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Written Answers to Questions

Monday 12 July 2004

INTERNATIONAL DEVELOPMENT

Africa

Mr. Tony Clarke: To ask the Secretary of State for International Development what steps his Department is taking to encourage developing countries to use revenues from exports of energy supplies to support programmes combating poverty in Africa. [183203]

Hilary Benn: DFID is promoting the transparency of payments and revenues from extractive industries in those countries where such industries contribute the major portion of government revenues. The Extractive Industries Transparency Initiative, launched by the Prime Minister in 2002, is gaining support from several African countries including Nigeria, with discussions taking place in several others. What governments do with the revenues from the export of energy (in particular oil) is another issue. DFID is working with developing countries to assist them develop and implement their poverty reduction strategies, including the relative importance of forestry and other natural assets.

China

Mr. Hancock: To ask the Secretary of State for International Development if Her Majesty's Government will agree to earmark part of their financial contributions to the UN High Commission for Refugees specifically for North Korean refugees in China. [182557]

Hilary Benn: DFID normally funds the UN High Commission for Refugees (UNHCR) through un-earmarked funding—ie UNHRC decide how to use resources based on their needs assessment process. DFID contributes £17 million core un-earmarked funding per year under a bilateral Institutional Strategy Agreement.

Un-earmarked funding allows UNHCR to prioritise their work based on humanitarian principles. Earmarking funds can contribute to inequitable and sometimes disproportionate resource allocation between crises.

This approach is part of wider international initiative on 'Good Humanitarian Donorship', which aims to improve humanitarian response through greater effectiveness, accountability and coordination between the key humanitarian organisations, including UNHCR to identify and agree prioritisation of need and hence equitable resource allocation. The UK is a strong supporter of good humanitarian donorship and has made commitments to take this forward.

DFID understands that the UNHCR do not have a funding problem in China hence there is no apparent need to vary DFID's normal approach.
 
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Civil Service Relocation

Michael Fabricant: To ask the Secretary of State for International Development, how many civil servants and what percentage of the total civil service workforce in his Department will be relocated over the next five years (a) outside the M25, (b) to the West Midlands and (c) to Staffordshire. [180174]

Fiona Mactaggart: I have been asked to reply.

The Lyons report gives details of Department's relocation plans, which are being taken forward and refined as part of the Spending Review. The Government will announce proposals for implementing and monitoring dispersal plans in the review. The Home Office is determining its own dispersal strategy in the light of the Lyons report and its own particular business needs and priorities.

Zambia

Mr. Caton: To ask the Secretary of State for International Development what representations his Department has received from non-governmental organisations about (a) trade liberalisation, (b) privatisation and (c) investment deregulation in Zambia; and if he will make a statement. [182329]

Hilary Benn: The reforms of the 1990s which dismantled pervasive government controls of Zambia's economy to establish a market based system have generated a vigorous and on-going debate in Zambia. The World Development Movement recently produced a report—"Zambia: Condemned to Debt"—adopting a largely critical view of these reforms. The evidence suggests a more positive view is justified.

Zambia's long run of economic decline is showing signs of reversal. Economic growth, which had been near zero from the mid 1970s to mid 1990s, has averaged 3.4 per cent. per annum since 1995. Zambia has experienced its longest period of sustained growth for three decades with the fifth successive year of positive growth in 2003.

The pace of liberalisation and deregulation in the early 1990s was rapid. The impact of reform has varied across sectors. People working in urban manufacturing suffered from the removal of protection before alternative employment opportunities were available. The improved growth since 1995 has been insufficient to boost overall employment, although there have been new jobs in service sectors. A new and significant commercial agriculture sector has also emerged. This has provided most of the impressive growth in non-copper exports, which have expanded from US$100 million in the early 1990s to US$405 million in 2003. It has also improved livelihoods. Since the privatisation of the cotton sector the number of small farmers in out-grower schemes has risen from 50,000 to 250,000. However, people who lack commercial opportunities and those hardest hit by food insecurity and HIV/AIDS remain very vulnerable.

The impact of privatisation has also been mixed. The reforms led to job losses during the 1990s, although this often reflected the struggling position of state enterprises before privatisation. The economic performance of these enterprises has improved, with
 
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239 of 254 entities privatised still operating, but growth has been insufficient to provide significant new employment. Privatisation has also ended a major drain on government resources. For example Zambia Consolidated Copper Mines ran losses of US$15–20 million per month in the two years prior to privatisation. This was equivalent to 69 per cent. of the entire health and education budgets during those years. Privatisation in this case has freed up significant resources for poverty reduction.

The Government of the Republic of Zambia (GRZ) believe that stronger diversification and private sector development, rather than continued dependence on copper and state industries, must be the basis for Zambia's long run growth and poverty reduction. The Department for International Development continues to provide significant support to Zambia as the Government seek to improve macroeconomic stability and the business environment in its efforts to achieve the 6–8 per cent. growth required to reach the Millennium Development Goals.

