Examination of Witnesses (Questions 304-319)
MR GARETH
THOMAS, PROFESSOR
SIR GORDON
CONWAY AND
MR JIM
HARVEY
25 MAY 2006
Q304 Chairman: Can I just welcome you
all to the inquiry. It is our final session of this inquiry, which
has featured very heavily on DFID. I particularly welcome the
Minister, who was an original member of the Environmental Audit
Committee back in 1997 for a couple of years, I think. So you
will be familiar with our ways and hopefully we will have a very
good session. I think we have you until about half past 12 at
the latest this morning. Could I start by asking you just how
the environment fits in with the work of DFID?
Mr Thomas: Mr Chairman, I wonder
if, just before I come to that, I can give a brief opening statement
to you, and then I will answer your question. Firstly, can I just
introduce the two officials who are accompanying me: Gordon Conway,
who is our Chief Scientist, and Jim Harvey, who I know the Committee
has already met, who is our Head of Livelihoods and Environment
[advisory groups]. Let me be clear: I welcome the Select Committee's
inquiry, not least because my honourable friend the Secretary
of State and I both recognise and indeed want to do more on the
challenges of supporting developing countries to address the issues
of sustainability, particularly climate change, but also natural
resources management. I think, Mr Chairman, your Committee will
be aware that we have been consulting on a third White Paper for
the Department, which we hope to publish some time in the summer.
I believe that White Paper will demonstrate further the Department's
intent in the areas of sustainability which I have mentioned.
At the same time, we are also considering what further staffing
and organisational challenges we have to address to support the
further work that we expect to do as a result of the White Paper.
I should say that, as Ministers, we specifically asked the Permanent
Secretary and his management team to look at environmental capacity
across the Department. They have set in train two reviews: firstly,
one on senior structure across the Department, and a second one
on advisory skills. Both are due to report shortly, and I expect
there to be an increase in our capacity in this area. In terms
of the specific answer to your question, where does environment
fit within the Department, I believe that environment has a huge
role within the Department's work, not least because, if we are
to achieve a substantial reduction in poverty, we have to recognise
the impact that environmental change has on the very poor. In
many parts of Africa, where they do not have access to, for example,
oil or other mineral resources, the natural environmental resources
are forests [and] things such as the fishing facilities available
through lakes or coastal waters. Uses of land in terms of agriculture
are fundamental to helping to begin to develop pathways out of
poverty for our very poorest people. Some of the work that we
have done in Ghana with the World Bank has sought to try to place
a value on the contribution of natural resources to economic growth,
and we reckon that about 50% of the growth that is taking place
in Ghana is directly attributable to the use of natural resources.
What is also clear is that environmental degradation is having
a significant impact on economic growth, about a 5-10% reduction
in the economic growth that could be achieved. So that is obviously
beginning to have a substantial impact on the way in which we
are thinking about our programmes, both in Ghana and more generally
across the Department, and I am happy to give examples of some
of the projects that we work. But if we are to achieve the economic
growth that we believe is fundamental to helping to lift people
out of poverty, we need to make sure that that economic growth
is done firstly in a pro-poor, sustainable way, otherwise future
generations as well as current generations are going to be, in
a sense, confirmed to a life in poverty.
Q305 Chairman: Clearly, natural resources
provide the means to economic growth, but is that all the environment
represents?
Mr Thomas: We need to recognise,
I think, as a Department that we have a specific legislative mandate
to concentrate on the issue of poverty, and therefore how we help
achieve the Millennium Development Goals, how we help to lift
people out of poverty. So you are right in the implication that
environment is obviously hugely significant in terms of its contribution
to global public goods, and we work with other government departments
who focus in particular on that global public goods dimension
of environment. The specific comparative advantage that we, as
a Department, bring to the table is the way in which the environment
impacts on the needs of the very poorest, and similarly, how the
needs of the very poorest impact on the environment. So, for example,
we work with DEFRA extremely closely through an inter-departmental
group on bio-diversity. They obviously focus very much on the
global public goods dimension; we feed into their work, as they
do into ours. Similarly, we work very closely with the Foreign
Office, who again have a role in arguing the case internationally
around protection of the environment. Again, what we bring to
their role is the specific comparative advantage in terms of the
impact on the very poorest.
