MONDAY 29 JANUARY 2001
                               _________
  
                           Members present:
              Mr Bowen Wells, in the Chair
              Mr Tony Colman
              Barbara Follett
              Mr Piara S Khabra
              Ms Tess Kingham
              Mr Andrew Robathan
              Mr Andrew Rowe
  
                               _________
                                   
                 RT HON CLARE SHORT, a Member of the House, Secretary of State for
           International Development, MR D BATT, Head, White Paper Team, and
           MR R MANNING, CB, Director-General (Resources), Department for
           International Development, examined.
  
                               Chairman
        1.    Secretary of State, as always you are very welcome indeed here
  and thank you also for helping us by attending the conference with the World
  Bank which has just concluded and helping us finance the conference, which
  generally speaking seems to have been thought to have been a very focused and
  useful meeting.  We have to organise it more strongly.  I believe in fact it
  will quickly get out of control in terms of numbers and finance.  Nonetheless,
  I should like to thank you for supporting us in that way.  I believe you have
  an opening statement to make on the globalisation White Paper and I think it
  is the Committee's duty to give you that opportunity since you have not had
  one in the House so far.  May I ask you to do that?
        (Clare Short)  Yes;  thank you.  I shall be brief.  It is important to
  say that this second White Paper since we formed our Government stands
  alongside the first White Paper, does not replace it and also stands alongside
  the target strategy papers which lay out how each of the international
  development targets could be achieved if we can mobilise sufficient
  international effort.  It looks specifically at globalisation itself, the
  nature of it, the historical and economic change which it represents and sets
  out an agenda for managing the process in a way which will ensure that the
  abundance and technology and capital which is now available is managed in a
  way that brings real benefits to the poor of the world rather than
  marginalises and excludes them.  The reason for the White Paper is twofold. 
  One is that since our Department was formed with the extra analytical capacity
  to look at trade, investment, core labour standards, environment, corruption,
  money laundering, all of that and cease to be just an aid distribution
  department which was looking for all the policies across Government which
  would promote, sustain development for the poorest countries, there has been
  a lot of new cross-Whitehall work and we wanted to consolidate that into a
  statement of Government policy.  There has been a lot of change and
  improvement so it is a commitment of the Government right across Government,
  committing us through trade, through approach to investment agreements,
  environmental negotiations and so on, to promote an international system which
  will really encourage development for the poorest countries.  The second
  reason is to address the enormous muddle and confusion there is in public
  debate about the nature of globalisation, which I find worrying.  Quite a lot
  of development NGOs for example are in an ideological position of opposition
  to globalisation because they are treating it as though it is the same thing
  as neo-liberalism and that is potentially a very dangerous area.  A lot of the
  voices of Seattle and Prague and so on claim to be speaking in the interests
  of the poor of the world but are basically making protectionist arguments. 
  If they become the predominant view of how the interests of the poor world are
  to be protected, the world would roll into a protectionist era which would
  damage the interests of developing countries.  So the second purpose is to
  elaborate as clearly as possible an analysis of what globalisation is, the
  effects it is having and try to make clear to everyone that it does not have
  some inevitable output.  It is for humanity and the political systems of the
  countries of the world to shape this if we want to make sure that it brings
  benefits to all.  There are two possible features, one is where it is left on
  its present track, which will potentially lead to more and more
  marginalisation of poor countries and people, or we can make the sorts of
  changes which are advocated in the White Paper and which are achievable and
  we could see a massive uplift in conditions of the poor of the world by making
  use of the knowledge and technology and capital and so on which is there.  The
  final point I would make is that we have engaged in the widest ever
  consultation undertaken by the Department internationally as well as in
  Britain, discussions with different groupings and representatives around the
  world and that is part of the objective both to hear what is being said across
  the world, but to generate a more informed and thoughtful debate about the
  nature of globalisation and how we can shape it.  The White Paper is selling
  very well.  It is being demanded across the world at great speed.  The first
  print run of 10,000 is already gone and it is being reprinted.  There have
  been 8,000 hits on our web site, so it is stirring up enormous interest across
  the international system which is very good.  We are pleased with the initial
  reception but obviously the task it outlines is enormous.  It is to get the
  whole international system to be more focused on the needs of the poor, to
  commit itself to systematic poverty reduction and to get changes of the  
  rules in trade, investment, the environmental agreements, the enforcement of
  core labour standards and the rest, in a way which brings sustained and large
  benefits to the poor.  It is a very, very big task but enormous progress is
  possible if we can get a united determination in the international system to
  make progress.
        2.    I did not invite you to introduce your colleagues, but of course
  we know them very well and should like to offer our welcome to both David Batt
  and Richard Manning.  We are glad to see you again.  Did they help you write
  the report?
        (Clare Short)  Indeed.  Richard Manning is the number two level in the
  Department which supervised all the work.  David Butt headed up the team which
  did both the preparatory and analytical work for the White Paper and drafted
  it.  There is a little of my own hand in the drafting too.
        3.    I thought I recognised your hand when I read one particular
  paragraph.  It says, "If democrats and internationalists do not address these
  concerns, then those who advocate narrow nationalism, xenophobia,
  protectionism and the dismantling of multilateral institutions will gain in
  strength and influence with disastrous consequences for us all".  I thought
  I recognised your phraseology there.  Are you trying to maintain that in fact
  globalisation will automatically benefit the poor?
        (Clare Short)  Absolutely not.  I find it worrying that so much of the
  debate about globalisation talks as though it is some ineluctable force which
  humanity cannot shape and change.  Globalisation has been going on since the
  industrial revolution:  the increasing interdependence in trade and spreading
  of technology and information across the world.  It speeded up recently
  because of the end of the cold war and therefore one global economy rather
  than two blocs and because of information technology and the speed therefore
  with which information, capital and so on can flow around the world.  Like any
  previous phase of history, it can be shaped by politics and democracy and we
  have more democracy in the world than we have ever had in human history.  It
  is for us in our countries and then all the intergovernmental organisations
  to which we contribute to determine that it brings benefits to the whole of
  humanity rather than marginalises some.  It is a matter of will and choice,
  as I say in the introduction, and not some sort of inevitable process.  I was
  struck in lots of the interviews I did after the White Paper was published
  that people were asking whether I was saying that globalisation was good or
  bad, as though we had to find it out there in the sky and decide whether it
  was a good or bad thing rather than bend our international and national
  political institutions to shape it in a way which would bring benefits.
        4.    So globalisation is there whether we like it or not.  We have to
  shape it to benefit the poor, we have to have the political will to benefit
  the poor, we cannot just leave it.
        (Clare Short)  Absolutely.  The parallel I often draw is with
  industrialisation.  The industrial revolution began and people in this country
  came out of the countryside where many of them were living in great poverty,
  to live in the cities in squalor, in slums, with child labour and low life
  expectancy and high maternal mortality and all the sorts of conditions we now
  measure in the poorest countries.  There was then a political struggle for
  democracy and for a commitment to social justice so that the new wealth being
  generated by industrialisation was shared and brought benefits to all the
  population of the country.  It is a similar parallel.  The wealth is being
  generated:  it is for democratic decisions and political decisions to
  determine who will get the benefits and whether the poor are brought into
  those benefits.
        5.    As I understand your paper, you see these benefits arising
  because of growth.  Do you believe and does the Department believe that we
  shall realise the international development targets through growth alone or
  are there other factors which will have to be brought in in order to realise
  the international targets which you have made the centrepiece of your policy
  since you took up the job of Secretary of State in your last White Paper?
        (Clare Short)  Indeed and we now have unprecedented international
  commitment to the targets which gives us the capacity to drive the whole
  international system forward together.  What we are saying is that there
  cannot be a reduction of poverty without economic growth and there is no
  question about that.  Some of the countries which have seen a great rise in
  poverty have seen that because they have had population growth faster than
  economic growth.  That happened in a number of African countries in particular
  in the 1980s and early 1990s and in those conditions poverty invincibly rises. 
  There has to be economic growth in order to reduce poverty;  there is no
  question about that.  However, special efforts need to be made to ensure that
  everyone is included in the benefits of that growth.  So the poorest people
  in the world, some of the people who live in the most remote rural
  communities, have no access or contact with markets, so that globalisation is
