Examination of Witnesses (Questions 60-79)
MR SUMA
CHAKRABARTI AND
MR MARK
LOWCOCK
WEDNESDAY 24 APRIL 2002
60. How is it going in Afghanistan in terms
of aid and poverty elimination?
(Mr Chakrabarti) Reasonably well. It is very early
days, obviously, but reasonably well in terms of getting some
co-ordination of the various flows of aid coming from many donors.
We put ours into a trust fund which the Afghans themselves control
with the World Bank.
61. If you looked at a graph with the level
of poverty in Afghanistan across time from September 11 onwards,
if you like, and presumably in terms of the devastation and the
inability to get through supplies and all the rest of it there
is a major increase in poverty and mortality and all this sort
of stuff, presumably now we are well above the levels that we
were achieving prior to September 11 due to people having food
and hospitals and the emergence of hospital health facilities
and schools? Is that true?
(Mr Chakrabarti) I think so. Even during the emergency
operations we were enormously successful in getting aid through
to feed people through a very rough winter and that has continued.
62. Mr Lowcock, you mentioned carbon based solar
energy at one point as presumably part of this effort of getting
sustainable economic development. Is there a trade-off here where
you can end up financing carbon based solar energy, for argument's
sake, and you could use that to save money on more conventional,
less environmentally friendly, industrial investment, but you
would have fewer people starving but it would not be as environmentally
friendly? Is that a trade-off you recognise?
(Mr Lowcock) This is not a sector where we do a lot
of work. The example I was giving was for money we give to another
organisation. It must be the case that in a lot of developing
countries solar power is a bigger option and a more economic option,
not just a more environmentally friendly option, than it is in
some other countries.
63. That is good. So you have not got some sort
of politically correct driving force that is letting people starve
in order to build solar panels if you would be better off using
conventional methods? That is not the case?
(Mr Lowcock) No.
64. In terms of corporate involvement, Mr Chakrabarti,
do you feel there is a danger that, in so far as you do get corporate
support, you accept their global brands and therefore are politically
vulnerable? Is there some sort of fear that there is some sort
of trade-off in that you may have overlooked some of their anti-environmental
activity in the developing world?
(Mr Chakrabarti) I would not want to do that. I think
it is very important, whenever we engage with any other player,
whether it is corporate or non-corporate, an NGO even, that we
do have a proper analysis of their activities and make sure we
are happy with putting money into them. We would not want to put
money into BP or Shell. They are wealthy enough to try and do
things in solar energy for themselves.
65. I did not mean put money in but presumably
corporate activity where they are providing money. Do you do that
or not?
(Mr Chakrabarti) Yes. If we were co-operating with
them in a new initiative we would want to make sure that their
policies in that area were kosher.
66. This may not be appropriate but perhaps
I could mention in passing that Nestle« are based in Croydon
and I have approached them with a suggestion that they invest
multi-million pounds in developing a world water infrastructure
partly to compensate for the very bad reputation they have got
for making people have dried milk that then is consumed with dirty
water and ultimately kills babies. I did put them in touch with
Water Aid but I think there are issues with some of these organisations
about the political match and if there is any way we can facilitate
that sort of investment it would be helpful. Can I move on? In
terms of your factoring in the risks of war and political change
in a given environment in which you are investing, if you thought
the political conditions for a major war were emerging how would
that influence what you were doing on the ground? Would that encourage
you to do less or more?
(Mr Chakrabarti) Can I just clarify the political
conditions for war?
67. Say you thought there was going to be some
civil war breaking out in Zimbabwe or whatever it was. What would
that encourage you to do, if anything? Would you try and direct
more aid in or hold back and think, "Look. This might not
get through. Let us spend it somewhere else"?
(Mr Chakrabarti) I think it would be according to
the question whether we could operate effectively because the
sorts of people who are doing HIV/AIDS testing clinics in Zimbabwe
operate in quite a lot of rural areas and if they were closed
because of civil war and food aid (another thing we are doing
in Zimbabwe) was not able to operate and we were not able to get
food to poor people, then we would not be there.
68. I think you mentioned that of the £3.5
billion turnover you had 2.5 per cent, say five million, was in
administration costs. How much do you estimate is consumed by
corruption,—not in your organisation, by the way—in
top slicing in aid, wherever it is going and all the rest of it?
