Examination of Witnesses (Questions 216-219)
MR PETER
HARDSTAFF AND
MR TIM
JONES
5 MAY 2006
Q216 Chairman: Good morning, Mr Hardstaff
and Mr Jones. It is good to see you here this morning. If I can
start off by asking you about the lobbying that you have done
with the Government on the issue of conditionality. There have
been some changes and I wonder what these changes are and whether
they match up to those that you have been calling for?
Mr Hardstaff: First of all, can
I start off by thanking the Environmental Audit Committee for
inviting WDM here to present oral evidence. On the issue of conditionality,
what we have seen over the past year is a commitment from DFID,
from this Government, that it will no longer impose economic policy
conditions, like privatisation and, trade liberalisation, in return
for UK bilateral aid. We still have to see that implemented. Currently
there are draft guidelines for DFID country offices that are being
consulted upon. There are one or two issues we have with those
guidelines and whether or not they potentially create loopholes
within which the UK Government might be able to revert back to
imposing these kinds of policy conditions. On the face of it,
what we have is a very progressive policy on behalf of the UK.
Q217 Chairman: Are you convinced
that it is not just a re-branding exercise to get you off their
backs?
Mr Hardstaff: In terms of the
UK Government, this is a significant move in the sense that it
is a first move. We have not seen another government explicitly
state that this kind of conditionality does not work, that it
is not democratic and we have to move away from it, so that is
important. Obviously the proof of the pudding is in the eating.
We will have to see whether or not this will be properly implemented.
The aid system is complicated, so there are issues around the
UK Government using its aid to come in on the back of, for example,
World Bank programmes which use conditions, so, in effect, DFID
would be supporting certain kinds of conditionality. There are
potential difficulties with it, there are potential loopholes,
but what we have seen is a government, the first one that I am
aware of, that has come out and said, "This is not acceptable,
we have to do something different".
Q218 Chairman: It is welcome but
you have not yet seen the changes in practice?
Mr Hardstaff: That is right. It
is welcome that the commitment is there and it is welcome that
our Government has been prepared to say these things. The guidelines
are out there, there are some potential problems with them, we
would like to see them a bit more robust, and ultimately there
are longer-term problems in terms of the World Bank and the International
Monetary Fund in particular. I think about 40% of UK aid is going
to the multilateral institutions and these institutions are still
using conditionality. That still remains to be a major issue.
Q219 Chairman: Is the UK Government
arguing a case for dropping conditionality in those other multilateral
institutions?
Mr Hardstaff: To some extent.
I think there are question marks over the political effort that
the UK Government has put into that. We have seen DFID call for
a review of World Bank and IMF conditionality, that was welcome,
that is good and it is the first step. The reviews themselves
were not very far-reaching and came to some pretty weak conclusions.
DFID itself put in some useful comments on the drafts of those
reviews but, unfortunately, was not able to change them. DFID
has been more prepared to talk at the World Bank and the IMF about
the number of conditions, "There are too many conditions,
maybe we should reduce them", rather than going out and saying,
"Imposing economic policies, which are very questionable
at the very least, like privatisation and trade liberalisation,
is undemocratic, unfair and unsuccessful, we need to change".
We have not seen that level of advocacy from this Government at
the World Bank and the IMF.
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