5 Developing and broadening opportunity |
Losing credibility on development
85. We took considerable evidence on progress towards
another of the Harare aspirations"the promotion of
sustainable development and the alleviation of poverty in the
countries of the Commonwealth". It is clear to us that there
are serious questions over the Commonwealth's credibility as a
provider of development assistance. For example in 2011 the Multilateral
Aid Review (MAR) conducted by the Department for International
Development (DFID) found that the Commonwealth Secretariat had
not fully delivered on its potential for contributing to international
development objectives, and assessed it as offering poor value
for money. UK Ministers placed the Secretariat under 'special
measures', which means that DFID funding will only continue if
the Secretariat's performance improves. DFID's future funding
levels for Commonwealth Secretariat development programmes will
be informed by progress made against key associated reforms.
86. The Ramphal Institute, which describes itself
as "an independent intellectual hub on policy issues for
the Commonwealth and its 54 member states as well as for the wider
world", told us that the Commonwealth was "no longer
playing a significant role" in the provision of socio-economic
development. DFID's doubts were shared by other agencies, such
as the Canadian International Development Agency and AusAid, the
This view was not confined to development professionals. In several
of the countries we visited, we were told by politicians of a
growing perception that the Commonwealth provided no tangible
benefits for its members and now needed to play a greater role
in international development.
87. This critical judgement on the Commonwealth and
development must however be slightly modified; we heard of some
successful and well-targeted development projects arranged bilaterally
between Commonwealth members. Professor Richard Crook, of the
Institute of Development Studies, for instance told us of support
for improvements to public procurement in the Pacific island states
provided by Australia and New Zealand,
and Senator Segal drew attention to effective aid given by Canada
to Commonwealth Caribbean states, especially for training of the
military and police.
88. The Commonwealth's
performance as a provider of development aid has been disappointing
in recent years, and needs to improve substantially if its reputation
is to be restored. We look to the UK Government to keep the development
performance of the Secretariat under close scrutiny and to keep
to its stated intention to provide further funding only on convincing
evidence of improvement.
Enabling trade and investment
89. In the last 20 years aid has been to some extent
replaced by trade as an engine of development in the Commonwealth.
Underlying this are signs of a fundamental shift in the balance
of the world economy from Europe and the United States to growing
Asian economies, and parts of South America and Africa, bringing
them not only economic success but growing global influence. Lord
Howell, who chaired a previous Foreign Affairs Committee when
it carried out the last inquiry into the Commonwealth in 1996,
took pride in the fact that his Committee had foreseen rapid growth
in several Commonwealth countries.
90. The facts are impressive. The Commonwealth's
membership includes two of the world's largest 10 economies (the
UK and India), two members of the G7 (Canada and the UK) and five
members of the G20 (the UK, India, Canada, Australia and South
Africa). Ian Milne, representing Global Britain, observed that
in the next 40 years the Commonwealth will be where much of global
GDP growth, and hence of growth in propensity to import, will
occur. Dr Sriskandarajah
argued that there was already in fact a "Commonwealth advantage"
in trading. He observed that "the trading volume between
two Commonwealth members is likely to be a third to a half more
than trade between a Commonwealth member and a non-Commonwealth
member." That figure, he said, was arrived at after correcting
for similarities in terms of language, history, proximity and
a whole range of other Commonwealth factors.
While accepting that "the role of the Commonwealth as a trading
bloc has long passed", our predecessor Committee said in
1996 that "it remains an invaluable asset to all its members
as an 'enabler' of contacts ..."
91. On our visits to member countries we heard a
number of times that the Commonwealth should do more to exploit
this apparent advantage, encouraging trade and investment between
its members and more widely.
92. The evidence
for the existence of a special "Commonwealth factor"
in trade and investment is not conclusive, despite the sustained
and vigorous growth in many of the Commonwealth's emerging markets,
but the potential for this to develop in the years ahead is enormous
and should be given a high priority by H.M. Government.
