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TIM COSTELLO, chief executive of World Vision Australia, explains why Australian business leaders should pay attention to this week’s UN meeting

This week political leaders are meeting in New York to attempt to get the world’s assault on poverty back on track. No doubt few business leaders in Australia will pay much heed to the UN General Assembly on the Millennium Development Goals. They should. The outcome of these goals will have a profound impact on corporate Australia. 

Amid the turmoil gripping world economic markets triggered by the credit crunch, it is very easy to miss the import of this event. But the fight against poverty has great implications for the future growth of the global economy and nowhere will the impact be felt more than in Asia. 

“The MDGs aim to eradicate extreme poverty and hunger. They commit developing countries to boost education, health and environmental outcomes. The MDGs commit rich nations to boost aid spending to a modest 0.7 per cent of GNI by 2015.”

It is why Prime Minister Rudd is right to take a leadership role in attending the NY meeting and why those critical of his decision to miss parliament in order to attend are simply wrong. 

Geographically, Australia has front row tickets to the war on poverty. The Asia region is home to more people living on less than $US2 a day than any other part of the world. This region is also the epicentre of a surge in economic growth that has jettisoned tens of millions of people out of poverty. 

To witness the opening ceremony of the Olympic Games last month was to witness the crowning glory of China ’s emergence as a world superpower. China is now critical to Australia ’s economy. It is also critical to the growth of many Australian companies. 

Yet a little over three decades ago, few Australian companies dared invest in China. It was a poor country, bedeviled by corruption and a lack of transparency and struggling under crumbling infrastructure. Today countries like Vietnam and Cambodia loom as the next frontier for Australian business. 

This business opportunity is underpinned by the realization the vast majority of products and services are developed exclusively for the richest 10 per cent of the world’s customers. Business now understands the 5 billion people at the bottom of the world’s economic pyramid not as “a problem” but as a massive, untapped, potential market. It is why in Australia companies such IBM, KPMG, Visy, IAG Insurance and the Grey Group set up the Business for Millennium Development alliance to highlight how Australian companies can do more to reduce poverty while developing business with emerging markets in the Asia Pacific region. 

And this is where the Millennium Development Goals are so critical. The MDGs aim to eradicate extreme poverty and hunger. They commit developing countries to boost education, health and environmental outcomes. The MDGs commit rich nations to boost aid spending to a modest 0.7 per cent of GNI by 2015. 

Of course boosting overseas aid is not going to create jobs, prosperity or national economic growth in the world’s poorest countries. Yet it is wrong to dismiss the MDGs as a bureaucratic-driven, folly in central planning. 

Aid helps to create an enabling environment for business. It creates the air that business breathes. Business cannot survive if a country’s workforce is blighted by hunger and disease or is poorly educated, if there is no infrastructure, if corruption thrives and if the rule of law or property rights are flouted. 

Where there is the political will there has been significant progress. Child mortality rates have fallen below 10 million a year for the first time since record-keeping began in 1960. In Malawi a fertilizer and seed program has doubled agriculture productivity.. The abolition of school fees – often due to debt forgiveness – in Burundi, Ethiopia , Ghana , Kenya and Tanzania has led to a surge in enrolments. It has led to 7.2 million more primary school students in Kenya alone. A vaccination initiative has reduced global measles deaths by 68 per cent. In Africa , measles deaths have plunged by 91 per cent. Aid programs have also doubled the number of HIV-positive pregnant women receiving antiretroviral drugs to prevent their children becoming infected. 

Yet overall the goals are badly off track, largely due to an $18 billion shortfall in funding by developed countries. A UN report released this month warned that aid levels were actually falling with total aid now amounting to just 0.28 per cent of the combined national incomes of rich nations. Australia ’s commitment to boost aid funding to 0.5 per cent of GNI by 2015 is short of the UN target, but it is to be applauded and represents a significant commitment. 

Critics argue aid doesn’t work. The reality is too little aid doesn’t work. Today the world provides just over $100 billion in aid for the billions who live in dire poverty. The United States and its allies will spend $150 billion this year in Iraq and Afghanistan alone to bankroll a “war on terror”. 

The war on poverty is not only a war worth fighting; it is a war that can be won. We are making inroads into the number of people trapped in extreme poverty but we can also do a great deal more. The spending required to fund the MDGs is modest and can help unlock enormous economic growth particularly in our region of the world.

Tim Costello is the chief executive officer of World Vision Australia.


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