August 2010

MDG 8

What is Goal 8 all about?

Goal 8 – a Global Partnership for development – is one of the broadest Millennium Development Goals (MDGs). The goal is about creating a genuine partnership between richer and more powerful nations and those nations where many people live in extreme poverty. It advocates more generous overseas development assistance or ‘ODA’, overcoming debt problems and better market access for developing countries.

Goal 8 is important is its own right as it sets out clear strategies to reach international commitments around aid  and poverty reduction and it also provides critical support for attaining the other seven MDGs. It is also the only MDG that does not focus solely on government.

Goal 8 targets include:

• Developing further an open trading and financial system that includes a commitment to good governance, development and poverty reduction – nationally and internationally.
• Addressing the least developed countries’ special needs, and the special needs of landlocked and Small Island developing States.
• Dealing comprehensively with developing countries’ debt problems.
• Developing decent and productive work for youth.
• In cooperation with pharmaceutical companies, providing access to affordable essential drugs in developing countries.
• In cooperation with the private sector, making available the benefits of new technologies – especially information and communications technologies.

Read some basic facts about the MDGs

Read more about the six quantifiable targets that the MDG 8 breaks down into

Explore country-level data collected as part of monitoring Goal 8

What is the progess on MDG 8?

According to the Millennium Goals Report 2010 published by the United Nations, progress towards attaining MDG 8 which covers aid [Link to information on aid below], trade [or can Link to information on below], debt relief [can Link to information on debt relief below] and access to technology [can Link to information on access to medicines technology below], and essential drugs has been mixed - influenced by the global economic crisis as well as changes in donor commitments to increasing aid and a slowdown in trade reform.

The positives in the Report include a slight increase in aid notwithstanding the financial crises and the continuing growth in the use of information and communication technology (ICT) worldwide.

The report notes for example, that in 2009, net disbursements of aid amounted to $119.6 billion, or 0.31 per cent of the combined national income of developed countries. In real terms, this is a slight increase (of 0.7 per cent) compared to 2008 even though, measured in current US dollars, ODA fell by over 2 per cent—from $122.3 billion in 2008.

However, this increase still falls short of commitments made previously by developed countries at events like the Group of Eight (G-8) Summit at Gleneagles and the UN World Summit in 2005, with negative implications for certain regions like Sub-Saharan Africa. The Report suggests that “Africa is short changed”, and donor commitments to double aid to Africa by 2010 have not been achieved in practice. It is envisaged that Africa will only receive $11 billion out of the $25 billion in aid previously committed to by the international donor community.

This finding has also been elaborated in the UN’s 2009 study on Assessing Progress in Africa toward the Millennium Development Goals and feeds into the broader debate on aid to Africa, which is fuelled by perspectives as diverse as those of large donors like the World Bank which have emphasized the complementary of  Aid and reform in Africa; think tanks like the Overseas Development Institute which have argued for policy coherence, beyond aid;  to outright critics like Dambisa Moyo, whose book Dead Aid, asserts that Africa needs strategies other than aid.

The other big implementation setback with respect to MDG 8 is the failure of the international community to conclude the Doha Development Round of trade negotiations, the objective of which was to lower trade barriers around the world, thereby allowing more countries to trade globally. Since the MDGs were agreed upon, developing counties have gained greater access to markets of developed countries. The proportion of imports by developed countries from all countries climbed steadily till 1998. However in 2008/09 the financial crises caused a drop in the value and volume of trade for almost all development countries.

Least development countries (LDCs), including landlocked countries and Small Island developing States, which were a MDG 8 target, continue to be disproportionately affected by weaknesses in the multilateral trading system.

What will it take to achieve MDG 8 by 2015?

A recent UNDP publication by that title: What will it take to achieve the Millennium Development Goals - advocates that the shortfall between what was committed at Gleneagles in 2005 is only $17.7 billion or 0.05% of GNI of developed countries, a small gap which can be filled. In addition UNDP advocates for policy coherence and increased budget support to developing countries research suggests that this is associated with better MDG outcomes. Innovative financial mechanisms at the international level, such as environmental and financial transaction taxes are also advocated.

The UN Millennium Campaign global policy demands further emphasize the role for both rich and poor countries with a focus on planning and efficient use of domestic resources at a national level as well as timetables for fulfilling aid commitments and a focus on aid effectiveness at a donor level.

What is aid and why is it important?

Aid (also known as international aid, overseas aid, or foreign aid) refers to the grants or loans from on one country (the donor) to the other (the recipient) with a view to the promotion of economic development and welfare.

The most widely used measure of aid, Official Development Assistance (ODA) is compiled by the Development Assistance Committee of the Organisation for Economic Co-operation and Development. The DAC consists of 22 of the wealthiest Western industrialised countries and is a forum in which they coordinate their aid policies.

Official development assistance (ODA) has more than quadrupled in the past 25 years and is now a $50 billion industry. The aid industry is changing too, as the number and diversity of funders increases. Though a majority of aid still comes from official donors, including emerging giants such China and India, this is being supplemented by new non-official providers, including private and corporate foundations, and social responsibility programmes. In addition, money is being spent in different ways, for example on global programmes to combat specific issues, such as the control of malaria or measles.

In 2005, at the Group of Eight (G-8) Summit at Gleneagles and the UN World Summit world leaders promised to double aid to Africa and to increase total official development assistance (ODA) by around $ 50 bn. a year by 2010 to reach at least 0.5 per cent of donor countries’ gross national product (GNP). The Summit recognised that such increases in ODA were required for achieving the Millennium Development Goals (MDGs).

