eliminating world poverty making governance work for the poor

A White Paper on International Development

Presented to Parliament by the Secretary of State for International Development by Command of Her Majesty

July 2006

© Crown Copyright 2006 The text in this document (excluding the Royal Arms and departmental logos) may be reproduced free of charge in any format or medium providing that it is reproduced accurately and not used in a misleading context. The material must be acknowledged as Crown copyright and the title of the document specified. Any enquiries relating to the copyright in this document should be addressed to The Licensing Division, HMSO, St Clements House, 2-16 Colegate, Norwich, NR3 1BQ. Fax: 01603 723000 or e-mail: [email protected] Cm 6876 | £24 contents

Foreword by the Prime Minister ii Chapter 6 Investing in people 72 From commitments to results 73 Preface: the challenge for our generation iii Getting children into school 76 This White Paper xi Improving health 78 Providing clean water and sanitation 82 Protecting the very poorest 84 Delivering our promises

Chapter 1 Delivering the promises of 2005 2 The case for development 3 Working internationally to tackle climate change Poverty is falling, but progress is uneven 6 Making progress against the 2005 commitments 9 Chapter 7 Managing climate change 90 The climate is changing 91 Climate change matters for development 92 Working for an international solution 93 Building states that work for poor people Making the shift to cleaner energy 96 Chapter 2 Building effective states and better governance 18 Helping developing countries to adapt 97 Good governance is essential to reduce poverty 19 Improving governance 21 The UK will use its aid to support good governance 23 Creating an international system fit for the 21st century International partners can help 25 Winning the fight against corruption 28 Chapter 8 Reforming the international development system 104 The international system must change 105 Chapter 3 Supporting good governance internationally 32 Collective action in a changing world: the United Nations 106 Governance is an international issue 33 Improving the international response to humanitarian crises 108 International standards encourage responsible behaviour 34 Financing development: the International Financial Institutions 110 International standards help fight corruption 37 Regional approaches to regional issues 113 International standards promote better governance 40 A new alliance for development: the European Union 114 Holding each other to account 117

Helping people get security, incomes, and public services What can you do? 122 Chapter 4 Promoting peace and security 44 Insecurity and conflict keep people poor 45 Glossary 127 Improving security and preventing conflict 46 Tackling conflict and building peace 49 Endnotes 128

Chapter 5 Reducing poverty through economic growth 56 Growth is the best way to reduce poverty 57 Promoting growth 58 Helping poor people to benefit from growth 64 Using natural resources for sustainable growth 66 Opening up trade 67 Managing migration for growth 69 ii foreword Tony Blair, Prime Minister

Eliminating world poverty is in Britain’s interests – and is one of the greatest moral challenges we face. In 1997, the Labour Government established the Department for International Development, to underline our clear commitment to ending extreme poverty in the world. Since 1997, we have increased aid for developing countries by 140% in real terms, from £2.1 billion to £5.9 billion. In 2004, we set a clear timetable for us to meet the UN target of 0.7%, by 2013. And in 2005 we put development and Africa at the heart of our G8 Presidency. Backed by enormous public support from the Make Poverty History coalition and the Live8 concerts, the Gleneagles G8 Summit in July 2005 agreed a comprehensive, detailed plan to fight poverty. This included plans to support an African Peacekeeping Force, provide universal access to AIDS treatment, and promote investment and infrastructure to create jobs for poor people. G8 countries agreed to provide an extra US$50 billion a year in aid by 2010, and to double aid for Africa. And African leaders at Gleneagles agreed in return to draw up ambitious plans to tackle poverty, and to work to end corruption, bad governance and conflict. This new White Paper on Eliminating World Poverty sets out how the UK will work with others to deliver on the promises we made last year. This will need an effort right across Government, to put our pledges into practice, to promote better governance across the world, to tackle the threat of climate change, and to create an international development system that is fit for purpose. We are making real progress. This White Paper shows there are many success stories. But there is still a very long way to go. It will need continuing commitment, and continuing support from the British public, to achieve this. But if we work together, it can be done. There is no greater or more just cause facing us today.

July 2006 iii iv

six human beings has to live on less than one preface dollar or that 30,000 children die needlessly; or that each year half a million women still the challenge for our generation die in pregnancy or childbirth; or that we could give AIDS treatment to every single Hilary Benn, Secretary of State for International Development person in the world that needs it, but have not. No, for me the greatest shame is that all this The scandal of poverty… vulnerable, or a helping hand when disaster happens not in an age of famine and world strikes. Nor is it only about addressing the root war, but in an era of unprecedented plenty Today, over six billion members of the human causes of poverty, whether through aid or and potential, in a world eight times richer family share our small and fragile planet. A debt relief, or fairer trade and better than it was 50 years ago. human family that is more interdependent governance. I believe, like the economist than at any other point in history. And a Amartya Sen, that development is above all family that – for the first time – has the …and what 2005 did about freedom. In his book Development as capacity to make sure that every one of its about it. Freedom, Sen argues that millions upon members is lifted out of poverty. millions of our human family are living 2005 was the year in which Nelson Mandela What people want and need is enough food imprisoned: by economic poverty, by political addressed a packed Trafalgar Square and to eat and water to drink. A roof over their tyranny, by sickness and disease, by ignorance, 250,000 people took to the streets of heads, a job, a school for their children, and and by oppression and violence. But now, we Edinburgh. In the UK, one in every six medicine and care when they are sick. The have the capacity to free our fellow human citizens supported the Make Poverty History chance to live in peace, without fear of beings, once and for all, so that each one can campaign. Millions of people the world over violence or war. And the opportunity to realise enjoy freedom’s ‘thousand charms’. watched the Live8 concerts and raised their the potential in each and every one of us. voices, not just to demand justice, but to The scandal is not only that so many lack the press for action to fight global poverty. This is what development – at its best – has chance to fulfil their potential for want of an always been about. Development is not only education, basic medical care or a functioning In doing so, they provided the most eloquent about care for the poorest and the most economy. Nor is it only that each day one in and inspiring response to the gloomy pessimists and the cynics who muttered that politics could not make a difference, that there was no point in trying, and that nothing would ever change no matter what we did. Governments did change their policies and made new promises, most notably with the G8 at Gleneagles undertaking to: increase aid by US$50 billion a year by 2010, with US$25 billion of that to go to Africa; cancel debt worth another US$50 billion; and provide AIDS treatment to all who need it by 2010. Already we have seen progress on debt cancellation, increased aid, a new humanitarian fund and funding for AIDS. The UK has changed its approach too: doubling aid since 1997; committing for the first time ever to a timetable – 2013 – for giving 0.7% of Gross National Income in development aid; writing off 100% of the debt owed to us by some of the world’s poorest nations; winning support for the International Finance Facility v vi

our aid will truly help those fighting for a more can be put at the service of the world’s poor, change. New ‘flash epidemics’ like avian just tomorrow. This White Paper sets out what the rapid growth of multilateralism over the flu or SARS could move through the world the UK will now do to make sure that these past century, and a growing awareness that rapidly if they are not nipped in the bud. global co-operation is needed to match promises are fulfilled. A generation of teenagers is entering the global interdependence. But 2005 represented more than just a workforce in developing economies. By change in governments’ policy and spending. But there are also causes for concern. 2010, 733 million more people will be of It was a recognition by the citizens of the Progress towards achieving the Millennium working age, compared to 50 million more world that we have all become more Development Goals is uneven, with the in the rich world. Many of them will migrate interconnected and more interdependent. biggest challenge in Sub-Saharan Africa and – internally and abroad – in search of a better It is no longer acceptable for the privileged South Asia. Women continue to be denied life. But, by 2030, two billion people could few to turn their backs on the many. We can their rights. Over 40 million people are also be living in slums without access to no longer claim that we did not know what already living with HIV. Tuberculosis and healthcare, education or sanitation. If ways was going on. Make Poverty History and malaria could become even greater killers as of earning a living aren’t available to help the Global Call to Action Against Poverty a result of the spread of HIV and of climate this new generation to realise their dreams, represented both an acceptance of the responsibility that comes with this change and a belief that we can do something about it.

In a changing world… If this belief is proved right, then it will not have come a moment too soon. Because every day that global poverty continues is a day too many. But first, we should recognise that some things have changed for the better. Over the past 40 for Immunisation which aims to save the lives years, the proportion of people in developing of 5 million human beings over the next countries who can read and write has risen decade; and making Africa a priority through from under half to nearly three-quarters. our G8 and European Union presidencies. Average life expectancy has increased by True, by the end of the year, poverty had around fifteen years, and there are 300 million not been made history. Most poor people more children now in school. Smallpox was continued their lives in countries still far eradicated just over a generation ago, and we from achieving the Millennium Development are on the brink of doing the same with polio. Goals, and too many children had died – Asia has seen a staggering reduction in deaths that could have been prevented. It poverty. China’s success is not just good for was not a moment for triumphalism, but it its people. It has also helped lift others out of was a year that saw real progress. Things felt poverty across the continent, and provided different, but only time – and what we do – opportunities for trade with other developing will tell whether they really were. regions. The truth is that, in the right circumstances, development works. Aid So, now the challenge for the world’s works. Debt relief works. Things can change, governments is to make good on these and have changed, for the better. commitments – especially on trade where we have failed so far – and to prove that aid But our world now stands at a crossroads. increases and debt relief really will make a There are reasons for hope: the energy and difference. We have a double promise to fulfil: politics of 2005, the power of economic a promise to the world’s poor not to let them development to change lives, the way that down; and a promise to our own people that our technological and scientific ingenuity vii viii

then their bitterness and anger at a world groundwater depletion, and urban spread. As …global good governance… that has let them down could lead instead to I write, oil prices are at their highest level ever. In order to meet these global challenges, political instability and radicalisation. Meanwhile, climate change is becoming the we will need to act globally more than ever. And other trends – rapid economic change, most serious and urgent problem the world When we look at the principal institutions of inequality, disease, and competition for natural faces. Unless we take radical action now, we multilateralism – the United Nations, the resources – could all push developing countries face the shadow of a century of rising sea World Bank and International Monetary further down the path to violent conflict. levels, droughts, hurricanes, heatwaves, Fund, the World Trade Organisation, and the glacial melting, floods, crop failures and European Union – the chief characteristic they But most important of all will be the forced migration. All of this will affect the share is that they were all the result of the challenge of managing our world sustainably poorest and most vulnerable people; the 1945 post-war settlement. They were, in and fairly. By the middle of this century, over very people least responsible for the problem. other words, institutions built for a world very 9 billion people will be sharing our planet; a different from today’s. half more than today. Meanwhile, the The scarcity of resources and climate change consumption of those of us already here – could stop development in its tracks. Yet on Back in 1945, the burning challenge of the mainly in developed countries – is running the other hand, there is the uncomfortable day was to rebuild Europe and Japan and to at unsustainable levels. Many of the natural realisation that development, if not managed avoid the new cold war becoming a third resources on which we all rely, and on which well, can itself make resources more scarce. world war. If we were creating the multilateral our economic development has always The challenge, then, is to ensure that system from scratch today, the foremost depended, are becoming seriously depleted. development is sustainable and also fair. challenges in mind would be trade and Fighting on both of these fronts – the need investment, climate change and scarcity of Already, a third of the world’s people live in to use resources wisely and within sustainable resources, state failure, conflicts within states, countries which don’t have enough water; by limits, whilst allowing the poorest countries the movement of people, international 2025, that proportion will rise to two thirds. and people a chance to prosper – will be at corruption and terrorism. So it is natural that Global fish stocks are running down faster the very heart of 21st century development. we should look at the multilateral system than they can renew themselves. The world’s critically, ask whether it is working, and be land is under pressure from deforestation, ready to help make it work better. unsustainable agricultural practices, The European Union is also evolving swiftly. EU countries will account for the lion’s share of the new aid commitments agreed last year at Gleneagles. Countries that were until recently recipients of aid have now, with accession to the EU, become donors. So it makes sense for the UK to work more closely with other European countries, both to influence their thinking and to make Europe’s development effort much more effective. Global good governance is not just about big organisations. It’s also – just as importantly – about the framework of global governance to help create a safer world. One example of this is building capacity to deal with conflicts. Another is the UK’s call for a new Arms Trade Treaty. Yet another is the need for greater co-operation in combating corruption and dealing at the global level with problems that can undermine governance in countries, such as illicit international markets for natural resources like minerals and timber. ix x

…and good governance make sure that money is spent where it’s people and their relationships, one with And politics is also what all of us will rely in countries will make all supposed to be; increasing our support to a another, more than it is about formal on here in the UK to sustain support for free press and media in developing countries; institutions. What makes the biggest international development. When citizens the difference. and offering much more support in areas like difference to the quality of governance is get involved in any one of a hundred ways, Ultimately, it is within individual countries elections, human rights, parliaments and active involvement by citizens – the thing it puts life into politics. It shows how we can that poverty will be eliminated. Nation trade unions. we know as politics. turn our burning hope for a better world states are central to the change that is into helping the poorest billion people on I am determined to ensure that our rising aid This, more than anything, lay at the heart needed. The commitments made in 2005, our planet to change their own lives for the budget is used for the purpose for which it is of Make Poverty History last year. It’s the only in particular relating to Africa, represented better. As Nelson Mandela said in Trafalgar given – helping to lift people out of poverty. thing that can in the long run transform the a deal. A contract in which increased aid Square last year “Sometimes it falls upon a We have to show results. That’s why we will quality of decision making in developing and debt relief were offered in return for a generation to be great.” It is up to us to make a careful assessment of the best way to countries, and the effectiveness of states. commitment to better governance. accept that responsibility and do what do this in each country and vary the way we It’s why DFID’s partners are not just needs to be done. Good governance and development are give our aid accordingly. And we will be governments but also people with the about people and governments of developing resolute in the fight against corruption. energy, courage and vision to make poverty countries working out this deal for history in their own countries. In the end, governance – from the global themselves. Each country needs to decide its right down to the village level – is about own economic and social priorities, and the best people to hold governments to account are those who live in the country and are most affected by its decisions. Whether states are effective or not – whether they are capable of helping business grow, and of delivering services to their citizens, and are accountable and responsive to them – is the single most important factor that determines whether or not successful development takes place. Good governance requires: capability – the extent to which government has the money, people, will and legitimacy to get things done; responsiveness – the degree to which government listens to what people want and acts on it; and accountability – the process by which people are able to hold government to account. To achieve lasting improvements in living conditions for large numbers of people, the capacity and accountability of public institutions needs to be strengthened. That’s why DFID already does so much to help developing countries build their capacity in areas like public financial management, police and civil service reform, and health and education. We will continue with this work and build on it. But we will also do much more at the grassroots end of political governance, working with organisations that train citizens’ groups in budget monitoring to

Pierre Labrie / Still Pictures xi xii

This White Paper is about delivering the promises …help people have security, made in 2005 and responding to the four big challenges incomes, and public services… for international development. 9 Work to help states promote peace and security. Where states are unable to protect First and foremost, the fight against poverty cannot be won without good their citizens, we will work with our governance. We need to help governments and citizens make politics work international partners to prevent, manage for the poor. And we need to make global governance better, because the and respond to conflict. international economy affects what happens in each country. 10 Promote rapid growth by supporting private sector development and employment, Second, we must help countries – especially those at risk of falling ever further investing in infrastructure and agriculture, behind the rest of the world – do better in ensuring security, achieving and working for international trade rules sustainable growth, and delivering health and education for all. that maximise the opportunities for the Third, if we do not act urgently, the threat posed by climate change will poorest countries. derail development. 11 Commit at least half of all future UK direct And finally, because no country can do this alone, we must make the support for developing countries to public services, to get children into school, improve international system fit for the 21st century. healthcare, fight HIV and AIDS, provide more clean water and sanitation, and offer social To this end, over the next five years, the UK will, in summary: protection; and agree ten year commitments with developing countries to do this.

…deliver our promises… …..help to build states that 12 Seek to make sure that growth is work for poor people… 1 Fulfil the commitments we made in 2005, equitable, and that natural resources and work through the G8, United Nations, 6 Put support for good governance at the are used sustainably. and European Union to ensure that our centre of what we do, focusing on state partners do the same. capability, responsiveness and accountability, ...work internationally to tackle working in particular with citizens, civil climate change… 2 Increase our development budget to 0.7% of society groups, parliamentarians and the Gross National Income by 2013 and, working 13 Work for international agreements on media. Adopt a new ‘quality of governance’ responsive international financial institutions; with others, press ahead with innovative climate change that stabilise greenhouse gas assessment to guide the way in which we supporting the growing roles of regional financing mechanisms like the International levels in the atmosphere, enable developing give UK aid, and launch a new £100 million organisations such as the African Finance Facility and an Air Solidarity Levy. countries to grow, create incentives and Governance and Transparency Fund. Development Bank and the African Union; generate investment for clean energy, and 3 Concentrate our development assistance on and a strong focus on merit-based 7 Tackle corruption; follow up the Extractive help poor countries to adapt to the impact. countries with the largest numbers of poor appointments, and greater accountability Industries Transparency Initiative with further people, particularly in sub-Saharan Africa and 14 Work with developing countries to make to developing countries. steps to bring greater transparency into South Asia; and on fragile states, especially sure that they are fully involved in future public revenues and procurement; and 16 Work more closely with European partners those vulnerable to conflict. international discussions on climate change, work internationally to tackle bribery, to promote development. and provide international support to help 4 Make sure that our wider policies, as well as corruption and money laundering. developing countries adapt. 17 Push for the Organisation of Economic aid, support development; and work with the 8 Decide how to provide UK aid based on Co-operation and Development’s European Union, G8 and others, including partner countries’ commitment to reduce Development Assistance Committee to large developing countries such as China, India …and create an international poverty, uphold human rights and monitor and hold donors to account on their and South Africa, to create an international system fit for the 21st century. international obligations, improve financial development commitments, and to work environment that promotes development. management, promote good governance 15 Work with others, and use our resources more closely with new non-OECD donors 5 Double our funding for science and and transparency, and fight corruption. and influence, to push for change in the such as India and China.. technology research, including efforts to find international system. This means: reform Full details of our proposals are set out better drugs, and new technologies for water of the UN; a more effective UN-led system in the following chapters. treatment, agriculture and to manage to deal with humanitarian crises; more climate change. delivering our promises 3

The promises of 2005 have the potential to change the lives of a billion men, women and children. Keeping those promises, in a rapidly changing world, is our priority.

The case for development... Aliki Sapountzi/aliki image library/Alamy

1.1 Poverty is about people. One in every six human beings – one billion people – lives on less than US$1 a day.1 Poverty for these men, women and children means not having enough food to eat, no clean water, no place in school, a mother dying needlessly, living in fear and violence, and little opportunity for a better life.

1.2 In the fight against global poverty, 2005 saw rich and poor countries make promises that will change people’s lives. These promises were made because people demanded them and leaders listened. They demonstrated that international politics can work in the interests of the poorest. Marching to make poverty history What is poverty? “As a veteran of all the major campaigns to fight poverty... the Make Poverty History “Poverty is like heat: campaign was different. Walking 25 miles you cannot see it, you a day for two weeks to link the two British G8 venues of Birmingham and Gleneagles, can only feel it; to know we found enormous public support and poverty you have to interest everywhere we went. The white tape decked countless towns and villages. go through it.” A mountain of cards and letters and a Saying from Adaboya, Ghana quarter of a million demonstrators awaited us in Edinburgh. Our hopes were high that this time we simply couldn't be ignored. The public have spoken and we will chapter 1 1.3 The promises made in 2005 were part of continue until we've seen it through.” a deal. The Commission for Africa set out its 2 Merryn Hellier, Member of the Jubilee Debt Campaign, proposals. At Gleneagles, African leaders Hereford, 2006 committed themselves and their people to lead their own development by improving delivering the governance, upholding the rule of law, and education provision, tackling HIV and AIDS, using their resources to fight poverty.3 In turn, and promoting economic growth – and to delivering our promises the G8 and European Union (EU) promised improve the way that aid was spent. They to provide an additional US$50 billion for promised to cancel debt, improve access to promises of 2005 development – increasing health and international markets, help poor countries 4

suffering from conflict or humanitarian African Peer Review Mechanism, thirteen emergencies, and tackle international reviews are under way and Ghana, Kenya corruption and climate change. and Rwanda have completed their reviews. The UN Peacebuilding Commission and UN 1.4 There has been progress over the last year. Central Emergency Response Fund have Twenty-one countries have already had all of been established. And the EU has agreed to their debt to the International Monetary Fund provide Euros 300 million to support African (IMF) cancelled. Nineteen countries – fifteen in peacekeeping efforts. Africa - have had their debts to the World Bank’s International Development Association 1.5 Much more remains to be done. To cancelled. The UK, with others, has launched sustain this new momentum in the fight the International Finance Facility for against poverty, it will be essential to Immunisation (IFFIm). This has the potential monitor progress. In the UK we have set 2005 – the promises to save the lives of 5 million children over the milestones for action and will continue next ten years and another 5 million after to publish updates so that Parliament and The G8 Summit agreed to: The EU agreed to: that. The Global Plan to Stop TB (tuberculosis) civil society can hold us to account. • Double aid to Africa by 2010 and give an extra • Set a new average EU aid target of 0.56% of and the Global Strategic Plan to Roll Back The G8 will publish a progress report this US$50 billion a year globally. Gross National Income by 2010 (doubling aid to US$80 billion) and 0.7% of Gross National Malaria have been launched. The UK has year. The new Africa Progress Panel will • Cancel the debts owed by some of the world’s Income by 15 EU Member States by 2015. helped establish an Infrastructure Consortium focus international political attention on poorest countries to the International Monetary • Adopt a new EU development policy with and an Investment Climate Facility for Africa. Africa and track progress against the Fund, World Bank and African Development Bank. This will be worth over US$50 billion the central aim of reducing poverty. The UN Convention Against Corruption has commitments made in 2005. As agreed at when fully implemented, and 90% will go • Implement a new EU Africa Strategy to come into force – the UK ratified it in Gleneagles, the Africa Partnership Forum – to Africa. support Africa to reach the Millennium February 2006. The Extractive Industries which brings together African countries and Development Goals. • Write off US$18 billion of Nigeria’s debt, Transparency Initiative (EITI) is now being their international partners – will also the biggest ever single debt deal for an implemented in over twenty countries. continue to monitor progress annually. African country. The UN World Summit Twenty-six countries have signed up to the The Development Assistance Committee • Uphold the principle that developing agreed to: countries should decide their own economic • Recommit all UN member states to the policies to support their own development Millennium Development Goals and other plans, for which they should be accountable international targets including those agreed at to their own people. the World Summit on Sustainable Development. • Get as close as possible to universal access • Establish a new UN Peacebuilding Commission. to AIDS treatments by 2010. • Endorse the concept of “Responsibility to • Support treatment and bed nets to fight Protect” when states fail to protect their people malaria, aiming to save the lives of over from genocide, war crimes, ethnic cleansing or 600,000 children every year. crimes against humanity. • • Fund the eradication of polio from the world. Establish a global humanitarian fund (the Central Emergency Response Fund). • Ensure that by 2015 all children have access • Re-affirm that managing natural resources to free good quality education, and to basic sustainably is essential for development. health care free where a country chooses to provide it. • Establish a UN Human Rights Council. • Help the African Union to set up a Standby Force as part of the 2004 G8 commitment to The World Trade Organisation train 75,000 troops for peacekeeping by 2010. talks agreed to work to: • Support early ratification of the • End all agricultural export subsidies by 2013, UN Convention Against Corruption and with substantial progress by 2010. find ways of recovering stolen assets. • Move, in principle, towards duty free and quota • Implement effective controls over the transfer free market access for all products from the of small arms and light weapons. poorest countries by 2008. • Implement a Plan of Action on Climate Change • End cotton export subsidies by 2006. to speed up access by developing countries • Increase substantially trade-related assistance, to low carbon energy and improve their including a UK pledge to increase its support to resilience to climate change. £100 million per year by 2010. 6 7

of the Organisation for Economic Poverty is falling, but progress Where do the poorest people live? Co-operation and Development (OECD is uneven… DAC) and the EU are monitoring financial commitments. And the African Monitor 1.7 In the last two decades there has been 1600 – launched by the Archbishop of Cape dramatic progress in reducing poverty. Thanks to rapid economic growth in Asia the 1400 Town – will help African civil society hold Projections their governments to account. number of people across the world living on 1200 less than US$1 a day is set to halve by 2015.5 1000 Other 1.6 This White Paper sets out how the UK There are now over 75 million more children Government will work with others to deliver in primary school than there were in 1990, 800 China the promises of 2005. It builds on the and the gap between the number of boys 600 international development White Papers and girls in education is slowly closing.6 South Asia published in 1997 and 2000, and is framed There are ten times as many people receiving 400 by the International Development Act of AIDS treatment as there were in 2000.7 200 Sub-Saharan Africa

