I beg to move,
That this House has considered jobs and livelihoods in developing countries.
I draw attention to my entries in the Register of Members’ Financial Interests.
“A good job can change a person’s life, and the right jobs can transform entire societies. Governments need to move jobs to center stage to promote prosperity and fight poverty”.
Those are the words of Dr Jim Yong Kim, president of the World Bank, in his introduction to the 2013 World Development Report. In 2014, my right hon. Friend the Secretary of State for International Development said:
“Growth reduces poverty through jobs…raising incomes for individuals through the dignity of work and providing tax receipts for governments to fund basic public services like health and education.”
On the other hand, the lack of jobs and the opportunity to earn a living fuels discontent and unrest and drives economic migration. We are seeing the consequences right now, which is yet another reason why working in partnership around the world is both the right thing to do and very much in our national interest.
In sustainable development goal 8, UN member Governments commit that by 2030 they will achieve
“full and productive employment and decent work for all women and men, including for young people and persons with disabilities, and equal pay for work of equal value”.
Just last year the International Development Committee published a report on jobs and livelihoods. One of its recommendations was that jobs and livelihoods were “such an important issue” that its successor Committee in this Parliament should take it up
“to assess what progress has been made.”
I am sure that that will happen in the coming years, but I wanted to ensure that the matter was raised in the House. I am delighted to see so many colleagues present. Other members of the International Development Committee would have been here, but the timing of the debate clashes with a meeting of its Sub-Committee on the Independent Commission for Aid Impact.
Does my hon. Friend feel that the Prime Minister’s initiative to make a number of MPs, such as myself, trade envoys will contribute to the work he is describing, given the wide role we have been given? How much does he think the prosperity fund will play a role in helping to develop local industries and situations to enable the creation of new jobs?
I am most grateful to my hon. Friend for that intervention. He is doing fine work as a trade envoy for Nigeria, which is vital, because British investment around the world will help to create jobs. The prosperity fund will provide opportunities for people to develop that work. I entirely agree with my hon. Friend.
The 2013 World Development Report estimated that, globally, 200 million disproportionately young people are unemployed, with a further 620 million young people neither working, nor looking for work. Due to age profile and population growth, the report estimates that a further 600 million jobs will need to be found in the next 15 years just to keep employment rates constant. Personally, I would put that figure even higher, at closer to 1 billion.
I congratulate the hon. Gentleman on securing this debate. He is discussing the figures and alluded to the fact that we would like to go further. Does he agree that it is almost a pipe-dream that the sustainable development goal that appears to indicate the elimination of poverty and unemployment, particularly in developing countries, will be achieved by 2030? We really need radically to reassess what we are doing to achieve that goal.
The hon. Gentleman makes a valuable point. One reason why I called for this debate is because not nearly enough work is going on around the world. The UK is taking a lead, but he is absolutely right that much more needs to be done here and around the world.
In many countries, much of the work is subsistence agriculture and low-income self-employment—that is true for something like 50% of the 3 billion people working worldwide. Making ends meet is extremely difficult. I have to admit that all the figures I have cited are imprecise and sometimes speculative, which is a problem. We do not have accurate data, but I hope we will see more in future. It is about not only data but action, but action depends on good data.
The World Development Report found that: first, there are too few productive waged jobs in modern, formal sectors; secondly, most people are engaged in very low-productivity, seasonal or subsistence work in both rural and urban areas; thirdly, there are large gaps in job opportunities for women, youth and marginalised groups; fourthly, much work is in poor conditions, or is unsafe or risky, including in formal employment; and fifthly, many labour market-related institutions are ineffective, including skills institutions.
I congratulate the hon. Gentleman on securing this debate. I apologise that I cannot stay for the whole debate, but I am going to an event in the House of Lords to mark Small Charity Week and speak about the importance of small charities in international development. Does he agree that many small and grassroots organisations have an important role to play in equipping people in developing countries with precisely the kinds of skills he is talking about, which they need in order to move into productive employment?
I entirely agree with the hon. Gentleman. I will give an example of that later in my speech, but he is absolutely right. I made a similar point in Monday’s debate in this Chamber on foreign aid expenditure.
What can be done? I shall give several possible solutions. First, let us work with what we have. I shall start with agriculture, because it is at the heart of the economies of most developing countries. It provides most of the work and a considerable share of GDP, Government income and exports. It also provides the basis for local manufacturing. Even in developed economies such as ours, food and drink production is the largest manufacturing sector. Why should that not be the case in developing countries?
Although all countries will of course wish to diversify into other sectors and reduce reliance on agriculture, that is not the same as neglecting agriculture. That mistake has been made far too often in the past, both by Governments and by their aid-funded advisers. I am glad to say that things have changed over the past three decades. Countries such as India and Vietnam, and more recently Ghana, Tanzania and Ethiopia—to name but a few of many—have given much more prominence to agriculture and increased their support of it. The same is true of development agencies, especially the Department for International Development. I welcome that.
Working with what we have in agriculture also means working with the smallholder farmers who are its backbone. When I started to work with smallholder farmers nearly 30 years ago, the view of many was that they were on the way out, and that the future of agriculture was large-scale farming. In fact, they are more important than ever, providing food security even in conflict zones. For example, in the 1970s Angola produced a similar amount of coffee to Uganda, but Angola’s coffee was almost all produced on large estates, while Uganda’s was produced by smallholders. Both countries went through long periods of turbulence. Today, Uganda’s coffee production is the same as it was back then, if not more, but Angola’s coffee production has almost disappeared. Smallholder farmers are incredibly resilient.
I congratulate the hon. Gentleman on securing this debate. He has vast experience of developing countries. Does he agree that there needs to be an emphasis on educating young people so that there are links with the business community? He will know that every year in the House there are campaigns to get children in developing countries into education. That would help them on the pathway to jobs, no matter how little.
I agree entirely. I shall address that issue in a moment, because it is vital.
I have a couple of other examples of sectors in which we can work with what we have. Hospitality is important in every developing country. It is about not only international tourism, but looking after people in one’s own country and wider region. Hilton estimates that, if there is proper investment around the world, the hospitality sector alone could create an additional 70 million jobs over the next decade. Apart from agriculture and agricultural processing, construction is very likely to create and sustain jobs and livelihoods in most parts of developing countries. I shall say a little more about that later in my speech. We must also consider local services. Services are often neglected in favour of large manufacturing investments, yet in every town and city, along every main street, one will see service businesses. We need to support and encourage them, because if every service business employed one more person, millions more people would be employed throughout the developing world.
Secondly, not only should we work with what we have, but we must not stand still. Everyone wishes to see a better life for their family. Incomes from agriculture can be improved in many ways. That subject is worth an entire debate in itself, but, to be brief, they include enhanced productivity through better inputs, advice, irrigation, finance, diversification, storage to reduce crop losses, and access to markets and to information about those markets. In other words, that means moving on from subsistence agriculture.
DFID’s recently published conceptual framework on agriculture puts it well. It says that there is
“the assumption that sustained wealth creation and a self-financed exit from poverty depend, in the long-term, on economic transformation and the majority of the rural poor finding productive and better paid employment outside of primary agricultural production”—
note that the framework says primary—
“Despite the need for this transition, agricultural growth and downstream processing and productivity growth are likely to be important, if not essential, as a continued source, if not driver, of growth.”
