Examination of Witnesses (Questions 1
- 19)
MONDAY 29 JANUARY 2001
RT HON
CLARE SHORT
MP, MR DAVID
BATT AND
MR RICHARD
MANNING CB
Chairman
1. Secretary of State, as always you are very
welcome indeed here and thank you also for helping us by attending
the conference with the World Bank which has just concluded and
helping us finance the conference, which generally speaking seems
to have been thought to have been a very focused and useful meeting.
We have to organise it more strongly. I believe in fact it will
quickly get out of control in terms of numbers and finance. Nonetheless,
I should like to thank you for supporting us in that way. I believe
you have an opening statement to make on the Globalisation White
Paper and I think it is the Committee's duty to give you that
opportunity since you have not had one in the House so far. May
I ask you to do that?
(Clare Short) Yes; thank you. I shall
be brief. It is important to say that this second White Paper
since we formed our Government stands alongside the first White
Paper, does not replace it and also stands alongside the target
strategy papers which lay out how each of the international development
targets could be achieved if we can mobilise sufficient international
effort. It looks specifically at globalisation itself, the nature
of it, the historical and economic change which it represents
and sets out an agenda for managing the process in a way which
will ensure that the abundance and technology and capital which
is now available is managed in a way that brings real benefits
to the poor of the world rather than marginalises and excludes
them. The reason for the White Paper is twofold. One is that since
our Department was formed with the extra analytical capacity to
look at trade, investment, core labour standards, environment,
corruption, money laundering, all of that and ceased to be just
an aid distribution department, which was looking for all the
policies across government which would promote sustainable development
for the poorest countries, there has been a lot of new cross-Whitehall
work and we wanted to consolidate that into a statement of government
policy. There has been a lot of change and improvement so it is
a commitment of the Government right across government, committing
us through trade, through approaches to investment agreements,
environmental negotiations and so on, to promote an international
system which will really encourage development for the poorest
countries. The second reason is to address the enormous muddle
and confusion there is in public debate about the nature of globalisation,
which I find worrying. Quite a lot of development NGOs for example
are in an ideological position of opposition to globalisation
because they are treating it as though it is the same thing as
neo-liberalism and that is potentially a very dangerous area.
A lot of the voices of Seattle and Prague and so on claim to be
speaking in the interests of the poor of the world but are basically
making protectionist arguments. If they become the predominant
view of how the interests of the poor world are to be protected,
the world would roll into a protectionist era which would damage
the interests of developing countries. So the second purpose is
to elaborate as clearly as possible an analysis of what globalisation
is, the effects it is having and try to make clear to everyone
that it does not have some inevitable output. It is for humanity
and the political systems of the countries of the world to shape
this if we want to make sure that it brings benefits to all. There
are two possible futures, one is where it is left on its present
track, which will potentially lead to more and more marginalisation
of poor countries and people, or we can make the sorts of changes
which are advocated in the White Paper and which are achievable
and we could see a massive uplift in conditions of the poor of
the world by making use of the knowledge and technology and capital
and so on which is there. The final point I would make is that
we have engaged in the widest ever consultation undertaken by
the Department internationally as well as in Britain, discussions
with different groupings and representatives around the world
and that is part of the objective both to hear what is being said
across the world, but to generate a more informed and thoughtful
debate about the nature of globalisation and how we can shape
it. The White Paper is selling very well. It is being demanded
across the world at great speed. The first print run of 10,000
is already gone and it is being reprinted. There have been 8,000
hits on our website, so it is stirring up enormous interest across
the international system which is very good. We are pleased with
the initial reception but obviously the task it outlines is enormous.
It is to get the whole international system to be more focused
on the needs of the poor, to commit itself to systematic poverty
reduction and to get changes of the rules in trade, investment,
the environmental agreements, the enforcement of core labour standards
and the rest, in a way which brings sustained and large benefits
to the poor. It is a very, very big task but enormous progress
is possible if we can get a united determination in the international
system to make progress.
2. I did not invite you to introduce your colleagues,
but of course we know them very well and should like to offer
our welcome to both David Batt and Richard Manning. We are glad
to see you again. Did they help you write the report?
