Select Committee on International Development Minutes of Evidence

Examination of witnesses (Questions 780 - 799)



  780. Have you had any cases where it has been difficult to get it out in the open because of the media?
  (Clare Short) Yes. Ghana had a big study before the election and it was not published pre-election. Of course, it becomes intensely political. You are going to have battles every step of the way with these things. Powers in the Anti-Corruption Commission, whether its reports can be published and whether the prosecutor acts, especially when you are on really big fish, it becomes intensely political. You have to be absolutely determined and never give in.

  Barbara Follett: More power to your elbow.

Mr Rowe

  781. We were interested to read in the English language newspaper in Vietnam that the party congress this year had carried out a study of 100,000 officials and had decided that 46 per cent of them were corrupt. They published this so we felt that progress was being made.
  (Clare Short) Old, very statist systems create lots of opportunities for corruption. China has this problem. Everything is regulated and you have to get a licence or permission for everything. At every single point in the chain there is the possibility of somebody giving someone a bung and they tend to maximise that kind of corruption. More pluralistic systems with better, more transparent management, it is more difficult to get that kind of endless payment corruption.

  782. I have said to you before that I worry a bit that DFID has become a kind of tick box culture.
  (Clare Short) Absolutely not.

  783. And that, in quite a lot of projects, the project team when they have had an exhausting day in the field, have to come back and fill in forms. I wondered to what extent DFID uses a participatory approach to evaluation. Do you use the local community to provide you with their own evaluation of your projects?
  (Clare Short) Firstly, you are completely and deeply wrong because the old systems were much more tick boxy. There were projects and you had to say, "Is it gender sensitive? Is it environmentally sensitive?" Another set of hands, tick and so on. Now, as we go right into the core of government's own systems, it is a much bigger scale. It is much more ambitious, but it is much more systemic and you are looking for sustainable development, not checking that the project is not environmentally damaging. You are going much further upstream in your ambitions. What can be achieved is much more upstream. On the contrary, we are moving away from a tick box structure. Quite stringent systems were endlessly checking whether their project would offend against any of the principles. I think that is a waste of time and precious staff.

  784. These brown reports that we used to get—?
  (Clare Short) Evaluation is post hoc. It is not every single project but out of whatever number it is there will be a post hoc evaluation. We have our own evaluation department and we employ a lot of academics to do this kind of work. We basically go back as independent people, talking to everyone who has ever been engaged in a project, finding out what they thought of it and whether it was successful.

  785. That includes the recipients?
  (Clare Short) Absolutely, or the stakeholders. That is after the event. We are entirely participatory. The other big thing we have gone strongly for is these participatory poverty assessments because you cannot always capture what you need to know by statistics. Uganda had done a lot of reform, focused a lot of its efforts on the poor and then did a participatory study where you just ask the poor what is happening and got all sorts of complaints that shocked it, but made it change the way it focused its money and they have put a participatory feedback mechanism into the Ministry of Finance. We have funded a lot of those kind of studies as well. There is no substitute for asking the people concerned and having enough respect for them to listen to what they are saying, because they can teach you an enormous amount about what is working and what is not working. People come flying in on aeroplanes and they are so important and they are sorry for the poor and they do things to them and for them and never ask them what they thought. Actually, they are quite wise people and they know a lot. If you ask them what they think and what happened, they can tell you an awful lot about what works.

  786. Can you see any chance of that happening in Maidstone or Drumchappel?
  (Clare Short) There are lessons to be learned from the best of development work in countries like ours.

  Mr Rowe: Try applying it with my local authorities.

  Chairman: We have a lot to improve ourselves, but not today.

Mr Worthington

  787. Can we try and get a bit further in terms of how you design programmes that are corruption free? We have all seen situations where you go to the local market and see stuff that is marked "Aid" and drugs sold in markets and so on.
  (Clare Short) I have not, but I have heard about it. North Korea, I believe.

