Select Committee on International Development Minutes of Evidence

Examination of witnesses (Questions 760 - 779)




  760. You have just described to us a great deal of work that Mr Mason is doing and that Mr Wilson is doing. Do you plan to publish the results of your investigations in any way and, if you do, what are you doing with this information? Are you mainstreaming it into DFID's work throughout its investments?
  (Clare Short) Absolutely. We are preparing the annual report for you and I have read it so many times I cannot remember what it says. We have really driven forward the thinking about corruption, and getting into much more systemic ways of working rather than just having financial systems to protect our aid budget, and little bits of help with training a few judges, the one-off interventions, or even building anti-corruption commissions—which is probably where we were before but now we see clearly you have to help countries build systems but also make them places where the private sector will flourish more as well as capturing corruption, as you said at the beginning. Obviously we report annually in the annual report on how the work is going forward. The website will be a continuously updated record of work we have done and where it has been effective and so on in our country strategies and as we update them; but we are trying to look now to not have separate country strategies but come behind the PRSPs of countries and then say, "Tanzania's plan is this, and we agree with that [and comment on it], and therefore the UK will do this". We review those annually. Progress on problems of corruption and tightening systems would be in the mainstream of the effectiveness of our work wherever we are working, rather than a separate corruption report.

Ann Clwyd

  761. The Department have told us about £90 million was spent on governance projects many of which would be relevant to corruption. I wonder if you could talk a bit about that and tell us what proportion is spent on governance and how much is actually spent directly on anti-corruption projects?
  (Clare Short) The first thing I would say is, not all work—the extent of it is measured by the financial spend. It is true of gender, for example. If you have separate women's projects you can say, "We're spending that", but the minute you take it right into the mainstream of your work you cannot say, "We're spending this on gender equality", because you are getting all girls to be at school and it is part of your health care etc. Similarly with this, probably in our older, less effective work, we could more clearly have said, "That's the building of the anti-corruption commission." Here are one-off interventions that are to deal with corruption, and we move more and more into budgetary support, helping the country. We help a lot with revenue authorities. There are taxation systems about the sustainable modern state. If you work, for example, in the education system, you might have aid money coming in, it is not sustainable until helping the country have a revenue system means it can take it forward. It becomes more and more difficult to disentangle corruption work from creating a modern state that looks after its money properly and bears down on corruption. We have got this good PIMS system I think you all know about. Our total commitments on governance are £350 million. The principal purpose of governance is the £90 million you referred to. Beyond that I can give you figures and let you have this piece of paper. The project with the World Bank Institute I just referred to is £1.7 million. The work we do with the Utstein group on corruption specifically is £300,000. We are doing a big thing with ASEM, the European/Asia anti-money laundering work, and that is £300,000. We have helped the OECD secretariat with £50,000 because it is poorly resourced just to make it more effective. We work a lot with Transparency International, and they are working on a global corruption report, going a little beyond the very useful, publishing rankings of levels of corruption, and that is £50,000. Our governance work is about systems that cannot be corrupted. Our budgetary support, which is more and more of where we were going in the systems built around that, is probably the most important work we are doing and cannot be separated from the fact it is also education work, and also budgetary support.

  762. As you know we have just come back from Cambodia and Vietnam, and you have been strengthening your governance work in Cambodia. One of the criticisms of Cambodia is that the judiciary is corrupt and that is a major problem. How does your governance programme impact on that judiciary in Cambodia?
  (Clare Short) We do not have a very big programme in Cambodia. Our strategy for Cambodia was to try and intervene and get the multi-lateral institutions working better, speaking from memory. We are not big in Cambodia. We decided to intervene to try and make sure that the international institutions, to which we contribute, were working in a more effective way. The judiciary is corrupt in most developing countries, sadly. If you look at the voice of the poor, with 60,000 people in 60 countries, one of the things that annoys them most of all is disorder and lack of justice. The police seek bribes and because they are poor they cannot pay them so there is no protection when people steal their animals or take their land. Indeed, they get pushed around. They cannot get any justice from the legal system because they cannot drive their way through it. Their children often end up in prison because they are the only ones who cannot get out. We have criminal justice systems across the developing world that are very corrupt, and it is the poor old poor who cannot pay their way out of them. It is a very common phenomenon. Presumably you have got a briefing on what we are doing in Cambodia. We are not big in Cambodia. I cannot remember on the judiciary, but I can find out and let you have a note.[2]

