Examination of Witnesses (Questions 20-39)
SIR SUMA
CHAKRABARTI KCB, MR
MARK LOWCOCK,
MS NEMAT
SHAFIK AND
MS SUE
OWEN
11 JULY 2006
Q20 Chairman: I think the Committee's
view, and I am sorry for those colleagues who work in Uganda,
was that the Government of Uganda was not delivering all of the
services to the people in the camps that they had reason to expect
of the Government of Uganda. For example, the schooling situation
was pathetic, policing was non-existent and the medical facility
we saw was being provided by external NGOs. So that should have
come out of the budget support, in our view, and if the British
Government was transferring the money from the Ugandan Government
it is a pity they did not transfer it to the services that the
Ugandan Government should have been providing anyway.
Ms Shafik: And earmark it for
the north. Is that what you are saying?
Chairman: That was a bit of a specific,
but that is an example where we felt that DFID was not entirely
in control of the situation.
Q21 Ann McKechin: If I could turn
to the issue of education, I think there has been a certain amount
of criticism that the Millennium Development Goals on education
have concentrated on issues of quantity rather than quality, and,
also, clearly the issue of capacity in government educational
systems. I wonder if I could raise another issue, which has struck
me when I have gone abroad with the Committee, and that is whether
the Millennium Development Goal is too narrowly drawn in terms
of educational targets. When we visited Pakistan two weeks ago
I spoke to a group of women in an isolated mountain community,
and I asked them whether the girls in the village attended school.
They said yes, they had attended primary school (which, in Pakistan,
finishes at the age of 10); none of the girls had gone on to secondary
education, and that did not really seem to be a realistic prospect
at that time. To be honest with you, there did not seem to be
the external environment to encourage an attitude and environment
of self-teaching. By that I mean there was no access to books
or reading material, and all the adults in the community, so far
as I am aware, were illiterate. Jeremy Hunt has raised this afternoon
the issue of specialisation. Given that we are a country which
is many generations from when we suffered from mass illiteracy
(I might say that my own surname was the result of a 19th Century
illiteracy attempt, a guess, at what the name is and that is why
I have ended up with this surname), we do not have much experience
of taking a community where there is mass illiteracy in its entire
population and bringing them up to the stage of literacy, but
there are other countries in this world who have had recent historical
experience of actually achieving that—countries such as
Cuba, Nicaragua and China have managed to do it over a remarkably
short period of time. I wonder whether or not you could give me
some insight about your views about adult illiteracy.
Sir Suma Chakrabarti: I will be
looking to my colleagues to help me on this. You started off with
a question about whether it was too narrowly drawn a target—the
MDG on education, and primary education, really. I think our view
would be no, it is the right thing to focus on. I will come on
to why it is also important to deal with secondary and tertiary,
but in terms of all the evidence on returns to education the highest
returns are at the primary level. That is the research evidence
over 30 or 40 years now. Having said that, the Pakistan case is
worrying because what it tends to show is that girls having done
the primary are not then going on to secondary, so there is a
whole set of issues around whether the Pakistani policy makers
and so on are focused on actually translating the gains they are
making in primary into secondary. I think, in Pakistan, this has
been a 25-year dialogue, frankly, between us and them about taking
more of an interest, frankly, in girls' education beyond the primary
stage. To continue the dialogue, they are putting in more money,
actually, to this area than they did in the past—that has
been one of the linkages on policy to our support in Pakistan—but
it is going to take some time, frankly. On secondary and tertiary,
I do think they are important. The returns overall to a society
are slightly lesser than primary, but they are important, for
a number of reasons, for the economy. In terms of vocational training,
for example, and so on, in terms of tertiary education the capacity
issues we discussed earlier, the very people who will be running
ministries, private sector firms and so on, need to get through
secondary and tertiary education systems. So we do not neglect
them; they do not get as much money, certainly, from us as primary
but we have a scholarship programme, we have the links scheme,
we have the development partnerships for higher education—a
new programme we have—and we have a paper (I think, Mark,
you are bringing out soon) on post-primary education because of
exactly the point you make. Adult literacy must be part of that,
it seems to me, but it is not the only part; it has got to be
linked in with some of these other things as well.
Q22 Ann McKechin: You mentioned,
obviously, the question of economic growth and there seems to
be a clear tendency of your Department to move towards greater
emphasis on private sector development, and we all anticipate
the White Paper in the next couple of days, but that seems to
be a clear trend in your own thinking, in terms of policy development.
Given the fact that it is utterly essential to develop a robust
SME market in many developing countries, clearly the issue of
technical education is utterly core to that, yet it does not seem
to be core in terms of the way that the donor community is currently
acting. I do not single out DFID, but I think there seems to be
a really significant gap in terms of trying to develop what is
an essential support for private business.
Sir Suma Chakrabarti: I think
in most of the countries we are focused in the fundamental problem
is primary education, but there are a number of them where your
point is absolutely right. If you go to India, the first discussion
you have with any chief minister now in any Indian state is not
so much about primary education, not because it is solved but
because there is at least a plan to solve that problem. So the
Indian Government has enormous resources which it is bringing
to primary education. The chief ministers of those states are
meeting on the same point you are on, which is: "I've got
all these private sector companies coming into, I do not know,
the coast of Orissa, I have not got enough people in Orissa who
have got vocational training to actually supply this, and all
that will happen is that outside labour will come in. How do I
solve this? Can DFID help?" And we are beginning, with some
of these countries and some of these states, some of the more
advanced ones in particular, to get into these questions of vocational
training and tertiary education.
