Draft African Development Fund (Ninth Replenishment) Order 2003

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Mr. Robert Key (Salisbury): What a pleasure it is to sit under your chairmanship, Mr. Benton. I have studied the second report of this session of the Select Committee on Statutory Instruments, which points out that this Committee has no power to make orders such as these. However, it is aware that, as on occasions in the past, we are acting on a ministerial undertaking, so there is no reason why we should not proceed. The Minister is making an extremely expensive undertaking on behalf of the Government, but we understand the technical position clearly. I have also read both orders and the explanatory memorandums, and I ask the Minister to pass on to her officials my thanks for the clarity and excellent quality of the explanatory memorandums. It is much appreciated.

I should say first that we shall not oppose the orders. Indeed, we welcome them. I have consulted several non-governmental organisations that are active in this area, and they are pleased that the orders are proceeding. However, they have raised a number of issues, which it is my duty to pass on to the Minister. I shall also add some of my own concerns.

The Minister referred to the relocation of the African Development Bank from the Côte d'Ivoire. What will happen to the local employees when the bank moves away? It is important that the bank should set a good example, and I hope that the locally engaged employees will have been properly taken care of.

There are several important issues that I should like to highlight in the orders. Neither order seems to address directly one of the major problems of Africa—HIV/AIDS. The imperative need for mainstream policies to tackle HIV/AIDS is a preoccupation of

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all the aid agencies involved—Oxfam, Christian Aid, Save the Children and Care International—and they would echo my concerns about that apparent omission. The development of Africa will be held in check by disease in general and by HIV/AIDS in particular, as well as by a lack of investment—those issues go hand in hand.

It is also important to recognise that things are not looking good for the fulfilment of the millennium development goals, which are all off target, particularly those on water and sanitation. Michel Camdessus, the former managing director of the IMF and chairman of the world panel on financing water infrastructure, said last month:

    ''The basic problem for the poor in particular is that finance for water and sanitation has always been taken for granted, and that to meet the millennium development goal targets we need to deliver clean water to 350,000 people a day until the end of 2014, and sanitation to 450,000 people a day by that date.''

We are not on track to do that, especially in Africa. Massive investment—$180 billion a year—needs to be spent on water issues, but only about $80 billion a year is being spent. That trend needs to be reversed, and the amount of money spent on water needs to be doubled.

Could the Minister explain the relationship between the orders, which she said looked forward over the next ten years, and the new international finance facility proposed by the Chancellor of the Exchequer and the Secretary of State for International Development? In paragraph 23 of the technical note that was published in February 2003, the Government state:

    ''The IFF will be a finance facility, not an agency for disbursement of development aid to recipient countries. It would therefore seek to disburse its funds through existing effective bilateral and multilateral mechanisms.''

Does that include the mechanisms that we are considering today? Paragraph 25 of the technical note states:

    ''Funds relating to each donor's commitment will be allocated by each donor to its choice of country and delivery channel.''

That is important, because it seems to be saying that the IFF will be created in addition to the two existing mechanisms, and that it will have a separate subscription. That raises the issue of whether the subscription to the new IFF will divert resources country by country into the IFF, so that those countries will not be able to obtain future replenishments. It also raises the question of how the countries will decide that they want the money spent through the IFF.

I do not expect the Minister to have answers to all those questions, as we still seem to be at the consultation stage on the IFF. However, the matter is relevant to the two orders under consideration, which deal with significant sums of money. We must be clear about what we are trying to achieve.

Will the Minister also clarify some issues related to Zimbabwe? I notice that there are a number of projects in Zimbabwe. The International Fund for Agricultural Development has three ongoing projects on irrigation, agricultural development and smallholder dry areas

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resource management. Will those projects be affected? According to their programmes, they are due to continue. The Dande smallholder irrigation project may be affected. There is also the Zhovhe small-scale irrigation project, which is the subject of a loan. I wonder whether that is also ongoing. What is the position with regard to sanctions? Does this order affect them or do these programmes run on?

Does the African Development Fund or the IFAD, which is a UN body, have any policy towards genetically modified crops in Africa? Do they not promote GM crop use, or do recipient countries accept funds only if they are allowed to say that they will not have such crops? There is an extraordinary situation in southern Africa. As the Minister knows, many crops in that region are already genetically modified, and it is hard to say that any country in southern Africa is GM free, yet countries are sometimes not prepared to accept food aid that might contain genetic modification.

Where is the money coming from for this replenishment? I have read both the orders. In some cases they refer to ''the Government'' and in others to ''the Secretary of State'', with the implication that it is the Secretary of State for International Development. Does all the money come out of the DFID budget, the Treasury budget or some other budget? That is rather important. In view of the current international situation, is the reconstruction of Iraq post-conflict, should it come to that, likely to divert any British Government funds from the African programmes?

Some of the current positive programmes are women-focused, including some agriculture programmes. That is important, because an increasing number of women are now heads of households as a result of HIV/AIDS, and it is the women of Africa who produce most of the food. Are any specific reproductive health programmes being encouraged under these schemes? Does the Minister know of any policy objectives that are likely to inhibit reproductive health programmes because of external pressure, perhaps from the United States or elsewhere?

I have outlined some of the concerns. It is not appropriate to go into any more detail because we support these funds. We just want to be sure where the money is going, and to get some answers to help us decide where we should concentrate our probing of the accountability of the programmes in the future. It is a big, long-term commitment for this country. It is a significant part of DFID's budget. We welcome it, but it is important to get some answers to those questions.

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Dr. Jenny Tonge (Richmond Park): The hon. Member for Salisbury (Mr. Key) has made some useful points, for which I thank him. I had made a note to ask what was happening to the employees in Côte d'Ivoire. It must have been a nice little earner for them to work for something like the development bank and it must be a great blow to lost that job. The Minister said that the development bank concentrated its money on conflict prevention, health—especially HIV/AIDS—education and clean water. I will not enlarge on those, except to say that we all share the

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concerns of the hon. Member for Salisbury. We should concentrate entirely on these issues and do nothing that is slightly more luxurious. Basic healthcare, education and clean water have to be the main projects in development.

I should like to ask about two aspects of the International Fund for Agricultural Development. The first is the effect of the Commonwealth Development Corporation, which does not now focus its investment so much on the least developed countries or on agricultural projects. Many of us were concerned about that, not least the former hon. Member for Hertford and Stortford, Mr. Bowen Wells, with whom I remember having several conversations in the previous Parliament. We were concerned when the Commonwealth Development Corporation became part privatised, and realised that that would mean a lack of investment in agricultural projects, which are so important. Has the agricultural development fund covered that deficit?

Does the fund help the least developed countries at the World Trade Organisation? One of the biggest problems for those countries is finding the capacity for proper representation at the WTO during various negotiations on trade agreements and tariffs. Will the Minister tell us whether the development fund is ever used for that purpose?

My party obviously supports both orders, but there is always a little concern about where the money goes, what it is used for and whether it is used properly. What sort of audit is done? If an audit is done, where can I find that information?

I share the hon. Member for Salisbury's concern about links with other funds, banks and so on. Can someone from the Department please provide us with a mind-map, a flowchart or even a road map—perhaps George Bush could produce one—of where funds come from, where they go and what links are in between? Do they come from the Treasury or from the Department, and do they go to the World Bank? Members appreciate that it is sometimes difficult to understand the connection between various funds and sources of income for developing countries.

The Liberal Democrats support the orders, and hope that the contributions can be increased in future.

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