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CORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 945 - ii House of COMMONS MINUTES OF EVIDENCE TAKEN BEFORE INTERNATIONAL DEVELOPMENT committee
MS NEMAT (MINOUCHE) SHAFIK, MR MARK LOWCOCK and MS SUE OWEN Evidence heard in Public Questions 46 - 107
USE OF THE TRANSCRIPT
Oral Evidence Taken before the International Development Committee on Members present Malcolm Bruce, in the Chair John Battle Richard Burden Sir Robert Smith ________________ Memorandum submitted by Department of International Development
Examination of Witnesses Witnesses: Ms Nemat (Minouche) Shafik, Permanent Secretary, Mr Mark Lowcock, Director General Country Programmes and Ms Sue Owen, Director General, Corporate Performance, DFID, gave evidence. Q46 Chairman: Can I welcome you to this annual session that we have of the Committee. I know, Minouche, that you have been in front of us before but not in your present capacity as the Permanent Secretary, so congratulations on your appointment formally. Perhaps for the record you could introduce your team, although we know them as well. Ms Shafik: Thank you very much and it is a pleasure to be here and an honour to lead this department. I would like to introduce my colleagues: Mark Lowcock, who is the Director General for Country Programmes and runs our Bilateral Aid Programme; and Sue Owen, our Director General for Corporate Performance. Q47 Chairman: Thank you for that. You will see that the Committee is a little depleted from its normal numbers, although John Battle will join us. We value this annual session a lot because it gives us a chance to explore with you the practical development work within the department and for you perhaps to share some of that with us, and to cover a number of topics. We have far more topics to cover than there will be time, so we will not necessarily cover everything that we should. Could I make a start with what you might call the absolute core of what you are about, which is your budget and the money that you have. We have got into a mindset that we have a rising aid budget and that the UK is becoming a more and more important donor, but actually when you look at the current figures it is not quite as good a story as it appears. Having had a one-off burst of expenditure on the back of debt relief, which boosted the development share of GDP quite substantially, we have fallen back so that the OECD DAC[1] statistics for April 2008 show that ODA[2] fell by 29.1 %-and that is total ODA, it is obviously not just the department's budget-in 2007. I think in global spending on ODA the UK is lying something like fourth or fifth in the table rather than nearer the top as we thought-behind Germany, possibly behind France as well as Japan and America. Obviously we are not in it as a competition, we are here to deliver what we think is appropriate. But can you give us an indication from the department's point of view of where you are at because we have talked about doing more with less, implying that you have more money but fewer staff, but the reality is that you do not have much more money and it looks to me as if what you have is promises in one form or another, non-specified, of quite a lot more money in a couple of years' time. Is that your understanding of it and is that money going to come to the department or is it going to go into ODA in other forms? Do you have any information on that because presumably you have to plan your forward budgets on the basis of some kind of estimate of where it is going? I do not know if you are able to help us with that? Ms Shafik: I would be happy to. The decline in Official Development
Assistance that we observed last year was a one-off that was a result of
Nigeria debt relief-that was the largest ever debt relief package for a
sub-Saharan African country, and obviously we have a lot of exposure to that;
so the decline that you see reflects the fact that we had to take that into
account. But if you take out Q48 Chairman: You are talking about the last year of the current Spending Review. Ms Shafik: That is correct. Q49 Chairman: And most of that is coming through the department? Ms Shafik: Yes. This year in the CSR there was ODA that was given to other departments; the Foreign Office has a modest ODA allocation for governance and for the first time the MoD was given an ODA allocation for stabilisation, amounting to slightly over £200 million. Q50 Chairman: It may be that the follow-up question is really not for you but for the minister, but what is not clear to us is where that money is coming from in as much as the forward projections for the department seem to imply that they either have to come up with debt relief money or money from some other source. Ms Shafik: There is an assumption of a debt relief package in the current settlement. Q51 Chairman: You are aware obviously of the debate about that and the Committee acknowledges that debt relief has a positive benefit and the DAC obviously allows for it, but you will appreciate-and actually from your point of view it makes a big difference - if the money comes in debt relief it does not actually help you to do more as a department, whereas if it comes in direct to the department then you can increase your country programmes or you can increase your support-and you have already made big commitments to multinational institutions. So are you comfortable that the department has what it needs to do what you, as head of the department, want to do over the next two or three years? Ms Shafik: Surprisingly, an 11 % real increase even though it sounds like a lot does not feel as much when you have huge needs to meet, but overall I have to say, given the state of the economy and given the allocations available for other government departments, I think we cannot complain about our CSR settlement. On the debt relief, if you like I can give you further detail if Mark would like to respond on the specific case and the assumptions therein. Mr Lowcock: I think it is the case that the share of Britain's total ODA that is going to be accounted for by debt relief over the next three years is lower than has been the case over the last three years, and that is because debt relief has been delivered to lots of countries-there are a few left. Just in terms of the department's own budget, the resources, the cash flow to the department rises from about £5.3 billion in the year we have just finished to £7.9 million over the period. It is a substantial increase, which is the 11 % Minouche refers to. There are also some other components to Britain's contribution to ODA, including investments made by CDC and some things done by the other government departments, but by far the bulk is now and will continue to be managed by the department. Q52 Chairman: CONCORD, the European Confederation of NGOs who have done an evaluation, gave a rather negative projection of the UK's performance basically saying they believed that on the trajectory currently set out it was unlikely that the UK would achieve the 0.7 % even by 2015. Again, we are looking into the future and you have to do that much more than we have to, but we have to talk about the future of development and where we think it is going. You can say, "Our CSR settlement says so, so we will work on that assumption" but from your point of view, when you are looking at planning is that built into your plan? Ms Shafik: I am very confident in the
current CSR period that we are on the right trajectory. I think the next CSR is too unknown to
know. I hate to quote Rumsfeld but it is a bit of an unknowable unknown and we
will not know what GDP is at that stage, but we also will not know what the
state of the economy is at this stage.