(Clare Short) Indeed. Richard Manning is the number
two level in the Department and supervised all the work. David
Batt headed up the team which did both the preparatory and analytical
work for the White Paper and drafted it. There is a little of
my own hand in the drafting too.
3. I thought I recognised your hand when I read
one particular paragraph. It says, "If democrats and internationalists
do not address these concerns, then those who advocate narrow
nationalism, xenophobia, protectionism and the dismantling of
multilateral institutions will gain in strength and influence
with disastrous consequences for us all". I thought I recognised
your phraseology there. Are you trying to maintain that in fact
globalisation will automatically benefit the poor?
(Clare Short) Absolutely not. I find it worrying that
so much of the debate about globalisation talks as though it is
some ineluctable force which humanity cannot shape and change.
Globalisation has been going on since the industrial revolution:
the increasing interdependence in trade and spreading of technology
and information across the world. It speeded up recently because
the end of the cold war resulted in one global economy rather
than two blocs and because of information technology and the speed
therefore with which information, capital and so on can flow around
the world. Like any previous phase of history, it can be shaped
by politics and democracy and we have more democracy in the world
than we have ever had in human history. It is for us in our countries
and then all the intergovernmental organisations to which we contribute
to determine that it brings benefits to the whole of humanity
rather than marginalises some. It is a matter of will and choice,
as I say in the introduction, and not some sort of inevitable
process. I was struck in lots of the interviews I did after the
White Paper was published that people were asking whether I was
saying that globalisation was good or bad, as though we had to
find it out there in the sky and decide whether it was a good
or bad thing rather than bend our international and national political
institutions to shape it in a way which would bring benefits.
4. So globalisation is there whether we like
it or not. We have to shape it to benefit the poor, we have to
have the political will to benefit the poor, we cannot just leave
it.
(Clare Short) Absolutely. The parallel I often draw
is with industrialisation. The industrial revolution began and
people in this country came out of the countryside where many
of them were living in great poverty, to live in the cities in
squalor, in slums, with child labour and low life expectancy and
high maternal mortality and all the sorts of conditions we now
measure in the poorest countries. There was then a political struggle
for democracy and for a commitment to social justice so that the
new wealth being generated by industrialisation was shared and
brought benefits to all the population of the country. It is a
similar parallel. The wealth is being generated: it is for democratic
decisions and political decisions to determine who will get the
benefits and whether the poor are brought into those benefits.
5. As I understand your paper, you see these
benefits arising because of growth. Do you believe and does the
Department believe that we shall realise the international development
targets through growth alone or are there other factors which
will have to be brought in in order to realise the international
targets which you have made the centrepiece of your policy since
you took up the job of Secretary of State in your last White Paper?
(Clare Short) Indeed and we now have unprecedented
international commitment to the targets which gives us the capacity
to drive the whole international system forward together. What
we are saying is that there cannot be a reduction of poverty without
economic growth and there is no question about that. Some of the
countries which have seen a great rise in poverty have seen that
because they have had population growth faster than economic growth.
That happened in a number of African countries in particular in
the 1980s and early 1990s and in those conditions poverty invincibly
rises. There has to be economic growth in order to reduce poverty;
there is no question about that. However, special efforts need
to be made to ensure that everyone is included in the benefits
of that growth. So the poorest people in the world, some of the
people who live in the most remote rural communities, have no
access or contact with markets, so globalisation is not affecting
them but they are living in great poverty and they need access
to credit, to send their children to school, access to health
care and rural roads so they can get their produce to market in
order to be able to benefit. There need to be measures to ensure
that all are included; if change is causing some to lose out,
that they are helped to get through that process of change and
take benefits from the growth which is taking place in the economy,
and you need active governments to benefit from the knowledge
economy and the new technologies which are driving a lot of globalisation.
Education is not just a human right it is an absolutely essential
economic investment and you need governments which are committed
to education for all children starting with universal primary
education. You must have growth plus these other measures which
make sure the growth brings benefits to all and that there is
investment in human development which enables individual human
beings to benefit from economic change.
6. CAFOD and Christian Aid have stated that
"the White Paper is at best ambivalent and at worst evasive
on inequality and redistribution".
