Speech Christiaan Global Compact

Toespraak | 19-01-2011

Introduction

• Developing countries ‘offer attractive investment opportunities, not just destinations for aid’. This is a recent statement by World Bank President Robert Zoellick in the report Unfinished Business. I couldn’t agree with him more. Investment opportunities in developing countries are in fact abundant, and can yield healthy returns. They can also create new sources of global demand. Today developing countries account for about half of global growth. Helping them grow more is not just charity; it is self-interest. For you, for me, for them. We all have something to gain.
• How can we relate this to our topic for today: eradicating poverty and hunger. For the first time in history, more than a billion people worldwide are estimated to be hungry and malnourished. How can we break the cycle of poverty that perpetuates hunger?
• One of my messages for today will be, that we can succeed only in halving poverty and hunger if all of us – including governments, NGOs, academia and last but not least: businesses –work together.
• I believe that your invitation to speak on behalf of the government and that of speakers of the business and NGO-community here today are proof that we have the will to join forces for development. I would like to thank the Global Compact Network Netherlands for inviting me. It is wonderful that you take the time to meet so as to enhance the contribution of private business to economic growth and poverty reduction. And I am pleased that the ten Global Compact principles and the Millennium Development Goals are guiding your efforts.
• Let me briefly introduce myself. I was appointed last September as Dutch Special Ambassador for the Millennium Development Goals and Public-Private Partnerships. My main tasks are to involve more public and private players in achieving the MDGs, and to explain why governments have a role in poverty reduction and why development cooperation can be and has often proven to be effective, despite all the criticism in the media and some political parties.
• And when I travel around the country, I am always proud to say that the Netherlands has been a frontrunner in launching public-private partnerships for development. We are involved in a range of public-private partnerships with many of you,  in fields as varied as health – with companies like Achmea and Merck & Co; nutrition – with companies like Unilever, DSM and many SMEs; energy – with companies like Philips, Nuon and many SMEs; financial sector with RABObank and Triodos and water with Vitens.
• I could go on at length about public-private partnerships, but today we have more effective methods of communicating our message. I would like to show you the second part of a five-minute video clip about our Ministry’s view of, and involvement in, public-private partnerships.

[video - 2.24]

MDGs

Ladies and gentlemen,

• Lets go back to the 8 Millennium Development Goals, which you can see behind me. Why are they so important?
• First, the Millennium Declaration is the first agenda for poverty reduction that has been endorsed worldwide. The eight goals were set in September 2000, when 189 world leaders met at the UN to sign the Declaration, committing themselves to work together to build a safer, more prosperous and more equitable world.
• Second, the Declaration has been translated into a roadmap setting out eight measurable goals with a specific time frame, to be reached by 2015. This makes the Declaration the first international agreement on poverty reduction to be expressed in concrete and measurable objectives.
• Since then, despite criticism, the MDGs have proven their value as instruments for focusing the international community’s efforts and making us speak the same language. The MDGs are interlinked; together, they constitute a comprehensive fight against poverty, hunger and disease. Success in one field brings success in others.

MDG Summit

• Last September, on the MDGs’ tenth anniversary, I joined Dutch Prime Minister Balkenende at the MDG Summit in New York. The necessity of involving business in development was emphasised repeatedly at the Summit.
• It was clear that public private partnerships are not only something governments want; they are strongly supported by the private sector itself. Prior to the MDG summit, the CEOs of 16 Dutch companies, including TNT, Accenture, Rabobank and Heineken, co-signed a letter with the Minister of Foreign Affairs to the UN Secretary-General highlighting the importance of partnerships. These are a win-win-win proposition, they wrote: good for business, good for the public sector, and good for society in both developed and developing countries.
•  Members of the Dutch business community were present at the MDG Summit. Heineken and DSM have even won awards for their contribution to the MDGs of some of their business models!

MDGs – where are we today?

• Looking at today’s theme – MDG 1: halving extreme poverty and hunger – where are we today?
• Lets start with MDG 1 halving the number of people living below the poverty line of USD 1,25 a day.
• SHOW CURRENT PICTURE. - Where the colour purple is the darkest, you find the higher percentage of people living in extreme poverty.
• But we have seen substantial progress on this indicator, as the next picture will show you. 
• SHOW PROGRESS PICTURE. - The green areas are about to reach MDG 1 before the year 2015. As you can see, quite a progress!
• Robust economic growth has substantially cut the number of people living in poverty. Between 1990 and 2008 the number of people living in extreme poverty dropped from 1.8 billion to 1.4 billion, while world population grew substantially. If that trend continued, we would succeed in reducing extreme poverty by half by 2015.
  So growth is a necessary condition for poverty reduction. However, we should remember that growth does not automatically lead to poverty reduction. For instance, Nigeria has had strong growth rates the last decade, basically because of oil production. Yet, the number of poor people has gone up (95 mln people live below poverty line).
• In any event, what matters to people in developing countries is not the global picture, but the situation in their region, their country and their village. These figures vary substantially per country and per MDG. I would like to illustrate this with the MDG Map, developed by the Dutch National Committee for International Cooperation and Sustainable Development.
• You all know what a map of the world normally looks like. But when you change the map so that the size of countries reflects their poverty rates, the picture looks totally different.
• SHOW PICTURE OF CHANGED WORLD
• 940 million people in Southeast Asia (India, Bangladesh) live on less than USD 1.25 a day. In Sub-Saharan Africa, the number is 380 million people.
• Lets move to the other indicator of MDG 1: halving the number of people with hunger. After 1990, developing regions made some progress towards meeting this target. Since 2000, however, progress has stalled. However, the overall reduction in hunger has not been sufficient to bring down the number of undernourished people to reach the 2015 target.
• SHOW PICTURE OF PROGRESS - This MDG is not about to be reached in the yellow and red areas (India, Pakistan). High food prices and lower incomes have worsened the situation since 2008.
• MDG 2 on education has been quite successful. More children are going to school than ever before.
• The total number of children out of school is decreasing — from 106 million in 1999 to 69 million in 2008.
• SHOW PICTURE - The green coloured areas are successful in terms of progress.
• Development cooperation has played a mayor role in this progress. If we look at the world in terms of the number of children going to school (MDG 2), the picture would change like this. The bigger the country, the lower the enrolment of children at school.
• SHOW PICTURE OF CHANGED WORLD
• Sub-Saharan Africa is still largest, with 35 million children not going to school. But you can see undeniable progress!
• All in all, the complete picture on progress is mixed. On some MDGs (poverty, access to water, education) we are on track to achieve the MDGs. Economic growth, cooperation with private partners and development aid are all essential contributors to this progress.  Yet, on other MDGs like hunger and access to maternal health care, the world is far off track. And even with the MDGs on track, a lot still remains to be done. The food, fuel and financial crisis in the last two years have reversed some of the progress that had been made. The World Bank estimates that the financial crisis has pushed an additional 65 million people into extreme poverty.

