Examination of Witnesses (Questions 20-39)
17 JUNE 2003
MR SUMA
CHAKRABARTI, MR
MARK LOWCOCK
AND MS
SUSANNA MOOREHEAD
Q20 Alistair Burt: Do you find the
same degree of confidence exercised by NGOs and are there any
conflicts there? You might be relaxed, but you might find an NGO
working very regularly in an area and feeling absolutely determined
to pursue a particular policy that it really believes is right
and there might be a conflict between your approach and local
ownership and what an NGO would like to do if it is being driven
from outside the country. Does this arise in practice or are NGOs
as relaxed and mature about it as you are setting forward this
afternoon?
Mr Chakrabarti: I think this does
arise and there is no point in saying that it does not. The same
NGOs who have been strong supporters of this shift sometimes also
would argue for a particular sector, a particular vested interest
and so on. Quite understandably so, to some extent. In some cases
this is what they are experts in and they may well feel that that
area has not been financed well enough, that policies are not
quite sorted out in that area and it is part of their role I think
to raise a flag and say, Come on, you have to look at this again.
I think what I would like NGOs to do more of is actually raise
those issues with the countries concerned. That is also buying
into the way that we are now trying to do development assistance.
There is not much point always lobbying us. What I keep saying
to many of our NGO colleagues is that they should lobby the government
if they do not like that PRSP. It is their PRSP and that is what
we are trying to finance. They should also try to persuade them
that they are a very effective delivery channel. There is the
whole argument about whether NGOs get squeezed out by budget support
also, and I think if more NGOs actually persuaded the governments
that they were an effective delivery channel then they would end
up receiving the funds anyway. I think NGOs need to embrace that
a bit more than they have done.
Q21 Alistair Burt: Could you say
a little about your confidence in the accuracy of statistics and
evaluating Poverty Reduction Strategies, both your own sense of
what it is like and could you also say a little bit about the
World Bank's independent review of overall progress in Poverty
Reduction Strategies and its own sense of independent evaluation.
Mr Chakrabarti: You can see that
six out of 26 of our PSA targets in the last PSA were missed and
quite a few were due to data problems. They were not necessarily
missed, but in the case of one, primary school enrolment, a classic,
where the base line was calculated to be 75% and was actually
much lower. We had assumed from the data we had from China and
South Africa that there was 100% enrolment but it turns out, when
the data was checked, that there were 93% and 95%. Data problems
do bedevil the Department's effort. Why is that? Because poor
data is characteristic of poor countries generally. Their systems
are not as good as ours yet and so we are working very hard, as
you know, through our bilateral efforts to strengthen data collection
in a number of countries. Uganda, Tanzania, Malawi, Bangladesh
and Nepal are five big programmes where we are trying to improve
that. Also, internationally we have joined in with what is called
PARIS-21 which is a statistical capacity building initiative.
I think this has been an area we have neglected as donors over
30 or 40 years, and only recent years—because of the MDGs
in many ways—we have been forced to rethink our support
on statistics.
Mr Lowcock: Let me mention a few
positives and a few continuing challenges. On the positives, what
the staff assessment of PRS experience to date shows is a growing
sense of ownership amongst the governments concerned, stronger
dialogue with civil society, a bit of progress on data collection,
although frankly, as Suma was just saying, there is rather further
to go on that. Challenges we are really concerned about include
joining the donors up better and more realistic forecasts of future
economic growth. Too many Poverty Reduction Strategies have been
over-ambitious about their growth forecasts. There is another
major study which has been published in the last month which has
taken a longer term perspective of these sorts of issues going
back to the pre-PRS period which we were involved in financing
for the World Bank and others and we are just digesting the results
of that. That corroborates these sorts of messages and adds a
few more that we think are probably important. One is to re-emphasise
the importance of supporting developing countries' own systems,
especially working through the budget process and building the
key institutions of the public sector. We are still digesting
all of this, but it is important that there is a growing volume
of evidence and experience which we can learn from and take account
of as we plan for the future.
