Fifty years ago, almost 20 million children under the age of 5 died every year. In 2010, the figure was down to 7.6 million. This 60 percent decline in childhood deaths — reflecting advances in agriculture, education, health and sanitation — is compelling evidence of the increasing justice in our world. But the global economic crisis is putting the long-term trend of progress at risk.
I am giving a report Thursday to the heads of the Group of 20 governments, including President Obama, suggesting creative ways for the world to continue investing in development despite fiscal constraints. I hope three key ideas become part of congressional deliberations over the coming weeks.
First, programs funded by U.S. generosity have been a core component of this 50-year project of raising living standards around the world. When the private sector doesn’t have incentive, and poor governments don’t have the money, smart aid pays for breakthrough solutions. Thirty-six cents worth of measles vaccine protects a child for a lifetime.
Second, development isn’t just good for people in poor countries; it’s good for all of us. It used to be that the world was, roughly speaking, one-third rich and two-thirds poor. Now, the number of dynamic, healthy, highly educated countries is much higher, which is a recipe for prosperity. Imagine the world economy without Brazil, China, India, Indonesia, South Korea, Mexico or Turkey. If countries that are currently poor can feed, educate and employ their people, then over time they will contribute to the world economy. On the supply side, they’ll increase the production of key commodities such as food, keeping prices lower. On the demand side, as their citizens are more productive, they’ll become important markets for trade.
Third, the United States is not doing development alone. We spend about 1 percent of our total budget on aid, as do dozens of donor countries.
In my report to the G-20, I’ll make half a dozen recommendations for mobilizing tens of billions of dollars annually from private sources. The African diaspora is sitting on $50 billion in savings that could fund development in their home countries if it were captured through diaspora bonds. If the transaction costs on remittances worldwide were cut from an average of 10 percent to an average of 5 percent, it would unlock $15 billion a year in poor countries. In addition, there are trillions of dollars in sovereign wealth funds, and a portion could be reserved for key infrastructure projects in poor countries.
If we do it right, we can keep shrinking the number of countries where aid is needed to zero.