209. Why We Can’t Abandon The World’s Poor

0:00At this time where we only have 20 % of sustainable development goals delivered and we only have 5 years to go We need to think a little bit out of the box. And the way to do that is to invent new ways of doing it to find that little hope again, because only with hope can you try to create new solutions for old problems.

0:34Hello and welcome to The Rest is Money with me, Robert Peston. Sadly, Stephanie cannot be with us today, but I'm delighted to be joined by Helle Thorning-Schmidt, former Prime Minister of Denmark, former head of Save the Children. And we're going to be looking at an issue that we haven't talked about for a while on the podcast, which is the massive challenge faced by developing nations. This is something that should matter to all of us, not just as humanitarians, but actually it's also linked to so many of the problems that we face in countries like the UK. One of the drivers of the migration problems that most Western countries are facing are the tremendous economic and humanitarian, in some cases, crises that many developing nations are facing.

1:27Now, we've got the United Nations General Assembly coming up. We had these very important sustainable development goals, which were all about trying to alleviate poverty in these countries. and we are way behind in hitting those goals. The landmark year is 2030. There's no chance we're going to hit the targets that we've set ourselves. But Hella is here to give us hope. You are part of a campaign called Be Hope. So, Hella, start by giving us some modest, at least, grounds for optimism. First of all, it's great to be with you, Robert. I mean, I think this is such a great opportunity. five years until we are supposed to hand in the sustainable development goals, dusted and delivered.

2:11It's a good time to take stock and ask ourselves if we have been too distracted to actually get to those goals. And as you started out saying, it's not going very well. We have been stopped by natural disasters, by armed conflict, by cost of living crisis, by political instability, by the pandemic, of course. And that means that if you look at all the sustainable development goals, just five years before we're supposed to deliver, we are only 20 percent on track, which is really not great. And of course, that means that all of us are thinking, should we just give up? Should we just give up and not stay with that hopeful promise that the sustainable goals was?

2:54And I guess my main message today is that we shouldn't lose hope. I know that there's so many things distracting us. I'm sitting in London right now and was witnessing the demonstrations this weekend in London. We are seeing political assassinations in the US. And all of these things are so negative and impact us so negatively. So we want to look away or we want to engage with a very negative frame of mind. And I guess our hope right now is that we don't lose hope and that we realize that it's only when enough of us sustain some hope that we can get progress. And that's what this campaign is all about.

3:33And also, there's good reason to be hopeful. If you look at the world, it is actually getting better every day for a lot of people. And I guess that's what we should try to focus on today and every day. Although the level of poverty, particularly in developing nations, but not just developing nations, we did see tremendous progress, but that has somewhat ground to a halt, hasn't it? It has. I think it's important to keep remembering that because people are still working on this, that poverty is falling. In just one generation, the number of people living in extreme poverty has fallen from one in three to less than one in 10.

4:15And that actually means if you look at children, which has been a specific focus for me when I was CEO of, say, the children, children are actually wealthier and healthier and better educated today than they were yesterday. And I think that should give us ground for hope. And I agree. I mean, the last year has not seen the progress that we wanted, but poverty is falling globally. And I think we need to remember that we can still do things to change the way things are. Many of these crises are man-made. And that means that the men and women people can be part of changing that as well. And that is what we should cling on to, that there's still time to do things and change things.

4:59I mean, as you well know, the biggest inroad into the global poverty figures was down to the extraordinary economic progress that China made over many years. I mean, lifting just astonishing numbers out of poverty. But if you look at sub-Saharan Africa, there is still extreme and just appalling levels of poverty and indeed conflict. Yeah, and most of the poverty and most of the problems that we see that goes from child marriage to children not going to school to poverty is connected to war and conflict. And most of all, of course, is internal conflict. Even hunger is connected to war and conflict.

