Pakistan

Alan Duncan Excerpts

Thursday 4th July 2013 Westminster Hall

[The Minister of State, Department for International Development (Mr Alan Duncan)]

DFID warmly welcomes the Committee’s report on Pakistan. It has made some helpful recommendations, and I am pleased to say that, as our reply makes clear, we agree with pretty much all of them.

As the Committee recognises, the need for our development support is clear. Pakistan is the sixth most populous country in the world, with an estimated population of 180 million, and it is growing fast. The population is likely to increase by half as much again by 2050. One in three Pakistanis live on 30p a day or less, and as the hon. Member for Bethnal Green and Bow (Rushanara Ali) has just made clear, one in 11 children die before their fifth birthday. Half of all adults and two thirds of women are illiterate, and 12 million children are out of school. Internal instability and sectarian violence have seen more than 30,000 Pakistani civilians killed since 2001, with many more left injured.

Those enormous challenges are not entirely insurmountable, and there is some reason to be optimistic for the future. Pakistan has just witnessed historic elections, which mark the first time a democratically elected civilian Government in Pakistan have served their full term and then handed over to another through credible elections. In the face of sustained extremist violence, the people sent a clear message that they expected change. They wanted improved security, better services, more jobs and better economic prospects. Both federal and provincial government have made ambitious commitments to deliver against those expectations.

The UK’s development programme is well placed to help. Since the Government made the decision to increase support to Pakistan in 2010, UK aid has helped 1.9 million children in school, provided cash transfers to more than 2.5 million people and provided life-saving support to millions of people during the devastating floods in 2010 and 2011. Ultimately, though, only the Government of Pakistan have the responsibility and wherewithal to solve Pakistan’s problems.

As the Committee set out, our development support must be dependent on policy reform that fosters increased economic and social development. That is why UK development programmes with the Government of Pakistan proceed only on the condition: that the Government of Pakistan provide the bulk of the funding and commit to increase their spending; that they deliver on agreed results and reforms; and that UK public money is protected from corruption. Those benchmarks are at the heart of all our joint programmes with both the federal and provincial government.

I think that approach is working. Through our education programme, we have helped the government of Punjab appoint 81,000 new teachers based on their ability to teach, not on their connections. Measures to increase both student and teacher attendance have led to 1 million more children and 35,000 more teachers attending school every day. We have helped the government of Khyber Pakhtunkhwa province adopt new budgeting procedures, which have reduced the cost of building a classroom by more than 40%. I appreciate what the right hon. Member for Gordon (Sir Malcolm Bruce) says about merit, attendance and standards overall. If he would like more information on the detail of what we are doing, we would of course be very pleased to oblige.

At national level, we have helped to generate significant increases and improvements in the Government’s income support programme, which is a financial safety net for the poorest and most vulnerable. The new Government have announced a 25% increase in the programme’s budget, which is a commitment of almost £500 million in the coming year. The risk of corruption has also been reduced—thus trying to ensure that the programme reaches those who need it most. Over the coming months, we will hold formal talks with the new federal and provincial governments as soon as we can to agree joint priorities. Central to those discussions will be economic reform, particularly on tax.

The Committee urged us to do all we can to encourage an increase in tax revenue, which is exactly what we are doing. We agree that, without more revenue, the Pakistani Government cannot meet the needs of their growing population. We have had initial discussions with the new Government on tax issues at both ministerial and official level, and we are clear on what needs to happen. Pakistan has one of the lowest tax takes in the world, which has to change.

Early signs from the new Government are positive. In their recent budget, they committed to increase their tax-to-GDP ratio, which is currently less than 10%, to 15% by 2018, and they took some initial steps towards that. I assure hon. Members that our Prime Minister raised that matter forcefully during his visit to Pakistan last week. We are already providing advice on how they can deliver that commitment, and we will continue to push for early, bold action, starting from the top. The richest must pay their fair share. Our Prime Minister had positive conversations with Prime Minister Nawaz Sharif on that issue during his visit, and my right hon. Friend the Secretary of State for International Development has also raised it in her early discussions.

As the Committee recommended, we are actively engaged with the IMF and other international finance institutions to ensure that any future IMF support is predicated on meaningful economic reforms, which, as my hon. Friend the Member for Stafford (Jeremy Lefroy) said, must include a firm grip on public finances. As negotiations with the IMF proceed, we are exploring how best the UK can provide assistance alongside other international partners. That includes considering the possibility of offering Pakistan expertise and advice from Her Majesty’s Revenue and Customs, but we are clear that co-ordinated action through an IMF programme, rather than individual donors setting their own reform conditions, offers the best long-term prospect for securing reform.

It is absolutely essential that the new Government take steps to address corruption, because corruption limits economic growth and erodes confidence in the state. Our governance work already focuses on such corruption. In Punjab, for example, we are supporting the Government to curb low-level corruption by officials, and to improve service delivery as a result. Every day, 30,000 people are providing feedback on government services, via their mobile phones for instance, and action is being taken against those accused of corruption. We look forward to discussing what more we can do with the new Government as they develop their own priorities in that area.

Central to addressing corruption is effective governance that ensures the rule of law and empowers citizens—what our Prime Minister calls the “golden thread.” The Committee suggests that that is lacking in governance work, and I want to make it clear that it runs through our portfolio. Our new sub-national governance programmes will operate across two provinces and benefit more than 7.5 million people, thereby improving the ability of government to deliver key services, including security and justice. Now the new Government are in place, we will review our approach with them to identify opportunities where more can be done.

We are supporting civil society to ensure it is able to hold the Government to account and to demand change, most recently through our support for the elections, which helped to increase voter turnout significantly and to provide election monitoring. As the hon. Member for York Central (Hugh Bayley) mentioned, supporting women will also remain, and must remain, a fundamental element of our work. Pakistan is one of the most dangerous places in the world to be a woman. To improve our efforts, we will take up the Committee’s recommendation to establish a gender advisory group, and will look to include Pakistan in the wider girls and women advisory group being established by DFID.

The right hon. Member for Gordon mentioned the health sector. In recent years, service provision has changed significantly through the devolution of responsibilities from federal to provincial government, as both the Committee and the Independent Commission for Aid Impact have noted. In response to that change, we have significantly redesigned our support for health. Let me assure the House that the redesign has addressed the concerns expressed by ICAI and the Committee, and has taken on board the lessons from the previous federal approach. DFID’s new provincial health and nutrition programme supports local governments to manage both community midwives and lady health workers, so ensuring that their remits are complementary. Our funding will also only be provided when there is clear evidence that results are being achieved. In a period of substantial political change, we will continue to review and adapt our programmes, in the light of the new Government’s priorities and the reforms that they implement.

I have taken on board the impassioned plea made by the hon. Member for York Central for the need to address the scourge of debt bondage among Pakistan’s helpless and ultra-impoverished people. Similarly, I have taken on board the important comment made by the hon. Member for Bethnal Green and Bow about empowerment, especially of women and girls—something that is always incorporated from the start in our programmes, not only in Pakistan but elsewhere.

To summarise, at last count DFID and the Government agreed with 16 out of the 17 recommendations made by the Committee, and we only partially disagreed with the 17th. We also agree that UK development support must be predicated on the commitment of the Pakistani authorities to implement policy changes that will foster economic and social development. I am pleased to see that the new federal and provincial governments have already made positive commitments to deliver economic, tax and social sector reforms. They have a real opportunity to set Pakistan on a path towards stability and prosperity. We will continue to do all we can to ensure that they take decisions that will lead to a brighter future for their people.