Select Committee on International Development Appendices to the Minutes of Evidence



  SC UK is pleased to have the opportunity to comment on the White Paper on globalisation, which builds on our earlier submission to the draft version.

  Our submission to DFID on the draft White Paper, which was written last year, included a number of main recommendations as well as detailed policy alternatives. In our comments below, we have taken each of these recommendations and commented on how far we feel they have been incorporated into the final version. These initial recommendations are highlighted in italics at the end of each section.


  SC UK recognises that there is a lot to be welcomed in the new White Paper on globalisation. We are pleased with the thrust—of managing globalisation so that it benefits the poor, but we would like to have seen more detail on how it will be done. We are also pleased to see the attention given to a country-by-country approach, for example in the area of capital account liberalisation. We also endorse the focus on aid co-ordination, getting the international system "in order" and the untying of aid, after many years of campaigning by the NGO sector, as well as the stance on specific issues such as child labour.

  However, while welcoming the breadth of the paper we feel it would benefit from greater detail regarding delivery. Specific reference to poor people within countries is infrequent, and for the most part there seems to be an expectation that they will somehow get pulled along by general improvements brought about by globalisation. We would welcome further disaggregation of who benefits and who loses and under what circumstances. Our experience suggests that even where economies are growing, child welfare may actually decline. For example, in Ghana and Uganda malnutrition rates have increased, despite sustained economic growth since 1985 (UNICEF, 1997 cited in Harper and Marcus, 2000).

  While we are therefore pleased with the general direction of the paper and we do recognise that there is a time lag between policy change and change in practice, we now need to see concrete evidence of a real shift among key players.


  The main emphasis of the Paper is on markets, trade, TNCs and making them work in order to promote growth. While we recognise the vital importance of growth, our primary concern is that these market processes are mediated in relation to the poor, especially those in chronic poverty, so as to ensure that the poorest benefit from globalisation. Despite the positive aspects of the Paper, we are disappointed with the lack of space given to discussing the types of important negative impacts of globalisation on some groups, and thus policies for ensuring that they benefit.


  SC UK welcomes the consideration of children in paragraphs 73-74, the attention given to breaking the cycle of child poverty in paragraph 75 and the box on child labour. However, despite children comprising a disproportionately large proportion of the poor, and despite the "win-win" nature of tackling child poverty, no strategies are outlined to ensure that policies are pro-child. There are also no proposed monitoring mechanisms to assess the impact of policies on children and no attempt to analyse the particular nature of child poverty and its impact on children's lives and development.

  We believe that both "ex-ante" and "ex-post" evaluation of all economic and social policy in terms of impact on children and families is essential to ensure that globalisation reduces the poverty of this large and key group.

  One of the key negative impacts on children of globalisation has been the increase in trafficking-such as for the growing pornography industry and the trade in child prostitutes alluded to in paragraph 74. However it is not clear how DFID, the Home Office and the Foreign and Commonwealth Office will be working together to combat trafficking at a national and international level. In paragraph 127 onwards, which focuses on the mobility of people it is unfortunate that there is no specific discussion about how to reduce child trafficking.

  The second White Paper on international development should reflect the same commitment to children's rights as the last White Paper by demonstrating how globalisation can positively improve the lives of children.


  Overall the Paper deals with the macroeconomic prerequisites for national growth in some detail, while inequality within states and the impact of globalisation on the poorest is given inadequate attention. We are disappointed that there is not a greater emphasis on equity.

  The Paper quotes one set of figures on inequality, and gives surprisingly little attention to the evidence base on these issues, given that as suggested in paragraph 27, in many people's minds, globalisation is a fundamental cause of poverty and inequality. Other studies, such as Milanovic (1999) or Cornia (2000) are less optimistic and suggest increasing inequality. The evidence SC UK encounters in its day-to-day work strongly supports academic findings which suggest that globalisation is associated with a reduction in welfare expenditures, inequality, social fragmentation, poverty, and a widening poverty gap both within and between countries. Thus while significant numbers of near poor people are making economic gains, equally significant numbers of poor people are being further left behind. SC UK believes this matters because inequalities are a source of social tension, fragmentation and conflict; it reduces economic growth and actual numbers living below the poverty line remain very large.

