Remarks by Chancellor of the Exchequer Gordon Brown on The UK's G8 Development Agenda Edinburgh 3 June 2005

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From Scotland this summer, the decisions of the G8 on debt relief, aid and trade justice, can lead the world – and put us on course to meet the Millennium Development Goals, that by 2015:

Instead of 100 million without schooling, every child has education;
Instead of 30,000 children dying avoidably each day, a two thirds fall in infant mortality and a halving of poverty.

For the last three years the British Government has argued that global aid to the poorest countries should double so that we can halve world poverty by 2015.

So today, here in Edinburgh, close to the G8 summit venue, I am now able to set out the proposals we the United Kingdom government will put to:

the European Union finance ministers meeting next Tuesday;
the G7 finance ministers meeting we will hold in London next Friday in the run up to the G8 under the Prime Minister's leadership at Gleneagles in July;
the UN special summit in September;
and the WTO talks in Hong Kong in December.

Taken together the proposals - which combine action on debt aid and trade with good governance, transparency, an attack on corruption and the encouragement of private investment - are a new deal between rich and poor countries, a Modern Marshall plan for Africa and the developing world.

Our first plan is 100 per cent debt relief to pay for education and health.

In 1999 we agreed bilateral debt relief - writing off the debts owed to the richest countries by the poorest countries.

But without multilateral debt relief to match bilateral debt relief, the poorest countries would pay between now and 2015 up to $15 billion principal and interest payments to international institutions - more than many currently spend on education or health.

Unilaterally the UK has already agreed to take on 10 per cent of World Bank debts paid by the poorest countries. 22 countries are to benefit. Canada and the Netherlands have led the way in doing likewise. And we are urging other countries to take on their share too.

In the next month in the run up to Gleneagles we will propose and seek an international agreement for 100 per cent debt relief, relieving the poorest countries of the burden of debts owed to the World Bank, African Development Bank and the IMF.

We want the richest countries to commit to wiping out these debt payments, which each year cost between one and two billion dollars, and we want an agreement from the richest countries to additional money to do so.

So our proposal is that the debt relief of as much as 100 per cent on bilateral debts owed by the poorest countries be matched by as much as 100 per cent relief on multilateral debts owed by the poorest countries.

And there can be a direct benefit from debt reduction for poverty reduction. The UK believes that agreements can be reached with the poorest countries so that - with the savings from debt relief - they will fund free primary and secondary education - so that many of the 100 million children in sub-Saharan Africa who today do not have the opportunity to go to school are offered education.

Our second proposal is the launch of an International Finance Facility for Immunisation, to be followed by the launch of a larger international finance facility, frontloading aid to meet the Millennium Development goals.

It is an extraordinary fact that a finance facility for immunisation, raising an extra $4 billion ahead of 2015 for vaccinations, could save an extra 5 million lives over the next 10 years. In the years after 2015 another 5 million more lives could be saved.

The UK, France and Sweden have already agreed to contribute to the new IFF for Immunisation, supported by the Gates Foundation, the World Health Organisation, UNICEF and the World Bank, and we will publish a list of other backers in the next few weeks.

The proposal supported by European countries is now before Eurostat for confirmation of its treatment in national accounts. And we are hopeful of a go ahead within the next few weeks.

The IFF for immunisation will demonstrate the feasibility of frontloading effective and predictable aid through a larger International Finance Facility that would use future commitments of aid to leverage resources from capital markets for immediate disbursement to the poorest countries in the world. The money would be frontloaded and disbursed to where it can make the most difference by delivering clean water, school facilities and health programmes.
However, vaccines for the biggest killers in the world - HIV/AIDS and malaria - do not yet exist. In the next few days we will announce plans that encourage countries to commit not only to the necessary research and development of vaccines but also to advance purchase agreements – an incentive for drug companies to develop vaccines for malaria and HIV/AIDS by guaranteeing to purchase hundreds of thousands of doses.

For every year a vaccine for malaria is brought forward, it is estimated 1 million lives would be saved.

Our third proposal is a large increase in direct development aid.

Since 2000, six European countries have committed to join the current five countries offering 0.7 per cent on their income on aid and have set out timetables to achieve 0.7 per cent.

In the last month - thanks to the work of Hilary Benn the International Development minister - the EU have now made an historic commitment to double aid by 2010.

This proposal includes:

donor countries raising aid from 0.33 to 0.51 per cent by 2010;
accession countries moving aid from zero to 0.17 per cent by 2010;
Overall the doubling of aid to 0.56 per cent of GNI by 2010, on the road to 0.7 by 2015.

Taking account of faster timetables to 0.7 per cent by the UK and others, the EU would raise aid from last year’s levels of around $40 billions to, by 2010, over $80 billion - doubling aid from European Union countries.

The G8 meetings give us a chance to seek a wider international agreement on levels of support.

Our fourth set of proposals focuses on trade: to maintain momentum for multilateral progress towards an ambitious, pro-poor outcome to the Doha development round, which delivers substantial increases in market access for goods from developing countries and makes real movement in dismantling developed country agricultural protectionism.

We want to see all countries agree to remove export subsidies and all trade-distorting support to agriculture, which work against producers in the developing world.

Sub-Saharan Africa's share of world trade is down from 6 per cent in the 1980s to just 2 per cent today, and while the western world spends just $50 billion a year on overseas aid, it spends $300 billion a year on trade subsidies.

However, we need not only to improve trading arrangements, but to help developing countries build capacity to trade. It is not enough to say, "you're on your own, simply compete", we have to say, "we will help you build the capacity you need to trade". For too long, enabling countries to trade has been defined narrowly as equipping them with the capacity to negotiate. We must also equip them with the infrastructure and economic capacity they need to take advantage of trading opportunities.

If sub-Saharan Africa could regain just an additional 1 per cent share of global trade, it would earn $70 billion more in exports - nearly five times what the region currently receives in overseas aid and debt relief combined.

I believe that from the millions of people who gave so much to Band Aid twenty years ago and to the tsunami appeal this year, there is a desire that public generosity be given enduring purpose in a new relationship between rich and poor countries.

By combining debt relief, increased aid, new finance facilities and proposals for trade justice with our proposals for governance and investment, the scale of what we are outlining is substantial: already a proposed $40 billion rise in aid levels by 2010.

This is not a time for timidity nor a time to fear reaching too high. This year of the UN special summit - and of Britain's G8 presidency - is our chance to reverse the fortunes of a continent and to help transform the lives of millions.