Written evidence submitted by Global Witness
1. Global Witness is a London-based non-governmental
organisation that investigates the links between natural resources,
conflict and corruption. We aim to promote improved governance,
transparency and accountability in the management of the natural
resource sector to ensure that revenues from resources are used
for peaceful and sustainable development rather than to finance
or fuel conflicts, corruption or state-looting.
2. Our investigations and campaigning were
a key catalyst in the creation of the Kimberley Process, to tackle
the trade in conflict diamonds, and the Extractive Industries
Transparency Initiative (EITI), to encourage transparency over
payments and receipts for natural resource revenues. We were co-nominated
for a Nobel Peace Prize in 2003 for our work on conflict
diamonds, and were awarded the 2007 Commitment to Development
Ideas in Action Award, sponsored jointly by Washington DC-based
Centre for Global Development and Foreign Policy magazine.
3. The government's Draft International
Development (Official Development Assistance Target) Bill (referred
to from hereon in as "the Bill") is intended to underline
the UK's commitment to invest in international development. Global
Witness supports this objective, but believes that the scope of
the Bill should be extended. Our submission makes the case that
increases in Overseas Development Aid (ODA) without concomitant
governance requirements on recipient countries can be counterproductive.
The Bill should place a duty on the Secretary of State to ensure
that UK ODA does not contribute to poor governance or high-level
corruption. This is with a view to making the most efficient use
of a finite pool of development aid, and upholding the UK's international
commitments to anti-corruption, poverty alleviation and human
rights.
MORE AID
+ BETTER GOVERNANCE
4. As recognised in the Bill, increasing
global aid levels is vital to achieving the Millennium Development
Goals (MDGs) by 2015. However, the Bill's focus on increasing
levels of donor aid fails to address the multi-dimensional nature
of the MDG challenge. Improving governance and cutting down on
corruption in aid-recipient countries should also be a core concern.
5. Studies are increasingly exploring and
underlining the links between governance and wealth creation.
For example, World Bank research from 170 countries showed
that governance supports wealth creation, but that wealth does
not necessarily support good governance.[8]
A 2007 UNDP paper titled Governance for the Millennium
Development Goals: Core Issues and Good Practices describes
the high correlation between progress on MDGs, governance and
anti-corruption efforts:
6. On the whole, it appears that for
achievement of MDGs, principal areas needing reform and strengthening
are economic institutions, either through effective decentralization
and/or sector specific improvements in service delivery. Improved
transparency and accountability—in particular, combating
corruption—along with an appropriate framework for pro-poor
policies and improved public administration and civil services
are essential. Strengthening of cross-cutting dimensions (for
example, human rights and rule of law) is also of importance,
as is the supporting role of civil society institutions. [9]
7. Poor governance and high level corruption
are particularly damaging to development prospects in resource-rich
countries. In 2008, aid to Africa totaled US$$44 billion
dollars.[10]
Total oil and mineral exports meanwhile came to US$393.3 billion
dollars.[11]
If used properly, these revenues would have the potential to lift
a generation of Africans out of poverty.
8. In other words, providing ODA alone is
insufficient to eliminate poverty. A dual approach from the UK
government is needed: one which combines increases in aid amounts
and reliability with concomitant requirements on the recipient
countries to curb corruption and improve governance.
9. These findings are borne out by Global
Witness' work in resource-rich developing countries over the past
18 years. In countries such as Cambodia, Turkmenistan and
Angola, we have documented the emergence of the "shadow state"
phenomenon which coexists with political lip service to good governance,
development and poverty reduction.[12]
In these countries, the mismanagement and outright looting of
natural resources fundamentally undermines the ability of the
state to provide basic services for its people, diverts funds
intended for development, and destabilises whole societies.[13]
10. A donor propensity to continue to give
large sums of aid money for the provision of basic services to
such states on an ongoing basis, without understanding the underlying
political economies or attaching any kind of governance obligations
is, in itself, part of the problem.
11. In these contexts, the practice of "working
around" predatory elites only serves to inadvertently strengthen
them and undermine the state-building process. The influence of
donors in the process of state-building and peace-building cannot
be described as peripheral or limited to simply the provision
of funds: it is a key political contributory factor and needs
to be recognized as such.
12. Development aid given into an environment
of poor governance without any requirements to improve accountability
and transparency, has inadvertently changed the political incentives
operating within a country. In short it has worsened the governance
environment by making the government less accountable to its citizens
and undermined the chances of successful development outcomes.
There is a responsibility on the UK government to oversee ODA
to ensure that it is being used to effect development. In many
countries where Global Witness has worked this is simply not the
case.
RECOMMENDATIONS
13. Global Witness recommends that the Bill
is amended to reflect the need to recognize high-level corruption
and governance as integral to development outcomes. This can be
done in the following ways:
14. A governance clause should be inserted
within the Bill to place a duty on the Secretary of State to ensure
that UK ODA does not contribute to poor governance or high-level
corruption.
15. Specifically, the clause should require
the Secretary of State to ensure that the disbursement of ODA
is dependent upon the recipient countries attaining basic, specific
and measurable governance and transparency (not economic) benchmarks.
February 2010
8 Kaufmann, D and Kraay, A, Governance and growth:
Causality which way? Evidence for the world, in brief, WBI Governance
Working Papers and Articles No. 57, Washington, DC: World Bank
Institute, 2003. Back
9
UNDP, Governance for the Millennium Development Goals: Core Issues
and Good Practices, 2007, http://unpan1.un.org/intradoc/groups/public/documents/un/unpan025110.pdf. Back
10
OECD International Development Statistics http://stats.oecd.org/qwids/ Back
11
WTO, International Trade Statistics, 2009, p42, Back
12
Global Witness defines the shadow state as one where political
power is wielded as a means to personal self-enrichment and state
institutions are subverted to support those needs. Back
13
See for example, Global Witness reports on Cambodia, Angola and
Turkmenistan at http://www.globalwitness.org/media_library.php. Back
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