  The White Paper should critically review evidence on economic inequalities within and between countries and lay out social and economic strategies to redress inequalities, including fair trade regimes and strategically targeted aid policies, which do not neglect "poor performers".

  The White Paper should use a broad concept of poverty beyond income and material poverty and including exclusion, violence, conflict and environmental degradation.


  The White Paper champions market reform. However SC UK remains concerned at the continuing impact of market reform on poor children's access to key basic services such as health and education. While we welcome the statement (paragraph 115) that "no child should be denied access to a basic education because she or he, their parents or guardians, cannot pay for it", we would have welcomed more detail on concrete strategies for achieving this and see little to allay concerns about the impact of continuing marketisation on public services.

  Although at places the paper expresses "rights thinking" (as above), we are concerned that elsewhere the White Paper continues to see them both as a means to economic growth, rather than as a basic right. The quality of education is mentioned only in passing in paragraph 111—and this in relation to building strong export-led growth and a learning economy. This continuing failure to see education as a basic right contributes to the narrow focus on enrolment rates and the further abandonment of difficult to teach children. We are also disappointed that the White Paper goes no further than the current HIPC initiative as a means to help poor countries increase their ability to fund public spending.

  The Paper does not give adequate attention to the issue of the provision of global public goods in general, or the detail of how public or private sectors will work together, an increasingly critical issue in need of urgent attention. In particular we were disappointed that the Paper does not address the contentious issue of public-private partnerships in the provision of health care, and how basic services for all are to be guaranteed. There are many examples of where private sector involvement may lead to a two-tier health service, for example, through provision of health insurance which benefits better-off users of services (Ghana) leaving poor to cope with an under-resourced public sector.

  The White Paper needs to affirm the role of the state in the context of globalisation, particularly in the provision of quality and affordable basic services.


  We welcome the suggestion that the WTO sign up to the IDTs and the proposal of duty free access for products from LDCs to the EU. However, the Paper's recommendations do not reflect the urgency of the situation. This raises a profound concern that if concrete steps are not taken fast to enable poor countries to take advantage of trade globalisation, they will be excluded in the long term. Particular concerns are access to Northern markets, and a strengthening of developing countries' ability to regulate trade and investment, within the framework of a rules-based system. We are concerned that existing proposals do not go far enough. Paragraph 222 says that tariffs in Developed Countries, from developing countries should be reduced—why not removed?

  SC UK shares UK Government's concerns about proposals to link trade and core labour standards through the WTO, given concerns about the use of indiscriminate trade sanctions by richer nations for protectionist purposes. There is also the danger that trade sanctions might drive young workers away from relatively non-hazardous work in the formal export sector into even more exploitative forms of work.

The White Paper should not treat trade liberalisation as a panacea for poverty alleviation but should consider the impact of trade openness in a variety of contexts and settings.


  We welcome the call to ensure a poverty focus in the IMF. However, we would like to have seen more on how this will be achieved and how DFID will encourage modification of adjustment processes to take account of their impact on the poor. There is thus a need to clarify mechanisms for achieving these goals, and for DFID to make explicit how IMF policies should be managed to support poverty reduction, as well as how it will counter the detrimental legacy of adjustment in terms of public sector service provision. The inclusion of adequate long term safety nets as part of the economic reform processes promoted by the Paper, is crucial, as well as specific details outlining how this will be ensured. This may include cash or food allowances, feeding schemes, health or agricultural insurance, pensions (for older or disabled people) and temporary employment programmes.

  SC UK does not agree with the assertion that the economic fundamentalism of the 1980s and 1990s has totally been discarded. Structural adjustment policies remain as conditions of many IFI loans. In transition countries, despite its effects on poverty and equity, privatisation and liberalisation continue to be vigorously pursued by international lenders and donors. To take one example, in Kyrgyzstan further assistance from the IMF is dependent on full liberalisation of the land market.

