UNDP and the Social Charter Strategic Responses & Initiatives George Gray Molina Chief Economist Regional Bureau for Latin America and the Caribbean October.

UNDP and the Social CharterStrategic Responses & Initiatives

George Gray MolinaChief Economist

Regional Bureau for Latin America and the Caribbean

October 2012

Presentation

• OAS Social Charter• UNDP’s work in the region– At the country level– At the regional level

• Challenges for Middle Income Countries– Financing– Operational

Core Focus AreasGlobal Agenda & Local Implementation

Strong MDG mandate

Provisional expenditures by focus area

Source: The Sustainable Future We Want, UNDP Annual Report 2011/2012

Provisional expenditures by region

Source: The Sustainable Future We Want, UNDP Annual Report 2011/2012

Latin America and the Caribbean2011 Budget & Expenditures by focus area

About 30% of the LAC portfolio focuses on poverty issues

Poverty reduction & MDGs 2011 Program Budget & Expenditures

Around 70% of the poverty portfolio is MDG-related,

Regional InitiativesCross-cutting themes

• A Middle Income Country Agenda: The High Hanging Fruit

• MDG Acceleration Framework• Post-2015 Agenda• Fiscal Equity Toolkit• Missing Dimensions of Poverty & Well Being

Middle Income Agenda: High-Hanging Fruit of Social Progress

Many social achievements show diminishing marginal returns. Improving one additional year of

Low-hanging fruit refers to “easy gains” given growth trajectory, high-hanging fruit refers to more difficult gains…

Low hanging fruit = high marginal returns

High hanging fruit = low marginal returns

The Preston Curve

Continued…• Low hanging fruit51 million people lifted out of

poverty between 2002 and present.

Mostly male, mostly in the service sectors, mostly urban and mostly form 25 to 49 years of age.

Poverty reduction mostly led by labor income has led the transformation, social protection second, demographics third.

• High hanging fruit170 million people still under the

poverty line, 70 million under the indigence line.

Mostly young and old, mostly female, mostly rural and mostly indigenous and afro-descendents excluded from windfall.

Poverty reduction need to become more balanced: inclusive development, capacities and opportunities for all.

MAF

– By December 2012, more than 30 nations will be in the process of implementing their tailor-made acceleration action plans

– Regional observatory of MDG national progress reports

– MDGs Community of Practice

– In LAC: Belize, Colombia, Costa Rica, El Salvador, Peru

Post-2015 Development Agenda

Fiscal Equity Toolkit

3-step strategy:

1.Diagnosis of fiscal and institutional bottlenecks behind social protection, social service and labor policies 2.Development of a policy toolkit to help country offices focus on places where UNDP might have highest impact 3.Creation of a fiscal equity consultation process that provides regular updating and feedback.

Countries involved: Peru, Dominican Republic, Guatemala, Bolivia, Costa Rica, El Salvador, Jamaica

Missing Dimensions of Poverty

• Aims to capture subjective, psychological and material deprivations that affect well-being and understand how these might vary over population group and across time

• Crucial to address the “high-hanging fruit” in the LAC region

ChallengesThe MDGs have provided an anchor for much of what UNDP does in the LAC region. The Post-2015 agenda will address what comes after the MDGs, both on Missing Dimensions, Sustainable Development Goals, Middle Income Traps, Citizen Security and Environmental Challenges after Rio + 20.

•On the financing side: Core resources for UNDP operations are shrinking, as non-core resources are growing. LAC is a leader in local service financing, closer to the needs of governments but also constrained by trends in fiscal equity. •On the operational side: Middle income agenda involves the high-hanging fruit of social and economic progress. Much to do: 170 million under the poverty line, 70 million under the indigence line. Highest inequality in the world. Highest insecurity in the world. Need a new MIC development model.