Q22 Tony Worthington: Can I just
ask about a tension we found between the World Bank and the World
Trade Organisation. You listen to the World Trade Organisation
and it is all about the voluntary putting forward of offers for
trade and services, but then for the Poverty Reduction Strategy
there has been the expectation of fairly intense liberalisation
of their services. Do you sense that tension as well? Is there
a role that DFID plays in that?
Mr Chakrabarti: I am not sure
I am equipped to answer that question as to whether we feel that
tension. I certainly have not felt it myself whenever I have discussed
this issue.
Mr Lowcock: I do not remember
it being a major issue for Poverty Reduction Strategies. I was
very struck when I was in east Africa in the late 90's and up
to 2001 by the impact on trade growth in the region covered by
the Common Market for Eastern and Southern Africa—14 countries
in eastern and southern Africa—which had some internal reduction
of barriers within that group. Trade growth reached double digits
in that group of countries and grew much faster than the countries
trade with others outside that group. I think that because COMESA
is an institution which attracts quite a lot of attention at high
levels of government in that group—the heads of state all
go to the annual meetings and so on—that was actually quite
a powerful experience in terms of addressing reservations about
trade openness because people began to see that as small markets
joined up the benefits really were quite significant.
Mr Chakrabarti: That is why in
the Africa Action Plan in the G8 context the UK have put such
a lot of emphasis on intra-regional trade in reducing barriers
within regions as well as, of course, CAP reform and WTO as well.
Q23 Tony Worthington: We are getting
a lot of attention as MP's at the moment from the Trade Justice
Movement. We point out to them in our responses coming from the
Department of Trade and Industry that it is up to them, it is
voluntary what service they put forward for liberalisation under
the GATS process. In going round myself and in talking to NGO's
they say that is all very well but you will only get your Poverty
Reduction Strategy approved if you have liberalised.
Mr Chakrabarti: I would not have
said if you have liberalised.
Q24 Tony Worthington: Or if you are
intending to liberalise.
Mr Chakrabarti: If you are intending
to or have a commitment to.
Q25 Tony Worthington: Perhaps it
could be looked at.
Mr Chakrabarti: We will send you
a note on that[4].
We need to research it.
Q26 Mr Walter: Following on from
that, there is only a limited amount of money to go round, limited
resources, therefore the Department has to have certain criteria
for its choice of partners. The World Bank published Assessing
Aid: What works what doesn't and why—in 1998—and
the predominant view is that aid only works when government policies
generally are good and therefore a more selective allocation of
aid to good policy/high poverty countries is where you get the
best results. A couple of months ago the Committee were in Washington
and had a lot of discussions on the Millennium Challenge Account
which does seem to be very selective in the way in which it allocates
aid on the basis of liberal democracies and liberal economies,
but I wonder if you could give us some steer in the way in which
DFID looks at poor performers. Obviously your humanitarian assistance
budget—I am just looking at the figures here—has increased
from £2.5 million to £33.8 million, rising to £40
million in 2005-06. Inevitably that is going to the poorest performers
because all the other policies have failed, but how did performance
and poverty levels factor in the identification of the 16 key
countries that you brought into the PSA?
Mr Chakrabarti: Very strongly
so. The evidence you cite is the same sort of evidence that we
have used. Since that publication things have moved on a bit further
and now the evidence shows that the most important thing is that
the country is poor. That is your guide to allocation. It is a
great bonus if it is also reforming. It is a sort of step criteria,
if you like. That is why, in our resource allocation framework
you will see this target which is to get to 90% of our bilateral
programme focussed on the poorest countries by 2005-06. We are
at 78% now so we need to move 12 percentage points to do so, that
is why we are also encouraging the EU to do similarly. That is
a key principle in the way we do resource allocation of our bilateral
programme. The Americans have taken their Millennium Challenge
Account—not all of it, part of it—and have gone for
a performance bonus pool. The very best performers would get this
extra money. It is an interesting idea as long as it does not
impart higher transaction costs on the whole system obviously.