  not affecting them but they are living in great poverty and they need access
  to credit, their children to school, access to health care and rural roads so
  they can get their produce to market in order to be able to benefit.  There
  need to be measures to ensure that all are included;  if change is causing
  some to lose out, that they are helped to get through that process of change
  and take benefits from the growth which is taking place in the economy, and
  you need active governments to benefit from the knowledge economy and the new
  technologies which are driving a lot of globalisation.  Education is not just
  a human right it is an absolutely essential economic investment and you need
  governments which are committed to education for all children starting with
  universal primary education.  You must have growth plus these other measures
  which make sure the growth brings benefits to all and that there is investment
  in human development which enables individual human beings to benefit from
  economic change.
        6.    CAFOD and Christian Aid have stated that "the White Paper is at
  best ambivalent and at worst evasive on inequality and redistribution".
        (Clare Short)  That is just false.  There are different elements in
  Christian Aid because I had responses to the White Paper from different levels
  of the organisation saying very different things.  Here we are coming to the
  nub of the ideological position of a lot of development NGOs.  They are
  adopting a posture of being hostile to globalisation, I think not fully
  understanding what they are doing, with a hangover mindset of the effects of
  neo-liberal policies of the 1980s and 1990s which did call for allowing the
  market to rip and rolling back the state and led to the exclusion of some
  people.  The White Paper does not advocate those policies and neither are
  those policies what globalisation is.  The White Paper makes absolutely clear
  that if you look at the levels of inequality nationally, you know it is often
  asserted that globalisation is leading to a growth of inequality in the world. 
  That is not so.  Some years back there was widening inequality.  It has been
  narrowing recently.  Objectively what is going on is that the OECD countries
  are continuing to grow at an average of 2.5 per cent per year and some
  variability in that sort of performance.  Whether global equality narrows or
  widens depends on the performance of the poorer countries.  Because in recent
  years China in particular has performed so spectacularly well, growth has
  increased in India and indeed in Bangladesh, so some of the most populous
  countries, the poorer countries have come up and global inequality has
  narrowed.  The White Paper makes that clear.  It also makes clear that there
  is not some inevitable consequence of opening up in terms of inequality that
  of different countries which have opened some have become less unequal, some
  have become more unequal.  It depends on policy, policy choices of
  governments.  It also makes it clear that economic growth reduces poverty more
  rapidly in less unequal countries because of course the fruits of growth tend
  to go to people in proportion to the original distribution of income.  In a
  highly unequal country, the poor get a relatively small share of economic
  growth and it takes much longer for economic growth to lift them up, whereas
  in a less unequal country, the economic growth lifts them up much more
  rapidly.  So it is highly desirable to lessen inequality and the whole process
  of social inclusion and the effectiveness of government and investment in
  health care and education for all, which is so strongly advocated in the White
  Paper, are means of reducing inequality.  That is just a nonsensical piece of
  ideologically driven failure to read what is contained in the White Paper.
        7.    What specific redistributive measures are more important?
        (Clare Short)  We need to be clear about redistribution.  It is very
  difficult if you look at the record of all countries to redistribute from a
  static position, whereas to share more fairly the proceeds of growth is a much
  more easily achievable political object.  In many of the countries in which
  we work elites are enormously powerful.  Sub-Saharan Africa is very, very
  unequal, as is Latin America.  Politics in Sub-Saharan Africa is frequently
  totally dominated by elites who tend to be urban dwellers, who want modern
  health care systems and will skew the whole of the health budget to be spent
  on state of the art hospitals in urban centres, who want higher education for
  their children, understandably, but there are privileged elites and therefore
  the whole of the education budget is biased there and there is no primary
  education for all.  We advocate very strongly, measures which invest in the
  health care and education of all people, both as a social good but also to get
  an efficient modern economy.  These are all profoundly redistributive measures
  or measures of social inclusion which ensure that marginalised and poorer
  people can participate in the modern economy and get benefits from economic
  growth.
        8.    How is the Government seeking to assist those adversely affected
  by change through risk reduction, mitigation and coping mechanisms?
        (Clare Short)  Do you mean what measures are we recommending that
  governments should take?
        9.    Yes.  The White Paper says that "all profound economic and social
  change produces winners and losers".  How are we going to protect the losers?
        (Clare Short)  What I am just trying to make clear is that the UK
  Government is not in a position to protect all the losers of the world.  What
  we have to do is advocate policies for governments in developing countries. 
  They must take the lead in all of this, but then all the international
  agencies to help the process of managing change where some people are going
  to lose out and need help to adjust to that change.  For example - and I think
  this example is in the White Paper - in the 1960s many countries put up high
  tariff barriers to try to encourage development by having nationally owned
  industries and had highly subsidised publicly owned industries focused in
  urban areas and often provided subsidised food to urban populations.  The net
  result of that was over time to cut off inward investment, failure to get
  access to modern technology, often highly priced rather shoddy goods produced
  locally and often low prices for food for urban dwellers but very low prices
  to very poor rural people.  Actually the poorer countries did badly out of
  that model.  If you are starting to unravel all of that, which you need to do
  to get the kind of economic growth which will lift up the poorer countries,
  there will be a lot of change.  There will be a lot of people working in non-
  viable industries, there will be highly subsidised food for urban populations. 
  You have to change all that to get the country on some viable path of
  continuing development and improve life for the rural poor, but you need a
  process which enables the urban populations which have worked in industries
  which are going to close down to get some retraining, some credit, some chance
  to work in another enterprise.  If food prices are going to become realistic
  so that rural populations will grow more food and increase access to food and
  their incomes, then that needs to be phased in a way which becomes feasible
  for the urban population.  You must not prop up an old order which is
  preventing development, but you need to assist those which have to change in
  order to get better development to be part of the process of change and get
  some benefit from them rather than adjust by brutalism and just sweep people
  into unemployment and misery and allow the economic change to come through but
  at great human cost.  This is a lesson for a country like this too.  A lot of
  deep change is taking place in the global economy and we are seeing some
  sectors of our population losing jobs and seeing change even though there are
  lots of new jobs in the economy.  Similarly people need chances to retrain,
  to get jobs in the new sectors as old sector jobs fall away.
        10.      Would DFID finance that transitional phase?  Would DFID help
  those who are having to be retrained, those who are being made redundant
  because of the changes?
        (Clare Short)  The model of development we are advocating would not have
  the UK and the Department for International Development separately parachuting
  into a country and saying they ought to engage in these reforms and we will
  help this particular group who are losing out to adjust.  We would be hoping
  there would be a poverty reduction strategy type approach in every country
  where the government has a clear plan for its macro-economic policy and the
  spending of all its revenues, so it plans its economic growth, it sees the
  sectors where there are going to be improvements.  If that is going to lead
  to redundancies it has plans to protect people and give them retraining and
  so on and so forth.  We as a government and the World Bank and other
  development agencies would come behind the government plan and make resources
  available which enables the government to manage all those changes.  Yes, but
  in a way which is led locally rather than us carving out a little bit of the
  change and saying we would fund it.  It is governments which need to manage
  these kinds of changes for themselves and they will need external resources
  in order to be able to make the change in a way which protects people rather
  than marginalising and impoverishing them.
        11.      This goes back to the poverty reduction strategy papers which all
  countries are now having to produce in the HIPC area anyway but presumably in
  other areas as well.
        (Clare Short)  That is right and it is becoming a model for the way of
  working beyond the HIPC area.  Bangladesh is currently working on a poverty
  reduction strategy but in other countries like India, for example, which is
  not, it is an approach.  It might then take on a different name, but we need
  to pursue everywhere so that development assistance is not lots of separate
  projects, but the resources are brought together behind local leadership which
  enables the process of reform and the building of sustainable government
  systems which will provide education for all, health care for all, economic
  growth which benefits all, assistance to people who are having to change their
  jobs because of some of the economic change which is taking place and so on. 
  These need to be universal government-led systems in developing countries.
        Chairman:   The changes in trade, which I have no doubt Mr Batt helped
  you with, are really rather crucial to this, are they not?  They are going to
  cause a great deal of disruption.
  
