JOINT COMMITTEE ON FOREIGN AFFAIRS (Sub-Committee on Development Co-Operation) debate -
Wednesday, 8 Oct 2003

Vol. 1 No. 32

Overseas Development Aid: Presentation.

Chairman

I am pleased to welcome Mr. Colin Roche and Mr. Oisín Coghlan from Dóchas, which is the umbrella organisation for Irish non-governmental organisations. I acknowledge the valuable work done by Dóchas in providing a forum for consultation and co-operation between NGOs as well as helping to build consensus among its members on development issues.

The subject of this afternoon's presentation is the level of resources allocated for development assistance and the issue of progression towards the UN target of 0.7% of GNP. Ireland has, for many years, aspired to the achievement of the UN target and steady growth in our overseas development aid took place in the 1990s, from 0.16% in 1992 to 0.41% in 2002. This unprecedented expansion meant that, in percentage terms, Ireland was ranked seventh largest donor internationally in 2002 and was well above the EU average.

Members will be aware that a specific timeframe for achieving the UN target was first set in September 2000 when the Government announced its decision to reach the target by the end of 2007. However, we are all familiar with the global economic downturn that has taken place over the past 18 months. The effects of that downturn have been felt across all sections of our economy. It has been necessary to make cuts in a range of areas.

The presentation by Dóchas will set out its rationale for an annual incremental approach to ODA so that Ireland can meet the UN target by 2007. I invite Mr. Roche to make his presentation.

Mr. Colin Roche

On behalf of the various member organisations of Dóchas, I thank you, Chairman, and the sub-committee for inviting us to discuss this important issue.

This time of year, when Estimates are dealt with, is an important one for legislators and we understand the various political issues that arise in that context. However, we also see the effects of poverty throughout the world. This sub-committee has heard many times about the effects of that mass poverty. I do not need to repeat the many statistics which are available on that subject but I will quote the Taoiseach, who said, "The statistics of poverty and inequality in our world are shocking and shameful - half the world's population struggling on less than $2 a day, over a billion on less than $1 and a quarter of a billion children of 14 and under working, sometimes in terrible conditions". That is the background to the important issues we are here to talk about.

The international community has, fortunately, decided to address the global issues of inequality and poverty. At the millennium summit in 2000, the world community agreed the millennium development goals for education, health care and gender aspects of development. The summit made a commitment to meet the millennium goal of ensuring that we address the issues of inequality and poverty in the world. Following from the summit, there was a commitment of $16 billion of extra financing to meet the millennium development goals. At the same summit the Irish Government was in the forefront of the response and since then we have raised our spending on overseas development assistance from €240 million to €454 million. The Taoiseach at the UN repeated this commitment to the overall target of 0.7% of GNP last month. Irish people, in Ireland and around the world, can be proud that we have made a commitment to reach the UN target of 0.7% of GNP. Only five countries have met this target and only one, beyond those five, spends a greater percentage of GNP on development aid than Ireland does. We can be proud of this commitment.

Unfortunately, however, the world is still far short of the financing needed to meet the millennium development goals. In 2002 OECD members spent $56.5 billion on overseas development assistance. In order to achieve the millennium development goals an initial $50 billion is needed. This makes it all the more important that Ireland reaches the target of 0.7% of GNP.

This year, new challenges face us, with the difficult fiscal situation facing the Government. However, we are judged, as a nation and as a people, by how we respond to these challenges. Ireland has won much admiration throughout the world for its commitment to reaching 0.7%. During the summer, at the launch of the UN development report, we received much praise for that commitment. Coming up to the EU Presidency it is, more than ever, necessary to show our commitment to reaching this international target. We will be in the limelight in Europe and internationally. One of the elements of our foreign policy which people throughout the world know and hear about and one of the ways in which a small country like ourselves can stand out in the international arena is by reaching this target. Fortunately, we have made a commitment to meeting it and now, with the extra spotlight of the EU Presidency on us, it is incumbent on us to have a credible plan to reach 0.7% by 2007.

