As delivered

Introduction

Fifty years ago, in this chamber, NOK 10 million was allocated to the Aid Fund for Underdeveloped Countries. It was not, perhaps, a large sum, even for those days. But it was still a radical decision for a country that had just emerged from a war, and that was itself receiving assistance. The Storting’s first allocation in June 1952 formed the basis for our aid to India. It was the beginning of Norway’s strong commitment to assisting developing countries.

I would like to take this opportunity to thank the many individuals and organizations, and the staff of the Norwegian Agency for Development Cooperation (NORAD), who have made it possible for Norway to demonstrate its solidarity with developing countries in such an outstanding way.

During these 50 years much progress has been made in the poor countries of the world. But the challenges are still formidable. Over 1 billion people still live in the direst poverty. Even more have been deprived of their fundamental rights. And war and violent conflicts continue to undermine the foundation for growth and welfare in many countries.

This past year has also been a difficult one for many developing countries. Economic growth has been weak, weaker than what is needed to keep pace with population growth. The price of raw materials has fallen to an all-time low. Declining demand in the industrialized countries has contributed to this situation. The terrorist attacks on 11 September not only affected the US economy, they also shook the entire global economy. And it is the developing countries that are most vulnerable to rapid fluctuations. It is the poorest that have to pay the bill.

We all have a responsibility for supporting the developing countries in their fight against poverty.

The Millennium Development Goals

The UN Millennium Declaration marks a milestone in international development cooperation. The world’s leaders have committed themselves to principles such as human dignity, equality, and justice. Not only states, but also key global actors such as the World Bank and the International Monetary Fund, have committed themselves to following up the Millennium Development Goals.

The Millennium Development Goals can be verified: the proportion of those living in absolute poverty and hunger is to be halved by 2015. The number of women who die during pregnancy and in childbirth is to be reduced. The number of children who die before the age of five is to be reduced by two-thirds, the spread of HIV/AIDS is to be reversed and every child, whether boy or girl, is to be able to complete primary school.

The Millennium Development Goals have one thing in common: they reveal the many faces of poverty – they describe the daily lives of over a billion people. They focus on the individual. This must have consequences for the way we deal with development issues.

Financing for development

The Millennium Development Goals can only be achieved if we intensify our efforts in a number of fields, through foreign investment, trade, debt relief and development cooperation. And of course, above all, if the developing countries themselves improve their policies.

The discussions in Monterrey, Mexico, in March showed that the rich countries have now understood that contributing to the fight against poverty will also contribute to global security. The promises of an increase in development assistance of about 20-25 per cent by 2004-06 and better market access are a sign that this is something the rich countries are willing to do.

The conference could mean a reversal of the longstanding decline in the volume of development assistance. We welcome the fact that the USA and the EU have signalled that they have concrete plans for stepping up assistance.

We know that sound development assistance gives results. According to the World Bank, a doubling of international development assistance, which today stands at USD 50 billion, is necessary to achieve the Millennium Development Goals. There is a long way to go. During the process leading up to the Monterrey conference, Norway played a proactive role in promoting a focus on the rich countries’ development assistance commitments.

And we are following this up at home as well. The Government’s aim is to increase the development assistance budget to 1 per cent of GNI by 2005.

Action Plan for Combating Poverty

However, development assistance alone can never lift a country out of poverty. The whole range of measures must be put in train and the countries themselves must take responsibility.

In March the Government presented its Plan of Action for Combating Poverty in the South. The plan will constitute the basis for development policy in the time to come and will guide our policy on a broad front. The overriding objective of the action plan is crystal clear. Our development cooperation policy is to be dedicated to fighting poverty so that we help to achieve the Millennium Development Goals.

The administration of development assistance

The Millennium Development Goals are ambitious ones. They call for a concerted global effort. We will do our share, and this is why the action plan is also very ambitious. Implementing it will require a great deal of us. We must therefore make sure that we are as well equipped and as well organized as possible. We are therefore beginning a broad-based evaluation and review of our entire development assistance administration, including the Ministry of Foreign Affairs and NORAD here in Oslo and the embassies in our partner countries.