More recently a cluster of high-level meetings including the UN MDG Summit (part of the 63rd session) and the Accra High-Level Forum on Aid Effectiveness in September and the Financing for Development conference in Doha have focused international attention beyond numbers to on the challenges around aid effectiveness. In many respects these challenges are much the same as they were in 2005 but what is crucially different is the global context in which this must now be achieved.

In respect to aid MDG 8 emphasizes measuring:

• Net ODA, total and to the least developed countries, as percentage of OECD/DAC donors; gross national income
• Proportion of total bilateral, sector-allocable ODA of OECD/DAC donors to basic social services (basic education, primary health care, nutrition, safe water and sanitation
• Proportion of bilateral official development assistance of OECD/DAC donors that is untied
• ODA received in landlocked developing countries as a proportion of their gross national income
• ODA received in small island developing States as a proportion of their gross national incomes

Overall, progress lags behind expectation. The 2010 MDG Report notes for example, that in 2009, net disbursements of aid amounted to $119.6 billion, or 0.31 per cent of the combined national income of developed countries. In real terms, this is a slight increase (of 0.7 per cent) compared to 2008 even though, measured in current US dollars, ODA fell by over 2 per cent—from $122.3 billion in 2008.

However, this increase still falls short of commitments made previously by developed countries at events like the Group of Eight (G-8) Summit at Gleneagles and the UN World Summit in 2005, with negative implications for certain regions like Sub-Saharan Africa. The Report suggests that “Africa is short changed”, and donor commitments to double aid to Africa by 2010 have not been achieved in practice. It is envisaged that Africa will only receive $11 billion out of the $25 billion in aid previously committed to by the international donor community

Also see

ODI Briefing Paper – Aid allocation and the MDGs

Poverty in Focus - Does Aid Work for the MDGs?

Why trade? Why is trade expansion critical for the Goals?

MDG 8 is about provided poor countries with equal access to international markets. This is tracked by measuring:

• Proportion of total developed country imports (by value and excluding arms) from developing countries and least developed countries, admitted free of duty
• Average tariffs imposed by developed countries on agricultural products and textiles and clothing from developing countries
• Agricultural support estimate for OECD countries as a percentage of their gross domestic product
• Proportion of ODA provided to help build trade capacity

The rational for linking trade expansion to a global partnership for development is clearly spelt out in initial Millennium Project reports:

“Openness to trade is associated with higher incomes and better economic performance. While there are differences of view about the magnitude and strength of this relationship, the general direction of effect is not in doubt: no closed or isolated economy has performed better than those integrated into the world economy”.

[Source: http://www.unmillenniumproject.org/documents/TF9-trade-frontmatter-chapter3.pdf]

The focus on trade as part of a global partnership on development also the forces the spotlight on the role of International Financial Institutions. In fact a recent World Bank Study on Trade, Aid and the International Financial Institutions suggests that open trade, trade finance and aid for trade will be key elements in ensuring the global recovery from the international financial crises.

The study also suggests that international financial institutions like the World Bank and International Monetary Fund need to adapt to post-crises world through programs to stabilize markets limit the slide in economic growth and support the poor.

What does debt relief mean for the MDGs?

MDG 8 has renewed the spotlight on debt relief. Over the past decade, several poor countries have received substantial amounts of debt relief. This has helped create more fiscal space for spending on national development. However much more needs to be done to make national debt sustainable. The food crisis and the global financial and economic crisis have increased external financing needs and limited country  capacity to service still outstanding debts.

MDG 8 tracks progress towards debt sustainability through measurement of:

• Total number of countries that have reached their HIPC decision points and number that have reached their HIPC completion points (cumulative)

• Debt relief committed under HIPC and MDRI Initiatives

• Debt service as a percentage of exports of goods and services

Why does Goal 8 mention technology?

Access to technology is one sub set of the indicators used in measuring progress towards attainment of MDG 8. The UN Millennium Project advocates that technological innovation and the institutional adjustments that go along with it are at the basis of sustained growth and must be at the centre of any strategy to strengthen the private sector.

Technologies for information and communication in particular, are stressed in MDG 8 monitoring. This includes the spread of telephones lines as well as the use of cellular phones and the internet. In fact, the spread of mobile telephony is cited as one of the successes of the Millennium Project:

“Mobile telephony continues to expand in the developing works is increasingly being used for m-banking, disaster management and other non-voice applications for development. By the end of 2009, cellular subscriptions per 100 people have reached the 50% mark” (Source: MDG Report 2010)

A recent publication on Innovation: applying knowledge in development by the Millennium Project however takes a broader look at technological progress recommending a strategic approach that starts by improving the policy environment and redesigning investment. The reports recommends to:

• Improve the policy environment and enhance global technology Governance
• Redefine infrastructure development as a foundation for technological Innovation
• Build human capabilities, particularly in science, technology, and Engineering
• Support entrepreneurship by creating and expanding links between technology and enterprise
• Manage technological innovation by using existing technologies, investing in global technology generation, and forging international technology alliances

There’s a section on medicines. What does it mean?

MDG 8 also calls for access to affordable medicines. Statistics by international bodies like the World Health Organisation suggest that people in developing countries pay three to six times more than the international reference price for the cheapest generic medicines. Access to affordable medicines therefore is about lessening this inequality – at a time when the purchasing power of the poor is under threat and the cost of many essential medicines is rising as well

MDG 8 aims, in cooperation with pharmaceutical companies, to provide access to affordable essential medecines in development counties.

 Maya Cordeiro, August 2010