The challenge of reducing poverty: Comparing developed and developing countries
Rt Hon Hilary Benn MP, Secretary of State for International Development, DFID
Rt Hon John Battle MP, Chair, APGOOD
Mr Benn opened his speech by stating that people fighting poverty in Britain and people fighting poverty in the developing world don't talk to each other enough and could learn a lot from one other.
Using the examples of Malawi and South Africa, he explained that in the future, successful development is going to depend on sharing expertise and knowledge, but that this should not be one-way traffic. The differences between developed and developing countries are shrinking and we are now more connected to each other than ever before, by technology, by the movement of people and by the global challenges we face. Many people think that fighting poverty in Africa, has little to do with fighting poverty in Britain because the images we have of each are very different, but there is a real danger in such complacency.
As the UNICEF report last week showed, there is still a long way to go in Britain. Too many of our young people still don't fulfil their potential and communities struggling with joblessness and anti-social behaviour remain far more susceptible to drug-related violence. If you live in poverty, you are much less likely to get involved in any form of activity aimed at influencing decisions and you're more likely to die earlier. What really links poverty and disadvantage here in Britain and in the developing world is wasted human potential.
What can we learn as we look to the future? The modern welfare state is no longer just a safety net. At best, it helps people to help themselves - a springboard. Development has gone through a similar journey and has broadened to include human development, and improving governance to give people more of a say at national and local levels and in their own lives.
Mr Benn then explained that the aim of his speech would be to draw out some of the links between these two strands of thinking - the domestic and the international.
Education and Training
In 1997, he explained that the UK government's top priority was education. In 2007, Mr Benn feels that the priority for the world must be education, which is why DFID has committed to 10 year agreements with poor countries to finance their 10 year education plans. Why education? Because it is the best way to change lives and fight poverty.
Mr Benn outlined that focusing on education, support and training to help people into work has been crucial to the success of the UK government so far. Developing countries too look to earning a living as the best route out of poverty. Just as in Britain, it is economic growth, not charity or handouts, that will help end dependency and give people the chance of a better life. This is why the DFID White Paper last year set out how growth, governance, human security and dealing with conflict and fragile states are central to what we seek to do. Providing people with the means to make a better life depends on governments creating the right climate for private investment, stability and growth. The role of trade unions and civil society is also vital in this process. Just as in Britain, trade unions helped to change the lives of people at work, and are still doing so, so too in the developing world they have an enormously important part to play.
Mr Benn explained that the second issue where there is much we can learn from each other is micro-finance and asset-building. With the new UK Child Trust Fund, every child will now have a financial asset at 18. This could change the way young people think about their futures.
From Muhammad Yunus disbursing the first micro-loan in Bangladesh in 1974, microfinance and assets have played a central role in helping people work their own way out of poverty. The developing world has in fact led the way in promoting the importance of financial inclusion.
In the UK, financial inclusion measures have meant that 2 million new basic bank accounts have been opened since June 2003, providing services to un-banked people and the Treasury is currently consulting on how best to provide good financial advice to everyone who needs it. The similarities between these two experiences are striking.
Finally, an area where the Minister felt the UK had the most to learn because in Britain, democracy is not in the state we would wish it to be, with election turn-out for both national and local elections in long-term decline. Too many people living in deprived areas don't see politics as relevant to their lives and only one in five British MPs is female. Until Parliament reflects Britain, it won't be fully representative or relevant.
We can learn from poorer countries in this regard. The more we involve people in shaping their future the greater the stake they have in it. This is particularly true of young people - and this is the group that is currently least engaged. Young people need to be taken more seriously as political activists.
In Brazil, young people can vote at 16. Mr Benn felt that giving the vote to all 16 year olds in Britain would constitute one step towards a better relationship between politics and young people, and a more inclusive society.
Another lesson the UK can learn from Brazil is the case of Porto Alegre where in 1989, the first participatory budgeting experiment was carried out. It gives residents a direct say in how their taxes are spent. They decide how to allocate part of the municipal budget in a series of neighbourhood meetings, regional meetings and city assemblies. The result is that the most money is spent in the more disadvantaged areas.
Britain is catching on, encouraged by the new duties on local authorities to consult more with local people set out in Ruth Kelly's recent White Paper. Bradford and Newcastle are already using 'participatory budgeting'. We need to extend this approach to all of our most deprived communities because when local people are involved in designing and setting up services, the services are better and people look after them.
