Minister of Planning and Local Development

On the Occasion of African Plenary on National Strategies for Poverty Reduction
and the Implementation of the Millennium Development Goals: The Second Generation

Conrad Hotel, Cairo
Sunday 26 March 2006
Excellencies,
Distinguished Guests,
Ladies and Gentlemen

I would like to welcome you all in Egypt, the cradle of civilization, wishing you a pleasant stay and enjoyable time. I am especially delighted that you chose Cairo, the magnificent city on the banks of the river Nile, to host the African Plenary on National Strategies for Poverty Reduction, and I sincerely hope that you would have the opportunity to explore some of its unique attractions.

Today, it gives me a great pleasure to address the opening session of this event. And let me start by congratulating you on organizing this Plenary, and of course, all experts and researchers for their valuable contribution to its main theme.

Ladies and Gentlemen

Your gathering today is a very important event. It illuminates your understanding and deep concern of the main challenges facing the African Continent of which poverty reduction is by all means a top priority.

As you already know, poverty in Africa is chronic and pervasive. It is also considerably higher than in many other developing regions and has been on the rise.

According to the Economic Report on Africa recently released by the Economic Commission for Africa, in 2003 about 46 per cent of the Sub-Saharan Africa population lived on less than one dollar a day, higher than it was two decades ago, and exceeding the next poorest region, South Asia, by about 17 percentage points. In real numbers, at least 61 million more Africans go hungry today than they did in 1990.

To admit, the African continent is facing a major challenge that requires tedious work and coordinated efforts amongst all concerned parties.

In this context, I would like to share with you some of my thoughts pertaining to issues that are of common concern and I am quite sure that they will be subject to thorough investigation and discussion in the coming sessions as outlined in the plenary agenda.

First of all, it goes without saying that the National Strategy for Poverty Reduction in Africa should rest on a clear Vision of Development for the Continent.

This vision should reflect the Millennium Development Goals with policy interventions seeking their achievements over the planned time horizon. This is of paramount importance if we wish to tackle all dimensions and aspects of the poverty problem.

A comprehensive poverty reduction strategy should therefore entail the achievement of universal primary education, the promotion of gender equality, the reduction of mortality rates, the improvement of maternal health, the combat of malaria, HIV/AIDS and other diseases, the provision of adequate public services and the ensuing of environmental sustainability. All these form integral elements of any effective strategy targeting poverty.

In fact, Egypt has adopted such approach, linking the development vision with its poverty reduction action plan and endorsing the Millennium Development Goals. This was reflected in Egypt's Socio-economic Development Plans and the Presidency Elective Programme and was clearly pronounced in the Human Development Report of 2005 that was launched last month.

In effect, some of the Millennium Development Goals have been already attained, such as those related to gender equality in secondary and tertiary education, urban accesses to improved water source, and the percentage of population below one dollar a day.

Other targets are likely to be met even before 2015. For instance, while the Millennium target for the percentage of population under national poverty line is set up at 12 per cent by year 2015, the actual ratio dropped from 24.3 per cent in 1990 to 20.2 per cent in 2004 and is expected to decline further to 10 per cent by the end of the Sixth Five Year Development Plan in 2012.

What is important to emphasize is that Egypt embraced a new vision in which the poor are seen not just as recipients of aid from the government or from the donor community, but as the major participants in and beneficiaries of a new social contract between the Egyptian government and its citizens. Accordingly, the less privileged segments of the population are viewed as dynamic new entrants to the economic scene as producers and consumers, and to the political arena as active stakeholders in shaping the future of the country.

Ladies and Gentlemen

The second point that I would like to emphasize is that the achievement of high economic growth rate is a must for any poverty alleviation strategy or action plan to be effective. Frankly speaking, the recorded 4.5-5 per cent growth rate in the past three years, though relatively high compared to previous years, is not yet sufficient to tackle the poverty problem in Africa in an effective manner.

To Quote the Economic Commission Report, African countries need to grow by an estimated 7 per cent a year to reduce poverty enough to achieve the Millennium Development Goal One of halving the number of poor people by year 2015.

Such high growth would undoubtedly enlarge the employment generating capacity of the economy, offering new job opportunities for the deprived segments of the population. This is quite vital for Africa with unemployment hovering around 10 per cent since 1995, not to mention underemployment which is widespread in agriculture and informal activities.
The achievement of high economic growth as high as 7 per cent is also necessary to provide sufficient public funds that could be allotted to the implementation of effective social safety nets designated essentially for the benefit of the poor.

The Egyptian case is a good example to cite. Since 2004 the economy has witnessed a strong recovery, growing at a rate exceeding 5 per cent, and at present at a rate surpassing 6 per cent.

This has allowed the government to declare the capacity of the economy to secure 750 thousand jobs a year that would reduce the unemployment rate from its present level of 9.2 per cent to 5 per cent by year 2012 .

It has also enabled the government to undertake ambitious social safety Programmes and to allocate substantial funds to subsidize energy and food items in the order of 40 billion and 30 billion Egyptian Pounds, respectively.

So, unless the economy grows at a high and sustainable rate, the escape from the poverty trap would remain a dream that can hardly materialize.

Ladies and Gentlemen

The third point that I think would be subject to long discussion in the coming sessions is how to ensure that the embracement of a pro-poor development strategy could be compatible with the high-growth objective. It is often said that high growth is a necessary condition but not sufficient to alleviate the poverty problem.

Historical experience has shown that employment growth has been lagging far behind output growth in many instances and that equity considerations may have been ignored in the strive for rapid growth.

The need for pro-poor initiatives is non-questionable but the main challenge facing policy makers is how to ensure that these initiatives are at the same time conducive to growth. In other words, we need to examine the effectiveness of the components of the pro-poor development package not only in improving the living standard of the less-privileged citizens but also in terms of enhancing the growth of the overall economy to ensure sustainability.

The compatibility of pro-poor development strategy with rapid growth is a critical issue that is worth thorough investigation.

The fourth point that I would like to stress relates to the importance of pursuing the structural reform Programmes in African countries at all fronts. Such reforms include among others, commitment to globalization, free-market economy, privatization and trade liberalization. Also, institutional reforms pertaining to good governance, transparency and decentralization of decision-making process are also essential to assure popular participation in the development efforts.

The harmonization of these country reform schemes at the regional level is needed to maximize the potential benefits of a common poverty reduction strategy for the African continent.

Ladies and Gentlemen

My last point in my address concerns the expected role of aid donors in the effectuation of the poverty reduction strategy. Official development assistance received by developing countries are still moderate, accounting for only 0.26 % of GNP of DAC countries, far short of the 0.7 % target reaffirmed in the 2005 World Summit Outcome.

In absolute terms, this financial aid totaled 79.5 billion dollars in 2004 and is likely to reach 97.2 billion dollars in 2006 with a target of 130 billion by year 2010. But even so, these amounts are far short of the 150 billion dollars which would be needed each year by developing countries to meet the Millennium Development Goals.

Aid donors are urged to live up to their commitments at the agreed level and within the agreed time frame.

Ladies and Gentlemen

I am sure that the high-level African dialogue in this plenary will thoroughly investigate these issues that would help in the formulation of growth and poverty reduction strategies aiming at the achievement of the Millennium Development Goals.

Once more, I would like to welcome you all in Cairo wishing you every success and hoping that the outcome of this Plenary would be a major contribution to tackling Poverty in Africa.

My sincere gratitude for all participants in this important event, and thank you for your kind attention.