The UK interest in trade and investment with the
93. There are clear implications for the UK in the
changing balance of the world economy. Britain already does a
great deal of trade with the Commonwealth; in 2010, total exports
of goods and services to the major Commonwealth countries were
nearly £37bn, over 8% of the total UK trade. However Ms Ruth
Lea argued that much more could be achieved in Commonwealth trade,
saying that exports to Commonwealth countries were "dwarfed"
by exports to the US (£72bn) and in particular to the EU27
(£210bn). The equivalent figures for imports were £36bn
from the Commonwealth, £46bn from the US and nearly £243bn
from the EU27.
Ian Milne of Global Britain outlined the opportunities for the
UK in coming decades, with the rest of the Commonwealth representing
a market over nine times greater than that of the rest of the
EU by 2050. He said that competition to export to and invest in
the developing world will be "fierce". He concluded
that the Commonwealth "has the potential to become a valuable
component of British trade policy".
94. Professor Philip Murphy said however that he
was sceptical "about the value that the Commonwealth adds
as a living, breathing organisation." He accepted that research
suggested that there was "a kind of Commonwealth effect"
but he observed that it tended to be more pronounced "among
smaller, weaker nations." He told us that the proportion
of trade that Commonwealth countries do with the rest of the Commonwealth,
"varies wildlyfrom over 90% in some cases to less
than 10% in the case of Britain, Canada and some other major economies.
It is very difficult to extrapolate anything from an average".
95. We heard evidence that the UK, and the Commonwealth
as a whole, may be failing to make the most of the opportunities
opened up by the Commonwealth connection.
Lord Howell considered some ways in which the Commonwealth connection
could be put to better use by the UK, urging British business
and Government to "think much more in our investment, project
capital development and huge new development programmes of the
Commonwealth connection." He urged British business to use
Commonwealth connections to tap new sources of capital for infrastructure
projects. Sovereign wealth funds of "these very prosperous
Asian nations, and of course the oil-producing nations of the
Middle East, are the wealth funds that we need to develop our
Lord Howell told us that it would be wise to invest more UK time
and effort in making use of the Commonwealth network and "the
gateways it provides to other giant new markets, which are next
door to the Commonwealth, like China and like Brazil".
Ms Kirsty Hayes, Head of the International Organisations Department
in the FCO, noted that the Department was responding to Asian
growth by opening a number of additional subordinate posts in
India "to take advantage of the prosperity agenda there and
also strengthening posts within south-east Asia".
96. However, in the current climate of austerity
the scope for increasing the diplomatic effort in this area must
be limited. It is not surprising therefore that the FCO should
stress the potential of greater contacts with the Commonwealth
Business Council, which has many private sector members and is
a self-funding part of the "unofficial Commonwealth".
The CBC says that it "strives to provide a bridge between
the private sector and governments, between emerging markets and
developed markets, and between small businesses and the international
private sector." Its goal is to "achieve economic empowerment
for shared global prosperity through the enhancement of the private
sector contribution to social and economic development."
The Council's activities include the submission of papers on business
issues to Commonwealth governments and the organisation of events
(around 70 events per year). The CBC also provides some consultancy
services to businesses. The CBC's largest event is the Commonwealth
Business Forum which precedes each CHOGM; the 2011 Forum in Perth
was the largest to date.
97. The FCO told us that it was hoping to use the
forthcoming appointment of a new CBC director general as "the
starting point for renewed dialogue on cooperation".
However there is clearly much work to be done; the FCO voiced
doubts about whether the potential of the CBC was being fully
exploited by UK businesses, telling us that "across the board,
the value of the CBC's work to the UK has been seen by some as
limited" although a number of large UK firms did "recognise
the networking opportunities the CBC can offer and are active
participants in their events".
