Developing Countries: Jobs and Livelihoods

Imran Hussain Excerpts

Wednesday 15th June 2016 Westminster Hall

[Jeremy Lefroy]

I agree entirely. I shall address that issue in a moment, because it is vital.

I have a couple of other examples of sectors in which we can work with what we have. Hospitality is important in every developing country. It is about not only international tourism, but looking after people in one’s own country and wider region. Hilton estimates that, if there is proper investment around the world, the hospitality sector alone could create an additional 70 million jobs over the next decade. Apart from agriculture and agricultural processing, construction is very likely to create and sustain jobs and livelihoods in most parts of developing countries. I shall say a little more about that later in my speech. We must also consider local services. Services are often neglected in favour of large manufacturing investments, yet in every town and city, along every main street, one will see service businesses. We need to support and encourage them, because if every service business employed one more person, millions more people would be employed throughout the developing world.

Secondly, not only should we work with what we have, but we must not stand still. Everyone wishes to see a better life for their family. Incomes from agriculture can be improved in many ways. That subject is worth an entire debate in itself, but, to be brief, they include enhanced productivity through better inputs, advice, irrigation, finance, diversification, storage to reduce crop losses, and access to markets and to information about those markets. In other words, that means moving on from subsistence agriculture.

DFID’s recently published conceptual framework on agriculture puts it well. It says that there is

“the assumption that sustained wealth creation and a self-financed exit from poverty depend, in the long-term, on economic transformation and the majority of the rural poor finding productive and better paid employment outside of primary agricultural production”—

note that the framework says primary—

“Despite the need for this transition, agricultural growth and downstream processing and productivity growth are likely to be important, if not essential, as a continued source, if not driver, of growth.”

When I was involved in buying cocoa from smallholder farmers, we saw the price per kilo paid to farmers, and hence their income, rise at least fourfold over two or three years as result of a combination of improved quality, better logistics, a higher world market price and a greater percentage of that price being paid to the farmers. It also depended on having a reliable buyer prepared to take a long-term approach, rather than one driven by short-term trading considerations. The farmers’ improved incomes not only sustained and improved their own livelihoods but created jobs at a tremendous rate. The money stayed in the local economy to support input dealers, schools, clinics, general stores and bars. That, in turn, created jobs in local and national manufacturing and service businesses. I am a believer not in trickle-down economics, but in trickle-up economics, and smallholder agriculture is at the heart of that.

I have concentrated on agriculture, but the need not to stand still applies to all the other sectors I mentioned. In hospitality, training, good-quality service and investment meet the needs of nationals, not just tourists. There is no reason why someone cannot provide an excellent hotel or tourist spot for their own population. They do not need to rely on a few hundreds of thousands or tens of thousands of overseas visitors.

Construction jobs can be enhanced through a formal apprenticeship scheme of the kind I mentioned. They can also be supported by placing specific requirements on contractors in large infrastructure projects to employ and properly train local people in their work. That is increasingly happening, but it needs to be extended to the most senior levels of the contract, not just the grassroots workers. Skills are best transferred in the heat of building a major road, bridge, airport or railway line.

[Imran Hussain (Bradford East) (Lab)]

Does the hon. Gentleman also recognise the importance of urban planning, in particular for the foundations it lays for economic development? We need to do more on that.

--- Later in debate ---

[Imran Hussain (Bradford East) (Lab)]

It is a pleasure to serve under your chairmanship, Mrs Moon. I follow other hon. Members in congratulating the Minister on his recent knighthood and elevation. In months to come, we may disagree on many things, but we can agree that there is no question of his commitment and passion to his current role and public service.

I also congratulate the hon. Member for Stafford (Jeremy Lefroy) on securing and introducing this important debate. He has a long-standing commitment and expertise in this area. Indeed, he was present when this important matter was last considered by the Select Committee on International Development. He made some important points in his excellent speech today and emphasised the importance of supporting industries such as construction and agriculture. He also made an important point about young people and putting more emphasis on education and training.

