making globalisation work for the world's poor - an introduction

An introduction to the UK Government’s White Paper on International Development

Work Making

Globalisationfor the

World’s Poor

DFID Department forInternationalDevelopment

December 2000

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thousands of miles away –perhaps those people arelaughing at a dubbed version ofone of ‘our’ sit-coms.The fuel inour cars, the microprocessors inour computers, the coffee in ourcup – so many of the productswe buy in our high street havejourneyed half way around theworld.And we’re connected inother ways too. For example,jobs in the UK depend on tradeEach one of us is

increasingly connected topeople we will never meet,

from places we’ll never visit.Many of our clothes or shoeswill have been made by people

Making globalisation work for poor people

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countries. People travel more, butso do pollution and diseases.

CONNECTED WORLD

As the world’s populationbecomes more and moreconnected the process has beenrecognised and given a name:globalisation.

And yet, while livingstandards rise for many as aresult of globalisation, more thana billion people on our planetlive in extreme poverty, forcedto make ends meet on a tiny

The InternationalDevelopment Targets

➔ A reduction by one half in theproportion of people living inextreme poverty by 2015.

➔ Universal primary education inall countries by 2015.

➔ Demonstrated progress towardsgender equality and theempowerment of women byeliminating gender disparity inprimary and secondaryeducation by 2005.

➔ A reduction by two-thirds in themortality rates for infants andchildren under age 5 and areduction by three-fourths inmaternal mortality – all by 2015.

➔ Access through the primaryhealthcare system toreproductive health services forall individuals of appropriateages as soon as possible, andno later than the year 2015.

➔ The implementation of nationalstrategies for sustainabledevelopment in all countries by2005, so as to ensure thatcurrent trends in the loss ofenvironmental resources areeffectively reversed at bothglobal and national levels by2015.

The world is smaller than it

has ever been…Its six billion citizens

are closer to each other than

ever before in history.

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whileliving

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many

economy. And that meansglobalisation must be managedproperly – to benefiteveryone.

In publishing its new WhitePaper on InternationalDevelopment, in December2000, the Government issetting out an agenda formanaging the process ofglobalisation in a way thatworks for the world’s poor.Thisbooklet introduces the issuesand the Government’s keyproposals for tackling them.

income and very few basicservices.These are the peoplefor whom the shrinking of theplanet has delivered no progress.

Eliminating such extremepoverty is the greatest moralchallenge the world now faces.In its first White Paper onInternational Development,published in 1997, the UKGovernment committed itselffirmly to the InternationalDevelopment Targets (see boxon page 3) through which theworld’s governments haveagreed to work to halveextreme poverty by 2015.

But reducing poverty is notjust a moral issue.The closer weare connected across thecontinents, the more we becomedependent on each other.

And, if we don’t take actionnow to reduce global inequality,there’s a real danger that life forall of us – wherever we live –

will become unsustainable.The UK government

believes that globalisationcreates unprecedented newopportunities for sustainabledevelopment and povertyreduction. It offers anopportunity for faster progressin achieving the InternationalDevelopment Targets.

But – so far – the benefits ofglobalisation have beenunevenly spread – for examplewhile the peoples of East Asiahave experienced benefits,millions of people in ruralAfrica have yet to see anychange.

Progress is not inevitable. Itdepends on political will.Andthis depends on governmentsand people across the world.

The challenge is to connectmore people from the world’spoorest countries with thebenefits of the new global

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◆ Work to manageglobalisation in theinterests of poorpeople, creating fasterprogress towards theInternationalDevelopment Targets.

Making globalisation work for poor people

more thana billionpeople onour planetlive inextremepoverty

THE UK GOVERNMENT WILL

growth for their citizens.States which invest in basic

infrastructure such as water andsanitation, transport, electricityand telecommunications canplay a major part in givingpoor communities access toglobal markets.

One of the biggest barriers todevelopment is armed conflict.Its threat to investment, stabilityand security destroys theconditions for growth.The UKgovernment will step upinternational efforts to regulatethe trade in small arms.