Where does that leave us with poor performers, countries which
are still poor but which do not have good policies? That has been
the sort of situation that we have tried to address in a place
like Nigeria. It is a very good example. One in five Africans
is a Nigerian, therefore what happens in Nigeria matters for the
achievement of the Millennium Development Goals in Africa. If
you do not get Nigeria right then Africa is not going to hit the
MDGs. The next few years, between now and 2015, donors and the
Nigerian government and civil society have really got to transform
Nigeria's performance. Does that mean we should stand back and
just say that when they have their act together we will go and
help them? Or does that mean we try to influence and engage? The
Government has gone for the latter strategy, but we do not put
huge sums of money into Nigeria compared with programmes in, for
example, Malawi. We do not have a very good toolkit, in my view
and the view of the Department, on how to work with poor performers.
When you go to a performing state you are sent out with the usual
toolkit which has been developed in the World Bank, in the OECD
and it is the same old arguments that we have had for years, do
more with civil society, do more with non-traditional providers
and so on. The problems are essentially to do with the malfunction
of the state and so one can certainly address some basic needs
through those routes. We have set up a new team in our Policy
Division to look at this, the whole question of poor performance;
and how should we and other donors engage with them in a far more
forensic and a far better way than we have in the past.
Ms Moorehead: I think the first
thing to say is that all countries are poor performers in some
respects, this is a spectrum, not an end point. We are quite cautious
about categorising countries like this and we would prefer to
look for opportunities in poor performing countries. Suma made
the point about arriving with the normal package. We are doing
a lot of work on drivers of change in poor performing environments,
so for example looking at how elites in those countries benefit
from poor performers, are there ways in which we and other donors
could engage with elites to try to change their minds? Are there
other levers of power that we would not normally work with? In
Bangladesh which is a long-standing poor performer but a country
which I do not think we would ever pull out of, we have supported
for years very large effective national NGOs and increasingly
what we are doing is joining them up with bits of government so
that what they have learned from providing primary education can
inform government policy. There are cases—and you mentioned
Zimbabwe—where we do have to take a decision that there
is nothing we can actually do right now, but even in cases like
that we need to have a much more imaginative re-entry point when
the time comes. I think it is worth saying that in our portfolio
of investment in poor countries we need a balance between the
really, really difficult ones where it is very hard to see what
we can do and the success stories, and also within the Department
to get much, much better at lesson learning between them. That
is something we are putting a lot of effort into so that if we
know that something has worked in post-conflict reconstruction
in Sierra Leone, are there useful tools coming from that which
can help us in other contexts? But it is a struggle, to be honest.
Q27 Mr Walter: I mentioned the Millennium
Challenge Account because it was something that I certainly found
interesting but not necessarily something I would advocated, but
it is very much a carrot approach rather than a stick approach.
In some of the poorest countries—you mentioned the elites
in those countries—the carrot is really of no interest.
How can you start to persuade and cajole those people into better
governance, into better organisation of their economy? If you
simply say that you are not going to support them because they
are poorly governed, then it is the poorest people who suffer.
Somehow you have to strike that balance, and I just wonder how
pro-active you feel that you as a Department can be in that.
Ms Moorehead: We have done a lot
of work recently on trying to understand better longer-term political
change. One of the things that we found is that even in countries
that appear to have no agents of change, to have no reformers,
an elite will be very diversified. There will be the elite that
are really benefiting from the current situation and those who
do want to work either with other bits of civil society or with
us. We are looking at ways of making all our overseas staff much
better equipped to make those political economy assessments and
to work much better with other donors as well. I think this is
an area where DFID does have a comparative advantage. We are very
fortunate in the quality of advisory staff that we have and we
should try to move donors away from making snap decisions about
what they see as a carrot or a stick. There are some countries
where there are no carrots for the poor.
Q28 Hugh Bayley: I hope it is helpful
if we make comments to you about how we feel the process of accountability
could be improved, as well as you making your comments to us.