                                Mr Rowe
        12.      Just to link with what we have been talking about, quite a lot
  of groups, trade unions, academics and so on, have criticised your reading of
  the evidence by the Government in linking growth to poverty reduction as
  highly selective and we have been asked whether the Government has any
  intention of letting the research on which you based your White Paper be
  available for academic discussion.
        (Clare Short)  It is all already available and serious academics know
  that.  Any academic who is saying it is not available when it is widely
  available, being read and used and has been commissioned from very respectable
  sources, is not a terribly good academic.
        13.      They are the ones who have time to write to us.  The British
  Consultants' Bureau have been quite supportive really of your untying aid but
  at the same time very concerned that other countries will not do the same
  thing, which would put them at a disadvantage.  Do you have any plans to put
  pressure on other countries to follow suit?
        (Clare Short)  Absolutely and I agree with you.  There was a little sort
  of critical explosion in the Evening Standard but apart from that there has
  been a very positive and mature attitude in the UK compared with other
  countries who very much view their development budget as a way of promoting
  their own business and then you get distorted development objectives when
  countries are seeing their development budget in that way.  It should be noted
  that lots of other countries think Britain is so in favour of untying because
  our consultants are of such high quality that they will take over most of the
  international work.  That is the reputation of a lot of the people working out
  of the UK.  Yes, we are not doing this in order to get some advantage for the
  UK or against the UK.  Development resources cannot be as effectively deployed
  as they could be into the budgets of governments thus forcing us to improve
  government's own financial management and procurement systems and build real
  capacity in developing country governments.  If different countries are saying
  the consultants have to come from our country and the vehicles which are being
  ordered have to come from our country, so some poor country which has a health
  system with some vehicle supplies has three French vehicles, two German
  vehicles, three British vehicles all with different spares, it creates
  enormous inefficiency.  If we want quality effective use of development
  assistance, we have to untie and build capacity in-country so people can run
  their economy and their government systems more effectively for themselves. 
  We have been working for years and years in the Development Assistance
  Committee of OECD to get an agreement on untying.  Mr Manning had hair all
  over his head when we started on this.  We are pushing very hard currently
  that everyone should untie their development assistance to start with to least
  developed countries.  It is very difficult.  There are some very entrenched
  bad practices out there.  We are still pushing there and we are hoping there
  might be a push out of a UN conference on least-developed countries which is
  going to take place and that the least-developed countries will ask us please
  to untie our aid to them as it enables them to use it better and more
  effectively.  The second whole range of questions is EU tying.  Our legal
  advice is very clear that it is a breach of the EU's own law and Action Aid
  has been campaigning very well and very effectively on this issue.  We really
  need to put pressure on the Commission to require all countries to untie their
  aid and that is 60 per cent of worldwide ODA and any EU which is not untied
  is in breach of law to which they have signed up.  We ought to be able to get
  progress there.  We are determined to push very hard in the multilateral
  system and also invite other countries to do what we have done and get on with
  it and untie.
        14.      I am delighted to turn to the EU, which we have heard in the
  World Bank seminar today is still extraordinarily sluggish.  Your White Paper
  says that the everything-but-arms initiative should give a great boost to
  developing countries but since it was written it has been watered down quite
  a lot;  some NGOs even talk about everything-but-farms.  Do you feel that the
  watering down will simply confirm the developing countries in their belief
  that the EU is irredeemable or whether you think that there is more to it than
  this?
        (Clare Short)  It still has not been watered down;  it is all to play
  for.  We have some really strange forces at work.  There is a very big
  campaign by the British sugar industry and we all understand the difficulties
  farmers have been through.  They are a group which needs help to adjust to
  change in our own country.  Clearly change is coming to them and for them to
  use their distress to block improved trade access for the poorest countries
  in the world will not remedy their problems:  it is to misuse their concern
  about the change they are having to adjust to.  The other big lobby has been
  from the ACP countries, and particularly the Caribbean which similarly has
  guaranteed quota entries to the European market which are under question
  anyway.  It was agreed in the Lom‚ renegotiation that there would be duty-free
  access for essentially all goods from least developed countries by 2005 and
  the ACP countries had already signed up to that.  There has been a very strong
  campaign coming out of the Caribbean opposing everything-but-arms.  We are
  still trying very hard to hold everyone together, to continue to support
  Commissioner Lamy who has driven this forward with very strong support from
  Commissioner Nielsen, of course to put in place assistance, particularly to
  Caribbean islands with the adjustment process they will have to go through,
  but it is coming to them anyway.  It is not settled and there are pernicious
  forces out there who want to scupper the proposal or weaken it or lengthen the
  phase-in periods and make it less beneficial to least-developed countries. 
  All the forces of decency need to combine and make sure that it is carried
  through.  I repeat:  the least-developed countries are 0.4 per cent of world
  trade.  They are the poorest countries in the world where some of the poorest
  people in the world live.  If we can give them a bit better trade access then
  they will be able to grow their economies a bit more and improve the life of
  their people.  Surely the European Union can open its markets to these very
  frail economies.  They are not going to produce masses of exports overnight
  because the economies are too weak to do so.  It is all to play for.
  