  788. Then you have the other kind of situation like some of the European Union programmes which are so scared about corruption no money ever gets through. It is all done in Brussels. You have talked about publicity, saying that this is funded in this way and this is the amount of money. I personally think broadcasting should be used more often than it is where people are illiterate but can you say some more about how you have made programmes corruption free because amazing things happen where states have rogue schools or phantom schools and people do not know that there is supposed to be a school there and someone has been paid for it and so on. Has there been any further thought about how you make programmes transparent and open rather than just what you have mentioned so far?
  (Clare Short) The Department used to run very high quality projects with all their own financial and accounting systems to make sure that there was not corruption. We have very tight systems and we were very good at it, but that led to no improvements in the systems of the countries in which we were working. It delivered good quality interventions where that intervention was at work. You are absolutely right. You might be running some schools in a region in a country and getting some better quality, but if you look at the whole of the education spending of the country and the number of teachers that are supposedly employed in virtually all developing countries there are loads of ghost teachers. Somebody is pocketing the money somewhere. There are other teachers who never go to the schools. With very highly centralised systems you get a real problem because someone is running the system at the centre, but no one at the local level knows what they are entitled to. If you want to get to scale and stay in with interventions, you have to get right into the ministry, the whole of its financial management, how it employs its teachers and so on but decentralise them. We advocate decentralisation because you get consultation with poor people and their opinions about what is important to them. Also, provided you do it transparently, the local people know what money they are entitled to and if the teacher does not come to school they will make a fuss or if the teacher is always drunk etc., which you do get. When you move from highly centralised systems in weak states with poor administrative capacity, to decentralise you sometimes get an upsurge of corruption because you have even weaker systems at local level. For example, when Uganda decentralised, immunisation rates dropped. You have to help the frail local government systems train bookkeepers, but this is building a state that will sustain itself. You see the scale and ambition of what you have to do to really crack the problem. I am glad we are working on these ambitions, because the old lovely projects did not build good, sustainable systems.

  789. I take that point. I think it is the number one problem which we have seen over the last couple of years or so of how you build those systems. The other problem is where you have a state that is determined to be corrupt, where the problem is that all kinds of sanctions or warnings have been given about perhaps the withdrawal of aid if the state does not mend its ways. Have you had any further thoughts about how that might be tackled, about the action by the international community as a whole to make it more effective?
  (Clare Short) We all need to deepen our thinking about this. It is almost a knee jerking policy frequently that if you get a bad, oppressive state, people say cut off the aid. If you have a state that is misgoverning its people, abusing its poor, what is the remedy to show that we are angry with the state? Take away a resource that is there to try and improve the life of the poor. I have challenged that a lot. After the nuclear tests thing in India, everyone said, "Cut off aid." I said that it was not the poor of India that organised the nuclear tests. It is the easy option. We have to be careful. I know that we cannot put resources into corrupt states that simply misuse them. In the case of Nigeria and Abacha, most countries left; Britain did not and we stayed in at local government level where we could find bits of the system that you could still prop up and keep working, which means you bring some relief to people who are having a horrendous time and you are keeping a foot in the country as an ally of those forces who feel the strength of the challenge. I have a worry—and this is just personal—that we are all too far back in Burma. Because things are so awful and everyone has pulled back and back and back, our knowledge of where the forces of resistance or change might be is very far back and this becomes a very complicated question. How do you work in very bad states? States do not fit neatly into the variable levels in between. We are doing some work in the Department, trying to develop our thinking. You can go with NGOs to deliver services; that is fairly easy, but that is very marginal when the vast bulk of the resources of a country are being misused and you cannot reach everyone in that way. You can look for ways of building voices of civil society that might bring about change. For example, if I take Bangladesh where there are lots of poor people, the recommendation on our financial commitment to the country was not to increase it so much because of problems of corruption but I was saying, "Is this right? There are so many poor people in Bangladesh." Are there ways in which you could say educating a generation of children is such a profoundly historically changing thing, is there any way to stay in a country imperfectly, to promote education because it might take 10 or 15 years to have these effects but it will bring change. I think we need to mature this debate.

  790. If we take Cambodia, for example, I fully support your sector wide approach but I wonder whether there are countries where it is premature to have a sector wide approach, where the government is not strong enough. In Cambodia, what was very striking to me was that the key thing was agricultural development, to get the land being farmed sensibly. I could not see anything coming out of the Government that was going to do that but I could see some good NGOs going in there and providing catalysts. If you put it into the government, you might have problems about whether the resources would effectively get to the people, but if you did the NGO approach it might be more effective and cause change more rapidly.
  (Clare Short) That is the easy answer. In a country where you cannot work with government systems because they are corrupt or do not care about people or are not focused on the needs of the poor, you can find some NGOs and that is better than nothing but it is not systemic change and it is not scale. When I went to Mozambique, Zambezia Province, where we are working, we funded a big NGO to do a rural development. It was doing goats. There was a war in that part of the country. There were no animals. You give people two goats, they have young and you have a system of distributing animals. We went to a village and we all drove up in hundreds of Land Rovers, all funded by the aid budget. They were doing good work and there were the local Mozambicans from the rural extension office. They did not have a bicycle. I felt deeply ashamed. It was wrong in terms of who you were respecting and also in terms of, when that project ends, it will all go away but those people are still going to be there. Even in a country where you have bad central government, yes, of course have a little pilot, but you are always going to be looking at can we get in here? Can we strengthen systems of people who are already there, where the government budgets are going. You might have really bad ministries but you might have one good ministry or a good local government area. You always have to be looking for those opportunities and not be satisfied by just a couple of projects, nice as they might be, but they are not reaching out to the bulk of the people. It is very difficult.