When I was involved in buying cocoa from smallholder farmers, we saw the price per kilo paid to farmers, and hence their income, rise at least fourfold over two or three years as result of a combination of improved quality, better logistics, a higher world market price and a greater percentage of that price being paid to the farmers. It also depended on having a reliable buyer prepared to take a long-term approach, rather than one driven by short-term trading considerations. The farmers’ improved incomes not only sustained and improved their own livelihoods but created jobs at a tremendous rate. The money stayed in the local economy to support input dealers, schools, clinics, general stores and bars. That, in turn, created jobs in local and national manufacturing and service businesses. I am a believer not in trickle-down economics, but in trickle-up economics, and smallholder agriculture is at the heart of that.
I have concentrated on agriculture, but the need not to stand still applies to all the other sectors I mentioned. In hospitality, training, good-quality service and investment meet the needs of nationals, not just tourists. There is no reason why someone cannot provide an excellent hotel or tourist spot for their own population. They do not need to rely on a few hundreds of thousands or tens of thousands of overseas visitors.
Construction jobs can be enhanced through a formal apprenticeship scheme of the kind I mentioned. They can also be supported by placing specific requirements on contractors in large infrastructure projects to employ and properly train local people in their work. That is increasingly happening, but it needs to be extended to the most senior levels of the contract, not just the grassroots workers. Skills are best transferred in the heat of building a major road, bridge, airport or railway line.
Does the hon. Gentleman also recognise the importance of urban planning, in particular for the foundations it lays for economic development? We need to do more on that.
That is a very interesting point. I agree. We see the consequences of poor urban planning in many parts of the world. In that context and the general context of construction, I would like to ask the Minister whether all the infrastructure and construction projects that DFID supports now have clauses that require the training and development of local skills, rather than just bringing in professionals and others from outside.
Thirdly, we must act locally and regionally, not just from the capital city. People working at the grassroots are the best at creating large numbers of jobs, so Governments and aid organisations need to concentrate their work there, not just in capitals or large cities. The Bangladesh-based international development agency BRAC is effective at doing that, as I saw in Babati in Tanzania—a small town south of Arusha, which the International Development Committee visited in 2014. Charities such as Hand in Hand, set up by the Swedish entrepreneur Percy Barnevik, also work outside the main cities and capitals.
In Nigeria, which the International Development Committee visited in March, DFID has an office in Kano. I think it is the only major aid organisation based in Kano, which gives it the advantage of having a greater appreciation of the situation on the ground. I would encourage the same elsewhere. I would like to see DFID staff based in regional towns and cities, not just capitals. Given modern communication technology, we do not need expensive infrastructure to do that, and I think many would welcome the chance to do their work outside the bubble of a congested, expensive capital city.
Regional trade is vital. DFID has some excellent programmes—in particular, TradeMark East Africa, which, like many things I am going to talk about, is worth an entire debate itself. I will not say more about it at this stage, other than that I believe it has done some excellent work in breaking down trade barriers across the region.
Fourthly, we need to embrace job creation in public services, which are sometimes forgotten. Building public services, such as health and education, provides huge job opportunities. The NHS is the UK’s largest employer by far. At the moment, in Tanzania there is one doctor for every 25,000 people, whereas in the UK it is something like one for every 350. If Tanzania increased its number of doctors to one for every 2,000 people, that would create more than 20,000 highly skilled roles in that country alone, and probably more than 100,000 in total in the health sector. I am very glad to hear that this month Tanzania is considering increasing its health spending substantially in its budget. If that happens, there will be greater employment in the health sector. The same applies to education.
Of course, there is an argument that that depends on increasing Government revenue. That is absolutely true, but it also depends on choices about how Government revenue is spent. It is a virtuous circle: greater access to healthcare and education helps people’s productivity, and hence increases the income that generates taxes. I do not have an estimate of how many additional jobs will be created in developing countries if staffing and education reached just one quarter of developed countries’ levels, but it would be in the millions globally, and almost all would be filled by the young people who need them most.
Fifthly, we need to be inclusive. We need to ensure that the work covers everybody, and women and girls must be at the heart of it. Policies that exclude people are not only wrong, but bad for jobs and livelihoods, and hence economic growth.
Sixthly, there must be access to the right kind of finance, without which we cannot create jobs and livelihoods. Again, a separate debate is required on that issue, so I will limit myself to two examples. Small and growing businesses, which will create the most jobs and need finance, tend to be seen as risky. Commercial banks are increasingly risk averse in developing countries, as they are in developed countries, as they implement capital adequacy rules designed, understandably, to protect depositors. Loans come with high security requirements, so finance will increasingly need to come in forms that are not so restrictive. The providers will need to be willing to take on risk—that applies as much to the UK as to developing countries. The last thing we should do is discourage entrepreneurs by promising them destitution if things go wrong, which is pretty much what commercial banks in developing countries do: they take everything away if the loan goes bad.
The Economist recently published an article with examples of that kind of finance, including GroFin and Equity for Tanzania. I have to declare an interest: I helped to found Equity for Tanzania, and I am director of its charitable parent organisation in the UK. It leases equipment to the growing businesses in Tanzania, and takes as security only the equipment itself. It has the specific aim of job creation. Returning to the point that the hon. Member for Glasgow North (Patrick Grady) made, it was supported by a small grant from DFID about 12 years ago and developed into a much larger organisation.
The second example is CDC—formerly the Commonwealth Development Corporation—which invests in larger business. It has the specific aim, set up by the previous Secretary of State, my right hon. Friend the Member for Sutton Coldfield (Mr Mitchell), to create jobs and livelihoods, and to work in the most needy countries. I welcome that.
Finally—this also relates to the point made by the hon. Member for Glasgow North—we need education and training. A strong and diverse economy built from the grassroots also needs a vibrant education and training system that teaches not simply the essential building blocks—mathematics, sciences and languages—but the skills that people need to work for themselves or run a small enterprise. When the International Development Committee visited Sierra Leone in 2014, President Koroma stressed to us his desire to see more vocational training. In Nepal in 2015 we saw a vocational training scheme run by the Swiss and supported by DFID. There is a tendency to see traditional vocational training models as ineffective, having high capital and running costs and being inaccessible to young people. I believe we need models that are more akin to our apprenticeship schemes, and that are based on working alongside skilled businessmen and women. People should receive financial support for doing so, together with some central training. That is cheaper and more effective.
I also suggest there is a need to embed business and self-employment training within school curricula. Most students will end up working for themselves, or in small enterprises, and they will be better prepared if the training starts in school—again, the same applies in the UK. We do not have enough of that in our school curricula. It would also raise the status of business and self-employment as something a student wishes to do, rather than as a last resort if they cannot go to university or obtain a government or salaried job of some kind. Excellent work on that is done by Youth Business International, part of the Prince’s Trust network, and Peace Child International.
I will now look briefly at DFID’s work, first at its economic strategic development framework, which has five pillars: improving international rules for shared prosperity; supporting the enabling environment for private sector growth; catalysing capital flows and trade in frontier markets; engaging with businesses to help their investments contribute to development; and ensuring that growth is inclusive and benefits girls and women. I have already touched on many of those subjects, so DFID is already covering a lot of the ground. The DFID framework, however, excludes the role of public services in economic development, especially job creation. When the framework is next revised, I ask the Minister to include that in it; it is important.
