Examination of Witnesses (Questions 36-39)
RT HON
HILARY BENN
MP, MR MARK
LOWCOCK AND
MR MARK
BOWMAN
19 OCTOBER 2006
Q36 Chairman: Secretary of State, thank
you very much for coming before us. Would you first of all introduce
your team, please?
Hilary Benn: On my right is Mark
Bowman, Director of International Finance from the Treasury, and
on my left is Mark Lowcock who is the Director General, Policy
and International, from DFID.
Q37 Chairman: Secretary of State,
you set some ripples running before the AGM in Singapore in which
you stated that you were withholding £50 million of British
Government contribution to the World Bank because you were not
satisfied with the progress on conditionality. I have to say—I
think it is probably worth putting on the record—my recollection
of a meeting this time last year is that you said something different
and you did, but we subsequently got a correction; namely you
said that the Bank said they will only use conditionality on privatisation
and trade liberalisation in exceptional circumstances and then
the correction went on to say that you had pressed this further
and such a specific commitment has not been given. Does that actually
encapsulate the problem, in other words you are not satisfied
on delivery or you are not satisfied on intent?
Hilary Benn: I think the principles
that the World Bank drew up are good principles and they are ones
that I support, but it is about the implementation of those. As
you will be aware, when we made our contribution to IDA [4]
we said that £100 million of that would be linked to progress
(a) on harmonisation and (b) on conditionality and that was specified
in the governor's resolution. I think the issue for me has been
that the Bank produced its development policy lending retrospective
which was considered by the Board in July 2006 and although it
provided some useful information bluntly I thought it was a bit
thin and really did not give me the facts and the figures and
the detail that I need in order to make a judgment about how the
principles—which I welcome—are actually being applied
in practice. Therefore our executive director at that meeting
said that we wanted further information. We were trying to persuade
the Bank to provide it. There was not a lot of support; I think
there was only one other country at the Bank Board meeting that
said it shared our view. However, having reminded the Bank that
the payment of the further amount of money was going to depend
on satisfactory progress—and I spoke to Paul Wolfowitz about
it—the Bank then agreed in the run up to Singapore that
they would produce a further report and I welcome that enormously
because that is what I need in order to enable me to make a judgment.
Q38 Chairman: Mr Wolfowitz seemed to
give two slightly contradictory replies. In a letter to The
Financial Times he said that you and he were at one and that
once you saw the details in November you would be entirely satisfied
that the Bank were delivering on policy. I think he put out a
press release that said he thought your motives were political
or a gesture rather than substantive and I suppose the question
really is how much influence can you have and what is it that
you are looking for? How are you going to be able to explain to
us, Parliament, and to the Bank what has satisfied you or, indeed,
are there circumstances in which you will continue to withhold
that money or, indeed, withhold more?
Hilary Benn: I cannot withhold
more. I set out very clearly at the start of the IDA 14 process
what we were holding back, conditional upon progress on two issues:
harmonisation and conditionality. I was very clear and upfront
about that and that formed part of the resolution that was considered
by the Standing Committee in February 2006 looking at the IDA
14 statutory order. The honest answer is that it depends what
the further report shows. Christian Aid got Eurodad to do their
own assessment of a number of different countries and I think
that the problem with that was that it was not absolutely clear:
what is a condition that the Bank is insisting upon? What is a
benchmark? What are benchmarks that countries themselves have
set? The question here is: is there real ownership by developing
countries? Since the thing that I have been particularly concerned
about is trying to enforce on countries what I regard as controversial
areas of economic policy conditionality and in particular trade,
liberalisation, I just want to know how the principles that were
agreed and which I support because they are the right ones have
actually been reflected in practice. Because we have now encouraged—and
I regard what I did in the run-up to the World Bank Annual meeting
as an encouragement—the Bank to do what our executive director
asked them to do when the report was considered in July, that
the Bank having heard our reservations—it was not at that
point planning to produce a further report but was encouraged
in the run up to Singapore and decided that they would produce
a further report which is going to come out in November and I
welcome that. We have used our influence to some effect.
Q39 Chairman: That report was a direct
response to your initiative.
Hilary Benn: Yes, that is unquestionably
the case.
4 Fourteenth Replenishment of the International Development
Association. Back
| 
