Gillian
Merron: I thank the Committee for this brief but
nevertheless interesting debate on an important matter. Hon. Members
have raised a considerable number of issues that I will respond to. In
the event that I miss anything, I am happy to write to hon. Members
because it will have been accidental rather than
intentional. I
shall start with the issue of Zimbabwe and deal with some of the
comments made by the hon. Member for North-East Milton Keynes. First,
the position he described is historic and I expect and anticipate that
it will be reviewed. The fact about Zimbabwe is that it has arrears,
and one cannot do business with the bank when one has
arrears. I can perhaps therefore reassure the hon. Gentleman that money
is not being used in the way in which he is concerned it is, as we made
clear when we discussed the issue
previously. Mr.
Lancaster: If countries cannot do business with the bank
because they are in arrears, why has a country office just been opened
in Sudan?
Gillian
Merron: Perhaps the hon. Gentleman will allow me to come
to that.
Mr.
Lancaster: It is a slight
contradiction.
Gillian
Merron: I understand the hon. Gentleman’s point,
but perhaps he will allow me to deal with that in due course.
The hon.
Gentleman raised some important points about governance and corruption.
Let me give the Committee the assurance that the ADB has produced a
robust governance strategy, which talks about its future contribution
to the transparent and accountable management of public resources. It
is important that the Committee and the House recognise the great
progress that has been made. The bank now has an AAA rating, and that
is due in no small measure to the efforts of President Kaberuka. When I
visit the bank and attend its annual meetings in my role as alternate
governor, I am in no doubt about the fact that we should support that
leadership. As a member of the International Development Committee, my
hon. Friend the Member for Bradford, West, will agree with that,
because his Committee was very satisfied with and very complimentary
about the leadership that is being provided.
On UK money,
the ADB and DFID strategic partnership for governance programme aims to
enhance the bank’s ability to strengthen governance in African
countries. I assure hon. Members that the bank is serious about
corruption and key steps have been put in place, a matter that I am
sure the hon. Gentleman will have discussed during his own visit. As I
said, the bank works with African countries to tackle corruption. It
has strong internal systems and policies and it has taken action,
including dismissing staff who have been found guilty of fraud and
corruption. There have been just a few cases of corruption of late, but
they have all been investigated or are subject to ongoing
investigations. The president has given high-profile support to the
auditor general and insisted that recommendations in internal audit
reports are followed up.
What matters
to me, however, are results and effectiveness. We need to think about
how we assess the effectiveness of an institution such as the ADB, and
that is a crucial issue for DFID—acting on behalf of UK
taxpayers—and for the international community. That is why we
have developed our own means—the multilateral development
effectiveness summary, the details of which I would be happy to provide
to the hon. Gentleman or any other colleagues—of presenting the
latest available information on the effectiveness of the main
multilaterals. I hope that I can reassure hon. Members on a number of
points when I say that it looks at four main areas: results, managing
resources, building for the future and managing partnerships.
At the risk of
going into great detail—I am happy to do so if colleagues want
me to—let me say that there is a range of supportive measures.
Those include the common performance assessment system and the
multilateral organisations performance assessment network. Those
systems have locked in a concentration on results and on ensuring that
we get the money to where it should be.
The hon.
Gentleman asked about regional offices. Let me make it clear for the
benefit of the Committee that the bank is working to increase capacity
in country offices. The office in Khartoum is necessary to improve
country dialogue with Sudan; it is not working on a regional base, and
nor is the bank working on regional offices.
The
administration budget was a big concern for me during the
investigations that I undertook on my visit. Members of the Committee
would want to be assured that we would not commit extra money to
administration if we were not sure that the existing amounts were being
used properly. The bank might well need an increase, but I have been
clear with DFID officials that until we are satisfied that the current
amounts spent on administration are being used to maximum effect, I do
not wish to commit more UK money to administration. I am interested in
results. Capacity has improved, vacancy rates have declined, and a
staff skills survey is being undertaken. The important thing is having
the right people in the right place, which is what the in-country
offices are
about. Mr.
Simon Burns (West Chelmsford) (Con): I appreciate the
Minister’s concern about administrative costs and monitoring
those. What proportion of the budget is spent on
administration?
