Examination of Witnesses (Questions 1-19)
MR JEFF
POWELL AND
MR SIMON
COUNSELL
18 OCTOBER 2005
Q1 Chairman: Gentlemen, good morning
and thank you for coming. I wonder if you would briefly like to
introduce yourselves. One of our witnesses is unwell this morning
and not able to be here.
Mr Powell: Good morning. My name
is Jeff Powell. I am the Coordinator of the Bretton Woods Project.
The Bretton Woods Project is an independently funded NGO that
monitors the activities of the World Bank and the IMF.
Mr Counsell: Good morning. My
name is Simon Counsell. I am the Director of the Rainforest Foundation,
which is a non-governmental organisation working with the rights
of local and indigenous peoples in tropical rainforest areas of
the world.
Q2 Chairman: Perhaps I could just
start by saying there has been a lot of debate about issues of
conditionality, which Jeff may wish to come in on first. The World
Bank have done a review of conditionality and the British Government
have changed their policies in saying they are lowering conditionality
thresholds; but there have been some people who have said the
consequence of that is people are not clear as to exactly what
is expected of them; whether they are administering international
or national aid projects. In the light of the World Bank view
and the British Government's own policy changes, can you give
us a feel for how you think the conditionality rules have changed
and whether they have been helpful or not?
Mr Powell: Broadly speaking, NGOs
in the development network have welcomed the new British Government
position on conditionality. The argument for some time has been
that conditions not only fail to do what they set out to achieve,
but that they undermine the policy space of governments and the
accountability of governments to their citizens; that they reinforce
a vertical accountability to donors and the international community.
The feeling was very much that the direction the British Government
paper on conditionality took was very welcome. The World Bank
review of conditionality, which largely came about because of
pressure from the British Government, was disappointing to us
in many respects. I suppose I should start with the strengths
which are, it does invoke a series of good practice principles
which we consider encouraging, these are: ownership; harmonisation;
customisation; criticality of conditions; transparency and predictability.
All of these are good things, but there is a real question mark
around how these will be operationalised by the Bank. The other
positive for us is the commitment by the Bank to review its use
of conditions in one year's time in light of these good practice
principles. There is a lot to be seen yet in a year's time.
Q3 Chairman: Do you have any specific
examples of where conditions have undermined the objectives of
the aid, the needs of the recipient countries?
Mr Powell: We could use any number
of conditions. One that is commonly invoked would be trade liberalisation
conditions in the past. There has been a study done recently by
Christian Aid which has looked at trade liberalisation conditions
either explicitly, through country support documents or implicitly,
through attempts by countries to meet the standards that the Bank
sets for good policy in order to have high case lending scenarios.
These liberalisation requirements have been damaging countries
in a number of ways. They have undermined their ability to negotiate
in the WTO, so they have been set back in terms of bilateral negotiations.
They have also created a situation where imports become cheaper;
it creates a balance of payments deficit as they bring more imports
in; and it leads to a deindustrialisation as countries look to
produce more from outside rather than from inside. It has been
premature trade liberalisation for many of these countries where
their domestic industries are not yet ready to compete. The examples
given by Christian Aid in their reports refer, for example, to
the tomato canning industry in Ghana, where that industry has
been overrun by cheap imports from the EU; another one they have
used is the domestic poultry industry in Ghana where, I believe,
it is the United States' poultry exports that have now flooded
into the Ghanaian market and largely wiped out domestic producers.
