• Foreword, Acknowledgments, Contents

  This is, sadly, the last Human Development Report for which I will write the foreword, as I will step down as United Nations Development Programme (UNDP) Administrator in August. When I arrived at UNDP in 1999, I said that the Human Development Report was the jewel in the crown of the organization’s global intellectual and advocacy efforts. Six years and six reports later, I can report with some pride that its lustre has only grown.
  Building on the powerful foundation laid during the Report’s first decade, when successive Human Development Reports introduced and fleshed out the concept of human development, the Reports have gone from strength to strength. From examining how best to make new technologies work for rich people and poor people alike to highlighting the critical importance of strengthening human rights and deepening democracy to protect and empower the most vulnerable, the Human Development Report has steadily widened the intellectual frontiers of human development in the new millennium. And that shift has been increasingly mirrored in development practice through work by UNDP and its many partners on the ground in all these critical areas.
  Kevin Watkins - Director
  Human Development Report 2005

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• Overview: International cooperation at a crossroads: aid, trade and security in an unequal world

  The year 2004 ended with an event that demonstrated the destructive power of nature and the regenerative power of human compassion. The tsunami that swept across the Indian Ocean left some 300,000 people dead. Millions more were left homeless. Within days of the tsunami, one of the worst natural disasters in recent history had given rise to the world’s greatest international relief effort, showing what can be achieved through global solidarity when the international community commits itself to a great endeavour.
  The tsunami was a highly visible, unpredictable and largely unpreventable tragedy. Other tragedies are less visible, monotonously predictable and readily preventable. Every hour more than 1,200 children die away from the glare of media attention. This is equivalent to three tsunamis a month, every month, hitting the world’s most vulnerable citizens—its children. The causes of death will vary, but the overwhelming majority can be traced to a single pathology: poverty. Unlike the tsunami, that pathology is preventable. With today’s technology, financial resources and accumulated knowledge, the world has the capacity to overcome extreme deprivation. Yet as an international community we allow poverty to destroy lives on a scale that dwarfs the impact of the tsunami.

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• Chapter 1: The state of human development

  “The test of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have too little.”
  (US President Franklin D. Roosevelt, second inaugural address, 1937>
  
  Sixty years ago the UN Charter pledged to free future generations from the scourge of war, to protect fundamental human rights and “to promote social progress and better standards of life in larger freedom”. At the start of the new millennium the world’s governments renewed that pledge. The Millennium Declaration, adopted in 2000, sets out a bold vision for “larger freedom” in the twenty-first century. That vision holds out the promise of a new pattern of global integration built on the foundations of greater equity, social justice and respect for human rights. The Millennium Development Goals (MDGs), a set of time-bound and quantified targets for reducing extreme poverty and extending universal rights by 2015, provide the benchmarks for measuring progress. More fundamentally, they reflect the shared aspirations of the global human community in a period of sweeping change.
  This year marks the start of the 10-year countdown to the 2015 target date for achieving the MDGs. Today, the world has the financial, technological and human resources to make a decisive breakthrough in human development. But if current trends continue, the MDGs will be missed by a wide margin. Instead of seizing the moment, the world’s governments are stumbling towards a heavily sign-posted and easily avoidable human development failure—a failure with profound implications not just for the world’s poor but for global peace, prosperity and security.
  Fifteen years after the launch of the first Human Development Report, this year’s Report starts by looking at the state of human development.

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• Chapter 2: Inequality and human development

  “There are only two families in the world, as my grandmother used to say: the haves and the have-nots.”
  (Sancho Panza in Don Quixote de la Mancha, Miguel de Cervantes)
  
  “What is it that impels the powerful and vocal lobby to press for greater equality?” asked Margaret Thatcher, then UK prime minister, in 1975. She offered her own answer: “Often the reason boils down to an undistinguished combination of envy and bourgeois guilt.” Plato took a different view. Writing in the fifth century BC he warned Athenian lawmakers of the threat posed by extreme inequality. “There should exist among the citizens neither extreme poverty nor again excessive wealth”, he wrote, “for both are productive of great evil.”
  Two contrasting views on a question that retains a powerful relevance today: does inequality matter? If so, why? In this chapter we argue that inequality matters because it is a fundamental issue for human development. Extreme inequalities in opportunity and life chance have a direct bearing on what people can be and what they can do—that is, on human capabilities. Children facing a higher risk of death because they are born into a low-income or indigenous household or because they are female, for example, clearly have less opportunity to realize their potential. Inherited disadvantage in opportunity is wrong for intrinsic reasons: it violates basic precepts of social justice. There are also strong instrumental reasons for a concern with inequality. Deep disparities based on wealth, region, gender and ethnicity are bad for growth, bad for democracy and bad for social cohesion. They are also bad for the Millennium Development Goals (MDGs). The MDGs do not directly address inequality. In this sense they are distribution neutral. Progress is measured by aggregating and averaging change at a national level. In theory, the MDGs could be met even if, say, households with low incomes were falling behind on the income poverty and health targets, or if the rate of reduction in child deaths among boys was sufficient to compensate for a slower rate of reduction among girls.

