Thank you for that introduction. And thank you to our hosts Standard Chartered and Omidyar Network.
Both of your organisations do fantastic work spreading opportunity, investing in entrepreneurship and driving sustainable growth across the developing world. I know Standard Chartered also support some really valuable community investment programmes: tackling blindness, raising awareness of HIV/AIDS and educating and empowering adolescent girls.
And DFID continues to work alongside Omidyar Network on a range of global transparency initiatives. In particular, exploiting the power of open data to shine a spotlight on the facts that bring power closer to the people.
And it’s a pleasure to be here today with so many representatives from the world of business, NGOs, open society groups, governments who are key development players.
I wanted to bring all of you together at a really important moment for shaping the future of development.
Most of you will be aware of the Millennium Development Goals – 8 global goals to fight poverty – agreed by countries and leading development institutions at the UN Millennium Summit in 2000. These goals have played a critical role in the fight against poverty, really galvanising the international community around some clear and inspiring commitments, halting the spread of HIV/AIDS, providing universal primary healthcare, halving the number of people going hungry.
The 2015 deadline for achieving these goals is now fast approaching and over the next 14 months the world will negotiate a new set of global development goals to take us to 2030. And there is a strong expectation that at the heart of these goals will be a commitment to end poverty for good, for everyone, everywhere.
But of course this is not going to be easy. There will still be 900 million people living in extreme poverty in 2015. They will be some of the most marginalised, most vulnerable people on the planet – the most difficult to reach. Many of them will be girls and women.
Last year global development aid reached the highest level ever recorded. The UK is plays a major part in this, contributing 0.7% of our national income to development. But the truth is that lifting almost a billion people out of chronic poverty will cost far more than the global development budget can ever provide.
I don’t think this means that we should scale back on our ambition, far from it.
And I’m going to argue today that to defeat poverty we need to go beyond aid, beyond the kind of aid we thought of a decade ago when the MDGs were agreed.
Building schools, vaccinating children, better sanitation – this kind of traditional aid will continue to be absolutely fundamental to development work and we will keep doing it.
But they are not the whole answer to getting a country on a sustainable path out of poverty and ultimately ending their reliance on aid.
In fact I believe if you only focus on health, education, sanitation it means you’re essentially looking at the problem the wrong way round. We’ve identified some of the critical services that we have in developed countries and tried to replicate them in developing countries but without a deep understanding of the institutions that were the catalysts for their existence.
As economists like Amartya Sen, and Daron Acemoglu and James Robinson have explained, institutions matter.
Our Prime Minister talks about the Golden Thread of Development: the building blocks that help societies, economies, and countries develop.
Building blocks like peaceful societies, accountable and transparent governance, the rule of law including property rights, an independent judiciary, free and fair trade and inclusive access to markets.
In other words the rules, written and unwritten, that mean society works fairly and consistently for everyone.
And you don’t need to be a development expert to instinctively understand why these things really matter. The debate around aid often centres around the fear that the aid we give can’t do any lasting good if institutions aren’t serving the people: if girls and women are being oppressed, if justice is not being done, if corruption is rife, if markets don’t function and business opportunities and jobs are restricted to the few and denied to the many.
That’s why right now the UK is pressing hard for these issues to be reflected in the next generation of global development goals.
Many of you will be aware that we have already played a critical part in the early stages of developing these goals. Our Prime Minister along with the Presidents of Indonesia and Liberia, was part of a panel that made recommendations on the post-2015 goals to the UN Secretary General last year.
But we know when it comes to deciding the final goals there is no guarantee that we’ll get a consensus on critical issues like peace, justice and jobs. In fact it’s going to be an uphill battle.
So today I want to set out very clearly why the UK will keep pressing, lobbying and negotiating for a clear, inspiring and ambitious set of development goals that will leave no one behind in the fight against poverty. And why we need everyone – businesses, NGOs, open society groups – to champion these issues too.
Great British institutions
There’s no better place to explain to you why this agenda matters so much than in the heart of the City of London.
From this very building Standard Chartered provide banking and financial services all over the world. Not far from here you’ll find the Bank of England, the London Stock Exchange, a little further west, the Royal Courts of Justice.
All around us: Britain’s great institutions. Institutions many of us take for granted and yet we rely on them implicitly when we buy a house, open a bank account, set up a business, enter into any kind of contract.
Britain’s great institutions – from the rule of law to parliamentary democracy to open markets – were fundamental to Britain’s development. Without them the innovation and entrepreneurship that made our country great could never have flourished.
And of course these institutions have evolved over time.
Next year we celebrate the 800 year anniversary of the Magna Carta, the Great Charter of the Liberties of England that was forced on King John by his barons.
