International Development Committee
Oral evidence: Democracy and Development in Burma, HC 821-iii
Thursday 23 January 2014
Ordered by the House of Commons to be published on 23 January 2014.
Written evidence from witnesses:
– Department for International Development
Watch the meeting Thursday 23 January 2014
Members present: Rt Hon Sir Malcolm Bruce (Chair); Hugh Bayley; Pauline Latham; Jeremy Lefroy; Sir Peter Luff; Mr Michael McCann;
Questions 108-177
Witnesses: Rt Hon Alan Duncan MP, Minister of State for International Development, and Gavin McGillivray, Head of DFID Burma, gave evidence.
Q108 Chair: Good morning, Minister, and good morning, Gavin. It is nice to see you back here for a short spell. Perhaps I can just say also thank you to you and your team for the work you did in our programme. Those of us who went had a really fascinating visit. I will just put that on the record. I am not quite sure, Minister, when you were last in Burma/Myanmar.
Mr Duncan: I was last there in June and then many of your Committee were there in November. I am slightly worried you are going to know more about this than me.
Q109 Chair: Let us see if we can work together. We take the view that Burma is in a unique situation. There is no other country we work with that is in this situation. Obviously, we would like to take your view on that. We had an informal meeting with Charles Petrie yesterday. He used to be the UN Special Representative and is now working with the Burmese Government. He is there and back a lot. He said that he thought the situation moved away from dictatorship to something more like democratic government. He said he thought it was irreversible, but it could move in a number of different directions—some rather more optimistic than others and some unpredictable. I just wondered, to set the scene, if you had a scenario of how Burma might develop and DFID’s role in that. For example, are you able to sit down or think about sitting down with the Burmese Government and saying, “Where do we think we could be in five, 10 or even 15 years’ time, and what could we do along the route that might get us to the right stage?”? Is that the sort of approach? It just seems to us a completely different situation from any other we have experienced.
Mr Duncan: I totally share your view and that of Mr Petrie that it could go any way, but the general mood is one of optimism and heading in the right direction. Indeed, we hope it is irreversible. To sit down and have a five or 10‑year plan is probably a little unrealistic, the reason being that there is so much that needs to be done and it is starting from a very low start. None the less, things are heading in the right direction.
If you look at a sector such as education, it really is from a very low start indeed, where a large fraction of kids do not go to school at all. This gives us an embarrassing range of choice as to where we could focus our limited resources. One of the dilemmas we face is if we focus as specialists in one area and try to make the most just of that or if we spread ourselves a bit more widely. At the moment, we are a bit more widely spread, but it is wise to be so. We have to press on, but we are facing a resources allocation round within DFID over the next few months, and Burma is going to be one of the most challenging, in an exciting way, countries to try to work out where we should devote our resources.
Q110 Chair: That is timely, because we will produce our report. I am not going to prejudge the Committee other than to say that all the informal conversations we have had suggest that we believe that Burma could take quite a lot more resource from DFID, usefully and constructively, but we will explore that and the detail. Indeed, this Committee will consider it. Education in particular we will have some questions on. I take your point.
The only thing, before I pass on to Michael McCann, is obviously that there is a watershed period in 2015 that everybody is working through. The question I suppose is: should that be seen as an obstacle or can we work through that? Can we make assumptions on a positive basis that we can commit to, with a contingency plan that, if things do not work out, we can draw back?
Mr Duncan: If there is constitutional change and a different form of government, I do not see that as an obstacle; it is much more of an opportunity. It is a milestone, if you like. Our resource allocation plans must, I suppose, be flexible. Regardless of who is in government, so long as the main indicators are heading in the right direction, it should largely be business as usual, I would think.
Q111 Mr McCann: You mention limited resources, Minister. The UK spends £62 million in Burma, when the Japanese are spending $900 million. In terms of the difference between those two figures, can DFID really be making transformational change in Burma?
Mr Duncan: Our budget will be £68 million this year, and you are right that Japan will be spending, we estimate, $900 million, but it is aid of a different sort. Half of that will be loans; half will be grant, largely for infrastructure—there is hardly any infrastructure in the country, so it is a very good thing they are doing it, but it is a different sort of assistance from ours. What we can say is that we were in there first and, if you like, at a scale that was effective, and now others are catching up. There is probably a group of five of us now who are spending about, let us say, $100 million, if I were to put this in dollars—the US, the UK, Australia and the EU, for instance.
