How to achieve equitable and sustainable economic growth was the focus of a recent UNDP forum in Kiev on growth, productivity and development in Ukraine and the Commonwealth of Independent States (CIS).

The Kiev forum, which was attended by academics, policymakers, representatives from international organizations and media, aimed "not only to increase understanding of the economic transition … but also to provide valuable expertise and economic advice to policymakers in Ukraine and their international partners," said Frank O'Donnell, UNDP Resident Representative in Ukraine, who opened the event.

Ben Slay, an economist and director of UNDP Bratislava Regional Centre, said that growth in the region has been promisingly 'pro-poor' but work remains to be done, particularly on access to health and education, gender issues and rural development.

"Not only is poverty is falling, inequality is falling as well," he said. "But the challenge still remains to transform general economic growth to growth that benefits all segments of society."

The growth, productivity and development issue of Development and Transition, a newsletter published by the London School of Economics and Political Science (LSE) with UNDP, was also launched at the forum.

The newsletter examines regional growth prospects through 2015, privatization and 'jobless' growth in FYR Macedonia as well as growth and cooperation in Central Asia. The March issue also features economic reform recommendations for Ukraine and an interview with Kemal Dervis, the new Administrator of UNDP. Here is the interview:

Development &Transition: In A Better Globalisation, you argued that the international governance structure needs to be rebuilt, replacing the post World War II system with one more appropriate to the realities and requirements of the 21st century. What should be the role of UNDP, and the UN as a whole, in such a system?

Kemal Derviş: Humanity went through its worst catastrophe in history in the middle of the 20th century, ending with World War II. The creation of the United Nations, and of related international institutions, was a response built on the hope that we could prevent such catastrophes in the future. Some of the specific features of these institutions reflect the world at that time 60 years ago. It is, therefore, natural and necessary to adjust the institutional architecture so we can now face the challenges of the 21st century. The UN remains at the centre of the international system and UN reform should be the driver for an overall renewal.

D&T: How have prospects for attaining this vision, been affected by September's World Summit? What specific innovations in the international governance architecture might we expect as a result of the Summit?

KD: The Secretary-General proposed far-reaching policy and institutional reforms to the Summit, and the overall intent of these proposals was accepted. Unfortunately, agreement could not be reached on many of the specific innovations. Nonetheless, the Summit was a step forward, particularly in relation to the Millennium Development Goals. In terms of the follow-up, what needs to be done first is to continue to extend the reforms to the areas in which the Summit could not yet agree and try to reach consensus and support for these other dimensions, and second, to implement those decisions where agreement has been reached. We need to redouble our efforts to follow-up on the MDGs and to try to build a roadmap that allows as many countries as possible to reach these MDGs in 2015. The Summit strongly asked all of us to work together in that direction.

D&T: In what ways do the development challenges facing the transition economies in the Commonwealth of Independent States, the Balkans, and Central Europe differ from those of other UNDP programme countries? In what ways are they similar?

KD: The development challenges of the Commonwealth of Independent States, the Balkans, and Central Europe have common features in that many of these countries have gone through a deep transformation of their political and institutional systems. In many cases, this transformation has been extremely disruptive and painful, particularly to the weakest segments of the societies in those countries. There is today a great hope for more prosperity in the future, and certainly in many cases participatory democratic institutions have been built. Nonetheless, serious equity problems - social service problems – remain. Serious governance problems threaten the stability of some countries. The region in some ways is similar to other parts of the world where UNDP has country programmes and in some ways it is different. The influence of the European integration process is particularly important in Central Europe and extends beyond the official EU members or candidates to the "European neighbourhood” to the East and Southeast. It is very important for UNDP and other organisations to work very closely with the European Union and to ensure our efforts are complementary.

D&T: Many transition economies no longer have strong programmes with the IMF and World Bank. For the new EU member states, this is because they have “graduated” from the Bretton Woods assistance, and can more easily finance themselves on international capital markets. However, the IFIs' cooperation with some of the region’s poorest countries—Moldova, Uzbekistan, Turkmenistan—as well as middle-income countries like the Russian Federation, Ukraine, and Kazakhstan—is much less vibrant now than it was 5-10 years ago. These countries generally do not have the same beneficial access to international capital markets. Many of these countries have likewise not yet joined the World Trade Organisation, even though their exporters face significant protection on OECD markets. In light of this, what roles should UNDP, and the UN system, play vis-à-vis these countries?

KD: In the area of financial cooperation, including IFI programmes and trade, the region’s poorest countries have needs that arenot very different from many of the poorer countries in other parts of the world. In the middle income countries, important financial needs remain due to the weakness of the fiscal systems and the need to build new social infrastructure. Some of the countries of the region have reasonable access to capital markets, some do not, or have access only to very expensive funds. UNDP’s main role is to work with these countries on the software of development, on capacity building, and the strengthening of the human resource development processes in those countries. As is the case in some other parts of the world, such as Latin America, middle income countries are not yet ready to be solely and entirely dependent on commercial capital markets. These countries still require some element of development assistance which is best provided in the form of blending commercially sourced resources with some official development aid.

D&T: UNDP has undergone significant changes in the last 10 years. What changes still lie ahead? Where would you like to see UNDP, and the UN system, 10 years from now?

KD: In 10 years I would like to see the achievement of the MDGs. Achievement of these goals will not be easy and will require constant work and vigilance on the part of everyone. We have seen tremendous progress in some regions of the world, while other regions have slipped even further into poverty or have fallen victim to disease and conflict. We must redouble our efforts and work closely with governments, civil society and the private sector to press ahead. I would also like to stress that achieving the MDGs is not just a question of resources. Resources are needed but we also need much better governance at both the national and international level. My hope is that in 2015 we have a secured and strengthened United Nations system reflecting the great needs of the 21st Century.

For Development and Transition: www.developmentandtransition.net.