MONDAY 29 JANUARY 2001 _________ Members present: Mr Bowen Wells, in the Chair Mr Tony Colman Barbara Follett Mr Piara S Khabra Ms Tess Kingham Mr Andrew Robathan Mr Andrew Rowe _________ RT HON CLARE SHORT, a Member of the House, Secretary of State for International Development, MR D BATT, Head, White Paper Team, and MR R MANNING, CB, Director-General (Resources), Department for International Development, examined. 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 cease to be just an aid distribution department which was looking for all the policies across Government which would promote, sustain 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 approach 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 features, 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 web site, 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 which supervised all the work. David Butt 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 of the end of the cold war and therefore 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 that globalisation is not affecting them but they are living in great poverty and they need access to credit, 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 health care 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 health care 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 government's 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 Action Aid 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 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 Lom 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 resource 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. 20. The fact is that the skilled people who leave countries like India or Pakistan or Bangladesh, wherever they come from but particularly those countries, will never have any desire to return to their own country with those skills. This is a fact of life. Therefore it is practically a brain drain. Either you force them to leave this country or you employ them here on condition that they go back. I do not know whether any such conditions will be imposed when they are allowed to come into this country. (Clare Short) I recognise the patterns you describe, but you are slightly overstating the case you make. For example, some weeks ago I was in Addis Ababa at a meeting called by the Economic Commission for Africa which has a lot of trained economists under K Y Amoako putting together strategies from much better economic performance in Africa and they have been recruiting a lot of staff. They had had masses of applications from Africans of high skill levels in the diaspora. Callisto Madavo, who is the Vice-President for Africa in the World Bank and is Zimbabwean and KY who is a Ghanaian economist both said we should never underestimate the pull of home. If there are jobs where you can use your skills people will come back and want to contribute to their country. Not all people of course. It depends on the age of your children and the commitments of your life, but there are always people who do want to go back and contribute to their country if they get a chance to use their skills. I share your concern but we should not overstate it to the point when there is no movement of people, no sharing of skills, no enablement for their to be fair trading in services because people from developing countries are not allowed to move temporarily to countries like ours in order to sell services, particularly like Indian IT where that can be a real earner going back to India. Chairman 21. It would be immoral, would it not, if all the nurses and all the doctors were recruited by the National Health Service, leaving none of those skills in countries like Trinidad and Tobago, Jamaica and so on. (Clare Short) Absolutely, and the National Health Service has some special rules to take account of this before it does any recruiting abroad, which were put in place by Frank Dobson when he was the Secretary of State. 22. I hope all area health authorities hear your voice. (Clare Short) No, there are procedures. I have had some correspondence with Alan Milburn about it recently. Procedures are in place. We think it is a good model which could be applied to other sectors. Perhaps we should provide details to the Committee of the way in which it works. Chairman: Yes, we should like to see that. Mr Robathan 23. At the weekend there was a newspaper article about developing countries complaining about their nurses being nicked for the NHS. Obviously the message has not quite got through yet. (Clare Short) As we all know increasingly, you cannot believe everything you read in newspapers. May I provide the Committee with the details of how the National Health Service works this? I agree very much with Andrew Rowe that that does not control private agencies, so there may well be other problems. However, it is an interesting and useful model. Chairman: We should like to see that. Ms Kingham 24. First of all I think I have to declare - it is unclear - an interest here in that my husband is doing work on globalisation and I believe a consortium of which he is part may be approaching DFID for support to work alongside them. (Clare Short) May I declare that I never involve myself in who gets contracts, so it will not make any difference? 