  We share DFIDS concern expressed in paragraphs 311 to 313 that there have been practical difficulties putting new poverty reduction strategies in place. However, SC UK is also concerned that there remains a gap between the rhetoric of participation contained in the PRSPs and the reality of millions of poor people. We remain to be convinced that the PRSPs "represent an enormous conceptual shift away from the structural adjustment of the 1980s and early 1990s" (paragraph 313). The evidence from Interim PRSPs in many countries does not suggest this. However, we welcome DFID's ongoing support to building country ownership of poverty reduction strategies and processes.

  One purpose of the White Paper should be to demonstrate how current economic orthodoxy can lead to a more positive outcome for human welfare and how economic policies for very poor developing countries, which fundamentally continue the adjustment framework of the 1980s, could be better adapted to each country' s unique internal and external environment.

  The White Paper should recognise that the "shock treatment" approach to national economic restructuring, still pursued under economic globalisation strategies, is fundamentally flawed. The White Paper should propose strategies that do not promote short-term shocks and critically, involve widespread government and national ownership of policies. This should move beyond the current PRSP process into a longer-term vision of policy participation and ownership.


  SC UK welcomes moves to promote global corporate responsibility and the more joined-up approaches to poverty reduction, for example the DTI looking at corporate responsibility as well as DFID. However we need further clarity about where responsibility lies within government to ensure this takes place. Within the White Paper it is not clear what role DFID has in engaging with the private sector and in particular with Transnational Corporations—or whether this will be the sole role of DTI—with the new Minister for corporate responsibility?

  We welcome initiatives to promote effective management of the corporate sector such as competition policy, strengthening domestic tax policies, cracking down on tax evasion and the proposal for an International Investment Agreement. However, the Paper is weak on the details of legislation required to manage private finance/corporate behaviour. This is the case with regard to the skewed distribution of private finance flows, volatility and capital flight, which is needed to ensure that financial systems can benefit the poor.

  The White Paper does not address our hope that ethical standards and human rights more generally should be binding for corporations and individuals, leading to greater coherence between company activities and their stated commitments to human rights standards.

  SC UK also warmly welcomes DFID's strong support for reducing the worst forms of child labour and the stress placed on addressing formal and informal sectors. This includes the importance of working with the private sector and the emphasis that civil society should be involved in identifying solutions.

  The White Paper must address issues of global governance in relation to economic and corporate governance and human rights arenas to ensure any adverse social impacts of economic policies are mitigated and civil, political and economic rights are upheld.


  SC UK remains concerned that global economic governance should be counter-balanced with governance regarding rights (eg that there should be mechanisms to ensure that human rights—and for SC UK in particular child rights—are respected and enforced).

  While we welcome the references to social protection in paragraphs 95-96, and to the need for effective social safety nets, we feel that this is a crucial aspect of policy coherence. Developmental social protection measures—those which build skills and assets—are crucial for enabling poor people to benefit from globalisation. Much more specificity is needed in terms of what this means in practice. Key areas include:

    —  Risk reduction—for example, making labour markets more equitable, enhancing skills and eliminating worst forms of child labour

    —  Risk mitigation—for example, old age income support, and unemployment benefits.

    —  Risk coping—safety nets for example, targeted transfer programmes during economic crisis and transition—eg free school meals, school fees exemptions etc.

  DFID's recent social protection publication (de Haan et al, 2000) covers this well and we would have liked to have seen these issues given more prominence in the White Paper.

  A major thrust of the White Paper should be social and economic policy coherence. This must include recognition of the social impacts of economic policies on human wellbeing and extend to an international architecture which, whilst promoting growth, also recognises and protects human development and human rights. The White Paper should explore how this can be achieved through economic policies rather than just through add on social protection schemes.

  The White Paper should seriously tackle the issue of social protection and public provision for social services building on human success stories, examining the role of aid, maintaining support for HIPC and strategies to increase bilateral assistance beyond 0.3%.


