International Aid Transparency

Part of Royal Assent – in the House of Commons at 2:52 pm on 13 November 2008.

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Photo of Douglas Alexander Douglas Alexander The Secretary of State for International Development 2:52, 13 November 2008

Of course, my right hon. Friend the Secretary of State for Defence—with whom I met President Karzai only this morning—is accountable to this House, which has plenty of opportunity to question him about the conduct of his Department. As I recollect, he appeared only recently in a joint session with the Foreign Secretary—it was before either the Defence Committee or the Foreign Affairs Committee—to answer exactly that sort of question in respect of Afghanistan. The House has significant opportunities to hold the Defence Secretary and his ministerial colleagues to account over their conduct of the Department in Afghanistan, other theatres, and elsewhere.

Transparency helps developing country Governments to plan and manage their budgets. In Rwanda last year, just half of all estimated aid flows to that country were recorded in the national budget, which made it difficult for the Rwandan Government to channel resources to the areas of greatest need.

In addition, transparency enables citizens to hold their Governments to account. In Uganda, a campaign to give information concerning education funding to the citizens of that country helped to increase the share of funds reaching schools from just 20 per cent. in 1995 to more than 80 per cent. by 2001. Transparency limits the scope for corruption in developing countries. The extractive industries transparency initiative, launched by the Government in 2002, requires Governments, as well as oil and mining companies, publicly to declare the value of contracts. That initiative has helped Nigeria to increase revenue collection by $1 billion—money that is now available to spend on meeting the needs of the Nigerian people. In recognition of the power of such transparency to increase the impact of aid, the Government launched a new international initiative in September. The initiative was intended to make information on aid flows more easily available and accessible, so that citizens of both donor and recipient countries could see where and how aid was invested.

The United Kingdom launched the international aid transparency initiative at the high-level forum on aid effectiveness in Accra in September this year. We did so, I am glad to say, with the support of 13 major donors, including the United Nations Development Programme, the World Bank, the European Commission and the William and Flora Hewlett Foundation. The initiative commits donors to publishing more detailed and up-to-date information about aid flows, to giving details and costs of individual projects and their aims, to providing more reliable information about intended future aid, and to agreeing common standards for publishing that information so that it is accessible to everyone.

The initiative is an important first step towards increasing certainty for both donors and the countries receiving aid, and has been warmly welcomed as such by developing countries and civil society, including by Transparency International and the Publish What You Fund campaign—a coalition including ActionAid and the UK Aid Network. I expect the initiative to be joined by growing numbers of international donors during its design phase, which is under way, and I expect it to be in place by the end of next year.

In addition to launching the international aid transparency initiative, the United Kingdom played a leading role at the Accra meetings to secure an international agenda for action to improve the quality of global aid. Supported by the outstanding team of civil servants from DFID, I was able to work with my counterparts from across the European Union frankly to raise the level of ambition for the meeting, and to persuade all donors and developing countries to sign up to concrete, time-bound, ambitious agreements to improve the way aid is provided. I would like to inform the House of some of the successes of the meeting, including agreements on mutual accountability, donor co-ordination and predictability of financing.

The first area of agreement regards mutual accountability between donors and recipient countries. Donors have a legitimate right to monitor the performance of developing country Governments to ensure that aid is well spent—a responsibility that this Government take seriously. We know that aid is more effective when recipient countries in turn monitor donor performance. In Mozambique, for example, independent reviews of both donor and Government performance have helped to improve the predictability of aid and reduce the costs for all parties involved. The House may be interested to learn that such rankings have rated DFID as the most effective donor for the past three years. In Accra, both donors and recipient Governments agreed to develop stronger mechanisms to hold each other accountable for meeting commitments, so that the good practice that I described in Mozambique is in future the rule, not the exception, in international aid.

