LOCATION British Embassy Tokyo

SPEAKER Martin Dinham, Director General, International, Department for International Development

DATE 2009/10/26

Introduction

It’s a great pleasure to be invited here today. It’s very good to be back in Japan where I have paid many enjoyable and rewarding visits throughout my career in DFID.

I am here today in my capacity as Director General International in the UK Government’s Department for International Development. DFID is a full Cabinet Department, responsible for all aspects of Britain’s international development funding.

Its clear remit is to reduce poverty through the achievement of the Millennium Development Goals. It has about 2,500 staff of whom about half work in delegated offices in developing countries and the remainder in the UK or in delegations to international agencies.    

My specific responsibilities include the funding we provide to the multilateral development system - so the World Bank, the Regional Development Banks, all the UN agencies responsible for development activities, the European Commission, the Global Fund and so on; plus the work that the UK does in tackling conflict and humanitarian issues in developing countries. But as a member of DFID’s Management Board I also have joint responsibility for the full range of the Department’s work.

I would like to cover four main themes with you today.

First, the successes of aid so far and the major challenges we still face in tackling poverty. Second, the importance of keeping to the commitments that the international community has made to developing countries to increase the support provided to help them out of poverty. Third, I want to say something about the British Government’s new White Paper on Development – and the four development priorities we believe need to be urgently addressed. And finally, I would like to refer to the rise of the G20 and the implications that this and other seismic changes in the global economic environment have for all of us.

At the end I look forward to opening up for questions and discussion.

Progress and Challenge

The last decade has seen real achievements in the fight against poverty.

• Aid increases and debt cancellation has helped to get 40 million more children into school. 
• The number of people with access to AIDS treatment has increased from just 100,000 to over 3 million.
• The proportion of the world’s population living in poverty has fallen from a third to a quarter.

So there is no question that aid works and that aid saves lives.

Yet this progress aside, it is clear – with nine million children dying each year, 70 million denied the opportunity to go to school, and a billion people around the world without enough food - that the world remains far from meeting the Millennium Development Goals which world leaders nine years ago agreed should be met by 2015.

And now the very gains we have made are threatened by the global recession – which may trap as many as 90 million people in poverty. That would push back progress towards the first Millennium Development Goal – the goal to eradicate extreme poverty and hunger – by as much as 3 years.

The gains we have made are threatened too by the advance of climate change. For if temperatures continue to rise at current levels, an extra 600 million people will be affected by malnutrition by the end of the century.

And the gains we have made are threatened by the effects of conflict and poor governance. Each year, at least 740,000 people are killed as a result of armed violence, with many more injured or disabled.

Unless all three of these global challenges – the recession, climate change and conflict - are tackled, the MDGs will be pushed far out of reach.

Keeping promises

Some have argued that in the teeth of these global challenges, and particular the strains which the economic crisis has put on national budgets everywhere, developed countries including the UK can no longer afford to pursue the task of eliminating global poverty.

We don’t agree.

The UK believes strongly that now is not the time to turn our back on the poorest.

We will keep to the commitments we have made to increase the volume of our aid to developing countries.  

That is why we have confirmed this year that the UK will remain on track to meet the target of raising development aid to 0.7% of national income by 2013. That means our aid will increase from about £7500 million in the current financial year to £9000 million next year and upward beyond that.

So we will do more – and that means more health care, education, and water for the poorest. But as well as simply doing more, we also need to find new approaches to address both the new and ongoing challenges we face in the 21st century, and to help us meet the Millennium Development Goals.

New UK White Paper

That is why DFID earlier this year went through the process of reviewing our policy approach with a new White Paper – launched in July, entitled “Eliminating World Poverty: Building Our Common Future”.

That White Paper sets out how the UK will pursue the fight against global poverty, and places new emphasis on four key areas: supporting growth; tackling climate change; tackling conflict and fragility and improving the international system.

Let me just say a little more about each of those areas.

Climate change
As we take measures to help people in developing countries to lift themselves out of poverty, we also need to work to re-order the global economy towards sustainable, low-carbon development. Because although the financial crisis is profoundly serious, the threat we face from climate change is greater still.

325 million people are already seriously affected by drought, disease, floods, loss of livestock and agricultural yields, and decline of fish stocks; a further 500 million people are at extreme risk

300,000 people - the equivalent of the Indian ocean tsunami - are already killed every year by the effects of climate change.

