Speech by Mr Peter Varghese AO, on partnering locally for effective, sustainable development, 2 July 2021.

Let me as Chancellor add my welcome to all the participants in this conference.

I, too, would like to acknowledge the Traditional Owners and their custodianship of the lands on which we are meeting.

And I pay my respects to their ancestors and their descendants – as we walk together on the path to Reconciliation.

The University of Queensland is honoured to host this conference. We are anchored in Australia but we also see ourselves as a university committed to helping solve global problems. And we want to do more to contribute to understanding and helping solve development challenges in our region and beyond.

Today I wish to speak less in my capacity as Chancellor and more from the perspective of someone who has toiled in the vineyard of international affairs for many decades.

Most of my work was not directly on development issues and I am no expert in this area. But as an Australian diplomat I did operate over a long period on the margins of Australia’s aid policy and development programs.

Like many on the periphery, I had some strong views.

And to be frank, my earlier views can be summarised in one word: sceptical.

I was sceptical about the historical achievements of global development efforts and aid programs.

I always knew that policy was driven by the best of intentions but thought that there was a large gap between intent and delivery.

However when I became Secretary of the Department of Foreign Affairs and Trade I had to revisit these assumptions and to think more deeply about both the conceptual underpinnings of development programs and the best way to deliver them. The trigger was the government’s 2013 decision, during my tenure as Secretary, to merge the operations of its foreign aid program, AusAID, into the Department.

It may not have been a Damascene conversion but I did come better to understand the very positive impact that our development programs had around the world – and particularly in our region.

It was also during this period, that I began to formulate my own views on the pre-conditions, or the ingredients, that drive success in achieving sustainable development.

In essence, I’ve come to the view that a nation’s capacity for sustainable development is dependent on three core factors.

First, you need the right policy settings to promote sustainable economic growth.

Second, you need leadership that acts in the national interest.

And third, you need stable and effective institutions.

So, today, I want to share my thoughts on why I see these three factors as the essential ingredients of sustainable development. They are by no means the only factors but if they are not in themselves sufficient conditions, they are certainly necessary conditions for successful development

I would also like to say a few words about partnership and the importance of our development programs being designed through a partnership with the other government and with local communities.

The first ingredient for sustainable development is that a nation must have policies that encourage economic activity and stimulate growth. There is no poverty reduction without economic growth. The nature and sustainability of that growth is however crucial.

And the right policies are heavily dependent on the local settings and circumstances.

For instance, there was a period – especially in the 1990s – when the so-called ‘Washington Consensus’ was regarded as the most effective method of stimulating a nation’s development.

The Washington Consensus was about how best to ensure market forces drove economic growth. It was an agenda which included deregulation, regulatory reform, trade liberalisation, and open investment.

These were powerful arguments and they are still relevant. But they tended to assume there was a single pathway to success. And this despite the fact that even at its peak, the Washington Consensus could not explain the performance of one of the most successful development stories in history: China which lifted more than half a billion of its citizens out of poverty.

China ’s policy settings certainly had some market elements but it was hardly a poster boy for the Washington Consensus. It gave a large role to the state to allocate resources and capital.

My point here is not that China’s model is superior or the way to go. It is that one size does not in fact fit all and that different settings require different policy approaches.

But, regardless of political systems or unique cultural attributes, the important thing is that the local policies settings are designed to promote sustainable economic growth.

After all, sustainable economic growth is the foundation for rising living standards for all.

It contributes to increased wealth, as well as improving education and health outcomes – and a better quality of life overall.

While there is no single formula on how to get there, there are a few key fundamental areas of policy consistency that are evident across nations that have successfully developed.

A developing nation needs policies that promote investment and an openness to trade.

You also need an effective, well-balanced regulatory system.

By that I mean the regulatory system needs to serve the public interest, the interests of the community – as opposed to the interests of companies or the ruling elite.

You also need policies that promote an expanding private sector, because private sector growth tends to be an efficient means of delivering job creation, the efficient allocation of resources and economic growth.

The important point here, though, is that developing nations cannot just follow a script that has been written elsewhere.

The most effective approach to driving economic growth involves developing policy approaches that complement the unique attributes of a nation – including its culture, political system, natural resources, human capital and position in the world.

The second essential ingredient is good Leadership.

This may sound a little prosaic, but it is borne out through history that nations that have successfully developed have had the good fortune of having strong and stable leadership.

Most significantly, their leaders have been able to consistently place the national interest first – above sectional or venal interests.