It is just one area where we can talk about the impact of conditionality,
but you can look at similar issues around privatisation and deregulation
of financial controls as well but we would probably get into quite
a long discussion going through examples of all of those. Some
of the critique of where the World Bank review of conditionality
might be useful: first of all, we were disappointed there was
a failure to prioritise the discussion of the conditionality review
at the annual meetings; it was simply presented as a background
paper. We think in a scenario where aid is being rapidly increased,
to discuss the conditions by which aid is accompanied is absolutely
vital; one cannot go without the other. Three comments: first,
we think the Bank has too narrow a definition of what it considers
conditions. It only considers conditions, what it calls "prior
actions", things that countries are required to do before
they actually receive the money. Other things which they call
"benchmarks", which are essentially conditions the countries
need to meet along the way to continue the flow of money, they
do not count in their conditionality review. Their own survey
of recipient governments said that 75% of government officials
could not distinguish between the impact of a prior action and
a benchmark. Essentially recipient governments are seeing all
of these as conditions. We very much support what the Secretary
of State has said, that he wants the Bank to set out a clear statement
on the circumstances where the Bank might use sensitive policy
actions as benchmarks. We are pleased to hear that but we do not
think that has come out yet. The second point we want to raise
is the persistence of a rather perverted notion of ownership in
the Bank review of conditionality. The Bank is still very much
defining ownership as a country's ability to implement the policies
it agrees upon with the Bank, and not the country itself taking
leadership in deciding which conditions are appropriate for its
economic development. Our suggestion here is that we need to turn
what is recommended as "mutually agreed accountability frameworks"—which
is where a country agrees to have certain conditions drawn from
its plan—to "mutual accountability frameworks"—where
donors agree there are certain conditions in terms of aid predictability
and aid harmonisation that they must maintain as part of the contract
in terms of a development plan. The final point we felt was missing
from the conditionality review was a sufficient discussion of
what are called "poverty and social impact assessments".
This is the need to look at what is going to be the impact of
any policy on the most vulnerable groups ex ante, before
these policies are brought to bear. These are some of the issues
we feel are still missing.
Q4 John Battle: You mentioned the
poverty impact on the most vulnerable groups, but I would be keen
to see poverty reduction as the focus of central aid of the World
Bank. Given that the World Bank has got extra ODA resources now,
what changes do you think that should make to the World Bank's
portfolio to make sure that poverty reduction rather than the
poverty impact is the key to its strategy, i.e. not just to make
sure that the most vulnerable are not hit again but actually to
eradicate poverty? What steps must be taken there?
Mr Powell: In response to your
question of what do we see as the biggest change to the way the
Bank is going to be working, the clear signal we have had is that
there is going to be a large return to infrastructure. Everyone
within the development community is once again talking about infrastructure
as being central to growth and, therefore, to poverty reduction.
The Vice President for Infrastructure at the Bank said that there
would be an increase of approximately $1 billion a year in lending
for infrastructure over the next four years, until infrastructure
lending reached 40% of the total Bank portfolio.
Q5 John Battle: Does that mean back
to big projects?
Mr Powell: This is our concern
very much. The Vice President assured us that the Bank had learned
the lessons of the past but we have concerns that that is not
the case. Central in terms of infrastructure should be exactly
what you are asking, which is: is poverty reduction at the core
of what infrastructure is trying to do? A recent review by the
Operation Evaluation Department of the Bank looked at private
sector development in the energy sector and they said "that
the poor are often the last to benefit from increased access",
and they urged a greater emphasis on the mainstreaming of poverty
reduction in infrastructure lending. To ensure that poverty reduction
is at the centre of infrastructure lending we would recommend
three key facets to examine: first is the question of options
assessments. All of these groups which you mention, the most vulnerable
groups, should be involved in a comprehensive, accountable and
participatory assessment of infrastructure needs. This is the
only way that we can overcome a bias towards large-scale, capital-intensive
and centralised infrastructure. This is the way that we can get
to things like rural electrification and sustainable irrigation
systems; and an emphasis on efficiency improvements over new bricks
and mortar. The second facet which we think is crucial to look
at is the question of safeguards for the most vulnerable. In terms
of World Bank lending, safeguards are environment and social safeguards.
