Global Development Goals

Viscount Eccles Excerpts

Thursday 11th December 2014 Lords Chamber

[Viscount Eccles (Con)]

My Lords, I am sure that everybody in the House is truly grateful to the noble Lord, Lord McConnell, for introducing this subject. We do not have enough debates—at least not in my view—about development, aid and the best way of going about these connected, but different, activities. I am grateful to him for his synoptic view of the scene. I confess that I approach the subject with a certain humility—and that perhaps makes me not the best possible person to follow the noble Lord—because I am a retired practitioner. I have to remember that I was a practitioner in the 1980s and 1990s and that the world has moved on, but in those days I was deeply involved with aid and economic development.

My interest in the subject arose a long time ago. There were two economists, Tom Bauer and Thomas Balogh: they were both immigrants—which is interesting —and both became Members of your Lordships’ House. They used to debate the philosophy of aid and development passionately on the Floor of this House, in a way that I have not seen us debating lately. Bauer was a market man. He believed in economic opportunities —a seizing of opportunities to trade and invest achieving a satisfactory return. His philosophy has been demonstrated to work in certain places, such as Malaysia and Brazil. His conclusion was that there was no reason to suppose that development could not be achieved all over the world in much the same way as it was achieved in western Europe and in the United Kingdom during the industrial revolution.

Balogh was much more a top-down Government-to-Government aid supporter. He was an adviser for a number of years to Harold Wilson. The aid orthodoxy of today is much more on the Balogh theme than the Bauer theme. As I said before, we do not have that much debate about it; we seem to hold similar views about the orthodoxy, which is probably something that makes me unsuitable to follow, because I am a Bauer man, not a Balogh man, and therefore in a minority—a quite familiar position.

My second interest in the subject arises because 30 years ago, I started about a dozen years with what was then the Commonwealth Development Corporation. At that time, it was a classic development finance institution: state owned and funded by Treasury capital, funding private sector economic opportunities and making modest profits that were liable to corporation tax. What it did was, in general, unattractive to fully market players, either because of the political risk or the risk of low returns. Therefore, what the CDC was doing then was filling gaps—doing things that other people did not quite want to do. That is my definition of a development finance institution: for it to be a DFI, it has to be prepared to do things that the market is not prepared to do—and of course to do them successfully.

My third interest, which is much smaller, is with the Hospital for Tropical Diseases—this relates back to the previous debate. CDC had some 250 people in 65 different locations, many of them tropical, and we needed the services of HTD. After retirement, I did quite a lot of work for HTD, including fundraising in order to move the hospital into more satisfactory premises.

I was, therefore, a bottom-up player in both senses. I respected and knew about millennium goals, in the sense that although I was pre-millennium, we were still aiming at much the same things that were codified in 2000. The problem is that bottom-up players cannot cope with millennium goals: they simply do not have the time. They are too big, too abstract and too distant from their lives. Take mobile phones in Ghana, tea in Malawi or marine offloading facilities in Papua New Guinea: while you are carrying out those projects and making sure that they are sustainable and generate returns, it is difficult to take time to think about the great, wide issues of the millennium goals.

With our experience as front-line operators, how should we think about the millennium goals and the aid programme? For my part, I think about striking a better balance in our aid programme between aid and economic development, as well as the contributions to the development goals. I will illustrate that briefly by taking the example of tea. The Commonwealth Development Corporation was responsible for starting the Kenya Tea Development Agency, which now has more than half a million growers and 64 tea factories. It has definitely been a sustainable enterprise and Kenya is now the third largest producer of tea in the world. But after that we went elsewhere.

I shall also mention Malawi, which is not a word-for-word accurate experience, but a good illustration. Malawi with its 17 million people is not abounding in economic potential. It is a difficult place with no access to the sea, and market players find it difficult to achieve returns there. So we started a tea property. We did our due diligence and saw that we had land with good soil, that water was available and that the climate was right—all of which would allow tea to be grown successfully. Tea needs a medium-term capital input. Tea plants are trees, but they are allowed to grow to only 30 inches high. However, they need time to develop, so you cannot pluck the leaves for tea for some years. You also need to build a tea processing factory, and therefore you must have capital. However, capital in Malawi was then and still is in very short supply.

We set up a nursery for the tea plants and for woodlots—because without timber for fuel, you cannot operate a tea factory. Immediately, we were creating jobs. We needed to make a road because you can bet your life that a lorry cannot get in and out of a remote place easily. Again, that is economic development and it creates jobs. Then there was the matter of housing and gardens for the people working on the plantation, as well as the school and the clinic, both of which we would build. We needed communications in the form of mobile telephones to contact the market in Mombasa and sell the tea. Lastly, women are very important in tea plantations because they are much better at plucking the leaves than men will ever be.

I should like to say in conclusion that this kind of activity is a way of fulfilling from the bottom up the millennium development goals. If I had to choose between aid and economic development, I judge that the contribution of economic development is the greater.