Some of it obviously must be siphoned off. Have you any estimates
on that?
(Mr Lowcock) I think there are no wholly reliable
estimates of the scale of corruption in most developing countries.
We have very few cases affecting our own budget that we come across
but clearly this is a major issue in a number of developing countries.
69. You have got no real estimate. Do you not
think it would be a good idea to try and put in some estimates
of how much corruption is going on?
(Mr Chakrabarti) There are estimates that organisations
produce but we are sceptical about how possible it is to have
good figures on this, so we are a bit cautious about the estimates
that there are.
70. You do not even have a range that it could
be in? It could be anything up to £3.5 billion.
(Mr Chakrabarti) I think our internal audit systems
would catch it if there was very large scale corruption, and so
far all their reports suggest there is not.
71. Can I move on? I understand that there is
a global target which reduces extreme poverty by half by 2015
and this poverty has been defined as those billion people who
are living on less than a dollar a day. If, for whatever reason,
the US economy went down and exchange rates changed, you might
find overnight that you could meet this target, might you not?
Certainly they might be on 1.1 dollars a day so they could afford
a bigger bowl of rice.
(Mr Lowcock) No, because the way the target is specified
it is about the amount of consumption that a person in that country
could buy with their purchasing power parity—I am sorry
to use the jargon—of a dollar a day in 1988, I think it
is. It is a real terms measure.
72. That is a great relief. Thank you for that.
In terms of the value of this billion we are talking about, a
billion people on a dollar a day, so we are talking about something
like $360 billion, are we not? Have you any idea of the amount
of agricultural subsidy the United States spends on grain each
year?
(Mr Chakrabarti) I do not know off hand, but it is
clearly high.
73. It is more than that anyway. Can I ask you
about trade and aid briefly? Obviously there has been some debate
about the trade restrictions from the EU being much more damaging
and would be more valuable if they were taken away than the global
aid from the EU. Is that correct? Can you give us some figures
on that?
(Mr Lowcock) The central problem as far as developing
countries are concerned is subsidies that the EU provides to farmers
within the EU. It is not so much that there are tariffs or restrictions
on developing countries getting their goods in. It is that they
cannot be competitive because of the subsidies that we have.
74. Prices are subsidised. How does that subsidy
compare with the total value of aid in the EU?
(Mr Lowcock) The size of the subsidy is much bigger
than the EU's figure on aid.
75. Can you give us some figures on that?
(Mr Lowcock) I am afraid I do not have the figures,
but we can get them.
76. That would certainly be of interest to me.
(Mr Chakrabarti) We can certainly give you a note.[2]
77. Is there any sense in which—and this
is certainly not my view—in some countries where you operate
you are developing a dependency culture partly as a result of
this subsidy on grain prices in the United States and the subsidy
on EU agricultural products? In other words, if you have got a
developing country that should be trading in agriculture and simply
cannot because it is unfairly undermined by the tricky operations
of the EU and the US and they cannot make grain at an economic
level, then they have got to consume aid even more? Is there a
problem here of not getting anywhere in terms of inevitably having
a dependency culture?
(Mr Chakrabarti) I would not say they are not getting
anywhere but you do raise a very interesting issue for us which
is the need to work on two fronts. You cannot just provide aid.
To some extent you are right. It is compensating for the bad policy
on the trade side so we, with our colleagues in DTI and elsewhere,
are also trying to remove some of the bad trade policies through
the WTO in order to have a much greater impact on the countries
we are supporting.
78. Can I briefly ask you about GM food? There
is a view that there is a conspiracy basically on GM foods to
get the developing world dependent on it and then to jack up the
prices of receipts. Have you considered this problem seriously
and do you think this is a major threat to world poverty?
(Mr Chakrabarti) I would not have thought it was a
major threat to world poverty but I am not aware of any analysis
on that. Have we done any analysis of that?
(Mr Lowcock) I am not sure.
(Mr Chakrabarti) We will have to check and come back
to you on that.[3]
79. But you understand the logic, that developing
countries would be using these crops and then suddenly the price
goes up and, hey presto, people die?
(Mr Chakrabarti) Yes, I understand the logic.
2 Ev 23, Appendix 1. Back
3
Ev 23-24, Appendix 1. Back
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