Whereas the Bank in the past has taken a mitigating approach—after
a project has largely been designed they look at what are going
to be the negative impacts and how can they mitigate that—we
think they very much need to move to a model where those risks
are anticipated and examined in the options assessment. We are
very worried by the IFC safeguard review, the Bank's private sector
lending arm, because we feel that it threatens to weaken the existing
safeguards that the Bank has. A couple of examples: it fails to
make explicit references to international standards; it removes
the requirement for third party environmental assessments; and
it transfers accountability for monitoring of these safeguards
from the IFC itself as an institution to the client company. The
final point we think is crucial in terms of maintaining a poverty
reduction focus is that the question of corruption is well examined
in the question of infrastructure. Over the last two years in
fact there have been US Senate hearings on corruption in the lending
of the multilateral development banks, and they have found that
corruption is pervasive in large infrastructure projects. Unless
we get to the root of that problem we will not solve it; and that
requires a step changed in the Bank's transparency of documents
for infrastructure projects, and a willingness on the part of
the Bank to sanction those companies who are involved in any corrupt
processes.
Q6 Joan Ruddock: There is a lot of
talk about accountability and good governance where aid and development
is concerned, but there have been criticisms that parliamentary
accountability does not feature very large in terms of the performance
of international financial institutions. In evidence last year
we heard from DFID that they did not obstruct parliaments, and
the Secretary of State said he was keen that DFID promoted parliaments.
I wonder what your view is of the international financial institutions
and what kind of progress, if any, they are making on parliamentary
scrutiny?
Mr Powell: We feel that the Bank
in fact have recognised this as a problem and they have invested
considerable resources into what they call parliamentary capacity-building.
We have some concerns about that. To put it in a glib way, it
is a bit like the fox guarding the henhouse. We feel that parliamentarians
themselves should be in the lead in deciding what they want to
learn more about, and who should provide that capacity-building;
rather than the IMF arriving with a mission to teach parliamentarians
about good economic management for example. The emphasis should
be placed, first and foremost, on national capacity-building and
on self-learning between recipient countries. We felt very recently
there was a step backwards. There was an attempt by southern parliamentarians
to present the issues raised by the international parliamentarians'
petition, which has been supported I think by many of you around
the table and many British MPs, to the G24 meeting at the annual
meetings of the World Bank and IMF. That presentation was blocked
by the IMF Parliamentary Liaison Officer who demanded that they
produce written evidence of their invitation to that meeting.
We just saw that as an example of the cautious and very defensive
attitude of the institutions towards critical parliamentary involvement.
In the coalition that works to support the international parliamentarians'
petition, we have a number of suggestions we think still need
to be taken to move this forward. For the Bank and Fund we think
they need to develop guidelines for staff in how they deal with
parliamentarians. There are very sensitive issues of sovereignty
that are involved here. They also need to improve transparency
throughout the project cycle and come up with ways for parliamentarians
to be involved in that process. We understand there are sensitive
issues, particularly around IMF lending, but there are creative
ways to get around that. Some research done by Ngaire Woods at
the Centre for Global Governance at Oxford University has recommended
a cross-party parliamentary group which would work in a certain
degree of secrecy, but would have some oversight of IMF lending
to countries. For DFID's part, we believe DFID should develop
a strategy for improved parliamentary participation in its bilateral
lending; this could then act as a guideline for its support through
multilateral lending. We believe there is more that could be done
to improve parliamentary involvement in poverty reduction strategies,
both in their development and in their implementation. This came
out of a study done by World Vision on poverty reduction strategies
in Bolivia and Zambia, which found that parliamentary participation
was still sadly lacking. On the part of the IDSC, I would encourage
you very much to work more closely with southern MPs, particularly
on this issue of accountability of the IMF and World Bank to parliaments.
I think there are a number of southern MPs who would be eager
to work on that with you. Finally, one suggestion we would like
to see implemented would be to involve more parliamentarians in
the World Bank/IMF annual meetings themselves. We think this would
go a long way to opening up the atmosphere of secrecy that still
cloaks these meetings.
Q7 Joan Ruddock: Simon, I wondered
if you had anything you wanted to add in terms of prescription
for change?