This is the first time such an evaluation has been conducted in Norway. It will be used as a basis for modernizing our development assistance administration with a view to enhancing Norway’s international status as an efficient and result-oriented development actor. We already score high internationally, but without an optimal administration we will not achieve the goals we have set ourselves in the action plan. The modernization process will be carried out within the framework of the Government’s programme for modernizing, decentralizing and simplifying the public sector and making it more efficient.

Now I would like to say a few words about some of the main initiatives and perspectives in the action plan.

Framework conditions and coherence between policy areas

In the action plan we point out that there are a number of factors that affect the economies of the developing countries and the situation of the poor in these countries. Some of them we cannot control. Others can be dealt with.

National and international framework conditions for trade in goods and services, debt and investment have a greater impact on developing countries than development assistance. We must therefore ensure that our policies in these areas actually contribute to the fight against poverty. I will get back to trade and investments. The Government is now following up the expanded debt relief plan that has been dealt with by the Storting. Norwegian policies in such fields as energy, fisheries and agriculture will be reviewed so as to make them as consistent as possible with our development policy goals.

The Government will therefore undertake a review of the various aspects of our policies in order to see how we can improve our efforts to combat poverty in developing countries. We intend to complete the review by the end of the year. On this basis we expect to achieve better coherence.

More to the poorest countries

According to the action plan, at least 40 per cent of our bilateral development assistance is to go to the least developed countries. These are the countries that need it most, since they have few prospects of attracting capital from other sources in the short term. This percentage is considerably higher than the average allocated by other industrial countries to the poorest countries. This should, however, be a realistic goal for us, and should probably be further increased in due course.

We will not, of course, forget the large number of poor people in other developing countries. Here, too, our objective is clear: our development assistance must benefit the poorest in these countries. In our partner countries, we will be focusing more strongly on the situation of particularly vulnerable groups, including the disabled and indigenous peoples.

Development cooperation must enhance human rights

The action plan is firmly based on a rights perspective. Fundamental human rights are the overriding goal of development, and at the same time they are essential for achieving development. The right to education and freedom of expression, for example, are human rights and must be promoted for precisely this reason. At the same time respect for these rights liberates forces that create and stimulate development. Focusing on economic growth is a necessary but far from sufficient way of lifting people out of poverty.

Education

Education is one of the most important tools for fighting poverty and promoting development. And investment in basic education for girls and women gives the best return. This has been shown in a number of reports. Education results in the birth of fewer children, better health for the family and a higher income for women. Education promotes gender equality. Education liberates creativity, encourages the belief that one can improve one’s situation and it is a human right. It is crucial to building a viable society. This is why education is one of the key Millennium Development Goals. And this is why education is job number 1 for this government in development policy.

The Government will undertake to increase support for education to 15 per cent of total development assistance. We will seek to ensure that there is a greater focus on education in all parts of development cooperation, including humanitarian assistance. This means that free basic education must be offered to all. At my initiative, an education strategy is currently being drawn up for attaining this goal.

This is naturally a question not only of how much money is allocated, but also of what purpose it is allocated for. We must give priority to helping people to complete their education and to improving the quality of education. Thus we must strengthen teacher training and teaching materials as well as institution- and competence-building. This should preferably be done through large-scale sector programmes administered by the authorities themselves.

Norway will be hosting a conference on education and development under the auspices of the Nordic Council of Ministers at the beginning of June. The conference will bring together the international development and education ministers of the Nordic countries for the first time. It will help to ensure optimal use of the technical and financial resources of the Nordic countries in a joint effort to improve education in poor countries.

Health

Investment in health is also investment in development and is one of the main conditions for achieving the objectives of the action plan. Children, young people and women will be given priority.

Last December the World Health Organization presented a report showing that if the developing countries increased their spending on health by 2 per cent of their GDP and if the donor countries increased their health-related development assistance to 0.1 of their GDP, this would yield an economic return of five to six times the investment in 10 to 15 years. And 8 million lives will have been saved every year.

The link between health and development can most clearly be seen in the fight against HIV/AIDS. Three million people died of AIDS in 2001. It is estimated that in those countries that are hardest hit, GDP could be reduced by over 20 per cent by 2020. The Government is taking this seriously. It is therefore continuing with the heavy investment in hiv/aids and health. The Government will also seek to ensure that international efforts to combat the genital mutilation of women are intensified.