Hon. Members on both sides of the Chamber made passionate and important contributions about ending extreme poverty, at the heart of which is corruption. It is real and must be addressed. It is a major roadblock to economic development around the world.

Hon. Members referred to another important point: the SDG and whether it is over ambitious. I think it is time we were ambitious and aspirational. Unemployment around the world may not be eradicated by 2030, but we can have that vision and I ask the Minister to ensure we thoroughly mark the SDG8 indicators.

Regardless of who someone is and regardless of where they live in the world, a good job can change their life. Decent opportunities and decent wages provide families with shelter, food and security. That not only provides direct benefits for the earner, but their wage gets passed around the community and benefits others. We know this and it presents obvious reasons for helping to create jobs in developing countries. However, around half of the world’s population still lives on roughly $2 a day and the World Bank’s World Development Report 2013 estimated that 200 million people around the world were unemployed and looking for work.

Evidence shows that 600 million new jobs that are needed globally for a growing population and particularly in developing countries, so it is clear that much more needs to be done.

[Mark Durkan (Foyle) (SDLP)]

Should we not recognise that, even when people seem to be outside extreme poverty according to statistics and are earning more money, many are in newly urbanised centres in the developing world? Their income may be above the indicators, but that does not take account of the fact that they are paying crippling rents to live in shanty-town conditions, even though their working environment may be quite modern, and they pay huge costs for water. They may have a livelihood, but their living conditions may not be good.

[Imran Hussain]

The hon. Gentleman makes a pertinent and timely intervention. He is absolutely right: there is strong evidence to suggest that, for many people, employment does not mean they are not living in poverty or even extreme poverty in some cases. The other issue with regard to urban areas, which I raised in an intervention, is urban planning. That is another barrier and we need to give it a lot more thought.

Certain aspects of DFID’s overall record can be commended. For instance, it provided £752 million of bilateral aid directly related to jobs, business and the economy in 2014. However, the figure fluctuated throughout the time of the last Government before the strategic framework for economic development set aside £1.8 billion, so I would be grateful if the Minister gave an assurance that that spending will be maintained following the bilateral aid review. Can he also indicate when we will have the findings of the bilateral aid review or report?

There are also specific areas where I will give credit where credit is due. DFID is regarded as an expert on mid-level private sector development programmes, and I hope it learns from the success in that area and applies it to others. The International Development Committee, whose Chair, my hon. Friend the Member for Liverpool, West Derby (Stephen Twigg), is here today, noted that DFID also has excellent examples of work in areas such as public financial management that it should build on.

Nevertheless, I seek clarification from the Minister on a number of areas. First, on SDG 8, can he assure me that the indicators will be thorough when we get them? With regard to private sector development, we welcome work that facilitates the development of sustainable and secure jobs in developing countries, and we recognise that the majority of jobs will be created in the private sector. Indeed, the private sector provides some 90% of jobs in developing countries, according to various reports.

That is not to say that we are supportive of all measures. I have a particular concern about the expertise of staff in DFID working on private sector development—the Independent Commission for Aid Impact found in its May 2014 report that there were gaps in knowledge and experience. I would therefore be grateful if the Minister told me whether progress has been made in addressing the concerns raised by the commission. How many full-time staff in DFID are working on private sector development? How many, if any, are externally contracted staff brought in to advise on private sector development projects? How many staff working on private sector development come from backgrounds of working in the private sector and working on businesses in developing countries? Does DFID make training and mentoring opportunities available to staff working on private sector development, so that they can build their expertise? I appreciate that the Minister may not have all the answers to hand, but I would appreciate a response, even if it is a written one, at some stage.

The final issue I want to raise is working conditions. We cannot overlook the potential influence that DFID has in helping to reform labour practices and working conditions in developing countries, so I would like assurances from the Minister that any aid or assistance provided by DFID or other Departments to foreign states or businesses is provided only with assurances that they abide by working standards.