Effective and inclusive states –where all people have a stake inthe well-being of the country –are much less likely to suffer thetragic human and economicconsequences of violent conflict.

Strengthening the

Vulnerable

The rights of the poor and theirinfluence on government policy

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Work to promote effectivesystems of government andefficient markets indeveloping countries.

legislate to give UK courtsjurisdiction over UK nationalswho engage in briberyoverseas.

Introduce a licensing systemto control UK arms brokersand traffickers, and work fortighter controls internationallyat the UN conference on smallarms.

conditions safeguarded.Developing countries with

effective governments – healthydemocracies, with propermanagement of public finances,effective health and educationservices, fair law enforcementand a free media – are far morelikely to deliver economic

It’s not enough for people in developing countries

to simply say, “Yes please, I’d like to take

advantage of the benefits of globalisation.”

They need governments that listen

and that work.

Governments in poorercountries have to createconditions at home that

will help the poorest people intheir communities find work ora market for their goods thatwill sustain their families.

While the marketfundamentalism of the eightiesand early nineties has beendiscredited, it’s now widelyaccepted that efficient marketsare indispensable for effectivedevelopment.

Developing countries mustattract foreign investors. Butthat’s not enough. If the onlypeople who benefit from a new

factory or the export ofagricultural produce are the richelite, nothing much has changed.

Policies for People

For globalisation to work forthe poorest people, governmentsmust introduce policies thatallow companies to conducttheir business safely and with areasonable return. Otherwisethey will take their investmentelsewhere. So there has to be astable legal system, where theftis punished, where bribery andcorruption are outlawed, wherepeople’s human rights arerespected and working

Good governments work for poor people

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must be strengthened – forexample by supporting thegroups which are helping thepoor speak with a strongervoice: religious organisations areparticularly close to the poor;co-operatives, women’sorganisations, human rightsgroups, development NGOs andtrade unions could all help.

But globalisation itself canalso work here. Newinformation technologies offernews and information from allover the world which can helpthe poor to be heard.The

increased access to informationcan also be used to bring to awider audience the plight of aparticular people – thusbringing the weight ofinternational public opinion onthose who are abusing orexploiting vulnerable people.

The UK Government believesthat creating a sound balancebetween good social policy andgood economic policy willprovide the surest way to pros-perity for developing countries.

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Good government makesglobalisation work for people.

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invest in primary education –especially for girls - developmuch more quickly.

International businesses investmore in better educatedcountries, because there theyfind an adaptable, more skilledworkforce.

The gap between rich and

poor arises more than

anything from the knowledge

and education available

to each.

Speeding the spread ofeducation and skills willmake the single greatest

difference to the way theworld’s poorest countries canharness globalisation toeradicate poverty.

When young children learnto read, write and work withnumbers they not only buildthe foundation for furtherlearning, but also learn how towork together, solve problemsand assimilate new ideas.

At present, an estimated 113million children of primary

school age have never gone toschool.A further 150 millionhave dropped out beforeachieving basic literacy andnumeracy skills.

Education –

the Way Out

The causes of poverty are manyand complex but it’s nowaccepted that education is thequickest route out of it.Research suggests that investingin girls is the single best strategyfor development any countrycan make. Countries which

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Education – key to progress

Education makesglobalisation work.

The Digital Divide

There is a real risk in poorcountries that the existingeducational divide will becompounded by a digitaldivide.Around 80% of theworld’s population has noaccess to reliabletelecommunications.There aremore computers in New Yorkthan in the whole of theAfrican continent. More thanhalf the people in Africa havenever used a phone.

International business isincreasingly built on the rapidmovement of information aroundthe world. New communications technologies can be harnessed to

boost traditionalindustries –witness the wayIndianhandicrafts arenow marketedthrough theinternet.

Therefore, in

tandem with investing ineducation, we must findimaginative ways of providingtelecommunications access topoor communities – at a pricethey can afford. For example, inBangladesh poor people in remotevillages can get a loan to buy amobile phone and set up a tinytelecentre for communal use.

