House of Commons International Development Committee
DFID Annual Report 2008
Second Report of Session 2008–09
Volume II Oral and written evidence
Ordered by The House of Commons to be printed 10 February 2009
HC 220-II [Incorporating HC 945-i, -ii and -iii of Session 2007-08 Published on 19 February 2009 by authority of the House of Commons London: The Stationery Office Limited £0.00
International Development Committee
The International Development Committee is appointed by the House of Commons to examine the expenditure, administration, and policy of the Department for International Development and its associated public bodies.
Current membership Malcolm Bruce MP (Liberal Democrat, Gordon) (Chairman) John Battle MP (Labour, Leeds West) Hugh Bayley MP (Labour, City of York) John Bercow MP (Conservative, Buckingham) Richard Burden MP (Labour, Birmingham Northfield) Mr Stephen Crabb MP (Conservative, Preseli Pembrokeshire) Mr Mark Hendrick MP (Labour Co-op, Preston) Daniel Kawczynski MP (Conservative, Shrewsbury and Atcham) Jim Sheridan MP (Labour, Paisley and Renfrewshire North) Mr Marsha Singh MP (Labour, Bradford West) Andrew Stunell (Liberal Democrat, Hazel Grove)
Ann McKechin (Labour, Glasgow North) and Sir Robert Smith (Liberal Democrat, West Aberdeenshire and Kincardine) were also members of the Committee during this inquiry.
Powers The Committee is one of the departmental select committees, the powers of which are set out in House of Commons Standing Orders, principally in SO No 152. These are available on the Internet via www.parliament.uk.
Publications The Reports and evidence of the Committee are published by The Stationery Office by Order of the House. All publications of the Committee (including press notices) are on the Internet at www.parliament.uk/indcom
Committee staff The staff of the Committee are Carol Oxborough (Clerk), Ben Williams (Assistant Clerk), Anna Dickson (Committee Specialist), Chlöe Challender (Committee Specialist), Ian Hook (Senior Committee Assistant), Vanessa Hallinan (Committee Assistant), Miguel Boo Fraga (Committee Support Assistant) and Alex Paterson (Media Officer).
Contacts All correspondence should be addressed to the Clerk of the International Development Committee, House of Commons, 7 Millbank, London SW1P 3JA. The telephone number for general enquiries is 020 7219 1223; the Committee’s email address is [email protected]
Witnesses
Wednesday 9 July 2008 Page
David Peretz, Chairman, Anthony Killick, Committee Member and Robert Picciotto, Committee Member, Independent Advisory Committee on Development Ev 1 Impact
Alison Girdwood, Evaluation Department, Department for International Ev 1 Development
Tuesday 15 July 2008
Nemat (Minouche) Shafik, Permanent Secretary, Mark Lowcock, Director General Country Programmes and Sue Owen, Director General, Corporate Ev 11 Performance, Department for International Development
Tuesday 30 October 2008
Rt Hon Douglas Alexander MP, Secretary of State for International Development; Martin Dinham, Director General International, and Andrew Ev 28 Steer, Director General Policy and Research, Department for International Development List of written evidence
1 Department for International Development Ev 46; 58; 60; 91 2 ActionAid UK Ev 61 3 BOND Disability and Development Working Group Ev 65 4 Joint memorandum submitted by the Coalition Of Women Living with Ev 65 HIV/AIDS (Malawi),Malawi Network of People Living with HIV/AIDS (Malawi) and One World Action (UK) 5 Joint memorandum submitted by Christian Aid, Concern Worldwide, Ev 67 FARM-Africa, Harvest Help and Send A Cow 6 Médecins du Monde UK Ev 70 7 One World Action Ev 71 8 Prospect Ev 72 9 RESULTS UK Ev 75 10 Saferworld Ev 80 11 Save the Children UK Ev 80 12 World Vision Ev 83 13 Yara International Ev 85 14 First annual letter from the Chairman of the Independent Advisory Ev 88 Committee on Development Impact (IACDI) to the Secretary of State for International Development 15 Reply from the Secretary of State for International Development to the first Ev 91 annual letter from the Chairman of IACDI List of unprinted written evidence
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International Development Committee: Evidence Ev 1 Oral evidence
Taken before the International Development Committee
on Wednesday 9 July 2008
Members present
Malcolm Bruce, in the Chair
Richard Burden Jim Sheridan Mr Stephen Crabb Sir Robert Smith Daniel Kawczynski
Witnesses: Mr David Peretz, Chairman, Mr Anthony Killick, Committee Member, and Mr Robert Picciotto, Committee Member, Independent Advisory Committee, and Ms Alison Girdwood, DFID Evaluation Department, Department for International Development, gave evidence.
Q1 Chairman: Good morning, Mr Peretz, and your indication of how your committee goes about its colleagues. Thank you for coming to give evidence work in answering those kinds of questions. You to us. We had said at the time when Hilary Benn were part of that discussion at the ODI, but do you announced the establishment of your committee accept that that is a good starting point for both that we would, in due course, take evidence from DFID and for your work as an independent you. I think it has taken slightly longer than we committee? intended, but it also fits into the report we will be Mr Peretz: I think it is a fine starting point. It is a doing on the department’s Annual Report. Clearly, question of what works and do you learn lessons evaluation is an important part of it. I wonder if you from things which do not work? Could I make one could introduce your colleagues. I guess Alison point at the beginning? I am very glad to have this should be introducing herself as she has a slightly opportunity to meet with the committee, and I hope oblique role in this. we might have a continuing relationship. I am Mr Peretz: I am David Peretz, and I am Chair of the required, as chairman, to write an annual letter to Independent Advisory Committee on Development the Secretary of State and copy it to members of this Impact. Can I call it IACDI for short? Robert committee, which suggests that you might have quite Picciotto is on my left. a role, if you agree with our recommendations, both Mr Picciotto: I am a professor at King’s College, in helping to make sure they get implemented but London, I suppose that I am on the committee perhaps also, and perhaps more immediately, we on because I used to head evaluation at the World Bank the committee would be very interested that your and because I sit on the Boards of the UK concerns, either at this meeting or in other ways, feed Evaluation Society and the European Evaluation into us. One of the things we are going to have to do Society. quite shortly is decide on, or begin to discuss, a work Mr Peretz: Anthony Killick, who is another member programme of evaluations for the next three years, of the committee. and the question of what is to be evaluated is the sort Mr Killick: I am a development economist who has of question on which I would have thought this specialised in Africa and I am a Senior Associate of the Overseas Development Institute (ODI) in committee might have views. Shall I just give a brief London. sketch of what we have done? Ms Girdwood: I am Alison Girdwood, representing the Evaluation Department at DFID. Q4 Chairman: If you could, briefly. I should say, we are aiming for this session to be around about an Q2 Chairman: Which the committee did visit when hour. we were in East Kilbride last year. Mr Peretz: I will try and be very quick, partly Mr Peretz: The Evaluation Department provides because we are being very transparent and the secretariat and secretarial support for our publishing the minutes of our meetings, which I committee. think you have got, so you will have seen those. One point to make at the beginning is we have seen our Q3 Chairman: Which, I suppose, is a bit of an issue role as covering both evaluations carried out we might want to explore too, but perhaps we can get centrally in the Evaluation Department of DFID into the meat of it. Clearly we are in a situation but also evaluations, some people call them self- where we have a rising aid budget and we need to evaluations, carried out across the department. It is know whether that budget has been eVectively spent, much easier to get a handle on what the Evaluation and a whole raft of questions, obviously, arise out of Department is doing than on what is being done at that. This committee frequently asks the question: the various places throughout DFID, but we are what works and how good is DFID at delivering trying to look at both, and I think, on the latter, what works? I wonder whether you could give an what I would say at this point is my impression is Processed: 13-02-2009 18:41:37 Page Layout: COENEW [E] PPSysB Job: 408061 Unit: PAG1
Ev 2 International Development Committee: Evidence
9 July 2008 Mr David Peretz, Mr Anthony Killick, Mr Robert Picciotto and Ms Alison Girdwood that there is not a very strong culture of self- what works, what does not work. Impact goes evaluation in DFID, there needs to be something of beyond outcomes, and for evaluating impact one a cultural change, and we are thinking about ways needs very sophisticated methods, which are very you could do that. One of our recommendations is close to social research. So it is in these two areas that the central Evaluation Department should have that the committee is going to focus. In order to some role in quality assurance and control over self- generate the kind of knowledge needed for this, you evaluations. So far we have had three meetings. We need two things: independence and quality. have given priority to trying to get the structures and Independence is crucial for credibility. As in processes right in order to be able, in due course, to auditing of accounts, you need an independent give the assurances that our terms of reference function, and that is what the committee focused on require us to do about independence, impact, at the very beginning and we hope to produce a eVectiveness and evaluation. I am going to ask Bob detailed report on this aspect. We used good practice in a minute to say something. We have been looking standards accepted by the international community at how to assure independence and bring it up to and based on the experience of governments and international standards. You will have seen in our auditing organisations, and we worked very most recent minutes we have a set of systematically through a template designed to assess recommendations about that. how independent is the evaluation function in DFID. We started reviewing the quality of the Q5 Chairman: We have, obviously, a number of reports. How are they produced? Are the methods questions to ask you which will draw out some of right? Are the skills appropriate? these points. Mr Peretz: Let me just say that, looking forward for our work plan, at our next meeting we are going to Q7 Chairman: It will be interesting to see how that discuss a new evaluation policy for DFID, which I develops. think could be quite important, and begin a process Mr Peretz: Can I try and address this? I think the of consultation about a three-year work plan, which question you were asking, Chairman, was about the I mentioned, for the central Evaluation Department. attribution of what DFID do. There is a big problem Do you want to go on with questions? of attribution in the aid business, and I should say, these are not issues we have discussed in the committee, I am just talking as an individual, but Q6 Chairman: We have a number of questions, so I successful development, it certainly seems to me, is think we can draw things out in the questions. As a usually the result of something of a team eVort supplementary to the more general question, the between the government of the country crucially, discussion we have had as a committee (and we have having the right sorts of policies, and a whole set of had some advice from the Scrutiny Unit in the donors supporting that and other agencies. I have an House of Commons to try and explore this a bit analogy: it is a bit like trying to assess the more) is that DFID in its Annual Report is using its performance of an individual member of a football traYc-light measures against the Millennium team when you are asking, “What is DFID doing Development Goals. The Millennium Development and what is the impact of what it is doing?” An Goals are big international objectives and it is pretty important part of evaluation is to make sure that the diYcult to relate back what DFID is doing to whole process is working, that the combination of achieve those outcomes. DFID, I think, will acknowledge that, but do you feel your approach government policies, support from any donors, is might help to fill in the space? The sort of thing we actually reducing poverty, making progress towards have been looking for is that DFID should be the MDGs. Then you have to ask a separate saying, if fulfilling the MDGs, either generally or by question, and it is like asking what contribution does country that we are engaged in, in part of our an individual member of a football team make to the objective, how do we identify the specifics that fact that it is a successful team or is at the top of the DFID is doing that directly relate to that league table? What is the full-back contributing? achievement, as opposed to taking collective credit You have to ask some rather more subtle questions. or blame for something which may have no causal It can be done, but it is not a question of being able link at all? Is what you are doing trying to help us to say that this money from DFID translates directly answer that question? Mr Picciotto is nodding. into so many children out of poverty or so many Mr Picciotto: Yes. What you are asking for is at the people getting HIV/AIDS treatment. It is more a core of the evaluation function. Namely, you are question of asking questions like, as with the asking for accountability and for learning about football player, “Is the ball being passed to other what works and what does not work. This is what an players at the right time?”, and at DFID you would independent evaluation department ought to be say, “Are they co-operating with others? Is the delivering. We are focusing on accountability, but advice they are giving to government good advice or one has to be accountable for learning as well: what bad advice? Are they helping to strengthen the are the policy principles and the agreed programme national systems of governance?”, and so on. These goals which have been approved by the governance are things that you can evaluate, but it is not a simple of DFID? Evaluation checks whether these thing. I sense that some people are looking for a very objectives are relevant, whether the policies are simple answer to the question, “How much does relevant, whether they are being achieved in an each pound a day do in terms of the MDGs?” Tony eYcient way. Next there is the question of impact— may want to add something. Processed: 13-02-2009 18:41:37 Page Layout: COENEW [O] PPSysB Job: 408061 Unit: PAG1
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9 July 2008 Mr David Peretz, Mr Anthony Killick, Mr Robert Picciotto and Ms Alison Girdwood
Q8 Mr Crabb: I take the point, Mr Peretz, but DFID Q10 Richard Burden: It is diYcult to know whether does claim that they lift three million people out of the Public Accounts Committee looked at the eVect poverty every year. Are you saying that that is an on developing long-term capacity. impossible claim for the department to make? Mr Peretz: That is a big issue. I am personally quite Mr Peretz: Tony may be able to answer. As I a fan of budget support, but there are circumstances understand it, this is based on the Collier/Dollar where it is clearly not the right thing to do and there research, which is a cross-country macro analysis of are circumstances where it is. As we talk about a what you would expect aid to do in good three-year programme of evaluations to be done by circumstances. It is perfectly reputable research, but DFID Evaluation Department, the question of what it is not looking at—. Tony you probably know evaluation or evaluations should, or might, be done more about the research than I do. in this area is one that we will address. Tony, you Mr Killick: As David has said, claims of that kind might want to add to this. I know that you have can only be derived from very macro level research. looked at the PAC report. I guess one of the underlying facts on which that Mr Killick: Yes. I share David’s view that there is a claim is based is the fact that, on the whole, British strong prima facie case in favour of budget support, aid is rather well distributed in favour of poor by comparison with the traditional sort of project- countries by comparison with various other donor based approach which leads to very fragmented and organisations. If one takes the view that aid helps incoherent and highly costly types of intervention, reduce poverty, then certainly the orientation of but budget support is not universally applicable. One is, after all, putting money into fiscal systems British aid is of a nature that helps in that direction, which are often quite weak, and so there is an but evaluation, which is the concern of the element of risk involved there, sometimes a committee, operates at a rather diVerent level. It substantial element of risk. I think risk is perfectly does not operate at that meta-level of trying to justified, but it does have to be justified in terms of a estimate numbers of millions of people pulled out of careful appraisal of the situation before one goes poverty from the programme as a whole. The into it. I had a look at the Public Accounts evaluation is looking at specific interventions and Committee report and one of the things I took from V what the e ects of those interventions are and the that was its conclusion that DFID, as an institution, V cost-e ectiveness thereof, which is a rather more is not collecting the information and does not have micro-level of examination. the systems in place to enable it to reach firm Chairman: Perhaps we could move on to some other judgments about cost-eVectiveness, and I think that aspects of that. Richard Burden. reinforces what David said about the need to look at that rather carefully. There has been this multi- donor, multi-country evaluation back in 2006, Q9 Richard Burden: I would like, if I may, to ask you which arrived at really quite positive conclusions a little bit about an area which, I suppose, brings out overall, but it was not addressing issues like are there this problem in very large quantities, which is how systems in place within DFID to take sensible you assess the eVectiveness of budget supports. 20% decisions about cost-eVectiveness, and maybe some of DFID’s bilateral aid programme goes through more process-oriented evaluations of that kind budget supports, very serious amounts of money, could be a very appropriate response to the PAC and the Public Accounts Committee recently had a report. look at that and, on the one hand, they seemed to be saying that this did seem to be eVective in terms of Q11 Richard Burden: It would seem to me that there increasing services to the benefit of the poor, is likely to be greater focus on this and, therefore, the expanding access to free health and education, and need to develop robust evaluation mechanisms on so on, and it said that in 6 out of 9 countries they that. It is not only necessary, on which I think we are assessed that that was the case, but then it also all agreed, but there are also probably quite urgent looked at areas where budget support was not ones that build in. The point that Malcolm said necessarily used and found fairly similar results. about issues of building capacity as well as more How do you think we can assess whether budget tangible results. You said this is going to be an area support is working or not? What are the kinds of you are going to be looking at. Is there any likely indicators we can use on that? timescale on that? I am looking for developing Mr Peretz: This is not an issue which my committee mechanisms rather than looking at DFID. has discussed yet, but we will, and I will ask Tony to Mr Peretz: What I said was it will be part of our say something in a minute about it. There was, of discussion. One of the few things that this committee course, a big multi-national multi-country actually has the power to do, we have the power to evaluation of budget support, which I think this agree the future work plan of the Evaluation committee has seen and had presented to you, which Department. What we have decided is that we will was pretty positive. My own view, I am speaking consult on a three–year work plan, which will start personally, but I have seen budget support working next March, and we will consult over the winter in a number of countries and, in the right about that with quite a long list. One of the elements circumstances, it works very well and it avoids doing of that list will be an evaluation, or several what traditional methods of aid often do: it avoids evaluations, of budget support. I should say, undermining or sidelining the national systems of though, there are things that certainly could be done setting budget priorities and financial management. in the meantime. 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Ev 4 International Development Committee: Evidence
9 July 2008 Mr David Peretz, Mr Anthony Killick, Mr Robert Picciotto and Ms Alison Girdwood already do about 5 or 6 country programme is why the evaluation profession is arguing for a mix evaluations a year looking at individual countries, of methods: randomised control trials, at other many of which have budget support as one of the methods of matching through propensity scores, instruments, and one of the things we have agreed as interrupted time-series, and other techniques which a committee, and I am very glad that the head of the are very close to research. That is why one of the Evaluation Department has volunteered to do this, issues in an evaluation policy is how the evaluation he is going to write, from now on, an annual report department connects with the research department which will look across the evaluations that have been and the chief economist, and so forth. At the World done over the year and try and draw out themes. One Bank both the research and the evaluation of the themes might well be the circumstances where departments are working together on developing budget support works and where it does not, just these techniques, but one has to be very careful to looking across those evaluations which have already triangulate between these techniques and more been done. traditional techniques which go beyond whether the Chairman: Sir Robert Smith has some follow-on intervention works or not to figure out why does it questions relating to that. It might be appropriate work, how does it work, who makes it work? One of for him to come in, if that is all right with you. the problems with impact evaluation of the highly abstract type of the kind I described is that it is weak on accountability, because all it does is answer the Q12 Sir Robert Smith: On the methodology of question, “does it work or does it not work?” It does evaluation and how rigorous it is, it has been put to not tell who is supposed to make it work, which is the us that you can have an informal evaluation that point the Chairman was raising earlier. So we are says the aim of the intervention by DFID was to recommending a mix of methods, and I think it is the achieve the goal of, say, 20,000 odd people getting choice of methods and their mix which the immunised, or something like that, and then the Evaluation Department should be overseeing. evaluation comes along and says, “We put the money in and we ticked the box because 20,000 people got immunised”. Or is there the more Q13 Sir Robert Smith: You mentioned earlier how rigorous evaluation which says, “If we had not made development and aid is a team eVort between the the intervention, was that going to happen anyway? recipient and the donor and many other partners Was there a causal link between the intervention and involved, but then, obviously, the partner countries the outcome?” Where on the spectrum does the do not necessarily have the resources, the capacity, evaluation tend to take place: more towards the to gather the data. What is DFID doing to overcome informal or the more rigorous? these challenges to make sure the recipients have the Mr Peretz: This is what I was trying to say earlier. resources to take part in the evaluation? Tracking through money to eVects is never that easy. Mr Peretz: I think it is a very important point. This If you say, if we take your example, money was put is the first part of my analogy. How do you judge the in for inoculations but, probably, for that to work, performance of the team? Is poverty being reduced? it depended not just on the DFID money but on Are more children going to school? Are education things the government was doing in terms of having and health outcomes better? Are more people being health centres and transforming the health service immunised? Collecting statistics and the national and even things like transport arrangements that get capacity to do this is absolutely essential. This is people to the clinics, all these things have several something Alison might want to add to, but my players, and that is the problem with attribution. On impression is that DFID are doing quite a lot to try actual evaluation methods, I turn to Bob, who is the and strengthen national systems of statistics and expert on this. monitoring arrangements of this kind, and it is Mr Picciotto: There is a need to focus on impact critical. evaluation of the kind that you are suggesting. In Ms Girdwood: The main areas of work are fact DFID is chairing a group which is focusing on supporting the Marrakech Action Plan for how the development community should approach Statistics, which is mainstreaming strategic planning impact evaluation. There is a lot of momentum of statistical systems and assisting capacity to behind randomised control trials where, indeed, you develop national strategies for statistics, supporting distinguish between two groups: the experimental internationally the 2010 Census around the group and the control group, and you select a group Household Survey Network and general statistical V of individuals a ected, (let us say by a vaccination capacity building, largely through the Paris 21 programme) on a random basis. This kind of Consortium. We are supporting that to quite a approach removes the bias that exists as you are large extent. implying, if one simply looks at what happens before Mr Peretz: This is a consortium of donor countries. and after the interventions since it may be the result Ms Girdwood: Yes. We are also doing an evaluation of other factors than the intervention. These are very through the Joint Paris Declaration, Evaluation of powerful methods, but on the other hand they have National Statistics Capacity Building, and their own limitations. You have something called internationally how best to support it. the Hawthorne eVect, where the simple fact of doing the intervention modifies the behaviour of participants; you have the John Henry eVect, where Q14 Sir Robert Smith: So there is proper co- people who are not in the control group are also operation between donors as well. Joint evaluations, aVected; you have a selection bias, and so forth. This presumably, can pool resources? Processed: 13-02-2009 18:41:37 Page Layout: COENEW [O] PPSysB Job: 408061 Unit: PAG1
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9 July 2008 Mr David Peretz, Mr Anthony Killick, Mr Robert Picciotto and Ms Alison Girdwood
Mr Peretz: Yes; absolutely. Certainly our committee important. It is one of the things we will take a look are very much in favour of joint evaluations as part at in terms of how the Evaluation Department of of the mix, and when you are looking at country DFID is contributing to this priority. programmes certainly the first half of my question— how is the whole thing working—would be much better done that way. On the other hand, there are Q17 Jim Sheridan: I think evaluation of how great problems in actually organising and getting taxpayers’ money is used in terms of development is people together to agree to do joint evaluations. It is absolutely crucial, and I do not think anyone would one of the things where there is quite a lot of money deny that, but there is a growing number of in the Evaluation Department’s budget which will be evaluators now coming into this field and we have available for this which they are having diYculty evaluators evaluating the evaluators, which is spending, but we are going to get on to budgetary somewhat concerning. I am just a bit concerned that, issues later. if we are going to be focusing on evaluation of evaluation, we are diverting resources away from where it should be going, and that is to the people Q15 Chairman: I am not sure you are there to help that actually need it. The question I really want to them spend; you are there to help them to get results. ask is: what so is unique about your organisation Mr Peretz: They are having diYculties spending V that other organisations have not brought to the e ectively, I should say. table so far? Is there a possibility of duplication, but, most importantly, how can you assist DFID in its Q16 Sir Robert Smith: You see a big benefit in joint overall objective of getting development to the working, but the barrier is the diVerent people that need it? methodologies and, presumably, diVerent cultures Mr Peretz: I think we were set up as a committee within the diVerent donors? with terms of reference to assure the independence of Mr Killick: Yes. There are diVerent methods, evaluation in DFID, to try to make sure that lessons diVerent approaches, but also diVerent objectives. from evaluations are learnt and, where DiVerent donors have diVerent objectives and want recommendations are made and accepted, that there to get diVerent things out of the system. The point I is follow-up, and also to improve the clout of the would be particularly keen to make, in the context of evaluation, to get it listened to in the department: your question, is that we should not have an because a lot of work is done and there are lessons to unrealistic expectation of what aid and what aid be learned. Evaluation is partly about donors can do by way of strengthening institutions. accountability, it is about saying whether a thing is What we have learned about the institutional well done or not, but also at least half is about factors, and how institutions change and improve lesson-learning. I think we have begun to make some over time is that the key factors are domestic, not impact. You will see that one of the things we have external and, of course, donors such as DFID can got now, we are having an annual report from the provide technical assistance, can provide training, department on follow-up to past evaluations so that other types of resources, but in the end the these are not just books which are put on the shelf, leadership and the motivation for this has to come the department is going to account for what it is from within the countries, which is one of the doing as a result of recommendations. Obviously, reasons why one needs to be really quite careful some of the recommendations will be rejected, but about choosing the countries or the governments where they are accepted, there should be follow- that one is assisting in these ways: because in some through, and one of the things we are doing as a situations it is so easy for a donor to design a fancy committee is making sure that happens. I think we programme for strengthening this institution and are taking steps to improve the independence of the that ,but without any real local buy-in that is most V central Evaluation Department in DFID, and you unlikely to be e ective. will see we have 11 proposals in our latest set of Mr Picciotto: Quickly, on this particular point, I minutes which we are going to take forward, and I would say three things. First of all, the Paris will attach them to my annual letter to the Declaration asks for harmonisation across donors department. for all aid practices, and this applies to evaluation as well. Secondly, harmonisation of evaluation methods is under way both in the multilateral system Q18 Jim Sheridan: I would hazard a guess that and in the bilateral system under the OECD similar organisations would say exactly the same. Development Assistance Committee, where Nick Can I ask Alison what is unique? York who heads the DFID evaluation department is Mr Peretz: Can I say, there is one other country taking over the evaluation working party. Thus the which has a committee similar to ours, which is harmonisation evaluation method is very much on Ireland. We have now some inquiries from other the agenda of the evaluation community. Thirdly, countries. I think the Dutch Head of Evaluation there is the issue of evaluation capacity development wants to come to our next meeting. It is early days in poor countries, connected, for example, to the yet, but I think it could have quite a big impact. PRSC System (the Poverty Reduction Strategy Paper System) involving selecting the right households and getting the statistical system Q19 Jim Sheridan: The point I am trying to make is connected to the evaluation systems. Building that there is a finite amount of resources. I do not evaluation capacity in developing countries is want resources spent searching for statistics or Processed: 13-02-2009 18:41:37 Page Layout: COENEW [E] PPSysB Job: 408061 Unit: PAG1
Ev 6 International Development Committee: Evidence
9 July 2008 Mr David Peretz, Mr Anthony Killick, Mr Robert Picciotto and Ms Alison Girdwood evaluations. I am interested, Alison, from a DFID term of oYce? I have a concern that it really should perspective, what is unique about this advisory be Parliament who is setting up these organisations committee? and not government. I am a little bit concerned that Ms Girdwood: Soon it will not be unique. It is there is actually a member of the department here, actually being copied by a number of our partner because I would have really liked to have seen you evaluation departments. I think the Netherlands are without anybody from DFID? adopting the same model. So I think there is a general feeling across the other agencies that they Q21 Chairman: It is a public meeting. need something of this sort to strengthen the Mr Peretz: The factual answer is that both I and all function internationally. members of the committee were appointed by the Mr Picciotto: You are making two points. First, Secretary of State, who appoints us. Personally, I what is unique about this committee? Your have a three-year contract, which is renewable for Secondly, who evaluate the evaluators? Our another three years, which will take me to over 70, committee does not do evaluation. Is too much which is probably the time I should give up anyway. going into evaluation whether in DFID or in this committee? The committee has only met three times. My own view is that the resources assigned to the Q22 Chairman: Mr Kawczynski is making a point committee are tight, but probably appropriately which Parliament quite often is seeking, which is tight, to make sure there is subsidiarity and we do that there should be more of these kinds of public not start doing other people’s work. And if you look appointments which are, at the very least, to some at how much resource goes into evaluation in DFID extent ratified or endorsed by parliamentarians. This today, it is 0.1% of the total programme budget, and is something that committees are trying to achieve. as a percentage of the evaluation budget it is roughly The Government, to be fair, have acknowledged in 2%, which is pretty much in line with other aid some quarters that they are willing to do this. You organisations. The point that the Chairman was have not fallen into this category yet. making is that, as the programme budget of DFID Mr Peretz: I do not fall into it. I am not sure it is an goes up, for quality purposes, and for accountability issue on which I have a view. As people say, it is a bit purposes, the evaluation budget should also increase above my pay grade. I think it is a question you in a reasonable way in line with good practice. This might want to ask of the Secretary of State. I guess committee is filling a gap: since before the committee he is the person who would reply. What I would say was established there were questions about how is it is a very high quality committee. We have a lot independent is the Evaluation Department in of experience and expertise round the table. I do not DFID. This is the key value-added by this think there is anybody round the table who feels committee. what they say is in any way aVected by the fact they Mr Peretz: The exact figure is 0.09% of the total— were appointed by the Secretary of State. We are that is for the current year—but, as I indicated, some appointed as individuals to give our independent part of that will not be spent because it is actually advice, and that is what we will do. The fact that allocated only for international co-operative Alison is here is partly because, as chairman, I evaluations which, as we have discussed, are quite invited her. As I said earlier, the Evaluation diYcult to mount, and that is more than half of it. If Department provide secretarial services to the you look at the administrative budget, which is what committee, and I thought it might be helpful to have DFID spend themselves and use to spend on somebody from the Evaluation Department here in consultants for evaluating DFID programmes, it is case there were questions, as there have been, about 0.04% of the total spend this year. I think what has what DFID is doing, rather than what the concerned the committee in our discussions so far is committee is doing, which she could helpfully not so much the absolute size of these figures, which answer. we have not really discussed, but the fact that this is Mr Picciotto: It is an international practice. You a declining figure rather than a rising figure at a time have two ways: one is reporting to the head or the when the total programme budget is rising quite fast. deputy head of the organisation, which is what our Daniel Kawczynski: I think my colleague, Mr committee is recommending, that the Evaluation Sheridan, has touched upon a very important point. Department should eventually report to the We obviously want co-ordination of evaluation, and Permanent Secretary, which is quite an acceptable Mr Picciotto said that there had been three meetings, way of defining independence. The other way, for is that right, that you had had three meetings, and example, in the United States, the General Y that the budget was how much: 0.1%? Accounting O ce reports to Parliament. This is also quite a legitimate way of doing it. All I am saying is that it really depends on the government of the Q20 Chairman: I think you were talking about countries concerned and it is quite respectable to DFID’s budget. have it one way or other. So, it is really a matter Mr Peretz: DFID’s Evaluation Department budget essentially for the UK authorities to decide how they is 0.09% of the total budget. Our committee is a tiny handle it. All I am saying is that this structure does proportion of that. meet good practice internationally. In other words, Daniel Kawczynski: We too also here are meant to be to have a unit which reports to the head or the scrutinising DFID and evaluating taxpayers’ deputy head of the department would meet good money. My only concern is who actually appointed practice. At the moment it does not, the Evaluation you—that is one question— and how long is your Department does not yet report to the Permanent Processed: 13-02-2009 18:41:37 Page Layout: COENEW [O] PPSysB Job: 408061 Unit: PAG1
International Development Committee: Evidence Ev 7
9 July 2008 Mr David Peretz, Mr Anthony Killick, Mr Robert Picciotto and Ms Alison Girdwood
Secretary, but when it does it will meet good practice Q26 Mr Crabb: So the total sum being spent by internationally. The alternative would be for your DFID for all of its aid evaluation may be committee to set up an evaluation unit. considerably— Mr Peretz: It may well be bigger than this, yes, quite a lot bigger. Q23 Daniel Kawczynski: I have no doubt that you are extremely eminent and competent people, and I Q27 Mr Crabb: One of the questions I was going to applaud the work you do. My only concern is that as ask, and you have probably answered it already, is a parliamentarian, as a democrat, I believe that you whether you believe that the amount of money should be appointed by Parliament itself and be DFID is allocating for this activity is appropriate accountable to Parliament directly, rather than and commensurate with the significantly increasing DFID appointing you and having you appoint size of its overall departmental budget? them. I have great reservations about that. Coming Y Mr Peretz: This is an issue we have only partly on to my o cial question, what do you think are the discussed as a committee. One of our organisational and institutional challenges to V recommendations is if you are going to have an e ective impact evaluation which DFID faces? independent evaluation department, then our What I am trying to get it is: we obviously have Y committee should have some control over the various di culties in terms of probing DFID budget. What we have said is we should have “a through their structure and organisation. Could you central role” in setting the budget. What the budget perhaps enlighten us on any negatives that you are should be we have not really discussed. As Bob says, experiencing in terms of being able to get under the if you look at it one way, it is a little under 2% of the skin of DFID? administrative spend of the department, which is Mr Peretz: It is early days yet. We have had three probably in line with international practice. If you meetings, but I would say our experience so far has look at it another way, the way I was saying, it is at been quite good in that proposals we have made present less than 0.1% of the total spend of the have been accepted. I am not sure “getting under the department, and actually it is the administrative skin” is the phrase I would use, but I think there is budget which is the most usable part of what they an issue, which I alluded to earlier, not so much have, and that is less than half of the Evaluation about the work of the Evaluation Department, Department’s budget. The figure there is 0.4%. What which we see and we see a lot of, but the evaluations actually concerns us all, as much as the overall done across the department as part of their regular figures, is the fact that these are falling figures. If you business: self-evaluation. I think I said at the look at the projections for future years it is due to beginning, our feeling as a committee is that there is come down. not yet a proper culture of self-evaluation in the department of looking at how you are going along Q28 Mr Crabb: As a percentage, not overall cash? with a project or a programme and regularly Mr Peretz: No, for the administrative budget in monitoring, evaluating and reporting back, and that absolute terms. is an issue which we want to get more involved in. We are going to discuss it more at our next meeting Q29 Chairman: Can I pick you up on that. when we come to talk about the evaluation policy for Mr Peretz: Both as a percentage and in absolute the department, but there are limits as to what an terms for the administrative budget. advisory committee like us can do except apply pressure where we think there are issues and ask for Q30 Chairman: This committee has just done two evaluations. The one thing we have suggested is that reports on DFID’s funding contribution to both the the central Evaluation Department itself should play World Bank and the African Development Bank, a role in trying to raise standards of evaluation because they are very substantial donations, and we across the department. You asked me where I would took the view that we should evaluate that. Have see problems. That is certainly one of the areas you done that, or would you be doing that: because where we do see a problem. I think what concerned us is, if we had not done so, an awful lot of money would have been devoted to Q24 Mr Crabb: Can I come back to the issue of the World Bank without any external check at all? money allocated by the department for evaluation. Mr Peretz: I can say, we will discuss this when we You talked of 0.09%. The cash amount was £2 discuss the future work programme. It is quite clear million pounds for the current financial year. That is that evaluations of contributions to multilateral the 0.09% figure that Mr Peretz referred to? organisations will be an important item on the Mr Peretz: £2.3 million for the administrative programme, simply because it is such a fast-rising budget. proportion of the total, and you can do it at two levels. You can evaluate the performance of the multilaterals themselves, and they have their own Q25 Mr Crabb: £2.3 million? evaluation departments, but the other thing you Mr Peretz: To get the total budget you need to add need to do is to evaluate how DFID are influencing together two figures. I have got a table here I can give those organisations. you. But these are the figures for the Evaluation Department, not for other evaluations carried out Q31 Chairman: Obviously, that is what our report by DFID. did. Processed: 13-02-2009 18:41:37 Page Layout: COENEW [E] PPSysB Job: 408061 Unit: PAG1
Ev 8 International Development Committee: Evidence
9 July 2008 Mr David Peretz, Mr Anthony Killick, Mr Robert Picciotto and Ms Alison Girdwood
Mr Peretz: That is another thing to be added to the Mr Peretz: It was an interesting report, and it also list, but, going back to the budget, as I was trying to had something to say about how the head of say, our concern is that it is a declining figure both evaluation department in DFID fitted into the in percentage and absolute terms at a time—I speak structure; and there has been a change since that now as an ex-Treasury oYcial, if you like, but I know report in the right direction, from our point of view, very well that when departments have its though I think what we are now recommending is expenditure rising at a very rapid rate, it is the very that he or she should report directly to the time you need to be doing the most evaluation. Permanent Secretary. We have talked about impact evaluation. I do not know if Bob— Q32 Mr Crabb: Given that we are in a period of a Mr Picciotto: Impact evaluation is obviously very aggressive ramp up of spending within the eliciting a great amount of debate at the moment, department and given that there is, I think it is fair and DFID is at the centre of this debate. No, I do not to say, a growing demand within Parliament, and agree with the conclusion that it is a function looking certainly maybe out in the public as well, for much for an identity, because there is not yet a full better knowledge and awareness of what actual consensus on the precise role of impact evaluation. impacts we are getting for the money that we are To do it well is very expensive and it does not always spending, what kind of size of evaluation budget answer the accountability questions. On the other should the department be deploying? Are you in a hand it can have a huge impact if applied in the right position to give us any idea of that? circumstances at the right time. So its role is part of Mr Peretz: We have not really discussed this yet. the evaluation policy which we hope will be One thing we have said is that if the central developed by DFID. department is to take on the extra role which we Mr Killick: Can I add one thing? It would be possible want it to of assuring quality of evaluations across to interpret the Minister’s decision to create us, this the whole of DFID, then you will need extra committee, as an attempt to narrow the gap between resources, so you would need a bigger budget for the rhetoric and the reality to give him greater that. We have also said over the next two to three assurance about the quality and independence of the years that the head of the Evaluation Department evaluation function and the lesson learning which should be of a more senior grade, which would cost goes on as a result of the evaluation. I am sure there a bit more money, and should probably be a person is still a rhetoric reality gap, but I think we are a who has said, ”I will not, after this work, stay in practical way of trying to narrow that gap. DFID”. Q36 Richard Burden: A few moments ago you Q33 Chairman: An end of career post. mentioned the possibility of the head of the Mr Peretz: Probably an end of career post, yes, but Evaluation Department having some greater not necessarily. It might be an expert in evaluation autonomy. I think the comment was made, an end of who sees his career in evaluation somewhere else. career post. We were talking about this before. If you create such a post it will be known in advance that it is an end of career post rather than arising out Q34 Mr Crabb: Just on a human resources point, do of what you did in that post! Do I take it from that, you think there are enough people within DFID though, that you think, as things stand at present, actually working on evaluation? Do you think that the Evaluation Department really does not have the the head-count of evaluators within the department clout that it needs for access at the level it needs in is right, or does that need to be increased too? the department, the access to the documents it needs, Mr Picciotto: It is about the same as other bilaterals, and so on? but we need to analyse this more systematically. The Mr Peretz: I think there is a set of questions there. key policy for evaluation is the extent to which Yes, and if you read the minutes of our last meeting evaluation is done by consultants or whether it is V we have got an 11-point plan, but, yes, we say the done by DFID sta . When I used to run the head of the department should be accountable department at the World Bank we essentially did directly to the Permanent Secretary, should be a most of the evaluations, using consultants to a very more senior grade and status, and the budget limited extent. Here it is the other way round. So, probably should increase. Certainly there should be looking at the interface between the Evaluation a role for IACDI in deciding the budget. We also say Department and its consultants is one area we are there should be rules about access to information. I going to look at. do not think we really have any indication that access to information is denied. There may be Q35 Mr Crabb: I think a colleague of mine is going occasions where it happens, but in general it is quite to come on to the consultants question. Finally, the good. But these are the sorts of things which there comparative study last December by ODI reached a should be written rules about which everybody number of conclusions, one of which was that there knows and understands. I suspect more of a is a disconnect between the rhetoric about the problem, particularly in current times when staYng importance of evaluation and the practice within is very tight across the department, is each agencies. It also characterised impact evaluation as evaluation actually takes up the time of ”a function in search of an identity”. Do you think departmental staV as well. They have to devote time either of those conclusions are fair and correct for to helping the evaluators and when they have other DFID? things to do it may not be top priority. 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International Development Committee: Evidence Ev 9
9 July 2008 Mr David Peretz, Mr Anthony Killick, Mr Robert Picciotto and Ms Alison Girdwood of what I was talking about earlier about changing Department is independent, particularly the head, the culture. I think that needs to be done, and there which is what we are trying to do. As a committee, need to be rules about them giving it priority too. one of our 11 points is that we think, over time, there Alison, you have had experience of evaluations. Do should be a move to doing more of the work in- you have any problems you want to point to? house and using consultants less. There are other Ms Girdwood: There has been a change recently problems with consultants, I understand, just where some evaluations are now mandatory rather ensuring the quality of what they do, which varies. than discretionary—beforehand it was a process of Some are very good and some are not so good. There negotiation—which has been helpful in terms of is just the whole process of managing them. ensuring that we can carry out the programme we Mr Picciotto: Fee dependence is what you are are expected to carry out. concerned about, which is right. The consultants are Mr Peretz: If you have a look at our list of propsals, dependent on fees and they may not be as we said there should be clear written protocols for independent as you may think they are. What we are V unimpeded access by DFID sta and their looking for is a golden thread connecting an consultants to information in DFID; there should be independent head of the evaluation function who V clear rules of engagement with DFID sta when has the authority for setting incentives for the discussing draft reports, because that is where, if you evaluation staV, who have clear accountability over are not careful, you can get into a negotiation the work of the consultants. The other aspect is clear process, toning down what reports say, and they methods, guidelines and standards that consultants become less than independent and rigorous; there should meet. All of these things take time to instil, should be rules with DFID for avoiding staV V and an action plan to develop those things is needed. conflicts of interest, and if sta are evaluating Given the need for flexibility there is nothing wrong something they have previously worked on, they in using consultants, and if the independence should not do it; there should be a written policy on recommendations are implemented and if we work publication of all reports, in fact I think they are all on improving evaluation methods, we will go a long published at the moment, but there is no policy. So way in dealing with the ODI concerns. there is a set of things that we have recommended.
Q37 Richard Burden: Are you expecting, if you like, Q40 Mr Crabb: Have you seen any evidence a composite response to that? yourselves of that concern being aVected in practice? Mr Peretz: Yes. Have you seen evidence of, for example, a positive report about a particular aspect of aid by a Q38 Richard Burden: If so, roughly when and are consultant where the suspicion is that actually they you hopeful? have been a bit weak, because of the issue we have Mr Peretz: If you look through these 11 points, most just talked about? of them we have had, I would say, some indication Mr Picciotto: I am talking now as an evaluator and that they would be accepted and a lot of them do not not for the committee, because we have not finished cause any problem, they are just putting down in our examination of the quality of reports; but one of written form what has been practised. But, no, I have the criterion of independence is behavioural not had a response yet. What we said in the minutes independence, which means producing on a regular of our meeting, which are published, is that I will basis uncompromising reports which go under the attach these—I am going to write an annual letter, skin of DFID. My review of the reports suggests that my annual letter, in October to the Secretary of it is a mixed bag. Some reports do get under the skin; State, and I will attach these, and hopefully some of others do not. By strengthening the independence of them will be acted on by then, but we will see. the whole system and by changing staV incentives, one will gradually see much more behavioural Q39 Mr Crabb: I was the colleague that was going to independence than can be observed now by looking raise consultants. Coming back to the issue of at the reports. That said, DFID evaluation reports, consultants, the ODI report, rightly in my view, as compared to those produced in the bilateral raised the question of how truly independent a development aid community, are well above consultant can be if they are relying on commissions average. It is not that the reports are bad; it is just from the department for their pay and then they that they could be better and tougher in some cases. have to basically evaluate the people who they are relying on for their livelihoods. Is that a concern that you share, and what other concerns would you have Q41 Mr Crabb: Very roughly, what estimate would about these consultants in evaluating aid? you make of the number of consultants working in Mr Peretz: As Bob indicated earlier, I think the the area of evaluation who are former employees of committee does share that concern. I think the Department? traditionally it was thought that using consultants Mr Picciotto: I do not know. guaranteed independence because they are were not Mr Killick: I would not identify that as a major issue. departmental staV, and I think what the ODI report I think that most of the consultants are academics or had to say is absolutely true, that consultants are no ex-academics. I do not think it is an issue so much of more or less independent than anybody else. What buying in to people who have previously been you need to do is to have the structures in place to working in the Department. That is not my make sure that the whole of the Evaluation impression. Processed: 13-02-2009 18:41:37 Page Layout: COENEW [E] PPSysB Job: 408061 Unit: PAG1
Ev 10 International Development Committee: Evidence
9 July 2008 Mr David Peretz, Mr Anthony Killick, Mr Robert Picciotto and Ms Alison Girdwood
Mr Peretz: In fact, previous departmental members currently what is happening with evaluation within may be the most critical. The point about conflicts of DFID? You shake your head. Is it your intention to interest applies, clearly. You would not want an ex- ensure that in future it does? member of staV to be evaluating something he had Mr Peretz: We have got DFID to agree to institute been involved in as a member of staV. At our last this process of producing an annual report of follow- meeting we had our first discussion about the quality up to previous evaluations. They have never done it of evaluations. We reached a conclusion rather before. It will be published; you will see it. It is quite similar to somebody else who gave evidence to you a patchy document, because it covers a period when that, in comparison to other bilateral agencies’ nobody knew they were going to have to produce evaluations, DFID scores pretty well. I think we said this, and in future they will. The departmental that it is well up, if not the best, of the bilaterals— response to evaluations is sometimes lacking. Very but that is not a particularly high standard and we, often it does not cover all the recommendations; so as a committee, will be aiming for something much you do not know what they are going to do and what better than that. they are not going to do at the beginning. The follow-up is then patchy, I would say. However, I think that we have set in train a process and we have Q42 Jim Sheridan: I still remain unclear about just also said, and got it agreed, that for each evaluation how your advisory committee would ensure that the report done by the Evaluation Department a self-evaluation of DFID will become independent. director in DFID will be responsible for managing Would there be some other alternatives, other than the response and the follow-up; and our committee what you have suggested today, to ensure that may call directors to meet with us and explain what DFID has that independence? What alternatives they have been doing. We have now created some could there have been? incentive, therefore, for lesson-learning and for Mr Peretz: I think that you are asking a question follow-up which was not there before—and that is a about evaluation, not in the central Evaluation bit of a success. Department but elsewhere in the Department, which we said we were doubtful about. To be honest, we Q45 Chairman: It has been a very interesting and need to find ways to get to grips with that. We useful exchange, because it is quite clear that you suggested one, which is that the Evaluation have set in process a whole range of actions which Department itself should have a role, and may have could clearly make a material diVerence, it seems to quite a key role, in assuring quality. It is not just me at a reasonably aVordable cost, in terms of what independence that you are assuring; it is whether it is involved. Obviously we will look forward to being is being done well and, indeed, are the lessons being copied in on your letter to the Secretary of State and, learned as you do it yourself. That would be my to take up your own remarks, I think that we may answer to that bit of the question, but there was well want to meet again. Perhaps there may be value another half of the question as well. in having an informal meeting as well and not necessarily always to do this in a formal evidence session. Clearly, what we are interested in is the Q43 Jim Sheridan: You could not identify any other extent to which you will be able to improve the alternative other than what is on the table today? culture, which you indicate was lacking in DFID, Mr Picciotto: I would say that if these 11 and to make the point of evaluation to deliver better recommendations are implemented, DFID aid and development funding, rather than simply to evaluation would move to the “top of the class”; but prove that DFID is right to be pleased with itself— they are not yet implemented and it will not happen which I guess is not really a justifiable use of public overnight. It takes time to develop the skills, to money. Can I thank you for that first initial develop the organisation, to change the culture; but engagement. To pick up on Mr Kawczynski’s point, it should not take too much time either. In two or the time may come when confirmation hearings for three–years we should see DFID become a centre of people in your position will be part of the process. excellence for evaluation. This is not the case now. We are working on it. Mr Peretz: Can I thank you and say that, as to the idea of an informal meeting, over the winter we will Q44 Chairman: In Mr Sheridan’s earlier be consulting on the future work plan and also intervention he was expressing concern about DFID’s evaluation policy. It will be very helpful to money being spent on evaluation that could have get this Committee’s informal input into that been spent on aid. The counter to that is that what process in some way. people will want to know is that the money spent on Chairman: I think that the Committee would evaluation actually leads to changes in policy and appreciate that opportunity. It would be mutually implementation that will improve the delivery of aid. beneficial. We will try to fit it into the diary at an First of all, do you get the impression that that is appropriate time. Processed: 13-02-2009 18:42:18 Page Layout: COENEW [SO] PPSysB Job: 408061 Unit: PAG2
International Development Committee: Evidence Ev 11
Tuesday 15 July 2008
Members present
Malcolm Bruce, in the Chair
John Battle Sir Robert Smith Richard Burden
Witnesses: Ms Nemat (Minouche) Shafik, Permanent Secretary, Mr Mark Lowcock, Director General Country Programmes and Ms Sue Owen, Director General, Corporate Performance, DFID, gave evidence.
