As my right hon. Friend the Prime Minister stated as recently as 17 October:
“By 2013, the UK Government will reach our target of spending 0.7 per cent. of national income on aid. We have clearly laid out our plans to the reach this goal and we are encouraging our partners to do likewise.”
Actis Capital, the opaque private equity company created in 2004 to invest the then Commonwealth Development Corporation’s funds, made $50 million profit in 2007 from sources such as a financial services company in South Africa and a hotel chain in China. How satisfied is my right hon. Friend with Actis’s use of public money at a time when aid budgets are under such pressure? Could it not be put to far better use in agriculture, health, education and infrastructure projects in the developing world?
CDC, which has worked with Actis in recent years, has accumulated capital while investing significant sums of money in the developing world. The need for continued flows of capital to the developing world has only increased in recent months and that is why it is important that, for example, the World Bank increases counter-cyclical lending. That is why we want to see other institutions, including CDC, continue to put capital into the developing world. Aid alone will never be sufficient to meet the challenge of poverty.