                               Mr Colman
        15.      I should like to ask some questions about the absence from the
  White Paper of any meaningful discussion of the General Agreement on Trade in
  Services (GATS).  I wondered why it had been left out.  Interestingly enough,
  in the submissions which we have received, we have received one from the World
  Development Movement (WDM) and another one from British Invisibles, from
  either end of the spectrum, asking why this was left out and particularly all
  of us as parliamentarians have been lobbied over recent weeks saying that the
  World Trade Organisation is forcing on developing countries this particular
  agreement to open up their markets.  Given this concern, you have mentioned
  the Commission on Intellectual Property Rights which you will be backing, but
  why have you not perhaps proposed a similar comprehensive and independent
  impact assessment of the liberalisation of service sectors on the poor?
        (Clare Short)  This is another area of mythical campaigning.  What the
  General Agreement on Trade in Services provides, which was negotiated during
  the Uruguay Round, is that countries will open up whichever services they
  choose at whatever pace they choose, bottom-up approach.  In fact the WDM is
  totally misleading and totally misinformed.  It is not just here, it is across
  the international system.  The Seattle-style protesters suggest that the WTO
  is making everyone privatise their higher education in the UK and so on. 
  Complete, absolute misleading nonsense.  That is not provided in the agreement
  at all.  In fact about seven per cent of services have yet been opened up. 
  If you go to developing countries, as members of the Committee will know, some
  of the opening up of banking and so on is leading to better quality banking,
  better regulated banking, people being able to get credit in order to have
  little businesses, opening up insurance, financial services, accountancy
  firms, lots of developing countries need much more effective accountancy
  capacity, better regulation of banks and so on, opening up some of those
  sectors which many countries have done has been wholly beneficial to get more
  effective economic management in order to improve the performance of the
  economy.  
        (Mr Batt)   There is mention of this in a couple of places in the White
  Paper of trade in services.  One is in paragraphs 130 and 131 which refer
  specifically to GATS and to movement of people which is one part of trade in
  services.  It is a dimension of this which is of particular interest to
  developing countries.  Later on in the paper, in paragraph 235, where the
  paper talks about the composition of any future round of multilateral trade
  negotiations, it actually mentions the opening of service sectors as one of
  the areas to be given high priority.
        (Clare Short)  Again another set of people who are so busy writing to you
  that they did not manage to read the White Paper first.
        16.      It certainly caught me out as well.  British Invisibles have
  said, and I agree with your analysis of the situation, that they would have
  thought that more would have been made in the globalisation White Paper of the
  particular importance of sectors, of financial services, telecommunications
  and power distribution which come within this.
        (Clare Short)  The whole question of telecommunications is dealt with
  elsewhere and we give these very worrying facts:  there are more internet
  connections in New York than in the whole of Africa;  Africa is the most
  expensive place in the world to be connected to the internet because there has
  been no liberalisation of telecommunications.  They tend to be government
  owned, very high prices, no investment and there have been massive
  technological changes in telecommunications, as everybody knows.  That is in
  there;  paragraph 121.  There is also a reference to the public/private
  infrastructure advisory facility where we work very hard with the World Bank
  to get a facility so that governments have support with putting in place
  regulatory arrangements, doing feasibility studies, really increasing
  investment in infrastructure by making appropriate partnerships with the
  private sector.  All of that is in there;  paragraph 251.
        17.      Yes, I have that one.  Just to prompt your officials, the
  Commonwealth Business Council has actually set up a public/private partnership
  working group for delivering just this.  This is very important paradigm.  Is
  there something you would suggest the World Bank should pursue as an
  alternative to privatisation of services going forward into the future?
        (Clare Short)  No.  We have already been instrumental in setting up with
  the World Bank a facility which is on the ground, opened in southern Africa
  and east Africa and a rolling programme of these offices opening.  We have put
  finances into it, as has Japan and other countries.  It is currently helping
  governments come to it for advice saying they need more investment in
  infrastructure, say in the telecom sector or in electrification or whatever,
  how can they get advice on getting private sector interests and making
  regulatory arrangements or doing some of the work the public sector needs to
  do to make these kinds of investment feasible.  Water, sanitation, all these
  sectors.  It is out there and running and the last time I looked at the number
  of enquiries which had been made a very considerable use was being made of the
  facility already.
        18.      The World Bank has already moved off privatisation as a nostrum
  and onto PPP.
        (Clare Short)  No.  Privatisation is not a nostrum.  I do not think
  anyone should approach these questions ideologically.  We should all be
  looking for efficiency, services for people and reduction in poverty.  For
  example, in India we have been highly involved with the bank in the
  restructuring of the electricity sector in Orissa and Andhra Pradesh and these
  reforms are going on across India.  You have publicly owned electricity, very,
  very highly subsidised, providing cheap irrigation to quite well-off farmers,
  power cuts all over the place because no-one will invest in the sector because
  it is so highly subsidised there is no rate of return.  Poor people getting
  no service whatsoever and it is sucking away from state budgets all the
  resource which ought to be going into health care and education.  We then will
  engage in helping the process of reform, because India will get better
  electricity services which it needs to grow its economy but our major and
  overwhelming interest is to release those resources which ought to be being
  spent on health care and education.  Across the world there are lots of
  publicly owned industries which are wasteful, inefficient, highly subsidised,
  where you could get more investment in infrastructure by privatising with good
  regulatory arrangements so you do not get any abuse or misuse of public
  resources.  We pragmatically support, as does the Bank, those kinds of reforms
  where they bring benefits to people.  That is one whole set of agendas.  Then
  how to get new massive scale investment in infrastructure, which is needed,
  water, telecoms, electricity, transport, in order to speed up the development
  and include the poorest in access to modern resources, the public sector
  cannot afford enough.  We need to get partnerships with the private sector to
  get the investment to the sort of scale which is needed in Africa and south
  Asia.
  
                               Mr Khabra
        19.      I am concerned about this new trend and desire on the part of the
  developed countries to recruit skilled labour from developing countries.  You
  know that the Home Office is considering proposals to make some changes in the
  immigration rules and DTI is also involved.  The White Paper does acknowledge
  both advantages and disadvantages of developed countries recruiting skilled
  staff from low and middle income countries such as India or any other:  "for
  developing countries, these outflows of skilled people generate significant
  remittances".  I do not agree that it does actually generate significant
  remittances back to those countries.  I do disagree with that.  "Longer-term
  benefits may include the new skills and contracts brought back by the
  returning migrants".  There is a contradiction here.  When you are already
  recruiting skilled people from other countries, where those countries are
  trying to develop further advanced technologies to train their own people, and
  we say that we are recruiting them here and then they will take back those new
  skills back there, I think there is a contradiction.  The Department is
  entrusted with investing money in developing countries to create conditions
  over there to let the people have the opportunity to acquire new skills. 
  There is something wrong here in this policy that the countries which are
  trying to keep their own skilled force, with a country like India, huge
  developments taking place, expanding economy, they need more skilled people,
  and here we are trying to recruit people and drain them of their own skills. 
  For me this whole thing is missing in the White Paper and this issue has not
  been taken up seriously.  Has the Government reached any conclusions on this
  issue?  What is the policy of the Government on the recruitment of staff? 
  Have you personally been involved in this new proposal that we should recruit
  skilled labour from abroad?
        (Clare Short)  Yes.  You can say you do not approve, but you cannot say
  it is not true that it generates remittances.  Migrants generate over
  $70 billion of remittances;  it is more than worldwide ODA.  It is just a
  matter of fact.  If you go to Silghat, Londa or wherever you will see some of
  the consequences of that sort of intermovement and some of the remittances
  which go home.  There are remittances.  There are also great pressures to
  migrate and some of it is very worrying;  I agree with you.  I have been told
  that there are more Ghanaian doctors in New York than in Ghana.  There are
  more Ugandan doctors in South Africa than in Uganda.  Of course if you take
  Sierra Leone, a country which was destroyed and plundered, most of its
  educated people left the country because there was nothing they could do with
  their skills in the country.  They must have that freedom.  When there are
  conditions where they are unable to work you cannot say in no possible
  circumstances can people migrate.  There is no doubt that people working
  abroad for a number of years and coming home again can often bring new skills
  and knowledge back to their country.  We all know that.  People moving around
  the world learn from each other and generate more skills and knowledge and
  that can be beneficial.  For example, Bangladesh, as a matter of policy,
  trains more doctors than it needs in order that they will be able to migrate. 
  Whatever view you take of that, that is a policy decision of the Bangladesh
  Government.  In the case of India its IT specialists are all over the world
  and there is a massive IT industry in India itself which is leading to great
  forces for reform and confidence in India about the capacity it has and the
  way in which it can grow its economy and use its trained people.  There are
  references in the White Paper also that to have real freedom to trade in
  services people who often carry the skills of a service have to be able to
  migrate temporarily, for short periods of time, in order to be able to sell
  their service to another country.  This is a matter of great concern to
  developing countries that very strict immigration restrictions prevent them
  from having the ability to trade in services.  There is a special working
  party in the WTO on that matter and we make some sympathetic references to
  that.  In my view, some of what you said went too far in damning all migration
  and movement of people and trade in services, but I agree with your
  fundamental point that it would be outrageous if countries like the UK just
  go out unselectively to recruit the skilled people they need regardless of the
  need of the country concerned.  I do not know whether it was Frank Dobson who
  brought it in - I do believe it was - but the NHS has put in some restrictions
  on its recruitment that it has to look at the skills needs of the countries
  in which it is recruiting and make sure that it does not go out denuding
  countries which have very great shortages of skilled health workers in order
  to recruit here.  That is the position we adopt in the White Paper.  There has
  to be some freedom of movement of people but we have to protect the skills
  base of developing countries.  As a country we cannot ourselves, and nor
  should we as a matter of international policy, be sucking away the skilled
  people from developing countries who need more people with skills.  We have
  been consulted and there are words to that effect in each of the Government's
  statements which are made.  I agree with you.  That needs interpreting in
  practice.  You could say the right things and not do the right things.
        20.      The fact is that the skilled people who leave countries like
  India or Pakistan or Bangladesh, wherever they come from but particularly
  those countries, will never have any desire to return to their own country
  with those skills.  This is a fact of life.  Therefore it is practically a
  brain drain.  Either you force them to leave this country or you employ them
  here on condition that they go back.  I do not know whether any such
  conditions will be imposed when they are allowed to come into this country.
        (Clare Short)  I recognise the patterns you describe, but you are
  slightly overstating the case you make.  For example, some weeks ago I was in
  Addis Ababa at a meeting called by the Economic Commission for Africa which
  has a lot of trained economists under K Y Amoako putting together strategies
  from much better economic performance in Africa and they have been recruiting
  a lot of staff.  They had had masses of applications from Africans of high
  skill levels in the diaspora.  Callisto Madavo, who is the Vice-President for
  Africa in the World Bank and is Zimbabwean and KY who is a Ghanaian economist
  both said we should never underestimate the pull of home.  If there are jobs
  where you can use your skills people will come back and want to contribute to
  their country.  Not all people of course.  It depends on the age of your
  children and the commitments of your life, but there are always people who do
  want to go back and contribute to their country if they get a chance to use
  their skills.  I share your concern but we should not overstate it to the
  point when there is no movement of people, no sharing of skills, no enablement
  for their to be fair trading in services because people from developing
  countries are not allowed to move temporarily to countries like ours in order
  to sell services, particularly like Indian IT where that can be a real earner
  going back to India.
  