Mr Counsell: I do not have very
much to add to what Jeff has already said. Hopefully one of the
issues in the evidence we submitted, in the specific case of the
Democratic Republic of Congo, does raise some very serious questions
about the accountability of the Bank to parliaments and, indeed,
to the populous in more general terms in post-conflict situations
where, through Bank intervention, some major policy changes are
being effected through, for example, interim, non-elected governments
that may (as they do in the case of the Democratic Republic of
Congo) actually consist of very little more than a conglomeration
of warlords and very corrupt vested interests. I think there is
a great deal more thinking to be done about the role of the Bank
and how it can exercise some degree of accountability in such
circumstances.
Chairman: It is a very difficult situation
from the Bank's point of view having to deal with what is there
rather than what they would like to see.
Q8 John Barrett: In March this year
DFID produced the first ever report on the UK's relationship with
the World Bank and how we expect the Bank to increase aid and
provide greater debt relief and open up markets to poor countries.
A lot of people thought it was a disappointing report. What was
your impression of this report?
Mr Powell: First of all, I think
some credit is due to the Committee for putting pressure on DFID
to produce this report. I think it is a useful report as an activity.
We were disappointed with the report. We felt, first of all, that
it lacked substance. There was no discussion of some of the key
policy developments during the period covered: for example, the
infrastructure action plan; developments in terms of environmental
and social safeguards; it had nothing to say on the key, large
investment projects over that period, save for one. In terms of
accountability and continuity, there was no assessment of whether
UK objectives for spring and annual meetings had been met, or
why. There was no follow-up on questions that had been raised
by the International Development Committee. There was no reference
to the work of the Operations Evaluation Department of the World
Bank or the Inspection Panel, the official bodies which are set
up to scrutinise these institutions. There was also no mention
of what I have just mentioned, the US Senate hearings on corruption
and multilateral development banks, which is a major event in
terms of how we view these institutions. Finally, we felt it was
incomplete; there were some things it would have been useful to
include for monitors of the UK Government's relationship with
the IFIs, such as a detailed account of its financial support
for the World Bank, including the many trust funds which the British
Government supports at the World Bank; and the objective notes
for the spring and annual meetings, and the institutional strategy
paper which DFID has drawn up for its work with the World Bank.
Having said that, we are optimistic that DFID consulted us on
the next version and we made some suggestions on how to improve;
and they seemed very receptive to improving next year's version
of the report. They have significantly improved their institutional
strategy paper for the World Bank by sharpening the objectives
and adding indicators by which they can measure the progress of
the institution. I would like to take this opportunity to say
that we urge Treasury to take the same steps. We think now Treasury
has fallen behind to some extent in terms of being more specific
about how it intends to develop its relationship with the IMF.
We continue to think it is an important role of the International
Development Committee to scrutinise such reports.
Q9 John Barrett: It is also important
for DFID to put pressure on the World Bank to be more transparent
in their operations?
Mr Powell: I think DFID has been
very good about continuing to push for transparency of the institutions.
This is perhaps an area where the multilateral nature of the institution
is what is holding up progress. They continue to push for greater
transparency, for example, of board transcripts, which are absolutely
vital to address the question of parliamentary scrutiny for example,
so that parliamentarians can know what their representatives in
the institutions are actually saying. In that case we very much
continue to support their efforts.
Q10 Richard Burden: Following on
from what you were saying, in addition to questions of parliamentary
scrutiny and transparency generally, how do you feel progress
has been made by the IFIs on trying to give developing countries
greater participation and democratising those institutions? How
is that going?
Mr Powell: It is not going very
well, would be the short answer. We started this year with the
announcement of Paul Wolfowitz as candidate for the President
of the World Bank; and I think I can speak quite unanimously for
British civil society groups that monitor these institutions that
they felt this was an inappropriate candidate for a number of
reasons, which we do not need to get into here; but that moreover
the process, whereby it is in the gift of the United States to
make this appointment, is completely unsatisfactory for such a
key institution. On the question of the voice of developing countries,
the democratisation of the structures of the World Bank, it is
apparent that the road map which was designed to be led by Trevor
Manuel has failed. It has gotten nowhere; it has made no progress
in terms of gaining consensus around what changes are needed.
