Amsterdam
13 March 2002

Conference on Innovation for Sustainability - Technology Meets the Market

It is a great pleasure for me to be here today to speak about an issue which has been central to my thinking and my work.

It formed, of course, the core of the work behind "Our Common Future", the Report of the World Commission on Environment and Development. And it is central to the work I now do as Director-General of the World Health Organization.

The approach of the World Commission on Environment and Development was to link firm evidence with a clarion call for action. Our findings helped change the course of development because the arguments succeeded in reaching Finance Ministers and Heads of State, not just Environment Ministers, Scientists and the NGO Community.

One of the impressive initiatives that I understand was inspired by the Commission's work is the Economy, Ecology, Technology Programme. It is a good example of the synergy that "Our Common Future" called for to harness the powers of society for a better future. Synergy between public and private sectors. Between and across government ministries, and between industry and academia.

Let me recall some key experiences before "Our Common Future".

Twenty-five years ago, I was called at midnight from a wedding dinner and informed that there was a blow-out of a well at the Ekofisk field in the North Sea. As the Environment Minister, I was less shocked about such an accident than many of my colleagues. I knew the oil drilling in the North Sea was pioneering work. I had been arguing that risks were real and that oil spill equipment must be put in place.

Luckily, after an intense week with little time for sleep and food, the well was capped, and the spill turned out to do less environmental damage than we had feared.

The Ekofisk blow-out was a turning point for the Norwegian people as well as for its politicians. For many, this was the first time they fully realized that environmental questions were not a peripheral issue for conservationists, but a policy area right at the centre of the country’s economic development. Investment in the environment became an integral part of investment for the nation’s future.

I understood that awareness-raising, whether through dramatic eye-openers like the Ekofisk accident, or the steady work of information and discussion, is a pre-requisite for action in any important field. One needs a solid and informed public debate which creates a real political momentum for action. This process is primarily driven by politicians, civil society and the media.

Major events that triggered attention about the environment were Rachel Carson’s "Silent Spring" and later the Report from the Club of Rome. This not only raised awareness but also inspired a profound ethical debate.

At first, however, this debate was mainly limited to those with special interests. The issue did not move into central decision making. What was lacking was a convincing, undeniable link to economics.

As a young environment minister, I realized that you cannot make real changes in society unless the economic dimension of an issue is fully understood. This is what took the environment from being a cause for the convinced and marginal green to becoming an issue for real societal attention by major players.

It was necessary for the scientific facts to come in. The true costs of environmental degradation were analysed and spelled out in figures. Then, gradually, governments and parliaments started to establish incentives to change behavioural patterns among industry and consumers.

Indeed, with an increasingly strong and robust economic argument, it was possible to make sense both of government investment in the environment, and commercial investment in the development of cleaner technologies. Finance Ministers and Heads of State got involved in reflecting on the developmental consequences of environmental policies. We moved from a situation of market failure to one in which the market was made to serve global interests: sustainable development has gradually come to be seen as a global public good. The EET programme is an example of this.

Another key element behind Our Common Future was to put people at the centre of the process. As long as we talked about "the environment" as something separate from our daily existence, it was difficult for many to see the crucial importance of the issue to their daily lives. Many industry executives and politicians looked at environmentalists as people who wanted to preserve nature as a museum - separate from and with higher priority than the people who live in it.

Some developing countries saw it as attempt to keep them down. To them, sustainability was just a way to say that since the rich countries had already filled up the waste basket, there was no room for them to develop an industrial base for their development.

Our Common Future succeeded because it was able to convince most people that sustainable development was about putting people first. Sustainability is about making lives better for people. It is about reducing poverty and maintaining prosperity. In other words, economic growth and sustainable development can go hand in hand.

This thinking was new and sensational when it was presented 15 years ago. Since then, it has become integrated into the mainstream thinking about global issues.

