Examination of Witnesses (Question Numbers 80-99)


30 NOVEMBER 2009

  Q80  Mr Mitchell: But we get less credit for it?

  Dr Shafik: I think if you went to Malawi you would hear lots of good things about the UK and DFID but we do not put flags on projects.

  Q81  Mr Mitchell: I am sure when you give tax credits here people do not say thanks to the Labour Government. They think the Inland Revenue is giving it to them from the generosity of its heart. I cannot see that in Malawi the British Government is going to get the credit for something that is coming through their government.

  Dr Shafik: I think the government of Malawi would acknowledge the contribution we made. I had a Sir Humphrey-like dinner with the various permanent secretaries in the government of Malawi and they were incredibly open about the fact.

  Q82  Mr Mitchell: I am sure the Malawi government will be grateful but I see from figure 8 that Malawi staffing is now close to the African average. Surely this is wrong? Malawi is definitely the poorest of poor and needs more individual attention, more staff attention. You have not got the staff relevant to the task in Malawi that you once had.

  Dr Shafik: As Gwen said, the nature of the staff have changed. We now have more higher skilled staff and many of the previous staff we had before were doing things like maintaining the buildings and things which we no longer need on our staff, we can get those services contracted out, so I do not think we have compromised on staff quality.

  Q83  Mr Mitchell: Mr Gallaher said with typical Treasury ingenuity that they give the money and the staffing levels are up to you. That is the usual Treasury attitude. Do you feel under any general compulsion from Treasury to reduce staff numbers in Malawi?

  Dr Shafik: The Treasury gives us an overall administration budget and it is up to us how we spend that, be it on staff or—

  Q84  Mr Mitchell: Yes but do you feel under any pressure to reduce staff numbers?

  Dr Shafik: They do not specify anything on staff numbers—

  Q85  Mr Mitchell: You are doing it out of the keenness of your enthusiasm because you think doing it through the government rather than through our staff is beneficial?

  Dr Shafik: I think that is correct. Sam, do you want to say something?

  Q86  Mr Mitchell: Mr Sharpe, you were holding your pen up in class.

  Mr Sharpe: Just on the agreement we have reached with the Treasury. We have said this to the Committee before. It is worth remembering that in the three-year settlement they agreed with us they agreed, along with all other government departments, reductions in our administration costs. They also ring-fenced some resources for our front-line administration costs overseas which they did not reduce at the same rate, so we have agreed with the Treasury that we need an adequate number of front-line staff overseas and that is part of our financial settlement for these three years.

  Q87  Mr Mitchell: I see from 1.13 that current DFID staff in Malawi question whether current staffing is sufficient. Why would they be doing that?

  Ms Hines: Obviously this was a survey of the staff and it is for them to have their own opinions on this, but over 50% of the staff I currently have in the office have been with DFID through the transition. I am not denying the transition—

  Q88  Mr Mitchell: You mean they are thinking of the old times when you had more staff?

  Ms Hines: I think so and it is something which the staff often raise with me.

  Q89  Mr Mitchell: They are also surely assessing the difficulty of doing the job?

  Ms Hines: Absolutely and I think it is also important to remember that the survey concerned which led to that figure by the NAO was done in December last year. December was a particularly difficult time within the office when I think staff were demoralised.

  Q90  Mr Mitchell: So you are telling us that staff in Malawi in thinking the staffing was insufficient are wrong and the Department here in thinking that it is better to transfer more functions to the Malawian government is right? That is what you are telling us?

  Ms Hines: I think if you reran the survey today you would get a very different number because, as I was saying, I think December last year when the survey was done was a particularly stressful time for the staff. If you look at other internal staff surveys which we have done, such as the one in February this year called the Pulse Survey, that showed that 95% of staff actually know how their work contributes to our objectives and generally the levels of staff satisfaction in that were very high. We have just gone through another one which will report next February. I will be very interested to see what that says. I think that, yes, some people who were around a long time before do prefer the time when there were two people doing one job.

  Q91  Mr Mitchell: I am sure their morale is higher because they were under pressure then, but I think I would prefer to trust the view of the staff on the ground about what staffing levels need to be than somebody sitting in London. However, let me move on. I see from 1.4 that there was an agreement on division of labour between the donors, and DFID decided to spend more in social sectors such as health and education rather than economic growth, and yet it goes on later in that paragraph to say that DFID's own analysis showed that through a focus on agriculture it would be likely to deliver peak growth as early as 2009 but the focus on the social sectors would deliver equivalent levels of income per head only by 2019. That seems to be a crazy choice. As Mr Curry said, the emphasis in this situation needs to be on agriculture and developing agricultural production, so why did you take the harder path?

  Dr Shafik: I think the NAO also says that DFID has made well-informed choices on the design of the programme and part of what we do with other donors is to agree a division of labour. We cannot do everything. We focus on the sectors in which we are most effective.

  Q92  Mr Mitchell: You cannot do everything but why did you take the most difficult part?

  Dr Shafik: I do not think we took the most difficult part. We took the sectors where we think investments in education and health are investments in growth. The other sectors like infrastructure and energy were ones in which we thought the World Bank had a comparative advantage. It was not that we were neglecting them altogether but we were dividing up the work among us.

  Ms Hines: It certainly is not a question of all or nothing because, as we have already said to the Committee, we do fund agriculture in Malawi. We fund it to the tune of £5 million per year in addition to what we provide through budget support, but it is a question of where DFID as an organisation, relative to the World Bank or the EC or another organisation, focuses its own effort. We have agreed with them that we will focus on health and education where we have most to offer. It is also worth noting that Malawi did achieve peak growth last year. 9.7% is absolutely unprecedented in Malawi so through our combined efforts and the Malawi government's efforts they did achieve growth.

  Q93  Mr Mitchell: Let me ask you just in passing, what is the EU aid effort in Malawi? Where does that go?

  Ms Hines: They are very heavily involved in agriculture.

  Q94  Mr Mitchell: Are there any barriers in the European Union against agriculture because it is a notoriously protectionist device? Does agricultural protectionism in the EU damage Malawian agriculture in any way?

  Ms Hines: Malawi is a least developed country—

  Q95  Mr Mitchell: That was a yes? It was a vigorous nod. I would like it to be a yes.

  Dr Shafik: All of Africa suffers in terms of its agricultural development because the Common Agriculture Policy is reducing opportunities for export. I think that is a fact.

  Q96  Mr Mitchell: So on the one hand the EU is helping agriculture in Malawi and on the other hand it is hindering agriculture in Malawi?

  Dr Shafik: I think in the specific case of Malawi because it is a subsistence agricultural system, it is not on the cusp of exporting to Europe, to be candid. Other countries like Kenya—

  Q97  Mr Mitchell: But if it were it could not?

  Dr Shafik: Yes, but it is sort of hypothetical.

  Chairman: I warn you that the Treasury man is getting very worried now by your answers because you are attacking the EU so just watch it!

  Mr Mitchell: They are very interesting answers, Chairman.

  Q98  Chairman: They are very interesting answers.

  Mr Sharpe: We do also need to remember that the trade barriers into the EU are very heavily differentiated between least developed countries like Malawi and more developed countries whose agriculture is more affected by it.

  Q99  Mr Mitchell: Yes, but we are contributing to EU aid and that is concentrating on agriculture which the EU—Let me move on because I see that we gave more in direct food aid in 2006 than we have contributed to the maize subsidy over a four-year period.

  Dr Shafik: That is correct.

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