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Baroness Jay of Paddington: My Lords, I, too, congratulate my noble friend Lady Whitaker on introducing the debate with her customary authority. I greatly value her authority and expertise in development policy issues in her membership of the Council of the Overseas Development Institute. I declare an interest as chairman of that council.

Like other noble Lords, I congratulate the Government on their leadership in raising the fundamental issues of global poverty in forums such as the G8 and the European Union. I commend their specific current policies, particularly the proposals on the international finance facility and debt relief. But I also support the policy of raising general aid levels to the 0.7 per cent of GDP by 2013. I support the so-called "Marshall Aid" plan for Africa.

However, noble Lords will be aware that recently some distinguished commentators and economists—I am glad to see my noble friend Lord Desai in his place as he has certainly contributed to this—have argued that aid in the conventional sense is an ineffective and inefficient method of reducing poverty. To put it in headline terms, with which I am sure he would disagree, they argue that the state of governance and levels of corruption in many African states are so bad that we should not pour more financial aid into a black hole which may lead directly to Swiss bank accounts. The noble Lord, Lord Eden, has already spoken of greed in this context.

My concern is that we must not abandon conventional aid programmes in the hope that taking this line will stimulate more rapid reform. The humanitarian, economic and public health crises in sub-Saharan Africa are too immediate for that approach. After all, poverty is increasing rather than decreasing in that area, where 46 per cent of the population are living on less than a dollar a day.

On the other hand, I do not think it is any longer sufficient for donor governments simply to "exhort" their counterparts to change their ways or to impose conventional conditionality on aid. The scale of inadequate governance and need in the poorest states is too great for that.

For example, indicators developed by the World Bank on effective government and the rule of law show only a handful of sub-Saharan African countries scoring more than 25 per cent. Another international checklist, which uses the criteria of the Universal Declaration of Human Rights and assesses political freedoms and civil liberties, puts fewer than a quarter of African countries in a positive category.
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I very much welcome DfID's new initiative announced this month on these so-called "fragile" states which aims to give more rather than less aid to them but, at the same time, to confront the problems of instability and corruption head on, to give help to institution building and to try to move to a more preventive than reactive position on current crises.

I am also pleased to see that after a somewhat tortuous process, my right honourable friend Patricia Hewitt has agreed a public review, through the Export Credit Guarantees Department, of the new anti-bribery rules. Initially, these had seemed a laudable attempt to reduce corruption involving UK companies, but then appeared to have been rather watered down. Perhaps in his reply my noble friend Lord Triesman could elucidate a little more on the current situation in regard to these anti-bribery rules because there have been conflicting reports about them in the press in recent days.

Overall, DfID is leading an encouraging new approach to aid through its "Drivers of Change" programmes, which involve political analysis of traditional systems and social development initiatives in fragile states receiving aid. It also puts an emphasis, which I am very glad to see, on the work of NGOs in delivering aid at the grass roots. I know from one of my own daughters, who is working on such a programme currently in Bangladesh, that where these initiatives are culturally sensitive, culturally appropriate and work with the grain of the local understanding of leadership and accountability, for example, real progress can be made.

The "capable" state, as defined by the UN's Economic Commission for Africa, is still, I am sure, a distant aspiration for many sub-Saharan countries, but at least through the work of NePAD—the New Partnership for Africa's Development—and the OECD, key indicators of change are being developed and a path for reform is being mapped out.

On crucial matters, such as the independent oversight of government spending and public sector management, the Economic Commission for Africa wants both aid donors and recipients to establish what it calls mutual accountability for investment and reform programmes; to accept mutual accountability for their outcomes. As the executive secretary of the commission wrote very recently:

Our Government, I am sure, can take the political lead in recognising these obligations and acting on them, and also in creating the practical tools to ensure that aid is better spent on the ground. Aid properly spent does work; and to achieve the millennium development goals we need to make it work, even in the most fragile and failing states.

Lord Selsdon: My Lords, it is rather sad that on this great and important subject the party of government will speak for 107 minutes, the Official Opposition for 22 minutes, the Liberal Democrats for 24 minutes, the
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Cross-Benches for 18 minutes and the right reverend Prelate for six minutes. As I was told I should speak for only five minutes, I wish to protest slightly.