Now, aid represented under 1% of GDP in 2012/13. The extent to which that can be transformational, therefore, is not in doubt, but it is not going to change the whole country like that overnight. It is having a sensible and effective impact. For instance, a third of our budget is spent on health, and it is from this low base that all of these foundations have to be put in place so that the country can improve over the next few years. It has to go hand in hand with governmental change as well. It is only if the politics goes hand in hand with the economics that you can genuinely see the transformation that you are seeking.
Q112 Mr McCann: We are spending £446 million in Pakistan and there was some substantial criticism of corruption in the country and how that money was spent. What do you say to those who argue that we should be transferring a substantial chunk of the Pakistan budget to Burma?
Mr Duncan: There are many people, both in our domestic politics and now I sense here, who want to rob Peter to pay Paul. A lot of people want claims on our budget in general but within it I do not either want to pre‑empt the resource allocation round or judge Pakistan, which I do not lead on, but my understanding is that, certainly in terms of GDP, the aid budget there is about 1.1%; in Burma, it is about 0.93%. You are right there are corruption problems in Pakistan, but I would not say that we are going to look at Burma in terms of what we can take from other programmes. We have to look at it comprehensively and see what we think is right for Burma. There is a case for increasing our budget in Burma, but I am not going to pre‑empt that today when we are at the early stages of our allocation round, for which there are a lot of bidders, if you like, particularly as some of our humanitarian calls are increasing dramatically, particularly on the back of Syria.
Q113 Jeremy Lefroy: Is it true to say that, although the UK is not directly providing budget support to the Government, some of the organisations to which we contribute money for work in Burma are doing so now?
Mr Duncan: Some of our partners work through or alongside certain line ministries and at the township level. We do not give any direct budget support, nor does it go through central budget accounts in any way. As with any country, once we think we are dealing with a Government that is able to administer money effectively and in a trustworthy manner, then of course one day I would envisage doing things directly with the Government, but we are not there yet.
Q114 Jeremy Lefroy: Following on from that, how do you think DFID can best help to build government capacity?
Mr Duncan: We are doing a number of things under what we call the accelerated reform facility, which is something we will augment. We are promoting responsible investment through the Myanmar Centre for Responsible Business. I think that is important. We are improving the public accounts committee’s capacity to scrutinise public spending. We are funding Burma’s application to join EITI, which is very important because all the growth at the moment in Burma comes from the extractive industry. We want to get the growth coming from job‑creating areas across the economic waterfront, so those are some examples where I think we are building capacity in the county. It is one of many other things we could be doing too.
Q115 Jeremy Lefroy: Mr McCann referred earlier to the $900 million being provided by Japan. You commented on it being partly grant and partly loans. We have had some evidence that there is really too little co‑operation between donors at the moment in Burma. Would you like to comment on that and perhaps indicate how DFID is working to try to ensure that donors are not working at cross purposes and doing the kinds of things that we have seen to be so destructive in other countries when donors do not co‑operate?
Mr Duncan: Yes. DFID actually chairs the Development Partners Working Group, which comprises the eight largest development agencies. We co-chair the Development Partners Group. We are there in the thick of trying to be a ringmaster of donors, so that we do not overlap or leave great big gaps. It is fair to say that any country office I go to allows me to see DFID playing a significant role in donor co‑ordination. It is one of the main ingredients of our soft power across the world that we tend to command enormous respect in doing this. It is also true to say that Gavin, as the head of DFID, will be playing a role in the Myanmar Development Cooperation Forum imminently—indeed, next week. We are very much in the thick of it. I do not know whether it would be appropriate, Mr Chairman, to ask Gavin whether everybody we would like to sit around the table comes or whether there are people who do not agree to be co‑ordinated.
Gavin McGillivray: I think it is a good story. As well as these aid architecture co‑ordination structures, we also chair the Three Millennium Development Goal Fund and LIFT, the Livelihoods and Food Security Trust Fund. There are particular efforts in certain sectors. All countries are subject to their capitals, and so there is only so much one can do in the country, but what we can do in the country is going pretty well.
