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Clare Short: I know the figure--I mentioned it in my speech. We spent £190 million in 1991 on improving the incomes and livelihoods of the poorest people living in rural areas. The reorganisation of CDC was to get a sufficient rate of return to demonstrate that the private sector could afford to invest more in developing countries. As I am sure the hon. Gentleman agrees, Africa needs to get more value out of its agriculture and to carry out more processing within the continent. That will produce a higher rate of return and attract the inward investment that the continent needs. So we have other means of providing support to rural populations on very low incomes, and we continue to use them. The CDC reform is going through and is still on track to achieve the objectives established in the Act that we debated so thoroughly.

Mr. Wells: I am grateful for the right hon. Lady's intervention on that point. We need more explanation as to how we can help the poor start up businesses and agricultural development, now that the CDC cannot offer assistance with that. I should like more detail as to how that is being done; I would be grateful if she let me know how it will be achieved.

Let me move on to clause 11, which deals with contributions to international organisations, and use it as a hook to bring two matters to the attention of the House. They are both based on the problem of accountability. The problems relating to the European Union's accountability to the House and to the institutions are extremely serious. I urge the Secretary of State on, as I know that she has been as critical as the Select Committee on International Development has been in three reports to the House about the way in which the EU conducts aid business, as regards both the European development fund and budgetary aid. My hon. Friend the Member for South-West Devon rightly referred to that in his speech.

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The Select Committee, in its report on the effectiveness of EC aid, said:

I want to discuss that further because the Bill says that all our money is to be poverty focused, yet we are giving to an international organisation that gives aid "for predominantly political reasons". Presumably that is why President Mugabe was seeing Mr. Poul Nielson, the Commissioner in charge of these matters, yesterday.

The Select Committee report continued:

that is, the backlog. The communication continued:

That is a disgraceful record by any standard.

Only last Thursday, Commissioner Patten came to the House to give evidence to the Select Committee on Foreign Affairs. Among other things, he said that the amount of money given to the southern Balkans--Bosnia-Herzegovina, Kosovo, Macedonia, and Serbia--amounted to 850 million euros. My ears pricked up at that figure, because it is the amount that the European Union gives to some of the poorest people in the world. The EU's programmes for Latin America and Asia amount to 850 million euros a year. The programmes manage to spend that money without accumulating the backlogs accrued by the programmes for the Mediterranean and the east of Europe.

The Secretary of State must work with her EU counterparts to put right the EU's aid budget and give it a poverty focus. I know that she has been trying hard to do that and that she has got the agreement of the vast majority of her counterparts in other Governments. I have never heard any of them resile from that objective, but it is not being implemented in practice. We must redouble our efforts in that regard.

Clare Short: The Select Committee on International Development has made a contribution in that respect. The statement about EU policy reform is unprecedented in its radicalism. It admits the failures of the past, and it has been agreed by the Council of Europe and the European Commission. The European Parliament also agreed to it last week, but the reform statement needs to be implemented. There is also agreement on the decentralisation programme, which will remove the layers of bureaucracy that prevent the money from being spent.

We still need to drive the reform through, but we have made a breakthrough in achieving the commitment to it. The Government, and the Select Committee, have contributed significantly in that regard. We must finish the job, but securing the admission of past failure and the commitment to deep policy change represent an unprecedented breakthrough.

Mr. Wells: I hope that I have made clear my awareness of the Secretary of State's hard work on this matter. I did

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not know that the European Parliament had adopted the programme, but I am delighted to hear it. We now have the basis to ensure that the reforms are pushed down to the right levels, and that power is devolved to the countries where the EU is working.

Unfortunately, such devolution has not happened yet. The Select Committee visited Vietnam and Cambodia and found that the EU representatives remained in the unhelpful mode that we have criticised for so long. Progress has been made but, as the Secretary of State and my hon. Friend the Member for South-West Devon have said, we must display the determination that the right hon. Lady has shown on many occasions and ensure that reforms are pushed down to the most appropriate levels.

We must ensure that the EU is accountable when it comes to adopting and delivering a poverty focus, and the same is true of the regional development banks. The present Minister of State, Scotland Office, the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes), used to be the Under-Secretary of State for International Development, a post now occupied by the hon. Member for Sunderland, South (Mr. Mullin). The present Minister knows a lot about this subject, and I enjoyed reading his book about Vietnam when I was there, but his predecessor did a huge amount of work on regional development banks and, unprecedentedly, visited them all.

The Department has issued reports on the banks, but the reports are disappointing because they are, inevitably, a little superficial. I know of some banks whose lending is seriously politically bent. Pressure is exerted to ensure that they invest where they should not. The banks agree to make investments for political reasons, and because their shareholders' representative in a particular country is often the Minister responsible for a particular project. The banks therefore get overwhelmed.

The Select Committee has seen the development bank for the Association of South-East Asian Nations in Bangladesh and Cambodia go behind the backs of the World Bank and the International Monetary Fund and offer its own help for projects on the basis that that help remains undeclared. That practice has to stop. The international community has to work together and implement a responsible and coherent policy that is accountable to the member states who are the shareholders of the World Bank, and to this House. We must ensure that the same poverty focus in bilateral programmes proposed in the Bill is adopted by the international community.

The Secretary of State has made huge efforts with regard to the problems that exist internationally. She hosted a high-powered seminar last Monday, attended by the presidents of the World Bank and the IMF. The president of the OECD, Mr. Johnson, also attended. The seminar dealt with the serious matter of child poverty. The problems of poverty require great vigour, and organisations that do not fulfil their obligations must be called to account.

My final point has to do with SWAPs--sector-wide approaches. In that regard, my hon. Friend the Member for South-West Devon mentioned the question of good governance. I agree with the Secretary of State's objectives. She told the Select Committee that if we can get the education departments in countries that receive assistance--bilateral assistance from us, and multilateral

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assistance too--to agree programmes with the IMF and to implement them, we will gain leverage, when it comes to focusing our efforts and money on poverty, that we have never achieved before.

The problem is that many countries are stricken with poverty because they are so poorly governed. Their Governments are corrupt, lazy and made up of elites interested only in feathering the nests of their members and friends. That makes it extremely difficult to get into the ideal position implied by the SWAPs policy.

When the Secretary of State gave evidence to the Select Committee last Tuesday, she said that SWAPs must be implemented at a lower level if they cannot be implemented at a higher level. She gave the example of Ghana, where co-operation and leverage were being achieved at regional or provincial level. That shows a welcome flexibility of approach, but such co-operation will not be possible in some countries.

We must learn to work to a time scale of more than three years. I could not agree more with the right hon. Lady that three-year projects merely pick at problems and do not address what is important--reducing rates of poverty and child mortality, raising the number of children attending primary school, improving the health of mothers, and so on.

More thinking must be done. In the meantime, we and the other donor countries must offer longer programmes that are better organised and designed. When faced with Governments whom we cannot trust, we must implement such programmes as far as we can.

Flexibility is essential. In Cambodia and Vietnam, the Committee encountered DFID people who said that they had worked on projects for 10 years, but were now being told that projects were out and SWAPs were in. The officials said that the Department in Victoria street did not want to hear anything about projects. However, the officials considered that projects represented the best way to address poverty, as they could be set in train before people were in a position to implement SWAPs. I hope that the Department is not going overboard in its enthusiasm for SWAPs as a method of getting a poverty focus into all our programmes.

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