The second area in which DFID is doing a lot of work is its youth agenda, “Putting young people at the heart of development”, published only in April this year. It focuses on two transitions, between childhood and puberty, or adolescence, and between education and productive work, going from dependence to independence. The April publication has been followed up with a couple of internal papers on youth and jobs, and youth and entrepreneurship. DFID is apparently preparing for a consultation on the issues later this year. That is good, and I welcome it, but we need not only consultations and papers, but action. DFID has the opportunity to lead such work internationally.
Finally, there is the World Bank, which I began with. I declare an interest, as I chair the international Parliamentary Network on the World Bank & International Monetary Fund. In 2014 the bank launched its Solutions for Youth Employment initiative and an umbrella trust fund for jobs, which is supported by DFID. Will the Minister tell us about any progress on that? Are we simply discussing a lot of nice platitudes, welcome though they are, and even policies, or are we talking about real action to create, or support the creation of, those jobs and livelihoods, which are so urgently needed?
In conclusion, I welcome what is being done at the moment. As the hon. Member for East Londonderry (Mr Campbell) said, we must go a lot further and a lot faster. I want to see every DFID bilateral programme fully engaged with the host Government on jobs and livelihoods, particularly for young people. They will find an open door, because that will always be one of the top priorities of any responsible Government. That does not necessarily mean large programmes in every country—we need to avoid duplication—but it does mean constant dialogue to see how we can support the Government.
DFID needs to use its influence in all multilaterals to put jobs and livelihoods at the centre of activity, particularly in health and education, which we cannot see as somehow completely divorced from jobs and livelihoods, because they depend on people working in them and having their jobs and livelihoods in those sectors.
Make no mistake, this is possibly the biggest challenge of our generation, along with tackling climate change. Hundreds of millions of young people could be ignored, without hope, seeking to move elsewhere, and at the mercy of people traffickers or extremists, or we could have those same young people engaged, valued and able to contribute where they are.
It is a pleasure to speak in the debate, Mrs Moon. I congratulate the hon. Member for Stafford (Jeremy Lefroy), who set the scene very well, as he always does. He clearly has not only a vast amount of knowledge and experience, but compassion for the people concerned and those he has interacted with over the years. It is always a pleasure to hear him, and it is a pleasure to follow him.
This issue must be highlighted; it is one in which many of us have an interest, especially given ongoing concerns about the amount of money that this House sets aside for overseas aid. We had a debate here on Monday about that, and the Minister responded to it. Every speaker in that debate said how important it was to retain the target of 0.7% of gross national income, although there were concerns about how the money is allocated. It is therefore important to not only retain money for aid in line with the GNI target, but look at its allocation.
I am unapologetic about always seeking what is in the best interests of my constituency and highlighting the best we have to offer. I have stood against austerity cuts that affect the vulnerable in our society and impact adversely on those who do not enjoy the same quality of life as many of us in this Chamber. I am proud to be an Ulsterman, with all that that entails—loyalty, compassion and generosity. My wee country is well known for having a big heart, which is why I have no difficulty in saying that it is essential for the Department for International Development to continue overseas aid. I know that on that issue, I speak on behalf of the vast majority of my constituents, who are generous to a fault.
In Parliament, we talk about the living wage and quality of life, and I argue passionately on behalf of my constituents on those issues, but I have also seen the flipside: those in other countries who have no quality of life or living wage. On a visit to a British Army base in Kenya with the armed forces parliamentary scheme—the hon. Member for Stafford was on the same trip—I was given a small glimpse of children living in absolute poverty, with no life and no hope whatever. I saw despairing mothers seeking to feed their children with scraps, and I saw men willing to work, but there was no work to be had. My heart was touched, just as I am touched by the needs in my community. When I saw such need, I knew that I would always stand up for the allocation of a small amount of funding to overseas aid to ensure that we can deliver the jobs and opportunities that the hon. Gentleman spoke about, and that the debate is all about.
I want the funding to be allocated, but there must be wisdom in how it is allocated to ensure that, as the saying goes, we give people the tools to feed themselves and their families for days and months, rather than simply giving them a meal. However, there is no point in giving a starving child a fishing net; wisdom lies in providing the child with a meal and the family with the ability to find future meals. That underlies the title of the debate, which is about promoting jobs and livelihoods in the developing nations that we support.
In March 2015, the International Development Committee published a report on jobs and livelihoods that said:
“Jobs and livelihoods is such an important issue we recommend that our successor Committee takes it up in the next Parliament to assess what progress has been made.”
It was clear in the previous Parliament and this one that the Committee knows that jobs are the only way to make a lasting difference to the lives of people throughout the world. The questions that arise are: have we been successful in our aim? Have we achieved those goals? Are we moving in the right direction?
I agree with my hon. Friend, but does he agree that the sustainable development target of eliminating unemployment and poverty over the next two Parliaments in the United Kingdom stands in stark contrast to escalating youth unemployment in developed nations? The eurozone has 40% youth unemployment. Without a radical and fundamental change, how on earth will we ever see anything remotely close to reducing unemployment and poverty in developing countries, let alone eliminating them?
My hon. Friend is most wise, as always. He sets the scene. There are many difficulties at home and abroad. All we can do in the debate is to set the scene and the goals, and contribute, we hope, to a strategy for a way forward. That is what we are trying to do. In 2014, the UK provided £752 million in bilateral aid directly related to jobs, businesses and the economy. Some £358 million was for particular production sectors, such as agriculture and forestry, and £394 million was for economic infrastructure and services, such as transport and storage, or banking and financial services. Together, that accounted for 11% of bilateral aid from the UK.
My hon. Friend has mentioned substantial amounts of money. Does he agree that it is essential for that money to be targeted on the people who need it? So often, we have seen corruption in a lot of the countries, with the money being siphoned off and going to the black market or whatever, and not getting to the people who need it.
My hon. Friend is right. Monday’s debate in Westminster Hall, to which the Minister replied, clearly hinted at such things. We all outlined examples where aid had not been focused on the sector that it should have been. My hon. Friend is right to highlight that point, as we did on Monday.
The Independent Commission for Aid Impact published a report on DFID’s private sector development work in May 2014, giving it an overall amber-red rating. It found that
“The impact of individual programmes is positive…and DFID has demonstrated its ability to assist the poor through a range of interventions”.
However, it also found that
“It has not turned these ambitions into clear guidance for the development of coherent, realistic, well-balanced and joined-up country-level portfolios.”
The hon. Member for Stafford is therefore right that that is what we should try to focus on.
How much of the money actually achieved its aim? Not much, it would seem. Have we made progress and moved from the amber-red zone? My fear is that we have not. Before her children came along, my parliamentary aide used to go to Africa every year in the summer to carry out mission and humanitarian aid work, and she told me of the horrific corruption in many countries that prevented aid from getting to where it was needed; my hon. Friend the Member for Upper Bann (David Simpson) mentioned that, too. The same goes for containers of agricultural equipment that we in Northern Ireland sent overseas; the containers reach their destination with some things having been taken out of them. In fact, those who pack the containers have learned to pack the essential stuff in the back, in the hope of it reaching its destination. The Elim church missionaries in Newtownards in my constituency of Strangford do fantastic work in in Malawi, Zimbabwe and Swaziland in Africa, as do many other churches across the whole of Northern Ireland, and indeed the United Kingdom.
