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UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 180-i House of COMMONS MINUTES OF EVIDENCE TAKEN BEFORE International Development Committee
DFID and
MR MICHAEL FOSTER MP, MR ADRIAN DAVIS and MR SCOTT WIGHTMAN Evidence heard in Public Questions 142 - 186
USE OF THE TRANSCRIPT
Oral Evidence Taken before the International Development Committee on Members present Malcolm Bruce, in the Chair John Battle Hugh Bayley John Bercow Mr Mark Hendrick Andrew Stunell ________________ Memorandum submitted by Department for International Development
Examination of Witnesses
Witnesses: Mr Michael Foster MP, Parliamentary Under Secretary of State for International Development, Mr Adrian Davis, Head of Office, DFID China, Mr Scott Wightman, Director, Asia Pacific, Foreign and Commonwealth Office, gave evidence. Q142 Chairman: Good morning, Minister. Thank you for coming in. For the record, I should be grateful if you would introduce your team, although for those of us who went on the China visit, Adrian obviously needs no introduction. Mr Foster: Thank you, Chairman. On my left is Adrian Davis, Deputy Director
of North and Q143 Chairman: You will not be surprised, Minister, to hear that we were more than a little disconcerted to see a ministerial statement this morning on The UK and China: A Framework for Engagement - this document here. It would be fair to say that the Committee was a little gobsmacked to find that, at a time when we are the taking final evidence on the role of DFID in the changing relationship between the UK and China, the Government felt it necessary to publish it on the very day that we are taking evidence from you, and that it comes from the Foreign Office and has the Prime Minister and the Foreign Secretary but not the Secretary of State for International Development featured in it. Can you explain to us why it was necessary to launch this document at this time and specifically today? Mr Foster: In terms of getting the
document to you, we were trying to be helpful to the Committee because the
written ministerial statement was going out today and the Foreign Secretary was
doing the launch later today in Q144 Chairman: I suppose that is an explanation but, as you can appreciate, it is not very helpful if the Committee have not even had a chance to read it. The fact that you have got us copies and we have not found out after the meeting I suppose is marginally better, but it is not entirely satisfactory. The point we need to establish is what it means in terms of the UK relationship. The key points are not new. So, what is new and specifically from your point of view, can you give us an indication of what it means for DFID's engagement within this policy and any recommendation this Committee may choose to make? Mr Foster: In terms of DFID's
engagement, many departments have contributed to the overall UK-China
strategy. It is a strategy that is led
by the Cabinet Office, the statement was delivered by the Foreign Secretary
with a view to the relationships that the Q145 Chairman: I am grateful for that. Clearly, the Committee has its own deliberations to make and, if not necessarily united or unanimous in the view, we are clear that it is very important for the future strategy that the UK takes the right decision in terms of ensuring that what we do will work and will deliver the kind of engagement with China that the strategy appears to require, but has not necessarily always been thought through. In that context, can we perhaps be reassured, because whatever the difference in the shape of what we might recommend, the indication we had was that DFID would continue to have a presence - a not insignificant presence - in China after 2011, that this is still the Department's current thinking and within that context, is there scope at least for there to be some funding of some of the programmes that we certainly observed as being very successful and to have created a very positive sense of partnership? Mr Foster: I am genuinely interested
and looking forward to reading the findings from the Committee's
conclusions. We have made it very clear
that we are willing to look at what you see.
Obviously, there are arguments about the nature of the bilateral aid
programme that we currently have with Chairman: That is a very fair answer. Just to put it on the record, this Committee makes its recommendations on the basis of the analysis of the evidence. We have quite lively discussions, but they tend not to be entirely party political; they are based on the evidence and what we believe is the right way forward. I think that is a characteristic of this Committee. Q146 John Battle: We have not had a lot of time to go through the document but from what I have read I would raise an eyebrow about the "down playing" of the role of DFID. Much of the work that DFID is doing, whether it is partners in health, and certainly climate change, the working relationship with China is led by DFID and the document does play up the climate change and sustainability issues, but does not mention DFID. When it says that the UK is a key strategic partner of China on climate change and sustainable development, I have to say some of the best work of DFID in the world is going on in China. Is the relationship not quite right? We spent a lot of time separating DFID out from the Foreign Office, for good reasons, and I thought that, having separated them out, we have now got back to a good working relationship. I am not looking for a re-co-option of DFID into the Foreign Office, but where are we up to in terms of the document? I would just like to express and reinforce a little bit of disappointment that the Secretary of State for DFID's name is not on the document on China, given the strength of our relationship with China through DFID. Mr Foster: All I would say, Mr Battle, is that the document is one that all departments with an interest have contributed to, led through the Cabinet Office, so not every secretary of state is listed and named. On the issue you raised about climate change, DFID has an international presence that many other departments do not have - such as the newly-formed Department of Energy and Climate Change - and therefore, other than the Foreign Office having an international outlook, DFID, because of the nature of its relationship in China, has been able to channel DECC and climate change issues and have a discussion with the Chinese authorities, because it has a more internationalist outlook and, without wishing to be too boastful, because DFID is a very trusted partner with the Chinese authorities. Q147 John Battle: So, is DFID to lead on that issue in China? Mr Foster: Certainly, with the