Mr Benn ended with a final point about political involvement. He said he would never forget marching in Edinburgh alongside a quarter of a million people to Make Poverty History. What people did there gave the backing, legitimacy and urgency to politicians around the world to make unprecedented commitments to the developing world.
He stated that to win the fight against poverty in Britain, there needs to be a similar campaign. The response to the UNICEF report showed the strength of the public's desire to tackle poverty and inequality. Make Poverty History saw clearly that poverty and exclusion is fundamentally about injustice, yet in Britain too often people look past systemic injustice. We need to build on what this Government has done and show that injustice is not inevitable.
In addition, at the heart of the Make Poverty History campaign was the belief that politics can make a difference. Perhaps the biggest lesson we can learn from the developing world is that if we work together, politics can change things. And that's how we're going to defeat poverty wherever we find it.
The following questions and comments were raised during the discussion which followed:
- Is the West 'kicking away the ladder' as Ha Joon Chang argues, and inhibiting the development of the South?
- To what extent has poverty really been reduced in the UK, given rising house prices and levels of inequality?
- Social protection is another way to reduce poverty (especially child poverty) in both developing and developed countries.
- Investment in education needs to be coupled with job creation.
- How is the UK reducing inequality?
- What action can the UK take to hold other G8 members to account on the promises made at Gleneagles in 2005?
- What is DFID doing to ensure that the environment and climate change are locked into a joined-up approach to development?
- There needs to be space within the UK curriculum for young people to engage with global issues.
- Partnerships between schools in developed and developing countries can contribute learning in both.
- East Asian education systems may offer a better example of school structures than that of the UK, particularly given the huge numbers of independent, grammar and other types of schools in the UK.
- Does the UK have anything to learn from China in tackling poverty?
- The poverty reduction agendas of developed and developing countries differ because the agendas of developed countries are often a by-product of foreign policy goals.
- What forums exist for developed and developing countries to debate, considering that the World Bank, IMF and UN Security Council are currently dominated by developed countries?
In his responses, Mr Benn stated the following:
- The world is now so inter-connected that countries cannot really choose to develop in their own way; rather they should work together. Measures such as special and differential treatment exist to assist developing countries.
- The UK needs to increase the availability of housing given rising population levels and changing family structures.
- Social protection/social security/cash transfers are important methods by which to give people choice and a way to 'get back on the ladder'. Cash is better than food aid in certain situations as it does more than just ensure basic survival. DFID and Concern run cash transfer projects in Malawi and Ethiopia.
- Peace and stability underpin investment and job creation so this is a priority. Developing countries can also take steps such as reducing customs red tape which will attract investment.
- Rich countries must follow through with promises on debt cancellation, and polities must hold governments to account. Investment in institutions that bind society together (universal education, health care systems) is crucial.
- Donor harmonisation is important.
- DFID is at the beginning of a process to make sure policies take account of climate change. It is also important to get China, India and Brazil on board.
- UK schools can increase understanding among students of global issues, using lessons (including citizenship classes) to bring the world into the classroom. Some are already successful at engaging students with these issues, all have the ability to do it and should.
- The developing and developed worlds have a lot to learn from each other - initiatives such as school partnerships help to do this for the young.
- It is vital to ensure school reforms improve the education of the majority but we can't take away the choice of private or other types of schools.
- China has reduced poverty, but has recognised that it still has economic inequality.
- When China makes a decision to do something, as it has for investing in development in Africa, it can work very quickly.
- It is in the interests of developed countries to have a stable and secure world - moral and self-interested agendas for reducing poverty are not incompatible.
- The involvement of the private sector in development is key for job provision - it creates wealth for things like universal health care.
- It is important to ensure developing countries have a better say on how they work with institutions such as the World Bank, and the UK campaign to reduce conditionality is helping to encourage debate.
At this APGOOD, Fabian Society and ODI event hosted by the Institute of Education, the Secretary of State for International Development, Rt Hon Hilary Benn MP addressed the question of whether policy makers and practitioners can learn lessons about poverty reduction strategies across the boundary between developed and developing countries. Specifically, are there lessons from UK government successes which could be transferred to the South, and vice-versa?
The topic of North-South learning with regard to poverty reduction strategies is not new, nor is the learning necessarily in one direction: good work in developing countries on topics such as participatory budgeting and new models of service delivery, etc. can also hold valuable lessons for developed country governments.
This meeting explored these links in more detail and discussed possible lessons and initiatives that could be learnt and transferred.
This event also formed part of the Fabian ‘Next Decade’ Lecture Series which explores and shapes the emerging political and policy agenda in British politics.