                               Chairman
        21.      It would be immoral, would it not, if all the nurses and all the
  doctors were recruited by the National Health Service, leaving none of those
  skills in countries like Trinidad and Tobago, Jamaica and so on.
        (Clare Short)  Absolutely, and the National Health Service has some
  special rules to take account of this before it does any recruiting abroad,
  which were put in place by Frank Dobson when he was the Secretary of State.
        22.      I hope all area health authorities hear your voice.
        (Clare Short)  No, there are procedures.  I have had some correspondence
  with Alan Milburn about it recently.  Procedures are in place.  We think it
  is a good model which could be applied to other sectors.  Perhaps we should
  provide details to the Committee of the way in which it works.
        Chairman:   Yes, we should like to see that.
  
                              Mr Robathan
        23.      At the weekend there was a newspaper article about developing
  countries complaining about their nurses being nicked for the NHS.  Obviously
  the message has not quite got through yet.
        (Clare Short)  As we all know increasingly, you cannot believe everything
  you read in newspapers.  May I provide the Committee with the details of how
  the National Health Service works this?  I agree very much with Andrew Rowe
  that that does not control private agencies, so there may well be other
  problems.  However, it is an interesting and useful model.
        Chairman:   We should like to see that.
  
                              Ms Kingham
        24.      First of all I think I have to declare - it is unclear - an
  interest here in that my husband is doing work on globalisation and I believe
  a consortium of which he is part may be approaching DFID for support to work
  alongside them.
        (Clare Short)  May I declare that I never involve myself in who gets
  contracts, so it will not make any difference?
        25.      I thought I had better say that as it is one of those grey areas. 
  The question I want to ask is about labour standards about which there has
  been a lot of debate.  In its submission to us the Commonwealth Trade Union
  Council state "... unless there is much greater recognition of the need for
  all governments to enforce basic labour standards the White Paper might well
  be entitled 'Making the Poor Work for Globalisation'".  The key word there is
  "enforce" labour standards.  How do the Government intend to ensure that the
  international community can in some way enforce labour standards?  Do the
  Government still support the establishment of a joint ILO/WTO standing working
  forum on trade globalisation and labour issues?  That was the forum which was
  suggested after the Seattle talks.  If so, are we promoting that in any way?
        (Clare Short)  I had a meeting with the Commonwealth TUC in Geneva once. 
  Obviously they have deep concern about core labour standards but we do very
  urgently need to mature the trade union debate on these questions in that the
  poorest of the world are not in organised sectors and are not in trade unions. 
  Trade unions can be their allies very importantly in advocating policies which
  bring benefits to the poorest people, but unionisation of the very poorest in
  the world is very unlikely to be the remedy which will improve the labour
  standards of the poorest.  Secondly, certainly the trade union input to the
  Seattle meeting, which was led by the American trade unions but supported by
  the AFL/CIO was calling for the World Trade Organisation to be used to enforce
  labour standards.  The logic of that is that any country which has problems
  of child labour, of bonded labour and of labour which is badly paid or badly
  treated, would have trade sanctions against it.  Every poor country has child
  labour.  If you go down that road you punish countries for being poor, you
  have trade sanctions against them because they are not in a position to have
  all their children properly in school and not in work and so on.  These are
  very, very important questions, but do they promote development and
  enhancement of the life of people who are labouring for very little return or
  do they actually make things worse for them?  In every developing country
  there is child labour:  the poorest countries have more.  It tends to be
  concentrated in non-traded sectors, lots of it in agriculture of course.  Of
  course some degree of children working for their parents in small subsistence
  farming is a perfectly acceptable practice.  The reason we have long summer
  holidays here is that children used to help their parents, a long time ago
  when we were a rural economy.  We need to mature the debate about how to get
  better enforcement of core labour standards.  That said, the ILO, which up
  until recently has tended to focus on enforcement of labour standards in
  organised sectors and therefore have little relevance to development, is now
  broadening out its work considerably.  We have the Convention on the most
  exploitative forms of child labour and an agreement worldwide to do a big push
  not to stop all aspects of child labour but the forms where children are being
  very grossly exploited:  the sex industry, children working very long hours
  which prevents them from going to school.  The push to get all children into
  school and make school and some work for their families compatible is a very
  important change and we are working with the ILO in Andhra Pradesh and
  Tanzania and in the Golden Triangle on resisting the sex trade, to try to
  improve children's chance of having a childhood and get to work.  Similarly
  bonded labour.  There is a declaration of the ILO that we should all work
  together on the enforcement of the four key labour standards, child and bonded
  labour, no discrimination and the right of labour to organise.  We need to
  interpret the right of labour to organise, to include communities organising
  themselves, not only trade union organisations, all forms of self-organisation
  of people which enable them to protect themselves and put forward their rights
  and standards.  We are working in support of that, particularly on bonded
  labour in Nepal where there are high levels of bonded labour.  Our own work
  with the ILO is going very strongly now.  Richard Manning has been negotiating
  with the ILO because it has rather broadened its viewpoint and taken account
  of the fact that most of the poorest of the world are not in organised
  sectors.  Then the standing working forum proposal, which we worked very hard
  to get to be the EU position and it is the EU position, to get it out of being
  a working party in the WTO, which all developing countries absolutely oppose
  and so do we.  We are opposed to the suggestion of using trade sanctions as
  the mechanism of improving core labour standards.  Yes, we support this
  outside the WTO but you can look at the contribution trade can make, the ILO
  can make, indeed the World Bank and development strategies can make and we
  need strategies to improve labour standards but not sanctions against
  countries for their poverty.
        26.      My second question is about international capital flows.  War on
  Want state in their submission to us "One specific aspect of globalisation
  which has caused poverty is the growth and instability of capital flows. 
  $2 trillion is now exchanged every day on world currency markets ... As a
  direct result", of the East Asian financial crisis, "the ILO estimates that
  10 million people were thrown out of work and poverty levels rose
  dramatically".  These are stark facts.  The White Paper states that the
  Government are prepared to countenance "specific measures to help discourage
  excessive short term capital inflows".  I should like to ask first of all what
  is meant by that.  Secondly, what is the Government's position on proposals
  for a capital transactions tax to impede financial speculation and provide
  increased tax revenue.  I am thinking here about the Tobin tax in particular.
        (Clare Short)  The first point I would make in response to that is that
  the abundant availability of capital, its willingness to move across the
  world, is one of the aspects of globalisation which creates the potential for
  great benefits to developing countries because beneficial investment, bringing
  access to modern technology in infrastructure and other sectors, can really
  lift up economic performance.  So we must not be against investment from
  outside.  We all know that there is this disgraceful and worrying fact about
  Africa in the White Paper:  40 per cent of its domestic savings leave the
  continent.  The same conditions which unstable banks, not well regulated
  banks, mean that the savings of Africa are in Europe and they should be the
  first call for re-investment in the continent.  The sort of reforms which keep
  savings at home are the same reforms which attract inward investment:  proper
  enforcement of law, properly regulated banks and so on.  We should welcome the
  availability of capital to invest and seek to channel that in a way which is
  beneficial.  Of course if you take the east Asian economies, they achieved in
  the past 30 years the fastest economic growth and reduction of poverty for the
  largest number of people that has ever been achieved in human history.  They
  did it by attracting inward investment and exporting and growing their
  economies and investing massively in education.  Without capital coming in and
  investing in their economies, they would not have achieved that enormous
  performance in reducing poverty.  Similarly China.  China's improved
  performance recently has been as China has opened up and attracted investment
  into itself and been able to grow its economy more rapidly.  Of course the
  east Asian crisis was short-term hot money realising that it had been taken
  into banks short term and then lent on long term to domestic enterprises in
  rather crony suspect relationships between local banks and local companies and
  that that was not viable.  Then once the scare started all the hot short-term
  money came out and threw the economies into deep recession and big
  devaluations of their currency and did do damage, but did not reverse the
  previous economic growth which had been achieved in east Asia.  Actually the
  evidence is that it was more the middle classes who suffered than the very
  poor because people were thrown out of employment in urban areas.  We do not
  want anyone to suffer, but as a matter of fact, that was the result and the
  cause of it was partly bad regulation of banks, untransparent relationships
  between banks and local investment, things which need to be cleaned up in
  greater transparency and better management of inward investment.  Indeed a lot
  of lessons have been learned from the Asian crisis in countries which are
  opening up their capital markets.  We say very clearly in the White Paper that
  it should be phased sensibly, proper regulatory arrangements have to be in
  place so that you cannot get this kind of abuse and destabilisation of an
  economy.  There are special measures to restrict short-term flows which we
  refer to in the White Paper.  Famous examples have been used, like in Chile,
  which required the depositing for no interest of sums of money to try to
  restrict the inflow of hot money.  It worked for a time but Chile has got rid
  of it;  it was a mechanism which was used and which is reasonable.  In the
  face of the crisis Malaysia used government controls and then phased them out
  which was its way of getting through the crisis.  What the Treasury favour and
  what the reference in the White Paper is about is that we think it is a good
  idea for countries to look for taxing mechanisms and so on to make short-term
  flows in and out, have some taxation and cost on them so that there is a
  restriction on hot money that can cause a destabilising effect.  On the Tobin
  tax, the idea that there should be a very tiny charge on hot money moving
  around the world which would go into a big global development pool is a very
  attractive idea.  The problem is that we have to get all countries in the
  world to agree for it to be able to work;  obviously, otherwise it would
  distort flows.  It is a good thing to campaign on and it might come one day,
  but I fear it might take quite a lot of time and we have to have methods in
  the meantime of making progress.
        27.      I would add the debt crisis.  When people were first campaigning
  on that in the early 1980s people said it could never happen, it was a long
  time, so maybe it is worth looking out for in the future.
        (Clare Short)  I know and I find it an attractive proposal, but we do
  just have to face the fact that it will not come in until everyone has agreed,
  will it, because you would be disadvantaging your own country as a destination
  for investment if you agreed to a tax and other countries did not?  It is
  quite a job to think of getting the world to a point where everyone would
  agree.
  
