to adapt to change and improves the functioning of the
labour market. Employability is also enhanced by basic social
protection. An employment strategy that includes a focus on access
to health care is one that promotes employability, since illness
is a major drain on growth and employment. In short, the existence
of social protection programmes facilitates greater labour mobility.
98. Promoting decent work as a means of improving the efficiency
of labour markets and, in this way, enhancing overall economic
and employment performance, is finding growing support. ILO argues
that the key policy challenge to achieving the threshold of decent
work is the promotion of core labour standards as set out in its
Declaration on Fundamental Principles and Rights at Work. The
Declaration calls for freedom of association and the right to
collective bargaining, an end to child labour, forced labour and
discrimination of all types. In this regard, decent work would
also involve extending the scope of social protection to those
presently uncovered, through the extension of public schemes or
the development of innovative arrangements based on community
or group support systems.
99. While Governments are responsible for employment policy and
for placing employment at the centre of economic and social policies,
social partners, especially employers and trade unions, can play
a crucial part in bringing about the achievement of a national
consensus on how such policies are designed and implemented, both
nationally and locally. Cooperation is important to ensure that
employment strategies are designed and implemented in order to
promote poverty reduction and social development and to minimize
the environmental consequences of economic activity. Social dialogue,
in the broadest sense, should be the cornerstone of employment
strategy formulation.
100. Social dialogue requires a vibrant private sector. An important
aspect of any employment strategy, therefore, is the promotion
of entrepreneurship and private investment to tap the private
sector as the main provider of new jobs in the future. To support
the role of the private sector in this regard, employment strategies
need to put in place and/or support an educational system and
policy environment that promotes a culture of entrepreneurship
and a business climate that encourages the start-up and growth
of enterprises.
101. In the developed market economies, intensified international
competition, skills-challenging technological changes and labour
market rigidities have been considered important factors in explaining
high unemployment rates and growing insecurity among workers.
The extent to which these factors have contributed to the loss
of jobs or slowed down the creation of new employment remains
a subject of heated debates. For example, many of the features
of the labour market that are being blamed for the rise in unemployment,
such as unemployment insurance systems, dismissal legislation
or minimum wage regulation, also existed in the period of full
employment. There has not been a uniform rise in the degree of
labour market rigidity to plausibly account for the increase in
unemployment in some countries or to explain variations in unemployment
rates across countries. It is also increasingly recognized that
some features of labour market regulation (e.g., level and duration
of unemployment benefits and the degree of coordination in wage
bargaining) are linked to the level of unemployment, while others
(e.g., employment security legislation and payroll taxes) are
not. Overall, a wider approach that recognizes the role of other
factors, including macroeconomic policy and distortions in product
and capital markets, as well as the importance of social dialogue
is needed.
102. At a time of stagnating public sector resources and high
unemployment in many developed market economies, NGOs have attracted
much attention as social services providers as well as significant
employers in their own right. While this sector has become an
important partner to the State and the private sector in the provision
of social, health and cultural services, and in education, it
is unrealistic to expect it to reduce unemployment through creation
of jobs on a massive scale. While the sector has been an important
source of innovation for the provision of social services, its
capacity to expand may be limited and highly dependent on
public funding. Existing evidence refutes suggestions that civil
society and nonprofit organizations could be turned into a major
source of employment in community and personal services or could
replace Government in the provision of social services.
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VI.
Policies and role of the international financial institutions
and their effect on national social development strategies
A. Evolution of the role of the international
financial institutions
103. By providing large-scale development assistance coupled with
well-defined policy advice, the international financial institutions,
in particular the International Monetary Fund (IMF) and the World
Bank, have a profound impact on socioeconomic development of the
countries in which they operate. Comprehensive and multi-faceted,
the policies advanced by these institutions are mostly of an economic
nature, underpinning specific conditions to be met by borrowers
in the developing countries and countries with economies in transition.
While the conditions have never been static, reflecting changing
priorities of these institutions in policy conceptualization and
implementation, conditionality remains not only one of the main
pillars of their lending activities, but a source of considerable
political controversy and debate in their relations with borrowers.