There are many issues related to how we spend the money. It is imperative that we set out a credible plan of increases to reach 0.7% in order to have a quality aid programme. We have been praised by the OECD in its latest peer review process and told we have a high quality programme of overseas development assistance. In order to ensure that we maintain a high quality programme we must set out a credible plan to reach 0.7%. After all, any planning process should set out a number of orderly steps by which to meet goals. It does not help anyone, particularly the people in most need in the south, if we have a process that is unbalanced and does not allow for the proper gearing up of our quality services to meet the challenge of 0.7%.

My colleague, Oisín Coghlan, from Christian Aid, will deal with the mathematics and will blind us with his statistical knowledge.

Mr. Oisín Coghlan

I thank the sub-committee for the opportunity to address it on this important topic at this crucial time of the year, when spending Estimates are being negotiated.

Mr. Roche mentioned the necessity for good planning so that we can manage the growth of our aid budget. It has been significant and will continue to be so if we are to meet the target by 2007. The Government recognised the need for a multi-annual planning process when, just after the Taoiseach made the initial promise three years ago at the millennium summit in New York, a rather unusual budgetary arrangement was made. There was an exchange of letters between the Ministers for Finance and Foreign Affairs promising certain levels of spending over a three-year period. It is unusual for the Minister for Finance to promise spending at all but to promise spending over a three-year period was a significant commitment. That led to an initial increase of €100 million in the year 2001-02. The idea had been that spending would reach €239 million in 2001, €372 million in 2002 and €443 million this year. Unfortunately, there has been some slippage. In percentage terms, which are often easier to use, the Governments commitment was to reach 0.45% of GNP as an interim target last year and to move on to 0.48% this year. As I am sure the committee already knows, the slippage means that last year we got to 0.41% and this year we are also at 0.41%. We are at least a year out of sync. The Chairman mentioned that the difficult international economic circumstances have changed the parameters. Obviously, this has made our spending more difficult but it also moves the goalposts. It was very difficult to raise the percentage during the boom years because the goalposts kept changing. As our GNP went up the amount of money we needed to spend to reach a certain percentage also rose. If our GNP is not growing as fast, then in terms of percentage we get more bang for our buck when we raise our spending.

We feel now is a key juncture. There has been, essentially, a pause over the past year in percentage terms. We need to demonstrate that we are moving forward towards the target for 2007. Both the credibility of our promise and the quality of our programme depend on that to some extent. That is at the heart of the submission the committee has in front of it today, particularly in light of the EU Presidency as Mr. Roche has said. We have already dined out on this promise. We have received the international praise and have had the international launches from UN agencies here. They expect us to deliver on that promise. We have made progress but now we need to show how we are going to complete the process.

In terms of quality, if we are to expect Development Co-operation Ireland to maintain a quality programme, the raises need to come in bite size chunks or manageable amounts. In turning to how that might be done, we would follow its own recommendations. When DCI, as it is now, addressed the OECD peer review team in late spring or early summer it set forth a possible scenario for getting from where we are now to where we need to be in 2007. That scenario seems to us a reasonable and rational way forward. It recommends basically that we move forward in equal incremental jumps between now and 2007. We are at 0.41% this year; we should go to 0.48% in 2004; 0.55% in 2005; 0.62% in 2006 and ever so slightly more - eight basis points essentially - to 0.7% in the final year.

The effect of that in overall ODA and in terms of Vote 39 allocations depends to some degree on our GNP and our growth. However, based on ESRI calculations, and the Government's figures, and using the same figures DCI did, we have laid out in the document before the committee what that would mean. It does mean a substantial increase. We are talking about finding €100 million of an increase next year for example. Given that we have made the promise, and that the Taoiseach continues to make it at every opportunity in the international arena, to do it any other way than in an incremental approach would be to undermine both our credibility and the quality of the programme.

Let us look now at what happens next and how we see this committee playing some sort of a role. From our own consultations with the Department of Finance, our understanding is that over the past week or so the Minister has been making his judgments on the allocations across the board. On the basis of that his Department officials are now preparing a memorandum for Government. The debate is about to move from the officials' level to the political level - to Cabinet and Government. We hope this committee might be in a position to make representations to the Minister for Foreign Affairs, and to the Taoiseach and Government as a whole, that they need to bear this promise, which is an international promise, and this commitment in mind strongly when they come to make the final decisions over the next few weeks.

