Examination of Witnesses (Questions 140-158)
MR SHAHID
MALIK MP, MS
BELLA BIRD,
MR MIKE
HAMMOND AND
MS SARAH
COOKE
2 JUNE 2008
Q140 John Battle: A few moments ago
Sarah mentioned sharing information and I am sure she is aware
that the OECD is conducting an evaluation of the Paris Declaration,
chaired by Denmark and Sri Lanka, but when the Committee was in
Denmark and met the secretariat of the evaluation team they sadly
reported that most participants had contributed to the first phase
of the evaluation except the UK and the Philippines. Have you
sent them anything yet?
Mr Malik: I did not quite catch
that; what is it that we are supposed to have sent but not sent?
Q141 John Battle: The UK has not
sent any contribution back to the evaluation of the Paris Declaration;
only the UK and Philippines have not sent anything according to
the secretariat which the Committee met on 14 May. You may have
done it by now but could you let us know whether you have and
could we just use that as a reminder that we might join in and
share information.
Ms Cooke: We have done it.
Q142 John Battle: We have; a little
message has been passed through.
Ms Cooke: We have sent them a
progress report on how we are doing in implementing Paris. We
have also been a case study, as I mentioned before, on the implementation
of the Paris evaluation, and that is currently being completed
at the moment, so all that information is being worked on.
John Battle: I mentioned it because you
have great ideas and you should be contributing and leading but
they said we were not doing it.
Q143 Chairman: Why was it later than
everybody else's?
Mr Malik: To be honest we anticipated
this question was coming and we sent it yesterday, is that right?
It has gone, but it is probably not received yet. To be honest
with you I get the sense that we cannot honestly answer that question
but I am more than happy to give you an explanation in writing.
John Battle: We do not need an inquest,
it is a nudge really that if we are going to join in the conversation
can we be up front?
Chairman: They were not angry and they
were sure it was coming, but it was quite a surprise.
Q144 John Battle: The next is really
more of a general question really because DFID in its submission
says a couple of times—and the Secretary of State in the
Annual Report says this very encouraging phrase—"DFID
helps to lift three million people permanently out of poverty
every year."
Mr Malik: Yes.
Q145 John Battle: I had a rather
wonderful teacher in primary school who used to say in arithmetic,
"Do not have a stab at the answer, can you spell out your
working so we know how you get there." Can you give us a
bit of the working of how you reach that figure please?
Mr Malik: It is actually based
on estimates, on the Collier and Dollar poverty models which have
been influential, I am told, in allocation decisions of other
bilateral and multilateral organisations, so it is actually based
on a standard formula which is one that I think is respected across
the globe for those that engage in international development;
that is where it comes from.
Q146 John Battle: I am not in a sense
asking you to spell it out now but that background working would
be really helpful actually because just as in the UK there are
arguments about what the poverty figures are and how we arrive
at them, if we are putting a very bold statement down and we are
going to use that publicly, DFID can lift three million out of
poverty permanently every year, that is a great story but I can
imagine a lot of people would say prove it. We need the background
working basically.
Mr Malik: I am very pleased that
you have just proved that I am still in touch with my parliamentary
colleagues 100% because when I was given this figure I said "Where
does that come from, it does not mean anything unless I can show
where it comes from." This was when I first got into DFID
and the answer is that model, but we will put some flesh on the
bone and we will give you something so that you can actually use
it with some authority when you go to either other parts of this
country or other parts of the world.[1]
John Battle: We would prefer it, just
as it were to boast about it in a way, we do not just want to
reference the genie of coefficients again, which is what we get
from the DWP whenever we ask about poverty. Can we have it in
language so that we can understand it and explain it to others;
that would be very helpful.
Q147 Richard Burden: You talked before
about your hopes for the UN as being a co-ordinator of donor assistance
and aid in particular situations. Could I ask you something about
how you see the EU; on the one hand it accounts for 52% of aid
and about 20% of that is directly managed through the Commission,
but what kind of role do you think the EU can or should be able
to play in terms of co-ordination, particularly given that there
has been a number of times—I put this politely—that
bureaucracy sometimes gets in the way of actually achieving very
much. Without mentioning any specific situations it is fair to
say that on a number of visits we have done the Commission have
been present, but quite what value they add as a co-ordinating
mechanism is sometimes a little bit questionable.
