Speeches

11 January 2005

Howard: The Conservative approach to international development 

Speech at Conservative Campaign Headquarters

"Trusting free enterprise; upholding the rule of law; accepting our moral duty to help those less fortunate - these are the values which will enable the global community to tackle world poverty".

I am delighted to be here this afternoon with Iain and Oliver at the Centre for Social Justice. In establishing this new centre, Iain has created a vibrant new body dedicated to advancing a timeless Conservative truth. Conservatism is rooted in an understanding of human nature - our thirst for opportunity, our need for security, our desire for freedom and our belief in community. The Centre for Social Justice affirms the vital importance in politics of treating all humanity with dignity. Its message could not be more timely.

Two weeks on it is still hard to grasp the awful scale of the disaster that hit the Indian Ocean on Boxing Day. It was a poignant reminder of how fragile the human condition really is, how tragedy can strike any one of us, at any time, and how we may live on different continents but we are all part of a wider, global community.

Confronted with a disaster on this scale, it would have been natural for people to feel helpless. But from the moment the disaster broke, the British people responded with heartfelt, urgent generosity. Spontaneously, quietly, selflessly, typically, they gave their money and their time to those in need. This required no Whitehall initiative, no grand scheme, and no ministerial diktat. The lead came from the people, not from the politicians.

As the events of the last two weeks have shown, governments don't have all the answers. But if politicians govern with the right values, they can make a real difference. Trusting free enterprise; upholding the law of rule; cherishing a sense of nationhood; accepting our moral duty to help those less fortunate - these are the right values. 

They are Conservative values. They are the values of the forgotten majority - the people who make up the backbone of our country. And they are the values which will enable the global community to tackle world poverty.

Long-Term Change

I hope that the tragedy of the tsunami will be a catalyst for change - that it will motivate both developing and developed countries to take the necessary steps to "Make Poverty History". Tectonic plates clashing off the coast of Sumatra led to Britain's biggest loss of civilian life since the Second World War. This was a global tragedy in which grief knew no boundaries. And neither should our quest to end poverty.

We must ensure that in those parts of our world where the struggle to survive is an everyday battle, our policies make a genuine difference for the good. In Africa, lack of clean water, disease, corruption, conflict and bad governance blight the lives of millions - from civil war in the Congo to AIDS in Botswana, where life expectancy is now under 40 years.

No-one underestimates the scale of the challenge. Every day 30,000 children die around the world from diseases that are entirely preventable. AIDS claims five lives every minute of every day. And almost a billion people live on less than a dollar a day. But if we stick to the right values, we will make a real difference.

Our Moral Responsibility

We have a moral responsibility to help those less fortunate than ourselves. As Winston Churchill once said:

"We make a living by what we earn. We make a life by what we give".

That is why I am committed both to increasing Britain's aid budget by a fifth in the next three years and to working towards the UN target of spending 0.7 per cent of our GDP on overseas development. This matches Labour's commitments.

But we must ensure that the aid we give is linked to good governance. It is there to help the poorest people on our planet earth - and we have a duty to ensure that it does not end up in the bank accounts of the governing elite. It is hard to imagine anything more counterproductive than aid being diverted to sustain rich dictators in office. 

We also need to ensure that our aid is targeted at the poorest countries. Despite Chris Patten's heroic efforts at reform, 50 per cent of the European Union's aid still goes to middle or even high income countries. That is why I want national governments to have far greater control over their overseas aid budgets - so Britain can target her support on the most deserving countries. 

But however effective our aid programme is - and it is vital - we have to recognise that on its own it will never solve the problem of global poverty. Good governance, free enterprise, free markets, fairer trade - these offer an end to the neo colonial world of rich donor countries handing out cash to dependent, poorer recipients. 

Following the right policies will create a world in which poverty becomes history: a world in which poorer countries have a real opportunity to play a full role in our global economy.

