Select Committee on International Development Third Report


3  INQUIRIES INTO AREAS SEEN BY THE COMMITTEE AS REQUIRING EXAMINATION BECAUSE OF DEFICIENCIES

Private Sector Development

19. Private Sector Development (PSD) was the subject of a major inquiry by the Committee between March and July 2006. The Committee examined the coherence of DFID's private sector development policy with its work in other sectors. The inquiry assessed DFID's broad range of policy approaches to driving growth and making markets work for poor people.

20. Our objectives in this inquiry were five-fold: to distinguish between different kinds of growth and identify the factors supporting pro-poor growth; to explore the constraints acting on the private sector in developing countries; to analyse the effectiveness of different donor interventions in improving the business climate in developing countries; to assess the role of the private sector itself in engaging in development; and to look at aid instruments which can be used by donors to encourage PSD.

21. We visited Botswana, Malawi and Mozambique in February and March 2006, in part to look at private sector development. In particular, we discussed a private sector 'mega-project' in Mozambique—the Mozal aluminium smelter—and heard from those directly involved of their experience of issues around employment and 'value chains' connected with the large-scale private sector.

22. We received a large volume of written memoranda from more than 50 individuals and organisations. We held eight evidence sessions at Westminster between February and May 2006. The broad range of oral witnesses included multinational companies such as Unilever and Syngenta; international banks including Citigroup and Standard Chartered; African-based companies including the Debswana Diamond Company; consultancies such as Pricewaterhouse Coopers (PwC) and Emerging Market Economics; ethical trade experts; non-governmental organisations; DFID officials and the Secretary of State.

23. Our report concluded that DFID may be trying to "run before it can walk" in its approach towards the private sector, and argued that PSD should be integrated across DFID's policies and also into wider Government policy through more efficient co-ordination with other UK departments.[15] We were concerned that DFID's organisational structure has not caught up with its growing prioritisation of PSD, and that a cultural divide seems to exist between DFID and the private sector, which could compromise the capacity of companies to contribute to PSD.

24. We were pleased to note that the Government's Response to the PSD Report agreed with many of our recommendations.[16] Since the Report's publication, we have noted several developments which meet our recommendations, including wider international support for the International Climate Facility and the UK's hosting of the second International Conference on Migrants' Remittances in November 2006.

25. Positive feedback about the Report was received from several of our key interlocutors. The Report was covered by Observer Business on the day it was published.

Conflict and Development

26. Following on from an initial one-off evidence session in March 2005, one of our major inquiries of 2006 was Conflict and Development: Peacebuilding and Post-Conflict Reconstruction.[17] The main purpose of the inquiry was to examine the effectiveness and external coherence of the UK's peacebuilding and post-conflict reconstruction policies, with a particular focus on conflict in Africa.

27. Using insights gleaned from our visits to the Democratic Republic of Congo, Rwanda, Sierra Leone and Uganda, the report highlighted that the cost of a single conflict in the world almost equals the value of annual development aid worldwide and that all the new aid commitments made in 2005 could be cancelled out by increased conflict and insecurity in developing countries. We were also concerned that trade in conflict resources can intensify and prolong conflicts. We endorsed calls for an international agreement on the definition of 'conflict resources' in the UN, and found the current approach to be piecemeal and inconsistent.

28. The Government response to our report agreed with most of our conclusions.[18] It did not agree with our analysis of the deficiencies of the UK response to the naming of British companies in a UN Report on the illegal exploitation of natural resources in the DRC. However, the Government has recently instituted a series of changes to the way in which the UK's National Contact Point operates. We may decide to pursue this issue at a later date.

29. DFID's work in conflict-affected and conflict-prone countries has increased in recent years, which poses new challenges for the way in which it delivers development assistance in difficult environments. We applaud DFID's intention to develop a conflict policy to guide its efforts to address conflict and achieve a more coherent approach and welcome the fact that DFID waited for publication of our report so that it could take our findings into account in constructing the policy.

Humanitarian Response to Natural Disasters

30. As well as being known as the 'Year of Development', 2005 was also characterised as a 'Year of Disasters'.[19] The year opened with the aftermath of the Indian Ocean tsunami, followed by Hurricane Katrina which devastated parts of the US in August 2005 and closed with the South Asian earthquake in October. 2005 also witnessed the less well-reported Hurricane Stan in Central America, typhoons in East Asia and food shortages in west and southern Africa.

31. Our predecessor Committee took evidence in February and March 2005 on Responses to the Asian tsunami disaster.[20] Witnesses included Jan Egeland, the Under Secretary-General for Humanitarian Affairs and Emergency Relief Coordinator, the UN Office for Co-ordination of Humanitarian Affairs, and the Secretary of State for International Development.

32. Prompted by the increasing frequency and intensity of natural disasters (which are made more severe by the impact of climate change), we launched a major inquiry in 2006 focusing on the Humanitarian response to natural disasters. Our inquiry looked at a wide range of issues associated with natural disasters, both slow and rapid onset, including: initial disaster response and the international humanitarian system; vulnerability and disaster preparedness; and development and humanitarian assistance.

33. In the first evidence session, out of a series of eight, we departed from the tradition of hearing first from Government officials, and instead heard from journalists from The Guardian and BBC World television and World Service radio. This was valuable as we were able to begin our inquiry with first-hand accounts of the events and the aftermath. We explored the thought process behind the media coverage of natural disasters, why coverage of some disasters is more intense than others, and why it varies so much.

34. We welcomed the opportunity to hear further evidence from Jan Egeland, and a range of other witnesses including NGOs, the Disasters Emergency Committee, the European Commission and the World Food Programme. The inquiry also included a visit to Pakistan to see areas affected by the earthquake in late 2005, and to scrutinise the humanitarian work and reconstruction.

