Draft African Development Fund (Ninth Replenishment) Order 2003

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Mr. Michael Connarty (Falkirk, East): I am happy to be called to speak to the orders. I commend the Select Committee on Statutory Instruments, which suggested that this matter should be referred to Committee because it gives Back-Bench Members the opportunity to ask questions and learn something. I agree with the hon. Member for Salisbury that the explanatory memorandum was extremely useful.

I welcome the contributions, and the sums mentioned; £18,531,000 under the order, and the total sum of £121,793, 375 if one takes into account the £40 million that was given as an interim contribution to the African Development Fund. In welcoming that money, it is important to underline the fact that the Government's policy has focused on the poorest countries and has had the biggest impact

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where it is most needed, which has not always been the case in the past.

I have some questions for the Minister. What other sources of funds are available to DFID for disbursal? Is the money detailed in the orders all of it, or do other funds exist? I presume some money comes from EU-funded projects to which we contribute. It would be good to put the orders in context for those interested in their purpose, rather than us considering them in isolation. We sometimes assume that a flowchart would not be followed by the public, who might wonder whether our proposals were just warm words spoken from rooms such as this. We should consider what such orders mean to people on the ground, and whether they contribute to other funds and multiply benefits. Do such efforts stand in isolation? I found that they did when I went to the European Union with the Labour Back-Bench international development committee. We found that many of the funds lie unspent because they are narrowly targeted at projects that some nation's Foreign Office wished to be carried out. The instruments have never been made into a reality because they were not combined with sufficient resources from other parts of the world, or even from the EU. What percentage of DFID's resources is covered by these orders?

I will return to that wider point, but I now wish to focus on the agricultural development order. I and people who read the report of this debate would be interested to know which schemes or countries are worthy of being highlighted from IFAD's past spend to give an illustration of what the £18 million might pay for. I thought that the Minister might give us some examples of that to encourage us to support the order. It should not always be assumed that we will nod when the Whips tell us to do so; we should be persuaded to nod by the Minister's speech.

What is the purpose of the phased spending? The figure for that is £18 million and the anticipated annual sums are listed; a first instalment of £1.5 million in 2003, £3.6 million in 2004 and 2005, £6 million in 2006 and £3, 831, 000 in 2007. One of the reasons why I ask about the purpose of the phased spending is because things are going on in the wider world—and even in a European context—that might throw much of that projected spend off course.

With regard to the agriculture order, the analysis does not break down our contribution to the sums in the same way as does the analysis in the African development bank order, which spells out the proportion of the spend for the bank that we are responsible for. If the annual spend on the agriculture fund is $450 million, $30 million would be one fifteenth of that. Is that the standard sum or have we increased or decreased the proportion that we contribute to that fund?

I turn to the annualised phased spending statement. Will the Minister say something about the impact of the proposal to budgetise the EU's international development fund, which would mean that it would be paid for in a different way than at present? Currently, that fund is paid for by a project-by-project vote and France contributes 23 per cent. of it.

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However, although that fund's money is allocated, much of it does not get spent because of the problems in the way it was set up. There is now a serious debate in the EU about budgetising that money; bringing it into the annual budget of the EU. That would put a substantial new burden on the UK that would not be imposed if it were merely part of the annual budget contribution. What would that do to our proposals with regard to these funds? If a decision on that were taken, we would have to take account of that.

I turn to the African development fund order. What percentage of our gross domestic product would those funds account for? We met people from non-governmental organisations in the voluntary sector as well as people from the EU, and we asked them, ''What is the message for the UK?'' The answer was clear: ''When are you going to get up to the 0.7 per cent. that you promised us 20 years ago, in the Labour manifestos of that time?'' That is why I want to know what percentage of our GDP currently will go to international development aid if the orders are passed. When do we anticipate proposing sums of money, in either these or other instruments, that take us to the promised level of 0.7 per cent. of gross domestic product? That seems very little to promise, given that we keep telling everyone that, because of the wonderful Government that we have had since 1997, we are all living better than we ever did and we are all better employed and better looked after, with better health and more money in our pockets. That is not the case for the developing world.

The Conservative spokesperson made a good point about the impact of AIDS. That has been a massive challenge, but we have not stepped up to the mark to meet it. One reason may be that we are not willing to allocate enough of our wealth and well-being and the fat in our economy to those who have no fat at all.