Trusting Free Enterprise, Promoting Good Governance

The growth of free markets has done more to lift people out of poverty than all the aid programmes in the world multiplied many times over. Far from the rich getting richer and the poor getting poorer, the spread of liberal markets means the poor getting richer. 

The failure of many politicians to grasp this fundamental truth has left millions of people stranded in poverty. The truth is simple: if you want to help the poor and extend opportunity - and that is why I came into politics - then the path is clear: establish independent courts, protect private property, and constrain the power of politicians. Good governance creates the stability essential to attract investment and for free markets to flourish - a virtuous circle.

As the Peruvian economist Hernando de Soto has explained: 

"Imagine a country where the law that governs property rights is so deficient that nobody can easily identify who owns what … Consider not being able to use your own house or business to guarantee credit. Imagine a property system where you can't divide your ownership in a business into shares that investors can buy …Welcome to life in the developing world, home to five-sixths of the world's population."

Thankfully these lessons are being learnt. In Asia, countries like China and India are increasingly adopting the right approach too. Since the 1970s, China has concentrated on strengthening property rights, liberalising prices and creating internal markets. India has also set in train far reaching reform. In these two countries, home to more than a third of the world's population, growth has averaged 8% and 4% respectively over the past decade or so. As a result, the proportion of people living on less than $1 per day in China has declined from a third of the population in 1990 to less than a fifth (16%) in 2000. The progress in India has been less dramatic, but still significant, with the proportion falling from 42% to 35% between 1994/5 and 2001. This is a huge achievement. We should celebrate it.

It means that many millions of people have escaped from poverty - almost certainly more than in any previous decade in the history of the world.

Freer, Fairer Trade

But it is no good developed countries lecturing the developing world about the importance of free enterprise, if they then prevent those countries reaping the rewards. Protection for developed countries at the expense of the developing world must come to an end. It is both immoral and hypocritical.

Western tariffs and farm subsidies reduce developing countries' export earnings by an estimated $39 billion a year - 50 per cent more than they receive in aid. For every dollar that western countries give to poor countries, those countries lose two dollars through barriers to their exports to the developed world. So while the West is busy giving with one hand by providing aid, we take with the other by imposing tariffs.

Both the European Union and the United States impose a hefty tariff on clothes from Sri Lanka - one of that county's biggest potential export earners. Even since the disaster, new tariffs have been imposed on goods from Thailand. It is a terrible indictment of our progress in this area that the poorest countries' share of world trade has dropped by almost a half in the last twenty years.

Instead of trying to put up barriers, we need to open our markets to the developing world. The richer countries should act in accordance with what they know to be true: free trade spreads prosperity. Protectionism does not.

There is an ongoing debate between free trade and fair trade. I believe in making free trade fairer and fair trade freer. Fairness does matter. It is quite wrong for the West to dump its own heavily subsidised goods on developing countries - ruining their fledgling markets.

The World Trade Organisation has ushered in a rules based system for deciding trade disputes. Might is no longer right. But, all too often, poor countries are not able to take full advantage of the system because they lack the necessary expertise. That is not fair.

So I believe that we should set up an Advocacy Fund paid for by the West to help the poorer countries fight their corner in trade disputes and international negotiations. It would help them make the most of this rules based system - making a real contribution to fairer trade.

We also need to make fair trade freer. While developing countries may well need to maintain some barriers in the short term to help sustain their nascent industries, the long term goal must be the reduction of tariffs. Britain's Presidency of the G8 is a great opportunity to get the Doha Round of trade talks going again. It has been estimated that Doha could increase global income by over $500 billion in just over a decade. With most of that gain going to poorer countries, it could lift 150 million people out of poverty.

Conclusion

2004 ended with great sadness. But with Britain's presidency of both the G8 and the European Union, there is real hope for 2005. By reforming the way we deliver overseas aid, by promoting free enterprise and by encouraging freer, fairer trade we can help lift millions of people out of poverty. There is no nobler cause for mankind - and no more fitting memorial to all those who have so tragically lost their lives.

Rt Hon
Michael Howard QC MP