Stories of corruption make it clear to me that work on ending it needs to be carried out with the Governments to which we send aid. We need to ensure that, when we send aid bilaterally, we do so only when there are procedures in place that allow it to make a difference on the ground, rather than being swallowed up in paperwork and translation. One of the best ways of achieving that goal is to use those who are already on the ground, and to divert funding through bodies that we see making a difference, whether that is Oxfam, Christian Aid or mission bodies with permanent staff on the ground.
The hon. Member for Glasgow North (Patrick Grady) spoke about charitable work. I know of one church in my constituency that, instead of giving Christmas presents, promoted the gift of a cow or a goat to Africa, so that individuals could breed the cows and in the meantime sell milk, or use it to live on. That is a practical way of doing things that changes lives in a small way. It may be a small change for the Government, but the change made in villages throughout Malawi and Zimbabwe was in no way small. Can we learn a lesson from missionaries who have been on the field for 20 years, and who know the systems and how to work in them to achieve results? I believe so.
There is a desperate need for jobs and livelihoods in these countries, and there is an onus on us, as a country that allocates a great deal of funding, to ensure that that is achieved, and that funding is not caught up, or whittled away in the process of getting to the man on the street. I look forward to hearing from DFID. I apologise to the Minister and the shadow Minister for the fact that I will not be here for their speeches, as I have a Select Committee to go to at 10.10 am.
I believe that we can effect change with the much-needed funding that this generous nation of the United Kingdom of Great Britain and Northern Ireland gives each and every year, and I encourage other countries to do the same.
It is a pleasure to serve under your chairmanship, Mrs Moon. What a great opening my hon. Friend the Member for Stafford (Jeremy Lefroy) gave to the debate on this incredibly important subject. As I had only two minutes to speak the other day, I was unable to congratulate the Minister on his knighthood—congratulations!
The UK has made significant contributions to improving the livelihoods of the poorest on the planet, and it is in our interests to help developing states strengthen further, economically and politically, if we are to avert the rise in emigration to the UK from developing countries. The UN states that we will need to create 30 million new jobs every year to keep up with the growth in the global working-age population. The enormity of that challenge is not something that the developing world can—or even should— shoulder by itself.
Our commitment to overseas business development should not be seen as just another programme aimed at helping the poor. It helps everyone, including the countries giving the aid. We are a trading nation, and as such we must always be on the look-out for new markets and new partners to work with. That includes those countries where we have to help develop and foster the conditions necessary for business to flourish.
It is in our national interest to encourage the growth of developing countries by unlocking the enormous potential of the private sectors in those countries. By encouraging business growth, we are turning those who receive state aid into key trading partners. Investment in developing countries brings them into our markets, as we now see across Asia and Africa. For example, our programme to support Rwandan agriculture has transformed the industry from a subsistence-based activity into one that is commercially oriented. With help from DFID, the Rwandan Government have collected greater tax revenues, which has meant that Rwanda’s dependency on foreign aid has declined. The Rwandan Government’s spending on education and healthcare programmes has trebled as a result of the revenues they have collected. Bilateral trade in goods between the UK and Rwanda exceeded £10 million in 2012, and UK exports to Rwanda totalled £7 million. The top exports included power-generating machinery, medicinal and pharmaceutical products, and general industrial machinery.
It is vital that we get the world’s young into work for their own dignity and personal development as well as their economic future. In so many places in the world, we see the consequences of young people feeling that they have no future because of conflict or migration, but where people have the opportunity to support themselves and their families, we see greater stability. That in turn encourages greater business development and attracts more investment.
The UK can be proud of its involvement in the millennium development goals, which significantly improve the livelihoods of billions of people. In particular, the UK’s action on development goal 8 has meant that, between 2000 and 2014, bilateral aid to the least developed countries fell by 16% in real terms, while 79% of imports from developing countries entered developed countries duty-free.
Globally, the population covered by 2G grew from 58% in 2001 to 95% in 2015, and anyone who has travelled in developing countries can see that even the poorest individual now has a mobile phone. Internet use has grown from 6% of the world’s population in 2000 to more than 40% in 2015, and 3.2 billion people are now linked to the content and applications that we can access here in the UK.
Those achievements in internet provision, coupled with the ready availability of technology, mean that people are seeing the quality of life in the developed world, so it should come as no surprise that the UK is a popular destination for those who have the skills and qualifications to get themselves here. Technology has vastly improved all our lives, and the opportunities for developing countries are even greater. Developing countries and businesses based there have leapfrogged obsolete technologies, which has allowed them to take advantage of the same level of technology that we enjoy. That has also placed on us a need to accelerate our programmes and ensure that as the expectations of those who live in developing countries rise, so do the opportunities available to them.
A lack of sustainable jobs, and livelihoods that fall below expectations, threaten to undermine our progress on the wider goals of tackling poverty. Unless we address that problem, we will continue to drain away the most educated individuals from the communities that need them most. As of April last year, about 80,000 doctors registered in the UK had obtained their primary medical qualification outside the UK. Many of them qualified in India, Pakistan, South Africa and Nigeria. In effect, developing countries are paying to train doctors for our health service. We have a high demand for doctors, but taking them from the world’s developing countries is counterproductive and not sustainable. Our foreign aid and investment in business development will not see real results unless we create an environment in which aspirational people see their future in their own communities.
A UN report highlighted that 780 million people in the world are earning less than $2 a day, which is the UN development goals’ definition of absolute poverty. We know that society as a whole benefits when more people are contributing towards their country’s growth, but employment must be worth while and rewarding. That is why it was so important that the UN reaffirmed its commitment to the principles of the global development goals in 2015. We will continue to build on what we have achieved.
We have committed to ensuring that everyone can enjoy prosperous and fulfilling lives by 2030 through the creation of sustainable jobs and by sharing the benefits of technology. Our business development spending must continue to be directed towards developing countries, helping them to build their economies and develop themselves. Continuing with that programme contributes significantly to our wider goals of eradicating poverty and conflict. It is essential that we make that one of our major focuses for the next 15 years and beyond.
It is a pleasure to serve under your chairpersonship, Mrs Moon. I congratulate the hon. Member for Stafford (Jeremy Lefroy) on introducing this important debate. He is a real advocate of what works in international development and it is a privilege to serve on the International Development Committee alongside him.
I am pleased to be able to take part in the debate. I have a great interest in the subject; I am a member of the Select Committee on International Development, and have a local interest as the Department for International Development in Scotland is based in East Kilbride, in my constituency. We need to recognise the importance of making sure that there are sustainable, inclusive jobs across the world; we must place that at the heart of the UK’s development agenda. I am particularly proud of my party’s work on that. The Scottish Government have a firm commitment to advance Scotland’s place in the world as a responsible nation. They have a £9 million international development fund and a £6 million climate justice fund, which supports 11 projects in places that include Malawi, Zambia, Tanzania and Rwanda.
Goal 8 of the sustainable development goals is about jobs and livelihoods. That key objective is required to be achieved by 2030. There is, as we have heard, much work to be done to realise that aim, and progress must be regularly monitored, and measured effectively through improved data collection and the development of disaggregated data. We need to ensure that the disproportionate unemployment rate for young people is tackled. About 600 million new jobs must be created just to keep things constant. Unemployment affects women and disabled people disproportionately. The target includes full and productive employment for all and equal pay for work of equal value, ensuring that no one is left behind. An example to consider is work that has been funded in Malawi, including projects focused on job development and economic growth. This month I met Malawian farmers who had developed a fair trade enterprise that enabled many people in their community to develop sustainable businesses. Their venture supported others besides their own families, and enabled many children to attend school. I would like DFID in future to fund initiatives of that type and think about developing them.
