Post-2015 Development Agenda

Bob Stewart Excerpts

Thursday 21st March 2013 Westminster Hall

[Fiona Bruce (Congleton) (Con)]

I congratulate the hon. Member for York Central (Hugh Bayley) on securing this important debate and his contribution to the whole issue, which I and many of our other colleagues on the International Development Committee value. I am still a newish member of that Committee, so I am on a learning curve with regard to these issues, which I hope that hon. Members will bear in mind as I make my contribution.

I shall concentrate on one of the points that the hon. Gentleman raised: job creation. MDG target 1.B was:

“Achieve full and productive employment and decent work for all, including women and young people”.

However, in evidence to the Select Committee, Michael Anderson, the special envoy to the Prime Minister on the UN development goals, said that one of the points that the Prime Minister had made was that

“that goal has probably not captured the collective imagination. Part of the task is to get the goals right, but also to get a narrative so that the world mobilises around that with the same passion that they mobilise around maternal mortality and infant mortality.”

I think that the whole Committee would agree with that.

We took evidence on the subject and were informed that employment, whether salaried employment or self-employment, is critical for development. The issue is of fundamental importance to poor people. After they have a road, a school, a health centre and, of course, sufficient to eat, a job is what people want. That is based on household survey data from sub-Saharan Africa, east Asia and Latin America that were reported to us by the organisation ONE.

One of the International Development Committee’s recommendations was therefore:

“Job creation is one of the most crucial of all development challenges. Whilst the issue of employment was included in the original MDG framework, it was insufficiently prominent and failed to capture the public imagination. In the post-2015 framework, the task will be to design an employment ‘goal’ which captures the imagination of people around the world.”

That is critical, difficult as it is. If we are to facilitate developing countries to get out of, or at least to reduce, their donor dependency, as so many of them aspire to do, the only way we can do so is to help them to develop their own private sectors, and we must do that in a way that enables them to move from micro to SME—and then even larger—from informal to formal sectors, and from individuals who are self-employed to those who employ people in their local community. All those businesses can then contribute to not only their local communities, but the revenues of their national Governments through tax receipts.

It is essential that we prioritise working with the private sector in these countries, and that we involve our private sector and the expertise of the private sector in those developing nations in doing so. I know that that might not be a familiar relationship for many of those in the aid community—it is not one that they are used to—but I congratulate DFID on now being a pioneer in this. There are now individuals working in DFID who have a private sector background. I think that we have started, just within the last week, a DFID private sector project in Ethiopia that will examine how to strengthen certain sectors in that country, such as textiles, horticulture and leather, and try to unlock the problems to ensure that businesses there can strengthen and develop. We need to look at such projects.

[Bob Stewart (Beckenham) (Con)]

May I utterly reinforce what my hon. Friend says? My wife, who, as an International Committee of the Red Cross delegate, started a camp for 100,000 people in South Sudan—and ran it from scratch—has told me repeatedly that the biggest problem arises if we give aid and thus just make a problem, because people are attracted to it. She pleaded with me, saying, “If you are a Member of Parliament, ask repeatedly for us to set up businesses so that people can get the means for employment, rather than setting up camps, which attract people, and then there is nothing for them to do but exist on aid from outside, because that is an appalling model.”

[Fiona Bruce]

I entirely agree, and I thank my hon. Friend for that intervention.

One of the first things that I think we need to do—I reiterate that I am very much feeling my way here—is to ensure that there is joined-up thinking on the other millennium development goals. For example, I have been involved with a school in Tanzania for some 10 years. At the start, there were five primary school children, but today there are 400 children in the school, which now has both a primary and a secondary element. The real challenge now is that it is saying, “We have spent years educating these young people, but where are they going to work? What employment will they go into?” We must consider tertiary education in developing nations and work so that there is a progression from the education that we are providing. I totally applaud the support that DFID is giving in many countries, such as through teachers’ salaries, but unless we consider what will happen when young people come out of their school environments, we will be failing them and, indeed, the communities in which they live.

These children have aspirations. During our recent trip to Ethiopia, we found that many young children in remote villages wanted to be doctors—they wanted to contribute to their communities and they had ambition. Many of the young people I have met, for example in Rwanda, are aspiring entrepreneurs. They want to develop businesses, but we need to give them the tools to do that so that they can run with the idea. At the moment, only 5% of Africans are educated at tertiary level, although the global average is 25%, so we need to consider, in the post-2015 MDG framework, the importance of tertiary education.

Also with regard to Rwanda, I would like to talk about building entrepreneurs’ capacity to do business. I shall relay an experience that my hon. Friend the Member for Stafford (Jeremy Lefroy) and I had when we first went to Rwanda in 2010, under the Conservative party’s Umubano project, to teach entrepreneurs how to run their businesses. We went for a week: on Monday, we taught how to write a business plan; on Tuesday, we taught how to write a marketing plan; on Wednesday, we taught how to set a budget; on Thursday, we taught how to recruit and interview staff; and on Friday, we taught how to review it all. No self-respecting management consultant would have entertained doing that in a week. We taught 14 businesses, and after day one, we thought, “If they’re interested, they’ll come back.” They all came back day after day.

