Examination of Witnesses (Questions 360-366)
MR GARETH
THOMAS, PROFESSOR
SIR GORDON
CONWAY AND
MR JIM
HARVEY
25 MAY 2006
Q360 Mr Vaizey: Can I ask you about
the Ghanaian chicken? This is a well-known story of the Ghanaian
chicken that was defeated by subsidised European frozen chickens.
The Ghanaians tried to put tariffs on foreign chickens and then,
apparently under pressure from the World Bank, removed those tariffs.
Does DFID have a view on that sort of issue, where developing
countries are trying to protect their basic agricultural industries
but in the interests of trade liberalisation are forced to . .
.
Mr Thomas: We do, and our view
is that in any sort of negotiations, be they the negotiations
around economic partnership agreements or be they the negotiations
around the Doha Round, we have to make sure that developing countries
can sequence for themselves the opening up of their markets, and
we need to recognise that their markets will need to be opened
up at a slower pace than developed country markets to them. So
part of the dialogue and part of the contribution that DFID is
making to the international negotiations around the Doha Round
is looking at what support we can give to developing countries
to negotiate their positions on special and differential treatment,
on what constitutes a special product, what the special safeguard
mechanism might look like. So we have funded a number of institutions,
including UNCTAD and ActionAid, to do work in this area, which
the negotiators in Geneva for developing countries can use to
argue their position more effectively around S&DT, market
opening etc.
Q361 Mr Vaizey: Do you think there
is a wider environmental issue in the sense that more and more
developing countries are becoming more dependent on foreign food
imports and less able to sustain their own agricultural industries?
Mr Thomas: I think that the developing
countries' capacity to allow their people to grow their own crops
and to develop their own agriculture in order to give them enough
food to survive is a huge issue. It is one that the international
community needs to do more work on and the number of famines that
take place and the regularity of famine in Africa is proof of
that point. We do have a substantial programme that looks at how
we can support agriculture in a number of countries, and I think
it is right that we have that focus. The focus is on pro-poor
agriculture, how we can help the individual household grow the
food they need to keep themselves alive.
Q362 Mr Vaizey: Finally, just in
terms of DFID's relationship with the World Bank and the IMF,
you have far less emphasis on things like conditionality and so
on. Is there a tension between you and those two organisations?
Are you seeking to persuade them that DFID's way is a better way?
Mr Thomas: One, when Hilary Benn
published our paper on conditionality in March last year we made
clear that we were going to try to encourage the World Bank to
change its approach to conditionality too. We have had a series
of discussions with the World Bank. They have put in place a number
of principles which are going to guide them in the conditions
that they set. It is a bit too early to say what difference those
principles have made but it is something that we are going to
continue to keep a very close eye on. I think, Mr Vaizey, if I
can say, what the Committee would need to recognise is that we
are one of a number of nations on the board of the World Bank,
and not every other nation shares our view on conditionality,
so we have a job of work to continue to persuade other players
on the board that our view is the right way. I think the World
Bank has moved in a positive direction in terms of the principles
that it sets. We have a continued selling job to do to other board
members that it is the right way to go.
Q363 Chairman: The Public-Private
Infrastructure Advisory Facility seems to get involved in a number
of activities which perhaps go beyond providing advice. They seem
to be trying to train local journalists or even trade unions to
come to the view that things like water privatisation, for example,
are very good things. Do you think it is going a bit beyond its
brief, using public money, £15 million, I think, to engage
in some of these activities?
Mr Thomas: Mr Challen, what I
have to do is to look at the specific remit of the programme.
On water privatisation more generally, let me be clear about what
the Department's position is on that, because I think there have
been a number of misunderstandings about the nature of our approach.
We are very clear that more needs to be done to give good access
to water and sanitation, where the level of investment that is
going in to develop people's ability to get access to water and
sanitation is nothing like what it needs to be if we are to achieve
the Millennium Development Goals. Hilary Benn has announced our
commitment to double our spend on water and sanitation and roughly
95% of our spend is not on private and private-related projects.
The gap between what donors and developing country governments
need to be spending on water and sanitation is not being filled
by the private sector at the moment and I think the international
community as a whole faces a real challenge about how we can get
that investment . . .