Mr Duncan: I would add one further dimension to this, which is the political one. Donors, particularly in our case with the EU, can often send a joint message to the Government, which is an important voice in trying to influence them, so this has a very useful political dimension as well.
Q116 Jeremy Lefroy: Do you have a recent example of that?
Mr Duncan: We did one jointly with the United States three days ago about the violence in northern Rakhine. Has there been an EU one recently?
Gavin McGillivray: Yes, there has. There was one just before Christmas on Myebon, so the EU and the US did a joint statement on access to one of the refugee camps in Rakhine. I just had an e-mail earlier this morning saying that, since that and the joint visit of our Ambassador with the Borders Minister, there has been continued access of humanitarian aid to that camp.
Mr Duncan: Indeed, when I last visited, I wrote a follow‑up letter to the Borders Minister on some issues. It is an example of where DFID, the Foreign Office and other countries can work very closely together.
Q117 Pauline Latham: You mentioned EITI, and when we were there we met some people who were working on this. I think they said that Ministers were very to keen to get on with this very quickly, but they were not sure that the Ministers actually realised what they were getting into. They wanted to include tree felling and water in EITI. Do you think that is feasible? I can see the benefit.
Mr Duncan: The answer is I do not know, because they are not normally classified as extractive industries as such, which is normally oil, gas and minerals, including precious gems. In the case of Burma, that would be extractive. Water and forestry, if I had to hazard a guess, are not normally included in EITI, but that is a question we can investigate. However, even if they are not, it is important to have a good government policy on both. They do not necessarily have to be in EITI in order to be captured in our efforts as a development agency or force.
Q118 Pauline Latham: Personally, I think we need to record what forestation they have, and suggest to them that they do not want to take out too much of it, because that is going to greatly affect the country and the wildlife there.
Mr Duncan: Definitely. It needs to be managed. It is a resource, but it needs to be managed.
Q119 Chair: Can I just tease out the country name issue? I think we found it quite interesting. I know it is British and American Government policy that the country is called Burma. I know that Aung San Suu Kyi insists that she is entitled to call it Burma and she will, but pretty well everybody we met called it Myanmar. The term Burma almost did not get used at all. I am sure Gavin would testify that if you go round the country on a day-to-day basis and keep insisting on calling the country Burma, it just does not gel. Is there any suggestion that, at some point or other, there will be an agreement that the country has a name that everybody agrees to?
Mr Duncan: I think these things emerge over time. There comes a point where you can feel what is right. In our lifetime, we have seen Peking become Beijing; we have seen Bombay become Mumbai. I expect—although who am I to judge?—that this may just change over time, but I am in no way dogmatic about it; it is not for me to be so anyway. It is much more for the Foreign Office, if we decide we need to shift official documents or anything, but I am interested to hear that perception. Do those who live there—meaning you, Gavin—share it? What do you think?
Gavin McGillivray: I agree with Sir Malcolm that in the vernacular people just refer to Myanmar. Although our policy is to refer to Burma, when we speak to Government directly, we generally refer to “your country” or we avoid the use of the word. I must say, just in everyday work, I do not find this being a particular problem or challenge. I agree with you, Minister: I think this will work out in time.
Chair: It is not a big issue, but it is always there.
Mr Duncan: No, we want to get it right. These things do matter.
Hugh Bayley: First of all, I just wanted to say I am pleased to hear the measure of flexibility from the Minister. I personally think, having learned a little about the country from our short visit, that there are two difficulties with the word “Burma”. One is that the Burmese people are about half of the population and, since one of the big political objectives is to try to get some inter-ethnic reconciliation, if we use the word “Burma”, we are seen by some to be identifying with the centre or with the Burmese, rather than some of the other ethnic groups. Secondly, some people will see it as us harking back to a colonial past, which is a long time ago. Perhaps we need to move forward.
Chair: I think I will take that as a comment.
Hugh Bayley: It is a comment.
Q120 Chair: The other thing is that we make an evaluation of the reformers who feel they want to move towards democracy step by step, and they are really working to do that. We got the impression that there are other people who think, “If we are going to open up the country to investment and international recognition, we need to be seen to be becoming more democratic,” but it is almost: “How few boxes do we have to tick to get that degree of acceptance?” Others are perhaps standing back saying, “We’ve seen this before. We’ve had to step in when it didn’t work out,” biding their time.