The Global Concerns Trust has run several projects that have helped adults with disabilities to receive vocational training. In one project, 106 adults have been given training in carpentry or tailoring, and the trust has given 57 people the tools they need to start their own business. Our development portfolio should ensure that no one is left behind. Another project has given 62 people with disabilities vocational training, as well as training in business skills and prevention of HIV/AIDS, so that they can help others in their community. That has helped people to earn a living, with a more than fivefold increase in income on average for those trained. Those achievements may seem small in scale, but they have a huge impact. They allow people the opportunity to develop and grow, and to create businesses and become economic contributors. They are then not reliant on government project work or aid for sustainability.
It is important for developing countries to have sustainable economies for growth—but that is not the only reason. There are also enormous psychological benefits to being employed and economically active. It gives dignity and fulfilment. Without a job people feel that there is no future for them or their families. Jobs meet important psychosocial needs, and work is central to individual identity and social status, whereas conversely there is a strong association between worklessness and poor health, including poor mental health, and poverty. Working towards full employment in developing countries helps to create a foundation of growing prosperity, inclusion and social cohesion.
DFID works on private sector development, but there is much work to be done in that realm. We need to engage private enterprise to ensure that the millions become the trillions that we need to leverage our sustainable development goals and make progress. We need a focus on entrepreneurship and allowing people to develop their own skills and attributes, including technological skills, which are so important to economic development. We also need effective measures to eradicate forced labour, slavery and human trafficking. We need to work at many levels.
It is necessary to develop clear guidance to ensure that future assistance is clearly structured to create coherent opportunities. It is a fundamental issue and it is of the utmost importance that we get it right and continually assess our progress. We need the UK Government to report on progress in an open, accessible and participatory way, supporting the active engagement of all, including children and marginalised groups. As I have mentioned, a key issue is that we require better datasets, which should be disaggregated across countries. I am hopeful that technology will be able to transform people’s lives—particularly women’s lives—across the world. Tools and equipment reduce drudgery and increase the amount of quality time that can be spent with family and on education. I would like a fair trade symbol to be developed, if possible, to show in particular women’s contribution to the production cycle, where women lead and develop businesses in the developing world. I should be grateful if the Minister commented on whether that is a helpful idea.
Jobs and livelihoods are crucial for all. The sustainable development goals mean that we must make progress at home as well as in developing countries. More focus is required on enabling, and less on scapegoating of the workless. That will give a motivation for change. I look forward to working constructively in the International Development Committee on this issue, as well as at home in my constituency, developing jobs and livelihoods for all.
It would be remiss of me not to congratulate the Minister on his elevation to a knighthood. I am sure that as a former Vice-Chamberlain of Her Majesty’s Household, who is traditionally held hostage in Buckingham Palace before the state opening, he had plenty of opportunity to lobby the right people, and his lobbying has come to fruition.
It would be remiss of me, too, not to pay tribute to you, Mrs Moon. Through your membership of the Select Committee on Defence you have become an expert in foreign affairs, international development and safety and security around the world, and I pay tribute to you for all that you have done in that field. You are now a leading light in this Parliament on those issues.
I want also to pay tribute to the hon. Member for Stafford (Jeremy Lefroy), whose speech taught us all a lesson. I have been a Member of Parliament for six years. So often in this place Members stand up, and we hear them read out a speech; but with his speech today the hon. Gentleman proved that he cares—and cares passionately. Throughout our debate we have seen something that we should remember in the midst of the referendum—many people try to divide us into in and out camps, but the one thing that unites us is that we are human. People in developing countries may live in places whose names we cannot pronounce, and that we do not understand; but if we care about poverty it does not matter whether it is in Blackwood or Newbridge in my constituency, Stafford or Mozambique. We all have a duty as human beings to care about those who are impoverished and who are suffering, around the world. The hon. Gentleman’s speech, and other speeches today, have expressed that.
There are many things we sometimes take for granted in the UK, which is one of the most developed countries in the world. We have fantastic infrastructure, such as our extensive network of motorways, which stretches across the country. We have the resources to put into projects such as HS2, to make a drastic improvement to rail links between the north and south. We do not have to rely on international aid for our business. Instead, we attract considerable foreign direct investment. Indeed, in 2014 the UK attracted foreign investment in a record 887 projects, which created more than 31,000 jobs in this country. Investors know that money invested in the UK is safe and will generate returns, in the main.
We are the lucky ones. For much of the rest of the world, specifically developing countries, the infrastructure and stability that we take for granted are simply not there. We have a responsibility to contribute towards the economic development of less developed countries, so those who live there become a market for us to trade with. More customers can never be a bad thing. Our assistance to developing countries in their efforts to industrialise, and to create business and thereby employment, is a moral duty. It will help to raise millions out of extreme poverty.
The United Kingdom has a long history of supporting international development. I may be partisan, but I am proud that the Department for International Development was founded by a Labour Government in the 1960s, under Jennie Lee, the widow of Aneurin Bevan. I welcome the commitment to more than double international development funding to £1.8 billion in 2015-16. We must ensure that that money is spent in the most effective way, providing the most value for money not only for our own citizens but for those we are trying to help. However, efforts so far have not been effective enough. The problem cannot be solved simply by throwing more and more money at it. We have seen over and over again that that does not work.
Although it is true to say that private enterprise contributes around 90% of jobs in developing countries, international aid must involve considerable planning and a joined-up approach in public institutions that takes a holistic view of a country. We must ask the question: what do they need, aside from money and finance, to do the business they need and to bring the jobs they need?
Businesses in developed countries rely on stability. It is simply not possible to do good business where there is war, conflict, crime and, above all, corruption. If we throw money at businesses in insecure countries, can we truly expect them to do well and ultimately provide jobs? It stands to reason that businesses will not prosper if they have to pay tributes or bribes to corrupt local politicians, or if corrupt businesspeople pocket aid money rather than invest it in their business. The president of the World Bank, Jim Yong Kim, said in 2013 that
“corruption is public enemy number one”.
In describing the effects of corruption, he said:
“Every dollar that a corrupt official or a corrupt business person puts in their pocket is a dollar stolen from a pregnant woman who needs health care; or from a girl or a boy who deserves an education; or from communities that need water, roads, and schools. Every dollar is critical if we are to reach our goals to end extreme poverty by 2030 and to boost shared prosperity.”
The point the hon. Gentleman makes about corruption is a very good one. Is he aware that the country I look after for the Government—Nigeria—has a President who has come to power to try to cure the corruption problem there and is doing a very good job on it? We are trying to help that through a number of projects, including a very exciting one: the judicial college will help to train judges to be able to deal with that sort of situation.
I am aware of the fantastic work in Nigeria and of the election of the President, who has got to the core of the problem. As we have seen in the past in places such as Rwanda, when corruption hits, it muddies the waters for fantastic projects such as those the hon. Gentleman mentions. It also gives rise to the idea that we should cut back on international aid and affects the efforts we are making.
