The Twin Challenges of Reducing Poverty and Creating Employment

ISBN 978-92-1-130327-8

ST/ESA/342

Division for Social Policy and Development Department of Economic and Social Affairs

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United Nations New York, 2013

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CONTENTS 3DJH

Preface

ϱ

Contributors

ϭϮ

Introduction

ϭϱ

Ͳ ŽŶĂůĚ >ĞĞ͕ DĂƌƚĂ ZŽŝŐ ĂŶĚ ŵƐŽŶ ^ŝďĂŶĚĂ

Part I: Poverty eradication

Ϯϭ

ŚĂƉƚĞƌ ϭ͘ WŽǀĞƌƚLJ ŵĂƩ ĞƌƐ Ͳ :ŽŵŽ <ǁĂŵĞ ^ƵŶĚĂƌĂŵ

Ϯϯ

ŚĂƉƚĞƌ Ϯ͘ ĚƵĐĂƟ ŽŶ ĂŶĚ ƚŚĞ ƌŽůĞƐ ŽĨ ƚŚĞ ^ƚĂƚĞ ĂŶĚ ƚŚĞ ŵĂƌŬĞƚ ŝŶ ƉŽǀĞƌƚLJ ĞƌĂĚŝĐĂƟ ŽŶ Ͳ DŝŶƋƵĂŶ >ŝƵ

ϯϳ

ϱϱ ŚĂƉƚĞƌ ϯ͘ 'ŽǀĞƌŶĂŶĐĞ͕ ĚĞǀĞůŽƉŵĞŶƚ ĂŶĚ ƉŽǀĞƌƚLJ ĞƌĂĚŝĐĂƟ ŽŶ Ͳ 'ŽƌĂŶ ,LJĚĞŶ

ŚĂƉƚĞƌ ϰ͘ ŐƌŝĐƵůƚƵƌĞ͕ ƌƵƌĂů ůŝǀĞůŝŚŽŽĚƐ ĂŶĚ ƉŽǀĞƌƚLJ ĞƌĂĚŝĐĂƟ ŽŶ͗ ƐŽŵĞ ƉŽůŝĐLJ ůĞƐƐŽŶƐ ĨƌŽŵ ƚŚĞ ĨŽŽĚ ƉƌŝĐĞ ĐƌŝƐĞƐ Ͳ Ğƫ ŶĂ WƌĂƚŽ

ϲϵ

ŚĂƉƚĞƌ ϱ͘ ^ƵƐƚĂŝŶŝŶŐ Ğī ĞĐƟ ǀĞ ĂŶƟ ͲƉŽǀĞƌƚLJ ƉƌŽŐƌĂŵŵĞƐ ďĞLJŽŶĚ ƚƌĂŶƐĨŽƌŵĂƟ ŽŶ͗ ĐŚĂůůĞŶŐĞƐ ĂŶĚ ǁĂLJ ĨŽƌǁĂƌĚ Ͳ :ƵůŝĂŶ DĂLJ

ϴϳ

Part II: The challenge of building employment for a sustainable recovery

ϭϬϯ

ŚĂƉƚĞƌ ϲ͘ ŵƉůŽLJŵĞŶƚ ŵĂƩ ĞƌƐ Ͳ :ŽŵŽ <ǁĂŵĞ ^ƵŶĚĂƌĂŵ

ϭϬϱ

8

ŚĂƉƚĞƌ ϳ͘ ϭϮϯ DĂĐƌŽĞĐŽŶŽŵŝĐ ƉŽůŝĐLJ ĂŌ Ğƌ ƚŚĞ ŐůŽďĂů ƌĞĐĞƐƐŝŽŶ ŽĨ ϮϬϬϴͲϮϬϬϵ͗ Ă ĚĞǀĞůŽƉŵĞŶƚ ƉĞƌƐƉĞĐƟ ǀĞ Ͳ /LJĂŶĂƚƵů /ƐůĂŵ ŚĂƉƚĞƌ ϴ͘ dŚĞ ĚŝƐƚƌŝďƵƟ ŽŶĂů Ğī ĞĐƚƐ ŽĨ Į ƐĐĂů ĂƵƐƚĞƌŝƚLJ Ͳ >ĂƵƌĞŶĐĞ Ăůů͕ ĂǀŝĚĞ &ƵƌĐĞƌŝ͕ ĂŶŝĞů >ĞŝŐŚ ĂŶĚ WƌĂŬĂƐŚ >ŽƵŶŐĂŶŝ

