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Speech

23 February 2006

5th White Paper Speech, Chatham House/BOND

Hilary Benn, Secretary of State for International Development

Development Beyond Aid

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Thank you Richard, BOND and Chatham House for hosting tonight’s event. And thanks too for the classy way you have stirred up the audience! There is always a certain tension in the engagement between government and NGOs, and it needs to be creative, because none of us have all the answers.

This is the fifth in a series of speeches I am making as part of our consultation on the Government’s development White Paper to be published in the summer. I think we are having a very good debate, and I am sure this evening’s discussion will be no exception.

The challenge facing developing countries in making poverty history for themselves is becoming more and more complicated because we live in an increasingly interconnected world. And if I can leave you with one thought tonight, I want it to be this. The world is entering a stretch of rapids on the river ahead. And what we need now are maps of safe routes through the currents; a willingness to paddle together; and lifejackets for the inevitable bumps along the way.

These rapids are the result of national borders having become ever more porous to a host of different flows over the past few decades – people, ideas, capital, trade, viruses - real and virtual - carbon emissions and so on. And the result is a world with few islands left, as the distinction between the domestic and the foreign erodes.

The symptoms of today’s problems will become the catalysts and the causes of tomorrow’s crises. And it is already clear that we will have to deal with a number of global trends over the next ten to twenty years - some of them positive and some of them negative - that represent an even greater acceleration of the pace of change.

And I want to begin by listing some of them.

Climate change is happening faster than any of us anticipated even five years ago. And I’ll say more on this later.

We are fast depleting natural resources including soil, oil, forestry, fisheries and water, and in the process creating potential flashpoints of conflict in the future. In just the last twelve months we have seen the results of water scarcity in Niger, Kenya, the Horn of Africa and Southern Africa, as well as in parts of Asia.

There is a double demographic time bomb. Ageing populations in industrialised societies with under-funded pensions and long term care liabilities, and a whole generation of teenagers wanting to find a job, and a life, in developing countries where employment and growth are stagnant.

This year, for the first time, more than half of the world’s population will live in cities or towns – and the same will be true of Asia and Africa within a generation.

Infectious diseases and rising HIV infection, with death rates from AIDS in sub-Saharan Africa possibly spreading elsewhere. And as the climate changes so malaria moves.

Poor governance and inadequate accountability which can trigger state failure that then causes human insecurity, refugee migration, organised crime, conflict and, potentially, terrorism.

The multilateral system under serious examination at the very time when we need it most, but it has to show itself to be effective.

A clash not of civilisations but within them, as different value systems increasingly “talk past one another”. The split between the “sacred” and the “secular” worldview in societies across the world.

And the endemic short-termism in our politics and economics that under-values the future relative to the present.

Now, all of these changes, all of these challenges, are partly the result of the same underlying shift it seems to me: the shift from a world organised primarily around independence to one increasingly based on interdependence.

In the light of this, I think there are five features of this interdependence that really stand out:

First, more interdependence – where countries come together and cooperate – can mean more safety. The European Union is a prime example of that. It has diminished the risk of another war between countries that spent much of the preceding centuries fighting each other.

Secondly, greater interdependence can also mean more risk, like antibiotic resistant illnesses, economic downturns, or currency crashes like the one that hit Asia in 1997. Interdependence can mean that you’re more at risk from actions over which you have no control. Like the fact, for example, that rising sea levels caused by global warming will cause – some people say - a tenth of Bangladesh’s population to have to move home – equivalent to more than all the people who live in Greater London.

Thirdly, global interdependence requires global management of its consequences. The erosion of borders between nation states creates a need for multilateral frameworks to manage shared resources, and shared challenges. Yet the most pressing global challenge of all – climate change - does not yet have a global framework for solving it.

Fourthly, the successful management of global interdependence will partly be about individual behaviour and values. Whether individuals drive their cars or take the bus. Whether they practise safe sex. How they treat neighbours of different faiths or ethnicities. Whether they finish the course of penicillin or not. National and international policy will increasingly be about trying to find ways to influence behaviour and change attitudes. Governments will not be able to solve these problems on their own.

Finally, and above all, the overarching and fundamental truth about global interdependence is this: interdependence means complexity and uncertainty, as well as opportunity.

I think this is the context. What are we going to do?

Well last year we made progress on aid and on debt cancellation. But this isn’t going to be enough if we and developing countries are to create a better world.

The truth is, aid – in itself - is not enough.

This might come as a surprise to some people, who often think of development in terms of building schools, hospitals, and providing water, giving money to a charity, or what aid or debt relief can do.

But we all know it is more complicated than that. It’s not just about money; other things we do matter as well, and we have to tell the whole story about what makes development possible.

Trade is a perfect example of that. The problem, as we all know, is that the poorest countries are denied a fair chance; they can’t compete with protected and subsidised agriculture in rich countries.

