Examination of Witnesses (Questions 20-34)
BARONESS AMOS,
MR TOM
FLETCHER, MS
SALLY HEALY
AND MR
GRAHAM STEGMANN
TUESDAY 16 JULY 2002
20. I know that to be the case but forgive me
for putting it in these terms. The discussions going on at present
in America where they committed $5 billion of that $12 billion
in the Millennium Challenge Fund is not necessarily committed
to Africa. They are defining the criteria now and, when we have
asked people, "Will it go to Africa?", the reply we
have had is, "Not necessarily." So, that could take
nearly half of that money away from Africa at the first shot.
(Baroness Amos) That is precisely why this commitment
is so important. The Americans are currently working on the criteria
for their Millennium Challenge Account. They are consulting with
other donors, with the civil society, and this is something which
has to go to Congress. G8 leaders have really said, ". .
. half or more of our new development assistance could be directed
to African nations that govern justly, invest in their own people
and promote economic freedom." This is a commitment that
the G8 leaders have made.
21. If America decide the five billion goes
to Latin America, not to Africa, what else goes to Africa other
than the commitment that the British government is giving now?
Where is any more added? There is no more money.
(Baroness Amos) This is a commitment that President
Bush signed up to and there are discussions ongoing now that we
all know with respect to the criteria for MCA. We have to go through
Congress and get congressional approval but my understanding is
that, as far as the Americans are concerned, half or more of their
MCA could go to Africa.
Chairman
22. John Battle and myself were in Washington
a couple of weeks ago. Can we look at the raw politics? We all
want to ensure that countries are governed justly. What was quite
clear to us in Washington was that President Bush had gone to
Monterrey and people had not had great expectations for what he
would do at Monterrey. He produced this money for the Millennium
Challenge Account and everyone was very pleased about that. It
was beyond most people's expectations of what the United States
would produce. It was then clear that this was going to be hedged
around with conditions and it was also clear to us that absolutely
no one in the machinery of government in Washington had the slightest
idea how they were going to deliver on this, a fairly bizarre
kind of machinery of government, where you make an announcement
and work out how you are going to deliver. Not in the wildest
days of Whitehall would anyone ever do that. I note the smiles
on the witnesses' faces but we would never do it like that. I
can see from your perspective—this is not a criticism; it
is a fact—that you have to engage in what the office has
describe as interlocutors where it is probably easier to engage
if one can demonstrate success of the process. On this side of
the table, there is some considerable cynicism as to whether Congress
is actually sufficiently engaged in Africa and whether Congress
and our colleagues in Congress, other than HIV/AIDS, where I think
they are concerned about transmission from mothers to children
and that, because it is mothers and children, gripped people in
Congress. If you take it beyond that, it seems to me that all
these phrases, govern justly and people investing their own future
and so on, are all phrases which can be taken any which way. I
think we are just concerned that maybe the G8 meeting was not
promoted as being too much of a success when in reality one did
not get the feeling that President Bush, notwithstanding the amount
of time that G8 was giving to Africa, was making any fresh, intellectual,
political commitment to Africa.
(Baroness Amos) Can I say something about the process
that led up to the development of the Africa Action Plan because
that might help the Committee? We had a group of Africa personal
representatives appointed by G8 leaders, reporting directly to
their leaders on this issue. On the side of our African colleagues,
they also had personal representatives of a 15 member implementation
committee. The two groups have been meeting consistently. We had
six meetings together since September last year, working through
a whole range of issues including what were the priorities on
the African side, where could we as G8 deliver added value, how
could we work through a process that delivered a degree of trust
between the two sides that enabled us to develop an action plan
that our African colleagues would have some degree of confidence
in? It would be no secret around this table that clearly there
would be differences between G8 countries about priorities but,
in addition to that, G8 countries are in very different places.
We have some G8 countries that are currently going through economic
crises, for example, which would make their ability to respond
to the totality of the aspirations in NEPAD more constraining
than for some other G8 countries. The process is very important
in terms of G8 countries actually understanding the red lines
for each and every one of us but also agreeing and understanding
the priority areas that our NEPAD colleagues wanted us to address.