(Clare Short) That is just false. There are different
elements in Christian Aid because I had responses to the White
Paper from different levels of the organisation saying very different
things. Here we are coming to the nub of the ideological position
of a lot of development NGOs. They are adopting a posture of being
hostile to globalisation, I think not fully understanding what
they are doing, with a hangover mindset of the effects of neo-liberal
policies of the 1980s and 1990s which did call for allowing the
market to rip and rolling back the state and led to the exclusion
of some people. The White Paper does not advocate those policies
and neither are those policies what globalisation is. The White
Paper makes absolutely clear that if you look at the levels of
inequality nationally, you know it is often asserted that globalisation
is leading to a growth of inequality in the world. That is not
so. Some years back there was widening inequality. It has been
narrowing recently. Objectively what is going on is that the OECD
countries are continuing to grow at an average of 2.5 per cent
per year and some variability in that sort of performance. Whether
global equality narrows or widens depends on the performance of
the poorer countries. Because in recent years China in particular
has performed so spectacularly well, growth has increased in India
and indeed in Bangladesh, so some of the most populous countries,
the poorer countries have come up and global inequality has narrowed.
The White Paper makes that clear. It also makes clear that there
is not some inevitable consequence of opening up in terms of inequality,
that of different countries which have opened some have become
less unequal, some have become more unequal. It depends on policy,
policy choices of governments. It also makes it clear that economic
growth reduces poverty more rapidly in less unequal countries
because of course the fruits of growth tend to go to people in
proportion to the original distribution of income. In a highly
unequal country, the poor get a relatively small share of economic
growth and it takes much longer for economic growth to lift them
up, whereas in a less unequal country, the economic growth lifts
them up much more rapidly. So it is highly desirable to lessen
inequality and the whole process of social inclusion and the effectiveness
of government and investment in health care and education for
all, which is so strongly advocated in the White Paper, are means
of reducing inequality. That is just a nonsensical piece of ideologically-driven
failure to read what is contained in the White Paper.
7. What specific redistributive measures are
more important?
(Clare Short) We need to be clear about redistribution.
It is very difficult if you look at the record of all countries
to redistribute from a static position, whereas to share more
fairly the proceeds of growth is a much more easily achievable
political object. In many of the countries in which we work elites
are enormously powerful. Sub-Saharan Africa is very, very unequal,
as is Latin America. Politics in sub-Saharan Africa is frequently
totally dominated by elites who tend to be urban dwellers, who
want modern healthcare systems and will skew the whole of the
health budget to be spent on state-of-the-art hospitals in urban
centres, who want higher education for their children, understandably,
but there are privileged elites and therefore the whole of the
education budget is biased there and there is no primary education
for all. We advocate very strongly, measures which invest in the
healthcare and education of all people, both as a social good
but also to get an efficient modern economy. These are all profoundly
redistributive measures or measures of social inclusion which
ensure that marginalised and poorer people can participate in
the modern economy and get benefits from economic growth.
8. How is the Government seeking to assist those
adversely affected by change through risk reduction, mitigation
and coping mechanisms?
(Clare Short) Do you mean what measures are we recommending
that governments should take?
9. Yes. The White Paper says that "all
profound economic and social change produces winners and losers".
How are we going to protect the losers?
(Clare Short) What I am just trying to make clear
is that the UK Government is not in a position to protect all
the losers of the world. What we have to do is advocate policies
for governments in developing countries. They must take the lead
in all of this, but then all the international agencies to help
the process of managing change where some people are going to
lose out and need help to adjust to that change. For example—and
I think this example is in the White Paper—in the 1960s
many countries put up high tariff barriers to try to encourage
development by having nationally owned industries and had highly
subsidised publicly owned industries focused in urban areas and
often provided subsidised food to urban populations. The net result
of that was over time to cut off inward investment, failure to
get access to modern technology, often highly priced rather shoddy
goods produced locally and often low prices for food for urban
dwellers but very low prices to very poor rural people. Actually
the poorer countries did badly out of that model. If you are starting
to unravel all of that, which you need to do to get the kind of
economic growth which will lift up the poorer countries, there
will be a lot of change. There will be a lot of people working
in non-viable industries, there will be highly subsidised food
for urban populations. You have to change all that to get the
country on some viable path of continuing development and improve
life for the rural poor, but you need a process which enables
the urban populations which have worked in industries which are
going to close down to get some retraining, some credit, some
chance to work in another enterprise. If food prices are going
to become realistic so that rural populations will grow more food
and increase access to food and their incomes, then that needs
to be phased in a way which becomes feasible for the urban population.