Q364 Chairman: If I may interrupt,
I appreciate all that and that is not really the point of the
question. We are providing taxpayers' money for the Public-Private
Infrastructure Advisory Facility, which provides free seminars
for journalists and trade unions in the recipient countries, which
no doubt espouse the virtues of privatisation. I am not commenting
on the value of that. Is it balanced with a similar activity with
free seminars for journalists and local trade unions espousing
the virtues of public sector investment?
Mr Thomas: I will have to get
back to you on the specifics, Mr Challen, of the particular programme
that you are referring to. What the Department is clear about
is that there are good examples of water privatisation and there
are bad examples of water privatisation, and it is for developing
countries to take the lead themselves as to whether or not they
want to privatise their water industries or not. If they come
and ask for our assistance, then I think we have a responsibility
to consider whether we should provide support or not, but I come
back to Mr Vaizey's question: we have a clear policy on additionality,
we think developing countries should take the lead in these types
of questions, and we will support them to do so. Where we are
asked to give specific help, we do give that help, and I make
no apology for doing that. You have asked me a very specific question
about a particular programme, and I will take that away and write
to the Committee.
Q365 Ms Barlow: The Commonwealth
Development Corporation, which is wholly owned by you: the Chief
Executive, Richard Laing, recently wrote an article defending
the role of the private sector and wealth in development, in which
he said, "The rich get richer but so do the poor." A
question in two halves really: how does this tie in with your
commitment to poverty reduction when you think that some of the
investments made by the CDC include shopping centres in Nigeria,
large-scale mining, energy, smelting projects, etc? How also does
it tie in with the environmental agenda, partly in specific areas
such as investing in palm oil in New Guinea, but I am particularly
concerned about the overall environmental impact of these large-scale
investments made by the CDC, and have you ever assessed the carbon
footprint of their investments?
Mr Thomas: The mission of the
CDC is to try and help developing countries facilitate the growth
of viable businesses in their countries through responsible investment,
through mobilising private finance to help achieve economic growth
and to help lift poor people out of poverty. They do have a responsible
investment policy, which we have looked at and agreed with them
and which their fund mangers apply. If a business in a developing
country wants to set up a shopping centre, then frankly, that
is a decision for that business to take and for the developing
country to decide through its land use planning policies whether
or not it wants that shopping centre to be built in a particular
way.
Q366 Ms Barlow: Why should CDC invest
in it? That is what I am saying. I think Mr Laing said an economy
such as Nigeria has middle classes, which is going to be key to
the growth of any country, so why should they not have a decent
shopping mall to invest in? Exactly, in building the infrastructure,
but in building the infrastructure for the middle classes? Due
to your commitment to poverty reduction, what exactly is the relationship
that you have with CDC? Can you influence them to put more money
into poverty reduction, investments which will directly affect
poverty reduction?
Mr Thomas: In terms of the specific
example you used of a shopping centre, if that shopping centre
creates jobs for the very poorest people in Nigeria to benefit
from, then I would see that as a good thing. We do not intervene
in every commercial decision which the CDC takes, nor do I think
we should. The CDC does have a clear environmental policy, it
follows the World Bank's environmental standards, unless there
are more stringent local standards in place, so it has a clear
environmental policy in that way, and if its investments help
to create jobs, which I believe they do, then I welcome that and
I believe developing countries welcome that. I come back to the
point about what we have to do, I think, is to support the developing
countries to develop their ability to better regulate what happens
in their country, to improve the environmental and a variety of
other standards, health and safety standards, etc, to develop
the laws and develop their capacity to implement those laws and
follow through on those laws. Through a variety of projects we
do support a range of ministries in a range of developing countries
to increase their capacity to regulate what is happening in their
own countries, and that is the way I think we have influence on
a better environment.
Chairman: I think we will have to draw
the session to a close now. There are one or two outstanding questions,
if we could write to you perhaps on that point in terms of the
infrastructure issue that I raised earlier. I would just like
to thank all three of you very much for very generously giving
your time this morning. It has been a very long session but a
very deep and interesting one too. It has been very helpful. Thank
you again.
|