programmes that are already in place, we are committed to continuing with
those. Whether we lead on climate change
in the future, or whether climate change should be an issue for DFID with its
relationship with Q148 John Bercow: I share John Battle's sense of disappointment that DFID is not referred to in the FCO document and there is no imprimatur from the Secretary of State for International Development. It does seem slightly possessive, some might almost say an imperialistic attitude by the Foreign Office in terms of territory. It would, frankly, be a basic courtesy to include some reference to DFID, not least in the name of joined-up government. So it is a pity, notwithstanding what Mr Foster has just told us. May I ask you, when did DFID know that the Foreign Office was contemplating publication of this document in January? Mr Foster: The response to the input into the UK-China strategy from DFID's point of view was made around June of last year, well before any IDC visit and inquiry. I understand there were obvious reasons for the delay in which the IDC took to the visit. As far as Mr Bercow's point about the disappointment that you have with the Foreign Office view, Scott Wightman may want to say something. But certainly I will make a note of what you have said to make sure that my Foreign Office colleagues are aware of your views. Mr Wightman: This is a cross-government
strategy and there are, throughout the report, specific individual departments that
are not identified in relation to what it is that we are looking to achieve in
most cases. To that extent, that
explains why there are not explicit references to the role of DFID. All other departments have been very closely
involved in its elaboration and will be very closely involved in its
delivery. The overall purpose of the
framework is to try to raise awareness within the Chairman: We have not had a chance to
read it. It would have been helpful if
that had been stated explicitly, apart from saying that it sets out ambitious
aims and outcomes for co-operation with China across the board, I cannot see
anything that says that several or all government departments have been
specifically engaged. I am not saying
that they have not been, I am not saying that what is said does not relate to
other departments; it does not actually say so.
Yet, when we were there, we were told that there was almost a unique
arrangement in Q149 Mr Hendrick: Pages 4, 12 and 16 refer to fostering China. Was that DFID's input. Mr Foster: The comments from DFID were done before I took office. Q150 Chairman: Do we have a scheduled date for this summit? Mr Foster: I do not know the exact date. It could be next week but I have not been given the information. Scott Wightman might know. Mr Wightman: Premier Wen Jiabao is arriving on 31 January and the summit itself is taking place on 2 February. Q151 Chairman: Will he be meeting the Secretary of State for International Development? Mr Wightman: I am not sure. We have not finalised all the arrangements. Q152 Chairman: It would be no bad thing if he did. We have cleared the air a little, but I think you will appreciate that the Committee was upset by that. To take forward the context of where we are, one of the things that very quickly came through to us when we were faced with the argument that effectively we were ending the programme because China had graduated to middle income status and therefore there would be no programme. Yet, the International Development Act says that 90% of the money will go to poverty reduction in the poorest countries and by implication, therefore, 10% goes to middle income countries. Yet, the middle income country strategy expired in 2008 and there does not appear to have been a successor to that. So, first of all, can you give us an indication of whether there is to be a middle income country strategy, or any flavour of what the policy towards middle income countries might be. What kind of strategies, targets or references would a spending of 10% going to middle income countries be based on? Mr Foster: Obviously, you are right in identifying the 10% issue for middle income country spend. What I will do, Chairman, if I can, is do a bit of digging around in the Department to get the precise information about a replacement for what you describe as a "time expired" strategy, which came to its end a couple of weeks ago in 2008. I will make sure the Committee gets the Department's thoughts on what we are doing about its replacement. Chairman: It would be helpful because
on more than one occasion it has exercised the Committee that we agree with the
strategy, we agree that the focus should be on poverty reduction and that it
should focus predominantly on the poorest countries, but there is the
underlying point that there is 10% - which is not an insignificant amount of
money - to be spent on middle income countries with no clear idea of how or
where. After all, that could well be
significant in terms of a country like Q153 Hugh Bayley: It seems to me that compared to other development agencies, DFID has an extremely good reputation for providing grant support for health and education, in particular, but also for other welfare-related programmes. I wonder, in relation to a middle income strategy, whether that approach is appropriate and whether there is too much of a "one club" policy? I would be very interested to know what proportion of the finance made available to China by the multilaterals - the UNDP and the World Bank and other large multilaterals - and the EU, goes in the form of grant finance and what in the form of loan finance? Could you also provide the same information in respect of the six or eight top bilateral donors, because it is certainly my view that with middle income countries it might be more appropriate to have a loan strategy than a grant aid strategy. I would like to know what France, Germany, Japan, the World Bank and UNDP's approach is. Could you gather those figures and let the Committee have them? Since next week we will be discussing the heads of a report, if it is possible for you to do that within a few days, it would be extremely helpful. Mr Foster: We will certainly do what we can to get the figures. Adrian Davis might want to say a word or two on this issue. Mr Davis: The main loans available to Q154 Chairman: We do have some information about other donors but we are looking for a specific breakdown of DFID's approach. Mr Foster: We will provide more detailed information. Q155 Chairman: The other point in this context is that repeatedly we are told that China is a major player, a global player; Scott Wightman said it is an emerging major power. It does have many people still living in poverty who could be sliding back into poverty in the present circumstances and in terms of progress towards the MDGs, if you take China out, you have gone backwards in almost everything; it is China which has closed the gap. Is it helpful to look at China and say it is low, it is poor or it is middle income, as opposed to saying that China is just such a major feature and with so many complexities, both in terms of helping China be effective and also partner in China to be effective in third countries, that in a sense it would be helpful to just treat China on its own terms? Mr Foster: That is the great conundrum