You must not prop up an old order which is preventing development,
but you need to assist those which have to change in order to
get better development to be part of the process of change and
get some benefit from them rather than adjust by brutalism and
just sweep people into unemployment and misery and allow the economic
change to come through but at great human cost. This is a lesson
for a country like this too. A lot of deep change is taking place
in the global economy and we are seeing some sectors of our population
losing jobs and seeing change even though there are lots of new
jobs in the economy. Similarly people need chances to retrain,
to get jobs in the new sectors as old sector jobs fall away.
10. Would DFID finance that transitional phase?
Would DFID help those who are having to be retrained, those who
are being made redundant because of the changes?
(Clare Short) The model of development we are advocating
would not have the UK and the Department for International Development
separately parachuting into a country and saying they ought to
engage in these reforms and we will help this particular group
who are losing out to adjust. We would be hoping there would be
a poverty reduction strategy type approach in every country where
the Government has a clear plan for its macro-economic policy
and the spending of all its revenues, so it plans its economic
growth, it sees the sectors where there are going to be improvements.
If that is going to lead to redundancies it has plans to protect
people and give them retraining and so on and so forth. We as
a government and the World Bank and other development agencies
would come behind the government plan and make resources available
which enables the Government to manage all those changes. Yes,
but in a way which is led locally rather than us carving out a
little bit of the change and saying we would fund it. It is governments
which need to manage these kinds of changes for themselves and
they will need external resources in order to be able to make
the change in a way which protects people rather than marginalising
and impoverishing them.
11. This goes back to the poverty reduction
strategy papers which all countries are now having to produce
in the HIPC area anyway but presumably in other areas as well.
(Clare Short) That is right and it is becoming a model
for the way of working beyond the HIPC area. Bangladesh is currently
working on a poverty reduction strategy but in other countries
like India, for example, which is not, it is an approach. It might
then take on a different name, but we need to pursue everywhere
so that development assistance is not lots of separate projects,
but the resources are brought together behind local leadership
which enables the process of reform and the building of sustainable
government systems which will provide education for all, health
care for all, economic growth which benefits all, assistance to
people who are having to change their jobs because of some of
the economic change which is taking place and so on. These need
to be universal government-led systems in developing countries.
Chairman: The changes in trade, which
I have no doubt Mr Batt helped you with, are really rather crucial
to this, are they not? They are going to cause a great deal of
disruption.
Mr Rowe
12. Just to link with what we have been talking
about, quite a lot of groups, trade unions, academics and so on,
have criticised your reading of the evidence by the Government
in linking growth to poverty reduction as highly selective and
we have been asked whether the Government has any intention of
letting the research on which you based your White Paper be available
for academic discussion.
(Clare Short) It is all already available and serious
academics know that. Any academic who is saying it is not available
when it is widely available, being read and used and has been
commissioned from very respectable sources, is not a terribly
good academic.
13. They are the ones who have time to write
to us. The British Consultants' Bureau have been quite supportive
really of your untying aid but at the same time very concerned
that other countries will not do the same thing, which would put
them at a disadvantage. Do you have any plans to put pressure
on other countries to follow suit?
(Clare Short) Absolutely and I agree with you. There
was a little sort of critical explosion in the Evening Standard
but apart from that there has been a very positive and mature
attitude in the UK compared with other countries who very much
view their development budget as a way of promoting their own
business and then you get distorted development objectives when
countries are seeing their development budget in that way. It
should be noted that lots of other countries think Britain is
so in favour of untying because our consultants are of such high
quality that they will take over most of the international work.
That is the reputation of a lot of the people working out of the
UK. Yes, we are not doing this in order to get some advantage
for the UK or against the UK. Development resources cannot be
as effectively deployed as they could be into the budgets of governments
thus forcing us to improve governments' own financial management
and procurement systems and build real capacity in developing
country governments. If different countries are saying the consultants
have to come from our country and the vehicles which are being
ordered have to come from our country, so some poor country which
has a health system with some vehicle supplies has three French
vehicles, two German vehicles, three British vehicles all with
different spares, it creates enormous inefficiency. If we want
quality effective use of development assistance, we have to untie
and build capacity in-country so people can run their economy
and their government systems more effectively for themselves.