25. I thought I had better say that as it is one of those grey areas. The question I want to ask is about labour standards about which there has been a lot of debate. In its submission to us the Commonwealth Trade Union Council state "... unless there is much greater recognition of the need for all governments to enforce basic labour standards the White Paper might well be entitled 'Making the Poor Work for Globalisation'". The key word there is "enforce" labour standards. How do the Government intend to ensure that the international community can in some way enforce labour standards? Do the Government still support the establishment of a joint ILO/WTO standing working forum on trade globalisation and labour issues? That was the forum which was suggested after the Seattle talks. If so, are we promoting that in any way? (Clare Short) I had a meeting with the Commonwealth TUC in Geneva once. Obviously they have deep concern about core labour standards but we do very urgently need to mature the trade union debate on these questions in that the poorest of the world are not in organised sectors and are not in trade unions. Trade unions can be their allies very importantly in advocating policies which bring benefits to the poorest people, but unionisation of the very poorest in the world is very unlikely to be the remedy which will improve the labour standards of the poorest. Secondly, certainly the trade union input to the Seattle meeting, which was led by the American trade unions but supported by the AFL/CIO was calling for the World Trade Organisation to be used to enforce labour standards. The logic of that is that any country which has problems of child labour, of bonded labour and of labour which is badly paid or badly treated, would have trade sanctions against it. Every poor country has child labour. If you go down that road you punish countries for being poor, you have trade sanctions against them because they are not in a position to have all their children properly in school and not in work and so on. These are very, very important questions, but do they promote development and enhancement of the life of people who are labouring for very little return or do they actually make things worse for them? In every developing country there is child labour: the poorest countries have more. It tends to be concentrated in non-traded sectors, lots of it in agriculture of course. Of course some degree of children working for their parents in small subsistence farming is a perfectly acceptable practice. The reason we have long summer holidays here is that children used to help their parents, a long time ago when we were a rural economy. We need to mature the debate about how to get better enforcement of core labour standards. That said, the ILO, which up until recently has tended to focus on enforcement of labour standards in organised sectors and therefore have little relevance to development, is now broadening out its work considerably. We have the Convention on the most exploitative forms of child labour and an agreement worldwide to do a big push not to stop all aspects of child labour but the forms where children are being very grossly exploited: the sex industry, children working very long hours which prevents them from going to school. The push to get all children into school and make school and some work for their families compatible is a very important change and we are working with the ILO in Andhra Pradesh and Tanzania and in the Golden Triangle on resisting the sex trade, to try to improve children's chance of having a childhood and get to work. Similarly bonded labour. There is a declaration of the ILO that we should all work together on the enforcement of the four key labour standards, child and bonded labour, no discrimination and the right of labour to organise. We need to interpret the right of labour to organise, to include communities organising themselves, not only trade union organisations, all forms of self-organisation of people which enable them to protect themselves and put forward their rights and standards. We are working in support of that, particularly on bonded labour in Nepal where there are high levels of bonded labour. Our own work with the ILO is going very strongly now. Richard Manning has been negotiating with the ILO because it has rather broadened its viewpoint and taken account of the fact that most of the poorest of the world are not in organised sectors. Then the standing working forum proposal, which we worked very hard to get to be the EU position and it is the EU position, to get it out of being a working party in the WTO, which all developing countries absolutely oppose and so do we. We are opposed to the suggestion of using trade sanctions as the mechanism of improving core labour standards. Yes, we support this outside the WTO but you can look at the contribution trade can make, the ILO can make, indeed the World Bank and development strategies can make and we need strategies to improve labour standards but not sanctions against countries for their poverty. 26. My second question is about international capital flows. War on Want state in their submission to us "One specific aspect of globalisation which has caused poverty is the growth and instability of capital flows. $2 trillion is now exchanged every day on world currency markets ... As a direct result", of the East Asian financial crisis, "the ILO estimates that 10 million people were thrown out of work and poverty levels rose dramatically". These are stark facts. The White Paper states that the Government are prepared to countenance "specific measures to help discourage excessive short term capital inflows". I should like to ask first of all what is meant by that. Secondly, what is the Government's position on proposals for a capital transactions tax to impede financial speculation and provide increased tax revenue. I am thinking here about the Tobin tax in particular. (Clare Short) The first point I would make in response to that is that the abundant availability of capital, its willingness to move across the world, is one of the aspects of globalisation which creates the potential for great benefits to developing countries because beneficial investment, bringing access to modern technology in infrastructure and other