There were other trends emerging as well. During the first half of the 1990s, free-market ideologies, coupled with systematic efforts to "roll back" the power of governments, were extolled as the way to go in the early part of the decade. However, by the end of the decade, good and robust governance, effective and democratic institutions, and enlightened stewardship by the State, were seen as vital for equitable development.

More and better markets do require more and better government. The people of some OECD nations understood that the forces of globalization can be harnessed for the benefit of the poorest billions. Their governments had the political support they needed for substantive levels of development spending, and a few surpassed the 0.7% GDP target. Domestic economic pressures and questions about the efficacy of such assistance have resulted in a relative decline in development assistance in many donor countries, however.

As we reached 2000, the world's leaders were ready to agree the far reaching "millennium commitments", building on the agreements about rights, goals, standards and accountability that had been negotiated throughout the decade. G8 leaders were paying more attention to global issues in their annual meetings. So, too, was the private sector.

At the same time, many nongovernmental organizations broadened their attention from service-provision to campaigning for equity and social justice. Médécins Sans Frontières, for example, has become an important influence for global health equity.

By the time I took up my current position at the World Health Organization in 1998, several people had already begun to question the old dogmas on health and development.

During the 1980s, investments in health were increasingly seen by economists as an add-on that developing countries could only afford after having reached a middle-income level. I was convinced this was wrong: you need a two-pillar approach. A healthy population is a pre-requisite for growth as much as a result of it.

In 1999, I asked leading economists and health experts from around the world, to come together and consider the links between health and economic development. I wanted them to change old dogmas.

I asked Professor Jeffrey Sachs from Harvard University to set up a Commission on Macroeconomics and Health. With him, he had 17 of the world's best economists and public health experts. The Commission included a wide range of backgrounds and experiences, from former Indian Finance Minister and reformer Madhmohan Singh, to the Nobel Prize winning doctor Harold Varmus. They drew on a network of several hundred scientists who produced an impressive amount of supporting literature.

On 20 December last year, in London, Jeffrey Sachs presented me with the Report of the Commission on Macroeconomics and Health. It shows, quite simply, how disease is a drain on development. It shows that investments in health can be a concrete input into economic development. It goes further, stating that improving people's health may be the single most important determinant of development in Africa.

This Report is a turning point. Health used to be the poor cousin in the family of development. It was neglected throughout the past two decades while the focus was on building infrastructure and creating favourable investment climates. The world has slowly seen the importance of education for development, but education alone cannot ensure sustainable development. Now, health should be given its rightfully central role.

We have known for years that people who are poor are more likely to get sick. But we now know much more about how ill health also creates and perpetuates poverty. Disease triggers a vicious cycle which hampers economic and social development and contributes to unsustainable resource depletion and environmental degradation.

The Commission has shown that health gains trigger economic growth and, if the benefits of that growth are equitably distributed - this can lead to poverty reduction.

Societies whose health status is good are societies where people are able to learn to their full potential, earn their living and nurture others - be they children, older people or those with disabilities. Health is no longer the domain only of Health Ministers. It must be seen in a wider social and political context.

Recent evidence shows how disease undermines economic progress. Consider the burden of HIV infection. HIV prevalence rates of 10-15% - which are no longer uncommon - can translate into a reduction in growth rate of GDP per capita of up to 1% per year. TB, which is exacerbated by HIV, takes an economic toll equivalent to $12 billion dollars from the incomes of poor communities.

The World Bank has shown that the economic costs to society resulting from tobacco-related disease by far outstrips the gains from tobacco production, sales and taxes, even in large tobacco producing countries like Zimbabwe and Indonesia.

As in Europe at the end of the 19^th and beginning of the 20^th century, we have seen that developing countries which invest relatively more, and well, in their peoples health are likely to achieve higher economic growth.

In East Asia, for example, life expectancy increased by over 18 years in the two decades that preceded the most dramatic economic take-off in history.

A recent analysis for the Asian Development Bank concluded that fully one-third of the phenomenal Asian economic growth between 1965 and 1997 resulted from investment in people’s health.

