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Note: This document is from the archive of the Africa Policy E-Journal, published by the Africa Policy Information Center (APIC) from 1995 to 2001 and by Africa Action from 2001 to 2003. APIC was merged into Africa Action in 2001. Please note that many outdated links in this archived document may not work.


Africa: British Policy, 1 Africa: British Policy, 1
Date distributed (ymd): 020213
Document reposted by Africa Action

Africa Policy Electronic Distribution List: an information service provided by AFRICA ACTION (incorporating the Africa Policy Information Center, The Africa Fund, and the American Committee on Africa). Find more information for action for Africa at http://www.africaaction.org

+++++++++++++++++++++Document Profile+++++++++++++++++++++

Region: Continent-Wide
Issue Areas: +political/rights+ +economy/development+

SUMMARY CONTENTS:

Among rich country leaders, British Prime Minister Tony Blair has taken the lead in calling for increases in development aid, opening Western markets to African imports, support for the "New Partnership for Africa's Development" framework presented by African leaders, and greater attention to addressing global and African poverty. In meetings of the G-7 Finance Ministers and other fora, British Chancellor of the Exchequer Gordon Brown has delivered the same message.

This message, contrasting to the indifference to Africa displayed by Blair's and Brown's counterparts in Washington, won applause on Blair's recently completed trip to West Africa. But commentators also raised many hard questions about British policies.

This posting contains excerpts from the pamphlet Tackling Poverty: A Global New Deal, published this month and based on recent speeches by Gordon Brown.

A related posting also sent out today contains (1) a critical analytical commentary from African scholar Mahmood Mamdani, (2) a statement by Tanzanian civil society groups on the $40 million sale to Tanzania of a militarily capable radar control system from the UK firm BAe, and (3) several additional links with commentary on the Blair trip and related issues.

+++++++++++++++++end profile++++++++++++++++++++++++++++++

Tackling Poverty: A Global New Deal

A MODERN MARSHALL PLAN FOR THE DEVELOPING WORLD

A pamphlet based on the speeches by the Rt Hon Gordon Brown MP, Chancellor of the Exchequer to the New York Federal Reserve on 16 November 2001 and the Press Club, Washington D. C. on 17 December 2001

HM Treasury, February 2002

[Brief excerpts only; for a PDF file of the 41-page pamphlet, see http://www.hm-treasury.gov.uk/mediastore/otherfiles/globalnewdeal.PDF]

And there is now growing agreement that as we work together to fight terrorism we must also work together to address the causes of poverty--not just because to do so is central to long term national security and peace, but because to do so is right--a moral imperative, an economic necessity and a social duty.

...

Managed badly, globalisation could leave whole economies and millions of people in the developing world marginalised. Managed wisely, globalisation can, and will, lift millions out of poverty and become the high road to a just and inclusive global economy. So the real issue is not whether we are against globalisation: it is whether we are for social justice.

...

But whatever our concerns about the sheer scale of the challenge of globalisation, we must resist two opposite temptations: the first is to retreat into the outdated protectionism and isolationism that would deprive developing countries of what they need most -- development itself; the second is to recycle the old laissez-faire that says there is nothing that can be done. To succumb to either temptation would hurt both the powerless and the prosperous.

...

As different understandings of the world economy converge, we are moving towards a new paradigm in which low inflation and fiscal stability are the necessary but not sufficient conditions for securing prosperity for all. ... From the foundation of stability, a modern strategy for prosperity involves a concentration on what brings not just low inflation but sustainable development. And we must now recognise as important: * the pursuit of competition and not just privatisation; * the importance of public as well as private investment; and * the need for proper financial supervision as well as liberalisation, including a route map sequencing the liberalisation of capital markets.

...

A strategy for prosperity for all requires us to combine policies for economic success and social justice and to tackle the causes of poverty. And this has led countries, international organisations and non- governmental organisations to sign up to the historic shared task of setting and meeting eight Millennium Development Goals. The United Nations (UN), International Monetary Fund (IMF), World Bank, OECD, G7, G20 and all major developed and developing countries have signed up to the goals of:

  • eradicating extreme poverty and hunger by halving, between 1990 and 2015, the proportion of people whose income is less than one dollar a day and the proportion of people who suffer from hunger;N
  • achieving universal primary education, by ensuring that, by 2015, children everywhere, boys and girls alike, will be able to complete a full course of primary schooling;N
  • promoting gender equality and empower women by eliminating gender disparity in primary and secondary education, preferably by 2005, and to all levels of education no later than 2015;N
  • reducing by two thirds, between 1990 and 2015, the under- five mortality rate;N
  • improving maternal health by reducing by three quarters, between 1990 and 2015, the maternal mortality ratio;N
  • combating HIV/ AIDS, malaria and other diseases;N
  • ensuring environmental sustainability, including halving by 2015 the proportion of people without sustainable access to safe drinking water and by 2020 to have achieved a significant improvement in the lives of at least 100 million slum dwellers; andN
  • developing a global partnership for development.