sectors, can really lift up economic performance. So we must not be against investment from outside. We all know that there is this disgraceful and worrying fact about Africa in the White Paper: 40 per cent of its domestic savings leave the continent. The same conditions which unstable banks, not well regulated banks, mean that the savings of Africa are in Europe and they should be the first call for re-investment in the continent. The sort of reforms which keep savings at home are the same reforms which attract inward investment: proper enforcement of law, properly regulated banks and so on. We should welcome the availability of capital to invest and seek to channel that in a way which is beneficial. Of course if you take the east Asian economies, they achieved in the past 30 years the fastest economic growth and reduction of poverty for the largest number of people that has ever been achieved in human history. They did it by attracting inward investment and exporting and growing their economies and investing massively in education. Without capital coming in and investing in their economies, they would not have achieved that enormous performance in reducing poverty. Similarly China. China's improved performance recently has been as China has opened up and attracted investment into itself and been able to grow its economy more rapidly. Of course the east Asian crisis was short-term hot money realising that it had been taken into banks short term and then lent on long term to domestic enterprises in rather crony suspect relationships between local banks and local companies and that that was not viable. Then once the scare started all the hot short-term money came out and threw the economies into deep recession and big devaluations of their currency and did do damage, but did not reverse the previous economic growth which had been achieved in east Asia. Actually the evidence is that it was more the middle classes who suffered than the very poor because people were thrown out of employment in urban areas. We do not want anyone to suffer, but as a matter of fact, that was the result and the cause of it was partly bad regulation of banks, untransparent relationships between banks and local investment, things which need to be cleaned up in greater transparency and better management of inward investment. Indeed a lot of lessons have been learned from the Asian crisis in countries which are opening up their capital markets. We say very clearly in the White Paper that it should be phased sensibly, proper regulatory arrangements have to be in place so that you cannot get this kind of abuse and destabilisation of an economy. There are special measures to restrict short-term flows which we refer to in the White Paper. Famous examples have been used, like in Chile, which required the depositing for no interest of sums of money to try to restrict the inflow of hot money. It worked for a time but Chile has got rid of it; it was a mechanism which was used and which is reasonable. In the face of the crisis Malaysia used government controls and then phased them out which was its way of getting through the crisis. What the Treasury favour and what the reference in the White Paper is about is that we think it is a good idea for countries to look for taxing mechanisms and so on to make short-term flows in and out, have some taxation and cost on them so that there is a restriction on hot money that can cause a destabilising effect. On the Tobin tax, the idea that there should be a very tiny charge on hot money moving around the world which would go into a big global development pool is a very attractive idea. The problem is that we have to get all countries in the world to agree for it to be able to work; obviously, otherwise it would distort flows. It is a good thing to campaign on and it might come one day, but I fear it might take quite a lot of time and we have to have methods in the meantime of making progress. 27. I would add the debt crisis. When people were first campaigning on that in the early 1980s people said it could never happen, it was a long time, so maybe it is worth looking out for in the future. (Clare Short) I know and I find it an attractive proposal, but we do just have to face the fact that it will not come in until everyone has agreed, will it, because you would be disadvantaging your own country as a destination for investment if you agreed to a tax and other countries did not? It is quite a job to think of getting the world to a point where everyone would agree. Mr Rowe 28. It has been suggested that one of the subsidiary causes of the Asian crisis was the fact that quite a lot of the highly prestigious accountancy firms worldwide were pretty careless about the way in which they carried out the audits. I wondered whether your Department was actually really satisfied that some of these famous worldwide names are as good as they ought to be, because clearly they give a lot of comfort to moneylenders and others, but if in fact they themselves are not behaving as scrupulously or as presciently as they might it must actually compound the problem rather than the other way round. (Clare Short) That is very interesting. I do not have enough information to comment. I do not know whether either of my colleagues does. Let me say that we have really learned about the need for transparency. You have big pension funds based here, investing money because there is an historic high rate of growth and therefore you are getting a good return, but into bad investments which were taking in a lot of short-term money and lending long. It was unviable in the end and there was incompetence in doing those kinds of investments and the need for much more transparency in where the investments were going, but much more scrutiny rather