Good governance

The action plan states that our bilateral cooperation is to be based on the developing countries’ own poverty reduction strategies (PRSPs).

These PRSPs will form a basis for the mobilization of the country’s own resources and for the prioritization of tasks between donors. But if these efforts are to succeed, this will require better governance.

The Government is therefore taking a special initiative to promote good governance in development cooperation. This will include both improving public policies and the public administration and strengthening control functions. We are currently making a systematic survey of the situation in these countries, beginning with our main partner countries.

As regards the public administration, we are examining factors such as the need for public sector reform, financial management, measures to combat corruption and promotion of the rule of law by the strengthening of the justice sector.

As regards control, we are concentrating on state control bodies such as the office of the auditor general, political institutions such as the national assembly, and non-state actors such as political parties, the independent media, civil society organizations and local communities that would benefit from development assistance. These non-state "watchdogs" play a very important role in the efforts to strengthen governance in developing countries.

The Government gives high priority to combating corruption and will intensify the efforts that were begun three years ago in this area.

We cannot expect our partner countries to be perfect. But on the basis of this review we will discuss with the authorities of the respective countries which measures can be implemented in the public administration and for purposes of control. In consultation with other donors and development actors, we will offer concrete financial support and expertise that will build up the capacity for good governance. Here, too, coordination is the key. Our three partners in the Utstein cooperation, the Netherlands, the UK and Germany, will be important actors in these efforts.

Political parties

Democratic development, with broad popular participation, is extremely important for promoting a greater sense of responsibility both among politicians and in the public administration. A functioning democracy plays a key role in the fight against corruption and poverty. The political parties have a central role to play here.

Some donor countries have had schemes for supporting political parties in developing countries for several years. As part of its governance initiative, the Government will in the course of the summer establish a centre for support to democracy which will help to strengthen the organization and functioning of political parties. The Government has decided that this is a better arrangement than the previous proposal to link this with the Institute for Human Rights.

In this way Norwegian political parties will be able to contribute to democracy-building in developing countries. The parties will have to apply for funds for concrete projects. The emphasis will be on promoting multiparty systems and the holding of free elections. Training women politicians will be important. Much of the money should go to measures on which several parties are cooperating, both in Norway and in the partner countries. Priority will be given to measures in Norway’s main partner countries, but projects in other partner countries should also receive some support.

In devising this scheme, the Government has drawn on British and Dutch experience, and has had consultations with representatives of the Norwegian political parties and associated organizations. The political parties will also be involved in the preparation of guidelines for the new scheme.

Civil society

Civil society also has an important control function. The Government gives high priority to close cooperation with NGOs. Currently more assistance for development measures and humanitarian efforts is channelled through NGOs than through government-to-government assistance to our partner countries. This shows how much importance is attached to the role of these organizations, and how much responsibility they have.

We want diversity. It is often easier for Norwegian NGOs than for the Norwegian state to contribute to the development of organizations that can serve as "watchdogs" and correctives. But the organizations that provide social and other services must also recognize the necessity of coordinating their efforts in relation to the plans and priorities of the national authorities. Several of our partner countries have indicated that this is very important for their own planning and for enabling them to maintain an overview of available resources.

Fredskorpset and young people

A number of NGOs now also cooperate within the framework of Fredskorpset, the Norwegian Volunteer Service. The new Fredskorpset supports cooperation between organizations and institutions in Norway and in developing countries and also helps with recruitment and training. During the past year Fredskorpset has got well under way and at the end of last year was active in over 50 countries.

The vision underlying Fredskorpset is the transfer of competence and mutual cooperation to promote development. Another objective is to create agents of change, both at home and abroad, and several volunteers from developing countries are currently in Norway. In this connection young people are a group that deserves to play a greater role and that should be given more opportunities to become involved.

We therefore intend to do two things.

Firstly, the Government will propose setting up a separate youth programme under the leadership of Fredskorpset in the government budget for 2003. This programme will support the many youth exchange programmes that are being run by various NGOs. The youth programme under Fredskorpset will give the young people thorough training before they travel abroad and proper follow-up when they return. We hope these young people will be bearers of the kind of values and commitment that we need to fight poverty.

Secondly, in this anniversary year I want to set up a youth panel to be our own "watchdog". The panel will consist of representatives chosen by the youth organizations themselves. It will have an opportunity to critically assess our development policy and give its views and comments on what we do. I promise to take praise and blame equally seriously.