I was struck by your response to Alistair Burt's question about
data. I agree with you that data are extremely important; they
are a way to measure performance. However, data are a means to
the end of measuring performance; they do not contribute to the
performance. You used the example of the difficulty you have in
measuring primary school enrolment because of data problems, but
I felt that when you gave your explanation of why you are below
target on meeting that part of the Public Service Agreement, you
commented solely on the data problems and not on what is actually
happening in schools. What matters is bums on seats or slates
on knees or however you describe it in Africa. Although you obviously
need to explain what it is that the figures record—otherwise
we do not know—in cases where it is difficult to tell what
the figures record because of inconsistency and the way they are
collected then I would have thought that either as a footnote
or perhaps as a main report with the comments on the data as a
footnote, you need to say what you are doing. For example, in
Nigeria we have expanded our primary education programme from
four states to eight states or whatever it might be—so that
we can see where progress is being made. How do you measure the
impact of funds spent through budget support?
Mr Chakrabarti: To answer the
data point, I fully agree with you. I am not using the data problems
to mask performance; we are off course on those six targets. The
fundamental reasons are not to do with data, they are to do with
performance generally, and we will hopefully next year have a
better presentation of what we are doing in trying to address
those problems. As to the impact of budget support, the sort of
work that Mark mentioned earlier, the joint review work that the
World Bank and IMF have been doing, then within each of the major
countries there is obviously evaluation work to be done now—because
this is quite a new phenomenon—to see what the impact has
been. But the general picture in countries with Poverty Reduction
Strategies is that there has been a much faster reduction in poverty
levels than in countries without that approach.
Mr Lowcock: We have tried to say
a little bit in the Report on page 108. We have basically summarised
some findings from an evaluation study that we have been doing
over the past two years. It has just been published. It is an
independent study so it has warts and all, if you like. This is
the first stage of a longer study so these are preliminary lessons
and in future we would hope to be able to share with you more
detailed lessons. The other thing I would just mention is that
the National Audit Office have looked at this issue for themselves
and for us over the last year. They have produced a study for
us to basically offer advice on whether they think we are getting
to grips with these things effectively and what more we need to
do. That has been an extremely helpful contribution. In another
report they did, also this year, on the water sector—which
Suma and I went to talk to the PAC about two or three months ago—they
basically endorsed the idea that in the right circumstances budget
support can be the most effective means of providing assistance.
They looked specifically at the Uganda case. Uganda has massively
increased its expenditure through public funds on primary education,
water, things to increase the growth rate, things to reduce the
incidence of HIV/AIDS. That has been financed largely by three
sources: firstly, growth in the economy; secondly, debt relief
(which is a form of budget support, actually); thirdly, budget
support of a direct sort from people like us. The early evidence
we have is on the whole encouraging and reassuring, but the number
of countries in which we are providing budget support is actually
still relatively small—15 or so—and in many of those
cases it is still too early to draw a lot of substantive conclusions.
We are continuing to invest in learning the lessons and in particular
tracking the impact as funds go into the budget of things that
we are trying to finance the achievement of appearing at the other
end, whether it is children in primary schools or drugs in clinics
or more roads being rehabilitated or more wells being dug or whatever
it is.
Mr Chakrabarti: What we have from
this early evidence is good evidence from a few countries; it
is good but we should not overstate it. What we probably have
a bit more on is process. Has the process been improved in the
relationship between donors and countries? I would say that the
glass is half-full. Some of the things we had hoped for have not
yet transpired. We had hoped that transaction costs in many of
these countries would be reduced very quickly. However, because
donors have not yet ceded power to each other—they are all
engaging with these countries in a particular sector instead of
one taking the lead—that reduction in transaction costs
has not always happened unless the country itself takes charge.
Tanzania and Uganda are good examples of countries which have
achieved some of that. Predictability of aid flows: we had hoped
this whole process would make it much more predictable, but still
some donors are attaching too many conditions which means that
their financing goes up and down. They react quite often to blips
in behaviour as fundamentals. But where things have really improved,
it seems to me, is the allocation efficiency of government budgets.