98. We are not
convinced that member states are making the most of the economic
and trading opportunities offered by the Commonwealth. There may
not be a distinctive "Commonwealth factor" in trade
and investment, but the Government should do more to help create
such a factor. In particular, we agree with Lord Howell's remark
that the UK should "concentrate ... very much more"
on seeking finance for infrastructure projects in the UK from
sovereign wealth funds, including those in fast-growing Commonwealth
99. We also
note with concern the doubts about the current value to the UK
of the Commonwealth Business Council (CBC), and welcome the FCO's
intention to take the opportunity of the appointment of a new
Director General of the CBC to explore the possibility of a closer
and more fruitful relationship. However, we do not believe that
this limited initiative will make the most of the economic opportunities
offered by the Commonwealth. We recommend that the Government
should set out, by the end of 2012, a five-year strategy to increase
the benefits to the UK of trade and investment with Commonwealth
A Commonwealth Free Trade Area?
100. Ms Ruth Lea, representing the Arbuthnot Banking
Group, urged the Government to take a radical step to make the
best use of the potential advantages of our Commonwealth and other
connections. She proposed that the UK should consider "having
free trade areas with the growing parts of the world economy,
including the Commonwealth".
Ms Lea described the hurdles which needed to be overcome if such
free trade areas were to be established, especially the fact that
at the moment, the UK cannot negotiate its own free trade agreements
because of its membership of the EU customs union. To be able
to develop those free trade agreements, the UK would have to withdraw
from the EU customs union.
Ms Lea denied that leaving the EU customs union would lead to
a loss of UK exports to the EU, arguing "of course they will
trade with us. If they have a £30 billion surplus, they will
also told us that if the UK developed a free trade agreement with
Canada, Australia or India, "there is no reason why we should
not continue to trade fully with the EU countries, as indeed Switzerland
101. On the other hand we heard evidence to suggest
that the complexities of present-day international trade arrangements
would make it difficult to set up a Commonwealth free trade area.
Professor Murphy was sceptical of the idea of such an area, citing
obstacles in the rules of the World Trade Organisation. He observed
that "the Commonwealth as a great economic bloc was never
a starter even in the heyday of the empire".
Although a free trade area might be possible, we also heard evidence
that the political will might not be present across the Commonwealth
to make it a reality. On our visit to the Caribbean it was observed
that plans for a common market among Caricom countries
had not been realised; this was said to demonstrate the difficulties
inherent in trade integration among Commonwealth countries. Lord
Howell told us that the idea of a free trade area with Commonwealth
countries was "a bit out of date, because the nature of world
trade has changed totally." He said that the "drivers"
of development and economic activity were instead increasingly
investment and capital movements.
102. There is
currently much debate about a possible re-evaluation of the relationship
between the UK and the EU, and the economic opportunities presented
by the Commonwealth certainly play a part in that debate. However,
many other considerations, including for instance economic relations
with such countries as China and the United States, will undoubtedly
play a bigger role. It is clear that the creation of a free trade
area with Commonwealth countries would require a fundamental and
potentially risky change in the UK's relationship with the European
Union, and the benefits may not outweigh the disadvantages.
Education and Scholarships
103. The Commonwealth provides many opportunities
for the education of the citizens of member states. In particular
we took evidence illustrating the importance of the Commonwealth
in supporting tertiary education. Of those countries listed as
each receiving more than 5% of all foreign students worldwide,
three are Commonwealth member statesAustralia, Canada,
and the UK. The Association of Commonwealth Universities (ACU)
noted that some 77% of Indian citizens enrolled abroad study in
just three countriesAustralia, the UK, and the US. The
Association identified the key motivating factors in this as the
use of English, the quality of education, and cost.
104. Commonwealth Scholarships play a major role
in this exchange of students. Over 29,000 Commonwealth Scholars
and Fellows across the Commonwealth have benefited from the Commonwealth
Scholarship and Fellowship Plan (CSFP) since 1959. The ACU told
us that "the substantial indirect impact" through the
spread of values, sympathies, and cultural/intellectual exchange,
as well as the direct benefits of individual career development,
had been identified in a series of evaluation studies.
