Examination of witnesses (Questions 20-39)
DEPARTMENT FOR
INTERNATIONAL DEVELOPMENT
4 JUNE 2007
Q20 Mr Touhig: But paragraph 2.8
of the Report says that you have carried out very little analysis.
Do you disagree with the Report? Have you told the NAO that you
do not agree with it?
Sir Suma Chakrabarti: We have
shared the evaluations that we have carried out and the surveys
carried out by other donors. You cannot forget that this is a
collective effort between all donors, so you are analysing the
efforts not just of DFID, but of all donors, including our partner
Governments. We think that there is a wider body of evidence.
Q21 Mr Touhig: We can consider only
what DFID does, of course, because that is our responsibility
to Parliament. The Report also says that your engagement at local
level is patchy, and that seemed to be the case judging by your
responses to the Chairman. How on earth can you actively and effectively
be of assistance to the rural poor, if you do not actually talk
to them?
Sir Suma Chakrabarti: Well, we
do. As I said in my answer—
Q22 Mr Touhig: But is it patchy?
Sir Suma Chakrabarti: No. I think
that it is not consistent enough. It is not patchy in the sense
that no one in any office ever does it—that is not true.
Every single office has contact with the rural sector. Some have
more contact than others, and we want to make that more consistent.
However, through our programmes, we are also working with people
in rural areas. I will ask Dave Fish to say something, for example,
about Ethiopia, where we have a very strong story to tell.
Dave Fish: One of the things that
we have found in several countries—Ethiopia is one, but
Rwanda is another—is that even where growth is reducing
poverty overall, it proves quite hard to reach the very poorest,
and that is actually true in the UK as well. So one of the things
that we are pioneering and leading on worldwide is the introduction
of social protection programmes—they are almost like social
security, to use our terms. With the Governments in Rwanda, Zambia,
Kenya and Ethiopia, we are developing social protection programmes
to make sure that resources get to the very poorest. We are doing
that fully in concert with our partner Governments. To take the
Chairman's point about the politics of this, we are very aware
that democratic Governments sometimes favour their own supporters,
for example, so we are being very clear not only about what the
benefits will be, but, in partnership with Governments, about
who the recipients of those benefits will be.
Q23 Mr Touhig: That is encouraging,
but the Report also says that you do not take a consistently strong
line in monitoring the use of the support that you give and that
you do not press Governments to target the rural poor.
Sir Suma Chakrabarti: We feel
that we do. We have plenty of evidence of where we do that. The
Report cites three countries. What has happened in Vietnam has
been influenced by donors, including DFID, and Vietnam has been
a major success story. What has happened in Uganda and Mozambique
would simply not have happened without DFID country offices pushing
those two Governments. That could have been brought out much more
strongly in the Report. It is a very strong story, but it is actually
better to let the Ugandans and the Mozambiquans tell you about
it.
Q24 Mr Touhig: You give a strong
defence of the Department, and rightly so—I would expect
you to do nothing less. However, how can you defend the fact that
DFID has no strategic position on the importance of tackling rural
poverty for achieving your own objectives?
Sir Suma Chakrabarti: But we do.
Q25 Mr Touhig: I am quoting the Report.
Either you have challenged it or you have not.
Sir Suma Chakrabarti: I am telling
you that, on the joint donor concept on rural development, which
is the internationally agreed strategy, DFID was a leading member.
Q26 Mr Touhig: I am only quoting
the Report. If you disagree with the Report, you should be telling
this to the NAO. We also learn that tensions exist between your
wish to support the very poorest, which is right, and the efficiency
of assisting the most easily helped at the cheapest cost. You
go for the easy stuff first.
Sir Suma Chakrabarti: Well, we
don't. The key thing in our country programmes is trying to shift
the resource allocations and policies to favour the rural poor.
For many of these Governments, that will cost them much more.
The issue is partly political economy, which I talked about earlier,
and partly cost-effectiveness. Just as in the UK, the issue is
the same in many of these developing countries—providing
services in rural areas is more expensive per person. However,
because of the depth of poverty, we think that it is still worth
these Governments making some money available to rural areas,
which is why we push them to do that through our budget support
and other means.
Q27 Mr Touhig: But we are also told
in paragraph 2.2 of the Report that you have not tried to assess
the extent to which your assistance is reaching the rural poor.
This seems kind of basic stuff to me.
Sir Suma Chakrabarti: But as I
said earlier, we are doing that, through various surveys and evaluation
work.
Q28 Mr Touhig: I appreciate the importance
of the comments that you are making and the strength of the argument
that you are advancing, but it seems to me that whenever I get
to a specific question, you give a very broad answer. My time
is limited, and I know that other colleagues will also—
Sir Suma Chakrabarti: Shall I
give you a specific answer on Uganda, then? Because of DFID budget
support in Uganda, the rural poverty rate fell from 60% in 1992-93
to just over 30% only two years ago.
