Work of the Committee in Session 2007-08 - International Development Committee Contents


2  Inquiries into Government Policy Proposals

9)  As in previous years, our activities in this Session have sought to follow the objectives contained in DFID's Public Service Agreements (PSAs). The PSA targets are largely based on the Millennium Development Goals, which have the overall aim of poverty reduction.

Trade

10)  Following on from our inquiries into Fair Trade and EU Development and Trade Policies in the last Session,[6] we have continued to press the case that international trade can play an important role in raising levels of human development and achieving sustainable poverty reduction.

11)  Our report on Development and Trade: Cross-Departmental Working was published in December 2007 and was covered in last year's annual report.[7] That Report followed up issues raised in our 2006 report on Conflict and Development in which we made recommendations on the UK's implementation of the Organisation for Economic Co-operation and Development (OECD) Guidelines on Multilateral Enterprises in relation to the regulation of the activities of companies operating in developing countries.[8] Evidence we received from the OECD Working Group on Bribery convinced us that there had been little change. We urged the Government to act on the OECD's recommendation to introduce new anti-bribery legislation in the UK. Current UK legislation makes it very difficult for prosecutors to bring an effective case against a company for alleged bribery offences. Although the UK ratified the OECD Anti-Bribery Convention 10 years ago, it has so far failed to prosecute successfully any bribery case against a company. Since our Report was published, the OECD Working Group has again criticised the Government's failure to bring UK anti-bribery laws into line with its international obligations. We hope that the Bribery Bill, which is to be introduced in the 2008-09 Session, will address these shortcomings.

Multilateral aid agencies

12)  International organisations have a critical role to play in helping developing countries achieve the Millennium Development Goals (MDGs). Multilateral institutions, including UN agencies, the European Commission and the World Bank, now receive over 40% of DFID's total budget, amounting to billions of pounds annually. We decided that it was timely to inquire into DFID's relationships with three multilateral bodies.

DFID AND THE WORLD BANK

13)  Towards the end of 2007, DFID announced a 49% increase in its funding for the World Bank bringing its contribution to £2.1 billion over three years. Our inquiry took place against the background of DFID becoming the largest contributor to the International Development Association, the arm of the Bank which focuses on the world's poorest countries. Our inquiry included a visit to Washington DC for discussions with World Bank President Robert Zoellick and other senior World Bank staff.

14)  Our Report concluded that the World Bank is a vital component in the international development system. It is a major provider of development funding, analysis and advice. Its lead is often followed by other donors and agencies. Given its profile, the Bank comes under considerable scrutiny from civil society, opinion formers and commentators. We believed that not all of their views were constructive and that some organisations seemed to have an instinctively hostile attitude to the Bank which was not always founded on evidence.

15)  However, we agreed that the Bank was not perfect. We concluded that the UK, as a major contributor to the Bank, should not only articulate a vision for its reform, but must pursue this with vigour. We believed the UK would have greater influence if DFID appointed a full-time Executive Director to the World Bank (rather than the post being a Treasury appointment with responsibility for both the Bank and the International Monetary Fund) and argued this case with officials when we were in Washington. We were pleased that the Government listened to our arguments: two days before our evidence session with the Minister, DFID announced that it would appoint a full-time UK Executive Director to the World Bank.

16)  We were also anxious to see reform of World Bank governance and concluded that adequate representation of developing countries in World Bank decision-making was not only a question of fairness, but was also one of effectiveness as greater ownership by developing countries would lead to more effective Bank programmes. We also believed that the Bank should alter the system of selection of its President to make it transparent and based on merit, rather than being in the gift of the United States. Governance issues have moved on since our Report, with announcements at the Autumn Meetings of the World Bank and IMF in October 2008 that the Bank would move to a merit-based system for selecting its President and that representation for African countries would be enhanced. We held an evidence session with the Secretary of State in November which explored these issues in more detail (see below).

DFID AND THE AFRICAN DEVELOPMENT BANK

17)  The UK contribution to the African Development Bank (AfDB) has also substantially increased. DFID's allocation to the African Development Fund (ADF)—the development arm of the Bank—doubled in the latest replenishment in November 2007 from approximately £200 million for 2005-07 to £417 million for 2008-2010. A series of significant reforms are changing the way the Bank is run, and this process has been intensified since Donald Kaberuka became its President in 2005. Our inquiry into the AfDB's work was therefore timely. It included a visit to its headquarters in Tunis where we met Mr Kaberuka, and a number of senior officials.

18)  Our Report concluded that record donor support for the AfDB offered the opportunity to make real changes to poor people's lives—but only if the effectiveness of its strategies were maximised. We praised DFID for influencing many of the most significant reforms to the Bank, but recommended that it must now keep a watchful eye on their implementation and that it should use its position of influence to push for more meaningful delegation of responsibility to decentralised offices. To assist this, we argued that DFID—now that it is the Bank's largest bilateral donor—should press for changes in the Bank's Board structure to ensure that the UK and other influential donors' leverage at the Bank is in line with their rising financial contributions.

19)  We said that the Department must be clear on how it expected the Bank to participate in climate change work in Africa. We also recommended that DFID should continue to press for closer collaboration between the AfDB and the World Bank. We concluded that the AfDB's contribution to achieving the Millennium Development Goals went far beyond its direct expenditure of development resources to encompass its role as a Bank for Africa, a collective voice for development on the continent and a regional leader. We recommended that DFID continue its worthwhile and highly creditable support to ensure the institution fulfilled its promise.