But I think for the current CSR period we are very confident that we are
on track. Q53 Chairman: I accept what you are saying but there is a bit of concern. We were on a trajectory, we thought-and allowing for the fact that it was a one-off debt relief-that was likely to put the UK firmly into the bracket of being number two or number three donor in the world, but that does not seem to be quite so clear. This is the document I referred to, of which you will be aware, CONCORD's No Time to Waste. They have their own agenda but it still comes across - and they have a quote about broken promises from Gordon Brown-their basic point is: "Will the UK meet its target of 0.7 % of GNI by 2013 without inflating its aid?"-which of course is their particular brief-"NGO prediction: Unlikely." Ms Shafik: It is a view; I do not think it is a majority view, it is not the view of most other major development players; it is not the view of most NGOs in this country. As I said, for the next three years we are pretty confident that we are on track. Thereafter, I think we have to see. Chairman: There will have been an election by then! Q54 John Battle: It may be the view of NGOs but it did not come out last week at the G8 because Britain was conflated with the rest of the world to say that we were not meeting our targets, and some of us are working hard, including in the Prime Minister's statement to say, "No, Britain is actually committing the money and getting it upfront," and the Prime Minister pushed both France and Italy to meet the commitments. I think on the target what then happens is people say, "Ah, but you are never going to reach the 0.7 %, it is just a speculative figure." I think we need to reinforce it because there is commentary saying what do we count in it and what do we not count in it, and I think if we are committed to it we need to be a lot clearer about it. I have had conversations here with ministers in the past about whether it is a meaningful target or we really should go for it hell for leather, and whether we should work out quality of aid and effectiveness of aid as well. But as long as we have that target I think we have to do more to campaign for it and champion it actually otherwise we will be conflated with those that fall down in the rest of Europe. We will also be blamed for not achieving it in difficult circumstances. So I do think the target has to be spelt out and stuck to because we actually have a good story to tell here. Ms Shafik: When we got our settlement the number that anchored the settlement was the 0.56 % European target by 2010 because that coincided with the end of the CSR period; so that was the end point and the current trajectory reaches that end point. I think there is always a danger that there will be pressure to fiddle the definition of Official Development Assistance and widen it and try to include expenditure that is not strictly eligible. Up until now I think I can say with confidence that DFID has been quite pure about the definition and resisted pressures, unlike other countries, to widen the definition and categorise everything as Official Development Assistance which technically do not qualify, and I hope we can continue to stick to an honest definition of what aid is. Ms Owen: Could I just say one sentence here. I think it was quite impressive when we were in the CSR negotiation that the Treasury were very committed to this as well and in the face of a lot of other pressures we actually had some support there. Q55 Chairman: Taking John Battle's point I can say that we as a Committee are committed to this and very much believe it should be delivered. What we are anxious to ensure is that it is not finessed or managed in a way that is not really the case. One point specifically on the timing and another one on detail: why are you not able to produce the figures for the DAC and the Annual Report at the same time? Why is it that the DAC gets more up to date figures than the Annual Report? Would it not be helpful if when you were producing the Annual Report that you are giving us the same figures that you subsequently gave to the DAC. Is there a practical problem in doing that? Ms Shafik: Sue, would you like to respond to that? Ms Owen: We produce the figures pretty much as soon as they are available. Yesterday we did publish the figures for both cash and resource bases for 2007/2008 final outturn. Of course the DAC is on a calendar year basis and we are on a financial year basis, but we publish the financial year figures that we have as soon as they are available[4]. Q56 Chairman: The problem we have - certainly I had as Chairman, -I got what you might call the correction through the DAC rather than through the Annual Report. The Annual Report, if I may say so, was just saying we are doing a great job, we are on course, and the DAC said, "Actually, we have had to adjust it down because of the other reasons." To me that comes across as bad public relations from the department's point of view because you are not saying the same thing. I understand what you are saying is that it is partly to do with timing but if there is anything you can do to improve that it would be helpful; and it would be helpful if what was in the DAC and what was in the Annual Report were not at odds with each or appeared at odds with each other. Ms Shafik: Perhaps we need to provide an explanation in future years. Q57 Chairman: The other thing was the definition, which you have just discussed. The Environmental Transformation Fund appears to be being treated as ODA but is a matter for negotiation. Again, there has been criticism in the evidence we have taken from other organisations on evaluation, saying that there is a tendency for donors to try to negotiate the definition of aid and development. The UK in fact does better than others in that there are things that we exclude that others include, but you can understand, can you not, that the Environmental Transformation Fund looks like one policy objective being then compromised to deliver an ODA target, and obviously in any case that is not your main flexible budget, if that is the case. Ms Shafik: We have checked with the DAC of course that these types of expenditures would qualify as Official Development Assistance. We have made it quite clear that the Environmental Transformation Fund is a pilot programme to try to facilitate and encourage a future climate deal. There is no official policy yet as to whether in the long run we will count environmental expenditures as Official Development Assistance, and that is actually being considered by ministers at this time. But for practical reasons we have chosen to classify this as Official Development Assistance because it is DAC-compliant under the current rules. Mr Lowcock: There is quite a lot of
history to this, as you know. In the
early 1990s when the Global Environment Facility was established that was
established to secure activity, the main goal of which was about global benefits-not
benefits for the country in which the activity took place. As a result most of that expenditure was not
scored as ODA. The Environmental Transformation
Fund is actually trying to do a different thing; it is trying to help countries
pursue their economic development in a way which is climate resilient and less
carbon intensive than the development path that richer countries have
taken. So it is a core development
proposition, if you like, and that is the reason why we believe that the
appropriate scoring for ETF expenditure will be that it is appropriately scored
to ODA, and that is the discussion we have been having with the DAC as
well. As Minouche says, negotiations are
underway towards Q58 Chairman: That may be something that we would like to look at more closely when you have it in place because you will understand that there is concern amongst developing countries that global warming, climate change will actually subvert what they would see as direct development, as opposed to add-in. In other words, would it achieve poverty reduction, for example? Can I assume that that is one of the factors that you are looking at? Ms Shafik: Yes. Q59 Richard Burden: If I could ask you a few questions in relation to middle-income countries. You still have your PSA[5] target of a 90:10 split between middle-income countries and low-income countries, but one of the things that has been bouncing round the back of some of our discussions is the awareness that a third of people living on less than a $1 a day do not live in low-income countries they live in middle-income countries, and I am conscious that your 2005 to 2008 strategy was talking about focusing limited bilateral assistance for middle-income countries "on countries and issues where we can add value to the wider international effort" and "This will include large, strategically important countries that affect the achievement of the MDGs regionally or globally; the poorest middle-income countries and middle-income countries that are vulnerable to falling back to low-income status." That strategy is meant to be up this year. Is there a new strategy being drafted and, if so, what is it going to look like? Ms Shafik: I think the issue for us in
middle-income countries is what the most effective intervention is because
clearly they do not necessarily need our resources and so our focus in middle-income
countries is increasingly about helping them use their own resources more
effectively to reduce poverty rather than us transferring significant financial
resources. Just a few examples: Q60 Richard Burden: The previous International Development committee in 2005 made some of these points, saying that DFID needed to find ways of working with the Indian Government to focus more clearly on socially excluded groups and to have a more pro-poor impact for its work. Could you perhaps say a little bit more about how you are seeing that pan out and whether you see the Government of India actually sharing those objectives. Where are the problems and where are the opportunities? Also, about India's role on the world stage that you touched on, how do you see that panning out? How do you see India fulfilling that role? Ms Shafik: In terms of how we address it
in our programme, we have just launched a new country strategy actually in
India - I was in Delhi just a couple of weeks ago to launch it- and we call it