than following the herd by really quite prestigious pension funds and so on. That is part of the lesson of the crisis. Does either of you have enough information to comment on whether accountancy firms have let their standards slip in countries in east Asia? (Mr Batt) I do not have that information. (Clare Short) I shall enquire but no-one has ever put that point to me before. Chairman 29. I am sure if you put that question to PriceWaterhouseCoopers they would say no. (Clare Short) True and it may well not be, to be fair. Mr Colman 30. May I take us back to the Tobin tax? At the Social Summit in Geneva last June, there was agreement with all the countries in the world that there should be an investigation into the Tobin tax and other taxes of that nature. Just before Christmas the UN Secretary-General made known the Chairman of the Commission which would look into this and who would sit on that panel. Perhaps it would be possible for the Secretary of State to give us a note on how far the discussions have gone in terms of the work on the Tobin tax and the report I believe this Commission is going to be making to a UN conference later this year on financing for development. (Clare Short) This is a Treasury lead, not us. Obviously it is a proposal for a tax on international financial flows. We can ask the Treasury for a note but I do say to everyone, let us look at it with interest but do not hold your breath. It might be out grandchildren who inherit that. 31. I hear what you say. I understand there is a world clearing system which is in fact coming in on this in February and that will be a mechanism to be able to control these flows. Clearly flows could be outside that mechanism but the major centres in the world are working through the single mechanism. There is movement on this and the French Government and Canadian Government, as you will know, have particularly led on this worldwide. I was pleased that the UK Government, certainly with the Treasury lead, supported a full investigation into this last June. (Clare Short) I repeat that this is a Treasury lead and I know that they see enormous difficulties in the likelihood of it coming forward. I have never before heard that the French and the Canadians are supposed to be fully in support; I shall have to investigate that. I am not sure it is fully the case. It is easy for people to be in generalised support of something which is not going to happen. Barbara Follett 32. The White Paper commits the Government to the establishment of a Commission on Intellectual Property Rights. What will be the Commission's terms of reference, its members, whom will it consult, when will it report and will it just look forward or will it have the ability to review existing agreements, for example the TRIPs World Trade Organisation agreement? (Clare Short) I cannot answer those questions fully; I am working on it and shall make an announcement fairly shortly. We say in the White Paper, and it is clearly our view, that intellectual property protection is in the interests of the poor. This is another area of campaigning. For example, new drugs and vaccines which we need for HIV/AIDS, for malaria and so on, the killer disease, and the greatest intellectual capacity in the world in this research is in the private sector. We need partnerships with the public sector to get the research done because there will not be a market response, but you need some intellectual property protection if you are ever going to achieve this. I just want to make clear that there are those who say there should be no intellectual property protection and we think that would prevent the development of treatments or prevent investment in developing countries which need investment. So the view of the Department is that some agreement on basic commitment to some intellectual property regime is beneficial to developing countries. Of course developing countries in the Uruguay Round signed up to putting in place basic intellectual property protection. I think there was no template; it was just some basic framework of law. (Mr Batt) Minimum standards. (Clare Short) Countries have mainly found that it is difficult in practice to do that. It is a whole other area of expertise and the implementation review which is taking place in the World Trade Organisation is looking at the difficulties countries are having. The purpose of the Commission is to get people with expertise who are knowledgeable about and sympathetic to the interests of developing countries and the whole issue of protecting natural property, indigenous plants and herbal remedies and all that which is protected under the biodiversity convention but which you need to protect in practice, not just in some theoretical international convention. The purpose of the Commission is to roll forward the detail of that debate, look at all the detail, why countries are having problems, what kind of advice they can be given about the sort of regime which might be most beneficial to them, how natural and indigenous knowledge and plants and remedies can be properly protected. As we look into some of that detail, it may well be that with the implementation review which is taking place in the World Trade Organisation there will be recommendations for some modification of the intellectual property agreement in the next trade round. It will depend where the work takes us on that. The purpose is to help countries implement the agreements which are there in ways which will be beneficial to the developing countries and beneficial to poor people. 