104. Since the 1980s the influence of the international financial
institutions on policy-making at the national level, already highly
visible in the periods of stabilization programmes and “structural
adjustment reforms”, has grown considerably, embracing more
areas than before. This expansion can be seen, for instance, in
the increasing numbers of “performance criteria” on
which the provision of loans are made conditional: in a sample
of 25 countries, there were about 6 measures in the 1970s, 10
in the 1980s and around 26 measures in the 1990s. The increase
in conditionalities has significantly broadened the oversight
of the institutions within the borrowing countries beyond the
regular monitoring of specific macroeconomic policy targets in
the context of a crisis, or of specific project loans. Both institutions
now negotiate with Governments regarding a whole gamut of socio-economic
policies, recently encompassing policies on HIV/AIDS, human rights
violations, gender discrimination, environmental degradation,
corruption, drug trafficking, and good governance. It remains
to be seen how the traditional agenda such as water resources,
infrastructure development, health and family planning and education
will survive, and to what extent the institutions will be
effective in carrying out their new tasks.
105. Critics have argued that IMF and the World Bank were neither
created nor structured to undertake such wide-ranging activities.
At their inception they were entrusted to deal with a narrow,
clearly stipulated range of technical issues, and for that reason
precisely it was decided that they should only deal with their
member countries through national treasury offices, finance ministries,
central banks or the like and that only representatives of those
agencies could sit on the Boards of IMF and the World Bank. As
a result of the broadening and deepening of the work of both the
Fund and the Bank, both are now making finance ministries or central
banks accountable for policies that normally fall under the purview
of other agencies, for which those other agencies are domestically
accountable. While different agencies within a Government compete
for and debate priorities and goals, negotiations with the Fund
and Bank can overshadow these debates. There is, therefore, a
risk that broad areas of policy may become subject to the priorities
and analysis of the central banks and/or finance ministries, even
though those institutions may not have expertise in “social
matters”, including health, education and welfare provision.
106. Whether or not structural adjustment policies have had a
perceptible impact on poverty reduction throughout the developing
world, and particularly in Africa, remains a topic of controversy.
During the 1980s, per capita GDP in Africa declined by 1.3 per
cent annually, and during the 1990s by about 0.6 per cent. Furthermore,
over the period from 1990 to 2000, the proportion of persons below
the internationally established poverty line of one dollar a day
remained unacceptably high, at around 48 per cent in Africa and
23 per cent for the entire developing world. Though poverty elsewhere,
for example in East Asia and the Pacific, has shown a considerable
decline, for the majority of least developed countries economic
growth and poverty reduction remain elusive goals. The continuation
of low growth and the persistence of wide-spread poverty necessitate
a concerted response that goes well beyond the scope of the structural
adjustment policies to include coherent policies as well as the
concept of good governance in all countries.
107. At both the World Summit for Social Development and the twenty-fourth
special session of the General Assembly, Member States made a
commitment to ensure the inclusion of social development goals
in structural adjustment policies. At the same time, Governments
increasingly demanded more ownership and a
greater role in the management of policy reforms. As a result,
over the past few years the World Bank reaffirmed its mission
of poverty reduction and achieving sustainable development. In
the context of a comprehensive development framework, social considerations
have been progressively recognized as a critical element of macroeconomic
reforms. Subsequent reform programmes have become more attuned
to the needs of protecting social expenditures, including specific
safeguards for expenditures on basic health and education services.
At the same time, social impact analysis and participation has
been given more attention in the operational work of the World
Bank.
108. Some crucial aspects of the social impact of the international
financial institutions on national development strategies were
covered in the report of the Secretary-General on the integration
of social and economic policy submitted to the fortieth session
of the Commission for Social Development. The present report expands
on that discussion by addressing in more detail some preliminary
results of a recent initiative by the IMF and the World Bank to
bring about debt relief and produce faster economic growth and
poverty reduction, the poverty reduction strategy papers.
