Examination of witnesses (Questions 760
TUESDAY 27 FEBRUARY 2001
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 commissionswhich
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
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 workthe 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
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.
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.
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 worryingthe economy is deteriorating and deterioratingas
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 lightBritain
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.
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)
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
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 projectsnot 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.
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 forcesay you did a
monumental ten-year improvement in the policebut 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 approachyou
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
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
(Clare Short) The mine clearanceit 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.
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.
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
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.
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
2 See Evidence p. 292. Back
Note by Witness: MKSS: Mazdoor Kisan Shakti Sangathan,
a people's organisation working in Rajasthan since 1988. Back