Their key areas were looking at issues around trade and market
access and debt relief. We had to have some pretty honest, straight
talking about the extent to which the G8 felt able to deliver
on those two areas. The extent to which parliamentarians in different
G8 countries are engaged in this process is something that we
have tried to foster and we were very pleased that Members of
this Committee, for example, were able to go over to the United
States. There were other visits between other G8 countries. The
NGOs were also very active in terms of raising awareness of these
issues in G8 countries and in African countries. This is a process
that has not just now stopped. To come to the specific question
about how can we ensure effective implementation, we will have
a continuation of the meetings between G8 and NEPAD colleagues
to enable us to report to the G8 next year. We will have elements
of the Africa Action Plan being placed within the appropriate
place internationally, be it the UN, the OECD, the World Bank
or the WTO, and we will have, through our individual work as G8
countries but also collectively as G8 in different fora, to deliver
on our commitments. I do not think that this will be at all an
easy or straightforward process. Just within Whitehall, we have
worked very well and I was very well supported, I feel, as the
Africa personal representative. We had a cross Whitehall group
involving the key government departments chaired by Graham Stegmann
from DFID, which gave me excellent support and ensured that the
kinds of issues that we wanted to see on this agenda that I was
able to argue for, even though I was not able to get everything
that we wanted into the document. Some form of cross Whitehall
coordination to facilitate implementation will continue to exist
within the UK government. We are talking about that process right
now. We are engaged in talking to the French who will be the chairs
of the G8 next year about how they see the implementation process
and how they will oversee the implementation process on behalf
of G8 colleagues. I would like to assure the Committee that these
conversations are going on. They began before the Action Plan
was agreed and they have continued post the agreement of the Action
Plan. We are involved in discussions with our American colleagues
about the Millennium Challenge Account and whether there are elements
of our own experience and our own understanding that the Americans
may wish to take on board in setting up that account. I know that
they are consulting with others. I will continue to work with
G8 colleagues both on a bilateral basis and collectively on the
implementation agenda. It is not an easy agenda precisely because
there are so many different international institutions and organisations
that will have a responsibility in terms of that implementation,
but I do feel that we already have the experience and expertise
in the way that we currently work and in particular in the way
that the Department for International Development works in terms
of influencing these organisations that will stand us in very
good stead. I think we have the right kinds of policies and strategies
in place that will enable us to know very quickly if things are
going wrong or if things are not happening at all.
Mr Walter
23. I wonder if we could look at a couple of
specifics. I wonder if you could give us some clue as to what
the G8 is doing to ensure that African countries that do not have
the capacity to produce their own essential medicines to treat
HIV/AIDS and other diseases will be able to source them from other
countries.
(Baroness Amos) The Committee may know that we have
had a working group on access to medicines which has been meeting
over the last year. We have been working with other international
players. What we have been looking at is to try to develop a voluntary
differential pricing package. Once that is agreed, we would want
to see that become part of the broader international agenda. I
think it would be very important for me to say that, whilst we
want to facilitate widespread, predictable, differential pricing
on essential medicines, what we are absolutely concerned about
is ensuring that the health systems exist within developing countries
which will facilitate not only access to those medicines but their
use. What we have in the majority of countries in Africa are health
systems which are not functioning effectively. We have people
who do not have access even to the basic primary care so even
if people have access to medicines they need, for example, to
have access to clean water. This is an agenda that is about poverty
and not just about health or access to medicines. Our entire approach
is to work with countries to put in place the right kinds of health
systems which will facilitate access, not just to medicines, but
also to support and care more broadly.
24. That is a longer term project than the specific
crisis which exists today. We had some striking evidence just
before you came in from the High Commissioner of Malawi on the
subject. What are we doing in terms of the crisis that is there
right at this moment and getting those medicines to those people?
Water and all the other things are important obviously as part
of the whole programme but there is a crisis there which is getting
worse by the hour.
(Baroness Amos) Are you talking specifically about
HIV/AIDS?
25. Yes.
(Baroness Amos) There are a number of things. We cannot
just say that because developing health systems is a long term
agenda we cannot do it. That is absolutely part of our focus.