We have been working for years and years in the Development Assistance
Committee of OECD to get an agreement on untying. Mr Manning had
hair all over his head when we started on this. We are pushing
very hard currently that everyone should untie their development
assistance to start with to least developed countries. It is very
difficult. There are some very entrenched bad practices out there.
We are still pushing there and we are hoping there might be a
push out of a UN conference on least-developed countries which
is going to take place and that the least-developed countries
will ask us please to untie our aid to them as it enables them
to use it better and more effectively. The second whole range
of questions is EU tying. Our legal advice is very clear that
it is a breach of the EU's own law and ActionAid has been campaigning
very well and very effectively on this issue. We really need to
put pressure on the Commission to require all countries to untie
their aid and that is 60 per cent of worldwide ODA and any EU
Member State which is not untied is in breach of law to which
they have signed up. We ought to be able to get progress there.
We are determined to push very hard in the multilateral system
and also invite other countries to do what we have done and get
on with it and untie.
14. I am delighted to turn to the EU, which
we have heard in the World Bank seminar today is still extraordinarily
sluggish. Your White Paper says that the everything-but-arms initiative
should give a great boost to developing countries but since it
was written it has been watered down quite a lot; some NGOs even
talk about everything-but-farms. Do you feel that the watering
down will simply confirm the developing countries in their belief
that the EU is irredeemable or whether you think that there is
more to it than this?
(Clare Short) It still has not been watered down;
it is all to play for. We have some really strange forces at work.
There is a very big campaign by the British sugar industry and
we all understand the difficulties farmers have been through.
They are a group which needs help to adjust to change in our own
country. Clearly change is coming to them and for them to use
their distress to block improved trade access for the poorest
countries in the world will not remedy their problems: it is to
misuse their concern about the change they are having to adjust
to. The other big lobby has been from the ACP countries, and particularly
the Caribbean which similarly has guaranteed quota entries to
the European market which are under question anyway. It was agreed
in the Lome« renegotiation that there would be duty-free
access for essentially all goods from least developed countries
by 2005 and the ACP countries had already signed up to that. There
has been a very strong campaign coming out of the Caribbean opposing
everything-but-arms. We are still trying very hard to hold everyone
together, to continue to support Commissioner Lamy who has driven
this forward with very strong support from Commissioner Nielsen,
of course to put in place assistance, particularly to Caribbean
islands with the adjustment process they will have to go through,
but it is coming to them anyway. It is not settled and there are
pernicious forces out there who want to scupper the proposal or
weaken it or lengthen the phase-in periods and make it less beneficial
to least-developed countries. All the forces of decency need to
combine and make sure that it is carried through. I repeat: the
least-developed countries are 0.4 per cent of world trade. They
are the poorest countries in the world where some of the poorest
people in the world live. If we can give them a bit better trade
access then they will be able to grow their economies a bit more
and improve the life of their people. Surely the European Union
can open its markets to these very frail economies. They are not
going to produce masses of exports overnight because the economies
are too weak to do so. It is all to play for.
Mr Colman
15. I should like to ask some questions about
the absence from the White Paper of any meaningful discussion
of the General Agreement on Trade in Services (GATS). I wondered
why it had been left out. Interestingly enough, in the submissions
which we have received, we have received one from the World Development
Movement (WDM) and another one from British Invisibles, from either
end of the spectrum, asking why this was left out and particularly
all of us as parliamentarians have been lobbied over recent weeks
saying that the World Trade Organisation is forcing on developing
countries this particular agreement to open up their markets.
Given this concern, you have mentioned the Commission on Intellectual
Property Rights which you will be backing, but why have you not
perhaps proposed a similar comprehensive and independent impact
assessment of the liberalisation of service sectors on the poor?
(Clare Short) This is another area of mythical campaigning.
What the General Agreement on Trade in Services provides, which
was negotiated during the Uruguay Round, is that countries will
open up whichever services they choose at whatever pace they choose,
bottom-up approach. In fact the WDM is totally misleading and
totally misinformed. It is not just here, it is across the international
system. The Seattle-style protesters suggest that the WTO is making
everyone privatise their higher education in the UK and so on.