2002. Promoting sustainable development Millions of people living on less than US$1 a day is a Strategic International Priority for the UK 1.8 But progress has been uneven. On 0 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 2015 as set out in the Government’s 2006 White current trends, many of the Millennium 8 Paper ‘Active Diplomacy for a Changing Development Goals (MDGs) will not be met. 9 World’.4 We believe that eliminating world AIDS killed over 3 million people last year. Source: World Bank Development Indicators 2006 poverty is not only morally right, but that it Half a million women still die in pregnancy will also create a safer, more prosperous or childbirth each year. And while death rates 1.9 Most of the improvements have been in 1.11 One third of the world’s poor people live world for us all. of children under the age of five have been Asia, particularly in East Asia. Some countries in ‘fragile states’.15 Fragile states include those dropping, every day around 30,000 children in sub-Saharan Africa are making progress, that have collapsed, such as Somalia, or have 10 still die from preventable causes. but the region as a whole will not meet any difficulties controlling their territory, as does of the MDGs; and South Asia is off-track on Afghanistan. They may be in conflict, or education, health, water and sanitation.11 recovering from conflict, such as Sudan, Across both regions, the spread of AIDS, Nepal and Angola. Climate change, energy malaria, tuberculosis and other diseases insecurity, scarcity of resources, population continues to present a major challenge. growth and migration could increase the The UK will Progress has also been slow in other regions, such as Latin America and Central Asia – but • Fulfil the commitments we made the absolute numbers of poor people there Learning to in 2005. remain low compared to South Asia and sub-Saharan Africa. On current trends, by tackle exclusion • Increase our development budget to 0.7% of Gross National Income 2015, over 90% of the world’s poor will live Sita is 11 and lives in a hut next to the 12 railway line in Patna, India. She belongs to by 2013. in sub-Saharan African and South Asia. the Musaha community, a low status caste. • Work with others to press ahead 1.10 Progress is slowest on the MDGs that Fewer than 1% of Musaha women can read with innovative ways of raising depend most heavily on improving the status and write. When Sita went to primary finance for development, like the of women and girls. Gender discrimination school the other children called her names International Finance Facility and is not only unjust but holds back economic and refused to sit next to her. The teacher said she needed a bath and threw her an Air Solidarity Levy. 13 growth and sustainable development. satchel out of the classroom. Sita was so • Work with the G8, Africa Around a third of people living on less than upset, she refused to go back. Her parents Progress Panel, Africa Partnership US$1 a day in sub-Saharan Africa are hadn’t been to school and were too shy to Forum, UN, World Bank, EU, chronically poor – they experience poverty go and talk to the teachers, so Sita stayed OECD DAC and civil society to most or all of their lives. Trapped in this way, at home looking after her younger brothers monitor progress and ensure they die of easily preventable causes and pass and sisters. But Sita's life changed when a

charity set up a class for girls. Now she is delivering our promisesdelivering our promises that developed and developing 14 on only poverty to their children. They have learning to read and write and wants to go countries live up to no way out and targeted assistance is needed back to mainstream school. their commitments. to help them. 9 Will the Millennium Development Goals be met?

Target already met or very close to being met Target is not expected to be met by 2015, Insufficient data number of fragile states. By 2010, half The UK will if prevailing trends persist of the world’s poorest people could be • Concentrate our resources on Target is expected to be met by 2015 if prevailing No progress or a deterioration living in such places, as more successful poor countries in sub-Saharan trends persist countries and regions leave them behind.16 Africa and in South Asia. Working in these countries is difficult, but

Sub-Saharan Latin America high levels of poverty and the threat of • Work more in those fragile states Goals and Targets Africa East Asia South-East Asia South Asia West Asia Central Asia and Caribbean conflict mean they deserve significantly that receive less aid overall in more international attention. relation to the number of poor GOAL 1 Eradicate extreme poverty and hunger people they have and which are most off-track on the MDGs. Reduce extreme poverty by half • Work in the middle income countries that have the largest Reduce hunger by half numbers of poor people and the greatest regional and global GOAL 2 Achieve universal primary education influence on development; and

Universal primary maintain links with others schooling (including through the EU) in order to help them avoid slipping GOAL 3 Promote gender equality and empower women back to low income status.17 Equal girls’ enrolment • Give greater priority to our work in primary school in support of gender equality and Women’s share of women’s rights. paid employment

Women’s equal • Continue to meet the representation development needs and promote in national parliaments the self sufficiency of the UK’s GOAL 4 Reduce child mortality Overseas Territories.18 Reduce mortality of under five-year-olds by two thirds

Measles immunisation Making progress against GOAL 5 Improve maternal health the 2005 commitments… Reduce maternal mortality by three 1.12 The promises of 2005 must be kept quarters in a world that is changing rapidly. This makes GOAL 6 Combat HIV/AIDS, malaria and other diseases the task of helping people to improve their lives all the more difficult. These global trends Halt and reverse spread of HIV/AIDS will bring new opportunities. Fast-growing

Halt and reverse countries like China, India and South Africa spread of malaria are generating trade and investment in other

Halt and reverse developing countries. But these trends will spread of tuberculosis also pose significant challenges, such as climate change, especially for the poorest GOAL 7 Ensure environmental sustainability countries. It is therefore essential to work Reverse loss with developing countries to manage these of forests global challenges and to help them respond. Halve proportion without improved Our development assistance and other drinking water international policies must work in tandem to delivering our promises Halve proportion without sanitation promote development. And we must build on the huge wave of support in 2005 – from the Improve the lives of slum-dwellers

Source: Adapted from 2005 UN MDGs Progress Chart 10 11

Science changes lives

Using science in the fight against poverty: The UK has helped bring together more Managing global challenges requires than 100 agricultural research organisations, investment in science, technological universities, scientists, non-governmental advances and innovation. Developing organisations, and farming groups from country governments need access to the best 50 countries. The collaboration led to the international expertise. And with the right development of virus-resistant crops and networks, scientists in developing countries policies that prevented the collapse of major can encourage governments to use their skills food-crops in over 30 countries. to help the poorest people. The UK is investing Public-Private Partnerships – joining the in partnerships between researchers, fight against malaria: Malaria kills more than international companies and people in three African children each minute.19 The developing countries – such as community Medicines for Malaria Venture, a public-private groups, the media and private sector – to partnership, has brought together academic exploit science to fight poverty. institutions and pharmaceutical companies to Tackling problems through research: Whiteflies research anti-malarial drugs, some of which and the viruses they carry affect the lives of 15 are due to be approved and licensed in the million people who tend 20 million hectares of next few years. food crops in some of the poorest countries.

public, media, charities, faith groups and 1.17 Additional resources will be essential trade unions – that pushed governments to for this. At the UN World Summit, take action. developing countries promised to make full use of their own resources for development. 1.13 As this White Paper sets out, eliminating Encouraging faster economic growth is the poverty means tackling four main challenges. only way to reduce dependence on aid. 1.14 First, good governance is fundamental. But even with this growth, the poorest Governance is about the capability of countries will not be able to generate governments to get things done, how they sufficient resources over the next ten years respond to the needs and rights of their to meet their needs for investment and citizens, and how, in turn, people can hold public services. their governments to account. In short, 1.18 We must, therefore, ensure that the governance is about politics – the way in international community delivers the US$50 which citizens and government relate to billion increase in aid promised by 2010. each other. Nearly 80% of this was promised by 1.15 Developing countries must keep the members of the EU. Innovative financing, promises they have made on governance. such as the International Finance Facility and But the international community must also the Air Solidarity Levy, could help raise these do more to tackle the international causes of resources more quickly. But the extra aid poor governance. Chapters 2 and 3 set out must also be spent well. In the past, aid has what developing countries, the UK and been unpredictable and often given for others need to do to achieve this. commercial or political reasons. This has made it difficult for poor countries to make 1.16 Second, there needs to be rapid progress long term plans. Aid has improved on the commitments made by developing significantly in recent years but could be countries and the international community better. Developing countries must now delivering our promises to provide peace and security, encourage make ambitious plans that international economic growth, and invest in the most partners can support. And international important public services. 12 13

partners must transform the way aid is 1.20 And fourth, we need effective international allocated and delivered. The promises made organisations if we are to win the fight in 2005 on aid mean that it will now be against poverty. The following chapters set possible – for the first time – to make the out how the UN, World Bank, EU and other long term commitments necessary to fight international organisations can help poverty. These issues are explored in developing countries tackle poverty and chapters 4, 5, 6 and 8. deal with the wider challenges facing them. And in chapter 8, we set out the UK’s 1.19 Third, climate change, together with views on reform of the international natural resource depletion, is the biggest development system. threat facing the world. Climate change is a huge challenge which is set to put 1.21 As this White Paper shows, development unprecedented pressure on resources and can make a difference to the lives of the people in developing countries. Developing poorest billion people in the world. countries will need support to adapt to the Developing countries and their international impact of climate change and urgent action partners know what needs to be done. 2005 is needed to cut emissions and prevent has given us the best opportunity to make dangerous levels of climate change in the sure that everybody, everywhere has the future. These challenges, and what needs chance to live a better life. We must not to be done, are covered in Chapter 7. squander it. Aid works Aid helps reduce poverty by increasing economic growth, improving governance and increasing access to public services. In Mozambique, after the war in the mid 1990s, aid – totalling more than 50% of national income a year - helped increase the growth rate to an astonishing 12%. Poverty fell from around 70% in 1996 to under 55% by 2003. In Rwanda, in the ten years since the genocide, aid – over 15% of national income a year – helped reduce poverty from 70% in 1994 to under 60% in 2001.20 In Africa as a whole, the situation would be worse without aid – economic growth would have been around 1% lower between 1973 and 2001.21 And contrary to popular belief, aid reduces the risk of money leaving the country, because it encourages people in developing countries to keep their wealth at home rather than abroad.22

Aid is helping countries make progress towards the MDGs.23 Aid has helped eradicate smallpox and – soon – polio. In Uganda, aid made it possible for the Government to offer free health care, which doubled the number of people visiting clinics and the number of children immunised. And, as the Commission for Africa showed, aid can help improve the way a country is governed. Ghana, which used to experience regular coups, is now a stable democracy with a growing economy. Aid, supporting the Government’s poverty reduction plan, helped to achieve this. So aid works – but the amount of aid and the way it is used has a significant impact on how effective it is.

Debt relief works Debt relief (which is a form of aid) provides reliable and predictable resources for developing countries. Twenty-nine countries increased their spending on the MDGs from about US$6 billion in 1999 to US$13 billion in 2005 because of the Heavily Indebted Poor Countries (HIPC) Initiative.24 The UK supports and is financing our share of 100% multilateral and bilateral debt cancellation for low income countries that are committed to using the savings to fight poverty. In 2005, the G8 announced the Multilateral Debt Relief Initiative, which will write off 100% of all remaining debt owed by HIPCs to the IMF, World Bank and African Development Fund. In total, this

could be worth over US$50 billion for 45 countries. The additional resources available from delivering our promises this have already helped Zambia to announce an end to fees for basic health care in rural areas. 14 15

The UK will

• Help partner countries to deal with • Push for the full implementation the global trends that have the and financing of the Heavily greatest impact on development. Indebted Poor Countries Initiative. • Work with others, including the G8, • Work towards 100% multilateral UN, EU and other partners, such as and bilateral debt cancellation for China, India and South Africa, to all the poorest countries that are create an international environment committed to using savings to that promotes development. reduce poverty. • Report annually to Parliament • Double our research funding on the effectiveness of UK policy by 2010, focusing on achieving and expenditure in helping to the MDGs. reduce poverty and support sustainable development, in line with the International Development (Reporting and Transparency) Bill currently before Parliament. delivering our promises helping to build states that work for poor people 19

Effective states are central to development. They protect people’s rights and provide security, economic growth and services like education and health care. Building better governance takes time and has to come from within each country, but international partners can help. This means we need to work not just with governments, but also with citizens and civil society.

Good governance is essential the Universal Declaration of Human Rights, to reduce poverty … and the Millennium Declaration of 2000. But the reality for many people in poor 2.1 People want to be governed well, and countries is very different. to have a say in what happens in their lives. They want to be safe. They want the chance 2.2 Effective states and better governance to earn a decent living for themselves and are essential to combat poverty. States their families. And they want to be treated which respect civil liberties and are fairly by their government and public accountable to their citizens are more officials. These aspirations are enshrined in stable, which in turn means they are more

A tale of two states

Tanzania is an increasingly effective state. Human rights are abused. The rule of law has It has a stable government committed to been undermined. Commercial farming was economic growth and reducing poverty, destroyed by drastic land reforms, and chapter 2 and a national plan known as Mkukuta economic mismanagement has led to sharp which the UK and other international partners rises in public borrowing. The private sector are supporting. Over the last decade the has lost confidence. The result? The economy Government has improved public finances, and has shrunk by 40% in the past seven years. strengthened local government. It is improving Inflation has soared over 1,000% and the conditions for business and is taking action unemployment to 70%. Food is in short building effective on corruption. The result? The economy has supply and the international community is grown 6% a year since 2000. There is less now helping feed the population. Public corruption. The proportion of children in services have almost collapsed. Huge numbers primary school has leapt from 58% in 2000 to of Zimbabweans have left the country and, for 95% in 2005. And infant mortality rates are those who remain, life expectancy has fallen states and better down by a third since 1999. to 34 years. Four in five people are living below the national poverty line.

Zimbabwe is a failing state. The ruling party improving governance governance used draconian measures to hold on to power. 20 21

likely to attract investment and generate long of governing. Good governance requires term economic growth.1 They can also cope three things: better with calamities. Famines, for example, • State capability – the extent to which are less likely where there is a free media, leaders and governments are able to because the press creates pressure on get things done. governments to provide relief.2 Unless governance improves, poor people will • Responsiveness – whether public policies continue to suffer from a lack of security, and institutions respond to the needs of public services and economic opportunities. citizens and uphold their rights. The contrast between Tanzania and Zimbabwe • Accountability – the ability of citizens, over the past decade is striking. civil society and the private sector to

2.3 So what is good governance? Good scrutinise public institutions and governance is not just about government. governments and hold them to account. It is also about political parties, parliament, This includes, ultimately, the opportunity the judiciary, the media, and civil society. to change leaders by democratic means. It is about how citizens, leaders and public institutions relate to each other in order to make change happen. Elections and democracy are an important part of the equation, but equally important is the way government goes about the business

Understanding good governance

Capability means having Responsiveness means taking Accountability means being the ability to perform account of citizens’ aspirations answerable for what is done… 2.4 All three characteristics are needed certain functions…. and needs… to make states more effective, to tackle Successful states – the poverty and to improve people’s lives. East Asian experience Providing political stability Providing ways for people to Offering citizens opportunities For example, there is no guarantee that and security. say what they think and need. to check the laws and decisions a more capable health ministry will East Asian countries have made made by government, remarkable progress in raising living Setting good rules and Implementing policies that automatically focus on the diseases killing parliaments or assemblies. standards. A sense of national purpose meet the needs of the poor. regulations. the poorest people unless it is responsive has helped in this. Political leaders saw Encouraging a free media Creating the conditions for Using public finances to and accountable. The UK will now make common interests between the citizen and freedom of faith and investment and trade, and benefit the poor – for example it a priority to help our developing and the state, and built confidence in association. promoting growth in jobs to encourage growth and country partners improve governance government’s ability to maintain security, and incomes. provide services. Respecting human rights and on all three fronts. protect savings, promote investment and making sure the ‘rule of law’, deliver better services. Managing public finances Providing public goods and is upheld, for example by an and putting government services in ways that reduce Malaysia is a good example. Political independent judiciary. policies into practice discrimination and allow all Improving governance… leaders implemented policies to address citizens – including women, economic inequalities faced by the effectively. Providing regular opportunities 2.5 Significant improvements in governance disabled people and ethnic to change leaders in peaceful largest ethnic group, but made sure Making sure government can take place. Botswana, Ghana and minorities – to benefit. ways. domestic minorities and foreign investors departments and services Tanzania have strengthened their public were not excluded. Regional economic meet people’s needs. institutions in recent years. Rwanda, growth created new opportunities. And Keeping borders secure Mozambique, Vietnam and Cambodia aid played a role in building government

and helping people move have successfully rebuilt their countries capability and providing access to improving governance safely and legally. after devastating conflicts. And East Asian technical knowledge. countries, such as Malaysia and South 22 23

Korea, have changed the lives of millions 2.8 But some countries struggle to improve of their citizens. governance. Sometimes this is due to grievances and conflict – as has recently 2.6 In most cases, strong political leadership, been the case in Palestine, Nepal and economic growth, and a vibrant private sector Sudan. On other occasions, it is because were the main factors encouraging change. A states are undermined by self-serving growing middle class, more educated citizens, leaders who siphon off huge personal and a greater willingness by civil society and wealth from natural resources such as oil media to speak out pushed political leaders to and diamonds. Sierra Leone, Angola and improve the performance of the state. In some the Democratic Republic of Congo (DRC) cases, the better off members of society led have all suffered this ‘natural resource the demand for better governance. Businesses curse’.5 In many of these instances, and trade unions demanded better rules corruption, unaccountable elites, patronage and regulation. Professionals pressed for and ethnic divisions have distorted the a more open media and the rule of law. political process. People called for better representation by political parties in exchange for the taxes 2.9 Governance is influenced by what happens they paid.3 in the region, by international organisations and standards, and by the views of other 2.7 Accountability is at the heart of how countries and international partners. For change happens. Where accountability is example, peer reviews by the African Union good, audit institutions and parliamentary (AU) and its New Partnership for Africa’s committees scrutinise the way government Development (NEPAD) are beginning to show bodies spend their money and what they how governance can improve. But change achieve. Courts help prevent abuse of office. takes time and outsiders cannot impose And beyond the formal structures of the businesses, faith and other civil society groups 2.11 To answer these questions, we will look models. People and governments in state, civil society organisations give citizens must determine the future of their countries. at a government’s record and its plans: developing countries have to choose better power, help poor people get their voices This is about politics. Politics determines how are people’s rights being respected, is governance for themselves. Political parties, heard, and demand more from politicians resources are used and policies are made. And spending on public services going up, are civil servants, journalists, trade unions, and government.4 politics determines who benefits. In short, efforts being made to tackle social exclusion, good governance is about good politics. is economic policy promoting growth, and are public finances well managed? The UK will use its aid to Answering these questions will mean understanding the underlying politics and support good governance... governance. We will use a new ‘quality of 2.10 The UK Government has a responsibility governance’ assessment to help us monitor to make sure that UK aid money is used whether governance is getting better or for the purpose for which it is intended. worse. We will do such assessments with We take this very seriously. In deciding others where possible, for example with how to provide assistance to developing the EU and World Bank. country partners, we will in future consider 2.12 Where governance is relatively good three principles: and improving, the UK will consider the • Is there a commitment to reduce poverty? use of direct budget support in order to back our partners’ plans to fight poverty and • Is there a commitment to uphold human increase spending on public services like rights and international obligations? health and education.6 In these countries, our • Is there a commitment to improve aid will be long term, predictable, and improving governance improving governance public financial management, promote delivered through the country’s own systems good governance and transparency, – because this delivers the best results for the and fight corruption? least cost.7 But even in these circumstances, 24 25

The UK will International partners can help…

• Adopt a new ‘quality of 2.16 It is difficult to build better governance governance’ assessment to on all fronts at the same time. In states monitor governance and our recovering from conflict, for example, it is partners’ commitment to important to create the conditions for security fighting poverty. The assessment and justice. But sometimes providing basic will be done as part of our services quickly may be more important. published Country Assistance Plans, or more frequently if After the 1994 genocide, the Rwandan necessary. It will be based on Government rapidly opened primary schools discussions with partner to show their commitment to educating governments, civil society and children from all ethnic groups. other international partners. 2.17 The UK has a strong record in working • Use this assessment of ‘quality with developing countries to improve the of governance’, as well as capability of public institutions. ‘Technical commitment to the three assistance’ – often comprising specialist staff principles – reducing poverty; and training – offers new ideas and ways of upholding human rights and international obligations; and working. Such support only works well when improving public financial the institutions themselves want change and management, promoting good are ready to lead reform. Where there is governance and transparency, strong leadership, for example in Rwanda it is and fighting corruption – possible for significant change to take place. to make choices about the way As with financial aid, we believe technical direct budget support must be accompanied of the poor; use basic services grants to direct in which we give UK aid. assistance should be provided through by continuing efforts to improve the aid to services like education and health; • In partner countries, help improve government systems so that developing management of public finances, to build the channel funds through ring-fenced accounts; the capability of state institutions countries can design and manage it to meet capability of government to provide services, set up implementation units outside and strengthen accountability to their needs. And donors should pool technical and to ensure citizens are able to hold government; or use independent and the poor. assistance funds to improve co-ordination and governments to account. Wherever possible, more frequent monitoring and auditing • Support the African Peer Review reduce administrative burdens. we will work with other international arrangements. In all cases, we will also invest Mechanism launched by the New partners to co-ordinate assistance – for in efforts to improve the long term capability, Partnership for Africa’s 2.18 It is essential that international partners example through joint plans or joint financing responsiveness and accountability of Development to help partners avoid doing things that undermine a agreements – to reduce the burden on public institutions. improve governance. country’s capability. For example, some AIDS developing country partners. projects have recruited professional staff from 2.14 Where the government is simply not government health services which are already 2.13 In other cases, where governance is not so committed to helping its citizens, we struggling to provide health care. Or in fragile good – where the commitment to reduce will still use our aid to help poor people states, such as Afghanistan, giving aid only poverty is weaker or where the risk of and to promote long term improvements through non-governmental organisations corruption is greater – we will still provide aid, in governance. But we will do this by (NGOs) or private contractors can actually sometimes budget support, but differently. working outside the government, and with hold back the process of building the Fragile states often lack the capacity to international agencies like the UN and capability of the state. reduce poverty but, paradoxically, have an civil society organisations. even greater need to deliver public services. 2.19 Consulting people improves government 2.15 Where circumstances deteriorate – or Consequently, they also need long term, policy. Involving citizens and asking them improve – the UK will re-assess governance, predictable, well co-ordinated assistance to what they want leads to better public our partners’ commitment to the three improve government systems. But, in these services. International partners can principles and, where necessary, change improving governance cases, the UK will restrict how our money can encourage this. For example, the UK is the way we provide aid. be used. For example, we might: limit our aid helping countries to analyse the social to specific programmes that meet the needs impacts of policies, and to monitor and evaluate poverty reduction programmes. 26 27