At the end of the week, the head of the Rwandan chamber of commerce came to see us and said, “This has really been of interest. Could you come back next year to teach some more businesses?” We said, “How many more would be interested?” She looked at us and said, “About 74,000.” They could not get basic help in Rwanda about how to develop businesses, so there is real potential for people in this country’s private sector to help to build business capacity. People with experience of developing businesses—perhaps those who are semi-retired or have taken early retirement—could be matched with businesses in developing countries and give them mentoring and support. Perhaps they could use technology so that they do not need to go out there to visit. There is a hunger for that kind of help, however.

Businesses that want to create jobs in the developing world have problems accessing finance. For example, on the International Development Committee’s recent visit to Ethiopia, we met the Nile Edible Oil Manufacturing Industry plc, which is a co-operative of about 32 small companies that produce edible cooking oil, often in little more than backstreet shacks. The group got together with some support from the UN. It produced an action plan, formed a business association and found a site where it wanted to build a business park, which would have involved individual units and a central processing plant. The plan was very exciting. Through the co-operative, the farmers had been helped to produce better crop yields and the producers were enhancing their productivity with better machinery and better technological support, and they were all delivering to markets at a better price. The group has a site for a business park and a plan, but it cannot get funding. I am sure that that situation is typical of many companies, organisations and associations in the developing world that cannot access finance. We think that accessing finance it is difficult here, but imagine how much harder it is there. As part of our job creation aspiration and prioritisation for the developing world, can we look at access to finance?

I wish to make a few additional points before I conclude. It is right that there are many aspects to enabling businesses to work. For example, there needs to be better land registration and security of land tenure for businesses. If someone is setting up a business, they want to feel secure, and we can help with that. Good community governance is also important, because when a local community understands that if local businesses flourish, local rates will improve, it is a win-win for the community’s support for local businesses. That understanding still needs to be developed.

Aid conditionality with regard to transparency, such as tax transparency and so forth, would be helpful, as would support for developing a “Companies House” in some developing countries. Businesses could then be registered and they would deliver annual accounts, which would lead to some sort of recognition in the business community to help them to move from an informal to a formal footing. Businesses should be given incentives to do that—whether through advice, or access to funding or grants—to ensure that the business community in developing countries has structural support.

I was encouraged when I read a communication from the European Commission—I do not often say that—to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions about the post-2015 discussions. The communication was called “A Decent Life for All”, and I shall read some brief excerpts to hon. Members because they articulate what I have been talking about better than I can. The document refers to the need for an “overarching framework” for millennium development goals, which would cover, among other things

“drivers for sustainable and inclusive growth and development that are necessary for structural transformation of the economy, needed to ensure the creation of productive capacities and employment”

It goes on to say:

“Goals should provide incentives for cooperation and partnerships among governments, civil society, including the private sector, and the global community at large”

Implementing the framework would involve “domestic resource mobilisation” within each country,

“legal and fiscal regulations and institutions supporting the development of the private sector, investment, decent job creation and export competitiveness”,

which are essential to making the ambition of developing strong economies achievable for all countries. Interestingly, that is true of all countries at all levels of development.

The Commission held a public consultation in summer 2012 to which around 120 organisations and individuals contributed. There was a consensus that although the MDGs had rallied many and different actors behind the same development objectives, there needed to be common views on future priorities. There are six views, and it is interesting that several highlight the importance of sustainable economic development. In particular, one says that priorities must

“Foster the drivers for economic growth and job creation including by engaging with the private sector”.

I hope that I have contributed to highlighting the hunger for, and opportunities to support, economic development in developing countries, particularly through the involvement of the private sector.

--- Later in debate ---

[Meg Hillier]

Of course, that process it is not very green, either. To go back to my comments about climate change, we should be shortening the food chain when it is sensible to do so.

DFID has done some good since it was established, but we need more joined-up government. The post-2015 agenda must not just be regarded as just DFID’s responsibility. The whole of the Government needs to engage in it—whether the Department for Environment, Food and Rural Affairs on agribusiness, or the Department for Business, Innovation and Skills.

[Bob Stewart]

I am listening carefully to the hon. Lady. It seems to me that DFID almost has to be a mini skills agency for all Departments. Rather than just distributing things, as in the past, and checking that things have happened, DFID now has to illustrate the skills of the whole of the Government, which of course the Minister ably does.

[Meg Hillier]

I will leave it to the Minister to take up that challenge.

Even the Home Office could have a role, because immigration policy has an impact on all sorts of development issues. We want people to come to this country with skills that they can contribute. That is part of the development agenda.

On that controversial note, I shall conclude my remarks. I once again congratulate my hon. Friend the Member for York Central on securing this debate, and I wish the Prime Minister the best of luck in his negotiations.