35. We concluded that there is a lack of worldwide political will to prepare for natural disasters, including those intensified by climate change, and we called on the Government to commit more funds for disaster preparedness, and for DFID to ensure that the multilateral organisations which it funds give sufficient priority to reducing the risk of disasters.

36. The National Audit Office was interested in our report, and we have now asked the Comptroller and Auditor General to review the performance of DFID and others in response to the Pakistan earthquake.

Water and Sanitation

37. Towards the end of 2006, we began a major inquiry into Water and Sanitation. Evidence of a global water crisis is widespread, with the scarcity of water increasing. Sanitation is in an ever greater state of crisis. The main purpose of our inquiry will be to examine how donors can support progress towards Millennium Development Goals on access to safe drinking water and adequate sanitation. Issues to be scrutinised will include water and sanitation service delivery; financing and aid instruments for water and sanitation; and the implications of climate change. The announcement of the inquiry has stimulated great interest, with a higher than usual number of written submissions. Six evidence sessions are planned for the inquiry. A visit to Ethiopia is scheduled to take place in the first week of February 2007.

38. We started the inquiry with a joint evidence session with the Communities and Local Government (CLG) Committee on UN-Habitat's World Urban Forum III.[21] The session was mutually beneficial, offering the CLG Committee the opportunity to inquire into the extent of UK policy influence on urbanisation debates at the World Urban Forum and to scrutinise DCLG's decision to send its Parliamentary Under-Secretary of State to the Forum. There is concern that urbanisation is increasing the number of poor people living in 'mega cities' and, from our perspective, the joint session allowed us to explore the role of UN-Habitat and the World Urban Forum in addressing challenges in urbanisation and development worldwide, in addition to informing our Water and Sanitation inquiry. The Committees found it constructive to examine the shared agendas between the developed and developing worlds.

HIV/AIDS

39. We published our report Delivering the goods: HIV/AIDS and the provision of anti-retrovirals on World AIDS Day 2005 (1 December).[22] The G8 summit of 2005 set an ambitious target to secure universal access to treatment for HIV/AIDS sufferers by 2010, but we were concerned that there was no system in place to track and monitor progress towards this target. We want to hold the UK Government to account for the commitment that it made during 2005 to support international efforts, led by UNAIDS, to achieve the goal of universal access to HIV/AIDS prevention, treatment, care and support for all those who need it by 2010. The UK is the second largest donor for HIV/AIDS, and has pledged £1.5 billion between 2005 and 2008 for HIV/AIDS funding. In our report, we urged the Government to encourage donors to work together to ensure predictable funding, and to strive to ensure that its progressive policies are implemented on the ground. We recommended that interim targets be established to enable progress towards the 2010 target to be monitored. The UK Government took up this suggestion and a proposal to this effect was considered at the UNGASS meeting in New York at the end of May. Our report and the Government's response were debated in Westminster Hall.[23]

40. In order to maintain effective oversight, we decided to review progress on international HIV/AIDS targets each year, and on World AIDS Day 2006 (1 December), the Committee published its report on HIV/AIDS: Marginalised groups and emerging epidemics.[24] The Report underlines our concern that the international targets on HIV/AIDS are already failing to be met. It focused particular attention on two distinct but interconnected issues: the provision of prevention, treatment, care and support to populations which are marginalised in society, such as intravenous drug-users, commercial sex-workers and men who have sex with men; and the extent to which HIV/AIDS policy and programming is effectively addressing emerging epidemics, including those in Eastern Europe and Asia.

41. Our Report made clear that questions of morality are not the issue: what is important is finding the most effective way to halt the spread of HIV/AIDS. Emerging epidemics generally start with concentrated epidemics among marginalised groups and can then spread exponentially among the wider population. We stressed that, to combat epidemics effectively, the rights and needs of those most at risk must be as central to strategies as are treatment and general prevention. We were supportive of DFID's overall policy of channelling money to countries' national AIDS programmes but recommended that DFID work with governments to ensure that these programmes are properly focused and that the rights and needs of marginalised groups are not overlooked.


15   International Development Committee, Fourth Report of Session 2005-06, Private Sector Development, HC 921-I Back

16   International Development Committee, Fourth Special Report of Session 2005-06, Private Sector Development: Government Response to the Committee's Fourth Report of Session 2005-06, HC 1629 Back

17   Conflict and Development, Oral and Written Evidence, HC 464-i, Session 2004-05; and International Development Committee, Sixth Report of Session 2005-06, Conflict and Development: Peacebuilding and Post-conflict Reconstruction, HC 923-I Back

18   International Development Committee, First Special Report of Session 2006-07, Conflict and Development: Peacebuilding and Post-Conflict Reconstruction: Government Response to the Committee's Sixth Report of Session 2005-06, HC 172 Back

19   Oxfam International, 2005: Year of Disasters Back

20   Responses to the Asian tsunami disaster, Oral and Written Evidence, HC 328, Session 2004-05 Back

21   The World Urban Forum III, Oral and Written Evidence, 21 November 2006, HC 48 Back

22   International Development Committee, First Report of Session 2005-06, Delivering the goods: HIV/AIDS and the provision of anti-retrovirals, HC 708 Back

23   UN General Assembly Special Session on HIV/AIDS; and HC Deb, 11 May 2006, cols 149-196WH Back

24   International Development Committee, Second Report of Session 2006-07, HIV/AIDS: Marginalised groups and emerging epidemics, HC 46-I Back


 
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Prepared 24 January 2007