Poverty in the Developing World

Lord Hastings of Scarisbrick Excerpts

Thursday 28th April 2011 Lords Chamber

[Lord Hastings of Scarisbrick]

My Lords, I am so grateful that on the day before we are enwrapped in the euphoria of the royal wedding, as we should be, we are focusing on the needs of the most marginalised abroad and at home. There are a thousand good reasons why we should keep the needs of those 1.4 billion to 1.6 billion people right in front of us. One reason is that we need to be continually embarrassed by the failure to achieve the millennium development goals and to be continually reminded of the necessity to try to hit them. We simply must not forget that. We need to ensure that where there is good governance, such as the significantly good governance shown by DfID now and in the past, it is used to seek to embarrass those who do not live up to their aid commitments.

On 12 April the US Government announced a cut in their aid budget roughly equivalent to the aid the United Kingdom gives from its Exchequer every year. The United States still remains the largest global cash giver but it is the smallest contributor in terms of the percentage of its GDP of any major nation. Will the Prime Minister face down President Barack Obama at the G8 about his responsibility and that of his nation to ensure that development does not take place on the back of the poor, which is precisely what this Government said they would not do with aid? The figures from the US budget review announced on 12 April indicated a very revealing statistic. This is relevant to the point made by the noble Lord, Lord Roberts, a moment ago. US aid development assistance will amount to $2.525 billion within a total of $48 billion, but the operation of the US aid development assistance will cost $1.35 billion. In other words, roughly half of what is being spent to aid the poor will go on administration. Will the Minister indicate the trajectory of administrative costs borne by the DfID budget as the years progress? Will we too find ourselves sucked into allocating more money to administrative costs rather than spending it on direct development assistance? That is an important point.

I want to emphasise a particular area about which I feel very strongly as somebody who works in a business setting. Next week the World Economic Forum on Africa will take place from 4 to 6 May in Cape Town. The summit will be chaired by Peter Brabeck, the chairman of Nestlé, and by Tim Flynn, the chairman of KPMG International. I declare an interest as the latter body is the partnership for which I work. I will be attending the summit in two roles: one reflecting my responsibilities at KPMG International and the other as chairman of Millennium Promise UK. The summit is one of the positive opportunities in which leaders across the continent will gather. Pretty much every viable president who is not held down by travel restrictions will attend, as will many leaders of non-governmental organisations. A vast array of people from businesses and NGOs committed to development will gather for three days in Cape Town. We will sing a positive story of the growth of Africa’s countries. Poverty, of course, is not just an African issue but we will focus on that matter.

I come back to the important question of how we ensure more effective co-ordination of the multiplicity of agencies, as the noble Lord, Lord Roberts, said. Will the Minister comment on the extent to which DfID sees its role as enabling fewer charities with larger budgets to focus on development assistance rather than encouraging a plethora of charities and campaigns in this area? Brilliant as next week’s campaign will clearly be, it is another one joining the long line. Eating up resources on administration and back-office facilities cannot be the right way to ensure that we get the maximum resources to the front line.

The British Government are committed to ensuring that enterprise is part of the way forward in overcoming the next round of development challenges. Enterprise, business development and microfinance have a part to play, but global and indigenous corporations have a significant role in driving investment. It is not just a matter of relieving poverty but of driving investment that embeds prosperity in countries and builds up the capacity for local work and employment. That is why it is so good that the chairmen of both Nestlé and KPMG are facilitating and leading the summit in Cape Town next week.

World Malaria Day occurred on Monday this week. We have already been reminded that every 3.5 seconds a child dies as a consequence of extreme poverty, hunger and disease, but every 45 seconds the mosquito takes its toll in all the African countries that still struggle with malaria. However, the good news is that, because of the Global Fund for AIDS, Tuberculosis and Malaria, we are just a short breath away from seeing the end of the malarial mosquito’s dominance in a few years’ time. The Japanese corporation Sumitomo Chemical Company has provided more than 700,000 bed nets to ensure that every child and adult sleeping in a Millennium Promise village in 10 different countries are free of the impact of that mosquito. That corporation has given away the technology to allow local production of the nets in African countries. That is a responsible and appropriate engagement on the part of business.

The many businesses that have lined up behind the Global Fund, such as Chevron, News International, Standard Chartered, the Bill and Melinda Gates Foundation and many others, prove that business has a critical role to play in partnership with bilateral development organisations and NGOs. My organisation has just taken on a five-year commitment to Pemba, a large island off the coast of Tanzania. I will visit it at the beginning of July to see for myself what a five-year plan will do for 7,000 people, with eight countries contributing the $2 million that are necessary to put in the infrastructure to provide water, healthcare, transport, businesses and educational services. Business has a role to play in this regard. It is in the frontline of ensuring that people get jobs that will provide them with prospects and opportunities, enable them to pay tax with robust tax systems being put in place, that local exchequers are able to invest in their own infrastructure and build up their own countries. I hope that the Minister will encourage DfID’s policy to bring enterprise to the forefront of development as that is the right policy.