105. The interests of the UK in this are clear. Many
overseas students come to the UK on Commonwealth Scholarships.
In 2008-09, the UK awarded the largest number of Scholarships,
with Canada, New Zealand and India coming next. The Commonwealth
Scholarship Commission in the United Kingdom (CSC) is responsible
for managing Britain's contribution to the CSFP. Awards are funded
by the Department for International Development (for developing
Commonwealth countries), and the FCO, the Department for Business,
Innovation and Skills and the Scottish Government (for developed
Commonwealth countries), in conjunction with UK universities.
CSC scholarships cover PhD research, including the Commonwealth
Cambridge Scholarship; Masters programmes; academic fellowships;
split-site Scholarships for PhD students to spend up to one year
in the UK; professional Fellowships for mid-career professionals
in developing countries; distance Learning Scholarships for developing
country students to study UK Master's degree courses while living
in their own countries; and shared scholarships.
106. The FCO told us in written evidence that in
some cases, universities support Commonwealth Scholarships with
Although the FCO said that it was too early to give a precise
figure for the number of new Commonwealth Scholarship awards in
the current financial year, this was estimated by the FCO to be
approximately 800. The Department told us that "overall,
funding for Commonwealth Scholarships has increased in the past
two years, and a four year settlement has ensured that this trend
will continue until 2015".
They said that, when compared on a like for like basis, Commonwealth
Scholarship award numbers were increasing and that therefore funding
would increase in real terms over the period 2011-15. The FCO
also told us that about a third of Chevening Scholarships, which
"support FCO objectives by creating lasting positive relationships
with future leaders, influencers and decision makers," go
to Commonwealth countries, with India among the top five recipient
107. The FCO argued that while the "main purpose"
of the Commonwealth Scholarship programme remains that of international
development, it also brings more direct benefits to the UK. The
results of recent evaluations, for example, show that Commonwealth
Scholarships "contribute significantly to the public diplomacy
activities of the FCO".
Many Commonwealth Scholars go on to great things, and could become
crucial interlocutors with the UK in the future. Mr Mark Robinson,
currently alternate Chair of the Commonwealth Consortium for Education
(and a member of this Committee's predecessor from 1983 to 1985),
told us that some former Commonwealth Scholars were playing highly
influential roles, becoming Prime Ministers, Permanent Secretaries
or Chief Executives in industry.
Successful alumni of the programme who were funded by the UK Government
include Dr Kenny Anthony, Prime Minister of St Lucia, Asheesh
Advani, former CEO of Virgin Money USA, Mark Carney, Governor
of the Bank of Canada and Professor Crispus Kiamba, Permanent
Secretary of the Kenya Ministry of Higher Education, Science and
108. In 2008 the FCO cut funds for the Commonwealth
Scholarship and Fellowships, but Mr Robinson told us that he was
pleased that the gap had been bridged by additional Government
support, along with funding from universities. The result was,
according to Mr Robinson, that the Scholarship fund had "more
or less held its own" in recent years.
109. We note
that part of the funding for Commonwealth Scholarships now comes
from institutions of higher education. We are concerned that this
could develop into an unsustainable burden on the limited funds
available to those institutions. We recommend therefore that,
recognising the importance of the Scholarships for the achievement
of the UK's objectives, the Government should guarantee to maintain
at least the current level of funding in real terms.
110. Proposals were put to us for an increased number
of scholarships with a Commonwealth theme. For example Professor
David Dilks recommended "a substantial number of 'Queen's
Jubilee Scholarships'". These did not need to be fully-funded
by the taxpayer, Professor Dilks told us; he believed there should
be an opportunity for businesses and for individuals to contribute.
Frank Field MP agreed with Professor Dilks's suggested scheme,
adding that for the scheme to have maximum impact, it would be
important to engage the interest and enthusiasm of the younger
members of the immediate Royal Family in this task, "and
for them to take a personal responsibility for the scheme's success".