Mr Lowcock: It is a very timely
question. On Friday we are publishing the post-primary education
strategy, and, as you know, we are publishing the White Paper
on Thursday, and we have got things to say on this topic in there
as well. I just want to make two points, if I could, on this generic
topic. The first thing is if we look back over the last 20 or
30 years on what development assistance has focused on, it is
incontrovertible that there was a scandalous lack of attention
in the 80s and 90s to primary education. When the Government was
elected in 1997 one of the things it said is we have to do something
about that, and we were, frankly, very comfortable about that
because one thing you do know is that if a child does not get
a basic education it does not get a secondary or tertiary education
either, and doing something about that, which as Suma says has
higher returns, has been a really, really important thing to do.
DFID has some comparative advantage in that because most of the
things you have to do to address basic education are recurrent
cost financing. You need to hire teachers, you need to build some
schools (that is actually a very small element of it) and you
need to pay for some books and some uniforms. It is very largely
recurrent cost financing, and that is one of the things we are
good at. Now, though, notwithstanding the fact that we are some
way off achieving the basic education MDG, we have made lots of
progress, and it is a good time to start to focus on the post-basic.
That has the set of dimensions that you talk about: adult illiteracy,
the technical, and so on. We will have to find our niche in those
areas. Actually, some donors do a lot in technical already; the
Germans, for example, are strong in that area. So one thing we
will have to do, as we detail how we will take forward the strategy
we are publishing on Friday, is work out our particular niche.
Q23 John Bercow: Chairman, thank
you very much and I apologise to colleagues and our witnesses
for being late and unavoidably detained. I entirely understand,
Chairman, where Ann McKechin has just been coming from in the
early part of her inquiries, and for what it is worth I do not
disagree, but I think it is actually possible, also, to critique
in a constructive way from the opposite vantage point—the
two are not mutually exclusive: narrowness and breadth. In a sense,
what Ann appears to be saying, and I entirely understand and respect
this point of view (and, indeed, concede the merit of it) is that
it is too narrow a target; why not look at all sorts of other
elements of education which ought to be addressed as well instead
of just confining oneself to primary? I think what I would like
to put to you, as a panel, to Sir Suma and colleagues, is that
there is a sense in which, in fact, you could argue, on the contrary,
that the target is very broad and that there is a tendency—an
understandable but, nevertheless, a dangerous tendency—to
avoid a sufficient focus on the narrow elements that make up that
broad target. So if you take, for example, universal access to
primary education, yes, a thoroughly good target, entirely laudable,
very long overdue and greatly welcome, but it does have to be
rigorously enforced, regularly reviewed, regularly monitored,
and progress, therefore, measured. In the process, does one not
want to be confident that all elements of the population are getting
a fair crack of the whip? I give the example: if we are concerned
about general equality, presumably we are also concerned about
respect for the rights, probably historically neglected on grounds
not only of resources but of attitudes, of people with disabilities.
Therefore, I say to you, yes, it is okay to have this great target
that says "universal access to primary education" but
you could perhaps benefit from having an interim target of the
kind for which Jeremy has very successfully argued in respect
of anti-retroviral drugs. It is all very well having a target
for some years hence, with people thinking: "This is a marvellous,
high-faluting declaration of good intent but there is not much
evidence of its achievement", and therefore Jeremy took it
back to brass tacks and said: "Wait a minute; it is all very
well saying: `It is not for us to be so presumptuous as to interfere'
and all this sort of self-effacing modesty that suddenly overcomes
the domestic governing politician but, actually, do we not need
to know what the interim target is so we can see we are making
some progress?" How are we doing with particular groups?
As I understand it, and I have not got the figures in front of
me, people with disabilities in the developing world are disproportionately
likely to be excluded from participation in primary education.
I suppose what I am saying is whilst respecting the principle,
to an extent but not exhaustively or exclusively, of national
sovereignty in the use of resources, we do want to press governments,
whom we are assisting in their programmes with our taxpayers'
money, to ensure that those people get a look in. I would not
want all children with disabilities in developing countries to
be left to last. There is the attitude, implicitly or explicitly,
of let us deal with the relatively straight forward cases first
and then see if we can say to these chaps and chapesses to consider
incorporating children with disabilities. No, absolutely not,
they should be dealt with contemporaneously.
Chairman: It seems to be a conservative
weakness today, very long questions.
John Bercow: It was articulated in a
well meaning spirit.
Sir Suma Chakrabarti: I think
it is well taken and we would agree with quite a lot of where
you are coming from. Let us have a frank discussion about this.
On education, as a good example, we are concerned that a lot of
the aid is going to go in, because government budgets do not always
distinguish between primary and within primary what elements,
and some of the money may go into levels or areas or sections
of the population which do not necessarily need the money as much
as others, so Nemat is very keen to kick off some work within
DFID that is really required to get below the top level composition
of the government budget and get down to where is it really going
this money. If you provide support, is it really going to primary
education, and within primary education going to the most needy
as defined? Some countries are doing better at this than others,
and you will not be surprised which ones are good at already de-composing
in this way. Vietnam is putting in an education programme which
is quite focused around disabled kids, because the Vietnamese
Government takes your approach to this. It is not shy about saying
that is what it is doing, so quite publicly identifying itself
with a particular section of the population. Other governments
tend to be rather worried about that if they say that for the
disabled, what does this mean for other castes, or what does this
mean in the terms of the political economy they are working in.
You get this a lot in Indian States, the unwillingness to say
there will be a skewing of the budget.
