HD IN I NCLUSIVE G ROWTH E XAMPLES OF ESW IN EAP Xiaoqing Yu (EASHS) and Jehan Arulpragasam (MDI) Human Development Unit, EAP

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, …

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

Context  China’s most prosperous province – 12% of China’s national output; 18 th largest economy in the world (similar to the size of Turkey and Indonesia)  China most populous province – 79 mln residents + 31 mln migrants  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… S HARED G ROWTH IN C HINA T HE S TORY OF G UANGDONG

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 S HARED G ROWTH IN C HINA T HE S TORY OF G UANGDONG

F OSTERING M ORE I NCLUSIVE G ROWTH T HE S TORY OF THE P HILIPPINES Context and Issues  Slow growth a long-standing problem for slow progress in poverty reduction.  But even with acceleration in growth between , poverty did not decline – actually increased from 30 to 32.9 percent between 2003 and 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)

F OSTERING M ORE I NCLUSIVE G ROWTH T HE S TORY OF THE P HILIPPINES 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 ( ) 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.

I NCLUSIVE G ROWTH AND HD C ONCLUSIONS  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.