13 June 2016
ECOSOC Dialogue Calls for Redefining MICs
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The UN Economic and Social Council (ECOSOC) held a dialogue on the role of the UN Development System (UNDS) in responding to the needs and priorities of middle-income countries (MICs).

A summary of the discussion will be prepared as a contribution to the ECOSOC Dialogue on the longer-term positioning of the UNDS, and will inform the negotiations on the 2016 Quadrennial Comprehensive Policy Review (QCPR).

ECOSOC26 May 2016: The UN Economic and Social Council (ECOSOC) held a dialogue on the role of the UN Development System (UNDS) in responding to the needs and priorities of middle-income countries (MICs). A summary of the discussion will be prepared as a contribution to the ECOSOC Dialogue on the longer-term positioning of the UNDS, and will inform the negotiations on the 2016 Quadrennial Comprehensive Policy Review (QCPR).

The background documentation for dialogue notes that the event built on agreements such as the 2030 Agenda for Sustainable Development, in which governments recognize that MICs still face significant challenges in achieving sustainable development, and that the full range of stakeholders involved in international development—not only the UN development system, but also international financial institutions (IFIs) and regional organizations, among others—should improve coordination and support of this effort. The Addis Ababa Action Agenda (AAAA) acknowledges that MICs have “diverse and specific development needs,” requiring not only tailored approaches, but also official development assistance (ODA) and other concessional forms of finance. The UN General Assembly’s (UNGA) December 2015 resolution on Development Cooperation with MICs invited ECOSOC to discuss concrete proposals for MICs within the ECOSOC Dialogue on the long-term positioning of the UNDS.

In the discussion on 26 May 2016, in New York, US, representatives of governments, the UN system, and the civil society discussed: how many and what categories should be used to replace the “outdated” MIC category; UN’s contribution to MIC’s support and redefinition, in collaboration with other multilateral organizations and IFIs; ways in which UNDS can update its strategies to enable informed decisions on what it does and what it does not do in different countries, as well as when to lead and when to stay out of the governments’ way; support for different stakeholders; incentives to help domestic environments improve; ways to develop a system that speaks to current realities without introducing “unnecessary rigidities;” and the need not to see international aid and cooperation as a “zero-sum game.”

Jonathan Glennie, Save the Children UK, called for ending the MIC categorization and changing the focus to the countries that receive the lowest level of aid, as studies show that those countries have the most difficulty overcoming poverty. Instead of MICs or Low Income Countries (LICs), he proposed classifying countries in “low” aid countries, middle aid countries, and high aid countries.

Carlos Alvarado Quesada, Minister of Labor and Social Security of Costa Rica, said using aggregate income to define MICs obscures the multidimensional nature of poverty and people living in the poorest quintile, and results in misguided policy choices. He explained that Costa Rica has developed, instead, a multidimensional poverty index that includes education, housing, health, and social protection, which enables more precise budgeting and public policy.

Lourdes Ortiz Yparraguirre, Permanent Representative of the Philippines, noted that MIC classification based on gross national income (GNI) groups together over 100 heterogeneous countries. She highlighted MICs’ contribution in building international partnerships for fighting pandemics, financial stability, global goods and peace. She identified main challenges such as: that MICs’ growth rates are highly volatile and vulnerable to external shocks; the difficulties in sustaining strong and inclusive growth; and increases in inequalities. Yparraguirre called for: sustained international support for MICs; orderly graduation from aid dependence; building the human capital base through creating skills and education; and access to environmentally sound technologies.

Maria del Carmen Sacasa, UN Resident Coordinator, Peru, stressed the need for: targeted interventions in remote parts of countries or to the most vulnerable groups; strengthening the UN Resident Coordinator (RC) system; and the next QCPR to address RCs’ access to the UN Development Group (UNDG)’s regional resources. Adriana Abdenur, Igarapé Institute, Brazil, cautioned that UN interventions are not successful when stepping on governments’ shoes. She called for the UN to help countries identify and scale up policy innovations, as well to balance neutrality and proactive engagement.

Ana Maria Romero, Ministry of Planning, Colombia, underscored the need for differentiated approaches to MICs, and drew attention to post-conflict MIC countries. Andrei Dapkiunas, Permanent Representative of Belarus, called for shifting from the concept of MIC to “Middle Development Countries.” Simon Springett, UN Resident Coordinator, Mauritius, noted that governments see UNDS’ role as a provider of: platforms for sharing lessons; capacity building; and research and analysis.

During the ensuing discussion, MIC representatives addressed: the need to revisit the criteria for ODA allocation to take into consideration the multidimensional aspect of poverty and MICs’ challenges; the need for UNDS to provide effective and coordinated support to MICs; the need to overcome existing economic and social gaps; the potential for the UN Regional Commissions to contribute to addressing structural gaps for MICs; and MICs’ access to technology, financing, and strengthening institutional capacities. Many called for removing the MIC category from UN documents and for defining a more complex methodology to identify countries’ different levels of development, which goes beyond GDP and income per capita. Several supported replacing MICs with “Middle Development Countries.”

Maldives said support to MICs should be based on their abilities and challenges, not their income level. Norway stressed that UNDS “should not do everything for everyone,” but provide more targeted support in MICs and and more broad support in fragile states. To support MICs, he said UNDS should: provide high-quality policy advice and help MICs develop their national plans; help countries devise policies and legislation that leave no one behind; focus on non-discrimination and human-rights based approaches; and provide capacity building. He underlined that the primary responsibility for ensuring the financial assistance should be with the host countries. [Website of the ECOSOC Dialogue] [Concept Note] [Report]

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