111. We believe
that Commonwealth Scholarships are a cost-effective way of widening
opportunities for young people across much of the Commonwealth.
They also help the UK to achieve some important diplomatic goals.
If the Government's commitment to revitalising the UK's relationships
with the Commonwealth is to mean anything, the numbers of Commonwealth
scholarships should increase. A special new scholarship scheme
would be a very fitting way to mark the Queen's Jubilee. The suggestions
made for part-funding by the private sector are promising. We
urge the Government to announce a competition for the first Queen's
112. Professor David Dilks also made a number of
other proposals for strengthening the educational activities of
the Commonwealth. His suggestions included exchanges and short-term
secondments of teachers, youth exchanges, medical collaborations
such as short-term secondment of doctors in training and a place
for the Commonwealth in school curricula.
113. The suggestions
made to us by Professor Dilks for strengthening the education
and engagement work of the Commonwealth, through such means as
medical, teacher and youth exchanges, and greater attention to
the Commonwealth in school curricula, deserve serious consideration.
They appear to be cost-effective ways of raising the public profile
of the Commonwealth. The Government and the Commonwealth Secretariat
should urgently examine their feasibility.
114. However several witnesses saw contradictions
between some UK domestic policies and the Government's stated
aim of strengthening links with the Commonwealth through education.
For instance, educational schemes could face an uphill struggle
to make an impact in light of recent changes to the UK visa regime
and high tuition fees. Mr Mark Robinson expressed concern that
PhD fellows, who were making a contribution both in the UK and
in their home countries, did not always find it easy to travel
because of problems with their visas. He also said that Commonwealth
participants in symposiums in the UK could run into problems because
they could not get a visa in time.
Mr Field saw a need to correct what he described as the "bias"
caused by the UK's differential fees and the immigration regime
against students who are citizens from countries which "have
loyally fought with this country through two world wars".
We were told by many of our hosts in Commonwealth countries that
the UK visa regime was a cause for concern, for those in public
life, for business people and for students.
115. Moreover, the UK is no longer regarded as the
only Commonwealth country with first-class Universities.
The challenge to the UK's universities also comes from Europe,
according to the Commonwealth Scholarship Commission in the United
Kingdom, which pointed to a recent study demonstrating that other
European countries, most notably France and Germany, are "significantly
more generous than the UK" in encouraging international study
amongst citizens from countries with which they share close historical
116. When considering
its policy on immigration, the Government must bear in mind the
possibly serious effects of a restrictive student visa policy
on the wider interests of the UK, including the economic and diplomatic
benefits brought to the country by Commonwealth students.
121 Ev 88. The National Audit Office largely endorsed
the methodology and judgements of the MAR in a report published
in September 2012. C&AG's Report The multilateral aid review,
Session 2012-13, HC 594, pp. 27-29 Back
Ev 149 Back
Ev 122 Back
Q 18 Back
Q 53 Back
Q 143 Back
Ev 106 Back
Q 122 Back
Foreign Affairs Committee, First Report of Session 1995-96, para
Ev 72 Back
Ev 106 Back
Q 42 Back
Ev 72 Back
Q 170 Back
Q 145 Back
Q 151 Back
Ev 93 Back
Q 89 Back
Q 80 Back
Q 43 Back
CARICOM Countries are Antigua & Barbuda, The Bahamas, Barbados,
Belize, Dominica, Grenada, Guyana, Haiti, Jamaica, Montserrat,
Saint Lucia, St. Kitts and Nevis, St. Vincent and the Grenadines,
Suriname and Trinidad and Tobago. Back
Q 157 Back
Ev 125 Back
Ev 124 Back
Ev 176 Back
Ev 94 Back
Q 100 Back
Q 99 Back
Ev 171 Back
Ev 170 Back
Ev 63 Back
Q 111 Back
Ev 171 Back
Ev 63 Back
Ev 119 Back