Deputy M. Higgins

I would like to make a few points. All Members and parties are in favour of us reaching 0.7% in 2007. What has been put before us today is that this should be on an achievable phased basis. In support of that I recall that most parties were also in favour of moving this out of the usual budgeting process into being something to which Governments, as they succeeded each other, would inherit a commitment and on which they would follow through. I have no difficulty with that either. There is merit in the proposal that has been made. We should make a recommendation to the Minister for Finance to sustain the commitment that has been made in regard to ODA and to put a timescale on it.

Let us deal with one or two small technical points that I am not sure were in the briefing note that we received. Some of us would need reassurance that the calculation will be based on gross national product, as we understand it. There is a clear commitment from one Government to another and it is clear in regard to United Nations discussions as to what is meant by 0.7% of gross national product. However, there are, for example, other new measures such as gross national income and so forth. Some of us raised this before in the sub-committee. It is important to be absolutely clear about what we are speaking.

I wish to make one other point concerning an issue on which the sub-committee may not meet. On issues such as this it is for the chairman to arrange a more thorough discussion. Before we are too congratulatory about the impact of what we are doing, I put it that we are meeting in the shadow of a complete failure in terms of the Doha commitment in regard to Cancun. What that means is that even when all aid is measured and a global figure put together, it does not come to 50% of what is lost in terms of trade, exploitation and unfair trade. Put another way, for every euro we give - even if we give our full commitment - we actually exploit by €2.2 approximately in terms of trade. That matter must be discussed here. Doha appears to me to be dead. It was, I think, article 13 in the 2001 declaration that set out an agenda that would address the issue of unfair trade.

Another issue is that the debt crisis is not over either. Daily payment rates in money are about €128 million per day on a south-north basis. While I applaud our aid I am putting it in context in terms of both trade and debt. What is taking place is quite tragic. I think that at some stage in this sub-committee and other committees people will want to question the model that insists that this is inevitable. We went with three different messages to Cancun. We can talk about the result again but the Chairman should put it on the agenda for discussion because all we came back with was with our contradictions intact. Certainly, the development goal was not made.

I question our commitment in regard to European Union aid and ask for a more thorough presentation in this regard in the general committee. We just get a kind of apologetics on this every now and again. Every committee for years, and the Chairman too, has sat here and heard about the scandal of unspent aid at the level of the European Union. I suggest another scandal relates to the world millennium development goals. This is interesting because while the parliamentary assembly relates itself to the WTO, for example, and the World Bank, it does not relate itself to the achievement of the world millennium development goals. Looking at my own figures - I could be completely wrong - there is a huge shortfall on the commitments and an enormous shortfall on the delivery. The idea that we would be able to halve poverty by the date specified, be able to have mass universal primary education and make the achievements referred to in regard to gender, is something a sub-committee like this should be discussing. These goals are slipping away. This is not a problem of the Government particularly but the reality is that we do terrible damage when we keep the language but the performance is short.

I have said where I stand on the presentation we have just had but I want to raise another issue I would like to see discussed here. I am not so happy with what has happened since the review on aid, now termed development co-operation. I was clear in my mind on how the old system worked with the agencies under APSO and how allocations were made.

There is a reference in the briefing document to the kind of working relationship that exists between the NGOs and that section of the Department of Foreign Affairs and which I am sure is a good thing for both sides. As a parliamentarian I am less than happy. The Irish aid programme has been massively increased and that is to be welcomed. However, is it easier to access information about the aid programme now? No. Is it easier to find out how a person can become involved in this much increased funded activity? No. I do not ask these questions in order to make any allegation. To my knowledge the review group under the chairmanship of Professor Jackson was never discussed in the Dáil and I do not recall it being discussed by this sub-committee or by the joint committee, which is quite extraordinary. This is a major review of the aid programme and it has never been tabled for discussion in the Seanad, the Dáil, the Joint Committee on Foreign Affairs or the Sub-Committee on Development Co-Operation. The sub-committee has set up another committee, chaired by the former Minister and TD, Desmond O'Malley. Has that committee met or when will it meet? What are its conclusions? It has been given an overseeing role on the undiscussed programme. That should be a matter for the sub-committee, the general committee, a matter for the Dáil and a matter for the Seanad because indeed did we not receive so many long lectures on accountability from that source?

I welcome Trócaire, Christian Aid, Comhlámh, Congood and all the others. I can support them but I am less than happy at the manner in which this has been brought before the committee.

