Working to end global poverty and precarity

The rise in global living standards over the last one hundred years has been, on average, an unmatched quantum leap.

The problem is that billions of people have been locked out of these gains. Indeed, extreme poverty remains entrenched in many parts of the world, even as overall growth has proceeded apace. Hunger remains rife, too, notwithstanding the fact that we produce enough to feed the world one and a half times over. And precarity is also on the rise, especially in the wake of the pandemic. Hundreds of millions of people are at risk of returning to the conditions of poverty they had recently escaped.

In a world of such aggregate abundance, the existence of hunger or extreme poverty should serve as a challenge to our collective moral conscience. That alone should be sufficient to motivate significant action.

Yet even if we were only animated by self-interest, it would still be strategically negligent to allow poverty and precarity to fester.

We know, for instance, that when people are in economic distress, even small fluctuations in food prices can be cause for unrest. In some cases, it can result in regime change, state collapse, and even civil war.

The butterfly effects can go further still. Syria stands out as an example in which food insecurity drove an upward and outward transmission of instability. As hunger motivated protests, and protests slid into civil war, we soon saw a refugee crisis, and external powers dragged into an intractable proxy conflict. The case illustrates the potential for poverty and precarity—however localised—to implicate global stability at large.

Given the risks of such spill-over, we have a significant security interest in working to eradicate global poverty and precarity.

Equally, though, there is an economic dividend to be had. So long as poverty effectively excludes one billion people from the international economy, we will miss out on significant opportunities to grow our prosperity. By contrast, we will reap great benefits, in terms of increased trade and investment, if we inclusively expand the ranks of the global middle class.

To be clear, the point is not that self-interest should only or even primarily guide our assistance. But it is to say that there are strategic rewards for being the generous global citizen that we should, per our values, strive to be anyway.

Australia will therefore look to rally a significant international effort towards the reduction of global poverty and precarity in the following ways:

Champion the 0.7% ODA/GNI target advocated by the UN. Ending global poverty requires a significant step up in development assistance by wealthy countries. While we lead such a step up in our near-region, we will also push our OECD partners to match that generosity in other parts of the world.

Support and rally progress around the UN Sustainable Development Goals. Australia will continue to work with our development cooperation partners on achieving the SDGs, especially Goals 1 & 2 (no poverty and zero hunger), in their national contexts. At the same time, we will advocate that the SDGs remain central to other providers' development programs internationally.

Work with other major agricultural producers, such as the US, to find supply-side ways of relieving food insecurity. As explained earlier, food insecurity is often caused or inflamed by entitlement failures, in which people go hungry out of an inability to afford food as priced in global markets. In such cases, financial assistance is an expensive and often ineffective solution, as it can bid up the price of food in self-defeating ways. Australia will therefore explore ways that we and other agricultural producers, such as the US, can contribute more food aid directly.

Reduce transaction costs on migrant remittances. Per SDG 10.A, Australia will work with other developed countries to ensure that we reduce the transactions costs of remittances transferring out of our jurisdictions to below 3%.

Support the work of the World Bank, the UN World Food Programme, and the UN Development Programme. We will coordinate with international partners to ensure they are appropriately resourced to meet global needs.

Advocate and contribute to a global step up of humanitarian assistance. Crises threaten to erupt in many at-risk countries, or metastasize in those already suffering conflict or famine. It is therefore crucial that Australia and other wealthy nations step up to task in providing immediate humanitarian relief.

Synergise our humanitarian assistance with the US' Global Fragility Strategy. To enable this, Australia will seek to deepen the working links between and among DFAT, Defence, and the interagency steering group implementing the US Strategy. Coordinating and concentrating our investments with the US and other partners will help to achieve multiplier effects.