HD in Inclusive Growth Examples of ESW in EAP

1. HD in Inclusive GrowthExamples of ESW in EAP Xiaoqing Yu (EASHS) and JehanArulpragasam (MDI) Human Development Unit, EAP

2. The inclusiveness of growth has been an increasing concern among EAP countries Concerns • Phenomenal growth and accumulation of wealth • Rising inequality in various dimensions • Need to sustain growth and remain competitive • Concerns over social cohesion and the changing societies – ageing, mobility, information Interests • China, Philippines, Thailand, Malaysia, …

3. Human development is an integral part of the inclusive growth story • Tackling the remaining challenges in absolute deprivation – social protection • Equal opportunities to prepare for future – education and skills development, health provision and protection, basic social services • Equal opportunities to participate in and benefit from economic growth – labor market, land and natural resources, financial market, private sector development • Equal chance to participate in the development process –transparency, governance, decision making

4. Shared Growth in ChinaThe Story of Guangdong Context • China’s most prosperous province – 12% of China’s national output; 18thlargest economy in the world (similar to the size of Turkey and Indonesia) • China most populous province – 79 mln residents + 31 mlnmigrants • Pioneer of China’s opening-up and economic reform; Closely integrated with the world. Issues and diagnostics • Persistent poverty in parts of the province; rising inequality not only between rural and urban, between Pearl River Delta and other remote areas, but substantially within Pearl River Delta; • Alarming level of disparities in income and wealth largely due to unequal opportunities – access to basic education and health services; lack of access to finance and land protection; barriers to migration and skills acquisition • Recent reforms in HD have profound positive impacts in moving towards a more balanced, human centered, more inclusive growth model, but they need to be taken further…

5. Shared Growth in ChinaThe Story of Guangdong The study • Initiated by senior leadership of the government during Mr. Zoellick’s first visit as WB President • A collaborative effort with the government: close involvement of the Government, a government funded Guangdong research team, and a multi-sectoral Bank team (HD, PSD, FPD, RD) • The study covers areas of poverty and inequality, social assistance, spatial transformation of industries, labor market, rural finance, land reform, basic education, skills development, and rural health. • Substantial knowledge sharing during the process – workshops, technical comments provided by the Bank team, use of other Bank products (e.g. WDRs) • Recommendations disseminated to entire provincial leadership; used as inputs to provincial economic planning and strategy documents

6. Fostering More Inclusive Growth The Story of the Philippines Context and Issues • Slow growth a long-standing problem for slow progress in poverty reduction. • But even with acceleration in growth between 2000-2007, poverty did not decline – actually increased from 30 to 32.9 percent between 2003 and 2006. Diagnostics • Analysis shows deterioration in income distribution with growth due to: • Unequal sectoral distribution of growth • Unequal pattern of regional development • Decline in relative price of labor of the poor • Unequal distribution of human capital and access to social services • Recommendations • Specific recommendations around a broad strategy for Inclusive Growth • Enhancing income opportunities (e.g. fiscal, agriculture, labor market, financial sector and competition policy reforms) • Assisting households to participate in markets (e.g. health, education/skills, social protection policy reforms)

7. Fostering More Inclusive Growth The Story of the Philippines The study • Set-up as part of AAA cluster led by HD and multi-sectoral programmatic AAA (FY08-FY10) led by HD and PREM, with collaboration of SDN and EXT. • ESW informed early engagement with new administration (elections May 2010) • Provided multi-sectoral analytical input into other flagship ESW, Philippines Discussion Notes for the Incoming Government. • Formed the basis of Inclusive Growth Forum with several key Cabinet Secretaries and attended by development partners and civil society. • Input into the Medium Term Philippines Development Plan (2010-2016) now entitled Inclusive Growth and Poverty Reduction • Government acting on key recommendations regarding labor, health, education and social protection; considering recommendations in agriculture. • Study also informed development of CAS and Bank program.

8. Inclusive Growth and HDConclusions • Fostering growth with equity a key issue for client countries (and esp. for MICs). • Human Development is a critical component of this agenda. • The HD Network is well-placed to work cross-sectorally with other networks to address these issues – both on issues that directly fall under HD remit (e.g. health, education/skills, labor market) – and broader topics such as poverty and vulnerability, governance and service delivery, and access to opportunities.