The issue that we are facing is the presidential and the parliamentary elections in 2015 and the eligibility, specifically, of Aung San Suu Kyi to be at least a candidate for the presidency. Under the current rules, she is not. I had the advantage of going out with Speaker John Bercow in June, when the attitude seemed to be: “Yes, the constitution is under review. It will change. It will all be taken care of.” When we there in November, Ministers were saying, “Oh well, there is a constitutional process. It doesn’t seem to meet very often. It is nothing to do with me; I only have to vote.” Now we are told that the President has said he does not want a situation where any citizen is denied eligibility and, again, our Speaker has called for the constitutional reform to be followed through. What pressure are we putting on and what expectation do we have that that issue will be resolved in a way that does not potentially create a crisis? I suppose that is the concern.
Mr Duncan: If I had to bet the ranch on it, I would say I think we are going to get there. It is fair to say that the UK is leading the international campaign to change the constitution. There is international pressure; there is also growing internal national pressure for this—something we are doing our best to encourage. If people want it, and it is clear to the people there that the people do want it, it is more likely to happen. I suppose this will be the crunch year to see if the change will happen, but we very much hope it will and are cautiously optimistic that it will happen.
Q121 Chair: Certainly when our Speaker was there, I thought he put it reasonably diplomatically when he said it was not for us to determine who the President of the country should be, but the international community and, indeed, many people in the country would not understand how the highest‑profile opposition politician—indeed, the highest‑profile politician in the land—was actually debarred by the constitution. You would have no credibility as a democracy if you actually pursued that.
Mr Duncan: I am delighted that Mr Speaker can prove so diplomatic.
Chair: I was impressed too.
Q122 Pauline Latham: Lord Williams, when he gave evidence to the Committee, was critical of the lack of UK cross‑government pressure being put on the administration in Burma for a peace agreement. How are you working with the Foreign and Commonwealth Office and the Ministry of Defence to encourage political engagement on the peace process? Do you think it is important that the UK Government raises the peace process in its negotiations with Naypyidaw?
Mr Duncan: I think that criticism is unfair. First of all, we are working very closely with the Foreign Office, so this is a cross‑Whitehall effort. We are so tied in with the Foreign Office on everything. If I may give an example, I have agreed to £750,000 being given to our Embassy in Yangon, so that they can be freer to take initiatives alongside what we are doing. That is a really good example of DFID/FCO co‑operation and a very good example of the sorts of things Lord Williams might have thought do not happen.
First of all, ceasefires are now in place across almost all of the country. The significant exception is Kachin. We, the UK, have given £1.5 million to InterMediate, Jonathan Powell’s NGO. We are using the experience from Northern Ireland to help them. We had some very senior figures over here at the end of last year, who also went to Northern Ireland to see what we did there, where there are some important parallels. We have approved £5 million for peacebuilding in ceasefire areas. We are a leading member of the Peace Donor Support Group, so we are very much in the thick of it. I do not think I would agree with Lord Williams in his criticism.
Q123 Pauline Latham: What are the chances of establishing some form of federalism, and do you think it would be possible for a ceasefire and progress towards federalism to happen at the same time?
Mr Duncan: Dare I say this with a Liberal Democrat Chairman? Federalism can mean many things. I have the same issue in Yemen, if I might say so. Everyone talks about federalism, but defining it is a completely different matter. In the context of Myanmar, we are neutral about federalism. What is important is that the constitution reflects the will of the people and leads to an effective, trusted Government, within which there have to be equal rights for ethic groups and all that kind of stuff, which federalism per se does not necessarily address in full.
Pauline Latham: Aung San Suu Kyi did agree with you that there are many types of federalism. She felt it was necessary.
Q124 Chair: The fact that the Government and the senior officials of the Government were talking about federalism was seen by most people as a positive indication of their trying to recognise the diversity of the country and find some system to accommodate it.
Mr Duncan: There is no doubt that it would sound very effective. As I say, we are neutral on this. As in many countries, federalism sounds great, because it tends to be less in the centre and fair to all. It all depends how you split it up, where the powers lie and all that kind of thing.