B. Poverty reduction strategy papers
109. Poverty reduction strategy papers are primarily meant to
accomplish two things: to ensure a greater ownership, and participation,
by the countries themselves, including government and civil society;
and to place poverty reduction at the core of policy analysis
and prescription. In return, the international financial institutions
are committed to providing concessionary finance in support of
the papers, while encouraging greater coordination and alignment
of policies by bilateral donors. To date, progress in the introduction
of the strategy papers has been slow. At the end of 2002, there
were 19 full papers and 29 interim papers awaiting completion.
The list of countries is given below:
List
of countries having completed poverty reduction strategy
papers and/or interim poverty reduction strategy papers |
Type
of document |
Countries |
Completed |
Albania,
Bolivia, Burkina Faso, Ethiopia, Gambia, Guinea, Guyana,
Honduras, Malawi, Mauritania, Mozambique, Nicaragua,
Niger, Rwanda, Uganda, United Republic of Tanzania,
Viet Nam, Yemen and Zambia |
| Interim
|
Armenia,
Azerbaijan, Benin, Cambodia, Cameroon, Cape Verde,
Central African Republic, Chad, Democratic Republic
of the Congo, Côte d’Ivoire, Djibouti,
Georgia, Ghana, Guinea-Bissau, Kenya, Kyrgyz Republic,
Lao People’s Democratic Republic, Lesotho, Madagascar,
Mali, Mongolia, Pakistan, Republic of Moldova, the
former Yugoslav Republic of Macedonia and Yugoslavia,
Sao Tome and Principe, Senegal, Sierra Leone, Tajikistan,
United Republic of Tanzania |
|
Source:
World Bank web site http://worldbank.org/poverty/strategy/boardlist.pdf |
110. The slowness of the process of introducing the poverty reduction
strategy papers has convinced the international financial institutions
to accept requests by countries to access concessionary loans
before the adoption of a full strategy paper. Although such early
approval and disbursement of loans may be taken as a positive
attribute, it may undermine the other requirements, namely the
need for a thorough analysis and full participation by civil society
before endorsement of the paper. In addition, there is no guarantee
that, if the interim paper is designed expeditiously with the
purpose of securing additional loans, its main objective, that
is, to be participatory and inclusive, will not be significantly
compromised. For example, in the case of Bangladesh, the process
of formulating the interim paper started in November 2000, yet,
by the beginning of 2002, it was not completed and consultations
with civil society only began in January of that year.53 This
may demonstrate that Governments lack the in-house capacity to
formulate the papers, and may have to rely on the services of
consultants, as well as limited participation of the civil society
in the preparation of the papers.
111. At this early stage, the poverty reduction strategy papers
give rise to both questions and concerns. The questions have to
do with the role of the financial institutions, the inclusiveness
of the process of preparing the papers, and the mechanisms for
monitoring and realigning policies if the objectives of poverty
reduction are not met. For example, can the international financial
institutions provide advice — thereby becoming involved
in the process — without compromising national ownership
and the participation of civil society? If civil society is crucial
to the participation process, who are its legitimate representatives,
and how are their concerns reflected both in the strategy paper
and in its implementation? If transparency is a key requirement,
should IMF and the World Bank submit their recommendations for
discussion at the country level, before being submitted to their
Boards for approval? Who undertakes the monitoring of the performance
and how is the independence of the monitoring process ensured?
What are the right indicators of performance and should these
vary according to local conditions or remain constant from country
to country? If countrywide or localized indicators are preferred,
how are inter-country comparisons on progress to be made or best
practices derived? Finally, how are bilateral institutions brought
into the process, and what happens if the constituents of these
donors do not submit to the requirements and policy conclusions
contained in the strategy papers?
112. There are also wider issues at stake. It has been argued
that poverty reduction strategy papers are at best the beginning
of a process and not a comprehensive response to the challenges
faced by developing countries. For example, the Government of
India has taken the view that its five-year plan is its definitive
document for defining its national poverty strategy and consequently
it has not prepared a strategy paper.
