[comment] War on poverty can be won

from The Age

by Tim Costello

NEXT week political leaders will meet in New York to try to get the world's assault on poverty back on track. No doubt few business leaders in Australia will pay much heed to the United Nations 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 importance 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.

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

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

To witness the Olympic Games opening ceremony 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 more than three decades ago, few Australian companies dared invest in China. It was a poor country bedevilled by corruption and a lack of transparency, and was struggling under crumbling infrastructure. Today countries such as Vietnam and Cambodia loom as the next frontier for Australian business.

This business opportunity is underpinned by the realisation that the vast majority of products and services are developed exclusively for the richest 10% 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 as 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 % of gross national income 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.

Critics argue aid doesn't work. The reality is too little aid doesn't work. Today the world provides just over $US100 billion in aid for the billions who live in dire poverty. The US and its allies will spend $US150 billion this year in Iraq and Afghanistan alone to finance a "war on terror".

Tim Costello is chief executive of World Vision Australia.

The Business for Millennium Development Summit, to be held at the Park Hyatt Melbourne on October 24, will outline how business can create new opportunities in the developing world and meet the UN Millennium Development Goals. For more information, visit www.b4md.com.au

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