  763. In a country like that where wages are extremely low, for instance one of DFID's drivers there was an ex-headmaster and was paid $22 a month as a headmaster. When asked, "How much are you being paid" it was considerably more than that; because a machinist in a factory was earning $65 a month, and he was only earning $22 as a headmaster. When you are poor and you are faced with the realities of supporting a family it is almost inevitable, is it not, that you will find ways, by fair means or foul, of earning extra money?
  (Clare Short) Absolutely. That is why we are engaged in civil service reform in many, many countries. You are also getting very poor countries where the job is survival. You get lots of political patronage, and people being promised jobs by politicians at all levels; then you get a civil service that is too big and unaffordable so you get lousy wages and weak systems, that is a really common pattern; so helping with better government systems often includes redundancy programmes, upgrading skills, upgrading salaries, upgrading systems. We sometimes use aid resources to pay for redundancy programmes. Take Tanzania, the follow-on study showed a lot of people who had taken redundancy were better off because they were given some help in enterprise development. That is exactly what I mean by having to get right inside the system to get the remedy, otherwise all of us, if we were in that job and could not read, our family would have to find some money from somewhere else if the common thing is to charge. Then you get students who do not pass their exams unless they pay their teacher. Another layer of injustice. Who is it that cannot pay the teacher? It is the poor families. Even in a system where they are allowed to go to school they end up losing out.

Mr Rowe

  764. Sometimes, Secretary of State, one gets an opportunity to make a major political statement. I would have thought that the sacking of the Chief Justice of Zimbabwe was an opportunity for this Government to say something very trenchant about the way in which the judiciary in that country was trying to be incorrupt. There is a real opportunity for us with our allies to make a very clear bold statement that this is intolerable behaviour. It seems to me they are pussyfooting about.
  (Clare Short) I think that is wrong. I actually think the period when British ministers made very loud criticisms of the ever-deteriorating situation in Zimbabwe, which is truly dreadful and deeply worrying—the economy is deteriorating and deteriorating—as you say, in a country which had lots of deficiencies in the previous regime, before independence, the judiciary has tended to have a traditional independence, even that is being assaulted now. As you will have noticed, President Mugabe is trying to frame the explanation of what he is doing in an anti-British light—Britain handed on this country of inequality, with the land unevenly distributed, and Britain's only interest is in preventing the fair distribution of land to the people of Zimbabwe. My own view is that we should be absolutely clear about what is going on; stand alongside the financial international institutions in the country, the EU and so on, as we do; make all our positions completely clear; other countries do look to us for our view because of our long history in the country; but for us to be making a loud noise as though this is a British Zimbabwean issue actually inflames what President Mugabe says he is doing. We should not deviate on where we stand, and stand with others, and be critical (which we do not). I do not think getting all over the airwaves and making things even worse helps anybody.