Dutch development cooperation policy

• Ladies and gentlemen, what does current Dutch policy on development cooperation do with these figures?
• The new coalition agreement and the policy note on development cooperation reaffirm the MDGs’ importance as our international framework for poverty reduction. Within this framework, we are focusing on the MDGs where the world is lagging behind, as well as on conflict areas where little or no progress on the MDGs has been made. And we are focusing on fields where the Netherlands has a strategic interest, and Dutch business and civil society have special expertise and knowledge.  Of course only when there is a clear demand for that.
• Concretely, this means that in the coming years we will focus on the following themes: water, private sector development, food security, sexual and reproductive health and security in the so called fragile states.
• The central goal of our development cooperation policy in the coming years will be to foster economic growth in developing countries. This government believes economic growth, driven by a strong private sector, is the engine of poverty reduction. Businesses generate income and create employment, allowing people to support themselves.
• Particular attention will be devoted to the role of the Dutch private sector. As you saw in the video, public-private partnerships between government, business and other partners have proven effective in promoting sustainable growth and leveraging private funds for growth.
• This leverage allows us also to cut the budget of development aid. Yet, we will continue to meet our international commitments by spending 0.7 % of GDP on development cooperation and maintain our position among the leading donor countries.
• SHOW PICTURE OF MDG 8 (CHANGED WORLD)
• This image shows the world’s leading donors of development aid; as you can see even with lower budget, the Netherlands clearly remains one of the most generous donor countries in the world.
• Yet, what matters are results, not budgets. We want our development efforts to be more effective. Within our development cooperation budget, many more opportunities will be created for the private sector. In his role as a special advisor on business and development cooperation, Paulus Verschuren, who formerly worked at Unilever, advises the government on linkages between business and development cooperation. Later today, he will be a member of the panel on “Partnering and Prosperity”.
• Despite the cut in the overall budget, we plan a 40 million euro increase in 2011 on incentives for investment in private sector development and food security in developing countries.
  We will launch new partnerships and expand existing ones.
  We will expand our instruments for small and medium enterprises, like the Private Sector Development Programme and the Infrastructure Development Facility.
  We will consult frequently with the Dutch and local private sector, since they have the knowledge and expertise we need for our policy. Finally, we will strengthen our efforts in developing countries aimed at improving the investment climate, creating a favourable environment for both local and Dutch business.

The eradication of hunger

• Ladies and gentlemen, I would like to conclude with some thoughts on one of today’s themes, the eradication of hunger.
• The world population is projected to increase from 7 billion today to 8.3 billion in 2030 and 9.2 billion in 2050. This growth will be concentrated in developing countries. As a consequence, global food production will need to rise by over 50% by 2030 and nearly double by 2050.
• Yet, this also means an enormous increase in investment opportunities for business. For example, let’s take a look at the tremendous business opportunities for the food sector in Africa. On the demand side, the African food market has an estimated potential of at least 500 million additional consumers. Increased commercialisation and urbanisation will change consumption patterns. This implies, for example, more demand for nutritionally enhanced products for consumers at the base of the economic pyramid. On the supply side, looking at the available resources, only 20% of Africa’s cultivable land is currently in use. Productivity levels of land already under cultivation could be substantially improved through greater access to irrigation and inputs. This represents a potential source of value for business.
• Last week I red an article by the Economist finding that over the ten years to 2010, no fewer than six of the world’s ten fastest-growing economies were in sub-Saharan Africa!
• This means an investment opportunity for you!

Conclusion

Ladies and gentlemen,

• I began my presentation with a quotation about investment opportunities in developing countries. Developing country growth is not only vital to overcoming poverty and hunger. It is also now an engine of global growth.
• I call on you today to undertake new types of public-private partnerships and adopt new business models, together with public authorities, civil society and academic institutions. 
• I call on you to do business and foster economic growth in developing countries, since you are the ones who can extend supply chains and create jobs and incomes for low-income people.
• I call on you to scale up the implementation of proven and innovative interventions, for example in agricultural techniques, the supply chain and food technology.
• And I call on you to use the network of Global Compact Network Netherlands and work together on its mission, to further the contribution of private business to sustainable development.

Thank you.