ϭϰϭ

ŚĂƉƚĞƌ ϵ͘ ĐŚŝĞǀŝŶŐ ĨƵůů͕ ƉƌŽĚƵĐƟ ǀĞ ĂŶĚ ĨƌĞĞůLJ ĐŚŽƐĞŶ ĞŵƉůŽLJŵĞŶƚ ĨŽƌ LJŽƵŶŐ ƉĞŽƉůĞ Ͳ ^ƚĞǀĞŶ DŝůůĞƌ

ϭϱϵ

ŚĂƉƚĞƌ ϭϬ͘ &ŝŶĂŶĐŝŶŐ ƐŽĐŝĂů ĂŶĚ ůĂďŽƵƌ ŵĂƌŬĞƚ ƉŽůŝĐŝĞƐ ŝŶ Ɵ ŵĞƐ ŽĨ ĐƌŝƐŝƐ ĂŶĚ ďĞLJŽŶĚ Ͳ <ĂƚũĂ ,ƵũŽ

ϭϳϱ

ŚĂƉƚĞƌ ϭϭ͘ ƌŝƐŝƐͲĚƌŝǀĞŶ ůĂďŽƵƌ ŵĂƌŬĞƚ ƉƌŽŐƌĂŵŵĞƐ͗ ƚŚĞ ĞdžƉĞƌŝĞŶĐĞ ŽĨ >ĂƟ Ŷ ŵĞƌŝĐĂ ĂŶĚ ƚŚĞ ĂƌŝďďĞĂŶ Ͳ :ĂĐƋƵĞůŝŶĞ DĂnjnjĂ ĂŶĚ ĂŶŝůŽ &ĞƌŶĂŶĚĞƐ >ŝŵĂ ĚĂ ^ŝůǀĂ

ϭϵϵ

ŚĂƉƚĞƌ ϭϮ͘ ŵƉůŽLJŵĞŶƚ ĐŚĂůůĞŶŐĞƐ ŝŶ ƚŚĞ DŝĚĚůĞ ĂƐƚ ĂŶĚ EŽƌƚŚ ĨƌŝĐĂ Ͳ njŝƚĂ ĞƌĂƌ

Ϯϭϱ

List of tables dĂďůĞ ϵ͘ϭ zŽƵƚŚ ƐŚĂƌĞ ŽĨ ǁŽƌŬŝŶŐ ĂŐĞ ƉŽƉƵůĂƟ ŽŶ

ϭϲϯ

dĂďůĞ ϭϬ͘ϭ DŽďŝůŝnjŝŶŐ ƌĞǀĞŶƵĞƐͶƟ ŵŝŶŐ ĂŶĚ ĐŽŶĚŝƟ ŽŶƐ

ϭϴϭ

dĂďůĞ ϭϬ͘Ϯ >ĂďŽƵƌ ŵĂƌŬĞƚ ƉŽůŝĐŝĞƐ ĂŶĚ ƉŽƚĞŶƟ Ăů ĨƵŶĚŝŶŐ ƐŽƵƌĐĞƐ

ϭϴϳ

dĂďůĞ ϭϬ͘ϯ ^ŽĐŝĂů ƉŽůŝĐLJ ĂŶĚ ůĂďŽƵƌ ŵĂƌŬĞƚ ƌĞƐƉŽŶƐĞƐ ƚŽ ƚŚĞ ĐƌŝƐŝƐ͕ ƐĞůĞĐƚĞĚ ĐŽƵŶƚƌŝĞƐ ;ϮϬϬϴͲϮϬϭϬͿ