that we will be juggling with in terms of a decision that both the Committee
makes and how we respond to it. If I can
put it in a footballing analogy: China,
in terms of raw GDP, is the third most powerful economy in the world; it is
literally at the top of the Premier League looking for a place in the European
Champions League. On a per capita basis,
it is 132nd out of 209; it is in the Vauxhall Conference and struggling. That gives the context in which people view Q156 John Bercow: Minister, what assessment have you made of the potential impact of declining growth in China of poverty reduction in the country and elsewhere? Mr Foster: Our assessment globally, to
start with, to set the reference as to what is our best estimate, is that
because of the economic slowdown, although the numbers of people in poverty
will still be reducing in the medium term, an additional 90 million people will
be pushed into extreme poverty in each year after 2010. So there is a real impact upon the poverty
target. There will be a subsequent
impact on the other MPGs as a result of lower economic growth across the
globe. Specifically to Q157 John Bercow: Let us work on the assumption of a bearish outlook. If the Chinese economy experiences a substantial decline, or a very marked slow down, would that influence the UK's decision as to when to withdraw its financial aid programme? Mr Foster: It would be wrong to say
that it would not have a bearing, of course, it would. Where it has some relevance is, when I was in
China - and you probably had exactly the same discussions as I did - one of the
concerns that the Chinese authorities have is that their economy is very much
geared towards being export led, so an economic hit in the United States or the
EU is having a disproportionate effect upon their real economy. They are not so much affected by the
financial market turbulence but by the real economy hits in these export
markets. What they are trying to do, and
I can see the absolute sense in this, is to try and stimulate domestic demand
for products bought and sold within Q158 John Bercow: When you say scope for further work in relation to the health sector, do you mean including by DFID? Mr Foster: Oh yes. Again, subject to what your conclusions are and our reflection upon that, but there is potential for further work there, where at the margins we can make a difference, because our aid programme is not huge, as you know - £32.6 million last year is not huge in economic terms to the Chinese economy - but in terms of having an impact, it has punched above its financial weight. Q159 Mr Hendrick: Would DFID have been able to give the assistance as quickly and as effectively as it did during the earthquake in Sichuan had it been working from outside China's borders? Mr Foster: Like you, I visited Hanwang
to see the devastating sight of the earthquake and what had happened. What struck me was obviously the sheer scale
of the devastation in terms of the number of people affected and the number of
homes and businesses that were completely lost.
DFID were praised by the Chinese authorities for their speedy response
to the earthquake. Now, as far as how we
deal with other natural disasters, there is a separate department within DFID -
CHASE - which is their set-up to deal specifically with humanitarian
needs. In the past, we have been able to
respond very quickly to help people with natural disasters. I am not saying that we would have acted any
more slowly, but having a presence in Q160 Mr Hendrick: To follow up on that, has the earthquake affected your assessment of when or whether to withdraw bilateral aid to China, especially given that climate change is likely to increase the incidence of extreme weather which could, and probably will, cause natural disasters? Interestingly, China is seeing the effects of climate change now. Whilst we talk about the effects of climate change as possible events in the future, China sees them on a day-to-day basis in terms of crop harvests and extreme weather. How do you feel about DFID's presence in China given the development on climate change? Mr Foster: In terms of the earthquake, which is taken separately to climate change, on its own, I do not think the response to the earthquake will necessarily change our view on what type of future programme DFID might have. On climate change, it might be different and if you were asking me as an individual now, what would I do in your shoes in terms of looking at the evidence and looking at the type of relationship, climate change would probably be the number one issue I would hone down on and consider whether we should be having a development programme of sorts with China. The way the world is working, climate change is increasingly going to be an issue. The impact is being felt in China already, as it is with many other countries, where the development goals that we have set could be adversely affected, disproportionately to the impact it has on the overall population, because the poorest people are going to suffer the most and the hardest from changing climate. That has always been our feeling. Climate has a role to play in terms of our work on climate change; we have already had programmes that have been developed in Ningxia. Of course, we are already committed to a bigger study with DEFRA DEC and DFID contributions. Q161 Mr Hendrick: Could I ask you to follow up on the point I made about the withdrawal of bilateral aid. Mr Foster: If I were looking at it in
your position, the difficulty we have is probably one of terminology as much as
anything else. The term "aid" tends to
