G8: Development Aid

Part of the debate – in the House of Lords at 3:38 pm on 26th January 2006.

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Photo of The Earl of Sandwich The Earl of Sandwich Crossbench 3:38 pm, 26th January 2006

My Lords, I begin by thanking the noble Baroness, Lady Jay, for introducing the debate, and for reminding the Government of their promises. I also want to congratulate the Secretary of State on his determination to see through the G8 recommendations, and those of the Commission for Africa. It is difficult for him to follow previous Secretaries of State, all of whom have shown tremendous commitment to poverty reduction. It is not easy for him, or anyone, to shine in a new job when your Prime Minister and Chancellor both want to be in on the act. He somehow seems to have weathered all of that.

The Minister herself may admit that there has been some element of public relations in our aid policy, which can disguise true achievement. That should not cloud the Government's sincerity in eradicating poverty.

Last year saw the culmination of several initiatives building up to and emerging from our presidency of the EU and the G8. There is now almost a hiatus, as the cost of meeting the MDGs is measured against other spending priorities. There will be a doubling of aid by 2010—an extra US$50 billion worldwide and US$25 billion for Africa. The Africa Commission called for an increase in aid to Africa alone of $50 billion by 2015. Whether or not either of those are realistic figures, we are now closer to reaching a timetable to meet existing UN targets. However, with regard to the UK's aid budget, while delighted that we are well over half way to 0.7 per cent by 2013, I am not clear how we can justify those percentages on the basis of borrowed money.

The international finance facility is only at a pilot stage. My concern, derived from research, but also from common sense, is that the UK's present proposal leaves open the possibility that aid flows will fall after 2015 when IFF bonds start to be repaid. Surely, that will be unacceptable. What will happen in a recession or when there is a change of government? The amount of money received by the poor cannot be allowed to fall as a percentage of GDP simply because donors have been unable to raise the money. There are other aspects of the IFF that remain unclear, such as which countries will be eligible for funding and what additional conditionality will the IFF impose on borrowers. On the quality and conditionality of UK aid, I agree wholly with my noble friend Lady D'Souza on better targeting. Budget support is not working in Ethiopia, where we have heard that DfID is rightly making a stand for human rights, so aid spending will go down in one of Africa's poorest countries, and probably others.

On debt, the G8 calls for the immediate cancellation of the debts of 18 of the world's poorest countries, most of which are in Africa. This is a welcome deal: we are told that it is worth $40 billion now, and as much as $55 billion as more countries qualify. It includes writing off $17 billion of Nigeria's debt, as we have heard, in the biggest single debt deal ever. That sounds good for the poor of that country who have waited a long time: 100 per cent debt cancellation for Nigeria was seen as a key breakthrough during the G8 process. But, as the noble Lord, Lord Roberts of Llandudno, rightly said, it now seems that to earn it, Nigeria will have to make a huge payment of $7 billion to the Paris Club to get the remaining 60 per cent of its debt written off. In effect, that will take from Nigeria money that was earmarked for fighting poverty and securing its economy. Are we not pressing the new government, who are responding to calls for good governance and transparency, by insisting on these repayments now? Debt relief, therefore, is rarely what it appears to the public in press releases. In some countries, up to 50 per cent of the debt burden is domestic debt, which is largely owed to international banks. This domestic crisis must also be tackled.

Moving briefly on to trade, we all know that Hong Kong was disappointing, but there is a commitment to end all export subsidies and to reduce trade distorting domestic subsidies. However, this Government still support the EU policy to introduce economic partnership agreements, even with the poorest countries. I remind the Minister what the Africa Commission said quite bluntly:

"The EU must ensure that EPAs support development needs. This means not forcing poor countries to liberalise".

I know that I have raised this before, and the position has slightly improved for the LDCS, but I am still not satisfied that the Cotonou agreement is being honoured.

One of the best things about the G8 is that it intends to hand over responsibility to developing countries who will,

"decide, plan and sequence their economic policies to fit with their own development strategies, for which they should be accountable to their people".

So, for Africa, there is now the Africa Partnership Forum. A joint action plan is being drawn up to incorporate the commitments made by African governments and development partners. It will integrate Africa Union and NePAD programmes, such as the Short Term Action Plan and the African Enterprise Challenge Fund, which will be operational this year, the G8 Africa Action Plan, Gleneagles commitments and the Millennium Review Summit commitments, not to forget the African Peer Review Mechanism.

These are all welcome initiatives, but they are optimistic. You only have to look at the websites behind all these acronyms to realise how long a process this is going to be. Let donors not be under any illusion that anything much is going to happen this year.

We are making some progress towards the MDGs, although not as much as the G8 would like. For example, they would like countries to get as close as possible to universal access to HIV/AIDS treatments by 2010, but there is a $3 billion dollar shortfall in the aid programme for AIDS; or that by 2015 all children will have access to good quality, free and compulsory education, and to basic healthcare. We all know that these are admirable goals, but unachievable in that timescale.

The DfID's interesting 2005 autumn performance report tells its own story of progress, referring to 16 countries in sub-Saharan Africa. The poverty target of 46 per cent is on an amber traffic light—no change by 2008. Primary school enrolment is only up if you take out Nigeria, Sudan and the Democratic Republic of Congo—amber again, moving to red. There are not enough girls in schools; gender parity rates are declining, even in eastern and southern African schools, where we would hope to get the best results. Infant mortality is gradually declining—on a green light—but again you have to take out Nigeria and the DRC, which are still over 200 per 1,000 births. Assisted births are unchanged, partly because in Ethiopia only 6 per cent of mothers have birth attendants.

With such figures, it is no wonder that the PSA targets—in annex B—have had to be revised or redrafted. We must be grateful for this evidence of statistical honesty.

Finally, but still speaking of figures, it is worth remembering that the statistics of world poverty understandably apply to settled peoples, who live mainly in cities or in agricultural regions. The pastoralists, who occupy the marginal land, the semi-desert, the marshes and the mountain ranges of Africa and elsewhere, are generally unsurveyed and uncounted. But they are a significant number. By and large, they have no political representation and they rarely get a mention in government policies or parliamentary debates even in their own countries.

It is to the credit of DfID, of the Institute of Development Studies in Sussex and of others such as the Pastoralist Communication Initiative, based in Addis Ababa, that the voice of pastoralists is increasingly being heard. I encourage the Government to continue to strengthen this important work, which I hope will be the subject of a future debate.