It appears that the torch has now been passed to the IMF's 13th
quota review. This does offer an opportunity to make some progress,
although there are some limitations in terms of what opportunities
we can get in terms of World Bank reform through an IMF-led process.
I think it is worth quoting Lorenzo Bini Smaghi, the former Head
of the Sub-Committee of the IMF at the European Union. He said
that unless the governance of the IMF is solved the IMF will be
replaced by other fora. It would not be an understatement to stress
right now that the IMF is in a crisis of confidence and legitimacy.
In terms of what we recommend—internal processes have failed.
We need an independent review process to try and build a certain
moral critical mass about the changes that are needed. We need
to de-link reform of the IMF from the World Bank; and even within
the World Bank it would be very useful to de-link the reform of
the International Development Association, the lending arm for
low income countries, from that of the IBRD, the lending arm for
middle income countries. Reform must focus on the effectiveness
of the institutions, and not on political horse trading as we
have seen in the past. We need to de-link the different functions
of these institutions so financial contributions, access to resources
and oversight can all be handled in terms of different formulae
for how countries participate. Urgently we think the leadership
and senior management selection question must be reformed. Everyone
agrees it is simply a question of high level political will to
get that changed. Of course, we continue to advocate for improved
transparency at the institutions. We would like to see the World
Bank embrace the principle of disclosure, rather than continue
with the current system whereby it agrees for certain documents
to be disclosed one by one. Very concretely we think there is
a UK role to spearhead a multi-stakeholder discussion at the sub-committee
of the IMF—a Treasury official has just taken over as head
of that sub-committee—to look at the rationalisation of
European representatives at the IMF, and also to bring together
a European consensus on how the leadership selection issue can
be solved.
Q11 John Bercow: I wonder if I could
ask Mr Powell whether you share the view of the Jubilee Debt Campaign
that the various 64 countries now require full debt relief in
order to achieve a realistic prospect to achieving the MDGs?
Mr Powell: I do not want to go
into too much detail on this issue. The Bretton Woods Project
is able to avoid the minutiae of debt questions because we have
the expertise of the Jubilee Debt Campaign on some of the issues.
We would simply support their call that debt relief needs to be
extended to a much larger array of countries than is currently
the case. Similarly, while we applaud the debt relief that has
been given at the last annual meetings, it is by no means 100
per cent. We have not looked at the other financial institutions
that are involved or private creditor debts that are involved,
for example the Paris Club of lenders. I think there is still
much more to be done for, as you say, a number of countries if
they are going to make progress towards the MDGs.
Q12 John Bercow: I am afraid that
will not quite do. To be fair, I have listened, as other colleagues
have, with great interest to your comprehensive and candid answers
to other questions but I feel it is not a question of getting
into the minutiae, as you put it; it is a question really of having
a view about conditions, about performance, about legitimate expectations
of recipient countries. Leaving aside the evaluative term "minutiae",
can I just ask you whether you think that access to that debt
relief for those very poor countries should, as far as you can
tell, be immediate, and unconditional on grounds of the severity
of their plight, or whether you think that it ought to be conditional?
Mr Powell: Certainly in terms
of the debt you have already agreed I think it should be immediate
and it should be without further conditions.
Q13 John Bercow: But if we are talking
about the extended provision of debt relief, which is really the
subject matter of the parliamentary investigations, from the existing
countries that have been agreed should benefit from it to the
60-plus that many of the NGOs think should receive it, what conditions
do you envisage?
Mr Powell: I think there is general
agreement that fiduciary conditions—conditions around transparency,
of how these funds would be used—are agreed across the board.
I also think there is agreement across the board that economic
policy conditions—particularly in the sensitive areas we
have already discussed, of liberalisation and privatisation—should
not be included. There is perhaps some disagreement of whether
or not there should be any conditions around what are broadly
called governance reforms; and for that I think there are differing
opinions from different civil society organisations which need
to be discussed in more detail, and that is where I defer to others.
Perhaps "minutiae" was a poor term to use but that is
where I defer, to those who have done more work on this specific
area.