And we look on this document as a historic moment. Not because our country changed overnight – on the contrary successive monarchs were soon busy trying to row back their powers – but a powerful idea was established: a vital guiding principle that we were all subject to the common law, not the whims of the powerful.
Ultimately there isn’t a blueprint for bringing about institutional change in other countries. Change happens in different ways, in different countries.
But if you can get certain institutions in place then they are the difference between putting petrol in a well-run car with 5 or 6 years, as opposed to a car with a bad engine and just 2 or 3 years. It’s not just about the journey or the direction of travel, it’s about having a car that can motor along fast, that can get into fifth gear.
Peace, jobs and justice
I know that for many people these things sound good in theory but they question what we can do in practice.
I believe there are three strands to it: delivering peace, jobs and justice.
Firstly, peace and stability is the foundation for development in all countries.
Time and again we find that conflict and violence directly correlate with the most extreme and intractable poverty.
It not only ruins people’s lives in the short term, but stops individuals and businesses from investing. The very thing a country needs if it is going to break out of poverty.
That’s why having an explicit intention of creating peaceful and stable states must be a priority for the international community.
The UK is investing in building and maintaining peace, as well as helping fragile states to avert the risks of spiraling into repeated cycles of violence.
For example in Bangladesh, we are supporting improved police and justice services – including providing access to community legal services for more than 3 million women.
We’re also increasingly focused on building growth and jobs. Economic growth has been the driving force behind the reduction in poverty over the last few decades. But to lift everyone out of poverty we need growth to accelerate faster and it needs to be inclusive, sustainable growth that creates jobs.
This hinges on building open economies, where entrepreneurship and innovation are allowed to flourish, investors can get capital to invest and there are economic opportunities for all.
For example we are focused on making the operating environment for businesses simpler, fairer and more transparent.
In Bangladesh, we have helped to cut the number of days it takes to register a business down from 57 days to just 3 days, contributing to nearly 30,000 new businesses being registered.
In Somalia, DFID has helped establish four ‘one stop business centres’, which have helped to reduce compliance fees from $2,800 to $300 for local businesses.
And we recognise that open economies are reinforced by open societies in which individual rights to liberty and property are safeguarded – in short: justice. Again getting these elements in place also represents a green light to companies thinking about investing in emerging and frontier economies. They need a level playing field so that companies who play fair can win.
A good example of this is land and property rights.
A key constraint to investment in Africa is insecure land tenure and property rights. 90% of Africa’s land is estimated to have insecure tenure or contested land rights. It’s hard to imagine – would anyone here be buying a house if you couldn’t check to see who owned the freehold?
We are strengthening land and property rights for the poorest, particularly for women and girls.
For example in Rwanda, DFID has supported 3 million people, half of them women, to gain formal rights to their land.
And peace, jobs and justice, is not just getting the right structures or laws in place, it’s about supporting people: ensuring local people have the necessary skills and expertise. That’s in part about institutions too.
In Britain, we have a wealth of expertise to share built up from the days when our guilds of mercers, goldsmiths and ironmongers were ruling the City of London from down the road at Guildhall, driving up standards and ensuring reliable quality. And I’m determined to draft in the best of British expertise.
This year we’ve supported experts from the Institute of Chartered Accountants to assist the Zambian authorities to strengthen business auditing. While experts from the Better Regulation Office have been working with officials in Nepal and Liberia to improve the efficiency of business inspection.
The UK has an unrivalled concentration of expertise, professionalism and talented legal practitioners within the country’s judicial and legal systems and many of them are providing their services ‘pro-bono’ in the countries DFID works in.
I want DFID to be working much more closely with the legal sector on this and today I am announcing a new DFID programme which will provide funding for DFID priority countries to access UK legal skills, to improve the policies, organisations and practices of legal and judicial systems in those countries.
In addition to this programme DFID is also investing £7million in the African Legal Support Facility which provides high quality commercial and pro-bono international legal advice to African governments and law firms.
Over the next 3 years, this investment will help African Governments to negotiate better oil, gas, mining and infrastructure deals. It will also provide training to local African law firms. 50% of ALSF contracts are currently won by UK firms – and DFID will be working with UKTI and TheCityUK to raise even greater awareness of ALSF contracts to UK firms.
Finally, we’ll be scaling up DFID’s commercial legal programme LASER, which helps countries to strengthen their commercial environment, issues from commercial court reform to competition law implementation. Things which, done right, so often ease the wheels of entrepreneurship.
