Department for International Development
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Changing world, changing aid: Where international development needs to go next
Speech by the International Development Secretary at the Overseas Development Institute (ODI) in London, focussing on the need for development to go beyond aid.
We’ve been saying for a while that the 12 months ahead are absolutely critical for development.
It starts with the Financing For Development conference in Addis the week after next, then the sustainable development goals that will be set at UNGA in September. Then the Climate Change Conference in Paris in November, and the World Trade Organisation Conference in Nairobi in December. And then right through to the World Humanitarian Summit in Istanbul next May.
We all need to go into these conferences, with our minds squarely focused on the challenges the world is facing.
There is an absolutely fundamental jobs challenge - in particular, jobs for young people.
Today’s generation of young people is the largest in history. In fact, it’s said we’re reaching ‘peak youth’.
And almost 9 out of 10 of these young people live in developing countries. Around half live on less than $2 a day. If you look at Africa, half the population is under 18.
What are the implications? The World Bank says there will be at least 600 million people entering the job market in the next 15 years. And in Sub-Saharan Africa and Asia, these young people will be entering labour markets where, as it stands, there is little waged work and little chance of escaping poverty.
What happens if just a small percentage come to Europe? The current problems we’re having with migration today may seem small-scale.
Unless things change, the prospects for women and girls are even worse: around the world girls and women still live in places where their rights are non-existent.
And we know that while some countries will grow and continue down the path of development. Fragile states risk being left far behind. You only have to look at the conflict in Syria to see how development can go into reverse.
And the threat of climate change, if we leave it unchecked, could undo much of the progress we’ve made over the last 20 years.
There is no doubt that these problems - if left untackled - will reach our own doorsteps. Anyone who wants to take an insular view of the world only needs to look at the scenes in Calais these last few weeks or those migrants making desperate voyages across.
What it’s telling us is that people are no longer willing to accept a life sentence of poverty. They will go looking for a better life, for jobs if they can’t find them where they are - and further afield if they can’t stay safe just by crossing a border.
Those are the challenges but we should never lose sight of the opportunity.
The world has made enormous progress in the battle against poverty since the MDGs were agreed. Together we have helped halve extreme poverty, we’ve cut under 5 child deaths from nearly 35,000 per day to around 17,000. We’ve cut maternal deaths by nearly half. DFID - and many of the organisations in this room - have played their part in these achievements and we should all be immensely proud of that.
And of course, we now live in a very different world now to 2000 when theMDGs were first agreed. New economic powers have emerged, private investment to developing countries has grown exponentially and new technologies have unlocked new possibilities.
I’ve talked about the youth challenge and the short window we have to create jobs for those young people. But the flip side is, if these young people were to have productive work then income levels in the poorest countries could increase faster than at any other time in their history. So, peak youth needs to be able to equal peak growth.
The beyond aid agenda
It’s in all our interests to seize the opportunity the coming year ahead presents - to put our planet on a more sustainable and prosperous path: a message the UK will be plugging hard at Financing for Development, as we urge more countries to step up to the plate and meet the commitment to 0.7% [of national income spent on development].
At the same time, we recognise lifting a billion people out of poverty will take far more than the global development budgets can ever provide. To deliver the Sustainable Development Goals, the UN says we are going to need to attract trillions of dollars a year in investment from governments and, crucially, from the private sector.
So that’s why we’re all talking about the beyond aid agenda: acknowledging that while aid is still necessary, it’s not sufficient either for the next development ‘leap’ in its scale or in its nature.
When it comes to scale, there are more players on the development scene than ever before - the private sector, donors, philanthropists, professional organisations - all playing key roles. GAVI and the Global Fund showed the way forward when they brought many of these actors together, working on a common plan.
And more sources of finance: aid has gone from being twice as large as remittances and foreign direct investment in 1991 to being around one fifth of FDI and a third of remittances in 2012.
The nature of aid is changing too. What we call traditional aid - the really important work we’re doing building schools, vaccinating children, better sanitation - all of that continues to be absolutely fundamental.