the Three Faces of India because it tries to deal with India at three levels:
the very poorest India, the sort of developing India and the India as a global
player. As you said, Q61 Richard Burden: One of my colleagues may come back to India but could I take you to Latin America? In relation to India there is a large programme there, there is quite a big DFID presence there and it does raise all the issues that you are saying. In relation to Latin America we are talking about some of the most unequal countries on earth and actually not much of a DFID presence there. So if the kind of middle-income country strategy that you are talking about is going to take off and have a relevance in Latin America how do we do that? How do we build up the capacity we were talking about? Apart from anything else you do not have any people over there to speak of. Ms Shafik: As you know we have had to
close most of our programmes in Q62 Sir Robert Smith: Can I just follow up on the India programme? In the past-or has it changed or have I got this wrong-was the Indian Government somewhat reticent about direct intervention at state level and required everything to come through the central government? Has that changed? Ms Shafik: We have to consult with them but we do actually have offices now at the state level and we operate quite closely with state level governments in the four focal states where we are currently working. Q63 John Battle: To press a bit more about Latin America - and I am tempted to say Central and Latin America-as someone who campaigned and championed DFID to be separate from the Foreign Office in the early years I am delighted with the way that it is, but I am still anxious to reinforce all the time that DFID's role is tackling poverty and not dealing with political issues, but of course they are mixed together. I am still a little confused, if I am honest, about what is a geopolitical legacy around India. But if we were to take what are now called the BRICs - Brazil, Russia, India and China-and we engage rightly with India, in my view, and we engage rightly with China and not sufficiently with Russia and hardly at all with Brazil-and I think the way that Brazil is one of the poorest countries in the world, there is the mining displacement issues, the forestry, the rainforest questions and sustainability as well as the economic questions-I wonder whether we have that right? And if I could just press- it was my job, an invidious job as Foreign Minister to go around saying that DFID was withdrawing from most of Central and Latin America-I wonder if we have that right and maybe we need to do more in terms of the Foreign Office. If I could ask you, if one of the staff could let us have a note I am particularly interested about the civil society funding in Latin America, does that include Porte Allegre and the participatory budgeting , which I am delighted to tell you is starting to be imitated and happening in my own inner city neighbourhood as well, and if we could get some of the spin-off from some of the positive and progressive work that is going on there under that governance heading I think that would be really valuable rather than spending money, but sharing that expertise and seeing it as a two-way street we can learn from what they are doing. Ms Shafik: We would be happy to share a
note on civil society funding on Q64 Chairman: Just on a detail point there, under the supposedly pro-poor government they have, has there been a noticeable improvement in the distribution? Ms Shafik: Apparently yes. They have a very successful cash transfer scheme which is in the Brazilian case conditional. They give households cash in exchange for them promising to send their children to school and sustaining them in school and they have had a massive increase in enrolment but also more importantly retention and achievement of poor households staying in education. So they have developed some very innovative pro-poor programmes. They have also been very progressive on HIV treatment and we are taking a lot of those lessons, particularly dealing with very vulnerable groups-sex workers and drug users-and transferring that experience to the rest of the world. So, yes, they do have quite a good story to tell. Q65 John Battle: If I move to agriculture. This Committee did a report about seven or eight years ago when we pressed DFID and the Government as a whole to take agriculture more seriously, and not to just go for industrial development, particularly of course in Africa. DFID under Hilary Benn, when he was Secretary of State, I think produced a paper on agriculture. I am really looking to the substance now. We have the policy but what about the substance? The head of the International Fund for Agricultural Development said last week that interestingly smallholders were crucial to food security and could be more productive if they are given the necessary technical assistance to boost production. Will DFID be taking that baton up and running with it and assisting? Ms Shafik: I think clearly the food
crisis has shaken all of us and made us aware that we have probably neglected
agriculture over recent years. I have to
say it is not that DFID has done nothing; we on average spend about £120
million a year on agriculture and we now have 50 agriculture professionals on
our staff. They do not work in all
countries because not all countries have identified agriculture as a priority
for us to work on, but we do have focal countries and big efforts in Q66 John Battle: I am encouraged by your answer, particularly the double focus that is covered in the research, as it were. DFID describes itself as "a leading supporter" of what is called the Comprehensive Africa Agriculture Development Programme, and you may not know but can you give us a clue as to how much of DFID's funding is allocated to that programme and a note on what it has achieved so far? Ms Shafik: Yes. That is CAADP; that is the African led research programme.. Mr Lowcock: We have made an initial contribution of £5 million. We will have to give you a note on the deliverables and I want to reinforce the word "initial". It is a new programme and we are feeling our way a little with it, so we will see how we go. But that is the initial contribution. Q67 John Battle: One of the Committee's visits some while ago was to Malawi and I learnt a tremendous amount from an absolutely inspiring man, wonderfully called Harry Potter, who works for the department! A DFID official, Harry Potter, not the magician-but he was a magician. And why? Because he understood seeds and fertilisers in Malawi and he was pressing Malawi and the World Bank as well as our own DFID effort to take this whole matter seriously. He showed us seed sheds, as it were, and was explaining to villagers, and I was so impressed with the agriculture voucher system that enabled poor farmers-and he was saying to us, "When you get back to London tell them to keep the voucher system going." I was a bit nervous at the time just helping people to buy seeds but, my God, do we understand it now when some companies refuse to allow people to have seeds because they are protecting their own seeds back in-dare I say-North America. But at the same time I wonder if that programme has been rolled out elsewhere in other countries and are you still sticking with that voucher system now? Mr Lowcock: I was there in January and
Harry Potter OBE, as he is, has moved on actually but the programme continues,
and it has been fantastically successful.
Over the last few years Q68 John Battle: Is the private sector alive to this kind of initiative and backing it? Are you engaging them so that they drive it forward? Mr Lowcock: The private sector is the main supplier of the inputs, delivering services sometimes directly financed by the government. I went in January to visit one of the main fertiliser providers, which is a private sector company and also one of the seed distributors and pushed them on exactly the set of issues that you pushed them on. In lots of countries market development and broadening the number of private sector actors is still a big issue. In too many countries there are one or two suppliers who have largely cornered the market and that is something we need to keep an eye on. Q69 John Battle: Finally, a last question about the research. I am massively keen on research and think it is really important and should not be undervalued, and the strategy is there, but I am trying to get my head around at what level and the joining up of research. By that I mean will it be working with-of course at international level there is the whole new green revolution questions that do raise questions about biotechnology and the new sciences and they are important and difficult and deep questions-ministries in governments, working at local government and village level projects. In one of the reports you said that you had used policy analysis to reduce the negative impacts of agriculture growth and the research would be used to ensure that poorer farmers are not left behind in the changes, and I just wondered how do you knit the research together to make sure that it is not just at one level of a generic report and they are all arguing about biotechnology and the big green revolution, but in the meantime some farmer in the back end of Ethiopia does not get a look in really. So how will you do that? Will you have staff on the ground doing the research? Will you get the universities and centres of excellence engaged and pay them through DFID? Will you get governments to do it and how will you collate and pull it together in a way that knits the base to the superstructure, as it were? Ms Shafik: About half of our agriculture research funding will go
through something called the Consultative Group for International Agricultural
Research (CGIAR), which is a multi-country consortium which has huge research
centres around the world. They bring together developing country scientists and
rich country scientists to work together on research and development to
developing countries. It is a network
that has existed now for many years, which we have supported and has arguably
had huge successes. We have quite good
data on the impact that they have had on agricultural productivity over the
years with some of the key new varieties like the new rice variety that they