Complete, absolute misleading nonsense. That is not provided in
the agreement at all. In fact about seven per cent of services
have yet been opened up. If you go to developing countries, as
members of the Committee will know, some of the opening up of
banking and so on is leading to better quality banking, better
regulated banking, people being able to get credit in order to
have little businesses, opening up insurance, financial services,
accountancy firms, lots of developing countries need much more
effective accountancy capacity, better regulation of banks and
so on, opening up some of those sectors which many countries have
done has been wholly beneficial to get more effective economic
management in order to improve the performance of the economy.
(Mr Batt) There is mention of this in a couple of
places in the White Paper of trade in services. One is in paragraphs
130 and 131 which refer specifically to GATS and to movement of
people which is one part of trade in services. It is a dimension
of this which is of particular interest to developing countries.
Later on in the paper, in paragraph 235, where the paper talks
about the composition of any future round of multilateral trade
negotiations, it actually mentions the opening of service sectors
as one of the areas to be given high priority.
(Clare Short) Again another set of people who are
so busy writing to you that they did not manage to read the White
Paper first.
16. It certainly caught me out as well. British
Invisibles have said, and I agree with your analysis of the situation,
that they would have thought that more would have been made in
the globalisation White Paper of the particular importance of
sectors, of financial services, telecommunications and power distribution
which come within this.
(Clare Short) The whole question of telecommunications
is dealt with elsewhere and we give these very worrying facts:
there are more internet connections in New York than in the whole
of Africa; Africa is the most expensive place in the world to
be connected to the internet because there has been no liberalisation
of telecommunications. They tend to be government owned, very
high prices, no investment and there have been massive technological
changes in telecommunications, as everybody knows. That is in
there; paragraph 121. There is also a reference to the public/private
infrastructure advisory facility where we work very hard with
the World Bank to get a facility so that governments have support
with putting in place regulatory arrangements, doing feasibility
studies, really increasing investment in infrastructure by making
appropriate partnerships with the private sector. All of that
is in there; paragraph 251.
17. Yes, I have that one. Just to prompt your
officials, the Commonwealth Business Council has actually set
up a public/private partnership working group for delivering just
this. This is very important paradigm. Is there something you
would suggest the World Bank should pursue as an alternative to
privatisation of services going forward into the future?
(Clare Short) No. We have already been instrumental
in setting up with the World Bank a facility which is on the ground,
opened in southern Africa and east Africa and a rolling programme
of these offices opening. We have put finances into it, as has
Japan and other countries. It is currently helping governments
come to it for advice saying they need more investment in infrastructure,
say in the telecom sector or in electrification or whatever, how
can they get advice on getting private sector interests and making
regulatory arrangements or doing some of the work the public sector
needs to do to make these kinds of investment feasible. Water,
sanitation, all these sectors. It is out there and running and
the last time I looked at the number of enquiries which had been
made a very considerable use was being made of the facility already.
18. The World Bank has already moved off privatisation
as a nostrum and onto PPP.
(Clare Short) No. Privatisation is not a nostrum.
I do not think anyone should approach these questions ideologically.
We should all be looking for efficiency, services for people and
reduction in poverty. For example, in India we have been highly
involved with the bank in the restructuring of the electricity
sector in Orissa and Andhra Pradesh and these reforms are going
on across India. You have publicly owned electricity, very, very
highly subsidised, providing cheap irrigation to quite well-off
farmers, power cuts all over the place because no-one will invest
in the sector because it is so highly subsidised there is no rate
of return. Poor people getting no service whatsoever and it is
sucking away from state budgets all the resources which ought
to be going into health care and education. We then will engage
in helping the process of reform, because India will get better
electricity services which it needs to grow its economy but our
major and overwhelming interest is to release those resources
which ought to be being spent on health care and education. Across
the world there are lots of publicly owned industries which are
wasteful, inefficient, highly subsidised, where you could get
more investment in infrastructure by privatising with good regulatory
arrangements so you do not get any abuse or misuse of public resources.