The next government initiative in our governance efforts will be to propose giving more priority to a wide range of free media. I will return to this later.

Private sector development

Private sector development and value creation are necessary if we are to achieve the goal of poverty eradication. The previous Bondevik Government launched a strategy for private sector development in developing countries in 1999. As we indicated in the budget last year, we have now stepped up the efforts to implement the strategy.

I have therefore initiated a systematic review of private sector development in all our main partner countries. We will identify bottlenecks and opportunities. We will also identify areas where Norwegian actors can contribute and where they have comparative advantages. And we will examine the potential for cooperation with other international actors.

I have invited the private sector to take part in these efforts, and our cooperation has been very constructive. Country reviews are being carried out for Bangladesh, Malawi, Mozambique, Sri Lanka, Tanzania and Uganda.

Cooperation and partnership between the authorities and the private sector are important. In order to enhance this cooperation, a separate secretariat with responsibility for development issues will be established in the Norwegian Confederation of Business and Industry before the summer. The secretariat will among other things serve as a resource base for the development assistance authorities and will promote partnership between the private sector, NGOs and the authorities.

The OECD countries are in the process of untying their aid to the least developed countries, which is opening up new markets for Norwegian companies.

Since 1 January all development assistance-funded projects of any size in the least developed countries are to be notified to the OECD. In order to ensure equal conditions of competition and open international competition, the Government is seeking to achieve agreement in the OECD on common procurement procedures. In Norway’s view, the tender documents should stipulate environmental and labour standards and should allow for factors such as transfers of competence and maintenance.

Trade is an important precondition for private sector development. As from 1 July all goods from the least developed countries will have duty- and quota-free access to the Norwegian market. We are now actively cooperating with Norwegian importers and other companies to identify products that satisfy our standards of quality and can therefore be sold in the Norwegian market.

Better market access is also one of the main demands being put forward by the developing countries in the new round of negotiations in the WTO. The Government is giving priority to the efforts to improve market access for goods from countries other than the least developed ones. It is important, however, to maintain the focus on the least developed countries as regards market access and technical assistance in connection with their participation in the WTO negotiations.

Agriculture is a crucial element of private sector development in poor countries. Most of the world’s poor live in rural areas. In spite of this, the proportion of Norwegian and international assistance for the development of the agricultural sector has declined in recent years.

The Government will seek to reverse this trend. An advisory group for assistance to agricultural development has been established and is to submit recommendations for concrete measures by September this year. The Government will revert to this later.

Review of partner countries

In connection with the supplementary budget proposition the Government announced that it would come back with a review of Norway’s partner countries.

The most immediate concern is our cooperation with Zimbabwe. It is important to step up the international pressure against President Mugabe and his government. The aim is to get the authorities to respect human rights and democratic rules, stop the political violence and work for national reconciliation. It has therefore been decided that Norway will join in the international sanctions against President Mugabe and his close supporters.

Cooperation with the authorities in Zimbabwe was suspended in 2001. All the suspended development cooperation agreements will now be terminated. However, development cooperation through non-governmental channels will be maintained. The aim is to promote democratic development, enhance respect for human rights, defend freedom of information and the press, promote national reconciliation and alleviate the humanitarian crisis. In order to ensure that there are sufficient resources for such measures, the Government will not propose that Zimbabwe should be deleted from the list of other partner countries.

The Government has signalled that the situation in Zambia will be examined more closely. Even though election observers pointed out serious deficiencies in the elections in December 2001, the new president has managed in a short space of time to distance himself from the government he took over from, despite the fact that he belongs to the same political party. The new government has also sent out positive signals as regards the fight against corruption and more active efforts to reduce poverty.

The Government now proposes that Zambia should retain its status as a main partner country. However, we must follow the situation in the country very closely to determine whether there is a basis for continuing to give Zambia high priority in our development cooperation.

State-to-state assistance to Ethiopia and Eritrea was suspended in 2000 because of the renewed hostilities between Ethiopia and Eritrea in 1999. Both because of the conflict with Eritrea and because of the internal situation in the country, which is characterized by lack of respect for democracy and human rights, the Storting decided that Ethiopia should lose its status as main partner country.