Governments in these countries now are able to allocate their
funds much more in line with their Poverty Reduction Strategies
and donors are much less into trying to push them into a bit of
a sector and so on than they used to be in the past. Their domestic
accountability has gone up significantly in this. I think the
process is half full in terms of where we have got to.
Q29 Hugh Bayley: There are two policies
which interest me. The PAC, the Comptroller and Auditor Generals'
Report gives a green light for this as a policy response in reforming
countries, but the gap—from my perspective—is that
I cannot see what it is buying state by state. I think it would
be useful and I think the Department ought to be checking on what,
in terms of children in primary school or reduction in maternal
mortality or whatever, is being bought. That must require some
better form of donor co-ordination. I guess in the case of Ghana
and Uganda for example there must be half a dozen budget supporting
donors.
Mr Chakrabarti: I agree with you.
I would not want to come to this Committee and argue that we have
been accountable to you if we simply tell you the processes have
improved. That is not much of an answer. Both sides of the table
want development outcomes. We want children in school, better
health care and so on. We are wanting to know, if you put money
into a budget, what is it that you are buying and what are the
outcomes. We have done some early work on that. The work is quite
fragile so far but we want to go exactly down that route.
Mr Lowcock: Maybe we could write
to you with some of the things we have on this[5].
It is work in progress but there are some quite interesting things
starting to emerge.
Q30 Hugh Bayley: In how many cases
has your Department either withdrawn or substantially cut budget
support? You mentioned the case of Tanzania. In those cases what
consultations or negotiations did you have with other donors?
How do the recipient governments respond to try to restrict donor
exit from budget support?
Mr Chakrabarti: The five that
come to mind off the top of my head are the Tanzania example you
mentioned, Ghana, Uganda, Malawi and Kenya. Mark can talk about
the Kenya example because he was instrumental in budget support
there. Tanzania, you know about. In the others it is very much
when they went off track with the IMF and World Bank on their
public expenditure plans. Their whole PRSP process, the whole
public expenditure process has been predicated on that agreement
with the Banks. There was a fundamental shifting of policy. In
doing so, we would of course have consulted with the other donors
on the ground, the local consultative donors would have got together
and discussed this with IMF and World Bank representative, with
the government ministers and officials. Undoubtedly the government
ministers in those countries would have tried to prevent exit
because this would have impacted on their spending powers. In
the case of Ghana when I went out there I was obviously lobbied
very heavily to turn the tap back on and we made it clear that
we would only do so if agreement were reached with the IMF which
it thankfully now has so we have been able to re-start our programme.
There are a number of cases. We do not just do this without checking
to make sure things are still on track. It is still quite a small
part of our overall programme because, as you say, it is focussed
on good performers, really. It is only about 15% of our bilateral
programme.
Mr Lowcock: The Kenya case illustrates
those principles, really. Firstly we acted in concert with the
other donors, in particular the World Bank, the EC and the IMF;
there was a collective view. Secondly, there was a very transparent
process of dialogue between the donors and government. It was
reported with tremendous accuracy in the Kenyan press. It was
very clear what the concerns that the donors had were and the
circumstances in which it would be possible for us to continue
providing support and those in which we could not. The Kenyan
government at that time made the judgment that they were unwilling
to follow through on some earlier commitments that they had made
and it was not that the donors introduced new hurdles, it is that
the basis on which we—in that group collectively—had
signed up to budget support was not followed through. The new
Kenyan government, since it was selected at the end of last year,
has started to get back into this dialogue and we are hopeful
that before too long the conditions will re-emerge for us to get
back to where we were. In the meantime, of the grant that we approved
in late 1999 of £30 million, £15 million was spent and
£15 million was not and that has now expired. We have to
go back into a fresh negotiation—as the IMF, the EC and
the World Bank do—with Kenya when we can get to that point.
Q31 Hugh Bayley: Last year you told
us about a process of selection of four states of Nigeria as ones
in which you felt more confident that development funding would
achieve poverty reduction goals. You had some kind of competition
or trawl through states to find those partners. Afterwards you
sent us a note about an exercise you had undertaken in Russia
to select a number of provinces to fund on that basis. What assessment
has been made about the effectiveness and impact, possibly even
of the added value you have achieved by this approach.