2.20 International partners can also help services such as water, policing, public strengthen accountability by supporting transport and hospitals. ‘watch-dog agencies’, such as national 2.21 The media and civil society organisations auditors, anti-corruption commissions, hold governments to account. The media ask ombudsmen and regulators, and human tough questions and encourage debate. rights commissions. Providing more public Business associations pinpoint how to information on local budgets in Uganda improve conditions for investment and and India is reducing corruption by local remove red tape. Civil society groups such as government officials.8 Independent customer trade unions, co-operatives and faith groups surveys in Bangalore between 1994 and press for better public services. In many 2003 produced dramatic improvements in countries, civil society is helping to improve the quality of public spending by identifying whether the poor – including women and Helping change in Iraq disabled people – will benefit. In Bolivia, they are monitoring the use of oil revenues. In In the south of Iraq, the UK is working with the BBC World Service Trust. We have Bangladesh, grassroots organisations are provided training for Iraqi journalists, and helping members get land rights. The UK will established an independent Iraqi-run TV do more to support such work. and radio broadcast station which went on air in summer 2005. Programmes include 2.22 In many societies, women have less power debates between election candidates, face- over their lives than men. Reducing poverty to-face interviews with senior politicians means helping them get their rights, helping and phone-in discussions. These broadcasts them hold officials to account and enabling help hold local and national government to them to engage in the political process. account. For example, in a past programme The UK is committed to promoting women’s a provincial governor faced hard-hitting questions about how local government and girls’ rights, particularly through How UK aid has helped Rwanda and elsewhere funds were being used. partnerships between civil society organisations and governments. The UK has provided substantial budget Other examples of UK support include: support and other assistance to Rwanda • Improving tax agencies and systems. since the genocide in 1994 (which destroyed In Zambia and Mozambique UK technical the house above). Public service reform is assistance and funding has helped raise strengthening ways of managing staff and revenue rates significantly. In Uganda, performance. This is helping local government reforms led to a 35% rise in tax revenues. to improve health and education. Land reform These taxes are helping to fund poverty is paving the way for agricultural development reduction programmes. and investment. The National Institute for • Improving how public finances are managed. Statistics is reviewing progress against the In places like Tanzania, Ghana, Pakistan, national Poverty Reduction Strategy. Rwanda’s Bangladesh and Vietnam, the UK is helping Revenue Authority has reduced paperwork for improve spending procedures, accounting businesses and increased tax collection from and auditing. These changes help ensure 9% of gross domestic product in 1998 to 15% money is spent for its intended purposes. in 2005. The result? Rwanda’s economy has grown by over 10% a year over the past • Helping education, health and other decade. Spending on programmes to reduce ministries to recruit more staff, improve poverty has increased. Poverty dropped from training, and use planning and monitoring 70% in 1994 to 60% in 2002. Primary school to improve the way services are managed. enrolment has steadily climbed to 94%. • Linking institutions between countries to Mother and infant death rates are falling. share lessons and skills. UK organisations Nevertheless, there are challenges. Maintaining such as the police service and National Audit improving governance improving governance political stability is important but so too is Office are working with sister organisations allowing space for different political views in poor countries. Exchanges between tax and freedom of expression. agencies within Africa are another example. 28 29

2.23 International links between civil society Winning the fight against groups – such as those promoted by UK corruption… trade unions, the Commonwealth Secretariat, and the British Council – can help improve 2.24 Corruption hurts poor people, and it 9 governance and accountability. We will harms women in particular. When health provide more support for such initiatives staff demand bribes for medicines, teachers in future. for enrolling children in school, or local government officials for providing water connections, it keeps people poor. Corruption damages economic growth The UK will by increasing the cost of doing business. It siphons off resources that should go • Set up a new £100 million into public services. And it undermines Governance and Transparency the accountability of political leaders and Fund to strengthen civil society officials to their citizens. When politicians are and the media to help citizens ‘bought’ by powerful people or businesses hold their governments through bribery, or when leaders themselves to account. use personal or public funds to buy support, • Work in our partner countries they become representatives of the few and to help make public institutions not the many. In short, corruption is both a more accountable, for example cause and a symptom of bad governance. by strengthening parliamentary and regulatory oversight. 2.25 Reducing red tape and simplifying procedures limits opportunities for extortion. • Support public sector reform Improving pay and conditions helps reduce to help improve public services. the incentives for officials to take bribes 2.27 Popular political pressure also reduces pressure on governments to raise standards. • Support more responsive in the first place. Making tax collection the scope for corruption. A good example The Framework has been used in nineteen governance, for example, by agencies independent of other government is the anti-corruption work of Transparency countries and plans are in place to use it in a helping partner countries to institutions raises standards and performance. International (supported by the UK) in further 30. consult with poor people, and Automating financial systems and improving countries such as Kenya, Ghana, Zambia, to produce better statistics public contracting practices further reduces Pakistan, and Bangladesh. Grassroots on poverty and monitor their the scope for corruption. And appointing and organisations and the media play a vital role Counting on education progress in overcoming it. managing people on merit leads to more in generating public debate about corruption At the African Inland Church Girls Primary • Improve the effectiveness of professional and less corrupt public services. by campaigning against it. Newspapers and School, like many others in Kenya, it isn’t our technical assistance, pool The UK will support these sorts of measures radio stations have led the demand for action unusual to see the entire school budget our funding with other donors in countries where we provide aid. in high profile corruption cases in countries written up on charts around the school. where possible, increase the use such as India, Kenya and Zambia. “This means,” explains Deputy Headteacher of local providers and ensure 2.26 But as well as more effective institutions, Francisca Sanare, “that parents and the value for money. there is also a need for better accountability. 2.28 The fight against corruption can be local community know exactly how much Audit institutions, anti-corruption won, and public financial reforms are should be spent on the education of their • Implement an Africa Capacity commissions and parliamentary committees making a difference. A recent assessment children”. The system allows parents to Building Initiative to share need to scrutinise how government works. of 26 Heavily Indebted Poor Countries shows hold staff to account and helps prevent knowledge and skills between There must be proper laws and rules against that improvements are possible. For example, small scale corruption by ensuring that UK central and local government every available penny goes on the children’s and developing countries. corruption. Most countries have them, but twice as many countries now produce education. “Since we have had this system they are completely ineffective if the police expenditure reports showing how they are in place, parents have taken a keener and legal system fail to investigate and using their resources which reduces the risk interest in the running of the school and prosecute offenders. of funds being misused.10 And the UK is know exactly what each child is supposed to get. Even the children know that the

working with the World Bank, the European improving governance Commission (EC) and others to support a government is providing them with pens, pencils and textbooks.” new international Public Expenditure Financial Accountability Framework which is putting 30 31

2.29 Tackling corruption is a long-term challenge and the UK’s approach is four-fold. Is Nigeria turning the How change happens: First, we will take all necessary steps to ensure corner on corruption? Enforcing land rights that UK aid is used for the purpose intended. Strict accounting, procurement and auditing Nigeria was bottom of the Transparency in Tajikistan International Corruption Perceptions procedures are required for all UK aid For poor people around the world, getting Index before 2000. But with strong political access to courts and legal support to protect programmes. Where necessary, independent leadership and help from its international their rights is often impossible. auditors track expenditure, and technical staff partners, the country is beginning to inch In many cases, the reason for this is strengthen management arrangements and its way up the league. President Obasanjo straightforward – they cannot afford to and Finance Minister Okonjo-Iweala have oversight. All allegations of corruption are pay the legal fees. investigated and, if necessary, corrective set up agencies to investigate and action taken. prosecute corruption and – as several high In Tajikistan, the UK has been helping to profile individuals have found – corruption solve this problem by supporting Third 2.30 Second, the UK will help governments to and financial crime now carry a real risk of Party Arbitration Courts. These courts are investigate and deal with alleged corruption prosecution. Revenue allocations to the an alternative way of resolving disputes: country’s 36 states and 774 local two sides to a dispute agree to nominate through the courts – especially where money governments have been made public a third party who they both trust to mediate has flowed through UK jurisdictions. The since 2004, so people can now see how The UK will their disagreement and come to a decision. UK Serious Fraud Office has provided legal much money their government has to Although they operate independently of assistance to court cases in a large number spend. The National Assembly is considering • Work with the World Bank the formal legal system, decisions are of countries including Zambia, Malawi and new laws to strengthen budget controls and others to develop a new, recognised by Tajikistan’s official courts. Sierra Leone. The UK also uses its influence and public contracting. The EITI in Nigeria is internationally agreed approach This means that where parties do not helping track the production of oil and gas comply with a decision voluntarily, the state to support and encourage political leaders to assessing and tackling and the public revenues it generates. can step in to enforce it. corruption in all developing to take action, as recent events in Kenya and Challenges remain, however, particularly Third Party Arbitration Courts provide Nigeria have shown. in making information on government countries. poor people with a cheap, fair and spending more widely available – but • Provide practical support to 2.31 Third, corruption will be a central part accessible way of resolving disputes progress is being made. governments to help them of our discussions with partner governments and protecting their rights. They are investigate corruption, and deal when agreeing and reviewing our Country particularly effective at protecting the with alleged offenders through rights of women to land and property. Assistance Plans. We will always assess our the courts. partners’ commitment and actions to reduce UK support to Third Party Arbitration Courts corruption when deciding how to provide aid • Raise the issue of corruption with has helped to make legal services available to 800,000 people in Tajikistan (12% of the and what safeguards are required. We will partner governments as part of our regular discussions. population). The approach has also been now regularly review the ‘quality of used successfully in Russia, Kyrgyzstan, governance’ as outlined above. • Help developing countries Moldova, Ukraine and Georgia. strengthen their public financial 2.32 And fourth, in order to reduce the management, and support scope for international bribery and money other public sector reforms to laundering and to promote better codes tackle corruption. of conduct for international businesses and public contracting, we will take action to • Support the implementation of the Public Expenditure Financial address the international incentives for bad Accountability Framework in governance as set out in the next chapter. order to increase international assistance to strengthen public finances in developing countries. • Support independent organisations (watch-dogs, lobby groups etc) that monitor and track

the performance of public services improving governance and organisations. • Continue to investigate all allegations of corruption affecting UK aid, and take action. 33

Incentives for good governance are heavily influenced by the international economy, the behaviour of other governments and the private sector. International co-operation is essential to tackle bribery, corruption and money laundering. Transparent management of government revenue and procurement is vital for good governance.

Governance is an corruption and crime and promote better use international issue… of resources. The UK is committed to taking these recommendations forward. 3.1 The global economy offers great opportunities for economic growth and 3.3 Chapter 2 set out what needs to be development. Goods, money and people done in developing countries to build better move around the world more than ever governance. But, where governments do not before. Transferring money has never been or cannot regulate, international standards easier. But without suitable regulation, these help to: opportunities can be abused. In too many • Encourage responsible behaviour cases, public money has been diverted for by companies. personal gain and the proceeds of bribery and corruption have been hidden away in • Tackle corruption by closing the financial centres around the world. international loopholes that allow people to get away with illicit gains. 3.2 The Commission for Africa and the G8 at Gleneagles set out what the international • Promote better governance by helping build community can do to prevent international accountability within states. chapter 3 Democratic Republic of Congo – the origins of bad governance

The Democratic Republic of Congo (DRC) was initially created as a commercial enterprise by King supporting good Leopold II of Belgium and subsequently governed to enable the ruling class to exploit its massive natural wealth. This was either used to buy off opponents or salted away overseas in personal bank accounts. Since the fall of Mobutu, work by organisations such as Global Witness shows that the government still does not ensure that DRC’s natural resources are managed in the interests of the people.1 Some of those in power bolster their positions through exploitation of natural resources in governance partnership with unscrupulous international investors, sometimes supported by foreign governments. In 2004, government revenue from the mining sector was only US$15 million. It is estimated that the state lost revenues ten times this amount, money that could have been invested improving governance internationally in providing health care and education. 34 35

International standards has set up expert monitoring panels to Natural resources are in conflict zones encourage responsible recommend sanctions, but has often been behaviour… slow to act. Establishing standards on how MOROCCO LIBYA to manage revenues from natural resources Western EGYPT 3.4 Governments need to be able to stop in conflict-affected countries would help Sahara ALGERIA unscrupulous individuals or companies address this problem. Stronger enforcement profiting from activities such as paying Red of UN sanctions – including better MAURITANIA bribes, illegal trading in natural resources Sea monitoring – would make international NIGER or selling arms that fuel conflict. ERITREA action quicker and more effective at cutting SENEGAL MALI CHAD SUDAN GAMBIA Casamance off the money that fuels conflict. DJIBOUTI 3.5 The best solution is for the government Bx Bx BURKINA FASO GUINEA- Bx of the country where such activity has taken BISSAU GUINEA BENIN NIGERIA 3.7 Export credit agencies are the largest TOGO IVORY GHANA Sn place to have effective domestic legislation COAST CENTRAL AFRICAN ETHIOPIA source of public funds for private sector SIERRA Bx LEONE Sn REPUBLIC and regulation to stop it. However, where CAMEROON projects in the world. These agencies need LIBERIA domestic capacity is weak, international SOMALIA to make sure that they are not supporting EQUATORIAL UGANDA codes of practice can encourage companies Atlantic GUINEA KENYA companies or their agents who may be CONGO Ocean GABON to work legitimately in developing countries. DEMOCRATIC RWANDA Sn paying bribes. The UK has recently REPUBLIC OF Sn The OECD Guidelines for Multinational strengthened the anti-bribery procedures CONGO BURUNDI Main roads Capitals Pb TANZANIA Enterprises, for example, set out what Cabinda of its Export Credits Guarantee Department. Energy resources Sn companies can do to meet standards on (Angola) But, because export credit agencies are in Oil and natural gas Uranium Coal Indian human rights, labour conditions, the competition with each other, their standards Ocean environment and corruption. Some Principal mineral resources ANGOLA and behaviour need to be agreed at an Diamond Sn Tin Gold MALAWI countries, including the UK, have found it Cobalt Iron Platinum international level. ZAMBIA Pb Copper Manganese Pb Lead and zinc difficult to respond to allegations of bad Chromite Ni Nickel 2 3.8 Pb Developing countries, like all states, Pb conduct under these Guidelines. We are ZIMBABWE have the right to acquire the means to “Productive” areas of Africa committed to following up specific cases Ni for oil production MADAGASCAR protect themselves – which means buying BOTSWANA more effectively in future. MOZAMBIQUE arms. But many arms that find their way for mining NAMIBIA 3.6 Illegal trade in natural resources like “Unstable” areas of Africa in 2000 into conflicts – for example in Somalia – are SWAZILAND diamonds or timber often pays for and conflicts ongoing in 2000 0 1000km arranged by unscrupulous brokers exploiting Pb SOUTH AFRICA LESOTHO prolongs conflict. In places like Sierra Leone loopholes in national legislation or breaking significant tension or political instability and Liberia, the international community relatively stable political situation

Source: Adapted from Philippe Rakacewicz, in Atlas du Monde diplomatique 2003, Paris www.mondediplo.com

arms embargoes. The UK Government is committed to making sure that exporters Too many guns licensed by us do not contribute to conflict “There is lack of security here,” says Elona or human rights abuses. Krasniçi, a woman from Shkodër, Albania. “No parent is calm about their children 3.9 There is currently no international going to school… because everyone agreement to regulate the trade in possesses a gun – without permission in conventional weapons. That is why the most cases. We can see these people UK wants an international, legally binding possessing guns in everyday life, we hear Arms Trade Treaty that will increase it in the news – this person was killed, transparency and prevent arms transfers this other killed himself. So all of this that make conflicts worse. Negotiating information creates an overall sense of the lack of security in the family,

such a treaty would give developing improving governance society and everywhere else.” countries a say in creating a system Source: Saferworld which would benefit all countries. 36 37

International standards help extraditions, investigations, prosecutions and fight corruption… judicial proceedings. The UN Office on Drugs and Crime has been asked to oversee and 3.10 The proceeds of corruption are often co-ordinate help for countries to put the spent or saved outside the country. Some UNCAC into practice. notorious leaders, like Presidents Mobutu of Zaire, Abacha of Nigeria and Marcos 3.12 The UK is committed to tackling of the Philippines, looted spectacular corruption, bribery and money laundering. amounts from their own countries. But This includes making sure that we rigorously huge amounts of money are now being enforce relevant UK laws so that people who returned to developing countries. Nigeria, for pay bribes are prosecuted, and assets are example, has received US$608 million from returned to the countries from which they Switzerland and US$149 million from Jersey.3 have been stolen.

3.11 The United Nations Convention Against 3.13 Following up allegations of bribery and Corruption (UNCAC) came into force in money laundering is difficult if developing December 2005, and was ratified by the countries do not have the ability to produce UK in February 2006. It is the first worldwide evidence of sufficient quality to enable an agreement on corruption. One hundred and international investigation. If developing forty countries have agreed to co-operate on countries request it, the UK will provide The UK will all aspects of preventing, investigating and help – ‘mutual legal assistance’ – in tracking prosecuting corruption, returning stolen down laundered funds and gathering the • Launch a revamped National is legally binding, covers all assets, and supporting each other on evidence needed. Contact Point by September 2006 conventional weapons and the

with the involvement of DFID, world’s major arms exporters, 2006 AFP/GETTY the Foreign and Commonwealth includes enforcement and monitoring Office (FCO) and independent arrangements, and report progress to experts as well as the Department the UN General Assembly by 2008. for Trade and Industry to strengthen • Work with others to deal with the our implementation of the misuse and inappropriate export of OECD Guidelines for Multinational small arms and light weapons. Enterprises. • Ensure, when assessing export • Work within the OECD to make the licences, that UK arms exports do not Guidelines more effective in undermine development, for promoting responsible business example by endangering human conduct, particularly in countries rights or increasing the risk of with weak governance. conflict. • Press the international community to • As part of the overall review of tackle the trade in conflict resources; strategic arms export licensing laws promote international standards on in 2007, examine how well the management of natural resource regulations to control the activities revenues in countries affected by or of arms brokers are working and at risk of conflict; help set up an whether these need to be changed international expert panel in the UN or strengthened. to monitor the links between natural resources and conflict; and support • Fully implement a new OECD ‘action improvements in the monitoring of statement’ on bribery that reduces UN sanctions. the risk of export credit agencies providing financial support to improving governance • Work with governments and civil companies that bribe overseas, and society to secure agreement at the press other OECD countries to take UN General Assembly in 2006 to start similar action. talks on an Arms Trade Treaty that 38 39

The other side of the coin4 In March 2006 the UK Africa All Party Parliamentary Group issued a report recommending how the UK could improve efforts to prevent and combat corruption in Africa. It also highlighted the UK’s responsibility to help the three Crown Dependencies (Guernsey, Jersey and Isle of Man) and fourteen Overseas Territories (such as Bermuda, British Virgin Islands and Cayman Islands), many of which are important financial centres, to meet their international obligations. The report recommends: better co-ordination of the wide range of activities undertaken by different government departments and enforcement agencies; strengthening the 2006 AFP/GETTY ability of the UK and its Dependencies and Overseas Territories to return assets taken from developing countries; and working to reduce the risk of UK businesses being involved in bribery in developing countries. The Government will implement almost all of the report’s recommendations. The UK will

• Publish an annual UK Action Plan • Help developing countries in to tackle corruption affecting response to requests for Mutual 3.14 Corruption and money laundering developing countries, particularly Legal Assistance. This will include: are frequently linked to other aspects of in Africa. The International organised crime, such as illegal trafficking. • Deploying fast response teams Development Secretary will oversee from UK law enforcement and Organised crime can corrupt political power and report progress against this other organisations. and stifle the development of legitimate every six months. business. Vulnerable people are often the • Supporting countries’ ability to victims of illegal trade, whether it is drug • Set up a dedicated overseas track assets and carry out Human trafficking corruption unit by the end of 2006, smuggling or trafficking of human beings investigations. wrecks lives staffed by City of London and for sex. The UK is working to tackle organised • Drawing up proposals for an Metropolitan police with support Arta, 19, is from a small town in Serbia. international corruption crime from developing countries. from DFID and others, to investigate A tough home life forced her to leave her investigation centre which can allegations of bribery and money home town in search of work. But things provide professional help as part laundering. didn’t turn out well. Her new boss sexually of implementing the UNCAC. harassed her, and she was poorly paid. Arta • Press our G8 partners to ratify the decided to accept a job as a sex worker in • Develop plans to tackle organised UNCAC by March 2007, and work Italy. The man who had offered her the job crime in a number of vulnerable with the UN Office on Drugs and provided her with a false passport and developing countries. transportation. As soon as she arrived, he Crime and other partners to ensure took away all her documents. Arta was that it is implemented • Help UK Overseas Territories and forced to work as a prostitute in an area internationally. Crown Dependencies to put into well known for its Serbian, Albanian and practice relevant international • Make UK businesses aware of the Russian mafia links. When she refused, she agreements, such as the UNCAC and risks of bribery overseas, and urge was beaten and raped. Ten days later a the OECD bribery convention, and them to report instances of client helped her to escape. measures equivalent to the EU improving governance attempted bribery to UK embassies, Source: Astra (Serbian NGO) directives on money laundering. so that they can be investigated by partner governments. 40 41

