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Ms Oona King (Bethnal Green and Bow): I apologise to the House for being in and out of the debate because of my duties in Standing Committee, but my right hon. Friend spoke about drawing poorer countries into global trade. Is she going to speak about the definitions of pro-poor growth, on which I know that the Department has been working? Does she consider that some areas of growth are more likely to draw more people out of poverty more quickly than others? If so, will the Department do more work on that possibility?

Clare Short: I am coming to that, but it is not a complicated proposition. More research can always be done into how progress can be made more efficiently, but pro-poor growth is inclusive. Non-governmental organisations and people working in the development sector used to argue about whether growth was necessary or desirable when it came to reducing poverty, but that was ridiculous. Population growth without economic growth means that poverty will grow invincibly. That has been evident in some countries, especially in Africa.

However, growth that is not sustainable--such as that depending on the extraction of mineral resources that are not replaced--does not lift up a country. Growth whose proceeds go exclusively to one group does not reduce poverty, but rather maximises the risk of conflict. The research clearly shows that if all a country's people do not benefit from growth, the excluded group is more likely to resort to conflict in the absence of democratic opportunity.

Economic growth has to be sustainable. That means that a country's environment and resources must be taken into account but also, in the modern world, that good education and health care are available.

Education and health care are not just desirable: the technologies of modernity require people to be educated so that they can contribute to their countries and participate in the global economy. The fair distribution of the proceeds of growth means that education and health care are available to all. Economic change often disbenefits one group of people, and Governments have a duty to help them to adjust and find new avenues by which to go forward. If that happens, the sort of growth that brings benefits to everyone, and especially to the poor, can be sustained.

I want to mention inequality. Some of the Latin American countries are the most unequal in the world. For example, enormous wealth and desperate poverty exist side by side in Brazil. It takes longer for growth to reduce poverty in such countries. Unless a country's economic development is strange, the proceeds of growth tend to be distributed fairly evenly, but in very unequal countries the

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proceeds that go to the poor are very limited. Questions about the degree of inequality are questions of justice, but removing inequality depends on stability and the speed with which poverty is reduced. That lesson is clear, and measures must be taken to ensure that action is put in hand to reduce poverty.

As I said, extending education and health care to everyone is a fundamental requirement. Ill health is undesirable and causes suffering, but the research shows that poor people work endlessly. They are creative people but they work harder than anyone else in the world as they try to lift their families out of poverty. However, ill health constantly throws people back into poverty. If a family's breadwinner cannot work because of ill health, that family has no income. If a child or a dependant is unwell, the family borrows money--or begs, or sells belongings--to get drugs and health care that is often of very poor quality. Better health is desirable not only for its own sake, but because it helps people improve their lives and the lives of the next generation.

Education and health care are crucial for development. They are to be paid for out of the proceeds of development, but investment in those sectors is one of the ways to secure the conditions necessary for development.

Mrs. Cheryl Gillan (Chesham and Amersham): The Secretary of State mentioned the terrible disparity between the very wealthy and the very poor in South America. Will she comment on the drug barons and the regimes in that part of the world, where there seems to be a vested interest in feeding drug habits and keeping as many people as possible oppressed in poverty? Should not the western world take even more interest in that than it does at present?

Clare Short: The problem of drugs extends world wide. Drugs involve criminality, illegality and instability. Their use by people who are marginalised and often damaged is evident even in countries such as our own. Drug use is a crisis of the era.

Colombia is an example of a country with poor governance, widespread violence and an absence of justice or law. In such countries, very poor people who do not use drugs grow them, as they are the only crops that will secure an income. It is no good persecuting those people: they must be offered the chance of a legitimate life. They need to have the economic well-being that comes with taking legitimate produce to market, and which gives them the chance to send their children to school and to enjoy decent health care.

Too often in the past the focus has been on bombing campaigns. Unless a decent future is promised, people return to growing drugs because that is all that they can do. The drug barons are the only people who will buy such crops, and we must work hard to find more constructive solutions that offer people the chance of decent lives.

For example, the UN spent a lot of money in Afghanistan on paying people not to grow drugs. They stopped, but they started again because they were not offered the chance of decent lives that did not depend on drug production.

Mrs. Gillan: The Secretary of State may know that I have been trying to champion the cause of growing

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pyrethrum as an alternative to poppies. It is possible that pyrethrum could be a crop substitute for drug production. Will she look again at my letters to the Department on crop substitution, which offers a way forward for families that depend on growing drugs to feed and clothe their children?

Clare Short: I should be delighted to do so, although I do not think that the hon. Lady has sent me any letters, as I would have read them. I am ashamed to say that I do not know what pyrethrum is.

Mrs. Gillan: It is a variety of chrysanthemum.

Clare Short: Oh, I know what chrysanthemums are. I should be delighted to look at her letters if she sends me copies, but there is more to the problem than finding just one crop substitute. People must also be able to get crops to market and their children to school. If the package on offer is not sufficient to allow people to have legitimate lives, the men with guns will remain in control and people will be unable to move forward.

Pro-poor growth and establishing educated and healthy populations are key requirements in achieving progress. Development assistance is also vital, and we need more of it, but it must be deployed differently. In the past, it has been associated with the charitable mindset. I do not deny the value of charity--we should all care for those in need--but charity consists of handouts to the poor, and it is not development. The task is to use overseas development assistance to create the conditions that enable people to lift up their lives.

To achieve that, we must stop having lots of different, fragmented projects and instead help countries establish the effective institutions of a modern state. Those institutions provide services to a country's people and run the economy in a way that ensures that savings stay at home, that inward investment is secured and that people have access to modern technology. In that way, a country's economy can grow in a way that benefits all.

The White Paper commits us to increase United Kingdom development assistance as a proportion of gross domestic product to 0.33 per cent. by 2003-04--a 45 per cent. increase. We are also allocating progressively more to low-income countries and untying our development assistance, for which we have had all-party support. However, we could do better and that I hope we will have all-party support to help us continue making progress so that we reach the UN target of 0.7 per cent. I am delighted to tell the House that after 32 years of trying, we have agreement with the OECD Development Assistance Committee that aid to the least developed countries will be untied. That is very important, because when aid is tied, supplies have to come from the giving country. It is motivated by trade connections, leads to growth inefficiency and does not enable countries to put in place the institutions that they need to go forward.

We must build an international system focused on the systematic reduction of poverty. We have been working on that with some success, but there is more to be done. The UN is precious--nothing can replace it--but it could be more efficient. I am haunted by Sierra Leone. We will succeed there, but UN peacekeeping could be more efficient and effective, and we must all work together to achieve that.

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We must have fair international rules and strong international institutions to harness private capital and trading opportunities to improve the life of the poor. We must challenge the MobGlob, the mobilisation against globalisation. What they preach is a disaster for the world and for the poor. The systematic reduction of poverty requires greater, not less, international co-operation. Without rules, the strong and the rich will bully the rest. Sovereignty now stays with nation states--it does not go to any other institution, but must be pooled to be exercised. There are some things that countries cannot do on their own. Countries must collaborate with others to produce rules that will benefit everyone. If we cannot do that, we will be in trouble.

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