Q125 Hugh Bayley: This is getting repetitive: I agree with the Government that we should be neutral. It is for the Burmese or the Myanmar people to work out a constitutional basis for reconciliation. That is important, not what label you put on it. One of the things that worried me was the view that appeared to be coming from the Government that, they were saying, “There is only a partial ceasefire and we cannot make progress on constitutional reform until there is a nationwide ceasefire.”
My view, very strongly based on the experience in Northern Ireland, is that if we waited for every republican group to give up the armed struggle, we would never have had the Good Friday agreement and we would never have had the deal that we had. With a ceasefire in most parts of the country, I think it is important that progress is made in those states or parts of the country. If you wait for another two years, the commitment to ceasefire in some of those places may weaken or go. That does not necessarily mean you are talking about federalism; you could be talking about local administration and local government. I am sorry—I have made a statement again—but can you convince me that the Government is trying to advance, if you like, a sub‑national peace process, where it is trying to persuade the Government of Burma to do this where there are opportunities?
Mr Duncan: I have never heard anyone suggest that we should take our foot off the accelerator on constitutional settlement because not every corner of the country is peaceful. I have not even ever heard a whiff or a hint of it, so I think I can give a clear yes; we are pressing on now, as best we can, to the question you put.
Q126 Hugh Bayley: I was very impressed with Minister Aung Min, who was charged with this business of negotiating a peace process, but I am not certain that he had the absolute support of all parts of the Government of Burma. What can we do, perhaps through military‑to‑military engagement, to try to build a different culture within the Myanmar armed forces, so that there is a broader base of those who see political and constitutional reform as a way forward?
Mr Duncan: You will appreciate that this errs more on the Foreign Office side than it does ours.
Hugh Bayley: Indeed, but you have just said how important it is to have joined‑up policy.
Mr Duncan: Yes, of course. We could be joined up, but do different things and allocate the role. I suppose part of what you are really saying is about what direct engagement we, as DFID, have with the military. That underlies your question perhaps. The answer is we have limited direct engagement with them, but we engage where appropriate, if only because a lot of the ministers are of course military—I do not know if you want to add to that, Gavin. What are you really getting at? Are you really suggesting we ought to have more direct engagement with the military or not?
Q127 Hugh Bayley: Thank you for coming back to me, Minister. First of all, I highly approve of the proposal for senior UK military figures here to go across and meet with counterparts in Myanmar and vice versa. I think that would be useful also at what you might call middle‑ranking colonel level, if there is willingness on both sides to do that. In a sense, I think this is what perhaps was at the heart of Lord Williams’ criticism. It is clear through the military attaché that the MOD has a role; the Foreign Office was clear that it had a role. We saw close co‑operation between the Ambassador and the head of DFID in-country, but there is a hesitation when you say military‑to‑military is something the MOD does. I think UK plc needs a Burma policy where you have a corporate buy‑in from each of the three—or perhaps four, including BIS—key Departments.
Mr Duncan: Some of the main ministries are held by the military—for instance Borders, Defence and Home Affairs. We are engaging with them, particularly Borders and Defence. The MOD has just run a course to try to speak to the Tatmadaw military about what sorts of attitudes they ought to have. It was called ‘Managing Defence in a Wider Security Context’. That was the title of it; it has just happened, and DFID staff played their part in that. We were woven into that military‑to‑military encounter, as a proper part of it. We are dovetailed, if you like. I agree; it is essential. They are going to listen more to someone in uniform for something like that than they are going to listen to someone like us. The fact that we are not doing it does not mean that it is not a cross‑Whitehall effort; it is just finding the right horse for the right course.
Those are the judgments that we are making at the moment, in the same way as it has been very appropriate for us to pay for InterMediate to take a lot of the senior people from Myanmar to Northern Ireland and here. Likewise, the best people to talk to them about public accounts committee stuff is someone from the Public Accounts Committee, and a Clerk at the House of Commons is the best person to talk to them about how legislation should work. We are, if you like, allocating to the right roles the best skill set and the best expertise, but we are doing it in a joined‑up way. I think that is an honest answer.
Q128 Mr McCann: One of our witnesses described the recent religious violence against Muslims as potentially being “the thread that unravels the entire ball of yarn” of democratic reform. Do you agree with that statement, and if so, what is the UK trying to do about it?