have developed for Q70 Chairman: First of all, the UK's own agricultural research institutions, who of course have their own agenda, claim that they have expertise which could be used and exported. Secondly I should declare an interest because I am a patron of a small charity which we visited-a project in Vietnam,-which is providing agricultural extension services in developing countries using UK research institutions and partnering the local ones. Interestingly enough, while DFID was very happy to go with us to the project at my suggestion their view was that they could not really support something like that because it was too intensive, which was John Battle's point. I am not complaining about that particular one, I understand that in a country you have to make your own priority decisions, but it did concern me slightly because it seemed to be very practical; it was exactly reaching the people on the ground and improving the quality of their agricultural output by giving them advice on imports and, if necessary, providing a subsidy. I actually had to hand over an envelope containing used dollar bills to buy sows for the village! But the point is it is that degree of intensity if you are going to reach millions and millions of farmers. Ms Shafik: Yes. Q71 John Battle: Not to lose sight of that in Britain there is an Agricultural Research Council funded by the Department for Innovation, Universities & Skills and I wonder whether they link up and work with you? Ms Shafik: We are expanding our own
research programme and agriculture and food is one of the areas on which we
will fund research in the Q72 Chairman: I have, yes. Ms Shafik: If you soak your seeds the day before you plant --- Q73 Chairman: The Archers Kenyan style! Ms Shafik: Exactly! So if you soak your seeds the night before you increase your yields by 20 %-a very simple technique. So this soap opera had a whole series around soaking your seeds and the villain in the neighbourhood-and they thought he was brewing alcohol and there was a big row, so you can imagine! But the main thing was about getting these messages out there so that poor farmers get benefits from this research. Mr Lowcock: Just on your specific question,
Mr Battle, about support for Ms Owen: The Archers was in fact set up after the war to get scientific techniques into use. One thing I would add is that we thought quite a lot about how to structure the administration of our research programme going forwards, and as Minouche rightly says-and it is a broader point in the British economy-actually innovating the results of research into use have dogged the economy for years. We want to make sure that DFID, as well as developing countries and other development agencies, really uses the research in our policies and in our programmes. What we want to do is have researchers rubbing shoulders a lot more with the people in the department doing the policy, and we hope that we have come up with a way that we can do that through some Fellowships-people will come into the department for three, six, nine, 12 and 24 month periods working part time for us so they can keep engaged with their research institution. They can interact and go out and visit developing countries and we can have a lot more interchange inside DFID and outside with policy makers in developing countries to dynamise the impact of this money that we are putting in. Q74 Sir Robert Smith: You mentioned that the food crisis was a wake up call. Where do you think the radar was broken that did not realise that agriculture was going to be a fundamental for human existence? Ms Shafik: I think it was one of those
things where you had a confluence of events, one of those "perfect storm"
situations, and it was a confluence of four events, each of which on their own
would not have caused a food crisis, but it was the four coming together. It was the fact that you had droughts in many
key countries, like Q75 John Battle: From rice to meat. Ms Shafik: Exactly. Q76 Sir Robert Smith: Looking at the impact on poverty reduction and your analysis of it, you have come up with a global figure of DFID lifting at least three million people permanently out of poverty every year. How confident are you on the accuracy of this figure, given how many variables must be involved in reaching it? Ms Shafik: I think it is an estimate based on a well respected piece of research on the impact of aid on growth and then growth on poverty. Would I bet my pension on it? Probably not! But is it a serious piece of research which is a plausible estimate, and to be frank we looked at the numbers and used the most conservative possible estimates and recent revisions of that show that you could estimate a higher number. But I think we have done it in a conservative ways so that the numbers are reasonably possible. It is very variable, as you imply, to many things; it varies in terms of what you do with the money in country, whether you spend it multilaterally or bilaterally; whether you are looking at the average impact of our expenditure versus the marginal impact of our expenditure. So there are many other things we could look at. We have asked our Chief Economist to look at this estimation technique again because we use this Collier/Dollar model also to decide how we allocate aid across countries because we want to do it as efficiently as possible and get the maximum poverty reduction per pound we spend. So we are doing a bit more further research on that. I think it is a credible conservative estimate of the impact of aid. Q77 Sir Robert Smith: In your written answer you talk about how the estimates are used, and "combining these two relations allow us to estimate for each country the number of poor people". In your answer to us on how you reach the conclusion would it be possible again to follow up with more in writing to break down those figures, rather than saying, "This is the method we use", but maybe give us the breakdown of the calculations so that we can see how it is derived? Ms Shafik: I could, although I have to confess that my confidence in the estimate gets less the more disaggregated it becomes because it then very much depends on country specific circumstances. Chairman: Paul Collier also says-I
think his figure is that where the government gets more than 16 % of its income
from aid diminishing returns set in-the example of Q78 Sir Robert Smith: When you reach the diminishing return do you switch? Do you use that calculation to look at, "If we put more money in here it is going to be a diminishing return and we have a finite budget." Ms Shafik: The model is driven by two
key variables, which determine when you get to diminishing returns. How many
poor people the country has-so the fewer poor people the returns diminish. Secondly, how good its policies are-so in countries
with better policies you get much bigger returns to aid; countries with bad
policies you get lower returns.
Countries like Ms Owen: Perhaps I could add that we
do not use the model in a completely mechanical way when it comes to allocation
between countries-that is the starting point.
But one important factor that we also look at is who else is aiding that
country and how important is the Q79 Chairman: What if we had not given aid? The point that gets made is that if aid is compensated or providing growth, but if it is growth in a country that actually has negative growth you do not get an absolute pay-off. Or, as Bob Zoellick says, the current crisis in food has knocked 70 to 110 million people back into poverty that you could argue on your model you permanently raised out of poverty. So do you not look at what would have happened if the aid had not been there? Mr Lowcock: It is quite a difficult
question to answer because obviously you can only gather evidence on what has actually
happened. One of the techniques we have
is a with project tool and a without project tool and we do try and use
that. We would not want to overstate our
ability to forecast what would happen in circumstances where we would just be
predicting an alternative future rather than able to observe evidence, able to
observe things. I guess the other thing
to say in response to Sir Robert Smith's question is we have tried over the
last few years to compensate for the observable trend that small countries have
tended, relative to big countries with a lot of poor people, to be over-aided
and that is why the fastest growing programmes we have had have been in places
like Ethiopia, which has a lower aid to GDP ratio and so does not quite have
the same problem as the one to which you are alluding that Sierra Leone
has. And the same in countries like DRC and
Q80 John Battle: Turning to the topic of governance, a theme that DFID has increasingly strengthened and developed in recent years. You have the Governance and Transparency Fund and I want to ask you about the reasons for the delay in allocation of the funds. The funds have been increased to £130 million. Is it getting enough? There is a list on your website of all the projects approved for the funding but no indication of the sums allocated or the timetable and I wonder whether that kind of detail could be amplified-not necessarily now-to make sure that there is some energy and drive behind this programme. I would be interested to know how much the Fund Managers, including KPMG, are paid for their work; and how the projects will be monitored and the impact assessed because I think it is a key part of the work of the department you referred to and I think good governance has been an area we have neglected in development. Ms Shafik: I should just note that the Governance and Transparency Fund is a very important part of our work but it is just a small part of what we do on governance, which is now the kind of major theme for our work. Our funding for governance has gone up from about £85 million in 1997 to over now £322 million and we have 200 governance professionals in DFID-it has become the largest professional group in DFID because it permeates virtually everything we do in the education sector and the health sector and in public financial management. The Fund is up and running and has made the awards to funding to civil society and Sue can say a bit more about how it is actually running and being allocated. Ms Owen: Of course, one issue here was
the success really in attracting applications.
