Four points for Point Four
[Delay]
Ladies and gentlemen; distinguished guests at the fiftieth anniversary of this unique and still very important and necessary Society for International Development; friends and colleagues in the struggle for development and against poverty. Let me call my remarks for this morning “Four points for Point Four”. Please allow me to start with a very real anecdote.
Time is pressing. John checks his watch. He stands amid the controlled chaos of the airport. Crowds of anxious people; everywhere bags and suitcases filled to bursting; a series of incomprehensible announcements for passengers. I think you are all travellers, you know how this works. John stands waiting for his guests to arrive. He scans the arrivals hall again, and comes eye to eye with a salesman – you know the type, cheap blue suit, ugly purple tie. Is he interested in a new credit card? As if he hasn't got enough of them already. John cuts off the sales pitch about unbelievably low rates, free holidays and charities with a friendly but firm “no, thank you.” While the salesman – enthusiastic as ever – accosts his next victim, John produces one of his own credit cards. There's time for a cup of coffee and a newspaper. His work today will undoubtedly make headline news tomorrow. If his guests arrive, that is. There must be some delay, because they are not appearing.
Ladies and gentlemen,
Let me leave the airport for a moment, the story will continue later. While John is waiting, let me deliver a few of my remarks to this conference of the Society for International Development, and I thank Jos van Gennip for inviting me for this. I was fortunate enough to be a board member of the Dutch branch before becoming a minister. I think this is not an ordinary conference: it marks your fiftieth anniversary. Looking at your Society today, these words by author J.F. Boyse come to mind:
“The tendency of old age to the body, say the physiologists, is to form bone. It is as rare as it is pleasant to meet with an old man whose opinions are not yet ossified.”
It is a genuine pleasure to be here today at the Society for International Development, which even after half a century is still a vibrant marketplace for opinions and ideas, we just heard Jos speaking this morning. A place where intellectual passion goes hand in hand with human compassion. A place where, from the outset, voices from every corner of the world have sounded loud and clear – from North and South, in all its diversity. An inclusiveness unique in our own time, but truly exceptional in 1957, the year the Society was founded, when Ghana was the first Sub-Saharan country to gain its independence. An event we all commemorate this year.
Those were the early days of development cooperation. In 1949, US President Harry Truman ushered in the era of foreign aid. Point Four of his inaugural address called for a “program of development based on the concepts of democratic fair-dealing”. The Netherlands was one of the first countries to heed that call, by making a financial contribution to what was then the United Nations technical assistance programme. But I think our contribution extended far beyond financial resources into the realm of ideas – the Dutch scholar Jan Tinbergen was one of the founding fathers of development theory. Originally a physicist, he later turned to economics, which he believed was a better tool to advance the goals of social justice. Ultimately, it was the goal that mattered, not the tool. When he was informed that he had won the 1969 Nobel Prize for Economics, he looked at first disappointed. He would have preferred the Peace Prize. At that time, Tinbergen was working on the preparations for the Second UN Development Decade. And he hoped that in the course of the 1970s, under UN leadership, the world would be able to bridge the growing gap between rich and poor – for the sake not just of prosperity, but also of peace. An urgent call in the contemporary world , which is more and more, in my view, characterised by political, cultural and economic divisions and fault lines. During the First UN Development Decade, UN members had already set themselves the joint task of ensuring an economic growth rate of 5% in the South. UN development targets are still with us today. We now call them Millennium Development Goals. And there is a good intellectual reason to critisise some of these goals. They say little about the interrelationships, little about the countries-specific and global political strategies to reach them. But there’s a big difference with the First Development Decade. As Jeffrey Sachs and others keep reminding us, for the first time in history such goals seem utterly, utterly affordable. Ours is the first generation in which the world could halve extreme poverty within the 0.7 envelope. Could and should. The practical opportunity is there, and so is the moral responsibility that goes with it.