Mr Touhig: Well that is good, and
DFID should be commended for it, but the point that I am trying
to get across is that you seem to be giving just general answers.
I will finish on this point. The great
socialist James Maxton once said: "Poverty is man made therefore
open to change". You are our hope of making this change.
There is a very good book on that written by one G. Brown—he
takes over on 27 June, so you might want to read it before then.
Q29 Chairman: I should like to pick
up the point about Uganda, which you mentioned. Paragraph 2.14,
on page 14, says: "In Uganda, where DFID has been providing
budget support since 1998, government allocations to districts
had not always been clearly related to the needs of the poorest
. . . spending per head in districts with similar poverty levels
varied by more than 100%" Mr Fish, you said in an earlier
response to Mr Touhig that you were monitoring the situation in
allegedly democratic countries to ensure that certain areas were
not favoured. What do you say about the clear inequalities in
aid uncovered in Mozambique, which is dealt with in paragraph
2.19 and earlier paragraphs?
Sir Suma Chakrabarti: Shall I
deal with Mozambique and ask Dave to deal with Uganda?
Chairman: Yes.
Sir Suma Chakrabarti: There are
a number of things to say on Mozambique. First, on the pattern
of growth and poverty in Mozambique, it is the only country—apart
from Vietnam and, until recently, Malawi—where rural growth
has been faster than urban growth. A recent Government study actually
suggests that inequality is often greater within districts and
provinces rather than between them. So, the map of Mozambique
hides even deeper and perhaps rather more interesting divisions.
Q30 Chairman: But there is inequality
between north and south.
Sir Suma Chakrabarti: Absolutely
there is, and there is no doubt—
Q31 Chairman: Do you think that you
could have taken a tougher line?
Sir Suma Chakrabarti: Well we
have, and I am about to tell you about it. A recurrent theme in
our policy dialogue with the Government in Mozambique is sub-national
resource allocation, because we have felt that they have not done
enough for the northern and western areas. We have now got them
to agree to a new public financial management system, which will
allow spend to be classified down to district level. That is because
DFID has helped the Government there to think that through and
put the systems in place. The Government will therefore be able
to track exactly what spending is going to which district, which
they could never do before. The new performance framework for
budget support will have many more disaggregated targets as well,
and we will monitor those targets.
Chairman: All right.
Dave Fish: On Uganda, since 1999
the Government there have had poverty as part of the formulation
for allocating resources to districts. They probably did not go
as far as we would have liked them to go initially, because the
initial political decision was that no allocations to districts
would be reduced, so change had to be, I am afraid, incremental.
But two years ago, the Government there instituted a completely
different arrangement for allocating resources to rural areas,
which gives poverty much more weight. In 2008-09, for which we
have had a preview of budget allocations, the signs are that poverty
and need will be major factors in resource allocation across all
districts in Uganda.
Chairman: Okay, thank you very much.
On future occasions, if you are dissatisfied with a NAO Report
and think that it gives a misleading impression, it would be helpful
if you made that clear to the NAO before it comes to the Committee.
Otherwise, it makes our hearings very difficult.
Q32 Mr Mitchell: I agree with Mr
Touhig that the record is disappointing. Indeed, the records of
most of the international institutions seems disappointing—apart
perhaps from those of the World Bank and the African Development
Bank—perhaps because the effort devoted to rural areas is
not proportionate to the problems of poverty and deprivation in
those rural areas. Is that not an overhang of the old development
pattern, whereby development happens in the industrial sector,
building up a huge internationally powerful trading centre of
manufacturing that produces growth and drains the population from
the rural areas, as it did in this country and in all the dragons—that
is happening in China, although they are trying to keep them down
on the farm, by force if necessary, after they have seen Beijing?
Is this not an overhang of that development strategy, which means
that the rural areas are less important to developing Governments?
Sir Suma Chakrabarti: It
is a number of things. That is undoubtedly true, and it is what
I was saying in response to the first set of questions from the
Chairman. Yes, I would say that from the 1950s to about the early
'80s there was a massive urban bias in development policy. There
was a massive manufacturing bias and a massive urban bias, and
that did not help to deal with rural poverty. There were attempts
to integrate rural development and various other strategies to
try to address some of that, but the policies that were pursued,
such as holding down the prices of products produced in rural
areas, often did not help. That is what we have been trying to
shift, and it makes a far bigger impact than aid would on those
poor areas.
