The Future of UK Development Co-operation: Phase 1: Development Finance - International Development Committee Contents

1  Introduction

1. There are a number of changes affecting developing countries and development finance, such as the changing geography of poverty, an increasing focus on global public goods and the emergence of new sources and types of finance. The future strategy of the Department for International Development (DFID)will need to set out how it will respond to these changes, and we therefore decided to undertake an inquiry into the Future of UK Development Cooperation. In October 2012 we published a call for evidence, inviting comments on the main global factors affecting poverty; the future role of development aid; whether DFID should offer concessional loans; the impact of non-aid policies on development; the UK's ability to influence the future global development agenda; and what the future of UK development cooperation should look like. We received a number of useful submissions which helped us to plan the phases of our overall inquiry, and decided to begin with an inquiry into aspects of development finance.

2. We published a further call for evidence in May 2013, seeking views on whether the 0.7% aid target will be appropriate in the long term; whether DFID has the right mix of financial instruments;[1] whether the UK should establish a new, independent development finance institution; whether DFID has the right balance between bilateral and multilateral aid; what lessons can be learned from other national donors; and how DFID should monitor and influence expenditure by multilateral institutions, especially in countries and regions where DFID does not have a bilateral programme.

3. We received 20 written submissions from a range of organisations and individuals, and held four oral evidence sessions between June and October 2013. We also held informal briefings with the Overseas Development Institute (ODI) and with experts from Chatham House, and held informal meetings with the President of the World Bank and with the Japan International Cooperation Agency (JICA). This inquiry was also informed by our visit in September to Washington and Brazil, where we held meetings with the World Bank, the Inter American Development Bank, the Brazilian government and other development organisations.. We are very grateful to all those who provided oral and written evidence, and to those who contributed to our informal meetings and to our overseas visit. We would like to thank our specialist adviser, Dr Dirk Willem te Velde of ODI.

1   The term financial instrument is used to refer to the different ways of providing finance, such as grants, loans, equity and other forms of finance Back

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