  791. That is one kind of country but Kenya is another kind of country where, for years and years, people have been saying, "This Government is corrupt and is not using international development money sensibly, wisely or honestly." What is the way ahead with countries like that?
  (Clare Short) In the case of Kenya, there was very big corruption and the IMF took a very firm position. We did our Kenya country strategy with a high case and low case scenario. If a reform effort was put in place, we would grow our programme; if not, we would carry on with some small stuff that we could package down and we knew was safe. We then worked with the IMF, World Bank and all the other development agencies to stand together with the government to try and get everybody to stand on the same ground so that the leverage becomes considerable. Kenya did adopt the change team and a big reform effort which involved strict, new action in dealing with corruption and management of budgets and so on. We put up £60 million to help the Civil Service reform. That programme is teetering a little at the moment and we are trying to stand with everyone else in the international community and all the voices of reform in Kenya to keep it alive because if Kenya falls the poor people of Kenya will get even poorer. It is very difficult because it becomes intensely political. One must not play political games. You have to keep your mind on the fact that your duty is to the poor of Kenya. You are not entitled to interfere in the politics of another country but you are entitled to be serious about resources that the British taxpayer votes are to help the poor. You have a duty to use it for that objective. You need to be quite careful in the way you handle this politically. Otherwise, you can end up hectoring countries in a quite improper, rude and aggressive way and using the aid budget as a "do what I say" which is not a proper relationship. On the other hand, it cannot be unconditional either. We are trying to refine the way we do that and include the Foreign Office more and more in our representations overseas in that kind of mind set. They have tended to have a mind set where ODA in the past did the projects and, if anything, the High Commissioner would do the hectoring. We need to see this as a shared United Kingdom effort and have the appropriate kind of sensitivity in the way in which we present ourselves. We are working at all of that. With Kenya, we are trying to use whatever influence we have with the rest of the international community to keep the reform effort alive in Kenya. It is touch and go at the moment.


  792. Has aid been resumed or stopped in Kenya, because at one time the International Monetary Fund said that unless they set up an anti-corruption bureau they would not lend. They set it up and now we are told it is unconstitutional.
  (Clare Short) It had virtually stopped and the change team with Richard Leakey and so on and a whole series of international Kenyans with good records was brought in. I had a programme put in place. We put our support for the Civil Service reform in place. There has been all this argument with parliament about the powers of the Anti-Corruption Authority and we are in great difficulty. Therefore, the IMF programme is in difficulty and the whole thing could crumble. Jim Wolfensohn and Hoerst Kohler have just been as part of their visit to Africa talking to President Moi and I know the IMF is going to send a team back shortly to try and track the problem and keep things going.

  793. We do not know the outcome yet?
  (Clare Short) No. They have not got there yet. Those talks have been helpful and we have been engaging in talks too with the reforming elements in Kenya to try and keep the whole thing alive. There you have some politicians of the past who were engaged in grand corruption and who are against the reform effort.

Ms King

  794. On this point about what do you do when very poor people are living under very corrupt and ineffective governments, as far as I am aware, DFID's policy at the moment is that we look for partners and where we do not find effective partners we do not sink our aid effort because it would sink without trace. This has been the single fact that has bothered me most greatly over the last three or four years, because I do not see how we avoid penalising people who are already penalised for living under whether barbaric or simply useless governments. Can you clarify? Is that DFID's core policy at the moment?
  (Clare Short) No. Humanitarian assistance we do anywhere and everywhere under any kind of government. No people should go hungry because they have a rotten government. That unconditionally reaches out. Those are the principles of the international system and ours to whoever they are, if they are displaced people or people who cannot eat. Of course, that is not development; that is just keeping body and soul together. We do not only look for partners. We also in difficult countries will fund NGOs who do work. In the forthcoming annual report, our Department spending on NGO work is, from memory, £198 million. Our contributions to the World Bank are £172 million and our contributions to the UN system are something like £150 million.[4] I think it is shocking—I do not know whether it is good or bad—that we are putting more funding through NGOs than through the World Bank. I am sure our pattern of funding is similar to most development agencies in the world. That is fairly easy to do but it is not development. If all you can do is reach out through UN agencies or NGO activity where it can get in and is safe, humanitarian relief, then do that, but no one should confuse themselves that that is development. You keep doing a little to help people be propped up, waiting for some change to take place and you may be not doing anything to help bring about the change. The bit about what else you do is the hard question that we are trying to elaborate our thinking on.