When I first came to this House only 42 years ago, these independent debates on Wednesdays were cross-party; there was no division between us, as there is not on this subject. If you were lucky enough—or unfortunate enough—to be given the time, you would be asked to choose a number of people who knew their subject, all of whom would speak without notes. You would write a hand-written letter to them—I made the mistake of sending a typed letter once—asking them if they would be kind enough to speak. They would write back and the debate would be staged so that no one repeated what was said. But now I feel rather like John Cleese in the film "Clockwise"—"One minute".

I will now turn to my subject and a topic which will include goats and Gleneagles. I begin by explaining how I got involved in what we called the third world and which consisted of most parts of Africa. I then got involved in and was promoted, like British Rail, to the second world, which was eastern Europe, where there was considerable poverty. I ended up in the banking world as an adviser to many third world countries, my favourite of which was the Government of Jamaica because I was conceived on the beach. Part of our plan was to try to replace the trade in what we called the "weed of wisdom" with more suitable agricultural products.

I was out there when in came the United States of America to try to put pressure upon Jamaica to boycott—an Irish word—Grenada. ODA had just finished building the airport there to open up Grenada when the Secretary of State, Mr George Bush, came to put pressure on Jamaica. He said "You know, you must boycott Grenada". Then the Prime Minister, Edward Seaga, and his team said to me "Malcolm, is it really true that Boycott is going to play cricket in South Africa?".

I had an involvement in government with sport and noble Lords may remember that, in the end, it was the Gleneagles agreement that got rid of apartheid. The United States has never understood that baseball is played only in Cuba and one of the other Caribbean countries—and American football not in many places—but cricket, rugby and soccer are played worldwide. We look at the performance now of our great premier leagues, where the third world, if I can call it that, is present. The sense of pride that it has in the achievements of its stars in sport has helped to raise the standards of thought and pleasure of its countries.

I shall not tell your Lordships how the Sudan could have been made the breadbasket of the Arab world in 1974 and could grow enough grain for the whole of Africa—but politics got it wrong. So with politics, trade and finance are the key aspects.

We once upon time had a facility known as the ATP—the aid and trade provision facility. I am grateful to the noble Baroness, Lady Whitaker, for starting off in the right way. We cannot get rid of poverty unless there is added value in the countries concerned and unless there is trade. One of the original
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thoughts—which is not new when I look at the Baker plan and I see the noble Lord, Lord Grenfell, and think of the remarkable work that IFC did to try to encourage investment—is that we need to buy.

Any orders that we place should be financed by the equipment that comes in. Yesterday, when I heard that British uniforms were to be made in China, I thought that maybe they could be made in another country. When you consider all the textiles consumed by the National Health Service, you could place a regular order to any one of those host countries. This could lead to the supply of the equipment, then to the training of their people and the buy-back, as is done with energy. These actions, in theory and in practice, are fairly reasonable.

But we should look, too, to the great Victorian entrepreneurs and philanthropists. I am extraordinarily impressed by the decision of Bill Gates to put—not as a grant—750 million dollars into the principle of vaccinating people in order to save lives. Looking back to the Jesse Boot's of this world, the Peabody's and Sir Thomas Salt, we should realise that many great corporations could be encouraged to make these gestures, but as investments and not as grants.

I was moved to note, with all the money produced for these recent disasters, that the one body that said it had enough money was Médecins Sans Frontieres. The other organisations said "We want more money, we want more money", but had not decided what to do with it. It is very simple: you need communications, accommodation and plant and machinery to make what the nations are good at.

The new Gleneagles agreement should be drafted today, planned and introduced rapidly. At the moment we are playing Simon says. Tony says "Do this", Gordon says "Do that"—but Peter is in Brussels and could wind up the Commission on these matters.

It is a matter of creating that added value and, in the United Kingdom, realising that many of these countries are Commonwealth countries and bringing together the Commonwealth. Forget not that there will be other disasters. I sit down with the perishing thought that as many people were killed in this recent disaster as were killed by British and Empire troops during the last world war.

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