Work to ensure that no government committedto universal primary education is unable toachieve this goal for lack of resources.

Work towards a development perspectivewithin international rules on telecom-munications and ICT, and a stronger voice forpoorer countries in setting these rules.

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health of poor communities.Thespread of primary healthcarepractices such as the use of cleanwater, hygienic sanitation andthe practice of simplerehydration therapy fordiarrhoea has saved hundreds ofthousands of lives.

But globalisation also posesrisks – increased travel has had adramatic effect on the spread ofkiller diseases such asHIV/AIDS and TB.World-widethere are 16,000 new HIVinfections every day – 70% insub-Saharan Africa alone.

This is not only a humantragedy but a developmentalcatastrophe. For instance, in just10 months in 1998, Zambia lost1,300 teachers to AIDS.

At present there is not enoughmedical research that benefits thepoor. Only 10% of internationalresearch on health is focused ondiseases which affect 90% of theworld’s population.

Countries which invest in theeducation and health of theircitizens, will inevitably create amore productive workforcewhich is more attractive tointernational investment and

more likely to harness theopportunities of globalisation.

A simple statistical comparison can sometimes

encapsulate the divide between the richest

and poorest countries on the planet.

In India, for example, more women die in

pregnancy each week than in europe each

year.

Good health care is essentialto a country if it’s to liftits people out of poverty.

In the developing world,general ill health – not tomention life-threateningdiseases – is a constant fear.Theknock-on effects of illness canbe devastating. For example, if afamily member falls sick,someone will have to look afterthem and medicines will costextra money.

Good health is a vital

component to development.Children, who are at most riskfrom sickness and disease, needalert minds and healthy bodies ifthey’re to get the most out of

learning. Multiply this and youcan see how important goodhealth is for the growth of adeveloping country.

Globalisation, and theshrinking ofour world,promisebenefits insharingmedicalknowledgeand positiveeffects on the

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Health equals growth

Good health makesglobalisation work.

Work with developing countries andinternational organisations to help strengthenthe international effort to tackle HIV/AIDS.

Seek to increase public and private expenditureon research for development, including byproviding new public incentives for privateresearch to benefit poor people.

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But if you’re an African garmentworker your prices may havebeen undercut by competitionfrom elsewhere.

Globalisation must bemanaged properly so that itdoes not become merely thesurvival of the biggest, and themost powerful.The means ofmanagement is via global traderules and if these are fair andtransparent for all – not just themost vociferous or historicallyinfluential - then globalisationcan become a road toprosperity for many.

The fastest-growingdeveloping countries in recentdecades have been thosepromoting exports. In thesecountries, mainly in east Asia,poverty has fallen most rapidly.

Open Trade is not

Unregulated Trade

Effective multilateral trade rulesmust be applied for open trade

If our interconnected world is to

work for everyone, the

international rules countries play

by must be fair.

Globalisation may mean thatthe fish on our plate hastravelled half way round

the world to reach our table –but it can also mean that thepeople in the region where itwas fished find stocks so depletedthat there’s not enough left fortheir own families, and the long-term sustainability of the resourceis threatened. Globalisation canbring consumers in richercountries more choice than ever– but if their own subsidisedsurpluses are then ‘dumped’ onpoorer countries, hundreds oflocal businesses in those countrieswill simply go bust.

Globalisation cuts both ways:for a worker producing greenbeans in Kenya or Zimbabwenew markets have been a boon.

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Making trade fairer

Globalisation cuts both ways

For a worker producing green beans inKenya new markets have been a boon.

The answer is not to try to preventchange, but to look for reform that willimprove life in the country and providesupport for those who are losing out, sothat they can adapt and go forward.

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For an African garment worker pricesmay have been undercut by

competition from elsewhere.

The UK will also press for apro-development EuropeanUnion (EU) negotiatingposition in a new TradeRound – including substantialcuts in high tariffs and intrade-distorting subsidies,especially to sectors which areimportant to developingcountries, such as agricultureand fisheries.

We will also press forimplementation of a recentEuropean Commission proposalwhich would allow all exportsfrom least developed countriesinto the EU duty free, exceptfor arms.