                                Mr Rowe
        28.      It has been suggested that one of the subsidiary causes of the
  Asian crisis was the fact that quite a lot of the highly prestigious
  accountancy firms worldwide were pretty careless about the way in which they
  carried out the audits.  I wondered whether your Department was actually
  really satisfied that some of these famous worldwide names are as good as they
  ought to be, because clearly they give a lot of comfort to moneylenders and
  others, but if in fact they themselves are not behaving as scrupulously or as
  presciently as they might it must actually compound the problem rather than
  the other way round.
        (Clare Short)  That is very interesting.  I do not have enough
  information to comment.  I do not know whether either of my colleagues does. 
  Let me say that we have really learned about the need for transparency.  You
  have big pension funds based here, investing money because there is an
  historic high rate of growth and therefore you are getting a good return, but
  into bad investments which were taking in a lot of short-term money and
  lending long.  It was unviable in the end and there was incompetence in doing
  those kinds of investments and the need for much more transparency in where
  the investments were going, but much more scrutiny rather than following the
  herd by really quite prestigious pension funds and so on.  That is part of the
  lesson of the crisis.  Does either of you have enough information to comment
  on whether accountancy firms have let their standards slip in countries in
  east Asia?
        (Mr Batt)   I do not have that information.
        (Clare Short)  I shall enquire but no-one has ever put that point to me
  before.
  
                               Chairman
        29.      I am sure if you put that question to PriceWaterhouseCoopers they
  would say no.
        (Clare Short)  True and it may well not be, to be fair.
  
                               Mr Colman
        30.      May I take us back to the Tobin tax?  At the Social Summit in
  Geneva last June, there was agreement with all the countries in the world that
  there should be an investigation into the Tobin tax and other taxes of that
  nature.  Just before Christmas the UN Secretary-General made known the
  Chairman of the Commission which would look into this and who would sit on
  that panel.  Perhaps it would be possible for the Secretary of State to give
  us a note on how far the discussions have gone in terms of the work on the
  Tobin tax and the report I believe this Commission is going to be making to
  a UN conference later this year on financing for development.
        (Clare Short)  This is a Treasury lead, not us.  Obviously it is a
  proposal for a tax on international financial flows.  We can ask the Treasury
  for a note but I do say to everyone, let us look at it with interest but do
  not hold your breath.  It might be out grandchildren who inherit that.
        31.      I hear what you say.  I understand there is a world clearing
  system which is in fact coming in on this in February and that will be a
  mechanism to be able to control these flows.  Clearly flows could be outside
  that mechanism but the major centres in the world are working through the
  single mechanism.  There is movement on this and the French Government and
  Canadian Government, as you will know, have particularly led on this
  worldwide.  I was pleased that the UK Government, certainly with the Treasury
  lead, supported a full investigation into this last June.
        (Clare Short)  I repeat that this is a Treasury lead and I know that they
  see enormous difficulties in the likelihood of it coming forward.  I have
  never before heard that the French and the Canadians are supposed to be fully
  in support;  I shall have to investigate that.  I am not sure it is fully the
  case.  It is easy for people to be in generalised support of something which
  is not going to happen.
  