Q24 John Bercow: I understand that,
you have the rather good and the perhaps less good, maybe awful,
maybe you are understating it. To what extent, when you encounter
those forces of resistance, or dare I say a reaction to say "No,
no, terrible problems in the community if we do that. It will
upset the dominant group or caste," do you, to be blunt,
take them on? To what extent do you feel we cannot do that and
take the line of least resistance that at least if they are helping
somebody, they are not helping as many disabled children as we
would like, or as many children from minority tribes or castes
where there is broad stability, ie you are providing development
assistance, but where there is still fairly widespread discrimination.
To what extent do you just concede, and how robust are you?
Sir Suma Chakrabarti: We are in
a fortunate position with DFID in that there is robust dialogue
and we do not hide behind there being an acceleration to have
this dialogue. We do have a robust dialogue. In some cases that
dialogue is well informed. In the Indian case, because Indians
do have statistics by caste and group and so on, there is a lot
of data which is in the public domain and can be used therefore
as part of the debate. Of course a lot of governments at the State
level want to do that, and some do not. Take the position of Dalits
in India. This is part of the dialogue of DFID in India, is this
money really focused on the Dalits, who have very few resources
of their own. I think it does vary. It is partly data driven and
knowledge driven, but it is not an unwillingness on our part or
some shyness. We definitely try and do that. There are some very
difficult public policy issues of understanding in some other
places. Take health and anti-retroviral drugs. One of the issues
with anti-retrovirals, as you run up towards universal access,
is on the way there several groups are not going to get access
very quickly. How does a government decide what criteria should
we be using to decide who gets access first? It is a public policy
choice that we face in the UK quite often, but it is a stark choice
when you have limited resources. Take the Malawi Government; it
is having to make those awful decisions. Does it prioritise extension
workers because it is important for Malawi's future prospects
over people laying roads in terms of anti-retroviral treatment?
That is a discussion we are getting into in a lot of these countries.
Again the data is not good enough to really inform the debate
in some places but we are not shy about taking this on.
Q25 John Battle: Could I ask some
questions in the general area of the Poverty Reduction Budget
Support (PRBS) process, because more money is going into budget
support. Do you imagine that will continue, and do you want the
programme to go in that direction? Let me try and focus on three
points around that. As well as the questions over UNICEF and Uganda,
the plan B, if we withdraw the budget support who do we go through,
what about stepping up budget support, particularly in cases of
emergency and crisis? Can we shift from emergency responses to
gearing up development so we do not just replace what was there
before in a crisis, such as Pakistan with the earthquake, but
we shift up a gear in development terms? Maybe that puts the budget
support in different terms and uses the crisis and the emergency
as an opportunity to get closer to the Millennium Development
Goals and work with the governments to do that. That is one example.
The second is a question of governance. It is a point I put to
you that I have not discussed properly with colleagues or thought
through, but sometimes we think good governance is having elections.
Elections are important but they are a tiny part of a massive
political process, about political understanding, involvement
in politics, and engagement in political parties. I sometimes
think we focus on the processes of politics as if we sort the
people out, make sure they stand in the right place, put the right
thumb print on the right paper without any corruption on the day,
but no real focus on the more difficult business, that is not
the executive side of the house, if you like, but the political
side of the house. We have elections coming up in the DRC. They
may well be verified as completely non-corrupt but it might simply
reinforce the current politicians and give them an electoral mandate
to continue the situation. I put that up as a question mark. Do
we need to think of ways, that means us as parliamentarians, of
engaging more in political processes at local government, regional
government and political level across party organisations and
injecting some of that into the debate rather than just insisting
that governance is just a technical process? I think we are missing
something there. If I could just talk about India, because a large
part of the programme still goes to India. In the Departmental
Report, on page 166, under the Predictability of PRBS in 2005-06,
as of March 1 this year, it says "Additional funding agreed
as programme making good progress." Last year some of us
were in India and we looked at the programme there, the scale
and size of it. Not to neglect the scale of poverty in India,
but we are into the budget support arrangement. I just wonder,
on the question of human rights in governance, what scope we have
for pressing the questions rather harder. We had a workshop, if
I remember rightly, with some members of staff of DFID working
with people who are described as Dalits, people who are part of
the excluded class there. It is a massively sensitive area, and
we all appreciate that, but I worry that as the world is more
local as well as global, the global issues are in my neighbourhood
and all our neighbourhoods now, we are all in it together. Some
of the issues, according to recent reports, of the caste discrimination
are now washing up here in Britain. I wonder if we are doing enough
at the India end, and how that would fit with the discussions
that take place around the budget support programme.