Within the next 20 years, one in ten of the world’s population could be directly and seriously affected by the impacts of climate change.

DFID is currently working with other UK Government Departments to secure a climate deal in Copenhagen that is both ambitious and equitable. That must mean a long-term goal, with credible targets, to contain temperatures to within two degrees centigrade above pre-industrial levels.

And it must mean developed countries taking the greatest responsibility for cutting emissions, as well as helping to re-order the global economy towards low-carbon development, and helping developing countries to adapt to the climate change that is now inevitable.

Our White Paper commits us to provide new and additional finance to developing countries for climate change - over and above our commitment to reach 0.7 per cent of gross national income on aid spending, so that our aid for health, education and other developing country priorities will be protected.

This is an issue our Prime Minister takes very seriously. He set out the UK position in his climate finance initiative, recognising that finance is key to unlocking the deal at Copenhagen.

That’s why the Prime Minister proposed a deal that provides for $100 billion per year in 2020 for tackling climate change. A substantial part of this should be delivered through the carbon market and part should be new public finance, i.e. over and above existing aid commitments.  

We have received considerable support for this proposal from other countries so far – but more is needed if we are to get real momentum behind tackling the enormous challenge of climate change.

We really welcome the "Hatoyama initiative" on climate finance and his principles for assisting developing countries, this is exactly the kind of leadership needed by developed countries in order to unlock mitigation from developing countries There was substantial agreement at the recent Major Economies Forum in London, on the need for significant scaled up finance, with substantial public finance contribution.  The international community now needs to explore the detail behind these principles, including a judgement on the overall amount needed, and the mechanisms to raise it. Also, one cannot underestimate the importance of governance –that is, how the funds will be administered - and this cannot be separated from other finance issues. The world will be waiting in anticipation for more detail on the Hatoyama initiative in the coming month and we look forward to working closely with Japan on this important issue.

But we cannot just focus on funding to tackle climate change after 2012, when the deal becomes operational. Climate change is already happening, we need to start now. It is for this reason the UK committed over $1 billion to the flagship Climate Investment Funds launched last year to address the twin challenges of development and climate change, which are inextricably linked. We welcomed Japan’s pledge of $1 billion and look forward to funds being released.
Because, put simply, while many people round the world came together four years ago determined to help make poverty history, climate change has the potential to make poverty the future for millions of our global neighbours.

Growth
The first of our priority areas is growth – which, of course is the exit route out of poverty and aid dependence for individuals and nations alike. Fifty years ago income rates in East Asia were equivalent to those in Africa – today, incomes in East Asia are five times higher.
Our common prosperity depends on shared sustainable growth. The global economy will decline this year by 1-2 percent. It is estimated that an additional 200,000 to 400,000 infants could die in developing countries per year between 2009 and 2015 as a result of the crisis. Urgent action is required.

To protect poorest people who could suffer permanent damage from the downturn – DFID has undertaken to get help directly to over 50 million poor people, in more than twenty countries, to protect them from the worst effects of the downturn.

We have also been pressing for the rapid delivery of the commitments made by the G20 at the London Summit in April to provide further financial support to the poorest countries. The Pittsburgh summit last month reported good progress in the delivery of the additional $50 billion of support agreed at the London meeting to address the needs of the poorest.

We know that even increased levels of aid are no substitute for fairer and better trade arrangements for developing countries. We will be working with all other key countries towards concluding a Doha deal that would boost the global economy by over $150 billion a year and deliver a fairer deal on global trade for poor countries.  

The White Paper also commits us to help developing countries build fairer and more sustainable economic growth, double our agricultural research funding, and provide investment for infrastructure and reforms that will help African countries to trade with each other and the world.

And we will advance our work with law enforcement agencies to clamp down on bribery and corruption, which have a parasitic effect on any economy. This includes increasing our support for the crackdown on assets illicitly removed from developing countries by corrupt individuals or organisations.  

Conflict and fragile countries
The third priority in our White Paper is the need to reduce conflict and increase security for ordinary people – particularly in fragile states. For of the 34 countries around the world furthest from reaching the Millennium Development Goals, 22 are in the midst of, or emerging from, conflict.

DFID has consciously increased the proportion of our assistance to fragile states over recent years – from a quarter of our bilateral programme, to 40 per cent of it today. In the future, we have committed that half of all our new bilateral aid will go to fragile and conflict-affected countries.

