18 September 2003
SPEECH BY THE ECONOMIC SECRETARY TO THE GROW UP FREE FROM POVERTY COALITION
I am pleased to welcome you to the Treasury this afternoon. Gordon Brown apologises that he cannot be here himself, but I am pleased to start event jointly with Valerie Amos. Since 1997 our two departments have worked very closely to drive the UK’s efforts on international debt and development.
Can I thank those of you present here today for your support in our work? Our determination to build an international drive for reform and resources from governments could not have made headway without the support of campaign, community and church groups like yours.
What brings us all together today is our shared conviction that child poverty is a wound on the world. 80 million lives at risk – as your report makes clear – when children should be our single biggest investment – 40 per cent of our population today, 100 per cent of the world’s tomorrow.
We strongly welcome this report here in the Treasury. It highlights the need to step up action on two of the most challenging Millennium Development Goals. We agreed barely three years ago to meet the Millennium Development Goals. But we know now that without unprecedented effort and unprecedented resources we will fail to meet these goals in many countries.
You know the figures as well as I do. If we are to achieve all the 2015 targets at least fifty billion dollars more will be required every year – a doubling of aid currently flowing to developing countries. So our current aid commitments are simply not enough. The International community must now face up to its responsibilities. We must double aid to halve poverty and meet the health MDGs as well.
Our International Finance Facility proposal is to commit each country directly, as part of an international initiative to making, not one-off emergency allocations but long-term commitments to sustain lasting change. On the basis of long-term, binding donor commitments from the richest countries, some of which have already been made, the facility would leverage in additional money from the international capital markets to raise the amount of development aid for the years to 2015 – from $50 billion a year to $100 billion per year.
The IFF would provide a temporary framework to raise additional funds and, while the facility would be in existence for around fifteen years, the repayment period would be around thirty years. So, under our proposal the developed world would make a commitment to providing long-term, predictable, untied and effective aid as investment to the countries that need it most. And of course, we would not want to impose an unsustainable burden of debt on recipient countries so the bulk of the IFF’s funds would be disbursed as grants, with perhaps an element of highly concessional loans.
In return, developing countries would have to demonstrate a commitment to poverty reduction strategies, and to political and economic stability. So in future no country genuinely committed to economic development and poverty reduction should be denied the chance to make progress because of a lack of investment.
When Gordon Brown first proposed the International Finance Facility, we won support from developing countries but received a cool response from many developed nations. But we’re making good progress in promoting the IFF, with serious examination of the proposal through the World Bank and IMF, and strong support now from France – at least now we’re standing shoulder-to-shoulder with them on one thing!
Government welcomes the backing that the Grow Up coalition – and many others – have given. Most recently, Nelson Mandela wrote to the heads of the G8 countries asking them to support the initiative. And the Chancellor will be taking this forward in Dubai this weekend.
We do not underestimate the enormity of what is being asked of donors through the IFF – to lock in long-term commitments to the increased finance needed to meet the MDGs. For our part, we in the UK stand ready to make this long-term commitment but we cannot make progress alone. The IFF cannot exist, let alone succeed, if all of us – governments of donor countries, international organisations, NGOs, trade unions, community and faith groups – many represented here today – do not demand its creation.
If we fail to find the finance, we fail to achieve the Millennium Development Goals. We fail the people who desperately need our help, and we fail ourselves.