We have contributed, as Committee Members know, to the research
on trying to find a vaccine. We have been told that there is a
possibility of a vaccine with 30 per cent coverage being achieved
over the next five years. We have bilateral development programmes
in a number of different countries in Africa. For example, we
have a programme in Nigeria where we have committed some £53
million. We have new commitments in Ghana for £25 million;
in Malawi, commitments for 30 million; in South Africa, 15 million,
and we continue to have an HIV/AIDS programme in Zimbabwe for
13 million. This is separate and distinct to the money that we
have given for the AIDS vaccine and is separate and distinct from
the work that we are doing in those countries in terms of trying
to get their health systems in place. As I mentioned, we also
have the working party on access to medicines which is due to
report at the end of July.
26. I wonder if we could move to another specific,
which is debt relief. NEPAD refers to costed poverty reduction
outcomes. I wonder if you could comment on what you think the
prospects are in the HIPC process of that being revived so that
debt relief is calculated on the basis of development needs and
countries' requirements for meeting the millennium development
goals?
(Baroness Amos) What we have been working on at the
moment is to ensure that countries which exit HIPC do so without
unsustainable levels of debt. Part of the additional one billion
that was agreed at Kananaskis is to help with topping up for countries
which potentially could leave the HIPC process with unsustainable
levels of debt. We are extremely worried about that. The World
Bank is currently engaged in a review of HIPC. They will report
in September on that and we are waiting to see the terms in which
that review has been concluded. The United Kingdom has really
led the way in arguing that we cannot afford to have countries
leave HIPC with unsustainable levels of debt. The additional,
bilateral debt relief which is given by countries is not included
in the calculations which are made for HIPC purposes with respect
to debt sustainability. In terms of the extent to which we will
manage to get the HIPC process to be altered to look more specifically
at the achievement of the millennium development goals, clearly
this is an aspect that is already included in terms of countries
having to develop their PRSPs, for example. I am sure that this
is an area that we will continue to look at because what we are
concerned about is the number of countries in Africa where we
can see that they are falling behind in terms of the achievement
of the MDGs.
Hugh Bayley
27. Lots of people quite rightly have commented
on the Prime Minister's commitment. It would have been inconceivable
a few years ago that Africa would have got onto the G8 agenda
at all, but I would like to start by paying tribute to your role.
If you had not woven together this agreement with your colleagues
from other G8 countries and in dialogue with African leaders,
we would not have an agreement at all. It is inevitable that we
talk about what is not in the agreement, but it is a great step
forward. I am particularly interested in the role of the private
sector. I do not see that the resource gap which NEPAD identifies
can ever be closed by aid alone. We have to create from our end
in the rich world and African leaders in Africa have to create
conditions where private investment and trade will flourish. Looking
at paragraph 3.3 of the plan, the second blob says, "Without
prejudicing the outcome of the negotiations, one of the things
that has to be done is applying our Doha commitment to comprehensive
negotiations on agriculture aimed at substantial improvements
in market access and reducing subsidies with a view to them being
phased out altogether and substantial reductions in trade distorting
domestic support." I am very pleased to see that in there
but rather alarmed at the opening phrase: "Without prejudicing
the outcome of the negotiations . . .". Who from the G8 wanted
to put in that rider and what does it mean? Does it really mean
that we are not committed to achieving the eventual phasing out
of export subsidies and substantial reductions in trade distorting
domestic support, because if we are not we have given up before
we start.
(Baroness Amos) Can I first of all thank you very
much for your kind comments about my role? I agree with you that
it is inevitable that we will concentrate on what is not here
rather than what is here. On 3.3, bullet two, the reading of it
should be the other way round. There was a very strong feeling
in our discussions around the G8 table that the appropriate place
for the discussions about trade and market access was the negotiations
following on from the agreement at Doha; that there are some good,
very specific commitments which already exist following the Doha
meeting; that the negotiations around the Doha agenda involve
a great many countries and the G8 did not want to prejudge what
might be the outcome of those negotiations. It is not going back
from the commitments that have already been made. It is recognising
that commitments have already been made at Doha which will form
the basis for the discussions, which we hope will lead to the
kinds of conclusions that we all want to see by January 2005,
but there was a feeling that that was the most appropriate place
for those negotiations to take place and that the G8 table was
not the appropriate forum.