We also know that if we can change this, the world’s poorest countries will have the chance, with the right support, to grow, create jobs, and increase the incomes of poor people.

The argument about fairer trade used only to be made by development ministers. Nowadays trade ministers make that argument – something that would have been impossible to imagine two or three decades ago.

We know now that the policies we pursue matter just as much, if not more for development, than the money we give.

And that’s why, at the launch of the Commission for Africa report, the Prime Minister committed the whole of the UK Government to implementing its recommendations. These have gone far beyond DFID’s reach, and are about more than money. The Home Office has taken action to get the UN Convention Against Corruption ratified, the Foreign Office is working hard with the African Union to help create an African Stand-by Force by the end of this year. The Office of Science and Technology and the Department of Education and Skills is working with DFID to implement the recommendations on Higher Education in Africa.

This evening I want to take just two of the challenges which I touched on earlier which we will all have to make priorities over the coming years. The first of these is climate change, and the second is global governance.

Let me start with climate change.

Climate change is increasing the intensity and severity of natural disasters. 2005 was an unprecedented year for disasters – some made worse by our behaviour – the hurricanes in the USA and the Caribbean, and the food crises and drought across Africa, and some just natural in origin - the tsunami and the earthquake in Pakistan.

Disasters, as we know, affect poor people most. 97% of all deaths due to natural disasters occur in developing countries. The super cyclone that hit the Indian state of Orissa in October 1999 destroyed or damaged every single aspect of the state’s infrastructure including roads, communication systems, public offices and schools. And as the sea temperature rises, cyclones we are told could become even more intense.

Climate change will have gradual but just as devastating effects. Sea levels are rising – a 1 metre rise projected over the next 100 years – and the result will be that people will be flooded from their homes. In sub-Saharan Africa, where a third of men, women and children are already malnourished, climate change could mean that food production is reduced by a fifth. Higher temperatures and shorter rainy seasons in Tanzania are expected to cut the main food crop, maize, by a third, making more people even more hungry.

Competition over natural resources already causes conflict. Climate change will make this worse. By 2025, only 20 years away, more than 3 billion people could be affected by serious water shortages. Some argue that we need a new agricultural revolution for water – a “blue revolution” to ensure the gains in food production are not wiped out as rivers run dry and underground reservoirs empty.

The truth is if we if we don’t do something about climate change, aid from rich countries will look pitiful by comparison with the consequences and the costs for developing countries.

And yet climate change is not, primarily, the fault of developing countries.

So what should we do? I think there are four key things we need to do.

First, we need to keep publicising the science. We have much better models now for predicting the impact of climate change. There should now be no question about the science and at Gleneagles, G8 heads agreed on the scale and the urgency of the problem.

Second, we need to work for a global solution.

There is new momentum on Climate Change. At Montreal, just before Christmas, all countries signed up to discussions on what will happen after Kyoto runs out in 2012, at which point we will need a new framework.

Negotiations will take place through the UN, but the Gleneagles Dialogue we set up last year will also set shared goals for action by the G8 and five of the biggest emerging economies. But what should the new framework look like?

Many argue that we will need to agree what a “safe” level of carbon dioxide concentration would be if we are to stop dangerous climate change, and a deadline by which we need to meet that target. That’s a job for both scientists and politicians.

We’ll then need to come up with a way of dividing CO2 emissions between countries so that this safe level isn’t exceeded. There are various ways of doing this. Some say that those who have polluted most should do more; others that each person on the planet should be able to emit the same as anyone else. But the international debate on all of this is at an early stage.

DFID’s interest in all of this is that climate change is a problem caused by the rich countries which is having the greatest impact on poor countries. We cannot ignore the impact of our own actions on the climate, nor can we deny developing countries the chance to grow and to reduce poverty.

Poor countries need reliable and affordable energy to meet the Millennium Development Goals. People increasingly point the finger at the rapidly industrialising economies of China and India. But although China does emit around 14% of the world’s greenhouse gas emissions, second only to the United States of America, per person it produces 8 times less than the US. India is the fourth largest emitter globally, but per person emits only one-sixth of the global average.

China and India, and other developing countries however, will have to be part of the solution, but it has to be fair to have any chance of being agreed. Understandably, they will not sign up unless they have helped to design that solution, and unless they understand and can manage the impact it will have on their economies.

Any global solution is going to require developing countries to have the capacity to negotiate. So, as we have done on trade, we need to help build the capacity of developing countries to better analyse the implications, and work out what they want out of a global climate agreement.

Third, we need to reduce the volume of carbon emissions through the greater use of cleaner technology.

Working on the global framework is the big prize, but it will take several years. There is much that can be done in the meantime to reduce the global level of carbon emissions.

Like making sure developing countries are able to take advantage of cleaner and more efficient technologies. This is an urgent question for China and India because the power stations they are building now will stay in operation for a generation. And it is much much more expensive to make an existing power station more efficient, than to use more efficient technology to start with.