Q306 Chairman: This paper, DFID's
Approach to the Environment, published in February, I thought
was a fairly honest assessment of the impact of climate change
on your pro-poor policies, and it seems to me that there are great
gaps revealed in that document in terms of MDG7, for example.
Our ability to make progress in dealing with poverty seems to
be greatly threatened by the environmental damage that the impact
of growth is causing. Is this thinking going to be reflected in
DFID's new approach stemming from the White Paper review?
Mr Thomas: Perhaps I can give
a specific country example by way of answer to your question,
Mr Challen. Let me take the example of Malawi, where the government
has a total budget of some US $730 million. Donors contribute
another $500 million. That simply is not enough money to help
Malawi's very poorest people address the health and education
challenges, for example, that they face in-country. Economic growth
is going to be crucial if we are going to lift the very poorest
in Malawi out of poverty, but if we do not make sure that that
economic growth takes place in a sustainable way, then the reality
is the environmental degradation which will follow in the wake
will ensure that the vast majority of the population of Malawi
stay in poverty or in very poor circumstances. I think the key
is to recognise that economic growth on its own per se
is not going to lead to protection of the environment and help
for the very poorest. What we have to do is to make sure that
the growth is sustainable and that we look at the distribution
of the benefits of that economic growth, because obviously, if
the benefits are spread in a more equitable way, that helps to
prevent damage to the environment; the pressure on the environment
is lifted to some extent, and that will be reflected in our increasing
work, which I hope the White Paper will signal.
Q307 Chairman: We are going to return
to growth very shortly. I wonder if I could direct a question
to Professor Conway and ask you if you want to add anything to
that particular debate about the interaction between environment
and development, whether there is a detached scientific view which
tells us anything about how to proceed and how this White Paper
should be structured.
Professor Conway: I have just
been to Malawi and let me just give you examples there. There
is a role for science and technology in creating sustainable economic
growth. Just to take one example in Malawi, the land is deteriorating
incredibly rapidly. They lose about 60 kg of NPK per hectare per
year; we put on about 100 and something kilograms per year, so
you have got to build up that soil nutrient. You have to do it
with inorganic fertiliser but you also have to do it by better
soil management. One of the things that we are doing actually
in neighbouring Zimbabwe, but we are hoping we can extend it to
Malawi, is what they call minimum tillage
(Fault in sound recording for approximately
two minutes. Log shows there is missing the rest of that answer,
a question from Chairman, and the beginning of the answer from
Mr Thomas)
Mr Thomas: . . . both in-country
and from Head Office, our ability to support our country offices
and internationally in negotiations the work that we need to do
on environment. One example, Mr Challen, that I would offer up
as an area where I think the Department has done a very strong
job but where further work is necessary is around forestry, where
I think we have helped through the European Union to ensure that
there is a very strong and robust forest governance process taking
place internationally. We have supported regulations within Europe
to help control better the sourcing of timber for sale in the
European Union, which has required a combination of ministerial
lobbying and active support from our policy division teams at
head office. Then we are working, if you like, in-country with
both country office staff and with other donors to develop the
capacity of countries such as Ghana, Tanzania, Indonesia, to look
at their ability to control their own timber industry, to control
the illegal logging which strips away forest cover and, if you
like, the global public goods side of things, but which also means
that the poor suffer if they depend on forests for a living. So
we have set aside some £24 million over the coming years
to fund our work at country level, and we are working very closely
with other donors to make sure that other donors pick up the lead
in other countries that need to do work in this area.
Q308 Chairman: Do you feel that the
lessons of this document are now beginning to really seep into
the organisation? It is only three months old, I realise, but
do you have any evidence that this is really making an impact?
Mr Thomas: The document is a publication
reflecting what we are doing, in that sense. The White Paper will
signal our intent in terms of what else we want to do on top of
what we are already doing. I think in the evidence session with
officials it was brought home, I hope, to the Committee that there
is more capacity than perhaps some of your other witnesses indicated
in terms of our work on the environment, both in terms of what
our Livelihoods advisers do, what our Infrastructure advisors
do, indeed, what the contribution of the Chief Scientist is to
that process. So I think there are many examples of where the
Department is working on the environment, but, as I say, I accept
that we need to do more, not least because there is the opportunity
to do more internationally because countries are beginning to
seek donor assistance to do more, and also because Ministers have
signalled that it is a political priority for us.