ϭϴϳ

dĂďůĞ ϭϮ͘ϭ ŵƉůŽLJŵĞŶƚͲƚŽͲƉŽƉƵůĂƟ ŽŶ ƌĂƚĞ ďLJ ŐĞŶĚĞƌ

ϮϮϭ

9

dĂďůĞ ϭϮ͘Ϯ zŽƵƚŚ ůĂďŽƵƌ ĨŽƌĐĞ ƉĂƌƟ ĐŝƉĂƟ ŽŶ ƌĂƚĞƐ͕ ϮϬϬϬ͕ ϮϬϭϬ ĂŶĚ ϮϬϭϱ

ϮϮϭ

dĂďůĞ ϭϮ͘ϯ zŽƵƚŚ ĞŵƉůŽLJŵĞŶƚ͕ ƐĞǀĞƌĂů ŝŶĚŝĐĂƚŽƌƐ͕ ϮϬϬϬ͕ ϮϬϬϴ ĂŶĚ ϮϬϭϭ͕ ĂŶĚ ĂĚƵůƚ ĞŵƉůŽLJŵĞŶƚͲƚŽͲƉŽƉƵůĂƟ ŽŶ ƌĂƟ Ž

ϮϮϭ

dĂďůĞ ϭϮ͘ϰ hŶĞŵƉůŽLJŵĞŶƚ ƌĂƚĞ ďLJ ŐĞŶĚĞƌ

ϮϮϰ

dĂďůĞ ϭϮ͘ϱ ŶŶƵĂů ƌĞĂů ' W ŐƌŽǁƚŚ ƌĂƚĞƐ͕ ƐĞůĞĐƚĞĚ ĐŽƵŶƚƌŝĞƐ

ϮϮϲ

dĂďůĞ ϭϮ͘ϲ dƌĞŶĚƐ ŝŶ ƉƌŽĚƵĐƟ ǀŝƚLJ ĂŶĚ ǁĂŐĞƐ͕ ƐĞůĞĐƚĞĚ ĐŽƵŶƚƌŝĞƐ

ϮϮϳ

List of figures &ŝŐƵƌĞ ϭ͘ϭ 'ůŽďĂů ĂŶĚ ƌĞŐŝŽŶĂů ƚƌĞŶĚƐ ŝŶ ĞdžƚƌĞŵĞ ƉŽǀĞƌƚLJ͕ ϭϵϴϭͲϮϬϭϬ

Ϯϰ

&ŝŐƵƌĞ ϭ͘Ϯ ŚĂŶŐŝŶŐ ƌĞŐŝŽŶĂů ƐŚĂƌĞƐ ŝŶ ĞdžƚƌĞŵĞ ƉŽǀĞƌƚLJ͕ ϭϵϴϭͲϮϬϭϬ

Ϯϱ

&ŝŐƵƌĞ Ϯ͘ϭ ƚǁŽͲƐĞĐƚŽƌ ůŽŶŐͲƌƵŶ ŵŽĚĞů ŽĨ ůĂďŽƵƌ ŵĂƌŬĞƚƐ ĨŽƌ ƐŬŝůůĞĚ ĂŶĚ ƵŶƐŬŝůůĞĚ ůĂďŽƵƌ

ϰϮ

&ŝŐƵƌĞ ϯ͘ϭ dLJƉĞƐ ŽĨ ƉŽǀĞƌƚLJ ŵĂŶŝĨĞƐƚĂƟ ŽŶƐ ĚĞƉĞŶĚŝŶŐ ŽŶ ŐŽǀĞƌŶĂŶĐĞ ĐŽŶƚĞdžƚ

ϲϮ

&ŝŐƵƌĞ ϳ͘ϭ dŚĞ ͞Į ƐĐĂů ĚŝĂŵŽŶĚ͟

ϭϮϵ

&ŝŐƵƌĞ ϳ͘Ϯ WƵďůŝĐ ŝŶǀĞƐƚŵĞŶƚ ŝŶ > Ɛ͕ ĨƌŝĐĂ ĂŶĚ ƐŝĂ͕ ϭϵϳϬͲϮϬϬϴ

ϭϯϬ

&ŝŐƵƌĞ ϴ͘ϭ 'ŝŶŝ ĐŽĞĸ ĐŝĞŶƚ ŝŶ ĂĚǀĂŶĐĞĚ ĞĐŽŶŽŵŝĞƐ

ϭϰϰ

&ŝŐƵƌĞ ϴ͘Ϯ ƵŵƵůĂƟ ǀĞ ĐŚĂŶŐĞ ŝŶ ƚŚĞ 'ŝŶŝ ĐŽĞĸ ĐŝĞŶƚ ďĞĨŽƌĞ ĂŶĚ ĂŌ Ğƌ ĐŽŶƐŽůŝĚĂƟ ŽŶ ŵĞĂƐƵƌĞƐ

