gdi lecture series: should rich nations help the poor? with professor david hulme

David HulmeExecutive Director

Wednesday, 12 October 2016

The University of Manchester

www.effective-states.orgwww.gdi.manchester.ac.uk

Introduction1. Rich nations should help the poor2. Foreign aid is part of this – not the main part3. Trade, international finance, migration and

environmental policies are central4. Business as usual is not an option with climate

change and rising inequality5. Contemporary context…and, how much is the

UK helping the poor?6. Conclusions

Rich nations should help the poor: ethics

• Rich nations should provide support to poor people and poor countries: two sets of reasons

• Ethics: it is the right thing to do– Things are getting better but still intense

deprivation in an affluent world– Moral duty: common humanity– Moral responsibility: rich nation causality

Rich nations should help the poor: ethics

Rich nations should help the poor: ethics

“… it makes no moral difference whether the person I help is a neighbor’s child ten yards from me or a Bengali whose name I shall never know, ten thousand miles away”.

- Peter Singer, 1972

Rich nations should help the poor: self-interest

• The well-being of rich nation citizens, their children and grandchildren, means we must help the poor

• Problems in faraway lands can rapidly become problems in rich countries

• Refugees, surges in migration, terrorism, climate change, international crime and new health problems do not recognise borders

• In an interconnected world global problems need global responses

Rich nations should help the poor: self-interest

Role of foreign aid

• Traditional answer has been foreign aid• Successes: smallpox, polio, green revolution,

child mortality in Africa, retro-virals, others• Failures: famous UK example of Pergau Dam• Aid is declining in significance: remittances,

private finance, Chinese finance• Priority focus is on aid quality… and, for US,

Korea and Japan, also quantity!

Role of foreign aidMajor inflows in fragile states: remittances, aid and FDI (constant 2011 USD million)

Role of other…joined up…policies

• International trade: an unreciprocated trade round• International finance: tackle illicit and illegal financial

flows; limit tax havens• Environment and climate change: emission

mitigation; finance for adaptation; technological transfer• Refugees: honour UN commitments• Migration: strategies to manage migration and

migration surges… migration and prosperity• Security and the arms trade

Role of other policies: migration

According to World Bank, average incomes in the EU are 21 times higher than in Sub-Saharan Africa…

What would you do…stay home…or migrate?

“Business as usual” is not an option

• Globalisation: flows of goods, services, finance, people, ideas, data continue to increase – we are connected!

• Climate change: economic growth and human development have been based on being carbon profligate. This cannot continue if we want a future for humanity.

• Inequality: The 1% or the 0.1%? Inequality is rising in most nations, rich and poor. This reduces growth and slows down human development. Evidence it leads to political decline, plutocracy and disillusionment.

Business as usual is not an option

June 2016 was the hottest month since records began in 1880.

It was also the 14th consecutive month of record-breaking heat.

Global mean surface temperature (January-June)

Business as usual is not an optionShare of income of the top 1% in different rich countries

A deteriorating rich world contextreversal?• Brexit – UK leaves EU• Populist right-wing movement across EU –

France, the Netherlands, Austria, Hungary…• Donald Trump in USA• Political polarisation - liberal, cosmopolitan

middle-class vs. precarious middle class and working class…isolationism, xenophobia

How is the UK doing?

How is the UK doing?

• Until June 2016 – real ‘soft power’ benefits• Seen as ‘world leading’ and ‘agenda setting’• Foreign aid – shaping EU plans and policies• Foreign aid - shaping World Bank policies• Tax & finance – advancing G7 and OECD• SDGs – ‘punching above its weight’• Now – in the balance…SDGs reporting?

What can be done?

• Make sure that rich nation citizens hear the moral arguments and the self-interested arguments

• Helping poor people and poor countries is the right thing to do and we would be stupid not to help!

• International development needs joined up policies – aid, trade, finance, climate change, migration

What can be done?

• Tackle the common problems of rich and poor nations– Illicit and illegal finance– Climate change– Job creation in poor countries– Rising inequality

• NGOs and civil society groups: reconnect with citizens. Stop functioning largely as professional lobby groups

• A ‘war of ideas’ – ONE WORLD

‘David Hulme has provided an invaluable primer on why and how we should help the poor of the world. He rightly sees the key issues as climate change and inequality. In the end, we are all in this together, rich and poor alike.’

Angus Deaton, Princeton University and Winner of the 2015 Nobel Prize in Economics