Sir Suma Chakrabarti: I will try
to answer some of those questions and I will have to ask for some
help. In terms of the future of budget support, you know the criteria
that we have set down for budget support and that criteria will
be driven by it. We came in below what we expected last year because
conditions were not met in some countries, but basically budget
priorities have to be in line with poverty reduction strategies
and also the fiduciary and risk management side has to be attended
to as part of this criteria. I need to assure myself this money
is going to be spent in the way the Government says it is going
to be spent. I think we will be doing more budget support. We
expect in some of the countries like Tanzania which has performed
very well, if we are going to scale up there, we will provide
more budget support. Some of the plans are in the report. Your
question was very interesting about using emergencies as a way
of changing the nature of the debate. That is really what has
happened. I know this because I was involved in Indonesia after
the Tsunami. Partly because there was a change of government just
before in Indonesia, that led to a completely different dialogue
in Indonesia about how aid money was going to be used, the transparency
mechanisms. The Indonesian Government designed all sorts of new
things. It wanted a civil society to be part of the monitoring
organism, things that were not remotely possible before the Tsunami
hit because of the worries about misuse of money. In Pakistan
similarly with the DFID programme, Nemat and her team have to
rethink the shape of the programme completely and re-shape the
dialogue with the Pakistan Government. She can say something about
that. On governance it is more than politics, it is more than
technical fixes; frankly it is both. You need all these things
and we define governance in quite a wide sense. What we are about
is trying to get more transparency and accountability into the
systems, and elections are only part of it. Just getting the financial
management right is only part of it. We need to work on a wide
canvas. I do not want to pre-empt the White Paper because it will
say quite a bit about this. This is actually the centre piece
of the White Paper so you will see that on Thursday and Hilary
will no doubt say more about it then. Nemat may want to say a
bit about the Indian programme and the class discrimination and
how we take account of it in our dialogue with the Indian Government.
Just to say that on the few occasions I have been to India to
look at the programme, I have also been given a line to take by
DFID India when I go and see any Indian minister to hit them with
these issues. Some of these are at Federal level and some are
at State level so the dialogue I had with the previous chief minister
of Andhra Pradesh, Chandrababu Naidu, who then lost the election,
was very much around Dalits in the rural areas. He had done quite
a good job in urban centres in terms of the poverty but not such
a good job in agricultural rural areas. It was around that sort
of dialogue and when will you roll out the programmes to the rural
areas.
Q26 Chairman: Elections have a role
to play because that is where the votes were and that is why he
lost.
Sir Suma Chakrabarti: There is
an interesting issue there because an Indian analysis would suggest
if you look in Andhra Pradesh that is the case, but if you look
in other places reformers did very well, so it depends on what
sort of reform and whether you are reaching out to a wide enough
audience.
Q27 Chairman: That is an even better
recommendation.
Sir Suma Chakrabarti: I am all
for reform.
Ms Shafik: I cannot resist saying
something about elections in the DRC case. You are quite right
that it is an incredibly expensive election. None of us could
think of any alternative to that process to deal with the post-conflict
situation in DRC. We know that civil war cost about four times
GDP, and the devastation which you saw on your visit showed the
cost of not having some kind of reasonable political process.
Having said that, one of the lessons we have learned in our governance
work is that we were probably too fixated on the executive, and
we were probably too fixated on anti-corruption campaigns, anti-corruption
commissions and drafting more laws and more regulations to respond
to poor governance. In fact, there is a lot more we can do in
areas of voice, accountability, freedom of the press, transparency,
the legislative branch, looking at deregulation as an opportunity
for reducing opportunities for corruption, accounting finance
issues, the way financial markets operate. All of those we need
as critical pieces of the governance story.
Q28 John Battle: Could I suggest
another one? Who are the appropriate people to work on politics?
I will give an example, and it is not a person working for DFID,
as far as I am aware, in the DRC. The person was suggesting to
me that they had taken part in elections in Britain where there
was a pretty low turn out and we had burn out policies in Britain
so it was not worth doing here any more, but they were encouraging
people to vote in another country in Africa. Perhaps in the DRC
we have encouraged everyone to vote, things seem the same, so
massive disillusion builds in. Where I would be thinking about
the next election the day we are elected, so we are thinking of
a process all the way through. How do you engage politicians as
well as civil servants in the process? Do we do more to involve
the Westminster Foundation, Hansard, the parliamentary organisations
internationally? I do not think we do as a bulwark to the development
work, in other words we pile it all on to the people who may not
have the experience and expertise and it does lead to disillusionment
sometimes. Is there any conversation taking place to build politics
in as part of the process of governance?
Ms Shafik: You are quite right.
The evidence shows that the risk of conflict during an election
is quite low. It is after the election that the conflict risk
escalates enormously, and that is the biggest risk we face.
Q29 Chairman: The one thing the election
will do is end the Government of National Unity.
Ms Shafik: The UN is actually
thinking a bit more creatively than usual on this. They are looking
at ways to compensate the losers and to bring some of the potential
spoilers into the process by creating a House of Lords thing,
or some kind of advisory council, or something like that, to find
ways to bring the potential spoilers into the process. There is
some creative thinking. The biggest risk I see is the level of
external support diminishes after the election and you have to
watch that.
Q30 John Barrett: If I could ask
two completely unconnected questions, and one is about the front
loading of the International Finance Facility. With the commitment
to doubling of aid to Africa by 2010, we have seen that some of
the poorest States, those that most need the aid, have the least
capacity to absorb that increased aid, with the possible exception
of vaccinations where it is very clear as to why it makes sense
to make the investment up front to stop the ongoing costs. The
International Finance Facility, is that going to produce more
problems? Do you need it like a hole in the head? Where the money
would be generated are for the countries least able to accept
or to make effective use of front-loaded aid. Would you see in
those countries rapid and diminishing rate of returns? While considering
that, on our recent visit to Pakistan we had a very lively debate
about whether or not the flag should be flown on different projects
and I would like some thoughts on that.
Sir Suma Chakrabarti: On IFFIm[4]
in a way I repeat the answer to an earlier question. There are
capacity issues clearly in many of the countries. Front loading
undoubtedly saves more lives earlier, that is a good thing, provided
we can solve those capacity issues. Part of the money from IFFIm
will not just go to vaccinations but to build up health systems
at the same time so it is an integrated process. We, with our
bilateral aid, and with others, will also be trying to improve
health systems. Health systems are at the heart of why maternal
mortality rates are what they are so it has a number of benefits.