Q309 Chairman: Just to press you
a little bit further on this then, you would say that you have
moved on a great deal since the DFID evaluation report in 2000
concluded that "there is a gap between the policy priority
attached by DFID to environmental issues and what has actually
been delivered in terms of positive environmental impact",
and it went on that "the environment as a potential development
opportunity—rather than a risk to be minimised and mitigated—has
not been mainstreamed across DFID's bilateral funding." That
was six years ago. You are saying that that has now completely
changed and that DFID has really adopted this new approach?
Mr Thomas: What I would say is
that we have more to do, Mr Challen, not least because the nature
of the debate about environment and poverty has changed substantially
since 2000. There is evidence of poverty reduction strategy papers
beginning slowly to take greater account of the environment, but
I would not want to give an impression to the Committee that there
has been the type of dramatic change that I think we all recognise
is going to be necessary in the long term.
Q310 Chairman: You could be confident
that a future evaluation report would not then repeat those criticisms?
Mr Thomas: I would be disappointed
if a future evaluation report did not recognise that there has
been substantial progress. I expect if that evaluation report
were to take place now, they would point us in the direction of
a series of other things that we should do and, as I say, Ministers
recognise that and that is why I think the White Paper will signal
our intention to do more in this area and why we have set up the
reviews of our staffing.
Q311 Chairman: Are there any particular
things you think that will appear in the White Paper that will
show that these concerns have been addressed and that it will
be transformed into meaningful action within the workings of DFID?
Mr Thomas: I am not going to tell
you the detail of the White Paper now, not least because we are
finalising our thinking on it but, as I said in my opening remarks,
we recognise that there is an opportunity and a need to do more
in terms of climate change and in terms of natural resources management,
and I expect the White Paper to signal our intention to do more
in those areas.
Q312 Chairman: So if we were to ask
you for an environmental strategy and an implementation plan that
incorporated all the lessons from these diverse and some very
successful projects that you have been involved with, is something
that you would consider favourably?
Mr Thomas: It is something that
we would consider. I would like to think that the environment
paper that we published in February is an indication of the way
in which the Department is addressing the environmental linkages
to poverty reduction. We have an implementation paper explaining
and in a sense setting out the steps that officials and Ministers
are going to take to continue to implement what we are doing on
the environment. Inevitably, that will require updating in time.
It is a relatively fresh document at the moment. So I would hope
to persuade you that a new document is not necessary immediately,
but I recognise we will need to keep it under review, particularly
if, as I believe it will, the White Paper takes us forward in
a number of areas that are reflected in the paper so far.
Q313 Mr Caton: Minister, you have
already mentioned the role of economic growth in achieving poverty
reduction and the issue of making sure the forests benefit from
that. Has the Department a definition of "pro-poor growth"?
Mr Thomas: Essentially, it is
growth that allows the very poorest to benefit, in a sense, from
the economic growth that takes place, that recognises the need
for growth to deliver livelihoods, to deliver effective support
to fund health and education and other facilities, to recognise
that pro-poor growth is sustainable growth. In that sense, we
recognise as a Department that we need to do more, and I hope
I have given a sense of confidence that the White Paper will address
the specific issue of what else as a Department we are going to
do in future.
Q314 Mr Caton: On growth, and particularly
on growth in terms of GDP, we were given evidence by the New Economics
Foundation of how the proportion of economic growth in the last
10 years benefiting the most poor has actually been shrinking
down to only 60 cents of every $100. With your focus on poverty
reduction, surely that sort of figure is totally unsatisfactory.
Mr Thomas: It is unsatisfactory.
However, I would suggest that there are other elements you could
look to, Mr Caton, which would paint a somewhat different picture.
If you look at the story of Vietnam, for example, in terms of
poverty reduction, we have seen in the last decade a doubling
in the size of its economy and over roughly the same period a
fall in poverty from three-quarters of the population in the late
1980s to under a third now. So substantial economic growth has
taken place in Vietnam and at the same time has helped to deliver
substantial poverty reduction. We know, for example, as well that
in recent decades, at the same time as Africa has been growing
poorer, as economic growth has been contracting, the numbers of
very poor people have been increasing too, and there are examples
from East Asia as a region again charting the economic growth
that has taken place and also at the same time charting the very
substantial pull in poverty that has taken place in the region
too. What I think those examples and the New Economics Foundation
study demonstrate is that economic growth on its own simply is
not enough. It is how you make sure that the poor benefit, and
are part of that economic growth, and also that you make sure
that that economic growth is sustainable in an environmental sense.
