Supplementary memorandum submitted by
the Department for International Development
Question 30: To what extent is DFID involved
in research on renewable energy?
1. DFID currently funds 12 knowledge and
research projects in energy with a total value of £2.34 million,
and a further 7 with a total value of £1.17 million have
been approved for funding in this years round, contracts for which
are being finalised. They are summarised in the table below. Full
details may be found on the website www.etsu.com/dfid-kar-energy/
2. In addition to our own bilateral support,
DFID also supports research into renewable energy at the multilateral
level through our contributions to the Global Environment Facility
(GEF). This was set up to help developing countries to meet the
additional cost of addressing global environmental objectives.
Projects under the GEF are implemented by the World Bank, United
Nations Development Programme and United Nations Environment Programme.
Since 1991 the UK has committed £215 million to the GEF.
The UK has pledged to support a 50 per cent increase to the fund
and is committed to encouraging other countries to do the same.
|The development and promotion of renewable energy sources, especially for rural communities|
|Micro solar lanterns: developing and marketing (June 1997 to May 2002)
||To review recent experience of solar lanterns, and to develop, produce and market an affordable, reliable solar lantern in Africa to meet the needs of large numbers of poor, rural people for better quality and cheaper lighting.
|Benefits from improved rice husk combustion efficiency (September 2000 to September 2003)|
|Improved efficiency of rice husk combustion in rice processing, with particular focus on small rural mills in Bangladesh, to enable use of saved husk for provision of animal feed, fuel for poor people and value-added by-products of rice husk ash.
|Fuel substitution-poverty impacts on biomass fuel suppliers (June 2001 to November 2002)
||To determine all poverty impacts on traditional household fuel suppliers arising from fuel substitution of biomes by more modern fuels, informing policy makers of the full cost benefit, livelihood and poverty impacts of fuel substitution.
|Disseminating approaches to sustainable livelihoods (November 2000 to March 2002)
||To develop, disseminate and build local capacity in participatory, multi-stakeholder workshopsand other practical methodsfor exploring in-country priorities and partnerships in Energy for Sustainable Urban and Rural Livelihoods.
|The development and promotion of renewable energy sources, especially for rural communities
||Uptake and commercial sustainability of watermill-based energy services (April 2002 to April 2004)
||To enable a self-sustaining watermill upgrade industry to become established in the Indian Himalayas
|Modern energy: impacts on micro enterprises (Inception Phase)
||To demonstrate the link between the provision of modern energy services and the emergence of sustainable micro-enterprises.
|Energy and the Environment||Clean Development Mechanism (CDM) pilot project to stimulate market for family-hydro for low-income households (March 2003 to April 2004)
||To build the capacity of institutions in Vietnam and the Philippines to develop Clean Development Mechanism projects for family-hydropower.
Question 76: How does the total EU agricultural subsidy
compare with the total value of EU aid?
1. According to the latest Organisation for Economic
Cooperation and Development (OECD) estimates, the EU provided
97.9 billion of support
to agriculture in 2000 (provisional figure). In 1999,
107.5 billion was provided. In 2000, EU Members provided total
net ODA of
27.4 billion. Therefore, EU agricultural support in 2000 costs
about four times as much as official development assistance.
2. The Government fully acknowledges the barrier EU trade
restrictions present to developing countries economic growth.
While many developing countries have preferential access to the
EU market, the highest tariffs continue to fall on historically
sensitive products of interest to developing countries, particularly
agricultural goods, textiles and clothing. According to a 1999
EC estimate, total developing
country gains from a 50 per cent cut in tariffs, by both developed
and developing countries, would be in the order of $150 billion.
This is around three times what developing countries currently
receive in aid.
Question 78: DFID analysis of the impact of GM foods on
1. In 1999 DFID provided £34,750 of funds to a research
project by Professor Timothy Swanson of University College London
into the implications of terminator seeds for developing countries.
Terminator seeds are genetically modified to make them sterile
and thus denying farmers the possibility of saving the seeds of
one crop and using them as planting material for the next crop.
2. Prof Swanson's main findings, published in The
Economics of Managing Biotechnologies (2002), are:
Terminator technologies are not likely to be widely
available commercially for about 5-10 years (from December 1999),
and will predominately be used in developed countries rather than
Developing countries and farmers which invest
in and are early adopters of GM and terminator technology are
likely to benefit. Slow adopters or countries with little biotechnology
capacity are likely to be bypassed or negatively affected through
The widespread use of expensive terminator seeds
in developed countries is likely to lead to a slower diffusion
of new technology to developing countries particularly the least
developed. This could increase food insecurity particularly in
the least developed countries.
3. GM technologies have the potential to provide significant
benefits for poor people and the environment if applied safely
and responsibly to the crops on which the poor rely. In response
to demand from developing countries, DFID is currently funding
research into affordable GM technologies. Such research aims to
adapt GM technologies to local ecologies, agricultural systems
and socio-economic circumstances with the aim of benefiting poor
farmers. DFID is working to ensure that developing countries are
able to make informed choices about whether to adopt GM technologies,
and to manage their safe development and use. We also recognise
that GM technologies are one of a number of tools that could help
the world meet the predicted increase in demand for food in developing
4. DFID's does not, and will not, fund activities that
involve the development, testing, or use of breeding material
which uses terminator technology, until and unless such technology
has been shown and agreed to be appropriate and beneficial for
the developing countries concerned.