Mr Malik: The EU is critical:
57% of global aid is what the EU represents, that is about £37
billion and £7 billion approximately of that is through the
European Commission. The EU obviously has a very important role
to play in terms of the co-ordination amongst EU states but it
has limitations also because it is not just EU states that will
ultimately define the effectiveness of aid globally, but it is
a very, very important player. The example of the Code of Conduct
on Division of Labour says something about the usefulness of the
EU co-ordinating role, but again it is important that there is
a country-led approach and it is not an EU or EC-led approach.
The EC has got an important role to play in country but it cannot
be a substitute for country leadership. It is also important again
to stress that it does not represent all donors, although it is
significant, and this is becoming increasingly important as there
is a proliferation of non-DAC donors—I talked about China
and I talked about India as well. In that sense it is important
but what is more important is the role that the DAC has, which
is right across the globe, and although the DAC itself does not
directly co-ordinate it can certainly empower countries to take
on board sound principles for co-ordination in country. It is
important, therefore, but it has its limitations and the European
Commission is the element that you were perhaps referring to in
that 20% of EU aid actually goes through the European Commission.
Q148 Richard Burden: As you say,
that is a sizeable amount and I suppose what I am just trying
to get at really is you talked earlier about the Code of Practice
on division of labour which has had in some sense a chequered
performance; how much effort really should we be putting into
trying to develop a central co-ordination mechanism, given that
it excludes by its nature a large number of donors and really
is a co-ordinating mechanism? Am I trying to flog a dead horse?
Mr Malik: Again, I would say that
our position is that the European Commission obviously has limitations
in terms of co-ordinating global aid, but we still think it is
quite useful. You have like-minded countries by and large—I
use that relatively loosely—whose geographical proximity
is by definition quite close, it is a geographical area that is
well-defined and so there has got to be added value that will
stem from that. It is important just to reinforce your point that
it has its limitations and sometimes in terms of the administration
there are some challenges there. If aid were better co-ordinated,
however, then that would be less of an issue.
Chairman: We have, unexpectedly, another
division, but I hope we will be able to come back for five or
ten minutes at the end.
The Committee suspended from 5.39 pm to 5.49
pm for a division in the House.
Chairman: Welcome back, Minister; Stephen
Crabb has a couple more questions.
Q149 Mr Crabb: Just before we broke
for the division you mentioned the importance of engaging with
the non-DAC donors like India and China. I would like to press
you on that a bit more and ask you exactly what you are doing
to encourage non-DAC donors to sign up to and abide by aid criteria
and sign up to the guidance that DAC donors are complying with.
Mr Malik: The non-DAC donors increasingly
are becoming much more important and we are trying to engage with
them—the Chinese for example in Africa where we have been
able to get some movement in terms of the Paris Declaration et
cetera. One would certainly hope that if you signed up as a beneficiary,
as India and China have, then you might wish to sign up as a donor
as well.
Q150 Mr Crabb: Have they?
Mr Malik: Not yet, but we are
working to build these relationships and it does take some time.
Of course, there are a number of other organisations that are
springing up who are not necessarily country organisations but
are new players on the scene: a number of the oil-wealthy nations
are starting to develop their own philanthropic bodies such as
the Al Maktoum Foundation which has got a $10 billion endowment.
We are trying to engage with those as well and that is why at
the end of this week on Thursday and Friday we are playing a role
in the World Congress of Muslim Philanthropists. The idea really
is to ensure as best as possible that as we move forward we can
convince these organisations that the way we work and our thinking
coincides with some of theirs in terms of the common objectives
that we have got, again we can pool resources and maximise the
impact. Compared to the Chinas of this world obviously it is relatively
small but certainly not insignificant. Development was an important
topic at the UK-China summit in January where the Chinese signed
up to the Call to Action which I talked about earlier on, that
Prime Minister Gordon Brown has been pushing for on 25 September.
That is a welcome move forward and the truth is that engagement
will yield results, that is certainly my belief. DFID and FCO
ministers met with China's special representative for Africa in
February of this year and the Foreign Secretary visited China
in that month, during which he hosted a roundtable on China and
Africa. We want this dialogue to move into something more practical
such as joint co-operation on education and health in Africa,
on infrastructure in countries like Sudan and the DRC. For example,
in the DRC DFID is working with the government of DRC and the
Chinese government to help mitigate the environmental and social
impacts of new, Chinese-built roads. The OECD DAC is also engaging
with non-traditional donors such as China on the Paris Declaration
as part of the preparations for the third high-level forum on
aid effectiveness. Again, in Ghana China attends the annual consultative
group meetings. I suppose what I am trying to say in a nutshell—if
that were possible for me—is really that there is no quick-fix
solution, there is no magic wand, it is quite time-consuming but
we believe it is an investment. We think that by engaging with
the Chinese and the Indians and by convincing them that the arguments
for co-ordination, better alignment and pooling resources are
a win-win, we can actually get to a situation where these countries
are signing up to the Paris Declaration and are playing their
rightful role in eradicating poverty, not just from their own
countries but for people around the world.
