Next year, 2005, is a defining year for our commitment to the developing world. 2005 is the twentieth anniversary of Live Aid, the moment when millions of the world’s richest people woke up to the plight of millions of the poorest; 2005 will see the publication of the Commission for Africa Report, on what the richest countries must do to support the continent’s development; and 2005 will also see Britain holding a special global responsibility through our presidencies of the G8 and EU: it is a year of great opportunity. It is also a year of challenge.
In New York exactly five years ago, in an historic declaration, every world leader, every international body – almost every single country – signed up to a shared commitment to right the greatest wrongs of our time. The Millennium Development Goals promised that by 2015 every child would be at school, avoidable infant deaths would be prevented and poverty would be halved.
At the Labour party conference I said the Millennium Development Goals continue to be well beyond reach. Indeed, far from achieving primary school education for all by 2015, 44 million children in sub-Saharan Africa still have no schools to go to and, on current rates of progress, the target will not be met there until 2129. Twenty-eight million Africans are suffering from HIV/AIDS and – with countries like Ethiopia having 70 million people but only 2,000 doctors – our target to cut child mortality by two-thirds by 2015 will, on current trends, go unmet in sub-Saharan Africa until 2165. Overall, on current progress, we will not only fail to meet the Millennium Development Goals in Africa in ten years time – we will fail to meet them in one hundred years time.
So we are proposing a new compact between developed and developing countries: that in return for developing countries devising poverty reduction plans to expand their own development, investment and trade at the pace best suited to their needs, and agreeing to eliminate corruption, the richest countries must:
• write off not just more of the debt owed by the poorest countries to the richest but also more of the debt they owe to international organisations;
• dismantle our damaging trade barriers and provide the investment needed for the poorest countries to build capacity to trade and protect their most vulnerable citizens;
• commit the billions needed each year for tackling aids, TB, and malaria, and for providing primary education for all;
• and that we do so by increasing development aid on the road to 0.7 percent of GDP and by immediately creating an international finance facility that, by leveraging in an additional $50 billion each year until 2015, brings forward the investment that is essential to meet the millennium goals – doubling aid to halve poverty.
For our part, building on record increases in aid since 1997, the British government will increase aid further. In the recent spending review, the UK government increased official development assistance from the 0.26 percent of national income we inherited to 0.39 percent next year, 0.42 percent in 2006-07 and 0.47 percent in 2007-08.
Beyond that, we have said that we wish to maintain those rates of growth in the overseas aid ratio that, on this timetable, would rise beyond 0.5 percent after 2008 and reach 0.7 percent by 2013. And I urge all nations yet to reach the 0.7 percent target to move further and faster to higher aid levels and on towards that target. But we know that even if one or two of the G7 could overcome fiscal constraints and go to 0.7 percent tomorrow, we will still not reach the scale of the resources needed to achieve the Millennium Development Goals – at least $50 billion more a year. That is why we must also pursue our proposal for an International Finance Facility that, if introduced, would deliver the much-needed resources now.
The IFF would be founded upon long-term, binding donor commitments from the richest countries. It would build upon the additional $16 billion already pledged at Monterrey and between now and 2015 it would leverage further funding from the international capital markets to raise the amount of overall development aid from $50 billion a year to $100 billion per year.
The IFF will make action on debt relief possible. Since 2000, debt relief has been extended through the Heavily Indebted Poor Countries initiative to 27 countries and $70 billion of debt relief is now being delivered. An extra $16 billion of annual development aid has been pledged by Europe and the United States after twenty years in which worldwide aid has been falling.
However, too many countries are still being forced to choose between servicing their debts and making the investments in health, education and infrastructure that would allow them to achieve the Millennium Development Goals and so we must do more. We will pay our share of the multilateral debt repayments of reforming low-income countries. Although there is no international agreement, Britain will take a lead as we did on 100 percent bilateral debt and make payments on behalf of poor countries to the World Bank and African Development Bank for the portion that relates to Britain’s share – ten percent – of their debt.
We will both deepen and widen our debt relief as we will pay our share on behalf not just of heavily indebted poor countries but – because their need is just as great – of all low-income countries, as long as they can ensure debt relief is used for poverty reduction and urge other countries to follow. The cancellation of debts owed to the IMF could and should be financed by making better use of IMF gold.
At the IMF, World Bank and G7 meetings in October we won significant support for these proposals. There is now an agreement that we must provide multilateral debt relief of up to 100 percent. The G7 agreed to look at the options for achieving multilateral debt relief and report back by the end of the year.
By locking in commitments from a wide range of donors, the IFF would enable us to tackle debt and deploy a critical mass of predictable, stable and coordinated aid as investment over the next few years when it will have the most impact in achieving the targets – saving lives today that would otherwise be lost. And it will enable us to invest simultaneously across sectors so that the impact in one area reinforces the investment in another.
The IFF is necessary for, and will enable, sustainable debt relief and will also enable poor countries to develop the capacity to take advantage of the trading and investment opportunities that we know are crucial for a sustainable exit from poverty.
Already 40 countries have indicated support for the IFF, in the G7 and elsewhere. For our part, the UK government is prepared to do more and commit additional long-term funding – indeed, if this new finance facility is agreed internationally, Britain could reach the objective of 0.7 percent not by 2013 but by 2009. I am also urging the European union not only to focus more of its external aid budget on the poorest countries but to commit its share of the Monterrey commitment – €1 billion – to the IFF so that it can leverage additional resources – up to €3 billion more a year from 2006 – to be spent on reducing poverty.
So next year can mark a new beginning: a worldwide campaign for justice on a global scale, a sea-change in the way rich countries address the needs of the poor and an affirmation that, even amidst the tensions of globalisation, we are – as we should always have been – not a world permanently divided but one moral universe: today’s rich and poor ready to act as one, recognising our shared needs, mutual interests and linked destinies.