Today, more and more economists and development specialists recognize that if public funds are carefully spent and lead to improvements in people's health, they represent an investment in any country’s prime asset: its people.

The new economic analysis is starting to yield political consequences.

One is the growing recognition that our world is turning into a two speed global society: perhaps a billion people are enjoying unprecedented prosperity and advantage, while nearly half are living on less than $ 2 per day and have extremely limited prospects for prosperity. This is the unacceptable - but not inevitable - consequence of globalization.

Another is the realization that this perpetuation of poverty and deprivation creates an insecure world for us all. Ill health undermines human security.

Illness does not respect national boundaries. The patterns of globalization that promote increasing inequities will encourage the spread of illnesses - particularly those which are associated with extreme poverty. In the modern world, bacteria and viruses travel almost as fast as money. With globalization, a single microbial sea washes all of humankind. There are no health sanctuaries.

The separation between domestic and international health problems is no longer useful, as over two million people cross international borders every single day. A tenth of humanity each year.

It is not only the infectious diseases that spread with globalization. Changes in lifestyle and diet prompt an increase in heart disease, diabetes and cancer. More than anything, tobacco is sweeping the globe as it is criss-crossed by market forces. Only weeks after the old socialist economies in Europe and Asia opened up to western goods and capital, camels and cowboys began to appear on buildings and billboards.

We can clearly see the powerful relationships between health, environment, economics and society.

Global warming, air and water pollution, biological and chemical pollutants in the food chain: all have an impact on health.

Environment and health are both inextricably linked to development. "Poverty is the greatest polluter", said Indira Ghandi. She did not blame the poor. She pointed to the obvious: As long as people are poor the immediate issue is survival. Caring for the future is a luxury.

So poverty links health and environmental issues together. We are moving towards a comprehensive view of development, focused on poverty reduction, participatory democracy and empowering of all groups in society.

As we look to the future, we are presented with two sharply different scenarios. Which of them we will turn into reality depends on the extent to which we can secure the political backing for firm global action.

The first scenario is truly horrendous. The incurable illness caused by HIV has already infected 36 million people in our world, and could still bring about devastation that far exceeds our most pessimistic expectations. The number of people infected with HIV doubles every year in Russia. HIV infection has progressed from a disease experienced mostly by the country’s intravenous drug-users to joining tuberculosis as one of the country's largest public health threats.

India could well be the scene of the next explosive increase in HIV infections: the pessimistic projection is that it will supersede what we have experienced in Africa over the past decade. China is also under threat of a major epidemic.

Climate change as a result of global warming is already breaking down century-old borders for malaria, spreading the disease into areas which have been free of the disease for decades or may never before have been under threat. Increasingly, malaria parasites are becoming resistant to commonly used and inexpensive medications.

Climate change may also be linked to the recent increase in violent weather patterns with a growing number of natural disasters bringing death and destruction in their wake.

Air pollution will be a growing health hazard. WHO estimates that close to half a million people are dying prematurely world-wide from exposure to air pollution, much of it linked to increased car density. In many Asian cities there has been an explosive rate of growth of cars, by as much as 600% during the last two decades.

The combination of pollution, lack of sanitation, the growing migration from the countryside to the cities and extreme poverty, have made many of the cities in the developing world extremely dangerous to the health of those who live there.

One of my staff members who until recently lived in Manila - one of the great urban centres of Asia - saw both his children infected by TB and some of their neighbourhood children die from dengue fever. He didn’t live in a slum. These diseases had already jumped the barbed-wire fences protecting the neighbourhoods of manicured lawns and swimming pools.

In addition, developing countries must deal with the double burden caused by increasing levels of noncommunicable diseases. This is brought about by rapid changes in lifestyle and eating patterns. Urbanizing developing countries will increasingly have to cope with the cost of treating cancers, diabetes and heart disease, as well as a growth in mental illness.