Q46 Chairman: Can I welcome you to this annual that you do not have much more money and it looks session that we have of the Committee. I know, to me as if what you have is promises in one form or Minouche, that you have been in front of us before another, non-specified, of quite a lot more money in but not in your present capacity as the Permanent a couple of years’ time. Is that your understanding Secretary, so congratulations on your appointment of it and is that money going to come to the formally. Perhaps for the record you could department or is it going to go into ODA in other introduce your team, although we know them as forms? Do you have any information on that well. because presumably you have to plan your forward Ms Shafik: Thank you very much and it is a pleasure budgets on the basis of some kind of estimate of to be here and an honour to lead this department. I where it is going? I do not know if you are able to would like to introduce my colleagues: Mark help us with that? Lowcock, who is the Director General for Country Ms Shafik: I would be happy to. The decline in Programmes and runs our Bilateral Aid OYcial Development Assistance that we observed Programme; and Sue Owen, our Director General last year was a one-oV that was a result of Nigeria for Corporate Performance. debt relief—that was the largest ever debt relief package for a sub-Saharan African country, and obviously we have a lot of exposure to that; so the Q47 Chairman: Thank you for that. You will see that decline that you see reflects the fact that we had to the Committee is a little depleted from its normal take that into account. But if you take out Nigeria numbers, although John Battle will join us. We value debt relief we have been on a consistently positive this annual session a lot because it gives us a chance trajectory. As to whether we have a real increase to explore with you the practical development work now, the CSR3 settlement which we got from the within the department and for you perhaps to share Treasury has resulted in an 11% real increase year on some of that with us, and to cover a number of year for the next three years. That is a pretty topics. We have far more topics to cover than there substantial and very real increase. Where we are will be time, so we will not necessarily cover tight, I have to confess, is on the administrative everything that we should. Could I make a start with budget where we have, like all other government what you might call the absolute core of what you departments, been cut 5% year on year. So we are are about, which is your budget and the money that tight on admin but I think on the programme budget you have. We have got into a mindset that we have we have been quite generously funded, and will keep a rising aid budget and that the UK is becoming a us on track to meet our Gleneagles commitment. We more and more important donor, but actually when are currently on track to meet the nearer target, you look at the current figures it is not quite as good which is the EU target of 0.56% of GNI by 2010–11. a story as it appears. Having had a one-oV burst of expenditure on the back of debt relief, which Q48 Chairman: You are talking about the last year boosted the development share of GDP quite of the current Spending Review. substantially, we have fallen back so that the OECD Ms Shafik: That is correct. DAC1 statistics for April 2008 show that ODA2 fell by 29.1%—and that is total ODA, it is obviously not Q49 Chairman: And most of that is coming through just the department’s budget—in 2007. I think in the department? global spending on ODA the UK is lying something Ms Shafik: Yes. This year in the CSR there was like fourth or fifth in the table rather than nearer the ODA that was given to other departments; the top as we thought—behind Germany, possibly Foreign OYce has a modest ODA allocation for behind France as well as Japan and America. governance and for the first time the MoD was given Obviously we are not in it as a competition, we are an ODA allocation for stabilisation, amounting to here to deliver what we think is appropriate. But can slightly over £200 million. you give us an indication from the department’s point of view of where you are at because we have talked about doing more with less, implying that you Q50 Chairman: It may be that the follow-up have more money but fewer staV, but the reality is question is really not for you but for the minister, but what is not clear to us is where that money is coming 1 Organisation for Economic Co-operation and Development, from in as much as the forward projections for the Development Assistance Committee. 2 OYcial Development Assistance. 3 Comprehensive Spending Review. Processed: 13-02-2009 18:42:18 Page Layout: COENEW [E] PPSysB Job: 408061 Unit: PAG2
Ev 12 International Development Committee: Evidence
15 July 2008 Ms Nemat (Minouche) Shafik, Mr Mark Lowcock and Ms Sue Owen department seem to imply that they either have to we also will not know what the state of the economy come up with debt relief money or money from some is at this stage. But I think for the current CSR other source. period we are very confident that we are on track. Ms Shafik: There is an assumption of a debt relief CONCORD has a view but I think others have a package in the current settlement. diVerent view. DATA’s recent report on the G8 and the rarely complimentary Bob Geldof and others Q51 Chairman: You are aware obviously of the have said that actually our settlement is pretty good debate about that and the Committee acknowledges and we are doing pretty well in terms of meeting the that debt relief has a positive benefit and the DAC commitments. obviously allows for it, but you will appreciate—and actually from your point of view it makes a big Q53 Chairman: I accept what you are saying but diVerence—if the money comes in debt relief it does there is a bit of concern. We were on a trajectory, we not actually help you to do more as a department, thought—and allowing for the fact that it was a one- whereas if it comes in direct to the department then oV debt relief—that was likely to put the UK firmly you can increase your country programmes or you into the bracket of being number two or number can increase your support—and you have already three donor in the world, but that does not seem to made big commitments to multinational be quite so clear. This is the document I referred to, institutions. So are you comfortable that the of which you will be aware, CONCORD’s No Time department has what it needs to do what you, as to Waste. They have their own agenda but it still head of the department, want to do over the next two comes across—and they have a quote about broken or three years? promises from Gordon Brown—their basic point is: Ms Shafik: Surprisingly, an 11% real increase even “Will the UK meet its target of 0.7% of GNI by 2013 though it sounds like a lot does not feel as much without inflating its aid?”—which of course is their when you have huge needs to meet, but overall I have particular brief—“NGO prediction: Unlikely”. to say, given the state of the economy and given the Ms Shafik: It is a view; I do not think it is a majority allocations available for other government view, it is not the view of most other major departments, I think we cannot complain about our development players; it is not the view of most CSR settlement. On the debt relief, if you like I can NGOs in this country. As I said, for the next three give you further detail if Mark would like to respond years we are pretty confident that we are on track. on the specific case and the assumptions therein. Thereafter, I think we have to see. Mr Lowcock: I think it is the case that the share of Chairman: There will have been an election by then! Britain’s total ODA that is going to be accounted for by debt relief over the next three years is lower than Q54 John Battle: It may be the view of NGOs but it has been the case over the last three years, and that did not come out last week at the G8 because Britain is because debt relief has been delivered to lots of was conflated with the rest of the world to say that countries—there are a few left. Just in terms of the we were not meeting our targets, and some of us are department’s own budget, the resources, the cash working hard, including in the Prime Minister’s flow to the department rises from about £5.3 billion statement to say, “No, Britain is actually in the year we have just finished to £7.9 million over committing the money and getting it upfront”, and the period. It is a substantial increase, which is the the Prime Minister pushed both France and Italy to 11% Minouche refers to. There are also some other meet the commitments. I think on the target what components to Britain’s contribution to ODA, then happens is people say, “Ah, but you are never including investments made by CDC and some going to reach the 0.7%, it is just a speculative things done by the other government departments, figure”. I think we need to reinforce it because there but by far the bulk is now and will continue to be is commentary saying what do we count in it and managed by the department. what do we not count in it, and I think if we are committed to it we need to be a lot clearer about it. Q52 Chairman: CONCORD, the European I have had conversations here with ministers in the Confederation of NGOs who have done an past about whether it is a meaningful target or we evaluation, gave a rather negative projection of the really should go for it hell for leather, and whether UK’s performance basically saying they believed we should work out quality of aid and eVectiveness that on the trajectory currently set out it was unlikely of aid as well. But as long as we have that target I that the UK would achieve the 0.7% even by 2015. think we have to do more to campaign for it and Again, we are looking into the future and you have champion it actually otherwise we will be conflated to do that much more than we have to, but we have with those that fall down in the rest of Europe. We to talk about the future of development and where will also be blamed for not achieving it in diYcult we think it is going. You can say, “Our CSR circumstances. So I do think the target has to be spelt settlement says so, so we will work on that out and stuck to because we actually have a good assumption” but from your point of view, when you story to tell here. are looking at planning is that built into your plan? Ms Shafik: When we got our settlement the number Ms Shafik: I am very confident in the current CSR that anchored the settlement was the 0.56% period that we are on the right trajectory. I think the European target by 2010 because that coincided next CSR is too unknown to know. I hate to quote with the end of the CSR period; so that was the end Rumsfeld but it is a bit of an unknowable unknown point and the current trajectory reaches that end and we will not know what GDP is at that stage, but point. I think there is always a danger that there will Processed: 13-02-2009 18:42:18 Page Layout: COENEW [O] PPSysB Job: 408061 Unit: PAG2
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15 July 2008 Ms Nemat (Minouche) Shafik, Mr Mark Lowcock and Ms Sue Owen be pressure to fiddle the definition of OYcial Q57 Chairman: The other thing was the definition, Development Assistance and widen it and try to which you have just discussed. The Environmental include expenditure that is not strictly eligible. Up Transformation Fund appears to be being treated as until now I think I can say with confidence that ODA but is a matter for negotiation. Again, there DFID has been quite pure about the definition and has been criticism in the evidence we have taken resisted pressures, unlike other countries, to widen from other organisations on evaluation, saying that the definition and categorise everything as OYcial there is a tendency for donors to try to negotiate the Development Assistance which technically do not definition of aid and development. The UK in fact qualify, and I hope we can continue to stick to an does better than others in that there are things that honest definition of what aid is. we exclude that others include, but you can Ms Owen: Could I just say one sentence here. I think understand, can you not, that the Environmental it was quite impressive when we were in the CSR Transformation Fund looks like one policy negotiation that the Treasury were very committed objective being then compromised to deliver an to this as well and in the face of a lot of other ODA target, and obviously in any case that is not pressures we actually had some support there. your main flexible budget, if that is the case. Ms Shafik: We have checked with the DAC of Q55 Chairman: Taking John Battle’s point I can say course that these types of expenditures would that we as a Committee are committed to this and qualify as OYcial Development Assistance. We have very much believe it should be delivered. What we made it quite clear that the Environmental are anxious to ensure is that it is not finessed or Transformation Fund is a pilot programme to try to managed in a way that is not really the case. One facilitate and encourage a future climate deal. There point specifically on the timing and another one on is no oYcial policy yet as to whether in the long run detail: why are you not able to produce the figures we will count environmental expenditures as OYcial for the DAC and the Annual Report at the same Development Assistance, and that is actually being time? Why is it that the DAC gets more up to date considered by ministers at this time. But for practical figures than the Annual Report? Would it not be reasons we have chosen to classify this as OYcial helpful if when you were producing the Annual Report that you are giving us the same figures that Development Assistance because it is DAC- you subsequently gave to the DAC. Is there a compliant under the current rules. practical problem in doing that? Mr Lowcock: There is quite a lot of history to this, Ms Shafik: Sue, would you like to respond to that? as you know. In the early 1990s when the Global Ms Owen: We produce the figures pretty much as Environment Facility was established that was soon as they are available. Yesterday we did publish established to secure activity, the main goal of which the figures for both cash and resource bases for was about global benefits—not benefits for the 2007–08 final outturn. Of course the DAC is on a country in which the activity took place. As a result calendar year basis and we are on a financial year most of that expenditure was not scored as ODA. basis, but we publish the financial year figures that The Environmental Transformation Fund is we have as soon as they are available.4 actually trying to do a diVerent thing; it is trying to help countries pursue their economic development Q56 Chairman: The problem we have—certainly I in a way which is climate resilient and less carbon had as Chairman,—I got what you might call the intensive than the development path that richer correction through the DAC rather than through the countries have taken. So it is a core development Annual Report. The Annual Report, if I may say so, proposition, if you like, and that is the reason why was just saying we are doing a great job, we are on we believe that the appropriate scoring for ETF course, and the DAC said, “Actually, we have had expenditure will be that it is appropriately scored to to adjust it down because of the other reasons”. To ODA, and that is the discussion we have been having me that comes across as bad public relations from with the DAC as well. As Minouche says, the department’s point of view because you are not negotiations are underway towards Kyoto; the saying the same thing. I understand what you are world will have to decide some future framework for saying is that it is partly to do with timing but if there financing activity in developing countries after 2012 is anything you can do to improve that it would be on a post-Kyoto deal. The scoring of that is up for helpful; and it would be helpful if what was in the grabs really, and that is to be determined, but we DAC and what was in the Annual Report were not think that the basis upon which we have designed the at odds with each or appeared at odds with each ETF and the proposition of the ETF is conceptually other. quite diVerent to some of its predecessors and that is Ms Shafik: Perhaps we need to provide an why we are confident about the appropriate scoring explanation in future years. treatment on which we are embarking.
4 By way of clarification, DFID did quote the DAC 2007 outturn figure in paragraph 1.26 of the Annual Report, but the detailed ODA tables in the Annual Report are based on Q58 Chairman: That may be something that we 2006 figures. This reflects the fact that the numbers provided would like to look at more closely when you have it by the DAC in April are on a provisional basis and are only in place because you will understand that there is at an aggregate level. Final outturn gross national income is concern amongst developing countries that global not known until June and the full sector breakdown details are not finalised until we get firm details from the DAC in warming, climate change will actually subvert what September and published in December. they would see as direct development, as opposed to Processed: 13-02-2009 18:42:18 Page Layout: COENEW [E] PPSysB Job: 408061 Unit: PAG2
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15 July 2008 Ms Nemat (Minouche) Shafik, Mr Mark Lowcock and Ms Sue Owen add-in. In other words, would it achieve poverty countries that is not black or white but, to be frank, reduction, for example? Can I assume that that is focusing much less on resource transfer than other one of the factors that you are looking at? things which we think would be more impactful. Ms Shafik: Yes. Q60 Richard Burden: The previous International Q59 Richard Burden: If I could ask you a few Development committee in 2005 made some of these questions in relation to middle-income countries. points, saying that DFID needed to find ways of You still have your PSA5 target of a 90:10 split working with the Indian Government to focus more between middle-income countries and low-income clearly on socially excluded groups and to have a countries, but one of the things that has been more pro-poor impact for its work. Could you bouncing round the back of some of our discussions perhaps say a little bit more about how you are is the awareness that a third of people living on less seeing that pan out and whether you see the than a $1 a day do not live in low-income countries Government of India actually sharing those they live in middle-income countries, and I am objectives. Where are the problems and where are conscious that your 2005 to 2008 strategy was the opportunities? Also, about India’s role on the talking about focusing limited bilateral assistance world stage that you touched on, how do you see for middle-income countries “on countries and that panning out? How do you see India fulfilling issues where we can add value to the wider that role? international eVort” and “This will include large, Ms Shafik: In terms of how we address it in our strategically important countries that aVect the programme, we have just launched a new country achievement of the MDGs regionally or globally; strategy actually in India—I was in Delhi just a the poorest middle-income countries and middle- couple of weeks ago to launch it— and we call it the income countries that are vulnerable to falling back Three Faces of India because it tries to deal with to low-income status”. That strategy is meant to be India at three levels: the very poorest India, the sort up this year. Is there a new strategy being drafted of developing India and the India as a global player. and, if so, what is it going to look like? As you said, India still has 400 million people living Ms Shafik: I think the issue for us in middle-income on less that $1 a day. I see you have the document! countries is what the most eVective intervention is There are 400 million Indians still living on less than because clearly they do not necessarily need our $1 a day; they are in Bihar, they are in UP, they are resources and so our focus in middle-income in the poorest provinces. So our state level countries is increasingly about helping them use programmes will focus primarily on building their own resources more eVectively to reduce capacity in those states. The Indian Government is poverty rather than us transferring significant quite supportive of us moving into those poorer financial resources. Just a few examples: India is a states. Often it is useful for them to have an country which will soon become middle-income— intermediary body—as you know, some of the states the expectation is it will be around 2013. It is in India are led by diVerent parties and there are currently our largest programme so when India some tensions around federal relations—and often makes that transition it will pose a huge challenge having a donor who is an independent body working for us. Our current thinking will be obviously that with those governments is quite useful to them from we will not turn the tap oV in 2013; there will be a the federal perspective. Additionally even though gradual transition as we have done with China. the Indian Civil Service is famed for its capacity it Increasingly in India we are focusing on a has actually deteriorated quite a lot and in those programme in three areas: one in terms of helping poorer states one of the most important things we ensure India’s very eVective national programmes can do is to build their capacity. In states like Bihar for poverty reduction on health and on education and UP they are entitled to substantial funds from reach the poorer states. We are focusing our state the central governments for programmes for level programmes on the poor states, so we have disadvantaged groups but they actually often only announced for the first time that we will be moving get 20% of those funds because the local into states like Bihar, which are really some of the governments do not have the capacity to prepare the most diYcult nuts to crack; but, as an example, if proposals and to secure the funding from the Bihar were an independent country it would be the national government. So part of our role is working fourteenth largest country in the world and the sixth with them to tap into the substantial central funding poorest. So it is hardly a pocket of poverty, it is quite for programmes like RCH, which is for reproductive a big pocket! So we will move to the frontiers in and child health; for SSA, which is the very good middle-income countries and move into the poorest national education programme. So state level areas. But also particularly with the large middle- funding is a key issue for us. I should say that most income countries like India, like China, like of those programmes are very focused on the poorest Indonesia we recognise that they are increasingly communities, disadvantaged groups and that is what global players, so a third part of our strategy is to DFID is focusing on—how to get dalits into the work with them on their role in the global agenda on educational system, how to ensure that girls are climate as aid donors themselves increasingly as they getting adequate health treatment through RCH 2, move into those spheres. So we are trying to take a and that is a strong focus of our programme. In much more nuanced approach to middle-income terms of being an international player, India is a very unusual country in the sense that it is probably the 5 Public Service Agreement. first country to become a global player whilst it is Processed: 13-02-2009 18:42:18 Page Layout: COENEW [O] PPSysB Job: 408061 Unit: PAG2
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15 July 2008 Ms Nemat (Minouche) Shafik, Mr Mark Lowcock and Ms Sue Owen still low income. India is quite schizophrenic about Ms Shafik: We have to consult with them but we do its role—at times it wants to be at the top table, at actually have oYces now at the state level and we the G8, shaping the international consensus; and at operate quite closely with state level governments in other times it says, “We are a poor country, do not the four focal states where we are currently working. ask us to contribute, we have our own problems at home”. They are struggling with that agenda. Q63 John Battle: To press a bit more about Latin Climate is the most obvious area where that is an America—and I am tempted to say Central and issue. But it also shows up in the fact of India Latin America—as someone who campaigned and thinking about what its role is as a donor; it is championed DFID to be separate from the Foreign actually starting to build its own aid programme and OYce in the early years I am delighted with the way we are working with them to try and share our own that it is, but I am still anxious to reinforce all the experience with them on their role as an time that DFID’s role is tackling poverty and not international donor. But I have to say it is going to dealing with political issues, but of course they are take time because they themselves are ambivalent mixed together. I am still a little confused, if I am about their role on the world stage. honest, about what is a geopolitical legacy around India. But if we were to take what are now called the Q61 Richard Burden: One of my colleagues may BRICs—Brazil, Russia, India and China—and we come back to India but could I take you to Latin engage rightly with India, in my view, and we engage America? In relation to India there is a large rightly with China and not suYciently with Russia programme there, there is quite a big DFID presence and hardly at all with Brazil—and I think the way there and it does raise all the issues that you are that Brazil is one of the poorest countries in the saying. In relation to Latin America we are talking world, there is the mining displacement issues, the about some of the most unequal countries on earth forestry, the rainforest questions and sustainability and actually not much of a DFID presence there. So as well as the economic questions—I wonder if the kind of middle-income country strategy that whether we have that right? And if I could just you are talking about is going to take oV and have a press— it was my job, an invidious job as Foreign relevance in Latin America how do we do that? How Minister to go around saying that DFID was do we build up the capacity we were talking about? withdrawing from most of Central and Latin Apart from anything else you do not have any America—I wonder if we have that right and maybe people over there to speak of. we need to do more in terms of the Foreign OYce. If Ms Shafik: As you know we have had to close most I could ask you, if one of the staV could let us have of our programmes in Latin America, for two a note I am particularly interested about the civil reasons. One, because many of them have reached society funding in Latin America, does that include middle-income status and our resources are no Porte Allegre and the participatory budgeting, longer as critical; but also because we do have admin which I am delighted to tell you is starting to be budget constraints and our ability to retain a imitated and happening in my own inner city presence in Latin America is limited by that. We had neighbourhood as well, and if we could get some of oYces remaining in Nicaragua, Bolivia and Peru the spin-oV from some of the positive and and Honduras—we have closed Peru and Honduras progressive work that is going on there under that and we are closing Bolivia and we will close governance heading I think that would be really Nicaragua next year probably. But we also recognise valuable rather than spending money, but sharing that Latin America, as you said, is one of the most that expertise and seeing it as a two-way street we unequal regions in the world and we have basically can learn from what they are doing. shifted our focus away from working as a donor to Ms Shafik: We would be happy to share a note on Latin American governments to focusing on civil civil society funding on Latin America. I should say society in Latin America. So we have substantially that on Brazil we are going to retain a presence in expanded our civil society funding in Latin America Brazil because of the BRICs Agenda. So while we with the view that in the end the real solution in are closing most of our presence in the rest of Latin Latin America is getting a fairer distribution of America we will retain an oYce in Brazil and we will wealth and having political pressure on governments work with them on two things. One, on climate—in from development voices for a fair distribution of fact we are supporting a mini Stern Review for Brazil resources in those societies, and doing that through of the impact of climate on Brazil. The second area support of civil society is arguably a more eVective we are working with them on is to transfer some of vehicle in the long run than continuing to have a Brazil’s big development successes to other parts of very, very small aid programme with a very, very the world, particularly on HIV and on cash transfer small presence—with some impact, I must say, but, schemes. They are working quite closely with us in to be honest, not as much as we could have in other parts of Africa now, particularly Mozambique and parts of the world. other countries which obviously share a language. So we will retain a presence in Brazil to keep sight Q62 Sir Robert Smith: Can I just follow up on the of that. India programme? In the past—or has it changed or have I got this wrong—was the Indian Government Q64 Chairman: Just on a detail point there, under somewhat reticent about direct intervention at state the supposedly pro-poor government they have, has level and required everything to come through the there been a noticeable improvement in the central government? Has that changed? distribution? Processed: 13-02-2009 18:42:18 Page Layout: COENEW [E] PPSysB Job: 408061 Unit: PAG2
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Ms Shafik: Apparently yes. They have a very roads in DRC6 and rural infrastructure where it is successful cash transfer scheme which is in the needed to revitalise agricultural production. Then of Brazilian case conditional. They give households course lastly—hopefully not in the longer term but cash in exchange for them promising to send their possibly in the longer term—we will continue to children to school and sustaining them in school and press for reform of the agricultural system under they have had a massive increase in enrolment but Doha. In many ways that could be one of the biggest also more importantly retention and achievement of wins that we make in terms of improving agriculture poor households staying in education. So they have production in poor countries. developed some very innovative pro-poor programmes. They have also been very progressive Q66 John Battle: I am encouraged by your answer, on HIV treatment and we are taking a lot of those particularly the double focus that is covered in the lessons, particularly dealing with very vulnerable research, as it were. DFID describes itself as “a groups—sex workers and drug users—and leading supporter” of what is called the transferring that experience to the rest of the world. Comprehensive Africa Agriculture Development So, yes, they do have quite a good story to tell. Programme, and you may not know but can you give us a clue as to how much of DFID’s funding is allocated to that programme and a note on what it Q65 John Battle: If I move to agriculture. This has achieved so far? Committee did a report about seven or eight years Ms Shafik: Yes. That is CAADP; that is the African ago when we pressed DFID and the Government as led research programme.. a whole to take agriculture more seriously, and not Mr Lowcock: We have made an initial contribution to just go for industrial development, particularly of of £5 million. We will have to give you a note on the course in Africa. DFID under Hilary Benn, when he deliverables and I want to reinforce the word was Secretary of State, I think produced a paper on “initial”. It is a new programme and we are feeling agriculture. I am really looking to the substance our way a little with it, so we will see how we go. But now. We have the policy but what about the that is the initial contribution. substance? The head of the International Fund for Agricultural Development said last week that interestingly smallholders were crucial to food Q67 John Battle: One of the Committee’s visits some security and could be more productive if they are while ago was to Malawi and I learnt a tremendous given the necessary technical assistance to boost amount from an absolutely inspiring man, production. Will DFID be taking that baton up and wonderfully called Harry Potter, who works for the Y running with it and assisting? department! A DFID o cial, Harry Potter, not the Ms Shafik: I think clearly the food crisis has shaken magician—but he was a magician. And why? all of us and made us aware that we have probably Because he understood seeds and fertilisers in Malawi and he was pressing Malawi and the World neglected agriculture over recent years. I have to say V it is not that DFID has done nothing; we on average Bank as well as our own DFID e ort to take this spend about £120 million a year on agriculture and whole matter seriously. He showed us seed sheds, as it were, and was explaining to villagers, and I was so we now have 50 agriculture professionals on our impressed with the agriculture voucher system that staV. They do not work in all countries because not enabled poor farmers—and he was saying to us, all countries have identified agriculture as a priority “When you get back to London tell them to keep the for us to work on, but we do have focal countries and voucher system going”. I was a bit nervous at the big eVorts in Bangladesh, in India, Afghanistan, time just helping people to buy seeds but, my God, Uganda, Rwanda and Malawi. Going forward, do we understand it now when some companies particularly with high food prices, we have refuse to allow people to have seeds because they are announced that we will be putting £800 million into protecting their own seeds back in—dare I say— food and agricultural issues over the next three North America. But at the same time I wonder if that years. That will mainly be part of a broader programme has been rolled out elsewhere in other V international e ort which we have been countries and are you still sticking with that voucher encouraging, which was announced at the G8, the system now? International Partnership for Food and Agriculture. Mr Lowcock: I was there in January and Harry That will consist of two sets of interventions—a Potter OBE, as he is, has moved on actually but the series of short run interventions focused on programme continues, and it has been fantastically immediate humanitarian assistance to countries successful. Over the last few years Malawi has which are experiencing a food crisis; an increase in moved from being a food deficit and importing social transfers and cash transfers to poor country to a food surplus country and in recent years households to enable them to buy food; as well as has exported maize, and it is the combination of the subsidies to inputs such as fertiliser and seed where fertiliser, the seed and the extension that has been they are well designed programmes to help farmers successful and the poverty focusing has been plant for the next season. But we are also investing successful. There is a lot of interest in the scope to in a set of longer term measures, so we are going to model that elsewhere. The new deputy at the Food put £400 million into agricultural research to and Agricultural Organisation who we talked to a develop new varieties, particularly climate resistant few months ago was exploring with other varieties but also ones that can work well for poor farmers. 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15 July 2008 Ms Nemat (Minouche) Shafik, Mr Mark Lowcock and Ms Sue Owen governments how far they wanted to take that up. Ms Shafik: About half of our agriculture research One place where there has been a substantial funding will go through something called the exploration has been in Ethiopia. At the moment Consultative Group for International Agricultural with fertiliser prices having skyrocketed as well as Research (CGIAR), which is a multi-country food prices there is a lot of attention on the countries consortium which has huge research centres around which need support with their fertiliser imports the world. They bring together developing country because a lot of the Malawi success is not just the scientists and rich country scientists to work seeds, as you say, it is the combination of inputs. together on research and development to developing And there are a few other countries where we are countries. It is a network that has existed now for exploring that as well at the smallholder level. I think many years, which we have supported and has the thing we would say is that it is not a panacea arguably had huge successes. We have quite good necessarily; there are particular reasons why it has data on the impact that they have had on worked well in Malawi and one of them, to be clear, agricultural productivity over the years with some of is that there have been three years of very good rain the key new varieties like the new rice variety that in Malawi. So this approach will be fully tested as they have developed for Africa, which has had a and when there are changes in climatic conditions. huge impact. So we do not want to overstate the prospect, but it has been very encouraging. Q70 Chairman: First of all, the UK’s own agricultural research institutions, who of course have their own agenda, claim that they have Q68 John Battle: Is the private sector alive to this expertise which could be used and exported. kind of initiative and backing it? Are you engaging Secondly I should declare an interest because I am a them so that they drive it forward? patron of a small charity which we visited—a project Mr Lowcock: The private sector is the main supplier in Vietnam,—which is providing agricultural of the inputs, delivering services sometimes directly extension services in developing countries using UK financed by the government. I went in January to research institutions and partnering the local ones. visit one of the main fertiliser providers, which is a Interestingly enough, while DFID was very happy to private sector company and also one of the seed go with us to the project at my suggestion their view distributors and pushed them on exactly the set of was that they could not really support something issues that you pushed them on. In lots of countries like that because it was too intensive, which was market development and broadening the number of John Battle’s point. I am not complaining about that private sector actors is still a big issue. In too many particular one, I understand that in a country you countries there are one or two suppliers who have have to make your own priority decisions, but it did largely cornered the market and that is something we concern me slightly because it seemed to be very need to keep an eye on. practical; it was exactly reaching the people on the ground and improving the quality of their agricultural output by giving them advice on Q69 John Battle: Finally, a last question about the imports and, if necessary, providing a subsidy. I research. I am massively keen on research and think actually had to hand over an envelope containing it is really important and should not be undervalued, used dollar bills to buy sows for the village! But the and the strategy is there, but I am trying to get my point is it is that degree of intensity if you are going head around at what level and the joining up of to reach millions and millions of farmers. research. By that I mean will it be working with—of Ms Shafik: Yes. course at international level there is the whole new green revolution questions that do raise questions Q71 John Battle: Not to lose sight of that in Britain about biotechnology and the new sciences and they there is an Agricultural Research Council funded by are important and diYcult and deep questions— the Department for Innovation, Universities & ministries in governments, working at local Skills and I wonder whether they link up and work government and village level projects. In one of the with you? reports you said that you had used policy analysis to Ms Shafik: We are expanding our own research reduce the negative impacts of agriculture growth programme and agriculture and food is one of the and the research would be used to ensure that poorer areas on which we will fund research in the UK, but farmers are not left behind in the changes, and I just that is separate from the CGIAR research, which is wondered how do you knit the research together to in the main for developing countries. So they will be make sure that it is not just at one level of a generic eligible to apply for that funding. I should also say report and they are all arguing about biotechnology that one of the things that is key to our research and the big green revolution, but in the meantime programme going forward is a keenness to get this some farmer in the back end of Ethiopia does not get research into use. I saw just last week quite a a look in really. So how will you do that? Will you fantastic soap opera that we are funding in Kenya, have staV on the ground doing the research? Will which apparently if you soak your seeds—I do not you get the universities and centres of excellence know if you have seen this? engaged and pay them through DFID? Will you get governments to do it and how will you collate and Q72 Chairman: I have, yes. pull it together in a way that knits the base to the Ms Shafik: If you soak your seeds the day before superstructure, as it were? you plant— Processed: 13-02-2009 18:42:18 Page Layout: COENEW [E] PPSysB Job: 408061 Unit: PAG2
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15 July 2008 Ms Nemat (Minouche) Shafik, Mr Mark Lowcock and Ms Sue Owen
Q73 Chairman: The Archers Kenyan style! Q75 John Battle: From rice to meat. Ms Shafik: Exactly! So if you soak your seeds the Ms Shafik: Exactly. night before you increase your yields by 20%—a very simple technique. So this soap opera had a Q76 Sir Robert Smith: Looking at the impact on whole series around soaking your seeds and the poverty reduction and your analysis of it, you have villain in the neighbourhood—and they thought he come up with a global figure of DFID lifting at least was brewing alcohol and there was a big row, so you three million people permanently out of poverty can imagine! But the main thing was about getting every year. How confident are you on the accuracy these messages out there so that poor farmers get of this figure, given how many variables must be benefits from this research. involved in reaching it? Mr Lowcock: Just on your specific question, Mr Ms Shafik: I think it is an estimate based on a well Battle, about support for UK institutions. Last year respected piece of research on the impact of aid on we gave a grant of about £7 million to the Biological growth and then growth on poverty. Would I bet my and Biotechnology Scientific Research Council in pension on it? Probably not! But is it a serious piece the area of crop sciences and we are planning a of research which is a plausible estimate, and to be similar grant in the area of animal health this year. frank we looked at the numbers and used the most Ms Owen: The Archers was in fact set up after the conservative possible estimates and recent revisions war to get scientific techniques into use. One thing I of that show that you could estimate a higher would add is that we thought quite a lot about how number. But I think we have done it in a to structure the administration of our research conservative ways so that the numbers are programme going forwards, and as Minouche reasonably possible. It is very variable, as you imply, rightly says—and it is a broader point in the British to many things; it varies in terms of what you do with economy—actually innovating the results of the money in country, whether you spend it research into use have dogged the economy for multilaterally or bilaterally; whether you are looking years. We want to make sure that DFID, as well as at the average impact of our expenditure versus the developing countries and other development marginal impact of our expenditure. So there are agencies, really uses the research in our policies and many other things we could look at. We have asked in our programmes. What we want to do is have our Chief Economist to look at this estimation researchers rubbing shoulders a lot more with the technique again because we use this Collier/Dollar people in the department doing the policy, and we model also to decide how we allocate aid across Y hope that we have come up with a way that we can countries because we want to do it as e ciently as do that through some Fellowships—people will possible and get the maximum poverty reduction per come into the department for three, six, nine, 12 and pound we spend. So we are doing a bit more further 24 month periods working part time for us so they research on that. I think it is a credible conservative can keep engaged with their research institution. estimate of the impact of aid. They can interact and go out and visit developing countries and we can have a lot more interchange Q77 Sir Robert Smith: In your written answer you inside DFID and outside with policy makers in talk about how the estimates are used, and developing countries to dynamise the impact of this “combining these two relations allow us to estimate money that we are putting in. for each country the number of poor people”. In your answer to us on how you reach the conclusion would it be possible again to follow up with more in Q74 Sir Robert Smith: You mentioned that the food writing to break down those figures, rather than crisis was a wake up call. Where do you think the saying, “This is the method we use”, but maybe give radar was broken that did not realise that agriculture us the breakdown of the calculations so that we can was going to be a fundamental for human existence? see how it is derived? Ms Shafik: I think it was one of those things where Ms Shafik: I could, although I have to confess that you had a confluence of events, one of those “perfect my confidence in the estimate gets less the more storm” situations, and it was a confluence of four disaggregated it becomes because it then very much events, each of which on their own would not have depends on country specific circumstances. caused a food crisis, but it was the four coming Chairman: Paul Collier also says—I think his figure together. It was the fact that you had droughts in is that where the government gets more than 16% of many key countries, like Australia, so their exports its income from aid diminishing returns set in—the fell. The droughts you could not have predicted but example of Sierra Leone, where it is something like it was the high cost of fuel and of course the high cost 50 plus% and nothing much has happened. of oil which then plays out into fertiliser costs and biofuels and all the rest of it; the depreciation of the Q78 Sir Robert Smith: When you reach the dollar, which also then aVected the price at which diminishing return do you switch? Do you use that food is denominated in international trade; so all of calculation to look at, “If we put more money in here those were somewhat unpredictable. The thing we it is going to be a diminishing return and we have a probably could have predicted but we did not finite budget”. anticipate how fast it would occur would be the Ms Shafik: The model is driven by two key variables, change in diets in China and India, and that of which determine when you get to diminishing course has been a major driver of the rise in food returns. How many poor people the country has—so prices. So there are those four things. the fewer poor people the returns diminish. Processed: 13-02-2009 18:42:18 Page Layout: COENEW [O] PPSysB Job: 408061 Unit: PAG2
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15 July 2008 Ms Nemat (Minouche) Shafik, Mr Mark Lowcock and Ms Sue Owen
Secondly, how good its policies are—so in countries problem as the one to which you are alluding that with better policies you get much bigger returns to Sierra Leone has. And the same in countries like aid; countries with bad policies you get lower DRC and Nigeria as well, we would say. So we have returns. Countries like Sierra Leone are ones where tried to be thoughtful about that issue. there are lots of poor people but the policies are not great because it is a post-conflict country and it is Q80 John Battle: Turning to the topic of just coming out of a period of civil war, and I think governance, a theme that DFID has increasingly it is fair to say that the returns to development strengthened and developed in recent years. You spending in Sierra Leone are high. If you look at 7 have the Governance and Transparency Fund and I their MDG performance it is not great. On the want to ask you about the reasons for the delay in other hand, the baseline is very, very low. Ten years allocation of the funds. The funds have been ago people were killing each other in the street. So increased to £130 million. Is it getting enough? There we are keeping afloat a state which is very, very weak is a list on your website of all the projects approved and is not able to deliver much in terms of for the funding but no indication of the sums development, but which has actually delivered allocated or the timetable and I wonder whether that incredibly good security and had a really well run kind of detail could be amplified—not necessarily election in which there was a transfer of power now—to make sure that there is some energy and between political parties last year with no violence. drive behind this programme. I would be interested So I think our development wins in Sierra Leone are to know how much the Fund Managers, including more about security and stability rather than on the KPMG, are paid for their work; and how the MDGs, although we recognise that that needs to be projects will be monitored and the impact assessed the focus of the programme going forward. because I think it is a key part of the work of the Ms Owen: Perhaps I could add that we do not use the department you referred to and I think good model in a completely mechanical way when it governance has been an area we have neglected in comes to allocation between countries—that is the development. starting point. But one important factor that we also Ms Shafik: I should just note that the Governance look at is who else is aiding that country and how and Transparency Fund is a very important part of important is the UK historically in that relationship? our work but it is just a small part of what we do on So, for example, going back to Latin America, when governance, which is now the kind of major theme I was in Guyana recently it turns out that that is one for our work. Our funding for governance has gone of the most over-aided countries in the world, up from about £85 million in 1997 to over now £322 whereas some of the countries that we are in it is only million and we have 200 governance professionals in us and a couple of multilaterals. So I do not want DFID—it has become the largest professional group you to think that we use this in a way where we could in DFID because it permeates virtually everything all walk away and leave it to a model. we do in the education sector and the health sector and in public financial management. The Fund is up Q79 Chairman: What if we had not given aid? The and running and has made the awards to funding to point that gets made is that if aid is compensated or civil society and Sue can say a bit more about how it providing growth, but if it is growth in a country that is actually running and being allocated. actually has negative growth you do not get an Ms Owen: Of course, one issue here was the success absolute pay-oV. Or, as Bob Zoellick says, the really in attracting applications. We had 272 current crisis in food has knocked 70 to 110 million individual proposals worth collectively £770 million people back into poverty that you could argue on and not just from the UK—we had applications your model you permanently raised out of poverty. from Europe, North America, Africa, Asia and So do you not look at what would have happened if Latin America. We decided to consider proposals the aid had not been there? that were between three-quarters of a million and £5 Mr Lowcock: It is quite a diYcult question to answer million and lasting over a three to five year period. because obviously you can only gather evidence on We have accepted 38 of the proposals. It was not just what has actually happened. One of the techniques KPMG—we circulated the proposal around the we have is a with project tool and a without project department and relevant advisers, such as Y tool and we do try and use that. We would not want governance advisors and country o ces fed in views to overstate our ability to forecast what would on the applications. We have actually worked quite happen in circumstances where we would just be hard then with those who are successful in predicting an alternative future rather than able to organising how they will account for the money and observe evidence, able to observe things. I guess the report back and that is one of the reasons why the other thing to say in response to Sir Robert Smith’s funding is only just now ready to go. But we think question is we have tried over the last few years to that about two-thirds of the proposals are ready now compensate for the observable trend that small and funding for them will come on stream in the next countries have tended, relative to big countries with month or so. On the final third we are still working a lot of poor people, to be over-aided and that is why with them on their financial management capacity the fastest growing programmes we have had have and how we can help them so that the concerns you been in places like Ethiopia, which has a lower aid to have are taken account of. GDP ratio and so does not quite have the same Q81 John Battle: And the follow-up for the 7 Millennium Development Goal. monetary impact assessment that will emerge? Processed: 13-02-2009 18:42:18 Page Layout: COENEW [E] PPSysB Job: 408061 Unit: PAG2
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15 July 2008 Ms Nemat (Minouche) Shafik, Mr Mark Lowcock and Ms Sue Owen
Ms Owen: That is what we are setting in place with support where the criticism was “you are so focused the civil society department here; so we will have on getting the government to allocate its budget in a annual reports and follow-up there. more pro-poor way that you have failed to look at the other accountability mechanisms”. I think we Q82 John Battle: What I am really asking is it be have gotten better on that. DFID has now funded 30 made public so that others can work from it, because parliamentary strengthening projects over the last 10 I would be interested rather than just seeing a topic years in countries like Ethiopia, Kenya, South title of the kind of action that is going on and how Africa, DRC, Malawi and Pakistan, where we that can be applied elsewhere. I think I am now focused particularly on getting women candidates looking at DFID as a possible development agency into parliament. It is delicate for us of course in my own constituency as well as in Africa, if you because we cannot be seen to be working with a get my meaning. But some of the work that has been particular party. Under the Governance and done elsewhere can really replicate in tackling the Transparency Fund now we have given a grant of £5 challenges of poverty in our own neighbourhoods million to the Westminster Foundation for because of the methodology. Democracy to build the capacity of parliaments in a Ms Shafik: Yes. cross-party way in Africa, Eastern Europe and the Middle East, and I hope that work will teach us a lot more about how we can eVectively look at capacity Q83 John Battle: So if we could get that detail out as in parliaments. well as just paying the money across to others to do. Ms Owen: Certainly when I went to Zambia in Ms Owen: Of course. January, I met parliamentarians from the opposition to talk about fraud and financial Q84 John Battle: If I could raise another theme and management kinds of issues. The other area where it is a theme that I think in politics we have neglected we are starting to do a bit of work—it is a bit ad hoc particularly looking at the cruelty of the history of at the moment but we would like to do more—is in the whole of Africa, perhaps we as governments here helping senior civil servants. The Permanent tend to relate to governments elsewhere and not to Secretary of the Department for Children, Schools politics. We talk to those who are in power and not and Families has a personal exchange with his those who are struggling to get power and we have opposite number in Rwanda and they spend a week been a bit mono-focal, if I can put it that way. We in each other’s oYces each year and have a kind of have neglected oppositions, if we are deadly honest, mentoring programme like that, and we are looking and the multi-variety of what politics might be, ie it to see if we could do more of that in Africa, but these is not just presidents and prime ministers but could are not costless in administration time. be a range of people, and I am keen to try and assert Mr Lowcock: As Minouche says, we accept your that parliaments might be important and that the point that we should have maybe got on to this faster range of those amorphous bodies should be taken and do more of it. We are trying to address that. I more seriously. Last year DFID’s view was that think the Chairman had an exchange recently with there was not much to be gained from stand-alone the Secretary of State on support to parliamentary programmes with parliaments in developing committees in Nigeria. I know the Speaker visited countries. What I mean by that—and if Hugh you and came to see us and we have a programme Bayley were here he would certainly assert this—is that we are working up with them, not just with the that parliamentarians meeting parliamentarians Speaker but also with the Budget Committee and the might be a good thing in its own right and not us as equivalent of the Public Accounts Committee. parliamentarians just meeting presidents and prime ministers and governments, but we compare notes at Q85 Chairman: His bold claim, I recall, was that if the local level of what MPs do, how we should be V accountable—and, yes, it includes rows on expenses you just funded him e ectively you could scrap the and all that stuV, they are an important part of the aid budget to Nigeria altogether! agenda of how we are democratically available and Mr Lowcock: He said that to us too. It is a bit more accountable. I do not think we are having those complicated than that but they certainly do have a conversations. There is no reference in the Annual very important role which we need to recognise. We Report of DFID to that work of parliamentary are starting to see the impact—this is the important strengthening. I think there is £14 million in the point for us—of strengthened institutions. I think it budget for it. Are you (a) the appropriate person to was a very important set of decisions that President just do it on your own or (b) should other bodies in Kikwete took early in his tenure in Tanzania of firing Parliament be involved or should the Cabinet OYce people who had been identified through a process led be beefing that up as an approach of inter- by the Public Accounts Committee in the National governance? How can you have a G8 on the one Assembly in Tanzania and that sent a big signal, so hand if the parliamentarians do not know what they we have watched that and we will invest more in are doing and it is all top-down? Can we really those sorts of institutions. champion good governance by bypassing parliamentarians? Q86 John Battle: I think it is a new area and in a Ms Shafik: I think it a fair criticism that in the past sense the exchanges at civil service level are excellent we have been too focused on governments in our and strengthening capacity in somewhere like governance work. We heard that message very Malawi is important. There were 12 people around clearly in the evaluation that was done of budget a table and four said to me that many people in their Processed: 13-02-2009 18:42:18 Page Layout: COENEW [O] PPSysB Job: 408061 Unit: PAG2