                            Barbara Follett
        32.      The White Paper commits the Government to the establishment of
  a Commission on Intellectual Property Rights.  What will be the Commission's
  terms of reference, its members, whom will it consult, when will it report and
  will it just look forward or will it have the ability to review existing
  agreements, for example the TRIPs World Trade Organisation agreement?
        (Clare Short)  I cannot answer those questions fully;  I am working on
  it and shall make an announcement fairly shortly.  We say in the White Paper,
  and it is clearly our view, that intellectual property protection is in the
  interests of the poor.  This is another area of campaigning.  For example, new
  drugs and vaccines which we need for HIV/AIDS, for malaria and so on, the
  killer disease, and the greatest intellectual capacity in the world in this
  research is in the private sector.  We need partnerships with the public
  sector to get the research done because there will not be a market response,
  but you need some intellectual property protection if you are ever going to
  achieve this.  I just want to make clear that there are those who say there
  should be no intellectual property protection and we think that would prevent
  the development of treatments or prevent investment in developing countries
  which need investment.  So the view of the Department is that some agreement
  on basic commitment to some intellectual property regime is beneficial to
  developing countries.  Of course developing countries in the Uruguay Round
  signed up to putting in place basic intellectual property protection.  I think
  there was no template;  it was just some basic framework of law.  
        (Mr Batt)   Minimum standards.
        (Clare Short)  Countries have mainly found that it is difficult in
  practice to do that.  It is a whole other area of expertise and the
  implementation review which is taking place in the World Trade Organisation
  is looking at the difficulties countries are having.  The purpose of the
  Commission is to get people with expertise who are knowledgeable about and
  sympathetic to the interests of developing countries and the whole issue of
  protecting natural property, indigenous plants and herbal remedies and all
  that which is protected under the biodiversity convention but which you need
  to protect in practice, not just in some theoretical international convention. 
  The purpose of the Commission is to roll forward the detail of that debate,
  look at all the detail, why countries are having problems, what kind of advice
  they can be given about the sort of regime which might be most beneficial to
  them, how natural and indigenous knowledge and plants and remedies can be
  properly protected.  As we look into some of that detail, it may well be that
  with the implementation review which is taking place in the World Trade
  Organisation there will be recommendations for some modification of the
  intellectual property agreement in the next trade round.  It will depend where
  the work takes us on that.  The purpose is to help countries implement the
  agreements which are there in ways which will be beneficial to the developing
  countries and beneficial to poor people.
        33.      I want to touch on pro-poor research and development.  The
  Intermediate Technology Development Group and Action Aid have expressed
  similar concerns because they say there is "little evidence to suggest that
  global markets will deliver improved technologies that the poor will find
  affordable, appropriate and accessible".  We should like to know whether you
  think there is a role for development assistance to support the development
  of poverty-focused research in areas such as information and communications
  technology, medical research and agricultural research?  I should like to tie
  into that:  what is DFID going to do to make sure that in one particular area,
  which is medicine and pharmaceuticals, there is early identification of
  emerging diseases and that the research for drugs and vaccines necessary for
  them is undertaken?
        (Clare Short)  I do not personally think that we need some sort of
  inferior technology for developing countries.  There is appropriateness of
  technology and clearly developing countries have cheaper labour and more
  intensive use of labour is often one of their comparative advantages but I do
  not think some sort of backward forms of technology are going to be beneficial
  to developing countries.  I do think that a major research effort needs to be
  focused on the needs of developing countries and indeed we do that as a
  Department:  knowledge, agriculture, medical research I have already referred
  to.  If you just take HIV/AIDS, the strain which is in developing countries
  is different from the strain in Europe and North America so if all the
  research for a vaccine is confined to Europe and North America you would not
  get a vaccine for Africa.  There has to be some parallel research and there
  is an international initiative to drive that research forward.  The market
  will not drive it because there are not enough people to buy consequent drugs. 
  We and others have contributed to some of that research.  For agricultural
  research there is an international research institute, because there are
  different kinds of crops, different needs, there needs to be appropriate
  agricultural research, certainly medical research and so on and then ideas,
  knowledge of what works in development, methods of consulting poor people,
  providing them with credit, all sorts of knowledge which needs to be spread
  around the international system and we and others invest in that research and
  that is very important.  On your final question on vaccines, a lot of
  international effort now is going on to find the vaccine for HIV/AIDS, where
  the science is optimistic.  In a five to six-year timescale we could have
  effective vaccines, but also malaria remains a bigger cause of death and ill
  health in Africa even now than HIV and that is suffering - a million children
  lose their lives to malaria - but also a lot of loss of work time which
  impoverishes families.  Both better application of existing treatments and
  getting new treatments are important and we need to find new ways of building
  partnerships between the public sector which can drive funding and guaranteed
  market but will cause the private sector to put in research effort to produce
  some of the new drugs and vaccines.  The Cabinet Office have these cross-
  cutting reviews taking place right now and in our Health and Population
  Department we are doing a lot of work on putting in place worldwide
  arrangements which will incentivise much better medical research to produce
  better treatments for the diseases of poverty than we have currently.
  
                              Mr Robathan
        34.      You acknowledge in the White Paper the importance of
  environmental science, particularly by having a whole chapter devoted to it. 
  You also acknowledge the conflict between environmental concerns and
  conservation and economic development.  We have heard from the World-Wide Fund
  for Nature that PRSPs have not adequately taken environmental concerns into
  account in their opinion.  I heard today from Trevor Manuel at the World Bank
  conference, the Finance Minister for South Africa, who said that when trade
  was freed up the grain which was grown in Brazil should be able to come here
  because they grow good grain in Brazil and they grow it very cheaply.  Of
  course in environmental terms one of the problems with agriculture in Brazil
  is that it tends to go into the rain forest and they cut down rain forest for
  ranching in particular but also for growing grain and diminish the
  environmental bank there.  My real question to you is:  what, if anything, can
  we or the Government really do to ensure that environmental concerns are
  better integrated into development initiatives?
        (Clare Short)  It is very important to get our thinking right on this
  crucial subject.  A lot of the international campaigning is driven by a
  conservationist anti-development mindset.  The planet is under strain, we
  cannot afford to promote more development and then it goes to romanticising
  conditions of poverty in which people in Africa and South Asia live, which
  causes fury in developing countries, that we developed, got all the benefits
  and are pulling up the ladder behind us.  If the argument goes that way we
  shall not get international agreement on the new environmental agreements we
  need.  On the other hand in developing countries there is also growing concern
  because forests are going, there are more and more problems with floods and
  so on, there is a growing awareness across Africa, across China, that the
  environment has to be attended to, that it cannot just be taken for granted. 
  We did a big review in the Department of our work on the environment and
  realised that we, like most others, the World Bank and everyone else, had had
  an approach saying that we must promote development, but development might
  damage the environment, therefore you have to monitor all proposals to see
  that they are not environmentally damaging;  a sort of negative check. 
  Whereas if you are promoting sustainable development, what sustainable
  development really is, is that you look at environmental resources, economic
  development and social needs side by side and plan for growth which will be
  sustainable in an economy and will not be eroding environmental resources
  which cannot be replaced.  It is a whole change of mindset, bringing
  sustainability and environmental resources into the mainstream of economic
  thinking in the future development of an economy and its people.  You know
  that one of the international development targets is that there should be
  national strategies for sustainable development in place in every country by
  2005;  this comes out of the Rio conference and then reversing the loss of
  environmental resources by 2015.  We agree very much with what it appears the
  World-Wide Fund for Nature said in their evidence that having a separate
  national strategy for sustainable development in developing countries, when
  they are meant to bring together all their macro-economic and social planning
  in their poverty reduction strategy, is not the right approach.  We need to
  bring the environmental considerations into the mainstream of the poverty
  reduction strategy, make it longer term and take the focus into the centre. 
  That is our view in the White Paper and we have started working with the World
  Bank and so on to try to achieve that objective.  Obviously PRSPs are very new
  but they are going round and they are popular in developing countries and if
  they are to work we have to get environmental sustainability into the
  perspective.  Our view on your point on trade and Brazil and so on, that we
  should not look for regulatory arrangements to restrict trade in order to
  prevent environmental abuse, and this is another issue which was very, very
  contentious at Seattle, developing countries believe that those who call for
  environmental provisions in the World Trade Organisation are again trying to
  set such high standards that their exports will be excluded from international
  markets.  Our view, and it is the EU position, is that the World Trade
  Organisation agreements and international environmental agreements should
  mutually recognise.  The Department is putting more effort into, rather like
  trade, enhancing the capacity of developing countries to be participants in
  international environment agreements, thinking about their own interests,
  their own environment, their own country, having more capacity to think about
  their own needs and represent their interests in those agreements.  Like
  trade, that analytical capacity and negotiating capacity just need building
  up in developing countries.
        35.      We have seen that natural disasters tend to have greater impact
  on less developed countries than on more developed countries.  We were in
  Mozambique last year in the floods and people who had next to nothing ended
  up with absolutely nothing apart from a plastic bag.  I think most people
  would agree that natural disasters are being exacerbated by global warming. 
  I notice the laudable comments about renewable energy in the White Paper but
  is there anything further that we, your Government, the developed world, can
  do to create greater capacity for developing countries to adapt to
  environmental change and climate change?
        (Clare Short)  There are two forces at work.  One is probably the growing
  instability in climate resulting probably from global warming.  The other
  thing is the growth in population leading to more and more people living on
  more and more marginal lands where they are more at risk.  That is the other
  big thing which has been going on which means more and more people are
  affected by natural disasters.  There is growing concern across the developing
  world about these issues and more and more sensitivity to the need to manage
  the environment in a way which minimises this.  Obviously in the case of
  global warming, the Climate Change Convention, it is the United States of
  America who have been the obstacle to agreement not developing countries. 
  Bangladesh stands to lose one third of its territory, Pacific islands and so
  on stand to disappear completely.  There is a real will in developing
  countries to get some progress.  We are making progress.
        36.      I particularly wanted to know whether we can assist developing
  countries to adapt to the environmental change which is taking place.
        (Clare Short)  Yes;  indeed.  Getting the environmental perspective to
  be part of the poverty reduction strategies, thinking about environmental
  resources and sustainability and indeed strengthening the capacity of
  countries to deal with natural disasters so that they save their people more
  quickly and have more knowledge of where the dangers lie and where not to
  develop the housing and so on.  We are working on those things too.
        (Mr Manning)   Things to keep an eye on.  A renewable energy task force
  has been established by the Okinawa summit which will be reporting its
  findings to the Genoa summit.  We shall see whether that produces any useful
  ideas in that area.  Secondly, we are planning to fund a study to analyse the
  extent to which climate change will affect the achievement of international
  development targets and how developing countries can mitigate or adapt to such
  predicted changes.
  