ϭϰϲ

10

&ŝŐƵƌĞ ϴ͘ϯ dŚĞ Ğī ĞĐƚƐ ŽĨ Į ƐĐĂů ĐŽŶƐŽůŝĚĂƟ ŽŶ ŽŶ ŝŶĞƋƵĂůŝƚLJ

ϭϰϲ

&ŝŐƵƌĞ ϴ͘ϰ ϭϱϬ dŚĞ Ğī ĞĐƚƐ ŽĨ Į ƐĐĂů ĐŽŶƐŽůŝĚĂƟ ŽŶ ŽŶ ŝŶĞƋƵĂůŝƚLJͶƌŽďƵƐƚŶĞƐƐ ĐŚĞĐŬ ĨŽƌ Ěŝī ĞƌĞŶƚ ƐĞƚƐ ŽĨ ĐŽŶƚƌŽůƐ &ŝŐƵƌĞ ϴ͘ϱ ϭϱϮ dŚĞ Ğī ĞĐƚƐ ŽĨ Į ƐĐĂů ĐŽŶƐŽůŝĚĂƟ ŽŶ ŽŶ ŝŶĞƋƵĂůŝƚLJͶƌŽďƵƐƚŶĞƐƐ ĐŚĞĐŬ ĨŽƌ Ěŝī ĞƌĞŶƚ ůĂŐƐ &ŝŐƵƌĞ ϴ͘ϲ dŚĞ Ğī ĞĐƚƐ ŽĨ Į ƐĐĂů ĐŽŶƐŽůŝĚĂƟ ŽŶ ŽŶ ŝŶĞƋƵĂůŝƚLJͶƐƉĞŶĚŝŶŐ ǀĞƌƐƵƐ ďĂƐĞĚ ŵĞĂƐƵƌĞƐ &ŝŐƵƌĞ ϴ͘ϳ dŚĞ Ğī ĞĐƚƐ ŽĨ Į ƐĐĂů ĐŽŶƐŽůŝĚĂƟ ŽŶ ŽŶ ǁĂŐĞ ŝŶĐŽŵĞ

