During his long political career and subsequent charity work, former Prime Minister Tony Blair has been devoted to the cause of sustainable economic development. As British premier from 1997 to 2007, he not only placed a high priority on improving quality and access to education and health care but was also a leading global advocate for human rights and efforts to address climate change. Since leaving Downing Street, Mr. Blair has helped Palestinians prepare for statehood and worked to promote common understanding and respect among the world’s major religions. The Tony Blair Africa Governance Initiative helps leaders in such formerly strife-ridden nations as Rwanda, Sierra Leone, and Liberia tackle extreme poverty. In an interview with Douglas Beal, leader of The Boston Consulting Group’s economic development topic area, Mr. Blair discussed what leaders must do to better translate their nations’ wealth into well-being for their citizens and BCG’s newly launched Sustainable Economic Development Assessment (SEDA).
I'm delighted to be joined today by former British Prime Minister and patron of the Africa Governance Initiative, Tony Blair. We're here to talk about sustainable economic development. Welcome, Mr. Blair.
From your perspective, both as prime minister and from your work since leaving office, how do governments translate globalization into benefits for their citizens?
It's a huge challenge for them because often a lot of the short-term political pressures are against globalization or against the impact of it. Obviously, when you make your economy more open, in a sense you introduce greater competition, and that can make some people feel vulnerable. But actually it is essential for governments to try and translate the potential benefits of globalization into economic wealth and development for their citizens. So for any of these countries that are struggling, it's clear, on the basis of the evidence, that the more open they are and the more they're prepared to welcome quality foreign direct investment into their country, the better they will do. So really, the challenge is: How do you make sure that you access those pools of intellectual capital and financial capital in order to develop your country in a sustainable way?
Our assessment shows that some developing economies do much better at translating their growth into the improvement and well-being of their populations. Brazil, for example, does much better than the rest of the BRICs. Why do you think this is?
It's very obvious what they've done. From the 1990s onwards, first under [former Brazilian president, Fernando Henrique] Cardoso, then under Lula [former president Luiz Inacio Lula da Silva], and now continued by President Dilma [Rousseff], they've had a series of policies that have been designed to enhance the ability of business to function there effectively, to develop their economy. They have also had social programs that have distributed the benefits of that. Now, I think Brazil has got a whole new level of attainment to achieve now in areas like education, continued development of infrastructure, and so on. But when you look at those countries that have succeeded and those that haven't, what I always say to people is, “Actually the lessons are reasonably clear. The hard thing nowadays is not working out what you should do, because I think there's a lot of clear, empirical evidence round the world as to what governments should do to make their countries grow and develop. The tough thing is how to do it."
Well, fundamentally, what do you think governments need to do, then, to translate wealth into the well-being of their populations?
I think there are basically three really important things for governments to do. The first is to create a climate for the development of their own business and for the encouragement of foreign and direct investment that has clear predictable rules at the heart of it, processes that allow things to be moved quickly, and a situation where you attract the right type of quality foreign investment into your country. That's the first thing. The second thing is linked to that: I think rule of law is fantastically important. That has the component both of having systems where you have some faith that the courts and judiciary operate in a proper way and also, frankly, that there's basic security for the citizens—because this is also an important component for countries to grow. The third element nowadays, I think, is the delivery of essential infrastructure. If you look at African countries today, if you've got power, if you've got electricity, everything else becomes achievable.
The reason I'm so focused today on the capacity of governments to deliver and govern effectively is that I think that's the challenge. You know, with the governments I'm looking at around the world—and by the way, this is true even of developed countries—the problem is to get the right skill set, the right capacity to deliver programs of change. Because you can identify what changes you should make. Doing them is tough, and doing them requires that capacity. And that's often where the gap is.
One of the countries that many people might be surprised to see has done very, very well in improving the levels of well-being is Rwanda. Do you have any insights as to what Rwanda is doing and what Rwanda is doing well?
Rwanda is a classic example of a government that has created a strong skill set now at the center. For example, they took all the different bodies doing inward investment and put them into one body. That's now really creating the opportunity for them to access high-quality capital from abroad. This is how you get it done. You do the basic stuff, and you'll succeed. My passion about governance comes from my own experience as prime minister of a developed country. By the end of it, I really had a very, very clear view of the need to make fundamental change and reform. In order to do that, you required a quite different type of skill set from the traditional British civil service. The problem's different in a lot of these African countries. They just have no capacity at all. But when they build that capacity, they should build it in a new way.
One of the reasons we developed our assessment is to provide a tool for leaders to make decisions and to make development strategies. I know you're on the record for being a proponent of having evidence-based policymaking. As a leader, how do you get this done?
I think this is why your work in this area is so important. I think that you are absolutely right to identify this question of evidence-based policymaking. I think with education and health policy, if I were in an emerging-market country today…Sometimes people will say to me, “When are we going to get a system like yours in the West?” And I say, “Don't ask yourself that question. Actually, study our legacy—the pluses and the minuses. And then say, 'What is the type of system we would create today if we didn't have all that legacy?'” My bet is that in health care and education, and in many of the ways the government delivers services, we would be doing it totally differently—because of technology, because of what we've learned about what works, and because of the different skill set you need.
So I think regarding this evidence-based policymaking, the good news for government is that you've got a wealth of evidence around as to what works. The challenge is overcoming all the interests trying to tell you this is a bad idea. This is very hard because I know this from my own experience. But I learned a lot about how you do it. You've got to make your system move. Bureaucracies are the same the world over, right? And their absolute key characteristic in my view is that they are a conspiracy for inertia. The thing about a bureaucracy is that it will manage a system, and sometimes manage it extremely well. But if you want it to change the system, it's hopeless.
So when you're coming in as a leader, the thing that's so hard for leaders coming in—and I think it's particularly true now—is that all those great things that made you such an effective person to win office unfortunately don't necessarily help you at all in executing the responsibilities of that office well. So to you as a leader—and this is something I talk about a lot with leaders who've just come into power—I say, “Of all those things you learn as a campaigner, remember them, because in terms of communication, they can be very valuable. In everything else, forget it. You're in a totally new ballgame now. The rules are different. The skill set's different. The way you've got to focus your mind and your energy is completely different. So if you carry on campaigning, you'll find that two, three years into your term, as time passes quickly, people will say you've done nothing.”
Let’s turn to the role of aid from other countries and helping them to do that. If you look at Africa, there seem to be a range of countries that are on the brink of reform. And there's a lot of discussion about the type of aid and what's tied to that aid from various countries. What do you think the role of governments and other organizations should be in supporting those countries in their reforms?
I would put a lot more emphasis into capacity building. But do it in a different way. Capacity building got a bad name for itself because it was kind of like doing training days for people. I think the aid that we put into capacity building has to be better directed. That's my view. Now, I've seen projects, for example, health care in places like Nigeria, where the Department of International Development in the U.K. has spent money really well and where there have been big reductions in deaths from malaria and so on. They've done a few very specific, discrete projects that worked well. And then, when we first came to Rwanda, the finance minister used to tell me he spent 70 percent of his time negotiating with the donors. I think getting some sort of logic into the way that donors work is very important. Now, I'm very pro-aid. But I'm skeptical about how a lot of aid is being used. So I think we should be adjusting our policy quite significantly.
Thank you very much, Mr. Blair.