Gillian
Merron: I shall be happy to write to the hon. Gentleman
and other Committee members to confirm
that. The
hon. Member for North-East Milton Keynes asked for clarification in
respect of allocation to regional integration projects. Twenty-five per
cent. of the overall ADF-11 replenishment resources will be allocated
to regional projects, and 17.5 per cent. of that will come from a
central pot. That may be where the misunderstanding has come from. The
rest will come from contributions from recipient countries out of their
own
allocations. The
African Development Bank does recognise that it is highly centralised,
with an insufficient presence in-country and too many operational
decisions taken at headquarters. By the end of 2007, 24 offices had
been opened. Those need to be fully staffed and we need to see
delegation of authority agreed. The bank has committed—I think
that this is happening at about the right pace—to increasing the
percentage of professional staff based in field offices from 5 to 15
per cent. by 2009. That is quite a big shift. The hon. Gentleman asked
about progress, and progress does need to be made, but I want it to be
made in the right way, so that people have the right ability to make
decisions. The
hon. Gentleman suggested that regional integration was somehow a low
priority for bilateral donors. I do not share that view. It is more a
case of that being more difficult bilaterally than it is
multilaterally. Certainly the UK has committed itself on projects such
as the one
that I saw at Chirundu on the Zimbabwe-Zambia border to establish a
one-stop border post to get people through the border more quickly and
to increase trade, which of course has great implications for the whole
region. Mr.
Lancaster: They were not my words; they come from the ADF
11 deputies’ report, of which the Minister will of course be
aware. Paragraph 4.10 is quite clear in saying that regional
integration has been a low priority for bilateral
donors.
Gillian
Merron: I accept that clarification. The reason why we are
so supportive of the African Development Bank is that, as an African
institution and a multilateral institution, it has a far greater
capacity to reach across the regions than a bilateral one ever could
have. Results
are what matter. That is really all we should be talking about, and
President Kaberuka has said that he is clear that he will be judged by
results. That is why a new framework has been developed that will track
progress on internal reforms. There will be increased monitoring of
projects. It will ensure baselines and ensure that lessons are learned.
I was asked for examples of the work. I shall give a few and if hon.
Members would like more, I shall be happy to provide
them. I
mentioned in my opening comments that in Eritrea an ADF livestock
development project has led to farmers’ incomes increasing by 65
per cent. The ADF has supported projects to enhance environmental
sustainability, including in Niger, which has meant that forest land
productivity has increased significantly while the transition has been
taking place to more sustainable management. In Uganda, the health
sector strategic plan project has sought to strengthen health services
in rural areas, with a focus on mental disorders. That project has
rehabilitated and equipped 32 primary health centres and six mental
health units, while also providing clean water and latrines and trained
village health teams. Yes, more needs to be done. It is probably worth
mentioning that one of the most recent approvals has been of a national
water programme for Malawi, which will bring clean water and sanitation
across the country. Therefore we very much see
results. Regarding
the Paris commitments, the targets are in the African Development Fund
results framework. They were agreed in December 2007 under the
replenishment, and I can confirm that we will track progress. The hon.
Member for West Aberdeenshire and Kincardine asked about UK
representation at the African Development Bank. First, let me state
that that is of course an African institution and shareholders
must—I believe—operate in constituencies. It is true that
we share a constituency with Germany, the Netherlands and Portugal, and
we alternate an executive director slot with Germany.
Through discussions with our team, I have been convinced that we have a
constituency—hon. Members will be pleased to know—that is
like-minded and collaborative. I am confident that that will continue
under the new executive director, who is the German representative.
Historically, constituencies have been determined by the size of
shareholdings in the African Development Bank, not by financial
contributions to the African Development Fund. It is true that the
current arrangements are not set in stone, and we discussed that on the
International Development Committee. We are very open to considering a
wide range of options with other shareholders, and are happy to have a
discussion. However, it is important to remind the Committee that we
are talking about an African institution, and that is our main
concern. This
Government’s efforts to find international solutions to the debt
burden of the poorest countries have received great support in this
House and among the British public, and we have already delivered
significant results, leading to real benefits. The African Development
Fund (Multilateral Debt Relief Initiative) (Amendment) Order will
enable us to go further. It is clear that the African Development Bank
has the potential, as the International Development Committee put it,
to
be “the
driver of African
development.” I
thank my hon. Friend the Member for Bradford, West for his supportive
comments, which are important to get on record. The African Development
Bank (Eleventh Replenishment of the African Development Fund) Order
will enable that potential to become a
reality. In
2005, the Government promised to help the world’s poorest and to
help us to get back on track towards meeting the millennium development
goals. We are halfway to the 2015 deadline, and we still have a
mountain to climb. We must stick to our word and not waver in our
efforts. This Government will strive to ensure that we see our
commitments through and we will do everything that we can to make
global poverty a thing of the past. These orders are a small but
important step. I thank members of the Committee for their support, and
I ask that the Committee approve the
orders. Question
put and agreed
to. Resolved, That
the Committee has considered the draft African Development Bank
(Eleventh Replenishment of the African Development Fund) Order
2008. draft
African Development Fund (Multilateral Debt Relief Initiative)
(Amendment) Order
2008Resolved, That
the Committee has considered the draft African Development Fund
(Multilateral Debt Relief Initiative) (Amendment) Order
2008.—[Gillian
Merron.] Committee
rose at nineteen minutes past Five
o’clock.
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