International standards 3.18 Public procurement is also a source of promote better governance… Fuelling accountability corruption. Transparency International’s bribe How change happens: in Azerbaijan payers’ index suggests that the construction, 3.15 The international community must also defence, and health sectors are highly prone Stopping the trade in help by agreeing standards of conduct which Azerbaijan’s future depends on its oil to bribery.5 Using EITI-type principles to ‘blood’ diamonds and gas resources, which are being strengthen accountability and governance. strengthen procurement in these areas will Diamond mining could help reduce poverty developed by international companies. For example, natural resources create wealth in many developing countries. But stones Azerbaijan joined the Extractive Industries help governments manage their finances and jobs, but when they are mismanaged from diamond-rich countries like Sierra Transparency Initiative in June 2003, as better. The UK will work with others to take Leone, DRC, Liberia and Angola among they can become a curse. Through the one of the first pilot countries. A National this forward. others have instead fuelled conflicts and Extractive Industries Transparency Initiative Committee on EITI was established in corruption. These stones are often called (EITI), launched in 2002, governments make November 2003. Three EITI reports, ‘blood’ or ‘conflict’ diamonds. public the payments they receive from oil, published between March 2005 and January gas and mining companies, and companies 2006, have sparked wide debate – especially The Kimberley Process, set up in 2003, is a where there are discrepancies between the make public the payments they make to The UK will certification system designed to record the numbers reported by companies and the origin of rough diamonds and assure buyers governments. This helps people to see how Government. Azeri civil society is now • Sponsor a UN General Assembly that a particular stone originates from a resources are being used, and to check there better able to scrutinise the oil and gas resolution for EITI to become an legitimate source. It now covers the vast is no corruption. sector and is more closely involved in international standard of good majority of international trade in rough discussions with the Government and the diamonds. It has helped to reduce management; work closely with 3.16 Four years on, EITI is working successfully oil companies. In turn, this has stimulated significantly the flows of illicit diamonds in countries like Nigeria and Azerbaijan. a wider public debate on how transparency China, Russia and others to and to end trade with countries accused We will encourage more countries to join the and accountability can contribute to promote EITI; work with others of involvement with them. Initiative, and will work to strengthen its democracy and the rule of law. to identify a permanent international secretariat for EITI; As a result, the Kimberley Process has cut implementation. The UK will push for a UN and develop a means of verifying the chances of conflict diamonds helping General Assembly resolution to establish the illegitimate governments, warlords and whether countries and companies Initiative as an international standard of good rebels to buy guns and launder money. It and Trade partnerships and the High Seas are doing what they promised. practice. We will also discuss with others how has also led to substantial increases in the Task Force on illegal, unregulated and We will also propose that EITI is proportion of rough diamonds exported the Initiative could be extended, for example, unreported fishing are already trying to extended to other areas of through official channels – which boosts by covering revenue paid to local authorities, ensure that these resources are well revenue and spending in the oil, government revenues that can then be and revenue from pipeline usage. managed. Just as EITI has succeeded by gas and mining sectors. used to fight poverty. The value of official diamond exports from the DRC rose from 3.17 Other natural resources, particularly bringing together governments, companies • Work with partners to develop US$642 million in 2003 to US$720 million in forestry and fisheries, are also major sources and civil society, the UK will support these codes of practice to make it easier 2004 and US$431 million in the first half of of income for many poor countries. Initiatives initiatives to ensure that revenues and to scrutinise forestry and fishery 2005 alone. It is estimated that 80% of like the Forest Law Enforcement, Governance exploitation rights are publicly scrutinised. agreements and revenues, diamonds produced in Sierra Leone are building on existing initiatives now sold on the legitimate market. such as the EU Forest Law But despite this impressive progress, Enforcement, Governance and conflict diamonds still exist. More needs Trade partnerships and the High to be done to ensure that the Kimberley Seas Task Force. Process captures all diamond trading, and • Build on the experience of EITI to strengthen government controls along to help developing countries the whole supply chain. improve transparency and value for money in public procurement, and develop international proposals to increase scrutiny of public spending in the defence, construction and health sectors to help fight corruption. improving governance improving governance helping people get security, incomes, and public services 45

Security is a precondition for development. Preventing conflict is better than trying to pick upto pickthe piecesup the afterwards. pieces afterwards. The international community has a ‘responsibility to‘responsibility protect’ when to statesprotect’ fail when to protect states theirfail civiliansto protect from their genocide, civilians warfrom crimes genocide, and crimes againstwar crimes humanity. and crimes against humanity.

Insecurity and conflict keep and forces people to flee across borders. people poor... Most of the 3.9 million people that have died in the DRC’s conflict, died of disease.4 4.1 Poor people want to feel safe and Women and girls are particularly vulnerable secure just as much as they need food to because they suffer sexual violence and eat, clean water to drink and a job to give exploitation. And violent conflict and them an income. Without security there insecurity can spill over into neighbouring cannot be development. Farmers cannot countries and provide cover for terrorists or farm if they are afraid that their land, organised criminal groups.5 livestock or family will be attacked. Girls cannot be educated if they are scared of the journey to school. And businesses will not invest where there is fighting, or where the rule of law is not upheld.

4.2 The number of armed conflicts around the world has dropped by 40% A victim of violence since the early 1990s. Even in Africa there After being abducted at the age of ten, has been a decrease in recent years.1 The Francis Owot spent almost ten years international community, including the fighting as a child soldier in the bush in UK, has helped prevent conflict and build northern Uganda. “After I was abducted, peace. However, there is still a lot of we moved the whole day until night. We woke up in the morning, we started violence and new pressures threaten marching, then after two weeks, I saw that to cause further instability in developing there is no change. I sat under a tree crying, countries – especially increasing competition when they got me I was beaten. I was still a over natural resources and, in Asia, child, still young, but they were teaching chapter 4 rising inequality. me the use of a gun.” Francis eventually became a willing fighter. “Fighting,” he 4.3 War and insecurity have a devastating says, “was part of my work. And if I stayed

impact. Of the 34 countries furthest from for two weeks without firing, I would feel getting security, growth and services reaching the MDGs, 22 are in, or just something was missing, something is not very normal.” Francis escaped from the coming out of, conflict.2 In Africa, there are promoting peace bush and now lives in a refugee camp with more than 12 million internally displaced his family. 3 people as a result of violence. Violent Source: Mergelsberg, B. (2005) Crossing Boundaries: conflict reverses economic growth, causes Experiences of Returning “Child Soldiers” and security hunger, destroys roads, schools and clinics, 46 47

Has the number of armed conflicts gone more likely to turn to violence. While there is improving courts and prisons, and giving up or down in the last 60 years?6 no evidence that poverty contributes directly people economic and political alternatives to terrorism, or that terrorists come from to violence and extremism. The UK poorer communities, they often justify their supports such work through our aid 25 actions by claiming to be fighting against programme and our conflict prevention 20 injustice. They exploit poverty and exclusion pools (see below). But this is not just 15

10 in order to tap into popular discontent – about aid. As we set out in the previous

5 taking advantage of fragile states such as chapter, international partners must also

0 Somalia, or undemocratic regimes such as in help improve security by tackling the 1946 2004 Afghanistan in the 1990s, to plan violence. trade in arms and reducing the risk of Europe international corruption. 4.7 Countries with good governance are 25 less likely to face these problems. Fighting 4.9 Helping countries to prevent war is 25 20 25 poverty and social exclusion through better far more cost-effective than helping 20 15 20 7 15 10 15 governance therefore contributes to security them rebuild afterwards. Having

10 5 10 – locally and internationally – and helps to neglected Afghanistan during the 1990s,

5 0 5 reduce the potential for radicalisation or the international community will need 1946 2004 0 0 extreme political violence. to spend US$20 billion to help reconstruct Middle East 1946 2004 1946 2004 the country.8 But to prevent conflict, Americas 25 Asia and Australasia 4.8 International partners can help international partners must first understand 20 developing countries to improve security the causes of conflict and ensure their aid 15 by getting arms out of circulation, does not unintentionally fuel it. After 10 reforming police and armed forces, 5

0 1946 2004 Africa

Source: PRIO/Uppsala Armed Conflict Dataset, as described in Gleditsch et al. (2002) and updated in Harbom & Wallensteen (2005) Journal of Peace Research.

4.4 At the G8 Gleneagles meeting and Improving security and the UN World Summit in 2005, the preventing conflict… international community agreed that more needed to be done to prevent 4.5 People need effective states to provide conflict. Development, diplomatic and them with security. This means protecting security efforts must complement each citizens and dealing justly with those who other better to achieve this. We believe commit crime. It means managing the there are two big challenges: causes of insecurity and conflict from both within and outside their borders. • First, helping developing countries to build This requires effective institutions – police, effective and accountable institutions to military, border controls, and a legal and provide security and justice to the poor. judicial system – that are overseen by • Second, ensuring that the international civilian authorities.

community builds capacity to prevent 4.6 Weak or corrupt governments are often and deal with conflict. responsible for some of the worst human getting security, growth and services rights abuses. In Burma and Zimbabwe violence has been sponsored by the state. Poor governance breeds disillusionment, grievances and conflict. People who live with constant abuse of power, or who cannot get justice or express their views peacefully, are 48 49

analysing the conflict in Nepal, the UK changed the focus of our aid programme to The UK will ensure that previously excluded social • Work with developing countries groups and regions were able to access and other international partners public services. to improve security and access to justice for the poor. 4.10 Early analysis of the causes of conflict or instability also helps the international • Through our aid programme and community to anticipate potential crises. the UK conflict prevention pools, The EU and African Union (AU) have ‘early increase our investment in at least warning’ systems and the UN monitors ten countries where security has been identified as a priority by: the risk of humanitarian crises through its Office for the Co-ordination of • Undertaking more work on Humanitarian Affairs. However, none of safety, security and access these mechanisms will be effective until to justice. there are better international arrangements • Supporting security to turn early warning into early action. sector reform. Without a stronger commitment to act, • Reducing the proliferation of and the capacity to do so, the international small arms and light weapons. community’s response to conflict will continue to be inconsistent and inadequate. • Supporting disarmament, demobilisation and 4.13 When states fail or cannot govern, the reintegration programmes Tackling conflict and for ex-combatants. building peace… UN has unique authority to speak out and step in. It represents the will of the whole Better security, • Supporting initiatives to 4.11 For people living in constant fear of international community. But other better development tackle social exclusion and violence, as in Darfur, Northern Uganda international and regional organisations radicalisation. In Malawi the UK has helped tackle failings and (in the past) Rwanda, the ultimate including the EU, the AU, the North Atlantic in the criminal justice system by introducing • Assess the causes of conflict and test of the international community – and Treaty Organisation (NATO), the Organisation a paralegal advisory service for vulnerable insecurity as part of our new particularly the UN – is the willingness to for Security and Co-operation in Europe, people, training traditional rulers to governance assessment and use take action to protect civilians when states and sub-regional groups like the Economic improve local dispute resolution, and this to shape UK development fail in their responsibilities. Community of West African States providing victim support units for women policy and programmes. and children in district police stations. 4.12 At the UN World Summit, all 191 UN (ECOWAS) also have important roles to play in preventing and managing conflict. In Jamaica, DFID, the Home Office the FCO Member States endorsed for the first time and other UK agencies are working the groundbreaking principle of a These organisations need stronger capacity, together to help the government tackle ‘responsibility to protect’. They agreed that and, in the case of the UN, major reform. armed violence in poor urban communities. while individual governments are responsible They also need clearer arrangements for In Afghanistan, the UK is supporting efforts for the protection of their own people, the working together. to reduce the supply of opium through international community would no longer 4.14 Mediation through the UN, AU and better law enforcement and by providing tolerate inaction by national governments sub-regional bodies is critical to resolving opportunities for poor farmers and in the face of genocide, war crimes, ethnic labourers to develop alternative, legal conflict. More civil wars have been brought livelihoods. And in Helmand province, DFID cleansing and crimes against humanity to an end in the past fifteen years through is investing in small community projects in within their borders. Translating this negotiation than in the previous two unstable areas to improve security and commitment into action means using centuries.9 Diplomatic efforts by the UK and getting security, growth and services encourage development. diplomacy, humanitarian assistance other international partners can help – as and sanctions to protect civilians; and we are trying to do in Darfur. And, behind the as a last resort, collective military action scenes, local and non-governmental authorised by the UN Security Council. organisations play an important role in defusing conflict and reconciling communities. Mediation efforts deserve more international support. 50 51

4.15 But the international community must Mediating crises also be ready to act to protect civilians where necessary. The demand for peace support Regional mediation for peace in Sudan: operations is increasing. There are currently The Comprehensive Peace Agreement between North and South Sudan in nineteen UN peace support operations January 2005 ended a twenty year war that underway around the world employing killed an estimated 2 million people. 62,000 troops, 6,000 police and 15,700 A team drawn from the governments of civilians.12 At present the UK has 300 armed the region worked with the chief mediators forces personnel in UN peace support from the North and South, facilitating operations. We provide training to countries negotiations on contentious issues, often for weeks at a time.10 The UK, Norway who contribute troops to the UN and are and the US underpinned these efforts by helping to make the UN’s Department of providing financial support, expert input Peacekeeping Operations more effective. for the mediation process, and diplomatic But the UN’s planning ability along with and political assistance. the availability of peacekeepers, police, Grass roots mediation in Somalia: transport, medical and engineering facilities The “Somali Dialogue for Peace” Project, are stretched to the limit. Much greater helped ensure a peaceful parliamentary international investment is needed to build election process in Somaliland in 2005 by capacity for peace support operations. developing codes of conduct for the political parties and media, and by As well as the UN, this should cover other facilitating dialogue to avoid violence regional organisations like the AU. The EU in the territories disputed between and NATO can play a particularly important Somaliland and Puntland.11 The project has role in providing high quality forces able also worked to address long-standing clan to respond quickly to new crises. And, conflict that has obstructed humanitarian alongside peacekeeping, other measures and development work in Mudug and Galgadud in the central regions of Somalia. are needed to protect people such as using human rights monitors and encouraging the media to report what is going on.

4.16 Countries have a 44% risk of falling governments. And funding should be back into conflict in the first five years provided throughout the reconstruction after the end of a civil war.13 The UN phase, not just in the immediate period Peacebuilding Commission has been set after the conflict. The Peacebuilding up to change this by ensuring that post- Commission will need to act on these conflict countries get long term help. lessons and improve co-ordination Important lessons have been learnt from between national governments and their the Democratic Republic of Congo and international partners, including the UN,

Afghanistan. There has to be a shared plan World Bank and IMF. getting security, growth and services between the government and international partners that focuses on security, the rule of law and development. Achieving rapid, visible improvements that maintain public support for peace is vital. Funds should be pooled to reduce the burden on weak 52 53

The UK will • Work with others to ensure • Continue to push for a significant that the international agreement increase in the number of high- on ‘responsibility to protect’ is quality peacekeepers internationally, turned into a willingness to act and train 75,000 troops by 2010 as in specific cases. agreed by the G8 in 2004 – including through the creation of an Africa • Invest in monitoring human rights Standby Force. and support the media to raise awareness and gather evidence • Work to ensure that the EU and when states fail in their NATO develop effective rapid responsibilities. reaction forces able to respond quickly to crises, including in • Work with others to ensure that the Africa, alongside the UN where UN, AU, EU and other regional appropriate. organisations have adequate capacity to prevent and respond • Contribute directly to UN to conflict by: mandated missions by providing UK troops and assets, subject to • Monitoring countries that are other commitments. vulnerable to conflict through effective early warning systems. • Provide diplomatic and financial support to the new • Mediating between conflicting UN Peacebuilding Commission, groups, for example through the the Peacebuilding Support Office UN Secretary General’s Special and the Peacebuilding Fund. Representatives or the AU’s Peace and Security Council and Panel • Through our development of the Wise. programmes and diplomatic efforts, ensure that the • Responding when states are unable to protect their citizens. international response in post- conflict countries has strong • Press for better co-ordination national ownership, clear between the UN and other international leadership and international organisations pooled donor funding, and helps Working across government to stop conflict involved in peacekeeping such tackle poverty. as the AU, EU and NATO. The Global Conflict Prevention Pool (GCPP) The Post Conflict Reconstruction Unit, set up in and the Africa Conflict Prevention Pool (ACPP) 2004, enables UK Government Departments were jointly established in 2001 by DFID, FCO and the military to work together to support and MOD to improve the UK’s work in conflict countries emerging from conflict. The Unit prevention, conflict management and provides skilled civilian staff at short notice peacebuilding. GCPP funding has helped the to help kick-start post-conflict recovery. It has UN Office for the High Commissioner for helped plan for the UK military deployment Human Rights in Nepal to monitor human to Helmand in Afghanistan and is supporting rights and is supporting regional police provincial reconstruction work in southern training in Afghanistan. The ACPP has Iraq. We will continue to work through the provided support for ECOWAS rapid response Post Conflict Reconstruction Unit, including getting security, growth and services missions to Liberia and Cote d’Ivoire, paving in Africa, where needed. the way for UN peace support operations, and significant support to ceasefire monitoring missions in Sudan. We will review the GCPP and the ACPP to ensure that they are as effective as possible. 54 55

How change happens: Ending conflict in Sierra Leone

Sierra Leone has been devastated by civil Since the conflict ended in 2002, the conflict and is desperately poor. But, over the Government has begun to manage the past few years, things have begun to change. economy more effectively, resulting in an The conflict is over, elections have been held annual GDP growth rate of 7.4%. Enrolment and the new Government is committed to rates in primary schools have doubled since development and fighting corruption. 2003. Child mortality rates are declining steadily and child immunisation rates have The UK played a major role in promoting climbed from 28% in 1997 to 50% in 2004. peace, security and better governance in Sierra Leone. The UK military was sent in 2001- There is a long way to go, but the immediate 02 to support UN and ECOWAS peacekeepers danger of falling back into conflict is receding and ensure elections could be held. The UK has and the people of Sierra Leone now have hope helped the government to rebuild and train for the future. the new armed forces, reform the Ministry of Defence, reintegrate armed groups into society and overhaul the police service. getting security, growth and services 57

Economic growth is the single most powerful way of pulling people out of poverty. Tackling inequality helps poor people participate in economic growth and trade. Reducing poverty sustainably means ensuring that today’s development successes do not become tomorrow’s environmental failures.

Growth is the best way 5.3 The picture is very different in sub-Saharan to reduce poverty… Africa, though there have been some success stories. Uganda and Ghana, for example, 5.1 Poverty is about lack of opportunity, not had high enough growth during the 1990s just a lack of income. The lesson from the to reduce poverty by more than 10%. But last 50 years is that economic growth is the the percentage of people living in poverty in most powerful way of pulling people out of the region as a whole has increased in the poverty. Economic growth creates higher past two decades. There are now over 300 incomes, which help people save, invest and million poor people in sub-Saharan Africa.2 protect themselves when times are hard. Higher family incomes mean children can go to school rather than have to work. And as economies grow, governments can raise the Struggling to grow money they need for public services. in Malawi

5.2 Over recent decades, Asia has seen Mary Banda lives on a small plot of land dramatic economic growth, first in the in rural Malawi. She plants maize at the start of the rainy season. Mary would like to East Asian ’Tigers’ of South Korea, Singapore buy new seeds and fertiliser but this is the and Taiwan, then Thailand, Malaysia and time of year when she is shortest of cash. Indonesia, and more recently in China Even in good years she relies on food aid and Vietnam. Trade and openness to the for the hungry months. In times of drought, international economy have been the key or when there’s an illness at home, the chapter 5 family have to sell their possessions and to this economic success. There has also livestock just to survive. It takes years to been significant progress in South Asia. regain them. Mary needs to find work or In the 1990s, economic growth helped sell something to bring in cash but few reduce poverty in the region from just local people have enough money to start reducing over 40% to around 30%.1 a business, and the area has poor roads, electricity and phone connections. The nearest market is eight miles away and she cannot be sure that she will be able to sell getting security, growth and services poverty through or buy what she needs there. economic growth 58 59

Which regions have been getting richer? 3 5.7 One of the lessons of recent decades is How did Botswana grow? that there is no single path to growth. Some of the reforms that international From 1965 to 1998 Botswana’s economy partners pushed through during the 1980s $5000 grew at an annual rate of 7.7%. East Asia & Pacific External threats during the 19th century and 1990s did not work. However, while $4500 helped unite tribal and ethnic groups. successful countries have followed a number $4000 This contributed to a common interest in of different policies to suit their own building a strong state following $3500 circumstances, they have based these independence in 1966 to safeguard reforms on common principles. $3000 property rights, improve infrastructure, South Asia $2500 and keep up the traditional ‘kgotla’ or 5.8 First, governments must establish Sub-Saharan Africa public meeting so that government macro-economic stability. This means that $2000 listened to the needs of the community.

GDP per head central banks and finance ministries must $1500 It created the stability and confidence necessary for investment and led to policies keep public borrowing and inflation at $1000 that benefited the whole country – so manageable levels, interest rates affordable and exchange rates stable and realistic. $500 that Botswana’s huge mineral revenue was used to boost national development, This makes costs and profits for businesses $0 rather than being siphoned off for the more predictable, which encourages 1980 1984 1988 1992 1996 2000 2004 benefit of a small elite. investment. A strong financial sector also helps people to invest their savings and Source: World Development Indicators 2006 use resources effectively.

5.4 We believe there are five big challenges for Promoting growth… the future: 5.5 It is the private sector – from farmers and • First, helping poor countries to grow faster, street traders to foreign investors – that especially those lagging behind or who creates growth. Growth is fuelled by the have the biggest numbers of poor people. creativity and hard work of entrepreneurs and workers. But as the Commission for • Second, enabling poor men and women Africa emphasised, it is governments that to benefit from growth, by providing better are in a position to make markets and access to economic opportunities. competition work, by taking the lead in • Third, ensuring that growth is based on the making business easier and less expensive, sustainable use of natural resources, given and determining the level of regulation. rising worldwide consumption and the 5.6 Some developing countries are hardly threat of climate change. growing at all. This is often because the • Fourth, successfully negotiating for a government is not managing the economy fairer international trade system from well. High and unstable inflation makes which developing countries can benefit. business difficult. And local and foreign investors take fewer risks if corruption • Fifth, managing migration to promote getting security, growth and services means they have to pay bribes for licences, growth. or if legal systems fail to uphold contracts. Growth happens faster when political and economic leaders create the right environment for trade and investment. 60 61

5.10 Third, investment in infrastructure is critical. Africa in particular suffers from Getting connected a lack of energy, communications and irrigation. The costs of building, operating “In the past, I had to carry rice on my shoulders to the Thua market, which is and maintaining infrastructure in developing 7km away,” says Kieu Van Do, a member countries are usually between 6% and of the Duong Quang commune in Vietnam. 8% of gross domestic product (GDP), but But the road running through the investment can bring big returns.6 Public- commune has recently been improved, private partnerships – often supported by and, like everyone, Kieu Van Do is aid contracts or guarantees – can help. delighted. Since the road improvement, incomes in the commune have increased However, countries will need to adapt their annually by 7% and the commune has infrastructure to deal with the risks posed expanded into rearing livestock and selling by climate change. services. At the same time schools, health clinics, power supplies and the post office have all been modernised.

