Examination of Witnesses (Questions 40-47)
MR JOHN WINTER, MR ROB HOLDEN AND MR JOHN HANSELL, OBE
TUESDAY 29 OCTOBER 2002
40. One of the issues which greatly annoyed us when we were in Malawi to the extent that we wrote to the Secretary of State about this was that the NGOs and others, the donors, had set up what seemed to us to be a very efficient allocation system for grain within the country which was distributing to about a third of the population, but then the World Bank and the government of Malawi negotiated a new deal for undifferentiated subsidised grain to go into the country and to be distributed by ADMARC. ADMARC had been the agency which had lost the previous grain. What is the Government's attitude to that?
(Mr Winter) As you will have discussed with the team, we were disappointed that the Bank had chosen to go ahead with this without widespread consultation and without taking cognisance of the work that had been done, and this point has been made very firmly to the Bank. As we understand it the World Bank took the view that in the circumstances and the need, as they saw it, to get affordable food out into the market that they had to accept a second best solution which was a general subsidy and using, as they saw it, the only organisation which was capable of it. As you know, we have reservations about both those judgments, reservations which we are taking up with the Bank now. That was one of the things I had in mind when I said earlier that we needed a much closer understanding with the World Bank and the IMF about their roles in promoting long-term food security rather than the kind of ad hoc decisions which people had felt rushed into because it is an emergency.
41. Here we have a situation where the general manager of ADMARC, which managed to lose the grain, became promoted to become the Minister of Finance. In any normal situation you could expect him to be at least suspended rather than promoted.
(Mr Winter) As you know, we have serious concerns about governance in Malawi.
42. If we are looking at these issues we have got to be quite open about it and there we have a negotiation of subsidised grain from the World Bank which is to be then administered by ADMARC on a very large scale. Might I just ask you to confirm that is the situation.
(Mr Winter) I believe that is the situation, yes.
43. We were very concerned about the relationship with the World Bank in Malawi, that here we had a situation where the World Bank programme had declined to the extent that if there had not been this grain coming in, Malawi would have been the net contributor to the World Bank. That is true, is it not?
(Mr Winter) I do not have the figures.
44. Can you assure us that the British Government is making strong representations to the World Bank about what has been happening with the World Bank's programme in Malawi?
(Mr Winter) I can assure you that we are taking it up at a senior level in the World Bank and that we have asked for a board discussion on this particular credit.
45. There is one other point concerning the IMF which does disturb me. The relationship, I think quite correctly, with the IMF had broken down because of the governance issues in Malawi but now we have a situation where the person who was in charge of Africa for the IMF, a Malawian, has now returned to become the President's Economic Advisor in Malawi. I do not see how you go from one side of the table to the other without questions being asked.
(Mr Winter) It is not a situation of which I have the details but we can certainly follow it up.
46. I think it is very important that as far as this Committee is concerned that we put these items on the agenda.
(Mr Winter) Thank you.
47. A very final question from me. Going back to the government of Malawi, and I think there have been a number of expressions of concern about their ability to deliver, I suspect that is as much a problem of capacity as suggestions of corruption. In other words, one of the impacts of HIV/AIDS is that it is no respecter of who you are and if one looks at government departments in Malawi a lot of civil servants are dying. I think I am right in saying that a quarter of Malawi's education budget is being spent on paying for the funerals of teachers who have died. In Kenya I noticed the other day they are losing something like 6,000 teachers a year to HIV/AIDS. I suspect that is the equivalent of all the teachers in Oxfordshire and not even a country like the UK could afford to do that. I just wonder to what extent you think in the future we and other Commonwealth countries, if HIV/AIDS continues to have the impact on countries like Malawi, the attrition rate, countries such as ourselves, Canada, New Zealand, Australia, other countries throughout the Commonwealth, are going to have to support Malawi in terms of people, people in ministries, people undertaking active roles again in management of projects rather than just having a DFID programme which tries to interact with the government of Malawi, that the international community with the support of the Malawi people and the government, maybe elsewhere in southern Africa, will have to have a proactive role in reinforcing the capacity of government?
(Mr Winter) It is a problem that is particularly stark in Malawi and you may well have had Malawians saying to you, as they do to us, that this is something we need to consider. We phased out all this 20 years ago and here we are back in the position of having to think about white faces in ministries. It is something we are looking at. Clearly continuing to provide technical advice to an overstretched institution is not going to produce results in the long run. The solutions that are being thought about in Malawi revolve around firstly trying to entice educated Malawians back into the country, because that is an enormous untapped resource, but also, if necessary, some flexible technical assistance funding to enable them to hire in expertise at whatever seems to them to be good value for money, whether or not it is people coming from Britain or other parts of Africa or other parts of the developing world.
Chairman: Thank you very much. Thank you for your evidence. I think there are some substantial issues here that we will be grappling with for some time to come. Thank you.