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15 July 2008 Ms Nemat (Minouche) Shafik, Mr Mark Lowcock and Ms Sue Owen department would die of AIDS, top highly trained diagnostic work on what the governance issues are people and they were begging us to send trained, in diVerent countries and so we will be working skilled bureaucrats to help, but I think there is hand-in-glove with them on this agenda. another level of operation that is more diYcult and that is perhaps how to say to civil servants they do Q88 Chairman: Can I turn to a diVerent issue not always understand the details and the pressures altogether which is the role of the CDC and the of politicians at the local level and nor do we; it is relationship between the Department and the CDC. kind of an emerging science. I do not think we have If I am honest—and I may be wrong and you will got a perfect democracy in Britain. I think we are at challenge me—the impression I get is it feels as the growing end of it basically. We are in a new phase though the Department has parked it over there and of trying to emerge into democratic structures. I am said this is our private sector job and although it is not sure who does it and who should lead it and I am owned by the Department and accountable to the glad that DFID is in there pressing it. If I may just Department, one does not get the impression that on a discursive note say that I was invited by the there is awful lot of day-to-day interaction. There is Foreign OYce after I left to take Muslim councillors a good story in one sense—increased profits from from diVerent parties involved in local government £375 million to £672 million and net assets increased to Indonesia because they were discussing how to set by 33%, there is a lot going on. But there are also up local democracy and they wanted to know how questions being asked about what its role really is, a Muslim could reconcile being a good Muslim and what its development eVect is or whether it is just going to the mosque on Friday with being a another national institution that happens to be councillor and doing the best for value for money at owned by the Secretary of State operating in the the local level. It was a fantastic experience for the market with some pretty loose development people from Britain that went and the good news objectives. They are not very tightly constrained. was that the two or three that went really became What is the relationship between you as oYcials and great councillors in Britain as well, so it strengthens the CDC on a day-to-day basis? democracy, accountability and governance at both Ms Shafik: I should say that one of the things that ends. The Foreign OYce had hardly any budget for surprised me when I took this job is how much time it so do we go to DFID for it? Should it come out of I spend on CDC because it had not been on my radar the Cabinet OYce to back it up from a general screen! However, Mark has been the primary budget of supporting international best practice in interlocutor. I should just say that part of the strengthening institutions? I think we are at the very philosophy of the restructuring of the CDC was to new end of doing this. Otherwise we are going to be get government out of the day-to-day investment caught between brilliant people meeting in the bush, decision-making because, to be honest, there was a participatory democracy around a tree in Ghana lot of oYcial and political intervention in their that I can bring back to my constituency to work on investment decisions which resulted in very bad community development, but at the same time we investments and huge losses, so what we wanted was have missed out the whole of the institutional to get to a situation where we had a clear policy structures of local government, regional direction of the CDC embedded in what we call their government, national government and parliament. I investment policy and then we would get out of the just think that it is a new area to move into and I day-to-day decision-making but we would hold them very tightly to their investment policy, which hope that you will promote it throughout Whitehall currently holds them at 70% of their investments not just in your Department. That is what I am having to be in low and middle-income countries saying. and 50% of that having to be in Africa and South Ms Shafik: I hope what we learn from this funding Asia. We have just had a whole series of discussions that we are doing with the Westminster Foundation with them over the last few weeks because we want for Democracy will teach us a lot about how to do to tighten the investment policy even further to press this well. I suspect what you are saying is exactly them to go into even more frontier and diYcult right which is that peer-to-peer learning is quite markets because we think they have done a pretty unique and I suspect that we civil servants are pretty good job. As you have said, their results have been bad at understanding the pressures on politicians. outstanding. They have gone from being worth £1 billion to £2.6 billion in just a few years which is quite remarkable, but the level of interaction on that Q87 Chairman: There are a number of diVerent investment policy has been—what is the polite routes by which parliamentarians are being involved term—we have had a vigorous and frank exchange, and when we met Bob Zoellick, he said he wanted would be a fair way of describing the conversations the World Bank to do more on the constitutional that we have been having with both the Chairman problem with the Parliamentary Network for the and the Chief Executive. Mark, do you want to add World Bank. They are trying to resolve, but it would anything? be good if these things were at least aware of each Mr Lowcock: I guess there are just two more things other and co-ordinating with each other otherwise in response to your question, Chairman. The first is they will be cutting across each other. about the way we structure the on-going discussion Ms Shafik: We have just launched an accountability with CDC. The core structure is that we have a fund jointly between DFID and the World Bank to quarterly meeting with them where they report to us look at governance and to do country-level on progress against a set of objectives that the Processed: 13-02-2009 18:42:18 Page Layout: COENEW [E] PPSysB Job: 408061 Unit: PAG2
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15 July 2008 Ms Nemat (Minouche) Shafik, Mr Mark Lowcock and Ms Sue Owen
Government has set and which Minouche has another investment in a rubber plantation in quite outlined and issues that have arisen for them over an insecure area in northern Cote d’Ivoire where that period. That is a meeting that I take with the there is a lot of employment generation but they Chairman and he has the Chief Executive there. I have also on the social side constructed 500 houses have a team from DFID and also DFID is supported for the workforce. We think that this is not just in our relations with CDC by the Shareholder about the financial success that Minouche has Executive which is Government body sitting in the outlined; the financial success reflects a substantial Department for Business Environment and contribution to economic development. Regulatory Reform these days, which advises Government on its shareholdings in companies, and Q90 Chairman: You have given us good examples they have expertise in doing that. That is the there and you have said to them go away and do it structure of the dialogue. The Secretary of State and these are things they have done and you are obviously also sees the Chairman from time to time happy to report back that you think they are and when we have got issues to resolve then others beneficial. Do you either here from the UK or in are involved in resolving those as well. The other country ever refer to possible development or thing you asked about was the development impact investment opportunities to CDC and, if you do, and obviously we could assess that in a number of presumably it is entirely on the basis of “will you V di erent ways. One is if we try and look at some take have a look at this”, but it is their decision? Would on the overall economic impact that CDC through that be a fair description? its investment can make on poorer countries, we can Mr Lowcock: Yes, just to give some examples, I had look at things like Celltel which is the biggest a discussion recently with the Minister for Energy provider of mobile telephony services in Africa. from Zambia who has asked the IFC8 to help them CDC was the cornerstone investor is Celltel some put together a proposition for a hydro-development years ago. One of the reasons why Africa in recent scheme and I mentioned the CDC and their fund years has had the fastest rate of growth of managers to him. As Minouche says, we think it is a penetration of mobile telephony is because of that good thing that Government is setting a framework initial investment and CDC in fact sold out its stake for CDC and then holding them to account for the with its other owners and brought in another $2 way they deliver against it. We do not want to get billion when the overall company was sold from into the position that at some points in the past we Middle Eastern money which ended up being have been in where we are doing more than that, invested in Africa. Another example on the more then passing on ideas that have come to us. economic side would be some of the things they have done in the power sector. The price of power going into the grid in Tanzania as a result largely of the Q91 Chairman: That is how its predecessor got into investment that CDC has contributed has come trouble in the first place. down from 11 cents to 6 cents a unit. This is a Mr Lowcock: That is exactly right and the country where one of the biggest banes of the predecessor lost at various points hundreds of business community is load-shedding. Anyone who millions of pounds. We believe the framework we has been to Tanzania will know that even if you are have set is the right one but of course yes we do pass sitting in a comfortable hotel you are woken up all on information when we get it. night because the generator clicks in because the grid is load-shedding, and CDC is contributing a lot on Q92 Chairman: A final point on its assets—it has a those things. You can then take it a layer down if you huge amount of cash. We have asked you about that want to look at employment generation. CDC for and you have given us your view on it, but given the example recently were the pioneer investor in starting conversation we had about where the building a big shopping mall in Lagos, the resources are going to come from for development, construction of which created thousands of jobs— would either selling oV CDC or getting a return to the Department to fund mainstream development be a potentially valuable option? For one thing you Q89 Chairman: And for which they were criticised of could sell it oV and get a one-oV take or alternatively course by NGOs because they did not think it was you could require it to pay a dividend to the appropriate. Department, which you do not do at the moment. Mr Lowcock: And we disagree with that. We think Mr Lowcock: Perhaps I can say a couple of things that development of the whole of the country’s about that. Firstly, the Minister, Gareth Thomas, in infrastructure is an important thing for countries to the Westminster Hall debate on this made clear that do and we want to do that and we think it is good the Government does not have plans to divest CDC that CDC can contribute to that. We also ask CDC but that the Government does have plans, as to be a model investor in terms of their business Minouche said, to very substantially refocus on the principles, their ethics, their dealing with labour poorest countries. We think the mission is not standards issues and environmental standards. One complete there. We do as part of the regime that of the things we flagged up in the Annual Report was applies to capital charging of assets that every this investment they have in Tanzania Tea Packers, government department holds in fact charge CDC Tatepa, which is a fair trade business, and CDC for the asset base they have and that is a charge that through that investment have contributed to the appears through the annually managed expenditure financing of clinics and text books in schools and the construction of schools and so on. They have 8 International Finance Corporation of the World Bank. Processed: 13-02-2009 18:42:18 Page Layout: COENEW [O] PPSysB Job: 408061 Unit: PAG2
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15 July 2008 Ms Nemat (Minouche) Shafik, Mr Mark Lowcock and Ms Sue Owen in the Department’s Budget and Accounts and Mr Lowcock: Higher returns, yes, and I beg your which we report. You are right to say that if we pardon. We do not know if that is true or not wanted to we could also take a dividend. At the actually. Some of their best realisations have been in moment the CDC are holding something like £1.4 the poorer markets. The Celltel realisation was billion in cash but they also have forward spectacularly successful. We debate that issue a lot commitments of investments that they are signed up and they worry that that might be a problem but to do which largely absorb those resources so there firstly the Government’s rationale for holding CDC is a balance to be struck. What we do not want to do is to invest in the poorer markets and secondly it will is provide them with an incentive to run down their be up to them to make those investments successful cash faster than they think would be commercially ones and their co-investors will share those goals. sensible by picking dud projects. We are trying to The fact that Africa has done so well over the last manage this set of things but the issue you raise on decade and more investment opportunities have should we take a dividend, as it happens, is quite a been created gives us some confidence that this is a live issue, and I have had a discussion within the last model that has now had some degree of proofing. month with the Chief Executive about that. That Ms Shafik: In terms of Africa’s performance the ultimately would be a matter for the Government on recent IMF projections of the eVect of the economic which to take a view. turmoil on Africa, particularly the oil price shock, show that oil exporters in Africa will grow by 8%, so they are going to do well, but even the non-oil Q93 Chairman: It might demonstrate a direct exporters are expected to grow by 5%. development benefit and clearly there is an ideological exchange where some NGOs, and it would not be unfair to mention specifically Christian Q97 Chairman: But that is not having a very good Aid, disapprove fundamentally of the CDC, but eVect on the poverty figures in Africa. again if you were getting a dividend for development Ms Shafik: I think the story varies a lot by country. it might just make a diVerence to the attitude. Ms Shafik: Two quick points on that. Of course Q98 Sir Robert Smith: On the eYcient use of technically speaking any revenues will accrue to the resources, the issue we come back to quite often is Treasury rather than to DFID so there would be a our concern about the staV targets and the impact on bit of an issue. delivery. As you are moving into more fragile states, surely in a way to get eVective outcomes you possibly need more staV rather than fewer staV? Q94 Chairman: I guess there would not be much Ms Shafik: It is certainly something that we are point unless you had a stake. struggling with and it is part of the reason why we Ms Shafik: Exactly. To reinforce your point, there are withdrawing staV from some of the middle- was a similar issue at the World Bank and they had income countries to put them in fragile states. By the very large profits one year and the President at the end of the CSR period we will have 60% of our aid time decided that those profits from its private sector in fragile states so it will become the core business of arm would go to pay for IDA,9 which funds soft DFID. You are quite right to say that we need more funds to low-income countries. It is a good example staV in those situations because we are augmenting of doing exactly what you are saying. government capacity and we are dealing with the Chairman: Thank you for that. I think we have two governments that have weak capacity. We are more topics. getting that additional staV both from good- performing countries like the Tanzanias of the Q95 Sir Robert Smith: Just one more thing on the world, the Ghanas of the world, who are doing CDC, presumably the whole world economic pretty well, where governments have more capacity climate is slightly changing and therefore the figures now and we can run our aid programme with fewer need to be looked at quite cautiously. Secondly, DFID staV, and also by shifting people out of presumably if they focus more at your behest on middle-income countries and putting them in fragile poorer countries then there will be a higher risk to states. That is broadly how we are coping with it. their investment and therefore their economic return Ms Owen: One of the things we are doing for the will change? CSR period which we have not done in the past is to Mr Lowcock: I think we will see at the end of the year ask our directors to be more systematic about what impact the market turbulence this year has planning the sort of workforce that they need. V V had, but I think there is some evidence to suggest Looking forward we cannot a ord as many sta as that in some markets at least your forecast might we have at the moment. We do not have a headcount well turn out to be right. They have had a target but we have a budget constraint, so in setting spectacular four years and so it would be very out their frameworks for the next three years and the surprising if they could sustain that for ever. Sorry, admin allocations that we have given them, we have I have forgotten the second question. asked directors to look not only at the number of staV they can aVord but what are the kind of people they need and what kind of skills they need, not just Q96 Sir Robert Smith: You are trying to refocus the hard skills such as whether they are an them on— agricultural expert or governance expert, but skills such as whether they are good at influencing people, 9 International Development Association. whether they are prepared to work in diYcult places. Processed: 13-02-2009 18:42:18 Page Layout: COENEW [E] PPSysB Job: 408061 Unit: PAG2
Ev 24 International Development Committee: Evidence
15 July 2008 Ms Nemat (Minouche) Shafik, Mr Mark Lowcock and Ms Sue Owen
When we were doing our allocation of appointed in country. They are not just doing low- administrative resources we did not inflict equal pain skilled jobs; they are doing really good adviser and everywhere. We tried to make deeper cuts in the programme jobs. Going forwards with our admin policy and corporate functions, with some constraints we want to encourage more policy exceptions, and less deep cuts in fragile states, so we development in country and to feed into the process are looking to cut proportionately more in in the UK. somewhere like India than somewhere like DRC or Sudan for example. This has proved quite an Q101 Sir Robert Smith: So given that the target is interesting exercise because our directors have found 950 and given all staV in country are an asset, why it relatively straightforward to work out how many are you not up to your target? Why have you got V V Y sta they can a ord but have found it more di cult fewer people in country than you think you need? to think about the kind of skills that are needed, and What is the barrier, is it a recruitment problem or is we are continuing to discuss that kind of thing so it a management problem? that we can plan a bit more carefully and give people Ms Owen: The 950 was a target set a few years ago. the right sort of training that they need to go to Of course some of the fall-oV in the numbers of staV fragile states in particular. I think something else appointed in country is because we have closed that is quite interesting is what we have learned a oYces, so we have probably closed more oYces than Y little bit from the Foreign O ce is that actually you we anticipated in March 2004, and that will account want to put sometimes your best people in the for quite a bit of that mixture. We have also done Y di cult places rather than the cushier places, and some eYciency work in for example reducing the they have certainly done that with Afghanistan for number of drivers and in some cases we have out- example, and we are thinking quite hard about how sourced that kind of function rather than doing it in- we can follow suit there. house, so I think there are quite a lot of things going on there. Q99 Sir Robert Smith: On some of the figures we have the technical notes state that there is a target to Q102 Sir Robert Smith: When you outsource you are reduce staV appointed in country by 124 from 1,162. still spending money on the function. The Annual Report gives a target to reduce staV Ms Shafik: It appears on our administrative budget appointed in country from a March baseline of 1,162 but it no longer counts as staV. to 950 which will be a reduction of 212 instead of V 124. Earlier in the report the sta appointed in Q103 Chairman: One of the big advantages that country is given as actually being 918 in March 2004 DFID is oVering countries is technical assistance, and 834 in March 2008. If there are fewer people in and indeed when we were doing our sanitation and country why has the baseline been set higher than water report we identified that DFID was spending a the actual? V huge amount more money on supporting sanitation Ms Shafik: We were not given a target for sta and water but not actually increasing significantly appointed in country by the Treasury, to be honest, the number of technical staV.ItisdiYcult to believe, that was a self-imposed target which we overshot to be honest, that you are not facing significant and over-delivered on, and that is why it looks a constraints on what you can do on that basis. There bit funny. are two ways of doing it. One is to say up-front and Ms Owen: However you are right to spot that there honestly we cannot deliver development as was a mistake. The figures this year are the correct eVectively as we would like unless we are given a bit ones and the figures last year were wrong, so it is more space or I suppose you could say we can get good that you keep us on our toes. One of the round that, whether they are drivers or very big reasons we wanted to put in a target was to help specialists, by sourcing them in another way. Of reassure the Treasury that what we were not going course they would then be described as consultants to do was to cut home-based civil servants and just and you would get hit on the head for spending too increase the numbers appointed locally abroad. I much money on consultants. I suppose they could be think it is worth saying again that the reason we have V part of budget support where there is an agreement sta appointed in country is not because they are within the budget support to include the cheaper; it is because they are better than us at employment of technical assistance in the knowing what will work in their particular developing countries’ staYng levels, but if that countries. happens are you sure that you maintain the degree of control that you would require? I do not know Q100 Sir Robert Smith: But also do they not have an which of those options you would be minded to important role of inter-relating with people in pursue. country and leveraging other activities to reinforce Ms Shafik: It is a challenge for us. Our staV are very what we are trying to achieve. pressed, they are working very, very hard. I think the Ms Shafik: Absolutely, as well as language skills and way we are coping is we are trying very hard not to the ability to operate in environments that we take poor value-for-money decisions whereby we cannot. outsource something although it would be cheaper Ms Owen: Interestingly, we have done a bit of work to keep it in house. We are trying very hard not to looking at our staV appointed in country workforce fall into that trap because that is just poor value for and over the years they have moved up the grade money for HMG. The way we are trying to cope with mix. We have really quite good careers for staV it is by changing the way we do business and to try Processed: 13-02-2009 18:42:18 Page Layout: COENEW [O] PPSysB Job: 408061 Unit: PAG2
International Development Committee: Evidence Ev 25
15 July 2008 Ms Nemat (Minouche) Shafik, Mr Mark Lowcock and Ms Sue Owen fundamentally to simplify many of our processes so projects but really embedding gender in everything that people have fewer steps to get things done. We we do, in the way we do budget support, water are also trying to do it by upskilling our staV so that projects, education and so on. The risk of a we will see a rise on average of the seniority of some mainstreaming strategy, which to be frank we have of our staV and trying to automate many low-level lapsed into in the past, is that mainstreaming tasks. Many of the financial and HR tasks have been becomes another way of forgetting. It is one of many automated, for example our posting system, so other things people have to think about and that is people who are going to be assigned to a diVerent what we are struggling with. Because of that we have post in the past we had a bit of HR that did all of realised that in order for a mainstreaming-based that, now it is done in an automated fashion and gender strategy to be successful, we have to embed it managers put in the job descriptions and there is a in our own management systems, so we have had a system. campaign at DFID that Mark has launched this last month called ‘Think Women’, so if you walk around Q104 Chairman: That is fair enough. Nobody would DFID now there are posters everywhere that say deny that it is good for you to be operating as Think Women and we have really devoted a lot of eYciently as you can and to be a lean, mean attention, including Mark being the champion of machine. The Committee so far has resisted saying that campaign. We also have a senior civil servant in that we think that if the Government is serious on every unit who is a gender champion, for every delivering on 0.7% and all that goes with it, they have business unit in every part of our work. For the first got to have a re-think about whether departments time this year we are going to be assigning part of the can do that eVectively under the present constraints, bonuses that managers get in DFID to their but I am teetering on the edge of saying perhaps we eVectiveness at delivering our gender objectives, so should be calling on the Government to do that. I every senior civil servant in DFID has now a set of appreciate it is slightly diYcult for you. You are gender objectives in their own performance there to deliver Government objectives and targets. assessment and part of their bonus this year will be I think what we need is an indication. I am taking it determined on that basis. That is one of the ways we from what you have said that you are here and there are trying to get traction of this mainstreaming hitting barriers in some areas. strategy into everything we do. Let me let Mark say Ms Shafik: We are coping but we are struggling. a bit more about how it is playing out particularly in all our country programmes and then Sue in terms Q105 Chairman: Let us leave that quote on the table! of our workforce. This is not a “last but not least” question, it is Mr Lowcock: I think what we would say is that we actually very central and a question that I feel we have focused the attention of the organisation on should address. Right across the development this issue in a qualitatively diVerent way to what we strategy the role of women in particular comes have ever done before and in terms of scale of across as absolutely crucial and (a) if women are activity that is reflected in the fact that the Gender empowered if does more for development than Equality Action Plan itself which we published last almost anything else; and (b) where women are year is 18 pages and the report which we have just empowered it starts to improve social conditions given you is 65 pages and there are dozens and and reduce population growth pressures as it dozens of examples of stuV that we are doing. There provides that degree of social support. Having said has definitely been a massive racheting up of eVort. all that, we obviously had a correspondence with We have got two bits of self-criticism really. The first you about the Gender Action Plan which you is a lot of what we have been doing is about putting promised to publish in April and was actually in place analytics or processes which when they published yesterday, or at least its first progress come through ought to deliver results, but what we report, and we have not had a chance to look at it. are saying to our colleagues now is we do not want Can you tell us what is in it in terms of what has been to hear so much about the bits of work you are achieved and what will happen next? doing; we want you to be able to answer the question Ms Shafik: First I want to apologise for the delay. It “show me the women and girls whose lives have been was purely because of the volume of things we had transformed in the countries in which you work by to report on in pulling it together— all this activity”. That is really the test. Then they come back to us and they give us dozens of examples Q106 Chairman: Because you had some staYng of the sort that we have put in the Annual Report constraints perhaps? and we have put in the report on the Gender Ms Shafik: Perhaps. But there are two key elements Equality Action Plan as well. What we then say to to what we are doing on gender. One is this Gender them is, “You have told us a story about how for Action Plan, which you have seen our first year tens or hundreds of thousands of women we are report on, and the second is the Gender Equality making a diVerence. What we want to do is to scale Duty Scheme, which describes what our legal that up. We want to be able to tell a persuasive obligations are in terms of gender. I will let Mark account of how for millions or tens of millions or speak particularly about the programme side and hundreds of millions of women in developing maybe Sue on our own staYng but just one message countries we are contributing to transformation,” from me. I think the main challenge for us on gender and that really in a way is the test that we will be is that our strategy has been very much focused on applying to ourselves, and I guess you will. There is mainstreaming gender and not having little gender a very helpful NGO analysis of this which is holding Processed: 13-02-2009 18:42:18 Page Layout: COENEW [E] PPSysB Job: 408061 Unit: PAG2
Ev 26 International Development Committee: Evidence
15 July 2008 Ms Nemat (Minouche) Shafik, Mr Mark Lowcock and Ms Sue Owen us to account as well which in future years we will where were the men, and it was about 15 minutes want to apply. This is obviously a very diYcult set of before he realised we did actually know quite a lot. things we are dealing with because the place of poor In DFID now we are 50% men and women for the women in a lot of countries in which we work is very workforce as a whole. It is not true that women are diYcult. There are social issues, economic issues, bunched into the lowest occupations as it is in the political issues and this is not a set of things that it is Civil Service as a whole, but it does fall oV a little bit always easy for outsiders to play a prominent role in, in the adviser grades. At the SCS10 level, which is but it does seem to us that unless the position of where we have a target, we have met the Civil Service women in many societies is dramatically improved target of 37% in March 2008 which few departments the MDGs will not be met and that is the have, and we are seeing progressively as promotions fundamental driver for us. into the SCS disproportionate numbers of women coming in relative to the grade below, so we are on a good trajectory there. One of the things that has Q107 Chairman: We found two strangely conflicting helped is having a special mentoring scheme called examples when we were in Ethiopia. First of all, we Crossing Thresholds which has really helped women went to a charity for women and children where we apply for jobs. One of the problems seems to be that were subjected to four presentations by men, where certainly in senior jobs men tend to think that if they tea was served by a woman who turned out to be its have got two of the qualities out of the seven that are finance director and had a PhD from Oxford. I have asked for they will have a go whereas women think to say we also went to another project where a very feisty lady in charge had got money to set up a they have to have all seven before they have a go, so shower project for women because it was a good idea we have done a lot in assembling the field. It may be for women to shower. The women came to the women do not get through the first time but that it is conclusion that it would be a much better idea to sell good to try and what we have found is that as we showers to the men and use the money to sue them have persuaded more women to apply more have for assault and file for divorce. At the other end of come through. However, in the very senior ranks the scale, we saw a really excellent health extension there is always the law of small numbers and we are service in a highland village where local government very aware that we need to keep an eye on that kind were training young women taken from the village of thing. We are now extending the Crossing and then sending them back to the village to train Thresholds programme to other groups such as people on sanitation and water and the issue about black and minority ethnic groups. I am myself latrines and hand washing and all those kinds of leading a group for Gus O’Donnell across the whole things. Interestingly enough, young women of 19, 20 Civil Service looking at why there are not more and 21 were lecturing their male elders about these women in number one and number two jobs. We things and the men were taking it in good part and have set up for the Civil Service as a whole some actually doing it, so it demonstrated the two more of this mentoring kind of activity. In the Civil opposite ends of the scale. I take Mark’s point that Service as a whole women are really beginning to get it is very diYcult, and Afghanistan is an extreme promoted now into Senior Civil Service jobs, but not case, but surely we have to have the conversation into the very top jobs. I think DFID is ahead of the that says it is your country, it is your decision and game there but there is never room for any you may have your culture, but all the world’s complacency. experience tells you that when you empower women Chairman: I have to say that the Committee’s record you secure development and if you do not you hold is abysmal. We only have one woman on this it back? Committee. We had two when Parliament started Mr Lowcock: That is exactly the conversation we and it is not for want of trying but on the other need to have. I was in Ethiopia in the last month and hand—and after all it is important—men need to I had a really inspiring discussion with the leadership fight for women’s rights for very practical reasons of the Women’s Association of Tigray. This is an and that is something that this Committee takes to organisation which has half a million members, heart. Indeed, we do not leave it to our woman, who which is half the female adult population of Tigray, is by no means a token woman in any sense of the all of whom pay an annual subscription, I think it is word, to raise the gender issue because I think it is five birr which is 20 pence or something, and it is a important that men raise it as well. We have many mass movement. It is incredibly impressive what more questions but you will be relieved to know we they secured in terms of change to the legal are not going to detain you to ask them all. We framework. We want to support more of those kinds obviously have had written exchanges and we will of things because we think that they do have the continue to do so. Thank you for answering our scope to be genuinely transformational. You are questions and for this exchange which, as I said at exactly right, we have to be raising the issue and the outset, we regard as beneficial. I think there are finding a constructive way to have the discussion. people who think that this Committee has a cosy Ms Shafik: I might ask Sue to say something briefly relationship with the Department. I hope it is not about our own staYng in DFID if that is of interest. cosy but I think it is constructive. We value it, if you Ms Owen: My story equivalent to yours is when I do, and you know perfectly well if we think you are visited Juba in southern Sudan and went to visit the wrong or on the wrong track, we will say so and you Minister for Social AVairs, I went with the head of will robustly disagree sometimes with the our oYce there who is a woman and two of our Scandinavian staV, and when we went in he asked 10 Senior Civil Service. Processed: 13-02-2009 18:42:18 Page Layout: COENEW [O] PPSysB Job: 408061 Unit: PAG2
International Development Committee: Evidence Ev 27
15 July 2008 Ms Nemat (Minouche) Shafik, Mr Mark Lowcock and Ms Sue Owen recommendations that we make. Looking back even the Committee’s view on some issues before you over the last year, I think it is fair to say that the finalise what you do and I think that makes us feel Committee has had an impact on some of the things that what we are doing is constructive. Thank you that the Department has done, which is very much very much indeed for doing that and we look right and indeed I know that you sometimes wait for forward to next year. Processed: 13-02-2009 18:43:40 Page Layout: COENEW [SE] PPSysB Job: 407662 Unit: PAG2
Ev 28 International Development Committee: Evidence
Thursday 30 October 2008
Members present:
Malcolm Bruce, in the Chair
John Battle Mr Stephen Crabb Hugh Bayley Sir Robert Smith John Bercow
Witnesses: Rt Hon Douglas Alexander MP, Secretary of State for International Development; Mr Martin Dinham, Director General International, and Mr Andrew Steer, Director General Policy and Research, Department for International Development, gave evidence.
Q108 Chairman: Good afternoon, Secretary of in July 2007, when the idea was originally proposed. State. Thank you once again for coming in to give In specific terms, there were pledges which the evidence relating to the Annual Report. You are also United Nations estimated to be $16 billion worth of coming in again in a couple of weeks’ time on the commitments made by diVerent stakeholders to Annual Meetings of the World Bank and the IMF, tackle poverty. We had identified particular areas which I think will raise a whole load of questions. where we were keen to see work taken forward and We will try to keep them in the appropriate we saw progress on each of those areas. I would be compartments. Can you introduce your team for happy, along with Andrew and Martin, to talk the record? through those. In addition to the specific financial Mr Alexander: Of course. It is a genuine pleasure to pledges, which we should remember were made as be here. Perhaps I could introduce Andrew Steer, the global financial crisis was literally unfolding a who is our Director General for Policy and few blocks away in New York— Research, who oversees our work in areas such as health, education, and food security. Alongside me Q110 Chairman: Can I just interrupt with a slightly also is Martin Dinham, who is our Director General cynical note? We have had pledges before which the International, who oversees our work on United Kingdom has certainly been fulfilling, or international institutions and donors and also areas certainly projecting to fulfil, but many of the such as aid eVectiveness. countries that made pledges do not seem to have followed them up. A clear question is that it is easy Q109 Chairman: Thank you very much. Obviously, to make pledges but how substantial are they? we are particularly looking at the Call to Action the Mr Alexander: Yes. On the morning of 25 Prime Minister initiated along with others and we September Bono, who was one of the attendees at will discuss what was said and agreed at that the event, gave a long interview on CNN and he said, meeting, but even since that meeting things have “Politicians like writing cheques but they are less changed so we might need to see what updates there keen to cash them,” and we were very mindful of that are. First of all, do you think that the response in real in the preparation for the event. That being said, I terms was satisfactory? If you do, what do you think would just add the final point I wanted to make and in particular came out of that which you might then I will deal with the specific point of pledges regard as a major step forward given that the being made. We also wanted this to be a diVerent meeting had a clear purpose? kind of event, in the sense that we would confidently Mr Alexander: Perhaps just a word by way of assert that this was the broadest ever coalition context. The origin of this event was the first speech brought together to tackle global poverty, in the made on an international platform by our Prime sense that this was not simply a governmental event, Minister, a year ago in July, who at the United although more than 140 governments were in Nations, alongside Ban Ki-moon, declared a attendance and 50 heads of government or state development emergency. It is greatly to Ban Ki- attended the High Level Event, but we also saw moon’s credit that thereafter he picked up the idea representatives of global campaigns, like Bono, like of saying there was an opportunity to both refocus Bob Geldof, and Elle Macpherson, but also a wide and re-galvanise the world’s eVorts around the range of corporate CEOs for the first time directly MDGs1 by calling a United Nations High Level involved in issues of poverty reduction and a wide Event, which turned out to be on 25 September. At range of NGOs as well. So it was a diVerent type of the High Level Event on 25 September in the event and it would be wrong to suggest that the concluding plenary session the Secretary-General pledges alone were the benchmark by which we himself described it as an inspiring day for the judge success. That being said, we had looked long United Nations. We would suggest that and hard at how best to ensure that we had a positive undoubtedly the outcome of the event surpassed outcome from 25 September. Although it is by no even our expectations—and we had high means a perfect analogy, we had looked at the expectations, albeit in very diVerent circumstances experience of 2005, which was the last time there had been a significant international eVort to galvanise 1 Millennium Development Goals global opinion around the MDGs. We discerned Processed: 13-02-2009 18:43:40 Page Layout: COENEW [O] PPSysB Job: 407662 Unit: PAG2
International Development Committee: Evidence Ev 29
30 October 2008 Rt Hon Douglas Alexander MP, Mr Martin Dinham and Mr Andrew Steer that one of the successes of 2005 had been in some Saudi Arabia; on agriculture, getting China to ways a much more benign domino eVect than we engage and put $30 million into private sector in risked with the financial crisis a few weeks ago, malaria and so on. rather to put in place key stepping stones which led to more progressive outcomes as the months moved through 2005. We had first a discussion with the Q111 Chairman: The MDG deadline is 2015, you have a review in 2010, which is five years from there. Development Ministers in the European Union and V then a decision taken by the June European Council Most of them are o track and when you ask people in 2005 in terms of a European Agenda For Action, what their projected dates are they are 10, 20, 30, 40, 50 years. Presumably some of the point of this was moving on to the Gleneagles Summit and after the to say “Are we going to meet any of these? What Gleneagles Summit the Millennium Review Summit would we need to do to give us a chance of meeting in September 2005. We very much had that model in these and if we cannot meet them by 2015, when will mind as we scoped the possibilities for this year to re- we meet them?” galvanise opinion. I would suggest that if you put Mr Alexander: The parallel I would draw is, to take together the European Agenda For Action that was a topical example of the Glenrothes by-election, agreed by the June European Council this year, you when people say “Secretary of State, you are put in place the reaYrmation of commitments that Election Coordinator. You have lost lots of by- had been agreed at Gleneagles that then emerged in elections recently. You are not going to win the communique´ in Hokkaido for the G8, the new Glenrothes, are you?” you never plan a campaign on pledges that were made and the commitments made the basis of failure so you are absolutely sincere in in New York at the High Level Event, allied to the saying “We are planning to win,” certainly speaking progress that we made on aid eVectiveness in Accra, on behalf of my own colleagues. Similarly, of course and then anticipate the Doha Financing For we recognize that a number of the MDGs are oV Development Conference that will take place in just track; of course we recognize that there are a few weeks, we have already taken steps to secure challenging international financial circumstances; gains that might otherwise have been at risk given but again, so resolute is our determination to see the global financial pressures. I would certainly say success on the MDGs that we want to plan for that we regard the progress that we have made success, and we did. Over a long number of internationally, of which the High Level Event is months—and oYcials within DFID and frankly only one example, as having certainly focused across Whitehall deserve huge credit for this—we international attention, obliged countries to make Y worked in a very disciplined way, not simply to say rea rmations or new commitments which might “What is the headline financial pledge?” but otherwise not have been made in the present essentially to say “If you were to draw a Gantt chart circumstances, and the challenge for all of us as an of the MDGs and identify those areas where unless international community now of course is to deliver there is substantive new progress we will on the pledges that have been made, but the very undoubtedly miss them by 2015,” that was our specificity of the pledges that we were looking for starting point and really with that we then cajoled, countries to commit to in New York we judged to be persuaded, worked to fill in the gaps that existed in one of the best guarantees to ensure that they that spreadsheet in terms of “Clearly we have a actually do deliver on the pledges that were being problem with malaria. Who can we get to make made. Perhaps, Andrew, you could say a word in specific measurable commitments to make sure that terms of some of the very specific pledges that we we close the bed net gap?” If we have a problem in were privately canvassing other countries to engage terms of aVordable drugs on malaria, how can we upon and to ensure actually happened. work with the Roll Back Malaria Coalition to make Mr Steer: I think the issue of money is what certainly sure that we find the funding to do that? Martin, this gets the headlines but what we would rather do is was your daily business for months. start from the desired outcomes and increasingly Mr Dinham: Indeed. To give an example, one of the focus on that. There was a very real eVort here to ask building blocks for New York was the EU Agenda the question “What is the problem and what are we For Action which was agreed at the June Council. trying to solve?” For example, there are 500 million With that we did exactly as you say; we worked out people suVering acutely from malaria every year and what would be needed by area or sector by 2015 to one million deaths. What is reasonable to achieve? It get to the MDGs and what a milestone would be for is a halving of that number, and we can monitor 2010. For example, on education, getting 25 million those. Between here and there, there are 125 million children into school by 2010, and then what that bed nets that are required; there are aVordable would require in terms of additional resources. Then medicines for malaria that can be monitored. While we pledged, as Europe, an amount of resources the money is absolutely essential because there are which would be our proportionate share of what the clear coeYcients that go from money to delivering global requirement would be, but it was not just, as on the ground, it is the delivery on the ground that you pointed out earlier, an input issue. What we set we need to monitor from now on as much as it is on out in that Agenda For Action, which we negotiated the money. What we tried to do is to start with what very hard on, was what outputs would come from we are trying to do, work our way back to the this: so, numbers of children in school, numbers of numbers, see the shortfall and then try to catalyse teachers recruited, and then having fixed that as the some donors that have not been active before. For EU position, we are now working with our example, in education getting $500 million from colleagues in the EU to do a review and monitoring Processed: 13-02-2009 18:43:40 Page Layout: COENEW [E] PPSysB Job: 407662 Unit: PAG2
Ev 30 International Development Committee: Evidence
30 October 2008 Rt Hon Douglas Alexander MP, Mr Martin Dinham and Mr Andrew Steer of that process through an annual report to make of State, made the point that it will vary from sure that what we said we were going to do both in country to country, whether they are an oil importer terms of inputs and outcomes will happen. That is or an oil exporter, whether they are a very poor absolutely critical. It is part of this whole issue that African country or a thrusting Asian country, we do not just look at the top end but look at what hoping to achieve middle income status shortly. It is going to happen. does seem to me, however, that in terms of planning how your Department responds to events beyond Q112 Hugh Bayley: Has the Department yet made your control, beyond our Government’s control, in an estimate of what the impact of the global financial order to keep the work to achieve the MDGs on crisis will be on incomes, GDP, in developing track, you need to make not a broad-brush, countries and therefore on the MDGs? For instance, macroeconomic prediction about percentages of have you made an assessment of the extent to which global slowdown; you need to do an analysis country remittances will fall, the extent to which income by country, and clearly, the sensible countries to from trade will fall, the extent to which investment start with would be those countries where our flows will fall country by country? programmes are particularly big in relation to other Mr Alexander: As with every other department of donors and the GDP of the country as a whole. We government, this is an unfolding picture but in that are going to be meeting you in two or three weeks’ sense I am in a position where on a regular basis—it time. I imagine you are doing some work with your is usually coming to me once every ten days—I economists of this kind, but we would welcome a receive the latest assessment from our own Chief statement, if possible in advance of the session on the Economist within the Department, who is a recent Bank’s Annual Meeting, to get a feel, an example hire for DFID but is an internationally renowned from one or two countries, of what you think the trade economist. In that sense, I have certainly impact will be. I just do not know how we respond found the indications that are being provided very and how great the impact will be. Until you see helpful indeed. Developing countries are, of course, figures, it is diYcult to know that. immediately aVected in two major transmission Mr Alexander: I think I can assist the Committee on channels, both in terms of capital flows and also in that. Let me start with a very specific example and terms of trade. Lower growth in the OECD2 then I will ask Andrew to speak about the countries will mean less demand for outputs from vulnerability matrix we have already developed in developing countries and remittances from OECD terms of our key programmes. Just a fortnight ago I countries are also vulnerable to decrease. Private was in Ethiopia and took the opportunity to visit the capital flows we anticipate will fall and shift back Somali region, which is the area certainly OCHA3 into the OECD areas and the dollar. We are, of judges to be most vulnerable to malnutrition and course, in light of the emerging evidence of what has hunger. I went there for that specific reason. been a changing phenomenon, frankly, over recent Following that visit, which was not without its months, trying to assess what the implications will challenges, I had a two and a half-hour meeting with be, not simply in terms of the 5.5 % growth that a Prime Minister Meles in which we discussed the number of African countries have been securing response of the Government of Ethiopia. It is over the last five years but more broadly what the directly relevant to your point given it is comfortably impact will be in terms of our own programmes, one of our largest programmes. It is a country which, where up until now, for example, in sub-Saharan in terms of classic poverty reduction, has made real Africa, you have had the benign coming together of and significant progress in recent years. It has high commodity prices in recent years with relatively attained sustainable and high levels of growth and low rates of interest and available credit. It was, for the proportion of its budget spent on poverty example, one of the issues that I addressed directly reduction is higher than any other country in Africa. in the Development Committee at the World Bank, That being said, if you look at the constituent where I was making a very clear plea for the Bank to elements of the challenges it faces at the moment, assume what in many ways has been a traditional there would be four elements I would probably role for it, which is to undertake counter-cyclical identify: there is a global rise in food prices, albeit lending, and in that sense we had been for some time that we have seen falls in food prices in recent looking at the capitalisation of the Bank’s balance months but still significantly 30 to 40 % above levels sheet to see what the stretch available for the Bank of a year ago. Secondly, again, because Ethiopia is would be in terms of picking up some of the lending an oil importer, there are significant challenges in that in more benign international circumstances terms of the continuing high oil price, albeit that, would have been picked up by the private sector. again, the oil price at $60 a barrel at the moment has halved in the last four months. Thirdly, there is the Q113 Hugh Bayley: One of the global leaders—I conflict with the Ogaden National Liberation Front, think it might have been Robert Zoellick—made a which is an ongoing feature of that part of the world. statement a few weeks ago that the impact of the Fourthly, there is climate change. In the course of financial crisis could undo all the progress that has the discussions I had with Prime Minister Meles I been made since 2000 to date in relation to the was very clear in saying, if you look at each of those, MDGs. It is a broad statement, the sort of thing you whether it be the existence of conflict, the existence say in a speech, and you, rightly, I think, Secretary of high international oil prices, the internationally
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30 October 2008 Rt Hon Douglas Alexander MP, Mr Martin Dinham and Mr Andrew Steer high food price or the diYculties that we are now billion in 2010 compared to what was expected. If confronting in terms of climate change because there you start adding those numbers up, clearly there is a has been sustained drought for three years, all of very serious issue, and that is why we have to do those are classically externalities, not directly within exactly the analysis you talk about. the control of the government, and in that sense I think you are right to recognize that, in a country such as Ethiopia, the character of how the Q114 Hugh Bayley: If I may ask one last question, how quickly will DFID’s priorities in spend change international externalities are impacting on poverty Y reduction will, frankly, be very diVerent even from to address new circumstances? It is di cult, of course, where you make forward pledges but if you potentially near neighbours. As well as doing a great find that six of the countries on your list are deal of work in individual countries to try and particularly vulnerable and are going to be especially quantify and understand the impact of these hard hit, and you calculate that there are some aid changed international circumstances, we have also programmes which could mitigate the eVect, would been doing work at the centre in terms of drawing up you shift more resources to those countries and, if this matrix of vulnerability. Andrew, you might so, how quickly could you do so? want to say a word about that. Mr Alexander: It is not always an issue of quantum Mr Steer: I think you are absolutely right. That is as much as where money is directed. Again, to take precisely what one needs to do, because diVerent a relevant example which I have been in discussions countries will be aVected dramatically diVerently about in recent days, there is much discussion at the through all these channels the Secretary of State is moment in terms of Pakistan and potential talking about. There is a lot of work going on, requirements for an IMF loan given diYculties in obviously, within the international system. The terms of balance of payments. We spend significant World Bank has done a preliminary scoping and sums, as you know, in Pakistan and we are already come up with 32 countries that are extremely considering the extent to which, given the potential vulnerable. Obviously, the earlier rather domestic for cuts in public expenditure in Pakistan—there view that the emerging economies would be to some could be decisions reached by the government in extent insulated is turning out not to be true, and Pakistan—how best our programmes can help some of us have always believed that would be the insulate the poorest in particular from the eVects case. The question is what happens to the low 4 that would otherwise be felt. One of the points income countries, the PSA countries, in particular. certainly Bob Zoellick drew out in that speech on There we are just starting to do some work on that, markets and multilateralism was the extent to which, V looking at indicators across the board, di erent notwithstanding the fact that a number of these types of vulnerability. Obviously, countries that countries are not as directly linked into the global have higher reserves are less vulnerable than others; financial core as other more advanced countries, the those that are more exposed to international impact on the poor in those countries is even more financial flows; those that are more exposed as severe. There is not a direct correlation between exporters of certain kinds of commodities, the prices engagement in the global financial system and might fall; countries that have high inflation are impact on the population. You can still be relatively more vulnerable, and so on; countries that are remote from the global financial system but, because heavily indebted are obviously more vulnerable. you do not have safety net programmes, you do not What we have done as a preliminary—literally in the have a level of resilience in terms of either income or last couple of days we have really been working hard society, the eVects on the poor can be harder there on that—we have a list of our PSA countries and than for everybody else. Again, it has to be judged then we trace these diVerent indicators and ask the on a country by country basis but we are looking at question “Which are the countries that are most our programmes. I would also emphasise that we are vulnerable?” Obviously we have to ground-truth trying to take a more strategic view and say what on that with all the analysis that is going on in the IMF an international level needs to be done to best and the World Bank and so on, and obviously with minimise the impact of both the eVects on the global our country oYces who are close to the ground. It is economy and the global financial system on poorer a very important point. Just in terms of the rough countries. One element of that is to ensure that the numbers, if you think of Africa, oYcial development aid flows that were anticipated continue to be assistance to Africa is about $50 billion a year. delivered, albeit in diVerent economic Capital inflows to Africa are almost exactly $50 circumstances, and are not curtailed as donor billion as well if you add portfolio, foreign direct budgets get squeezed. Secondly, how do we best— investment and debt. You have to assume that is and this is directly your point—assist countries to going to fall quite a bit. It could well be $25 billion; adjust to changed international conditions, and let us say it halves; that is a $25 billion decline. That particularly the impact on the poor? Thirdly, given is very serious money for Africa. In terms of the the expectation of this meeting that is due to take growth rates that are being estimated, Africa last place in Washington on 15 November, how do we year grew at 6.5 %. Nobody knows what will happen ensure that the voice of developing countries is heard but the ballpark estimate is that one should assume as consideration is given to what a refashioned a two percentage point decline in that for 2009-2010. international financial architecture could look like, That means that GDP in Africa will fall by about $40 because we want to avoid a position whereby the design and eVect of this is limited to those advanced 4 Public Service Agreement countries. 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30 October 2008 Rt Hon Douglas Alexander MP, Mr Martin Dinham and Mr Andrew Steer forum is going to be the G20, so there will be not that happened at the White House simultaneously simply donor countries represented. Also, candidly, with the Annual Meeting, so in that sense we are the terms of the invitation letter that has been issued comfortable that both the Bank and the Fund are by President Bush very explicitly, in the penultimate taking an active role in these discussions and we paragraph of the letter, identifies the needs of certainly welcome that. developing countries, which we welcome and we see as a real opportunity to try and shape the Q115 John Battle: One of the worrying things with a conversation on 15 November. In that sense, I and global media is that we seem to have one wave of a others within the Department are already very crisis that overwhelms the next. We were talking heavily engaged with the Treasury because our lead about the food price crisis, then the oil crisis, now the ministers at that meeting will be the Prime Minister financial crisis. In response to Martin’s last point, and the Chancellor. Fourthly, we are already will the debt reduction initiative that has been on the working with colleagues across government to make table for some years and is still being worked sure that we keep markets open and scope for through be reconciled with the refinancing initiatives imports from developing countries in advanced and or will the debt reduction work be put on the back- developing countries themselves, because if we were burner while we look at refinancing, which means we to see a wave of protectionism follow the impact of are not just managing the situation now but reducing the present global financial crisis, again, we clearly the debts, which was the original target? judge that there would be very significant damage Mr Dinham: I think that is an extremely good point. done not simply to global growth prospects but also That is an issue that we need, with the IFIs,6 to be in particular to some of the poorer countries. focusing on. We can come back to you on that but it Martin, you have been working on this area daily. is absolutely critical. Mr Dinham: Yes. Just to add to that, the international financial institutions, particularly the World Bank and the IMF, really in a sense were set Q116 Chairman: It is fair to point out that the up exactly to be able to be on the front foot to deliver consequence of the latest crisis is that it has actually for us in these kinds of situations. We have been diminished the food and oil crisis. That is not exactly working very closely, particularly with the Bank, good news but it is not totally bad. You mentioned pressing it and urging it to do the maximum to deal Ethiopian, Secretary of State, which you visited just recently. You said there in the light of your concerns with these situations. For example, it is entirely about starving children being hidden from your possible for the Bank to significantly increase its visit, “In light of our continued concerns, I said I was level of lending. At the moment it lends about $13.5 now not prepared to make a multi-annual billion a year. Because it is very heavily capitalised, commitment.” Can you just clarify what the it could actually up to double that amount to about situation is in relation to Ethiopia and how that $27 billion a year. This was suggested at the fits—and I understand the reasoning—with the Development Committee. There is demand for that statement you just made about the need to maintain now whereas the private sector money is drying up.. long-term commitment? The International Finance Corporation, one of the Mr Alexander: Yes, certainly. I had, as I say, a two arms of the World Bank, is now coming forward and a half-hour very constructive meeting with with a proposal for a fund to help recapitalise banks Prime Minister Meles in which actually there was at in developing countries. It is important for the Bank, least as much focus on the issue of the new NGO law for example, to work very closely with the IMF in a that was under contemplation as the discussions number of these countries to ensure that they have which afterwards both the Times and the Telegraph coordinated advice as well as finance, and to look for focused on. I had both Times and Telegraph innovative financing mechanisms which are reporters with me when we visited the Somali region, appropriate to these kinds of spikes and shocks. and I think they judged that their readers were There is a whole range of issues which we are perhaps more interested in whether malnourished working very closely on with the Bank and indeed children had been removed from hospital than the the Fund at the moment. intricacies of the NGO law, but we were in policy Mr Alexander: One other point I would add quickly terms concerned both by the adequacy and on the Bank—and I am conscious that I will be eVectiveness of the Government of Ethiopia’s before you again in a couple of weeks’ time—is that response to the humanitarian challenge in the we take great heart from the speedy response of the Somali region and also what the immediate and Bank to the global food crisis in the sense that the long-term impact will be of the civil society law that President, Bob Zoellick, I think deserves real credit is under discussion and is making progress through for the extent to which he has been keen to ensure the government and ultimately through the that the Bank plays an active and constructive role in Ethiopian Parliament. In the course of that partnership with WFP,5 Josette Sheeran and others, conversation with Prime Minister Meles I made very but the fact that resources have been yielded up—I clear that we allocate resources within the think the Bank package was $1.2 billion—we take as Department for International Development on the being a positive sign, and of course, Bob will be at basis of clear evidence of eVectiveness in terms of the meeting taking place on 15 November and was poverty reduction, and to that extent we have seen represented at the G7 Finance Ministers’ meeting real and decisive progress being made by the