33. I want to touch on pro-poor research and development. The Intermediate Technology Development Group and Action Aid have expressed similar concerns because they say there is "little evidence to suggest that global markets will deliver improved technologies that the poor will find affordable, appropriate and accessible". We should like to know whether you think there is a role for development assistance to support the development of poverty-focused research in areas such as information and communications technology, medical research and agricultural research? I should like to tie into that: what is DFID going to do to make sure that in one particular area, which is medicine and pharmaceuticals, there is early identification of emerging diseases and that the research for drugs and vaccines necessary for them is undertaken? (Clare Short) I do not personally think that we need some sort of inferior technology for developing countries. There is appropriateness of technology and clearly developing countries have cheaper labour and more intensive use of labour is often one of their comparative advantages but I do not think some sort of backward forms of technology are going to be beneficial to developing countries. I do think that a major research effort needs to be focused on the needs of developing countries and indeed we do that as a Department: knowledge, agriculture, medical research I have already referred to. If you just take HIV/AIDS, the strain which is in developing countries is different from the strain in Europe and North America so if all the research for a vaccine is confined to Europe and North America you would not get a vaccine for Africa. There has to be some parallel research and there is an international initiative to drive that research forward. The market will not drive it because there are not enough people to buy consequent drugs. We and others have contributed to some of that research. For agricultural research there is an international research institute, because there are different kinds of crops, different needs, there needs to be appropriate agricultural research, certainly medical research and so on and then ideas, knowledge of what works in development, methods of consulting poor people, providing them with credit, all sorts of knowledge which needs to be spread around the international system and we and others invest in that research and that is very important. On your final question on vaccines, a lot of international effort now is going on to find the vaccine for HIV/AIDS, where the science is optimistic. In a five to six-year timescale we could have effective vaccines, but also malaria remains a bigger cause of death and ill health in Africa even now than HIV and that is suffering - a million children lose their lives to malaria - but also a lot of loss of work time which impoverishes families. Both better application of existing treatments and getting new treatments are important and we need to find new ways of building partnerships between the public sector which can drive funding and guaranteed market but will cause the private sector to put in research effort to produce some of the new drugs and vaccines. The Cabinet Office have these cross- cutting reviews taking place right now and in our Health and Population Department we are doing a lot of work on putting in place worldwide arrangements which will incentivise much better medical research to produce better treatments for the diseases of poverty than we have currently. Mr Robathan 34. You acknowledge in the White Paper the importance of environmental science, particularly by having a whole chapter devoted to it. You also acknowledge the conflict between environmental concerns and conservation and economic development. We have heard from the World-Wide Fund for Nature that PRSPs have not adequately taken environmental concerns into account in their opinion. I heard today from Trevor Manuel at the World Bank conference, the Finance Minister for South Africa, who said that when trade was freed up the grain which was grown in Brazil should be able to come here because they grow good grain in Brazil and they grow it very cheaply. Of course in environmental terms one of the problems with agriculture in Brazil is that it tends to go into the rain forest and they cut down rain forest for ranching in particular but also for growing grain and diminish the environmental bank there. My real question to you is: what, if anything, can we or the Government really do to ensure that environmental concerns are better integrated into development initiatives? (Clare Short) It is very important to get our thinking right on this crucial subject. A lot of the international campaigning is driven by a conservationist anti-development mindset. The planet is under strain, we cannot afford to promote more development and then it goes to romanticising conditions of poverty in which people in Africa and South Asia live, which causes fury in developing countries, that we developed, got all the benefits and are pulling up the ladder behind us. If the argument goes that way we shall not get international agreement on the new environmental agreements we need. On the other hand in developing countries there is also growing concern because forests are going, there are more and more problems with floods and so on, there is a growing awareness across Africa, across China, that the environment has to be attended to, that it cannot just be taken for granted. We did a big review in the Department of our work on the environment and realised that we, like most others, the World Bank and everyone else, had had an approach saying that we must promote development, but development might damage the environment, therefore you have to monitor all proposals to see that they are not environmentally damaging; a sort of negative check. Whereas if you are promoting sustainable development, what sustainable development really is, is that you look at environmental resources, economic development and social needs