Q151 Mr Crabb: Simply on DAC itself
one of the bits of evidence we were given from Professor Moore
of the University of Sussex was about the proliferation of new
donors and in his words "the system is now out of control"
and that as a system for encouraging co-ordination DAC will not
do any more. Is that a view that you would agree with and do you
see alternatives to DAC emerging that might be able to provide
some kind of overarching, co-ordinating forum for new and traditional
donors?
Mr Malik: Most people who are
looking at these things independently and objectively—and
again you could ask what is objective, what is independent—would
say that DAC is playing a really important role and, in the future,
has got an even more important role to play. We would subscribe
to that. The DAC has got a role to play, not only in terms of
the work that it currently does but in terms of helping hold governments
to account for the commitments that they have made to the poor
of the world. I actually believe that DAC ought to be sufficient
as a mechanism, that any country ought to be able to subscribe
to DAC and basically play its role within the kind of DAC family,
if you will, so I do not think there is a need for a new body
to be formed; that could be quite counterproductive. Investing
and expanding the existing DAC in terms of its influence is probably
the best way forward for the poor of the world.
Q152 Chairman: Do you envisage including
private foundations in that?
Mr Malik: Looking forward, again
if you look at the Gates Foundation for HIV AIDS, malaria and
TB, it has given two tranches of $750 million and is a very significant
player. These are not areas that we should shut off, I do not
think we should have a closed mind to this, we have to look at
the membership, the rules and whether this has added value, whether
it be private foundations, trusts, whoever it might be. My view
would be at the moment that because these organisations have an
important role to play in reducing poverty around the world we
ought to have an open mind as to their role in the various bodies
and mechanisms that currently exist.
Q153 Mr Singh: I hope you do not
mind if I veer off my question, Chairman, I have a far more interesting
one. We are doing this inquiry into donor co-ordination and we
have made the assumption that donor co-ordination will lead to
greater aid effectiveness. Does DFID have any evidence at all
or any research-based evidence that that is actually true, or
is that just an assumption we are making?
Mr Malik: We kind of touched on
this earlier on. Everybody would accept that donor co-ordination
does have a positive impact. It reduces duplication, it creates
opportunities, it frees up resources, and if we just look at the
UN I can give you a couple of examples of how some UN reform has
actually been quite positive in this regard. In Mozambique on
travel there was some rationalisation that went on within the
UN bodies which led to a saving of about $50,000 per year which
was enough to fund the electricity for a millennium village, so
there are lots of examples of how better co-ordination, better
alignment leads to more effective aid on the ground.
Q154 Hugh Bayley I recall a meeting
that members of the Committee and Mike Hammond attended in Ghana
with the Minister of Health, and one of the questions I asked
him was "Now that you have to deal only with one adviser
in relation to the UK health funded support programme and the
Dutch programme, does that release some time and resources amongst
your officials for them to do other things?" His answer was
"No."
Mr Malik: Perhaps it is an internal
management issue. Some of that defies logic, to be blunt.
Q155 Hugh Bayley It might be a case
of scale but at one level at least some official is spending an
hour or two hours once a month rather than twice a month. What
evidence do you have that developing countries are seeing a real
saving in terms of costs as a result of better co-ordination?
Mr Malik: Zambia is a case in
point where it is estimated that there has been a 50% reduction
in transaction costs because of better co-ordination; that is
quite substantial. Obviously, logic alone is not sufficient and
there will be a number of examples, but certainly that is one
of the examples that springs to mind.
Q156 Hugh Bayley We were discussing
earlier what benefits we as donors get from co-ordination, but
are we seeing lower donor transaction costs as a result of co-ordination
or will we in the long run need more DFID officials to co-ordinate
properly if we do not have direct control of lines of expenditure
in country?
Mr Hammond: If could speak about
the first one, the issue with the Minister of Health was that
we were very like-minded with the Dutch before we actually merged
so he probably did not notice a vast difference because although
there were two people in the room there was only one conversation.
