International Development (India)

Rushanara Ali Excerpts

Thursday 26th January 2012 Westminster Hall

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

I pay tribute to the right hon. Member for Gordon (Malcolm Bruce) and to the Foreign Affairs Committee for its inquiry. I also welcome the contributions to this debate.

A range of issues have been cited, including sanitation, health, tackling discrimination and exclusion, and the continued need for a focus on poverty reduction, given the changes proposed by the Government in respect of the important role that the private sector needs to play in Indian development. We must consider how we make such a transition in a way that maintains focus on alleviating poverty and tackling inequality.

India is a hugely important country for our aspirations in meeting the millennium development goals, for the future of international development and for economic development and growth. As the right hon. Member for Gordon and others have pointed out, our two countries not only have historical links—as shown by the success stories of the UK’s Indian population—but a strong future to look forward to and be optimistic about, if we play our cards right, both in terms of our work in international development and in terms of our economic relationships. Those relationships include the strengths that we have through our diaspora communities here in this country and their trading and family links with India, as well as their interest in alleviating poverty in India. Of course, the diaspora communities play a key role by providing remittance aid and support to India. We have a rich array of mechanisms for contributing to India in order to see it thrive and, in time, we ourselves will benefit from helping India; indeed, we are already benefiting.

We can rightly be proud of the progress that we have all worked for in making our contributions through the UK aid programme and other links towards India becoming a middle-income country. Although India takes the credit for getting to that stage of development, our relationships with and contributions to India should not be underestimated.

As right hon. and hon. Members have pointed out, 72% of the world’s poor now live in middle-income countries and, given that fact, we must change the way that we provide development aid. Once India was squarely in the group of developing countries, but now it is a roaring economic success story. The three decades following India’s independence saw minimal progress, but that legacy was cast aside in the next three decades, as India enjoyed staggering growth figures. India is one of the fastest growing economies in the world, even at a time of global economic crisis. Its economic growth has topped 7% in just about every year since 1980. As President Obama said during his 2010 visit to India:

“India is not emerging, it has already emerged.”

What is remarkable about India’s growth is that it has not just been dependent on labour-intensive, low-priced exports to the west. Instead, it has been driven by a new middle class consuming domestically produced goods, the rise of service industries and a focus on high-tech manufacturing. Innovation and entrepreneurship have been central to the birth of the new India, which many of us are very excited about, especially those who have an origin there. I myself do not claim to have an origin in India, but many people in my constituency and in other Members’ constituencies do. Their presence in Britain is a positive example of the links between Britain and India.

As the former colonial power, Britain has had a long, if sometimes chequered and challenging, relationship with India, which several Members have pointed out. As we look to the future—not only the future of India, but the future of Britain—we have a unique opportunity to build a new and special relationship between the two countries, which will provide a significant opportunity for the UK economy in the years ahead. We can already see the benefits of that relationship, and in the years to come there is no reason why we should not continue to see them.

Although our aid programme is not about promoting economic opportunities, as several Members have pointed out, if we can establish an appropriate aid strategy, there will be great dividends, not only for our economy but for India’s. It will be of mutual benefit for the two countries.

Having said that, there are two Indias and that has been reflected in the Select Committee’s report and in the contributions to this debate. One India is vibrant, innovative and at the forefront of a new political and economic powerhouse, but the other India looks much less inspiring. The testimonies that have been given in the Select Committee’s report, some of which were given to the members of the Select Committee on their visit to India, show that there are two Indias. There are references in the report to human rights violations and discrimination, which are faced by particular groups, such as the Dalits, women and other religious minorities. There are also concerns about lack of freedom of speech and other human rights violations, and we should maintain our focus on those issues.

The reality is that, behind India’s story of success, there is also deep poverty, which all the Members who have contributed to this debate have highlighted. There are 800 million people in India living on less than $2 a day, half of whom—400 million people—live on only $1.25 a day.

A third of the world’s poor live in India. As several hon. Members have pointed out, there are more poor people in India than in sub-Saharan Africa. Tackling such poverty and inequality must be the focus of our development programme.

Regarding the work that we have already done, when Labour was in power, there was a great focus on reducing maternal mortality in India. Huge progress has been made in that area, but much more needs to be done, given that India still accounts for a fifth of all maternal deaths globally. Child mortality in India has also fallen, but each year 1.83 million children in India still die before the age of five. The Select Committee’s report highlights many of these continuing challenges and, in essence, points to the need for a continued or even renewed focus on alleviating poverty.

Although the promotion of the private sector’s role in providing aid to India is significant, and builds on some of the work done under the last British Government, there are major issues that need to be addressed, as has been pointed out already in this debate. If we are to channel 50% of our aid to India through private sector development, it would be valuable to see precisely how that will be done. What kind of programmes will be beneficial for pro-poor development? It is also important that there is sufficient monitoring and evaluation of the programmes and their funding, including programmes that are in the private sector. Just as we set tests for non-governmental organisations when we channel aid through them, it is vital that the same standards of measurement and transparency are applied to aid that is channelled through private sector organisations.

There are great opportunities for developing the private sector’s role in providing aid. We can see the impact that microfinance has already had in many parts of the world, including in India, Bangladesh and many other countries. However, although we welcome the role that the private sector can play in tackling poverty in India, there is a real need to ensure that our focus remains on poverty alleviation. Right hon. and hon. Members have highlighted the need for that focus on poverty to remain, and it would be valuable to see more detail in the Department for International Development’s plans, to build on the detail that has already been provided.

I want to highlight a couple of other issues, one of which relates to monitoring. We believe that the Department should provide further information on the significant investment being channelled through the private sector, including details of the kinds of investment and of how it will focus on poverty. The second issue relates to gender, on which there has been some emphasis. How precisely could programmes such as microfinance be used to support women and create economic opportunities for them?

I welcome the contributions made by the members of the Select Committee and, in this debate, the focus on ensuring that we continue to provide assistance to India. Looking forwards to 2015, we must consider how best Britain can maintain its focus and act as a catalyst through its aid programme, but we must also ensure that we have a way of exiting that ensures that India can be genuinely self-sufficient. We must leverage our influence and resources in such a way that over the coming years—post 2015—India is genuinely in a position to itself provide the welfare systems and support needed to tackle poverty and is no longer dependent on aid, from Britain or anywhere else. The facts and numbers show, however, that we are a long way from that, and Britain must therefore continue to maintain its commitment to the aid programme until such time as India is genuinely in a position to lift the millions who remain in poverty and who require our assistance.