Our strategy for international development clearly needs to focus on supporting the security infrastructure in developing countries and ensuring they have robust legal systems that can root out corruption. Security is fundamental to stability—I do not have to tell you that, Mrs Moon, since you are a long-serving member of the Defence Committee. Without stability, it is impossible for businesses to not only thrive but, in many cases, to survive.
The joined-up approach must also ensure that aid is given to education services and health services and invested in the infrastructure and logistics capability, which facilitate trade and economic growth in developing countries. A key reason for the rapid development of industrialised and highly developed economies is the heavy emphasis on education. A good, open and inclusive education system not only gives workers the basic skills they need to become a productive member of their local economy, but allows those with the ability to develop the skills to innovate and solve their own problems by developing their human capital.
Another key point is that the aid we provide should allow developing countries to help themselves, which we know they want, as nobody truly wants to rely on charitable aid. We all know the proverb, “Give a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime.” In this case, that is very apt.
If we do not focus our aid on the fundamental things without which business cannot flourish—security, law and order, education, healthcare and infrastructure—we run the risk of continuing the cycle of extreme poverty and unemployment. If crime pays more than work or education, it is no surprise that many young men in developing countries turn towards it. That is yet more evidence that developing economies need balanced and simultaneous improvement, investment and aid across the board. It simply will not do to build an extensive road network if corruption is rife, just as it will not do to tackle corruption without investing in infrastructure.
Some say that charity starts at home and that we should cut away aid to developing countries. To me, that is a narrow-minded view. If we support economies in developing countries, we open up new markets where we can sell our products. Surely that is a win-win situation, as we will bring millions of people out of extreme poverty—the goal we all strive towards—and create more export and business opportunities for British companies, creating more jobs at home. We have a moral duty when it comes to international development. I am pleased to see that everyone who has spoken in this debate, from all parties, shares that goal.
Several hon. Members rose—
Order. I need to go to the Front-Bench spokespeople at 10.30 am.
I am grateful to you, Mrs Moon, for giving me the opportunity to speak. I will keep my remarks brief. First, I congratulate my hon. Friend the Member for Stafford (Jeremy Lefroy), who has over a number of years shown great passion, commitment and dedication to international development, and brings a huge experience and knowledge to this place. I have known him for a number of years. We have been to Rwanda, Burundi and Sierra Leone for Project Umubano, and I can vouch for his commitment to international development and in particular to entrepreneurship, livelihoods and jobs. This is a timely debate, following the debate in this Chamber earlier this week about the 0.7% target and the report on the implementation of the SDGs from the International Development Select Committee, of which I am a member.
I will keep my remarks to one simple fact: if we truly are committed to the 0.7% target, which I believe we are, and to the sustainable development goals, the way to move beyond aid and to move countries away from a dependency on humanitarian aid, with which I fundamentally agree, is through encouraging sustainable development and economic development. That means giving people a life chance, whether it is in our country or abroad. As the hon. Member for Islwyn (Chris Evans) said, if we teach a man a fish, he will feed several people. We must give people an education, which they need if they are to get on in life, just as they need to be able to earn incomes to look after themselves and their families.
DFID has a very good reputation for supporting many business projects. I have seen some of them, in particular in Nigeria. We need to keep our focus on enterprise and entrepreneurship. We need to keep women involved in this agenda as well, and above all, we need to recognise the value that business and enterprise can bring.
It is a pleasure to serve under your chairpersonship, Mrs Moon. I congratulate the hon. Member for Stafford (Jeremy Lefroy) on securing this debate. It is not the first of his debates in which I have spoken in this place, and I am sure it will not be the last. I am delighted to contribute today.
As Members have said, goal 8 of the 2015 UN sustainable development goals makes promoting inclusive and sustainable economic growth, employment and decent work for all a key objective for the world to achieve by 2030. Sustainable economic growth will require societies to create the conditions that allow people to have quality jobs that stimulate the economy while not harming the environment. Job opportunities and decent working conditions are also required for the whole working-age population. An adequate supply of jobs is the foundation of sustained and growing prosperity, inclusion and social cohesion. Where jobs are scarce or where livelihoods leave households in poverty, there is less growth, less security and less human and economic development.
In the current turbulent economic environment, job creation is one of the most pressing global development priorities. The aim to support employment and livelihoods with rising incomes, dignity and respect is a development goal that the Scottish National party would like to see at the heart of the UK’s development agenda. Jobs connect people to their society and the economy. Access to safe, productive and fairly remunerated work is a key vehicle for battling poverty.
As has been mentioned, the World Development Report 2013 found that:
“Worldwide, 200 million people, a disproportionate share of them youth, are unemployed and actively looking for work. An estimated 620 million youth, the majority of them women, are neither working nor looking for work. Just to keep employment rates constant, around 600 million new jobs will have to be created over a 15-year period.”
It also highlighted that the problem in many developing countries was that, although unemployment rates could be low, only a minority of workers were wage earners. More than 3 billion people are working worldwide, but almost half of them are farmers or self-employed. Most of the poor work long hours, but simply cannot make ends meet.
The SNP is committed to advancing Scotland’s place in the world as a responsible nation by building mutually beneficial links with other countries, as outlined in the Scottish Government’s international framework. Since 2007, the Scottish Government have doubled the international development fund to £9 million per annum and launched the climate justice fund, bringing the total spend on international development work since 2007 to over £86 million. The SNP has also highlighted Scotland’s commitment to the sustainable development goals.
Work funded by the Scottish Government has included projects focusing on job development and economic growth in Malawi. For over a decade, they have supported the Scotland Malawi Partnership and its sister organisation, the Malawi Scotland Partnership, which is based in Malawi. Through the two organisations, more than 94,000 Scots and 198,000 Malawians work in partnership together, and more than 300,000 Scots and 2 million Malawians benefit from those activities every year. The main focus of the Scotland Malawi Partnership is to work in dignified partnership with local people or Ubale, as they say in Chichewa. Scotland is playing an active and important role in helping to support jobs and livelihoods in Malawi by building markets for Malawian products.
Kilombero rice is a high-quality aromatic rice which the Malawi Government believe is an important export crop. For smallholder farmers it is an effective cash crop, which is popular among the urban population. The challenge is to assist more farmers to turn their smallholdings into effective, market-orientated, small businesses, which together can dramatically improve the livelihoods of people in northern Malawi.
JTS—Just Trading Scotland—is a Scottish fair trade importer. KASFA—Kaporo Smallholder Farmers Association—is a farmers’ association in northern Malawi. They have been working together, with support from the Scottish Government’s international development fund, to improve livelihoods and to strengthen communities. Since 2009, JTS has been working to establish a market for Kilombero rice, selling through civic society groups in Scotland: schools, churches and fair trade groups. This in turn has encouraged fine food distributor, Cotswold Fayre, and larger retailers like the Co-op to stock the product.
Howard Msukwa and Kenneth Mwakasungula, who are both rice farmers, visited Scotland last month to promote the launch of the rice in Co-operative food stores across Scotland and to tell people about the project’s success. The benefits of the scheme have been recognised by local rice farmers in Malawi. I had the pleasure of hearing both gentlemen speak at the Scotland Malawi Partnership road trip in Aberdeen.
Over the last five years, membership of the farming association in Malawi has grown from 2,500 to 6,700. Northern Malawi now has an effective farmers’ organisation that can deliver training and cost-effective farm inputs, and plays a vital role in community development. More farmers can send their children to secondary school and the first students are finding places in universities and colleges.