...

There are four building blocks of this global new deal.

The first building block is an improvement in the terms on which the poorest countries participate in the global economy and actively increasing their capacity to do so: new rules of the game in codes and standards that all countries--rich and poor-- can sign up to.

The second building block is the adoption by business internationally of high corporate standards for engagement as reliable and consistent partners in the development process. My main proposal is to back up a code of corporate standards with support for the creation, in developing countries, of investment forums between public and private sectors.

The third building block is moving forward the great progress made at Doha by the swift adoption of an improved trade regime essential for developing countries participation on fair terms in the world economy.

Stability, investment and trade are the main long term drivers of global prosperity but not all will benefit without a fourth building block: a substantial transfer of additional resources from the richest to the poorest countries in the form of investment for development. Here the focus must not be on aid to compensate the poor for their poverty, but investment that builds new capacity to compete and addresses the long term causes of poverty.

And there is an urgency for action.

America's post- Second World War achievement in what we now call the Marshall Plan should be our inspiration in this post--Cold War world--not just for the reconstruction of Afghanistan but for the entire developing world.

The plan proposed by the US Secretary of State George Marshall transferred one per cent of national income every year, for four years, from America to Europe--in total the equivalent in today's money of $75 billion--not as an act of charity but as a frank recognition that like peace, prosperity was indivisible; that to be sustained it had to be shared; and that to achieve this goal would require a new public purpose and international cooperation on a massive scale.

...

II. Rules of The Game

The first building block is improving the terms on which the poorest countries participate in the global economy and actively increasing their capacity to do so.

In a world of ever more rapid financial flows, developing countries who need finance most are, at the same time, the most vulnerable to the judgements and instabilities of global markets. We know that capital is more likely to move to environments which are stable, and least likely to stay in environments which are, or become, unstable. And we know that in unstable economies, poverty rises.

So for every country, rich or poor, macroeconomic stability is not an option but an essential pre-condition of economic success and the fight against poverty. It is in the interests of stability, and of preventing crises in developing and emerging market countries, that we seek a new rules-based system. And such a rules- based system depends on there being clear rules, proper transparent procedures for decision- making and well understood systems of accountability.

...

III. Investment

Open, transparent and accountable national policies, internationally monitored, are the foundation for macroeconomic stability. But we must also do far more to ensure growth and development by taking steps to promote and raise domestic and foreign investment--and by finding better ways for public and private sectors to work together in raising investment levels.

In the last decade, foreign direct investment flows across national boundaries--including to, and between, developing countries--have increased four-fold. And evidence shows that such investment is an important driver for growth and development generating higher productivity, employment and wealth, and transferring knowledge, skills and technology.

But the poorest and least developed suffer a double handicap. Foreign direct investment is too low, with investment per head in developing countries just $35 compared with $805 in the higher income countries. In sub-Saharan Africa foreign direct investment is even lower at $12 per person. In addition domestically generated savings and investment are low, with savings that do exist often leaving the country.

...

IV. Widening and Deepening Trade

In the last forty years those developing countries which have managed to be more open and trade more in the world economy have seen faster growth rates than those which have remained closed. From the early 1970s to the early 1990s, developing countries that were able to pursue growth through trade grew at least twice as fast as those who kept their tariffs high and their doors closed to imports and competition. We must ensure that all countries have the opportunity to reap these benefits.

Full trade liberalisation could lift at least 300 million people out of poverty by 2015. Even diminishing protection by 50 per cent in agriculture and in industrial goods and services would increase the world's yearly income by nearly $400 billion: a boost to growth of 1.4 per cent. All countries and regions stand to benefit, with developing countries gaining an estimated $150 billion a year and higher than average increases in GDP growth.

...

V. Financing for Development

... there cannot be a solution to the urgent problems of the poverty these countries face--and to the need for public investment as a partner with private investment--without a fourth reform: a substantial increase in development aid to nations most in need and willing to focus on the fight against poverty.

... [debt relief, effectiveness of targeting aid, better use of funds received, new sources of finance (inlcuding Tobin Tax, Arms Tax or Special Drawing rights)]

We in Britain approach further evaluation of all these proposals with an open mind.

But in the end, it all comes back to the duties national governments--especially the richest national governments-- recognise and are prepared to discharge. If the international community is to move with the urgency that the scale of today's suffering demands, we must each, as national governments, be bold and acknowledge the obligations of the richest parts of the developed world to poorest and least developed parts of the same world.

One proposal for additional resources involves the richest countries making a substantial additional commitment of resources to 2015 and beyond. And there is a case for adding to these resources by examining a further option. Through richer countries making a long-term commitment of increased resources for development for, say, 30 years and with national governments offering a guarantee--either through callable reserves or appropriate collateral as security--then additional aid contributions could be levered up in the years to 2015 to meet our target for extra funds.