5.5 pm

Ms Keeble: We have heard about a range of issues, and I shall deal with as many as I can now. If some remain, I shall pick them up later.

The orders do not stand on their own; they are part of the Government's commitment to development assistance. The two funds focus—this may help my hon. Friend the Member for Falkirk, East (Mr. Connarty)—on the poorest countries in the world and on some of the most important sectors. Some 75 per cent. of the poorest people live in rural areas, so the agricultural fund is extremely important. These funds may be better focused in some ways than, for example, the EU fund to which he referred. I shall return to that.

The hon. Member for Salisbury asked about local employees. I understand that they will be given opportunities to relocate to Tunis, so they will have the same opportunities as other staff members. He also asked about HIV/AIDS. I understand that work is being done on that under the agricultural fund—more work is being done on health generally, including HIV/AIDS, through the Africa fund—but its track record has not been one of specialisation on those

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issues. It is important that donors—be they multilateral, bilateral, special funds or regional banks—do not overlap, but work on the issues on which they have the most expertise. I am sure that, like me, the hon. Gentleman is aware of plenty of examples of where that has not happened and where there has not been such effective spending of the quite limited money for development assistance.

The hon. Member for Salisbury is right that some millennium development goals are off target, and that on issues where they might be on target globally—for example, halving the number of poor people by 2015—the more detailed figures do not look as good. He will be aware that, particularly in sub-Saharan Africa, there are real difficulties. That is partly why these two funds are so important. They specifically consider Africa and the agricultural sector, focusing on the poorest countries, so their work is particularly effective at tackling the problems that underpin poverty in developing countries.

The hon. Member for Salisbury will know that the MDGs that are particularly off target relate to infant and maternal mortality. My Department is doing a great deal of work on that. It is not just a question of money; there are also issues about policies and the relative priorities or not that the Governments of some developing countries attach to those services.

The hon. Member for Salisbury is right that there is more money. My hon. Friend the Member for Falkirk, East also made a point about that. However, there is a question about how we increase the amount of money and the effectiveness of the way in which it is spent. A key area is the international financing facility, which the Chancellor and the Secretary of State for International Development have been promoting, which would add extra money to the development budget. It would fast-forward funds that the Governments of different donor countries would pay, and would then make available large sums of money to invest in the services that are so desperately needed if we are to achieve the millennium development goals.

There has been much discussion about the international financing facility. It has been assumed that it is almost like another bank, but it is a facility for raising the money, not necessarily for spending it. Once the commitments have been obtained, the spend is then channelled through the different agencies' multilateral or bilateral spending programmes, with the donor countries specifying how it should be spent. There is no contradiction between having a variety of multilateral agencies and banks and having this very important facility to obtain the commitments from the donor countries to provide the money up front. It can then be rolled out sensibly in developing countries.

I suspect that the real challenge will be to obtain the commitments from the donor countries and to ensure that the money is actually there to achieve the goals to which we all subscribe. I shall address the other issues about the EU funding later, so that I address issues and hon. Members' questions in order.

Zimbabwe is in arrears to the ADF, which we also discussed when we last talked about the fund, so it is

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not receiving any more money. The schemes that it secured through the agricultural fund are currently on hold because of the obvious difficulties that we are having with that country.

I understand that there is not yet a policy on GM, although the question is being actively considered. The fund recognises the benefits and the risks involved, but is does not yet have a clear policy. The money will come from the DFID budget.

The hon. Member for Salisbury asked about Iraq. We do not yet know what the exact position will be with Iraq, but these commitments are made through the fund, and they will stand. The hon. Gentleman also asked about women. That is an extremely important question because of the large number of women who work in the agricultural sector—the poorest sector—in the poorest countries. The agricultural fund devotes some 40 per cent. of the funds to grants for women and the work that they do. It is also effective in its focus on gender, which is another reason for supporting this way of providing assistance to developing countries.

The hon. Member for Richmond Park (Dr. Tonge) asked about the plethora of different funds, a question she has asked before. She also asked whether the fund is taking over from the CDC. No, it is not, although much of its work focuses on the areas with which the CDC used to deal. She also asked about the effectiveness of the spend and the amount of monitoring. In fact, arrears for the agricultural fund are remarkably low. Its track record for repayment is a remarkable 96.6 per cent. Only one country, Cuba, accounts for about a quarter of the arrears.

 
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