Chairman

I can inform Deputy Higgins that the committee received a letter from the Trade Matters group who wish to make a presentation on the issues arising from the WTO meeting in Cancun. The committee agreed to that and we could use the opportunity to discuss other issues on Cancún.

Deputy Noonan

I thank Mr. Roche and Mr. Coghlan for their presentations. They are very welcome to the meeting of the sub-committee. It is important that the sub-committee focuses on these issues now as the Government Departments are having probably the second cut in their Estimates and matters should be finalised within the next three weeks or so. There is no doubt that this year is emerging as a difficult budgetary year and there does not seem to be much room for manoeuvre for the Government. It will probably be borrowing more than it did this year but there will be cuts in many programmes. If there are increases in some programmes they will be increases to match cost, increases on the basis of no policy change. What is being sought in this case is a real increase and therefore I support the views expressed by Deputy Higgins.

I recommend that the sub-committee make a submission to the Minister to bring forward a budget for ODA from now to 2007 and to remove it from the Estimates campaign so that it is treated as a non-Estimates item. If it stays within the normal Estimates campaign, it will be lucky to be held at 0.41%. I suppose there will be a projection of GNP increasing by 2.5% or perhaps 3% for next year. Holding the percentage is the same as an implied increase. What we want to achieve is a significant instalment on the road to 2007. If it were included in the Estimates, it would be lucky to hold the percentage with the way things are emerging this year. I do not think the Government Deputies present will disagree with me when I say that I do not think I am a million miles away from what is happening in the Estimates campaign at present.

Senator Ryan

I thank the two speakers and I apologise for my late arrival. Taking the optimistic view which is that the commitment shared by all political parties will be met, and taking the even more optimistic view that this will not be done by perhaps re-classifying some areas of expenditure as overseas development aid. This is one possible way in which I can foresee the promise being kept without extra expenditure. I do not wish to go into the detail but I have thought of a couple of ways in which somebody could do that if they wanted to be devious.

I am concerned about quality and both speakers referred to it. Many years ago I visited development co-operation projects. I hope the two organisations will accept that I am somebody whose commitment is unequivocal. Having spent 20 years examining ODA, will the speakers tell the sub-committee where ODA works? I ask them to spell this out fairly bluntly. There is a genuine issue about whether it works. By working I do not mean disaster relief. There is a limitless need for disaster relief to deal with floods and famine, for instance. Where are the models of success for overseas development aid either from this country or from other countries against which this committee could adjudicate on the general run of the mill operation of development co-operation?

This is an issue about the quality and use of the aid. Like my colleague, Deputy Higgins, I am increasingly fixated on trade because of the degree to which aid is being used simply to compensate for unjust trade practices. Vested interests are being protected at home and money is being paid under the general heading of development aid to compensate people who are not allowed participate in our markets.

Has either organisation any thoughts on international minimum labour standards and environmental standards? I raised this point at a WTO parliamentary association meeting. What the Malaysian representative said about me in particular in any other forum would have been very close to being libellous. I suggested that we should examine minimum standards and he chose to interpret it as protectionism that it most assuredly is not.

Mr. Roche

I will make a response and as some of these issues are close to Mr. Coghlan's heart, I am sure he will wish to add his voice.

I reiterate our thanks to the committee for inviting us to make a presentation. We appreciate the opportunity to engage with legislators and policy-makers on these issues of development aid and our relationship with people in developing countries. We hope to make this a fruitful dialogue.

On the issue of trade, Mr. Coghlan and I were in Cancún and our organisations are members of the Trade Matters network. We are grateful for the opportunity to discuss the issue in more depth with the committee.

It is vitally important that we maintain an ongoing critical assessment of the effect of aid in developing countries. Our organisations would certainly support those efforts, both internally and through the efforts of multilateral organisations and bilateral aid programmes by countries such as Ireland. On an ongoing basis we are fully supportive of that critical analysis. Our organizations engage in that critical analysis quite a bit at both the national and international level and are very happy to engage with the committee on these issues.

