It is a privilege to open this first session. The acceleration of development and the eradication of poverty have been the enduring commitments of USAID throughout our more than 50-year history. And yet we stand today at a unique time, with unique opportunities.

In 2009, the Obama Administration elevated development as a core pillar of our national security in the first-ever Presidential Policy Directive on Global Development (the so-called PPD6). In his 2013 State of the Union Address, President Obama called for the United States to “join with our allies to eradicate … extreme poverty.” And in September of this year, the world will launch the Post-2015 Development Agenda with its commitment to “end poverty in all its forms by 2030.”

As the United States government’s lead development agency, USAID will play a central role in coordinating and implementing our nation’s efforts at combating extreme poverty. The Agency’s new mission statement states our ambitions in simple but powerful terms: We partner to end extreme poverty and promote resilient, democratic societies while advancing our security and prosperity.

In my brief remarks, I’m going to draw on a forthcoming policy document that will present our agency’s Vision for Ending Extreme Poverty. As my colleague Don Sillers will discuss later this morning, USAID embraces a multidimensional view of extreme poverty that encompasses deprivations not just in consumption but also in other social outcomes including knowledge, health and nutrition, and autonomy. Given my limited time, I’ll focus on consumption poverty, as measured by the World Bank’s $1.25-a-day line. I’m going to touch briefly on our theory of change, on why extreme poverty is an important priority for the Asia region, and on how USAID’s vision is likely to affect our operations.

To put it as succinctly as possible, USAID believes that progress on extreme poverty will depend on rapid and sustained inclusive economic growth, built on a foundation of participatory good governance and capable institutions. These concepts frame a theory of change that incorporates four inter-related challenges: achieving inclusive growth, proactively connecting the poor to the growth process, building resilience against shocks, and promoting participatory good governance. We see these challenges as highly contextualized. There is no one pathway out of poverty. And in each of these inter-related domains, it is local actors that will matter most in driving outcomes. It is the institutional legacy of our efforts, as much or more than the resources transferred, that will determine whether improvements are sustained. The concept of partnering is crucial to how we see our own contribution.

Inclusive growth will be crucial; it was the main driver of poverty reduction in all regions during the first Millennium Development Goals campaign, and it will be indispensable to placing the roughly one billion people who still live in extreme consumption poverty — below $1.25-a-day at 2005 international prices — on a pathway not just to $1.26 but to $2-, $5- and $10-a-day. This challenge will in some ways be harder than it was in the first Millennium Development Goals campaign, because the geography of global poverty has shifted. Growth will have to be rapid not just in China and India but, increasingly, in sub-Saharan Africa, where the productivity of agriculture remains low and where exports are even more dominated by primary commodities now than they were in 1990. And extreme poverty is increasingly concentrated in countries that confront a legacy of conflict and institutional fragility – as in the Ebola-affected countries of West Africa, where an unanticipated health disaster has brought development progress to a standstill.

Proactively connecting the poor will be important because most projections suggest that it will not be enough for the incomes of the poor simply to keep pace with economy-wide incomes, as they have tended to do since 1960. Growth will have to be more inclusive than this neutral benchmark if consumption poverty is to be eliminated by 2030. In our theory of change, connecting the poor to a transforming economy requires: expanding the access of the poor to information and market opportunities that enhance their economic productivity, including opportunities in global markets; improving the coverage and quality of universal public services that work together to break the inter-generational transmission of poverty, including education, health, water and sanitation, and power; and empowering the poor by protecting their assets from private and public predation and broadening their political voice.

Building resilience will be important because shocks to households, communities and economies can wipe out hard-fought gains and discourage risky but high-yielding innovation. In this context, global climate change poses a new and growing set of down-side risks for the extreme poor, both in rural areas where water scarcities will become more acute and in coastal areas that continue to urbanize rapidly and where rising sea levels confront stressed and vulnerable infrastructure. Social safety nets are going to be increasingly important; they have contributed substantially to reducing the depth of extreme poverty in Latin America and other regions and will play an increasingly prominent role as information technologies enhance the scope for effective targeting.

And finally, sustained progress will depend on improvements in governance. Governments that secure the safety of all citizens, implement growth-promoting policies through accountable public institutions, and expand the scope for political voice and participation throughout society will not only drive inclusive growth but also sustainably reduce extreme poverty in all its dimensions. Empowering women and girls is a cross-cutting priority in our theory of change, with powerful links to growth and inclusivity and tremendous potential for breaking the inter-generational transmission of poverty.