5:43And that's why, obviously, I've seen firsthand what that means. If there's war and conflict, you can't get vaccinations to children. You can't get them to school. You are splitting up families. You're seeing masses of people trying to leave their country to move to another place. You're seeing record-breaking numbers of refugees. So yes, war and conflict leads to hunger, leads to us not being able to live up to the sustainable development goals. And that's why the level of war and conflict that we have and the way that war and conflict is carried out in modern times means that a lot of people are suffering as a result.

6:23And we're seeing that everywhere in the world. If you look at where the eradication of poverty has been more successful, I mentioned China, but actually in general, the battle to reduce poverty has been more successful in Asia than in Africa. Is that because Asia has just been a more stable place? Yes and no. I mean, it's important to remember that I would say that 80, 85 percent of the global population have really benefited from globalization, have benefited from international trade. Everyone benefits when there's peace, prosperity and trade, culture exchanges. And obviously, some of that has come to Asia.

7:04But what we're going to talk about later as well is that there's a number of things that has affected countries in Africa that mean that it is much harder for them to leave that poverty. And obviously, it's war and conflict. And with that follows hunger, poverty in general. And yeah, so the African continent is a continent where you have an explosion of population. That is where the real population growth is. And also all these factors that contribute to the lack of poverty being alleviated, like we promised in the Sustainable Development Goals. The statement that you made that globalization has helped to alleviate conflict and helped to lift people out of poverty would have been uncontroversial 10 years ago.

7:53Obviously, through much of the West, that is not a sentiment that millions of people would these days agree with. You talked about the march in London over the weekend. end, I would imagine that very few of the people who went on the march thought that globalisation had been good for them, because in the case of many of them, they will associate globalisation with stagnating living standards for them in the developed world over a period of many years. How do we, in a sense, given that very large numbers of people in poorer countries over a long period of time, globalisation was good for them, how do we, in a sense, persuade people in countries like the UK, in France, in America, that globalization is not some terrible impoverishing phenomenon?

8:42It's an interesting question. And I'll dare being a little bit provocative. I will say that, particularly in the Western world, we have benefited from globalization. We have gotten wealthier with 1%, 2%, 3%, 4 % every year, depending on which year you are picking. Of course, some years, it's stagnating growth. But the fact is that we are getting wealthier every year. And that includes the UK and definitely also the United States, where they have had very large growth figures over a number of years. So everyone has actually gotten wealthier via globalization. What you could then argue that within the various countries, France, the UK, whatever, you maybe should have had a more equal distribution of that wealth, And that the opportunities that people have have been too unequal, even though that the whole nation has become wealthier.

9:35And, you know, I come from a social democratic background. And I truly believe that when a country gets wealthier, as we have all become over the last many, many decades, that wealth should, of course, be distributed to everyone so that everyone feels that they have got opportunity, access to part of that welfare and that wealth. So maybe that's a big question to ask everyone. But the fact is that all countries have actually become wealthier with globalization. And many, many citizens have also not only contributed to that wealth, but also lived with that wealth. And that goes for the UK as well.

10:12As a former Danish Prime Minister, you probably don't want to give advice to Keir Starmer in his current predicament. But do you think he should be braver in making the redistribution argument? I think he is very brave. I admire Keir Starmer. They had developed a centrist way of trying to deal with the huge problems that got handed to them by former governments. They have very high standards of public office. So I'm a huge admirer of Keir Starmer and what they're trying to do. But this issue of persuading people whose incomes have stagnated and millions of British people's living standards have stagnated for at least 15 years and they currently don't have hope that their living standards will rise.

10:53I mean, what you're saying, which I think many would agree with, is this government can't succeed unless those people feel tangibly better off. But I think that's exactly what the Stammer government is trying to do. I think everything they've done in terms of their budget and everything has been about that, has been about lifting everyone and giving everyone the opportunity to benefit from the fact that the UK is still a very wealthy country. I think that's exactly what they're trying to do. Hela, there is so much more I want to talk to you about, but let's go for a quick break.