Q315 Mr Caton: Is not the dilemma,
if the New Economics Foundation are anywhere near right, that
you have the option of relying on trickle-down from growth but
growth has to be so huge that the consequences for the natural
environment would be appalling, or you forget about ever getting
those people out of poverty?
Mr Thomas: I am not sure I see
it in those terms. I think the idea that developing countries
are not going to want economic growth to take place would be an
illusion. What I think we have a responsibility as a country to
do and through my Department I believe we are beginning to do
it very effectively in a number of countries, albeit we have to
do more, is to support those countries in making sure that that
economic growth does help the very poorest people to be lifted
out of poverty and it is done in a sustainable way, because that
is the only way in the long term large numbers of poor people
are going to be lifted out of poverty. So I do not see it as a
dilemma as such; I see it as a fundamental challenge. We have
to give the developing countries the support they need to make
sure the very poorest people in their countries benefit from the
economic growth that they need.
Q316 Mr Caton: Can we move on to
looking at DFID's Management Board? At the moment it is overwhelmingly
dominated by people with a World Bank or economic background.
Do you believe there is a need for greater diversity within the
Board so that all aspects of development are covered rather than
just the economic side?
Mr Thomas: In terms of the Management
Board, I would expect the Management Board to be able to focus
in on all the challenges that the Department faces, not just the
specifically economic challenges that the Department has to look
at, and I believe they do that. I think we have a very strong
management team. It is one of the reasons why I think the Department
has the strong international reputation it does. So I do not think
we need a radical change to the Management Board. I do think we
need to look at our senior civil service structure and at the
number of advisers who work on environment issues, and that is
why Hilary and myself have asked the Permanent Secretary and that
Management Board to review our senior structure and our advisory
skills so that we can increase our environmental capacity in the
future.
Q317 Mr Caton: I hear what you say
about the Management Board, but if you look at the focus of this
Committee's interests and you look at the minutes of the Management
Board and the Development Committee for the last two years, environment,
sustainability and climate change hardly feature: once, I believe,
in the last year. Nor do these issues appear high on the Committee's
agenda. What does this say about the commitment to these issues
within the higher echelons of the Board?
Mr Thomas: I think it is a little
unfair to pick out just the Management Board to arrive at that
conclusion. I think if you were to look at the work of the Secretary
of State and myself as well as the Management Board and as well
as the broader Department, I think you would actually see a very
substantial work stream on the environment. One asks the Management
Board to look at problems and do some broad strategic thinking
for us. They do that extremely well. As I say, I think the Department
will signal its intent to do more on the environment in the White
Paper that is coming.
Q318 Chairman: Can I just ask, have
you met any resistance in the Department to this new agenda?
Mr Thomas: You have within the
Department on all sorts of issues pretty robust discussions, but
I think there is a recognition across the Department . . .
Q319 Chairman: Not shouting matches
though?
Mr Thomas: Certainly not shouting
matches. Neither Hilary nor I have that type of personality. I
think there is a recognition across the Department, and indeed
across the Management Board and the senior civil service as a
whole, that the Department does need to do more on climate and
natural resources, and I think people are beginning to recognise
that there are a growing number of international opportunities
to do that, and that there is a growing recognition from the developing
country governments with whom they work that they also need to
be asking donors for greater support in these issues. What has
been quite interesting just by way of example is that a couple
of developing countries with whom we work have asked us to work
on a strategic environmental assessment of their poverty reduction
strategy papers. That is a very positive move. It is, if you like,
a start. It is not something we have yet had the opportunity to
extend across every poverty reduction strategy paper with which
we engage. It may well be that there is a place for a number of
other donors to take a lead in particular countries, but it is
those types of opportunities that are beginning to open up, which
is one of the reasons why we think we need to do more and why
we think we need to look at our capacity within the Department
to support us taking advantage of those opportunities.
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