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Part of the debate – in the House of Commons at 7:30 pm on 30th March 2009.

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Photo of Malcolm Bruce Malcolm Bruce Chair, International Development Committee 7:30 pm, 30th March 2009

Indeed, that is exactly right in terms of the publication. I acknowledge that entirely as the hon. Gentleman is a member of the CPA executive.

Interestingly, in Tanzania we were looking at different aspects of development. They do not normally fall within the area of things that we would expect our Department for International Development directly to support, but because it is the Department for International Development, it is important to know where the dynamic growth in an economy comes from. There are still roles for education and training to enable the private sector to flourish.

We were looking at the tourism industry in Tanzania and at the Tanzania National Parks association—TANAPA. The immediate information that we received was that tourism was down one third over the past six months. Many of the tourism companies we met were laying people off or making them redundant and that the revenue to the national parks had diminished, which meant that the animal conservation mechanisms were under threat. Of course the benefits, some of which accrue to the local people, were diminished too. It is estimated that about 20 per cent. of the tourist spend goes to the local community, which is not as bad as it sounds given that half the money is spent before people even arrive in the country. Obviously, however, more pro-poor tourism would be desirable.

Again, that raises a longer-term point. Tourism is down right now because people are reining back their expenditure. Some people, including Members of this House, have said that people should not go on long-haul holidays. We need to think very carefully when we make such decisions. Many developing countries rely on tourism for significant potential employment and development. If we stop going to them, we make it virtually impossible for them to lift their economies in that significant sector. It is important that we are aware of the consequences of what we are doing, because tourism generates revenue for Government, jobs for local people and the opportunity to invest and develop.

We also looked at the fact that a high proportion of the timber extracted from the coastal forests, in particular, and from forests across Tanzania, is illegally extracted and that most of it is being shipped to China. That reinforces the point that I made at the beginning of my speech. That activity is unsustainable and most of it gives no revenue to the Government and virtually no benefit to the local communities. The WWF was working with some local communities to try to tackle those programmes, as well as to tackle illegal fishing that uses dynamite, and to try to ensure that a system was in place to prevent the illegal exploitation of resources, to give the Government access to revenue and to give people a share of the resources in their communities. At the end of the day, the problem is that in a huge area of territory where there is no inspection, no follow-up and no enforcement, people find ways to exploit the area in a way that gives no benefit to 99.9 per cent. of the people in the country. It seems to me that we could help to prevent that by training people and providing resources to deliver that training.

In Tanzania, we give a considerable amount of our contribution in direct budget support, which is a controversial matter. It is very difficult to audit every penny but it would be fair to say that the method bears fruit inasmuch as the proportion of the Tanzanian budget that comes from overseas development aid has diminished year on year over the last several years as Tanzanian revenues have risen. That seems to show that the mechanism is working. Indeed, the Government say that their objective is to take the amount of aid that supports their budget down to below 25 per cent. over the next two to three years. That is a remarkable achievement. At the same time—Hugh Bayley is not here—the International Monetary Fund suggested that it was prepared to allow the Tanzanian Government, who have low debt and reasonably good management, to stimulate the economy by 2 to 3 per cent. I hope that I have made the point that that is all very well, but if we do not buy their products or send our tourists there, they will need more than that simply to offset what they have lost from the financial downturn.

That brings me to my final rounding-off point. We are considering the impact of climate change and of poverty in developing countries, and there is a conference of the parties summit in Copenhagen in December. It seems to me that we have to ensure a recognition that the effects of climate change have been caused by the development of the G20—by us—while the impact is greatest on the poorest of the G77. In those circumstances, they cannot be expected to respond to that impact without help.

We also have to be careful that the aid and development budget is not subsumed by the climate change budget, which does not reduce poverty. That is the real tension. The president of the World Bank has suggested that all stimulus packages should have a top-slice that goes towards climate change. I was worried to hear Javier Solana's response, at a Conference of Foreign Affairs Committee Chairs—COFACC—meeting at which I had the opportunity to question him, to my question about why the European Union's proposal was that its contribution to developing countries for adaptation to climate changes should be a third. Not surprisingly, the developing countries think that contribution should be 100 per cent. They say, "We did not cause it, we are suffering from it, you should pay." That is a reasonable proposition to my mind. Mr. Solana's answer was, "Well, that is just a negotiating position—an opening position for a bargain." The bargain implies that poor countries will have to pay for the climate change damage that we have done to them. The question for the Minister to answer is whether we as a country or as a Government would accept that that is reasonable. There is no justification for compromising poverty reduction measures with climate change measures. Those aims need to be separated and delivered. When one can deliver the other, that is fine, but one should not be delivered at the expense of the other.

My final concern is about the effect of the exchange rate on the cost of the budget. I have very little time left, but perhaps the Minister could let me know in writing rather than with a direct answer. The House needs to know what the real effect of the exchange rate will be on the purchasing power of aid and development. Specifically, we make our contribution to the European Union in euros but the statement in the report is in sterling. That implies that some £300 million to £400 million will not be available for development at the end of the year. It is important that we know. The Government are not in any way compromising their commitment on development, but they have some challenges to meet, and the House needs to know how best to meet them and what the priority decisions involved would necessitate. I hope that the Minister will be able to answer, if not now, in writing.

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