We had 272 individual proposals worth collectively £770 million and not
just from the Q81 John Battle: And the follow-up for the monetary impact assessment that will emerge? Ms Owen: That is what we are setting in place with the civil society department here; so we will have annual reports and follow-up there. Q82 John Battle: What I am really asking is it be made public so that others can work from it, because I would be interested rather than just seeing a topic title of the kind of action that is going on and how that can be applied elsewhere. I think I am now looking at DFID as a possible development agency in my own constituency as well as in Africa, if you get my meaning. But some of the work that has been done elsewhere can really replicate in tackling the challenges of poverty in our own neighbourhoods because of the methodology. Ms Shafik: Yes. Q83 John Battle: So if we could get that detail out as well as just paying the money across to others to do. Ms Owen: Of course. Q84 John Battle: If I could raise another theme and it is a theme that I think in politics we have neglected particularly looking at the cruelty of the history of the whole of Africa, perhaps we as governments here tend to relate to governments elsewhere and not to politics. We talk to those who are in power and not those who are struggling to get power and we have been a bit mono-focal, if I can put it that way. We have neglected oppositions, if we are deadly honest, and the multi-variety of what politics might be, ie it is not just presidents and prime ministers but could be a range of people, and I am keen to try and assert that parliaments might be important and that the range of those amorphous bodies should be taken more seriously. Last year DFID's view was that there was not much to be gained from stand-alone programmes with parliaments in developing countries. What I mean by that-and if Hugh Bayley were here he would certainly assert this-is that parliamentarians meeting parliamentarians might be a good thing in its own right and not us as parliamentarians just meeting presidents and prime ministers and governments, but we compare notes at the local level of what MPs do, how we should be accountable-and, yes, it includes rows on expenses and all that stuff, they are an important part of the agenda of how we are democratically available and accountable. I do not think we are having those conversations. There is no reference in the Annual Report of DFID to that work of parliamentary strengthening. I think there is £14 million in the budget for it. Are you (a) the appropriate person to just do it on your own or (b) should other bodies in Parliament be involved or should the Cabinet Office be beefing that up as an approach of inter-governance? How can you have a G8 on the one hand if the parliamentarians do not know what they are doing and it is all top-down? Can we really champion good governance by bypassing parliamentarians? Ms Shafik: I think it a
fair criticism that in the past we have been too focused on governments in our
governance work. We heard that message
very clearly in the evaluation that was done of budget support where the
criticism was "you are so focused on getting the government to allocate its
budget in a more pro-poor way that you have failed to look at the other
accountability mechanisms." I think we
have gotten better on that. DFID has now
funded 30 parliamentary strengthening projects over the last 10 years in
countries like Ms Owen:
Certainly when I went to Mr Lowcock: As Minouche
says, we accept your point that we should have maybe got on to this faster and
do more of it. We are trying to address
that. I think the Chairman had an
exchange recently with the Secretary of State on support to parliamentary
committees in Q85 Chairman: His bold claim, I recall, was that if you just funded him effectively you could scrap the aid budget to Nigeria altogether! Mr Lowcock: He said that to us too. It is a bit more complicated than that but they certainly do have a very important role which we need to recognise. We are starting to see the impact - this is the important point for us-of strengthened institutions. I think it was a very important set of decisions that President Kikwete took early in his tenure in Tanzania of firing people who had been identified through a process led by the Public Accounts Committee in the National Assembly in Tanzania and that sent a big signal, so we have watched that and we will invest more in those sorts of institutions. Q86 John Battle: I think it is a new area and in a sense the exchanges at civil service level are excellent and strengthening capacity in somewhere like Malawi is important. There were 12 people around a table and four said to me that many people in their department would die of AIDS, top highly trained people and they were begging us to send trained, skilled bureaucrats to help, but I think there is another level of operation that is more difficult and that is perhaps how to say to civil servants they do not always understand the details and the pressures of politicians at the local level and nor do we; it is kind of an emerging science. I do not think we have got a perfect democracy in Britain. I think we are at the growing end of it basically. We are in a new phase of trying to emerge into democratic structures. I am not sure who does it and who should lead it and I am glad that DFID is in there pressing it. If I may just on a discursive note say that I was invited by the Foreign Office after I left to take Muslim councillors from different parties involved in local government to Indonesia because they were discussing how to set up local democracy and they wanted to know how a Muslim could reconcile being a good Muslim and going to the mosque on Friday with being a councillor and doing the best for value for money at the local level. It was a fantastic experience for the people from Britain that went and the good news was that the two or three that went really became great councillors in Britain as well, so it strengthens democracy, accountability and governance at both ends. The Foreign Office had hardly any budget for it so do we go to DFID for it? Should it come out of the Cabinet Office to back it up from a general budget of supporting international best practice in strengthening institutions? I think we are at the very new end of doing this. Otherwise we are going to be caught between brilliant people meeting in the bush, participatory democracy around a tree in Ghana that I can bring back to my constituency to work on community development, but at the same time we have missed out the whole of the institutional structures of local government, regional government, national government and parliament. I just think that it is a new area to move into and I hope that you will promote it throughout Whitehall not just in your Department. That is what I am saying. Ms Shafik: I hope what we learn from this funding that we are doing with the Westminster Foundation for Democracy will teach us a lot about how to do this well. I suspect what you are saying is exactly right which is that peer-to-peer learning is quite unique and I suspect that we civil servants are pretty bad at understanding the pressures on politicians. Q87 Chairman: There are a number of different routes by which parliamentarians are being involved and when we met Bob Zoellick, he said he wanted the World Bank to do more on the constitutional problem with the Parliamentary Network for the World Bank. They are trying to resolve, but it would be good if these things were at least aware of each other and co-ordinating with each other otherwise they will be cutting across each other. Ms Shafik: We have just launched an accountability fund jointly between DFID and the World Bank to look at governance and to do country-level diagnostic work on what the governance issues are in different countries and so we will be working hand-in-glove with them on this agenda. Q88 Chairman: Can I turn to a different issue altogether which is the role of the CDC and the relationship between the Department and the CDC. If I am honest - and I may be wrong and you will challenge me-the impression I get is it feels as though the Department has parked it over there and said this is our private sector job and although it is owned by the Department and accountable to the Department, one does not get the impression that there is awful lot of day-to-day interaction. There is a good story in one sense-increased profits from £375 million to £672 million and net assets increased by 33 %, there is a lot going on. But there are also questions being asked about what its role really is, what its development effect is or whether it is just another national institution that happens to be owned by the Secretary of State operating in the market with some pretty loose development objectives. They are not very tightly constrained. What is the relationship between you as officials and the CDC on a day-to-day basis? Ms Shafik: I should say that one of the things that surprised me when I took this job is how much time I spend on CDC because it had not been on my radar screen! However, Mark has been the primary interlocutor. I should just say that part of the philosophy of the restructuring of the CDC was to get government out of the day-to-day investment decision-making because, to be honest, there was a lot of official and political intervention in their investment decisions which resulted in very bad investments and huge losses, so what we wanted was to get to a situation where we had a clear policy direction of the CDC embedded in what we call their investment policy and then we would get out of the day-to-day decision-making but we would hold them very tightly to their investment policy, which currently holds them at 70 % of their investments having to be in low and middle-income countries and 50 % of that having to be in Africa and South Asia. We have just had a whole series of discussions with them over the last few weeks because we want to tighten the investment policy even further to press them to go into even more frontier and difficult markets because we think they have done a pretty good job. As you have said, their results have been outstanding. They have gone from being worth £1 billion to £2.6 billion in just a few years which is quite remarkable, but the level of interaction on that investment policy has been-what is the polite term-we have had a vigorous and frank exchange, would be a fair way of describing the conversations that we have been having with both the Chairman and the Chief Executive. Mark, do you want to add anything? Mr Lowcock: I guess there
are just two more things in response to your question, Chairman. The first is about the way we structure the
on-going discussion with CDC. The core
structure is that we have a quarterly meeting with them where they report to us
on progress against a set of objectives that the Government has set and which
Minouche has outlined and issues that have arisen for them over that
period. That is a meeting that I take
with the Chairman and he has the Chief Executive there. I have a team from DFID and also DFID is
supported in our relations with CDC by the Shareholder Executive which is Government
body sitting in the Department for
Business Environment and Regulatory Reform these days, which advises Government
on its shareholdings in companies, and they have expertise in doing that. That is the structure of the dialogue. The Secretary of State obviously also sees
the Chairman from time to time and when we have got issues to resolve then
others are involved in resolving those as well.