Ann Clwyd

  765. Dr Anne Cockcroft from CIET stressed the inmportamce of community involvement in tackling anti-corruption. Can you point to any DFID funding which involves the community in supporting anti-corruption measures?
  (Clare Short) I do not know CIET so I cannot respond in any informed way about that. I have already said that in Uganda these whole procedures are making everything transparent, including the schools having a notice saying how much money comes to this school, and what date it comes off, so all the teachers, parents and children know exactly how much the money is. The same sort of thing is going on in Andhra Pradesh. There is a famous organisation in India (whose name I cannot remember[3]) who have been doing this kind of work. Going to villages, telling people what the money is, and people getting really angry when they find the money has not been properly spent. They have got so much integrity they will not take the money because they do not want to be charged with that. We have helped them in many ways to take their example to other countries because it is really home grown and a real revelation. Similarly, Bangladesh has a problem with very serious corruption levels, and not a lot of will at the top level of government to deal with it. I think it was with Transparency International there was funding for a study of local ordinary people's perspective of corruption, so it comes out into the open and people say, "This is where it's aggravating me". My own view is you cannot get much collaboration top down to clean up systems that is periodically repeated either because nothing much is being done, or even to test the effectiveness of what is being done. There are probably other examples, I would agree with you, but you have to operate at all levels and get the systems working. Where you have got a government or senior figures in the government committed to doing it, you can get much further much faster but then empower the people to expose it where it is not done; or if they cannot expose it because they would be punished, and they are not going to get their child into school, pass the exam or get the drugs they need when they are sick, have studies in a protected way that mean they are able to report on how bad the corruption is for them.

(Mr Mason) A lot of the work we are supporting with the World Bank Institute is to do with mobilising civil society, working with the media and supporting the oversight organs of parliament and public processes. It is very much a part of our programme.

  766. Could I just ask about aid and trade provision. You have got strong views on it.
  (Clare Short) We got rid of it.

  767. Do you think it made a real difference? We criticised it a lot in opposition and when we came into government we implemented that policy.
  (Clare Short) The standards of integrity in the British civil service are very high indeed. I do not think officials from my Department would even corrupt it in any way whatsoever, the aid and trade provision. If you have got a provision in the department that subsidises a British company's project it does a series of things, and it takes you to countries that are able to handle big projects—not to the poorest countries. It takes you to sectors where big projects happen, rather than what will benefit the poor. It takes you to roads and dams and bridges in the very nature of the instrument. Then, of course, it takes you to murky places like the Pergau Dam, not because there are very few cases in the history of the Department (there are one or two) but because the very nature of the instrument draws you into that kind of work, which is not the work that is the top priority for improving life for the poor.

  768. You reckon it is a different culture as a result of scrapping it?
  (Clare Short) The Department did not particularly like it and had to keep it running, and it caused endless headaches and they were delighted when it went.

Mr Robathan

  769. Secretary of State, if I could pursue the question of systems you have mentioned already, and you have talked about all levels as well. Do you think there is a priority when looking at giving anti-corruption systems: should the priority be judiciary, auditors, public sector reform or revenue collection systems; or do you think it has to be all levels at once?
  (Clare Short) Broadly the approach must be holistic. It is no good sorting out the police force—say you did a monumental ten-year improvement in the police—but the courts are all wrong; or say you got the courts sorted and the police are not sorted etc etc. If you just go into the criminal justice system but all the revenue systems and getting your child to school and everything requires a bribe, and the teachers have to pay bribes to get jobs, and you got that sort of thing right through the system, there is another whole place where there will be a rottenness. That is the beauty of the World Bank Institute approach—you need to approach each country of itself, get some real feedback from the country and the people who live in it about where the problems are most acute; work there but work collaboratively with others. Because you are talking about whole systems, as Tony Worthington was saying, the UK cannot in every country we are working in clean up all the systems right across; but if we, the World Bank, the UN system and other donors are behind a big study that is looking right across the system where the problems are and collaborating and sharing out the work then you can really help a country move itself forward. This is big stuff and it is creating an efficient modern state and routing out inefficiency and, therefore, corrupt practice and grand corruption right through the whole of the government system.