But ultimately it’s jobs, it’s inclusive growth for women and men, and it’s enterprise that will defeat poverty for good.
And we know this requires stability, a pro-business environment, rule of law so that contracts can be enforced, and property rights to allow men and women to invest in their property and keep the gains.
It requires global action on tackling corruption, illicit financial flows and tax evasion, as well as supporting free and fair trade - all absolutely critical issues for the world’s poorest.
In summary: different players, different models, different money, different needs. All of this means that business as usual just won’t cut it for successful development today. We all need to embrace the beyond aid agenda in all aspects of our work - what we do, the way we do it and who we work with.
I want to take you through now how DFID has, and is, changing to go beyond aid - and how our changing agenda ties in with our evolving partnerships with young people, businesses, suppliers and multilaterals. And, finally, how the next stage of our evolution will be a more strategic and more effective relationship with all of you, our civil society partners.
Changing DFID – value for money
So firstly, how has DFID evolved itself?
Since coming into this role I’ve been clear that if DFID is going to realise its potential to be the most effective, agenda-setting development organisation in the world – then we needed to spend smarter. That meant targeting our investments better: doing the right things, in the right places, in the right ways.
I’ve driven value for money and efficiency in everything we do. We’ve strengthened our internal audit, reviewed programmes more frequently and cut ones that don’t deliver.
We’ve transformed our procurement practices - winning Chartered Institute of Procurement and Supply awards for the last 2 years, beating public and private competition, and we have been shortlisted again this year for 4 awards.
We are driving the highest transparency standards, which was recognised most recently with our first place ranking in the Publish What You Fund EU Transparency report.
And we’re doing this as probably the most scrutinised government department in Whitehall - not just from our parliamentary Select Committee, not just from journalists - but also from the independent aid watchdog ICAI that we set up.
If all this was in ‘The Week’ magazine I know it would be in the ‘boring but important’ column. But it’s actually one of the things I’m most proud of, because I want to get the most possible out of our budget.
And some might project this to be a frustrating process - some impression of dragging civil servants along the value for money path. But actually it’s been an agenda that’s really been embraced at DFID.
Why? Because I believe at DFID you will find some of the most committed people in Whitehall - staff who come through the door every morning knowing exactly what they are about to do - which is changing lives for the better in some of the toughest places in the world.
All of this has allowed us to go much further and faster on our priorities. We’ve kept up all of that work on health, education and nutrition. In fact, we’ve been doing a lot more of this and delivering incredible results – asBill Gates wrote about last week.
This government set out some of our key commitments on health, nutrition and education in our manifesto - including immunising 76 million children against killer diseases by 2020 and continuing to help 11 million children in the poorest countries gain a decent education.
But as many of you know, since coming into this job I have also been clear that DFID needed to work much more ambitiously around three key priorities: economic development, women and girls and leading in emergencies.
These priorities very much come out of the global challenges I set out just now. In many ways, the theme that runs through all of them is opportunity - building a more levelled-up world, so no matter where you are or who you are, you have a chance to live up to your potential.
This matters for people right here in Britain. I know that as much as anyone. But it’s also got to be the same for young people growing up in developing countries too.
These young people want - and they deserve - jobs. They deserve the chance to support themselves and the families that they will have, and the dignity work brings.
So, we now have the most thoughtful, coherent, focused and ambitious approach on the jobs agenda and economic development that DFID has ever had. We’re helping small businesses get financial lift-off, we’re building roads and ports, we’re helping more women access bank accounts and own their own land for the first time.
Our development finance institution, CDC, reported last week that CDCbacked-businesses helped to create nearly 1.3 million jobs in 2014 alone. This includes new jobs in the businesses in which they invest, new jobs in supply chains and new jobs created through better access to power and finance.
And there’s much more to come on this, and I’ll shortly be setting out the next big step of our economic development strategy.
On the next priority, leading in emergencies, we continue to be first on the ground when a crisis hits. And your support is of course a huge, vital part of that - as I saw for myself very recently in Nepal, and we should be proud of the work we’ve done there.