We pragmatically support, as does the Bank, those kinds of reforms
where they bring benefits to people. That is one whole set of
agendas. Then how to get new massive scale investment in infrastructure,
which is needed, water, telecoms, electricity, transport, in order
to speed up the development and include the poorest in access
to modern resources, the public sector cannot afford enough. We
need to get partnerships with the private sector to get the investment
to the sort of scale which is needed in Africa and south Asia.
Mr Khabra
19. I am concerned about this new trend and
desire on the part of the developed countries to recruit skilled
labour from developing countries. You know that the Home Office
is considering proposals to make some changes in the immigration
rules and DTI is also involved. The White Paper does acknowledge
both advantages and disadvantages of developed countries recruiting
skilled staff from low and middle income countries such as India
or any other: "for developing countries, these outflows of
skilled people generate significant remittances". I do not
agree that it does actually generate significant remittances back
to those countries. I do disagree with that. "Longer-term
benefits may include the new skills and contracts brought back
by the returning migrants". There is a contradiction here.
When you are already recruiting skilled people from other countries,
where those countries are trying to develop further advanced technologies
to train their own people, and we say that we are recruiting them
here and then they will take back those new skills back there,
I think there is a contradiction. The Department is entrusted
with investing money in developing countries to create conditions
over there to let the people have the opportunity to acquire new
skills. There is something wrong here in this policy that the
countries which are trying to keep their own skilled force, with
a country like India, huge developments taking place, expanding
economy, they need more skilled people, and here we are trying
to recruit people and drain them of their own skills. For me this
whole thing is missing in the White Paper and this issue has not
been taken up seriously. Has the Government reached any conclusions
on this issue? What is the policy of the Government on the recruitment
of staff? Have you personally been involved in this new proposal
that we should recruit skilled labour from abroad?
(Clare Short) Yes. You can say you do not approve,
but you cannot say it is not true that it generates remittances.
Migrants generate over $70 billion of remittances; it is more
than worldwide ODA. It is just a matter of fact. If you go to
Silghat, Londa or wherever you will see some of the consequences
of that sort of intermovement and some of the remittances which
go home. There are remittances. There are also great pressures
to migrate and some of it is very worrying; I agree with you.
I have been told that there are more Ghanaian doctors in New York
than in Ghana. There are more Ugandan doctors in South Africa
than in Uganda. Of course if you take Sierra Leone, a country
which was destroyed and plundered, most of its educated people
left the country because there was nothing they could do with
their skills in the country. They must have that freedom. When
there are conditions where they are unable to work you cannot
say in no possible circumstances can people migrate. There is
no doubt that people working abroad for a number of years and
coming home again can often bring new skills and knowledge back
to their country. We all know that. People moving around the world
learn from each other and generate more skills and knowledge and
that can be beneficial. For example, Bangladesh, as a matter of
policy, trains more doctors than it needs in order that they will
be able to migrate. Whatever view you take of that, that is a
policy decision of the Bangladesh Government. In the case of India
its IT specialists are all over the world and there is a massive
IT industry in India itself which is leading to great forces for
reform and confidence in India about the capacity it has and the
way in which it can grow its economy and use its trained people.
There are references in the White Paper also that to have real
freedom to trade in services people who often carry the skills
of a service have to be able to migrate temporarily, for short
periods of time, in order to be able to sell their service to
another country. This is a matter of great concern to developing
countries that very strict immigration restrictions prevent them
from having the ability to trade in services. There is a special
working party in the WTO on that matter and we make some sympathetic
references to that. In my view, some of what you said went too
far in damning all migration and movement of people and trade
in services, but I agree with your fundamental point that it would
be outrageous if countries like the UK just go out unselectively
to recruit the skilled people they need regardless of the need
of the country concerned. I do not know whether it was Frank Dobson
who brought it in—I do believe it was—but the NHS
has put in some restrictions on its recruitment that it has to
look at the skills needs of the countries in which it is recruiting
and make sure that it does not go out denuding countries which
have very great shortages of skilled health workers in order to
recruit here. That is the position we adopt in the White Paper.
There has to be some freedom of movement of people but we have
to protect the skills base of developing countries. As a country
we cannot ourselves, and nor should we as a matter of international
policy, be sucking away the skilled people from developing countries
who need more people with skills. We have been consulted and there
are words to that effect in each of the Government's statements
which are made. I agree with you. That needs interpreting in practice.
You could say the right things and not do the right things.
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