That’s why Gleneagles asked the World Bank and other development banks to look at how to increase public and private investment in cleaner technology on a major scale – in the order of billions of dollars a year.

Making more use of clean technology is not just about reducing emissions. It is also vital to sustainable growth. High oil prices are a barrier to development for countries that don’t produce their own energy. For Ghana the $35 increase per barrel in the last two years has meant that the annual cost of energy for that country is equivalent to nearly 70% of all the aid it receives.

Finally we need to help developing countries cope with, and adapt to, the impact of the climate change that we already know will happen, and make sure that they can plan to minimise its future impact.

Part of this is knowing more about what is going to happen in future, and not just what we know will already happen but that we can’t change. The Global Climate Observation System, which DFID is helping to fund, will help to give a better picture about which areas will be most affected, including in Africa.

Once countries understand better what is going to happen, they will be able to plan and respond more effectively. And the way they will respond will depend on the kind of change, whether a sudden event like a flood or gradual change from rising temperatures and reduced rainfall.

We need to make sure that investment now takes into account the effects of climate change; for example, building roads that can still be used after they have been flooded. Work like this is being pioneered in Bangladesh and again supported by DFID.

And in the worst case, we will need to prepare for population movement caused by rising sea levels as I mentioned earlier in the case of Bangladesh.

But all these initiatives come at a huge price – far beyond what our aid can help with. And that’s why Nick Stern’s Review – which is due to report in October - is taking a serious look at the economics of climate change, to work out the best course of action and how all these things will be paid for. DFID has seconded two people to Nick’s team to help make sure that development considerations is at the heart of these calculations.

We also need to remember that climate change is not something governments can solve by themselves – we will all need to take action to change our own lifestyles. To stop global warming, the average person in the industrialised world needs to reduce their carbon emissions by three quarters. One short haul flight to Europe emits over a fifth of our annual “allowance”. One hundred miles in an ordinary family car produces over 3 times as much carbon dioxide as the same distance on a train.

Our consumption patterns even affect the global water crisis. While many of us would avoid leaving the tap running at home, how many people realise that the water needed to grow a T-shirt’s worth of cotton is equivalent to 25 baths! Or that the water needed to produce the grain to make just a hamburger’s worth of beef takes 3,000 baths!

Being a vegetarian does make me feel a bit better about that statistic !

Now, the second major issue which I think we have to address is the global causes of bad governance. I talked a few weeks ago at SOAS about corruption and governance, but most of that was about what happens in countries. Now I’d like to talk about how bad governance can create insecurity and conflict, and lead to large scale theft and the squandering of the wealth and resources of poor countries.

One of the reasons this happens is that rich countries and we, their consumers, are willing to pay a great deal of money for valuable commodities, like oil and gas to keep us warm, and coltan to make our mobile phones work. This provides an opportunity for political elites in some countries to enrich themselves, and the ease with which money can now move around the world makes it easier to steal.

The DRC is an example of a country with huge natural resource wealth, above the ground, below the ground, but which has seen terrible conflict, bad governance and as a result desperate poverty.

Mobutu’s appalling and corrupt regime was backed by rich countries for much of its history. During the 32 years he was in power, what was then Zaire received over $12 billion in aid - not just because Mobutu was on the side of the west in the Cold War, but also because of the DRC’s huge wealth of natural resources. The whole economy of Zaire was geared towards institutionalised kleptomania for the benefit of those who controlled the army and the police. During that time, according to the UN, Mobutu embezzled $5 billion.

As the regime collapsed, different armed groups fought for control of these resources, including armies of neighbouring countries, with many doing deals with international investors along the way. The ensuing regional war led to the deaths of 4 million people – more than lost their lives in battle in the 1st World War. Some 1,200 people a day are still dying in the DRC from disease and malnutrition and violence.

We need to tackle the causes as well as the consequences, and in the DRC, help create the conditions in which new leaders will have an incentive to invest in their country.

What are we doing? Just to take some examples.

We’re working with FCO, MoD and other donors to help create a safe and secure environment for people to live in, for example helping the DRC’s transitional government to integrate various fighting forces into a proper national army. Some 50,000 soldiers have decided to return to civilian life and are being helped to do so. And for those who stay, we are supporting reform of soldiers pay, so that they do not resort to robbery and violence to make ends meet.

We’re supporting the elections – the first the people of DRC will have experienced for 40 years - and in the longer term we want to ensure natural resources are used for the benefit of the citizens of DRC. Government revenue from the mining sector - copper, cobalt and diamonds - amounted to $15 million in 2004. Potential revenue - if governance had been better - is estimated to have been ten times that! Meanwhile the annual income for people from using forests – wood, charcoal, bush meat – is around $900 million – poor people depending on earning a living from natural resources.