conjure up an image where future relationships with Q162 John Battle: On partnership, and it is a suggestion rather than a question, as we are all well aware in this Committee and you are as a Minister in the Department, it is about much more than giving money or organising programmes, whether through budget support or direct projects, DFID is also about experimental, really innovative, really advanced 21st century methodology. I mention that because one of the most exciting things of my whole visit to China - and I have been a few times before, including as a minister in the Foreign Office - was a primary school that we visited in Yongtai, the Yongtai Centre School. Why is that important? Because I saw methods of participatory teaching there that I have not seen anywhere in the world, that were so advanced that I want to bring them back to my neighbourhood in inner city Leeds to lift the education levels of the people that I represent, and I want Ed Balls to take it up in the Department of Education. What I am suggesting is that while we are looking at things as bilateral programmes, if we take an overview of the programme and certainly if we just look at it as money, but even if we just look at it as a programme, we may miss out on some of the far-sighted, experimental work where DFID, in that partnership, is leading the new thinking of development that will be development not just in China but also development in our neighbourhoods. At last we are starting to link north and south together and see that development might be a common project. I am desperate not to lose sight of that. It was not just that one school. We met two heads, both of whom were spectacular and could stand high in my neighbourhood tomorrow. So, as for the notion that they are behind us, I think it is the other way around. I am putting in a plea, rather than a question to say, can we make sure that when we think out our relationships and partnerships that we do not lose the absolute best bit. Mr Foster: I am sure you are not going to let this lie when it comes to writing up the report that you are currently considering. I share with you my admiration for the enthusiasm of certain projects that I saw over there. I did not see schools, as they were on school holidays at the time, but I went to see the International Labour Organization project, where starting your own business and improving your own business schemes are being run, which DFID are funding, a post-earthquake reconstruction. I raise that because I used to teach accounting and went to look at a class about cash flows and business plans, which was something I would have taught before I became a Member of Parliament. It was not just their ability to grapple with a cash book and cash forecasts, there was a real enthusiasm that they were not just going to use this learning for their own sake, they were absolutely determined that they were going to set up their businesses and improve their businesses. There was a real enthusiasm there which I picked up on and from what you said, you picked up in the schools. On the impact that DFID has on schooling, David Dollar, the World Bank Country Director, had a fantastic quote. He said that when he goes around schools, he can recognise a DFID-influenced school straight way, merely because of the layout of the room, no longer in formal rows as we would have seen perhaps in Victorian times, but really encouraging a participative approach to learning. On the issue of future programmes and north-south, south-north learning, people are talking about whether the department should bring out a new White Paper and challenge things in the future, if we were going to do that then global links will be an absolutely essential key to that because we need to take the issue of development that step further forward. Q163 Hugh Bayley: Can I push that last exchange a little bit further? Like John, I was very interested to see the child-centred learning and impressed also to see that it was rippling up through the policy chain. It was being spread province-wide with hopes that it might be spread further. That is really important from a development point of view; you run a pilot study and it ripples through the system; it succeeds. To what extent do you think it would be possible for Britain to influence Chinese education and health policy after 2011 if we no longer have health and education programmes in China? How will you do it without the aid relationship? Mr Foster: That is a good
question. In my earlier response to Mr
Battle, I forgot to deal with the issue of cutting-edge policy development that
he mentioned. I will put the two
together, because that is where they could have a future relationship - a
post-2011 development programme, a partnership programme, but geared towards
action research so that pilots may be tested.
If they work, they can be rolled out not only in China but because China
is increasingly a major player elsewhere in the world, we could look to
influence Chinese attitudes and Chinese policy, say, in Africa, through a
research programme that they have seen running domestically in China, possibly
seeing whether it is successful in China and then move forward. We have evidence of that happening already. I am sure that Adrian Davis would be able to
give you examples of pilots that we have run alongside Q164 Hugh Bayley: Before you move on to Africa, could I focus back on China, because I have much less of a problem putting British taxpayers' aid money into partnerships with China to deliver development in Africa because, clearly, those are some of the poorest countries of the world. But in terms of China policy, if we want to see the positive policy developments which we saw on child-centred learning continuing after 2011, but to use your own words, do not believe this should any longer be an aid relationship, but perhaps a partnership relationship, how might that be developed? Is it feasible that our expertise would be paid for by the Ministry of Education because of the excellence for which we are known? Or would it be possible for us to change the relationship so that it is not a gift relationship and provide loan finance to pay for our input, and then when China has the dividends of the pilot study, repay the loan? Are either of those feasible? Mr Foster: On the loan issue, it is
possible that the Department gives loans as well as grants subject, obviously,
to the foundations laid down in the International Development Act, about the
necessity to look at tackling poverty, which I am sure they would do, but there
is a caveat that we have to comply with.