The other thing you asked about was the development impact and obviously
we could assess that in a number of different ways. One is if we try and look at some take on the
overall economic impact that CDC through its investment can make on poorer
countries, we can look at things like Celltel which is the biggest provider of
mobile telephony services in Q89 Chairman: And for which they were criticised of course by NGOs because they did not think it was appropriate. Mr Lowcock: And we disagree with that.
We think that development of the whole of the country's infrastructure
is an important thing for countries to do and we want to do that and we think
it is good that CDC can contribute to that.
We also ask CDC to be a model investor in terms of their business
principles, their ethics, their dealing with labour standards issues and
environmental standards. One of the
things we flagged up in the Annual Report was this investment they have in
Tanzania Tea Packers, Tatepa, which is a fair trade business, and CDC through that investment have contributed
to the financing of clinics and text books in schools and the construction of
schools and so on. They have another
investment in a rubber plantation in quite an insecure area in northern Q90 Chairman: You have given us good examples there and you have said to them go away and do it and these are things they have done and you are happy to report back that you think they are beneficial. Do you either here from the UK or in country ever refer to possible development or investment opportunities to CDC and, if you do, presumably it is entirely on the basis of "will you have a look at this", but it is their decision? Would that be a fair description? Mr Lowcock: Yes, just to
give some examples, I had a discussion recently with the Minister for Energy
from Q91 Chairman: That is how its predecessor got into trouble in the first place. Mr Lowcock: That is exactly right and the predecessor lost at various points hundreds of millions of pounds. We believe the framework we have set is the right one but of course yes we do pass on information when we get it. Q92 Chairman: A final point on its assets-it has a huge amount of cash. We have asked you about that and you have given us your view on it, but given the starting conversation we had about where the resources are going to come from for development, would either selling off CDC or getting a return to the Department to fund mainstream development be a potentially valuable option? For one thing you could sell it off and get a one-off take or alternatively you could require it to pay a dividend to the Department, which you do not do at the moment. Mr Lowcock: Perhaps I can say a couple of things about that. Firstly, the Minister, Gareth Thomas, in the Westminster Hall debate on this made clear that the Government does not have plans to divest CDC but that the Government does have plans, as Minouche said, to very substantially refocus on the poorest countries. We think the mission is not complete there. We do as part of the regime that applies to capital charging of assets that every government department holds in fact charge CDC for the asset base they have and that is a charge that appears through the annually managed expenditure in the Department's Budget and Accounts and which we report. You are right to say that if we wanted to we could also take a dividend. At the moment the CDC are holding something like £1.4 billion in cash but they also have forward commitments of investments that they are signed up to do which largely absorb those resources so there is a balance to be struck. What we do not want to do is provide them with an incentive to run down their cash faster than they think would be commercially sensible by picking dud projects. We are trying to manage this set of things but the issue you raise on should we take a dividend, as it happens, is quite a live issue, and I have had a discussion within the last month with the Chief Executive about that. That ultimately would be a matter for the Government on which to take a view. Q93 Chairman: It might demonstrate a direct development benefit and clearly there is an ideological exchange where some NGOs, and it would not be unfair to mention specifically Christian Aid, disapprove fundamentally of the CDC, but again if you were getting a dividend for development it might just make a difference to the attitude. Ms Shafik: Two quick points on that. Of course technically speaking any revenues will accrue to the Treasury rather than to DFID so there would be a bit of an issue. Q94 Chairman: I guess there would not be much point unless you had a stake. Ms Shafik: Exactly. To reinforce your point, there was a similar issue at the World Bank and they had very large profits one year and the President at the time decided that those profits from its private sector arm would go to pay for IDA[9], which funds soft funds to low-income countries. It is a good example of doing exactly what you are saying. Chairman: Thank you for that. I think we have two more topics. Q95 Sir Robert Smith: Just one more thing on the CDC, presumably the whole world economic climate is slightly changing and therefore the figures need to be looked at quite cautiously. Secondly, presumably if they focus more at your behest on poorer countries then there will be a higher risk to their investment and therefore their economic return will change? Mr Lowcock: I think we will see at the end of the year what impact the market turbulence this year has had, but I think there is some evidence to suggest that in some markets at least your forecast might well turn out to be right. They have had a spectacular four years and so it would be very surprising if they could sustain that for ever. Sorry, I have forgotten the second question. Q96 Sir Robert Smith: You are trying to refocus them on --- Mr Lowcock: Higher returns,
yes, and I beg your pardon. We do not
know if that is true or not actually.