11:29I want to take us back to where we started, because in the end, we're only going to hit these sustainable development goals if all or as many as possible of the richer countries make a bigger effort. We do need to just therefore focus on America for a second. You made the absolutely accurate point that America has been a massive beneficiary of globalisation. But we do have, again in America, millions of Americans who don't believe that. They elected a president who not only speaks the rhetoric of anti-globalisation, but is rolling back globalisation through imposing all these tariffs, which are massively undermining free trade across the world.

12:08And he has dismantled their incredibly important development body, USAID. And, you know, particularly in very poor countries, this has caused enormous anxiety as immunisation programmes, for example, have been cancelled. So the negative impact on helping these countries has been enormous from the election of the American president. Can the rest of the world, this is the fundamental point, make enough of a collective effort without America's involvement to really revive this important ambition of trying to lift these countries out of poverty? Yeah, first of all, I'm in the States quite a lot, because I work on a number of boards in the US.

12:55And I always wondered why the Americans are talking their own country down. I mean, this is a country which had big growth levels over the last years. They have benefited enormously from globalization. Of course, there are many problems that have to be solved. But in many ways, they got so much opportunity to be a leader in the world, both in terms of culture, security and economically. So I always wondered why you would want to talk that phenomenon down and also effectively probably weakening the American economy and political influence by the steps that have been taken over the last six months.

13:35So I don't really understand that. And one thing that I've really been sad about is, of course, USAID because I've seen firsthand how USAID have helped thousands of people across the world with very simple things, such as vaccine, helping children in famine. I've been there, sat with those children and seen it, how it can help children. And I never will understand why the US have decided to withdraw from being the leader in that space and leaving that space perhaps also to other nations. I don't think we can do anything without the US, but I think we have to find a new language. But how do we get the US involved then?

14:17Because if we can't do anything, if we cannot make progress without Trump's buy-in, and I have to tell you, I don't believe Trump is going to help at all. Does that mean that nothing can be done until after the next US presidential election? No, that's exactly what we shouldn't think. First of all, we must sometime look elsewhere to what is happening right now. I know that everyone is engaged now in demonstrations in London, in political assassinations in the US. All of those things are deeply important and they matter. But what I think we're trying to do from this HOPE campaign is to say sometimes we should avert our eyes and look somewhere else to see are there some solutions for the long term.

15:04And what I'm seeing right now is that on the African continent, they're living with huge debt levels, which actually means that more money is leaving African countries that are coming in via aid or trade or investment. So what you're saying is broadly that the interest that these very poor countries are paying on the money that's been lent to them is greater than they're bringing in either from trade or their spending on what are, in some cases, really pretty basic education systems. So it is the way that the interest payments are depleting the resources that they've got to help their own people.

15:45Exactly. That is the problem with debt, particularly some of the debt that has been taken up by some African countries, where it's private debt and where restructuring is really, really difficult. The repayments are crippling those countries, crippling in terms of that they have to choose between paying creditors and funding public health, schools, clean energy, you name it. When the payments are so vast, they will have to make that choice. And I guess what I want to try and talk about is that there are actually solutions for this. And one of the things that bring me hope right now is that restructuring of debt has been marked as one of the issues that the G20 meeting will be discussing.

16:29And also religious leaders will come together in this jubilee year to discuss debt levels. So just a little hand up from us in the hope sector to say there are actually things that can be done. I'm very sad that USAID has stopped, but I do think that there's other things we can be doing right now. And first of all, we have to recognize that these massive debt levels, private debt levels, are crippling countries and crippling, of course, poor people's opportunities in those countries. That there is actually a way of trying to restructure that debt, making sure that that debt gets scrapped if countries are living up to their climate goals, whatever, that there is an exchange here.

