Simon Maxwell, in the chair, opened the event by congratulating Peter Lilley on a hefty, detailed, balanced and well written report which had drawn on work done by a multitude of different working groups. He drew the audience’s attention to Mr Lilley’s background in development which had stood him in good stead for the chairmanship of the group and highlighted a blog which he had written about the report when it was first published in July. He emphasized that the aim of the ODI blog was to share thoughts, views, and to have a public ‘conversation’ about issues. He urged attendees to read it and to share their own thoughts and views on the report, using this forum.

Rt Hon Peter Lilley MP
Peter Lilley began his presentation by stating that the group was indebted to ODI, amongst many other development organisations, for the information, guidance and briefings they had provided to the group over the course of 18 months of information gathering the group had undertaken in preparation for the publishing of the report. He also emphasised that the group’s membership constituted a mixture of talented and experienced people, not just Conservative in outlook, including Sir Bob Geldof. He also highlighted that the report represents a submission to the Shadow Cabinet and the next step would be for them to consider the recommendations and decide whether or not to adopt any of them as policies. He also urged people to put forward their own comments and criticisms of the report to be taken into account by the Shadow Cabinet.

In advising the Shadow Cabinet, the group were aware that the only spending commitment made by the Conservative Party so far has been a commitment to increase Overseas Development Aid (ODA) to 0.7% of GDP by 2013 or sooner. They therefore placed less emphasis in the report on the quantity of aid given by the UK, and more on its quality. Even if all aid pledges are met however, aid on its own is not sufficient to achieve development. Lilley stated that many countries will develop as a result of growth. Growth is therefore essential in development, but over the last few years, the group observed that the share of aid aimed at promoting growth strategies has declined by two thirds. This is especially true of aid going into infrastructure (both physical and commercial) and agriculture. The report therefore recommends a renewal of emphasis on growth and investment in infrastructure and agriculture.

With regard to trade, the report states that there is an opportunity for an all party transnational public ‘Campaign for Real Trade’ or similar, the aim of which, much like the recent high profile campaigns on aid, debt and the Make Poverty History campaign, would be to assert pressure on developed country governments to create real opportunities for developing countries to trade. The five main tenets of such a campaign are recommended as:
- Free and open EU and US markets for trade with developing countries
- More generous Rules of Origin to enable poor countries to participate in supply chains
- The abolition of high tariffs between countries within the South
- The abolition of export subsidies
- An increased emphasis on Aid for Trade

Such a campaign could either be run as part of the Doha round of trade talks, or as a individual, standalone campaign.

On making aid more effective, the group acknowledged that it is impossible for people in the UK to know how best to spend money in developing countries. They therefore recommend exchanging what is currently a ‘top-down’ approach to aid for a ‘bottom-up’ approach, making aid more demand-led, with recipients responding directly to proposals for funding from donors. In this way, local knowledge will be harnessed and aid will be channelled according to the self-interests of the beneficiaries. Aid must also be prevented from undermining the work of developing country governments.

With regard to corruption, aid must be channelled via governments and government departments, but the risk posed by corruption to aid funds should not be played down as has been the case in the past, for fear of loss of funds and/or public support for aid. Rather, the report advocates a more open approach to corruption. In this vein, the group attempted (see p357) to assess the extent of corruption and to quantify it. Lilley explained that the best example of a study of this kind was one carried out by the World Bank which involved questioning 32,000 small businessmen to see where bottlenecks lay and where bribes had been given to officials in order to secure contracts, etc. It is also possible to track and expose corruption via public expenditure tracking and other surveys.

With regard to ‘good governance’, the group believes that this principle can also be applied to donors. The report advocates setting up ‘partnership trusts’ in developing countries which would act as channels for most types of aid, not just general budget support, but also types of project and programme aid too. The group also advocates the establishment of a ‘Global Donor Index’ which would put pressure on donors to adhere to certain standards.

With regard to reforming DFID, the report advises the adoption of a results- or outcomes-focused approach, in exchange for the inputs focus it currently has. Also, to look more carefully at the steps being taken by developing countries to achieve the MDGs, rather than merely assessing how successful (or not) their attempts might be. Finally, the report suggests establishing an Independent Evaluation Group to assess and report on the work carried out by DFID, much like the UK National Audit Office. The group acknowledges that DFID is one of the best development agencies in the world, but that is not to say it could not be even better. Lilley emphasised in conclusion that the group’s recommendations for DFID were not proposals merely for a future Conservative government, but were ideas that he hoped DFID would consider implementing itself anyway.

Discussion

Questions and comments raised in the discussion included:

• How did political divides play out within the group's discussions? Were any issues left out of the recommendations because it was assumed that they might not be adopted by the Shadow Cabinet? Lilley explained that there isn’t huge scope for ideological differences in the field of international development policy. He said that there was some resistance against direct budget support, because corruption can be a problem, but it was acknowledged that it is more important to build the capacity of recipient country governments.
• Growth featured heavily in Gordon Brown’s recent speech in New York. What about pro-poor growth - should there be more of a focus on that? Lilley stated that three-quarters of the world’s poor rely on agriculture, so smallholder development has to be a focus. Potentially, this could have an effect on climate change, especially as those countries most likely to suffer the acute effects of climate change are the ones who have contributed least to the problem. He also explained that while discouraging certain types of tourism may be good for environmental reasons, it could also be bad for growth.
• What about trade and investment and obstacles to economic development? Also, growth can be good for the poor but in some cases it can be bad. How can governments better engage themselves in effective partnerships? Lilley replied that enabling developing countries to participate in supply chains will play an important role. Also that there must be investment to enable the creation of new jobs.
• What is the Conservative Party's vision for DFID in the longer term? Lilley answered that there must be more emphasis on fragile states within DFID's work in the future. He did not advocate changing the institutional structure of the organisation but stated that the most difficult thing to achieve would be co-operation between two separate Whitehall departments. DFID and FCO ministers need to work together to ensure that common goals are met. Furthermore, operations within DFID need to be both more open and more easily measurable.
• Partnership trusts are very risky endeavours. Will it not be hugely difficult to operationalise such multi-donor approaches? Lilley replied that although difficult, such partnerships would resolve the problem of duplication by channelling money from both bilateral and multilateral donors more effectively.
• Will it be problematic if bilateral donors do not want to put money into the same pot as each other? Lilley replied that the arguments around multilateral versus bilateral assistance needs to be examined further and in more detail.