28. Market access is one of those less than
transparent phrases but what it means is creating conditions in
which more agricultural produce from Africa is sold in the G8
countries and in our case the EU. Are you in a position to take
a stab at what we would regard as a successful outcome, say a
doubling of agricultural produce by volume sold in the EU? And
what would be your stab at a successful outcome for eliminating
export subsidies, a halving of food exports from Europe to Africa?
(Baroness Amos) I think it is too soon to take a stab
at either of those areas. I will say two things. One is that the
G8 were very concerned not just about trade between Africa and
G8 countries or Africa and EU countries but also about intra-African
trade and working with our African colleagues to try to facilitate
the creation of free trade areas and customs unions between African
countries which sometimes have even higher tariff barriers than
between Africa and the European Union or other G8 countries. We
were very keen to ensure that we put in the document our commitment
to working towards enhanced market access for trade with African
free trade areas or customs unions which we did manage to include
in the document, which is included under 3.5. The other important
area for us was to work to ensure that African countries understand
and appreciate AGOA and EBA, for example, and the plethora of
other market access arrangements which exist. The point under
3.4, bullet two, is also very important because we have agreed
to establish these market and trade information offices which
will support trade related technical assistance and capacity building,
but will also be a mechanism for ensuring that countries knew
what existed and they could make the maximum use of that. One
of the concerns that we have about the Everything But Arms initiative
is that the Americans have made an excellent job of marketing
AGOA and African countries understand the benefits of AGOA but
very few of them understand the benefits of EBA and maximise the
opportunities that exist within EBA, which is one of the things
that we would want to look at.
29. Setting up initiatives to promote regional
trade is important and badly needed but they are inputs so I would
simply ask that, when the G8 has its review next year, it is looking
for indicators of outcome and I think trade volumes must be a
key indicator. Whether they look good or bad on the sheets of
paper, I hope the figures will be presented to G8 leaders next
year and in subsequent years so that you can track whether you
are making progress. In relation to private sector flows, NEPAD
talks about there being a US$64 billion resource gap. The World
Bank estimates that 39 per cent of Africa's private wealth is
not in Africa but held abroad, largely in our banks. What is being
done to arrest the capital flight of Africa's resources? If Africa's
resources are not pledged to Africa's development, how can you
expect relatively poor people in my constituency and other parts
of the country to pay taxes to increase aid contributions when
people who are Africans, a minority of Africans who are much richer
than they are, take their money out of their country and invest
it over here? What can we do to create conditions in which the
wealth of Africa is repatriated?
(Baroness Amos) I totally agree with you about the
importance of stemming capital flight. It is a discussion that
I have constantly with colleagues from Africa. It has been a key
part of the discussion around NEPAD and the G8 Africa Action Plan.
There were two important meetings which were held, one in Senegal
which President Wade presided over, inviting the private sector
not just within Africa but also from other parts of the world,
where African leaders were engaging the individuals from the private
sector about how to create the best kind of climate for investment.
The Commonwealth Business Council had a very similar meeting in
Abuja looking at the same kinds of questions. One of the things
that we have had to ensure our African colleagues understand is
that G8 governments cannot make their private sectors invest in
Africa. African countries have to create the right kind of environment.
Some of that is about the nature of the bureaucracy; some is about
the nature of the regulatory environment, but it is also about
issues around peace, stability and security. It is about the image,
that stereotype, that continues to exist about Africa and the
fact that the difference between countries is not necessarily
recognised. Many countries have not understood the impact that
the situation in a country like Zimbabwe, for example, has not
just on neighbouring countries but on perceptions of the region
as a whole. We have had a number of conversations about this and
about the ways in which we can support countries in Africa to
put the right kind of environment in place. We are doing that.
We are working with countries in making sure they have the right
kind of judicial systems, the right kind of regulatory frameworks,
working on reform of the public service, dealing with corruption.
Even with all of that, there is still I think a perception gap.
If the kinds of resources that we are talking about—US$64
billion—are going to be delivered, one, it is going to take
time and, two, it is also going to take a great deal more work.
If those conditions are created, not only will foreign direct
investment be attracted but it will be exactly the kind of conditions
that will stop capital flight. A lot more money is leaving African
countries than is staying in these countries. In a way, that needs
to be the starting point.