5.9 Second, governments need to remove unnecessary barriers to business, including Changing the obstacles to foreign trade and investment. Regulation is needed to make sure that climate for business workers earn a decent wage and have safe The Investment Climate Facility (ICF), working conditions. But this should not make launched in June 2006, aims to boost growth in Africa by reducing barriers to it too hard or expensive for people to set up private sector investment. It will create in business. While some governments more and better jobs, particularly in regulate too little, many regulate badly or too small-scale businesses and will help: much, placing huge costs on the private • Improve the image of Africa as a place sector. For example, it takes two procedures to do business. and two days to start a business in Australia, • Improve business regulation, including but fourteen procedures and 153 days in fairer and more efficient taxation and Mozambique. In Singapore, it takes seven customs. hours and two signatures to clear goods • Strengthen property and contract rights. through customs but in Bangladesh, it takes seven days and 38 signatures.4 Improved • Develop Africa’s financial markets, and investment in infrastructure.

business conditions in China and India during getting security, growth and services the 1980s and 1990s meant that private The ICF will work with African investment nearly doubled. Countries which governments, private-sector, regional and improve their regulation to the best specialist organisations. The UK has played a leading role in helping to shape the ICF. international standards can increase growth We are contributing US$30 million over its 5 by as much as 2.3% a year. first three years. 62 63

climate can be difficult. Getting the timing of reforms right and rebuilding basic CDC: Boosting the infrastructure is essential. Sometimes, just private sector getting the macro-economy under control CDC Group plc (a company wholly-owned can attract large-scale investment. by DFID) invests in poor developing countries and aims to attract private capital 5.13 The UK believes that growth is the ‘exit strategy’ for aid. To reduce poverty by showing that such investments are worthwhile. It is proving a great success. quickly, international partners need to put CDC has mobilised about £360 million of growth at the heart of their relationships with private investment since 2003 and its developing countries. Multilateral and portfolio has grown by 60% to £1.6 billion. bilateral donors can support growth and Its investment in African telecoms highlights macro-economic stability by providing advice its success. CDC was the first institutional and financial support to countries, and by co- investor in Celtel which now has telephone operations in fourteen countries, covering operating closely with the international and 30% of Africa’s population. It has local private sector. transformed access to telephones for more than 5 million customers.

Investing in infrastructure

The Commission for Africa argued for 34 country projects worth US$1.8 billion, The UK will an extra US$10 billion a year in funding for and agreed scoping studies that will lead to infrastructure from 2005 to 2010, and US$20 further rounds of projects. Asia’s infrastructure • Support investment climate reforms, Development and the European billion in the following five years. International is better developed than Africa’s but the total including through the Africa Investment Bank to increase partners are on course to meet these targets. investment needed is higher. A new Investment Climate Facility, and help investment and support to the The Infrastructure Consortium for Africa was Asian Private Infrastructure Financing Facility identify and address constraints to private sector, especially in established by the G8 to increase investment in is to be launched soon. International financial domestic and foreign investment. difficult environments. infrastructure. The UK provided initial finance institutions like the World Bank and the Asian of US$20 million to help establish the and African Development Banks are helping • Increase investment in • Work closely with organisations Consortium. In its first year, Consortium to bridge the funding gaps, improve infrastructure by strengthening like Business Action for Africa and members secured funding for ten procurement and technical standards, partner governments’ capacity to the Commonwealth Business regional projects worth US$750 million, and stimulate private sector investment. prepare, finance, implement and Council to identify ways to support maintain projects. development of the private sector and employment. • Increase our support to private sector investment in infrastructure • As part of doubling research 5.11 Fourth, agriculture is central to the invest in infrastructure (for irrigation and by at least £40 million over the next funding, we will increase support to economies of many poor countries and to get goods to market) and innovation three years. With contributions science and technology to promote the lives of many poor people. Agriculture (including adaptation to climate change); from others, this will help double the growth, including on agriculture, creates jobs and income, and helps the and promote access to rural financial services. amount of private sector investment forestry and fisheries – for example rest of the economy to grow by boosting The G8 is supporting national and regional to US$3 billion. through the AU/NEPAD’s demand for local goods and services. initiatives under the AU/NEPAD’s Comprehensive Agricultural • Work with international partners to For every US$1 of farm income in Zambia, Comprehensive African Agriculture Development Programme. ensure that at least US$10 billion is a further US$1.5 of income is generated in Development Programme. provided annually for infrastructure • Encourage developing country other businesses.7 But to expand agriculture, getting security, growth and services 5.12 Growth is especially important in the in Africa by 2010 through the Africa governments, the private sector governments need to guarantee land wake of conflict and where the state Infrastructure Consortium. and civil society, including trade ownership, make sure that regulation, is weak. The private sector in fragile states unions, to work together to standards and subsidies are appropriate, • Work with multilateral development can create jobs and provide some services promote growth and employment. and see that land is used sustainably so it banks and development finance when governments are unable to. But institutions such as the International continues to be productive. They also need to re-establishing a favourable investment Finance Corporation, the European Bank of Reconstruction and 64 65

sector investment in the past five years.9 Improved property rights are also important, The UK will as they provide collateral and encourage • Help to tackle the barriers that people to invest in the land. When rural prevent poor people from gaining households in Vietnam were given greater access to markets and financial rights to farm land in 1988, it led to better services, including by improving and more productive land use, increased property rights. growth, and higher incomes. • Support microfinance initiatives, 5.17 Large numbers of poor people make their particularly in partnership with living as small traders and day labourers. Their banks and regulators. ability to do this is greatly affected by local • Promote good labour standards regulations like market licences and work and work to get rid of child permits. Small and medium sized enterprises labour. account for about 40% of employment in low income African countries.10 Governments • Support the Africa Enterprise Challenge Fund with US$20 need to help people in this sector to access million in its first three years, business support services. As proposed by the and encourage others to provide Commission for Africa and NEPAD, an Africa a further US$40 million. Enterprise Challenge Fund is being set up to Helping poor people to 5.15 Growing now and redistributing the extend financial services, open markets to 8 benefit from growth... benefits later does not work. Governments small producers and share skills between need to increase economic opportunities large and small companies. 5.14 Inequality – the gap in incomes and for all from the start. In Chapter 6 we set out opportunities between rich and poor – is how investment in education (especially for a problem in many countries. It means that girls), health and social protection can boost even if the economy is growing fast, the poor opportunities and reduce the vulnerability can still be left behind. Inequality causes that most poor people face. Investment in social tensions, and unequal access to Making markets work agriculture is especially important for many for poor people resources can mean that powerful vested poor people. Investing in rural roads to link interests continue to ignore the interests remote regions to local and regional markets, Markets work for the poor when they of the poor. and providing access to new technology, like provide opportunities for business and decent jobs, and enable poor people to mobile phones, makes trade much easier. In get the goods and services they value. most countries – as successful Bangladeshi The UK is supporting a number of initiatives NGOs have shown – more can also be done to expand such opportunities, including: to help women fulfil their economic potential. • In Southern Africa, the FinMark Trust is Women must be able to borrow capital and working with financial regulators, the access appropriate technology so that they banking sector and policy makers to can develop their businesses. Governments extend access to financial services. In need to remove legislation that discriminates South Africa alone, the Trust’s work has against women owning land or finding a job. helped an additional 2.3 million people access financial services. 5.16 Access to finance helps poor • In Bangladesh, the KATALYST programme people invest in productive assets like is helping to strengthen business services livestock, or goods for their business. for small and medium size enterprises. getting security, growth and services Banks and governments need to work In Faridpur for example, KATALYST has together to make credit more widely been working with more than 3,000 fish farmers to increase the volume and available. The UK contributes about £30 quality of their production. million a year to develop microfinance and financial services schemes – just one of these has attracted a further £58 million in private 66 67

The UK will Energy for growth • Help partner countries identify Economic growth is highly dependent on and respond to environmental the availability and affordability of energy. opportunities and risks, for Long term energy plans should aim at example by helping them to security, diversification and efficiency, and undertake strategic contain greenhouse gas emissions. For environmental assessments. example, an energy strategy being developed by West African countries will • With international partners, help help countries manage their energy countries to make efficient use resources, promote diversification and of natural resources – especially improve access to energy by poor people. water and energy. In India, a long running programme in power sector reform, working in several • Reduce the impact of UK Indian states, has reduced losses and consumption, production and improved public services and accountability. procurement on the global environment. • Work with large developing countries through ‘Sustainable Opening up trade… Development Dialogues’ to share experiences on managing 5.20 International trade is vital for growth the environmental impacts – as set out in the Government’s 2004 of growth. White Paper on Trade and Investment.15 It encourages competition and productivity, and helps developing countries earn their Using natural resources for reduced crop yields.13 And as we explore in way out of poverty. But sub-Saharan Africa’s sustainable growth… Chapter 7, climate change will alter growing share of world trade actually declined from seasons and increase the risk of droughts 6% in 1980 to 2% in 2002.16 Building trade 5.18 A great deal of economic activity in and floods.14 with neighbouring countries is therefore developing countries depends on natural especially important for Africa where 5.19 Governments can do a number of resources. Natural capital – which includes intra-regional trade is only 5% of GDP, in things to make sure that natural resources land, minerals, and forests – constitutes contrast to East Asia and the Pacific where 5% of the world’s wealth, but 26% of are used sustainably and continue to help it is 27%.17 the wealth of developing countries (excluding economies to grow. These include: removing oil-producing states).11 But if exploitation of inappropriate subsidies; regulating or taxing 5.21 The best way of improving the access resources like oil, metals and timber is not to discourage over-exploitation; clarifying of developing countries to world markets regulated, or the resources are used exploitation rights; preventing illegal use; is through a strong, multilateral rules-based inefficiently, it could undermine future investing in innovation, such as better trading system. The UK is working hard for growth. For example, Asia’s rapid growth adapted crops and more efficient ways of an outcome to negotiations on the World is, in some cases, being undermined by using water and energy; and ensuring Trade Organisation’s Doha Development increasing consumption of natural resources that these resources are priced properly. Agenda that leads to gains for all developing and the costs and social inequities associated These challenges apply to developed and countries. This includes opening markets for with it.12 In Pakistan, build-up of salt in the developing countries alike. goods like agricultural produce, industrial soil, caused by overuse of irrigation, affects goods, textiles and clothing, substantially 16% of agricultural land, and contributes reducing all trade-distorting farm subsidies getting security, growth and services to the loss of over US$200 million a year in and ending export subsidies. But if it is to work, the World Trade Organisation agreement will have to meet the needs of countries at very different levels of development. Developing countries need 68 69

‘special and differential treatment’ in order, 5.23 While greater access to markets is vital, for instance, to protect vulnerable farmers it is not enough by itself. To make the most from surges in food imports. of more open markets and regional trade, developing countries must be able to 5.22 The EU has already made significant export the right goods at the right price. reforms to the Common Agricultural Developing countries need to build their Policy. However, more radical reform will ability to trade, and developed countries be needed, including during the 2008-09 need to tackle the growing problem of review.18 This should reduce agricultural non-tariff barriers. These include unreasonable subsidies which distort trade opportunities for product standards, or ‘rules of origin’ which developing countries and should encourage prevent developing country businesses from other OECD countries to phase out their buying raw materials from the most agricultural subsidies. The EU’s negotiation competitive sources. of Economic Partnership Agreements with African, Caribbean and Pacific countries offers another opportunity to increase trade. The UK is committed to ensuring that these agreements help reduce poverty. The UK will • Work with others to seek to A comparison of subsidies to ensure that the Doha agriculture and funding for Development Agenda delivers development 19 gains for developing countries, including significant market opening, reductions in trade- 300 distorting farm support and the Managing migration elimination of all forms of export for growth... subsidy by 2013. 5.24 For many families in poor countries, other 250 • Work with EU partners to make migration is an important way of earning sure that the 2008/09 review of a living. Between 50-80% of rural African the EU’s Common Agricultural households are said to have at least one Aid for trade: helping USA Policy leads to significant reform migrant member in their own or a 200 generate growth that benefits poor countries, and neighbouring country or further afield.20 that EU Economic Partnership International migration has more than Aid for trade helps developing countries Agreements help African, use opportunities for fairer and more open Japan doubled in the past twenty years, with Caribbean and Pacific countries trade. The UK will increase our assistance 150 an estimated 200 million international increase economic growth and to £100 million a year by 2010. Total donor migrants in 2005.21 commitments to date are about US$1 billion. reduce poverty. US$ billion in 2004 Aid for trade could include customs reform, • Meet our pledge to increase our 5.25 Planning for and managing migration can 100 assistance to poor producers in meeting ‘aid for trade’ to £100 million a help both to reduce poverty and meet the health and safety standards set by importing EU year by 2010 and encourage our demand for labour in developed countries. countries or supermarkets, and help with other G8 and EU partners to meet the It can also have a positive social and political getting goods to market. For example, the USA UK is providing £4 million to help increase 50 Japan commitments they made during impact as successful migrants return home. Southern Africa’s exports of fruit, vegetables our 2005 Presidencies. Money sent back by migrants plays an getting security, growth and services and other natural products by at least EU important part in sustaining the local US$115 million by 2010. European and economy. These ‘remittances’ through formal 0 South African supermarkets will help small banking channels amounted to nearly farmers find innovative ways to meet public Support to Official Development Domestic Agriculture Assistance US$167 billion in 2005 – much more than the and private product standards. combined aid rich countries gave in the same Source: OECD year.22 In Lesotho, for example, remittances 70 71

How change happens: Reducing poverty in Vietnam

In 1986 the Vietnamese Government approved about a third of total state investment. It has a sweeping series of reforms known as doi moi helped improve access to transport services, to improve economic performance and power, water and telephones, and is financing combat poverty. Since then, Vietnam has made ambitious reforms, for example in banking the transition from a centrally planned to a and state-owned enterprises. market-based economy. The result has been Aid also helped Vietnam to increase social remarkable. sector spending fast and to reach its MDG Since doi moi began, Vietnam has had one of targets early. Schooling in remote and poor the fastest growing economies in the world. regions has improved – reaching ethnic Growth has averaged almost 7% over the minority and other marginalised children. entire period, and 7.6% for the last five years. Access to safe water grew from 26% in 1993 to Trade has driven much of this – exports 49% in 2002, and electricity from 51% in 1996 increased by 19% a year during the 1990s. As to 88% in 2004. This has helped to underpin a result, poverty has fallen at a breathtaking economic growth. pace – from 65% in 1993 to 19% in 2004. Of course, challenges remain. Corruption for The Government has dedicated an increasing one. Democratisation for another. But aid and share of public expenditure to fight poverty growth are continuing to improve the lives of and improve social welfare. Aid of over US$5 millions of people. billion over the past ten years has financed

account for 26% of the country’s total national income.23 The UK will 5.26 Developed countries can help poor people make the most of migration by: helping • Work with partner countries countries plan for and manage the and international organisations consequences of it; understanding better to seek ways in which both the impact of their own immigration policies developing and developed countries can benefit on development; supporting the efforts from migration. of migrant groups to help their home communities; and helping people to invest • Monitor the effect of our at home by making money transfers easier. migration policy on development, including the points-based approach that the UK announced in March 2006. • Work with the private sector and partners in the EU to make

it easier for people to send getting security, growth and services remittances to help developing countries. • Help partner governments to develop policies that help poor people to benefit from internal and international migration. 73

Everyone should have access to health care, education, water and sanitation and, when times are hard, social security. Real progress is possible, even in fragile states, but we all need to do a lot more. Preventing the spread of HIV and treating people with AIDS is essential.

From commitments to results less likely to drop out of school. Social protection helps children attend school or 6.1 All human beings have a right to food, get to a health clinic. Investing in people – clothing, shelter, education, health and social their skills, health and security – boosts security. These are set out in the Universal economic growth and increases incomes. Declaration of Human Rights and the And having more money, in turn, gives Millennium Declaration. people more choice, and generates the 6.2 Progress is possible. Since the 1960s, tax revenues which pay for public services. average life expectancy in developing 6.5 We believe that there are four countries has risen from 48 to 63 years.1 big challenges to providing essential In 1970 most adults in the world could not public services: read or write, now most can. In sub-Saharan Africa and South Asia, adult literacy rates • Developing country governments and have doubled since 1970, and in East Asia the international community must spend they are now over 90%.2 But progress is not more on public services. fast enough. On current trends, most of the • Developing countries will need to improve MDGs will be missed in sub-Saharan Africa their capacity to provide more schools and and South Asia. clinics, and employ more teachers, doctors 6.3 The UK believes there are four essential and nurses. public services that are needed to make • Developing countries have to address faster progress towards the MDGs: the reasons why the poor – especially education, health, water and sanitation, women, girls and disabled people – cannot and ‘social protection’ – various forms access services. of direct help to poor families. In many chapter 6 developing countries these basic services are • The international community will need to of poor quality and do not reach everyone. do more in fragile states, where there is the greatest risk that large numbers of 6.4 Essential public services are linked to poor people will be left behind. getting security, growth and services each other. When there is access to water, children can go to school rather than spend investing time fetching it. Going to school leads to better health. A girl who has been educated is much more likely to get her own children in people immunised, and healthy children are much 74 75

6.6 In 2005, developing countries and the their capacity to provide good quality public international community promised to tackle services. Governments will need to the first of these challenges by rapidly strengthen and reform the organisations that increasing financing for public services. Lack provide education, health, water and social of funding has meant that many developing protection. They will also need better countries have been forced to limit what national and local monitoring to improve they want to do. In turn, international management of services and results. partners – some of whom were sceptical 6.9 Third, governments and partners have that increased resources would be used to address the problems which prevent poor effectively – have focused on constraints people – especially women and children – rather than the scale of need. This cycle from using services, even when they are needs to be broken. available. This means doing something 6.7 Developing countries now need to set about user fees and discrimination against out ambitious plans to reach the MDGs over particular regions and groups such as ethnic the next ten years. And the international minorities and disabled people.3 Poor people community must respond by funding these need to be more involved in decisions about plans using the new aid they have promised. services – whether through local councils, Where the circumstances are right, aid NGOs, trade unions or faith organisations. should be paid direct into government 6.10 Fourth, international partners, UN budgets. This aid needs to be long term and organisations and NGOs will need to play a predictable, so that developing countries are more active role in providing public services able to make long term decisions to employ in fragile states where governments are teachers and doctors, buy drugs, and build weak and direct support to governments is schools and clinics. not yet possible. Where states are committed 6.8 Second, as part of these plans, many to providing services but lack capacity, this NGOs. Just such a move has been made developing countries will need to improve might mean contracting out basic services to in Cambodia and Afghanistan. Often, communities and local authorities can The UK will provide services even where national institutions are ineffective – and so reach • Increase spending on public poor people more quickly than would services - education, health otherwise have been possible. But these (including HIV and AIDS), arrangements need to be designed to water and sanitation and social support the long term responsibility of the protection - to at least half of state. In Afghanistan, the Government is the UK’s direct support to giving small grants to community councils developing countries. through the National Solidarity Programme. • Make long-term commitments to partner countries through 6.11 By working together, international ten year plans for expanding partners can help provide public services public services. more quickly than stand-alone projects. In joint programmes such as the national • Provide predictable and flexible AIDS programmes in Burma and Zimbabwe, assistance to these plans using, as appropriate, either direct budget

pooled funding and a single plan have getting security, growth and services support, basic service grants helped pay for the activities of a range (which earmark resources to one of NGOs, while reducing burdensome or more sector), or working procedures usually associated with through civil society, faith based multiple projects. or other organisations. 76 77

Getting children into school… Abolishing fees helps children go to school 6.12 Our priority is to get the 100 million children of primary school age who are not currently attending school into a classroom 8 with a teacher. Education is both a right and a route out of poverty. People who have 7 been to school are more likely to find work,

look after their health and demand that 6 governments act in their interests. But on current trends, 67 countries will not achieve Kenya 2002 the MDG for universal primary education.4 5 Urgent action is needed to increase funding, Tanzania 2001 and to deal with the problems that prevent 4 children from going to school – including the devastating effects of AIDS.5 3

6.13 School fees deter parents from enrolling Uganda 1996

their children, particularly girls. Seventy-eight Primary enrolment (millions of pupils) 2 out of 94 low income countries charge some Malawi 1994 type of fee for primary education.6 When faced with a choice of paying for a son or 1 daughter to go to school, parents will often choose the son. Countries that have 0 2 years before 1 year before Year fees 1 year after 2 years after abolished school fees, however, have seen a were abolished huge increase in enrolment. The UK strongly supports free primary education, and is helping governments to pay for the Source: UNESCO Institute for Statistics, www.uis.unesco.org additional teachers and classrooms needed to cope with the growing numbers of children in school.