Sadly, so far we haven’t lived up to that responsibility – we haven’t pushed the envelope. Despite all the promises made in the past few years, worldwide development aid even dropped by 5% last year. 1200 billion of military expenditures compared to just over 100 billion in development cooperation. Yes, conflict, development and political change are related, I will come back to that. But these figures are clearly out of any sensible set of priorities. I think Jos van Gennip was right this morning when he talked about the hijack by the war on terror. Of course we should say that the Millennium Development Goals are progressing in many areas of the world – they are. But also, for many, they are disappearing beyond the horizon – and disappearing fast. Of course, globalisation has freed many millions of people from poverty – I think that is very important to note – especially in China and India. It seems ages since economists were writing books with titles like “The Asian drama”, by Nobel Laureate Gunnar Myrdal. But today we are witnessing growing inequality between and within states. And today we are also witnessing, at least in some parts of Africa, a drama, with the continent off track on all the Millennium Development Goals. But still, while too little progress is currently being made to achieve the goals, it is sufficient to remain optimistic about the enterprise as a whole. Just a recent UN report highlights a few encouraging signs on the horizon. Development cooperation, good development cooperation can contribute. Primary school enrolment is increasing in countries like Ghana, Kenya, Tanzania and Uganda, and malaria is under control in Niger, the poorest country in the world, Togo and Zambia. And African economies are maintaining the growth momentum of previous years, with average growth expected to approach 6% in 2007. To maintain this momentum for development, Africans need support to help themselves. As UN Deputy Secretary-General Asha-Rose Migiro recently pointed out, all the challenges can be addressed using resources, skills and technologies that the international community has at its disposal, based on the commitment made by African governments and the donor community alike.
Ladies and gentlemen,
Of course we cannot leave African countries to their own devices, and we cannot leave it up to globalization to help them. It is simply not true that the tide of globalisation is lifting all the boats: in two decades of international economic integration, in many countries poverty has doubled. And not just in Africa, but all over the world, people are debunking the myth that globalisation leads to a happy ending for everyone. In Latin America, left-wing populism is undergoing a revival, after neoliberal governments failed to kickstart the economy and reduce poverty at the same time. In India a few years ago, the poor majority voted en masse against an economically correct policy of liberalisation. Unlike the middle classes, these 800 million poor Indians did not identify with the government’s “India Shining” campaign. And the results of the Dutch election late last year were regarded by many as a vote of no-confidence in globalisation.
Market fundamentalists and orthodox economists have themselves sown the seeds of distrust in their failure to be totally frank about the risks of opening economies, without proper institutions, pro-poor growth, and proper sequencing and safety valves. Their dogmatism has put the very real benefits, the enormous benefits of globalisation at risk, by concealing the disadvantages for some, which are just as real in their perceptions and reality. Popular discontent could at some point even put an end to some forms of globalisation. In the 1930s – yes, a very different time, but still – the protectionist trend was one of the factors leading to the collapse of the nineteenth-century liberal economic order. Open societies and open economies both came under fire as the Second World War approached. After the war, US President Harry Truman drew, I think, the right conclusions. He recognised that there are dangers to open markets and that political support for a new era of openness depended on social protection – it is the combination of the two. A safety net for those losing out, for the ones left out. But from the 1970s onwards, this pact, this cooperation, this necessary cooperation between capital and labor to open the world and open our economies, was unraveled as neoliberalism, championed by Milton Friedman and Friedrich Hayek, gained ground. This backlash against the welfare state could now lead to a backlash against globalisation itself. Of course welfare states had to change, had to change fundamentallly, but if you delink the nexus between globalisation and welfare for the individuals, we have a problem. Fortunately, many economists are at long last opening their eyes to the other side of globalisation. This spring, for example, the International Monetary Fund admitted for the first time that globalisation was having a negative impact on the incomes of many workers in the West. We need less Friedman and more Truman. Less “laissez-faire” and more globalisation with a human face.
