Photo: Russel Watkins, DFID
Moving Beyond Aid to Eradicate Extreme Poverty
With the agreement of the Sustainable Development Goals (SDGs), the world has a unique opportunity to set future development policy for a generation. These goals will stimulate action over the next fifteen years in areas of critical importance for humanity and the planet, and ensure that no one is left behind.
This is no longer just a question of aid; the development world is changing. We need a revitalised global partnership that brings together governments, civil society and business to support the ambition and spirit of these new goals. There is a growing recognition that a variety of different forms
of funding—domestic resource mobilisation, international public and private finance, external debt and climate finance —need to combine to achieve the necessary scale.
We should not underestimate the significance of the unique global agreement achieved at the UN Financing for Development Summit in Addis Ababa. It was a historic international deal to take us beyond aid, forging agreements such as the Addis Tax Initiative that might have been unthinkable just a few years ago. It recognised the important part developing countries’ own domestic resources have to play in the development architecture. Most importantly the agreement in Addis Ababa was the first ever that allows us to liberate the private sector to provide trade and investment that will deliver tangible benefits for development.
Part of the solution is to invest in growth which benefits the lives of poor people, particularly girls and women who can be so transformational if allowed to fulfil their potential. Implementation needs to be farsighted and sustainable. These are two natural strengths of the private sector, and trade and investment can be a real solution for the kind of progress that the developing world needs.
This is why the Department for International Development
(DFID) recently announced a new investment of capital into CDC, the UK’s development finance institution, to help ensure promising businesses in emerging and frontier economies receive the finance they need to grow and create jobs.
If we want business to be a key player in the solution to the world’s development problems it is only right that they help shape the architecture through which the SDGs are implemented. It is no surprise that companies prefer to operate in countries that are politically and commercially stable—where partnership, entrepreneurship and individual leadership are allowed to flourish. There is a role for donors here. For example, DFID is helping national governments in our partner countries to secure property rights, improve infrastructure, strengthen the investment climate and facilitate trade. We want an active dialogue with the private sector to understand better the constraints to greater levels of investment and trade.
We are looking to a future which harnesses the pioneers and the trailblazers delivering success at the cutting edge, from services delivered via mobile phones to ground-breaking financial products. We also need to challenge the mainstream, utilising the employment opportunities offered by textiles manufacturing or agricultural production to generate more and better jobs. When all companies capitalise on the significant growth opportunities in these markets, not through their corporate social responsibility activities but through their core business aligned with broader systemic change—this can put countries in the developing world on the fast track towards economic growth, the eradication of extreme poverty and the achievement of the SDGs.