  SC UK welcomes attention in the White Paper to conflict issues in relation to international systems and globalisation and we recognise the moves highlighted in paragraph 84, that the UK Government has taken steps to tighten controls over arms exports. We also recognise that the UK Government was instrumental in establishing an EU code of conduct in 1998 to set common standards regarding arms exports by all EU Member States. We support the licensing system to regulate the activities of arms brokers and traffickers.

  Despite these positive steps outlined in the White Paper we are very concerned that the Government has chosen to reject the recommendations of the joint report published in July 2000 by the International Development, Foreign Affairs and Defence Select Committees. This covered the introduction of a two-stage system of prior parliamentary scrutiny of export licensing decisions that would allow parliamentarians to scrutinise arms export licence applications before a decision is taken whether to authorise them. We would recommend that the Government re-think this decision in order to promote greater transparency and accountability in arms export licensing. Sweden and the United States operate all arms exports by ensuring prior parliamentary scrutiny; this is not a new approach.

  The 2001 UN Conference on the Illicit Trade in Small Arms and Light Weapons, mentioned in paragraph 85, will give governments a real opportunity to ensure concrete action in many key areas. These include elimination of arms sales to regions of conflict, strengthening mechanisms to prevent and control the illicit proliferation of small arms, and the enforcement and monitoring of arms embargoes.

  We are pleased that DFID are advocating the adoption of the ICC. However, the White Paper does not mention other protocols relating to child soldiers, such as the Optional Protocol on child soldiers to the UN Convention on the Rights of the Child. Neither does it mention increasing assistance and funding, or political intervention, to ensure that access to displaced people for the protection and delivery of humanitarian aid is guaranteed by all governments and armed opposition groups.

  The White Paper should press for the ratification and signing of the Optional Protocol on child soldiers to the UN Convention on the Rights of the Child. It should also seek to encourage the UK, the UN and other donors to provide more assistance and funding, and where appropriate, to intervene at a political level to ensure that access to displaced populations, for protection and delivery of humanitarian aid, is guaranteed.


  SC UK fully supports the statement in the White Paper that the UK Government believes the Brahimi Report should be implemented within 12 months. The report offers an informed vision of a "genuinely integrated" Peace Operation and calls for improvements across the board, including doctrine, strategy, and planning, decision-making, headquarters organisation and staffing levels, logistics, rapid deployment and public information.

  However, we have two concerns about the report, which we would like to be addressed in the implementation. First that humanitarian assistance must be undertaken based on principles of neutrality and impartiality and secondly, that the unequal distribution of humanitarian resources worldwide, which is not addressed in the report, must be investigated.


  SC UK welcomes the untying of aid from April 2001, which follows many years of NGO sector campaigning on this issue. SC UK is also pleased that the Government has agreed to increase development assistance to 0.33 per cent of GNP and looks forward to progress towards the UN target of 0.7 per cent. We re-iterate our belief that increases in aid should be focussed on the poorest countries, though this should not happen at the expense of the poorest people in countries where governance and human rights abuses are worst.

  Finally we support DFID's proposal to introduce a new International Development Bill and look forward to commenting on it in due course.

  The White Paper should seriously examine the role of aid, maintaining support for HIPC and strategies to increase bilateral assistance beyond 0.3%.

Save the Children UK

January 2001


  Cornia, A., 2000, Inequality, growth and poverty during the Washington Consensus. Paper presented at the UNU Millennium Conference "On the Threshold: the United Nations and Global Governance in the New Millennium" sponsored by the UNU, UNDP and the Japanese Ministry of Foreign Affairs (Tokyo, 19-21 January 2000). Presented at the G24 Technical Consultation, Lima 1-3 March 2000.

  De Haan, A, Conway, T., Holtzmann, R., Jorgensen, S., Norton, A., Ortiz, I. and Van Ginneken, W., 2000, Social Protection: New Directions of donor agencies" produced as a paper by Social Development Department

  Harper, C. and Marcus, R., 2000, Mortgaging Africa's Future: the long-term costs of child poverty, Development, 43 (1): 65-72

  Milanovic, B., 1999, True world income distribution, 1988 and 1993: first calculation based on household surveys alone. Development Research Group, World Bank, Washington, DC

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