So far the peace process has gone better than many people expected. We hope the progress that has been made will eventually make it possible to restore Ethiopia’s status as main partner country. This is our aim. At this point, however, it is too early to tell. A number of difficult issues have yet to be resolved in the peace process. The border demarcation issue alone, which requires the presence of UN peacekeeping forces, is not expected to be settled until 2004. Ethiopia’s relations with Eritrea will also be considered in this context.

Therefore, for this reason, I cannot recommend that Ethiopia’s status should be upgraded to that of main partner country at the present time.

For many years Norway has had an extensive NGO presence in Mali, and we have also provided aid through multilateral organizations. Mali fulfils many of the criteria for being a main partner country, particularly in terms of its willingness to carry out reforms. It is drawing up a strategy for combating poverty, and democratic elections were held in April. We are following these developments with great interest.

The reform process in Mali is, however, still at an early stage. How the ongoing presidential election will affect the situation in the country remains to be seen. If the progress continues, we will come back to the question of whether Mali should be given main partner country status in due course. Until then I would recommend that the broad cooperation between the NGOs, the research communities and the UN system should be continued.

As regards the category other partner countries, the Government has announced that it will take a closer look at the situation in both Madagascar and Rwanda.

Norway has had close ties to Madagascar for more than an century, through both missionary work and development cooperation. If we are to intensify our development cooperation with Madagascar, the country will have to have a government that pursues democratic policies, safeguards human rights and combats corruption.

Unfortunately, Madagascar has not made much progress in this area. The presidential elections in December last year could have remedied this, but so far the outcome is unclear. The country’s economy is suffering severely, and there is there a growing need for humanitarian assistance from abroad. The agreement recently concluded in Dakar between the presidential candidates was a step in the right direction. The situation is currently very tense after the supreme court of the country after a new counting of the votes declared a winner.

The Government will follow the situation closely. Norway is prepared to support the people of Madagascar in this difficult situation. On this background it is difficult to make a recommendation as to whether Madagascar should be given the status of other partner country.

The situation in Rwanda continues to be difficult. The trials after the genocide in 1994 continue to be a major problem for the country. The plan is that elections will be held once the constitution is in place, sometime towards the end of 2002. The human rights situation is still very poor. The Government for these reasons does not consider that there is a basis for including Rwanda in the category other partner countries.

As regards Niger, Bhutan and Mongolia, nothing has happened that would affect the Government’s decision to recommend that these countries should not be included in the category other partner countries.

In the current budget year, we do not have any main partner countries in Central America. There is no reason to change this for the time being, despite the fact that the new governments in Nicaragua and Honduras have given positive signals and show willingness to combat corruption. Several of the countries in the region are at a critical stage in the democratization process, and it may be advisable to support those that are making progress. In the light of this, the Government will consider increasing regional assistance to Central America when drawing up next year’s budget.

Peace and development

Yet another dramatic year is behind us. A number of countries have been riven by war and conflict.

Peace and development are inextricably linked. Investment in peace is investment in development and poverty reduction. Through peace-building development assistance measures, we will promote viable political and administrative structures, democracy and respect for human rights. We will contribute to security, reconciliation and the non-violent resolution of conflicts. We will seek to ensure that peace-building is integrated into national poverty-reduction strategies in conflict areas.

The responsibility for building peace lies with the parties involved. But the international community can help by prevention and by building competence, capacity and institutions, and by supporting processes that promote conflict resolution. Development cooperation plays a key role in this respect.

We strongly support the UN’s conflict-management and peace-building efforts. We will help to develop and strengthen a common international approach to peace-building under the leadership of the UN. But Norwegian support can also be channelled bilaterally or through other organizations.

Norway is still heavily committed in Sudan, the Middle East and Sri Lanka. We have also systematized our peace-building efforts in West Africa and in the Great Lakes region. Moreover, Norway holds the chairmanship of the Afghanistan Support Group this year.

Afghanistan quickly became the focus of world attention after the terrorist attacks on the USA on 11 September last year. The country is deeply marked by years of drought and more than two decades of fighting. The infrastructure has been destroyed, human resources have been depleted, and social institutions have disintegrated.

