How to achieve and sustain development

Kofi Annan, Secretary General, United Nations

It's a great honor for me to speak at the London School of Economics, which counts among its alumni so many heroes of the struggle for independence and for development in the former colonial world -- including Kwame Nkrumah, the founder-president of my own country.

What I want to talk to you about this afternoon is essentially the continuation of that struggle.

Independence was achieved, but development has been very uneven -- especially in Africa, which since independence has fallen sadly behind some other parts of the developing world.

I do not need to describe for you the multiple hardships to which so many of our fellow human beings are subjected, each of which makes it harder to escape from the others: Poverty, hunger, disease, oppression, conflict, pollution, depletion of natural resources.

Development means enabling people to escape from that vicious circle.

Like the struggle for independence, the struggle for development has to be carried on mainly in developing countries and by their people. Its first prerequisites are basic security, the rule of law, and honest, transparent administration -- which only national governments can provide.

But it is a struggle that concerns the whole world. Developed countries like this one have a strong interest in the outcome -- both in whether development succeeds and in what form it takes.

They can also do much to influence that outcome. It is to institutions like this Center for the Study of Global Governance that we look for intellectual leadership. LSE can play a part in this struggle no less important than its part in the previous one.

Eighteen months ago, at the Millennium Summit in New York, world leaders reached agreement on some immediate targets, the Millennium Development Goals, for halving extreme poverty in the world by 2015 by tackling both its worst symptoms and its most obstinate causes.

Those goals are ambitious, but even if we achieve them the struggle will not be won. There will still be hundreds of millions of people lacking the minimum requirements of human dignity. There will still be a great deal to be done.

And it will all be in vain if the achievement cannot be sustained. So it is equally important that we achieve another goal set by world leaders at the Summit: "To free all of humanity, and above all our children and grandchildren, from the threat of living on a planet irredeemably spoilt by human activities, and whose resources would no longer be sufficient for their needs".

Success depends on the answers to three global questions, each of them associated particularly with one of the three international conferences referred to in the title of my lecture.

The first question is: Will men and women in the developing world be allowed to compete on fair terms in the global market? That question received the beginning -- but only the beginning -- of a positive answer at last November's meeting of the World Trade Organization in Doha.

The second question is: How can we mobilize the resources so desperately needed for development?

That question will be discussed next month at the International Conference on Financing for Development in Monterrey, Mexico.

And the third question -- a more complex one -- is: Can the people now living on this planet improve their lives, not at the expense of future generations, but in a way from which their children and grandchildren will benefit?

That, of course, will be the issue at the World Summit on Sustainable Development that begins in Johannesburg six months from tomorrow.

The three questions are clearly related, and the conferences should be seen as a continuum, not as isolated events.

Poor people in poor countries are not asking for a handout. What they want is a hand up. Indeed, the poor are enormous, untapped reservoirs of initiative and entrepreneurship, but their energies are often held in check by poverty, misrule or conflict. They would be the first to say that trade, not aid, is the path out of poverty.

That's why it's so important that we fulfill the promise of Doha -- the promise of a "development round" of trade negotiations, which will remove the unfair subsidies now given to producers in rich countries, and fully open the markets of those countries to labor-intensive exports from poor ones.

Not only do these subsidies make it impossible for developing countries to compete. They also do great damage to the rich countries themselves, by perpetuating unsustainable practices in farming, transport and energy use.

Powerful interest groups within rich countries will try hard to block meaningful concessions to the developing world. They will argue that the interests of workers and farmers are being sacrificed.

But there are other ways to help those groups that really need help -- ways less costly to consumers and taxpayers in rich countries, and less harmful to producers in poor ones. To fulfill the promise of Doha, political and business leaders in the developed world must rise above special pleading and narrow sectoral interests.

However, even if developed countries were to declare their markets fully open, developing countries would still need help in walking through the door.

Many small and poor countries do not attract investment -- not because they are badly governed or have unfriendly policies, but simply because they are too small and poor to be interesting markets or to become major producers, and because they lack the skills, infrastructure and institutions that a successful market economy needs. The unpleasant truth is that markets put a premium on success, and tend to punish the poor for the very fact of being poor.

At Monterrey, leaders from north and south -- presidents, finance ministers, the United Nations, the Bretton Woods institutions, heads of private companies and foundations, and NGOs -- will come together to discuss creative, practical ways of overcoming this market failure.

They will address issues crucial to the fight against poverty and the transition to sustainability -- such as debt relief, commodity prices, and the management of the global economy.

They will seek ways to tap private investment, which is a far bigger source of money for development than official development assistance will ever be. The question is how to tap it with the right mix of incentives, policies and partnerships.

But I hope the leaders of industrialized countries will also give new commitments of official aid -- as Gordon Brown, for one, has so eloquently urged.

Simply writing off debt, or giving away any particular sum of money, will not guarantee results, and that taxpayers in some rich countries have become wary of foreign aid as a general proposition.

But they are almost invariably responsive, when you present them with a major human problem and a credible strategy for dealing with it -- as I think we are now doing with the HIV/AIDS epidemic.

Our greatest challenge is to show that these problems are part of an even bigger problem -- the problem of global poverty and underdevelopment. Islands of treatment are a vital start; but we must also address the larger sea of misery.

There is a global deal on the table: Developing countries doing more to reform their economies and increase spending on the needs of the poor, while the rich countries support this with trade, aid, investment and debt relief. At Monterrey, let us clinch that deal!

The above is based on the writer's lecture at the London of School of Economics and Political Science, presented in London on Monday.