113. These wider challenges have been spelled out, for example,
in the Millennium Declaration, and go beyond reducing poverty.
Without detracting from the centrality of the poverty objective,
much more than a poverty reduction strategy paper process is warranted,
even where the poverty goal is concerned. For example, in the
case of Africa, where the level of poverty is critical, and in
places deteriorating, the 300 million people living in abject
poverty are unlikely, according to present trends, to be lifted
out of poverty in sufficient numbers to make the strategy papers
a significant instrument for the fulfilment of the Millennium
development goals. Hence, relying on the papers in the context
of the development goals and the other commitments made at earlier
United Nations conferences and summits and their follow-up processes
seems logical. Such revisiting should benefit the process of formulating
and implementing strategy papers beyond what they contain today.
114. The World Bank and IMF have acknowledged that plans for participatory
processes in developing full poverty reduction strategy papers
were generally not well defined. While all interim papers outline
some plans for participatory processes for developing full strategy
papers, these vary considerably in both quality and coverage.
Many countries (e.g. Rwanda, Sao Tome and Principe and Senegal)
included only broad commitments rather than details of the planned
participatory process. Although, in the case of Bangladesh, consultations
with civil society took place, no written inputs were provided
to the participants and no documentation of these consultations
is available to date. Though the participatory process was, in
the main, saved for the preparation of the full strategy paper,
the process was even then by no means comprehensive. In a number
of cases, participants in the process received little feedback
from the organizers as to which suggestions had or had not been
incorporated. As the Fund and the Bank have noted, where participation
is being undertaken in an ad hoc and fragmented manner, or only
to meet external demands, the process may not be viable or effective.
The major challenge is to move away from ad hoc forms of consultation
to more institutionalized and systematic forms of collaboration
and dialogue.
115. At the World Social Summit (1995) and the twenty-fourth special
session of the General Assembly (2000), Member States emphasized
the primacy of policies for growth that encompass both social
and economic considerations. Gender issues, the importance of
building social capital, social inclusion and an emphasis on the
composition of public expenditure, with due attention to social
objectives, were highlighted. By comparison, as the 2002 IMF-World
Bank Review attests, poverty reduction strategy papers are long
on description but short on providing directives as to how to
raise the status of social objectives and mobilize the necessary
resources for their fulfilment. A number of civil society groups
have noted that analysis of the impact of the policy actions on
the lives of the poor appears to have been limited. A serious
omission is the role that gender inequality has played in constraining
agricultural growth and rural poverty reduction. Clearly it is
necessary to place the strategy papers within a wider context,
in which social objectives, the mobilization
of funds and the budgeting and allocation of resources underpin
the poverty reduction objectives. In this context, the International
Conference on Financing for Development at Monterrey provides
a useful context and a resource mobilization framework.
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VII.
Policy recommendations
116. The
priority theme of the forty-first session of the Commission
for Social Development, “National and international cooperation
for social development”, is both complex and extremely
broad, making the proposal of a set of policy recommendations
not only challenging but subject to criticism with regard to
any omissions or inclusions. It may be useful to state at the
outset that the concept of international cooperation for social
development has been less thoroughly thought through than the
notion of international economic cooperation, a concept with
a long history at the United Nations. Issues such as trade,
foreign direct investment, debt relief, capital flows, exchange
rate regimes and macroeconomic policies are all part and parcel
of international economic cooperation, regarding which standardized
rules and regulations have and are being set at the international
level.
117. The
understanding of international cooperation for social development
is altogether different. Social development is largely seen
as a national task, supported by the international community
mainly by means of aid, capacity-building and technical cooperation,
and is often contingent on such matters as good governance,
democracy and the rule of law.
118. The
objective of the following recommendations (paras. 119.1-119.37)
is to show that there is more to the concept of national and
international cooperation for social development than meets
the eye. Social development is about the end results; it encompasses
long-term development objectives. Economic development is largely
about the means towards those end results and is generally of
a short-term nature. Too often, however, international discourse
tends to focus solely on the means, only touching tangentially
on the ends. It is hoped that these recommendations will redress
this imbalance.