Workers in many, if not all western countries can look to their own governments for a fair share in the benefits, or adjustment, or change, or scholing. And even there we see the anxieties and neo-nationalisms in our own societies. People in the South, or many countries in the South, who are losing out from globalisation, depend at least in part on international cooperation and institutions to get back on their feet. As Truman called it in his inaugural address: “A worldwide effort for the achievement of peace, plenty and freedom”. More than half a century later, what Truman was aiming for with his Point Four agenda is now truly, I think, within reach. But for all our development ambitions, we have to establish clear priorities and implement them through a more efficient and inclusive aid architecture. In my view, reversing our delays and achieving our development goals will require an ambitious and a relentless effort by governments, the business community, private investment, non-governmental organisations and ordinary citizens alike. Here in the Netherlands, these parties have already subscribed to such a development pact. Let me now, in the remainder of my introductory speech, outline the four points which I believe crucial in the run-up to the 2015 deadline and which will be central to Dutch development cooperation in the coming years. Of course it is a policy that should include other aspects, which I am not going to discuss, but I find them very crucial. Predictable capital flows, also to the poorest nations; equitable and fair trade; and a strong reform of international institutions like the World Bank, the IMF, the UN, and not to be forgotten the WTO, making them relevant to all people in a 21st century era. It is a policy that includes a large role for private business on the basis of the three P’s, for civil societ y and, yes, for parliaments. It is a policy that should put the relation between migration and development on the forefront; and it should think about a new aid architecture. But I will limit myself to four points, and some of them are very known, and they are old ones.
[An active agenda for women’s rights]
And maybe you did not expect it: an older agenda which requires new and urgent attention is the first of these four points. It’s an active agenda for women's rights – for equal rights and opportunities for girls and women. Many of the problems countries face in achieving the Millennium Development Goals are closely related to the position of women. If we check the Millennium Development Goals and their progress, the figures speak really for themselves. Seventy per cent of the poor are women. That is no coincidence, since girls attend school less frequently than boys – we all know this. And women have fewer opportunities of finding work outside agriculture. In many poor countries, outside this sector women occupy only one in every five jobs. And only one in every five members of parliament is a woman. Cultural obstacles also play a role – we all know this. People believe that a woman’s place is in the home and that her job is to be a mother. But even then she is not safe. Every minute, a woman in the South dies in childbirth or during pregnancy. Unnecessary. This is a double tragedy: the woman loses her life, a family loses its mother. The issues the Millennium Development Goals address are nearly all women's issues. So there will be no equal opportunities for the poor without equal opportunities for women. That is why it is so important for the Netherlands to take the lead again in the fight for women's rights and that is why I have made it a priority – this sounds, maybe, not new.
Some of the areas we work on, including the so controversial area of sexual and reproductive health and rights, are in fact extremely political. Because we are talking here about women's freedom to make responsible decisions about spacing their children, and about their sex lives. And we are talking about the information, resources and health services they need to enable them to do so. All over the world, this freedom is now under pressure from conservative forces. And the ideological campaign against condoms is sabotaging the fight against HIV/AIDS, a disease that now hits girls and women in particular. Last year, the tally reached 2.9 million deaths and 4.3 million infections. Most could have been avoided if condoms had been more easily available. This silence, this enormous silence about contraceptives and sex in general, has led to a sharp rise in unsafe abortions in poor countries. And in many, unsafe abortions are the main cause of death among teenage girls. That is simply intolerable, and, again, that is why it is a priority. And it will not only be reflected in our projects and programmes. It is a political issue that calls also for political solutions and political diplomacy. And for many diplomats in my ministry that will be a new thing, because they will have to talk about sex. We will see how it goes, but we are deadly serious about this.