In terms of using DFID as consultants, I am not sure whether that would
be an appropriate route. There might be some
issues about other consultants who might want to sell their wares to Q165 Hugh Bayley: We saw a couple of very good examples of work in the field of HIV/Aids on methadone replacement for drug addicts on a gay care voluntary organisation providing services to their community. If in 2011, it still appears that China is off track on its MDG target for HIV and Aids, would the Department seek to continue to work in this field and if so, how? If aid finance is not available, how would you do it? Mr Foster: I also saw the programme. It was quite remarkable and is clearly
delivering results. Talking to some of
the recipients of the methadone, I got to know them a little and heard why they
had gone to the centre and the benefits of the centre as far as the reduction
in risk for HIV transmission, which although HIV/Aids in China is at a
relatively low level, in certain groups it is markedly higher - the group that
you mentioned, commercial sex workers, gay men - those are the three vulnerable
groups that if we were going to look at a programme, then we would focus on
those areas where it is contributing to a failure to achieve Millennium
Development Goals. In terms of how it
would be paid for, if it was going to be an aid programme, that would be
subject to any decision that we make in response to your Committee's findings,
but also subject to what the Comprehensive Spending Review suggests. The programme itself and the piloting of that
particular programme has brought benefit in that the Chinese authorities are
rolling it out as a more national programme.
That is obviously going to be of huge benefit more broadly, rather than
just in the Q166 Hugh Bayley: My colleagues and I saw in China, some of the most effective DFID interventions that we have seen anywhere in the world. But there is a nagging thought in the back of my head that it is hardly surprising, because China is not a developing country, it is a country with a massive cadre of university-educated professionals. It has a lot of administrative capacity, which Zambia and Mozambique do not have, and therefore DFID is working in a climate where it is working with teams of fellow professionals who can make the best use. How would you reflect on that view that the very success of DFID's programme in China is a reflection of China's development as much as DFID's work? Mr Foster: That is one of the "unique"
features that applies to Chairman: It is fair to say that the debate that we are having is not about a further aid programme - I do not think there is anyone on the Committee who sees a further aid programme. It is a question of the dynamics of the relationship and the role in partnership and being able to fund and pilot some of those projects, to enable and facilitate them to happen. We may have differences of opinion and we do not know how we are going to reconcile those but nobody is suggesting that a continuation of aid is what it is about. It is how you take the partnership forward. John Battle: Crucially, if we picked up the notion of action research, that might be helpful. Q167 Mr Hendrick: Minister, you referred to China using the analogy of it being a Premier League team as far as its impact globally but on a per capita basis looking like something from the Conference. Have you or the Department thought about looking at how China can in some ways mimic the development of the European Union in that it has a regional policy, because clearly there are huge disparities in terms of wealth and income between the big cities and some of the fairly remote provinces, particularly in the west? I am sure there is some excellent work going on with your Department in terms of development in different parts of China but, given the huge resources that are available, when you have a situation where Chinese peasant farmers are currently funding the Gucci watches bought in the United States by a country that is over-consuming and under-producing, which seems a bizarre situation, and at the same time we are providing aid to a country that is financing the downfall of western capitalism. Have you thought about looking at ways in which you can promote certain forms of governance that may help development as well as the specific programmes around health and education? Mr Foster: I am conscious that this is
probably a question that should be geared towards what Q168 John Battle: If I were praising DFID for being way out ahead through learning programmes and education, I might be a bit critical of DFID in terms of its response rate when it comes to water and sanitation. I say that because we did a report in 2007 on Sanitation and Water, highlighting not just DFID but right across the world; in terms of the MDGs, it is the one that is well behind. In China, it is well behind; a quarter of the population does not have access to safe water. Some of the figures are lower than that: Zimbabwe, Zambia and even Malawi, which is quite shocking. If we say that China is going to carry us through the Millennium Development Goals, we have to do much more in the water and sanitation fields. DFID has waited until really late to get in on the game on water and sanitation, despite the Chinese having talked about it for about 10 years. To be fair, DFID has done good work on the ground - the community participation, i.e., hygiene - there was nothing but praise for the detailed work going on there; how they were changing the consciousness of the people. But with that larger scale, water provision and clean water provision, should DFID not be doing much more to say that this is a neglected sector in China and unless we lift the water and sanitation sector, the world has no chance of meeting the World Development Goals in that topic? Mr Foster: I am not going to disagree
with your concerns on this. Without
doubt, globally, the MDGs for water and sanitation are off track; quite
frankly, they are slipping - 900 million people globally without access to
safe water and 2.5 billion without access to sanitation. I was mindful of this Committee's previous
report with its focus on sanitation and water, as opposed to water and
sanitation. I did not want to get the
ire of the Chairman, but yesterday I had a meeting with WaterAid and Tearfund
and we have agreed a new acronym - they came up with it and I thought it was a
really good one -that is, Q169 John Battle: I preferred your point about action research; can we include water and sanitation in a new programme of action research so that DFID puts money into an enhanced sanitation programme in China? What if I were to suggest that to you, even in the face of the proposed ending of the programme? Mr Foster: I came away from my visit
with my private thoughts as to what I would do in your shoes. Looking at the evidence and making an
assessment of where the future would be, one of the four things I would have put
down would be WASH. Where I also think