However, there is a question about the quality of aid and whether it has an impact. It is certainly my belief that there is an impact in developing countries through aid. Certainly in the past number of years we have not seen the effectiveness of aid that we would like to have seen. We have been very critical of some of the multilateral agencies, for example the World Bank and the procedures it has operated over recent years. We would be at the forefront of that criticism and will continue to engage at the multilateral level with organisations such as the World Bank to ensure that their programmes are effective. Certainly from our point of view as Oxfam on the ground, we see benefits on an ongoing basis to people with whom we work as a result of programmes in which we engage. I can only assure them that we engage in continual monitoring and evaluation of our programmes. DCI has a monitoring and evaluation unit and we encourage it to continue that process to ensure that we have effective aid programmes.

Of course we should mention the OECD peer review, which has said that the Irish programme was a high quality one. Another review was carried out this year. The last I heard was that the peer review report was expected on 17 November, but may come later. I would encourage the committee to engage with what comes out of that review and to see how our bilateral aid programmes are seen from abroad. We could spend a long time on that. That is what I would like to say on the issue of quality and effectiveness.

On the issue of minimum labour standards, certainly from the Oxfam point of view, we are engaged on a consistent basis to ensure that producers in developing countries get a fair deal, for example the producers of primary commodities like coffee. We recently had a coffee campaign to ensure that producers got a better deal. I appeared before this committee and made a presentation on that. As part of our broader "make trade fair" campaign and the work we do promoting justice and trade, we seek to ensure producers in the south have access to minimum labour standards and that ILO core labour standards are respected globally. We will be doing some more work on that in the new year. We feel strongly that ILO core labour standards should be respected and that it is up to everybody in the supply chain to respect them from sub-contractors right through to the major multinational branding companies. Consumers themselves have a responsibility to engage in that process, as do policy makers and NGOs.

I now hand over to Mr. Coghlan who will have something to say on those issues.

Mr. Coghlan

We are in agreement on the trade issue. It is a fundamental issue and in monetary terms it probably has a much greater impact. It is where the key decisions on the prospects for development will be taken over the next three years. There is a lot to play for. The talks at Cancun collapsed, but there is a chance to take stock of what we mean by development round and move forward. There is also a chance for the bigger powers to walk away, which is a danger. We would emphasise that trade and aid can be complementary as opposed to compensatory as they are now in a way. The poorest countries in particular will need the aid, as we did, in order to be able to participate effectively in the global economy, no matter how good the terms of trade are. In order to exploit market opportunities, etc., they will need the development that aid can help to bring. I look forward to returning to this issue in more detail with members of the committee.

On the quality issue, we were asked when does this work best. It works best when there are locally and nationally owned plans around poverty reduction that our funds buy into. Our organisations work well with small NGOs on the ground in order to do the local stuff and to hold their national governments to account. There are more efforts at international level to co-ordinate and for organisations like the World Bank to base their funding strategies on nationally owned programmes - poverty reduction strategies. There are issues still to be resolved there and the key one is the participation of civil society and the democratic accountability of those plans, but they do offer a potential way for those plans to be responsive to the real needs on the ground.

There are examples in Ireland's own priority aid countries. Uganda has been a controversial example of a recipient of Irish aid. Aid in Uganda has helped to finance programmes that have made a real difference to HIV infection rates for example. That is one illustration of how it can work.

It is not for us to answer for DCI or the Advisory Board of Ireland Aid, ABIA, but we can at least let members know that ABIA exists. I believe it will now just be known as the advisory board as Ireland Aid has changed its name. The advisory board has convened a development forum so there is a chance for a strategic dialogue between stakeholders. Perhaps the committee should be looking for parliamentarians to play a role in that. The board has met once this year so far and will meet again before Christmas to look in particular at the issue of coherence around trade. NGOs have found it a more useful form of dialogue than some of what went before, as it is both collective and strategic. Perhaps it needs to be broadened and be more accountable to the Oireachtas.

On the next matter I speak on behalf of Christian Aid, as Dóchas has not yet reached a collective position. One of the issues for maintaining a quality programme will be staffing levels. While DCI has increased its staff, if it is growing a programme from €200 million to almost €1 billion it needs the human resources to manage that programme effectively, not to add reams of bureaucracy but to have the technical skills and the expert knowledge. Obviously, as it forms part of the Department of Foreign Affairs, it is subject to the overall cap the Minister of Finance has placed on the public service. Equally it is subject to the rotational effects of being part of the diplomatic service to some degree. The entire focus of the Department of Foreign Affairs at present is getting through the European Presidency. It has made some progress in the past year.