119. While the primary responsibility for development, be it economic
or social, rests with national Governments themselves, without
international support underpinning those national efforts, many
developing countries and countries with economies in transition
will be hard pressed to reach their development objectives within
reasonable time frames, including those set in the Millennium
Declaration. With this in mind, the following recommendations
are submitted to the Commission for Social Development for its
consideration:
1.
National and international cooperation for social development
should be mutually supportive;
2. National ownership of and responsibility for development
policies and programmes should continue to be enhanced;
3. Governments should avoid adopting approaches to development
that reduce national autonomy in social development priority-setting.
South-South cooperation should play an important role in this
respect by promoting mutual learning among developing countries.
Governments should actively seek out opportunities and actively
participate in South-South cooperation;
4. Transparency in the formulation and implementation of policies,
accountability of public authorities and the private sector
and participation of labour and other organized elements of
civil society in decision-making are critical aspects of good
governance and democratic structures and are processes that
should be fostered by international and national cooperation
for social development;
5. Governments should strengthen measures to combat income
and job insecurity and their negative social and human impacts;
6.
In promoting broad-based social development, there is a strong
case for ensuring that job creation is targeted. Most new
jobs are not created for women, young people, older persons
or persons belonging to vulnerable groups. It is especially
important that employment strategies target equality of opportunity
for women, which can both empower women and produce positive
results for social development;
7. A key consideration in formulating national employment
strategies should be the promotion of entrepreneurship and
private sector investment in order to tap the private sector
as the main provider of new jobs in the future;
8. Strong governmental commitment is required to strengthen
national capacity in skills, knowledge and institutions;
9. Special attention should be paid to developing the human
capabilities of marginalized groups in society;
10. The international community should expand learning opportunities
and strengthen national capacities for social development
and for the formulation of social policies. Development assistance
that helps build the recipient country’s capacities
should be strengthened, including through the untying of aid;
11.
Long-lasting solutions to trade and financial constraints
affecting most of the developing countries should be implemented
by the international community, taking into account their
social development priorities. In this regard, Governments
should also strive to acquire strong negotiation skills in
their interactions with multilateral and bilateral partners
and donors;
12. Building the capacity of developing countries to create
effective structures and formulate policies for development
is a primary objective of international cooperation. This
includes strengthening the capacity of developing countries
to participate effectively in the management of the world
economy and the globalization process. It also entails strengthening
the scientific and technological capacity of developing countries;
13. Donors need to provide cooperation in ways that interfere
less with government functions, for example, by using sector-wide
approaches and by reducing aid conditionality. Furthermore,
aid needs to take local realities into account, as a “one
size fits all” approach does not apply;
14. Donor funding for social development should be provided
in harmony with recipient government budget cycles. Donors
should be encouraged to provide budgetary support as the primary
instrument for resource transfers;
15. There is an obligation, for both donors and recipients,
to ensure that official development assistance is used effectively.