there is scope for work to be done with Q170 Andrew Stunell: In terms of China's role in the world, its impact for good and ill on climate change is clearly going to be absolutely fundamental and therefore fundamental to the long-term future of the United Kingdom and our policy. Can you say what plans you are putting in place to support development aspects of climate change post-2011, because that would seem to be the thread which, above all else, ought to carry on as being the UK's engagement with China? Mr Foster: In terms of the four issues that I rate, climate change is my No. 1. It is not only where we can add value with the Chinese Government, it is where they have a real vested interest that they need to tackle this issue both in adaptation as well as in mitigation, because they are a huge emitter of greenhouse gases. That is why they are so important to engage in the issue of climate change. As for our work that we can see running on from now post-2011, it is through the sustainable development dialogue that we have with China - I think I am right in saying that we are the only country that has that relationship with China on climate change - there is potential to continue it onwards as we seem to be a trusted partner of the Chinese Government on this matter. Q171 Andrew Stunell: I had a two-minute flick through the report and, as the Chairman said, it does not mention any Government department apart from the FCO. Do you see the post-2011 development of that relationship being one which is a DFID-based relationship, or do you see it as being a DECC or a DEFRA-based relationship? How do you see the UK Government engaging and taking that forward? Mr Foster: Contrary to what you may
have read in the newspapers, DFID does not deliver a separate foreign policy to
the Government generally and as far as moving forward on climate change, it
would be a joint approach of Her Majesty's Government. At the moment, DFID plays a lead role because
we have expertise on the ground and have had those pilots that have run. For our initial pilot project, DEFRA was the
biggest funder of the project but we led because we had our expertise and had
that international relationship with Q172 Andrew Stunell: Do you see that rolling forward or do you see that relationship changing? Mr Foster: There is potential for it to roll forward. That would have been my No. 1 area of choice if I were in your shoes - to look at a post-2011 relationship. Q173 Chairman: We have already explored the nature of the relationship and the quality and benefit of it now. Given that we have this relationship and we are seen to be a lead, and the discussion we had with some of the multilateral agencies, if the programme did come to an end in a financial sense, and possibly qualitatively after 2011, is there any danger that other donors might take that as a signal for them to take the same view, which might lead to an accumulative compromising withdrawal from China that could be counterproductive? Mr Foster: I am not aware that there is any evidence to suggest that other countries are looking at their aid programmes, given what we announced some years ago about ending our relationship in 2011. That does not mean that they are not thinking of it, but clearly that might well be a concern of the Chinese authorities. In the discussions I had with other international donor bodies, they see a small aid programme - because £32 million is a relatively small aid programme compared to the size of the overall Chinese economy - as a way in to a development partnership. The expression they use is "you don't buy a seat at the table but you're seen to be working shoulder to shoulder with the Chinese authorities". I think that works. John Battle: It is traditional, after a
visit, to thank the department, the Foreign Office and DFID for arranging the
visit. Of all the visits, it was the
best arranged visit, so in terms of the programming and planning, it was
absolutely superb. It was encouraging
and enlightening. DFID is about
brilliant expertise on the ground and is associated with analysis and action. DFID is also known in Chairman: On that point, a personal one perhaps, I was particularly impressed with some of the Chinese national staff who had that real ability to articulate the Chinese point of view, whilst fully understanding the DFID approach and philosophy. Q174 John Battle: People have complained about DFID not branding everything it does. The Norwegians are there and have their label on a project or a tin hut. But, no, DFID has managed to get its presence respected at such a high level in China. What I worry about is that if we have the bracket "action research" - and I am minded to go in that direction - and we put in some things under that heading: education, participatory learning, water, climate change - what about leading the international development community in the relationship with the leadership of China? That is a valuable thing and should not be jeopardised. If we pull out, will the Japanese, the Norwegians, the French and others pull out their aid money? It is something to do with the way the nature of that conversation at the centre is going on. How could you turn that into a heading for action research as well? Mr Foster: First of all, what I will
make sure Adrian Davis passes on your comments about the DFID staff in the Q175 Chairman: It may seem in retrospect that setting a deadline for withdrawing was perhaps not the best thing to do. Why was it done? Perhaps it is worth reflecting, particularly on the discussions we had with the multilateral organisations - I know Adrian Davis will acknowledge that it came as a bit of a shock to him - particularly with David Dollar and Constance Thomas of the ILO, who fundamentally said that you are doing a fantastic job here; you have an enormous reach and influence with a remarkably small amount of money; you could still reach it with significantly less money, but we do not think you can do it with no money, not because the Chinese need the money, but because you need to be able to step up to the plate and say whether it is child-centred learning - let us show you how to do it - or health - let us show you how to do it - knowing full well that for every pound you spend you will probably ultimately get a hundred or a thousand from the Chinese authorities when they then apply it across the piece. That is something, obviously, on which we reflected. Would it not have been better and more appropriate, going back to the middle income country strategy, to say that in any case you do not set a deadline and say at that point it all stops? What you say is that it changes, there is a transition. Is that possibly what you are now acknowledging and what is meant? Mr Foster: That is probably one of the
learning experiences that I have picked up from looking at Chairman: The counter to all of this
is reassuring the taxpayer and politicians, too that we are careful about what
we are doing. That is one of the
reasons, arguably, that the programme, as it is at the moment, should come to