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30 October 2008 Rt Hon Douglas Alexander MP, Mr Martin Dinham and Mr Andrew Steer
Government of Ethiopia in recent years. If you look nutrition survey working with established at progress on the MDGs that we have been international bodies in the Somali region?” He discussing, Ethiopia scores very highly. Secondly, frankly accepted that argument, and one of the we of course look at issues of public financial undertakings which I repeated to the press but was management and, again, Ethiopia is one of the not reported was that he accepted at the conclusion significantly less corrupt countries in sub-Saharan of the meeting that he would now facilitate Africa. Thirdly, there is an issue in terms of human immediately a nutrition study being undertaken so rights. We have not previously been in a position, that we can have some verifiable and quantifiable within certainly my recollection, in which you could numbers against which to judge the humanitarian have a country which is making clear and discernible eVort being undertaken in the south. Similarly, in progress in terms of poverty reduction, clear and relation to the passage of the NGO law, he explained discernible progress in terms of public financial to me that the P3, as it is called, our ambassador management but, at least in the eyes of a number of along with a couple of others, the French and NGOs, is at risk of trending in the wrong direction American ambassadors, had been in to see the Prime in relation to human rights. It was that issue that I Minister a few days before my arrival and, even since was exploring with Prime Minister Meles. The point the draft that they had discussed with him and that I was making in terms of the multi-annual expressed the concerns of major international commitment was that it would have been open to NGOs like Oxfam and Save The Children, there had me, given the spending review settlement that we been a further discussion at the Cabinet of the have, at that point to say “This is the commitment I Government of Ethiopia which had taken place on am going to make over the next three years working the morning that I visited and he assured me that the with the Government of Ethiopia systems,” document that had been agreed by the Cabinet that recognizing of course that my predecessor, Hilary morning was eVectively a fourth version of the NGO Benn, after previous events within Ethiopia had law rather than the third version which had been the made a judgement to establish a Protection of Basic basis on which our ambassadors had previously Services system, which is a diVerent instrument than been in to make representations and, when I pressed classic budget support within Ethiopia. I explained him, that there would undoubtedly be further to Prime Minister Meles that my intention was not, opportunities for international NGOs like Oxfam as was reported accurately in the newspapers, to and Save The Children to be able to address their make a public announcement of support at that concerns when the matter moved from the stage but instead to be in a position where we would Government of Ethiopia to the Parliament of continue the dialogue with the Government of Ethiopia, which is due to happen in the coming Ethiopia both on the issue of the adequacy of the weeks. I hope that both on the issue of the nutrition response to the humanitarian situation in the south study and on the issue of the further opportunity for and also the continuing concerns being expressed to engagement by international NGOs in the 7 us in terms of the NGO and the civil society law. development of the CSO law, the evidence I have There was a clear understanding on both of these given you today can assure you that it was a very issues from Prime Minister Meles. One particular serious and at times forthright exchange but actually issue which was not picked up in the newspapers but, quite a constructive one, and I would hope that again, I took to be a sign of genuine intent on the people would understand both within the part of the Prime Minister Meles was that I made the Committee and beyond the Committee that we point to him “Listen, if you have all of these factors, regard it as part of our job as well as handing over if you have had drought for the last three years, cheques to governments for protection of basic which can at least in contemplation be suggested to services to be advocating for both full humanitarian be a function of climate change, if you have high oil space and adequate humanitarian response and prices, you have high food prices and you have respect for human rights. In that sense, I made no peremptory or arbitrary undertakings in terms of conflict, it need not be judged a matter of shame or what we would or would not do with our future embarrassment for you to be suVering vulnerability programme. We had a very forthright and useful to hunger because many of these are not directly conversation, at the conclusion of which I explained within your control. If the concern is that 25 years that we wanted both to keep under review the ago Ethiopia was somehow judged to be a byword V emerging response in the Somali region, the practical for famine and hunger, there are very di erent eVect of the CSO law if it is ultimately passed by the circumstances in Ethiopia today and, frankly, the Parliament of Ethiopia, and that this was a matter developed countries and its media have moved on in which we would want to discuss not least with an their understanding for example of climate change incoming administration in the United States than was the case 25 years ago when Michael Buerk because the Americans have taken a very firm view was here.” I said “I simply cannot understand why on the CSO law as well. On that basis, I very much in these circumstances you would be resistant to regard the meeting that I had with Prime Minister undertaking a comprehensive malnutrition survey Meles as being part of an ongoing discussion. within the Somali region. My recollection is that there have been 18 such surveys undertaken in Q117 Chairman: Are you able to give any indication Darfur, there have been 18 surveys of a similar type of timescale? You were going to make an undertaken in Somalia. How can it possibly assist announcement. your cause internationally to appear as a government to be resistant to undertaking a 7 Civil Society Organisations Processed: 13-02-2009 18:43:40 Page Layout: COENEW [E] PPSysB Job: 407662 Unit: PAG2
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Mr Alexander: Because we have indicative numbers Financing For Development Conference to again which we use for planning purposes, once we have a lock in and reaYrm the commitments countries have CSR8 envelope—as you would imagine, we develop made in terms of their aid budgets. that for each of our countries—it is open to us but Mr Dinham: Absolutely, and I think that was part of there is no deadline for us to at any point put into the the very strong rationale for the EU Agenda For public domain planning assumptions that we have as Action document and the work going into that, firm commitments. As I say, I have made clear that which actually underlined what the implications we want to track what progress is being made on were of the 0.56% commitment by 2010 by Europe both of those issues, discuss it with European and actually concretise that in detailed allocations to partners and with the incoming US administration, sectors as well as an overall figure. Indeed, with the and in the meantime we will carry on with some of UN High Level Event one of the key purposes was to the very successful work that I witnessed in terms of secure real commitments from people which would production of safety nets, education, health and the carry them forward towards those overall promises other programmes that I visited during the time I that we have made. That has been our key intention was there. and, as the Secretary of State has said, Doha, which was going to be a really important meeting, becomes an essential meeting for reaYrming the Q118 Mr Crabb: Firstly, I am probably not alone on commitments on ODA9 flows because, without that, the Committee in being very encouraged by your poor countries are going to be suVering even greater comments about the importance of human rights hardship. being mainstreamed to what you are trying to do, not just handing out cheques in terms of development assistance. Coming back to the issue of Q119 Mr Crabb: In terms of what we are doing the money, how do we square your very positive within the UK, given the discussion that we were opening comments about the need for funding having a few moments ago about the impact of the pledges or reaYrmed pledges for funding at the High financial crisis on emerging markets in the poorest Level Event in New York with reports we have been countries, do you see any scope for accelerating the seeing in the last two weeks or so that, for example, progress that we are making to reaching 0.7 % of some of our larger European partners –Italy, GNI, to see that there is a need and a scope to France, Spain—announcing that they are going to increase the assistance we are giving? either freeze or cut their aid budgets in response to Mr Alexander: I think, with respect to the question the financial crisis? Are you not concerned that the you have just asked, our most pressing challenge is likelihood is that for the next 12 months or two years to ensure that not simply the United Kingdom but the trend will be for donor countries to tighten their other countries as well meet their commitments, aid budgets rather than give more? whether it be the $50 billion commitment made at Mr Alexander: Of course, our challenge is both to Gleneagles, whether it be the 0.7 % commitment or meet our obligations as the United Kingdom and to the 0.56 on the way to 0.7 %. If we were simply to work eVectively internationally to convince others ensure that those other major partners with whom to meet the commitments that they have made. I we work match the United Kingdom in terms of the anticipated that I might be asked the question resolution and determination notwithstanding the specifically in relation to the United Kingdom and I challenges that we face to hold to the promises we recollected the quote which I have in front of me, have made, we believe that would mark a significant which the Prime Minister himself stated on step forward. This also tracks back to the point I 17October. This is, of course, after the immediate made earlier about the UN High Level Event. One financial crisis. He stated: “By 2013 the United of the reasons that we worked so hard to ensure that Kingdom Government will reach our target of there was a broad coalition, not simply heads of spending 0.7 % of national income on aid. We have government—with great respect to heads of clearly laid out our plans to reach this goal and we government—in New York on 25 September was are encouraging our partners to do likewise.” That that we want to broaden the coalition of people and is the clearest and most authoritative statement of organisations, ensuring that development does not V British Government policy on this issue. That is why su er significantly as a consequence of a failure to we have worked hard to concretise and make specific understand how essential a continuing focus on the commitments that other European partners are development will be as one of the responses to the making and anticipating the fact that there would be global economic downturn that we are now facing. concern as to whether pledges are being made. That is why we have worked to put other governments in Q120 Mr Crabb: You are probably unique amongst a position where they are obliged to publicly reaYrm your Cabinet colleagues in enjoying double-digit the commitments that they have made, whether percentage increases in your budget in the next few those be G8 commitments reaYrmed in Hokkaido, years. Many of the other Whitehall departments are and again, our Sherpas and our ministers were responsible for very real public services that matter working hard to make sure that was part of the to people in this country and they are going through communique´ in Hokkaido, or indeed the European some extremely tight spending round decisions at Agenda For Action. In that sense we are already the moment. How concerned are you that public working to see what we can do at the Doha support here within the UK for this continuous
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30 October 2008 Rt Hon Douglas Alexander MP, Mr Martin Dinham and Mr Andrew Steer ramping up of our aid budget will be sustained at a and even if one does think of it substantially in terms time when people are losing their jobs, losing their of a duty to those less fortunate, I confess that I houses and starting to endure a level of economic think there is good reason to be fairly optimistic pain we have not seen in this country for quite because, frankly, the growth of the 24-hour media, some time? and in particular the graphic physical depiction on Mr Alexander: I shared a public platform, as the our screens of people enduring grinding poverty, are Chair of the Committee knows, with Simon such that I would hope in all sorts of diVerent Maxwell of ODI,10 earlier this week, and he spoke constituencies, Labour, Conservative, middle-class graphically about this being a moment of real danger and working-class, there would be a sense that, for development, and I am far from complacent in whatever our privations, they are minimal and terms of the hard-won consensus that has been built insignificant by comparison with those of the people in recent years. At the same time—and Presbyterian whom it is our business to help, and you should help ministers’ sons are not known for their natural good most those who have least. On the subject of seeking cheer and optimism—I have an uncharacteristic to extract from other governments commitments to optimism on this particular point. If you take my stick to what they said they would do, and constituents, who are genuinely concerned at the recognizing that you cannot possibly be expected to moment as the impact of higher gas bills, higher be the financier of last resort if other people renege electricity bills, the cost of filling the car and the cost on their commitments, how confident are you that of buying the weekly shopping impact on household you are going to get those commitments? Secondly, budgets, if you look at the experience of those leaving aside the bird’s eye view, if you look at the constituents over the last six or seven months, on one worm’s eye level, and individual, in some cases level it has been a unique example of the extent to multilateral programmes in which we are engaged as which we now live in a genuinely interdependent taxpayers, are you at all concerned that some of world, because if you take each of those issues— those programmes might suVer even though we have food, fuel or finance—by any reckoning, no country retained our commitment to them and perhaps can adequately respond to those challenges by increased ours because other people have, frankly, saying “We are going to pull up the drawbridge. We copped out? are going to have uniquely national solutions.” In Mr Alexander: Let me try and deal with each of your that sense I think—and this places a heavy burden of points in turn. I think you were right to pull me up responsibility on all of us as politicians—if we find in recognizing that I think there are two parallel the right public language, that recognizes the real arguments we need to make for development in a concerns that people here in the United Kingdom downturn. One is to see we have a shared interest, feel about their living standards, about the cost of and to that extent, whether it be the benign petrol, about the cost of food and about the cost of consequences of an interdependent world, with their general household budgets, I do believe there is unprecedented opportunities for travel, for sharing an opportunity for people to understand the extent of ideas and mobility of capital, there are also very to which recent events remind us that we have a dangerous consequences, whether it be disease, genuinely shared interest in delivering a world that terrorism, a script with which all of us in this room is less unequal, more peaceful and more sustainable would be familiar, but there is undoubtedly an than the world of recent decades. In that sense, that argument around interdependence. It is important is far from a given. It will require a quality of however not to lose sight of the fact that the moral argument and a seriousness of intent and repetition case for development expenditure endures. If you that will challenge us all, but I do believe that the look at the latest World Bank figures, published only circumstances are there where, if we get right the about five weeks ago, the estimated number of public discussion that we have, people can come to people vulnerable to hunger are not down but up, an even clearer understanding of the extent to which inevitably, as a consequence of the global food price the impact of a drought in Australia now directly rises, from 850 million to 967 million people. impacts on the price of bread in Paisley, the extent to Because the cost of food has risen does not change which the change in the oil price will directly impact the value of a human life. If we are called upon to act on the lives of all of our constituents. Given that when there are 850 million people going to bed reality of interdependence, I think the opportunity tonight vulnerable to hunger, if there are 967 million to make the case for development spending being an people, now is the time to re-dedicate ourselves to investment in our shared future is actually quite that moral obligation. In that sense, I do think strong. that—and I would put all of us in this category around this room—we need to be committed to the Q121 John Bercow: I very much welcome what you interests of eVective development expenditure. We have just said, Secretary of State, and I entirely should not be shy in these circumstances from understand the point about interdependence and the continuing to make the moral case as well as the sense that we are doing what we are doing, or the shared interest, interdependence case. On the second Government is doing what it is doing, aided and point you make in terms of the United Kingdom abetted by others, not merely out of some spirit of Government cannot be the financier of last resort, of altruism but in the collective interest of the world as course that is true. There is always a tension and a a whole. However, even if one leaves that point aside balance here because there is always the opportunity to accentuate the extent to which Britain is meeting 10 Overseas Development Institute its commitments at the expense of other Processed: 13-02-2009 18:43:40 Page Layout: COENEW [E] PPSysB Job: 407662 Unit: PAG2
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30 October 2008 Rt Hon Douglas Alexander MP, Mr Martin Dinham and Mr Andrew Steer governments and say “Well, look how well we are new Prime Minister of Australia, said, “I have now doing relative to others.” Frankly, as all of us as come to realise that there is a kind of established practising politicians would know, that perhaps is pattern at the start of these meetings, which is that not the most astute strategy if you are trying to everybody pays tribute to Gordon Brown.” He said, simultaneously influence those governments to “I don’t have diYculty saying that because, quite make their pledges. You sometimes, in discussions candidly, I have known Gordon for many years like this, get into a cat and mouse exchange where we before he became Prime Minister and before I say “Will you name which governments are not became Prime Minister and, quite simply, he has meeting their commitments?” and you say “There is been the moral conscience of the G8 for a decade.” a number of partners” and we all know the script. In that sense, I think it is hard to overstate the That being said, we have thought a lot about this and personal credibility that Gordon, as an individual, continue to think a lot about it. One of the brings to the work that all of us engage in to try and approaches we have taken is, firstly, to ask how we persuade other international partners, either in create those moments—and that is in part what we Europe or internationally, to meet their pledges. The were trying to do over the last six months—to final point that I would make, which is specific to replicate the focus and scrutiny on the conduct of Accra but I think of general reference, was that the other governments as well as, to be fair, our own, reason we were able, in the dying hours of the which will oblige other governments to recognize the negotiations in Accra, to get very significant extent to which they are or are not meeting their movement, which I could not with any confidence commitments. The very fact that you had a range of have been assured of prior to the meeting, was celebrities in New York undoubtedly attracted a because we had a common European position. So degree of media attention to the event and to the essentially, when I was in the room negotiating with MDGs that would not have been the case had it principally the Americans and Japanese but others, simply been a heads of government meeting in New along with the French presidency, I was not York for a standard United Nations meeting. We spending my time looking over my shoulder saying, thought long and hard in terms of the structures and “How can I deliver the Europeans to an ambitious the events that we could put in place to create those outcome?” It was the fact that we had quite an moments of evaluation both for the public and also ambitious European common position which meant for the governments themselves. In addition to that, that on the three occasions that the Council of we are consciously working at the moment to ensure Ministers met almost in permanent session during that the structure of the global architecture, in those hours when we were resisting the communique´ V particular in relation to financing but more broadly that was o ered to Ministers and saying “No, we can thereafter in terms of the global multilateral do better and must go further,” I was able to appeal institutions, is better equipped to meet the to a European sentiment saying, “I am not asking development challenge of the coming century given you to go any further than we have already agreed.” that they were broadly devised 60 years ago at the That was an extraordinarily powerful thing, partly time of Bretton Woods and the establishment of the because it freed us up to negotiate proactively rather United Nations. We are trying strategically to than to be discussing amongst ourselves. It brought anticipate what will be the structures that will allow together the Commission and the Council of other governments with confidence to make their Ministers because Louis Michel very graphically at commitments. Thirdly—and this was a very large the meeting said, “We face a choice here in Accra. focus of our work in Accra in September—it is to We have always been big players. The question is, is close the door on the argument that development Europe going to be a big player in these expenditure would be fine but the money is somehow negotiations?” In that sense, I have made lots of being wasted because it is being spent ineVectively. speeches as a former Minister of Europe about the One of the reasons that I worked so hard in Accra importance of a common European voice in international aVairs. I lived that reality in Accra to deliver an ambitious communique´ rather than the because, had we not had the strength of 27 behind communique´ that greeted me when I stepped oV the us, notwithstanding the sincerity of our belief, plane was because I fully anticipated even in notwithstanding the credibility of our Government, September that the issue of the eVectiveness of notwithstanding the urgency with which we would international expenditures was going to grow rather have tried to negotiate, I doubt we would have been than diminish in the years ahead. In that sense, those anything like as eVective. of us who want to see continued commitment to John Bercow: Secretary of State, can I tell you that significant public resources being spent on aid need your incisive rebuke to the most blinkered Euro- to properly address that concern. Beyond that, I scepticism is duly noted. I will circulate it amongst would also say that the credibility of our own Prime colleagues. Thank you for those answers, which Minister frankly helps a great deal. It was the first were extremely helpful. occasion I had travelled internationally with the Chairman: We are not proceeding very quickly Prime Minister to a major international meeting through the questions, interesting as that exchange since he became Prime Minister. If I just tell you that is. at the Class of 2015 event, which was the event brought together by the Global Campaign for Education to refocus attention on the number of Q122 Sir Robert Smith: The Business Call to Action kids who are still missing the target in terms of event in May 2008, according to your website, was having a school to go to, Kevin Rudd, the relatively aimed to inspire companies to commit to concrete Processed: 13-02-2009 18:43:40 Page Layout: COENEW [O] PPSysB Job: 407662 Unit: PAG2
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30 October 2008 Rt Hon Douglas Alexander MP, Mr Martin Dinham and Mr Andrew Steer transformative initiatives that used their core monitoring and supporting the announcements that business and to access up-to-the-minute have been made whether prior to the event or at the information, money and business expertise as well as event in September. create new business and employment opportunities. Out of that High Level Event what sort of private sector initiatives were agreed? Q124 Sir Robert Smith: How do you see, from when those commitments were made in a diVerent Mr Alexander: Let me give you three very specific economic world, private sector companies actually examples. One is Yara International, who are a being able to deliver through this current financial Norwegian-based fertiliser supplier, who are now crisis? making, as a result of pledges made at the High Level Mr Alexander: Fortunately for myself, I asked this Event, a $60 million investment to build a fertiliser question ahead of coming to the committee. We terminal in two key African ports in Tanzania and have had no indication from any of the 27 companies Mozambique to significantly improve port that the commitments that they have made have eYciencies for agricultural inputs, crucial for small- been compromised by the economic downturn now, scale farmers in particular. A second one is Map or not across the balance sheets and business models International, who are a financial infrastructure of each of these companies, but there has been no technology provider. When I asked my oYcials at indication whatsoever of any of the companies the time of the meeting “What does that mean?”, drawing back from the commitments that they have they provide electronic banking facilities to 2 million made in recent months. people in Uganda. Basically, what they are going to do is to provide facilities for an additional 2 million people within Uganda, as a result of a pledge made Q125 Sir Robert Smith: Presumably the recruitment there, fast, easy and secure access to banking of new companies could be somewhat less? services, which will greatly reduce the time and eVort Mr Alexander: Listen, I cannot predict, because, required to make and receive payments, generate frankly, we do not have in our own mind a target substantial eYciencies for farmers and others within number that we were working towards. We have the country. The third example, which I was made a huge eVort, both around the event that we personally attending at the meeting of, was hosted here in London in May around the launch of Eriksson, who are establishing an Innovation Centre the Business Call to Action and then for another that will develop mobile applications for phones to moment in New York on 25 September; and there focus on health, education, agriculture and small was, inevitably, after those two spurts to the line a businesses in sub-Saharan Africa. They will necessary changing of the consortium in the sense establish three hubs in Kenya, Nigeria and South that new partners have emerged and we want to get Africa and they will initially concentrate on this onto a sustainable basis, but we were applications tailored to the needs of 400,000 people anticipating even before the financial events of in these countries. There are about 27 individual September a period of immediate consolidation companies who have now made pledges but those after the specific meeting in May and the specific were three very specific pledges that were made at the events in September. Call to Action in September. Mr Dinham: I think what was interesting particularly about the event in May but carried forward to September was the amount of interest Q123 Sir Robert Smith: What are the next steps for and almost competition that was going on between the Business Call to Action? private sector companies really attracted by this Mr Alexander: Essentially, what we have formed proposition. This is not us going to them and asking now is a consortium which involves a limited but for charity or philanthropic contributions but continuing role for not only the UK Government something which actually made sense with their but the International Business Leaders Forum, the bottom line, which was making a huge contribution Clinton Global Initiative, the World Economic to employment and other services particularly in 11 Forum, the UNDP, who have in many ways been Africa. There was a real sense of excitement from the the body to whom we have looked for confirmation CEOs that were there, and I think that will carry as to the development gains from the proposals that forward quite a long way and I think all the we have received from these companies. That indications in New York were that that sense of consortium will continue to take forward its work. progress was being taken forward. The next significant event, we would anticipate, will take place in Davos at the end of January, where there will be a further opportunity to review progress Q126 Sir Robert Smith: A related thing to do with that has been made. We would not anticipate that the private sector. I understand that a silver lining of the consortium in the immediate months between past complaints about Africa is that the African now and Davos will be looking to secure lots of banking system has been very conservative and very additional new pledges, although, of course, if highly regulated, but the consequence of that is that people want to come forward with serious they were not involved in sub-prime markets and propositions they will be considered, but a big part that sort of thing. Does that give some confidence of the work will now be in taking forward, that maybe, at least when it comes to going forward, that the African banking system may be better 11 UN Development Programme placed to cope? 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Mr Alexander: I think it is quite diYcult to talk in were talking to the Secretary of State a couple of generic terms about the African banking system. I days ago about this. He was saying the trick now is think there is probably an easy distinction. On the to in some ways do what the countries did in the East one hand you have quite an advanced banking Asian crisis. Africa now needs more than ever to system in South Africa, you have, again, a quite demonstrate transparency and governance reform. large and powerful banking system in Nigeria and Why? Because that will strengthen even more and then you have a third category, which is banking make this investment more likely to continue. systems which are often much less connected to the Mr Alexander: Can I add one brief point on this? international financial system than would be the case Relating to our earlier conversation as to how you in other more developed markets. I certainly would make the case for development on a downturn, when not want to sit here today and, hand on heart, say I was in the United States that weekend in New York there will be no diYculties being visited upon the I watched an interview because the High Level Event African banks or the African countries that I have was happening simultaneously with the Clinton mentioned, but you are certainly right in recognising Global Initiative meeting in New York. In my that the fact that they are not themselves large personal judgment, Bill Clinton is almost without enough or connected enough in many countries to peer as a political communicator, and I was have already felt the impact of the global financial therefore fascinated to watch an interview which he crisis oVers some grounds for optimism that they gave answering the American equivalent of the will be able to undertake the work they have been questions that we will all be being asked in terms of undertaking in recent years. On the other hand, I why we should be spending in developing countries would caution against blanket predictions at this when there is a global economic downturn. In stage because there may well be individual response to the specific issue, which was why should institutions that have particular problems related to the CGI be continuing to work in these African the commercial decisions they are taking. countries, he oVered two very interesting answers Mr Steer: I think that is absolutely right. There is no which I have been reflecting on a lot in the question; the banks there are just not as integrated subsequent weeks. First, he, said, if you look at the and so there is opportunity; there are grounds for Pew Global Attitudes studies, where in the world is hope. Linking that to your previous question, I think the United States more popular today than eight the trick in the coming year is going to be to monitor years ago? It is in central and Southern Africa where these 27 companies to make absolutely sure that our a combination of the Clinton Global Initiative, hypothesis of investing in Africa actually will still be MCC,12 PEPFAR13 are working in significant attractive for these companies. If you go down the numbers. Simply in terms of our national interest, list it is remarkable—Microsoft, Pepsico, this is a huge game for us to be seen to be part of the SABMiller, the Standard Chartered, Sumitomo— answer to the challenges facing these countries. The they are all doing things, all 27 of them, and about second answer he gave though, which sparked in my two-thirds of them are in Africa, that actually are mind when Andrew was speaking, was, “I would good for their long-term development; and Africa is have a plea to all journalists covering these issues. still going to be, we hope and pray, growing at a rate Please do not ever use the word Africa again, that is significantly higher than has been the because actually Africa carries with it an association traditional rate. So if it is now 6.5 %, let us imagine of failure, however unmerited, which makes it it comes down to 4.5—it is still going to be attractive diYcult to make the case, which actually is for these companies. The trick is to monitor whether compelling if you look at the evidence of the or not these companies are going to have access to individual countries in Africa’s achievement over the enough capital to make these investments, but last five to ten years”, and he said when you get to actually the size of these investments in the initial the level of talking about what has happened in a part is not going to be so large. So we are going to country like Rwanda, what has happened in a work very hard to monitor precisely that. country like Ethiopia, they comfortably bear comparison in terms of economic progress with more developed markets in recent years, and in that Q127 Sir Robert Smith: So on a scale it may not be sense I think one of the challenges for us is to find a a big thing, but if it sets an example and encourages way of telling the story of the continent in a way others and shows the way, then it is an important which does not take people back to a perception of start. failure and famine but actually recognises the Mr Steer: That is what this is all about. There are objective truth, which is that many of these countries some investments that are fabulous that, quite have been growing at five or six % for a number of frankly, we do not need to highlight because years now, albeit with high commodity prices. We everybody knows them, there is a lot that is not still anticipate they will continue to grow. There will attractive. There is a zone in the middle which is now continue to be very real commercial opportunities growing because the quality of policy-making in there. If, critically, the public policy choices which Africa over the last ten years has gradually been have been one of the ingredients of sustained improving. The risk premium has stayed reasonably growth, along with relatively easy credit and high high. Literally in the last couple of years you are commodity prices, continue and one of the starting to see investors that are saying, “Wait a conversations we are having at the moment with minute. The rate of return is good, the risk premium has shrunk a lot”—the real risk as opposed to the 12 Millennium Challenge Corporation risk premium—“because of quality of policy.” We 13 US President’s Emergency Plan for AIDS Relief Processed: 13-02-2009 18:43:40 Page Layout: COENEW [O] PPSysB Job: 407662 Unit: PAG2
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African governments is to say, if you are to seize the the standard measure, the so-called DALY. opportunity of having higher rates of return on Anything under $100 is traditionally regarded as investment in the years ahead, you cannot aVord actually a pretty good investment. That means if now to do anything than to put the foot to the floor there are 500 million cases of pretty serious malaria and accelerate the kind of regulatory and every year and a million deaths, and it is mainly governance changes which make you a safer and children, for $17, using the technologies, a stronger business environment in the years ahead combination of spraying and bed nets, you can than you have been in past years. basically restore a lost year of life either through death or, more likely, through disease. If that is an adult, even if they are only making $150 a year, that Q128 John Battle: Can I come back to the Global is an incredible rate of return. If it is a child, it speaks Malaria Plan that was announced at the High Level for itself—that is just a wonderful investment. What Event, because it set an aim of achieving near zero we have to be able to do is demonstrate that, and preventable deaths by 2015, but people assess that who would not want to put money in with that kind that would take investment of a billion dollars a year of rate of return, but we have to be able to being raised from now until then, and that was demonstrate it, which I think we can. drawn up before the credit crunch, so how realistic is that plan? Can it possibly be achieved or will it just be another target that disappears into the distance? Q129 John Battle: Could I apply that across to the Mr Alexander: One of the reasons that we are Task Force on Innovation Financing for Health optimistic in terms of the progress that has been Systems, because there, as far as I understand it, the made on growth by the launch of the Global Malaria first year is going to be spent exploring funding Action Plan and also the event that took place in mechanisms rather than getting on and doing the New York is it is probably the best exemplar of job. Are we losing a year by doing planning? Why do putting together a diVerent kind of coalition than not those mechanisms for financing that you applied that which has been put together in the past, in the to the malaria initiative apply to this taskforce, or sense that with the engagement of private sector am I being too sceptical? The reason is, we need not people like Ray Chambers, Peter Chernin at News just set to targets but to make sure that the stones to International, there is real private sector reach down that road are in position, do we not? engagement on the issue of malaria in a way there Mr Alexander: I am reminded of Barack Obama’s has not been in the past. Secondly, in a more co- response when challenged as to why he is not taking ordinated fashion than has been the case on previous part in the debate while dealing with the global diseases or in previous years, we have the real financial crisis, and he said, “As President of the engagement of people like the Gates Foundation, United States you need to be able to do more than and in that sense you have got the philanthropic one thing at once.” In that sense, it is not for us a piece, you have got the private sector piece and you choice between looking and exploring this issue of also have the kind of government commitments that innovative financing mechanisms in terms of health Gordon made when he was appearing on Pop Idol, systems and getting on with the job. If you look at or American Idol, in the United States earlier in the the sum that I confirmed when we were in New York year with an additional 20 million bed nets to make in terms of the eight first wave of IHP countries and a contribution to filling the bed net gap. So in that the money that we are spending on health, there is sense our measure of the capacity to achieve the for us no contradiction between getting on with the Global Malaria Action Plan is not solely contingent work of supporting health system reform and at the on the level of public investment that is secured. same time consciously raising the bar for the That being said, you are absolutely right in international community as we sought to do in recognising that our estimate is the Global Malaria Hokkaido by identifying the need for additional Action Plan will require $5.3 billion in 2009 health workers. worldwide, about $2.2 billion for Africa and $6.2 billion worldwide in 2010, $2.86 billion of which is Q130 John Battle: But unless—and this is where I for Africa to expand the malaria control am not clear—there are parallel financing structures, programmes, and will also require an additional or will the money go through things like the Global $750-$900 million per year to meet the needs for Fund to Fight AIDS, TB and malaria or the Global research, vaccines, drugs and other tools. So we have Alliance for Vaccines and Immunisation? Will it be made some progress, but it is right to recognise that used in the existing funding mechanisms or will you the plan identified numbers that need to be moved be setting up parallel ones? forward. Again, it bears on the point that Martin Mr Alexander: No, there is no presumption that we made earlier, the very specificity of the Global will be setting up parallel structures at all. We are Malaria Action Plan and the gap that still needs to saying, however, if you look at the opportunities be filled to meet it to me is an assistance in meeting that we have, for example, anticipating the Italian the challenge of malaria rather than a threat to G8 Presidency next year, this is now a very serious meeting the challenge of malaria. and credible task force that we have established. We Mr Steer: I think one of the things that we need to have got Bob Zoellick co-chairing with Gordon, we be able to do in malaria, which I think we can, is to have got Prime Minister Stoltenberg, if I recollect we demonstrate that this investment is really a have got Margaret Chan from the World Health wonderful investment. It costs $17 to reduce a Organisation, Ellen Johnson Sirleaf, Bernard disability adjusted life-year in malaria, and that is Kouchner, Giulio Tremonti, the Italian Finance Processed: 13-02-2009 18:43:40 Page Layout: COENEW [E] PPSysB Job: 407662 Unit: PAG2
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Minister, anticipating the G8 Presidency. We have innovative financing for health and, simply in terms put together a serious group of people which we of the World Bank piece, never mind the additional believe will give us clout and authority as a taskforce resources, I think that is a significant gain. internationally. We consciously have recognised Mr Dinham: They are also, of course, the treasurer this. The main criticism is not have you just set up a for the advance market commitment for vaccines. planning process that will takes months and months and months. If anything, we have put ourselves Q132 John Battle: Mr Zoellick is still there. If the under a huge degree of pressure in terms of can we elections go in a certain direction next week, he may start work immediately, and, although we are still move on. working on this, we would probably anticipate that Mr Alexander: Could you possibly tempt me into a there will be a task force meeting in Doha at the prediction on that! Financing for Development Conference, our first opportunity for the task force to get together and Q133 John Battle: He might be treasurer. start its work, and given the normal planning Mr Alexander: We will have a view by the next time timescales for these kind of tasks forces, that is quite we meet! quick, anticipating that we want quick results. But we are convinced that, given the collective experience that we have, whether through the Q134 John Bercow: Secretary of State, to ensure that AMC,14 whether through other forms of innovative the Millennium Development Goal of all children financing, the challenge is to apply that to a sector completing primary education by 2015 is met, it which historically has not had the focus on logically follows, of course, that universal access to innovative financing in particular in relation to schooling has to be achieved by 2010. What specific health workers. steps is DFID taking to ensure that new teachers are Mr Dinham: That is right. We are genuinely open trained for schools built as a matter of urgency to about what this taskforce could come up with. There facilitate the achievement of this important is a whole range of possible outcomes. As you say, objective? some form of IFFIm (International Financing Mr Alexander: The context in which all of our Facility for Immunisation) arrangement, increase spending on education takes place is the pledge donor support for health results, more debt for which preceded my arrival in the department, but I health SWAps,15 private participation and the am delighted that it was made in terms of the £8.5 financing and delivery of health services, insurance- billion that has been pledged between 2006–07 and based health schemes, whatever. There is a range of 2015–16, and in that sense, we have been working possibilities and this is genuinely a way in which we very hard. I personally have witnessed the results. I can lever more resources. saw for myself in three countries that I recall most recently, one was in Uganda, where I visited a school with the Prime Minister, where extraordinary results Q131 John Battle: As long as it is levering more have been achieved in terms of additional kids resources in. The reason I asked the question is that coming into schools. I then travelled on and saw for in this room, perhaps not that long ago, we were myself in Tanzania the progress that has been made looking at funds to increase assistance for anti- in terms of primary schooling and, most recently, ten retrovirals for HIV/AIDS, and we are doing an days ago, two weeks ago, I saw in Ethiopia the inquiry on AIDS, as you know, at the same time as progress that has been made. In some ways the great this. I am rather hoping we can guarantee that it is frustration that we face is we know how to get kids not just a shift in facility and malaria becomes more into school, we have seen progress and brought 40 important than HIV. Similarly, when we went for million more kids into school, but we have still got the anti-retrovirals we neglected the TB elements, so 75 million children who this morning had no school we have got to go back to it. How can we keep all of to go to. That is why there is a balanced approach them, increase the maximum drive for all of these, so that we take working with specific country plans in that we actually get nearer the final goals that we are terms of the Fast-Track Initiative (FTI) seeing what aiming at? That is the issue really, is it not? individual countries require. Is it physically the Mr Alexander: We very much see this as new building of a school? The school that I visited ten resources for health in developing countries. The days ago was built by World Vision but then all the other point I would make would be I personally on-run costs were being met by the Government in greatly welcome the involvement of Bob Zoellick, in Ethiopia. Is it actually teachers themselves and the the sense that I know there has been some criticism training of teachers, which we are very clear has a in the past in terms of the record of the World Bank consequential impact in terms of rates of retention in in terms of investment in health and it is an issue the school? Is it the provision of something as basic which I think he is gripping within the bank, but also as sanitation facilities at the school? Again, I was it holds out, again, a kind of false multiplier eVect sharing a platform, or speaking at a meeting with the that not only can we look to lever in new resources, Chairman earlier in the week at the launch of our but also it will mean that you have as President of the new water and sanitation policy and, in truth, both World Bank somebody who is across quite simply the mothers that I met in Ethiopia and the mothers the best thinking anywhere in the world on that I met in Kenya said, “We simply would not consider having sent our daughter to the school if it 14 Advance Market Commitment for Vaccines had not been for the fact that there were separate 15 Sector Wide Approaches toilet facilities.” So whether it is the provision of Processed: 13-02-2009 18:43:40 Page Layout: COENEW [O] PPSysB Job: 407662 Unit: PAG2
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30 October 2008 Rt Hon Douglas Alexander MP, Mr Martin Dinham and Mr Andrew Steer decent toilets, whether it is the provision of decent aYrmative action in this context. It logically follows teachers, whether it is the provision of, in some cases, that if girls are far behind and if there is a general feeding programmes to ensure that kids have an default presumption in a family with devastatingly incentive to come to school or whether it is as basic inadequate resources in favour of sending the boy as the abolition of school user fees, which in a case rather than the girl, or if a judgment has to be made like Tanzania resulted in a million more kids turning to withdraw a child where there are school user fees, up the following week, we work with the Global to withdraw the girl rather than the boy, frankly, Campaign for Education to highlight the issue and that needs to be revisited, and it is perfectly we work with the Fast-Track Initiative to make sure legitimate if DFID is paying the piper for it, at least that the country plans meet the particular needs of to some extent, to call the tune. The second point, if the countries in which we are working. I may say, Secretary of State, is that I think it has been a recurrent feature of our visits as an Q135 John Bercow: That is a very helpful answer, International Development Committee, there are a V but I wonder if, as a follow up, Secretary of State, I number of di erent places in respect of a range of can ask you whether the Class of 2015 Partnership, projects not specifically related to primary announced at the High Level Event, includes specific education, to find that in so many cases we go to gender targets within its aims? Because you will be these meetings about women’s issues and it is men aware of, and I am sure duly disappointed by, the who are speaking. On one occasion Malcolm and I fact that the 2005 MDG gender equity in education and Ann McKechin, whom of course we are target was missed and, sadly, missed by a mile. delighted now to see as a member of the Government Mr Alexander: It is impossible to build credible and, sadly, no longer a member of this committee, strategies for getting those 75 million kids into were absolutely infuriated that there was a woman— school unless you recognise the centrality not just of I can think of one at least, and there were other gender but disability. From my recollection, I do not examples—who had a Master’s degree, who was have the figures in front of me, but I think one in standing there serving the tea while men prated on every six of those children is in Northern Nigeria in eloquently at very considerable length and it is a fair which there is predominance of lack of opportunity bet that a number of them will have lesser for girls in particular. So in that sense it is a constant qualifications. dynamic in the conversations that we have with Mr Alexander: Sounds a bit like my kitchen! I simply other partners in terms of how do we get those observe the fact that probably none of us are well additional kids into school. You are right that the qualified to comment on this, given that all of the gender target for 2005 was missed, I think, in 94 witnesses and all of the questioners are men, and I countries, a huge number of countries, and in that am conscious that we are having this discussion sense progress has been hampered for a range of against that backdrop. I would also say with diVerent reasons, and understanding the factors that humility that, following the reshuZe, all of the stopped the last target being met is instructive in ministers at the Department for International terms of how do we make progress. It is partly a lack Development are men. Partly as a result of that, I of international political leadership and people have taken on the responsibility of being the minister articulating exactly the discussion we are having; the responsible for gender issues within the department, global funding gap has itself contributed to the because I wanted an unequivocal message sent out problems; a lack of plans and capacity, which is why that at the highest level of the department that we do the FTI is so important, because it gives the donors and continue to take extremely seriously the gender no place to hide in terms of a credible plan being dimension to the challenge of poverty reduction. In developed by the national authorities, and locally, the best traditions of the Civil Service, I have been the number of poor families who simply cannot surreptitiously passed two notes clearly determined aVord to send all of their children to school has a to make sure that I present an accurate picture of the diVerential impact in terms of girls there. So in that department’s work. One note, if I may quickly sense it is absolutely essential to the planning that we indulge the committee, says, “Target missed but put in and the work that we do with the Fast-Track progress.” In 1999 there were 94 girls per 100 boys in Initiative to try and anticipate that, and in that sense school and, happily, in 2006 that number has at least it was a repeated theme in the Class of 2015 meeting risen to 97 girls per 100. So there has been progress, which I attended and at which our Prime Minister but I am far from complacent and there is more to spoke. be done. The second torn piece of paper I was passed was just confirming that the Fast-Track iInitiative Q136 John Bercow: As a very brief follow-up, endorsement of which I spoke requires very specific Secretary of State, may I say thank you again for attention being paid to the issue of gender. So I can that and for your commitment to build upon the assure you that, if there are further opportunities for work that you have already done. I wonder if I could dialogue with the committee, we will continue, I just, in a sense, suggest that this committee can oVer hope, to prove the sincerity of our concern, but it is reinforcement and ballast to you in your eVorts: a very fundamental part of our thinking about the because on the one hand, obviously, cultural factors challenge of education. very often are of longstanding and they are not easily Mr Steer: Just to support your point about tackled, and one has to be both sensitive to them but aYrmative action, yes, aYrmative action is required not, ultimately, led by them, and, to put it very and that is why actual cash is handed over to parents bluntly, there is a compelling case, I think, for to enable their children, their girls, to go to school in Processed: 13-02-2009 18:43:40 Page Layout: COENEW [E] PPSysB Job: 407662 Unit: PAG2
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30 October 2008 Rt Hon Douglas Alexander MP, Mr Martin Dinham and Mr Andrew Steer countries like Bangladesh, and we will be financing if there are eight of them, somewhat reductionist, that. It is hard to imagine that degree. Twenty years they do not cover everything. Frankly, it is an ago this would have been so radical, the idea, it important conversation to have, but at the moment would sound like a bribe, but in fact it is not at all, it is the best framework we have, and I do not want it is enabling their children to go to school in a very to give people the excuse to spend months or years direct way. reflecting your earlier question, having Chairman: I am pleading with the Labour whips to conversations about how to redraw matrices for the ensure that Ms McKechin’s replacement is female; MDGs, I want us to get on with the job, and in that otherwise we will have an all male committee. sense at the High Level Event in New York the UN John Bercow: That will be deeply unsatisfactory, and estimate $265 million was specifically committed to then there will be questions of pots calling kettles women’s education. That to me is a better use of the black and all that sort of thing, as people start collective time of the international community than moaning about these matters. at this point in the progress towards the MDGs or, Chairman: We genuinely try to feminise ourselves indeed, the failure to make progress redrawing the with at least one woman. matrix.
