Employment and Millennium Development Goals

This paper looks at the role of employment-intensive growth in attaining the Millennium Development Goals (MDGs) that the United Nations Millennium Summit in 2000 ratified by setting specific targets with respect to eight different goals: eradication of extreme poverty and hunger; universal primary education; gender equality; reduction of child mortality; improved maternal health; combating HIV/AIDS, malaria and other diseases; ensuring environmental sustainability; and promoting global partnership for development. With the exception of the last goal, which is a matter for the international community dominated by the advanced countries, the remaining goals are to be pursued by individual developing countries by adopting appropriate policies. The seven such goals may conveniently be divided into three categories: (a) those that may by and large be treated as private goods whose benefits are mainly captured by their recipients; the promotion of personal income is the principal instrument for their achievement; (b) those that are characterized by substantial externalities in that they provide benefits not only to their direct recipients but also to others; their achievement is a matter of both private income generation and public action; and (c) those goals that are public goods characterized by non-excludability and non-rivalry; their achievement is primarily a matter of public action. The first MDG - reduction of poverty and hunger - is achieved by rapid and inequality-averse economic growth filtering down to households and providing the poor with an increase in personal income to enable them to rise above the poverty threshold which is defined in terms of personal income. Employment-intensive growth is the principal instrument for the achievement of this goal. There can be plenty of scope for public action in promoting this kind of growth and for supplementary public action to augment the income of the poor households who are bypassed by such growth. But the instrument for the reduction of poverty and hunger is the augmentation of personal income. For the attainment of the MDGs entailing externalities it is not enough to augment personal income. Households would not spend enough to purchase the socially desirable amounts of education and health for children and healthcare for mothers. Public action would be necessary to supplement private expenditure to attain desirable quantities of these services. The attainment of desirable levels of public goods like gender empowerment, control of epidemic diseases and environmental protection would be even more a matter of public action and expenditure with at best a limited role for private expenditure. Compared to the earlier development goal of promoting growth with poverty reduction, the endorsement of MDGs as the principal development strategy by the world community thus represents a substantial widening of the role of public action in development, a point that should be adequately recognized. Employment-intensive growth would need to be supplemented by a broad range of public action in the achievement of the MDG package. The paper analyzes the range of policies related to the promotion of employment-intensive growth and other public actions needed to attain the three categories of MDGs. It illustrates the above by taking a close look at the performance of four countries – Armenia, Cambodia, Ethiopia and Mongolia – in attaining MDGs. It also looks at a more limited set of aspects of performance in attaining MDGs for a larger set of so-called poor Integrated Package Service countries.