side by side and plan for growth which will be sustainable in an economy and will not be eroding environmental resources which cannot be replaced. It is a whole change of mindset, bringing sustainability and environmental resources into the mainstream of economic thinking in the future development of an economy and its people. You know that one of the international development targets is that there should be national strategies for sustainable development in place in every country by 2005; this comes out of the Rio conference and then reversing the loss of environmental resources by 2015. We agree very much with what it appears the World-Wide Fund for Nature said in their evidence that having a separate national strategy for sustainable development in developing countries, when they are meant to bring together all their macro-economic and social planning in their poverty reduction strategy, is not the right approach. We need to bring the environmental considerations into the mainstream of the poverty reduction strategy, make it longer term and take the focus into the centre. That is our view in the White Paper and we have started working with the World Bank and so on to try to achieve that objective. Obviously PRSPs are very new but they are going round and they are popular in developing countries and if they are to work we have to get environmental sustainability into the perspective. Our view on your point on trade and Brazil and so on, that we should not look for regulatory arrangements to restrict trade in order to prevent environmental abuse, and this is another issue which was very, very contentious at Seattle, developing countries believe that those who call for environmental provisions in the World Trade Organisation are again trying to set such high standards that their exports will be excluded from international markets. Our view, and it is the EU position, is that the World Trade Organisation agreements and international environmental agreements should mutually recognise. The Department is putting more effort into, rather like trade, enhancing the capacity of developing countries to be participants in international environment agreements, thinking about their own interests, their own environment, their own country, having more capacity to think about their own needs and represent their interests in those agreements. Like trade, that analytical capacity and negotiating capacity just need building up in developing countries. 35. We have seen that natural disasters tend to have greater impact on less developed countries than on more developed countries. We were in Mozambique last year in the floods and people who had next to nothing ended up with absolutely nothing apart from a plastic bag. I think most people would agree that natural disasters are being exacerbated by global warming. I notice the laudable comments about renewable energy in the White Paper but is there anything further that we, your Government, the developed world, can do to create greater capacity for developing countries to adapt to environmental change and climate change? (Clare Short) There are two forces at work. One is probably the growing instability in climate resulting probably from global warming. The other thing is the growth in population leading to more and more people living on more and more marginal lands where they are more at risk. That is the other big thing which has been going on which means more and more people are affected by natural disasters. There is growing concern across the developing world about these issues and more and more sensitivity to the need to manage the environment in a way which minimises this. Obviously in the case of global warming, the Climate Change Convention, it is the United States of America who have been the obstacle to agreement not developing countries. Bangladesh stands to lose one third of its territory, Pacific islands and so on stand to disappear completely. There is a real will in developing countries to get some progress. We are making progress. 36. I particularly wanted to know whether we can assist developing countries to adapt to the environmental change which is taking place. (Clare Short) Yes; indeed. Getting the environmental perspective to be part of the poverty reduction strategies, thinking about environmental resources and sustainability and indeed strengthening the capacity of countries to deal with natural disasters so that they save their people more quickly and have more knowledge of where the dangers lie and where not to develop the housing and so on. We are working on those things too. (Mr Manning) Things to keep an eye on. A renewable energy task force has been established by the Okinawa summit which will be reporting its findings to the Genoa summit. We shall see whether that produces any useful ideas in that area. Secondly, we are planning to fund a study to analyse the extent to which climate change will affect the achievement of international development targets and how developing countries can mitigate or adapt to such predicted changes. Mr Rowe 37. I have asked you this question before but it was some time ago and you might want to think about the answer again. How much does your Department do to make sure that the lessons you learn overseas are applied here? Community development in England and Wales and Scotland and Northern Ireland is pathetic. Yet we go round the world preaching how communities should develop themselves. That is just one example. They are learning a great deal overseas. What mechanisms do you have in place for your Department to spread the information you have gathered through the domestic departments? (Clare Short) There are few very good mechanisms. There has been a sort of snobbery that is out there in the world that developing