6.16 Many developing countries will need to Learning for free increase their spending on education. This Fast track to success Mrisho is an eight-year-old pupil at will require a substantial increase in aid, until the UN Girls Education Initiative, together The Fast Track Initiative brings international Kerezange School on the outskirts of the poorest countries have grown enough to with special projects to support girls partners together to support national Dar es Salaam, Tanzania. He and his brother support themselves. Providing a good quality education plans. The results so far are good. Benadi know how lucky they are: ”My education. education to all children of primary school In the first seventeen countries to join the parents say that it is a blessing that they do 6.15 While universal primary education FTI, more children are completing primary not have to pay for us to go to school,” says age by 2015 will require an extra US$10 school than in other similar countries. For Mrisho. “I think so too, because if they did, remains our priority, there is also a growing billion in aid each year. This will include the example, in Niger only 20% of children my brother and I may not have been able to need to invest in secondary and higher costs of removing school fees, dealing with completed primary education – one of the come to school.” education and vocational skills training. the effects of AIDS, and providing school lowest rates in the world. Since joining the Young people graduating from secondary meals and grants to help poor families send FTI in 2002, school enrolment has doubled, schools and colleges today will become their children to school. and completion has risen to 36%. From 6.14 Helping girls enrol and stay in school getting security, growth and services the teachers, health workers and business hiring 250 teachers a year, it is now hiring means tackling the discrimination they face. people of tomorrow. Secondary education 6.17 The Education for All Fast Track Initiative more than 2,500 a year.7 Community awareness programmes about is one of the most important ways (FTI), which the UK supports, estimates that the importance of educating girls help. More of improving the status and health of by 2008 up to 60 countries will have credible women teachers and better sanitation in young women. plans to get all children into primary schools also helps overcome some of the education by 2015. social barriers. This is why the UK supports 78 79

Improving health… 6.21 International partners have increased more than four million are needed.12 The UK will their support for health significantly in recent We need to do more to invest in 6.18 Too many people die of easily years. There are now a number of initiatives human resources. preventable diseases and too many suffer • Spend at least £8.5 billion on on individual diseases, and over 70 health education between 2006 and ill-health which stops them from earning a funds and partnerships. The Global Fund to 2015, and provide long term living. If everyone could receive basic health fight Aids, Tuberculosis and Malaria and the commitments to help governments care, the number of children dying could be Global Alliance for Vaccines and plan ahead. This will double reduced by two-thirds, and the number of Immunisation have raised US$8.7 billion our spending to over £1 billion mothers dying by three-quarters.8 a year by 2010. and US$1.7 billion respectively. The IFFIm 6.19 However, the funding gap is huge. will raise a further US$4 billion. The Joint • Increase our total contribution to Developing countries are short of finance, United Nations Programme on HIV/AIDS the Education for All Fast Track trained staff, and basic medicines. The (UNAIDS) estimate that US$8-10 billion will Initiative from £50 million to £150 Commission on Macro-economics and million over the next three years be spent on AIDS each year from 2005 to to help countries speed up the Health estimated that basic health care 2007 – but this is only about 60% of what implementation of their in poor countries can be put in place for will be needed.10 The UK will work with education plans. around US$35 per person per year.9 But others to close this financing gap and ensure spending on health in most countries is that the money is used effectively. • Support the removal of user fees far less than this. for primary education in all our 6.22 Developing countries, bilateral agencies, partner countries, and help 6.20 Developing countries therefore need UN agencies and civil society have agreed to governments cope with the to increase their own spending on health. fight AIDS through ‘the three ones’: one resulting increase in enrolment. In 2000, African Governments meeting in co-ordinating organisation, one plan, and • Support special initiatives to Abuja agreed to increase funding from an one monitoring system for all external get more girls into school. average of 8% of their budgets to 15%. support. These principles should apply to However, most are far from achieving this health services more widely. Fighting stigma • Provide new support for higher because of other demands for expenditure. education and vocational skills and discrimination, making condoms training to train the professional available and providing better information so people can protect themselves will be staff needed by health and Tackling the African education services. important too. health staff crisis 6.23 Almost all deaths as a result of pregnancy and childbirth are avoidable. The UK will help partners to solve their staffing crises by: Sexual and reproductive health services and rights need significant support. Action • Training professional workers such as doctors, nurses, managers, pharmacists is needed to tackle social and cultural and other support staff – this includes discrimination that prevents women getting support to higher education. information and health care, denies their • Creating incentives for staff to work in freedom to choose if and when to have under-served areas – for example through children, and greatly increases their hardship allowances or better housing. vulnerability to HIV. • Increasing support for community health 6.24 Strong national health services are workers – people who can help treat many essential to do all this. The biggest problem simple illnesses and are more likely to live many countries face is not having enough in the communities they serve.

doctors, nurses and support staff. This has • Expanding links between the UK National getting security, growth and services been made even worse by AIDS, and by Health Service and poor countries. highly trained health professionals leaving • Exploring opportunities for health to work in richer countries, including the workers to return from the UK to their UK.11 Sub-Saharan Africa needs nearly 1.5 own countries, for extended periods, to help improve health services. million more health workers. Worldwide, 80 81

In Uganda, abolishing fees helped double attendance at health clinics The UK will

• Work with developing countries to people at risk from malaria with 30 back ambitious ten year plans to mosquito nets and access to improve health services, including effective treatment by 2010; and 25 ways of recruiting and training the 2006 Global Plan to Stop TB, Government abolished user fees more doctors and nurses. in order to halve the number of deaths from TB by 2015. 20 • Help partner governments abolish user fees for basic health services, • Support access to sexual and 15 and help them tackle other barriers reproductive health services to access, including discrimination and rights, especially for girls against women. and women. 10

Millions of outpatient visits • Implement the IFFIm which aims • As part of the doubling of our 5 to save 5 million lives in the next research spending, increase our ten years. funding for a new generation of drugs and vaccines against the • Support international efforts, 0 major killer diseases, particularly led by UNAIDS, to achieve 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 through new public-private the goal of universal access to partnerships. comprehensive HIV prevention Source: Ministry of Health (2005) Annual Health Sector Performance Report for 2004/05. Kampala: Government of Uganda. programmes, treatment, care • Work with G8 and others to and support by 2010. establish advance market commitments for vaccines for • Support the long term major diseases. replenishment of the Global Fund 6.25 As with education, removing user fees mosquito nets are bringing down death can dramatically increase access to health rates from malaria. And antiretroviral drugs to fight AIDS, Tuberculosis and • Make a long term commitment Malaria, based on improved to the new International Drug services. In Uganda, abolishing fees doubled are helping people with AIDS to live longer, performance on the ground. Purchase Facility. the number of people going to clinics, and and preventing the spread of HIV to infants more than doubled immunisation rates for at birth. • Support the implementation of the children. More than 230,000 children’s lives 2005 Global Strategic Plan to Roll 6.28 More research is needed for a new could be saved each year if fees were Back Malaria, providing 80% of generation of drugs, vaccines and treatment abolished in twenty African countries.13 methods. But the commercial incentives for 6.26 More also needs to be done to hold undertaking research on the diseases that service providers to account. For example, afflict the world’s poor are weak. Globally, publishing local budget information can only 10% of the total money spent each show whether more money is being spent year on health research is devoted to on men's or women’s health. In Nepal, diseases responsible for 90% of health South Africa and Zambia, radio dramas problems.14 The G8 agreed to use more funded by UK aid have helped inform public-private partnerships to share the citizens about family health and costs of developing new products. ‘Advance AIDS services. market commitments’ are a powerful way of providing guarantees that new successful 6.27 Medical research offers huge potential vaccines will be purchased. With these

for improving people’s lives. It has already getting security, growth and services incentives, there are now better prospects helped eradicate smallpox, and soon polio, for malaria treatments. But more work is thanks to an easy-to-use oral vaccine. urgently needed on antiretroviral therapies Simple treatments for diarrhoea, such as oral for children with AIDS. rehydration, have saved millions of children’s lives. New artemisinin-based therapies and 82 83

Providing clean water implementation in order to improve services, This makes sure that water, sanitation and and sanitation… Better water for and to make sure that systems are well hygiene education are provided together a better life managed and maintained. Where possible, and with the involvement of the whole 6.29 An estimated 1.1 billion people – one in the technology used should be simple and community so that everyone benefits. six of the world’s population – have to drink Nana Kofi Okyere, chief of the Ghanaian affordable. More research is needed, for This new approach is now being used in unsafe water every day. As a result, about village of Akim Koforidua, is delighted by example on new technologies for water other countries. how much better life has become. He points 5,000 children under the age of five die treatment and purification. Better at his new village well: "This well has 6.32 International partners are investing more every day from diarrhoea. This will get worse management of water and natural disasters brought a lot of improvement. We do not in water and sanitation, but a great deal as climate change reduces the amount of have to form long queues, and children and will also be essential – both to deal with the more effort and better co-ordination is water available in many parts of the world. adults do not suffer from water-borne effect of climate change on livelihoods, and needed. There are far too many partnerships Yet despite this, many governments in diseases." The availability of fresh water to ensure sufficient food is available at a and agencies with some responsibility for developing countries do not give water and also means the children now spend less time price that people can afford. sanitation enough priority. collecting water for their families, giving water – the UN alone has 23 agencies – them more time to attend school. The new 6.31 Programmes to provide sanitation need, which creates confusion. 6.30 Far more funding is needed for water well is the result of a joint initiative first of all, to create demand for it and to 15 between three organisations: Cadbury and sanitation, including maintenance. emphasise the responsibility of households This is especially the case for local Schweppes, WaterAid (supported by DFID) and the Ghanaian farmers’ co-operative, and communities for maintenance. NGOs government, which will have to cope with Kuapa Kokoo. have a particularly important role to play huge population growth in towns and cities. here. For example, the UK has funded The UK will It will be particularly important to involve WaterAid in Bangladesh to develop all sections of a community in planning and • Double our assistance to water ‘Community Led Total Sanitation’ to villages. and sanitation in Africa to £95 million a year by 2007/08, and more than double funding again to £200 million a year by 2010/11. Getting water running • In Africa, focus our efforts on In Bangladesh, the UK supports an countries most off-track to meet expanding Government and United Nations the water and sanitation MDGs. Children’s Fund (UNICEF) programme for • Support the African rural hygiene, sanitation and water supplies Development Bank’s Rural Water which has already served 7.5 million people. Supply and Sanitation Initiative In India, we support the Government’s to help achieve 80% water and Urban Services for the Poor Programme sanitation coverage by 2015. in 32 towns across Andhra Pradesh. It provides infrastructure in slum areas, • In Asia, work directly and with including water supply and sanitation, others to expand water and for 2 million poor people. sanitation services across In South Africa, the UK has supported the region. the Government’s programme to use the • Work with civil society private sector to build and operate new organisations in all regions, water systems, before handing them to help them demand better over to local government. In four years access to water and sanitation. this has given 4 million people better water supplies. • Support UN Water to co-ordinate international assistance more

effectively. getting security, growth and services • As part of our doubling of research funding, significantly increase support for the development of innovative technologies for cleaner water and sanitation. 84 85

6.35 Transfers can be made to everyone (such as a pension for all older people) The UK will or can be targeted at the very poor (such • Significantly increase spending as households with orphans and vulnerable on social protection in at least children). Communities can help identify ten countries in Africa and Asia those in need, or the providers of by 2009, supporting national transfers can identify families directly. Local programmes and working government and social welfare departments with the UN and NGOs in have a big role to play, but they often need fragile states. more staff and money. And private • Working with European partners organisations, like banks, can be highly and national governments in effective at distributing transfers. Africa, double to 16 million the

6.36 In recent years, a number of developing number of people moved from countries have shown that there are effective emergency relief to long term ways of providing social protection. The social protection programmes by 2009. Ethiopian Government has established the Productive Safety Nets Programme to help • Support partnerships between over 8 million people with regular cash developing countries to share payments and food. This is reducing hunger, experience of expanding and helping families buy livestock. Countries social protection. such as Bangladesh, Brazil and Mexico have linked cash transfers for poor families to children using health and education services. In Nepal and Bangladesh, voucher schemes are helping women to access family planning. The UK supports many of these schemes, and we are working with partners million each year.17 This is just 3% of the Protecting the very poorest… in Kenya, Zambia and Pakistan to develop US$25 billion of additional aid to Africa 6.33 There is now strong evidence that new ones. agreed by the G8 at Gleneagles. social protection – such as small but regular transfers of cash – has huge benefits for poor people.16 Social protection reduces hunger and boosts incomes. It helps families send their children to school, helps women Cash in on education to use health services, and helps people with Maria and Carlos Oliveira da Silva live AIDS to get treatment. It injects cash into with their two children near the town local economies, creating demand for goods of Formosa, in central Brazil. The family gets support from the Government’s and services that help small businesses grow. Bolsa Familia programme. This provides And it helps tackle the inequalities that trap a monthly grant to poor families with successive generations in long-term poverty. children – on the condition that their children attend school and use local health 6.34 Social transfers in poor countries are services. “For us the best thing is the a realistic option. The International Labour certainty,” says Maria. “We know that each getting security, growth and services Organisation has shown that providing small month we can afford to buy enough food cash transfers to the poorest 10% of people and school supplies for our children. This in most African countries would cost less means that we can plan for the future. Even when all of our chickens died, we had than 3% of government budgets. And for enough spare money to pay off our loans sub-Saharan Africa as a whole, reaching without selling our land.” 10% of the population would cost US$760 86 87

How change happens: Getting children into school in Uganda

After the despotic rule of Idi Amin and the Education which allowed children to go to damaging effects of the 1979 war with school for free. This put unprecedented Tanzania, Uganda’s education system had pressure on teachers, textbooks, classrooms virtually collapsed. Things began to improve and the education budget. But the after President Yoweri Museveni came to Government did not give in and, supported by power in 1986. Primary school enrolment rose its international partners, increased education modestly from 2.2 million in 1986 to 3.1 million spending from 17.8% of recurrent expenditure in 1996. But by the mid-1990s Uganda was a in 1990 to 31% today. It recruited an country heavily in debt, with little money to additional 70,000 teachers, built 50,000 new spend on education. Parents across the country classrooms, bought 20 million new textbooks were struggling to pay education costs and introduced new policies to improve equivalent to about one-fifth of an average efficiency, promote gender equity, tackle AIDS, family’s income. Almost one-third of school- and fight corruption.

age children were not enrolled in school at all. getting security, growth and services The effect of introducing universal primary And the few who were enrolled were unlikely education was astonishing. Pupil enrolment to reach the final grade. jumped by 70% in a single year, from about The Ugandan Government committed itself 3 million in 1996 to over 5 million by 1998, and to tackling the problem, and in 1997 had reached 7.4 million by 2004. implemented a policy of Universal Primary working internationally to tackle climate change 91

Climate change poses the most serious long term threat to development and the Millennium Development Goals. Developing countries must be part of a future solution to climate change. Developing countries will need support to adapt. The costs will be huge.

The climate is changing… 7.3 The greatest impact of the rising temperatures will be on the water cycle, 7.1 Climate change is re-shaping our world. which is a vital part of our whole climate It is a global problem, requiring a global system. The IPCC forecasts that rainfall solution. It will affect developing countries will become less predictable over time – most of all because they have the least particularly in parts of Asia, sub-Saharan capacity to respond. All countries will need Africa and Latin America. Greater variations to work together to tackle global emissions in rainfall, combined with rising sea levels of greenhouse gases, and to adapt to the and higher sea temperatures, are likely to impact of climate change. lead to more frequent and more extreme 7.2 The Intergovernmental Panel on weather events – such as storms, floods Climate Change (IPCC), and a growing and droughts.4 body of independent research, have 7.4 In 2005, under the UK’s Presidency, the provided overwhelming evidence that the G8 focused on climate change along with world is getting warmer, and that human Africa. The G8 agreed a Plan of Action that activity is primarily responsible.1 Burning will help developing countries to access low fossil fuels, like oil and coal, and the carbon energy and adapt to climate change; changing use of land, including the and began an ‘informal dialogue’ with large destruction of forests, have increased the atmospheric concentration of ‘greenhouse gases’ (mainly carbon dioxide) – so called because they keep the world warm by Living on the edge trapping heat from the sun.2 In the last Abukar is a village elder who is 150 years, greenhouse gas emissions have experiencing climate change first hand. increased so rapidly that during the 20th The number of droughts in the Somali century the world became warmer at a region of Ethiopia has increased in the last chapter 7 decade, but people’s ability to endure them faster rate than at any point during the past has decreased. Abukar explains that “the 3 1,000 years. Due to time lags in the climate droughts are killing our livestock. People system, temperatures are already set to rise are struggling to feed themselves. Because by one degree celsius over the next few of this there have been more conflicts decades. If the world does not act now to between tribes and even within villages. managing managing climate change curb emissions, average global temperatures Without support from the Red Cross, human lives and livestock would have in 2100 could be between 1.4 and 5.8 been lost.” climate change degrees higher than they were in 1990. 92 93

developing countries – Brazil, China, India, already shrinking the amount of agricultural Extreme weather is happening more often Mexico and South Africa - to promote land.7 Declining rainfall and higher international action. temperatures in sub-Saharan Africa will

significantly shorten the growing season in 350 many countries, resulting in lower crop yields 2000

Climate change matters for Number of floods per decade and less pasture for livestock. The poorest 300 development… 8 regions are likely to be worst affected. 250 7.5 Many poor countries already struggle to The OECD estimates that in six developing 2000 200 cope with extreme weather and variations in countries alone, climate change could 150 the climate. People in the poorest countries undermine US$1.5 billion of development 2000 are most reliant on environmental resources assistance – for example by damaging 100 5 1950 2000 for their livelihoods. These resources are infrastructure as sea levels rise.9 1950 50 Europe already under pressure and likely to be 1950 0 7.6 Climate change will undermine public degraded further by climate change.6 For Asia health. Higher temperatures make it easier America 2000 example, in Africa, desertification (where 1950 1950 for diseases to spread. Longer rainy seasons Oceania fertile land becomes desert) in the Sahel is Africa

Climate change vulnerability in Africa Source: UNEP (2005) Millennium Ecosystem Assessment. Cartography by Philippe Rekacewicz UNEP/GRID - Arendal and Millennium Ecosystem Assessment www.millenniumassessment.org

North Africa have already started to increase malaria reduced economic growth from a target in parts of Rwanda and Tanzania. The of 10% to below 4%.13 worldwide risk of catching malaria could double by 2080.10 More frequent floods, West Africa particularly in areas of poor sanitation, Working for an increase the risk of water borne diseases international solution… 11 Central Africa such as cholera. Meanwhile, retreating 7.8 The UK is working for international East Africa glaciers and less freshwater from rivers will agreement on urgent action to prevent make it more difficult to provide drinking dangerous climate change. Getting the water and sanitation. whole world to agree is difficult, but it is 7.7 The effect of extreme weather on poor essential nonetheless. Countries fear they communities is devastating. Approximately will be put at an economic disadvantage if

Southern Africa three in four natural disasters – such as they reduce emissions ahead of their droughts, floods and cyclones – are weather competitors. The Kyoto Protocol set targets related.12 Ninety-seven per cent of deaths up to 2012 for the richest countries, which from natural disasters occur in developing have historically contributed more to Western Indian Ocean Islands countries. Poor communities struggle to emissions. But in recent years, developing recover as disasters become more severe countries have started to account for an increasing proportion of overall emissions. The vulnerabilities and more frequent. And disaster prone regions struggle to attract investment, By 2025, developing countries are predicted Desertification Deforestation Spread of malaria which further undermines their to overtake the energy emissions of Impacts on food 14 Sea level rise Loss of forest quality developed countries. Among them, China, security development prospects. In Mozambique, Reduced freshwater Degradation of torrential rainfall in 2000 led to the worst India, Brazil and Mexico will be the most managing climate change Coastal erosion availability woodlands flooding in 50 years. It directly affected 2 significant although their emissions per Cyclones Coral bleaching million people and forced 650,000 to leave person will still be low compared to their homes. It cost US$600 million and developed countries.

Source: Vital Climate Graphics, Africa 2002, UNEP/GRID Arendal. Cartography by UNEP/GRID-Arendal, Norway http://www.grida.no/climate.vitalafrica 94 95

Who is emitting the most carbon dioxide?

20

15

10

5 Global average Tonnes of carbon dioxide per person from energy use in 2002

0 United States Russian Japan European China Brazil India of America Federation Union (25)

Source: World Resources Institute Climate Analysis Indicators Tool Version 3.0 (2006) www.cait.wri.org

7.10 The cheapest way of stabilising the concentration of greenhouse gases, or meeting individual targets for reducing The UK will emissions, is by trading ‘carbon credits’ (or emissions permits). The EU Emissions • Work for international Trading Scheme is the largest regional agreement on: carbon-trading scheme in the world and has • A long term stabilisation goal to the potential to become the hub of a global avoid dangerous climate change. carbon market. Further development of • A way of reaching the international, regional or domestic schemes stabilisation goal, which enables 7.9 In December 2005, at the Montreal UN grows, so too, initially, will their share of could help developing countries – particularly developing countries to grow, Climate Change Conference, governments global emissions. And any future agreement large developing countries – to reduce helps to fund the investment agreed to begin discussions about must enable developing countries to access emissions and generate resources for cleaner needed for clean energy and arrangements beyond 2012. The UK believes resources to reduce carbon emissions and energy of up to US$120 billion a year.15 helps developing countries there is an urgent need to build a shared help them adapt to the effects of climate to adapt. international understanding on the safe level change. At Gleneagles, the G8 launched • Help developing countries of concentrations of greenhouse gases in the an ‘informal dialogue’ with large developing to prepare for international atmosphere – a level that will avoid countries in support of formal negotiations. discussions on a future climate dangerous climate change – and the action Since 1997, the UK and other donors have change framework. required to meet this. Any future agreement helped developing countries build their • Help developing countries

must ensure that developing countries, capacity to negotiate on international trade. take part in and benefit from managing climate change particularly the poorest, can continue to Negotiations on climate change will require mechanisms to reduce emissions, grow their economies. This will mean that a similar effort. including trading schemes, as as their share of global energy consumption these evolve. 96 97

with a stable price for carbon, will be essential to create incentives for private The UK will sector investment. But specific action • Support the World Bank’s Energy will still be needed to overcome barriers Investment Framework to increase to investment in developing countries. private sector investment in low At Gleneagles, the G8 agreed to promote carbon energy and energy greater use of clean energy. The World efficiency in developing countries. Bank has launched the Energy Investment • Work through the UN to develop Framework which could increase investment mechanisms linked to in cleaner energy by several billion dollars international agreements on 18 each year. cutting emissions that maximise investment in clean energy in 7.12 Some technology transfer for cleaner energy is already taking place developing countries. through the Kyoto Protocol, for example • Work with the G8 and EU to through the Clean Development Mechanism. develop and use clean energy This enables countries that have emissions technology in developing countries. targets to meet them by paying for equivalent reductions in developing countries. But resources are limited.19 Proposals exist to expand the scheme Helping developing and the UK is examining how we can guarantee a continued market for carbon countries to adapt… credits up to and beyond 2012. Discussions 7.13 Adapting to the impact of climate on arrangements for the period beyond change is already an urgent priority for 2012 will also need to consider how some developing countries – particularly more countries can get involved, and the poorest and most vulnerable. It will how to maximise access to resources soon become a priority for many more. and technology.20 Adaptation is about reducing the risks posed

Making the shift to cleaner Changing our behaviour energy…

Climate change is a global problem that 7.11 Reliable and affordable energy, including cannot be solved by governments alone. But electricity, is essential for economic growth. governments can set the framework, and Access to cleaner, non-fossil fuel energy can can set an example. The UK has set targets also help oil-importing countries that are to make central government offices carbon- neutral by 2012. DFID is using 100% green affected by high oil prices. Initial estimates electricity in our UK offices, making our put the additional cost of meeting the overseas offices greener too, and committed energy needs of developing countries with to offsetting carbon emissions from official cleaner, more efficient sources at over US$40 air travel through a Government Carbon billion a year.16 This is well beyond the scope Offsetting Fund. In addition, DFID will set a of current and planned aid. The UK has set target to reduce emissions from air travel and will publish progress against this. up a review of the Economics of Climate

Change (the Stern Review) to look at the managing climate change costs and benefits of making the transition to cleaner energy in the medium to long term.17 A long term international agreement, 98 99

impact of climate change, and improving with neighbouring governments. And better consultation between all levels of infrastructure is needed to store and government and civil society is essential. distribute water. This is particularly important Through consultation with stakeholders, in Africa where the majority of agriculture is Bangladesh has prepared a National rain-dependent and the capacity to store Adaptation Programme of Action to work water is inadequate. out the implications of climate change. The 7.18 ‘Disaster risk reduction’ is a crucial part Government of Bangladesh is now working of adaptation and particularly important to with local communities to plant trees along vulnerable communities. Natural disasters the coast, educate children about climate are already claiming a growing share of aid. change, and introduce fish that can live in Emergency assistance was estimated to inland water made more salty by rising sea exceed US$6 billion in 2003 – around 8% levels. The Climate Change Adaptation in of total aid, compared to around 5% a year Africa programme will help governments in the early 1990s.23 The UN Hyogo develop different approaches to protect the Framework for Action aims to reduce the livelihoods of the poorest people.22 risk of natural disasters, and the effect they 7.17 Adapting to climate change also means have on the lives and livelihoods of the poor, finding ways to manage existing variations over the next ten years.24 Implementing the in the climate, and pressures on natural Framework will mean building awareness resources – such as water, soil and forests. about actions that governments and people For example, water resource management can take, such as building hurricane-proof is already critical due to population growth, houses, preparing for disasters by by climate change to people’s lives and unknown. The UN has set up funds – to urbanisation and greater demand for improving early warning systems, and livelihoods. Sustainable development would which the UK has contributed £20 million water-intensive products like paper and putting supplies and people in place to help poor countries become less vulnerable. over three years – to help poor countries textiles. Water supplies need to be respond quickly.25 Such investment is well Education, health, savings and access to develop strategies for adaptation. The World monitored and managed to meet priorities worthwhile. A Tearfund study in India markets are important. Economic Bank is looking at the potential costs of for development – including agriculture, found that preparing for disasters was up diversification is one of the best defences adaptation and possible sources of funding.21 drinking water and sanitation. Close to thirteen times more cost-effective than against climate shocks. But specific action to As in the case of finance for cleaner energy, co-ordination is needed between different responding to them afterwards.26 manage the impact of climate change is also the costs are likely to be well beyond the branches of government, and sometimes needed. Adaptation and financing for scope of current and planned aid. adaptation should be part of developing 7.15 Countries will also need reliable records countries’ development plans, such as on the climate and accurate projections of Poverty Reduction Strategies. The G8 has climate change for adaptation. In most poor agreed to develop, with the World Bank, countries there is inadequate information on ways of making sure that the impact of the climate and insufficient capacity to use climate change is taken into account in the it. This is particularly true of Africa. The G8 design of development programmes. has agreed to support the Global Climate 7.14 Every developing country needs to know Observation System to address these gaps how climate change might affect poverty in Africa. But greater investment is needed and economic growth, what it might cost, to build and use better local climate and the options for reducing the risk. It will information, not only in Africa but also in be essential to understand the costs of South Asia and other regions. adaptation now and the costs that will arise 7.16 Reducing risk will mean diversifying the if no action is taken to reduce emissions managing climate change economy, investing in alternative crops and ahead of negotiations on any future livestock or responding to changing disease international agreement. For much of the patterns. Raising awareness about the developing world, these costs are currently 100 101

How change happens: Adapting to floods in Bangladesh

For people who live on Bangladesh’s many The DFID-funded Chars Livelihoods Programme Chars - low-lying, infertile islands in the is helping to bring about physical, social and north of the country – physical disaster is a economic improvements for 6.5 million of the way of life. Bangladesh already suffers from poorest and most vulnerable char dwellers in the effects of climate change, and chars are Bangladesh. To help cope with flooding, plinths acutely vulnerable to floods, which often wash are being built to raise houses above the 100 away homes and kill livestock. This vulnerability year flood line. 10,500 have been built to date is set to increase as the effects of climate and the number is increasing every day. Raising change on Bangladesh become more severe. houses like this will save lives, help people Adapting to them will become increasingly sustain precarious livelihoods, and reduce the important, especially for the poor, who are losses caused by frequent floods. often the most vulnerable.