We need to tackle those. The good thing about the IFFIm in terms
of the burdens it might put on countries compared with some other
international channels, is it is very much uses the country's
own channels. It does not try to have its own offices running
this in the country. It is light on transaction costs compared
to many others but it is something we do need to watch, and your
point is correct in that sense. On the question of the flag, we
have a view on this which the Government has taken since 1997,
that it is bad for country ownership to put the flag on humanitarian
aid, for example. It is looking at this policy again, at least
in the UK, because it is important for the UK taxpayer to know
how all this money is used. It is considering whether we should
not have a more pro-active policy and badge some of our aid, e.g.
when it leaves East Midlands airport or whatever, partly because
Hilary does feel Oxfam and others badge as their aid money that
has gone from DFID to them.
Chairman: In Pakistan we saw the Norwegian
Refugee Council.
Q31 John Barrett: We were on the
point of congratulating the Norwegians on the fine job they were
doing and we then realised it was UK taxpayers' money.
Sir Suma Chakrabarti: That is
the point. Hilary is trying to hit two objectives. We do not want
to detract from the country ownership objective, which is really
important, and countries like Pakistan say they do not like the
flags. They do not like the Norwegians putting a flag on it. At
the same time, Hilary does want to explain to the UK taxpayer
it is their money and it has been used for this purpose.
Ms Owen: At present, as you know,
there is not a sign there. The USA is one of the biggest exponents
of branding but the Canadians and the Dutch do not do it either.
The risks we have seen are that it can be patronising for the
beneficiary. There is also the fact that we do not have much control
of where the brand is placed and you do risk high profile footage
of looting and rioters, disturbances and that kind of thing. For
me the most serious risk you have to think about is security.
In Iraq and Afghanistan, for example, I want as little badging
as possible for the safety of our staff. However, as Suma said,
Hilary Benn has recently agreed to some badging, and the principles
that we have set out are that the branding should not obstruct
or detract from the humanitarian operation; secondly that it should
not increase the risk to DFID staff; and thirdly that the branding
should not be undignified in any way. The sort of things that
we might see now are the branding of DFID funded flights from
the UK, staff in the field wearing DFID-branded clothes, and that
specific large items procured by DFID, such as helicopters, and
greater media coverage for teams on the ground. We will consider
all these options on a case by case basis.
John Battle: I am not in favour of badging
at all. They should ban badging from all agencies including NGOs.
In Pakistan there are lots of posters everywhere with everybody
claiming their bit. I tend to take the view that we should enable
people to be able to take steps to move forward and not be giving
them help and aid all the time. It is a massive devaluation of
what development is about to have badges of aid with any labels
anywhere. I would be encouraging our partner country donors and
NGOs to pull their banners and badges and flags back so that eventually
the people can say, as one famous person said, "We did it
for ourselves." We should be going in that direction. That
is the way our policy tends to go on the ground with our DFID
practitioners and I think we should stick to it.
Chairman: We had a very lively debate
about this.
Q32 John Bercow: Unfortunately I
did not join in the badinage because I was not in Pakistan. I
understand my honourable friend, the Member for Grantham and Stamford,
expressed himself eloquently and at some modest length and with
intensity on this matter. I usually agree with him but I do not
agree with him on this. It does seem to me the absence of badges
is one thing, but if the effect of the absence of the United Kingdom
badge is that a wholly contrary and misleading impression is given
that a project which is, in fact, due to us is due to another
country, that is a most unsatisfactory state of affairs. Can I
say in parenthesis, and not entirely with levity, that given funds
that come from this country come ultimately from the United Kingdom
Treasury it does not seem unreasonable that a British flag should
be installed where appropriate to mark the fact that it is our
contribution, the more so given that the Chancellor of the Exchequer
apparently wants to see a flag in all of our gardens.
Sir Suma Chakrabarti: As you can
see, this is a lively issue. As Sue said, Hilary Benn is considering
this on a case by case basis. I really agree with Mr Bercow about
the issue that if it is quite clear that this was a British project,
why are we allowing someone else to take credit for it. I do find
that very irritating indeed.
Q33 Chairman: On that particular
project, the Norwegian Refugee Council was 55% funded by DFID
and only 25% funded by the Norwegian Government. Interestingly
enough, they also made the point that DFID, on the other hand,
was much more rigorous in finding out how the money had been spent
than the Norwegian Government.
Sir Suma Chakrabarti: I think
we have also said we have to up the communications effort. One
of the criteria Sue read out was very much trying to do more to
explain what we are doing in these crises. In the Pakistan case
the British public was quite well informed about what the UK Government
was doing, if not on the individual projects but on the overall
impact of the UK aid.
Q34 Hugh Bayley: This is a national
question not a flag question. China's economic development is
having an enormous impact on Africa. What is the Department doing
to equip Africa to rise to the challenge of Chinese competition
and the opportunities? For instance, should they be putting in
resources to enable the African Union to set up a China strategy
unit? What are we doing in our bilateral relations with China
to encourage them to think of what the consequences of their perfectly
reasonable search for raw materials will have on Africa's development?
Are we in any way in a position to shape their thinking?
