Gordon Brown: Globalisation and the poor man's burden

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The Independent Online

The collapse of the World Trade Organisation talks at Cancun has been a bitter disappointment for a world that must fight a war, not just against global terrorism but against global poverty.

But behind the apparent growing divide between rich and poor countries is a debate about different approaches to globalisation. So in our decisions on world economic growth, debt relief, and financing aid at this weekend's International Monetary Fund and World Bank meetings in Dubai, as well as giving priority to resuming trade talks, we must show that global economic change need not impoverish millions but can enrich even the poorest and bring social justice on a global scale. It is only by action against poverty that a world divided over trade at Cancun can unite together again at Dubai.

First we must assert that a multilateral trading system is essential to deliver fair trade for poor countries and, in putting developing countries' interests first, we must focus on agriculture and not be distracted by the Singapore issues (investment, competition, transparency in procurement and trade facilitation). Second, instead of the old vicious circle of debt, poverty and underdevelopment that held half the world back, we must show that a virtuous circle of debt relief, poverty reduction and economic development is now possible. In particular no country pursuing anti-corruption and pro-stability reforms should be denied the resources to meet the Millennium Development Goals: that by 2015 every child is in education and poverty is halved.

So we propose a new compact between the richest and the poorest.

In return for the poorest countries eradicating corruption and pursuing pro-stability and pro-growth policies, the richest countries must not only provide a fair trading regime for developing countries but raise their contribution to the education and health of the world's poorest citizens through debt relief, traditional aid and policies for growth that help the poor.

By removing unpayable inherited burdens, debt relief allows countries to grow again. Current debt relief plans are leading 27 countries to write off up to $70bn (£42.7bn) of debt and we must now move to the next stage - a plan for post conflict countries. This plan can raise debt relief to $100bn in total and we will need additional relief to ensure a genuinely sustainable exit from the burden of debt. But this must come from additional resources and not be a reallocation of existing aid.

Modern aid is not about compensating the developing world for its poverty but building new capacity to produce, trade, and prosper. That is why so much focus is on the needs of education and of the 120 million children, two thirds of them girls, denied even the most basic of schooling.

When poor countries have workable plans to expand their schooling - as under the World Bank Fast Track Initiative - rich countries should offer to help with resources. Today only $20 a year is spent on educating the typical African child. At Dubai the world will have before it a World Bank report showing that it will take billions more each year to bring schooling to all by 2015. And neither the $5bn promised by the United States, nor the $7bn by the European Union will be sufficient to meet the education needs of poor countries.

Nor will existing funds - either bilaterally or through the Global Alliance for Vaccines and Immunisation and the Global Health Fund - or the new agreement on drugs prices be sufficient to build health systems in the developing world or to fund treatments to combat the two million deaths every year from TB, the one million from malaria and the three million from HIV/Aids. That is why we have proposed a new International Finance Facility that would raise global development aid to $100bn a year. It would use donors' long-term commitments to leverage private finance and to frontload aid.

Funds from the International Finance Facility would then be used to provide additional grants for health and education, and greater debt relief. The International Finance Facility would double aid to halve poverty. But such is its nature - a worldwide pool of financial support - that it cannot exist, let alone succeed, without the determination of the international community as a whole.

The UK stands ready with other countries to provide the long-term financial commitment that is necessary. And at the meetings in Dubai, we will seek to persuade other developed countries to join us.

So the IMF and World Bank meetings offer a real opportunity for a world community split over issues of global trade at Cancun to come together over issues of global poverty at Dubai. By seizing this opportunity only a week after the breakdown of trade talks, we can achieve something more powerful than a deal or a legal agreement: we can help even the least wealthy country start to see globalisation not as a poor man's burden but as the means to social justice on a global scale.

Alan Watkins is away

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