[Upscaling efforts in fragile states and post-conflict areas]
This brings me to a second priority for the years to come. Among the many, but you know development experts – they always think everything is related, you can talk for hours and days about development. I take four. And this is a very difficult one, Jos van Gennip was mentioning it: fragile states and post-conflict areas. This is where the battle for these Millennium Development Goals is really raging, where the chance of achieving them is the smallest. These states are home to a tenth of the developing world’s population, but they account for a third not only of the world’s extreme poverty, but also of its infant mortality and school drop-out rates. According to the recent issue of Foreign Policy, Sudan is the world’s number one failed state. The question is, if it is really is a failed state, when you visit Khartoum. But as I pointed out in an article with my Norwegian counterpart Erik Solheim, which we published in the Guardian last month, fragile states are forgotten states when it comes to development aid. While other poor countries are receiving more aid, they are receiving too little. And it is not easy to put aid in fragile states. You take risks and we all know the Dollar theory: you only spend money and it only reaches the poor if there is good administration, good governance. And, yes, that is true, so most of our aid goes correctly to those areas, with budget support, political dialogues. But, at the same time, I think we should not try to avoid finding islands of change in those fragile states. And I think we have a much better policy of cooperation – the 3 D’s: defence, development and diplomacy. But, frankly, we do not know yet how to do it. After many, many years of lessons learned, you find every day again that the new truth has to be invented. That the instruments determine the policy, rather than the other way around. That the timing is mostly too little, too late. That we are not ready to really know how we have to do this. And this applies to many of the countries. To the Democratic Republic of Congo, Guinea, Nigeria, Uzbekistan, Yemen, Burundi. I sponsored, together with the Norwegians, not long ago a succesful donor conference for Burundi. Our concerns for these countries are not motivated purely by altruism – frankly also by self-interest. Where development fails to take root, conflict looms, terrorism looms. One percentage point less growth literally means one percentage point extra risk of conflict, often cross-border conflict.
So we have to help rescue these fragile states from the edge. But we cannot do it alone. We will have to work together – at both national and international level. First, we need a thorough analysis. I think that in their analyses, the United Nations and the World Bank take too little heed of the political and security dimensions of fragility. I want to address these factors. In the field – in Afghanistan and Africa alike – we focus on the 3 D’s, as I mentioned. And I want to explore scope within my Ministry of Foreign Affairs to free up more money and human resources for fragile states. I also want to work more closely with the Ministry of Defence, the Ministries of Justice and the Interior, and with civil society organisations, businesses, universities and religious institutions. In fragile states, the government itself may not be the most reliable counterpart, but there are enough other partners we can work with to achieve the Millennium Development Goals. It means a bit of risk taking, and it will not be easy when we approach our parliaments or our auditors. And I am convinced that development cooperation can only work if we are sure that it reaches those who it is meant for. And that we have to make sure that our accountancy rules are in order and that we have a zero tolerance towards corruption. But it does not mean we should not take risks. Because then we only go to a few countries, and maybe they can actually borrow on the capital markets.
[An extra commitment to growth and distribution]
Ladies and gentlemen,
So our aim is for fragile states to become part of the worldwide mainstream of democracy and development. Uganda and Mozambique have already succeeded in emerging from fragility. There are positive signs. Of course, there are developing countries that have come much further than that – emerging economies that are likely to overtake us in the future. Very good, that is what development is for. A good example is India, where economic growth will almost reach double figures again this year. In Bangalore, the Indian version of Silicon Valley, IT specialists now drive in their German cars from their office complexes to their apartment buildings. But along the way, we see the other face of India: an impoverished slum, only recently hit by floods after heavy rainfall. This is where Amala lives, or rather survives. She tries to supplement the pittance she earns in domestic service by selling the baskets she weaves at home. In the evening, she has to walk several miles to collect water for herself and her family. The majority of Bangalore's slums have no basic facilities such as clean drinking water, sanitation or electricity. The international system has its forgotten states. Emerging economies have their forgotten people. People with fragile lives who do not share in the profits.
