Examination of witnesses (Questions 60
- 79)
WEDNESDAY 15 DECEMBER 1999
THE RT
HON CLARE
SHORT and MS
SUE UNSWORTH
Chairman
60. How many other governments take the same
view as the United Kingdom and have suspended parts of their aid?
(Rt Hon Clare Short) Quite a few of the Governments
with a strong track record on human rights suspended at the time
of the nuclear tests. I have explained earlier that we took the
view that we should except anything that was beneficial to the
poor, that they should not pay the price of the nuclear tests,
so I think the Swedens and so on of this world had already suspended.
The United States has not suspended.
(Ms Unsworth) The United States has not really been
a donor for quite a few years.
(Rt Hon Clare Short) Yes, so I think they are in a
slightly different position. Ms Unsworth, can you answer? I think
because the people we normally move with had already moved out.
61. France, for example?
(Ms Unsworth) We are the only donor in response to
the coup that I know of that actually froze current aid as opposed
to new commitments, but that is against the background of a very
significant scaling down of bilateral assistance by others over
the last year or so, including in response to the nuclear tests.
The World Bank is continuing existing programmes, but until the
IMF re-engaged will not come back with major new programmes.
62. No new programmes?
(Rt Hon Clare Short) But it has not taken the action
we have taken which is to suspend anything that engages with government.
63. But that is the IMF so that is not quite
the same?
(Rt Hon Clare Short) No, that is the World Bank.
64. Yes, but the World Bank has suspended new
projects because they are not now IMF compatible, is that not
right?
(Ms Unsworth) It is both. The fast disbursing lending
will be linked to having an IMF programme in place and the IMF
programme is not there.
(Rt Hon Clare Short) You will know from your visit
that this very big poverty programme—what is it called?
65. The Social Action programme?
(Rt Hon Clare Short) Yes, the Social Action programme
which the World Bank is engaged in and we were engaged in and
we have suspended our contributions to that as part of our suspension
of things engaged with government and the World Bank has not suspended
its engagement and indeed pressed us to disburse, which I have
not done. So they are taking a slightly different judgment. That
is a hard one, but it is a programme to benefit the poor, but
it does engage with government.
66. I see. You will be keeping that under consideration
I suppose?
(Rt Hon Clare Short) Absolutely. We are waiting for
the return of this mission. My own very strong conviction is that
if the international community stands together, the IMF engagement
is the big lever because the Pakistan economy is in trouble and
without the IMF they are going to be in such serious trouble,
that we could leverage very significant process of reform, including
a movement to democracy.
67. Well, that is the opportunity?
(Rt Hon Clare Short) That is the prize and that is
what we are looking for.
68. That is the prize, that is exactly it?
(Rt Hon Clare Short) I am optimistic that we might
get that commitment.
69. But if you are not sufficiently co-ordinated,
and clearly you are not—well, there are parts that you do
and parts that you do not, as you said, and the different organisations
take different views and for different reasons, nuclear weapons,
IMF failure and so on—we will not get that leverage. We
need to get much more co-ordinated, do we not?
(Rt Hon Clare Short) But the IMF decisions will be
made by the Board involving all countries and we have been working
very hard—me, and the Foreign Office and the Treasury—talking
to other governments to get an agreed view on IMF programmes,
that is the big leverage, and there is an emerging consensus—
(Ms Unsworth) Yes, there is.
(Rt Hon Clare Short)—around the kind of position
that I have been describing so that is looking hopeful. There
is an IMF mission there too which has not come back yet.
70. The Committee will be very anxious to learn
what your mission to Pakistan and the IMF mission actually decides
and on what basis?
(Rt Hon Clare Short) I would be more than happy to
write when they are both back.
71. Would you?
(Rt Hon Clare Short) Yes.[5]
72. I think that would be very helpful to us.
Thank you very much. Just one last question on this, the European
Union what are they doing in Pakistan now?
(Ms Unsworth) They have not frozen.
73. They have not frozen. They have continued
as usual, but as you say nothing is dispersed because it is all
in the bureaucracy, is it?
(Ms Unsworth) They are continuing—
(Rt Hon Clare Short) Well, you know their processes
are pretty frozen anyway.
Chairman: Well I suppose it does not
make any difference. Anyway, let us move on. Mr Robathan.
Mr Robathan
74. Secretary of State, when we came back from
Pakistan in March we had a meeting with you shortly afterwards
and I think we discussed our concerns with you at the time and
you agreed. Indeed, we said at the time—I certainly said,
and I think my colleagues that went with me agreed—that
the Pakistan Government was heading straight for some sort of
catastrophe. We rather imagined a revolution, although Pakistan
tend to have military coups more often. So I am actually encouraged—you
will be surprised to hear—by what you have been saying about
Pakistan and I think you are adopting very much the right attitude
there. I have to say it is rather in contradiction, it seems to
me, with the messages that have been coming out both from the
Foreign Secretary in questions in the House and surrounding the
Commonwealth Heads of Government meeting. I got very much a more
hawkish approach, if I can put it that way, towards the military
government, but I am glad to hear what you say?