ϭϱϰ

ϭϱϲ

&ŝŐƵƌĞ ϭϬ͘ϭ &ŝƐĐĂů ƐƟ ŵƵůƵƐ ƉůĂŶƐ

ϭϳϲ

&ŝŐƵƌĞ ϭϬ͘Ϯ &ŝƐĐĂů ƚƌĂŶƐŵŝƐƐŝŽŶ ĐŚĂŶŶĞůƐ

ϭϳϵ

&ŝŐƵƌĞ ϭϬ͘ϯ ZĞǀĞŶƵĞ ƚLJƉĞ͕ ĚŝƐƚƌŝďƵƟ ŽŶ ĂŶĚ ƐŽĐŝĂů ƌĞůĂƟ ŽŶƐ

ϭϴϱ

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Contributors >ĂƵƌĞŶĐĞ Ăůů :ŽŚŶƐ ,ŽƉŬŝŶƐ hŶŝǀĞƌƐŝƚLJ njŝƚĂ ĞƌĂƌ ŝƌĞĐƚŽƌ͕ ŵƉůŽLJŵĞŶƚ WŽůŝĐLJ ĞƉĂƌƚŵĞŶƚ͕ /ŶƚĞƌŶĂƟ ŽŶĂů >ĂďŽƵƌ KƌŐĂŶŝnjĂƟ ŽŶ ĂŶŝůŽ &ĞƌŶĂŶĚĞƐ >ŝŵĂ ĚĂ ^ŝůǀĂ /ŶƚĞƌͲ ŵĞƌŝĐĂŶ ĞǀĞůŽƉŵĞŶƚ ĂŶŬ ĂǀŝĚĞ &ƵƌĐĞƌŝ /ŶƚĞƌŶĂƟ ŽŶĂů DŽŶĞƚĂƌLJ &ƵŶĚ <ĂƚũĂ ,ƵũŽ hŶŝƚĞĚ EĂƟ ŽŶƐ ZĞƐĞĂƌĐŚ /ŶƐƟ ƚƵƚĞ ĨŽƌ ^ŽĐŝĂů ĞǀĞůŽƉŵĞŶƚ 'ŽƌĂŶ ,LJĚĞŶ hŶŝǀĞƌƐŝƚLJ ŽĨ &ůŽƌŝĚĂ /LJĂŶĂƚƵů /ƐůĂŵ ŚŝĞĨ͕ ŽƵŶƚƌLJ ŵƉůŽLJŵĞŶƚ WŽůŝĐLJ hŶŝƚ͕ ŵƉůŽLJŵĞŶƚ WŽůŝĐLJ ĞƉĂƌƚŵĞŶƚ͕ /ŶƚĞƌŶĂƟ ŽŶĂů >ĂďŽƵƌ KƌŐĂŶŝnjĂƟ ŽŶ :ŽŵŽ <ǁĂŵĞ ^ƵŶĚĂƌĂŵ ƐƐŝƐƚĂŶƚ ŝƌĞĐƚŽƌͲ'ĞŶĞƌĂů ĨŽƌ ĐŽŶŽŵŝĐ ĂŶĚ ^ŽĐŝĂů ĞǀĞůŽƉŵĞŶƚ͕ &ŽŽĚ ĂŶĚ ŐƌŝĐƵůƚƵƌĂů KƌŐĂŶŝnjĂƟ ŽŶ ŽĨ ƚŚĞ hŶŝƚĞĚ EĂƟ ŽŶƐ ŽŶĂůĚ >ĞĞ &ŽƌŵĞƌ ŚŝĞĨ͕ ^ŽĐŝĂů WĞƌƐƉĞĐƟ ǀĞ ŽŶ ĞǀĞůŽƉŵĞŶƚ ƌĂŶĐŚ͕ ŝǀŝƐŝŽŶ ĨŽƌ ^ŽĐŝĂů WŽůŝĐLJ ĂŶĚ ĞǀĞůŽƉŵĞŶƚ͕ ĞƉĂƌƚŵĞŶƚ ŽĨ ĐŽŶŽŵŝĐ ĂŶĚ ^ŽĐŝĂů ī ĂŝƌƐ͕ hŶŝƚĞĚ EĂƟ ŽŶƐ WƌĞƐŝĚĞŶƚ͕ /ŶƚĞƌŶĂƟ ŽŶĂů ŽŵŵŝƩ ĞĞ ĨŽƌ KĐƚŽďĞƌ ϭϳ ;hŶŝƚĞĚ EĂƟ ŽŶƐ ŝŶƚĞƌŶĂƟ ŽŶĂů ĚĂLJ ĨŽƌ ƚŚĞ ĞƌĂĚŝĐĂƟ ŽŶ ŽĨ ƉŽǀĞƌƚLJͿ DŝŶƋƵĂŶ >ŝƵ ĞŶƚƌĞ ĨŽƌ ,ƵŵĂŶ ĂŶĚ ĐŽŶŽŵŝĐ ĞǀĞůŽƉŵĞŶƚ ^ƚƵĚŝĞƐ͕ WĞŬŝŶŐ hŶŝǀĞƌƐŝƚLJ͕ ĂŶĚ ƐŝĂŶ ĞǀĞůŽƉŵĞŶƚ ĂŶŬ /ŶƐƟ ƚƵƚĞ