Questions 164 and 165: How much of the lost EU budget is
attributable to international development?
1. The European Commission does not produce an annual
consolidated report with figures for levels of detected fraud.
Nevertheless, the financial year 2000, the latest for which audited
reports are available, revealed little evidence of fraudulent
or irregular behaviour in the budgets related to international
development (the External Actions budget and the European Development
2. Detailed findings are set out below. They illustrate
the scale of the problem to some extent: against an average total
budget spend on international development of 6 billion annually,
levels of possible fraud total about 15 million of which
the UK share is about 2 million.
3. The European Court of Auditors (ECA) focused their
audit in 2000 on the Tacis programme (former Soviet Union States
and Mongolia). The Court picked up on internal procedural weaknesses
but found no evidence of financial irregularities as a result
of its audit. The Court's report on the activities of the European
Development Fund pointed to the continuing investigation or irregularities
surrounded expenditure within the Africa, Caribbean & Pacific
(ACP) Group Secretariat based in Brussels, and the misappropriation
of some 6 million in Senegal uncovered by an audit in 1995. The
ECA studied the close of audits in progress at the end of 1999.
The study covered six financial audits concerning approximately
40 million which had found evidence of ineligible expenditure
amounting to almost 36 per cent of the expenditure audited by
the auditors engaged by the Commission. Recovery orders had not
yet being issued. The report identifies Tanzania and Central African
Republic as two of the countries involved.
Question 166: The Committee asked for a note on the mechanics
of the UK's contribution to the EC development programmes and
an indication of the levels of funding.
1. The UK and other member states finance EC development
assistance in two distinct ways:
Voluntary contributions to the European Development
2. The EC's external programmes are, with the exception
of those for African, Caribbean and Pacific states, funded from
the EC budget. Each member state's share is based on a formula
that takes account of GDP and customs receipts. The UK's current
share is approximately 19 per cent.
With a few exceptions for particular programmes, DFID is responsible
for the UK's contributions to the external relations and pre-accession
chapters of the budget. In 2001-02 this is forecast to accounts
for £670 million of DFID's budget, up from £636 million
in 2000-01, and an estimated £517 million in 1999-2000. Each
year the Treasury withholds the UK's estimated budgetary contribution
to the EC on international development from DFID's vote. Adjustments
are made in following years when the final outturn is known.
Voluntary contributions to the EDF
3. The EDF was established as the financial instrument
for the series of agreements signed between the EC and African,
Caribbean and Pacific states (the Lome« Conventions and,
since June 2000, the Cotonou Agreement). It is a voluntary fund
which all member states contribute to and which is managed by
the Commission. The EDF is replenished every five years. The size
of the replenishment and each member state's share are negotiated
afresh on each occasion. For the past two replenishments, the
UK share has been 12.7 per cent. The estimated UK share of EDF
expenditure in 2001-02 is £91 million, down from £121
million in 2000-01 and £213 million in 1999-2000.
Questions 166-170: The Committee wanted further information
on why donors were unable to agree a set of common indicators
for measuring good governance.
1. There is no internationally agreed definition of governance.
Most development agencies have formulated their own definitions.
These differences reflect various governance traditions and differences
in language. In the case of the multilateral development banks,
for example, their mandates influence their definitions. So the
World Bank's mandate limits its governance operations to the economic
sphere. Our view is that good governance extends to every sector
and is key to creating the economic conditions and services necessary
for poverty reduction.
2. In March 2000 a joint Development Forum comprising
representatives from the OECD Development Assistance Committee
(DAC), World Bank, IMF and UN, attempted to identify a set of
governance indicators that the international community could use
to measure progress towards the improved governance of developing
countries. These negotiations were initiated by the DAC in recognition
of the importance of governance in development and the absence
of any internationally agreed targets. In particular, the International
Development Targets (now superseded by the Millennium Development
Goals) did not cover governance.
3. The DAC identified certain necessary characteristics
for governance indicators if they were to be useful and secure
international acceptance. The following key points were agreed:
The indicators had to measure change over time
and therefore had to be replicable and quantifiable.
It was also recognised that the international
community could only afford to adopt a relatively small number
of indicators so that the collection of data and measurement of
progress in all countries was both practical and economical.
The DAC agreed that indicators should be truly
representative of what they measured. For example, the measurement
of whether a country holds periodic elections is replicable, quantifiable
and economical, but on its own it is not an adequate measure of
the quality of democracy.
4. The majority view at the March 2000 meeting was that
the statistical data then available did not match these requirements
and that the international community should not accept second-best
indicators in such an important and sensitive area. As a result,
the DAC failed to agree on good governance indicators.
5. Since then, DFID has invested in further work on so-called
`second generation indicators' that match up to the requirements
identified in the DAC. This work is being taken forward in the
World Bank. In the light of this, the DAC Working Group on Governance
will later this year revisit the questions of governance assessments
and indicators to review the prospects of agreeing governance
Department for International Development
As measures by the Producer Support Estimate (PSE), which measures
support from consumers and taxpayers to farmers, including government
subsidies and price support. Back
Nigel Nagarajan, Millennium Round: An Economic Appraisal,
EC Economic Papers, Nov 1999. Back
The abatement to UK budget contributions to take account of our
relatively lower receipts from the CAP does not apply to the external
relations part of the budget. Back