DfID Economic Development Strategy

Baroness Hodgson of Abinger Excerpts

Monday 27th November 2017 Lords Chamber

[Baroness Hodgson of Abinger (Con)]

My Lords, I thank noble Lords for allowing me to contribute and in particular I thank my noble friend Lady Nicholson for introducing this important debate. Encouraging economic development is the way to help countries lift themselves out of poverty, and ultimately the goal of development strategy has to be to make countries sustainable and able to stand on their own feet.

Many of the poorest countries have the ability to generate economic growth but too often they are hampered by lack of knowledge, political instability, conflict and corruption. Today’s world is complex and those of us lucky enough to live in a developed country need to help. That is why we should be proud that we in the UK not only give 0.7% of GNI in aid, we have enshrined it into legislation to ensure that it continues. While this still appears to be somewhat controversial, we need to stand firm. Not only is it the right thing to do, but by helping those countries to gain stability it will help to cut migration flows and stem potential conflicts. Conflict creates poverty, but poverty can also create conflict.

Investing in the poorest countries is one tool we can use. I congratulate our Government on having increased the budget to the CDC by £3.5 million. Investing in private sector businesses has the benefit not only of generating income but of creating direct and indirect employment and thus having a real impact on individuals, families and communities. The general public here in the UK is quite rightly demanding that aid is well spent but supporting businesses in the most fragile countries does have risks and sometimes there will be failures. I would like to ask my noble friend the Minister about DfID’s appetite for risk, and for transparency and accountability of the long-term investments that the CDC makes. How are the CDC’s successful investments accounted for in the ODA budget—are they put against the spending as they create income? Is there more that we can do to encourage UK private sector investment in businesses in developing countries?

Besides investing in existing businesses, stimulating business creation is also important. As my noble friend Lady Jenkin has already said, microfinance is an important grass-roots tool to encourage people to set up businesses. I have seen examples in Africa where a tiny bit of seed capital has helped women to set up stalls in the marketplace and create an income. Can the Minister say what the Government can do to encourage more microfinance opportunities?

Besides encouraging capital investment, there are other ways that we can help. The Hammamet conference last year, organised by the British Council, brought together youth from across the MENA region, where there is much unemployment but no culture of entrepreneurship. So perhaps through our trade envoys and attachés, ways could be found to link entrepreneurs in the UK with aspiring entrepreneurs in developing countries to encourage and assist. For example, getting produce into an international market can often be a problem. This is an area where the UK has speciality skills. Perhaps we can look to specifically link expertise and mentoring to help increase access to markets as well as to help with marketing. Too often, products are sold and then packaged and marketed elsewhere, losing the added value to the producer.

However, we should not overlook that, all too often, the barriers to economic prosperity are poverty, conflict and corruption. All the work done by DfID through its programming and the UK embassies on the ground to help with stability and to encourage law and order, border controls and anti-corruption laws is to be applauded. Of course, too often it is women who are the poorest of the poor, so I particularly welcome all the work that the UK is engaged in to counter violence against women and to promote equality.

I thank noble Lords for letting me intercede today. I congratulate DfID, under a Conservative Government, on leading the way in creating this important strategy and all it is doing to encourage economic development in the poorest countries.