Discussions I have had with the Zambian Ministry of Health indicate
that they have seen a difference and they have seen a lowering
in transaction costs on the ministry itself, the director of planning
talking about 20% for him alone. There is anecdotal evidence out
there that it is happening. When it comes to do I need more staff
to do donor co-ordination, doing donor co-ordination properly
in a sector is time-consuming, there is no doubt about it, but
one hopes it is swings and roundabouts and in the areas where
we have a comparative advantage we are applying more of our resources,
but the converse is that we are applying less in other areas where
others are doing it for us.
Q157 Hugh Bayley Looking at the Zambian
example, if 20% of the time of top officials in the Ministry of
Health is freed up from conversations with donors what is that
time used for; is it for doing more administrative work in the
Ministry of Health or are those people sent out to run health
services around the country?
Mr Hammond: Doing his day job.
Mr Malik: Let me give you one
example if I may, which is slightly tangential but it is the same
principle. I was in Yemen in one of the most inhospitable, rugged,
mountainous parts of Yemen, where traditionally it is the girls
that gather the water. To do so they have to go down a dangerous
ravine, they usually carry it on their heads and then come back
up—very time-consuming and obviously dangerous, though perhaps
it looks more dangerous to us than to them, but still nonetheless
it is dangerous. We had invested there in some solar panels on
the top of the mountain as it were, which were able to channel
water up the side of the mountain and into a well which cut out
that whole journey. I was allowed to speak to the girls and the
women separately and I asked them firstly what was the most important
thing for them in their daily lives and they all said the water-gathering
and it has meant the biggest difference to their lives. I asked
them, "Now that you have that extra time, what do you do?"
I thought they might say they focus a bit on education, but the
answer was "We can focus on our herds now". You can
free up time, therefore, but what people do with that time and
how they invest that time is really a matter for them. The one
thing that I do want to come back to, which we have not really
talked about, and in the context of co-ordination it is really
important, is the whole area of donors' forward aid plans, which
is an area that really people have not looked at from a co-ordination
perspective. If that is done correctly it will ensure that the
number of aid orphans is dramatically reduced. It is an area of
aid co-ordination that has not seen much international attention
physically but actually could be extremely useful moving forward.
That relies of course on countries having some kind of forward
aid plan, and we know that that is quite sketchy and patchy; I
apologise for lumping that in with your question even though it
is not directly relevant but I thought it was an interesting addition
to the discussion that we have had which has been a very good
discussion.
Ms Bird: If I could just add one
very specific example which will answer your question on what
people do with their time, I worked in Uganda in the health sector
between 1999 and 2003 and in 1999 donors all had their own separate
projects. We went into the ministry of health planning department
and nobody was there, they were all out managing the separate
donor projects. As a result the money was not getting out of the
door into the health centres, the health system was not working,
we were all in despair. What happened when you brought those donors
together around a pooled fund, a health sector wide approach,
by 2003 you go into the planning department and all those officials
were there doing their jobs. They were planning on how to use
expenditure, they were getting the money out of the door to the
health centres, the health officials were being paid on time,
drugs were moving and we started to see the data show improvement
in utilisation and health outcomes. There are those very concrete
examples around but perhaps we have not collected them as systematically
as we should have done.
Q158 Chairman: Thank you for that;
I am sorry about the interruptions but that is the nature of having
a session on a Monday afternoon when the House is sitting. I said
that this was our last evidence session, but that is not entirely
true because we are going to have a video link with Sweden to
complete our European contributions and I hope we shall then produce
our report. You will appreciate that effective co-ordination,
however that is defined, and also monitoring the way that aid
can be more effective is pretty crucial to what development is
all about. The simple question this Committee was asked is what
works, and the trouble is we do not always know what works. We
must obviously get out of the habit of saying how much money we
are putting in, it is what are the outcomes in real terms from
the budget and are those outcomes measurable. It is patently obvious
that governments with a relatively small number of officials cannot
deal with an infinite number of agencies and NGOs, there are not
enough people to do it, so some simplification perhaps is essential.
I just hope that our report will make a useful contribution from
DFID's point of view as to how we can help to achieve that. Thank
you very much indeed, Minister.
Mr Malik: Not at all, Chairman.
Just on that last point, which was not a question, there are examples
of where we are directly funding a lot of this rationalisation
with the One UN pilots—Vietnam is an example where we have
put £4 million in. These are pilots but the challenge there
is really to ensure that there is sufficient power with the UN
resident co-ordinator to be able to do what he or she needs to
do to bring people together. The UN is a reform challenge that
will remain for some time. On behalf of DFID thank you for being
as courteous and friendly as you have been and, as somebody who
sat on the Home Affairs Select Committee, I used to think that
was the best committee but obviously I take it all back now. Thank
you.
Chairman: Thank you, Minister.
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