For those people more broadly affected by the more chronic humanitarian crises, we will increasingly focus on going beyond the immediate life-saving relief, looking at how we can help children in school and helping people to work and, crucially, rebuild their livelihoods. So what we’re doing is bringing together our humanitarian and economic development work.
I’ve also put girls and women at the heart of everything DFID is doing, driving crucial issues like Female Genital Mutilation and Child Marriage right up the agenda through our Girl Summit co-hosted with UNICEF almost a year ago.
No country can develop if it leaves half its population behind and this year we’ll be ramping up our work on girls and women in every area from education, to violence against women and girls, to economic empowerment.
Working in partnership
I’m very clear that DFID’s evolving partnerships are critical to delivering on these priorities.
The Girl Summit very much crystallised how we need to do this. In fact I think it was a watershed moment for the department.
First of all, one of the unique things about it was the role young people had in shaping and being a massive part of the day. And some of the most powerful voices at the Summit were young people speaking up on behalf of young people.
I said earlier that this planet is reaching peak youth. The work we’re doing with and through young people is hugely important for all of us in development.
I believe when young people have opportunity and are given a real voice they can be both agents of change - making it happen on the ground and advocate for change - advocates for their own futures and the future of our planet.
So, I’m determined to involve young people in developing countries, and also here in the UK, in the design and implementation of DFID’s work - and we will achieve that working, I hope, with you.
The other important thing about the Girl Summit was that it highlighted the importance of wide-ranging partnership and collaboration for delivering on complex issues. We brought together not just young people, but governments, donors, businesses, activists and civil society.
For everyone in development, the private sector must be key partners. AtDFID our relationship with business has never been closer.
And in the last few years we’ve built much more strategic relationships with key private sector partners through our Key Supplier Management Programme and we now have an annual supplier conference.
I’m also demanding much higher standards from our suppliers too, especially when it comes to value for money and transparency, just as I am everywhere at DFID. That’s set out under our supplier Code of Conduct.
We’re doing the same thing with our multilateral partners. The Multilateral Aid Review in 2011 was a critical process for helping DFID to target our work in the right countries and in the right way.
And it helped us build much more strategic relationships with major partners like the World Bank and their President Jim Kim and we now have a common set of priorities - in particular on economic development and women and girls.
Finally, DFID’s building new partnerships in government too - from the cross-government response to the Ebola outbreak in Sierra Leone that involved the Ministry of Defence, our fantastic armed forces and the NHS, to the work we’re doing with the Treasury to help developing countries to develop their tax systems, to our expanding work with Scotland Yard to tackle corruption. The importance of this cross-Whitehall working will grow and grow and I am determined DFID will be at the forefront of shaping our government’s ‘beyond aid’ agenda.
The Civil Society Review
It all adds up to a new model of development. In the last few years, DFIDhas taken a hard look at and then strengthened our partnerships with young people, with the private sector, with our suppliers and across government - and we’re going to do much more.
But one area that to date I think probably hasn’t been looked at as thoroughly is how we can have a more effective, strategic relationship with our civil society partners, which I want to talk about now.
Of course we already work hand-in-hand with you in so many different ways. We couldn’t do the work we want to do at DFID without you and without civil society organisations from across the world.
In fact, last year almost a fifth of DFID’s bilateral budget was spent through civil society organisations. We have wide and deep connections, in policy, at country level and on the global stage. You’re agents of change but, importantly, you’re advocates of change too – and we really value that.
And that’s why I want to create a relationship with civil society which is much more strategic than it is at the moment, has more depth to it – and is more efficient - so we can deliver even more for the world’s poorest. I know from my conversations with many of you over recent months that you’re looking for the same.
So I’m launching a Civil Society Partnership Review.
This review will take place over the next 5 months. And it will really consider DFID’s relationships with civil society in the UK and across the world and how they, and the environment we are operating in, is changing.
I’m really determined it’s a collaborative process, we want to speak to all of you - current and previous civil society partners and those seeking new partnerships.
The review team is going to set out our next steps over the next few days and talking about the opportunities that will bring us all together.