The UK will • Work with the G8 to implement • As part of our doubling of research the Gleneagles commitments on funding, significantly increase our climate change. support for research on identifying and adapting to the impact of • Work through the EU, UN and climate change. multilateral development banks to help developing countries work • Strengthen capacity to manage out how climate change will affect environmental assets that are economic growth, the chances of important for the poor in reducing poverty, and their options developing countries. for reducing risks. • Help partner countries to develop • Support international efforts to sustainable, equitable ways of generate resources to help managing their water resources. developing countries adapt to • Help developing countries reduce climate change. the impact of natural disasters

• Develop guidance with the on the poor, including by investing managing climate change multilateral development banks up to 10% of our response to each by 2008 to screen all development major natural disaster in preparing investments for the effects of for future disasters. climate change. creating an international system fit for the 21st century 105

International problems need international solutions. Multilateral organisations have a critical role to play in delivering aid and implementing policies that work for development. Developing countries must have a stronger say in how the international system works.

The international system we channel around 40% of our aid through 1 must change… multilateral organisations.

8.1 Much of today’s multilateral system – 8.4 But some parts of the international including the UN, World Bank, IMF, and system have become either too complicated the EU – was created after the terrible and inefficient or simply do not work at all. destruction of the Second World War. These They must change. We will use our resources institutions have served the world well, but and influence to encourage reform. And in the challenges we face in the 21st century future we will use success – rather than are very different to those of 60 years ago. history – as the criterion for deciding how to allocate UK funding. 8.2 Effective international organisations are needed now more than ever to balance 8.5 This chapter sets out the changes that competing national interests, and find the UK will work for. The world needs an solutions to problems that cannot be solved international development system that: by individual countries alone. Only by • Delivers increasing levels of development working multilaterally will it be possible assistance effectively and shows results. chapter 8 to: act when states fail to protect their people; enforce rules-based trade; tackle • Reflects the interests of developing epidemics like AIDS or Avian flu that countries and allows them to lead their threaten us all; and manage the climate, own development. reforming the forests, fisheries and water that we all share. • Holds countries (whether donors or There is no alternative. Without an effective recipients) to account for the commitments international system, the world would be a they have made to each other. more unequal, dangerous and divided place. • Upholds human rights and other 8.3 International organisations play a international standards, and takes international major role in delivering aid. As aid action when these are not being met. increases sharply, donors will need to rely more on multilateral channels to • Monitors progress against the targets reforming system the international distribute it. Between them, just three agreed to reduce poverty. development institutions – the EC, the World Bank and the UN – already account for around 30% of global aid flows through loans, grants and technical co-operation. The UK is system committed to working with others – 106 107

Where do developing countries get aid from? 2

Non-OECD DAC bilateral 4%

Other OECD DAC EC 10% bilateral 63% Total bilateral 74% Total multilateral 26% World Bank IDA 9%

UN 4% African Development Fund 1% Asian Development Fund 1% Other multilateral 1% United Kingdom 7%

Source: OECD DAC. Total net disbursements (US$78.3 billion) of ODA to developing countries in 2004.

8.6 Significant change is needed to achieve Collective action in a changing all this. The UN’s role in development world: the United Nations… needs to be radically reformed, in keeping development, humanitarian assistance and with its unique political mandate. It should 8.8 The UN’s legitimacy is unparalleled. This the environment. The UK believes the Panel How does the UN make focus on providing strong political leadership comes from its universal membership and is the best chance in a generation to help a difference? in conflict and in fragile states, on setting unique responsibilities for peace and security, the UN re-organise. Alongside this, the • The MDGs were agreed at the UN global standards, and on helping countries sustainable development, human rights and UK also supports enlargement of the UN international law. It enables the UN to agree Security Council, management reform and in 2000. These eight goals have guided agree solutions to climate change and other international development ever since. international policies and standards that are efforts to strengthen the UN’s role in threats to development. The World Bank, Having set the standard, the UN is helping IMF and regional development banks vital for development. counter-terrorism. hold countries to account for progress. In 2005 at the UN summit, world leaders should help developing countries finance 8.9 The UN also provides leadership on 8.11 We think the UN should focus more investments for sustainable and equitable re-committed themselves to achieve the international efforts towards the MDGs. on two areas. First, it should do more to MDGs by 2015. growth and public services; and help their Through its funds and programmes, the prevent conflict, broker peace, help fragile members manage economic shocks. UN works to reduce child mortality, improve and conflict-affected states recover after • In 2001, 189 nations agreed a Declaration To do this, they will need to reflect better of Commitment on HIV and AIDS, an maternal health and achieve universal crises and lead humanitarian assistance action plan to halt and reverse the AIDS the interests of all their members. And primary education. It gives advice and where needed. Second, it should continue epidemic. The UN is leading international the EU should ensure that its aid is helps governments build their capacity to to develop international agreements and efforts to help developing countries effective, and that its wider policies also provide public services in a wide range standards – as it has on human rights – deliver their plans to tackle AIDS. support development. of developing countries. and push for and report progress on these. • In the DRC, the UN has helped prepare for national elections, co-ordinated the 8.7 The UK is strongly committed to working 8.10 But over time, fragmentation, duplication 8.12 If the UN is to do these tasks effectively, through the international system to reduce humanitarian effort, and put 16,800 reforming system the international and excessive competition for resources reform is needed. UN agencies and peacekeepers on the ground to help poverty in developing countries. We will use within the UN have reduced the impact of its programmes must be rationalised, and create a more secure environment. our resources and influence to strengthen development operations. The UN Secretary merged where necessary. There should be the international system for this purpose. General has recognised the need for change, a unified UN presence in countries – based and has established a High Level Panel to around a single programme, with one identify ways to improve UN performance on leader, one office and one budget. 108 109

Improving the international The UK will response to humanitarian Internally The UK will • Urge the UN to play the leading crises… displaced people • Push for a single, integrated role in fragile and conflict states. 8.13 Each time disaster strikes, the job of International agencies have not been UN humanitarian system, with • Seek agreement on implementing the international humanitarian system is able to cope with the rising numbers a lead role for UN Humanitarian the ‘four ones’ in developing to be there to help. Many organisations – of Internally Displaced People (IDPs) in Co-ordinators and the Office recent years. Responsibility for IDPs has countries: one UN office, one including the UN, NGOs and the Red Cross for the Co-ordination of been unclear. In Darfur, DRC, and Liberia, Humanitarian Affairs. leader, one programme and movement – and many committed people agencies were unable to protect IDPs, one budget. work hard to provide assistance to people provide adequate camps or help them • Invest at least £40 million a • Work with other donors to in distress. return home. In future, the UN High year in the Central Emergency reform financing by pooling Commissioner for Refugees (UNHCR) Response Fund. 8.14 The humanitarian system achieves a should be responsible for IDPs as well as funding for the UN at country great deal, but it could be much better. refugees. This means extending UNHCR’s • Continue to provide substantial level and centrally. As a result of climate change, it will need mandate and providing it with adequate support to NGOs, the Red Cross movement and the UN, for • Support the UN’s work with the to respond to increasingly frequent disasters. funding to support IDPs as well as refugees. humanitarian assistance. World Bank to help developing This is one reason why the UK has argued countries draw up long-term for reform. We proposed major changes to • Promote changes to the plans to achieve the MDGs. humanitarian funding, which led to the 8.15 The response to the Asian tsunami, the emergency appeals process • Support the UN in developing launch of the Central Emergency Response Pakistan earthquake and Niger’s food crisis to make ‘flash appeals’ and implementing international Fund in March 2006 – the UK is the largest has shown that these reforms are making a more realistic. standards. contributor. The Fund aims to tackle difference. But further change is needed. • Support the ‘cluster system’ imbalances between well-funded and This includes finding more skilled and whereby different agencies neglected crises, and to make money experienced people to work in emergency lead on specific issues during available as soon as a new crisis happens. situations, and better arrangements to an emergency. We argued for stronger UN coordination rapidly deploy planes, helicopters and other • Help ‘cluster lead’ agencies and leadership – as is now happening in logistics, for example in co-operation with increase the number of countries like Sudan and the DRC, where the military. Gaps have to be filled – such as experienced, skilled staff international partners, including the UK, the lack of clear responsibility for internally available in an emergency, have pooled funding under the UN displaced people. And the humanitarian and improve the availability Humanitarian Co-ordinator’s leadership. And system should be more accountable for its of supplies and arrangements a new ‘cluster system’ has been established, performance. In short, the world needs an to move them quickly. in which different agencies have overall effective international emergency service. • Develop clear arrangements responsibility for nine areas of need.3 for using UK military equipment and personnel in humanitarian crises. • Work with partners to publish Flights of hope an independent World Ten year old Abdullah lives in Kot, in Humanitarian Report to monitor Pakistan-administered Kashmir. In October how well the world responds to 2005 he and his family were at home when humanitarian crises. an earthquake measuring 7.6 on the Richter scale struck. Abdullah’s village is at 1,600 • Support changes to UNHCR’s metres and is almost impossible to reach by mandate to include internally road. Without the blankets and iron sheets displaced people, and be willing reforming system the international transported by a United Nations to provide extra resources to Humanitarian Air Service helicopter flight support this work. (funded by the UK), Abdullah, his family and his neighbours would have faced a harsh winter without warmth and shelter. 110 111

the World Bank. We believe these standards Free treatment, fresh start should not be discarded, because they protect people’s rights. So the World Mr Chen is 40 years old and lives in Hunan Bank will need to find new ways to work province, China. In 2005, he was diagnosed with tuberculosis at a local hospital. His with middle income countries as they still family could not afford the cost of the face major development challenges and are treatment and Mr Chen was forced to stop shaping the wider world. working. The Chens found themselves struggling to make ends meet but a few 8.20 Third, the World Bank should help weeks later the hospital learned about a tackle the global challenges facing World Bank/DFID tuberculosis project and its developing countries – focusing urgently on free treatment policy. Mr Chen received a a financing framework for clean energy and free physical examination and treatment. adaptation to climate change. And it should The doctor insisted that Mr Chen’s family was tested and discovered that his wife also use its position and expertise to forge a new had tuberculosis. The dispensary provided international framework to help developing six months free treatment to the Chens. countries tackle corruption and improve They are now fully recovered and can work their governance. and lead a normal life again. 8.21 Like the World Bank, the IMF must continue to change in order to better

8.19 Second, middle income countries are meet the needs of poor countries. Recent borrowing less from the World Bank and important innovations include: the new more from private markets than in the past.5 Exogenous Shocks Facility, which ensures This is because the combination of low that development is not undermined by global interest rates and the World Bank’s global economic conditions; and the Policy social and environmental standards have Support Instrument that helps countries Financing development: 8.18 But to be more effective the World Bank reduced the advantages of borrowing from access IMF advice without borrowing from the International Financial must deal with three major challenges. First, as aid increases, the World Bank should play Institutions… a leading role in providing more long-term, 8.16 The World Bank and the IMF play a predictable funding for developing countries. critical role in providing development The World Bank should convene ‘Results and assistance to poor countries, monitoring Resources Meetings’ to help countries gather economic conditions and promoting better support for their plans to achieve the MDGs; macro-economic management. But, if they provide flexible finance itself to help are to remain relevant in a changing world, developing countries pay the wages of we believe they must reform. health staff or teachers, for example; and take the lead in managing increasing donor 8.17 Poor countries need to fund health, finance for education through the FTI. It education and other public services and should do more to help the private sector invest in infrastructure and growth. But in and support equitable economic growth, the poorest countries, neither government and do more in fragile states where the nor business can generate the finance they challenges and the needs are greatest. And – need. To help plug this gap, the World Bank working with the IMF, regional development provides around US$8 billion each year to

banks, and potential lenders – the World reforming system the international low income countries through the Bank should help ensure that debt problems International Development Association.4 do not re-emerge for the poorest countries. It also provides middle income countries with loans at close-to-market terms. And it plays a major role in gathering and sharing knowledge about development. 112 113

it. In low income countries, the IMF should Both institutions must do more to support focus more on macro-economic policy developing country priorities and not impose advice, and less on structural issues like economic policy conditions in areas like privatisation and trade liberalisation where privatisation and trade liberalisation. And, if its track record has been mixed; and provide their members demand it, both institutions advice to fragile states that is tailored to should be ready to change how members the challenges they face. And, in line with are represented, and how decisions are its recent medium term strategy, the IMF made – for example through greater voting should help all developing countries plan rights for poor countries. There also needs for larger amounts of aid and help them to be greater transparency in the way that manage their macro-economic and the World Bank and IMF operate. More budgetary policies accordingly. 6 World Bank analysis should be disclosed. And the practice of picking the heads of 8.22 Developing countries need more both institutions based on nationality should influence in the World Bank and IMF. They end – Presidents should be chosen on merit, are weakly represented on both Boards, as happened recently with the African where voting rights are decided by financial Development Bank. contributions. This balance must change. Regional approaches to Bank) should agree ground rules with each regional issues… other to govern their lending operations.

8.23 Many regional problems are best 8.25 Regional political organisations also solved at a regional level. Developing matter. The AU is beginning to prove countries benefit from close economic Africa’s determination to deal with Africa’s co-operation with their neighbours, problems – particularly through its Peace enabling them to exploit regional markets and Security Council, the African Peer and manage shared resources.7 The regional Review Mechanism, and action on migration. development banks in Asia, Africa, Latin Similarly, Asian countries want more progress America – and others like the Islamic on regional integration and co-operation. Development Bank and the Kuwait The Association of South East Asian Nations Fund – are vital in their regions. They and South Asian Association (ASEAN) for can be particularly helpful on issues like Regional Co-operation (SAARC) are setting infrastructure, the spread of diseases, up free trade agreements in East and South regional markets, cross-border investment, Asia, and there is growing political support and access to scarce water. But the Asian for more regional co-operation on energy, and the African Development Banks, in environment and infrastructure issues. particular, need significant organisational change to serve their members better. Working beyond borders 8.24 Stronger regional banks would give developing countries a choice between The Asian Development Bank has supported sources of finance and advice on policy. the countries of the Mekong region And that choice would encourage (Cambodia, Lao PDR, Myanmar, Thailand and Vietnam) since 1992. The Greater innovation, and improve the quality of

Mekong Subregion Economic Co-operation reforming system the international aid. But competition must not compromise Programme helps make sure that shared economic, social and environmental natural resources are well managed, tackles standards. To guarantee this, the UK believes health and social issues, makes transport the World Bank and regional development across borders easier, lays modern roads, banks (and other international financial telecommunication and power links, and promotes tourism and investment. institutions such as the European Investment 114 115

used. And Europe’s influence in shaping aid The UK will policy is growing. The European Consensus • Press the World Bank to be more • Press the World Bank, IMF and on Development, agreed in 2005, united effective and responsive to regional development banks to Europe – Member States and the EC – for developing country priorities; and ensure that any new lending to the first time behind a shared view of adapt its aid instruments to better poor countries is consistent with development co-operation. The Consensus suit the differing needs of low and the ‘debt sustainability framework’. is clear that: the primary objective of middle income countries. • Support developing country calls European aid is eradicating poverty; the • Encourage the World Bank and IMF for a stronger say at the World poorest countries should get priority; to do more to help countries cope Bank and IMF. developing countries should ‘own’ the with economic shocks, corruption, development process; EU Member States • Seek transparent, competitive and to respond to trends such as should increase and harmonise their aid; selection processes for the heads climate change. and the EU’s wider policies should support of all international development 12 • Encourage the multilateral and agencies – including the World Bank development. The challenge now is to regional development banks to and IMF and UN – to ensure the best make sure that these principles are applied 13 develop guidelines that ensure they candidates are appointed, regardless in practice in all countries receiving EC aid. do not compromise on economic, of nationality. 8.30 After five years of reform, EC aid is now social and environmental standards, • Work with others to strengthen much better than it was. EuropeAid was set when they compete with each other the African and Asian regional up to implement all external assistance, for business. development banks, especially replacing the previous fragmented system. • Press the World Bank, IMF and for regional and cross-border Management of aid has been largely others to avoid economic policy infrastructure. decentralised to the field. And the European conditionality in such areas as Development Fund, which supports African, • Work with others to support believe more change is needed to improve privatisation and trade liberalisation. Caribbean and Pacific countries, has become AU, SAARC, ASEAN and other co-operation between EU donors, and to • Encourage the IMF and World regional efforts to address regional more effective and flexible.14 Europe’s make EC aid more effective. Policy and Bank to help developing countries issues critical for growth and humanitarian work is highly respected. And implementation of aid remains split between manage the macro-economic poverty reduction. new, streamlined ‘instruments’ for the EC’s different parts of the Commission. And consequences of larger aid flows. aid to different regions and themes will be field offices have less responsibility and in place by 2007. 15 capacity than they need. If performance 8.31 But to realise Europe’s potential as a does not improve, a second wave of reform A new alliance for development: and the Pacific, Europe’s ‘neighbourhood’, leader on international development, we will be needed. the European Union… and with influential middle income countries.

8.26 The EU is now more important for 8.28 Common European policies on issues development than ever. The EU acts like trade, agriculture, migration, climate politically, makes policies that matter for change and security have significant developing countries and spends 55% implications for developing countries. of the world’s aid money.8 The UK is Recognising this, the Council of EU Member committed to working more closely States and the EC have agreed to report with EU member states and the EC every two years on the impact of EU policy on international development policy. on development.10 We will work closely with EU member states to tackle international 8.27 EU expansion has brought stability to

corruption, and take forward EITI and other reforming system the international Europe. In countries that aspire to join, such initiatives. political dialogue, European aid and the prospect of EU membership are leading to 8.29 By 2010, nearly 80% of the new aid rapid change.9 And the EU has significant promised in 2005 will come from European political and economic relationships with Member States.11 Decisions made in Europe developing countries in Africa, the Caribbean will determine how effectively that money is 116 117

Europe makes a difference The UK will to development • Work with others for further reform of European development • EU aid helps tackle poverty. In Burkina assistance and institutions, so Faso, the EC’s Euros 125 million budget that the EU can play a leading support (2002-05) has helped increase international role on primary education enrolment by over 25% development. since 2000, and doubled vaccination rates for measles and yellow fever since 1998. • Work closely with EU Member In Nicaragua, the EC’s Euros 11 million States to implement the EU water project has helped repair 145 Development Policy Consensus, kilometres of pipes, built over 100 wells, covering commitments on aid and helped 10,000 homes to improve and wider international policies. hygiene standards.