Sir Suma Chakrabarti: I am glad
we are getting into a discussion on this because this is a middle-income
countries issue and we need to move on to post-aid issues. China
is undoubtedly a force for the good and a challenge as well in
Africa. The good part of it is the demand for raw materials is
one of the reasons Africa's growth rate has improved so much in
the last few years. That is why for five years running it has
been above the world average. A lot of these countries have done
well, like Zambia, because of that demand. It has some issues
in terms of driving up exchange rates and that has an impact in
Zambia in terms of the non-traditional export sector. The difficult
side for us is that Chinese money is often a soft loan, and therefore
as the UK and others write-off multilateral and bilateral debt
in Africa, our concern is some of these African countries are
getting themselves in a bit of a potential debt issue some years
down the line. Secondly, some of the governance and economic policy
issues, the dialogue you would encourage us to have and we are
having, the Chinese, who are now very big players in terms of
financial flows to Africa, are not having that dialogue and not
interested in that dialogue so much. In a way there is a concern
that it is going to dilute the policy reform process that has
been taking place in Africa. It is a balanced picture I am trying
to give here. Africans themselves are very interested in this
and very concerned, on one hand, but also pleased about the increased
investment. It is very notable that the African Development Bank's
next annual meeting is going to be in China. Why is that I wonder?
We have, in the African Bank, a great president, Donald Kaberuka,
who sees both the plusses and the minuses. That is one of the
reasons he is keen for this. What does this mean for DFID? It
means in Africa for many of our country offices, take the Zambian
office, they are beginning to have a dialogue with the Chinese
Embassy. The Chinese Embassy and DFID had never heard of each
until quite recently and they now have to have this dialogue.
What does it mean for DFID in China? As you know, we have a small
resource transfer programme, about £30-35 million, but what
we are doing is reducing the resource transfer, because we will
graduate from there, and moving more into a dialogue with China
about its global and regional development footprint, bad and good.
The Country Assistance Plan for China looks very different from
what it would have looked like two or three years ago. We would
have just described our programmes and projects in China. It now
talks about climate change, Africa, those sorts of issues where
we need to interact with China. As it happens, I am being sent
to Beijing in September to have a discussion with the Chinese
on some of these issues. We are also trying to engage the OECD
DAC, the Development Assistance Committee, to try and have a discussion
with the Chinese and the Indians about good donorship principles.
That is proving tough. It is finding it difficult to get meetings
in Beijing. The Chinese have said they are not ready for dialogue
yet. We think it is part of China becoming a member of various
international clubs like the World Bank, the IMF, and potentially
in the future the OECD. We should be using that process in the
way that we might use joining the EU to try and improve standards,
and that is where we are. Nemat has been trying to get Whitehall
very interested in this discussion to spark a debate on this.
We think our globalisation strategy in Whitehall is a bit too
focused around the traditional suspects, scholarship programmes
and the like, and China needs to tackle some of these other issues
too.
Ms Shafik: The scale is phenomenal.
Our latest estimates were that Chinese commitments to investments
to Africa last year exceeded all official development assistance
to Africa and exceeded all private investment in infrastructure
in Africa. The scale is phenomenal and Suma is right, we have
to engage. We have no choice: if we care about Africa, we have
to. It seems right to point out that it is difficult. We have
particularly tried to engage China in some of the transparency
work, to get them to join the Extract Industries Transparency
Initiative, for example, since 58% of their investment is around
oil and about 24% around minerals. Transparency issues, revenues
and contracts, are quite key. They have not signed on yet and
our attempts to get them to engage in some of these international
fora is hard. Sometimes they do not show up. They do not want
to share much information. There is a sense that although Beijing
has actually published an African Strategy recently, I do not
think they are quite ready to join some of these international
clubs.
Sir Suma Chakrabarti: There is
a Chinese Commissioner on the Commission for Africa.
Ms Shafik: That is right. We also
invited the Chinese, as part of this bringing them in, and Mark
was leading on that.
Mr Lowcock: We had a Chinese observer
on the review by the DAC of the UK programme, and that was about
this strategy of engagement. Our view is that we have to play
to what Chinese interests are. If they are going to lend money
to Africa, then they become a creditor and have a similar set
of interests to other creditors. We have engaged them in discussion
in the Paris Club. It has to be something which plays to China's
own interests otherwise it is not going to be a productive dialogue.
Q35 Mr Hunt: I had a couple of questions
and the first is just a practical one. When you are dealing with
small African countries, or even big African countries, but very
undeveloped African countries where really the UK agenda is wholly
about development, why do we have a separate Embassy and DFID
infrastructure? Should not the person in charge of DFID actually
be the Ambassador with a small additional staff to deal with diplomatic
issues? Would it be much more sensible, from a UK taxpayer point
of view, to integrate those two infrastructures?
John Bercow: We should have the Foreign
Office permanent secretary here.
Sir Suma Chakrabarti: My colleagues
are laughing because this is a question we have been debating,
and it is part of the dialogue we are having with the Foreign
Office and Treasury as part of the issues the Foreign Office face
as well, given their own headcount issues. How do they maintain
a global network without having to pay the overheads? You are
right. Take the case of Malawi or Zambia, the UK's key interest
in these countries is now in development. There is some consular
work, even some minor commercial work and as economies improve
British investors will want to go in, and these are Foreign Office
things, but there is a dialogue going on, exactly as you say,
as to a more joint operation, with DFID taking the lead in some
places but perhaps not in the High Commissioner role. Perhaps
there could be someone in the DFID office from the Foreign Office
who would be the High Commissioner reporting to a regional hub
or to London or whatever. That would possibly save the UK taxpayer
some money overall and allow Britain to have a global network.
That is a possibility. The cultural and systems issues Sue has
been looking at and she may say something about the shared services
issues underlying this. It is helpful for both this Committee
and the Foreign Affairs Committee to start thinking about this.
