THE JORDAN TIMES

Nobel laureates set a course for peace and prosperity

By Surakiart Sathirathai and David L. Phillips
Monday, July 18, 2005

When they met recently in Jordan to discuss "a world in danger", 50 Nobel laureates and prominent persons identified economic development and poverty reduction as priorities for the new century.

The Petra Conference of Nobel Laureates - hosted by His Majesty King Abdullah and Elie Wiesel, the 1986 Nobel Peace Prize recipient - also reaffirmed that poverty has a bigger impact than human development. It affects peace and security, having the potential to give rise to fanaticism, radicalism and terrorism. The London terror attacks dramatically underscore the importance of addressing the root causes of terrorism.

The recent decision to cancel the debt of the world's poorest countries was significant, but it should be kept in perspective. Debt relief is not enough. G-8 leaders must follow through on their commitment by adopting a broader strategy for poverty reduction that includes aid and trade. Only a comprehensive approach can meaningfully ease the burden of poverty and help break the cycle of human suffering.

At the Petra Conference, Nobel laureates developed some guiding principles underpinning a plan for peace and prosperity around the world:

Globalisation has lifted millions from poverty by integrating them into the global economy, but it has also created problems for countries that are unable to compete in the world marketplace. To maximise its positive impact, globalisation should be more fair and equitable.

Though self-reliance is essential, developing countries cannot solve endemic problems on their own. Cooperation among developing countries and a strengthened north-south partnership are needed. Capacity building is necessary for sustainable development.

Transparency and accountability are critical. Developing countries should demonstrate a commitment to good governance, market discipline and economic reforms with specific performance benchmarks, monitoring systems and a timeline for realising objectives.

Donor countries should be commended for their decision to cancel $40 billion owed to international agencies by the world's 18 poorest countries, but beneficiaries cannot just pocket the savings. Money saved paying off their debt should be used for education and strengthening the public health sector to fight pandemics such as malaria and HIV/AIDS.

Moreover, debt relief alone will not generate new funds to fight poverty. The world's richest countries should match the decision to cancel debt with an equally bold commitment to expand foreign aid.

The 2002 Monterrey Consensus committed donors to increase aid to .70 per cent of the GNP, but only a few countries have met the target. While increasing aid values, it makes no sense just to throw money at a problem. Foreign aid must be responsive to local needs in order to make the most of scarce resources. This requires consultation with affected populations. In addition, donors should deliver resources faster and more reliably, while respecting the dignity of beneficiaries. Shifting from loans to grants will keep countries from reaccumulating debt. Donors wisely compensated the World Bank for the loss of debt interest payments. Now it is incumbent on the international financial institutions to make sure that new funds continue to flow.

In addition to debt relief and aid, wealthy countries should open their markets. Farmers in developing countries would reap a bonanza - estimated by the World Bank at $100 billion annually - if rich countries simply removed trade barriers and eliminated agricultural subsidies. (Wealthy countries spent $280 billion last year subsidising farmers - more than triple their total expenditure on foreign aid.) Whereas protectionism causes overproduction and drives down the price of agricultural goods, market access for developed countries reduces the gap between rich and poor while creating wealth, driving innovation, and raise living standards.

Job creation would also benefit from access to capital via public/private partnerships, private equity funds, and microcredit mechanisms. In addition, educational curricula should be matched with the requirements of the labour market to help develop local capacity. It is also important to empower women so that they have a proportional role in economic development.

Today's problems are so serious no individual or nation can hope to master them alone. Collective strategies, collective institutions and a sense of collective responsibility are needed.

Building on unprecedented feelings of friendship and cooperation, Nobel laureates are taking steps to institutionalise their collaboration and meet again next year. In the meanwhile, G-8 leaders could benefit from their insights aimed at ameliorating many of today's most pressing problems. Poverty's victims would be well-served. So would the goal of achieving a more peaceful and prosperous world.

Dr Surakiart Sathirathai is the deputy prime minister of Thailand; David L. Phillips is director of the Nobel Laureates Initiative at the Elie Wiesel Foundation for Humanity. They contributed this article to The Jordan Times.