Deputy M. Higgins

Is the delegation in a position to say what was the staffing level before the creation of the new entity and what it is now? How many people are to be recruited this year? Will it take on anybody next year? Can this information be found on any website?

Mr. Coghlan

I do not know if its website shows this. Just by chance I got a new organisation chart from it yesterday and compared the numbers at first secretary level, which is the level below principal officers. Between October 2002 and September 2003 it has gone from 23 to 32, so it has increased. There are ten principal officers, which is more than there were before. DCI might be able to give the committee a more precise and more detailed picture.

Chairman

To which area are you referring?

Mr. Coghlan

That is DCI.

Chairman

What about the advisory board?

Mr. Coghlan

The advisory board did not exist before the review. It has a principal officer or principal development specialist, Mary Sutton, who used to work for Trócaire. She is one of the contract staff that has been brought in. There definitely are increased staff numbers, but they are subject to that rotational issue and other activities in the Department of Foreign Affairs.

Further to what Mr. Roche said international standards relating to human rights and labour rights also form part of the work of Christian Aid. It is not surprising that Malaysia has responded that way. It has been an issue at the WTO. In fact the European Union wanted to make labour standards one of the new issues back in Singapore. That was where the debate first began. There is a difference between what developing countries' governments think and what developing countries' trades unions and civil society think. They would be interested in the WTO having a greater role. There are questions as to whether the WTO is the best place to enforce international labour standards. People look to it because it has a dispute settlement mechanism and can impose sanctions unlike the ILO. However, its mandate is progressive trade liberalisation. It is not necessarily holistic enough to really respond to those needs. Some people were trying to portray the potential investment agreement as a way of introducing standards, but that was not what the agenda was about. We believe strongly that it is not possible to balance investor rights and investor responsibilities there. For example, there is work in progress in Mary Robinson's former office in the United Nations on human rights guidelines in relation to transnational companies. We consider that a more fruitful approach and Christian Aid is focusing particularly on that area.

Deputy M. Higgins

This is also relevant to events in Cancun. We were very glad that the NGOs were represented and the diary on developments there was greatly appreciated. However, other countries had decided that their parliaments should be represented and invited Opposition spokespersons and representatives of committees dealing with these matters. Ireland did not do so. Without dwelling further on that, I suggest that, in terms of accountability to this sub-committee and the joint committee, the situation in relation to the advisory board and the new entity is an incredible morass of non-accountability. This is highly unacceptable.

Undoubtedly, some of us will sustain our interest in these matters, but if the entire discussion is to take place without any relationship back to Parliament and its committees and sub-committees, I regard that as an impossible and unacceptable situation and I suggest that our Chairman should convey to the Chairman of the joint committee that this is just not good enough. Members have always been willing to attend meetings, often at short notice, to hear presentations by people who have valuable contributions to offer, as at today's meeting. Our role is greatly diminished in the absence of any real involvement in policy matters. We cannot be expected to continue in this manner - I speak for myself, of course.

Chairman

Thank you, Deputy Higgins. Are there any other comments? I thank the delegation for their attendance and their very informative contribution to this meeting. As Deputy Noonan mentioned, the annual Estimates process is under way and the situation for 2004 will soon be decided. It is timely that this sub-committee has an opportunity to discuss the issues involved. We will, of course, bring the views expressed today to the attention of the Ministers concerned.

Deputy M. Higgins

I propose a resolution to the effect that the figure of 0.7% be adhered to and that it should have a time scale attached.

Chairman

Yes, I take that proposal - I was just about to come to that point. First, I believe we can accept the recommendations from Dóchas on the 2004 budget and incremental increases up to 2007. Is that agreed? Agreed.

Deputy Noonan had a separate proposal on ring-fencing - if that is the right word - funding, to take it out of the loop.

Deputy Noonan

The only additionality I am suggesting is that it should be taken out of the Estimates campaign and treated as a separate item.

Chairman

Yes, that was a point mentioned by all speakers.

Deputy Noonan

The increments suggested in the Dóchas briefing note are fine.

Chairman

I believe we are all in agreement on that. We will convey it to the Minister.

The sub-committee adjourned at 2.54 p.m.sine die.