I think it is in other places like China we might want to think
about the reverse, where the issues are of a global development
nature, but there are other UK interests with China as well and
a more joined up operation may be sensible there, with us being
the smaller amount part of that. We are up for this.
Ms Owen: Already at the moment,
as you know from your visit to Pakistan, we are moving towards
having a co-location of the DFID office with the Embassy, but
it is still very much a separate office as you will have seen
in Pakistan. That helps us share some costs like security, which
in some countries are very high, and some satellite communication
costs, that kind of thing. One problem is that in many cases sharing
services with the Foreign Office does not mean it is cheaper,
sometimes it means it is more expensive so we have to be quite
careful that we only share services where we are getting proper
value for money for that. To date I do not think we have any examples
of a country where there is only a DFID office.
Sir Suma Chakrabarti: Central
America, Nicaragua, where the Foreign Office closed down, Honduras
may be another one. Basically the Foreign Office closed down and
we provide some consular services that are required. More could
be made of this in some places, and I hope the Comprehensive Spending
Review will push us on this front. This cost issue is really important
if the UK taxpayer is to get a good deal out of this. DFID can
purchase services locally in India and Africa much more cheaply
than the Foreign Office currently does, so co-location is not
the objective so much as effectiveness plus savings for the UK
taxpayer.
Q36 Hugh Bayley: Can I make a few
comments about what I find useful in the Annual Report and give
comments about what might be useful innovations? Having an index
is very important. I think to list all your publications is very
important, but I think it would be really useful for the public
to see where they are available on the website. I think it followed
a conversation we had at this Committee three or years ago that
you started publishing your Annual Report on your work with the
World Bank, which I think is a very useful publication. When you
read your report within this Annual Report on the World Bank you
have a page and a half, or couple of pages, about something that
is now absorbing half a billion pounds. Maybe that is the right
amount of detail in this report given that you do a separate Annual
Report on the Bank, but I certainly think within your section
in this report you should refer to the fact that you do an annual
publication of a 40 page document about the Bank. I wonder whether
you ought to publish similar reports on the other big multilateral
agencies. Should you have a report on your work with UNDP: what
you are putting money in for and what you are getting out of the
money you give them? If not, I think you ought to say more about
these big programmes in the Annual Report. You should say more
about the EU programme. I notice this year, for the first year,
the IDA[5]
is getting more money than the EU, but nevertheless the EU is
getting about £1 billion of British taxpayers' money and
it would be useful to have a clearer statement of what it is that
the British taxpayer gets in return for that money. A final comment
is this. After this year's spring meetings I picked up fairly
quickly the Chancellor's statement on top line key decisions made
at the IMF meeting which he published as Chair, but there was
not a similar statement from DFID. I searched for it and I assumed
there would have been a Written Ministerial Statement since there
was not an oral one. I put down a PQ and the Secretary of State
wrote a really good note about what the UK had taken to the World
Bank spring meeting and what had come out as a result. Could we
have that sort of statement produced routinely, maybe as a written
parliamentary statement after the spring meeting, certainly after
the annual meeting?
Sir Suma Chakrabarti: I will ask
Sue and Mark to help me out on this. I think the first point,
index, list of obligations linked to web site, absolutely, we
can do that in the future. That is not a problem. We will refer
to the report on the work on the World Bank, that is a good idea.
It would be helpful as a heads up for the Committee that we ought
to have some discussion about strategic direction of the World
Bank. This is something that is clearly quite important to all
of us. The World Bank is the other great institution in development.
Is it now fit for purpose is an issue coming up. Mark will be
involved in IDA 14 Mid-term Review and 15 replenishment coming
up, so heads up on that. Similar report on the multilaterals,
we will have more about them in the Departmental Report. I think
we will be definitely willing to do more of that. EU, it is worth
remarking on the European Union programmes. We feel the EDF, the
European Development Fund, is probably the most improved channel
of assistance in the last few years. There were issues about disbursement
rates which came out in one of the reports today but in terms
of quality it has improved a lot. This says a lot about UK investment
in Brussels in terms of people to improve the quality of the EDF.
It says quite a lot about the fact the EDF on the ground is increasingly
co-financing the World Bank and DFID programmes which helps the
quality, because they do not necessarily have very good staff.
The third thing is it does say a lot about taking a hard-nosed
approach to replenishment, unlike on the EU budgetised programmes
where we do not have any say because they are Treaty obligations.
The EDF story is a quite interesting one and we would be willing
to talk more about that in the future. Finally, on the top lines
achieved at the spring meetings on the Development Committee side,
we should certainly do that for the spring and annual meetings.
I will have to talk to Hilary Benn about that but I am sure we
are willing to do that.
Mr Lowcock: This is the longest
and most expensive report we have ever given you. We have tried
to make more use than in the past of this technique of cross-referencing
to other documents. Clearly we have not cracked that yet but we
will try to do that again next year. One of the other things that
we will do is if it is enacted following the passage through the
Commons, is have additional reporting obligations as a result
of Mr Clarke's Private Member's Bill. We are gearing up now for
how we are going to discharge those. The Bill sets us a set of
additional responsibilities on reporting, including on the multilateral
agencies so we are looking at that as an active issue. We are
developing a new tool to provide ourselves with better information
on what we think about the quality of activity and spending in
the major multilaterals, and clearly that is something which speaks
to your point: how do you know how effective the spending through
this set of institutions is. We are looking at the issue of how
we publicise the outcome of that work and we will complete it
later in the year, and that is what does the tax payer get for
the investment in these institutions.