an end. People look at the Olympics;
they look at the achievements of the space programme and ask why we are giving
aid. Is there not a need for a clear
explanation that this is not about that, it is about helping to achieve the
MDGs, of which China is the biggest means of delivery, and helping to develop
programmes that will be applicable, not only in China to that direction, but
can be tested elsewhere, either in partnership with the Chinese or just on the
basis of what DFID has learnt. I got the
impression that there were things we saw in Q176 John Battle: Just as a supplementary, which, in a sense is in retrospect, our Government did well to make a party political point, quite deliberately moving from annual budgeting to three-year budgeting at the Comprehensive Spending Review. The Chinese got a much longer time-frame. It may have been that instead of 2011, we should have targeted 2015, including for the middle income development strategy - because that is when the MDGs line up - and then ask who has met the MDGs? If China is well behind on some MDGs - and it will be - then that 2015 internationally should have been a marker. What worries me is that our strategy as a Government - not all governments, but in Britain, in particular, as we do sub-annual budgets - is to have pilot projects and then snuff them out before the oven has caught alight. We could be moving away from things in 2011, which if we kept going to 2015, might spark up much more in terms of those MDGs. That is a retrospective comment as to why that date was fixed then. We know why, because of the brackets of the Comprehensive Spending Review, but on this one we need to think longer term and that would give us some space to talk about the transition to a new kind of relationship. Mr Foster: In terms of the decision on
why 2011 was set, I would ask you to reflect that this decision was made in
2006 - so, five years' notice was being given.
I think it is right and proper that we give notice of graduations like
that, so that people have time to adjust and if they wanted to, could come in
and carry on with the programmes. In
terms of the point that you made, Chairman, about the future, where DFID needs
to focus more would be on the higher end of development policy, rather than
direct provision. That could easily
facilitate a sizeable reduction in future spending commitments for any
programme that we might want to reflect on that we have with Q177 Chairman: On that point, are you involved in discussions with other departments as to the extent to which DFID can help co-ordinate that? I am thinking particularly of education and health, but where the development dimension - put it at its crudest, for example, we heard of the conflict during a DFID approach on health and the Department of Health. The Department of Health was saying, how do we get China to buy our pharmaceuticals, as opposed to, how do we actually help China have a functioning health service which will enable it to be a much better developed economy and player in the world? I am not saying the two things are mutually exclusive, but are you engaged in those kinds of discussions with other departments as to how DFID could represent their interests? Mr Foster: The short answer is, yes. Q178 Andrew Stunell: Turning to the international role of China in development. They are clearly becoming big players; perhaps we might say they are somewhat clumsy players. There is clearly a role here for DFID to provide "subtle training" or "indoctrination", or something similar. Can you say whether, if we terminate the programme in 2011, the work that is being done on that aspect of getting China's international development programme to be more engaged with the real problems in the countries that it is helping, will that process be slowed down? How would you see that developing? Mr Foster: To be honest, I would simply
say that there would be a risk that UK-DFID influence would diminish if we were
no longer there with the programme and Q179 Andrew Stunell: Could you tell the Committee if you can see any practical impact in Africa as a consequence of what you have done so far in China? Mr Foster: Adrian Davis might be able
to give you a few more details about specific programmes that have been piloted
in Mr Davis: There is great interest now with
our Chinese partners for us to work and help them in work they are doing in Q180 Andrew Stunell: How would you be able to maintain that if your presence in Beijing was taken out completely, or perhaps putting it in a slightly more positive form, what would you see as being the basic necessity of a presence in Beijing in order to maintain that international throughput? Mr Foster: Having a presence in Q181 Andrew Stunell: Have you got a view about a threshold level where it ceases to be meaningful? Mr Foster: Not in terms of numbers of staff or in spend. If we were going to make a decision about funding a future programme, it has to be in line with discussions we have had on the CSR, and we need to engage with the Chinese Government to see where we can add value together. It is premature to say £5 million or £10 million; we would need to have a sensible, serious discussion on it. Q182 Mr Hendrick: I think you have made it quite plain that you see the value of DFID's presence in China, not only because of the development programmes that you are working on in China currently, but strategically in the longer term, given that China has such an important presence in Africa as well. Clearly, given our past, and I speak as a product of that relationship, our colonial relationship with Africa is seen in many negative terms for historical reasons. I wonder if you see our influence diminishing in places like Zimbabwe and elsewhere in Africa, where we are seen as the colonialists of the past? Clearly, a relationship with China could strengthen our arm in seeing Africa develop in a way that we would like. Much of the bilateral or multilateral aid to Africa, which comes either from the UK or Europe, tends to have strings attached in terms of governance and human rights. The Chinese, historically, have not been as strong on those issues. Do you think our relationship with China, even with a relatively small spend and the number of people out there, could be such that we may be able to influence them to look at issues other than the way in which minerals or their projects influence their interest in Africa? Mr Foster: There is certainly a
possibility of that working and is a way forward to fill the void of the Q183 Mr Hendrick: China has been very successful over recent decades in feeding its huge population. A number of projects were mentioned, like forestry and one or two areas. What I did not hear mentioned was agriculture. There is a huge need for food in Africa which is grown and developed locally, rather than imported from elsewhere in the world. Is there anything going on, for example, in the area of agriculture, with China providing expertise? Mr Foster: I had a very good meeting
with the Ministry of Agriculture on this issue.