In this way $50 billion more could be available each year to the poorest countries in their fight against poverty. In future no country genuinely committed to economic development, poverty reduction, and transparency and proper standards should be denied the chance to make progress because of a lack of investment.

There should, of course, be a full discussion on how the extra resources could be most effectively employed.

...

VI. An Action Plan for the Global New Deal

For if we are to achieve a global new deal for the developing world we must agree a shared responsibility for the task--setting out the practical steps each partner must take. So developed and developing countries, international institutions, the private sector and non-governmental organisations and faith groups all need to work within their powers and responsibilities to ensure a greater effort is made to guarantee a new global deal. Our joint responsibility must reinforce not diminish accountability for the outcome. And each of us have to discharge specific responsibilities.

...

(a) Developed countries

We first call upon all the developed countries to work together to:

  • move forward on debt relief, in particular to renounce the right to any benefit from the historic debt owed by the HIPC countries;N
  • ensure the successful resolution of the new 'development' trade round, including by negotiating reductions in agriculture export subsidies with a view to phasing them out, by all countries granting duty and quota-free access to developing countries for all exports except arms and by financing capacity building in developing countries so they can participate fully and effectively in the forthcoming negotiations;N
  • improve aid effectiveness through untying; better coordination and a greater focus on poorest and best performing countries; andN
  • significantly increase the overall aid effort, considering a broad package of measures to achieve this including the support for the $50 billion increase in investment aid.

(b) Developing Countries

A sound domestic environment is the foundation of poverty reduction and sustained economic growth enabling countries to make effective use of aid and harness the private sector finance in development. We therefore call upon the developing countries to:

  • adopt new codes and standards for transparent management of fiscal and monetary systems;N
  • strengthen the accountability of their public financial management systems so as to eliminate corruption;N
  • develop, strengthen and implement fully comprehensive and costed national poverty reduction strategies; andN
  • establish business environments to facilitate growth in private investment, including the creation of investment forums.

(c) International institutions

The United Nations and other international institutions have a central role to play in bringing our efforts together and supporting developing countries. ...

(d) The private sector

Long-term investment is critical for growth and development. There needs to be a new engagement by business as reliable and long-term partners in economic development. We therefore call upon the private sector to:

  • work with developing countries to increase investment, in particular through participation in national and regional investment forums to share best practice, examine current barriers and seek to build consensus for necessary actions; andN
  • increase stakeholder awareness to achieve cross-border accountability, in particular by applying agreed international standards of best practice for multinational companies and by assessing and reporting on their economic and social impact through such initiatives as the Global Compact and the Global Reporting Initiative.

(e) Non-governmental organisations and faith groups

NGOs and faith groups around the world campaign to end poverty and injustice and their support for the Millennium Development Goals is vital. We therefore call upon the NGOS and churches to:

  • ensure developed and developing countries, businesses and international organisations are held accountable for progress towards the Millennium Development Goals;N
  • raise public awareness and campaign regarding the outrage of child poverty and the need for urgent action on the Millennium Development Goals, including progress on poverty, debt, trade and social justice; andN
  • assist developing countries in developing and implementing community-driven national poverty reduction strategies.

VI. Conclusion

After 1945, George Marshall's plan for the reconstruction of Europe played a vital part in winning the peace. As a result, both Europe and America flourished, with increased prosperity and employment helping to create a more stable peace.

And just as, with extra resources, Marshall affirmed a unifying vision in the fight against "hunger, poverty, desperation and chaos," so again today we must transfer the resources necessary to secure for our time "a working economy in the world so as to permit the emergence of political and social conditions in which free institutions can exist." In this way, we will not only win the peace but secure prosperity.

The challenge is immense but--in the spirit of Marshall--the answer is not to retreat from globalisation. Instead we must advance social justice on a global scale, to the benefit of all-- and do so with more global cooperation not less, and with stronger, not weaker, international institutions. If the worldwide debt campaign has taught us anything it is that we advance only if we advance as one.

Our vision of the way forward is that in an increasingly interdependent world, all can benefit if each meets agreed obligations for change. This global new deal can ensure that the world's poor can share fairly in the benefits of prosperity throughout the world and is grounded in the belief that not only do we have inescapable obligations beyond our front doors and garden gates, responsibilities beyond the city wall and duties beyond our national boundaries, but that this generation has it in its power--if it so chooses--to finally free the world from want.

N


This material is being reposted for wider distribution by Africa Action (incorporating the Africa Policy Information Center, The Africa Fund, and the American Committee on Africa). Africa Action's information services provide accessible information and analysis in order to promote U.S. and international policies toward Africa that advance economic, political and social justice and the full spectrum of human rights.

URL for this file: http://www.africafocus.org/docs02/brow0202.php