THE WORLD FOOD PROGRAMME AND GLOBAL FOOD SECURITY

20)  The UN World Food Programme is another multilateral body which receives substantial amounts of DFID funding and one which was very much in the spotlight in 2008 following the steep rises in food prices which have had a devastating impact on the world's poor. In this context, we decided to undertake an inquiry into the World Food Programme and Global Food Security. Our inquiry focused on how the UK could best support the agency in carrying out both its humanitarian work and its broader efforts on food security. We also examined some of the factors behind the food crisis. We took the opportunity provided by a visit to Ghana to go to the WFP-managed UN Humanitarian Response Depot in Accra. We also visited the UN food agencies' headquarters in Rome in May. We took evidence in Westminster from Josette Sheeran, the WFP's Executive Director, as well as other experts on food security.

21)  We concluded that the causes of the global food crisis were complex and outcomes were uncertain but that it would be sensible to prepare for higher prices in the medium term. We warned that up to 20 million additional tonnes of food might be needed to feed new groups of people being pushed into poverty by food price rises, and that as a result annual donations of around US$3 billion to the WFP might need to double to US$5-6 billion. Our view was that the WFP should clearly be identified as the lead UN agency on hunger.

22)  We highlighted that, although the share of under-nourished people in the global population had decreased, the absolute number of such people in three regions—sub-Saharan Africa, South Asia and Western Asia—had increased since 1990, even before the recent deterioration caused by rapidly rising food prices. We argued that nutrition was under-funded and under-emphasised by the UK Government, the international community and the UN system. We were shocked that DFID lacked both a specific nutrition policy and measurable targets for assessing progress in reducing malnutrition. We recommended that DFID add a new indicator under Millennium Development Goal 1 in its 2008-11 Public Service Agreement to enable its work on nutrition and hunger to be properly targeted and measured.

23)  We concluded that agencies such as DFID and the WFP must also look beyond the current crisis and address long-term drivers of food security. This would require DFID to refocus on agriculture, and ensure that its new support for research was accompanied by efforts to assist poor farmers in entering markets. We said that new technologies such as biofuels and genetically modified crops offered both challenges and opportunities to developing countries. We highlighted as positive steps the establishment of a UN Taskforce and its Comprehensive Framework for Action on food security, and the UK's proposed Global Partnership for Food and Agriculture.

THE ANNUAL AUTUMN MEETINGS OF THE WORLD BANK AND THE INTERNATIONAL MONETARY FUND

24)  It has been our practice to take evidence from the Secretary of State on the outcome of the Autumn Meetings of the World Bank and the International Monetary Fund. In 2007 we incorporated this work into our inquiry into the World Bank. In 2008, the Meetings were dominated by the global financial situation. Our evidence session took place in November and we used this opportunity also to question the Secretary of State on the UK's objectives for the meeting of the G20 later that month to discuss reform of the international financial institutions.

25)  The session discussed initial assessments of the impact of the financial crisis on developing countries and the response of the Bank and the Fund to this. We also examined the World Bank's development report on agriculture and its response to food price rises earlier in the year. We discussed progress made on reform of the governance structures of the Bank as well as the Bank's proposals on climate change, including carbon financing and carbon markets, and the proposed Strategic Framework for Climate Change and Development. We will return to many of these climate change issues in our forthcoming inquiry into Sustainable Development in a Changing Climate (see below).

DFID's New Water and Sanitation Policy

26)  Water and sanitation are essential to development, underpinning and impacting upon other issues such as health, education, conflict and economic growth. The Millennium Development Goals on water and sanitation—which DFID is focused on achieving—aim to halve the proportion of people without sanitation and water by 2015. On 1 May 2008, our 2007 Report on Sanitation and Water was debated in Westminster Hall.[9] DFID's new Water and Sanitation Policy was launched on 28 October 2008.[10] This commits £200 million of DFID funding over the next five years to help up to 25 million people across Africa gain access to safe water and basic sanitation. As well as providing crucial support in Africa, the new policy will help up to 30 million people in South Asia to gain access to sanitation.

27)  At the policy launch event, tribute was paid to the Committee for the role our Report had played in formulating DFID's new policy.[11] We were pleased that DFID had taken note of many of the Report's recommendations in its new policy, particularly the focus on sanitation and water resources management. It was encouraging to hear that, under its new strategy, DFID will work harder to integrate sanitation with health and education programmes, a step we strongly recommended. During the launch event, the Chairman was asked to comment on the new policy, alongside international experts in the sanitation and water sectors. He highlighted key messages from our Report, including the importance of matching human resources and expertise within developing countries—and within DFID—to the Department's expanded funding for sanitation and water. A lively debate followed in which over 100 representatives from the sectors, including from developing countries, participated. We saw at first-hand the challenges of providing water and sanitation in Asia's largest country, China, during our visit to the country in December 2008.



6   Seventh Report of Session 2006-07, Fair Trade and Development, HC356; Fifth Report of Session 2006-07, EU Development and Trade Policies: An update, HC 271  Back

7   Third Report of Session 2007-08, Work of the Committee in 2007, HC 255, paras 8-10 Back

8   Sixth Report of Session 2005-06, Conflict and Development: Peacebuilding and Post-conflict Reconstruction, HC 923-I, paras 105-119 Back

9   HC Deb, 1 May 2008, Cols 141-174 WH Back

10   Water: An increasingly precious resource. Sanitation: A matter of dignity, DFID, October 2008 Back

11   Sanitation and Water, HC 126-I, Sixth Report of Session 2006-07 Back


 
previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2009
Prepared 21 January 2009