Q137 John Bercow: Mr Dinham wants to say Q139 John Battle: I take your point, and I am not something, I think. redrawing matrices, but the reality is on the ground Mr Dinham: No, it was just to re-emphasise that the as it were. To cross-reference a conversation that this Class of 2015 event had this issue about girls’ committee is having co-terminis with this education shot right through it, and if you look at conversation, if you like, on HIV and AIDS, is the the UN document, which sets out all the various question that 60 % of women that suVer HIV/ pledges which have been issued, a number of them AIDS—and pregnant women—there is a massive refer to girls’ education and specifically Norway put issue there—and one of the issues that DFID have in $180 million specifically for that through the been good at has been doing some work on the UNICEF Programme, so it was quite a strong ground on violence against women and HIV/AIDS, motif really. I think, if I remember, in Bangladesh, Nepal and South Africa. Can I flag that up with you and say Q138 John Battle: We have, quite rightly, referred to that as well as setting a matrix out, perhaps some of the Prime Minister and, indeed, his wife. There have the practice on the ground that DFID has been defaults on MDG5 on maternal health, which implemented already ought to be disseminated right has fallen the furthest behind, but if gender is to be across the international agencies to make sure that it driven as a theme throughout all the MDGs, it does is built into their practice. We may then make some seem that some of them are both too narrow and more progress as a whole. I make a plea to say that others are not even taken into scope. For example, there is some good work going on on the ground. It with HIV/AIDS the question of violence against may not be in the matrix, but unless we get there, we women is a theme that we are waking up to perhaps will not get the outcomes that we would want. late in the day. I just wonder whether, on the whole Mr Alexander: I have got the figures in front of me question of gender equality, if we set each of the for South Africa, Nepal and Bangladesh and we targets against gender equality most are really far oV have made real progress, and I can certainly show track. Should we not be setting specific targets, the committee if it would be helpful. When I left the perhaps along John Bercow’s lines of aYrmative press conference last September in Downing Street, action, for women and girls in all the MDGs? Would and we had Prime Minister Stoltenberg, Gordon that not help set a framework to be much more was there and I was there, as we left we had managed inclusive, although we are still hoping they will to get a single column in the Glasgow Herald and trickle down and reach through? half a column in the Financial Times after months of Mr Alexander: It is interesting. I had a similar international eVort out there and, as we left the conversation relatively recently with my Danish room, Gordon said, “I wonder if this proves that we counterpart, Ulla Tørn?s, who is responsible for need to have more focus in our publicity on taking a strong leadership role on the issue of gender individual diseases”, because we know that the IHP at the High Level Event, and you can have quite a (International Health Partnership) is the right theological conversation as to whether it is better to response in terms of health system strengthening and have a vertical or horizontal target: do you think of co-ordination but in that sense what attracts the target in terms of gender equality as running, like attention about DFID’s work is not always the same a theme through a stick of rock, through all of the as your point: what actually we are proving by our MDGs, or is it better to identify and specify specific policy leadership on the ground. In that sense, gender outcomes in terms of poverty reduction? I although there was a big discussion of malaria and think the real test is the progress that we make, and other issues in New York, we relentlessly take the in that sense my answer on gender would echo my opportunity to make the policy argument in terms of broader response when people say why is it that the gender and other issues as well, and I can assure you, MDGs do not have enough emphasis on climate whether it is Bangladesh or South Africa or Nepal, change, or conflict, or other issues which, were the we have the examples already of where that MDGs being written today, probably would have a combination is making a very significant diVerence, stronger emphasis. At one level you can have a and in that sense we are sharing that with fellow critique of the MDGs to say they are, by definition, policy-makers all the time. The truth is we struggle Processed: 13-02-2009 18:43:40 Page Layout: COENEW [O] PPSysB Job: 407662 Unit: PAG2
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30 October 2008 Rt Hon Douglas Alexander MP, Mr Martin Dinham and Mr Andrew Steer at times to get the public recognition of the donors, we were across this issue. I think there has interaction of these factors, whether it be gender and been recognition, which is reflected in the response education, whether it be sexual violence and HIV, that we gave to the committee’s work, that this is an whether it be how to simultaneously attack malaria issue that has grown in significance, not least in the and attack HIV and AIDS and tuberculosis by light of the rising food prices. I would, with respect, building a sustainable health system which is the somewhat diverge from the overly pessimistic foundation on which any of these three diseases can characterisation you have oVered of my response, or be tackled, but our public recognition is not always the Government’s response to your report, in the the best guide to the integrated nature of our sense that in front of me I have got the exact wording policy work. for clarity: “DFID’s policy in the research division John Bercow: The committee has the same problem established a nutrition taskforce team in June this Secretary of State. year. Ministers”—myself—“have asked the team to recommend ways in which DFID can strengthen its focus on improved nutrition outcomes in the context Q140 Hugh Bayley: Compared to some select of rising food prices”, and in that sense that is work committees, we are pretty supportive of the that we are taking forward. We are looking to have department we are going to scrutinise. In fact, our a nutrition strategy by the end of 2008 and in that previous Chairman described it as a conspiracy, the sense there is ongoing work on this issue. Andrew, committee working with the department to rein in do you want to add to that? support for the department’s work out of the Mr Steer: I think your comments and criticisms were Government, and I think it is still generally true, we fair. DFID, I think, has done some wonderful work very warmly support the work that the department on nutrition. The way we have gone into it, though, does, but we have a gripe, and the gripe is this. In our has been a lot through social transfers, as you know, report on global food security we raised the concern in 20 countries in Africa. Our view has been you have that the way that DFID measures progress towards to empower poor people with the purchasing power Millennium Development Goal 1 uses poverty as the so that they can purchase the nutrition they need and indicator rather than nutrition. Millennium then invest in agriculture, and so on, but I think what Development Goal 1, of course, is to eradicate we have been missing is the bulls-eye on nutrition. extreme poverty and hunger, and they are not the Looking at nutrition, we have looked at all the same things. I do not think one could make a instruments that can address it, but I think we do credible argument that you remove hunger simply need to focus more fully, and that is why the by increasing people’s income. There is clearly a Secretary of State has asked us to get back to him correlation but they are not the same thing. I precisely with some very clear ideas, and we will be wonder, when you were looking at the committee’s discussing it with our internal so-called development recommendation and making your response when committee in about six weeks, two months, and we you decided to make no change to the way you assess will be presenting to the Secretary of State at about the department’s contribution towards the the same time. achievement of Millennium Development Goal 1, whether you came close to adding a nutrition indicator or whether you would want to add a Q141 Hugh Bayley: I am certainly reassured that nutrition indicator somewhere else. That struck us you are working in the area. In your response you as very important when we wrote our report back in said this in explanation of the department’s policy, June and July and, given what has happened to food “We have selected eight of the 48 MDG indicators, prices since, I think it is even more important. I one for each MDG, as a summary measure of wonder whether it is something you would like to progress against the PSA in 22 partner countries. We comment on and possibly consider further. have selected a poverty measure—the proportion of Mr Alexander: A word of context before I come on population with income below one dollar—as our to this specific response that we oVered to the indicator of progress against MDG1 to eradicate committee. The Davos Conference that took place extreme poverty and hunger.” Our question to you last year at the end of January was noteworthy, and is: why did you chose the poverty indicator, not the it is usually to Bob Zoellick’s credit by the fact that nutrition indicator? If you do work on this field, and he took the opportunity, frankly ahead of anybody I am reassured to know that you are re-examining else, of highlighting the quite seminal Lancet article the matter, perhaps you do not need to pursue it that identified nutrition in particular as a problem, further, but I think as a committee, if you decide as and he took the opportunity to talk about the fact a result of your nutrition work to retain the single that the international community was going to have indicator for MDG1 as a poverty indicator rather to recognise nutrition and hunger as a significant than a nutritional indicator, can we have an issue in the months ahead. Actually, with certainly explanation of why you think it is the right thing Andrew, one of the things I did when I came back to do? from that conference was to say, “I want to see my Mr Alexander: With respect, I think there is a slight agriculture people and I want to see my health risk if we are not complete in the quotation, in the people in a room so that I am confident that we are sense that the following sentence is also relevant. It across these issues”, because, frankly, nutrition had states, “We will, however, continue to monitor not been a central focus of my work in the first six to progress against all MDG indicators, including eight months in the department but I wanted to those of malnutrition, throughout the PSA period.” make sure that, as one of the key international In that sense we can have a further exchange, and I Processed: 13-02-2009 18:43:40 Page Layout: COENEW [E] PPSysB Job: 407662 Unit: PAG2
Ev 44 International Development Committee: Evidence
30 October 2008 Rt Hon Douglas Alexander MP, Mr Martin Dinham and Mr Andrew Steer hope that the undertakings that we have given reflect and was in some ways both encouraged and the seriousness with which we reflect on the work on educated by what he told me in terms of wheat and the committee. On the other hand, it does not seem rice, because it tells quite a diVerent picture in each to me to be inappropriate to see that you can both of them. have summary indicators and take a more Mr Steer: Certainly, Chairman, you are absolutely comprehensive look by measuring all of them, but I right that prices today are lower substantially— take the point you have said, and, as I said, there is wheat is 47 % down on its peak, maize is 35 % continuing work underway within the department. down, rice is 26 % down on its peak—but if you compare prices today with a time when they were Q142 John Battle: In terms of the sensitivity of the reasonably stable, like October 2004, four years indicators, some of the Government specialists now ago, wheat is up 66 %, maize is up 98 % and, most are saying, obviously, a dollar a day, you cannot disconcerting of all, rice up 253 %. So, whilst there survive on that in a rural area. It is very diVerent are some grounds for encouragement in that, the from trying to survive on that if you are in an urban spike has gone, but I think we are all very much area. I think in the past we have focused on hunger aware for three or four well-known reasons that the as a rural issue and not as an urban issue. Given era of really low prices is not with us any more. that now more than half the population in the Mr Alexander: In terms of what actually happened world live in urban conurbations, will the at the High Level Event, those assembled promised indicators be sensitive enough to realise that there nearly $2 billion for emergency food aid to stop the is malnutrition and hunger in the urban centres that immediate tragedy of the threat of starvation of the might actually be a greater challenge than in the horn of Africa and for the rapid distribution of rural areas? support including seeds and fertilizers to 30 priority Mr Steer: I think it is certainly true that more countries. In terms of the UK’s commitment, we attention will, and should, be given to urban issues have on-going commitments of over £1 billion to by the development community world-wide. With support agriculture, food security and livelihoods, regard to the poverty indicators, at the country which I had set out earlier at the Rome Summit level, which is where it matters, country level but, to encourage others at the time of the New poverty indicators, if they are done well, reflect V York event, I committed £42 million for the whole crises in di erent regions of the country, so that of Africa and £70 million to Bangladesh in terms would already be embedded in the overall poverty of the Chars Livelihood programme, and we measure, to the extent that you would wish all good believe our eVorts helped persuade China in measures of poverty—and generally the World particular to contribute $30 million to establish a Bank tends to lead this work—would have trust fund to enhance agricultural productivity. In regionally disaggregated and urban/rural terms of our broad brush strategy in DFID in disaggregated measures because the bundle of goods that you are trying to measure is diVerent in terms of food, I would say basically three things. those two and the prices are quite diVerent in the Firstly, immediate humanitarian intervention—for two, as you say. example, what we are doing in the Horn of Africa; secondly, social protection which we believe adds resilience and is an eVective and smart way to Q143 Chairman: Following on from that, coming respond to the vulnerability of the 967 million towards the end, the food security issue obviously people vulnerable to hunger; and, thirdly, a big has changed somewhat from the extreme situation focus on agricultural productivity for the long- earlier in the year. I am not sure whether you have term, how we make sure that we are able to see the made an evaluation, but clearly some of the prices kind of rises in agricultural productivity we saw in have come down. I guess it is too early for people South East Asia 20 or 30 years ago being replicated to predict what the overall trends are, but there in other parts of the developing world, principally were two particular points. One was the World sub-Saharan Africa -- Food Programme’s Purchase for Progress initiative, in other words to buy more locally and secure their supplies more eVectively, and at the same time as helping local farmers get more of a Q144 Chairman: Is there specific progress on this share of the purchasing power, and your own Global Partnership for Food and Agriculture? commitment to increase investment in agricultural Mr Alexander: Yes. I can give you some of the production. Are you able to give us an indication, details in terms of GPAF, as it has come to be first of all, how this was addressed at the summit known. It was envisaged as being a compact which and how it is going to be taken forward, because will bring together a broad range of diVerent clearly these are two issues which should help partners behind nationally developed country alleviate these kinds of crises in the future and plans, in some ways not dissimilar to the kind of actually contribute to development and poverty conversations we were having earlier in terms of the reduction at the same time? Fast-Track Initiative, both to hold people to Mr Alexander: I am happy to do so. I think it might account and help facilitate access to the finance. It be helpful for the information of the committee if will involve donors, developing countries, Andrew very quickly goes through what is international agencies, civil society and the private happening to commodity prices on three of the key sector; it will use existing financing mechanisms markets, because I asked a similar question earlier and instruments. We are not looking to establish a Processed: 13-02-2009 18:43:40 Page Layout: COENEW [O] PPSysB Job: 407662 Unit: PAG2
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30 October 2008 Rt Hon Douglas Alexander MP, Mr Martin Dinham and Mr Andrew Steer new global fund for food but rather to see how can partnership approach which has not always been we use the eVective instruments, help align replicated in the past but is certainly proving its stakeholders by working through national and worth in terms of the World Food Programme. regional plans, in particular CAADP,16 in terms of agricultural research for Africa and also the Q145 Chairman: You had the aim of doubling African-led social protection processes and, finally, production in participating countries. What you help to take forward the UN Comprehensive did not say is how many countries you hoped Framework for Action. In terms of progress that would participate and by when you would double has been made to date on that, we have the initial production. Are you able to give you any firmer proposal of this at the Rome Summit in June, idea as to that? broad support reflected for it in the July Summit Mr Alexander: As the clock ticks towards four of the G8, and we used the High Level Event to o’clock, I cannot give you the exact number, but I actually further strengthen the commitments and, will happily write to the committee on that point.17 as I say, there were $2 billion worth of Chairman: Secretary of State, thank you very commitments made. I think the success of the much. I think the committee appreciates that you Global Partnership for Food and Agriculture is will be appearing in front of us twice in two weeks, reflected, in particular, by the size of the World which is not ideal for either of us, I guess, but it Bank commitment, the $1.2 billion, which, frankly, gives us an opportunity to pull a lot of threads has reflected a speed of response and an integrated together, particularly in international institutions. Thank you and your team very much for coming. 16 Comprehensive Africa Agricultural Development Programme 17 Ev 60 Processed: 13-02-2009 18:50:25 Page Layout: COENEW [SE] PPSysB Job: 407662 Unit: PAG1
Ev 46 International Development Committee: Evidence Written evidence
Memorandum submitted by the Department for International Development
INQUIRY INTO DFID’S DEPARTMENTAL REPORT 2008
ANSWERS TO THE INTERNATIONAL DEVELOPMENT COMMITTEE’S WRITTEN QUESTIONS
June 2008
Aid Effectiveness
1. The Annual Report includes the statement that DFID helps “to lift at least 3 million people permanently out of poverty every year (Foreword and para 5). The source is footnoted as the “Collier-Dollar Model of Impact of Aid”. The Committee would be grateful to receive the Department’s detailed calculations for the figure of 3 million people. How has DFID used the Collier-Dollar model in its assessment, and how has it adapted it for this current “3 million people” assessment exercise?
Answer—The detailed calculations relate to the Collier and Dollar poverty model which essentially yields total numbers pulled out of poverty based on estimates by country of the total, average and marginal numbers of people pulled out of poverty. These estimates are derived from evidence about the impact of aid on growth, and the relationship between growth and poverty. Combined these two relationships allow us to estimate for each country the number of poor people that are pulled out of poverty for a given aid allocation which summed over DFID’s entire bilateral and multilateral contributions yields DFID’s annual 3 million people pulled out of poverty figure. For the current exercise, whilst we did not adapt the model we used the original methodology to derive more up to date marginal and average estimates.
2. The Committee notes that a 2003 paper, “Poverty EYcient Aid Allocations—Collier-Dollar Revisited”, updating and reviewing the earlier Collier-Dollar work, was undertaken by the DFID-established Economics & Statistics Analysis Unit (http://www.odi.org.uk/spiru/publications/working papers/esau wp2.pdf). Has the Department carried out, or taken into account, any subsequent research on the Collier-Dollar work? What is DFID’s latest assessment of the number of people each £1 million (or $million) of UK ODA lifts out of poverty?
Answer—DFID continues to use the original methodology to estimate average and marginal eYciency estimates of the numbers pulled out of poverty per million dollars by country. For the CSR 2008–11 bid, we looked at alternative ways of expressing the aid growth relationship in Collier Dollar models to yield diVerent average and marginal eYciency estimates but as the original estimates are more conservative, they continue to be used. It would be appropriate for future exercises to produce new estimates using more recent global aid data, and updated poverty and GNI per capita data based on new purchasing power parities. In addition to this work, the Chief Economist is currently preparing a review of research on alternatives to the Collier Dollar allocations work. The number of people pulled out of poverty for each £ million of UK ODA diVers for diVerent expenditure levels, diVerent allocation patterns, and whether we are talking about average or marginal £ million and bilateral or multilateral programme. The average figure can vary between 650 to 1,000 people pulled out poverty for each £ million of UK ODA and at the margin can vary between 450 to 750 people.
PSA Targets
3. The 2007 Annual Report included an annex which discussed progress on PSA targets which were “oV-track”. Although some targets have not been given a “final” performance assessment and remain outstanding, such an annex has been dropped from the 2008 Report. Why is this?
Answer—It was agreed with HM Treasury that there was no formal requirement to include an “oV-track” annex. Given that many of the targets were assessed as final (because we had come to the end of the SR04 PSA period) we decided not to include this. The targets that remain outstanding are mainly due to the time- lag in obtaining reliable data to measure final outturn. We will still be required to report on those outstanding targets from SR04 PSA and what we are doing to address these targets in our Autumn Performance Report. Processed: 13-02-2009 18:50:25 Page Layout: COENEW [O] PPSysB Job: 407662 Unit: PAG1
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4. For PSA 3(3) indicator (i)—Poverty Reduction Strategies (PRSs)—the Annual Report gives figures from the latest World Bank Aid EVectiveness Review showing 80% of the countries covered had PRSs that were assessed as either largely developed (13%) or with actions that had been taken (67%). The 80% exceeds the 75% target for the indicator. However, the Autumn Performance Report (APR) noted equivalent figures of 17% and 62%, giving a comparable total of 79%. Why was the indicator assessed as amber in the APR but green in the Annual Report when in both cases the 75% target had been met and the percentage of PRSs which were “largely developed” had actually fallen? Answer—Since the World Bank and IMF no longer approve PRS or PRS progress reports, we scored this indicator by using the best assessments available at the time of the Autumn Performance Report and the Annual Report to assess whether the strategies were suYciently developed to have met the WB and IMF’s threshold. In the Autumn Performance Report, an assessment was made using the 2006 Survey on Monitoring the Paris Declaration. This survey used the World Bank’s Comprehensive Development Framework (CDF) approach to assess the operational value of national development strategies. This is the source of the assessment that 17% of countries had national development strategies which were largely developed towards achieving good practice, with 62% reflecting action taken towards achieving good practice. In scoring the indicator as amber, only those countries with already developed strategies were classed as having reached the required level. The assessment used in the Annual Report draws on the 2008 Survey on Monitoring the Paris Declaration. This uses an updated World Bank assessment of national development strategies using a diVerent and more rigorous set of criteria. Using the new criteria, the proportion of countries assessed to have largely developed operational development strategies has increased from 8% in 2005 to 13% in 2007, while the proportion of countries assessed to have made progress increased from 58% in 2005 to 67% in 2007. The amber light given in the Autumn Performance Report was changed to a green light following discussion with the World Bank and HMT. Under the new more rigorous methodology, we agreed that all countries assessed by the World Bank to either have largely developed strategies, or to have made progress towards this aim, would be considered to have reached the threshold which would be required for PRSP endorsement. As 80% of countries had reached this threshold, we scored the target as met.
5. On PSA target 4—reduction in world trade barriers—the Government Response to the Committee’s report last year stated that the technical note included measures, not sub-targets, and that the Department reported a qualitative assessment due to a lack of data (HC 64-II Ev 35 (Q19)). Has the data now become available to give a quantitative assessment on the measures? How has your assessment of the four measures changed since the Autumn Performance Report to alter the PSA outcome from Red to Amber? Answer—No. We have still not reached a point where we have data which we can apply our quantitative measures. This is primarily because of lack of progress on the Doha Development Agenda (DDA). There is, though, one measure that does not rely on this but the time lag between policies being agreed and their having an eVect means that assessing change in tariV and changes in the level of EU imports from LDCs would not, at this stage, provide a useful guide to performance. However, our performance assessment has moved from red to amber because, despite lack of progress on the DDA, wider progress across Trade Policy has been made in reducing EU and world trade barriers. A good deal of this progress has been made fairly recently. 35 interim Economic Partnership Agreements (EPA) have now been signed, the Common Agricultural Policy (CAP) Health-check and EU budget review oVer real potential to reduce CAP trade-distorting support and delivery on our 2005 G8 commitments on Aid for Trade and the launch of the Enhanced Integrated Framework (EIF) in 2008 to support LDCs with trade related assistance are now taking eVect. The UK Government continues to vigorously push for a Doha Deal.
6.The Annual Report gives an Amber assessment for PSA target 4. This target focuses on progress with the Doha round of WTO negotiations. Why is target 4 reported as a “final assessment when those negotiations are still unresolved? Answer—A final assessment was made because the target period ended on March 2008. As outlined above, there are other non-Doha processes which contributed to partly meeting the target.
7.Reduction in world trade barriers is now a DBERR-led PSA under the new CSR regime. Have there been any further changes in the level of DFID’s staYng and budgets allocated to this work since the Parliamentary Under-Secretary of State (Gareth Thomas) gave evidence to the Committee on changes in ministerial responsibilities in October 2007 (HC 68 (2007–08), Ev 17–30)? Answer—No. The Joint Trade Policy Unit (BERR/DFID) responsible for delivering the trade related targets under the new CSR period remains staVed and funded as outlined in PUSS evidence in October 2007. Processed: 13-02-2009 18:50:25 Page Layout: COENEW [E] PPSysB Job: 407662 Unit: PAG1
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Departmental Strategic Objectives
8. The Annual report notes that there are 32 indicators for the DSOs. The Department shared a draft set of DSOs and their indicators with the Committee last July, which we published. Subsequently, with the publication of the CSR, the DSOs were slightly revised. The Committee would like to receive details of the final list of DSO indicators, along with details of any baselines for measuring progress on those indicators over the life of the CSR. Answer—The final set of indicators were published on DFID’s website in December http:// www.dfid.gov.uk/news/files/psa-1712.asp. The reference period for the baselines will be 2007–08 drawing on the latest available information for each indicator. Much of the relevant information is drawn from the international system and some of the data are not yet available. We willpublish full details of the baselines together with more detail of the indicator methodology in our Autumn Performance Report.
Departmental Strategic Objectives DSO Indicators
DSO 1: Promote good 1. Governance (improved state capability, accountability and governance, economic responsiveness) growth, trade and access to 2. Improved support for economic growth basic services 3. Increased participation in global trade by developing countries 4. Delivery of the White Paper commitments on public services (improved outcomes for education, health, HIV and AIDS, water and sanitation and social protection) 5. Increased access by women and girls to economic opportunities, public services and decision-making
DSO 2: Promote climate 6. Policies and programmatic approaches developed for change mitigation and eVective climate change mitigation and adaptation measures adaptation measures and in developing countries, along with coherent international ensure environmental support for both sustainability 7. Environmental sustainability integrated into programmes
DSO 3: Respond eVectively 8. Improved capacity of the international system to prevent to conflict and humanitarian conflict, respond early to crises and build peace crises and support peace in 9. EVective implementation of DFID Security and order to reduce poverty Development Policy in priority countries 10. EVective DFID response to prioritised humanitarian crises 11. Improved international system for humanitarian assistance
DSO 4: Develop a global 12. Enhanced HMG coherence of assessment, planning and partnership for development implementation of conflict prevention and stabilisation (beyond aid) 13. High quality research and evidence based policies for achieving MDGs 14. Cross Whitehall agreement and support for coherent, pro-development forums and programmes 15. Greater positive participation by Brazil, Russia, India, China and South Africa (BRICS) in multilateral and other development forums and programmes
DSO 5: Make all bilateral 16. Improved global performance against Paris Declaration and multilateral donors more commitments eVective 17. 2005 Gleneagles commitments delivered (Including increased aid volumes) 18. Improved eVectiveness of the European Commission 19. Improved eVectiveness of the International Finance Institutions 20. Improved eVectiveness of the UN system 21. Improved eVectiveness of the Global Funds
DSO 6: Deliver high quality 22. Paris Declaration commitments implemented and targets and eVective bilateral met corporately and in country oYces development assistance 23. DFID programmes in fragile states are consistent with the DAC principles 24. Portfolio quality is improved Processed: 13-02-2009 18:50:25 Page Layout: COENEW [O] PPSysB Job: 407662 Unit: PAG1
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Departmental Strategic Objectives DSO Indicators
DSO 7: Improve the 25. Achievement of CSR spending and eYciency targets eYciency and eVectiveness of 26. Financial management, compliance and controls the organisation 27. Improved leadership and management of people 28. A healthy, safe and secure workplace 29. Developing and changing the workforce 30. Investing in IT and business change 31. Greater public support for and understanding of development 32. Strengthening eVectiveness through learning and better use of evidence
Gender
9. In response to the Committee’s report on the DAR 2007, DFID said that “A report on the first year’s implementation of the [Gender Action] Plan will be published in April 2008. A copy will be forwarded to the Committee”. [HC 329 (2007–08) page 6, response to recommendation in Paragraph 49]. We understand that this report has not yet been produced. What are the reasons for the delay in publication?
Answer—We acknowledge that publication of this report has been delayed from our original target date but this does not indicate a lack of commitment by DFID to the Gender Equality Action Plan (GEAP) or to reporting on progress. Rather, the delays were for practical reasons. Our aim is to provide a comprehensive report which accurately reflects progress over the first year of the GEAP, and sets out our plans for year 2. Whilst the report will outline progress against the individual Key Indicative Activities for year 1 set out in Annex A of the GEAP itself, it is clear that the Plan has successfully acted as a catalyst for a wider range of new or strengthened work on gender equality and women’s rights across DFID. We therefore wanted the report to reflect the breadth of work being undertaken as well as provide an overview of progress against GEAP objectives. It has, however, proved a challenge to capture a representative range of work in a report of manageable length which has meant that preparation of the report has taken longer than planned. We envisage that the progress report on implementation of the Gender Equality Action Plan will be published in July. We will forward a copy to the Committee as soon as it is finalised.
Official Development Assistance
10. Paragraph 1.26 of the Annual Report gives a figure of £1.5 billion for debt relief in 2006–07, and page 202 gives a figure of £2 billion. How do these two figures reconcile?
Answer—We apologise that the figure appearing in Paragraph 1.26 was printed in error and we did not pick this up in proof reading. The correct figure for the financial year 2006/07 is reported in the Annex and is consistent with data reported in Statistics on International Development 2002–03 to 2006–07 published in September 2007. We will ensure that the correct figure is reported on the website. The relevant comparator should also have been the relevant calendar year figure for 2006 (£1.9 billion) which is slightly lower than the financial year figure. The correct calendar year figures were provided to the DAC and released in April.
11. The Committee requests a breakdown of planned ODA for each of the CSR07 years, as well as for 2007–08, which diVerentiates DFID and non-DFID expenditure. It would be helpful if the statistics showed: total ODA expenditure and % of GNI; total DFID ODA and total non-DFID ODA; and the contributions from diVerent sources (eg Environmental Transformation Fund, Stabilisation fund, debt relief, CDC net investments, etc). Non-DFID ODA data should also be broken down by the government department providing the aid.
Answer—Annual plans for DFID Departmental Expenditure Limits (DEL) and total UK ODA were set out by the Treasury at the time of the CSR. http://www.hm-treasury.gov.uk/media/6/B/pbr csr07 annexd10 148.pdf. Almost all of DFID DEL is ODA eligible. As such it is possible to estimate the non-DFID contribution to UK ODA over the CSR period as shown in the table below. Processed: 13-02-2009 18:50:25 Page Layout: COENEW [E] PPSysB Job: 407662 Unit: PAG1
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PUBLISHED CSR FIGURES FOR DFID DEL AND TOTAL UK ODA (£ MILLION)
2007–08 2008–09 2009–10 2010–11
DFID DEL 5,354 5,790 6,843 7,917 Total UK ODA 5,291 6,392 7,477 9,140 Implied (minimum) non-DFID contribution "63 602 634 1,223 of which: DEFRA ETF 50 100 250 FCO 57 92 107 Stabilisation Fund 58 58 108 Other government DEL 39 39 39 Other ODA not in DEL 398 345 719 (includes CDC investments and debt relief)
Note that the implicit negative contribution of non-DFID ODA in 2007–08 is the result of net CDC disinvestment. Indeed this eVect was larger than forecast at CSR time and total UK ODA for 2007–08 is likely to be slightly lower than shown in the above table. Provisional 2007 calendar year ODA figures were published by the DAC in April. UK ODA was estimated to be £4,957 million. Of this £5,167 million was DFID expenditure with non-DFID contribution estimated to be negative £210 million.
2008–09 Main Estimate
12. DFID’s 2008–09 Main Estimate Memorandum notes the Capital-DEL budget increasing by £160 million in 2008–09, which includes £50 million for the Environmental Transformation Fund. How much of the Capital- DEL budget increase is for increased debt relief and how much for increased funding for the IDA and African Development Bank? Answer—The budget for debt relief will increase from £90 million in 2007–08 to £192 million in 2008–09. The budget for IDA will reduce from £493 million in 2007–08 to £453 million in 2008–09, with significant increases thereafter to £701 million in 2009–10 and £721 million in 2010–11. The budget for the African Development Bank (through the African Development Fund) will increase from £73 million in 2007–08 to £82 million in 2008–09. The remainder of the increase is mostly accounted for by the Asian Development Bank (through the Asian Development Fund), which will increase from £28 million in 2007–08 to £48 million in 2008–09.
Environmental Transformation Fund
13. DFID’s 2008–09 Main Estimate memorandum notes a £50 million commitment for the Environmental Transformation Fund (ETF). What other ETF projects are being developed, and how much of the £400 million DFID share of the ETF will be taken up by these projects? What representations has DFID received from other potential donors, potential recipient countries and NGOs about the likely attractiveness and take-up of ETF loans? Answer—The £800 million international Environmental Transformation Fund (ETF) was announced in the 2007 budget for the period 2008–11. The ETF is jointly owned by DFID and Defra, with a £400 million share allocated to each department. The £50 million noted in the Main Estimate memorandum is DFID’s indicative allocation from the ETF for financial year 2008–09. We do not plan to use the ETF to develop bilateral projects, but instead want to ensure it is part of a bigger multilateral eVort to help address climate change in developing countries. An initial capital grant allocation from the ETF of £50 million over three years was earmarked for the Congo Basin Fund. We plan to channel this and some of the rest of the £800 million ETF-IW through the proposed multilateral Climate Investment Funds (CIFs). The CIFs aim to ensure a coherent, global response to climate change to pilot ways to assist developing countries in moving to low carbon and climate resilient development. We are not yet in a position to confirm the exact ETF contribution to the CIFs, but it will be in the form of an equity subscription in a manner analogous to the International Development Association (IDA). Like IDA most of the funds will be provided to recipient countries in the form of loans and some in the form of grants. We have openly communicated this to other donors, potential recipients, and NGOs during the CIF consultation period (January to May 2008). NGOs have been critical of the loan component. We have explained that as the ETF was allocated to DFID/Defra under our capital budgets, we are required to allocate the bulk of this funding as concessional loans. The loans will be highly concessional with negligible (near zero) interest rates. The repayment period will be 40 years, with a 10 year grace period. This means that the loans which recipients receive through the CIF will be about two thirds cheaper than if borrowed at average global interest rates. Processed: 13-02-2009 18:50:25 Page Layout: COENEW [O] PPSysB Job: 407662 Unit: PAG1
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Other donors are likely to increase the grant envelope within the CIF (particularly for the climate resilience element) so countries will have a blend of financing options available to them. Any loans from the funds will not be made to countries who cannot aVord to repay them. It will be entirely up to recipient countries whether they choose to take highly concessional loans in addition to the grant finance available. This is not a new “indebting” of developing nations—it is entirely consistent with standard development finance and is in line with the Bali Action Plan call for finance—“to provide new and additional resources including oYcial and concessional funding for developing countries”.
14. Will ETF loans score as UK ODA, and if so what proportion of the planned 0.56% of GNI by 2010–11, envisaged in the CSR, will be made up of ETF loans? Will ETF loan repayments count as negative-ODA? Answer—We are working with other donors to ensure that UK ETF funding will meet OYcial Development Assistance (ODA) conditions, and as such would be eligible to contribute to the planned 0.56% of GNI target by 2010–11. Our current understanding is that there would be negative ODA if money were returned to the UK. But loans and repayments between CIFs and borrowers would not aVect ODA. Current plans are for £500 million of ETF-IW funding (£250 million each from DFID and Defra) to be allocated in 2010–11 which constitutes just over 5% of planned ODA in that year. The precise ODA treatment of the funds including the potential treatment of repayments as negative flows will be determined by the DAC and is unlikely to be formally agreed until the first relevant flow information is submitted in 2009.
Efficiency Programme
15. The Department’s evidence to the Committee on the 2007 Annual Report referred to an Internal Audit department review of the eYciency programme, which had not been finalised at that time (HC 64-II, Ev 36, (Q22)). What were the outcomes of that review? Answer—The internal audit review concluded that DFID has made eVective use of SR04 eYciency guidance from the OYce of Government Commerce (OGC) and the Treasury notes on value for money proposals for CSR07 bids. It stated that the reporting processes in place to HM Treasury via DFID senior management appear to be eVective and eYcient. 8 recommendations were made to strengthen the governance of the programme all of which were accepted. They included recommendations to strengthen assurance on data quality and systems, and to include delivery of eYciency savings within Divisional Performance Framework targets. 5 have been implemented and 3 are in progress and will be implemented for the CSR07 VFM programme.
16. What arrangements is the Department making to have its final eYciency programme savings for 2007–08 validated/audited? Will the National Audit OYce be involved? Answer—EYciency programme savings were validated in accordance with HMT published measured guidance including an internal audit review during the SR04 period. We are aware that the NAO does not plan to conduct further studies of the SR04 programme during 2008–09 but may do so in future years.
17. What proportions of the £588 million eYciency savings figure for 2007-08 are assessed as “preliminary”, “interim” or “final” (using the OGC classifications)? Answer—£476 million of the 2007–08 eYciency savings was assessed as preliminary (mainly because the financial expenditure outturns were not finalised at that time) and £112 million assessed as final. We will continue to update this assessment during the first two quarters of this financial year.
DFID’s Value for Money Delivery Agreement
18. The Value for Money Delivery Agreement includes two eYciency streams (streams (a) and (b)) which use a similar rationale to the previous eYciency target, by seeking to capture allocative eYciency gains from aid being directed to low income countries. The previous eYciency target was classed as “non-cashable” because eYciencies are realised through greater outputs for the same inputs. Given the similarity in the new and old eYciency measures, why is the target in the Delivery Agreement viewed as a “cash-releasing” target? Answer—The terminology and definitions DFID uses in its Value for Money (VfM) Delivery Agreement are consistent with Treasury guidance. HMT specifically advised that it was appropriate to use the term “net cash-releasing savings” to describe all our savings. This includes the savings forecast from allocative bilateral and multilateral choices against a counterfactual baseline. Processed: 13-02-2009 18:50:25 Page Layout: COENEW [E] PPSysB Job: 407662 Unit: PAG1
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HMT guidance for VfM Delivery Plans asks departments to break down their “cash-releasing” VfM initiatives into categories. One of the standardised categories is “allocative eYciency”. The guidance then goes on to define this category as “releasing resources by transferring activity from less eVective to more eVective policy interventions”.
19. For eYciency stream (c) of the Value for Money Delivery Agreement which seeks to capture the increase in the value of DFID’s projects/programmes that are scored as successful, why has the approach for calculating eYciencies been altered to recognise all improvements in the rating of projects, rather than only those achieving the top two grades? As this target under the previous PSA regime was regarded as “non-cashable” why is the revised target now treated as “cashable”? Answer—The table below sets out DFID’s project/programme scoring system on which the value for money measure is based.
Score DFID Description
1 Likely to be completely achieved 2 Likely to be largely achieved 3 Likely to be partly achieved 4 Only likely to be achieved to a very limited extent 5 Unlikely to be achieved
The way DFID calculates a value for money index for its bilateral projects/programmes has changed for CSR period 2008–11; from including only the commitment values of projects scoring 1 and 2, to including those with scores 1 to 5 on a sliding percentage basis. Under the previous approach, it was recognised that projects with the highest score 1 were given as much weight in the calculation as those with score 2, despite the fact that there is a diVerence between the two success ratings. Furthermore, projects scoring 3 and 4 were given no weight, despite the fact that these projects are achieving some success. The new approach is fairer and recognises the relative success of projects by the giving the most successful projects more weight than the least. The terminology and definitions DFID uses in its Value for Money Agreement are consistent with Treasury guidance. In the context of eYciency stream (c), the Treasury advise that it is appropriate to use the term “net cash-releasing savings” and this term includes “releasing resources by transferring activity from less eVective to more eVective policy interventions”.
CDC Group Plc
20. What influence does DFID have over CDC’s investments, or its mix of cash and investment asset holdings? Over 50% of CDC’s net assets are held as cash or short term deposits. Would DFID prefer to see a higher or lower proportion of CDC’s assets invested in development projects? Answer—DFID sets CDC’s investment policy and provides overall targets for proportions of new CDC investments in poorer markets. CDC is also precluded from investing in certain sectors such as arms, illegal drugs, gambling, tobacco and prostitution. In 2004, DFID set an Investment Policy for CDC that at least 70% of its investments had to be in the poorer developing countries (with a per capita income below $1,750) and at least 50% in Sub Saharan Africa and South Asia. The Investment Policy constitutes part of an MOU between CDC and DFID that sets out the responsibilities and obligations of CDC. DFID also agreed CDC’s Business Plans in which CDC had set out various business targets for the following period. Within these parameters, CDC has autonomy in making responsible investments in private sector businesses. CDC has out-performed substantially all of the targets we agreed at the time of its reorganisation in 2004. Since the end of 2003 CDC has: — Grown in value from £1.0 billion to £2.7 billion. — Exceeded its Investment Policy targets, achieving 74% in the poorer developing countries and 67% in Sub-Saharan Africa and South Asia as in 2007 five-year rolling average. — Made a cumulative return of £1.7 billion (vs £0.26 billion target set in the reorganisation). — Mobilised $1.5 billion of third party capital (vs $0.95 billion target). — Realised £2.1 billion of investments (vs £0.8 billion target). — Accumulated £1.4 billion cash (vs £0.1 billion target). — Committed capital to 52 fund managers and 112 Funds. Processed: 13-02-2009 18:50:25 Page Layout: COENEW [O] PPSysB Job: 407662 Unit: PAG1
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The CDC Board holds responsibility for the mix of cash and investments. The company regularly runs an over-commitment (14% as at end 2007) to funds. This means that the cash held is more than fully committed to funds. But actual cash levels are dependent both on the timing of fund draw downs and on the volumes of investment realisations. The cash balance at end 2007 (£1.4 billion) was particularly high because of the partial Globeleq power subsidiary sale of $1.2 billion. The majority of this amount has already been committed to a new infrastructure fund. DFID monitors CDC’s mix of cash and investments on a quarterly basis. We would like to see the maximum amount possible invested in development projects but acknowledge CDC’s expertise in recognising opportunities for investing in diYcult markets. We would not want CDC to rush into investments that turn out to be poor ones. We consider it important that the company makes the decisions about fund selection and works with its fund managers on the timing of actual disbursement of the capital.
21. What is the reason for the exemption for CDC from UK corporation tax? For each year since it was given that exemption: what amount of UK corporation tax would have been paid if the exemption had not applied; what amount of UK corporation tax credits (negative corporation tax liability) were applied to allow CDC to reduce its corporation tax liabilities in other countries’ jurisdictions; and what amount of corporation tax was paid to other countries?
Answer—CDC was exempted from UK Corporation Tax in 2003. Most investment funds are domiciled in tax eYcient countries and it is important that CDC has a level playing field with other funds in order that it can show competitive returns. Not paying Corporation Tax also means that it is able to invest all of its reflows for the benefit of poor people in developing countries. If CDC had not been exempted from UK Corporation Tax, it would have structured its business diVerently, so it is not possible to say how much tax CDC would have paid without exemption. CDC’s UK corporation tax status does not change the amount of tax paid in non-UK countries. For the avoidance of doubt, no UK corporation tax credits (negative corporation tax liability) were applied to allow CDC to reduce its corporation tax liabilities in other countries’ jurisdictions. CDC invests in managed funds. The funds then invest in companies in developing countries. These companies pay taxes under the laws of the countries in which they operate. In accordance with normal industry practice, when the funds report to CDC there is no detailed record of the tax paid by each underlying company in their country of operation.
22. Why is the exemption of CDC from UK corporation tax in 2007 (£245 million) greater than the pre- exemption charge (£190 million)? Why was there no exemption in 2006?
Answer—As noted above, if CDC did not have UK corporation tax exemption it would have structured its business diVerently so certain reconciling numbers in the tax notes are in reality theoretical. The line in Note 5 of CDC’s Annual Report and Accounts for 2007, showing “EVect of UK tax exemption” at £245 million in 2007 is greater than the “Tax charge on the accounting profit at the UK tax rate of 30%” charge of £190 million is because the former is calculated by applying 30% to the CDC parent company’s profit, whereas the latter is calculated on the group profits. The group profits are lower than the parent company profits because the parent company contains valuation gains on subsidiaries, which are taken out of the group consolidated accounts and replaced by the operating profits of those subsidiaries. Prior to 2007, the basis on which the note 5 reconciliation was prepared was diVerent, so a detailed comparison of 2007 against 2006 on this line of Note 5 is misleading. On a comparable basis the 2006 number is £137 million.
23. What is the UK Government’s view on the appropriateness of publicly owned companies investing in businesses using oVshore tax havens? What representations has DFID made to CDC about its investments in funds based in tax havens?
Answer—We have advised CDC that they are allowed to use oVshore tax regimes, but only to the extent that they are legal and transparent and are entirely necessary for the objectives we have set CDC. As noted above, oVshore tax regimes may be used to ensure that CDC can demonstrate competitive returns against other fund operators. We have advised them that they should seek to avoid those jurisdictions listed as uncooperative tax havens by the OECD, or tax regimes listed as harmful under the EU Code of Conduct for business taxation. The advice that we received from our independent financial advisers at the time was that an onshore structure for CDC’s energy subsidiary Globeleq, for example, would not have attracted other investors. Bermuda was chosen because its corporate law is similar to the UK’s, and a Bermuda location would facilitate subsequent listing on a US stock exchange, should that be the strategy adopted. Processed: 13-02-2009 18:50:25 Page Layout: COENEW [E] PPSysB Job: 407662 Unit: PAG1
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24. Of the 78 subsidiaries listed in the PQ of 3 April 2008 [HC Deb 3 April 2008 c1225w], 30 are incorporated in countries viewed as tax havens (Mauritius, Barbados, Bermuda, British Virgin Islands, Cayman Islands and Jersey). What are the activities of these companies; how much of each of the companies does CDC own; and why are they incorporated in those countries? What would be the eVect on the taxation paid by (i) the CDC group and (ii) the companies it invests in, if the 30 subsidiaries were instead registered in the UK? Answer—These companies are investment holding companies; ordinarily, CDC holds 100% of the share capital of these companies. CDC avoids using investment holding companies in jurisdictions listed as uncooperative tax havens by the OECD or tax regimes listed as harmful under the EU Code of Conduct for Business Taxation. These investment companies were either: (a) acquired as part of a larger deal in purchasing operating subsidiaries; or (b) set up to facilitate the most beneficial disposal of investments at a later date; or (c) set up for tax eVectiveness. Only one company (CDC Group plc) has exemption from UK corporation tax. The rest of the CDC group of subsidiaries has no special tax exemption. Therefore, any subsidiary of CDC in the UK would pay normal UK corporation tax. There would be no eVect on the underlying corporation tax paid by the companies in which the holding company invests (ie the underlying investee companies) because these companies pay tax in their own local jurisdictions—this would be the same whether the holding company was in the UK or overseas.
25. Has DFID or CDC made any assessment of the amount of corporation tax paid (i) to the UK and (ii) to overseas tax authorities by the funds that CDC has invested in? Answer—Neither CDC nor DFID has made any assessment of the amount of corporation tax paid by the funds that CDC has invested in. The funds that CDC invests in are either resident outside the UK or, if resident in the UK, are tax transparent partnerships (ie are looked through and ignored for tax purposes). In either case they do not pay UK corporation tax. It is normal industry practice to structure managed investment funds so that they are tax transparent and/or pay minimal tax. The underlying companies in which the funds invest pay tax in their country of operation and the investors in the fund pay tax in their country of residence.
26. How does CDC reconcile its role as a “fund of funds” with the acquisition and ownership of companies such as Umeme (a power generation company in Uganda)? To what extent is the rationale for altering CDC’s structure in 2004, to separate out direct investments from CDC itself, undermined by such direct CDC investments? Answer—Although CDC entered into the demerger from Actis in 2004, commencing operations as a fund of funds, it had a legacy portfolio of direct investments and still does some investment through other intermediated structures. When the reorganisation of CDC took place in 2004, it was agreed that the portfolio at that time would be managed by Actis with a management fee from CDC. The investment in Umeme was via Globeleq, a legacy portfolio power company that was on the CDC balance sheet but managed by Actis as part of the legacy power portfolio. Umeme has transformed the electricity distribution to over 270,000 customers in Uganda. It has increased access to electricity for 20,000 properties per annum, upgraded dilapidated infrastructure, increased eYciency, reduced losses and implemented a formal safety policy, which is now meeting international benchmarks. As the legacy portfolio investments that are directly held are managed by Actis under an umbrella agreement for a management fee, (ie an arrangement similar in management terms to a fund) they are consistent with the rationale for altering CDC’s structure in 2004.