Some of their best realisations have been in the poorer markets. The Celltel realisation was spectacularly
successful. We debate that issue a lot
and they worry that that might be a problem but firstly the Government's
rationale for holding CDC is to invest in the poorer markets and secondly it
will be up to them to make those investments successful ones and their
co-investors will share those goals. The
fact that Ms Shafik: In terms of Africa's performance the recent IMF projections of the effect of the economic turmoil on Africa, particularly the oil price shock, show that oil exporters in Africa will grow by eight %, so they are going to do well, but even the non-oil exporters are expected to grow by five %. Q97 Chairman: But that is not having a very good effect on the poverty figures in Africa. Ms Shafik: I think the story varies a lot by country. Q98 Sir Robert Smith: On the efficient use of resources, the issue we come back to quite often is our concern about the staff targets and the impact on delivery. As you are moving into more fragile states, surely in a way to get effective outcomes you possibly need more staff rather than fewer staff? Ms Shafik: It is certainly something that we are struggling with and it is part of the reason why we are withdrawing staff from some of the middle-income countries to put them in fragile states. By the end of the CSR period we will have 60 % of our aid in fragile states so it will become the core business of DFID. You are quite right to say that we need more staff in those situations because we are augmenting government capacity and we are dealing with the governments that have weak capacity. We are getting that additional staff both from good-performing countries like the Tanzanias of the world, the Ghanas of the world, who are doing pretty well, where governments have more capacity now and we can run our aid programme with fewer DFID staff, and also by shifting people out of middle-income countries and putting them in fragile states. That is broadly how we are coping with it. Ms Owen:
One of the things we are doing for the
CSR period which we have not done in the past is to ask our directors to be
more systematic about planning the sort of workforce that they need. Looking forward we cannot afford as many
staff as we have at the moment. We do
not have a headcount target but we have a budget constraint, so in setting out
their frameworks for the next three years and the admin allocations that we
have given them, we have asked directors to look not only at the number of
staff they can afford but what are the kind of people they need and what kind
of skills they need, not just the hard skills such as whether they are an
agricultural expert or governance expert, but skills such as whether they are good
at influencing people, whether they are prepared to work in difficult
places. When we were doing our
allocation of administrative resources we did not inflict equal pain
everywhere. We tried to make deeper cuts
in the policy and corporate functions, with some exceptions, and less deep cuts
in fragile states, so we are looking to cut proportionately more in somewhere
like Q99 Sir Robert Smith: On some of the figures we have the technical notes state that there is a target to reduce staff appointed in country by 124 from 1,162. The Annual Report gives a target to reduce staff appointed in country from a March baseline of 1,162 to 950 which will be a reduction of 212 instead of 124. Earlier in the report the staff appointed in country is given as actually being 918 in March 2004 and 834 in March 2008. If there are fewer people in country why has the baseline been set higher than the actual? Ms Shafik: We were not given a target for staff appointed in country by the Treasury, to be honest, that was a self-imposed target which we overshot and over-delivered on, and that is why it looks a bit funny. Ms Owen: However you are right to spot that there was a mistake. The figures this year are the correct ones and the figures last year were wrong, so it is good that you keep us on our toes. One of the reasons we wanted to put in a target was to help reassure the Treasury that what we were not going to do was to cut home-based civil servants and just increase the numbers appointed locally abroad. I think it is worth saying again that the reason we have staff appointed in country is not because they are cheaper; it is because they are better than us at knowing what will work in their particular countries. Q100 Sir Robert Smith: But also do they not have an important role of inter-relating with people in country and leveraging other activities to reinforce what we are trying to achieve. Ms Shafik: Absolutely, as well as language skills and the ability to operate in environments that we cannot. Ms Owen:
Interestingly, we have done a bit of
work looking at our staff appointed in country workforce and over the years
they have moved up the grade mix. We
have really quite good careers for staff appointed in country. They are not just doing low-skilled jobs;
they are doing really good adviser and programme jobs. Going forwards with our admin constraints we
want to encourage more policy development in country and to feed into the
process in the Q101 Sir Robert Smith: So given that the target is 950 and given all staff in country are an asset, why are you not up to your target? Why have you got fewer people in country than you think you need? What is the barrier, is it a recruitment problem or is it a management problem? Ms Owen: The 950 was a target set a few years ago. Of course some of the fall-off in the numbers of staff appointed in country is because we have closed offices, so we have probably closed more offices than we anticipated in March 2004, and that will account for quite a bit of that mixture. We have also done some efficiency work in for example reducing the number of drivers and in some cases we have out-sourced that kind of function rather than doing it in-house, so I think there are quite a lot of things going on there. Q102 Sir Robert Smith: When you outsource you are still spending money on the function. Ms Shafik: It appears on our administrative budget but it no longer counts as staff. Q103 Chairman: One of the big advantages that DFID is offering countries is technical assistance, and indeed when we were doing our sanitation and water report we identified that DFID was spending a huge amount more money on supporting sanitation and water but not actually increasing significantly the number of technical staff. It is difficult to believe, to be honest, that you are not facing significant constraints on what you can do on that basis. There are two ways of doing it. One is to say up-front and honestly we cannot deliver development as effectively as we would like unless we are given a bit more space or I suppose you could say we can get round that, whether they are drivers or very big specialists, by sourcing them in another way. Of course they would then be described as consultants and you would get hit on the head for spending too much money on consultants. I suppose they could be part of budget support where there is an agreement within the budget support to include the employment of technical assistance in the developing countries' staffing levels, but if that happens are you sure that you maintain the degree of control that you would require? I do not know which of those options you would be minded to pursue. Ms Shafik: It is a challenge for us. Our staff are very pressed, they are working very, very hard. I think the way we are coping is we are trying very hard not to take poor value-for-money decisions whereby we outsource something although it would be cheaper to keep it in house. We are trying very hard not to fall into that trap because that is just poor value for money for HMG. The way we are trying to cope with it is by changing the way we do business and to try fundamentally to simplify many of our processes so that people have fewer steps to get things done. We are also trying to do it by upskilling our staff so that we will see a rise on average of the seniority of some of our staff and trying to automate many low-level tasks. Many of the financial and HR tasks have been automated, for example our posting system, so people who are going to be assigned to a different post in the past we had a bit of HR that did all of that, now it is done in an automated fashion and managers put in the job descriptions and there is a system. Q104 Chairman: That is fair enough. Nobody would deny that it is good for you to be operating as efficiently as you can and to be a lean, mean machine. The Committee so far has resisted saying that we think that if the Government is serious on delivering on 0.7 % and all that goes with it, they have got to have a re-think about whether departments can do that effectively under the present constraints, but I am teetering on the edge of saying perhaps we should be calling on the Government to do that. I appreciate it is slightly difficult for you. You are there to deliver Government objectives and targets. I think what we need is an indication. I am taking it from what you have said that you are here and there hitting barriers in some areas. Ms Shafik: We are coping but we are struggling. Q105 Chairman: Let us leave that quote on the table! This is not a "last but not least" question, it is actually very central and a question that I feel we should address. Right across the development strategy the role of women in particular comes across as absolutely crucial and (a) if women are empowered if does more for development than almost anything else; and (b) where women are empowered it starts to improve social conditions and reduce population growth pressures as it provides that degree of social support. Having said all that, we obviously had a correspondence with you about the Gender Action Plan which you promised to publish in April and was actually published yesterday, or at least its first progress report, and we have not had a chance to look at it. Can you tell us what is in it in terms of what has been achieved and what will happen next? Ms Shafik: First I want to apologise for the delay. It was purely because of the volume of things we had to report on in pulling it together --- Q106 Chairman: Because you had some staffing constraints perhaps? Ms Shafik: Perhaps. But there are two key elements to what we are doing on gender. One is this Gender Action Plan, which you have seen our first year report on, and the second is the Gender Equality