  770. You also mentioned the problem of low wages in the public sector, which we saw in Cambodia. Do you think therefore that it is most important for government and the assistance we give to tackle the question of grand corruption. In Cambodia there is a lot of talking at the big level where big cheeses in government are on the take somewhere. Do you think we can give more assistance to that which might have a trickle-down effect to petty corruption?
  (Clare Short) If you look at the voices of the poor it is the petty corruption which hits them every day of the week in their lives. It is the thing that really aggravates them because they cannot get a stall in the market without paying the guy; they cannot get their children to school and so on; they cannot get their drugs. There is a lot of corruption around drugs, and when your family is sick and you are desperately poor, to not be able to get some anti-malaria drugs drives poor people crazy. You cannot ignore it if that is where the poor are and that is what is really messing up their lives. If there are ways of improving things that will enable them then to get their little stall and get their children education, we have to do what we can because that is a generation of people improving their lives. Grand corruption is more morally evil. I said earlier, we should not just approach this morally. It leads to an horrendous waste of economic resources. A lot of the debt problem of the highly indebted poor countries, when it comes to export credit debt, a lot of the projects were lousy projects that were not any good for a country, but because there had been grand corruption they had failed and wasted lots of money and the poor old poor have to pay their tax revenues to endlessly pay off. Grand corruption can be more difficult, because when it is there and it is rife you will have big figures in politics who engage in it. Even if you have got some people in politics who are not, there are usually good people there and you can find them and work in their ministry, but if there are some people round presidents engaged in grand corruption it becomes very difficult not to get crunches between countries. I personally think you have got to proceed on both levels; you should not say it is one or the other because both matter so much and they need approaching in different ways.

  771. When you talk about co-ordination with other agencies, what can we do or what can your Department do to assist in a country where, when you give money through a multilateral agency, sometimes it is not as well policed as it may be if it was given bilaterally? Particularly if it is given bilaterally to a government, how can we ensure that money is policed more effectively? If I could just digress: we had an instance of this in Cambodia with CMAC, which is a particular interest of mine of course.
  (Clare Short) The mine clearance—it got corrupted, yes. You get corruption in financial transactions and even corruption on where you clear the mines. Is it the little farms and fields of poor people, or is it in the forests so that some corrupt people can get at the trees and the gems. It crops up everywhere.

  772. How can we assist and make sure co-ordination is fair across the board?
  (Clare Short) It was bilateral versus multilateral. I am trying to abolish this concept, this differentiation in the mind of the Department, because we used to have this culture of, "We have to give all this money to some of these international institutions, but bilateral is best and bilateral is the most British"; but it is a little under half of our budget that is multilateral including a big chunk to the EC, and you know my views of that.

  The biggest and best possible British bilateral programme cannot work in every country. The best possible international development system can work in every country. Therefore, learning through our bilateral efforts, taking them into the wider multilateral system to get a system that will root out corruption wherever it is working is the way we see ourselves. Collaborating with others is about getting all parts of international development support to be more effective, more focused on improving the lives of the poor and better at dealing with corruption. That is our strategy and approach. As an example, I went to Indonesia. We are doing good forestry work there, which is difficult in an area of major corruption, the military misusing the forest resources, thus making themselves rich, helping to pay for the armed forces but impoverishing very poor people who live in the forest. I think that our current programme is on something like £15 million. We could grow it to 50 million. It is a middle income country. It should not be a big spend for us. It is about the fourth most populous country in the world and it is in transition to democracy and it is succeeding. I met the Asian Development Bank there and they are seeking to lend $1 billion a year in Indonesia and wanting to work with us. You suddenly think, "Good heavens. If we can work with the Asian Development Bank, help improve the quality of their programmes with $1 billion a year, is that not so much more effective in terms of improving systems and life in Indonesia than having a stand alone programme going from 15 even to 50 million?" You have to be opportunistic because you have to get entry points where you can do effective work. You have to get your feet on the ground, start to know a country, find the places where you can start in. In order to influence the big multilateral players, you need the authority and quality of people we have in the Department; also the quality of knowing the country, having your feet on the ground, so you have to balance what you do bilaterally and what you do with the multilaterals, always remembering the object is to reach more people, not to have a lovely, little British programme.