Mr. Caton: To ask the Secretary of State for International Development what discussions (a) he and (b) his Department's officials have had with representatives of non-governmental organisations concerning the situation in Zambia. [182330]

Hilary Benn: The Department for International Development (DFID) maintains a regular dialogue with non-governmental organisations in Zambia.

DFID works closely with Civil Society for Poverty Reduction (CSPR), whose members include major non-governmental organisations such as the Jesuit Centre for Theological Reflection, the Catholic Commission for Justice and Peace and Oxfam. CSPR plays a significant role in contributing to the Government of the Republic of Zambia's Poverty Reduction Strategy (PRS) and in arguing for debt cancellation. The effectiveness of development assistance in the implementation of the PRS, and the need to look beyond the Heavily Indebted Poor Countries (HIPC) Completion Point are regular themes of discussions with CSPR representatives. DFID agrees with CSPR that a new approach to aid delivery combined with sound budget and domestic debt management is required to ensure government is effective in delivering services for long term poverty reduction.

DFID has drawn on its dialogue with CSPR members and other non-governmental organisations to help identify key areas of vulnerability for the poor. This helped inform DFID's new Country Assistance Plan in highlighting food insecurity and HIV/AIDS as the most critical risks facing poor people in Zambia. DFID has recently agreed a Programme Partnership Agreement with CARE Zambia to enable the poorest to better manage social risk associated with food security, destitution and HIV/AIDS.

Mr. Caton: To ask the Secretary of State for International Development what plans his Department
 
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has (a) drawn up and (b) implemented to help reduce the number of people affected by HIV/AIDS in Zambia. [182331]

Hilary Benn: Zambia has endured high HIV infection rates for many years. Currently the HIV prevalence rate among adults is 16 per cent. In June 2003, DFID Zambia began implementing a £20 million five-year programme to tackle HIV/AIDS. Its main elements are:

strengthening the National Aids Council (NAC);

providing public sector services such as drugs for treating sexually transmitted infections, education materials for use in schools, condoms, and supporting the prevention of mother to child transmission;

funding civil society organisations that work on behaviour change, care and support of those infected and affected, and protecting human rights, particularly of women and girls; and

supporting HIV/AIDS private sector workplace interventions.

In addition, DFID's £20 million Zambia Health Programme (2001–05) is strengthening health systems in Zambia. A new £10 million Programme Partnership Agreement with CARE International, Zambia, includes £2 million toward supporting positive living for those infected with HIV/AIDS.

All the programmes that DFID supports in the social, economic and services sectors in Zambia have an HIV/AIDS component. DFID is planning to expand our support in these areas.

Mr. Caton: To ask the Secretary of State for International Development what assessment his Department has made of the humanitarian implications of the level of external debt in Zambia. [182332]

Hilary Benn: Zambia's external debt poses severe problems both in terms of the stock of debt and the particularly high level of debt service in the 2001–05 period. Zambia's scheduled external debt service averages US$570 million per year during 2001–05. This is equivalent to approximately 80 per cent. of total government domestic revenues. However, under the Enhanced Heavily Indebted Poor Countries (HIPC) Initiative, Zambia's actual external debt service has averaged US$122 million per year in the three years since Decision Point in December 2000. This has been essential in enabling the Government of the Republic of Zambia (GRZ) to maintain and improve vital public services.

During this period GRZ's expenditure on health has averaged US$161 million per year, an increase of 63 per cent. on the three previous years. Expenditure on education has averaged US$182 million per year, an increase of 53 per cent. on the three previous years.

The Department for International Development (DFID) supports GRZ in its objective of reaching HIPC Completion Point at the earliest opportunity. The recent approval of a new Poverty Reduction and Growth Facility with the International Monetary Fund is a major milestone towards this. DFID is also engaging in dialogue with GRZ and other donors to ensure that development assistance is effectively delivered in support of GRZ's Poverty Reduction Strategy after Completion Point.
 
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Mr. Caton: To ask the Secretary of State for International Development what assessment his Department has made of the impact of (a) International Monetary Fund and (b) World Bank policies in Zambia. [182333]

Hilary Benn: The Government of the Republic of Zambia (GRZ) embarked on a comprehensive programme of economic reforms during the 1990s, with the support of the International Monetary Fund (IMF), World Bank and other development agencies, including the Department for International Development (DFID).

There is evidence that the reforms have started to reverse Zambia's long run of economic decline. Economic growth, which had been near zero from the mid 1970s to mid 1990s, has averaged 3.4 per cent. per annum since 1995. 2003 marked the fifth successive year of positive growth for Zambia under an IMF macro-economic programme.

While this improved economic performance is welcome. Other aspects of reform have had mixed results. Closure of urban manufacturing and state owned enterprises before alternative employment opportunities were available, affected people working in those sectors. The emergence of commercial agriculture and stemming the drain on the budget from nationalised industry losses, have not fully offset the negative impact on urban poverty or benefited remote rural areas.

The Zambian Government's public sector reform programme, largely implemented with World Bank assistance, has made very slow progress since its launch in 1993. The current reform agenda, with a focus on public financial management and financial sector reforms is making better progress. It has been developed with a clear sense of leadership by GRZ and support from a wider group of development agencies.
 
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