                                Mr Rowe
        37.      I have asked you this question before but it was some time ago
  and you might want to think about the answer again.  How much does your
  Department do to make sure that the lessons you learn overseas are applied
  here?  Community development in England and Wales and Scotland and Northern
  Ireland is pathetic.  Yet we go round the world preaching how communities
  should develop themselves.  That is just one example.  They are learning a
  great deal overseas.  What mechanisms do you have in place for your Department
  to spread the information you have gathered through the domestic departments?
        (Clare Short)  There are few very good mechanisms.  There has been a sort
  of snobbery that is out there in the world that developing countries have
  nothing to teach us, whereas actually on community involvement in development
  we do have a lot to learn.  As we publish all our documents, like Human Rights
  Based Approach to Development, we need to consult people and to listen to
  them, to get people effectively buying in and also doing more effective
  development.  One bit of feedback I notice is that some of the work of
  Professor Ruth Lister who used to be the head of the Child Poverty Action
  Group is doing here was inspired by that document.  Starting to publish all
  our material is beginning to get more consideration, but in general there are
  not good mechanisms.  I hope, as there is more recognition for quality
  effective development, there might be more openness to learning from it.
        (Mr Manning)   I have been struck by the extent to which DFID staff are
  increasingly being headhunted by Cabinet Office to work on a whole variety of
  things, so there are obviously some feedback mechanisms.
  
                               Chairman
        38.      We do have other questions, but perhaps we may put them to you
  in writing.  However, may I ask you about the process of producing the White
  Paper which has fascinated some of our academic interlocutors, so we need to
  put the questions to you?  How much did the Department spend on producing the
  White Paper, both in terms of research commissioned, the consultation process,
  internal costs and in the production and dissemination of the White Paper? 
  From what part of DFID's budget was it drawn?  Why was there no Statement in
  the House of Commons and why was it launched before copies were available in
  the Vote Office?
        (Clare Short)  The total cost of the paper was under œ700,000.  Just over
  œ300,000 came from our Information Department budget to cover design, print,
  translation, internet site, The Independent supplement.  The rest of the money
  was drawn from a special budget set up for the White Paper:  œ161,000 was
  spent on commissioning research specifically for the White Paper but we do
  commission a lot of research in general anyway;  the final œ225,000 was spent
  on the staff costs of the small team which was formed specifically for the
  exercise and on the organisation of consultations, including a Round Table
  with representatives of developing countries in Sussex.  We would have paid
  you lot anyway so there might be a bit of double accounting there.  Those are
  the figures.  Why there has been no Statement in the House of Commons is a
  matter for the "usual channels" and the "usual channels" from both ends
  decided they had other priorities.  I noticed at the last Question Time that
  some MP asked whether we could not have a debate on these matters and I think
  that would be highly desirable myself and I hope we might be able to persuade
  the House.
        39.      Is not the point that after your last White Paper we were
  constantly asking for a debate and we never got one?  We do not even have a
  Statement on this one and perhaps the Leader of the House should take note of
  the fact that she has neglected these Statements and the work of your
  Department by not responding to these requests.
        (Clare Short)  I share that view but I believe that both ends of the
  "usual channels" have that difficulty.  On why the White Paper was launched
  before copies had been made available in the House, that was some problem with
  the Table Office.  It was delivered here but not distributed until later.  I
  have written to the Speaker.  Did I send a copy of that letter to you?  If not
  I probably should have done.
        40.      No, we did not receive that.
        (Clare Short)  We shall certainly supply you with one.  We delivered it
  but for some reason it was not made available to Members for some hours and
  there was some sort of problem with the arrangements in the House.
        41.      What has been the reaction of other bilateral and multilateral
  donors to the White Paper and what has been the reaction of NGOs?  The fact
  that you have run out of copies and have to reprint says something but have
  you had any reaction directly to it?
        (Clare Short)  Yes, we have had a lot of feedback, very, very high levels
  of interest, quite a lot of embarrassingly effusive praise, very speedy
  distribution.  The last White Paper was put into French as well as English. 
  This time we are going to do more languages.
        (Mr Batt)   Spanish, Portuguese and German.
        (Clare Short)  My own view is that it is not so much that we want people
  to sign up to every single proposal we make but to get the more informed
  debate on how we shape globalisation is really important and the more people
  read it and argue over it the better I think.  In terms of NGOs, we were
  pleased by the response.  I have had a meeting with BOAD directors, which was
  very positive indeed.  Obviously there is a bit of negative comment from World
  Development Movements, but most of the others welcomed it very strongly and
  then made some comments about some elements of it.  I am not trying to get
  everyone to sign up to every single thing we say, but to get a positive
  informed debate about how together we can get the international system to
  manage globalisation which makes sure poor people in countries are not
  marginalised.  I think the White Paper is beginning to generate a more
  informed positive debate.  It is also circulating in quite big numbers in
  developing countries, which is good.  When I go I do seminars and things to
  try to have that shared debate much more openly.
        Chairman:   I am sure that it will in fact promote a great deal of
  debate, both in this country and overseas and in the multilateral
  institutions.  We are most interested and should like to thank you and
  David Batt and Richard Manning who have worked so hard with you to produce it. 
  May I thank you for coming and spending your time with us?  We shall obviously
  go into a lot more of these issues if time permits before we get to an
  election.  Thank you very much indeed.