Emerging Economies
Debate between Jeremy Browne and Andrew Murrison(14 years, 5 months ago)
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Dr Andrew Murrison (South West Wiltshire) (Con)
What attitude does the hon. Gentleman take to emerging economies in what the European Union calls its near abroad? It seems to be keen to devote a portion of its aid—to which, of course, we donate royally—to those countries, whereas Britain’s philosophy, through DFID, has been that our aid should go to countries that are impoverished.
Mr Browne
I do not want this debate to be just about aid, because the emerging economies are important in many different ways, not only as recipients of our largesse. Let me proceed with some of the points I was going to make, not least those relevant to the comments of the hon. Member for Hartlepool (Mr Wright). If I do not cover them to the satisfaction of the hon. Member for South West Wiltshire (Dr Murrison) and others, perhaps we can return to them later.
There has been a truly transformational shift in economic and political power. That is a change that will have enormous consequences for Britain and about which we cannot be complacent. Although it is a challenge that may, in some ways, pose difficulties for us, it is also a great opportunity. It is worth saying—this is relevant to the point about aid—that about half a billion more people have been taken out of poverty as a result of these changes taking place around the globe: a figure that could not possibly ever have been achieved through international aid and generous donations from our country. It is a phenomenon that has transformed the life chances and opportunities of millions of people who previously lived in a state of destitution.
The World Bank has estimated that the global middle class is likely to grow from 430 million people in 1999 to more than 1 billion people in 2030, and most of that growth will be in the emerging market countries. That increase in middle class consumers is equal to the total population of the European Union, in the course of just three decades. If we are to see Britain’s economy growing strongly again, which must happen if we are to tackle the UK’s deficit and raise the prosperity of our own citizens, we must tap into these vast new markets.
We have huge economic advantages in this country. Britain is home to many of the leading global companies in the energy, retail, financial and communications spheres. We are an outward-looking and open country ranked by The Economist as the best place in Europe to do business. London is a global city and Britain is increasingly a global hub. Ours is a multicultural nation with connections across the world. We will use those connections to build and intensify our commercial, cultural and educational links. The English language is the most widely spoken in the world. It is the common language not only of international business but of science, academic research and the digital world. There are today more English language students in China than there are people in the United Kingdom, and English is the common tongue for business in India. This can only be good news for British businesses wanting to tap into these giant markets.
Mr Browne
The hon. Gentleman makes another excellent point, about how we ensure that there is a global architecture of decision making and responsibility, which means that resource allocation and other political decisions are made in a framework of law and consensus. That is our foreign policy objective and why our foreign policy has to evolve to match reality. We cannot sit, King Canute-like, and try to cling on to the G8 and European-north American-centric architecture. We need a decision-making framework, which reflects the change in the status of different countries and allows us to make decisions in concert with them as we proceed with economic growth and political decision making in the decades ahead.
Much of the analysis that I have shared with the House is widely accepted if under-appreciated by some in our national discussion. We must now ask how we respond to that and what the consequences are for our policy making. Let me suggest three overlapping subjects as a framework for our debate in the next hour and a half or so. First and perhaps most important, we must make the case—and win the argument—for keeping global markets open to foreign trade and investment. A resurgence of protectionism in any of the markets about which I have spoken would be a far greater risk to the UK economy than the rise of those markets. We must also have a dynamic, outward-looking economy—this point was made by my hon. Friend the Member for Bermondsey and Old Southward (Simon Hughes)—that is not burdened by unsustainable levels of Government debt.
Secondly, we will significantly increase our cross-Whitehall effort to engage not only with the obvious, big emerging economies, but with the medium-sized emerging economies. We must also build on our solid co-operation with Japan, which remains the second-largest economy in the world. All of that will mean working with business to reap the opportunities in countries and regions whose cultures and languages may be less familiar to many of us, and getting the official dialogue right, including through more structured relationships at Government level with many such countries.
Thirdly, we must continue to invest in our political as well as our economic effort. The rise of emerging economies will make the world a more prosperous place, but it will also make it more complicated. A more multilateral world will require us to engage on key security issues with a wider cast of global actors, which will put an even higher premium on ensuring that we are all bound by the same international rules-based system. Upholding that will be the key task of our diplomacy in its widest sense in the years ahead.
That places a heavy burden of responsibility on the Foreign and Commonwealth Office. One FCO priority will therefore be to look at how we can best use our diplomatic network and shape our resources to ensure that we have the capability to make the most of the new world that is being brought about by the emerging economies. We are already being innovative in our representation overseas. I do not claim that such innovation started magically a month ago—it has been undertaken for a period of time—but I hope that we will accelerate it and give it extra momentum. We are using regional networks of experts and so-called laptop diplomats, among other innovative measures. In a difficult resource climate, we must ensure that our language training, including in Mandarin, Spanish and Arabic, is focused where we need it most. We will look at how to resource stronger UK engagement with the Governments, peoples and societies of emerging economies in the forthcoming spending round.
If we are to retain our influence in the new global, economic and political world, we will need to change and adapt. Our diplomatic effort will be focused where it is needed and adapted to the new realities, but our efforts must go beyond discussions between diplomats in capital cities. We must inspire business and community leaders throughout Britain to build relationships with their counterparts in the emerging powers. That task is not only for the FCO and the Government: I am emphatic in my view that that task is for our country as a whole and all the people who live in it. Everybody in our country needs to step back for a moment and ask themselves, “Are we able to think and act globally in a way that reflects the new realities of the world? Are we seeking better to understand and engage with the emerging global players? How does the UK media cover the rest of the world? How does our educational curriculum meet our global needs? How well can our major businesses reach out beyond our borders to the markets of the future?” The Government should and will provide leadership, but our national outlook needs to adjust to the rapidly changing global landscape.
Dr Murrison
That is all very well, but what do the Government plan to do to combine Government offices abroad? In particular, does the Minister agree that it makes absolutely no sense to have Department for International Development offices and FCO offices in the same capital? Surely to goodness if we are to have the joint working to which he refers, we need co-location.
Mr Browne
My hon. Friend makes an excellent point that echoes one made by my right hon. Friend the Foreign Secretary and others. How can we best concentrate our resource in countries and avoid duplicating Government functions or Departments in the same location? There is a wider point: although it is important for the FCO to give intellectual leadership and momentum to our policy making overseas, our policy is not simply about relationships between the FCO and other Foreign Ministries. Rather, it is about Britain as a whole visiting China, India or Brazil, which includes the Department for Business, Innovation and Skills, the Department of Energy and Climate Change and right across the board. We should not see emerging markets policy as a bolt-on, extra function of the Government that is divorced from our other deliberations in the House. Rather, it is a key function of the Government. It is led by the FCO, but it involves many Departments.