Ladies and gentlemen,
On the African continent, a decade of economic growth has also failed to substantially reduce poverty. It is high time to reaffirm a forgotten truth: that poverty reduction is a matter not only of growth. Yes, growth is key, I think sometimes has been forgotten too much, also by development experts. Growth of an economy is a necessary and very important condition for poverty alleviation. But we have forgotten a little bit about distribution. So that will be my third priority. Governments in developing countries must themselves address distributional issues. I just came back from Guatemala – we know that taxes there are below the ten percent, in a very unequal society, which is almost a middle income country. There is no space for large development programmes. It is a matter of unequal distribution. We can do a lot about human rights, about supporting tax systems, about support for good governance and democracy. But here the distribution issue is the key. And if we want growth to benefit the poor, more attention will also have to be devoted in other areas to agriculture and the informal sector, where many of the poor work. And if we want to give the poor acces to markets, substantial public investments will have to be made in education, health care and infrastructure.
Let me give you an example here in the Netherlands. Our ORET grants for infrastructure, as we call them, have attracted considerable attention in the media recently, partly at the instigation of the Dutch business community. The ORET programme stands for development-related export transactions. The aim is to give poor people better access to infrastructure – to facilities such as energy, water and transport. Key areas for development. But evaluations have shown, that projects for which grants have been awarded are not as development-related as they could be. And they did not even support our export very much, because it was a one-off export transaction, and then nothing followed. “Projects doing little to reduce poverty”. That is literally what these evaluations say. With the Minister for Foreign Trade, I am therefore planning to introduce some changes to the ORET scheme, which is heavily criticised in this country. But it has nothing to do with mistrust in the private sector. To the contrary, I think the private sector is key to employment creation and technology transfer in a globalised world. But more people should benefit from access to infrastructure, the focus should be on demand from developing countries, and there should be guarantees that the infrastructure is sustainable. So not just export transactions, but long-term investments, taking account of maintenance and the transfer of knowledge. I think that is key.
Economic growth is impossible without such investment in infrastructure. In Africa, infrastructure is so inadequate that more than three quarters of farmers are too isolated to get their products to national or international markets. So even if finally – and I am afraid we will not – we open up our markets for the agricultural products of Africa and other areas – this will be the big political battle that is still going on in the Doha round – we have to make sure actually that they can get products to the markets. And, finally, for the most deprived there must be a safety net. Yes, there must be a safety net. That means working on an equitable insurance system, competent trade unions and of course a vigorous parliament. These are people living in the shadows of the glittering new office blocks – and we must not forget them.
[Sustainability as the key, with an extra effort for sustainable energy]
Ladies and gentlemen,
Some people live, as we know, on the margins of the city, others live on the margins of nature. That brings me to my fourth priority. Let me introduce you to Rana – a poor Bengali farmer eking out a living on the banks of the river Brahmaputra. For years, he has been trying to protect his crops from the water. In the past few years, the river has burst its banks more and more often, and it is becoming more and more difficult for Rana to keep his head above water. A few years ago, two thirds of Bangladesh was flooded, a disaster inextricably linked to climate change. Rana doesn‘t need a television or newspaper to tell him about the effects of climate change: hotter weather, more hurricanes and higher water levels. Slowly but surely, the river is swallowing his land. He used to have three fields, now he only has two. Rana’s family wants to move, possibly to the town, but Rana doesn't want to leave the land that was his father's.
Ladies and gentlemen,
These are in fact the front lines of the battle against climate change. Instead of Bengali farmers, we should be standing there. We created the problem in fact. In this country we have for years industrialised and progressed, but with a pollution in the atmosphere of CO2. And the poorest countries are the main victims of the more extreme weather conditions, of the droughts and floods. Any progress made towards the Millennium Development Goals will either be washed away or dried up. A temperature rise of only two degrees will destroy the coffee sector which is so crucial to Uganda, the country I visited just recently. A Stanford scientist has compared climate change to the sinking of the Titanic. Then too, most of the victims were the poor emigrants on the cheaper decks. The disaster isn’t far away. I am not a person who always sees a dark and bleak future. I think we have an enormous amount of opportunity. But we also have to be realistic. The iceberg has been sighted, and we need to change course right now.