Tobacco, is of course, the cause of most heart and cancer-related diseases. If the growth in tobacco use goes unchecked, the numbers of deaths related to its use will nearly triple, from four million each year today, to 10 million each year in thirty years. Practically the entire growth in tobacco-related mortality, more than 70% of these ten million deaths, will take place in developing countries.

If we do not act positively, with determination and resources, the gap between the three billion who live on less than $ 2 per day and the rest of us will increase. It will also threaten the economic development of large parts of the world – and in doing so affecting both the prosperity and the political and military stability of our whole world.

There is a real alternative. The second scenario is one where the mortality of the main infectious diseases, such as malaria, tuberculosis and HIV/AIDS is drastically reduced. Where issues such as global warming and serious pollution are dealt with through forceful international action. And where global negatives, such as the impact of tobacco sales and marketing can be dealt with through internationally negotiated regulation.

Such a scenario calls for powerful political leadership, and democratic action by all. This means joint working by governments, civil society and the private sector. There is no other way.

There are signs that we are moving in this direction. The political commitment is increasing. Heads of State recognize that good health is essential - to fuel the engine of development, to unleash the forces of economic development and to permit the reduction of poverty.

We know how to reduce suffering in poor communities. The Commission on Macroeconomics and Health have provided us with a road-map.

Quite simply, if proven interventions are taken to scale - and by that I mean to a global scale - we can contribute to real reduction in poverty and sow the seed of longer-term prosperity and security.

Investing in health will produce enormous benefits. With an annual investment of $66 billion by 2007, we will be able to save eight million lives each year. By 2015, such investments will bring a six-fold return in economic growth.

The Commission is arguing for a comprehensive, global approach to health with concrete goals and specific time frames. It wants to see the forces of globalization harnessed to reduce suffering and to promote well-being. The proposed investments are well-tried interventions that are known to work. Their impact can be measured - in terms of reducing the disease burden and improving health system performance. The emphasis, throughout, is on results: on investing money where it makes a difference.

The Commission's Report is the first detailed costing of the resources needed to reach some of the key goals set in the Millennium Declaration. I believe this needs to be pursued in other areas, if we are to succeed.

While the Commissioners were hard at work, many of the Heads of State who attended the Millennium Summit in New York argued that the goals cannot be reached without a fundamental change in the way we all work together. They were supported by many others committed to global change - notably Kofi Annan, Bono and Bill Gates.

They sought ways to give development a higher profile, and to harness the forces of globalization so that they work for equitable human outcomes. This is a radical change, and it is not surprising that they have been challenged by many sceptics to show that they mean what they say.

We can point to a range of alliances that bring together public and private, north and south, young and old, with the explicit intention of making a real difference. Within the alliances, the individual parties pursue agreed goals using common strategies. They do their best not to waste time or energy in unhelpful conflict.

The Global Polio Eradication Initiative is in the last stages of its epic struggle, achieving positive results despite the continuing difficulties posed by conflict and strife.

The Tobacco Free Initiative has triggered thousands of actions within countries, as well as globally, to tackle an unprecedented health threat which will kill more than 10 million people a year by the late 2020s. Perhaps its most important legacy will be the Framework Convention on Tobacco Control: the global negotiating process for this novel instrument is entering its fourth phase shortly.

Governments have moved fast, trying to develop efficient mechanisms to move funds rapidly to where they are needed - mechanisms that are not undermined by bureaucratic battles. They are encouraging independent monitoring of development action, using global standards, and the prompt reporting of results. At the same time, they do not want to create new and overlapping institutions.

WHO and other international agencies have over the past three years played a new and trail-blazing role in facilitating and enabling private sector engagement in new areas.

First of all, we have helped define new markets where there originally was none. Take vaccines. Over the past ten years, we saw a shrinking interest in production of life-saving vaccines, because countries who needed these vaccines were unable to pay for them, no matter how low the price was. Large pharmaceutical companies focused their production on vaccines that were too expensive for children in many developing countries.