And we recognise that theEU’s Common AgriculturalPolicy (CAP) is an unfairbarrier to the access ofdeveloping countries to ourmarkets – a barrier that theUnited Nations has estimatedcosts developing countries£13.7bn a year. And through

the CommonFisheries Policy(CFP), some ofthe EU’s fishingindustry getsthe chance tofish indevelopingcountries’waters, makingcompetitionharder and sometimes leadingto over-fishing.The UKgovernment will lobby forchanges to both.

Trade Standards Must

Serve Development

As consumers reasonably pressfor more information and higherstandards to protect labour andthe environment, developingcountry exporters find it hard tokeep up with the proliferation ofregulations and standards.Theyfear the ‘process standards’ – onlabour, animal welfare or the

environment – may be used tokeep their products out ofdeveloped country markets.TheUK Government is committedto promoting core labour,environmental, social and healthstandards, but believes that wemust provide adequateinformation and quality toconsumers while still enablingdeveloping countries to exportand grow their way out ofpoverty. Standards must not beused to lock developingcountries’ products out of ourmarkets.

The answer to trade ruleswhich are not working is not toscrap the WTO – but to ensurethat the trade rules work for all.

The WTOneeds reform andas a first step theUK Governmentwill work formore effectiveparticipation inthe WTO andinternationaltrading system bydevelopingcountries.We alsowant to see theWTO commititself, with therest of theinternationalcommunity, toachieving theInternationalDevelopmentTargets – apowerful signal

of its commitment to povertyreduction and sustainabledevelopment, acknowledgingthat trade is not an end in itself.

to work for the world’s poor.This is what the World TradeOrganisation (WTO) does.

But while developingcountries are a majority of theWTO’s members, its discussionscan be dominated by theconcerns of older, richermembers. Not surprisingperhaps, when half the least-developed countries have norepresentation at its headquartersin Geneva.

Poorer countries can befrustrated by a feeling that theirvoices are not being heard.

Campaigners demanding theend of the WTO – such asthose in Seattle in 1999 andPrague in 2000 – grabheadlines. But without a rules-based trading system thepowerful countries can bullythe rest – not least by strikingmutual deals which excludepoorer countries.

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Making trade fairer

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Support an open and rules-based internationaltrading system, and work to promote equitabletrade rules and an effective voice fordeveloping countries.

Support continuing reductions in barriers totrade, both in developed and developingcountries, and work to improve the capacity ofdeveloping countries to take advantage of newtrade opportunities.

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Alongside a fair and accessible global

trading environment, developing countries also

require the ability to harness international

financial investment.

Many poor countries seetheir own wealth keptin banks outside their

country. For example it isestimated that 40% of Africanprivate wealth is held overseas,compared with only 4% in Asia.The reforms needed to preventcapital flight also attract inwardinvestment.

In recent years more andmore money has been investedin poor countries, increasingprivate capital levels from £25billion in 1990 to £137 billionin 1998 – more than fourtimes the level of developmentaid. But much of this was

invested in only a very fewcountries.

While transnationalcompanies want to invest innew markets – they also wantto know that it’s a safeproposition. And when theright domestic policies areestablished, the money follows– look at Mozambique, whichhas seen a six-fold increase inForeign Direct Investmentsince 1994.

Business can also play agreater role in reducingpoverty and creatingsustainable development. Byapplying best practice in

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Sound investment

Mozambique has

seen a six-foldincrease in Foreign

Direct Investment

since 1994.

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relation to child labour,corruption, corporategovernance, human rights,health and safety, environmentand conflict, business can makea real contribution to povertyreduction. Many companieshave also realised importantcommercial benefits, in termsof reputation, managing riskand enhanced productivity.

We will work to improve themonitoring of countries’performances, boostinginformation to potentialinvestors – and helping avoidsudden shocks and outflows of

investors’ funds.Wewill also work tostrengthen theinternational system’scapacity to resolvefinancial crises andimprove the stabilityof global financialmarkets.