Supplementary memorandum submitted by the Department for International Development
23 September 2008
DFID Annual Report 2008—Evidence Session (15 July)Follow up Thank you, and your colleagues for holding our recent oral evidence session on DFID’s Annual Report 2008. I and my colleagues, Sue Owen and Mark Lowcock, welcomed the opportunity to explain the work of the Department in more detail and to answer the questions of the committee. We find this exchange valuable and constructive. Processed: 13-02-2009 18:50:25 Page Layout: COENEW [O] PPSysB Job: 407662 Unit: PAG1
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During oral evidence in response to questions, we said we would provide a note of: (a) the funding of civil society projects in Latin America; and (b) DFID’s involvement with the Comprehensive Africa Agricultural Development programme. This is attached as Annex A and B to this letter. We also said that we would let you have a note on how we derive our estimate of the number of people DFID helps lift out of poverty from a model. This is attached as Annex C. Many thanks and kind regards. Minouche Shafik
Annex A
NOTE TO QUESTION 83 INTERNATIONAL DEVELOPMENT COMMITTEE HEARING DFID ANNUAL REPORT 2008 TUESDAY 15 JULY 2008
Note on DFID Funding to Civil Society in Latin America 1. To better address persistent poverty in Latin America, DFID is increasing its financial support to the region and changing the way it is provided. One of the changes is an increase to our support to Civil Society Organisations (CSOs). CSOs are at the frontline of tackling the social exclusion and inequality responsible for persistent poverty in Latin America, and therefore channelling more support through them will help address these important issues. 2. DFID funding for UK CSOs working in Latin America will increase from £7 million to £13 million per year by 2010–11. Based on a competitive process, 12 of our existing Programme Partnership Agreement (PPA) partners have been selected to receive the additional funds as from 2008–09. The successful partners are: — ActionAid; — CAFOD; — CARE; — Christian Aid; — HelpAge; — HIV and AIDS Alliance; — Oxfam; — Plan; — Progression; — Save the Children; — World Vision; and — WWF. 3. The selection criteria were based on the following thematic priorities for work in the region: — supporting and promoting accountable public sector and political systems that are responsive to poor people and their needs; — increasing access to markets and economic opportunities for poor people; — tackling gender inequality and social exclusion; — addressing HIV and AIDS; — climate change mitigation and adaptation; and — promoting the exchange of experience and lesson learning from Latin America. 4. Our PPA partners work though national and local partners in Latin America and engage in processes that will strengthen government accountability such as participatory budgeting. For example ActionAid in Brazil has engaged in participatory budgeting in the region of Recife, and promotes the experience by sharing lessons with other countries, including African countries. 5. We are currently developing a joint action plan with our PPA partners who work in Latin America in order to strengthen our mutual learning by establishing mechanisms for collaboration. 6. Though we will be closing our oYces in the Andes and Central America, which will no longer be needed to deliver our new regional programme, we will maintain a programme of £4 million per year in Nicaragua as it becomes a middle income country. We will switch the funding for the government to providing support through alternative channels, including other donors and civil society. Processed: 13-02-2009 18:50:25 Page Layout: COENEW [E] PPSysB Job: 407662 Unit: PAG1
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7. DFID’s Civil Society Challenge Fund (GSCF) also provides support for UK CSOs working in partnership with local civil society in Latin America. Currently 15 CSOs receive funding from the CSCF to promote women’s rights and children’s rights, and to tackle social exclusion amongst other important issues. These projects have a duration of three to five years and entail a total commitment of over £5 million. 8. Through its Governance and Transparency Fund, DFID is supporting a number of international civil society organisations based in or working in Latin America—the Wildlife Conservation Society in Guatemala (£1.33 million over five years), Associacion Benefica PRISMA in Peru (£4.56 million over five years), and Global Witness in a number of countries including Honduras (£3.75 million over four years). A successful Transparency International bid included Euros 50,000 a year for five years for the core work of Etica y Transparencia—this represents almost 60% of Etica’s annual budget. DFID September 2008
Annex B
NOTE TO QUESTION 66 INTERNATIONAL DEVELOPMENT COMMITTEE HEARING DFID ANNUAL REPORT 2008 TUESDAY 15 JULY 2008
Note on Comprehensive Africa Agricultural Development Programme (CAADP) 1. CAADP is the Africa Union/New Partnership for Africa’s Development (NEPAD) programme for accelerating progress towards MDG1 (on income poverty and hunger) in Africa, agreed by African leaders in 2003. The Commission for Africa recommended that donors should back CAADP. This was reflected in the Gleneagles communique´. The UK’s leadership on CAADP led to the EU’s Advancing Agriculture Africa Strategy of 2007 aligning with CAADP. 2. Through CAADP, African governments are committed to raising agricultural productivity by at least 6% per year. African governments have agreed (Maputo Declaration) to increase public investment in agriculture to a minimum of 10% of their national budgets—substantially more than the 4 to 5% average they commit today. Mali, Madagascar, Namibia, Niger, Chad and Ethiopia have met or surpassed the 10% goal. Governments including Zambia, Malawi, Kenya and Rwanda have boosted their agriculture budgets significantly. 3. The CAADP initiative contains a set of principles and targets to (i) guide country strategies, (ii) enable regional peer learning and review, and (iii) facilitate greater alignment of development partners. Under the CAADP framework, African governments have established four continent-wide priorities for investment and action in agriculture, forestry and fisheries: (i) extending the area under sustainable land management and reliable water control systems; (ii) improving rural infrastructure and trade-related capacities for market access; (iii) Increasing food supply reducing hunger and improving responses to food emergency crises; and (iv) improving agriculture research, technology dissemination and adoption. 4. DFID supports CAADP because it is Africa led, 70% of the poorest in Africa are engaged in the agriculture sector, and it provides an important mechanism for alignment and harmonisation among donors. Though there is much more to do, CAADP has had significant impact both in individual countries and across the continent. African governments are beginning to invest more in agriculture and the donors are beginning to respond more eVectively. CAADP provides the framework that enabled an African led response to recent high food prices and food insecurity situation. 5. DfID’s financial support to CAADP is done through a number of channels. Several country programmes provide support that address CAADP’s objectives on agricultural growth and addressing hunger. In addition, DFID has provided an initial £5 million to regional and pan-African institutions (NEPAD, regional economic communities) to enable them to leverage better and higher levels of investment from African governments. Our leadership here will likely draw other partners—the EC, USAID, Japan, Netherlands, SIDA, France and Germany—into a second phase of support through a multi-donor trust fund, hosted by the World Bank. DFID’s five year £400 million pound research funding for African agriculture is aligned to CAADP’s mandate. Achievements to date include: — Increased Investments by some African countries. Mali, Madagascar, Namibia, Niger, Chad and Ethiopia have met or surpassed the 10% goal for national budget allocation that Africa leaders set for themselves in 2003. Governments including Zambia, Malawi, Kenya and Rwanda have boosted their agriculture budgets significantly. Processed: 13-02-2009 18:50:25 Page Layout: COENEW [O] PPSysB Job: 407662 Unit: PAG1
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— A framework for delivery of Paris principles. Donor coordination has improved. Our initial investment of £5 million to help the CAADP accelerate has leveraged the establishment of a multi- donor trust fund (managed by WB) with initial contributions of around $80 million. CAADP has provided the framework for joint donor trust funds for African research organisations (through which some of DFID’s research funding will be channelled). It is an African led agenda that the G8 and others (including TICAD) align behind. DFID September 2008
Annex C
NOTE TO QUESTION 77 INTERNATIONAL DEVELOPMENT COMMITTEE HEARING DFID ANNUAL REPORT 2008 TUESDAY 15 JULY 2008
The calculation that “DFID estimates that it helps to lift at least three million people permanently out of poverty every year” 1. DFID estimates the number of people our aid helps to lift out of poverty using a model based on a methodology developed by Collier and Dollar which explored the link between aid, economic growth and poverty reduction in over a hundred developing countries using data from the 1970s to 1990s. Their research suggests that donors can aVect growth through their allocation of aid, and that growth in turn will typically lead to poverty reduction in low-income countries. It further suggests that if donors wish to use their aid to maximise the reduction in poverty, aid should be allocated to countries that have large amounts of poverty and good policy. 2. DFID uses estimates of the eVect that aid has on growth (and therefore poverty reduction) drawn from Collier and Dollars research to estimate the total number of people DFID helps lift out of poverty, given our allocation of aid across countries. 3. The statistic that DFID helps lift an estimated three million people out of poverty every year was generated in 2006, by using the approach set out above. It was based on aid allocations that were, at the time, our estimated bilateral and multilateral allocations for 2007–08. The model suggested that DFID’s allocations in this year would help to lift 3.45 million people out of poverty. This was rounded down to three million for simplification and to help ensure that our estimate remained conservative. 4. Table 1 below provides an example of how the calculation of the impact of DFID’s aid is made in an individual country. It shows that the average eYciency of aid in a particular country is 500 which implies that, for each million pounds of aid spent, on average 500 people will be lifted out of poverty. As DFID spends £150 million in this country, the total number of people that we estimate we would lift out of poverty is 75,000.
Table 1: Example of estimating the poverty impact of aid in a particular country
Average EYciency Bilateral Allocation Multilateral Total Allocation Estimated number of of Aid (£m) Allocation (£m) (£m) people lifted out of poverty 500 100 50 150 750,000
5. We used this methodology to estimate DFID’s aggregate impact in all countries in which we deliver aid, but we do not use the country breakdown of the estimate to infer any estimate of impact in any individual countries. This is because estimates are subject to statistical margins of error. Also the model is based on an assumption that other influences on growth rates (except aid) remain constant. While this is a common assumption in economic analysis, and a necessary assumption to allow estimation of the impact of aid on growth, it does mean that individual country estimates will not always be borne out. 6. To illustrate this more clearly, the results of this methodology could be compared with a medical trial that says; “1,000 people given a new treatment lived on average 5.2 years longer”. If we repeat this with another group (or at another time) we do not expect to get exactly 5.2 again; if circumstances change (eg patients start smoking) the result may change; and it is certainly not true that all patients live exactly 5.2 years longer. This last point in particular makes clear the diYculty with looking at each country (patient) separately. 7. While this methodology is a reasonable way of estimating the impact of DFID’s aid on poverty reduction, we recognise that is it imperfect. We will continue to invest time and energy into developing alternative measures of our impact. Processed: 13-02-2009 18:50:25 Page Layout: COENEW [E] PPSysB Job: 407662 Unit: PAG1
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Supplementary memorandum submitted by the Department for International Development ahead of the International Development Committee Hearing on the UN High Level Event
15 October 2008
Executive Summary 1. The UN Secretary General and President of the General Assembly hosted the UN High Level Event (HLE) on the Millennium Development Goals (MDGs) on 25 September 2008. The main objectives of this event as stated by the UN Secretary General were to: review progress and take stock of existing gaps at midpoint in the global eVort to achieve the MDGs by 2015; identify concrete actions needed to scale up eVorts to this end; and help ensure the MDGs and international targets remain on track and the momentum is maintained beyond the 2008.1 2. The HLE involved the broadest ever alliance assembled to fight for poverty reduction. In addition to the formal proceedings over 40 partnership events took place which brought together new broad partnerships moving forward. 3. Participants in the Event, and the partnership events during the week, represented over 140 countries and leaders of NGOs, business, faith groups, philanthropic organisations and cities. The UN estimates that countries, charities, foundations and business pledged some $16 billion in commitments for accelerating progress to achieve the MDGs, including $11.5 billion of commitments in the UK priority areas for the HLE of malaria, food, education and health. The coming together of this broad and diverse coalition inspired new partnerships to form around areas such as malaria and education, and galvanised the international community to take further action such as the pledges made by countries including China.
Introduction 4. The Eighth Millennium Development Goal was that we would “develop a global partnership for development”. The MDG Call to Action (CtA) was launched in July 2007 by the Prime Minister, Gordon Brown in New York, speaking alongside the UN Secretary General, to encourage the international community to accelerate progress to reach the Millennium Development Goals. By January, the UN Secretary General and Prime Minister were joined by a group of governments, faith groups, NGOs and the private sector at Davos to declare 2008 as the critical year to make progress on the MDGs. 5. From July 2007, DFID led a cross-Whitehall campaign, the “MDG Call to Action”, to take forward the Prime Minister’s objectives. The aim was to galvanise international support for the UN’s eVorts to accelerate progress on the MDGs and secure not just expressions of general support but concrete pledges of action towards this eVort by a range of key, international stakeholders both in the run up to and at the time of the UN High Level Event. The CtA, and in particular UK involvement in the UN High Level, was a collective eVort by cross Whitehall departments that included active engagement by FCO posts and DFID country oYces working closely with counterparts in other governments and organisations. 6. The MDG CTA team worked to ensure ambitious outcomes from international meetings in order to accelerate progress on the MDGs. The EU Heads of State welcomed the Agenda for Action on the MDGs at the June Council which sets out how they intend to keep their commitments to deliver their 2005 aid pledges. It includes key milestones on health, education and water and the EU’s contribution to these up until 2010. The EU Agenda for Action states for health there would be an additional „8 billion by 2010, of which „6 billion for Africa. For education an additional „4.3 billion by 2010, of which „3.2 billion would be allocated to Africa. Securing the EU Agenda for Action required intensive UK lobbying in Brussels and with other Member States. The MDGs were not one of the original priorities for the Slovenian EU Presidency. With UK strong encouragement, the Presidency and Commission both became vocal advocates for the EU taking an ambitious stand on the MDGs and setting the momentum for the subsequent G8, Accra and UN meetings. The result was the Agenda for Action which, despite the economic uncertainties, committed the EU to its ambitious targets. At the UN High Level Meeting, President Barroso and various EU development ministers highlighted the Agenda for Action as demonstrating the EU’s commitment and leadership role on getting the MDGs back on track. The UK and other Member States are currently working with the Commission to ensure the commitments are tracked and monitored and to provide guidance to developing country oYces on implementing the Agenda for Action. 7. At the G8 summit, the G8 reaYrmed its promises on ODA and made commitments on climate change, food security, malaria and health workforce coverage in African countries. In Accra, the High Level Forum on Aid EVectiveness at the beginning of September agreed an ambitious “Accra Agenda for Action” which included concrete commitments to improve the quality of aid. DFID’s international leadership and influencing, working closely with the European Union (EU) helped reach a landmark international agreement which all major donors, including Japan and the US, have signed to help deliver commitments in crucial areas: a step change in donor’s use of partner government systems to deliver aid, with a target to
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channel 50% of government-to-government aid through country systems; strengthening of national, and for the first time international, mutual accountability mechanisms, allowing donors and partner countries to better hold each other accountable for meeting their commitments, with a milestone agreed for 2009; donors agreed to respect and support partner country-led eVorts to agree a better division of labour between donors at country level—and for the first time at international level too; we agreed to start dialogue on international division of labour by June 2009; new policy commitments for donors working in fragile situations, including through use of pooled funding mechanisms where needed to support stabilisation and peace building; or the first time and beginning now, donors will provide partner governments with forward expenditure or implementation plans for the following three to five years. 8. The MDG CTA team also worked to build relationships with a huge range of stakeholders to encourage action to accelerate progress on the MDGs by the broadest coalition possible. In May 2008, the United Nations Development Programme (UNDP) and HMG hosted the Business Call to Action where the PM along with President Kagame of Rwanda and President Kufuor of Ghana welcomed over 60 global CEOs who announced several new initiatives as part of their core business that would also accelerate progress on the MDGs. A further five companies announced initiatives at the UN High Level Event in September. Meanwhile on 24 July, spearheaded by the Archbishop of Canterbury, more than 1,400 robed bishops and other faith leaders from all over the world conducted a “walk of witness” through the streets of London to call on global leaders to deliver the MDGs. The group was then addressed by the Prime Minister and representatives including the Archbishop of York, went on to attend the UN HLE in September. 9. On 17 July 2008 the UN Secretary General and the President of the General Assembly formally announced that they would convene the High Level Event on the Millennium Development Goals (MDGs) on 25 September 2008. 10. The main objectives of this event as stated by the UN Secretary General were to: review progress and take stock of existing gaps at midpoint in the global eVort to achieve the MDGs by 2015; identify concrete actions needed to scale up eVorts to this end; and help ensure the MDGs and international targets remain on track and the momentum is maintained beyond the 2008 UN HLE.2
High Level Event 11. At the conclusion of the UN HLE on 25 September, the UN Secretary declared, it had been an “inspiring day at the United Nations”. According to an initial statement by the UN Secretary General the governments, NGOs, foundations and business at the UN High Level Event made commitments totalling approximately $16 billion. The definitive numbers that were committed are now in the process of being finalised by the UN. The following is a breakdown of some of these commitments as well as the UK contributions. It should be noted that these are estimates at this point while DFID reviews the full list of commitments issued by the UN Secretary General and individual countries and stakeholders: 12. On malaria, a multi-stakeholder Malaria Action Plan was launched involving governments, a number of leading NGOs, and the Bill and Melinda Gates Foundation. Together this group committed to raising $3 billion to encourage further steps towards universal coverage of bed nets and sprays by 2010, and at least an 80% reduction in malaria deaths by 2015. The UK committed to providing 20 million bed nets by 2010; increasing funding for vaccine research of up to £5 million by 2010; and committing £40 million to support the AVordable Medicines Facility for Malaria, which the UK encourages the Global Fund to Fight AIDS, TB and Malaria (GFATM) to host. This is in support of the Global Malaria Action plan that was developed by Roll Back Malaria, with contributions from 250 partner organisations, and launched with Malaria No More, the Bill and Melinda Gates Foundation and the UN on 25 September. 13. On food, according the UN’s latest figures, the international community pledged at least $1.75 billion for emergency food aid to stop the immediate tragedy of starvation in the Horn of Africa, and for the rapid distribution of support, including seeds and fertilisers for 30 priority countries in time for the next planting season. The UK Government announced £40 million of emergency assistance, which is part of UK measures to tackle the recent food crisis totalling around £800m so far. In addition, the UK has already announced ongoing commitments of over £1 billion through which the UK will continue to support agriculture, food security and livelihoods in priority countries. 14. On health, figures currently suggest the international community pledged $2 billion and launched a major new innovative financing task force to be co-chaired by the Prime Minister and the President of the World Bank. The task force will report to the G8 next year, with the aim of recruiting a million health workers and saving 10 million lives by 2015. The Global Campaign for Health members announced in New York that they intend to mobilise an extra $30 billion by 2015 to ensure that by 2010, 4 million more children’s lives are saved and 33 million more births are attended by skilled health workers. The UK also announced £450 million over the next three years to support national health plans for eight International Health Partnership (IHP) countries. Both the £40 million for the GFATM and the £450 million for the IHP would form part of the £6 billion announced for health systems by the UK in June this year.
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15. On education, the launch of a “Class of 2015” Partnership by a mixture of government leaders, faith groups, the private sector and NGOs, to help get the education MDGs back on track, increasing the prospects of getting 24 million children into school by 2010. There were $4.5 billion worth of pledges and commitments. The UK announced £50 million for the Education for All Fast Track Initiative (FTI) as part of the UK delivering on the commitment, announced in April 2006, to provide £8.5 billion in support of education over 10 years. There was also an announcement of a £5 million commitment for a partnership with Comic Relief totalling £10 million (£5 million each) through which school children in the UK will raise money for schools in Africa. As with the FTI funding it’s part of our delivering on our £8.5 billion commitment. 16. Additional commitments were made on water and sanitation, including by the UK and Dutch governments; and on other key areas including climate change and UN reform, bringing the total, according to the UN, to $16 billion. 17. In terms of stakeholder representation, some of the highlights included events on Malaria (with Bill Gates, the UN Secretary General’s Special Representative on Malaria, the President of Rwanda and Bono); Education (with the President of the European Commission, the President of the World Bank, the Archbishop of York, and Comic Relief); and Health (with the Prime Minister of Norway, Bill Gates, the President of the World Bank and the Executive Director General of the World Health Organisation). 18. At the conclusion of the HLE, the UN Secretary General declared, “Today, we have strengthened the global partnership for development. Your resolve to act is evident. Yes, you have stepped up to confront growing challenges. Now, I urge you to move with more speed and focus”. The draft outcome document with the list of commitments has been sent from the UN to the Permanent Missions in NY and is now being finalised. The agreed version should then be sent out by the UN shortly after. 19. The UK has three main objectives for follow-up to the UN High Level Event: — A. Tracking implementation of the actions announced during the week (as summarised by the Secretary-General on 25 September); — B. Encouraging the UN to produce better analysis of where the MDGs remain oV track and what needs to be done to get them back on track; and — C. Maintaining a high-level, political focus on accelerating progress on the MDGs. 20. These objectives will be pursued by HMG, led by DFID, first through our work with the UN to track the commitments made and their implementation at international and country level. We will be working with the UN to support a session at the Economic and Social Council (ECOSOC) to look at rigorous monitoring of the commitments. In this respect, the next major international meeting will be in Doha where the international community will come together to review progress on financing for development. This meeting must reinforce promises and explore the impact of emerging development issues such as food security. There are also a number of sector-specific meetings at which the diVerent commitments will be further highlighted such as the proposed food security meetings, health Partnership meetings and Fast Track Initiative meetings. 21. Second, DFID will work with the UN to improve its analysis and encourage continued leadership. This includes not only DFID’s ongoing programme to help reform the UN and improve its delivery, but also by supporting the UN Secretary General and President of the General Assembly’s proposal for a GA resolution mandating an MDGs Review Summit in 2010. 22. Third, DFID will continue to work with colleagues across Whitehall to maintain a high-level, political focus between now and 2010 on accelerating progress on the MDGs. This will be achieved through inter-governmental processes such as the G8 and EU along with maintaining relations with the range of key stakeholders who have contributed so much to accelerating progress on the MDGs this year.
Supplementary memorandum submitted by the Department for International Development
12 November 2008 At the IDC oral evidence session on the 30 October, you requested analysis on the impact of the financial crisis on countries where my Department has particularly large programmes. We have undertaken a preliminary analysis of the vulnerability of our Public Service Agreement (PSA) countries, most of which are low-income countries, focused on the impact of both the immediate financial crisis and the global slowdown. Some emerging economies are directly impacted by the global economic downturn and have had to seek support to avert a financial crisis. Low income countries and most of the PSA countries have suVered less direct impact, but are experiencing a drying up of short term and trade credits, which curtail trade and raise production costs. To date, Pakistan is the only PSA country that has had to go to the IMF for emergency support. Processed: 13-02-2009 18:50:25 Page Layout: COENEW [O] PPSysB Job: 407662 Unit: PAG1
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I am also concerned about the impact of the recession in Europe and the US on poverty reduction and growth in our PSA countries. The IMF has revised down its growth projections for low income countries. Sub Saharan Africa is now expected to grow by 5.5% and 5.1% in 2008 and 2009 respectively, compared to projections of 6.1% and 6.3% for 2008 and 2009 made in its October World Economic Outlook. Similarly, Developing Asia is expected to grow at 8.3% and 7.1% in 2008 and 2009 respectively, compared to earlier projections of 8.4% and 7.7% for 2008 and 2009. We expect slower world growth to hit hardest the PSA countries that are heavily dependent on world markets for capital or export sales. But, where policies are sound, we do not expect the consequences to be massive. However, where reserves are low, fiscal and foreign balances weak and debt high, the dangers are significant. A particular threat is inflation with 17 out of 24 PSA countries having inflation rates of over 10% in the last year. Preliminary analysis has identified several PSA countries vulnerable in several of the above dimensions—for example, Ethiopia, Rwanda and Cambodia. Governments will need to adjust fiscal and monetary policies to minimise the impact on growth and protect the poorest, for example through safety nets and access by the poor to credit. Maintaining a competitive exchange rate is important for countries suVering from a negative shock to their export markets. But closing their own markets will not be helpful. Our bi-lateral programmes will help PSA countries make adjustments needed, while protecting the poor and keeping up budget expenditures on health and education. My department is prepared to consider reallocations or increases in country level aid budgets to help, if this is needed. In Malawi we are already proposing to bring forward £5 million in budget support so the government can continue pro-poor spending. However, the main response to the crisis needs to be multilateral. We will strongly support the IMF and World Bank in financial stabilisation and emergency lending. We will also maintain our ODA commitments and respond to partner governments who need to re-prioritise the use of aid resources. Other donors should be pressed to do the same. I also undertook to provide information on our evolving ideas for a Global Partnership for Agriculture and Food (GPAF), specifically with regard to how many countries might participate, and when the international community might achieve its ambition of doubling agricultural productivity in Africa. Ultimately there should be no limit to the number of developing countries who might sign up to the GPAF. But realistically, given that it will take a little time for consultations to conclude in relation to the development of agreed national strategies in agriculture and food security, we envisage perhaps 20 developing countries joining in the first raft by the end of 2009. Thereafter, countries will join as and when national strategies are agreed. On target dates for doubling agricultural productivity in Africa, or for doubling the rate of agricultural growth in Asia, I am keen to see clear and monitorable targets set for each country at the time it joins so that those making commitments to achieve these targets (both donors and developing country governments) can be held to account. To be worthwhile such targets need to be ambitious, and in the appropriate circumstances I see no reason why these targets should not be set at 2015, or as soon as possible thereafter. Douglas Alexander
Memorandum submitted by ActionAid UK
Introduction 1. ActionAid International is an international NGO working in over 40 countries worldwide, including the UK. While this submission has been put together by ActionAid UK staV, our positions and recommendations reflect the experiences of our staV and partners in Africa, Asia, and Latin America. 2. ActionAid welcomes this opportunity to discuss the 2008 DFID Annual Report and DFID’s performance and priorities. The Annual Report shows that DFID has made progress in the eVectiveness of its development aid. However, there is no time for complacency. Improvement and further eVorts are required particularly in the following areas: — Not diverting the focus of aid from poverty reduction and ensuring policy coherence among UK departments in development cooperation. — Reforming DFID’s Technical Assistance Programme, including implementing the 2001 agreement on fully untying UK aid. — Improving transparency in aid processes and strengthening independent monitoring and evaluation mechanisms. — Providing funds from the Environmental Transformation Fund as grants not as loans, and ensuring that funds for tackling climate change are additional to existing aid budgets. Processed: 13-02-2009 18:50:25 Page Layout: COENEW [E] PPSysB Job: 407662 Unit: PAG1
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— Ensuring the implementation of the Gender Equality Action Plan and mainstreaming gender equality all over its work particularly on its four priority themes.
UK Aid Quality
Broadening the objectives and purpose of UK aid 3. There has been widespread concern among UK civil society organisations about perceived broadening of the objectives and purposes of aid. The expansion of the “Conflict Prevention Pool” and the creation of an “Aid Stabilisation Fund” (a joint DFID, FCO and MoD Fund which counts as OYcial Development Aid) raises concerns that security and foreign policy objectives may be playing a greater role in directing UK aid spending. DiVerent government departments’ aid budgets must be spent coherently with the aim of poverty reduction.
Question: — How does DFID ensure the policy coherence and poverty focus of oYcial aid spent by other departments?
Reform of Technical Assistance and Implementing the Untying of All UK Aid 4. In 2006, the IDC made a number of recommendations to DFID on the subject of Technical Assistance (TA, aid money spent on consultants, training and research), including requests for DFID to both carry out a full analysis of the eVectiveness of its TA. In 2007, DFID promised to do a review of its 2006 note “How to provide Technical Cooperation Personnel” assessing whether the How to note is suYcient to meet DFID’s commitments in the 2006 White Paper. However, DFID has repeatedly delayed the review and the process has still not started. The 2008 Annual Report does not mention either the quantity or quality of DFID’s TA programme even though TA still accounts for at least 20% of DFID’s bilateral aid budget. 5. The 2008 Annual Report reconfirms that UK aid is still tied in practice. In FY 2007–08, 82% of DFID’s business was awarded to UK contractors.3 This suggests that the market is still highly uncompetitive and therefore may not be delivering value for money or oVering recipients the best possible choice of options. 6. In 2006, DFID promised to do an evaluation of its procurement practices including a review of other donors’ practices and experiences of fully untying their aid. However, this has not been done. Instead they conducted a minor review focusing on barriers faced by national/local consultants in South Africa, Bangladesh, India and Nigeria when bidding for UK contracts. This review shows that national/ local consultants often do not have the capacity to bid for big contracts and have not enough access to information on upcoming contracts and feel that big international and UK consultancies are preferred. However, this evaluation has left out more pressing questions, particularly on cost eYciency. For example, no attempt has been made to benchmark DFID Technical Assistance costs against those of similar suppliers. The question of cost eYciency of DFID’s aid programs particularly in the area of Technical Assistance becomes even more pressing under the current trend to minimize staV within DFID and tender big aid packages to consultancies.
Questions: — What steps has DFID taken to reform its Technical Assistance Programme to make it more demand-driven and country-led? — When will its long-promised review be completed, and what plans does DFID have to report to Parliament on this? — Will DFID conduct a benchmarking exercise, comparing the price it pays for Technical Assistance to other agencies?
Improving Transparency and Independent Monitoring Mechanisms 7. Transparency is a prerequisite for strengthening ownership and accountability and improving the eVectiveness of aid. DFID’s Annual Report is a first step towards more transparency; however DFID’s record in communicating its policies, activities and impacts to recipient governments, parliaments, civil society and citizens is very poor. The 2008 Annual Report for instance does not include important data on the quantity, recipients and types of Technical Assistance provided. DFID could turn its current position as transparency laggard into genuine leadership by adopting a comprehensive transparency policy, including: (a) Automatic disclosure of all documents including regional and country strategies as well as monitoring and evaluation reports.
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(b) Proactively making key information about aid processes available and accessible to parliaments and other stakeholders. This information should include disbursement tables, conditions attached to aid and priorities and criteria for allocation of aid. 8. Another key challenge ahead is to make DFID’s decision-making more transparent. For example, the criteria upon which budget support (and other aid) will be disbursed or withdrawn from particular countries should be clear and transparent to recipient governments, parliaments and civil society. 9. In December 2007, DFID established an Independent Advisory Committee on Development Impact (IACDI) as a monitoring body of UK aid eVectiveness. However, its independence is questionable as the members have been chosen by and report to the Secretary of State, and the work of the Committee will be supported by DFID staV from the in-house evaluation department. Reporting procedures to parliament are weak. While the Annual Report highlights the importance of impact based monitoring and evaluation mechanisms, there is no mention of further including parliaments, Southern governments, CSOs or other stakeholders in these processes.
Questions: — Will DFID adopt a policy of automatic disclosure of documents with a strictly limited regime of exceptions? — Will DFID proactively disseminate timely information on aid disbursement tables and allocation priorities as well as on decision making processes to parliaments, governments and citizens? — How does DFID ensure that recipient governments as well as parliaments, civil society and other stakeholders are included in monitoring and evaluation processes?
Climate Investment Funds/UK “Environmental Transformation Fund—International Window” (ETF-IW)
Grants not loans 10. ActionAid believes that the UK ETF-IW should be spent as grants not loans. Otherwise poor countries will end up paying twice for climate change: once through the damage done to them, largely by rich countries’ emissions, and then again by having to repay the interest on loans. 11. DFID has argued that the Bali Action Plan mandates the use of loans yet all it actually says is that loans are one option for “consideration”.4 The real reason is that Treasury rules governing the use of ETF- IW money mean that the funding has to be spent as loans—and this is a political decision that could be changed if there was suYcient political will to do so.
Question: — Does the UK Government still believe that debt cancellation can play a positive role in reducing global poverty? If so—why is it persisting with a plan that will increase the debt burden of several of the poorest countries in the world?
Additionality and innovative financing 12. The ETF-IW also fails the additionality test (additional to the existing 0.7 by 2013 commitment) set by Douglas Alexander in his speech of 14 April 2008: “But we cannot spread existing aid resources even thinner as this would risk the achievement of the MDGs. It is a key principle for the UK that financing for climate change should support not detract from our eVorts to achieve the MDGs”. 13. The UK must lead by example—even if the funds are a temporary, bridging measure before a new international agreement comes into force in 2012—and not count climate change funding towards the 0.7% target. In practice this is a “trajectory test”—does the ETF money—£800 million over three years—take the UK ahead of where they should expect to be in 2008–11 (the initial lifespan of the ETF)? The UK should reach 0.43% for 2008–09 so will including the ETF money take the UK to 0.6% (for example)? If so, it is fair to say it’s additional. But if the ETF money helps the UK to reach 0.43% and not go beyond it then it’s not. 14. The Bali Action Plan mandates countries to investigate “innovative means of funding to assist developing countries” such as taxes on polluting activities such as aviation. The Leading Group on Solidarity Levies is currently investigating innovative sources of finance for development but is not explicitly looking at climate change adaptation. Since the UK is a member of the Leading Group they could encourage it to investigate this area as a contribution to the Bali Action Plan.
4 Decision 1/CP.13: Bali Action Plan, paragraph 1(e)(i),: http://unfccc.int/resource/docs/2007/cop13/eng/06a01.pdf Ev 64 International Development Committee: Evidence Question: — Will the ETF-IW money take the UK beyond its expected target of 0.43% for 2008–09? — What work is DFID doing to investigate innovative sources of funding for climate change adaptation and therefore to help fulfil this part of the Bali Action Plan? Gender Implementation of DFID’s Gender Equality Action Plan 15. As noted in ActionAid’s recent report, Hit or Miss: Women’s Rights and the Millennium Development Goals, insuYcient action on women’s rights is a key barrier to achieving all of the Millennium Development Goals.5 16. Last year, evidence from ActionAid, Oxfam and the Gender and Development Network expressed concern that not enough was being done to ensure the eVective implementation of the Gender Equality Action Plan, which was launched in April 2007. On the basis of this evidence, the IDC commented in its report: “We do not doubt DFID’s commitment to gender equality but translating this from policy to practical implementation at every level is a complex task. We are not convinced that DFID yet has the measures in place to achieve this but, as the Secretary of State has acknowledged, the Millennium Development Goals cannot be achieved without progress on gender equality”.6 17. DFID is currently conducting a review of the Gender Equality Action Plan, which at the time of writing was not yet available. We would encourage the Committee to request a copy of this review to feed into this year’s enquiry on DFID’s annual report to assess whether adequate progress has been made. 18. Drawing on DFID’s annual report, ActionAid’s analysis is that although there has been progress, gender equality is still not well integrated into DFID’s work across the board, particularly on DFID’s four thematic priorities Growth, Peace and Security, Climate Change and Reform and strengthening of international and regional institutions. DFID’s approach to gender equality is to mainstream it across all the work of the department. However, it is questionable how successful DFID has been in achieving the step change that is needed to address gender equality adequately across all its work. 19. While we support the system of having high level gender champions, the team that drives work on gender equality, the Equity and Rights team, must be much better resourced. Currently there are the equivalent of 1° full-time staV devoted to gender equality. Although the Social Development Advisers have expertise on gender equality, it is only one of many priorities for them. Experience from DFID and many other international organisations, including ActionAid shows that gender equality is rarely eVectively mainstreamed without significant devoted capacity and expertise to drive it forward. 20. Last year, DFID commissioned a review of its learning needs on gender issues led by One World Action. The review is not in the public domain and this work is not mentioned in the section of the report on “Building an EVective Organisation”. We would encourage the Committee to request a copy of the review and information from DFID about how the recommendations are being implemented. 21. ActionAid welcomes the integration of gender equality, sexual and reproductive health and violence against women in DFID’s HIV and AIDS strategy. This marks a welcome step toward placing the needs of women and girls at the heart of the HIV and AIDS response. The challenge now lies in implementing this strategy eVectively, which in turn requires clear, tangible milestones and indicators with which to monitor and evaluate progress. Questions: — How does DFID plan to step up eVorts to mainstream gender equality across all its work, particularly on its four priority themes? — How is DFID planning to implement the recommendations of the learning review and address the under-resourcing of gender equality work? — What work is DFID doing to ensure HIV/AIDS data is disaggregated by gender? 24 June 2008 5 See http://www.actionaid.org.uk/doc lib/aamdg.pdf 6 See http://www.publications.parliament.uk/pa/cm200708/cmselect/cmintdev/64/6407.htm Processed: 13-02-2009 18:50:25 Page Layout: COENEW [O] PPSysB Job: 407662 Unit: PAG1 International Development Committee: Evidence Ev 65 Memorandum submitted by the BOND Disability and Development Working Group 1. The new UN Convention on the Rights of Persons with Disabilities (CRPD) states that international development co-operation must include disabled people (Article 32). In order to know whether the UK is meeting this international responsibility, DFID’s annual report must start to provide data on the inclusion of disabled people within the programmes DFID supports. 2. Disabled people make up a fifth of the world’s poorest people. A third of the children out of school are disabled. DFID needs to rapidly strengthen and scale up its eVorts to ensure that this group is reached by development assistance if the MDGs are to be met. 3. Although DFID is making increasing eVorts to address disability in its development assistance, there is almost no mention of disability in the annual report. Unfortunately, this gives the impression that DFID is not taking the CRPD seriously. 4. DFID’s evaluation system should start to assess the participation of disabled people and the specific impact on disabled people of its development activities. All annual, mid-term and final reviews and evaluations should include disability within the terms of reference; without this, DFID cannot know if it is excluding this significant group of people living in poverty. There is some expertise for this within DFID, and there are lots of other organisations with disability experience that could provide assistance and advice if needed (including disabled people’s organisations, NGOs, universities and research institutes, and other development agencies). 5. Better reporting on disability would help those within DFID assess their progress and the need for further action. Further, it would provide an indication to stakeholders outside DFID of whether the Department is actually meeting its obligations. Joint memorandum submitted by the Coalition Of Women Living with HIV/AIDS (Malawi), Malawi Network of People Living with HIV/AIDS (Malawi) and One World Action (UK) In reference to Annex 5—EVectiveness of UK Aid in pursuing the MDGs in the PSA countries (Malawi, Pgs 307–308) in DFID’s Annual Report 2008. Agricultural Subsidies 1. The Coalition Of Women Living with HIV/AIDS (COWLHA), the Malawi Network of People Living with HIV/AIDS (MANET!) and One World Action (OWA)7 would like to bring to the attention of the International Development Committee discrimination faced by people living with HIV (PLHIV) in Malawi which directly impacts the achievement of the MDGs especially MDG1, 3 & 6. 2. For Malawi to reach the Heavily Indebted Poor Country (HIPC) initiative completion stage, donors insisted that the Government of Malawi remove all agricultural subsidies and privatise the state marketing board, the Agriculture and Marketing Corporation. The decision to stop all subsidies in 1994 due to pressure from the donors actually resulted in widespread hunger and food insecurity as Malawi had no coping mechanisms in place. 3. Agricultural subsidies became the key election mandate in the 2004 elections. Going against the wishes of the donors the new government of President Bingu Mutharika announced fertilizer subsidies would be introduced in 2005–06 funded entirely by the Government of Malawi. Due to relatively eVective distribution of the coupons and good and timely rains, Malawi had a bumper harvest and food insecurity was significantly reduced across the country. DFID and other donors then realised the vital role that agricultural subsidies could play in countries such as Malawi and decided to implement an extensive subsidies programme for the following year. 4. According to DFID, 2006–07 was also a successful year because actual wages increased, food prices remained low and acute food need disappeared. However, the picture on the ground is more complex. 5. We would like to raise the following concerns regarding the fertilizer coupons that were distributed as part of the agricultural subsidies scheme of the Government of Malawi from 2005–08 which DFID helped support: (a) Fertilizer coupons were distributed through the agricultural extension workers who first of all consulted village headpersons. Village headpersons are often aware of the HIV status of community members so discrimination faced by PLHIV can start at this level. Some village headpersons refused to distribute coupons to HIV positive persons because they were already “half dead”. (b) As in the past, village headpersons were used by the ruling party to influence potential voters, so the fertilizer coupons became political tools. In many instances coupons were distributed to friends and relatives of headpersons. 7 Look at annex 1 for details about COWLHA, MANET! and One World Action. Processed: 13-02-2009 18:50:26 Page Layout: COENEW [E] PPSysB Job: 407662 Unit: PAG1 Ev 66 International Development Committee: Evidence (c) Women living with HIV faced specific discriminated during coupon distribution which led to increased food insecurity for women headed households. (d) Rural communities in general have had diYculty in accessing fertiliser coupons. (e) Business people accessed the coupons and then began selling the fertilizer on the open market. (f) Coupon distribution for 2007–08 has been delayed to such an extent that it is too late now to use the fertilizer and for it to have any eVect. This is particularly devastating for those who are dependent on the coupons. 6. These issues have contributed to a situation in Malawi where people—particularly women and PLHIV—are facing grave food insecurity and are forced to survive on one meal a day. Currently a small bucket of maize is being sold for MK600 by local traders (a prohibitive price for the majority). 7. Malawi has one of the highest HIV prevalence rates in the world.8 Out of a population of 12.3 million, almost one million people in Malawi were living with HIV at the end of 2005.9 High levels of gender-based violence, weak health systems that fail to address the needs of women, women’s limited participation in decision-making processes all contribute to the unabated feminisation of the HIV/AIDS epidemic in Malawi. 8. Issues of discrimination faced by PLHIV have to be directly addressed by DFID if they are to support the achievement of the MDGs, particularly MDG 1, 3 and 6. 9. DFID should take steps to ensure that agricultural subsidies schemes are assessed and then monitored on how they impact the most excluded and vulnerable sections of society. Bridging this gap between policy and implementation is crucial to achieving the MDGs and protecting the rights of women and PLHIV. 18 June 2008 Annexe 1 Coalition Of Women Living with HIV/AIDS (COWLHA) COWLHA was formed on 29 June 2006. They have 50,000 registered members from all districts of Malawi. COWLHA is the first platform that is enabling women living with HIV to address important issues that aVect their lives. They help women to become stronger and fight discrimination. COWLHA is led and managed by women living with HIV. COWLHA is now one of the strategic partners of the Ministry of women and the OYce of the President and they have been selected as a winner of the Red Ribbon Award 2008. From a pool of over 560 organisations, the Technical Review Committee of the United Nations Development Fund (UNDP) considered the action and leadership of COWLHA exceptional in terms of sustainability, adaptability, impact, innovation, empowerment, involving PLHIV and developing strategic partnerships. Malawi Network of People Living With HIV/AIDS (MANET!) MANET! was established in 1997 as a coordinating and facilitating body with the main goal of promoting eVective networking amongst associations and support groups of people living with HIV/AIDS (PLHIV). It was founded and run by PLHIV who felt the need to coordinate their activities and work towards common goals that will contribute to improving their lives. MANET! lobbies for representation of PLHIV at the district level on District Assemblies and District AIDS Task Forces. MANET! sits on the board of the National AIDS Commission (NAC) as the oYcial representative of PLHIV, a position they won through intensive lobbying. They are also part of the Coordinating Mechanism meetings of the Global Fund. As part of the National Steering Committee, MANET! coordinated the launch of the 25th Annual International AIDS Candlelight Memorial on 18 May 2008. Initiated by the Global Health Council the Candlelight Memorial remembers those who have died of AIDS and raises awareness about the epidemic and the rights of those who live with it. One World Action (OWA) OWA was founded by Glenys Kinnock on 21 December 1989 in memory of Bernt Carlsson, the former Swedish UN Commissioner for Namibia who died in the Lockerbie aircraft bombing in 1988 while travelling to the signing ceremony of the Namibian independence agreement. Today, although we are an organisation of just 15 full time members of staV (well supported by a fantastic team of volunteers) we work with 41 partners in 19 countries in Asia, Africa and Latin America and have gained a sound reputation for our work on governance, democracy and gender. 8 http://www.who.int/hiv/HIVCP MWI.pdf 9 UNAIDS (2006), “UNAIDS 2006 Report on the global AIDS epidemic”, HIV/AIDS estimates and data, 2005. Processed: 13-02-2009 18:50:26 Page Layout: COENEW [O] PPSysB Job: 407662 Unit: PAG1 International Development Committee: Evidence Ev 67 Our partners overseas include other non-governmental organisations, community and co-operative movements, women’s organisations and trade unions. Though diverse in kind, they have a common commitment to strengthening local institutions and giving people a say in the decisions that shape their lives. We believe poverty is about lack of power so we work with the poorest, most marginalised people, to enable and empower them to transform their own lives. Joint memorandum submitted by Christian Aid, Concern Worldwide, FARM-Africa, Harvest Help and Send A Cow DFID’s Approach to Agricultural Development in Africa “We must help smallholders address problems of limited and insecure landholdings, lack of access to inputs and markets, poor rural infrastructure and inadequate market information”. Letter from the British Prime Minister to the Japanese Prime Minister, 10 April 200810 Executive Summary In the past few years, investment in agriculture for development has featured high on the donor agenda. In the run up to the 2008 World Development Report and at the newly established International Donor Platform for Rural Development, there has been a lot of discussion on the need to increase the quality and quantity of support to agriculture, especially in low income, agriculture-dependent countries. Recent hikes in the international prices of staple foods have also led to new rhetorical commitments to support smallholder agriculture as a means to reduce the vulnerability of low income food deficit countries to volatile international prices. Yet, so far very few donors or governments have committed new money or shown tangible support for smallholder farmers. In the case of DFID, support to rural livelihoods as a proportion of its total bilateral programme in Africa reduced from 5.33% in 2004–05 to 3.17% in 2006–07.11 We believe that DFID needs to increase its support to smallholder farmers and increase the eVectiveness of that support. It can do this by: (i) placing hunger reduction and improving rural livelihoods at the heart of its approach to agriculture; (ii) ensuring that DFID country teams implement DFID’s agricultural policy and prioritise agriculture; (iii) developing a comprehensive strategy on agriculture that focuses on long-term, sustainable production; and (iv) ensuring that the research it supports is focused on, and involves, poor farmers. Introduction 1. Christian Aid, Concern Worldwide, FARM-Africa, Harvest Help and Send A Cow all work with smallholder farmers and livestock keepers in a number of African countries. We know from experience that the challenges in supporting smallholder farmers can be overcome and that approaches which are eVective in enabling more productive, sustainable livelihoods can be developed. But poor farmers often receive little support from governments and donors and concerted action, including by DFID, is required. Factual Information International developments 2. There is widespread recognition that increased support to smallholder farmers in Africa is essential if poverty and hunger are to be reduced. In his Foreword to the World Development Report 2008, Agriculture for Development, the President of the World Bank Group commented that accelerated agricultural productivity growth requires “a sharp productivity increase in smallholder farming combined with more eVective support to the millions coping as subsistence farmers, many of them in remote areas”. The authors of the World Development Report also concluded that the enormous potential of agriculture to contribute to development has been “vastly underused”.12 A separate World Bank report found that “the agriculture 10 Source: http://www.number-10.gov.uk/output/Page15234.asp 11 Derived from DFID, 2007, Statistics on International Development, table 21. 