The key to success has been to link farm development work with establishing markets, which offers farmers an assured income. This encourages them to invest time and money to transform their farms. With altitude, climate and weather conditions ideal for cultivating coffee, Mzuzu coffee is another crop with a fast-growing reputation from one of the best coffee-growing regions in the world. In the 2014-15 Malawi “taste of harvest coffee” competition, Mzuzu took the top five positions. Interestingly, the first coffee plant in Malawi was introduced in the 1870s by John Buchanan from Scotland—it originated in the Royal Botanic Garden in Edinburgh, so there is a strong historical link.
The recently completed project by Scottish Government-funded TraCSS—Trading with Climate Smart Supply—aimed to stimulate sustainable economic growth in Malawi through development of agricultural value chains in a climate-smart and pro-poor way. The objective was to improve the competiveness of tea, coffee and pigeon pea value chains in an inclusive way to deliver improved smallholder incomes and to reduce natural resource degradation. One of the outcomes of the project was the distribution and implementation of the “Handbook for Sustainable Coffee Production in Malawi” through the Coffee Association of Malawi—CAMAL.
I am coming to the end of my time. The work of the Scottish Government and the Scotland Malawi Partnership demonstrates how Government aid and civic society can work to create markets for developing countries that will support jobs and livelihoods in the developing world.
It is a pleasure to serve under your chairmanship, Mrs Moon. I follow other hon. Members in congratulating the Minister on his recent knighthood and elevation. In months to come, we may disagree on many things, but we can agree that there is no question of his commitment and passion to his current role and public service.
I also congratulate the hon. Member for Stafford (Jeremy Lefroy) on securing and introducing this important debate. He has a long-standing commitment and expertise in this area. Indeed, he was present when this important matter was last considered by the Select Committee on International Development. He made some important points in his excellent speech today and emphasised the importance of supporting industries such as construction and agriculture. He also made an important point about young people and putting more emphasis on education and training.
Hon. Members on both sides of the Chamber made passionate and important contributions about ending extreme poverty, at the heart of which is corruption. It is real and must be addressed. It is a major roadblock to economic development around the world.
Hon. Members referred to another important point: the SDG and whether it is over ambitious. I think it is time we were ambitious and aspirational. Unemployment around the world may not be eradicated by 2030, but we can have that vision and I ask the Minister to ensure we thoroughly mark the SDG8 indicators.
Regardless of who someone is and regardless of where they live in the world, a good job can change their life. Decent opportunities and decent wages provide families with shelter, food and security. That not only provides direct benefits for the earner, but their wage gets passed around the community and benefits others. We know this and it presents obvious reasons for helping to create jobs in developing countries. However, around half of the world’s population still lives on roughly $2 a day and the World Bank’s World Development Report 2013 estimated that 200 million people around the world were unemployed and looking for work.
Evidence shows that 600 million new jobs that are needed globally for a growing population and particularly in developing countries, so it is clear that much more needs to be done.
Should we not recognise that, even when people seem to be outside extreme poverty according to statistics and are earning more money, many are in newly urbanised centres in the developing world? Their income may be above the indicators, but that does not take account of the fact that they are paying crippling rents to live in shanty-town conditions, even though their working environment may be quite modern, and they pay huge costs for water. They may have a livelihood, but their living conditions may not be good.
The hon. Gentleman makes a pertinent and timely intervention. He is absolutely right: there is strong evidence to suggest that, for many people, employment does not mean they are not living in poverty or even extreme poverty in some cases. The other issue with regard to urban areas, which I raised in an intervention, is urban planning. That is another barrier and we need to give it a lot more thought.
Certain aspects of DFID’s overall record can be commended. For instance, it provided £752 million of bilateral aid directly related to jobs, business and the economy in 2014. However, the figure fluctuated throughout the time of the last Government before the strategic framework for economic development set aside £1.8 billion, so I would be grateful if the Minister gave an assurance that that spending will be maintained following the bilateral aid review. Can he also indicate when we will have the findings of the bilateral aid review or report?
There are also specific areas where I will give credit where credit is due. DFID is regarded as an expert on mid-level private sector development programmes, and I hope it learns from the success in that area and applies it to others. The International Development Committee, whose Chair, my hon. Friend the Member for Liverpool, West Derby (Stephen Twigg), is here today, noted that DFID also has excellent examples of work in areas such as public financial management that it should build on.
Nevertheless, I seek clarification from the Minister on a number of areas. First, on SDG 8, can he assure me that the indicators will be thorough when we get them? With regard to private sector development, we welcome work that facilitates the development of sustainable and secure jobs in developing countries, and we recognise that the majority of jobs will be created in the private sector. Indeed, the private sector provides some 90% of jobs in developing countries, according to various reports.
That is not to say that we are supportive of all measures. I have a particular concern about the expertise of staff in DFID working on private sector development—the Independent Commission for Aid Impact found in its May 2014 report that there were gaps in knowledge and experience. I would therefore be grateful if the Minister told me whether progress has been made in addressing the concerns raised by the commission. How many full-time staff in DFID are working on private sector development? How many, if any, are externally contracted staff brought in to advise on private sector development projects? How many staff working on private sector development come from backgrounds of working in the private sector and working on businesses in developing countries? Does DFID make training and mentoring opportunities available to staff working on private sector development, so that they can build their expertise? I appreciate that the Minister may not have all the answers to hand, but I would appreciate a response, even if it is a written one, at some stage.
The final issue I want to raise is working conditions. We cannot overlook the potential influence that DFID has in helping to reform labour practices and working conditions in developing countries, so I would like assurances from the Minister that any aid or assistance provided by DFID or other Departments to foreign states or businesses is provided only with assurances that they abide by working standards.
It is a pleasure to follow the hon. Member for Bradford East (Imran Hussain), and I thank him for his kind words. He referred to my passion, but it is clear that his passion equals, if not exceeds, mine, as does that of the hon. Member for Hackney North and Stoke Newington (Ms Abbott). I sometimes imagine that we disagree less than we think, but what is clear is that we all share the same objective and the same passion.
Today we have debated a very important, game-changing report. Since that report, we have been pushed in a direction that we were very keen to head in in the first place. We have created a new directorate for economic development by combining five separate departments. We have created a new youth and education department to focus on the transition from school to work, and to drive that focus through all the bilateral relationships and all our programmes. We have implemented a new growth diagnostic. This is the focus that my hon. Friend the Member for Stafford (Jeremy Lefroy) demanded there be in every bilateral relationship and every programme. The diagnostic informs every team of the barriers to growth in the countries in which they are working, so that they can devise programmes with the greatest impact on growth. My hon. Friend referred to the new agricultural strategy; it is, as he demanded, focused on smallholder agriculture. We will shortly publish—after we have disposed of that business on 23 June—our new economic development strategy.
The delivery of this agenda is vital to all the global sustainable development goals across the entire piece, and not just to the most obvious ones—1, 8 and 9. We will not see a reduction in world poverty of the order that we want unless we get a great increase in inclusive growth. In the past, we have had growth that has not generated inclusivity or sufficient jobs. It is vital that we get inclusive growth, because as we have heard so often this morning, we need 600 million new jobs in the next decade; otherwise, we will have a growing army of underemployed, frustrated and increasingly angry young people. As we have heard again this morning, lack of economic opportunity, a job and a livelihood is the principal driver of migration. That has been going on for decades. Millions of people have dropped everything that they have known and moved from their homes to the unknown in pursuit of economic activity. We are beginning to notice it as we see that tide of humanity coming up from south-Saharan Africa. Nevertheless, that driver has existed for decades, and we have to address it by providing those jobs.
