Symposium marking the 10th anniversary of the Prince Claus Chair in Development and Equity

Toespraak | 28-11-2012

Your Majesty, Your Royal Highness, ladies and gentlemen,

The thing that struck me most about His Royal Highness Prince Claus was his frankness. Prince Claus was never shy about calling things as he saw them. He said that the African elite should listen more to its own artists, writers and thinkers. And he wasn’t afraid to say that the issue is not how much money we spend on development, but how we spend it. Nor did he shy away from criticising the habit of constantly inventing new words for old ideas in development cooperation. The concept of inclusive development somewhat proves this last point.

Because in the end, inclusive development is all about equity. Everyone should be able to benefit from progress, not only the happy few. Black or white, man or woman, gay or straight. None of this is new. I myself have spent a significant part of my life fighting for equity. For example when I was director of Mama Cash, back in the nineties. Mama Cash helps women to achieve their dreams with moral and financial support. Women in the Netherlands and women all over the world. In countries like Nepal.

I remember meeting Nepalese women who had been sold to brothels in Bombay. They had founded an organisation to help other victims and to prevent trafficking in women. No fancy office, no glossy brochures, no government grant. But important work nonetheless. Mama Cash gave these women a grant. A grant to help them fight stigma, prejudice and rejection. A grant, basically, to support equity.

Ladies and gentlemen,

Equity is important not only in my work. It has long been a key concept in Dutch development cooperation as well. At first, the focus was on reaching the poorest of the poor. Later, economic growth and private sector development got more attention.

One of my predecessors, Bert Koenders, made growth and equity a priority in 2010. His analysis led to five crucial conclusions.

First: economic growth is essential for poverty reduction.

Second: economic growth has no consistent effect on inequality – positive or negative.

Third: both extreme egalitarianism and extreme inequality can be bad for economic growth.

Fourth: unequal opportunities are economically inefficient.

And fifth: redistribution can potentially stimulate both growth and equity.

The Tracking Development project agreed with this analysis. This was a project run with our Ministry’s support and the help of the eminent professor Leo de Haan. The central question was: what had enabled various Asian countries to escape from poverty?

As it turned out, the Asian miracle was merely due to policy choices. Sound macro-economic management. Economic freedom for farmers and small entrepreneurs.

And, last but not least, pro-rural and pro-poor public spending. The conclusion is clear: equity is at the heart of development. So my development cooperation policy will continue down this path. We support the Productive Safety Net Program in Ethiopia. We endorse the UN’s emphasis on equitable, inclusive and sustainable growth. And we have a knowledge platform to research best practices in the field of inclusive development and discuss them with policymakers.

But research is nothing without policy, a project in Ethiopia is nothing without supplementary measures, and growth is nothing without equity. For equity we need coherence. That’s why my portfolio covers trade, investment and finance, industry, social policy and rural development. That’s why coherence is at the heart of my development policy.

Ladies and gentlemen,

It is true that economies in Asia, Africa and South America are growing rapidly. And that’s good news. But GDP doesn’t paint the whole picture. Take Mexico, for example. The Mexican entrepreneur Carlos Slim might be number one on the Forbes Billionaires list, and the Mexican economy might be growing, but many Mexicans still live in extreme poverty.

So economic growth alone is not the answer. We need inclusive growth; we need equity to fight poverty successfully. I already said that this is not a new concept. It has been used to fight poverty in Western Europe. Take progressive taxation. Take social services and safety nets. Take government subsidies for the underserved. Some people still think that this means killing economic growth.

But history proves them wrong. Here’s what The Economist — hardly a bastion of socialism — had to say recently: ‘Inequality has reached a stage where it can be inefficient and bad for growth.’

All the more reason to step up the fight against inequality. I said at the beginning of this speech, ladies and gentlemen, that what struck me most about Prince Claus was his frankness. Let me conclude with another striking example.

The Prince once expressed his doubts about the benefits of conferences like the one we are attending today. ‘Will the result be no more than a glossy publication?’ he asked. ‘Or can we increase life expectancy for millions of people who, through no fault of their own, are doomed to die an early death?’ I hope and trust we can prove that his concerns were unnecessary. I hope inclusive development will not turn out to be just another development buzz word. I hope we can truly place equity at the heart of our development efforts.

Thank you.