Ms Owen: We do welcome this kind
of feedback about what you would like to see and what you would
not. We will need to discuss with you, if the Bill goes through,
whether we include that reporting in the Departmental Report or
as a separate report. I would also say on the cost front, any
ideas you have about what we can drop from the report are also
welcome.
Chairman: I would just echo it is actually
a very good, well presented report and is easy to use as a working
document. What one wants is a useful document rather a trumpet
for the Department.
Q37 John Battle: We asked questions
about staff and what the Department is doing. I have to say in
the eight countries I visited in the last 18 months everyone that
we have met, whether it has been Prime Ministers, Presidents,
ordinary people on the ground, have been full of genuine praise
for DFID's staff. I have never ever heard criticism, marking out
DFID staff to be ahead of the game, enlightened and leading the
debate and leading the action. It might not always get reported
back into the system and it should be said. In terms of the report,
I know we pushed as a Committee in the past for there to be a
refocusing on agriculture and the report came forward. That was
welcome this year. The UN now projects that most people on the
planet will live in cities by 2025 and most of the poor will live
in mega-cities, so the whole debate is from agriculture to urban.
I know there was a passage on page 155, Faith in the City, "Towns
and cities are the primary source of the future growth of developing
countries." You have a fund of about £10 million that
goes into slum upgrading in India. I do not know if that is expended
elsewhere. There was a picture of Kingston in Jamaica and challenging
crime there. Are you doing more work in research, or thinking
of doing more work in research, on developing urban strategies
for development and collaborating with other bodies to do that?
Sir Suma Chakrabarti: First of
all, thank you very much for what you say on DFID staff, which
you have picked up from the countries you have been to. It is
very nice to hear and we will pass it on to our staff. It is very
kind to let us know that. On urbanisation, this is an up and coming
issue. It is very obvious in South Asia in our programmes there
and the programmes Nemat is managing in India. That is a feature
of the content of the programme. In Calcutta, for example, the
whole urban services debate, how Calcutta can been rejuvenated,
is now taking off because of policy reform and DFID is at the
leading edge of that. That may be an issue as to whether we now
need to re-look at our policy of urbanisation across the board.
I would not want to give up on the fact that in many African countries
rural poverty and growth in the rural sector is something we need
to keep attending to. We sent our chief economist and chief scientist
to Malawi and they are about to come up with views on how to get
agricultural development going. It may not be something DFID needs
to do, I hope, but someone needs to work with the Malawi Government
on this. You can get eight times the output from a hectare in
Zimbabwe, or at least before recent troubles, than in Malawi.
That is partly managerial issues, partly technology, partly transport
costs, all those things are part and parcel of this. There is
a big job in agriculture to do.
Ms Shafik: We are doing on that
in partnership with others. The work in India is being led by
the Cities Alliance which is a consortium of all the donors concerned
about urban issues and that is specifically being led by UN Habitat
and the World Bank.
Q38 Chairman: Two things that were
of interest to us, one mentioned in passing, relating to the language
issue. It was mentioned both as a requirement but also we got
the impression it was a constraint. In particular we have been
to Mozambique and the Democratic Republic of Congo. Mozambique
is a Portuguese speaking country. In both cases DFID staff had
language training and were doing very well with it, but they also
said they are supposed to be engaged in quite sophisticated discussions
with ministers and their capacity in the language is not good
enough. That is even more true in the DRC because in Mozambique
there is a reasonable use of English which did not materialise
in the DRC; French was absolutely the language. We were told the
trouble is, of course, if they got the Foreign Office length of
training then that creates more staff pressure and that creates
more budgetary pressure. It raises two questions. Clearly to go
into a country where English is not the language of government
has significant implications for your staff and budget. On the
other hand, if you are going to do it you have to do it properly.
Are you going to address these issues?
Ms Owen: It is an issue, and it
is an issue not only in so-called fragile states but other countries
too. You have already answered the question: it is one about cost.
The Foreign Office, as you know, has a Rolls-Royce service and
it would be great if we could do that. It is pretty difficult
when we are under the constraints that we are under. If you would
like to try and help persuade the Treasury to keep our budget
at least flat in real terms, if not growing, I think we could
do more there. We will have to do more selectively on this in
countries where we are finding it difficult to post people as
well. For the Foreign Office there they talk about six months
to a year before posting. The other thing, of course, they do,
which we would need to do to get a return on that kind of investment,
would be to encourage staff to stay in post for at least three
years to make that worth it.
Q39 Chairman: The point I am making,
and I think Suma you said before, we are up for this staff debate.
You have decided to go into the DRC, you decided to go into Mozambique
and you brought these problems on yourself. There are two arguments.
You could say given the staff constraints, we cannot do that,
or alternatively you do need to make a pitch to say we think it
right to do that but that needs to be taken on board when you
are talking about staffing levels and so forth. I think we need
you to give a bit of thought about that.
Sir Suma Chakrabarti: Sue said
we do think it is a constraint on our business in some places.
I would say it is more of a constraint on DRC than Mozambique.
Many of the key policy makers and people we work with in Mozambique
do speak some English. It is more of a problem outside of Maputo
than in Maputo. In the DRC it is a fundamental problem with government
all over the place. It is a constraint so we have to try to resolve
this and put some money into it. We need to have a discussion
with the Treasury about this, because if we are going to build
this into our postings plans then we do not have, as the Foreign
Office does, a margin. They have a margin at any one time where
people go on language training. We do not have that. Maybe that
is what we need to do for one or two of these postings.
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