John Barrett
30. Obviously, there are people who want to
make investments outside Africa but there are also very large
sums that are coming out of corrupt regimes into this country
and others. One complaint I have heard from the banking industry
is, whereas the banks are doing a lot and investing millions in
this, they are not seeing the same amount of commitment from this
government. I wonder if you have anything to say about that. The
banking industry are feeding leaks into the government but they
are not getting any response and, while they are investing a lot,
they are saying that the government is under-resourcing the same
research that is required to establish where these large sums
are.
(Baroness Amos) I hope that is not the case. As you
know, through the Proceeds of Crime Bill, for example, we are
putting in place the measures that we think will help with respect
to issues of embezzlement, corruption and money laundering. In
the Africa Action Plan under section two, which is strengthening
institutions and governance, paragraph 2.6 talks specifically
about putting in place the measures to combat corruption, bribery
and embezzlement. The UK government has been in the past criticised
for not ensuring that the terms of the OECD Convention on Bribery
have been put in place in terms of our domestic legislation. We
have now dealt with that and there is a commitment for G8 countries
across the board, not only to make sure that the UN Convention
on Corruption is put in place; we also want to work within the
G8 for the early ratification of the UN Convention against transnational,
organised crime. We want to strengthen and assist the implementation
of the OECD Convention on Bribery but, as a government, we have
also supported a number of voluntary initiatives, including the
ethical trading initiative, the UN Global Compact and the OECD
guidelines for multinational enterprises. We have been in the
forefront of support for those and we will continue to do that.
31. The Prime Minister, yourself and others
have taken a very positive response in the G8 to NEPAD but from
the UK's perspective what are the main areas of disappointment?
Where are the stumbling blocks? Is it individual countries on
the G8 side or the NEPAD side?
(Baroness Amos) The areas where we were particularly
disappointed were in the areas of trade and market access. We
felt the G8 could go further. Also, on the aid effectiveness agenda.
We published at Monterrey a document that was produced jointly
by the Treasury and the Department for International Development
looking at the whole area of aid effectiveness and ways in which,
if countries for example move to sector wide approaches in the
way that they work with developing countries to create donor groups
and think about the sectors that they will support, rather than
going down the route of just supporting individual projects, untying
aid, this could deliver in terms of effectiveness up to 50 per
cent more in terms of the use of our development resources. Those
are the two areas where we would have wished to see more. We pushed
on the areas that we were particularly concerned to see in the
document and where we have cause to be pleased with the outcome
is in the area of peace, security and debt relief, where we have
worked very hard to have debt relief retained as an agenda item
within the G8. Those two areas we are particularly pleased with
the outcome of, and we are very committed to working on the education
millennium goals. Within our own bilateral programmes, we have
given a considerable amount in terms of education resources. On
trade, we had wanted to see a commitment to the doubling of Africa's
share of world trade. It is extremely low at the moment. It is
currently under two per cent and a doubling of Africa's contribution
to world trade would have made a significant difference to development
within Africa.
Mr Khabra
32. What is the G8 going to do to implement
this Action Plan and what are the prospects of the G8 holding
a special Africa summit in 2003? What might such a summit be reasonably
expected to achieve? The Action Plan is a very ambitious plan
and there is the NEPAD pledge to implement it, but there are two
big problems. One is the conflict between states and within states
and the question of corruption. How is it going to be tackled?
(Baroness Amos) In terms of the call for a special
Africa summit next year, this is a proposal which was put by a
number of NGOs. The proposal was first made in a meeting the Prime
Minister had with NGOs on the day we left for Kananaskis and was
put again to the G8 leaders at Kananaskis. It is not at all clear
to me what NGOs at a special African G8 summit might achieve.
We have the G8 Africa Action Plan. We have a number of G8 leaders
who have made trips to African countries, including before the
summit our own, Prime Minister Chretien, President Chirac and
it has been announced that President Bush will travel to Africa
next year. I am not clear what the added value of a special Africa
summit would be and I am also very mindful of the costs of holding
summits, particularly in terms of security. We would not want
to see the burden of that on any particular countries in Africa.
In terms of implementation of the G8 plan, I hope that I have
assured the Committee in terms of the procedures which we will
be continuing within our own government, in terms of the cross
Whitehall machinery, my own involvement and delivery of the elements
of the plan through the different government departments that
have a responsibility. Clearly, the Department for International
Development will have a key role but so will the DTI, the Treasury
and the Foreign and Commonwealth Office. There will be other commitments
no doubt arising out of the World Summit on Sustainable Development.