Last month, the crew took the first steps. In the German town of Heiligendamm, the G8 leaders discussed the climate problem. You know, this group of countries that are very important in the world. The most important step forward: they are seriously considering the goal of 50% fewer emissions by 2050 and they will take a constructive attitude during the UN climate summit on Bali later this year. A constructive attitude. There was no revolution in Heiligendamm, but there was a first step. The UN negotiations should lead to a worldwide agreement in 2009. In our efforts to reduce emissions, our guiding principle should always be: “Do no harm”. What use is more palm oil and ethanol if the rain forests in the South have to be destroyed so they can be produced? This weekend, I signed an agreement with Dutch civil society and the private sector to apply sustainability criteria to the import of biomass. And we will use a certification system to work towards this. At the same time, in accordance with the “polluter pays” principle – which I think is key – the rich countries must put money on the table to cover the extra costs climate change inflicts on poor countries. We have started to do this in the Netherlands as an increase in our aid budget. But development aid cannot be used for this purpose only. It is needed far too badly for education and health care. The G8 countries should follow our example, I think. Over and above the 0.7 we earmark for development aid, we spend 0.1% of our GNP on international environment and climate. With the environment and transport ministries – that’s coherent policy – we have to examine how much adaptation measures will cost. The Netherlands has drafted some ambitious climate goals: 30% fewer greenhouse gas emissions by 2020. To solve the climate problem sustainably, I plan to nudge developing countries in the direction of sustainable energy, and I have been given 500 million euros extra for the next four years for this purpose. Together with my colleagues responsible for economic affairs and the environment, we shall publish a paper showing how we plan to use the extra funds as effectively as possible – and that’s not easy – to ensure maximum sustainability. Because sustainability, in relation to climate, is my fourth priority.
[Arrival]
I am coming towards the end of my speech, don’t worry. Today, at the halfway mark towards 2015, I have shared four of my priorities with you. Women, fragile states, growth and distribution issues and climate. With these four points, we could go a long way towards achieving the agenda launched by President Truman in Point Four of his inaugural address – the development agenda. Four points for Point Four.
Ladies and gentlemen,
Before I finish, I should like to take you back to the airport, where John is still waiting in the arrivals hall. He throws his empty coffee cup away, and checks his watch again. It is one minute past twelve on the fifth of July 2015. Where on earth have the guests he is waiting for got to? The only person he recognises in the hall is the credit card salesman. But wait a minute, who's that man he's talking to, the one who’s nodding his head, looking a bit confused? It’s Rana from Bangladesh. Like a few other citizens from the former Third World, he's been invited to the G10 summit by the American President Obama. Rana will tell the world leaders gathered there how Bangladesh succeeded in adapting to climate change, thanks to international aid. With a grant from a local NGO, Rana himself set up a company that builds ingenious floating gardens, where you can grow cucumbers and aubergines. As John frees him from the clutches of the credit card salesman, he sees his other three guests pass the iris scan at customs control. First comes Amala from India, who will give the G10 leaders a presentation on regenerating slums in megacities. In her own neighbourhood in Bangalore, Amala has set up a large federation that invests residents’ money in water projects. She is accompanied by Aina from Niger. In a brand new clinic, built by the Bill and Melinda Gates Foundation, her seventh child was safely delivered. She has brought the eldest of her three daughters with her. During the G10, this girl will be awarded a special grant. Like 10,000 other talented African students she has been invited by the newly elected Chinese president to study in Beijing for four years. What does she plan to study? Development cooperation. The Millennium Development Goals may have been achieved by 2015, but poverty has still not been eradicated, and she wants to do something about that. Her own mother’s experience of poverty has inspired her. While John and his guests leave the airport for the summit, I should like to leave you with the announcement that this vision of the future is no figment of my imagination. I can just about see it on the horizon, it is not yet beyond reach. But time is pressing.
I wish you a very inspirational anniversary. Thank you very much.