• EU Member States - the UK, Spain, Italy • Develop more joint strategies and France and Sweden - launched the and seek opportunities for IFFIm which could save 10 million lives. co-financing with the EC and EU Member States, wherever • The EU is using its bilateral partnerships appropriate. to foster sustainable development in countries such as China and India, for • Work with the EU as the main example through the EU-China ‘clean coal’ partner for our development initiative, launched in 2005. aims in the ‘Accession’ and Holding each other • The EU has provided Euros 300 million ‘Neighbourhood’ countries, to account... Better aid for Sudan through its Peace Facility for peace and as an important partner to support operations in Africa in 2004-2007, further development objectives 8.32 Aid relationships are, by nature, unequal. In Juba, South Sudan, the UK is working particularly in Darfur, helping put in middle income countries. If developing countries are to lead their own with the Netherlands, Norway, Denmark and thousands of African Union peacekeepers development, they must have more authority Sweden in a Joint Donor Team to support • Work more closely with EU development in the south following the on the ground. to ensure that the international development Member States to increase our Sudan peace agreement. The new office influence in international system responds to their needs. (above) combines the bilateral programmes of the five countries into one operation. development organisations. 8.33 Within developing countries, governments The aim is to create a fully harmonised need to be clear about what they want. programme to make it easier for the Tanzania and Mozambique, for example, Government of South Sudan to manage aid, have set out clearly how they want to work and to make aid work better. The Dutch are with their international partners.16 These leading the initiative, and have provided a arrangements should not be the exception joint office which is staffed by a combined team from all five partners. but normal practice. And there should be better arrangements at the international level, for international partners and support based on local needs and priorities, developing countries to hold each other to and use developing countries’ institutions account for delivering their commitments. and procedures rather than building their 8.34 International partners must find ways own parallel systems (‘alignment’). of working together to make aid better. • Donors reduce the burdens on developing The Paris Declaration on Aid Effectiveness – country governments – for example by

agreed in March 2005 – made clear that aid reducing the number of individual projects reforming system the international works better where: and administrative requirements and by • Developing countries determine their own ‘untying’ aid (‘harmonisation’).17 policies and programmes (‘ownership’). • Donors and developing countries focus • Donors provide long term, predictable on making the most difference to the lives of poor people (‘managing for results’). 118 119

• Donors and developing countries hold collected and published statistics on each other to account for their promises aid and developed guidelines for OECD The UK will (‘mutual accountability’). members – could do this. But this will mean • Work with others to implement to account on their commitments, strengthening its capacity, and working the Paris Declaration. and in leading debate on how aid is 8.35 There are now good examples of bilateral much more closely with new non-OECD allocated overall. and multilateral partners working together in • Participate in multi-donor donors such as India and China. this way. The UK already pools funding with arrangements in all developing • Encourage the OECD DAC to work countries by 2010 where we have more closely with new non-OECD other donors in more than twenty countries, 8.37 We also need to overcome the unequal has joint strategies with other donors in six way in which aid is currently distributed. a bilateral programme. donors such as India and China. countries and joint offices in two more. But Countries often receive different amounts of • Work with others to create • Support developing country efforts there are still too many donors with different aid regardless of their poverty or population arrangements for international to manage their relationships with spending and monitoring requirements. The size. This is partly because bilateral partners partners and developing country donors more actively so that they UK believes that we, and other international have stronger commitments to some governments to monitor their lead their own development effort. commitments to each other. partners, need to make faster progress to countries than others for political or • Encourage civil society and meet our commitments under the Paris historical reasons. The result is that some • Push for a stronger role for the other organisations to monitor Declaration, especially as aid increases. countries are under-aided. The DAC should OECD DAC in monitoring and international donor performance highlight where this is the case. The UK will holding international partners in developing countries. 8.36 The UK would like to see an independent work with others to agree a mechanism to organisation monitoring aid commitments, resolve this problem, probably involving allocations and performance. This would multilateral donors balancing out aid flows. significantly increase accountability. The OECD DAC – which has traditionally

Aid is not distributed evenly 18

70 Mozambique Zambia

60 Sierra Leone

50

Ghana Tanzania 40 Uganda DR Congo Cambodia

30 Aid per head (US$)

20 Policy and performance Kenya Nepal Ethiopia Best Pakistan 10 Sudan

Nigeria Bangladesh reforming system the international India 0 Worst 0 500 1000 1500 2000 2500 3000 3500

Income per head (US$ purchasing power parity)

Source: ODA per capita 2000-04 average from OECD-DAC and World Development Indicators (WDI); GNI per capita 2004 from WDI; Policy and performance from World Bank CPIA 2004. 120 121

How change happens: Poverty Reduction Strategies

In 1999 the World Bank and IMF came up against poverty at the centre of the public with a new approach to help developing policy debate in developing countries. countries. In order to qualify for debt relief This has improved the quality of their budgets under the HIPC, countries were asked to and financial management, and raised the prepare Poverty Reduction Strategies (PRSs), level of public spending to tackle poverty. to set out their priorities for development and For example, Ghana increased its expenditure to explain how aid and debt relief would be on poverty reduction through its PRS from used to benefit the poor. 4.8% of GDP in 2002 to 8.3% in 2005. This allowed the government to hire 10,000 Almost all international partners now support additional teachers and boost primary school the PRS approach, and many – including the enrolment from 81% to 92% of children.19 UK – have put them at the heart of their The economy also grew at rate of 5.2% in 2003 development assistance. This is much better and 5.8% in 2005. Forty-nine countries have than multiple donors working to different now drawn up PRSs. objectives. PRSs have helped put the fight reforming system the international 123

9.1 Eliminating world poverty is a job for difference – to understand how poor everyone, not just governments. In 2005, people live and how to turn seemingly people all around the world raised their impossible problems into manageable voices to demand change. Many people will tasks – is to get involved. have a direct role to play in helping deliver the commitments we have set out in this White Paper. NGOs will help deliver services, Seeing development especially in fragile states. Businesses will for yourself need to invest and create jobs. Parliament and civil society groups will hold the Jon Snow, a Voluntary Service Overseas (VSO) volunteer as a young man and now Government to account in the UK, and presenter of Channel 4’s evening news, encourage their counterparts in developing had his life changed by his first visit to a countries to do the same. developing country. “I had never been on a plane, and had only once been out 9.2 But eliminating world poverty is not just of England. Yet suddenly here I was about people who work on development. standing in the tropical sun, next to a For most people, development is not their couple of rusting customs sheds at Entebbe day job. Nevertheless, in today’s increasingly airport in Uganda. I was waiting for a priest interconnected and interdependent world, in an old Volkswagen who would drive me the 200 miles to the school in the bush, on our lives in the richest countries are affected the banks of the Nile, where I was to teach by what happens in developing countries, for the next twelve months. VSO and and we also have an impact on the lives of Uganda have informed my life ever since. people there. Making progress in the fight I only became a journalist to find a way against poverty will mean harnessing this back to Africa.”1 relationship. And the best way to make a

what can you do? getting involved 124

9.3 There are many ways to do this. Schools, universities, clubs, churches, temples and The UK will mosques can debate the issues, generate • Double our investment in new ideas, and ultimately influence opinion. development education, as we And people can help organisations that need seek to give every child in the their skills. A link between Nottingham City UK the chance to learn about Hospital and Jimma University Teaching the issues that shape their world. Hospital in Ethiopia, for example, has helped build capacity for better nursing, midwifery • Set up a scheme to help other groups – such as faith groups, and management training. Links between community groups, local schools can help children learn and help government, business and each other, and change the way they see the charitable organisations – build world. Links between trade unions can help links with developing countries. build capacity. Volunteers – whether they are campaigning in this country or sharing skills • Expand opportunities for young in developing countries – can affect the lives people and diaspora communities to volunteer in developing of hundreds of people. In times of crisis or countries. disaster, people can give money, volunteer their time in the UK, or in the affected area • Support internship programmes if they have specialist skills. for young people to work with NGOs.

9.4 Everyday choices matter too. In 2004, DFID and the Rough Guide launched ‘The Rough Guide to a Better World’, setting out how you can use your money, time and influence to change the world – giving to charities, buying fairly traded products and goods made without child labour, taking part in local campaigns and events. All these actions raise money for good causes. But they also help build commitment to change, The world in your and make that change happen. classroom Dornton House School in Sevenoaks is partnered with the Milton Margai School for the Blind in Freetown, Sierra Leone. Both schools are working to broaden the experience of blind and partially sighted young people. Students have been To get further exchanging Braille letters, and some have formed lasting friendships. And the schools information on are looking together at how to deal with conflict. Dornton House is just one of many how you can make schools in the UK that are using the ‘Global Dimension’ to teach our children about a difference, go to the world they live in. 2 www.dfid.gov.uk 127

glossary

AU African Union AIDS Acquired Immune Deficiency Syndrome ASEAN Association of South East Asian Nations DFID Department for International Development DRC Democratic Republic of Congo EC European Commission ECOWAS Economic Community of West African States EFA Education for All EU European Union EITI Extractive Industries Transparency Initiative FCO Foreign and Commonwealth Office FTI Fast Track Initiative G8 Group of 8 most industrialised countries GDP Gross domestic product GNI Gross national income HIV Human Immunodeficiency Virus IBRD International Bank for Reconstruction and Development ICF Investment Climate Facility IDA International Development Association IDPs Internally displaced people IFF International Finance Facility IFFIm International Finance Facility for Immunisation IMF International Monetary Fund IPCC Inter governmental Panel on Climate Change MDGs Millennium Development Goals NEPAD New Partnership for Africa’s Development NGO Non-governmental organisations ODA Official development assistance OECD DAC Development Assistance Committee of the Organisation of Economic Co-operation and Development PRS Poverty Reduction Strategies SAARC South Asian Association for Regional Co-operation SARS Severe Acute Respiratory Syndrome TB Tuberculosis UN United Nations UNAIDS Joint United Nations Programme on HIV/AIDS UNCAC United Nations Convention Against Corruption UNEP United Nations Environment Programme UNESCO United Nations Educational, Scientific and Cultural Organisation UNHCR United Nations High Commission for Refugees UNICEF United Nations Children’s Fund 128 129

Chapter 2 32 Internal conflict is the most important cause of Building effective states and better governance displacement. The other main causes are government endnotes repression and cross-border conflict. Norwegian Refugee 12 Kaufmann, D. (2004) Human Rights and Governance: The Council (2005) Internal Displacement, Global Overview of Empirical Challenge. Unpublished paper. Washington DC: Trends and Developments in 2005. Geneva: The Internal World Bank Institute. Displacement Monitoring Centre. Chapter 1 12 World Bank (2006) Global Economic Prospects: Economic 22 Sen, A. (1981) Poverty & Famines: An Essay on Entitlement 42 Coglan, B. and others (2006) Mortality in the Democratic Delivering the promises of 2005 Implications of Remittances and Migration. Washington and Deprivation. Oxford: Clarendon Press. DC: World Bank. Republic of Congo: a nationwide survey. The Lancet, 12 World Bank (2006) World Development Indicators 2006. 32 Mcleod, D. (2005) Review of Drivers of Change Country Volume 367, Issue 9504. Washington DC: World Bank. 13 Klasen, S. (2005) Pro-Poor Growth and Gender. What can Study Reports. Unpublished report. UK: DFID 52 we learn from the Literature and the OPPG Case Studies? Department for International Development (2005) Fighting 22 The Commission for Africa was formed in 2004 at the 42 Unpublished discussion paper for the Operationalising Adapted from World Bank (2004) World Development Poverty to Build a Safer World. A Strategy for Security and invitation of the Prime Minister. It consisted of seventeen Pro-Poor Growth Working Group including the World Bank Report: Making Services Work for the Poor. New York: Development. UK: DFID eminent people (nine of them Africans) from all over the Oxford University Press. and the Department for International Development. 62 world, and their report ‘Our Common Interest: Report of the Shows conflicts that involve a government and result in 52 Commission for Africa’ was launched in 2005, containing 14 Chronic Poverty Research Centre (2005) The Chronic Palley, T.I. (2003) ‘Lifting the Natural Resource Curse’. 25 or more battle deaths. Foreign Service Journal. December. ideas and recommendations for action by G8, EU, and Poverty Report 2004-05. Manchester: The Chronic Poverty 72 Centre for International Co-operation and Security, African leaders and international institutions. Research Centre. 62 Direct Budget Support is when funds are provided directly Department of Peace Studies (2005) Spending to 32 Gleneagles, Perthshire, was the location for the G8 15 World Development Indicators used in DFID (2005) to partner governments to spend using their own financial Save: Is Conflict Prevention Cost-effective? UK: Summit in 2005, under the UK Presidency. At the Summit, Why we need to work more effectively in fragile states. management and accountability systems, in support of University of Bradford. poverty reduction programmes. discussions were held on Africa between the G8 leaders DFID: London. 82 Islamic Republic of Afghanistan (2006) Afghanistan and seven African leaders (from South Africa, Algeria, 72 16 DFID calculations based on World Bank estimates in International Development Department and Associates National Development Strategy: An Interim Strategy Nigeria, Ethiopia, Tanzania, Ghana and Senegal), and on World Bank (2006) Global Economic Prospects: Economic (2006) Joint Evaluation of General Budget Support (1994 - for Security, Governance, Economic Growth and climate change between the G8 leaders and the leaders of Implications of Remittances and Migration. Washington 2004): Synthesis Report on behalf of 24 members of the Poverty Reduction. five developing country economies (China, India, Mexico, Development Assistance Committee of the OECD. Glasgow: DC: World Bank. 92 United Nations (2004) A more secure world: our shared Brazil and South Africa). The outcome of the Summit, DFID. And Organisation for Economic Co-operation and 17 responsibility. Report of the Secretary General’s High Level including the Chair’s Summary of the discussion can be A Middle Income Country is defined by the OECD Development (2005) Paris Declaration on Harmonisation Panel on Threats Challenges and Change. The United found at www.g8.gov.uk. Development Assistance Committee as a country and Aid Effectiveness. Paris: OECD. with Gross National Income per capita of between Nations Department of Public Information. 42 Foreign and Commonwealth Office (2006) Active 82 Jenkins, R. and Goetz, A.M. (1999) ‘Accounts and US$826 – US$10,065 in 2004, compared to less than 102The Inter Governmental Authority on Development is a Diplomacy for a Changing World: The UK’s International Accountability: Theoretical Implications of the Right-to- US$825 for low income countries. DAC List of ODA sub-regional organisation which includes Djibouti, Eritrea, Priorities. London: Her Majesty’s Stationery Office. Information Movement in India.’ Third World Quarterly recipients. Ethiopia, Kenya, Somalia, Sudan and Uganda. Sustainable development aims to enable all people 20(3): 603-22. throughout the world to satisfy their basic needs and enjoy 18 Our policy towards the Overseas Territories is guided 112WSP International Somali Programme. WSP International 92 Utstein Anti-Corruption Resource Centre: www.u4.no a better quality of life, without compromising the quality of by the objectives and commitments of the 1999 Overseas is an international organisation specialising in conflict life of future generations. See Department for Environment, Territories White Paper, and the earlier International 102International Development Association and International management. Food and Rural Affairs (2005) Securing the Future – UK Development White Papers. The International Development Monetary Fund (2005) ‘Update on the Assessments and 122Centre on International Co-operation (2006) Annual Review Government Sustainable Development Strategy. London: Act includes an enabling provision for DFID to fulfil this role, Implementation of Action Plans to Strengthen Capacity of Global Peace Operations. Lynne Rienner Publishers. Her Majesty’s Stationery Office. as a specific exception to its poverty reduction remit. of HIPCs to Track Poverty-Reducing Public Spending’. 132 52 World Bank (2006) Global Economic Prospects: Economic 19 UNICEF/WHO (2005) World Malaria Report. Unpublished paper. April. World Bank (2003) Breaking the Conflict Trap: Civil War Implications of Remittances and Migration. Washington DC: New York: UNICEF. and Development Policy. Washington DC: World Bank and World Bank. Oxford University Press. 20 Commission for Africa, taken from IMF (2004) The Fund’s Chapter 3 62 UNESCO (2006) Education For All Global Monitoring Support of Low-Income Member Countries: Considerations Supporting good governance internationally Chapter 5 Report. 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Doing Business in 2006. http://www.doingbusiness.org/documents than just monetary terms. Dollar, D. (2004) Development Effectiveness: What have 52 Transparency International (2002) Bribe Payers Index. we learnt? Economic Journal 114:244-271. In a typical /DoingBusines2006_fullreport.pdf 92 UNAIDS/WHO (2005) AIDS Epidemic Update. www.transparency.org/policy_research/surveys_indices/bpi developing country, receiving aid at 2% of GDP, an 52 New York: UNAIDS. Djankov, S. McLeish, C. and Ramlho, C. (2005). Regulation additional 1% of GDP is associated with an extra 0.9% and Growth. World Bank 10 WHO (2005) The World Health Report 2005 – make every of gross investment. Chapter 4 62 mother and child count. Geneva: WHO. Maternal mortality Promoting peace and security Briceño-Garmendia, C. Estache, A. and Shafik, N. (2004) 23 Studies cited in Clemens, M. Radelet, S. and Bhavani, R. 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82 Asian Development Bank, World Bank and Department Chapter 6 Chapter 7 152World Bank (2006) ‘Clean Energy and Development for International Development (2006) Asia 2015. Promoting Investing in people Managing climate change – Towards an Investment Framework.’ Paper for the Growth, Ending Poverty. 6-7 March 2006. Conference Development Committee, April 2006. 12 Population Division of the Department of Economic 12 The Inter governmental Panel on Climate Change (IPCC) Report. UK: DFID. and Social Affairs of the United Nations Secretariat, was set up by the World Meteorological Organisation and 162World Bank (2006) ‘Clean Energy and Development 92 Department for International Development Financial ‘World Population Prospects: The 2004 revision’ the United Nations Environment Programme. It is open – Towards an Investment Framework’ Paper for the Deepening Challenge Fund: Strategic Project Review. www.esa.un.org/unpp to all countries who are members of the UN or World Development Committee, April 2006. Unpublished report. Meteorological Organisation. The Secretariat, composed 22 In sub-Saharan Africa adult literacy has risen from 28% in 172The Stern Review of the Economics of Climate Change of climate change experts, has prepared three assessment 102International Finance Corporation, SME Department,(2005). 1970, to 60% today, and in South and West Asia it has risen is due to report in Autumn 2006 with analysis on the reports about the impact of climate change, endorsed by Micro, Small and Medium Enterprises: A Collection of from 32% to 59%. UNESCO (2006) Education for All Global economics of moving to a low carbon economy, drawing IPCC members, of which the most recent was published in Published Data. Washington DC: IFC. Monitoring Report. Paris: UNESCO. implications for timescales for action and different policies 2001. The Fourth Assessment Report is due in 2007. and institutions. It will also assess different approaches for 112World Bank (2006) ‘Where Is the Wealth of Nations? 32 Department for International Development, Africa Policy 22 As well as carbon dioxide, these include methane and adapting to climate change. Measuring Capital for the XXI Century’. Conference Edition. Department (2005) Review of Health and Education nitrous oxide gases. Washington DC: World Bank. Progress in Selected African Countries. Unpublished report. 182At Gleneagles, the G8 invited the World Bank and other 32 IPCC (2001) Summary for Policymakers: A Report of multilateral development banks to develop a clean energy 122Asian Development Bank, World Bank and Department for 42 UNESCO (2006) Global Monitoring Report. Paris: UNESCO. 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Washington DC: World Bank. 62 The UN Millennium Ecosystem Assessment estimates that were traded at an average of US$7 and US$11 in 2005 and 152Department of Trade and Industry (2004) Making 82 World Bank (2004) World Development Report: Making 60% of environmental services are degraded or being used 2006 respectively. Therefore, the value of the 950 million Globalisation a Force for Good. Trade and Investment White Services Work for Poor People. New York: Oxford University unsustainably and that climate change is the single most CERs will range from US$6.7 billion to US$10.5 billion. Paper 2004. London: Her Majesty’s Stationery Office. Press. And The Commission for Africa (2005) Our Common important factor that will affect environmental change over (World Bank and International Emissions Trading Association 162The Commission for Africa (2005) Our Common Interest – Interest. London: Commission for Africa. And The World the next 50 years. 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Chapter 8 112OECD Journal on Development, Development Co-operation Reforming the international development system Report (2005). Efforts and Policies of the Members of the Development Assistance Committee. Volume 7, Issue 1. 12 This includes around 35% to the main multilateral Paris: OECD Publishing. institutions (EC, World Bank, UN and regional banks) and contributions to the main global funds such as the Global 122The 2005 EU Consensus on Development (SEC (2005) 929) Fund to fight AIDS, TB and Malaria, the Global Alliance for states that “EU development policy concerns all developing Vaccines and Immunisations and the Global Environment countries benefiting from public development aid as listed Facility. Department for International Development (2006) by the OECD development aid committee” and that “the Departmental Report. DFID. And, Department for overriding objective of poverty reduction is based on the International Development (2005) Statistics on complementary aims of promoting good governance and International Development 2000/01 – 2004/05. DFID. respect for human rights, which form an integral part of long term development”. 22 This chart shows UK bilateral aid as a share (7%) of total aid received by developing countries. The UK’s share 132EC or Community aid refers to aid administered on behalf of total ODA in 2004, including contributions to multilateral of EU Member States by the European Commission. agencies was 10%. UN includes: UNDP, UNTA, UNICEF, 142EDF is managed by the European Commission but is outside UNRWA, UNHCR, WFP, UNFPA and others. OECD DAC its main budget. include only UN expenditure financed from un-earmarked support as multilateral. UN spending is around US$10 billion 152The EC plans to introduce three new geographical if earmarked contributions are included (UNDP figures, instruments: for countries trying to join the EU excluding UNHCR). (accession countries); countries in Europe’s geographical neighbourhood; and developing countries. In addition, 32 The nine clusters are: logistics, telecommunications, there will be a new instrument for maintaining stability camp management, emergency shelter, health, nutrition where this is threatened, alongside instruments for the and feeding, water and sanitation, early recovery, other major cross-cutting issues of humanitarian aid and and protection. macro-economic support. 42 OECD International Development Statistics (IDS) online 162In Tanzania, an Independent Monitoring Group of advisers databases on aid and other resource flows was set up in 2000 to mediate the aid relationship and www.oecd.org/dataoecd/50/17/5037721.htm monitor progress against specific commitments. In 52 The World Bank (2005) Global Monitoring Report. Mozambique, a Programme Aid Partners Performance The Millennium Development Goals: From Consensus Framework established in 2003 monitors and ranks to Momentum. Washington DC: World Bank. donor performance. 62 International Monetary Fund (2006) The Managing 172Aid that is freely available to buy goods and services from Director’s Report on Implementing the Fund’s Medium-Term all countries is known as ‘untied aid’. Aid that is restricted Strategy. Washington DC: IMF. to the procurement of goods and services from the donor country is known as ‘tied aid.’ www.webdomino1.oecd.org 72 The Commission for Africa (2005) Our Common Interest: /comnet/dcd/untiedpubliccws.nsf Report of the Commission for Africa. 182This graph shows aid distribution in some of the countries 82 EC (2005) Highlights, Annual Report 2005 on the European where DFID works. It shows that a country that is poor and Community’s development policy and the implementation performs better, can receive less aid per capita than other of external assistance in 2004. Brussels: EuropeAid countries. The policy and performance ratings reflect Country Co-operation Office. Policy and Institutional Assessment (CPIA) scores, which are 92 Ten new countries joined the EU in 2004, two are expected annual World Bank ratings. The 20% of countries with the to become members in 2007 bringing the total to 27, and highest CPIA scores are in the first quintile. This is a widely six more countries aspire to join. used measure of the likely effectiveness of aid in a country, but does not take account of other factors influencing aid 102April 2005 Commission Communication and May 2005 effectiveness, such as post-conflict reconstruction. Council Conclusions identified 12 areas for action (trade, climate change, environment, security, agriculture, fisheries, 192Government of Ghana, Ministry of Education. Education social dimension of globalisation, migration, research and Strategic Plan 2003 to 2015. Volume 1. Policies, Targets innovation, information society, transport, energy) and and Strategies. tasked the Commission to produce a biennial report on EU Policy Coherence for Development. May 2005 Council Chapter 9 Conclusions asked Council to assess existing internal What can you do? procedures, mechanisms and instruments to strengthen the effective integration of development concerns in its 12 Excerpt from Wroe, M. and Doney, M. The rough guide decision-making procedures on non-development policies. to a better world and how you can make a difference. Also called on EU MS and Commission to strengthen policy London: Rough Guides Ltd. coherence for development. 22 Resources produced for schools by DFID and the Department for Education and Skills for linking subjects to international development.

With thanks… This White Paper was written and produced by Catherine Masterman, Jas Malhi, Jonathan Hargreaves, Kathryn Casson, Michael Howells, Moazzam Malik (Team Leader), Richard Montgomery, Sarah MacGregor, Sarah Saxton, Tony Burdon and Veema Shah, with contributions from colleagues across DFID and other UK Government Departments and over 600 submissions during the public consultation that ran from January to April 2006.

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