The review will be one of several processes that will - together - ensure DFID is spending every pound as well as we can. This includes the Strategic Development Review that’s underway, new Bilateral and Multilateral Aid Reviews and of course we’ll play our part in the government-wide Spending Review and Strategic Defence and Security Review.
I recognise that for those of you who currently get PPA funding this transitional period will create uncertainty. In recognition of this I have agreed to extend PPA funding and grants to the Think Tanks IDS, ODI, IIEDand the Centre for Global Development by 9 months to end of next year. I have also agreed to similarly extend funding to VSO, Bond and the disability rights fund.
This will give us the time we need to work out where we are going and be able to smoothly transition.
The civil society challenge
So what are we looking at in the review? Just as we’ve set out the kind of suppliers we want to do business with, I’m clear that in the future we want to work alongside and through civil society groups that share our values, share our approach on value for money and transparency, and share our strategic objectives too.
I know many of you have made real progress on transparency and demonstrating results. But the environment we are in means all of us need to keep raising our game - there can be absolutely no let up on this.
I believe our best investments and our best partnerships, right now, are with organisations that are responding to the future, that are innovating and embracing new technology, that are putting girls and women at the heart of what they do and are driving value for money throughout their organisation.
They are with organisations that are recognising the importance of locally-led development and supporting local civil society actors.
And I’m really pleased that, working with DFID, Bond has already begun to engage its members on the changing role of UK-based INGOs, culminating in its report, ‘Fast Forward’. I hope that the review can build on some of the findings of this work.
I also want to work with civil society partners that recognise that the private sector is an intrinsic partner in successful development. Because, as I’ve said, the reality is that everywhere in the world, people want jobs. And companies that aren’t making any money don’t tend to recruit or grow. In fact as I know from my family’s experience growing up, when companies lose money, people lose jobs.
It is all of our responsibilities to work with businesses to ensure they can adopt inclusive business models and invest responsibly. And I’ve seen great examples from organisations here today partnering with companies such as Unilever and Barclays. We’re in the early stages of that and I believe it needs to become the norm.
And, finally, I want to be working with organisations that are helping us make the case for international development.
Let’s be clear: this does not mean lobbying the UK government on policies that we’re already pursuing - this government is a global leader on development, on the women and girls agenda, we have achieved 0.7.
In many ways, that’s to your credit. It was the voices of civil society that made this happen. But we know that now the biggest, hardest challenges to getting the progress we need lie outside this room, outside this city and outside this country.
So I want to urge you to use your networks, knowledge and passion in that wider world – less on campaigns to lobby us, but to get on the case of more countries - show why the UK was right to do 0.7 and urge others to follow our leadership. That’s where we need to put our efforts.
Ultimately, of course, we - DFID and civil society - share the same goal: to use our limited resources to help as many of the world’s poorest as possible. For this reason alone I hope you will embrace this review, so we can challenge ourselves to deliver even more for the very poorest.
It’s one of the privileges in this job to work, to work, hand-in-hand, with lots of your amazing organisations, from the big international NGOs based here to the smaller civil society organisations who are more out of sight, but are doing incredible, innovative work on the ground, often finding a niche where no one else is.
We know it’s crunch time. If the Girl Summit was a watershed moment for DFID, then development’s watershed year is already underway.
I don’t think anyone in the development community will be thinking that it’s just FFD and UNGA and the SDG conference that matters to them. The conferences on climate change, trade and next year on humanitarian crisis response will also be game-changing moments for the world’s poorest.
And it’s not just about these moments. We need to look at what happens after and how we deliver. We need to keep asking ourselves if we’re doing the right things, in the right way, with the right partners - embracing the beyond aid agenda.
I have absolutely no doubt that, working together, DFID and our civil society partners can meet the challenge I’ve presented today.
I believe Britain stands alone in the world with our civil society network, who can advocate and deliver change on the ground. We should be immensely proud of that and this Review is about how we can use this amazing resource to shape, drive and help development in a way other countries will look on, admire and follow.
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