(Rt Hon Clare Short) It is an agreed government position.
Mr Robathan: Good. I am sure, but the
perception that one would have got from, for instance, the last
Foreign Office questions was rather different, but I am quite
sure there is no controversy between the two of you.
Chairman: Do not tempt the Secretary
of State off the question
Mr Robathan: No, I am not. I am encouraging
her; I think she is right, unlike China.
Chairman: I was trying to discourage
you from encouraging her.
Mr Robathan
75. One hopes that the military Government will
be better than the Sharif regime, who knows. One of the things
that has already been mentioned was corruption. Now does this
new administration genuinely seem any more committed than previous
Governments to combat both corruption and poverty and do we have
any evidence yet? I would think the corruption would be more easily
seen perhaps?
(Rt Hon Clare Short) I agree very much with the point
Mr Khabra made earlier. Military governments tend to start off
with fine declarations of being technocrats and cleaning things
up and if you do not get a process of reform and restoration of
democratic government it tends to deteriorate. They are making
strong declarations of commitments to reform, action on corruption—which
is a very serious issue in Pakistan—and a return to democracy,
starting with local government. What we need to do, in my view,
is tie that down, start the process of reform and get some sort
of time bound commitments. So then we help with the process that
leads to time bound change, that makes sure the commitments the
military regime are making are honoured. But they have taken action
to freeze the bank accounts of political leaders and as Ms Unsworth
is saying, arrested loan defaulters. So they do seem to be taking
action on that kind of corruption, which of course is very popular
in Pakistan where ordinary people feel very angry about the levels
of corruption there have been.
76. What about any messages or action they are
taking about the fight against poverty? I am afraid I have not
followed it closely enough to know.
(Rt Hon Clare Short) They have written to me and said
that they share the objectives of our White Paper and very much
want to work with us in this way, but we now want to tie that
down in very specific commitments.
Mr Khabra
77. I am a little bit surprised to hear from
people in this country actually supporting the military regime.
Now it does not matter what sort of government, the democratic
Government, they had in Pakistan in the past, corrupt and inefficient,
but I am really surprised that we are beginning to realise or
feel that we can support actually a military dictatorship where,
on the other hand, we were not prepared to support the military
dictatorship of Pinochet. The question is, is it possible for
you to put a time limit on the military regime to say that: "Within
the next five years or six years, if you do not make any progress
towards normalisation, to restore democracy for the people of
Pakistan, we are going to be tough on you".
(Rt Hon Clare Short) First of all, let me simply repeat
things that I have already said, but let me say them more clearly
and more slowly. We are not supporting the military regime. We
have suspended our programmes because there has been a military
coup. We are in the very complex situation that the previous Government
was very poor in its economic performance, in the quality of its
democracy, failure to act on corruption and its failure to prioritise
the poor. We are in a situation where the military coup is popular
in Pakistan and amongst people originating from Pakistan in our
own country and that shows what a terrible quandary the previous
Government had got itself into. So that is fact; we are not supporting
it. The question now is where can we go from here and what we
believe is the right policy is to get the military regime to commit
to a process of time bound reform that includes action on corruption,
better economic management, prioritising the poor and democracy
starting with local government, time bound, that is time. So we
will not engage with them without a series of time bound commitments
to action on all of those things that will lead to the end of
the military regime. That is our position. We do not have the
agreement yet, we have not reengaged yet, but if we get it we
will re-engage in driving forward those reforms and they will
have time commitments in them.
Chairman: Fine. Now Mr Worthington would
like to ask you a question.
Mr Worthington
78. May I ask you what response you have had
from—I think you dealt with the Government of Pakistan and
you said what their response had been to your policy of the freezing
of aid, but what has been the response of other people like the
donors or the NGOs? What kind of pressure have you been under?
(Rt Hon Clare Short) I am not aware of any pressure,
are you?
(Ms Unsworth) We have had expressions of disappointment
from a number of donors and NGO contacts.
(Rt Hon Clare Short) Disappointment that we have suspended?
(Ms Unsworth) Yes.
(Rt Hon Clare Short) From people who were engaged
in programmes of course.
79. The pressure was that you should not have
suspended?
(Rt Hon Clare Short) Yes, because if you are doing
any good at all you are hopefully doing some good for the poor.
So even though you are working for a government that has now become
a military government, if you suspend things there will be some
actions that were helping the poor that are suspended. That is
the difficulty of these kind of decisions. Yes, some of the people
working in Pakistan said: "Please reconsider our project"
and the World Bank pressed us to disburse money behind the Social
Action Programme, so there has been that kind of pressure. Not
very intense, but it has been there. I think broadly now that
we have worked out this strategy of trying to get the commitment
to reform there are a lot of people who think that is the right
way to go. It will depend, will it not, on whether we get agreement.
If we get agreement a lot of people will believe that is the right
route; if we do not get agreement we are going to have trouble
in deciding what is the most positive way.
5 See Evidence p. 23. Back
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