Duty Scheme, which describes what our legal obligations are in terms of gender. I will let Mark speak particularly about the programme side and maybe Sue on our own staffing but just one message from me. I think the main challenge for us on gender is that our strategy has been very much focused on mainstreaming gender and not having little gender projects but really embedding gender in everything we do, in the way we do budget support, water projects, education and so on. The risk of a mainstreaming strategy, which to be frank we have lapsed into in the past, is that mainstreaming becomes another way of forgetting. It is one of many other things people have to think about and that is what we are struggling with. Because of that we have realised that in order for a mainstreaming-based gender strategy to be successful, we have to embed it in our own management systems, so we have had a campaign at DFID that Mark has launched this last month called 'Think Women', so if you walk around DFID now there are posters everywhere that say Think Women and we have really devoted a lot of attention, including Mark being the champion of that campaign. We also have a senior civil servant in every unit who is a gender champion, for every business unit in every part of our work. For the first time this year we are going to be assigning part of the bonuses that managers get in DFID to their effectiveness at delivering our gender objectives, so every senior civil servant in DFID has now a set of gender objectives in their own performance assessment and part of their bonus this year will be determined on that basis. That is one of the ways we are trying to get traction of this mainstreaming strategy into everything we do. Let me let Mark say a bit more about how it is playing out particularly in all our country programmes and then Sue in terms of our workforce. Mr Lowcock: I think what we would say is that we have focused the attention of the organisation on this issue in a qualitatively different way to what we have ever done before and in terms of scale of activity that is reflected in the fact that the Gender Equality Action Plan itself which we published last year is 18 pages and the report which we have just given you is 65 pages and there are dozens and dozens of examples of stuff that we are doing. There has definitely been a massive racheting up of effort. We have got two bits of self-criticism really. The first is a lot of what we have been doing is about putting in place analytics or processes which when they come through ought to deliver results, but what we are saying to our colleagues now is we do not want to hear so much about the bits of work you are doing; we want you to be able to answer the question "show me the women and girls whose lives have been transformed in the countries in which you work by all this activity". That is really the test. Then they come back to us and they give us dozens of examples of the sort that we have put in the Annual Report and we have put in the report on the Gender Equality Action Plan as well. What we then say to them is, "You have told us a story about how for tens or hundreds of thousands of women we are making a difference. What we want to do is to scale that up. We want to be able to tell a persuasive account of how for millions or tens of millions or hundreds of millions of women in developing countries we are contributing to transformation," and that really in a way is the test that we will be applying to ourselves, and I guess you will. There is a very helpful NGO analysis of this which is holding us to account as well which in future years we will want to apply. This is obviously a very difficult set of things we are dealing with because the place of poor women in a lot of countries in which we work is very difficult. There are social issues, economic issues, political issues and this is not a set of things that it is always easy for outsiders to play a prominent role in, but it does seem to us that unless the position of women in many societies is dramatically improved the MDGs will not be met and that is the fundamental driver for us. Q107 Chairman: We found two strangely conflicting examples when we were in Ethiopia. First of all, we went to a charity for women and children where we were subjected to four presentations by men, where tea was served by a woman who turned out to be its finance director and had a PhD from Oxford. I have to say we also went to another project where a very feisty lady in charge had got money to set up a shower project for women because it was a good idea for women to shower. The women came to the conclusion that it would be a much better idea to sell showers to the men and use the money to sue them for assault and file for divorce. At the other end of the scale, we saw a really excellent health extension service in a highland village where local government were training young women taken from the village and then sending them back to the village to train people on sanitation and water and the issue about latrines and hand washing and all those kinds of things. Interestingly enough, young women of 19, 20 and 21 were lecturing their male elders about these things and the men were taking it in good part and actually doing it, so it demonstrated the two opposite ends of the scale. I take Mark's point that it is very difficult, and Afghanistan is an extreme case, but surely we have to have the conversation that says it is your country, it is your decision and you may have your culture, but all the world's experience tells you that when you empower women you secure development and if you do not you hold it back? Mr Lowcock: That is
exactly the conversation we need to have.
I was in Ms Shafik: I might ask Sue to say something briefly about our own staffing in DFID if that is of interest. Ms Owen: My story equivalent to yours is when I visited Juba in southern Sudan and went to visit the Minister for Social Affairs, I went with the head of our office there who is a woman and two of our Scandinavian staff, and when we went in he asked where were the men, and it was about 15 minutes before he realised we did actually know quite a lot. In DFID now we are 50 % men and women for the workforce as a whole. It is not true that women are bunched into the lowest occupations as it is in the Civil Service as a whole, but it does fall off a little bit in the adviser grades. At the SCS[10] level, which is where we have a target, we have met the Civil Service target of 37 % in March 2008 which few departments have, and we are seeing progressively as promotions into the SCS disproportionate numbers of women coming in relative to the grade below, so we are on a good trajectory there. One of the things that has helped is having a special mentoring scheme called Crossing Thresholds which has really helped women apply for jobs. One of the problems seems to be that certainly in senior jobs men tend to think that if they have got two of the qualities out of the seven that are asked for they will have a go whereas women think they have to have all seven before they have a go, so we have done a lot in assembling the field. It may be women do not get through the first time but that it is good to try and what we have found is that as we have persuaded more women to apply more have come through. However, in the very senior ranks there is always the law of small numbers and we are very aware that we need to keep an eye on that kind of thing. We are now extending the Crossing Thresholds programme to other groups such as black and minority ethnic groups. I am myself leading a group for Gus O'Donnell across the whole Civil Service looking at why there are not more women in number one and number two jobs. We have set up for the Civil Service as a whole some more of this mentoring kind of activity. In the Civil Service as a whole women are really beginning to get promoted now into Senior Civil Service jobs, but not into the very top jobs. I think DFID is ahead of the game there but there is never room for any complacency. Chairman: I have to say that the Committee's record is abysmal. We only have one woman on this Committee. We had two when Parliament started and it is not for want of trying but on the other hand - and after all it is important - men need to fight for women's rights for very practical reasons and that is something that this Committee takes to heart. Indeed, we do not leave it to our woman, who is by no means a token woman in any sense of the word, to raise the gender issue because I think it is important that men raise it as well. We have many more questions but you will be relieved to know we are not going to detain you to ask them all. We obviously have had written exchanges and we will continue to do so. Thank you for answering our questions and for this exchange which, as I said at the outset, we regard as beneficial. I think there are people who think that this Committee has a cosy relationship with the Department. I hope it is not cosy but I think it is constructive. We value it, if you do, and you know perfectly well if we think you are wrong or on the wrong track, we will say so and you will robustly disagree sometimes with the recommendations that we make. Looking back even over the last year, I think it is fair to say that the Committee has had an impact on some of the things that the Department has done, which is very much right and indeed I know that you sometimes wait for the Committee's view on some issues before you finalise what you do and I think that makes us feel that what we are doing is constructive. Thank you very much indeed for doing that and we look forward to next year. [1] Organisation for Economic Co-operation and Development, Development Assistance Committee [2] Official Development Assistance [3] Comprehensive Spending Review [4] By way of clarification, DFID did quote the DAC 2007 outturn figure in paragraph 1.26 of the Annual Report, but the detailed ODA tables in the Annual Report are based on 2006 figures. This reflects the fact that the numbers provided by the DAC in April are on a provisional basis and are only at an aggregate level. Final outturn gross national income is not known until June and the full sector breakdown details are not finalised until we get firm details from the DAC in September and published in December. [5] Public Service Agreement [6] Democratic [7] Millennium Development Goal [8] International Finance Corporation of the World Bank [9] International Development Association [10] Senior Civil Service |