A global agenda: tax, trade and transparency
So DFID has a growing number of programmes focused on delivering peace, jobs and justice, but this needs to be a global effort. When the Prime Minister talks about the Golden Thread he is talking about a Golden Thread that ties us all together, developing and developed countries getting their house in order.
That’s why at the UK’s G8 Presidency at Loch Erne last year the Prime Minister championed three key issues: tax, trade and transparency.
We need stronger international standards on tax to allow countries to collect what is due to them.
At the G8 we made progress on new international rules to stop companies from artificially shifting their profits across borders to avoid taxes.
We also need freer trade because trade barriers and bureaucracy are preventing people selling their goods at a fair price. In December last year, the World Trade Organization delivered the first global trade deal in a generation – a momentous agreement which could add £70 billion to the world economy each year, including £7 bllion for sub-Saharan Africa and £1 billion for the UK.
Finally, we need to promote greater transparency globally. In particular when it comes to extractives, ending, once and for all, the scandal of looted billions of pounds from countries that are rich in oil, gas and minerals.
Today I am announcing a new £34 million programme to increase the transparency and accountability around the extractives industry, in resource-rich countries, including Tanzania, Nigeria, Burma and the Democratic Republic of Congo.
This programme will ensure citizens, the media and investors can see exactly what revenues governments are receiving from extractives resources and where this money is being spent. We’ll also be helping to develop new technology so citizens can easily access user-friendly data on extractives.
We know transparency exposes inefficiency and corruption. This programme will allow citizens to really hold their governments to account and ensure extractives resources are invested in areas that promote wider economic development and jobs for everyone.
And this investment stands alongside new EU rules that will mean citizens can see company-by-company, project-by-project reporting of payments – not just nationally aggregated data. The UK will be introducing regulation on this in 2014.
This is all important for ensuring natural resources in developing countries are benefiting the many instead of lining the pockets of the few.
Conclusion: Call to action on post 2015
All of what I’ve been outlining is progress, but there is a need to move not only further but faster. This is in all of our interests. Helping other countries to grow and develop and to become our trading partners means a better, more prosperous future for Britain too.
As I said at the beginning we now have a historic opportunity to make these issues count in the next set of global development goals.
Negotiations on this will formally kick off in January next year with a view to new goals and targets being launched in September 2015, subject to us getting unanimity from UN member states. But the lobbying starts now.
The UK wants a simple, clear and inspiring set of goals and targets that centre on eradicating poverty. We believe this needs to include the missing issues from the MDGs: economic growth, governance, rule of law, tackling corruption, peace and stability, and putting women and girls first.
But we know the argument is far from won in the UN. There is broad agreement about the need to tackle extreme poverty but a lack of consensus about how we tackle the root causes of poverty.
Everyone here has a chance to influence, to champion key issues, to help build an international consensus.
It’s crucial that this is not just a traditional debate between public donors and recipients.
We really need businesses to make a case too. I believe it’s in your own self-interest. Smart businesses know it’s best to get into the world’s emerging and frontier markets today rather than start late in a crowded market tomorrow. In 10 years, the number of middle-class African consumers has increased by 60% to 313 million. African consumer spending could reach $1.4 trillion by 2020.
Delivering peace, jobs and justice – this isn’t simply about corporate responsibility – these things are fundamental to having business models that can do successful, long-term business in the world’s current frontier economies that are tomorrow’s major economies over the next 20 years.
So I urge you to press the governments in all the countries where you do business: make the case for putting governance, rule of law, justice and property rights at the heart of the new goals. Explain why these things represent a green light to investors. Your voices are those that can speak the most credibly on this.
I know that several businesses, led by Unilever, are working on a manifesto for business to feed into the post 2015 negotiations. Other groups, such as the Business Action for Africa, whose members include De Beers, Standard Chartered and Shell are also thinking through their priorities. I urge other businesses, of all sizes, to get involved.
I’m delighted that the UN Global Compact is represented among the panel tonight as the formal channel for feeding in views.
I also want to challenge NGOs to work closely with open society groups who are already actively stepping up to the plate and championing these issues.
For those of you who see the risks of irresponsible investment then help us, help us create the level playing field that will crowd out the irresponsible money by letting the good money compete.
We know that the poorest people on the world aren’t just going hungry – they want justice, they want a voice, they want jobs, they want to own their own land and grow their own businesses.
You have a real opportunity to articulate a strong and united civil society voice in support of peace, jobs and justice.
Together, we can build more peaceful, more prosperous, more open, more successful societies and economies. There is no room for complacency. A post 2015 development framework without peace, jobs and justice at its heart will see the development engine stuck in first gear. It needs to shift up.
But there is a clear opportunity to help build a better future for developing countries, and for all of us – a historic opportunity that together we must seize.