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ĂŶŝĞů >ĞŝŐŚ /ŶƚĞƌŶĂƟ ŽŶĂů DŽŶĞƚĂƌLJ &ƵŶĚ WƌĂŬĂƐŚ >ŽƵŶŐĂŶŝ /ŶƚĞƌŶĂƟ ŽŶĂů DŽŶĞƚĂƌLJ &ƵŶĚ :ƵůŝĂŶ DĂLJ /ŶƐƟ ƚƵƚĞ ĨŽƌ ^ŽĐŝĂů ĞǀĞůŽƉŵĞŶƚ͕ hŶŝǀĞƌƐŝƚLJ ŽĨ ƚŚĞ tĞƐƚĞƌŶ ĂƉĞ :ĂĐƋƵĞůŝŶĞ DĂnjnjĂ /ŶƚĞƌͲ ŵĞƌŝĐĂŶ ĞǀĞůŽƉŵĞŶƚ ĂŶŬ ^ƚĞǀĞŶ DŝůůĞƌ /ŶƚĞƌŶĂƟ ŽŶĂů >ĂďŽƵƌ KƌŐĂŶŝnjĂƟ ŽŶ Ğƫ ŶĂ WƌĂƚŽ ZĞƐĞĂƌĐŚ ŽŽƌĚŝŶĂƚŽƌ͕ Kĸ ĐĞ ŽĨ ƚŚĞ ŚŝĞĨ ĞǀĞůŽƉŵĞŶƚ ^ƚƌĂƚĞŐŝƐƚ͕ /ŶƚĞƌŶĂƟ ŽŶĂů &ƵŶĚ ĨŽƌ ŐƌŝĐƵůƚƵƌĂů ĞǀĞůŽƉŵĞŶƚ DĂƌƚĂ ZŽŝŐ ŝǀŝƐŝŽŶ ĨŽƌ ^ŽĐŝĂů WŽůŝĐLJ ĂŶĚ ĞǀĞůŽƉŵĞŶƚ͕ ĞƉĂƌƚŵĞŶƚ ŽĨ ĐŽŶŽŵŝĐ ĂŶĚ ^ŽĐŝĂů ī ĂŝƌƐ͕ hŶŝƚĞĚ EĂƟ ŽŶƐ ŵƐŽŶ ^ŝďĂŶĚĂ ŝǀŝƐŝŽŶ ĨŽƌ ^ŽĐŝĂů WŽůŝĐLJ ĂŶĚ ĞǀĞůŽƉŵĞŶƚ͕ ĞƉĂƌƚŵĞŶƚ ŽĨ ĐŽŶŽŵŝĐ ĂŶĚ ^ŽĐŝĂů ī ĂŝƌƐ͕ hŶŝƚĞĚ EĂƟ ŽŶƐ

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The Twin Challenges of Reducing Poverty and Creating Employment

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Introduction

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Chapter 1 Poverty matters -202 .:$0( 681'$5$0

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205

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349

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395 640

683 633

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Source: World Bank (2013).

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China dominates the East Asian regional poverty rate because of its vast population.

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5 Such policy advice and loan conditionalities were challenged by the World Bankâ&#x20AC;&#x201C;associated Growth Commission (2008), which noted that â&#x20AC;&#x153;â&#x20AC;Ś no generic formula exists. Each country has specific characteristics and historical experiences that must be reflected in its growth strategyâ&#x20AC;? (p. 2). It also observed: â&#x20AC;&#x153;In recent decades governments were advised to â&#x20AC;&#x153; â&#x20AC;&#x2DC;stabilize, privatize and liberalizeâ&#x20AC;&#x2122;.... this prescription defines the role of government too narrowly. Just because governments are sometimes clumsy and sometimes errant, does not mean they should be written out of the script. On the contrary, as the economy grows and develops, active, pragmatic governments have crucial roles to playâ&#x20AC;? (p. 6).

6 However, after reviewing International Monetary Fund agreements with 41 crisisaffected countriesâ&#x20AC;&#x201D;including Stand-By Arrangements (SBAs), Poverty Reduction and Growth Facilities (PRGFs) and Exogenous Shocks Facilities (ESFs)â&#x20AC;&#x201D;Weisbrot and others (2009) concluded that 31 of them contained procyclical macroeconomic policy prescriptions.

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7 The right to social security contained in the Universal Declaration of Human Rights requires universal social protection to ensure the basic well-being of all individuals, including people living in poverty and those at risk of becoming poor.

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