  795. Will part of your thinking be looking at how you make that transition or how you build in development into humanitarian—we saw in Burundi very clear examples of how you would provide humanitarian aid but it virtually backfired because it was not development aid. You feed the baby until it reaches a certain weight but then you send it back but because you cannot sink any wells to get clean water you cannot do that and the babies come back. It is a continual cycle. In fact—
  (Clare Short) In the case of Burundi, it is not a decision about what to do. It is because the country is full of violence and you cannot do development. People have been killed from UN agencies. It is not that we are saying we will not do it; it is impossible to do it. It is the same with the DRC and in southern Sudan. Mrs Ogata, the former, much respected head of UNHCR, talked a lot about this and there has been a lot of thinking about that. We as a Department only integrated; some parts of the international system cannot but, in the case of Burundi, it is violence and fighting. President Mandela was there yesterday. The fighters would not sign the peace agreement and were being armed by Kabila and that was within the DRC to try and destabilise Burundi and Rwanda. You have to get peace and some kind of settlement to do development but even in big countries where there is not peace if you can opportunistically help some communities and areas to improve their lives, sort of humanitarian plus, it would do it, but it gets very difficult, like in southern Sudan, where the fighters are in theory on the side of the people but they tend to take from rather than help the people use international and humanitarian relief. You have to be very careful you are not helping the fighters. We do not have stringent lines in our head that say, "We will never move from pure humanitarian to some developmental aspect until we have got some sort of acceptable, political leadership at the national level." This paper that we are working on is trying to address some of these very important and very difficult questions and I will share it with you wherever you are.

Mr Robathan

  796. Particularly on the issue of corruption, I understand exactly what you are saying that it can be counterproductive to hector a government, but when it comes to the misuse of funds, possibly British taxpayers' funds, where do you draw the line? Where do you stop trying to encourage a move to a firmer, cajoling position? You mentioned the violence in Burundi and the former Kabila government. Where do you draw the line? Where do you start saying, "I am sorry but this is entirely unacceptable and if you want our money—"?
  (Clare Short) We draw the line sharply. I just told you the story of Kenya. We try to get everyone to stand together in the reform effort to try and get leverage and commitment. We were working on electrification in the slums of Dakar with terrible corruption and we ended the work. It broke the hearts of our engineers because it was really important to bring light and electrification to some desperately poor people. We tried every which way. In terms of budgetary aid, you have to get agreement to tighten and clean up systems or we will not move, but we use the leverage because governments often want it and it often gives you leverage on big systems improvement. We are at the point in Tanzania where we have been in sector wide programmes, going straight into the budget, which means you have to have Ministry of Finance tight, strong systems. We are talking about going a bit further than sector wide in health or education. The government of Tanzania, which has weak systems but is trying to move things forward, is interested and then you can get yourself in a stronger position to help them tighten up their systems. There is more risk in that way of working but the gains are massively bigger. We do not ever move into a corrupt system. We have our own additional safeguards and we protect the taxpayers' money fantastically tightly because that is our duty, but we try to use our willingness to go bigger to get governments to talk to us about the kind of major system reform that would give them a much better way of preventing corruption in their country. I assure you we do not throw money around, take risks or do it in a big, political way.


  797. I want to explore the implications of the policy of lending into government programmes which—
  (Clare Short) We do not lend.

  798. If you are not lending, you are investing in government programmes. You have said that you do not give money or establish programmes in ministries which are corrupt and which you cannot support. Does that mean that in that position we do not and cannot help the poor in that country?
  (Clare Short) No. In the case of Ghana before the elections, we had a very effective, state of the art, sector wide, collaborating with others health care with the Ministry of Health. We tried to do the same on primary education and we could not get it to move, so we went down a level. Instead of working through the budget to the Ministry, we went down to the regional level and got books into schools but it was through our intervention. It is less effective because it will not be sustainable. When we go away and these books wear out, there will not be others coming along but we did that because we could not work in the budgetary system into the Ministry because we could not get the changes that were needed to do it safely. If we have the ambition but it does not work, we will pull ourselves back into something where we are certain that help is being provided. We are getting books into schools in Ghana and we were getting the kind of sector wide improvement of the whole management of the school system programme but if we could not get that we would not carry on putting money into the Ministry systems.

  799. You are prepared to be flexible about the doctrine of SWAPS in Ghana as you have just illustrated?
  (Clare Short) Absolutely, but it is not a doctrine. It is a way of getting systemic, sustainable change that reaches scale. It is not just an idea; it is an ambition to bring benefits to the largest possible number of poor people.

4   Note by Witness: The figures are £195 million, £170 million and £151 million respectively in the year 1999-2000. Back

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