Mr Chakrabarti: There has not
been a formal evaluation yet of the Russia process. It has only
happened very recently and the new programme has just started.
The Nigeria process, in effect, is being evaluated because we
are just redesigning our country plan for Nigeria. One of the
key questions is: Has this four state approach worked? When I
talked about this last year, I talked about the two Oblasts in
Russia in this competition. I was keen on it because it was another
way of showing ownership of a reform programme. It is a bit like
the MCA in some ways. What it is saying is that if you think so
well of your reform programme, market yourself and we are happy
to try to finance it. How far this can be extended is an issue,
I think. In Russia what it had going for it is a federal government
which is willing to let go. It is essentially going to say, okay
you Oblasts, you compete. We are not going to guide the donor
to which Oblast it should go. What it also has—at least
in some Oblasts—is sufficient human capacity to compete,
to actually put together a plan, to command credibility and implement
that. In the case of India, we are also doing a Country Plan this
year. We have a four state approach there too. One of the questions
we will be asking ourselves is: Can we go down this route in India?
I think it will be more difficult because the federal government
in India prefers a much more guided approach. It wants donors
in certain places; it does not want all the donors in Andra Pradesh—which
is a great reforming state—it wants to spread it round.
In India most of the states do have the capacity—like the
Russian ones—to compete if we went down that route, if the
Indian government allowed it. In Nigeria, I suspect the central
government would allow some sort of competition. I am doubtful,
given my experience, whether the state governments would have
the capacity to perform in the competition. That is one of the
reasons why we are taking another look at this. There is a sort
of matrix here of issues that we need to resolve. I would like
to look at it more in some of the more federal places that we
are operating in. China is another one, I think.
Q32 Hugh Bayley: Would you accept
that there is a policy contradiction between what you were saying
earlier about your relationship with non-reforming states. You
said, Do we just wait until they reform and then help them, or
do we try to help them on the reform process? In other words,
you put in some capacity-building aid, some support for states
where you are not going to get very good value for development
assistance money. There is some policy incoherence between that
on the one hand and picking those areas in which you are finding
partners who can deliver and get good value for development money.
If you try to do a bit of both, you do not provide for the recipient
of aid the clarity that their side of the bargain is to do certain
things. How do you resolve that contradiction?
Ms Moorehead: I think India is
an interesting case in point there because we have Andra Pradesh
which is the reforming state that many donors like to work with.
Orissa is the opposite; it is a very, very difficult environment
but again we have identified some of these levers of change. What
we have found in India is that precisely to stop sending these
confusing messages; we probably de-centralised a little bit too
far, and we need to build up our national programme more. We put
a lot of energy in the last three years into building up the state
level work and in the new Country Assistance Plan that we are
working on at the moment, we want to devote more resources—in
particular staff resources for influencing—to try to broker
some of these difficult choices with the government of India.
So where should DFID's focus be? How should we balance the work
between the states that are reforming and going places and the
hard to reach or the really poor performers?
Hugh Bayley: I think we need to be clearer
about whether we want help for everybody, a bit of equity; or
whether we want best value for money in terms of reducing a Millennium
Development Goal. It is a classic equity, efficiency trade off.
Q33 Mr Walter: I want to go onto
the question of technical assistance. Technical assistance seems
to have gone out of fashion. I think there is a perception that
it has gone out of fashion amongst the donor countries rather
than the recipient countries. Some of the Committee were in Malawi
last year and certainly felt there was a paucity of expertise
and a lack of capacity within government ministries. I wonder
whether, in terms of the way DFID looks at this, there is a case
for putting capacity back into government, into ministries and
agencies in those countries, particularly the ones where middle-ranking
civil servants are being claimed by AIDS and other problems. Should
we be giving much more priority to technical assistance than we
seem to be doing at the moment? We seem to have shifted away from
that.