The Global Alliance on Vaccines and Immunization has changed this. Brought to life by a large grant from the Gates Foundation and sustained by bilateral donor money, not the least from the Netherlands, GAVI has responded to 36 countries with support for immunization programmes, committing more than US$600 million. In the process it has re-invigorated the vaccines market and also brought prices for new vaccines down to a level where children in developing countries can benefit from them. The Global TB Drug Facility has had similar effect on the market for TB medicines.

Roll Back Malaria is an example of another international partnership that is opening up a new market, making the aim of a mosquito net for every bed in Africa a realistic target and creating markets for new combination treatments for malaria.

The work the UN system is doing with the pharmaceutical industry - both the research-based industry and the generic - is helping to redefine the market structure for pharmaceuticals. While companies earlier maintained high prices globally and therefore largely ignored the developing countries in their market strategies, the ongoing dialogue about differential pricing is carrying a promise to open new markets. The fact that there is a new acceptance of spending development assistance money on treatment as well as on prevention and capital expenditures in health has also contributed to new market opportunities.

WHO and its partners are also helping to bring new technologies to the market. Financing structures, such as the Medicines for Malaria Venture and the Global Alliance for TB Drug Development, have reduced the risks involved in developing new medicines for developing country markets.

Through costings of global needs and measurements of health system performance and other health variables, such as research capacity, disability, etc. WHO is increasing the order and predictability in the field of health. This benefits private entities which need information for market assessments.

All this shows that increasing private-sector engagement in issues of global importance is not a question of "leaving it to the market", as some have long argued. It takes close public-private collaboration, with strong public sector stewardship.

Governments are setting regulatory parameters, such as in the WTO negotiations on intellectual property rights that recently took place in Doha. They stimulate market conditions and provide incentives, they fund the purchases of global public goods, ensuring as far as possible that those who need medicines and vaccines, can get them.

This illustrates how we need to tap the strengths of both the public and private sector as we seek sustainable equitable solutions. This kind of public-private collaboration is also important when we look to the future challenges. I am referring to the implications of knowledge resulting from new advances in genomics and other areas of biotechnology.

The basic knowledge on the human genome is, of course already in the public domain.

Today, most biotechnology research is carried out in the developed world, and is primarily market-driven. It is inevitable therefore, if this pattern continues unchanged, that the knowledge and technology gap between developed and developing countries will widen, and that the health needs of poor nations will fail to get the attention they deserve.

Research performed in the developing countries is equally important to the future advancement of medicine and to the health of all people on our planet.

I see this as being as true in genomics as it is in the more established branches of science. Developing country researchers need to participate, and to be involved in the innovative aspects of biotechnology. There is much they can contribute, not only scientifically, but also socially and economically, from their own diverse cultural perspectives. Only by their participation can they eventually reap the full benefits biotechnology has to offer.

Ladies and Gentlemen,

What I have been talking about this evening is a fundamental break from "business as usual". This break includes a realization that governments can only do so much. The private sector and civil society must play a crucial role if we are to succeed.

The private sector’s role is crucial - also for its own future interest. Brusquely put: reducing poverty and ill health is good for business.

The private sector plays a central role in the economic and social fabric of any country - but often more so in developing countries which suffer from under-developed and under-resourced public sectors. A single company can have better distribution networks and communication capacities than the government in the country it works. Through its workforce, some companies can reach whole communities or sectors of society. From their presence in a large number of countries, many companies possess a set of experience and a perspective that no national government or public sector entity can match.

In this new age, being global means being local world-wide. Companies which show commitment to the countries and communities they work with find that their standing among people - ranging from Prime Ministers to their own work force - improves. So does productivity. In the long term, markets are increased.

Ten years have passed since the Rio Conference. In Johannesburg in August, we will assess the achievements from the past decade and set out an agenda for the years to come. I believe we know where we need to go.

It is a way where people stand at the heart of all we do. It is a way where partnerships play a key role.

And it is a way that will take considerable new investment in people's health and education to reduce poverty and make a real effort so that people everywhere can live safe, productive lives.

Thank you.