Work to support developing countries to put in place conditions that will allowthem to attract private financial flows and deal with the problem of capital flight.

Work to strengthen the global financial system to manage the risks associatedwith the scale, speed and volatility of global financial flows, and promoteinternational co-operation on tax, competition and investment issues.

Work to encourage corporate social responsibility by national and transnationalcompanies, and more investment by them in poor countries.

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1918

are

demanding

political,

economic

and social

change.

Progress

is greatest

when

ordinarypeople

We also need nationaland global civil societyto demand policies

which will deliver on theInternational DevelopmentTargets. Progress is greatestwhen ordinary people aredemanding political, economicand social change.

Agents of Change

Governments in developingcountries are more likely toprioritise the needs of the

poor if there is an active civilsociety insisting that they do.Governments will act whenthey feel the heat from theirpeople, from religious groups,trade unions, human rightsorganisations, women’s groups,theprofessionsandacademia.

The voiceof civilsociety in

developed countries is alsovital; and in the UK, forexample, the revised nationalcurriculum in Englandincorporates a commitment tosustainable development andthe global dimension.

Work with others to build an effective, openand accountable international system, in whichpoor people and countries have a moreeffective voice.

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Louder voices

If we are to enhance the way that key

international institutions contribute to the

reduction in poverty, we must give poor people and

countries a more effective voice within these

institutions.

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those who had the leave theirhomes because of war.

People in developed countriesconsume more per head thanthose in developing countriesand often actively contribute tothe environmental challenges wemust solve. For example, ourdemands for timber, minerals,cheap food and tourism canresult in deforestation, waterpollution, erosion, loss oftraditional land use patterns andthe destruction of fragile habitats.

Developed countries should

Existing patterns of production

and consumption are placing

enormous strains on the

eco-systems of the planet.

Pollution in one part of theworld has knock-on effectsin another.

The release of greenhousegases into the atmosphere fromour burning of fossil fuels andthe destruction of foreststhreaten to change the weatherpatterns across the world and putat risk coastal areas.

Poor countries contribute leastto these environmentalproblems, but they are mostlikely to be the victims ofenvironmental disasters.The RedCross estimates that in 1998, for

the first time, the number ofrefugees displaced by ‘natural’disasters, caused by floods, stormsand droughts, outnumbered

Protecting people and places

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do more to reduce theircontribution to climate change,pollution and the depletion ofnatural resources.They shouldlead by example and workclosely with developingcountries to enable them tomanage environmental assetssustainably.

Developing countries willneed help to make theiremerging industries conform toglobal environmental agreements

and objectives (such ason emissions ofgreenhouse gases) aswell as their ownnational priorities forsustainabledevelopment.

Protecting thefragile resources of theplanet, and the peoplewho depend on them,makes globalisationwork.

Meet our global environmental responsibilities,including our goal of reducing our CO2

emissions by 20% by 2010.

Work with developing countries to integrateenvironmental sustainability into their povertyreduction strategies and increase assistancefor them to benefit from multilateralenvironmental agreements.


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Poor countries

contribute least

to environmental

problems

but are most likely

to be the victims of

ENVIRONMENTALDISASTER

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Richer countries cannotexpect them to do thisalone.

Over the years, immensesums of money have beenhanded or lent to developingcountries in the name of aid,but it’s not always been wiselygiven or wisely used.We haveto make sure that aid does whatit’s supposed to do – reducepoverty by strengthening thearm of the poor, but also createconditions to attract inwardinvestment and boost economicgrowth.

In the past too much aid hasbeen:

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Aid that really works

While aid, effectively targeted,

can make a significant

difference to the lives and

prospects of poor people, it’s

not a solution by itself.

If globalisation is to work forpoor people then all theissues we’ve mentioned in

this publication will need to betackled.

This involves all the players,right across the board –governments at home andabroad, business, internationalinstitutions (such as the WorldBank and the Word TradeOrganisation) and NGOs. It alsodemands reform and freshthinking across a broad swatheof policy areas, including trade,economics and foreign policy.

