International Development Funding

Oral Answers to Questions — International Development – in the House of Commons at 11:30 am on 5th November 2008.

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Photo of David Taylor David Taylor Labour, North West Leicestershire 11:30 am, 5th November 2008

What assessment he has made of the effect global economic turbulence will have on the UK's international development funding.

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Photo of Douglas Alexander Douglas Alexander The Secretary of State for International Development

As my right hon. Friend the Prime Minister stated as recently as 17 October:

"By 2013, the UK Government will reach our target of spending 0.7 per cent. of national income on aid. We have clearly laid out our plans to the reach this goal and we are encouraging our partners to do likewise."

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Photo of David Taylor David Taylor Labour, North West Leicestershire

Actis Capital, the opaque private equity company created in 2004 to invest the then Commonwealth Development Corporation's funds, made $50 million profit in 2007 from sources such as a financial services company in South Africa and a hotel chain in China. How satisfied is my right hon. Friend with Actis's use of public money at a time when aid budgets are under such pressure? Could it not be put to far better use in agriculture, health, education and infrastructure projects in the developing world?

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Photo of Douglas Alexander Douglas Alexander The Secretary of State for International Development

CDC, which has worked with Actis in recent years, has accumulated capital while investing significant sums of money in the developing world. The need for continued flows of capital to the developing world has only increased in recent months and that is why it is important that, for example, the World Bank increases counter-cyclical lending. That is why we want to see other institutions, including CDC, continue to put capital into the developing world. Aid alone will never be sufficient to meet the challenge of poverty.

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