17:12And what I believe is that that kind of conversation could bring us all hope that there is actually stuff to do and we don't have to wait four years to get started again. We can start right now. And I think that's in line with the thinking of the sustainable development goals that we think that hope can actually be part of this change and actual proposals like this can be part of this change. Would your hope or proposal be that there's an across the board forgiveness writing off of debt, or are we looking at country by country negotiations? It's more complicated than that. You can't just write off debt because some of the debt has to be exchanged to a different kind of debt, less private debt.

17:54Maybe some of the big international banks have to take over that debt. It could be a different interest rate. It could be a message of post-payments when there are natural disasters or pandemics or whatever hits a country. It could be that these debt negotiations are faster and clearer, more transparency around this debt, swap old debt for new, fairer debt. Also, big, big issues with debt is that the currency that they lend in is foreign currency, which makes it even more volatile. We could swap that debt so it's in local currency, for example. So there are a lot of answers here that we could try to talk about.

18:35So I guess what us in the HOPE movement are trying to say is that let's not get stuck in the old answers. Let's try to find new answers. And in that way, we could quickly, actually quite quickly see that instead of paying these big interest rates, You could send children to school. You could create more clinics where you could have vaccines for children. You could do all these things very concrete. And my hope is that the G20 will look into this in a way where they try to find solutions that can actually change things quite quickly. But what should the G20 democracies do about the crippling debts in countries like South Sudan, Yemen, Zimbabwe, Sudan itself, where human rights are trampled on, where there's no freedom, where in many cases we have really appalling governments?

19:34Their people are suffering, but then there would be an argument that says you are rewarding despotic, corrupt, appalling governments. And that's why, I mean, obviously, if a country is at war, have a civil war, then it's much more difficult. I don't know how you would give debt relief to a country like Yemen, for example, which is in a very long lasting civil war. And that goes for a lot of the other countries you mentioned as well. But I also think it's important not maybe to start with the most difficult ones, but remind ourselves that you have examples of countries that have that kind of debt relief before.

20:12Ghana, for example, is a very good example where they had debt relief. I think it was in 2010, where it really helped them to change their loans and help them to invest in public services. So let's look at the countries where they have a more stable government and where this is possible and start somewhere. And I guess that's the hope that you don't necessarily need to start with the most complex countries where it's actually very difficult to give that debt relief because maybe that's not even a functioning government. But there are countries in Africa where they have much more stable governments and where you could do this.

20:49And what we're trying to say is let's not let the extreme difficulties be the enemy of thinking what could actually be done in the current circumstances. And not all African countries are the same, far from it. And we should try with some countries to try and help. And I think the G20 is a really good place to start that conversation. Obviously, in the UNGA, where we're discussing the Sustainable Development Goals, that's a good place to start this conversation as well. Yeah, of course it is. And I'm sure most people listening would agree with you. It is complicated. I mean, even in countries that are currently looking more stable, we know that some of the money that was lent has been stolen corruptly by previous leaders.

21:37And there's always the sort of slightly moral hazard, what you might call the moral hazard problem of rewarding. You know, this was an issue about bailing out our banks back in 2007, 2008. And when a country has behaved badly and money has been stolen, there's always a question about whether, in a sense, you should reward them by, in a sense, saying that, well, you no longer have to pay it back. Absolutely. And that's why corruption is a big issue also in these countries that we are talking about. And that's why I'm suggesting that this is something that the international banks should look into.

22:11They're actually quite good at coupling demands with any relief that they can provide. That could be demand on switching to cleaner energy, less corruption, better structures in the economic system, making sure, of course, that the money that gets released or the resources that get released by this debt release goes directly into public services that everyone wants. schools, hospitals, whatever it is. So there are mechanisms for doing that. And I guess the whole point of this is to say, there will always be a million of bots. There's a million of bots, but we can't do this. This is too unstable.

22:50There's too much corruption. And I totally agree with that, that those bots exist. But at this time, where we only have 20 % of sustainable development goals actually delivered, and we have only five years to go, We need to think a little bit out of the box. And the way to do that is to invent new ways of doing it to find that little hope again, because only with hope can you try to create new solutions for old problems. And that's what we are trying to do. It's so easy. And I find myself doing that again and again. and you probably do as well, to fall into a negative trap where you just think, oh, we have to wait four years to trump this out of the way.