Q14 John Bercow: Let me give you
a very specific example of what I am driving at and then you might
feel inclined to give a view on it. If we were to take a very
poor country such as Burma, which is also practising horrific
human rights violations and failing to spend any significant sum
of money on health and education on its own people, would you
accept that there the fiduciary issue and the governance issue
come together? In other words, is a country which, through its
brutal government, is spending 19p per person a year on health
and education and half of its national budget on the military
a proper beneficiary of extended debt relief?
Mr Powell: I have to confess first
that I simply do not know the debit situation of Burma as a country.
It has been such a pariah for so long I am not even sure the debt
is much of a question in the Burmese case, so I have to confess
my ignorance of those details. I think what most NGOs as a principle
would suggest in cases where there are questions of human rights
violations is that there should be what is called a multi-stakeholder
process, where various organisations, donors and civil society
groups can make a joint evaluation of whether or not violations
are so serious as to not validate debt relief for that particular
country. I cannot get into the particulars of a particular country
without knowing more about the circumstances on the ground.
Mr Counsell: I could perhaps just
add to that, if there are conditions that are to be attached in
the case of certain countries, perhaps those conditions might
relate to the strengthening of Bank governance rather than the
strengthening of governance in countries, although the two might
well be interrelated. It is absolutely clear from the example
we have presented in our evidence, and others I am aware of, of
the countries that are scheduled for debt relief in the coming
year or so that there have in the past at least been serious failures
of Bank oversight of the programmes and projects in which they
have been involved, and which have clearly failed to promote the
stated objectives of the Bank in terms of the Millennium Development
Goals. To a certain extent it comes back to the question Mr Battle
asked earlier on: is there a linkage between Bank activities and
poverty alleviation and reduction at the outset? In the case of
the Congo, for example, and many others I could cite (Cameroon
in Africa perhaps being one of them) it is absolutely unclear,
to us at least, that there has been any thorough-going analysis
on the part of the Bank to define whether its interventions in
the various economic sectors there are actually going to achieve
any impacts in terms of achievement of the Millennium Development
Goals. Perhaps to answer your question, this analysis, in our
view, at least needs to apply in order for debt forgiveness or
reduction to truly have effect in terms of reducing poverty.
Chairman: Is not the nub of the difficulty,
Bob Geldof says, "Just give them the effing money",
that is one of the extreme views; just write off the debt. It
is a very popular slogan, but you have just articulated a situation
where governance and the people in governments have stolen the
money. We do need to ensure that if we are going to write off
this debt and then establish new aid programmes that we are doing
it in circumstances that do not get us back to exactly this situation
in ten years' time, because if that happens nobody will want to
write off any debt, good or bad. There has to be some conditionality—I
take it you accept that.
Q15 Ann McKechin: Following on from
your criticisms of the Bank's approach, in the Congo in particular,
can I ask if you were in the Bank's position would you lend at
all and, if so, what kind of criteria would you apply to answer
the criticisms you have referred to by African civil society organisations?
Mr Counsell: It is a difficult
situation, clearly, but if I were in the Bank probably what I
would do would be to attempt in such a delicate and important
situation to comply absolutely rigorously, firstly, with my own
internal safeguard policies and, secondly, with the good work
that the Bank has done in terms of addressing the extra difficulties
of working in post-conflict countries. For example, the whole
development approach and rationale in countries such as the Democratic
Republic of Congo should be bottom-up, community driven, rather
than the kind of top-down approach we have actually seen the Bank
pursuing over the last three years. Also that long-term resource
rights should not be given out to private sector concessions in
such circumstances, but that the private sector should be encouraged
to play a more service provision role in those circumstances.
Those are very clear descriptions of the Bank's own post-conflict
work which is not what we have seen the Bank doing to date.
Q16 Ann McKechin: You would appreciate
in the DRC, which has no local government whatsoever, that the
definition of what civic society communities are can be very difficult,
particularly in remote areas where minerals and logging activity
occurs. I suppose it is a balance of trying to propose a more
rigid form of conditionality, on the one hand, but at the same
time actually trying to start a post-conflict reform of industry
and business in an area which has totally lacked any controls
for many years?