We have been trying to correct that, but
at the same time for the past 20 years we have seen a recognition
that if we wait for growth as the only way in which to deal with
poverty, a lot of people will die of disease and would not have
opportunities for education, and so we have had a twin-track strategy
to try to promote growth but also—
Q33 Mr Mitchell: Should we not therefore
be leading the other way much more vigorously than we are towards
the rural areas?
Sir Suma Chakrabarti: We certainly
agree that Governments ought to focus on the poorest—rural
and non-rural. Therefore, in our interactions with Governments
and international institutions such as those that you mentioned,
we are trying to get them to focus on poverty in both rural and
non-rural areas. You have some of the examples of what is working
in that respect in this Report.
Q34 Mr Mitchell: Vietnam stands out
as an example of what is working. The Government there seem more
concerned about rural poverty. Should we therefore place more
emphasis on giving more help to those Governments that are concerned,
on the old Yorkshire principle that: "God helps them that
helps theirsen"?
Sir Suma Chakrabarti: Our model
of allocation depends on two main variables. One is the depth
of poverty; the other is the policy response of the Government
to that. Vietnam scores well because its policy response is very
good. Its depth of poverty has, of course, declined significantly.
It will reach middle-income country status very quickly indeed.
Q35 Mr Mitchell: We face real difficulties
where Governments do not have that sense of priority.
Sir Suma Chakrabarti: Yes, that
is absolutely right. In the more democratic countries in Africa,
and in some south Asian countries, the key issues have been about
to what extent the rural poor are represented and whether they
have a voice in national decision making. That has been a fundamental
problem. In Pakistan, for example, a country that is close to
this country, we have known for 20-odd years that social sector
spending has been too low in many rural areas. We have been pressing
them for 20 years to shift allocations in favour of the rural
poor, principally through social spending, but that has proved
difficult because of representation in the provincial assemblies
and the National Assembly. Only in the last two years, interestingly,
has spending suddenly shifted in favour of the rural poor.
Q36 Mr Mitchell: Does that not mean
that we should be going more directly and immediately to the rural
areas? If you are working with the Government, as you are, the
temptation is to stay in the air-conditioned capital, is it not?
If officers are tending to spend their time as indicated in the
table—you said that it is inaccurate about the number of
days spent in rural areas—should not more officers be picking
out areas and going to them more directly and for longer in order
to help on a more continuous basis and to set an example?
Sir Suma Chakrabarti: Undoubtedly,
direct assistance has its place, particularly where the state's
capacity is very weak. For example, in certain countries in post-conflict
situations, such as the Democratic Republic of the Congo, where
the state is very weak and unable, really, to shift resources
to the right areas, direct assistance is undoubtedly the right
way forward. However, by and large, we think that the best and
most powerful way in which to help the rural poor is to shift—if
you like—and influence the political economy.
Q37 Mr Mitchell: In that case, why
do we pull the plug on projects such as the Kenya one mentioned
in paragraphs 2.23 and 2.7? We pulled the plug on a viable project,
and then it faltered.
Sir Suma Chakrabarti: Dave Fish
set up the Kenya project, I think.
Dave Fish: Yes, I was based in
our office in East Africa at about the time when the project was
established. It ran for nine years and contained arrangements
for it to become self-financing. In the end, we were unable to
reach an agreement with the organisation sponsoring the programme,
but we did put it in touch with a replacement mechanism through
a joint DFID-Danish programme of business marketing.
The suggestion in the Report, however,
that the programme was a complete disaster is inaccurate. At the
end of the day, there are strong indicators that the 5,000 to
6,000 families involved—I think that that was about 30,000
people—benefited from improved access to food, nutrition,
health and education. It was not a disaster. It was a project
that we funded for nine years. Quite honestly, it is impractical
to continue funding certain projects ad infinitum.
Q38 Mr Mitchell: Okay, but cutting
across the commitment that you say that you are developing in
specific areas and projects, actually, you are employing more
people on trendy things such as governance—whatever that
means—and fewer on direct projects. I noticed that a few
years back, in Grimsby, where there is a lot fishing expertise,
your predecessor organisation employed a number of people.
Chairman: You do not want DFID to support
Grimsby, do you?
Q39 Mr Mitchell: Not Grimsby Town.
People there with fishing expertise were
being employed to go and advise on fishing projects in, for example,
Uganda and the south Pacific. That yielded marvellous results,
because they could advise on catching, storage, transmission and
the food chain. However, there is very little of that now.
Sir Suma Chakrabarti: We are not
yet out of the project business. Our budget support is only 28%
of that for total bilateral assistance, and we still do a lot
of project work. However, the way in which we think about such
things has changed. Essentially, we ask Governments what they
think is the comparative advantage of the UK in a particular area,
and then they can think through what they want from the UK. I
gave you some examples of direct assistance, but let me give you
another one.
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