23:33You have to get all these wars ended, Israel-Gaza conflict, and you get stopped in your tracks by the negativity in your own brain. And I think we tend to do that collectively, globally right now. But what is actually needed is that as many of us try to find a little bit of hope and say what could be the actions that we could do collectively to just change a little bit. And I think that relief and changing that is one of the biggest things that could actually change the situation for a lot of people in Africa. I'm sure you're right. I mean, one of the things that I find sort of curious about Donald Trump's reluctance to provide help and aid to these developing countries is, of course, the gap has been filled now for many years by China, which has provided lots of investment, particularly in Africa, also in Asia and South America, and is gaining massively in influence in many of these countries.

24:39And given that Trump regards China as the great competitor, the great enemy of America, It's slightly odd that he's allowing China to build up these alliances with these countries. They may have terrible poverty problems, but these are nonetheless potentially very, very important countries with enormous mineral resources. They will develop. They will be buyers of whatever China or America want to export over time. It seems curious to me that Trump doesn't see that actually having strong financial relations with these countries is in America's interest. That's what I started out saying. I will never understand why a great nation like the United States, which politically, economically, militarily, in terms of security, is such a strong power and been for decades, is making itself smaller.

25:38And that is basically what the United States is doing right now. It's making itself smaller. Obviously, the UK did the same when the UK decided to leave the European Union. These countries are making themselves smaller. And when you make yourself smaller, you are obviously leaving space for other nations to step in and have political, economic and cultural influence in other spaces. So that is exactly what's happening. That's what's happening. China is using this void, this gap to move in, not only to African nations, but everywhere in the world. So that's my best advice to anyone would be don't make yourself smaller.

26:16If you're a big, great nation, use that power for good and make yourself even bigger if you can. So, yeah, I will never understand why a country choose to make yourself smaller in the world when they have the opportunity to do the opposite. And by making yourself smaller, you're leaving space for other nations who are really, really keen to move in. And what we're seeing in Africa is just that the Chinese interests are very clear. But we also know that any Chinese money that is given or lent to these countries come with a price and come with very strict demands from African countries. That's another good reason why this should be discussed at an international level.

26:54And D1020 and the UNGA is a good place to start. Now, frustratingly, we're almost out of time, but I'm going to set you a challenge. So if you look at whether it's Britain, where the interest that the British government pays on its 100 % debt burden is about the same as everything that's spent on education. It's considerably more than the UK spends on defence. If you look at France, where just mere discussion of trying to get the debt burden down has led to the ousting of the latest prime minister and absolute government chaos in America. Again, massive interest burden there. How do you persuade electorates in countries like ours, where we have this enormous sovereign debt problem, that it's in the interest of the citizens of rich countries to actually provide money effectively to the poorer countries to reduce their debt burden?

27:55Debt burden is such a complex issue, and I don't know if we have time enough to do it. But obviously, even our part of the world, European countries, the US, all of them have taken a lot of debt to either restructure or to use it as a growth tool. I'm not a super fan. I come from a country where we've been very, very strict on taking up debt. So I'm not a super fan of just taking up debt for growth. You can create growth in a number of different ways. But there is a difference between the positive and constructive way that many countries in Europe and the U.S. have borrowed money, which can be used for growth.

28:35And for many development countries where it's very, very different. And these countries have not arrived there by choice. It wasn't their choice to borrow money, as it is in our part of the world. And on top of that, these countries have been battered by crisis after crisis. So there is a difference in those debt levels. And I do think it's important that we remember that if the African continent does not work, if people are too poor, that will have an immediate impact on what happens in Europe. We have the refugee situation. We have a very poor continent very, very close to us, which impacts us enormously.