And good leaders, in my opinion, have another defining quality.

They are comfortable operating at a local, national and international level. They are both political and cultural navigators.

And they are particularly adept at understanding global trends – and translating these trends into a set of policies that are beneficial for their own nation.

Whatever your view of his politics, a leader like the late Lee Kuan Yew, for example, consistently made strategic policy decisions over three decades as Singapore’s Prime Minister that ensured the rapid development of the city-state.

Under his leadership, Singapore’s gross national product per capita increased from $1,240 in 1959 – to more than $18,000 by 1990. Yes, there is more to life than GDP per capita but there is also less to life with falling or stagnant GDP per capita.

Over those three decades, the unemployment rate in Singapore fell from 13.5% to 1.7%.

And life expectancy increased from 65 years to 74 years.

Leadership matters. Just look at the contrast between Singapore under Lee and Zimbabwe under Mugabe. This is not a political point, nor is it blind to the shortcomings of success stories. It is a statement of what works.

The third ingredient I want to mention is the role of institutions.

When I talk of institutions, I’m referring to the various bodies that underpin the rule of law; the independence of the judiciary; and the effectiveness of electoral systems – as well as the public service institutions that provide independent advice to government.

The strength of a nation’s institutions is closely correlated with national success throughout the world.

The strength and integrity of key institutions do not get nearly enough credit for the role they play in a society’s success.

The point about institutions is that they are painstakingly hard to build.

But they can be very quickly subverted, damaged or eroded.

There are many countries that once had strong institutions and then for one reason or another, those institutions have been weakened.

Most commonly, institutions are deliberately undermined by political leaders who resent the fact that these institutions have a degree of independence which might in some way obstruct their plans. Leaders who find checks and balances annoying.

But our institutions provide a bedrock of stability and accountability that’s essential for confidence and for attracting capital to invest in a nation’s economic development.

If you don't have strong institutions, it is very difficult to have sustained development or, indeed, to achieve any form of sustained progress.

With the right policy settings, leadership and strong institutions, sustainable development is within the grasp of most countries. Without them, no aid program can compensate for their absence.

I hope you don’t interpret that comment as a slight against the development sector – or the importance of the role that it performs.

Because it is also the case that well designed development programs can contribute to all three of the ingredients for success that I have described.

Indeed I believe development programs have an essential role to play in building local capacity in ways that contribute to good economic policies, the development of local leadership, and strong institutions.

I would like now to turn to the importance of partnership in development strategies.

In my experience, in order to make a meaningful and lasting contribution to capacity-building in a developing nation, you’ve got to be on the ground locally – and operating in a genuine partnership with that nation.

That partnership needs to reflect your partner’s local priorities.

And the implementation needs to be deeply rooted in the local culture, local conditions, and – especially – the local political context.

After 75 years of aid programs all over the world, I think we now have a broadly accepted view of the core principles that contribute to program effectiveness.

At a high-level, development programs should be:

  1. locally led and owned;
  2. they should involve partnerships that are genuinely inclusive;
  3. there should be transparency and accountability for progress by all involved; and,
  4. the program needs to be focussed on achieving specific results.

Let me now take off my hat as a former diplomat and put on my Chancellor hat.

The University of Queensland has a rich history of engaging across the Indo Pacific region – and contributing to exactly the kind of local capacity-building programs that I’ve just been describing.

There are a multitude of examples where UQ teams have contributed to building the capacity of locals to drive economic policy, develop local leadership; and strengthen institutions.

Some examples include:

  • Running workshops on governance, public policy and ethical leadership for mid-level public servants from Papua New Guinea.
  • Training government officials from a variety of South-East Asian nations in the theory and application of competition law, so that market regulation is properly balanced.
  • A management training program for the emerging leaders of the major fisheries agencies from Pacific nations.
  • And an executive leadership program for emerging female leaders in Bhutan, Pakistan and Mongolia.

While these programs are varied in their scope, they have consistently focussed on building the capacity of people to contribute to the sustainable development of their own local community – or their nation.

As a university, we’re very proud of that impact, but we intend to do more.

We have just recently released our first ever Global Development Impact Plan.

That Plan sets our ambition to become the “go-to” Australian institution for development expertise and impact – especially in our Indo Pacific region – in the years to come.

So, I hope that this conference provides a bit of a showcase of UQ’s wide-ranging development expertise.

And I hope it also demonstrates our desire to collaborate with our partners – in NGOs, Government agencies and other universities – on creating programs that truly leave a legacy of sustainable development.