Mr Rowe

  773. The thing that shocked me most about Cambodia was that you have no time. 43 per cent of the population is under 15. Quite a large chunk of them will be looking for jobs very soon indeed. All the land appears to be either unregistered or just being sold off by rich people who are selling it off corruptly and illegally. It seems to me that if ever there was a recipe for instability that is it. It is a very small programme in Cambodia and I am sure it is effective, but I have this awful feeling that there was no time scale to it, that all sorts of good things were being done but they were quite ready to be unfolded over a period of five or ten years. I wonder whether your Department has a sense of urgency and whether it is possible to have a sense of urgency, because I realise that these are huge questions. I am not being critical; I am just asking the question.
  (Clare Short) It is a very important question. Old methods of development did three year projects. You would go to a country that is very poor and say, "We will do a few schools in this region" or, "We will do some water projects through some NGOs." It is all good stuff, but it had no sense of system or future. If you look at the population of the world, 1.2 billion people in 1900, three billion by 1960, six billion now and there will be nine billion by 2020 or so. There have been massive gains in development. More people are educated; more people have clean water; more people are living longer. Even when we are doing well, to get to the scale that can stabilise the world, to enable countries to go forward, if you look at all the countries where poverty has grown, you have economic growth slower than population growth. If you get that, you get the invincible growth of poverty which has happened in a number of countries. Even when you are doing well, you have to do more well. You have to get economic growth beyond population growth. That is my whole reason for wanting to get people to be serious about the 2015 targets. It gives us the capacity to think long term enough to face the challenge, not so we delay all action until 2015 but where is the world going to be then? Where is each country going to be then? What does it take to make sure countries are moving forward and poverty is being reduced in the face of growing population where that is still the case? The present population is still growing and it is so young. That is true of the population of the world. Getting beyond one and three year projects to poverty reduction strategies where a country says to itself, "Where are we going to be in 2015?" I am working very hard to try and answer your challenge, to make the whole thing move beyond one off projects that mean well but are really charitable in their mind set to be really development, to face up to the future, the scale of the challenge, the scaling up of what we know so we can get on top of this and get the world to be more healthy and people to have some prospects of a better life, rather than growing catastrophe because of growing population, growing poverty and land that is inadequate and that leads to conflict, environmental degradation and all the rest.

Barbara Follett

  774. I have four questions. How many of these anti-corruption commissions and bureaux does the Department currently fund? How does the Department support them in countries where the judicial system is corrupt? As you said, that is in most developing countries at the moment. Three, have these commissions and bureaux had any success which you would like to share with us? Four, what do you think are the preconditions for success for these commissions and bureaux? How can the Department help to make sure that these preconditions are in place?
  (Mr Mason) We are supporting Kenya and Malawi. We are setting one up in Sierra Leone. Tanzania, Uganda and Zambia have been long standing areas of support.
  (Clare Short) Hong Kong was a successful example. We do it where it seems to be the appropriate mechanism. You have to have political support to do that. How effective have they been? We think the anti-corruption work in Uganda has moved forward very strongly. It is not just that; it is a series of measures including the much better financial management in the Ministry of Finance which has been a leading force in Uganda. The Malawian Finance Minister was arguing yesterday that the recent scandals coming out of Malawi are partly the success of this kind of work. The cars were not corrupt; they were extravagant, wasteful and disgraceful, but it was all cleanly done. He sold them off and got the money back into the budgets of the country. The Anti-Corruption Commission has done all these inquiries. It led the President to sack the whole government and reshuffle it. There have been a number of ministers charged with offences. What we are likely to see in Malawi is the legal system slightly let the Anti-Corruption Commission down. They are arresting people all over the place in Malawi. Forgive me for the example but it is a bit like child sex abuse. When you have systems that catch it, the whole country gets depressed because it is such a horrible thing but when it comes out it might not be that a country is becoming more corrupt; it can be that the country is beginning to confront its corruption and some of these institutions are working but they then fall at the next fence. If the judiciary are bribable and you are getting people engaging in grand corruption, you might fail there but at least it is out in the open and there will be calls for improvement in the judiciary.

