Third World Quarterly, Vol 22, No 2, pp 291 –296, 2001

FEATURE REVIEW

Beyond poverty? The new UK policy on international development and globalisation

ADRIAN HEWITT

Eliminating World Poverty: Making Globalisation W ork for the Poor. White Paper on International Development Presented to Parliament by the Secretary of State for International Development by Command of Her Majesty December 2000, Cm 5006

It is a measure of the transformation taking place in British political life that the latest (December 2000) government policy document (or ‘White Paper’) on a matter as broad as world poverty and globalisation should emanate essentially from a department which a generation ago was just a small and somewhat marginalised ministry running the UK overseas aid programme. For Clare Short’s success has been to convert international development over the first four years of the Labour government (1997–2001) into a weighty subject. The first two of these years were, moreover, subject to a severe, inherited, but self- imposed, spending freeze. Yet the ‘Short’ cut to development prominence has even succeeded in making international development popular, fashionable and youthful— so far without much extra disbursement. Now that was difficult. Recall how aid was widely reported to be dying of fatigue in the 1980s (the ‘lost decade’ for Africa) and again in the 1990s after the end of the : of course, this was always more correctly ‘donor fatigue’ than aid fatigue itself, but development hardly ever made the ‘top table’ of meetings of presidents and government leaders in the last quarter of the twentieth century. 1 Now it does and it will. The Short approach, which includes output in preference to input targeting, consists in leading by example and shaming foreign leaders into ‘at least doing as much’. Her department, and her strong position in government, depend on the world being her constituency, not just Ladywood, the suburb of , and it was thus appropriately from the pens and computers of her chosen officials in the Department for International Development that was

Adrian Hewitt is at the Overseas Development Institute, 111 Westminster Bridge Road, London SE1 7JD, UK.

ISSN 0143-6597 print; 1360-2241 online/01/020291-06 q 2001 Third World Quarterly DOI: 10.1080/01436590120049763 291 FEATURE REVIEW written the new December 2000 policy document, Eliminating World Poverty: Making Globalisation Work for the Poor. White Paper on International Development (or Globalisation for short). Globalisation was the second White Paper from this government in three years and one month and, unlike the first, Eliminating World Poverty: A Challenge for the 21st Century (henceforth C21), it was not rushed out but subjected to a quite elaborate process of prior consultation, within but also far beyond government, and some broad participation at its various drafting stages. But do we need two White Papers in three years—especial ly as the first did not lead to any legislation; and especially as there had not been one for the previous 22 years, during which policy had clearly changed in several directions? The previous development White Paper, The Changing Emphasis of Britain’s Aid Policies: More Help for the Poorest (henceforth Poorest), went before Parliamen t in 1975, when was minister; and for the entire period of the Conservative government of and from 1979 to May 1997 no White Paper on this subject was produced. Yet clearly policies changed. This obliges us to address a number of questions, with three at the core: c What are such policy documents for? c Who are they really for? c Is the new White Paper really new?

For answers it helps to adopt a perspective which is retrospective. This takes us back into the wicked and depraved twentieth century, where development theory and practice was invented (at least, that not already available in Smith and Ricardo) and despite the exhortation in the penultimate White Paper to think only about the twenty-first century. For if we do not understand our development past, we shall be condemned to reinvent it—at great cost in consultancy contracts. Globalisation can be seen as the third in a series of White Papers on poverty over 25 years. The first, Poorest, was presented to Parliament in 1975 by Judith Hart. Its 1970s-vintage poverty-focus was genuinely innovatory: it adopted a ‘basic needs’ approach, identified the rural poor as the dominant group to be brought out of poverty and therefore it committed to increasing the resources devoted to the agri- cultural sector. (Donors in those days were allowed considerable commercial biases—including outright procurement-tying in their oversea s spending, so infra- structure and industrial projects tended to be favoured to keep domestic contractors happy. All the OECD donors went along with this.) It even had a new instrument—its unique selling point—with which to reach the rural poor and boost their incomes: integrated rural development projects ( IRDPS). Almost equally remarkable was that this early policy document was not just about aid, there are some early glimmers of globalisation. By including a substantial section on Europe, it recognised that international trade policy decisions and invest- ment were at least as important for developing countries. Moreover, the Europe section is unmitigatedly optimistic (the UK had just joined the EEC in 1973) and the soon-to-be signed Lomé Convention was seen as a genuine opportunity for the country to extend its international partnerships. The prospect of a quarter of the UK’s aid going through EC channels—and effectively all its trade with developing countries, in goods at least—is greeted in the 1975 White Paper with equanimity and 292 BEYOND POVERTY? even enthusiasm. For all its originality, the 1975 White Paper is a modest, slightly self-effacing document:it talks of the changing emphasis and it merely promises comparatively more aid (in fact the UK aid programme peaked in 1979, just afterwards). However, it worked a practical policy change towards pro-poor growth in rural areas; it brought about organised changes which altered the character of development aid (some domestic lame ducks, like shipyards, were supported by drawing on the aid programme none the less); and it delivered additional resources over the following years. Had donors had the courage to persist with IRDPs over a large period, they might have worked. Instead a new government was elected in 1979 and Margaret Thatcher replaced as prime minister. For the next 18 years of Conservative government, no new White Paper on development was issued, and yet the policies changed markedly. As early as 1980 the government passed a new Overseas Development and Cooperation Act. This remark- able document, which is still law , permits the secretary of state (who in those days, and up to 1997, was the , since the minister in charge of inter- national development was not even in the cabinet) to do just about anything with the aid programme so long as s/he spends the money abroad. There are hardly any constraints on his or her powers. Its opening paragraphs are:

1.—(1) The Secretary of State shall have power, for the purpose of promoting the development or maintaining the economy of a country or territory outside the United Kingdom, or the welfare of its people, to furnish any person or body with assistance, whether financial, technical or of any other nature. (2) Any such assistance may be provided on such terms and subject to such conditions (if any) as the Secretary of State may determine.

Consequently, when, a dozen years later, a British NGO, the World Development Movement, took the secretary of state (then Douglas Hurd) to court for misusing the aid programme on the Pergau Dam, it was far from certain it would win: only the admission of an ‘entanglement’ with arms sales, diverting from the development purpose, won it the case. Nor did it require a White Paper to mark the shift away from poverty-focus to domestic interests in the aid programme. Instead, a minister stood up in the House of Commons and another in the Lords in 1981 and stated three lines committing the government in future ‘to give greater weight in the allocation of our aid to political, industrial and commercial consideration alongside our basic development objectives’. This unleashed the new mixed-credits element in the aid programme, the Aid–Trade Provision ( ATP), and a host of doubtful but expensive bilateral aid projects (often essentially supply contracts) ranging from steel mills, Leyland buses, Hawker- Siddley aircraft, dams and, perhaps most notoriously, Westland helicopters. The government did not have to argue for continuing poverty-focus because it had been abolished in a short statement. Nor would it have felt comfortable playing the globalisation card, for many of the beneficiaries of the ATP were in fact British lame ducks which later went into bankruptcy, unable to face international competition without subsidy. A further major development occurred in 1990, again without a White Paper, when Foreign Secretary Douglas Hurd made a statement at an African symposium which I 293 FEATURE REVIEW myself organised in the House of Commons on 6 June, to the effect that, with the Cold War over, aid policy was going to change again: dictators would no longer be subsidised in their folly, and donors would in future choose to aid only governments which opted for democracy. Not only did it not require a White Paper to make this major shift from economic conditionality (or no conditionality at all) to political conditionality; other Western leaders, notably President Mitterrand at La Baule a few weeks later, made essentially the same speech subsequently. By the time the Labour governm ent was elected in May 1997, UK international development policy had lost its focus on the poor and on agriculture and rural development, and had also lost quite a lot of its credibility (although there were improvements in the 1990s). Seven months after the election, the first International Development White Paper on eliminating poverty was issued. Compared with its predecessor, the 1997 White Paper was comprehensive, visionary, targeted—and apocalyptic. C21 introduced major changes: input targets were ignored (in fact, the UK’s aid: GNP ratio was to fall to 0.23% in 1999, partly because of a public spending freeze and rather buoyant GNP performance) and output targets emphasised; the key targets adopted were international (from the big UN conferences, but also OECD-endorsed) and long-term—inter alia to eliminate half of global poverty by 2015. The instrument (perhaps what Hitchcock called the McGuffin, but which I identi- fied as IRDPS in the earlier White Paper) was to be partnerships, in a rights frame- work, and the refocusing on the poor was to occur through the social sectors rather than, say, agriculture. This was very far from a productionist approach:more a social welfare programme. There was a new livelihoods strategy, but it was not specific to agriculture. This certainly changed the nature of UK development policy and execution. Not only was ATP abolished, aid projects supplying goods or embodied capital became rare, whereas technical assistance and advice boomed. Social development briefly took over many of the powers of economics (and of the economists) and, in the year of the East Asian financial crisis, very little was said in the White Paper about trade, investment, capital flows or even the EU’s role, through which the UK had to operate at least on the trade front. Important though the 1997 White Paper was in changing formal policy back towards poverty-focus and in helping some reluctant fellow OECD governments to do likewise, as is quite legitimately claimed, C21 directly led to no new legislation. Yet this is not in itself the litmus test of a good White Paper. Instead, the document has a presence in domestic political life. It was translated (in