12 World Bank (2007), World Development Report 2008 Overview: Agriculture for Development,ppv&7. Processed: 13-02-2009 18:50:26 Page Layout: COENEW [E] PPSysB Job: 407662 Unit: PAG1 Ev 68 International Development Committee: Evidence sector has been neglected by governments and the donor community” and concluded that rapid growth in agricultural incomes in Africa is achievable if improved seeds, water, infrastructure, credit and extension, among other measures, are made available at the same time or in optimal sequence.13 3. The importance of supporting smallholder farmers was reaYrmed by the International Assessment of Agricultural Science and Technology for Development (IAASTD) in April 2008. That assessment argued that smallholder farmers need to be placed at the heart of agricultural development.14 The assessment concluded that “Targeting small-scale agricultural systems by forging public and private partnerships, increased public research and private partnerships, increased public research and extension investment helps realize existing opportunities” and that “Significant pro-poor progress requires creating opportunities for innovation and entrepreneurship, which explicitly target poor farmers and rural labourers”.15 4. The current world food price crisis has led to a welcome call for increased support to agriculture by leading international and national political leaders and researchers. The UN General Secretary Ban-Ki Moon urged the international community to seize the “historic opportunity to revitalise agriculture” as a way of tackling the food crisis.16 The International Food Policy Research Institute identified “scale up investments for sustained agricultural growth” as one of the priority actions to deal with the current crisis.17 And the Prime Minister made a welcome call for the G8 to support smallholders (see quote at the beginning of this memorandum). Progress by DFID 5. The case for increased support by DFID to agriculture is, in our judgement, overwhelming. The International Development Committee, the Public Accounts Committee and DFID’s own Evaluation Department have made strong calls for increased support.18 There is international consensus that support to smallholder farmers is essential to improving agricultural productivity, and that increased agricultural productivity is essential to reducing poverty in agriculture-dependent low income countries. And the world food prices crisis means that the time for action is now. Given this context, what progress has DFID made? 6. There has been a number of notable developments over the last year including: — a review of implementation of its agriculture strategy by DFID’s Development Committee at its meeting in November 2007, a result of which recommendations on how to increase support were made to Ministers; — continued support to the Malawi seed and fertiliser subsidy programme, contributing, according to DFID’s Annual Report, to the largest maize surplus ever recorded, benefiting two million households; — a focus on getting “research into use” in Malawi, Rwanda, Sierra Leone, Tanzania and Nigeria through the Research into Use Programme; — identification of Uganda, Rwanda, Afghanistan, Bangladesh and India as priority countries in which the agriculture policy will be implemented, with Malawi, Ethiopia, Kenya, Tanzania and a West African Country also being considered; — plans to make a contribution to the Alliance for a Green Revolution in Africa (AGRA) to support “the institutional costs of AGRA” rather than programme funding; — a commitment to increase funding for research into sustainable agriculture to £80million a year by 2010; — a commitment to provide £120 million a year to boost the agricultural sector in poor countries, with more funding to come; and — continuing support of the NEPAD Comprehensive African Agriculture Development Programme.19 13 World Bank, 2007, World Bank Assistance to Agriculture in Sub-Saharan Africa: An IEG Review, (see http://www.worldbank.org/ieg.) 14 A useful summary of the assessment is contained in GreenFacts 2008, Agriculture and Development: A summary of the International Assessment on Agricultural Science and Technology for Development. 15 International Assessment of Agricultural Knowledge, Science and Technology for Development, 2008, Global Summary for Decision Makers. 16 BBC website, 3 June 2008. 17 The International Food Policy Research Institute 2008, High Food Prices: The What, Who and How of Proposed Policy Actions. 18 House of Commons International Development Committee 2007, Department for International Development Annual Report 2007, HC64-I; House of Commons Public Accounts Committee 2008, Department for International Development: Tackling rural poverty in developing countries, HC172; DFID 2007, DFID’s 2005 Agriculture Policy: an interim evaluation, Evaluation Report Ev 672. 19 Sources: (1) Minutes of the Development Committee, 13 November 2007, available at http://www.dfid.gov.uk/aboutdfid/ dev-committee/dcmeeting13nove07.asp., (2) DFID 2008, DFID Annual Report 2008, (3) DFID Press Release of 22 April 2008, “UK announces aid package to tackle global food prices”. Processed: 13-02-2009 18:50:26 Page Layout: COENEW [O] PPSysB Job: 407662 Unit: PAG1 International Development Committee: Evidence Ev 69 Key Issues and Recommendations 7. We recognise that some progress has been made by DFID and we welcome, for example, the announcement of increased support to agricultural research and to the agricultural sector in poor countries. But we believe that this investment will not have any impact unless there is a much greater investment at the grassroots to ensure that existing knowledge, let alone new knowledge is adopted by farmers in an appropriate manner. This includes, amongst others, scaling up and resourcing eVective national agricultural extension services. Otherwise this investment will have no impact. To increase the eVectiveness of its approach to agriculture we believe that: — DFID should place reducing hunger and improving rural livelihoods at the heart of its approach to agriculture. — The Permanent Secretary and the Management Board should ensure that DFID teams prioritise support to agriculture, and that agriculture and rural livelihoods are prioritised in DFID’s Country Assistance Plans. — DFID should develop a comprehensive strategy on agriculture that covers the support provided through research, its bilateral programmes, regional initiatives and multilateral organisations. — DFID should ensure that the research it supports is focused on, and involves, poor farmers. Approach 8. We are concerned that DFID’s 2005 Agriculture Policy Paper, which continues to provide the basis for DFID’s engagement, is focused solely on agriculture’s role in achieving economic growth.20 In our experience, agriculture in low income agriculture-based economies serves many functions. These include pro-poor economic growth, the protection of biodiversity, environmental conservation, providing culturally appropriate food, and transforming rural livelihoods. We believe that if DFID prioritises only economic growth in its support for agriculture, we will not see a significant transformation of rural livelihoods in low income countries, given that these require diVerent types of interventions. In Malawi, for example, this shift has led to DFID’s agricultural intervention focusing solely on support for national fertiliser subsidies and ensuring that the national subsidy programme contributes to the development of a private sector input market. While this would be a very useful contribution if sustained, this will not transform rural livelihoods by itself. A more holistic approach is needed. This will include support for market development, rural infrastructure, and developing appropriate farming technologies together with semi-subsistence farmers.21 Leadership 9. We believe that stronger leadership on, and commitment to, agriculture is needed from DFID’s senior management. The interim evaluation of DFID’s agriculture strategy concluded that “[a] bigger attempt must be made to communicate to country oYces the need to prioritize agriculture. This. . . presupposes commitment at the highest levels within DFID”.22 A year on from that conclusion, we remain unconvinced that such commitment exists. The review of the agriculture policy, which was due to be completed by the end of 2008, will now only begin in December this year. Furthermore, in a recent letter, Gareth Thomas wrote that DFID is still “considering carefully the recommendations of the International Development Committee and the Public Accounts Committee conclusions”.23 The reduction in the number of livelihoods and agriculture specialists, which the interim evaluation highlighted, remains a problem. The delay in the review, the fact that DFID is still only considering the committee’s previous recommendations and the continuing lack of technical expertise do not suggest the degree of urgency that we would expect. Strategy 10. We believe that DFID needs to take a more strategic and joined-up approach to its support to agriculture and smallholder farmers. Though there have been some welcome announcements of increased support (as outlined above), it is diYcult to see how they fit together. DFID could maximise the eVectiveness of its support by ensuring that the support to agriculture it provides through research, through its bilateral programme, through regional initiatives (such as the Alliance for A Green Revolution in Africa (AGRA) and Comprehensive Africa Agriculture Development Programme (CAADP)) and through its support through multilateral institutions is part of a joined-up strategy. Such a strategy, which could be developed quite quickly if the commitment exists and would also enable progress to be reviewed annually. The development of a strategy and its annual review need not be a time intensive exercise. Such a strategy would help DFID to facilitate coordination and dialogue between regional initiatives such as CAADP and AGRA. 20 DFID 2005, Growth and poverty reduction: the role of agriculture. 21 Internal note of meeting between Christian Aid and DFID Malawi in April 2008. 22 DFID 2007, DFID’s 2005 Agriculture Policy: an interim evaluation, Evaluation Report Ev 672, p xi. 23 Letter from Gareth Thomas MP to Clare Short MP, 20 May 2008. Processed: 13-02-2009 18:50:26 Page Layout: COENEW [E] PPSysB Job: 407662 Unit: PAG1 Ev 70 International Development Committee: Evidence Research 11. The additional resources for research into sustainable agriculture are welcome and DFID should be commended for consulting on the approach that it should take. We also welcome DFID’s adoption of the IAASTD report, which makes very challenging recommendations on the need to scale up investment in science and technology that benefits small-scale resource-poor farmers. The emphasis that DFID is placing on the participation of farmers in research is of particular importance.24 To make eVective use of these resources for research, we would urge DFID to emphasise the importance of local and traditional knowledge and encourage researchers and scientists to work more closely with farmers and local communities. Memorandum submitted by Me´decins du Monde UK Me´decins du Monde 1. Me´decins du Monde UK—(MDM UK) is part of Me´decins du Monde (MDM), an international medical humanitarian organisation whose volunteers provide healthcare to vulnerable populations in both developed and developing countries. Our aim is to provide healthcare for people in situations of crisis or social exclusion around the world. In order to be eVective in the long term, Me´decins du Monde’s work goes beyond providing healthcare. Based on the information and testimonies collected through our medical practice, we identify and highlight violations of human rights, particularly with regard to accessing healthcare. 2. Since its founding in 1980, MDM has been present in nearly all of the countries referred to in DFID’s annual report. Based upon our experience we make the following submission. The Effectiveness of DFID’s Mechanisms for Evaluating Impact of its Aid 3. We share DFID’s view that an eVective aid partnership is based on a shared commitment to the three stated objectives of reducing poverty and the MDGs, respecting human rights, and strengthening financial management. With the goal of maximizing impact DFID, has recently increased its contributions to pooled funding mechanisms and multi-laterals such as the World Bank. When it comes to evaluation, it is crucial that mechanisms be in place to ensure that those recipients are committed to the same objectives. 4. Such evaluation should also extend to cross cutting issues such as gender equality and operational transparency and accountability. 5. The mechanisms for such evaluation are not presented or referred to in the annual report. Given that 43% of DFID’s aid is channelled to multi-lateral institutions, this is a considerable gap. Mechanisms to Provide Immediate Field Input when DFID is Undertaking Assessments of Rapid Onset Emergencies 6. Especially where DFID does not have a strong in-country presence, persons working in DFID funded projects might be well positioned to provide timely information about the situation in the field during periods of rapid onset emergency. It might be useful to have a mechanism in place through which such information could be quickly transmitted to DFID. The Exchange of Lessons Learned through a Shared Monitoring and Evaluation Database 7. DFID encourages grantees to undertake rigorous monitoring and evaluation in order to track progress against their stated goals. These tools have great potential to provide lessons learnt, both positive and negative, for the grantee and indeed for those within the larger community. Perhaps DFID could create a central and widely accessible database to which grantees could contribute their reports. This would also help reinforce DFID’s message that it values critical self assessment and the exchange of information and ideas, both overseas and here in the UK. AGreater Role for DFID in the Call to Action 8. Reference is made to the fact that the Call to Action is about mobilising “not just governments but private sector, NGOs, civil society, faith groups and cities to do more to deliver the MDGs” as well as the fact that the government will “push forward the need for accelerated action at every possible opportunity in 2008 including through the G8 and EU” as well as at the high-level meeting on the MDGs in September 2008. 24 DFID 2008, DFID Research Strategy 2008–13, Working Paper Series: Sustainable Agriculture, p 19. Processed: 13-02-2009 18:50:26 Page Layout: COENEW [O] PPSysB Job: 407662 Unit: PAG1 International Development Committee: Evidence Ev 71 9. The annual report makes no reference to DFID’s eVorts at doing so in partnership with or on the basis of the shared expertise of these actors. Given the UK government’s leadership role in these meetings, it is perhaps uniquely positioned to help ensure that these voices are heard. Encouraging Projects which Meet Cross Cutting and Complementary DFID Objectives 10. There are numerous opportunities for DFID to encourage projects which eVectively meet a number of its objectives. Unfortunately DFID’s funding streams do not always aVord the requisite level of flexibility to do so. A project which, for example, combined service delivery and research might be seen as too research based to qualify for CHASE funding and too service focused to qualify for research funding. It may be worth considering a pilot program for the funding of such projects. Assessing the Extent to which Civil Society Delivers in Ways that May not be Possible within a Pooled Fund or Multi-lateral Context 11. We agree with DFID that the rich diversity of civil society is reflected in the multiple roles they play, including “giving poor people the voice to demand better from their governments and others in power”. When DFID participates in pooled funding, “One UN” funding, or indeed World Bank funding, there is an inherent risk that the recipients of such funding may not feel free to voice demands from governments supported by these actors. And in some cases, the recipients may consider that these actors are themselves “in power”. DFID may want to assess this risk, in order to be certain it is being adequately addressed. Memorandum submitted by One World Action 1. One World Action is a UK based NGO working with 41 local partners in Africa, Asia and Latin America. We create the power and opportunity for the poorest citizens to transform their own lives and we challenge international policies that make and keep people poor. One World Action is a PPA agency. This submission includes feedback from some of our partners. Concern with Classification of Countries and Subsequent 90:10 Split in Funding DFID’s classification of middle income countries as defined by “gross national income per capita” masks deep inequalities and absolute poverty—this decision excludes some of the world’s most marginalised people from receiving UK government aid. Jen Albano, Institute for Politics and Governance, Philippines 2. A third of the world’s people who survive on less than $1 a day are living in middle income countries (MICs). Latin America which has the majority of MICs is the most unequal region in the world. In Africa 4 out of the 10 highest HIV prevalent countries in the world are MICs. Research shows there is also a correlation between HIV spread and inequality, for example the sex trade tends to grow in areas where large wealth disparities exist. Using a classification based on income per capita is too blunt a tool that poses a barrier to the attainment of the MDGs. 3. While we welcome DFID’s emphasis on aid to low-income countries, we would urge that the needs and interests of the poorest women, men and children in MICs are more fully addressed. Absence of Governance in the Report—the Missing MDG 4. DFID has a vital role to play in promoting democratic inclusive governance that is vital to reducing poverty, gender inequality and achieving the MDGs in sustainable ways. 5. Although good governance is mentioned as a strategic objective DFID does not report against any governance indicators and there is no mention of the Country Governance Analysis tool. The only other mention of governance (p 146) is in relation to the role that civil society plays. 6. A challenge to all countries is building accountable and democratic governments and public sector institutions, and increasing the influence of citizens in decision-making. Supporting mechanisms to strengthen government accountability is the most sustainable way to ensure partner country ownership. If we are to see more democratic and legitimate governments and policies responsive to human rights and civil liberties DFID must recognise the key role that civil engagement can play in developing and strengthening the demand side of good governance—through funding civil society organisations (for example to lobby for gender equity policies at local level, to work with national commissions to implement and monitor national gender action plans, to reduce structural political violence and impunity that prevent women becoming engaged in governance issues) and establishing and reporting against governance indicators (including local governance) in future annual reports. Processed: 13-02-2009 18:50:26 Page Layout: COENEW [E] PPSysB Job: 407662 Unit: PAG1 Ev 72 International Development Committee: Evidence Building an Effective Organisation 7. We welcome the joint DFID/BERR unit on trade but are still concerned about the lack of policy coherence across Government. DFID has a critical role to play in ensuring that eliminating poverty and promotion of human rights and sustainable development are not undermined by other UK policies, particularly those of trade, defence and security. Future Annual Reports should report against outcomes related to policy coherence and how DFID are meeting targets in this area. 8. Given the emphasis on building public support for development, One World Action was concerned to see recent research revealing DFID is only recognised by 4% of the UK public. More emphasis is needed on evaluating public contact and supporting genuine and accessible engagement with new audiences. This must be reported on in future Annual Reports particularly if aid targets are to be welcomed and supported by UK tax payers. 9. Future reports should outline the strategies that will be used by DFID to ensure an adequate level of commitment to and expertise on DFID’s core values, in particular on gender equality, women’s empowerment and good governance, from the increasing number of private companies and consultants that are employed to implement DFID policies. It would be useful if the Annual Report could outline whether adequate resources are being deployed to build capacity and understanding in these areas. 10. We would recommend that future reports include an evaluation into the use of private companies to administer Government funds. This is particularly relevant given the delays with decisions on the Governance and Transparency Fund that caused great uncertainty for civil society groups in the South and undermined DFID’s reputation internationally. 11. We welcome the attention and inclusion of gender analysis throughout the report but would suggest including data on the political participation of women in local government and public institutions. Effectiveness of DFID’s Mechanisms for Evaluating the Impact of its Aid 12. We welcome direct budget support (DBS) as an opportunity to reform the relationship between donors and developing countries. DBS can increase country ownership and enhance long term financial planning by recipient governments. However DFID is accountable to Parliament for ensuring that its expenditure on DBS is properly accounted for and used for the intended purposes of poverty elimination. 13. When funds are granted to the recipient government DFID is not directly responsible for the use of those funds. Therefore the report should include greater acknowledgement of the associated risks and the subsequent assessment and monitoring procedures that will be used for DBS—for example when channelling funds to governments such as Cambodia. The next report should include a comprehensive overview of how DFID will mitigate and monitor these risks. 14. DFID should take steps to make funds available to civil society organisations and particularly women’s organisations. 15. The risks of weakening linkages between state and civil society by increasing DBS should also be better acknowledged and addressed. 16. DBS and other forms of financing for development which foster country ownership and pave the way for better governance must have a framework for consulting with civil society, in particular women’s organisations which will lead to more gender sensitive resource allocation. Memorandum submitted by Prospect Introduction 1. Prospect is a TUC aYliated union representing 102,000 scientists, engineers and other professional and specialist staV in the Civil Service, research councils and in the university and private sectors. We have approximately 120 members at the Natural Resources Institute and elsewhere within the University of Greenwich. We also represent substantial numbers of scientists at WHRI (formerly Horticulture Research International), CAB International, the Department for Environment, Food and Rural AVairs (DEFRA) and its agencies, and the Department for International Development (DFID). This submission draws heavily on the expertise and first-hand experience of our members. 2. The paragraphs below set out our response to the consultation questions. Prospect did also submit evidence to the then House of Commons Science and Technology Select Committee inquiry into “The use of science in UK international development policy” and to DFID’s earlier consultation on its Research Funding Framework. We are happy to make available further copies of these submissions. 3. Prospect welcomes the opportunity to comment on DFID’s Annual Report for 2008 and DFID’s Research Strategy 2008–13, whilst noting that the latter has been a very long time in its gestation. Prospect responded to DFID’s consultation exercise on the strategy in August 2005 and made representations to Processed: 13-02-2009 18:50:26 Page Layout: COENEW [O] PPSysB Job: 407662 Unit: PAG1 International Development Committee: Evidence Ev 73 DFID as long ago as February 2006 to enquire why the strategy had not appeared and repeated this request at intervals thereafter. Prospect was also puzzled why DFID produced subsidiary strategy papers such as the 2006 paper on Research for Sustainable Agriculture before the main research strategy was finalised. Responses to Specific Points of Inquiry Raised by the Committee The implications for achievement of the MDG poverty reduction targets of DFID’s middle-income country strategy and the 90:10 split in funding between low- and middle-income countries 4. Prospect has no comments to make on this issue. The eVectiveness of DFID’s mechanisms for evaluating the impact of its aid 5. We feel that this is a critical and essential issue because of the scale of the aid budget (£5.3 billion in 2007–08; page 16 of the Annual Report for 2008) and the need for transparent accountability. However, we searched unsuccessfully for a released DFID evaluation strategy on the DFID website. Such a strategy may or may not exist. If it has been written it should be released and if it does not exist we would question why this is the case. Prospect notes that there is now an independent body involved in evaluating the UK aid programme (the Independent Advisory Committee on Development Impact, IACDI, see section 5.41 on page 102 of the Annual Report for 2008), but we feel that DFID’s accountability could be enhanced by addition of natural and social science expertise to supplement the largely econometric specialists on the committee. We also note that in paragraph 8 (see http://www.dfid.gov.uk/aboutdfid/performance/files/ IACDI-minutes-march08.pdf), of the minutes of the IACDI’s second meeting, many criticisms of DFID’s Evaluation Department were raised, including the need for a clear and agreed departmental policy on evaluation to meet internationally recognised criteria. 6. Prospect is concerned that in the context of an increasing trend for DFID to provide its assistance in the form of direct budgetary support that there are adequate safeguards that the monies disbursed are used appropriately. Our members who work in developing countries have considerable experience of how funds are liable to mismanagement and view direct budgetary support as an ineYcient mechanism, albeit lacking high transaction costs, open to widespread abuse. Linking development funds to clear goals within bilateral or multilateral project structures are the preferred models. 7. We note on page 23 of the Research Strategy that over £20,000,000 is committed to the Consultative Group on International Agricultural Research (CGIAR). We question how the CGIAR’s use of these funds is evaluated. Is there suYcient in-house scientific expertise within DFID HQ to perform this role adequately? 8. We welcome the commitment (page 9 of the Research Strategy) “to strengthen our research expertise” but question why in the next line there is a commitment to “decentralise some research management functions”? The implementation of recommendations from the Rothschild customer-contractor principle involving decentralisation, outsourcing and privatisations has not been successful, leading to a lack of coordination of the science for development agenda, the loss of valuable expertise in DFID headquarters and the initiation of the withering of UK capacity in science for development. 9. In Prospect’s submission to the consultation on the research strategy in 2005 we welcomed the appointment of a Chief Scientific Adviser (CSA) to DFID. Perhaps it is now timely for this role to be evaluated in terms of the quality and quantity of scientific thinking in the aid agenda, with a view to strengthening the impact of scientific advice within DFID and providing resources for public sector research in science for development to match the example of France, as the UK used to do. 10. Prospect welcomes the inclusion of climate change in the new research strategy since developing countries, who contribute least to the causes of climate change, will suVer the most from its consequences. Also, the UK science base is a globally recognised source of expertise in climate change subjects and so we anticipate future opportunities across diVerent UK Departments, including DFID, to play a major role in the future, in contrast to the past record of devolving responsibility on climate change to a non-UK organisation. The Climate Change Adaptation in Africa programme is largely funded by DFID, see section 9.15 on page 171 of the Annual Report for 2008, but is managed by the Canadian International Development Research Centre (IDRC). Prospect was dismayed by this decision to outsource internationally and questions how the IDRC Climate Change Adaptation in Africa programme is evaluated. DFID’s approach to agricultural development (including the likely impact on agricultural research of DFID’s Research Strategy 2008–13) 11. Prospect welcomes DFID’s commitment to invest £220,000,000 in research by 2010 and £1 billion on development research in the next five years. We also welcome the commitment to spend £80,000,000 a year on agriculture, fisheries and forestry by 2010. DFID has taken the lead in returning agriculture to its rightful place at the heart of the development agenda, following a regrettable fallow period. Prospect welcomes DFID’s recognition that agriculture plays a major role in the reduction of poverty and in economic growth and DFID’s lead in increasing its budget for agricultural research. Processed: 13-02-2009 18:50:26 Page Layout: COENEW [E] PPSysB Job: 407662 Unit: PAG1 Ev 74 International Development Committee: Evidence 12. An increasing budget for agricultural research is, however, not enough by itself since it has to be deployed by experienced practitioners. Prospect appreciates the positions taken by DFID in its research and agricultural strategies but regrets that these papers do not indicate in suYcient detail how and by whom the policies will be realised. Whilst recognising and applauding the increased role that practitioners based in developing countries play, the implementation and evaluation of the strategies will be diYcult because of the continuing decline in the UK’s capacity for such research and development (see next paragraph). This decline is partly attributable to DFID’s intransigence in maintaining a misguided notion that all aid including scientific research must be untied (see section 5.9 on page 89 of the Annual Report for 2008). This has led to a bizarre contradiction whereby DFID can provide funds for raising awareness of development issues such as the Millennium Development Goals within the UK, but is hamstrung when it comes to funding organisations such as Engineers without Borders who seek to work in developing countries outside the UK. 13. The untying of aid may be an admirable policy for the supply of goods, but it is inappropriate when applied to the supply of services and research expertise. The policy has led directly to funding crises within UK organisations that used to be at the forefront of development. Prospect has repeatedly asked DFID to reconsider its policy on the untying of aid and reiterates this position here. If the policy on untied aid was reversed, the UK science base could make very substantial contributions to development programmes and recover its position as a world leader in multidisciplinary science for development. 14. Referring again to page 23 of the Research Strategy where it is stated that over £20,000,000 is committed to the Consultative Group on International Agricultural Research (CGIAR), we note that this core funding to a non-UK organisation is possible through untied aid, yet the provision of core budgets to UK’s own research institutes for development science is prohibited by the untied aid policy. 15. Although the recently constituted UK Collaborative for Development Science is making a valiant eVort to facilitate UK involvement and coordinate UK operations, a stronger signal needs to be given by the UK Government on the contribution that science can make to averting food crises in the 21st century. There are already 850,000,000 hungry people. 16. There has been a near-collapse in the UK’s capacity to conduct scientific research on agriculture for development. Thus, it is diYcult to envisage how the work will be conducted, managed or evaluated with the degree of rigour that was second nature to the 600 or more staV who worked for the Overseas Development Administration’s three scientific units and the Department for Overseas Surveys (DOS) in the mid-1990s. Their successors in the Natural Resources Institute are very much reduced in numbers. Other cuts have included the loss of development specialists from the former Silsoe Research Institute at Wrest Park, CABI, East Malling Research Station, WHRI, the Central Science Laboratory and related organisations. It also includes forestry specialists who worked for DFID’s 40-year old Forest Research Programme that ended in 2006 such as those based at the Oxford Forestry Institute which has been absorbed within the Department of Plant Sciences at Oxford. These cuts have occurred despite the importance of tropical forests for maintaining ecosystem services and the carbon cycle, so important for climate change mitigation. University staV, who conduct research on development within universities on a part-time basis, can never substitute for a cadre of dedicated specialists working in a goal-oriented environment to promote development and enhance capacity development, impartially. The Natural Resources Institute exemplifies the catastrophic decline in the UK science base for aid work (see annex). 17. In the context of agricultural research, Prospect members are curious to know if and when the UK Government will endorse the recommendations of the International Assessment of Agricultural Knowledge, Science and Technology for Development (IAASTD) (see http://www.agassessment.org/). The IAASTD urges a re-think about agriculture to treat it as an integrated, holistic enterprise that not only produces food, but also enhances the environment and provides for rural development opportunities and income security. The apparent stand-oV between key stakeholders in this debate, specifically representatives of the private sector who disassociated themselves from the process at the eleventh hour and the Non Governmental Organisation (NGO) community, cannot continue. The debate must be driven by the kind of evidence that Prospect members in the UK have the experience and ability to deliver. Prospect members include staV in many public sector organisations who could act as “honest brokers” and arbiters, providing unbiased evidence to policy and decision-makers in partnership with their developing country-based colleagues. The best way to influence policy is by providing advice, expertise and practical know-how that is demonstrably functional. Success breeds success. Annex The Natural Resources Institute (NRI) In 1990 there were about 500 NRI staV, employed directly by the ODA. After a pre-privatisation re- structuring exercise in 1995 there were 373 NRI staV left available for privatisation, and after that exercise there remained 325 staV who transferred from the Agency Status version of NRI into the University of Greenwich in 1996. As of 2 June 2008, NRI has 66 employees of whom 38 (57.6%) are scientists (Science, Engineering, Technology and Innovation, SETI, staV) of whom 22 (57.9% of SETI staV) were entered into the 2008 Research Assessment Exercise (20 under Agriculture, Veterinary and Food Science and two included in the non-SETI Development Studies RAE submission). In addition there are (a) 16 Social Processed: 13-02-2009 18:50:26 Page Layout: COENEW [O] PPSysB Job: 407662 Unit: PAG1 International Development Committee: Evidence Ev 75 Scientists and Economists (24.2% of staV), 10 of whom (62.5%) were entered into the Development Studies RAE submission; and (b) 12 support staV (18.2%). At least 8 of the 66 staV are part-time so only about 60 full-time equivalent staV, of whom only 20 (see above) are research-active SETI scientists, remain. Many of these are likely to retire within a few years without being replaced. June 2008 Memorandum submitted by RESULTS UK RESULTS UK has focused on two areas of analysis, arising from the work of RESULTS and the suggestions of the International Development Select Committee. The two areas are: — The eVectiveness of DFID’s mechanisms for evaluating the impact of its aid. — DFID’s progress in meeting the Millennium Development Goals (MDGs), focusing on the targets associated with tuberculosis (TB), basic education and microfinance. The UK Department for International Development (DFID) states in its 2008 Annual Report that “DFID’s aim is the reduction of poverty, in particular through the achievement of the MDGs by 2015. Everything that DFID does, through its country programmes and collaboration with international organisations, is guided by the MDGs”. It is further stated that “DFID has a Public Service Agreement (PSA) which sets out the objectives and targets by which we measure our progress as monitored by HM Treasury. The current Public Service Agreement (PSA) runs for the three-year period from 2005 to 2008.We measure performance through targets that are based on the MDGs”. In terms of the eVectiveness of DFID’s aid, we have concluded that DFID emphasises inputs to a greater extent than outcomes, and partly as a result DFID cannot adequately measure the eVectiveness of its aid nor whether it has reached the intended beneficiaries. Moreover the current PSA targets are inadequate as a measurement of DFID’s aid and inadequate as targets to assess progress towards achieving the MDGs. In terms of tuberculosis, there is a general lack of mention in the 2008 report of TB and global TB targets compared with HIV/AIDS. A further issue is DFID’s focus on health systems strengthening and budget support at the expense of funding disease-specific programmes, rather than complementing them, as well as the lack of DFID’s policy recommendations being implemented at country level. In terms of education, we focus on the need for long-term predictable funding, removing barriers to education such as user fees and teacher shortages, reaching those in greatest need such as children living in conflict aVected states as well as the need for more qualitative indicators for measuring the success of aid dedicated to education. As regards microfinance we emphasise that it is an underutilised tool, but one that has a growing and substantial body of evidence attesting to its eVectiveness in achieving several MDGs. We note the lack of mention of microfinance in DFID’s 2008 report, and that there is a need to focus on targeting the poorest people. 1. The Effectiveness of DFID’s Mechanisms for Evaluating the Impact of its Aid DFID emphasises inputs rather than outcomes 1.0 The previous report (2007) by the International Development Select Committee (IDC) upon DFID, states that “DFID continues to emphasise inputs rather than outcomes—it focuses too much on how much it spends on aid rather than measuring the eVects of its aid spending on poverty”. This issue is the main theme that we would like to raise as a point of concern, considering the lack of detailed information in the 2008 report on the particulars of which DFID programmes and what funding are contributing to each MDG, as well as which programmes and what funding are not. 1.1 In the 2008 report, Douglas Alexander sets out DFID’s main priorities for achieving the MDGs: Peace and security, climate change, growth, and international reform. From the report it seems clear that DFID is increasingly focusing upon these macro-level priorities, through multilateral aid and through providing budget support to country governments, as opposed to increasing bilateral aid to vertical programming or through alternative funding streams. As a result, this makes measuring the eVectiveness and impact of DFID’s aid very diYcult. Increases in funding to multilateral agencies and recent pledges such as £6 billion to support health systems strengthening are needed and welcome, but we are concerned that DFID cannot adequately measure the eVectiveness of the outcomes of such support in contributing toward the MDGs. 1.2 Whilst DFID’s budget is increasing due to the need to meet the UN target of 0.7% of GNI allocated to OYcial Development Assistance by 2013, the previous IDC report noted that it is also obliged to reduce its administrative costs, “which in practice means cutting the number of staV it employs”, furthermore that “one of the ways DFID deals with disbursing a growing aid budget with fewer staV is through poverty reduction budget support (PRBS)”. We are concerned that DFID is giving preference to budget support and thus emphasising how much it spends as opposed to what it has specifically achieved, not because it is Processed: 13-02-2009 18:50:26 Page Layout: COENEW [E] PPSysB Job: 407662 Unit: PAG1 Ev 76 International Development Committee: Evidence the most eVective way to reduce poverty but because it is an easier way to disburse aid. A further issue that arises is whether DFID will be increasingly outsourcing its work to other agencies or consultants, if this trend continues. DFID cannot adequately measure the eVectiveness of its aid nor whether it has reached the intended beneficiaries 1.3 Although the 2008 report is a target-oriented summary of DFID’s work, and based around progress made towards the PSA 2005–08, this system does not provide an adequate and complete overview of DFID’s support and expenditure. The previous IDC report noted that following the publication of DFID’s HIV/ AIDS Strategy Taking Action in 2007, DFID could only identify “potentially relevant” projects and programmes that benefitted from funding earmarked for children made vulnerable by HIV and AIDS. 1.4 The 2008 report notes the creation of the Results Action Plan, as well as the Independent Advisory Committee on Development Impact. Within the Action Plan one of the key priorities is to achieve “strengthened performance and results frameworks for country programmes”, a priority which is also included in the 2005 Paris Declaration on Aid EVectiveness. If implemented eVectively this priority should lead to a greater capacity for DFID to report on the outcomes and eVectiveness of its aid. We believe that this Action Plan and other such measures should be given greater priority by DFID, as measuring the outcomes of specific pledges and how eVectively policy has been implemented is a major challenge for DFID. 1.5 Within the 2008 report DFID states that its policies are based on “evidence of what works”. We are concerned that there is not enough evidence to justify DFID’s increasing use of general budget support (GBS) or sector budget support (SBS, eg health) at the expense of, instead of in complement to, more targeted aid to reach the poorest of the poor. Although we commend DFID’s achievements and commitments to-date, we believe that there is not enough evidence to show that DFID’s current approach to monitoring its aid “works”, as the 2008 report does not provide specific details on how promoting GBS or SBS are meeting the MDGs. The PSA targets are inadequate as a measurement of aid 1.6 DFID has stated that its raison d’eˆtre is to achieve the MDGs, the monitoring of which occurs through assessing progress towards achieving the current PSA objectives and targets. However, DFID has diVerent targets for diVerent regions within its PSA 2005–08 objectives, whilst the MDGs are universal. No explanation is given to the allocation of these targets. In the targets associated with MDG6, there is no tuberculosis (TB) target for Africa, whilst there are two for Asia, yet DFID acknowledges in its report and in its AIDS Strategy that TB is a pandemic of poverty in Africa that merits urgent attention. 1.7 The IDC reported that the proposed PSA Delivery Agreement 29, which will replace previous PSAs, will focus monitoring on 22 countries in which DFID considers it can “make the most impact in measuring progress”, as well as having fewer targets. That DFID necessarily has to prioritise key countries and key development topics relative to its strengths is understandable, however we believe that the focus should not be on where the most progress can be measured but on where the most progress is needed. 1.8 We are concerned that DFID is not comprehensively addressing the MDGs, due to the inadequacy of the PSA objectives and targets as a system of measurement to report on the eVectiveness of the programmes and support DFID is providing to reduce poverty. We are also concerned by the observation of the previous IDC report, which noted that “some PSA targets were eased in the current Spending Review period (2005–08)”. If DFID is to obtain an adequate measure of the impact of its aid, whether it has reached its beneficiaries and what impact DFID is having in progress toward the MDGs, a more detailed and comprehensive evidence-based results-oriented assessment strategy is needed. 2. DFID’s Progress in Meeting the Millennium Development Goals,Focusing on the Targets Associated with Tuberculosis (TB), Basic Education and Microfinance 3. MDG 6: Focusing on Tuberculosis (TB) The general lack of mention of TB and global TB targets compared with HIV/AIDS in the PSA targets related to MDG 6 3.1 DFID’s 2008 report noted that the UK will commit up to £1 billion up to 2015 to the Global Fund to Fight AIDS, TB and Malaria, with £360 million for the period 2008–11, as well as noting the launch of the International Health Partnership (IHP) in 2007. We applaud these commitments as well as the mention of the global co-epidemic of TB/HIV in DFID’s recently revised AIDS Strategy; “stronger links must . . . be forged between TB, malaria and HIV services…in hyper-endemic countries, TB and HIV are fuelling each other, and the need for integration is made more urgent by the steep rise in drug resistant TB infections”. Processed: 13-02-2009 18:50:26 Page Layout: COENEW [O] PPSysB Job: 407662 Unit: PAG1 International Development Committee: Evidence Ev 77 3.2 Despite DFID’s acknowledgement of the severity of TB as a disease of poverty, there is little mention of TB or TB/HIV in the 2008 report. Although the report is structured around DFID’s progress in achieving the MDGs, the MDG target for TB is rarely mentioned. Perhaps the most important observation is that there is no PSA TB target for Africa and insuYcient ones for elsewhere, as such the report does not state, for example, what DFID is doing to support TB/HIV co-ordinated activities in hyper-endemic countries. 3.3 The All-Party Parliamentary Group on Global Tuberculosis released in 2007 the report Agenda for Action, which included concrete recommendations on how the UK should continue its vital support to TB control and scale-up its response. It is impossible to answer, based on the report, what specific activities DFID is supporting to implement the APPG report, as well as the World Health Organisation’s Stop TB Partnership’s Global Plan to Stop TB; the MDR-TB and XDR-TB Global Response Plan, and any funding provided to these plans in the period covered by the 2008 report. 3.4 The PSA Delivery Agreement 29 which replaces the current PSA 2005–08 has fewer targets than the previous PSAs and has only one indicator for MDG 6: HIV prevalence among 15–49 year olds. The lack of mention of TB and malaria compared with HIV/AIDS, and the focus on health system strengthening raises a worry that progress will not be properly monitored concerning the confrontation of TB, and the appropriate action may not materialise in order to address the health emergencies of drug-resistant TB and the co-epidemic of TB/HIV in areas such as sub-Saharan Africa. DFID’s focus on health systems strengthening and budget support at the expense of funding disease-specific programmes 3.5 Of the evidence concerning MDG6 in DFID’s report, much concerns prioritising support to health systems strengthening and health sector budget support. We understand that DFID is increasing health sector budget support, whilst at the same time reducing disease-specific bilateral aid. We believe however that targeted investments are important for addressing priority diseases as part of a broader health systems approach. The recent report “Healthy Aid” by Action for Global Health, cited with evidence the case of Zambia, in which the introduction of GBS and a sector-wide approach (SWA) to health led to “the collapse of the Zambian TB programme”. The report concluded that GSB “only helps the Government deal with regular health problems and not extraordinary problems such as HIV, AIDS and TB”. Reflecting policy recommendations at country level 3.6 In 2007 RESULTS UK produced a report on the response of the UK Government and civil society to the TB/HIV co-epidemic. One important finding of the report was that although DFID recommends integration of TB and HIV services at policy level, a survey of DFID country oYces revealed that these policies are not being implemented. This raises a significant issue about the lack of co-ordination within DFID and whether other policy areas have experienced a lack of implementation. Secondly, due to the fact that DFID does not disaggregate its TB, TB/HIV or even HIV funding, it was impossible for DFID to state how much it had spent on combating TB, and therefore diYcult for DFID to evaluate the eVectiveness and impact of its aid to confront TB. 3.7 According to DFID’s 2008 report there has been some welcome progress in South Asia on the two PSA TB targets for Asia concerning TB cure and detection rates, but the same cannot be said for Central and East Asia or sub-Saharan Africa. DFID states, “In many countries progress is slowed by health systems that do not have the capacity to deliver services”. Whilst this is an important issue, we are concerned, due to the reasons given above that DFID is not able to adequately monitor progress in achieving MDG 6, nor is it addressing it adequately at country level. The implications for the issues that have been discussed raises a significant point that was noted by the previous IDC report: DFID cannot adequately state to a suYcient level whether its aid is reaching the intended beneficiaries. 4. MDG 2: Commitment to Education For All Funding education 4.1 DFID should be commended for making generous commitments to funding basic education which is vital if the world is to meet its MDG commitment of ensuring universal access to education. The pledge of £8.5 billion over a 10 year period, made in April 2006 was a most welcome development. However, despite this pledge being made over two years ago DFID has yet to release details of how and where they intend to spend this money. 4.2 Long term and predictable funding is vital for developing countries if they are to be able to develop and implement comprehensive long term education plans with a view to meeting the MDG 2 target. We welcome the knowledge that 11 African PSA countries have been able to develop such long term plans with DFID’s financial support, but DFID should seek to encourage and provide assistance to all PSA countries to develop such long term plans in the near future. Processed: 13-02-2009 18:50:26 Page Layout: COENEW [E] PPSysB Job: 407662 Unit: PAG1 Ev 78 International Development Committee: Evidence 4.3 The Education For All Fast Tack Initiative (FTI) is an eVective and important multi donor funding mechanism to which DFID is now the second largest contributor, but it is a mechanism which is unexplainably absent from the 2008 report. With the UK now at the end of its three year funding cycle to the FTI we would encourage DFID to make a significant and long term commitment to the fund and push for a speeding up of the funds disbursements to allay the one major criticism that is often directed at the FTI. Removing barriers 4.4 One of the greatest barriers to education remains the charging of tuition fees. The 2008 report highlights the enormous impact that their removal can have on school enrolment and on achieving gender parity in schools. Despite significant progress in recent years it is estimated that out of 94 poor countries, 77 still have some type of education user fee, including several DFID partner countries. Though DFID have a policy of seeking to dissuade partner countries from charging such fees and encouraging them to include plans for their abolition in their education plans, DFID need to provide greater clarity on which of their partner countries still charge fees and what, if any, concrete plans are in place for their abolition. 4.5 It is clear that the world cannot reach its education goals by 2015 unless it urgently deals with the current chronic lack of teachers. It is estimated that an additional 18 million teachers are needed if MDG 2 stands any chance of being met, yet policies imposed by the IMF continue to prevent many poor countries from employing the teachers that they so desperately need. DFID point out in their report that “the main role of the IMF is to provide stability in the world economy”, but true lasting stability can only be achieved if all the worlds children are oVered the chance of a quality education so that they have the opportunity to contribute to that economy and help lift themselves out of poverty. Reaching those in greatest need 4.6 It is thought that up to 37 million of the 72 million children out of school in the world live in conflict aVected fragile states. If MDG 2 is to be met by 2015 far greater emphasis must be placed on reaching these children. DFIDs 2008 report fails to directly address this issue. We believe that DFID should use its experience in fragile states to expand its education programmes to all fragile states it has a presence in so that they too can hope to achieve universal primary education for their children. 4.7 Up to 26 million, or one third of all out of school children worldwide are thought to be disabled, and in Africa it is thought that only 10% of disabled children receive an education. DFID should encourage its partner countries to make specific provisions in their education plans for increasing access to children with disabilities. Measuring success 4.8 DFID’s PSA targets for both South Asia and India use enrolment rates as the measure of DFID’s success in the education sector. The picture painted by such indicators is very rough and at times deceiving as factors such as high drop-out rates, poor learning outcomes, pupil-teacher ratios far above the recommended 40:1 target and chronic absenteeism can be underplayed. DFID should measure the quality as well as the quantity of education provided in assessing the eVectiveness of its aid. 5. Microfinance and the MDG’s An underutilised tool 5.1 There is a mounting body of evidence which shows that microfinance is a proven and eVective tool for poverty alleviation with a strong impact on the achievement of the MDGs including but not limited to poverty alleviation, promoting children’s education, improving health outcomes for women and children and empowering women. Microfinance is unique among development interventions in that it can deliver social benefits on an ongoing, permanent basis and on a large scale. 5.2 Despite the great potential for microfinance to help attain the MDGs, DFID barely mentions microfinance in its 2008 report, with only a fleeting mention in the “Reducing Poverty in South Asia” section. To its credit DFID has committed at least £70 million to microfinance schemes in 6 diVerent countries over the last three years. However such investment in Microfinance Institutions (MFI’s) appears to be the exception rather than the rule and far greater investment is needed in more DFID partner countries if they are to harness the full potential of microfinance and make progress towards the MDGs. Processed: 13-02-2009 18:50:26 Page Layout: COENEW [O] PPSysB Job: 407662 Unit: PAG1 International Development Committee: Evidence Ev 79 Targeting the poorest 5.3 In recent years DFID has moved towards investing almost exclusively in the strengthening and widening of the financial sector in developing countries in preference to providing direct financial support to MFI’s. Whilst financial widening and strengthening is an important process in the development of a countries economy it can have the adverse eVect of taking the focus away from reaching the very poorest. If the MDGs are to be met by 2015 it is these people who DFID should be targeting. 5.4 DFID provides no reliable data to show whether their funding for MFI’s benefits the very poor (those living on less than $1 a day or the bottom half of those living below the national poverty line). DFID should provide information on what, if any, mechanisms it has in place to measure the income/poverty level of MFI’S incoming or current clients. Such data is crucial if DFID is to be able to state with confidence that the aid it is providing is having the greatest possible impact. 5.5 With many MDGs still oV track, microfinance could help provide a much needed boost to DFIDs eVort to alleviate poverty and meet the MDGs. DFID should increase funding for microfinance programmes, increase its involvement in capacity building in respect of MFI’s and should work to ensure that at least 50 percent of its resources reach those living below the poverty line. 6. Conclusion DFID’s main priorities as outlined by Douglas Alexander are indisputably essential and worthwhile areas to focus upon. There is also evidence that DFID is adopting a more results-oriented approach to development, attested to by the adoption of the Results Action Plan and other such measures. DFID has made major contributions to reducing poverty worldwide, but there are several challenges and major issues concerning the inadequacy of the PSA targets and the method in which DFID disburses its aid. Too much focus on macro-level issues and sector budget support misses the essential focus of what development should be about; human beings. We are concerned that DFID is focusing too much on the means of development and not enough on the ends. Memorandum submitted by Saferworld 1. Saferworld’s mission is to prevent and reduce violent conflict and, as such, we take a close interest in UK Government policies that have an impact, positively or negatively, on conflict prevention. With the relationship between development and conflict well recognised, if not always fully explored, Saferworld welcomes the chance to give evidence to the International Development Select Committee on DfID’s Annual Report 2008. Conflict and Development 2. There is much to praise in the report and we particularly welcome the explicit recognition that we “. . . will not meet the millennium development goals, nor ensure regional and global security and the fulfilment of human rights without progress in fragile states”.25 3. Of course, the relationship between conflict and development works both ways and poorly designed development programmes may end up inadvertently causing or escalating conflict. This is a fact DfID have recognised in relation to fragile states with their leadership on the OECD Principles for Good International Engagement in Fragile States and Situations.26 4. However, the need for development to be conflict-sensitive goes beyond operations in fragile states. DfID’s “scenario and contingency planning” processes are welcome but should be mainstreamed across all of their programmes. Additionally, DfID must ensure that these exercises are operationally meaningful and be prepared to adapt their programmes as appropriate in light of the results. The annual report highlights the European General AVairs and External Relations Council’s commitment to undertaking conflict assessments for EU country and regional strategy papers.27 DfID should ensure that it is conducting, referring to and updating conflict assessments for everywhere it works. 5. Ensuring that development programmes really are conflict-sensitive requires a good understanding of the political situation on the ground. It is therefore encouraging to read about DfID’s increased cooperation with the Foreign and Commonwealth OYce, both in terms of more co-location of overseas oYces as well as more “lesson learning” and “scenario planning” exercises conducted with FCO involvement.28 25 DfID Annual Report 2008, p 151. 26 “International interventions can inadvertently create societal divisions and worsen corruption and abuse, if they are not based on strong conflict and governance analysis and designed with appropriate safeguards”. OECD Principles for Good International Engagement in Fragile States and Situations. 27 DfID Annual Report 2008, p 156. 28 Ibid, p 17 and p 153. Processed: 13-02-2009 18:50:26 Page Layout: COENEW [E] PPSysB Job: 407662 Unit: PAG1 Ev 80 International Development Committee: Evidence 6. However, understanding the context in which operations are happening requires a certain commitment to staYng, as the annual report acknowledges in relation to risk management in Nepal.29 It would therefore be interesting to know how DfID plans to build on their successes in this area, particularly in light of the fact that an increase in budget to £7.9 million in 2010–1130 is to go hand in hand with the reduction of administrative costs called for by the 2007 CSR. More aid being given by less staV would bode ill for the kind of analysis and monitoring that eVective, conflict-sensitive aid requires. Arms Export Controls 7. The report is right to recognise DfID’s eVort in pushing for a global Arms Trade Treaty and we hope that DfID will continue to work hard on this during the crucial years of negotiation ahead when the issue may be far from the public eye. 8. Domestically, whilst it is true that the UK’s arms export controls are stricter than many countries, neither the controls—nor their implementation—are perfect. DfID should use its position as “. . . part of the cross-Whitehall team that scrutinises applications for licences to export arms from the UK and ensures that these exports do not seriously undermine sustainable development”31 to push for improvements to these controls (for example, addressing the weak legal status of sustainable development in assessing exports of military equipment) and ensure that legislation is backed up with suYcient resources to be eVectively implemented and enforced. It is worth noting that, between 2004 and 2006, France refused 60 export licences on development grounds whilst the UK refused none.32 Peacebuilding Commission 9. Saferworld are glad that DfID’s commitment to managing conflict extends to supporting the work of the Peacebuilding Commission (PBC) but have some questions about the level of funding that it is providing. 