The donors gathered in Accra made a commitment to improving the co-ordination of aid. Developing country Governments spend far too much time managing donors, and are left with too little time to conduct the proper business of government as they take their countries forward on their development paths. Over the past four years, Government staff in Uganda have dealt with more than 1,000 donor-led projects. In one year alone, the Government of Vietnam played host to 791 donor missions—more than three for every working day. Government staff in Mozambique have to maintain 1,000 different bank accounts simply to meet differing donor requirements. It was because of such concerns that this Government last year launched the international health partnership to improve donor co-ordination in the health sector. The agreements made in Accra take that approach beyond the health sector. Developing countries committed to taking the lead in co-ordinating and agreeing an effective Division of labour between donors. In turn, donors agreed to respect those priorities and work together to put better co-ordination into practice.

In developing countries where aid funding can be equivalent to as much as 75 per cent. of the national budget, it is vital that donors provide as much clarity as possible regarding intended future aid flows. Our Government are taking part in 10-year agreements in the education sector; as part of that, developing countries provide robust, costed 10-year plans. We have already made such agreements in a number of countries, including Ghana, Mozambique and Rwanda. By doing so, we are giving those countries the confidence that they need to build a school; they know that the money will be there to maintain it, and can train teachers knowing that they can afford to pay a salary at the end of that training.

In Accra, donors agreed to provide regular and timely information on the aid that they expect to provide in the next three to five years. Donors also agreed to increase the share of aid channelled through to partner country budgets. Those measures will help developing countries to plan and manage their budgets better, to use resources more effectively and to provide the services that their citizens need.

The successful conclusion to the meeting of donors and developing countries in Accra provided a positive precursor to the high-level event on the millennium development goals held later in September at the United Nations in New York. That meeting brought together literally the broadest alliance ever assembled to fight for a common goal to tackle global poverty. The UN Secretary-General and the President of the General Assembly were joined by 140 countries, alongside dozens of multinational chief executives, faith leaders and non-governmental organisations. The commitments made included a malaria action plan, launched to point the way towards universal coverage of insecticide-treated bed nets by 2010, and achieving near-zero malaria deaths by 2015. Those gathered made commitments to provide emergency food aid in the horn of Africa, and the rapid distribution of support, including seeds and fertilisers for 30 priority countries in time for the next planting season. A major new financing force was launched with the aim of raising funds to help recruit 1 million health workers and save 10 million lives. To get 25 million more children into school by 2010, as a milestone to universal primary education by 2015, international partners launched a "Class of 2015" partnership. Those and other commitments combined to form $16 billion-worth of pledges to tackle poverty. In response, UN Secretary-General Ban Ki-moon called the meeting

"an inspiring day at the United Nations".

As I said at the outset, the coming weeks will, however, be crucial in determining the global response to the slowdown in the world economy. The G20 leaders meeting in Washington this weekend should send a clear and unequivocal signal to the international community of their continued commitment to international development. At the financing for development conference in Doha at the end of this month, donors should agree that changes to international financial regulations will not harm the interests of the poorest countries. All parties should reaffirm the commitments on aid effectiveness made in Accra. Donors should agree to keep promises on aid, as the UK, I am glad to say, is doing, and they should reaffirm their commitment to maintaining open markets and resist the threat of protectionism.

I hope that I have given the House an assurance that the Government are committed to tackling global poverty at a time of global uncertainty. It is not only our moral duty to help our fellow men, women and children to lift themselves out of poverty but it is in our interest as a nation to do so. Government Members, at least, are united in that conviction.

The financial crisis and its effects have underscored the interdependence of nations at the beginning of the 21st century, and while recent events have shown every family across Britain to be connected to some of the richest people in the world so, too, are we connected to the world's poorest people. In our response to dangerous climate change, the depletion of natural resources, the threat of global disease, and indeed the threats to our global security, there is quite simply no more "over there" and "over here". Tackling those great problems requires a truly global mindset, and calls for global solutions, which means bringing the fifth of the global population who live in extreme poverty into our global community. The United Kingdom will therefore keep working to tackle disease, illiteracy and hunger. As I have set out, we will continue to lead international efforts to ensure that any aid delivered provides the benefits that the world's poorest need, and that British taxpayers rightly demand.

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