Select Committee on International Development Appendices to the Minutes of Evidence


Memorandum submitted by KPMG

  We are delighted to see the new White Paper, Eliminating World Poverty: Making Globalisation Work for the Poor, and we welcome the opportunity to comment on it. It is a very comprehensive and well researched document, and some sound suggestions are made for achieving the International Development Targets.

  In this letter we first make some general observations about the White Paper. Secondly, we comment on the digital divide, particularly given our recent work with the Department for International Development (DFID) to carry out a study of The Impact of the New Economy on Poor People. Thirdly, we reflect on governance issues, because we believe these are particularly critical to the achievement of the International Development Targets. Finally, we comment on the commitment to improving the effectiveness of development assistance.


  We are very pleased with the UK Government's increasing commitment to international development, as demonstrated by the rise in development assistance as a proportion of GNP and the continual progress towards the UN target for development assistance. We are impressed with the breadth of the issues covered in the White Paper and of the resulting policy commitments. We believe that this White Paper complements the previous White Paper, and contributes to the global discussion on how to eliminate poverty.

This White Paper is intended to be read in parallel with the 1997 White Paper and other statements of DFID's objectives (as represented in the Public Service Agreements, Departmental Reports, Strategy Papers, etc) and we recognise therefore that a more comprehensive picture of the UK Government's plans and priorities can be obtained when all relevant documents are reviewed together. However, we believe that it would be useful for DFID to clarify the impact of some of the policies set out in the White Paper further. It would also be helpful to understand how the Government will seek to measure the achievement of the objectives.


  We fully endorse the Prime Minister's statement in the foreward that "if the poorest countries can be drawn into the global economy and get increasing access to modern knowledge and technology, it could lead to a rapid reduction in global poverty". The White Paper goes on to suggest how development agencies can help poor countries harness the benefits of the new technologies, for example through ensuring that international communications-related agreements are supportive, through smoothing the transition to more competitive telecommunications sectors and through promotion of communal access models or pay as you go schemes. The key benefit of new technologies is sharing skills and knowledge, for example improving the supply of education and in giving a voice to the poor.

  We believe that the UK Government can play an influential role in promoting the use of information and communication technologies (ICTs) to enhance poverty alleviation interventions. Governments can drive economic and social development by applying ICTs to improve the delivery of services and by creating an enabling environment for the utilisation of ICTs by the private sector. We suggest that DFID's pilot projects could be of two types-developing an overarching strategy and implementing specific e-enabled solutions-and that these could take place in parallel.

  The first approach involves supporting an assessment of current "e-readiness" and formulation of a vision, strategy and action plan for a particular government—or region or organisation—to enhance achievement of its mission through enabling technologies. This type of project could even be coordinated with the process of developing a country's Poverty Reduction Strategy. During the review, specific recommendations for utilising ICTs to tackle poverty would be identified for that country. These might, for example, include:

    —  improving the efficiency of government services, allowing the re-allocation of scarce resources;

    —  ensuring effectiveness in the delivery of public services, by facilitating provision of information on financial performance and the quality of service to citizens;

    —  stimulating private sector development, and pro-poor economic growth, by providing access to markets, funding, information, partners and training;

    —  improving access by the poor and socially disadvantaged to information and services, providing a means of social empowerment;

    —  establishing or developing transparency, objectivity and accountability into government procedures to tackle corruption and enhance good governance;

    —  overcoming obstacles of physical infrastructure and distances to link up people with shared interests, to bring the benefit of global knowledge to the poor in developing countries.

  The second approach involves supporting discrete "e-enabled" solutions, which have been identified because they are relatively easy to implement and have the potential to improve significantly the quality of life of the poor. In this way, success can be demonstrated quickly and powerfully to help build the business case for further projects. Examples include:

    —  providing communications infrastructure for poorer communities in rural areas so that they can access information on markets and public services;

    —  working to improve the legal and regulatory framework to promote private sector investment;

    —  using ICTs to facilitate specific development goals in health and education, such as facilitating teacher training.

  We look forward to taking this area of discussion forward with DFID and governments in developing countries.


  We believe that good governance is a fundamental requirement for ensuring that poor people benefit from globalisation. It is our view that the White Paper should stress the centrality of governance further; good governance is critical to the provision of the basic services required to build a country's human capital, in supporting the development of the private sector, and in addressing security issues.

  The policy commitment to supporting effective government in the White Paper takes account of the importance of the justice system, the legal, institutional and regulatory framework, social policies and resource allocation. We would also encourage a more explicit recognition that support to governments is required in order to help them to develop programmes for governance reform which would embrace, for example, a focus on their core functions and understanding the potential of the new technologies to facilitate reform initiatives. This, ideally, could be part of the Poverty Reduction Strategy process. The UK Government intends, together with others, to provide support to at least 12 countries to develop and implement their Poverty Reduction Strategies by 2004. An accelerated programme of assistance for the development of the Poverty Reduction Strategies would help provide early direction for development agency interventions.


  We are encouraged by development agencies' commitment to the Poverty Reduction Strategy process. This should provide focus and cohesiveness to development assistance. We understand that the process has been pursued as a result of lessons learned and that the developing countries have had a significant input into the design of the process. This will help to ensure their ownership of the process and the strategies that are developed. The key will be to include appropriate success criteria. These Poverty Reduction Strategies will be pivotal in guiding country and development agency actions; the results of such actions can then be evaluated in the light of identified and agreed success criteria.

  The UK Government has said it will drive forward the simplification and harmonisation of development agency procedures to reduce the burden imposed on developing countries. This is also very encouraging, and could help to accelerate the provision of support where and when it is needed. It will be critical to help developing countries to integrate different tools for directing development and gaining donor support—for example, the Dakar Framework for Action commits countries to develop or strengthen their own national plans of action by 2002 (an outcome of the 2000 World Education Forum in Dakar). We believe strongly that these should link with the Poverty Reduction Strategy papers.

John Anderson

Partner, KPMG

January 2001

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