10. The Peacebuilding Fund (PBF) currently has around $235 million in its accounts and another c $35 million in pledges. However, PBC country accompaniment is, necessarily, an activity with a long time-frame and, with just a handful of countries on their agenda, the PBC is already operating at pretty much maximum capacity. If the good work of the PBC is to be built on and spread to other countries, then DfID may have to think about increasing its financial support to the PBF from its current level of £30 million over three years,33 as well as encouraging other donors to raise their level of contributions too. 11. DfID will also need to ensure that their overseas staV in PBC focal countries have a full appreciation of the added value that the PBC brings and appreciate it as a complementary, rather than rival, mechanism to the Poverty Reduction Strategy Papers. June 2008 Memorandum submitted by Save the Children UK Introduction Save the Children UK is the world’s independent children’s charity. We are outraged that millions of children are still denied proper healthcare, food, education and protection. We are working flat out to get every child their rights and we’re determined to make further, faster changes. This submission focuses on two of the three areas outlined by the IDC inquiry: — The eVectiveness of DFID’s mechanisms for evaluating the impact of its aid, specifically on poverty reduction. — DFID’s approach to agricultural development and agricultural research as outlined in DFID’s Research Strategy. Monitoring and Evaluation:Achieving Real Change 1. Save the Children believes that the need to improve the monitoring and evaluation of the UK’s aid lies most importantly at two levels: one concerns the lack of clear mandate to promote uptake of specific policies and their subsequent monitoring across DFID; the second, is the urgent need to address the lack of accountability and transparency of donors’ aid commitments and disbursements globally. 29 Ibid, p 152. 30 Ibid, p 16. 31 Ibid, p 158. 32 7th, 8th and 9th EU Consolidated Reports. 33 DfID Annual Report 2008, p 155. Processed: 13-02-2009 18:50:26 Page Layout: COENEW [O] PPSysB Job: 407662 Unit: PAG1 International Development Committee: Evidence Ev 81 2. When we consider DFID’s system for policy implementation and monitoring, there is a lot to say in praise of its country-driven, demand-led approach in which DFID country oYces set the agenda rather than it being centrally led. However, this creates a tension with the overall DFID policy-making process at the centre. Responsibility for the implementation of DFID-wide policies and priorities does not sit clearly with anyone and the result, as the 2007 evaluation of DFID’s agriculture policy makes clear, is that “country oYces show little awareness of, or commitment to” the policy. 3. Policies such as social protection suVer from a lack of clear internal coordination across teams and countries. In addition, without cross-country policy monitoring no system exists for tracking the implementation of policies once they are produced; the DFID Evaluation Paper 22 calls for “an audit of monitoring and evaluation in DFID”, meaning that it is not possible to say how specific DFID policies are impacting on developing countries. 4. An additional concern in the area of UK aid monitoring is related to the monitoring of aid that is spent through budget support. While we strongly support the use of budget support over a fragmented, burdensome project approach, DFID have a long way to go to better understand what impact budget support spending has. EVorts to better assess how budget support aVects developing country spending on poverty and at decentralised levels are encouraged. 5. The second area of consideration in aid monitoring is at the global level in terms of holding donors, including the UK, to account on commitments made. No system exists for actively tracking donor commitments, reporting whether they are delivered upon, or holding donors to account publicly for unfulfilled agreements. While the OECD DAC holds a database of much of this information, some donors continue to not submit accurate or complete information and information that is gathered is not assessed, commented upon or circulated to stakeholders such as the general public or recipient governments. We would like to see the UK proposing and supporting an international independent body that would report on donor’s commitments versus disbursements, levels of tied aid, independent evaluations, and recipient feedback etc, perhaps building on the OECD DAC’s capacity. This body would have to be supported with adequate budget and profile with clear mechanisms to ensure its impact such as Parliamentary and UN reporting. 6. Regarding the monitoring of humanitarian aid, DFID’s ability to support strong programme evaluation has been reduced by its increasing commitment to channelling funds through UN-managed bilateral funding mechanisms. These mechanisms—of which DFID has been the major champion—include the global Central Emergency Response Fund (CERF) and the in-country Common Humanitarian Funds (CHFs). An independent evaluation of the CHFs in DR Congo and Sudan in October 2007 found monitoring and evaluation to be “very weak, both at strategic level—in terms of whether the Funds are having a positive impact—and programmatically, particularly for UN agencies”. The draft 2-year evaluation of the CERF also raises this issue forcefully; a final version of the report will be presented to the General Assembly in August. 7. Monitoring and evaluation are important components of the “Learning and Accountability” principles established under the Good Humanitarian Donorship initiative, in which DFID is a leading player. However, the monitoring requirements attached to grants from the CERF or the CHFs are not generally as robust as those established for projects funded by bilateral donors such as DFID, while evaluations are not systematically required or implemented. In order to achieve its objectives of improved coordination and accountability in humanitarian aid, DFID needs to take responsibility for mainstreaming much stronger evaluation systems and standards into the new multilateral funding mechanisms. This may require additional financing—eg for fully staVed Monitoring & Evaluation units reporting directly to UN Humanitarian Coordinators in country—and a political commitment to strengthen the capacity of the CERF Secretariat in New York to ensure higher evaluation standards for all CERF-funded programmes. Monitoring Achievement of the First MDG 8. On the specific area of monitoring impact on child nutrition, a key target for achieving the first MDG, Save the Children commissioned a report from the Institute of Development Studies in 2007. 9. The study found it hard to assess whether DFID’s programmes were having the benefits on nutrition that they were directly intended to. It was also hard to ascertain whether nutrition benefits were flowing from programmes that might have another aim as their main outcomes—for instance, health or cash transfer programmes. 10. DFID does not report its spending on nutrition (tending to roll it into health or humanitarian budget codes). This means that assessments of DFID’s eVectiveness must rely on secondary data sources, such as OECD DAC Creditor Reporting System (mentioned above), where programmes are often poorly described, and which does not cover DFID contributions to multilateral programmes. 11. Monitoring nutrition outcomes is important because poor nutrition is responsible for around 36% of preventable under-5 deaths.34 At the moment DFID is unable to eVectively track how well its programming is tackling this major underlying cause of mortality and morbidity (illness) in developing countries. 34 Lancet Maternal and Child Undernutrition Series, 17 January 2008, p 5. Processed: 13-02-2009 18:50:26 Page Layout: COENEW [E] PPSysB Job: 407662 Unit: PAG1 Ev 82 International Development Committee: Evidence Recommendations — Conduct a nutrition audit of current indirect nutrition spending. This would essentially be a thematic baseline assessing how nutrition-friendly the current indirect nutrition portfolio is, with follow ups to determine improvements or worsening. — In Central Research Department, fund work on generating new evidence on nutrition interventions and policy (some evidence dates from the 1990s). Agricultural Development for Effective Poverty Reduction 12. Save the Children UK commends the centrality that agricultural growth plays in DFID’s poverty reduction eVorts and the critical role that DFID sees for an increase in agricultural productivity to trigger agricultural growth. 13. Save the Children also endorses DFID’s awareness that agricultural development strategies must reflect individual countries’ development and the central role that investment in agricultural research must play in informing agricultural polices. 14. Save the Children believes that DFID could greatly increase the eVectiveness of its agricultural policy by sharpening its understanding of the characteristics of the rural poor and the role that they play in agricultural production. Far too often DFID is aligned to the orthodox view that the majority of the rural poor in developing countries are small (and crucially self-employed) farmers working on their own land with the help of unpaid family members. Consequently the vast majority of projects on rural poverty and poverty reduction strategies tend to emphasise the key role of self-employment and small family farming and aim to devise polices to boost poor’s people capacity as producers. 15. However, Save the Children has found—drawing on extensive literature and livelihoods research— that a substantial proportion of poor people rely on casual and manual work for others as their primary source of income. This work is generally low-skilled and badly remunerated. The work conditions they face tend to be very poor (eg long workdays, no accommodation, no benefits such as paid leave, sick leave, overtime payments, etc.-, no protection, arbitrariness in payment rates, and sometimes physical threats and violence). As the number of working days available in rural areas is low, and the income from the working days that do exist is low and irregular, the income of rural workers is usually low—well below the poverty line. 16. As a significant segment of the rural poor is predominantly engaged in agriculture as an employee for better oV farmers, rural labour markets are crucial to their livelihoods. By and large the inadequate number of working days available to the rural poor and the inadequate return from existing working days are the key sources of their poverty and vulnerability. At the same time, research has shown that access to (scarce) decent work opportunities can play a key role in allowing some poor people to escape poverty. 17. Such a characterisation of poverty and ways out of it has important implications for DFID’s agricultural policy: — It is misleading to base agricultural policy on the fact that the poorest are small-scale agricultural producers. Policy objectives such as increasing small-farmers return from agriculture by improving access to markets (including financial markets), which are an important part of DFID agricultural policy, are not directly relevant to the significant section of the very poor who do not produce own crops (or hardly do so). — An inclusive pro-poor agricultural development strategy must reflect the fact the very poor earn a high percentage of their income by working for other people. This is an irreversible trend due to increasing pressure on land. The policy challenge therefore becomes to identify ways to help the functioning of rural labour markets. Save the Children UK hopes that the upcoming new DFID agricultural policy strategy will clearly focus on this policy area. 19. Agricultural development has been identified as a driver of economic growth in developing countries, which is rightly viewed as crucial to reducing poverty. However, Save the Children has key concerns about DFID’s approach to economic growth and the impact it will have on the ability of UK aid to reduce poverty. 20. While it is true that no country has reduced income poverty without economic growth, we know that its impact on people’s incomes can vary substantially, and that economic growth may not reduce non-income poverty. In its agricultural policy work and economic growth analysis more generally, DFID needs to: — integrate their poverty reduction objectives into their economic growth policy analysis, rather than allowing the two areas to run parallel as at present. DFID must carry out in-depth country analyses in order to identify specifically which policies will be eVectively pro-poor in each country. These analyses must include examination of the dynamics of inequality and exclusion, in order to understand the strategies needed to reach the poorest and most marginalised children and their communities; and Processed: 13-02-2009 18:50:26 Page Layout: COENEW [O] PPSysB Job: 407662 Unit: PAG1 International Development Committee: Evidence Ev 83 — understand how growth translates into reductions in non-income poverty; for example, increasing aggregate household income does not necessarily translate into an equal reduction in child malnutrition; what if an improvement in agricultural trade caused an increase in children labour? Better attention should be given to monitoring how countries translate growth into improvements in non-income indicators such as educational achievements and health outcomes. 21. We hope that DFID’s new International Centre for Growth will prioritise these points and work with civil society to understand poverty dynamics. The role of agricultural research 22. Following decades of policy neglect, agricultural and pro-poor growth policy research must fill the knowledge gap currently existing on rural labour markets, as this hampers the design of eVective poverty reduction strategies. To address the lack of decent jobs in rural areas, DFID needs to fund research that: — documents the significance of rural labour markets to the livelihoods of the poor in developing countries; — understands the nature and eVective functioning of informal rural labour markets; — understand the reason for the existence of a wide range of wage rates and working conditions between and within regions of a country; — identifies context-specific policy options to create decent jobs in rural areas; and — identifies the synergies between agricultural development policies and social protection mechanisms—including the scale and predictability of transfers—that can best support rural workers to graduate from poverty. 23. The most promising questions/lines of enquiry in DFID new research strategy are its focus on: “High value agriculture in areas of medium to high agricultural potential as a means to boost labour productivity and create jobs”. And DFID’s focus on improving “our understanding of how the rural farm and non-farm economies interact” is also important although its focus on seasonal workers migrating to urban areas needs to be broadened to include research on rural-rural migration. 24. Finally, DFID plans to support research of “changing land and labour markets, the role of farmer organisations and the increased competitiveness of small farms” to identify ways in which farmers can obtain “a bigger share in food markets where marketing chains and supermarkets are demanding greater eYciency at wholesale and retail levels”. Whilst in support of such a goal, Save the Children UK believes that well designed research would show that in small farms both labour employing “small farmers” and casual labourers coexist and that these two groups deserve a diVerent policy approach. 25. In terms of policies to stimulate pro-poor agricultural growth, it is necessary for the new research to draw more explicitly on the 2006 DFID publication “Growth and Poverty Reduction: the role of agriculture”, which rightly sees the role for eVective state intervention in developing agriculture in poor countries. In addition, DFID must consider how its research into technological innovations in agriculture can incorporate consideration of how these innovations can reach and support the poorest, rather than increasing wealth gaps. And identify interventions that can be taken to scale to diversify the livelihoods of rural workers, both agricultural and oV-farm, where eVective demand exists. Memorandum submitted by World Vision Introduction 1.1 World Vision is a Christian relief, development and advocacy organisation, dedicated to working with children, families and communities to overcome poverty and injustice. Motivated by our Christian faith, World Vision is dedicated to working with the world’s most vulnerable people. World Vision serves all people, regardless of religion, race, ethnicity or gender. 1.2 World Vision welcomes the opportunity to give evidence to the International Development Select Committee enquiry into the Department for International Development’s Departmental Report 2008. World Vision recognises DFID’s substantial contribution to global poverty reduction eVorts during 2007–08. However, this submission will focus on the department’s need to place much greater emphasis on the “doubly-disadvantaged” in the poorest countries, including girl children, disabled people, children aVected by AIDS and other marginalised groups. The Millennium Development Goals cannot be met unless DFID, with governments and other donors, adopts specific strategies to address the poverty traps faced by these groups. In our view, this issue should be a central focus of the forthcoming MDG “call to action” meeting in New York on 25 September. Processed: 13-02-2009 18:50:26 Page Layout: COENEW [E] PPSysB Job: 407662 Unit: PAG1 Ev 84 International Development Committee: Evidence Achieving the MDGs Child focused 2.1 Children’s experiences of poverty are diVerent from those of adults and need targeted strategies if they are to realize their rights. This cannot be achieved while children remain invisible within an adult focused approach to development. Moreover, as a Department of Her Majesty’s Government, DFID is bound by its obligations and commitments to children as expressed in the UN Convention on the Rights of the Child and other international and regional instruments. At present, however, DFID does not adopt a child rights approach to its work, the understanding of child rights is uneven and it needs greater capacity to develop analysis, policy and programming that puts the needs and priorities of children front and centre. 2.2 World Vision is concerned that this gap is reflected in the annual report, especially regarding children. We welcome the acknowledgment within the annual report of the specific ways in which poverty impacts on women, but a more disaggregated poverty analysis is needed that recognizes the multiple barriers to social and economic empowerment faced by poor people. In particular, we believe that MDG 4—on child mortality—is a valuable barometer of progress on a range of indicators of wellbeing, from health, nutrition and clean water to education. Yet on current trends, this goal will not be met until 2045. We encourage DFID to place particular policy focus on accelerating progress on MDG 4 in the context of a coherent eVort to achieve all eight of the goals. 2.3 World Vision is also concerned that DFID is not meeting its education commitments of MDG 2 and 3. Although progress has been made towards ensuring the right of every child to quality primary education, with enrolment growing particularly rapidly in both South and West Asia and sub-Saharan Africa, there were still 72 million primary age children, one in nine of the world’s children, out of school in 2005. Completion of the primary education cycle—the actual measure of progress in MDGs 2 and 3—lags far behind enrolment rates, with only 63% completion in sub-Saharan Africa and 79% in South and West Asia. The quality of education also needs to be improved. International, regional and national assessments all indicate weak learning outcomes, particularly for pupils from poorer and other disadvantaged groups, in most developing countries. 2.4 As the education challenge shifts from enrolment to completion, eVorts will need increasingly to focus on hard to reach groups, including girls, the disabled, pastoralists and ethnic and linguistic minorities. For example, there are still 18 million primary-age girls not in school in sub-Saharan Africa—2.6 million more than the number of boys—while it has been estimated that one third of out-of-school children are disabled. Education’s Missing Millions, published by World Vision UK last year, highlights the need to mainstream disability through education. Nearly half of all the children who live in conflict-aVected fragile states still have no access to education. Other groups of excluded children include working children, street children, and orphans and other children made vulnerable due to the impact of HIV and AIDS. In this respect, it is surprising that chapter 2 of the annual report—Reducing poverty in Africa—makes no mention of the more than 12 million children orphaned by HIV & AIDS in Africa. 2.5 While DFID has increased it’s total spending on education since 2000, and is committing its “fair share” of funding for the education Fast Track Initiative, it must triple its funding disbursements to education in the next two years in order to meet the Prime Minister’s pledge of spending £1 billion per annum by 2010. It’s essential that this spending is directed to where the needs are greatest: countries that are lagging on MDGs 2 and 3, including Nigeria, Afghanistan, Pakistan and Yemen are currently under-aided in the education sector. DFID also needs to adopt explicit strategies at the country level, with governments and other donors, to address the particular needs of hard-to-reach groups. Questions for DFID — What is the department doing to meet the PM’s pledge to spend £1 billion of aid annually by 2010 on education, and ensure that this money goes to countries that are currently under-aided, and to support hard-to-reach groups? — What is the department doing—especially in the context of the MDG “call to action” meeting on 25 September—to ensure that political attention and financial resources are committed to addressing the development needs of children, reflected in progress on MDG 4? Disability mainstreaming 3.1 Of the 650 million disabled people worldwide, 80% live in developing countries. Disabled people globally face marginalisation, lack of opportunity and often severe and chronic poverty as a result of stigma, prejudice and other societal barriers to their inclusion. As a recent IFPRI report stated: “Poverty-reduction eVorts have been successful at targeting those just below the dollar-a-day line, but ultra-poverty rates have stagnated. The poorest are more likely to belong to socially excluded groups, such as… those suVering from ill-health and disability”.35 35 Ahmed, A and R Vargas Hill. 2007. “The World’s Most Deprived: Characteristics and Causes of Extreme Poverty and Hunger”. IFPRI: Washington, D.C. Processed: 13-02-2009 18:50:26 Page Layout: COENEW [O] PPSysB Job: 407662 Unit: PAG1 International Development Committee: Evidence Ev 85 3.2 World Vision encourages the Department to heed its own call and implement plans for disability mainstreaming across all its activities as well as requiring the same from its strategic partners and recipients. By not mentioning the signature of the UN Convention on Disability at any point within the report, its commitment in addressing disability as a cross-cutting issue in the MDGs and the department as a whole has not been emphasized. The report suggests that there is little or no notable progress or commitment to disability occurred during 2007. This point is misleading, as DFID have launched their “how to” paper and verbalized a commitment to disability research and data gathering on disability. However DFID seem to be avoiding a public recognition and commitment to the importance of this work. 3.3 Without significant political, policy and operational focus on disability, progress on the MDGs will be slowed. World Vision hopes that, with the ratification of the UN Convention, DFID can make some real progress in their mainstreaming agenda by adopting specific disability-related targets against each goal. Question for DFID — What is the department doing to ensure that the disability is addressed eVectively in the context of eVorts to achieve the MDGs, especially when there is very little mention of this issue within the report? The eVectiveness of DFID’s mechanisms for evaluating the impact of its aid DFID staV cuts 4.1 World Vision continues to be concerned about DFID headcount reductions in UK and field oYces, and its potential impact on programme quality. Partly because of cuts in staV, DFID’s capacity to engage in policy dialogue is constrained at a time when their budget is increasing by 11% each year. In our view, DFID’s spend will be most eVective where it is informed by extensive dialogue with recipient governments, civil society and other donors. This is especially the case in conflict-aVected and “fragile” states where DFID is not providing budget support and aid is projectised and requires labour-intensive design, planning and management. Yet it also arises where DFID is giving DBS, and where policy dialogue risks being confined to macro-level discussions with Finance and Planning Ministries. One example of these capacity constraints is that DFID field staV did not have the capacity to launch the recent AIDS strategy at meetings with key stakeholders at the country level. Question for DFID — Are the current eYciencies truly sustainable and is DFID going to be eVective in delivering an increased level of aid with fewer staV? June 2008 Memorandum submitted by Yara International Summary 1. Yara International is pleased to submit this memorandum to the House of Commons International Development Committee to aid its inquiry into the Department for International Development (DFID) Annual Report 2008. 2. Yara is a Norwegian chemical company that converts energy, natural minerals and nitrogen from the air into essential products for farmers and industrial customers. Yara is the only global fertilizer company with a long-term presence in Africa. We, at Yara, strongly believe that addressing the challenge of African agriculture in the context of global food security is essential to the continent’s overall economic development. It is alarming that while modern agriculture is constantly becoming more eVective 854 million people still suVer from hunger and malnutrition. 3. Through Yara’s support for an African Green Revolution we have been helping farmers in their fight against poverty. We have also pioneered innovations in public-private partnerships in a number of African countries where agriculture still forms the backbone of their respective economies. 4. We share with the Committee the concern that funding agricultural development has not been suYciently prioritised and that donors have shifted their focus to other sectors. We believe that improving the profitability of agriculture is central to reducing rural poverty levels, which is necessary to meet the United Nation’s Millennium Development Goal of tackling overall poverty. DFID needs to recognise this objective in its funding allocations, in the priorities it sets in its Country Assistance Programmes and in the agreements in reaches with recipients of budget support for priorities in allocating those funds. Processed: 13-02-2009 18:50:26 Page Layout: COENEW [E] PPSysB Job: 407662 Unit: PAG1 Ev 86 International Development Committee: Evidence 5. At a Business Call to Action meeting recently hosted by Prime Minister Gordon Brown, UNDP and DFID, businesses were invited to demonstrate their commitment to growth and development through increasing investment, creating jobs and increasing skills. We believe that no one sector alone can help bring about change. What is required is a collective partnership approach that brings together NGOs, donors and businesses alike to agree to work together along diVerent agricultural value chains towards a common goal of improving agricultural growth and competitiveness in Africa. DFID’s approach to improving investment climates alongside supporting the development of markets such as agriculture is most welcome. Initiatives such as the recently launched African Enterprise Challenge Fund are a positive contribution to improved inter sectoral collaboration but need to be entrenched with mainstream support from DFID programmes for agricultural growth and development. African Agriculture and Poverty 6. We hope that this inquiry signals the prioritising of sustainable agriculture and its immense potential to bring real benefits to poor farmers in developing countries and lasting growth, and to enhance DFID’s capacity to address the current food crisis in its aid strategy going forward. 7. Africa is the only region in the world where poverty is on the increase. Agriculture is at the core of African society. It employs the majority of its people and for many countries provides the major share of export earnings. At the current pace, it is estimated that Africa will be able to feed less than half of its population by 2015. A major increase in agricultural productivity is absolutely essential. 8. With the current food crisis threatening political stability there is need for concrete and coherent action. For the first time in 25 years, the World Bank’s World Development Report 2008 prioritised agriculture and development and stressed the importance of increased investment in agriculture in developing countries to trigger growth and help meet the Millennium Development Goals on poverty and hunger by 2015. 9. The Comprehensive Africa Agriculture Development Programme (CAADP) under the New Partnership for Africa’s Development (NEPAD) shifted its focus to implementation and fixed targets in its work though an agricultural markets development programme, food security and nutrition programme and agricultural research and the dissemination of technology. To achieve the first Millennium Development Goal, the Comprehensive Africa Agricultural Development Programme has set a target of improving agricultural productivity at an average growth rate of 6% per year, with particular focus on small-scale farmers, especially women. Private-sector participation is especially important to Pillar Two of the CAADP, which targets improvement of rural infrastructure and trade-related capacities for increased market access. 10. At the UN FAO Summit on food security on 3 June, UN Secretary-General Ban Ki-moon argued that boosting food production and revitalizing agriculture was essential to respond to the food crisis and ensure food security. Agriculture is referred to throughout the Declaration of the High-Level Conference on World Food Security. Published on 5 June 2008, the expansion of and investment in agriculture and agribusiness is seen as crucial to resolve the global food crisis. 11. For the first time in its 33-year history, the ACP-EU Council of Ministers has come out with a joint political resolution on a number of issues including food prices. The ACP countries acknowledged that only sustainable and well-financed regional and national agriculture policies will lead to stable medium and long term solutions. African Green Revolution 12. A long-term concerted eVort to transform smallholder agriculture, to increase productivity and sustainability, and to end poverty and hunger requires a sustainable and uniquely African green revolution. With better access to fertiliser, improved seed and water, coupled with more hardy plant varieties and agronomic expertise, Africa’s food production could be tripled by 2015. 13. We recognise that the green revolution is not a novel concept. The idea has been around for decades; it has been attempted, but not fully implemented—and it has not always succeeded. However, in recent years it has resurfaced, not least due to repeated calls from the former Secretary-General of the United Nations, Kofi Annan. 14. In this context Yara has initiated the Tanzanian Agricultural Partnership, together with partners including NORAD, Norfund, Prorustica, Agricultural Council of Tanzania and the Tanzanian National Microfinance Bank & others, looking at the role inputs plays across various interconnected agricultural value chains from farmer field school promotion, to agro dealer development, to finding solutions to the massive void in rural agricultural credit and the scope for initiatives such as warehouse receipting, to eYciencies at the port, to the role of government policy interventions in the process. What has become clear to us through undertaking this partnership is the need to engage the whole value chain uniformly rather than deal independently with a collection of individual links in the chain. A key component of the success of the Tanzanian pilot was the support of quick release funding from NORAD that helped to fast track the adopted approach in a series of districts. Subsequently this led to the beginning of a national roll out of this value chain approach in less than nine months. Equally important was their support in developing the Processed: 13-02-2009 18:50:26 Page Layout: COENEW [O] PPSysB Job: 407662 Unit: PAG1 International Development Committee: Evidence Ev 87 capacity of a local broker and facilitator organisation, in this case the Agricultural Council of Tanzania, to build their capacity to promote and develop such a multi-sector value chain partnership. In each country that we have initiated such a partnership the need for a local and neutral partnership facilitative platform has been key. In Malawi and in Ghana we have had to develop this capacity from scratch as it currently doesn’t exist in the agricultural sector. 15. A key feature of the Tanzanian Agricultural Partnership was the commissioning of an independent report on the eYciency of port facilities when it comes to delivery of inputs into the country. The report found major ineYciencies which bring significant costs to importing fertiliser into the country. This led Yara to develop a strategy that would begin to harmonise transport linkages, including ports, in the delivery of fertiliser. Yara, as part of its commitment to the green revolution in Africa, have agreed to look at the feasibility of developing port facilities at both Dar es Salaam port in Tanzania and Beira port in Mozambique well ahead of when it normally would from a business only perspective. In Ghana we have initiated the Ghana Grain Partnership. As opposed to Tanzania where the approach adopted by Yara was to look at improving access to inputs, in Ghana a similar value chain approach has been adopted but beginning from a market demand side with the aim to strengthen key staple grain markets integral to improved national food security. Currently there are more than 10 partner organisations involved along the value chain in this partnership alliance. 16. In Malawi a similar value chain initiative, involving a range of partners, has been initiated to improve farmer outputs beyond maize, including rice, cotton and legumes. 17. Currently discussions are underway to form of a private sector-driven, Sub-Sahara Africa based non- profit consortium African Grains Partnership. The Partnership will be enterprise, productivity and incomes focused, and will intensify farmer production, enhance farmer profitability and incomes, and promote new African agri-business through the entire grain and staples value chains. 18. African ministers of agriculture and finance, gathered at the Oslo Green Revolution conference on 31 August 2007, recommended the establishment of a financing framework: Global Fund for the Africa Green Revolution. The proposed Global Fund for the Africa Green Revolution will provide access to large-scale financing for the green revolution to African governments, civil society and the private sector, via grants instead of via loans. The Global Fund for the Africa Green Revolution seeks to complement and work closely with the Alliance for a Green Revolution in Africa (AGRA) in assisting African countries to access new sources of financing for the green revolution. The Global Fund should be based in Africa; support the accomplishment of the CAADP goals; support rapid scale up of successful national and private sector approaches in agriculture; and speed up the attainment of the MDG goal on hunger and extreme poverty. Recommendations 19. African farmers lack financing to buy critical inputs such as fertilizers and high-yield seeds. The donor countries would help Africa by focusing much more on helping African farmers to gain access to the inputs they need for higher productivity. An exemplary model is Malawi’s voucher programme for smallholder farmers, which gives impoverished farmers in Malawi the access to a modest amount of fertilizer and improved seeds per household, at an aVordable price. DFID is one of Malawi’s biggest donors, and continues to support the voucher programme. In Malawi the fact that DFID do not have an agricultural advisor or growth and livelihoods advisor in country means that their role, though beneficial, has less depth than otherwise would be the case. This is particularly so in terms of ensuring that these kinds of agricultural subsidy voucher schemes can be developed into smart subsidies that promote private public sector growth orientated partnerships along the agricultural value chain. It would seem to us that at present there is unprecedented support for a multi-sector approach to scaling up agricultural production in Africa but this requires an investment from DFID on the ground to promote and drive sustainable initiatives that can go to scale. 20. Contrary to views held by certain NGOs, what African farmers need is not to reduce fertiliser use from nine kilograms a year to none; they need to increase it from nine to 50 to meet the commitment made by agricultural scientists in Africa through the New Economic Partnership for African Development (NEPAD). As fertiliser usage increases across the continent there is however a critical need for a joined up approach to educating farmers as to appropriate use of inputs and to develop the capacity of local agro dealer networks and extension service delivery oYcers to ensure fertilisers are applied appropriately and in moderation in a way that is suited to the needs of local environments. 21. DFID, and the UK development community as a whole, can make a potentially significant contribution to African agriculture; indeed they already do in a number of ways. Improving the way in which UK support for agriculture is delivered, particularly through supporting collaborative frameworks with the private sector, and by working with European and foreign agencies to encourage others to do the same, is firmly in the UK interest and should be an important part of DFID’s overall programme in Africa. 22. The approach the donor community adopts has to be holistic. Businesses, governments, donors and NGOs need to address value chains in their entirety. Even if we only serve a specific component of that chain we have to understand that we are interdependent on the whole and to facilitate linkages at all levels of the value chain in a way that promotes sustained growth and development. Processed: 13-02-2009 18:50:26 Page Layout: COENEW [E] PPSysB Job: 407662 Unit: PAG1 Ev 88 International Development Committee: Evidence 23. Support to agriculture should not be seen in isolation. Good agricultural outcomes can be achieved by investment in related sectors such as infrastructure and we would agree with DFID that the building of roads and port facilities enables farmers to market their crops. We see it as critical need that private sector initiatives, such as Yara’s suggested investments into improved eYciencies in Beira and Dar es Salaam ports, are supported through coordinated inter sectoral action. This is critical in order to develop eYcient and competitive agricultural development corridors linking improved logistic constraints and cost eYciencies to inland agricultural hinterlands in the host country and land locked neighbouring countries. Unless infrastructure is improved, there is little hope for real progress in reversing the alarming food insecurity trends or in making agriculture an engine of economic growth. 24. Just as there was a revolution in microfinance there needs to be a similar rethink as to the critical role of rural agricultural credit. The answer requires not so much a new invention, but an alignment of government/donor guarantees, commercial bank loans, microcredit players with micro crop insurance and even the use of cell phones and smart cards to come up with a mechanism that works as we have been able to begin to demonstrate with some of our partners such as NORAD and Norfund in Tanzania. A key strength of donors is that they have the ability to work with governments simultaneously in a range of countries to fast track successful pilot initiatives to a point where private sector involvement is a natural consequence of their involvement. 25. Smart partnership and scalability is key. To date in Africa at least in agriculture there have been very few examples of multi-sector partnership to eVect change on a wide scale. What is required is a collective partnership approach that brings all the various initiatives by NGOs, donors and Governments and business alike into a loose aYliated partnership agreeing to work to a common goal, in this case, achieve food security in the country. To bring this about, a key missing ingredient is local institutions who have the inter sector knowledge and skills to facilitate these kinds of multi-sector partnerships. Together with NORAD we have initiated a partnership approach to develop these multi-sector facilitative institutions working with partners such as the African Institute of Corporate Citizenship (AICC) in Malawi and the Agricultural Council of Tanzania to ensure sustainability of any initiatives we may help to catalyse. We would like to see these partnership development facilities at a local level as a key part of DFID’s activities in Africa. In the past there has been support for this approach in another area, as it related to HIV & AIDS, in the formation of HIV & AIDS Business Coalitions which in many cases proved very eVective. 26. A key to agricultural success in Africa will also be in the eYcient functioning of state owned agriculture related enterprises working in coordination with ministries. In this capacity the development planning capabilities of institutions responsible for the ordering of key inputs is also critical. Improved planning, ordering and tendering frameworks could have a strong net impact on leveraging cost eYciencies in the procurement of inputs when done at a national level. The support by DFID for improved corporate governance training for state owned enterprises aligned to the agriculture sector would also be a key to improved eYciency of supply. First annual letter from the Independent Advisory Committee on Development Impact (IACDI) to the Secretary of State for International Development Independent Advisory Committee on Development Impact (IACDI) The committee’s terms of reference require that I write to you once a year, and this is my first such letter. It reflects conclusions we have reached at our first four meetings. The minutes of these meetings are available on our website. In our first year we have given priority to identifying changes needed to DFID policies and processes to strengthen the central Evaluation Department (EVD), to enhance the culture of learning and decentralised evaluation across the department, and to encourage use of lessons learned from evaluation by DFID staV. We are conscious that high quality, independent evaluation is particularly important for the management and accountability of spending programmes like DFID’s that are, expanding rapidly and where the links between departmental policies and expenditures and their impact—notably on poverty and achievement of the Millennium Development Goals—are usually indirect and often complex. High quality evaluation is needed both to provide assurance that DFID’s money is being well spent, and so that lessons from experience are learned and applied in future. The creation of IACDI is a signal of the Government’s recognition of this. Our initial assessment is that the quality and independence of evaluations carried out by and for EVD are comparable with other leading bilateral aid agencies. But we think DFID can and should aim for a higher standard, as is implicit in IACDI’s mandate. Our conclusions on this were reached after in depth discussion at two consecutive meetings of the committee and informed in part by recent written reviews including in particular a helpful assessment of the state of evaluation independence at DFID carried out by one of the committee’s members (Evaluation independence at DFID), an assessment that in turn drew on criteria endorsed by the international Evaluation Cooperation Group taking account also of DFID’s specific institutional arrangements. We have made a number of proposals that would help ensure DFID practices Processed: 13-02-2009 18:50:26 Page Layout: COENEW [O] PPSysB Job: 407662 Unit: PAG1 International Development Committee: Evidence Ev 89 meet best international practice, and allow us to give the unqualified assurances about the independence, quality and impact of DFID evaluations envisaged in our terms of reference. These proposals are set out in full in Annex A. We welcome the broadly positive reactions of your oYcials to these proposals, the actions taken to implement some of them, and other relevant changes already underway. More generally, we are encouraged by the support given by senior oYcials for the work of IACDI, and their commitment to establishing a stronger and more prominent role for evaluation in the department. In particular we are delighted that the Head of EVD has agreed to produce an annual report drawing out some general themes from evaluations carried out during the year, and I am pleased to enclose a copy of this first annual report with this letter. I would underline his emphasis on the importance of implementing the Paris Declaration (and now the Accra Agenda for Action) commitments on better international coordination of evaluations, and focus on building partner countries’ systems for monitoring and evaluation, within the context of eVorts to strengthen ownership and giving partner countries a stronger role, not least by reducing unnecessary burdens on them. We also welcome your oYcials’ agreement to produce an annual report of follow up to past EVD evaluations and their recommendations. While future evaluation reports need to be more selective and specific in their recommendations, the department needs to be more specific and systematic in its responses. Of course the department may sometimes disagree with the conclusions of an evaluation—that is to be expected, and the disagreements should be documented. But where DFID undertakes to make changes following an evaluation, there is now a process in place for tracking and reporting on implementation. The first such report, on follow up to evaluations carried out in 2006–07, was enclosed with this letter and reveals a patchy implementation record. There are positive examples where evaluations have fed into and influenced DFID’s approach, but also others where they have not. We hope the department will take action so that next year’s report on follow up to 2007–08 evaluations will reveal an improved performance. We have begun an in-depth review of evaluation quality and welcome steps now underway to improve quality assurance arrangements. We are also concerned that the ability of evaluations to draw robust conclusions, especially on development impact, remains limited by weaknesses in objective setting and relevant data and monitoring information about DFID’s interventions. The eVort now being made by DFID to improve systems for measuring outcomes and impact is welcome and timely as is the substantial support being given to international cooperation on impact evaluations. We have spent more time discussing how to strengthen independence. Independence of the evaluation function should not mean isolation from decision makers and there needs to be a balance between independence and engagement. However our detailed assessment is that the structure and processes associated with DFID evaluations need further strengthening to meet intenational best practice, especially as regards EVD’s independence and influence. Perceptions are important too. We are concemed at some sample survey evidence (NAO Survey of Perceptions of DFID Evaluation) suggesting that most inside and outside DFID believe that EVD is less than entirely or very independent. We are less well placed as yet to make a judgment on evaluation carried out in DFID outside EVD, but our preliminary discussions have pointed to weaknesses especially in relevant monitoring information. We would like to see stronger arrangements in place to assure its quality. We are also concerned to ensure that the level of administrative resources available for evaluation in DFID both inside and outside EVD is adequate for the task. Several of our recommendations can be implemented as part of the new DFID evaluation policy which is to be agreed by early next year. We look forward to contributing to the design of this policy, and to helping guide a process of public consultation over the next few months. At the same time IACDI will consult on the topics for evaluations by EVD for the period 2009–12. We recognise that some of the steps we propose will need to be worked through in greater depth, and that some can only be implemented over a period of years, such as the proposals to raise the grade and change the accountability arrangements of the head of EVD. Also, as we continue our discussions we may identify additional steps needed in other areas. I look forward to further discussion with you and your oYcials about how best to implement our proposals, so that in future we can give our assurance that the independence and eftectiveness of DFID’s processes for evaluating development impact have achieved or are clearly on track to achieve the high standard of excellence that the Government committed to in establishing IACDI and in setting our terms of reference. I am sending copies of this letter and attachments to members of the International Development Committee of the House of Commons. David Peretz Chair, Independent Advisory Committee on Development Impact Processed: 13-02-2009 18:50:26 Page Layout: COENEW [E] PPSysB Job: 407662 Unit: PAG1 Ev 90 International Development Committee: Evidence Annex A IACDI PROPOSALS TO STRENGTHEN THE INDEPENDENCE, EFFECTIVENESS AND IMPACT OF EVALUATION IN DFlD A. Proposals Already Being Implemented 1. DFlD will produce an annual report of follow up action taken following the previous year’s evaluations, and nominate a Director responsible for follow up to each evaluation report. IACDI may on occasion ask to meet with Directors responsible to discuss progress. The first such report is appended to this letter. 2. The Head of Evaluation Department (EVD) has agreed to make an annual report drawing lessons and common themes from reports completed during the year and to discuss it with IACDI in draft form. The first such report was enclosed with this letter. 3. DFID Management Board has agreed to hold at least one annual discussion of evaluation work, and the first such discussion is scheduled for November 2008. 4. There should be an agreed Departmental policy on evaluation that meets internationally recognised criteria, and is endorsed by IACDI. The Committee has discussed a first draft of a new policy and will help guide a process of public consultation before formal adoption of the policy early next year. B. Other Proposals to be Implemented in the Immediate Future 5. Evaluation in DFID undertaken outside EVD needs to be strengthened. This will require the creation of the right incentives. There is a case for EVD taking on appropriate responsibility for oversight, quality assurance and guidance on an evaluations carried out in DFID, as at present this function seems fragmented and largely left to the judgment of line managers. This would require extra resources for EVD and is an issue to be resolved as part of the new evaluation policy. 6. A formal role for IACDI or its chair in agreeing a written job description, protocols and in arrangements for performance review will help buttress the independence of the head of EVD. 7. There should be clear written protocols for unimpeded access by EVD and their consultants to information in DFID: for rules of engagement with DFID staV in discussing draft reports; for rules for avoiding staV conflicts of interest; and a written policy on disclosure of reports. C. Proposals to be Implemented over a 2 to 3Year Period 8. To match good practice the Head of EVD should be accountable to the Permanent Secretary of DFID, and be able to make reports without clearance from the management line. The Committee has welcomed the recent decision to make the head of EVD directly accountable to the DG Corporate Performance as a step in the right direction, but a further step is needed. 9. The post should also have a more senior grade and status to give greater visibility and clout. 10. There is a contradiction between the need for more, high quality evaluation and a declining administrative budget for evaluations, suggesting a need to explore ways to protect the budget for evaluation. IACDI should have a central role in deciding EVD’s budget in future. 11. There should be changes in modalities for (and control of the Head of EVD over) staYng, probably with more staV recruited from outside DFID—over time EVD may need to change the balance towards an increased role for EVD staV and a lesser role for external consultants. 12. Future heads of evaluation should probably be appointed on an understanding precluding employment elsewhere in DFID, and the contract should be for a fixed term, possibly renewable on the advice of IACDI. IACDI would expect to see this last group of proposals implemented after the more immediate changes have been made, over the course of the next 2 to 3 years, with some changes to be implemented, perhaps, when the current head of EVD is replaced. 1 December, 2008. Processed: 13-02-2009 18:50:26 Page Layout: COENEW [O] PPSysB Job: 407662 Unit: PAG1 International Development Committee: Evidence Ev 91 Reply from the Secretary of State to the First Annual Letter from the Independent Advisory Committee for Development Impact (IACDI) Thank you for your letter of 1 December. As I said when we met, the Government is committed to ensuring that the UK’s development budget is used eVectively to make the maximum impact on the lives of the world’s poorest people. I wholeheartedly then support the importance of high quality and independent evaluation to underpin our policy decisions and accountability for the impact of UK aid. The establishment of the Independent Advisory Committee on Development Impact is an important part of the Government’s commitment to independent, open and transparent scrutiny of our development assistance, and I welcome the Committee’s recommendations. I am also pleased that the Committee confirms DFID’s performance as among the best of comparable international development agencies. I very much appreciate the work of the Committee during its first year, and note that it has already had a major role in shaping DFID’s new evaluation policy, which we are launching for consultation on 9 December. The Committee has helped raise the profile of evaluation and the expertise of the members is having a real impact; in particular I welcome IACDI’s eVorts to enhance lesson-learning and follow-up action and understanding of rigorous impact evaluation across DFID. I am also pleased that DFID’s first Annual Evaluation Report has proved useful to the Committee. We should always aim higher; that is why we created IACDI, and acted on your immediate recommendations to strengthen the quality and independence of evaluation in the following ways:. — The Head of Evaluation Department (EvD) now reports directly to Director General for Corporate Performance on the DFID Management Board. This gives the Head of EvD considerable access to the Board. The Head of EvD plays an active role in senior committees including DFID’s new Investment Committee, on which you are a permanent observer, and the Country Planning Review Committee, which reviews the content of our major country programmes. These are important mechanisms for ensuring evaluation findings inform our own decision making on country assistance and overall value for money. — We have increased resources for EvD from £3.6m in 2007–08 to £5.1m for 2009–10. The size of our Evaluation Department has nearly doubled since 2004. Programme resources allocated to evaluation allowed DFID to lead bilateral donors in investing in international systems for rigorous impact evaluation, supplementing our major expansion in development policy research. — We have strengthened our systems and processes to help ensure evaluation recommendations inform decision making and progress is tracked routinely. This is clearly making a diVerence particularly for lesson learning in major policy areas. Our country planning approval process now requires explicit use of country programme evaluations. Earlier this year, DFID drew extensively on evidence from a joint evaluation to update its policy on budget support and guidance on assessing benefits. Similarly the recommendations from an evaluation of DFID’s gender policy fed directly into the Gender Equality Action Plan in 2007, supported by updated guidance through a Gender Manual published this month. We agree on the need continually to strengthen the quality, independence and impact of evaluation in DFID. It will be important however, that any future decisions are based on evidence of both eVectiveness and value for money. As I said at our meeting, I am happy to consult IACDI on future resourcing decisions for evaluation in DFID, and look forward to your advice on evaluation study quality. I will review current arrangements in the context of progress in the implementation of our new Evaluation Policy. I look forward to further discussion with you and the Committee over the coming year. I am copying this letter to Malcolm Bruce MP the Chair of the International Development Committee. Douglas Alexander 11 December 2008. Supplementary written evidence submitted by the Department for International Development The following information was provided to the Committee during it’s public evidence sessions in it’s inquiry into DFID and China. DFID’s Strategy Towards Middle Income Countries We no longer have a public version of our strategy towards middle-income countries. We are committed to ensuring that the proportion of the UK’s bilateral programme going to low-income countries is at least 90%, as stated in the HMG Poverty Reduction Public Service Agreement for 2008–11. Processed: 13-02-2009 18:50:26 Page Layout: COENEW [E] PPSysB Job: 407662 Unit: PAG1 Ev 92 International Development Committee: Evidence Within the 10% allocated for middle-income countries, our approach is governed by the following principles: — Upon achievement of middle income status DFID’s general approach is to pursue a strategy of sustainable graduation from bilateral assistance. — Our limited bilateral assistance for middle-incomes is increasingly focused on large, emerging global partners which have the potential to make a significant impact on poverty reduction in other countries (eg China, South Africa). — DFID believes the 90/10 commitment of bilateral assistance between low- and middle-income countries is an appropriate policy because: — Aid is more eVective at reducing poverty in countries which have higher levels of poverty and gives us the best chance of meeting the MDGs. — DFID provides substantial support to middle income countries through our contributions to regional programmes and to multilateral institutions, such as the EC, World Bank, Asian Development Bank. — Middle-income country needs are more focused around getting the right opportunities and voice in international fora, accessing global best practice, and technical assistance (skills/ training). DFID supports the transfer of knowledge to both middle income country governments and between key international agencies. — Middle income countries have access to greater sources of capital (both concessionary and non-concessionary). Printed in the United Kingdom by The Stationery OYce Limited 2/2009 407662 19585