How relevant is USAID’s extreme poverty mission in Asia? The quick answer is: extremely relevant. East Asia and South Asia combined account for more than half (fifty-five percent) of global poverty at the $1.25-a-day line. But a more thoughtful answer might be: Just wait around – these poverty numbers are driven by high populations, not high poverty rates. Growth will be fast enough to reduce the remaining poverty to near zero well before 2030. The thoughtful answer has a lot to recommend it. Among countries with consumption surveys, Asia accounts for five of the top eight countries in the world in terms of the number of poor people but only one of the top 25 (Bangladesh, at forty percent) in terms of poverty rate. And at historical growth rates, the headcount ratio in East Asia is indeed projected to fall below one percent by 2025, bringing the total number of extreme poor below 10 million by 2030. South Asia’s headcount rate is projected to fall below one percent by 2030. This would represent a truly historic outcome.

Nonetheless this prospective outcome does not exempt USAID and development partners from grappling with extreme poverty in Asia. Three reasons come to mind. First, extrapolating high rates of growth into the future can be highly misleading. As Lant Pritchett and Lawrence Summers remind us in a recent paper, cleverly titled Asiaphoria Meets Regression to the Mean, history teaches that very rapid growth is rarely persistent, and that regression to the mean is the empirically most salient feature of economic growth. If growth falters, global experience suggests that the scope for sustainable reductions in extreme poverty will be limited. Second, 15 years is a long time, and the force with which the poor are pulled into the growth process will vary not only across countries but also within countries. Pockets of extreme poverty may therefore persist, whether by sub-national region or by other markers of exclusion. There may therefore be major opportunities to connect the poor more effectively to the growth process through the channels emphasized in our theory of change. Finally and maybe most fundamentally, a very large number of people are living not far above $1.25. These people are poor by any reasonable standard, and in some countries they are extremely poor according to national poverty lines. They are also vulnerable to falling back into extreme poverty due to shocks including illness, civil conflict, droughts or floods.

The numbers here are striking. Using a $2-a-day standard, for example, the headcount ratio in East Asia jumps from just eight percent to almost twenty-three percent. South Asia jumps from a headcount ratio of about one-quarter to over sixty percent. Ending extreme poverty therefore requires more than just bringing the $1.25-a-day headcount ratio down; it also means reducing vulnerability by increasing incomes further and building resilience to shocks. From this perspective the extreme poverty problem and the development problem remain deeply intertwined in large parts of Asia. The broader development mission of USAID will remain urgent even as the $1.25-a-day headcount falls.

To close, what are the implications of our vision for what USAID does and how we operate? First, our new mission powerfully re-expresses the Agency’s enduring commitments to promoting development and ending poverty. At least in the short run, our main contributions as development partners will be through our existing lines of effort, rather than through a major new program or initiative. Our initiatives in global health, agricultural development, education and global climate change are very strongly motivated within our theory of change, which now offers avenues for documenting and strengthening their impact on extreme poverty. Second, we will be selective, in order to foster a strong, focused and clear commitment to the extreme poverty agenda. Ending extreme poverty coexists with other objectives for U. S. development assistance including promoting resilient and democratic societies, combating climate change and reducing global health risks. The Agency will develop a parameter-setting exercise to inform the extent to which individual USAID Missions should focus on extreme poverty in developing their country development cooperation strategies. Criteria will reflect poverty rates and multi-dimensional deprivations, but also the competing realities of USAID’s country presence and budgets. Where the extreme poverty priority is most relevant and applicable, we will develop operational and programmatic guidance to strengthen the integration of extreme poverty into the program cycle, from policy to strategic planning, project design, and monitoring and evaluation. Third, we will continue to refine our analytical tools to support contextualized and evidence-based planning and learning in a country context. Fourth, we will partner. To achieve our goals, USAID is scaling up its New Model of Development that promotes local ownership, leverages private investment, spurs innovation, harnesses scientific and technological advances, and demands results and accountability. This New Model is USAID’s response to the international community’s continued pursuit of improved aid effectiveness — building on years of global experience and learning — as eloquently expressed in the Monterrey Consensus, the Paris Principles and the Busan Declaration.

Let me end by reiterating our understanding that sustained progress against extreme poverty will require inclusive economic growth, underpinned by improvements in governance and institutional capabilities. This type of progress cannot be effected from the outside. The United States is nonetheless uniquely placed to exert leadership in tackling one of humanity’s noblest and most achievable challenges. By being ambitious in our commitments, we can give others the confidence to join our efforts. By delivering new innovations, we can give people across the world the tools to shape their own future. And by having the courage to take smart risks and embrace new partnerships, we can unlock old problems and new ones — and together, end extreme poverty.