EAC Report: Development Aid

Earl of Sandwich Excerpts

Monday 22nd October 2012 Lords Chamber

[The Earl of Sandwich]

My Lords, I, too, have high regard for our aid programme, and it is encouraging that so authoritative a committee as the EAC should have decided to report at length on its impact and effectiveness. I say this sincerely because, like the noble Lord, Lord Hannay, I believe that aid, although universally popular in this country, is a neglected subject in Parliament. Even in this House, which has a good record on foreign affairs, aid tends to come up only in general or country-specific debates. With such a large budget, though, international development should be examined like every other aspect of our economy. Indeed, in many ways much overseas assistance provides a catalyst to our own domestic economy.

I still cannot decide whether the committee was attacking the 0.7% target as an intellectual exercise or whether members of the committee such as the noble Lord, Lord Lawson, disapprove of the use of the aid target as a mantra of the political parties. It helped that the media picked up on the report and ran the headline, and I in no way attribute base motives to the committee in seeking attention from the press. All Governments should receive criticism, especially of their core values and their red lines, so this debate and others at least challenge Ministers to rethink and reaffirm policy if necessary.

The 0.7% target is only a target and has now been set in stone by all the main political parties, if not yet in legislation. After all, we have taken 60 years to get to this point; it was back in 1958 that the World Council of Churches proposed a target, initiating the debate leading to the Pearson commission’s recommendation and the UN’s first adoption of the target in 1970. The noble Lord, Lord McConnell, talked of our international responsibility, and today Britain’s acknowledged leadership in the world of development assistance, as measured by the OECD in terms of its performance and effectiveness, to me makes the UN target of 0.7% inevitable.

We have not yet caught up with the Scandinavian countries, which came up to the target some years ago. Last year we were only at 0.56% but we are getting there. Whatever one’s assessment of the Liberal influence on this Government, it is this coalition that should be congratulated on ring-fencing aid during a recession—a difficult thing to do, as they are finding. It was the Labour Government, as we have heard from the noble Lord, Lord Boateng, who deserve credit for raising our sights in the first place, reflecting growing public support for aid. We should give the maximum support to the Government in fending off critics within their own ranks and maintaining our international reputation. After all, it is widely acknowledged that DfID, whether or not it remains a different department, is a cornerstone of our foreign policy and should remain so.

That the developing world needs more aid can hardly be in doubt, considering the effects of poverty, conflict and climate change. Agriculture in Africa, above all, as the noble Lord, Lord Boateng, said, requires much greater investment at a time of extreme weather conditions and rising populations. India will continue to have a large proportion of the world’s poorest people, and I disagree with the committee about an exit strategy; with the benefit of our historic experience and partnership with India, there is a moral as well as an economic imperative to defy the critics and keep at least three or four Indian states inside our aid programme.

There is little doubt in my mind that aid works if it is carefully managed. It can be very successful in what must be its primary objective and motivation, which is to help the poor on to a sustainable level at which they can earn more, feed themselves adequately and care for their own health. Aid agencies such as Oxfam, Christian Aid and Save the Children have given us many examples not only of their own successes but of DfID’s achievements in malaria prevention in Kenya and Tanzania or the reduction of infant mortality in Bangladesh—there are many examples.

Perhaps more important to the committee is whether the aid system—the current machinery for delivering aid to the poorest communities—can really absorb the budget over the next two or more years, during which our aid is supposed to climb towards £12.6 billion. I doubt whether 0.7% will be reached next year or even the year after. A lot depends on recipient Governments, and I think the committee may be too cautious in recommending more conditionality and less budget support—although I understand what the committee is saying.

However, the committee rightly points out that speed can reduce quality and accountability and encourage corruption and diversion. We also need an assurance from the Minister that DfID’s own administrative cuts, such as country office closures and the loss of staff, are not going to affect the efficiency of the current programme. The committee recognises, as I do, that NGOs in the right context can often deliver aid most effectively and, better still, can be a catalyst to more efficient official spending. I have seen NGOs and church agencies working so successfully with the poorest in India, for example, that—through small business development, loan and credit schemes and integrated development in the best sense—they have shown the way to local government and have often substituted for government altogether. We cannot take that away.

At the same time, I agree that while NGOs have increasingly taken on a quasi-governmental role, they occasionally and perhaps deliberately get in the way. One thinks of Ethiopia under the late Meles Zenawi, especially where even the most established agencies like Oxfam and Save the Children were outlawed at different times. The Independent Commission for Aid Impact says that NGOs funded in recipient countries are not subject to the same level of scrutiny, and this is not surprising. Although DfID is rightly stepping up its monitoring of NGOs, ultimately it is their freedom from bureaucracy that ensures their flexibility, quality and innovative character.

I will not go into the issue of corruption because DfID’s anti-corruption strategy is still at an early stage. No kind of aid can be free of it altogether, but I think there is some exaggeration of deliberate corruption. Much of it can be incompetence. Those of us who have visited UK projects overseas will recognise what might be called the “muddle factor”, which is where perfectly good, well designed programmes are brought down by incompetence both by donors and recipients. I will give one example from Nepal. DfID’s once excellent Livelihoods and Forestry Programme in Nepal—which the Minister may remember visiting with the Inter-Parliamentary Union a few years ago, and was seen more recently by the Commons International Development Committee—was notable for its direct involvement of the local community through forestry user groups. However, in the past two years the whole programme has stalled during an attempt to upgrade it into a multi-stakeholder project involving the Swiss Government. There have since been management failures, expertise and jobs have been lost, and there is still doubt whether the new programme in its revised form will go forward.

The position was summarised in an answer I received in Kathmandu this summer from DfID:

“Following formal approval in January 2012, the new programme is currently in initiation with activities being geared up to establish a project coordination office and select implementing agencies for the new programme”.

This kind of language—which I have also seen in explanations of delays to projects in South Sudan—reveals wastage of taxpayers’ money, nothing less. I emphasise that there are usually two sides to these problems, although they are more often blamed on the host Government or the lack of government, as in Nepal. If the noble Baroness is still familiar with this project, she may wish to make a comment in writing. The Minister Alan Duncan’s letter of last month gives me no confidence and suggests that the project should be the subject of a wider inquiry.

I will say a final word on the multilateral agencies. I do not agree that we should reduce our EU funding to neighbouring states, and I am not convinced that the committee had enough time or evidence to draw useful conclusions about the World Bank or the UNDP. How do you decide in a report like this whether the bank should invest in coal in Kosovo, when half the country cannot afford the price of electricity?

In conclusion, my support for the UN target is as a target, and even for legislation, but it does not contradict the main thrust of the report, which concerns our aid performance and effectiveness. As it says in the report, experts also disagree on what effectiveness usually means. However, experts often disagree anyway.