Mr Chakrabarti: I think it is
a really interesting issue at the moment. We are debating this
internally quite a lot ourselves. The Malawi case is, if you like,
an extreme example where, when I last looked at this, there was
a 50% vacancy rate in central government either through AIDS or
people were migrating to South Africa for higher salaries. What
do you do in a case like Malawi, then? Do you simply say, Carry
on and try to implement those policies, despite having huge numbers
of vacancies? I think in a case like Malawi you can say to their
government, Here is our budget support (provided they are back
on track) and you can use part of that to purchase your technical
assistance. One of the reasons why the previous approach to technical
assistance did not work very well was because it was essentially
donor imposed technical assistance, quite often built around the
projects that were donor financed and the skills were not transferred.
I think a new approach, which we need to explore, is much more
saying to governments like Malawi, Here is a sum of money and
you are free to purchase technical assistance on the international
market and manage it. The question of managing it when you already
have thin resources is also an issue, I think. That is the way
we are thinking about some of these examples. There are very few
examples of good technical assistance over the years. There are
examples I can give from our own personal experience in Botswana
and others where things have worked pretty well, partly because
the governments in those cases actually took charge of the assistance
rather than having it donor determined. I think you are on to
something we also feel is a missing area.
Q34 Mr Walter: Are you suggesting
that either you transport a bunch of consultants and sit them
in the nurseries in Malawi, or are you suggesting—I am just
clutching the name of a company out of the hat who run congestion
charging—that Capita suddenly go into Malawi and start running
ministries? What sort of solution would you be looking at?
Mr Chakrabarti: My strong preference
would be for the Malawi government to choose—it is obviously
for them—people with experience of development country context
not people who are inexperienced in that situation. There are
people around who have had experience and who are willing to make
a career of living abroad as well. I do not think it is a question
of going to Capita. It is much more a market with experience that
you need to focus and home in on.
Mr Lowcock: One thing we found
is that untying aid and being able to access the world market
for technical assistance has had substantial benefits in terms
of broadening the range of options we have and developing countries
have really welcomed that. That is a step towards what Suma was
talking about. When we talk to them about technical assistance
they no longer think that what we are talking to them about is
only suppliers from the UK. As it happens, suppliers from the
UK win a lot of our competitions, but others win a small proportion
of them as well. That has had an effect on helping us get better
value for money because there is more competition, but also broadening
the range of sources of expertise is a good thing.
Ms Moorehead: I do not think we
should underestimate the role of our own staff in this either,
even though it is not technical assistance in the old sense of
the term. Effective budget support needs more not fewer people,
certainly in the early days. Our own staff work very, very closely
with their counterparts in government and part of that process
is not just to influence them but to transfer knowledge and to
support them.
Q35 Chris McCafferty: I know that
you are aware that a number of members of this Committee were
very concerned about the abolition of the specialist desk for
Sexual and Reproductive Health in your Department restructure.
I was very pleased yesterday to receive a letter from the minister
indicating that the Millennium Development Goals Team will now
be called Millennium Development Goals and Reproductive Health
Team and that you are preparing a public policy statement on reproductive
health. I wonder if you could tell the Committee a little bit
more about DFID's position on reproductive health and the Millennium
Development Goals.
Mr Chakrabarti: We are absolutely
committed to reproductive health as a key element of a successful
Poverty Reduction Strategy. As you know—and I think the
Committee knows—we wanted an MDG which was specific to that
area. As you also know, we were unable to get international agreement
to that, much to our disappointment. However, there are three
MDGs—the health ones, HIV/AIDS, infant mortality and maternal
health—which cannot be achieved without doing better on
reproductive health. We focus around those MDGs and interestingly
our expenditure has shot up in the last few years in this area.
A couple of years ago it was around £220 million a year and
I think it was under £50 million in the mid-90's. So it has
shot up quite a bit. That really shows our commitment to it. In
terms of the reorganisation we will reflect our interest in reproductive
health in three policy teams. There is the one you mentioned.