DEFRA plays the key role in relation to that. The African personal
representatives will continue and France will take the lead role
in terms of overseeing the implementation on behalf of the G8.
G8 countries individually and collectively, within other international
fora like the UN, the OECD and the international financial institutions,
will also play a role in implementation. I would describe the
plan as comprehensive in terms of ambition. We would have liked
to have seen more in some areas. The areas dealing with peace
and security which particularly tackle the conflict agenda do
take us much further than ever before and it is an area that the
UK government takes a particular interest in. On corruption, this
is an area that our NEPAD colleagues are looking at, particularly
in the context of the Africa peer review mechanism which has been
developed in terms of the ideas being put on paper that need to
be implemented. Of course, we and other donors will continue to
work through our bilateral aid programmes in African countries
on rooting out corruption; but also globally in supporting for
example the mechanisms coming out of the UN and through OECD.
We all recognise that tackling corruption is absolutely critical
to the development agenda.
Mr Robathan
33. I apologise for missing part of your evidence.
As you know, being a Member of Parliament means trying to be in
several places at one time. I would like to pick up on what you
said to John Barrett because John particularly asked about corrupt
money being syphoned off by corrupt leaders into banks in the
UK. You gave an interesting answer about the Proceeds of Crime
Bill which I have not studied the details of as closely as I might
have. About 20 months ago, we had a delegation from Nigeria about
Abacha's millions and you may recall that Abacha moved billions
out of Nigeria and the new government tried to get its hands on
some of it. I think they succeeded and there were some rather
dodgy deals but would the Proceeds of Crime Bill allow the government
to act on a case like Abacha, where it was known that some of
his money was in the UK? Would it allow the government to act
for instance against former President Balangiga, who is rich beyond
the bounds of avarice in Nigeria and certainly did not make the
money by conventional means, according to everybody in Nigeria?
Would it allow us for instance to act, particularly with the sanctions
now imposed, against President Mugabe if he had a bank account
in the UK? These are examples rather than the overall picture.
(Baroness Amos) On the Abacha money, it was not that
the UK government did not act or could not act. A request came
to the UK government from Nigeria. We agreed that we would act
on that request. The government was then subsequently judicially
reviewed, which meant that our decision to act on the request
was then put on hold. As I understand it, the Nigerian government
subsequently came to an agreement with respect to the Abacha money.
In relation to Zanu PF and Robert Mugabe, there is an EU asset
freeze which has been imposed on 19 members of Zanu PF which enables
us to freeze bank accounts. The Proceeds of Crime Bill is a much
bigger and broader piece of legislation which is looking at criminal
activity, money laundering and so on, and tightens up in certain
key areas. The implications of these two specific examples that
you have given I am not able to answer here, without going back
to my colleagues who are responsible for the legislation but I
am very happy to write to the Committee.
34. Is it your understanding that it gives the
British government greater power to follow up leads which I believe
are given by commercial banks on money which we would accept has
been obtained corruptly by a leader or politician?
(Baroness Amos) It certainly gives greater powers
to do that with respect to criminal activity in the United Kingdom.
Whether or not it gives greater powers applied in that general
way to money which is not related to criminal activity in the
United Kingdom, I am not able to answer in that blanket way but
I am very happy to write to the Committee.
Chairman: Minister, thank you very much
for having answered our questions over nearly two hours. We will
watch with very considerable interest the process that has been
initiated by NEPAD or the G8 process. I think there is a real
danger that we are all feeling that Africa could well become the
lost continent. Just two per cent of world trade comes from Africa.
We heard today before you came in from the High Commissioner of
Malawi that, whilst highlighting the achievements that Malawi
has made in recent years, he was describing in human terms the
impact on that single country of HIV/AIDS and it is pretty desperate.
These are all issues that this Committee is going to be continuing
to observe in our work over the coming months. Many of the Committee
are going to Malawi later this year on the whole issue of food
security, but thank you very much for very full answers. We wish
you well with your work. I am glad that the Foreign Office and
DFID are working closely on these issues and I hope that we can
come back and discuss some of these topics with you again in the
future.
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