I accept that not any job will do. It is no good having jobs that enslave. That is why we are still concentrating our programmes on work and freedom. There is what we are doing with the International Labour Organisation in Bangladesh, and there is the ethical trading initiative and the responsible, accountable and transparent enterprise initiative. Those are vital, but in the end it all comes down to jobs. The Government have an important role in that regard. My hon. Friend referred to the importance of public services. Yes, public services are important; there are important jobs and roles in public services. It is precisely for that reason that we take—and manage—the very considerable risks of working through Government-provided services in places such as Nepal, where our healthcare programme is channelled through Government provision, although it is a corrupt environment.
I share the passion of the hon. Member for Islwyn (Chris Evans) for tackling corruption. He is absolutely right, and that is why our programme on governance under SDG 16 is so important to our economic development programme. It is precisely for that reason that we held the anti-corruption summit and, the day before, the summit to engage with civil society on how it deals with that. As I say, the hon. Gentleman is absolutely right: where elites hijack the lucrative parts of the economy and wreck it, that impoverishes everyone. When a person gets an important job in the Government or the civil service because they are someone’s cousin, rather than capable of carrying out that function, that leads to complete inefficiency.
Over and over again, we find Governments getting in the way of the creation of jobs, through unwillingness or lack of capacity to raise revenue to invest in the necessary infrastructure; a lack of regulation, or over-regulation; or a lack of contract law or any other law, or of the rule of law. All those things drive away investment.
The real engine of job creation is private sector-led investment. One of the principal barriers to that investment thriving is the lack of necessary infrastructure. A reduction in productivity of some 40% throughout Africa and Asia is accounted for by the lack of necessary infrastructure, and it is estimated that Africa suffers a vital reduction of 2.1% in its annual growth rate as a consequence of the lack of necessary infrastructure.
Some 1 billion people have no access to electricity, and 1.3 billion live nowhere near a road. We must address those infrastructure problems. There is an annual deficit of some $3 trillion a year, in terms of the infrastructure that we need to invest in. Most of that must be provided by Governments. Grant aid will remain important for filling about half of that infrastructure gap, but all investors will need to increase their ability to invest massively if we are to do that. That is why we are working with the World Bank and the regional development banks.
We are working on projects on hydroelectricity in Nepal and power sector reform and roads in Nigeria. We have launched Energy Africa, working in 14 sub-Saharan African countries to address the needs of 600 million people who are without electricity. Although we only launched the campaign last year, we have proved the root; we kick-started the campaign with the work that we did with M-KOPA, which has put in place some 300,000 solar panels that serve 1 million people. It has also used highly innovative methods, so that power can be paid for using pay-as-you-go mobile phones.
Where we have been relatively slow in moving to meet the infrastructure needs of Africa, the Chinese have moved relatively rapidly. Does he agree that that is not entirely unproblematic, because the Chinese do not share our commitment to human rights?
The quality of our investment and the fact that we do not tie our aid certainly make our aid of a higher standard. I accept the hon. Lady’s challenge: we need to raise our game, and that is why we use the Private Investment Development Group to leverage more investment. Through an investment of $1.2 billion, we have secured $20 billion from the private sector and $9 billion from international financial organisations to provide early equity, long-term debt and guarantees to meet vital infrastructure needs. Equally, we use CDC, our development capital arm, to blaze a trail and show other investors that there are profitable opportunities even in the most difficult markets. We recapitalised that with some £730 million last year, and we are driving that into the infrastructure sector. CDC has backed some 40,000 GWh of production as a consequence of the move into the power market.
On the point about opportunities, does the Minister agree that we need policy coherence between the climate change goals and economic development policies?
My hon. Friend is right. Climate-smart development must be integral to everything we do. It has to be a part of it. It is not a box to be ticked; it must be designed into the programme from the start.
My hon. Friend the Member for Henley (John Howell) mentioned the prosperity fund in his intervention on my hon. Friend the Member for Stafford. I take a slightly different view of the prosperity fund. We are spending all this taxpayers’ money creating opportunities and opening markets, and my breath is taken away when other countries simply move in and take the opportunities that have been created by that investment. The prosperity fund’s primary objective must be to reduce poverty. However, it is right that that fund should make British companies alive to the opportunities available to them. We will not tie our aid.
As an aside, I point out that 80% of our procurement is with British companies simply because they are the most competitive we can find, but my hon. Friend the Member for Henley drew attention to an important point in the piece. This is, of course, an enormous agenda. It is a whole trade facilitation agenda, and my hon. Friend mentioned the importance of trade envoys. We spend about £1 billion a year on trade facilitation and improving the ability of the least developed countries to enter our markets and to trade effectively. Trade dwarfs aid. It is a vital part of the agenda. The hon. Member for Bradford East raised the vital issue of urban planning. It is precisely for the reasons that he gave that we launched the new programme for economic development in cities, and that will be driven forward with a will.
The whole piece, including TradeMark East Africa and the trade facilitation agenda, is part of the drive for economic development that is at the centre of everything that we do regarding the provision of jobs. I come back to a point that has been made several times this morning: it is all about jobs. We need 600 million high-quality new jobs that will not impoverish and enslave people. That is what we have to deliver. I defer to my hon. Friend the Member for Stafford to sum up the debate.
I am most grateful to everybody here for their valuable contributions. We have touched on a huge range of subjects that are vital to consider in relation to jobs and development. The hon. Member for Strangford (Jim Shannon) spoke about the need to tackle unemployment everywhere, and the importance of small projects. The hon. Member for East Kilbride, Strathaven and Lesmahagow (Dr Cameron) mentioned the important work that the Scottish Government do through their development fund, and how critical it is to work with young people. The hon. Member for Islwyn (Chris Evans), in a powerful and passionate speech, spoke about the business environment, the importance of tackling corruption, stability and direct investment.
My hon. Friend the Member for Portsmouth South (Mrs Drummond) spoke about many issues, and particularly the importance of the digital economy in the developing world. My hon. Friend the Member for Aldridge-Brownhills (Wendy Morton) mentioned the importance of education. The hon. Member for West Aberdeenshire and Kincardine (Stuart Blair Donaldson) spoke about the vital nature of partnership working and the work that the Scottish Government have done in partnership with Malawi on Kilombero rice and, indeed, Mzuzu coffee, which I have had the pleasure of tasting. The hon. Member for Bradford East (Imran Hussain) spoke powerfully about the need to be ambitious and aspirational, and touched on city planning.
The Minister spoke about DFID’s work, which I commend. He indicated that DFID is moving powerfully in the directions in which I would like to see it go. He spoke about infrastructure and Energy Africa, which my right hon. Friend the Member for Welwyn Hatfield (Grant Shapps) instituted last year, and about how that is already making progress.
Above all, there is a passionate desire here to work for inclusive, job-rich growth in developing countries, because that is important for the people in those countries, and because it allows them to stay where they are and not put pressure on our country. It is in their interests and ours.
Motion lapsed (Standing Order No. 10(6)).