abbreviated form) into the half-dozen languages used by the UK’s ethnic voters, though not into the other languages used widely in the developing world, French, Spanish and Portuguese. The new 2000 White Paper on globalisation, in contrast, does promise a new inter- national development act, but otherwise comes across less as a policy announcement than as a wide-ranging essay on the subject of globalisation. Whereas it does not succinctly differentiate the internationalisation of the world economy (which is inexorable) from liberalisation (which is a political choice), it clearly adopts the market approach to trade, investment, the environment and even aid itself (the UK’s bilateral strategies are to be linked to the so-called country-led Poverty Reduction Strategies ( PRSP) approach which has succeeded the Washington Consensus and adjustment conditionality). However, input targets are restored (modestly to reach aid 294 BEYOND POVERTY? as 0.33% of GNP by 2003/04) and output targets are made more specific . While it clearly represents a victory for the Department for International Development (DFID)’s economists over the social development advisers who had monopolised Clare Short’s attention at the time of her first White Paper, it does not contain the basis for firm policies which will change the modus operandi of government (or even the department) as radically as the 1997 document. So why was it produced? Not merely to entrench the poverty reduction targets— the new act itself will do that. Not just to put globalisation on the agenda (too much already has been written, especially since 1997) or to mark out the broader territory of Clare Short’s cabinet responsibilities and those of her department (for it is a government White Paper, after all). Although there is a general election looming, it is not even to address the voters, ethnic or not. By now development has become a fairly popular topic in the UK (unlike in the USA) but this heavy document will not in itself win votes. There is certainly the party-political argument that a secretary of state who anticipates a cabinet reshuffle (and why not, at an election?) might prefer to issue two major policy statements than one; but there is no evidence of this one being rushed out; it is, however, a mild corrective to the first. No, the leading justifications for the new White Paper on globalisation were, first, to respond to the ‘post-Seattle’ emotion s which are making policy-making in Britain and other developed countries more difficult nowadays; to take on the environ- mentalists who are effectively against development; to recognise that welfare and redistribution require a basis in growth if they are to be successful internationally; to decide in favour of capitalism, it seems (there is surprisingly little socialist sentiment in the whole document, one reason why the Labour Left Tribune newspaper condemned it as a sell-out, while the centre-left daily, , approved; so did the more conservative Economist) because there is so little alternative, but to assert the importance of a long-term programme (longer than the lifecycle of most politicians) to eliminate poverty, or half of it. Hence the second underlying justification for the White Paper on international development. Any government should be concerned if a UNESCO report on Child Poverty concludes: Britain has a growing problem of child poverty, which is now one of the most severe among industrialised nations … The challenge of overcoming child poverty is a challenge to the whole society. 2 To have a robust international policy on poverty elimination, together with what the next government intends to be a major domestic push to eliminate child poverty, brings globali sation back home in language more understandable than that of MFN, GSP,derivatives and even the Kyoto Protocol. It is called joined-up government, and the UK chancellor (finance minister) and Clare Short at international development are accomplished exponents of this (not many countries have finance ministers and development secretaries who see eye to eye and can argue together in the Cabinet). Eliminating poverty worldwide, as well as at home, is of course a noble aim. In the new White Paper on globalisation the difficulties of a pro-poor only approach are at least being addressed: it marks the beginning of political maturity.

295 FEATURE REVIEW

Notes

An earlier version of this paper was given at the OECD, Paris, 29 January 2001. 1 The author accompanied leaders such as Willy Brandt, James Callaghan, , Jimmy Carter, Robert NcNamara and Malcolm Fraser to such meetings and symposia—but always when they were already out of office. 2 D Piachaud & Holly Sutherland, How Effective is the British Government’s Attempt to Reduce Child Poverty ?, UNICEF Innocenti Working Papers, 77, Florence, June 2000.

296