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• Chapter 3: Aid for the 21st century

  “Hunger is actually the worst of all weapons of mass destruction, claiming millions of victims every year. Fighting hunger and poverty and promoting development are the truly sustainable way to achieve world peace….There will be no peace without development, and there will be neither peace nor development without social justice.”
  (Brazilian President Luiz Inácio Lula da Silva)
  
  International aid is one of the most powerful weapons in the war against poverty. Today, that weapon is underused and badly targeted. There is too little aid and too much of what is provided is weakly linked to human development. Fixing the international aid system is one of the most urgent priorities facing governments at the start of the 10-year countdown to 2015.
  This chapter sets out an agenda for rethinking international aid that is relevant to rich countries and poor countries alike. Many people equate aid with charity—a one-way act of generosity directed from high-income countries to their lowincome counterparts. That belief is wrong. Aid should be thought of as a hand up, not a handout— and as an investment in shared security and shared prosperity. By enabling poor people and poor countries to overcome the health, education and economic resource barriers that keep them in poverty, aid can spread the benefits of global integration, expanding shared prosperity in the process. It can also reduce the mass poverty and inequality that increasingly threaten the collective security of the international community.
  Aid has not always played a positive role in supporting human development, partly because of failures on the side of aid recipients and partly because donor countries have allowed strategic considerations to override development concerns. But whatever the failings of the past, today there are new opportunities for reshaping development assistance. For the first time in history there is an international consensus that human development should be the primary objective of aid. That consensus was reinforced in March 2002 when world leaders, gathered at the International Conference on Financing for Development in Monterrey, Mexico, agreed to make aid one of the building blocks of a new “global partnership” for poverty reduction.

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• Chapter 4: International trade— unlocking the potential for human development

  “The division of labour among nations is that some specialize in winning and others in losing.”
  Eduardo Galeano
  
  “ Until the lions have their historians”, declares an African proverb, “ tales of hunting will always glorify the hunter.” The same is true of tales about international trade. For globalization enthusiasts the rapid expansion of world trade over the past two decades has been an unmitigated blessing, notably for the world’s poor. Reality is more prosaic. Greater trade does offer enormous opportunities for human development. Under the right conditions it has potential for reducing poverty, narrowing inequality and overcoming economic injustice. For many of the world’s poorest countries, and for millions of poor people, these conditions have yet to be created.
  Improved multilateral cooperation on trade is vital if the international community is to achieve the Millennium Development Goals (MDGs) and wider development objectives. International trade rules and national trade policies need to be aligned with a commitment to poverty reduction. The starting point should be a recognition that greater openness to trade, like economic growth, is not an end in itself: it is a means to expanding human capabilities. Indicators for increased openness—such as export growth and rising trade to GDP ratios—are important, but they are not proxies for human development.
  Trade is at the heart of the interdependence that binds countries together. That interdependence has contributed to some highly visible human development advances, enabling millions of people to escape poverty and share in the prosperity generated by globalization. Yet many millions more have been left behind. The costs and benefits of trade have been unevenly distributed across and within countries, perpetuating a pattern of globalization that builds prosperity for some amid mass poverty and deepening inequality for others.

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• Chapter 5: Violent conflict—bringing the real threat into focus

  If human development is about expanding choice and advancing rights, then violent conflict is the most brutal suppression of human development. The right to life and to security are among the most basic human rights. They are also among the most widely and systematically violated. Insecurity linked to armed conflict remains one of the greatest obstacles to human development. It is both a cause and a consequence of mass poverty. As the UN Secretary-General has put it, “humanity cannot enjoy security without development or development without security, and neither without respect for human rights.”
  Almost 15 years after the end of the cold war there is a perception that our world is becoming less safe. In industrial countries public opinion polls suggest that this perception is linked to fears of terrorist threats. These threats are real. Yet they also create a distorted perception of the distribution of human insecurity. Since 1998 terrorism has been responsible for nearly 20,000 fatalities globally.3 Meanwhile, conflict in the Democratic Republic of the Congo is estimated to have caused nearly 4 million deaths, the vast majority not from bullets but from malnutrition and disease. In Sudan the ongoing humanitarian tragedy in the Darfur region flickers intermittently into world news reports, yet it is claiming victims on a scale that dwarfs the threats facing people in rich countries. Every civilian death linked to conflict is a violation of human rights. But the risk of violation is heavily weighted against people living in the world’s poorest countries.

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• Notes, Bibliographic note, Bibliography
• Human Development Indicators
• Technical Notes
• Complete report
• Errata

This 2005 Human Development Report takes stock of human development, including progress towards the MDGs. Looking beyond statistics; it highlights the human costs of missed targets and broken promises. Extreme inequality between countries and within countries is identified as one of the main barriers to human development—and as a powerful brake on accelerated progress towards the MDGs.
The report suggests that the world’s governments are faced with a choice. They can start a decade for development with the financial resources, technology and capacity to end poverty or we could have a human development failure. “Business as usual” will not allow fulfilling the promises and the commitments made in 2000. The cost of this failure will be measured in human lives, increased inequalities, violations of human rights and threats to peace.
International aid, one of the most effective weapons in the war against poverty, needs to be renovated and reshaped. It should be thought as an investment as well as a moral imperative. In this respect, three conditions for effective aid are:

• sufficient quantity;
• better quality (delivered on a predictable value for money basis,with low transaction cost); and
  
• country ownership.

Failure in any one area undermines the foundations for future progress.

The 2005 Report presents:

• A comprehensive overview of international development assistance, looking at both its quality and quantity;
• A critical review of progress in the “Doha Development Round” of trade negotiations, highlighting how unfair trade rules reinforce inequality; and
• Evidence of the human development costs of violent conflict, and a review of strategies for conflict prevention.