  Mr Rowe: Was it not in Malawi that the Anti-Corruption Commission complained that we did not help them?


  775. That was Zambia.
  (Clare Short) This is not true because we did help them and I increased the help after my recent visit. We were helping them before.

  776. In Zambia, they were saying that they had applied to the British Home Office, not the Department for International Development, for information concerning a particular case they were looking into and got no cooperation from the Home Office. We are going to see Mr Jack Straw tomorrow about that.
  (Clare Short) We have got engaged in the whole mutual legal assistance business in the Department recently. We have seen in the case of Abacha and Pakistan that the system was unresponsive and it depends on saying we will not help unless there are good legal systems in the country that is applying to us. Most developing countries might have reasonable legal systems but it is always easy to say it is imperfect and terribly slow. In the case of Pakistan and Nigeria, we have an agreement with the Home Office which is new. When they get requests from developing countries they will inform us and we can help countries put their requests in the shape they need to put them into to get through the system. The system needs making legal and more efficient but these systems are so complex. Developing countries need a bit of help technically to prepare the application and get it into the right frame to qualify for these systems.

Barbara Follett

  777. Has there been anywhere where you felt it has been a complete failure?
  (Clare Short) We are having difficulties in Kenya. The issue of the reform agenda for Kenya is pivoting the powers of the Anti-Corruption Commission. I nearly said we have not failed yet. The whole reform effort could go off track in Kenya tragically with terrible consequences for poor people around the battle over the Anti-Corruption Commission.
  (Mr Wilson) I cannot think of any examples where they failed completely. Their success depends on political support, particularly in terms of the prosecutions. The Secretary of State has explained that they can have a very positive effect just in bringing prosecutions into the public eye. They are also important for education. They can train people in the techniques of anti-corruption and they are there to promote the policy. They depend on the environment in which they are working quite a lot.
  (Clare Short) In the end you do not just want a system that goes on being corrupt, where you have a commission to catch corrupt people and then you prosecute them. You want ideally for that to bring it all out into the open and then systems are being tightened up so that you are preventing corruption in the future.

  778. My second question is possibly harder to measure in terms of success and failure of these bureaux and anti-corruption commissions. How will the Department measure the success or failure of its anti-corruption strategy overall and when? How will individual projects in countries be measured? Three, have any of these been externally evaluated and audited? Four, how are you engaging the civil society in the countries in these projects and in continuation of anti-corruption measures?
  (Clare Short) The success or failure overall is the success of the development effort in a country. More effective government systems deliver more health care, more education, better management of banks, better economic growth. You know the broad ways in which we have some tight objectives for measuring our overall achievements in working in a country. We do evaluate everything that we do. I really think the public sector should learn from the way in which development work is evaluated. Because we work in difficult climates, a culture has grown up that everything is evaluated. The whole public sector should have that culture. We would really improve the performance of the public sector across our country. We have strong evaluation systems in the Department. We have our own evaluation department. We use external evaluators. We now publish the evaluations. For our prison system we are going to have all the information available on a system that anyone in the Department can access, both post hoc evaluations and while a project is going on official sense of how successful or unsuccessful it has been. We do it very tightly and we really believe in it because we learn from it.

  779. In individual countries, is it as tight?
  (Clare Short) Yes. We do it by how we are doing in the country overall and any individual interventions. We have these assessment systems at work. I answered civil society engagement earlier in general anti-corruption work and then it would depend. If you take anti-corruption bureaux, they are publishing their reports and people who live in the country are hearing about it and it has been in the press, as it has been in Malawi, for example. That is deep civil society engagement. Transparency, getting it out in the open, is a fundamental part of getting corruption dealt with.

2   See Evidence p. 292. Back

3   Note by Witness: MKSS: Mazdoor Kisan Shakti Sangathan, a people's organisation working in Rajasthan since 1988. Back

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