Monitoring and evaluation practices should be strengthened
in order to assess such use of official development assistance;
16. Once social development is viewed as a global public good,
further efforts should be made to increase the level of resources
available through international development cooperation and
through increased international private investment backed
by guarantees from donor Governments and multilateral agencies;
17. Multilateral organizations should develop more effective,
specifically focused strategies and financial packages to
assist countries that face catastrophic events and shocks
such as wars, financial crises, natural disasters and epidemics,
including HIV/AIDS. These strategies should take into account
longer-term development needs, within the local context, and
should create conditions for poverty eradication and sustainable
social development in a democratic context;
18. When periodically reviewing and assessing the effectiveness
of their support to country programmes and strategies for
social development, international agencies should take corrective
action, when necessary, to improve their level of accountability;
19. There should be more systematic integration and involvement
of the recipient country in evaluations;
20. International financial institutions should take steps
to counterbalance the concentration of private capital flows
in a small number of emerging economies; place priority on
the provision of additional official development assistance
to low-income countries; provide funding to low- and middle-income
countries that lack access to global markets; and furnish,
in addition to short-term resources, long-term resources to
developing countries when financing dries up during times
of crisis;
21. International financial institutions should strengthen
efforts to ensure that concern for improved social outcomes
is incorporated into their policies and into the national
policies they support. The poverty reduction strategy paper
process currently under way in many countries appears to contribute
to those efforts;
22. Concerning poverty eradication, more than a poverty reduction
strategy paper process is warranted. A revisiting of the strategy
paper process in the context of the Millennium development
goals and other commitments made at earlier United Nations
conferences and summits and their follow-up processes seems
logical. Such revisiting should benefit the process of formulating
and
implementing the strategy papers beyond the scope of what
they contain today;
23. A broader platform is necessary to place the poverty reduction
strategy papers within a wider context, where social objectives,
the mobilization of funds and the budgeting and allocation
of resources underpin the poverty reduction objectives. The
International Conference for Financing for Development, held
at Monterrey, Mexico, provides a useful context and a resource
mobilization framework;
24. Coordination and collaboration among all stakeholders
is required for the implementation of development programmes
at the international level, taking into account the importance
of coherence and complementarity;
25. Development assistance efforts by donors should be coordinated
in order to avoid duplication of activities or conflict with
different donor priorities in the same field. This also requires
the establishment of a coherent development strategy by the
recipient Government;
26. There is an urgent need for international cooperation
in the area of international migration in order to ensure
that national employment strategies are not derailed by the
movement of labour at the global level;
27. The complementarities of the work of international agencies
should be acknowledged and more fully taken into account so
as to strengthen the coordination of their mandates and work
as well as to promote partnerships between them;
28. Governments should establish a supportive and enabling
environment for private sector social responsibility requiring
that internationally recognized standards of business be upheld.
This enabling environment should be established through a
legislative and regulatory framework, as well as through promotion
of voluntary action on the part of the private sector;
29. The private sector should contribute positively to social
development through constructive engagement in the community
and society, seeking business opportunities that increase
inclusion and participation and improve well-being;
30. The recent emphasis on the social responsibility of the
private sector has to be seen in relation to the growing awareness
of the indispensable role of market mechanisms and forces
in the process of development and in the context of the increase
in the power of the private sector. Corporate social responsibility
should increasingly incorporate ethical elements, questions
of employment creation and respect for labour standards, as
well as observance of tax laws;
31. As a basic guide to minimum standards, the private sector
should adhere to and apply internationally acknowledged legal
norms, treaties and agreements, particularly those of the
United Nations, the International Labour Organization and
other international bodies;
32. Governments should serve as a positive model for the private
and civil society sectors by integrating social and environmental
standards into their own operational and investment practices;
33. Governments should, in partnership with the private sector
and civil society, establish transparent mechanisms to manage
conflicts of interest and to maintain democratic accountability.
The important legal aspect of close or informal relations
between the public and private sectors in terms of public
regulation must be borne in mind. Special consideration must
be given as to how partnerships may affect the public sector
regulatory framework and enforcement by the public sector
of regulations governing the private sector;
34.
Social partners, especially employers and trade unions, are
crucial in achieving national consensus on how employment
policies are designed and implemented. Social dialogue should
be the cornerstone of employment strategy formulation;
35. A set of international standards for private sector social
responsibility, which is universally acceptable yet flexible
enough to take into account local conditions and circumstances,
is needed;
36. The integration of economic and social policies is a desirable
prerequisite for the well-being of society as a whole, as
underscored by the World Summit for Social Development in
Copenhagen and twenty-fourth special session of the General
Assembly in Geneva. The harmonization of economic growth and
social policies is crucial to successful social outcomes.
The United Nations is the place where this confluence of the
economic and social spheres can and should occur. Therefore,
consideration should be given to moving the social agenda
items of the Third Committee to the agenda of the Second Committee
of the General Assembly;
37.
In order to provide a more focused agenda for the Commission
for Social Development, the adoption of a multi-year programme
of work should be revisited with a view to replacing it with
biennial adoption of the priority theme of the Commission.
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