Norway’s chairmanship of the Support Group gives us a good opportunity to play an active role in the international coordination of assistance to the country and in the dialogue influencing political developments. In a situation that has become even more precarious since the earthquakes just before Easter, there is an acute need both for humanitarian aid and for support for security measures, reconstruction and long-term development measures.

The new allocations for transitional aid are an important means of financing Norwegian assistance for reconstruction in Afghanistan. In 2002 Norway intends to allocate approximately NOK 350 million in support to Afghanistan.

Transitional aid and assistance for peace-building are important, but also involve a great deal of risk. We have seen this not least in the Palestinian territories, where institutions and development projects funded through Norwegian and international aid have been bombed and destroyed.

In the current crisis, the regular development cooperation with the Palestinian authorities has had to be adapted to the situation. Parts of the long-term development programme have been delayed, while our support for short-term projects and emergency relief has been increased.

Unfortunately, there is little to indicate that the economic and social situation in the Palestinian territories will allow us to go back to our original plans for development cooperation in the near future. We have therefore begun working on a new strategy for Norwegian assistance to the Palestinians.

In Angola, Jonas Savimbi’s death has led to a political situation that indicates that the country may be able to end 40 years of civil war. Peace-building will be an important task. Recent developments may entail a change in the limitations on assistance to Angola that the Government envisaged in the budget proposition. The Government will revert to this matter in the budget proposal for 2003.

Norway’s support for peace-building and development will be dealt with in more detail in next year’s budget.

Important international conferences

The Government’s Action Plan for Combating Poverty provides a firm basis for a targeted and coherent development cooperation policy and for Norwegian participation in international forums. The Conference on Financing for Development has provided a good basis for the important summit meetings that will soon be held.

The UN will hold its Special Session on Children at the beginning of May. The Special Session is a milestone in international efforts to enhance children’s rights and welfare. For Norway it is important that the Special Session helps to train a clear focus on children’s fundamental right to health, education, development, protection and participation in processes and decisions that affect them.

The World Summit on Sustainable Development will take place in Johannesburg, after the summer’s Food Summit in Rome, where Norway will focus on the right to food.

Ten years have passed since the Rio Summit. The main message from Rio was that the world’s people – both rich and poor – are inextricably linked together in a single community. But now we need action-oriented, binding results. And the UN’s role in efforts to promote sustainable development must be strengthened.

Many of the world’s poor are directly dependent on natural resources and ecological systems to meet their needs. It is the poorest who will suffer most from both local and global environmental changes. The consequences of climate change will be greatest for the poorest countries, which have the fewest resources for adapting to these changes. At the same time these countries have only contributed to these problems to a small degree. Norway and other rich countries therefore have a moral responsibility both for reducing their own carbon dioxide emissions and for alleviating the consequences.

When we go to Johannesburg, we will contribute to a new momentum for sustainable development. We will confirm the need for strong international institutions, in both the development and the environmental field, with clear commitments. We will continue to work for good national governance, to encourage other rich countries to be consistent in their policies for combating poverty, and to persuade these countries of the need for increasing assistance to the poorest if we are to achieve our goal.

Conclusion

A great deal of progress has been made in the 50 years in which Norway has participated in international development cooperation. In the past 20 years alone, the world population has increased by 1.6 billion, but according to World Bank figures, there are fewer people living in absolute poverty today than there were 20 years ago – 200 million fewer to be exact. That is a good result. Nonetheless, at the beginning of a new century the international community is facing formidable challenges.

We must do what we can to promote lasting economic and democratic development. This is essential for strengthening the developing countries in their fight against poverty and for development.

Development cannot be achieved from without. Development is primarily the result of a country’s own efforts, based on its own premises. There is broad international agreement on this, among both rich and poor countries. But there is also broad agreement on something else: that we in the rich part of the world also bear the bulk of the responsibility. We must be willing to cancel debt and eliminate barriers to trade. We must provide a considerable share of the financing that is needed if the poor are to have a decent life. Development is about expanding people’s freedom, people’s choices. Are the poor also to have an opportunity to choose a different life? Or are they always to be constrained by the straitjacket of poverty?

If there is one thing we do not lack in our part of the world, it is choices. But some choices are more important than others. We have a choice between helping to give people in poor countries freedom and choices, or not doing so. We can be part of the problem, or part of the solution. I am confident that this chamber will continue to make the right choice in this vital issue.