Food security is an issue that all of us with responsibility for
development have to consider. But also
in the research arm of DFID, we are increasing our spend on research,
particularly on agricultural research. I
sat down with the Ministry to come up with a joint agreement to work together
on this. We have agreed a form of words,
which we think will be announced in this UK-China summit coming up at the end
of the month, where we are looking to have a very tight relationship. You have picked the third of my four areas so
far, and it is exactly where we can be placed to add value, not just for the benefit
of Q184 Chairman: I concluded that China was far different from what I was expecting. When you come back and explain to people that you have had 10 days in China and you start to say positive things, their reaction is to say that you cannot possibly say that, that it is a dreadful country, and you try to point out how much they have achieved in terms of poverty reduction and economic growth, and the vast majority of people in the country are better off than they were, even if some of them are still poor, and there are human rights issues, and there is a lack of democracy, etc. Is it not the case that part of this partnership is a two-way process of us trying to influence the way China presents itself, and about helping China to understand why it gets this negative reaction and, at the same time genuinely furthering legitimate British interests and having a better dynamic relationship and possibly helping China's attitude towards Third countries in ways that are of mutual benefit. I take John Battle's point absolutely that the relationship with China is one where we have much to learn from each other. It is certainly not a one-way street. Mr Foster: It would be crazy, Chairman,
if the Q185 John Battle: I would be interested to ask Scott Wightman, I have been to China a few times and went for an extended visit as a foreign minister. I was absolutely shocked by the pace of change in China, of the people and the processes. It is the fastest moving place on earth, it is not a lumbering giant joining in the 21st century; it is moving faster than the rest of us on the planet; it is moving faster than African countries and faster than Latin American countries. I see China as a place as a function of economic growth rates behind the rest of the world, put crudely, but the capacity for change of that place, for adapting new ideas, for moving, for reaching out, that is where the action is and if we engage with that action it will help us to grow faster and change faster also. The big problem we have is that none of us is keeping pace with the pace of change. China is leading the way and it is not just about exports. It would be interesting to hear whether the Foreign Office - and I have not read the booklet in detail yet - view it in that way, not just as a market to export to in the future and have good relationships with, but as that dynamic of change which our world will be about in the 21st century. Mr Wightman: It is a phenomenon of
historical significance, there is no doubt about it. You have captured in a few words what we have
tried to set out in a bit more detail collectively in the framework. It is not just about exports, it is about the
skills that our workforce needs to develop in the face of the pace of change
that you are talking about and the challenge that presents to us. The potential for positive benefits for the Q186 Chairman: Thank you very much. The Committee has found this whole exercise fascinating and interesting. Although we have not come to a conclusion, we are certainly in a place which we were not when we started, which of course is the whole point of conducting an inquiry and taking evidence. Adrian Davis has openly acknowledged to us that it has been a dynamic exchange, which has re-engaged some thinking within DFID and which we appreciate. Obviously, our objective now is to produce a report which can be helpful and constructive. We understand that we have to find terminology which is clear and some degree of practicalities, which we will endeavour to do. We hope in that process we might be able to help the Department come up with a programme beyond 2011 which is not inconsistent with the objectives that you have set - on the contrary - which reinforces the outcome that you are seeking. Hopefully, we will be able to agree to a report which you will find helpful and I appreciate your saying that the Department is more than willing to listen to what we have to say and take it into consideration. That is all we can reasonably ask. Mr Foster: Thank you, Chairman. Can I thank you for guiding me through my first appearance as a Minister in front of a Select Committee. I was somewhat wary, having had two and a half years in the Whip's Office when I saw some of my colleagues to see what conversations I may have had with them in the past. Thank you for your time and that of the Committee. Chairman: Thank you very much. |