So what we need to do is work to improve governance in the sector with the aim of attracting new investment from the private sector and improving the livelihoods of poor people who depend on these resources.

Our support to the Extractive Industries Transparency Initiative and the Kimberley process will improve the transparency of revenue flows and can help ensure that the exploitation does not continue to fuel the conflict. I hope we can get the support of Brazil, Russia, China and India for EITI best practice. A UN General Assembly resolution would give EITI legitimacy across the world, as I think we should be looking to apply its lessons to other sectors such as fishing or construction or forests or public procurement.

The new EU Forest Law Enforcement, Governance and Trade regulation will help to tackle illegal logging in DRC. Globally the World Bank estimates that illegal logging results in $10-15 billion per year in lost revenue.

NGOs like Global Witness have been instrumental in documenting the trail of illegal natural resource exploitation and holding politicians and officials to account. And we will continue to support them in this role.

And I’ve just returned today from Darfur, where civil war has been fuelled in part by the fight over resources – has seen thousands and killed – numbers ranging from 80,000 to 300,000 to 400,000 – no one knows, because no one was counting. And just under 2 million people displaced.

And two camps I visited in El Fasher the day before yesterday are being supported by the international community.

A lasting resolution of the conflict in Darfur will require agreement on returning land and livestock; compensation, and opening up of transport routes to provide safe passage of people, livestock and goods.

The conflict has in part arisen from competition between nomads and farmers, with one group armed by the Government to take on the rebels.

The Abuja peace process and the wealth-sharing arrangements in particular, provide a framework – if those who are fighting are prepared to put bombs and bullets aside - for addressing these issues. The precondition for all of this is security. We are working hard to improve security on the ground through support to the African Union Mission in Sudan because despite continued ceasefire violations on the part of the Government and the rebel groups, and we are providing financial and technical support to the Abuja process.

And the message is that the world’s patience has run out. Because the only chance the 1.8 million people - tonight and every night - have to leave these camps and go home is through peace.

UK support to peace building means that we have to bring together the development, defence and diplomatic parts of government. We have done this – one example - through our Conflict Prevention Pool. In Mozambique, we have funded the destruction of over 3,300 guns and 1.6 million rounds of ammunition. In Sierra Leone, the Pool has paid for the police, a functioning court system, and a comprehensive national security plan.

UK government departments are working closely together to fight international corruption. We did work very hard to get the UN Convention Against Corruption agreed, we reformed our own legal systems and we ratified it two weeks ago. And we are helping developing countries with the legal reforms they need in order to bring their legalisation in line with the convention.

We passed the proceeds of Crime Act in 2002 to fight money laundering. You’ll have heard of Alamieyeseigha who fled the UK recently dressed as a woman. Well, he hasn’t escaped justice, and is now in prison in Nigeria awaiting trial for stealing $55 million of public money and 40 counts of money laundering. And our shared work with other police forces led his assets to be seized by the South African authorities.

We need to do more to recover stolen assets – this is a long and complex legal process. In the UK, Joshua Dariye, the Governor of Plateau State in Nigeria, has had his assets seized in December last year, and we are making efforts to return them to Nigeria. An appeal is in progress.

So there’s climate change and there’s bad global governance. These are some of the problems. What these two examples of our interdependence demonstrate – and there are many others which I’m sure we’ll discuss later – is that progress demands work across government; and across many governments. These challenges can’t be tackled by any one department, and any one state; they are by their nature global.

I’ve talked about what the UK government is trying to do. And can I mention Tom Clarke’s Bill – now gone through committee stage – which will help, for the first time requiring us to report not just on aid, but also on how other issues affect development.

Other countries do it differently. Germany requires their plans for helping countries to highlight issues of concern beyond aid, and one result is that there are new policies in Germany on arms exports and export credit schemes. Sweden has legislation; others have what they call policy coherence units. And last year all EU members agreed to report back on the action they are taking to promote a more coherent approach to policies that affect development.

And then, of course, there’s you – the development and NGO community – because you keep us on our toes by pressing us – and long may you continue doing so - to ensure everything government does assists development.

Since these speeches are about consultation – this issue of interdependence and what we do about it is one on which I’d particularly like to know your views. Why ? Because, as I said at the beginning, none of us yet have all the answers. So, for each of the issues I’ve raised – and others you may think about, I want to end with these questions.

What should a “whole of UK government” approach look like, in say, 2010 or 2015?

What would a global plan for each of these issues look like by 2010 or 2015? And how much influence can the UK have? Question.

What will happen if no action is taken? Which countries or regions are most at risk? Question.

And how can we in the UK, and especially those countries and regions in the developing world, best cope with, and adapt to these changes? Question.

What we are grappling with here are the consequences of our interdependence as human beings – the most complex area of all. So a really good reason for us to think about this and ask these questions.

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