And just as we cannot meet the Millennium Development Goals without working in these different, more challenging environments, in countries affected by conflict we need to go beyond our support for economic growth and basic services like water, health and education.

So we will put security and justice as a priority alongside these basic services – tripling our spending on work to promote security and justice and to address violence against women.

International institutions
Global challenges need global solutions.  So our fourth priority area is reforming international institutions to equip them for the challenges of the 21st century.

If we want to make real progress on economic growth, climate change and conflict, we need to work collectively with others through the international system.  But if international organisations are to live up to these new responsibilities, they must become more accountable, responsive and representative.  

The White Paper sets out proposals for improving the effectiveness of international institutions in tackling poverty reduction in the years ahead.

We explicitly propose a deal.  DFID will invest a higher proportion of its increasing future budget in the international system, in return for key reforms.

What does that mean in practice?

Let me take the main institutions in turn:

We want UN agencies to be much more joined up – to ‘Deliver as One’. So we will channel more funding through system-wide funds – like the UN MDG Fund and the Peace building Fund - that pull the agencies together. And we will give additional performance funding to those individual agencies which meet agreed targets on improved efficiency, impact and reform

The European Union is the world’s largest provider of aid - accounting for some 60% of global aid flows, more than $50 bn annually. The UK puts 20% of our aid budget through the European Commission. So we are determined to ensure that these substantial resources are spent effectively. That means the EU continuing to speed up its processes; playing a major role in reaching agreements on trade and climate change; having a single Development Commissioner covering all development and humanitarian aid; and reprioritising its funds towards conflict and fragile countries.

We will also continue to push for improvements in the performance and governance of the IMF, World Bank and the regional development banks, to maximise the volume and quality of support they provide to poor countries, particularly during the economic downturn.

G20 and the changing world
I referred earlier to the important implications for developing countries of the agreements reached at recent G20 Summits.

At the Pittsburgh Summit last month, we saw a clear moment of transition as the G20 was formally adopted as the “premier forum” for international economic co-operation.

With the economic crisis acting as a catalyst, we have now seen China, India and Brazil, South Korea, Australia, Saudi Arabia, Argentina, Turkey, South Africa, Indonesia and Mexico formally assume their seats at the top economic table, alongside the G8 countries.

We want to encourage the new large emerging economies to engage fully and constructively in these new fora.

At some point within the next two decades, three of the world’s four largest economies will be from Asia and Japan’s role as a traditional member of the G8 will be very important in the new transition.
That shift is already changing the nature of international negotiations – the large emerging economies are not the deal-makers and deal-breakers of tomorrow, but of today. We saw this last year, when we came so close to reaching a deal on the Doha trade round, but failed at the last as India and the United States were unable to agree terms on agricultural subsidies.

This rise of the G20 provides the world with an opportunity. It provides a new forum to face challenges such as economic and climate crises as an international community.

But what of the G8?  

It is clear that the G8 has focused much of its time in recent years on issues affecting developing countries. Just this year at the L’Aquila Summit in Italy, they agreed on work to take forward an International Assessment of MDG Needs; on the need to establish ODA targets for developed countries to meet beyond 2010; and on establishing an Accountability Framework – to hold donors to account for their promises. It is essential that this and similar G8 work - pushing the boundaries on development - is continued and not lost sight of.

As of now, it is uncertain what the future international structures will look like. In the middle of 2010 we will have Canada hosting both the G20 and the G8 Heads Meetings; and then South Korea will be hosts of the G20 Heads later in the year. By the end of 2010 it will no doubt be clearer what the future roles of the G20, the G8 and other bodies will be.  

But there is no question that the rise of the G20 presents an opportunity to take account of the interests of developing countries within a larger forum, building on the work that has been done and ensuring that the voices of these countries are heard even though their present economic weight may be modest.

This is important not just because it’s right but because, it has become increasingly apparent that we are ever more interdependent. The evidence of this is all around us – from the internet to the financial crisis, from the label that says ‘made in China’ to the swine flu pandemic that began in Mexico.

And in an interdependent world, all interests have to be shared; no one can safely be left out. Our common prosperity requires the developing world to resume growth and trade, our common climate requires all countries to adapt growth for a low carbon world, and our common security requires tackling state fragility and social exclusion that threaten peace and security all around the world.

Finding common cause is not always easy. But we need to strive to do so, more now than ever. With the tectonic plates of the world’s economic powers shifting, we have both the opportunity and the responsibility to bring about real and lasting change in our lifetimes.

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