Those three MDGs that I mentioned are the hardest MDGs to hit
and that is why we are focussing on that. Also the service delivery
team and the HIV/AIDS team cannot succeed in their work without
taking reproductive health into account. To tell you a little
of our work internationally to try to influence the debate, like
you we have been worried about conservative states arguing for
a change in what was an internationally agreed position. We are
actually pulling out all the stops at ministerial level, at senior
official level, to try to influence others to hold firm. I co-chaired
a meeting in Ottawa quite recently with the Canadians and the
World Bank on health MDGs and this whole issue continues to play
into that. We managed to keep to the agreed wording so far. We
are, as a Department, heavily committed to this area. That is
why we also feel we should put a public note out to make our position
clear, if you like.
Ms Moorehead: I obviously reiterate
what Suma said. It is much more than a name change. Our intention
in Policy Division is actually that we do more work ensuring that
reproductive health issues are part of everyone's agenda than
they have been hitherto. It is this perennial trade-off; it has
been asked in the context of gender as well, should we have a
gender unit or should we mainstream it? Our view is that we have
a well-developed and very clear and focussed policy on reproductive
health and the time has now come to make sure, for example, that
the poor performers team looks at reproductive health in poor
performing countries. The work that we do centrally is constantly
reinforced by and informs what is happening in countries. We are
still spending over £200 million a year bilaterally on reproductive
health and HIV/AIDS. Even though there is a distinct reproductive
health agenda from the HIV/AIDS one, the work that we are doing
is mutually reinforcing in that sense. We did a lot of work last
year on maternal mortality reduction because we were so concerned
that this was one of the most off-target MDGs. Interestingly,
what we found there in a cross-departmental assessment of this
was that the contributions from people like engineers on this
issue was vital. Communication matters if you are in labour. What
we are hoping, even though it is a change, is that reproductive
health will be on everybody's radar now and not simply in the
traditional domain of the health and population people.
Q36 Chris McCafferty: You have mentioned
the very large increase in the sexual and reproductive health
budget. Does that include spending on HIV/AIDS?
Mr Chakrabarti: Yes, it does.
Q37 Chris McCafferty: Given the very
difficult environment that you yourself have acknowledged, how
will you ensure that HIV prevention projects are not restricted
by the climate which seems to be getting tighter and more difficult
all the time?
Mr Chakrabarti: By that do you
mean the international climate?
Q38 Chris McCafferty: Yes.
Mr Chakrabarti: I think we and
other like-minded donors feel the same way about this. None of
us have any intention of clawing back our effort in the HIV/AIDS
area despite the pressures, so we will continue. I think there
are some signs that the United States has increased the amount
it wants to spend on HIV/AIDS. That is greatly welcome, but there
are one or two messages that go with it that are not so welcome
about abstinence and so on which we know is not the way to approach
this. I spend quite a lot of my time going to Washington to argue
the case. We only get so far. This Committee has done the same.
I think we must do that together, really.
Q39 Chris McCafferty: I thought that
I understood from statements made by the former Secretary of State
that funding to UNFPA was to increase substantially, but having
a look on page 128 in the Departmental Report, it rather appears
that the core grant has been halved since 2000-01. Can you explain
that?
Mr Chakrabarti: Yes, I think there
is a misunderstanding going on here. What has happened is that
the core grant has increased. The UNFPA core grant was £15
million in 2000-01 and it has risen to £18 million since.
What the figures in there show are that there was a one-off payment
which was not part of the core grant to UNFPA for a supply of
condoms; secondly, in one year, for our own financial management
reasons, we actually paid £9 million at the end of the previous
financial year. So it looks like a much higher figure went to
UNFPA that year then a sudden drop, when in fact it was still
£18 million for the two years.
Mr Lowcock: For their financial
years there has been this 20% increase from £15million to
£18 million. As Suma says, for our internal financial management
reasons we had to phase the payment for the 2001-02 year. This
is something we do, to pick up Mr Bailey's point earlier, to juggle
how we manage pressures during the course of the year. If there
is a particular crisis that we need to respond to and it does
not make a difference for a UN agency if we pay them in March
or in April, as a practical matter we will take advantage of that.
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