Mr Counsell: Clearly in circumstances
such as this a two track approach is needed, and the first of
those might involve emergency assistance, a certain amount of
conflict resolution work, the democratisation process and a certain
amount of infrastructure for health, education and so on. These
are all things that to a certain extent the Bank has been supporting
along with DFID as well. On the other hand, for the longer term
developmental options for that country, the Bank should be engaging
much more widely with civil society organisations, faith-based
groups, trade unions and so on for the development of policies
such as those affecting the forestry sector and the mining sector
that will have a major effect on the country's long-term development
as well as on the vast majority of the population. That is a process,
particularly in the kind of circumstances DRC finds itself in,
that is long-term, but it has to be begun at some point. What
we are seeing at the moment is, despite three years of major interventions
by the Bank and something in the order of $2 billion worth of
programming and credits in that three years, the process of engagement
of civil society across these major policy areas has not even
begun. That is something we would see as a major flaw in the Bank's
approach in that one example of a country.
Q17 Chairman: Does the Bank have
the capacity to do that? What you have just described is a huge
bureaucratic process and it is all about getting the government
to deal with this but I take your point about having to start
it.
Mr Counsell: In many cases you
appreciate that the DRC is an important test case for the way
that the Bank operates, certainly in Africa but perhaps more widely.
Does the Bank want to get it right or does it want to get it wrong,
as it has done evidently in so many cases in the past. If it wants
to get it right then, yes, it does have to begin the long-term
process of engagement of civil society and other actors of course
in a process of dialogue that may in itself run over a period
of years in order to draw up these policies affecting strategically
important economic sectors. That is not saying anything extreme
whatsoever; in fact it is what the World Bank's own policies say,
such as the Forest Policy which prescribes exactly this kind of
approach; that is quite a simple prescription.
Q18 Chairman: Jeff, you mentioned
infrastructure coming back up the priorities again and your concern
about that leading to big projects. DFID have effectively opted
out of infrastructure and they acknowledge it should rise up the
agenda but they are going to leave it to other people. Is that
a matter of concern, or do you think DFID should take that view
because, by definition, they reduce their influence in ensuring
projects go in the direction they actually want them to go?
Mr Powell: I think there are two
answers to that. I suppose one is that, regardless of what intentions
are in bilateral programmes, there is a responsibility for what
is done through multilateral contributions, both through the contributions
to the International Development Association and also through
considerable contributions to a number of trust funds which do
not necessarily fund the project itself but usually fund the studies
which come up with the recipe for what kind of infrastructure
should be implemented. There is a responsibility on that level.
The second part would be that I would encourage DFID's voice,
and here we had the UK objectives for the annual meeting stressing
the poverty reduction impact of infrastructure which we were very
encouraged to see; but then we did not see it in the UK outcome
note from the annual meetings; and we did not see it in the Bank's
infrastructure action plan. We would not want DFID to sit silently.
We would want DFID and its representative at the World Bank to
be vocal about what shape infrastructure lending should take by
the World Bank.
Q19 Chairman: They do not all have
to be big projects. If you took the reports on the situation of
Niger, there was a very practical problem that you could not even
find the people, because communications were so poor, to define
what the scale of the problem was, and people could not get to
where the food could be provided. Those are not necessarily huge
projects it is just providing basic roads that are driveable and
that does not have to get into that huge infrastructure problem.
Mr Powell: I absolutely agree.
Often the real infrastructure needs are a large number of very
small projects which respond to people's local transportation
needs; needs to get their goods to local markets; needs to get
water for families; needs to get basic electricity in a sustainable
way. These are the real infrastructure questions that concern
poor people. Very often unfortunately the lion's share of the
lending goes towards these large centralised projects. We recognise
there is a grey area, but that is the balance we would like to
see shift from the way the Bank approached infrastructure two
decades ago.
Chairman: Thank you both very much. That
has helped us to question our own departments and some of the
other agencies more effectively. Thank you for your time.
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