In It Together

Poverty is a denial of human potential. The stifling of dynamism, creativity and intelligence that attend poverty affects us all. Unleash that potential and we will all benefit through an explosion of thought, culture and trade.

In the twenty-first century extreme poverty is not only a preventable economic absurdity but a moral disgrace. That is what has motivated this group in its work.

But even if we were driven purely on the basis of self interest then act we must. Poverty undermines our security and prosperity as well as our humanity. It is necessary for our own well-being that we work together to remove the scourge of poverty that so blights our time.

The bald fact is that extreme poverty does not affect only the few, it harms the many. We are all in this, like it or not, together. And that is the only way that poverty will finally be eradicated: together.

So begins Peter Lilley in his introduction to the second of the Conservative Party's policy group reports, published today. Unlike the Social Justice Policy Group's recent report, media coverage of In it together: the attack on global poverty, from the Globalisation and Global Poverty Policy Group, has so far been very poor.

Overall, with its emphasis on trade and training instead of aid and tariffs, it looks good, although expecting the World Bank and other multilateral organisations to track corruption seems rather naive. In all, the group makes 76 recommendations, all of which could be funded within the current commitment to spend 0.7% of national income on international aid. Here are a few of the highlights, listed under the report's six headings:

Aid

• DFID’s process for allocating bilateral aid should be adjusted from a cliff edge to a slide. So when low income countries pass the middle income threshold they should no longer risk losing all their aid.
• DFID should continue to develop funding mechanisms which provide longer term, more stable and more flexible aid funding. This principle should apply both to bilateral aid and that provided through NGOs and local partners.
• We recommend that DFID should allocate its aid budget so as to encourage NGOs to develop specialist competences and focus on them, and should be more willing to use smaller NGOs which have already specialised in a particular function or country and proven their ability and integrity.
• DFID should create a Human Rights Review Panel to advise whether aid should continue to flow to governments after human rights abuses occur and DFID should respond speedily but proportionately to any deterioration in standards, thereby obviating the need for a more drastic response later on.
• The UK must make a long-term commitment to training medical staff in countries with the greatest need for them.

Economic development

• Increased UK support for skills and enterprise training for young people is necessary.
• The UK should endeavour to extend its support for secondary education, to assist low income countries in moving towards universal secondary education.
• We support the provision of development funding directly to private sector enterprises and entrepreneurs, if this offers the best way to tackle poverty.

Trade

• There is a strong case for allowing low income countries, in particular, i) open access to EU and other developed country markets; and ii) flexibility as to how rapidly they liberalise their domestic markets. Real Trade involves both.
• The UK should aim to spend a larger proportion of its existing aid budget to 2013 on aid for trade.
• The UK should press the EU to take up the US offer of an end to all market distorting support as part of the Doha Round. At the very least the UK should press for the EU to meet the G20’s request for deeper reductions. The UK should also seek to hold the EC to its earlier offer to abolish all subsidies on exports from the EU ... The UK should push for an immediate end to certain CAP programmes such as tobacco and cotton subsidies.

Corruption and governance

• DFID should live up to its promises and respond more vocally, robustly and proportionately to evidence of corruption affecting UK aid.
• Aid to promote good governance should be used to help both stimulate and satisfy demand for greater accountability, by strengthening the capacity of civil society to challenge governments over issues of corruption, human rights, and transparency and accountability.

Conflict, fragile states and humanitarian aid

• The UK should support an International Arms Trade Treaty to curb the flow of weapons to conflicts.
• Pledges for quick-onset emergencies should either be made from existing contingency funds or from new money, and should not involve the re-allocation of previously allocated funds.
• What is needed is greater coordination, not centralisation. If donors duplicate, this is a waste, but if the UN were to attempt to centralise all donors and then assign tasks this could take up valuable time – putting lives at risk. Attempts to centralise responsibility under a single agency should be resisted by the UK Government.
• The UK should welcome and undertake to uphold the commitment of the international community at the UN Millennium Review Summit in 2005 to ‘take collective action [to protect vulnerable populations] in a timely and decisive manner . . . should peaceful means be inadequate and national authorities [be] manifestly failing to protect their populations from genocide, war crimes, ethnic cleansing, and crimes against humanity’.

DFID - the aid effectiveness challenge

• DFID should, as a leading bilateral donor, take a much more robust line with multilaterals, demand evidence of effectiveness and performance, be ready to withhold discretionary funding where necessary and through this more assertive stance create real impetus for change.
• DFID must focus on results, rather than processes, and must develop methodologies and techniques that will enable a results-focused comparison of different projects and programmes.
• Our proposed option for the evaluation of DFID’s effectiveness is the creation of an Independent Evaluation Group which would report to Parliament via the International Development Select Committee.

Bank of the South

"Sooner or later, those institutions will fall due to their own weight. They will wear away, the International Monetary Fund, the World Bank and all those institutions. We're better off without the Fund and without the World Bank."

So the Venezuelan President Hugo Chávez has told a meeting of Latin American leaders. Mr Chávez says he wants to formalise his country's exit from the World Bank and IMF and is developing an alternative economic vision for the continent called the Bolivarian Alternative for the Americas (ALBA) to rival the Free Trade Area of the Americas (FTAA) being championed by the United States.

Following the precedent set by the Bolivian President Evo Morales, who nationalised his country's natural gas industry last year, Mr Chávez has this week taken control of Venezuela's last oil field projects that were still being run by foreign companies, which will increase his ability to provide alternative forms of credit and financial support for other countries in the region. The foreign firms, which include Britain's BP, are more than likely to remain involved, in part because of the significant investment that they have already put into the projects and in part because the country's Orinoco River basin is the world's largest known oil deposit, holding a possible 1.2 trillion barrels of extra-heavy crude, rivalling even Saudi Arabia's reserves.

Venezuela's share of the IMF is apparently worth $3.9 billion, although it is not clear how much money the fund or the World Bank might have to return to Caracas. One can't but be reminded of another intergovernmental giant and refrains of "Better off out!"