countries have nothing to teach us, whereas actually on community involvement in development we do have a lot to learn. As we publish all our documents, like Human Rights Based Approach to Development, we need to consult people and to listen to them, to get people effectively buying in and also doing more effective development. One bit of feedback I notice is that some of the work of Professor Ruth Lister who used to be the head of the Child Poverty Action Group is doing here was inspired by that document. Starting to publish all our material is beginning to get more consideration, but in general there are not good mechanisms. I hope, as there is more recognition for quality effective development, there might be more openness to learning from it. (Mr Manning) I have been struck by the extent to which DFID staff are increasingly being headhunted by Cabinet Office to work on a whole variety of things, so there are obviously some feedback mechanisms. Chairman 38. We do have other questions, but perhaps we may put them to you in writing. However, may I ask you about the process of producing the White Paper which has fascinated some of our academic interlocutors, so we need to put the questions to you? How much did the Department spend on producing the White Paper, both in terms of research commissioned, the consultation process, internal costs and in the production and dissemination of the White Paper? From what part of DFID's budget was it drawn? Why was there no Statement in the House of Commons and why was it launched before copies were available in the Vote Office? (Clare Short) The total cost of the paper was under 700,000. Just over 300,000 came from our Information Department budget to cover design, print, translation, internet site, The Independent supplement. The rest of the money was drawn from a special budget set up for the White Paper: 161,000 was spent on commissioning research specifically for the White Paper but we do commission a lot of research in general anyway; the final 225,000 was spent on the staff costs of the small team which was formed specifically for the exercise and on the organisation of consultations, including a Round Table with representatives of developing countries in Sussex. We would have paid you lot anyway so there might be a bit of double accounting there. Those are the figures. Why there has been no Statement in the House of Commons is a matter for the "usual channels" and the "usual channels" from both ends decided they had other priorities. I noticed at the last Question Time that some MP asked whether we could not have a debate on these matters and I think that would be highly desirable myself and I hope we might be able to persuade the House. 39. Is not the point that after your last White Paper we were constantly asking for a debate and we never got one? We do not even have a Statement on this one and perhaps the Leader of the House should take note of the fact that she has neglected these Statements and the work of your Department by not responding to these requests. (Clare Short) I share that view but I believe that both ends of the "usual channels" have that difficulty. On why the White Paper was launched before copies had been made available in the House, that was some problem with the Table Office. It was delivered here but not distributed until later. I have written to the Speaker. Did I send a copy of that letter to you? If not I probably should have done. 40. No, we did not receive that. (Clare Short) We shall certainly supply you with one. We delivered it but for some reason it was not made available to Members for some hours and there was some sort of problem with the arrangements in the House. 41. What has been the reaction of other bilateral and multilateral donors to the White Paper and what has been the reaction of NGOs? The fact that you have run out of copies and have to reprint says something but have you had any reaction directly to it? (Clare Short) Yes, we have had a lot of feedback, very, very high levels of interest, quite a lot of embarrassingly effusive praise, very speedy distribution. The last White Paper was put into French as well as English. This time we are going to do more languages. (Mr Batt) Spanish, Portuguese and German. (Clare Short) My own view is that it is not so much that we want people to sign up to every single proposal we make but to get the more informed debate on how we shape globalisation is really important and the more people read it and argue over it the better I think. In terms of NGOs, we were pleased by the response. I have had a meeting with BOAD directors, which was very positive indeed. Obviously there is a bit of negative comment from World Development Movements, but most of the others welcomed it very strongly and then made some comments about some elements of it. I am not trying to get everyone to sign up to every single thing we say, but to get a positive informed debate about how together we can get the international system to manage globalisation which makes sure poor people in countries are not marginalised. I think the White Paper is beginning to generate a more informed positive debate. It is also circulating in quite big numbers in developing countries, which is good. When I go I do seminars and things to try to have that shared debate much more openly. Chairman: I am sure that it will in fact promote a great deal of debate, both in this country and overseas and in the multilateral institutions. We are most interested and should like to thank you and David Batt and Richard Manning who have worked so hard with you to produce it. May I thank you for coming and spending your time with us? We shall obviously go into a lot more of these issues if time permits before we get to an election. Thank you very much indeed.