This is not something the UK

Government can do on its own.We can make sure we pull ourown weight by getting our ownpolicies right, but poverty issuch an enormous, globalchallenge, that it demands a

GLOBALISATION can WORK for the world’s poorest PEOPLE

Provide more money indevelopment aid – rising to0.33% of GNP by 2003/4and continuing our progressto 0.7% thereafter.

Allocate more of our aid tolow income countries.

Stop tying UK aid only to UKsuppliers and work to get allother donors to act similarly.

Work to ensure that EC aidis more effective and isfocused on low incomecountries.


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Globalisation must become a force

for good for poor countries.

But it’s an enormous

challenge for developing countries

to turn this into a reality.

➔ Want to know more about globalisation?

➔ Want to find out about what this government isdoing to encourage development around the world?

➔ Want a copy of the full text of the White Paper?

➔ Want to have your say?

unified, global approach.We must combine our efforts

with a wider internationalcommitment to improve the lotof the poor. It’s also in all of ourinterests to do so.Therefore, webelieve we have an unrivalledopportunity at the beginning ofthe 21st century to harness thebenefits of globalisation to givepeople living in some of thepoorest countries the chance tobuild a viable future forthemselves and their families.

Research indicates that thebest results come when aid isfocused on the poorest peoplein countries where thegovernment has good policiesof pro-poor reform.

Aid from developed nationsneeds to dovetail with realisticstrategies to reduce poverty,

designed and led by developingcountries themselves.This is alsotrue in the case of debt relief –on which the UK has ledinternational efforts for fasterand more substantial progress.

World Bank research suggeststhat aid given in this way wouldbe as valuable as increasing theaid budget by 50%.

The right kind of aid makesglobalisation work.

➔ used as a sweetener towin lucrative contracts.

➔ tied to the purchase ofgoods from the donorcountry.

➔ given as part of a donor-led project which is notnecessarily in the bestinterests of the country.

0845 300 4100call

www.dfid.gov.uk

DFID public enquiry pointAbercrombie HouseEaglesham RoadEast KilbrideGlasgow G75 8EA UKw

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The Department for International Development(DFID) is the UK government department responsiblefor promoting development and the reduction ofpoverty.The government elected in May 1997increased its commitment to development bystrengthening the department and increasing its budget.

The policy of the government was set out in the firstWhite Paper on International Development,published in November 1997.The central focus ofthe policy is a commitment to the internationallyagreed target to halve the proportion of people livingin extreme poverty by 2015, together with theassociated targets including basic health careprovision and universal access to primary educationby the same date.

DFID seeks to work in partnership with governmentswhich are committed to the international targets, andseeks to work with business, civil society and the

research community to encourage progress which willhelp reduce poverty.We also work with multilateralinstitutions including the World Bank, United Nationsagencies and the European Commission.The bulk ofour assistance is concentrated on the poorest countriesin Asia and sub-Saharan Africa.

We are also contributing to poverty elimination andsustainable development in middle income countries,and helping the transition countries in Central andEastern Europe to try to ensure that the widestnumber of people benefit from the process of change.

As well as its headquarters in London and EastKilbride, DFID has offices in New Delhi, Bangkok,Dhaka, Kathmandu, Nairobi, Dar-es-Salaam, Kampala,Harare,Abuja, Pretoria, Maputo, Lilongwe, Lusaka,Beijing, Suva and Bridgetown. In other parts of theworld, DFID works through staff based in Britishembassies and high commissions.

DFID Department forInternationalDevelopment

12/00 50K Produced for DFID Information Department

by Folio Creative Communication ISBN 1 86192 325 2

DEPARTMENT FOR INTERNATIONAL DEVELOPMENT

DFID’s headquarters are located at:

DFID94 Victoria StreetLondon SW1E 5JLUK

and at:

DFIDAbercrombie HouseEaglesham RoadEast KilbrideGlasgow G75 8EAUK

Website: www.dfid.gov.ukemail: [email protected] enquiry point: 0845 3004100 From overseas: +44 1355 84 3132

making globalisation work for the world's poor - an introduction

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