Mr Duncan: It is the biggest threat. It is the issue, particularly in Rakhine state, which attracts the most international criticism and concern. We are very active in giving humanitarian aid, both to Rakhine state and Kachin, and up on the borders with Thailand. We talk very directly with the Government about this. The problem of ethnicity is the most vexed and complicated problem in the country—it really is. It is very easy for us to sit in judgment and just say, “Tidy it up; it has to look like this and that,” but once you dig a little bit deeper into the country, you realise political activity is sometimes constrained by the deep historic feeling in the country amongst their own citizens. Even a semi‑dictatorial Government could only go so far in pushing these issues.
I think we are very much in the thick of it. I have here—and I mentioned it earlier, and I can hand it to you, Mr Chairman—the joint statement we in the British Embassy made with the American Government about recent problems in Rakhine. On a diplomatic level, at a development level, on the ground with UN agencies, humanitarian aid, trying to address the rights particularly of the Muslim Rohingya, we are absolutely in the thick of it, but this is not going to be solved easily. I am sure we will discuss other issues about the Rohingya, but it is very complicated.
Q129 Mr McCann: Is the risk of the potential for extremist Islamists from outside Burma to start participating in this dispute being measured by the UK Government or in collaboration with other Governments across the world?
Mr Duncan: I suppose we see that happening in so many countries at the moment that we have to be alert to the danger. I have not yet seen any suggestion in Government papers that I have read that this is an obvious danger in Rakhine. It is much more a historic domestic ethnic issue, where those who originated in Bangladesh who came across, and are Muslim, are thought to be more enterprising and get the jobs. The indigenous Buddhist communities are deeply resentful, hence the ethnic violence. It is not seen as anything that might be classified loosely as jihadist or anything like that. I will turn again to Gavin, just in case I have missed anything, but that would be my reading.
Gavin McGillivray: Minister, I completely agree with you. That is the current situation. We have got to be alert to attempts to radicalise the situation further, but I completely agree with your analysis.
Mr Duncan: You are not looking at radical young hotheads; you are looking at communities that feel oppressed and deprived, then they burn each other’s houses down. It is very much a domestic‑based pool of hatred that has to be overcome.
Q130 Pauline Latham: There will be a census in 2014, which DFID is co‑funding. Have we had any discussions with the Burmese about the 1982 citizenship law and recognising the Rohingya as Burmese citizens? Do you see, in the 2014 census, a category for the Rohingya to be classed as an ethnic group?
Mr Duncan: This touches on what we were just referring to. The Rohingya have three objectives, I think. Firstly, they want to be recognised as citizens, because many of them do not have citizenship at all. They want to be classified as a distinct ethnic group, and they want to end what they see as systematic discrimination. The census can play a role in this. It does not, in itself, address all these things.
First of all, the census will take place between 29 March and 10 April. We are the biggest bilateral donor, contributing £10 million to it. In this census, there will be an option for people to self‑identify their ethnicity. Probably in Rohingya, IDP camps and villages, enumeration will be done by members of their own community rather than by separate census operators. I think it is likely that the census will show a larger Muslim population than people currently estimate, which in itself will be quite a controversial finding. It will not in itself recognise the ethnicity of Rohingya, but it will provide a pretty sound statistical base for estimating their numbers, assuming that the self‑definition is properly recorded and used by the Rohingya community.
Q131 Pauline Latham: Will there be some training for them, so that they understand?
Mr Duncan: That is a good question. I do not know the answer; I hope so.
Gavin McGillivray: Absolutely, yes. From now onwards, for the next two and a half months, the enumerators will be going through intensive training courses.
Q132 Pauline Latham: Maybe this is another question for you, Gavin: is humanitarian access in Rakhine improving? If not, why not?
Gavin McGillivray: I gave the example earlier of Myebon, where humanitarian access has improved. The answer is varied, so there has been what looks like a terrible incident in northern Rakhine, which the Minister referred to just now, and nobody has access to that area to try to verify what went on. In other camps it is variable. Sometimes the local communities—it is not so much the Government, but the local communities—do not permit aid to get through.
Q133 Pauline Latham: Why?
Gavin McGillivray: Because of animosity towards the Muslims.
Q134 Mr McCann: We have been told that as a result of the shift in international focus from the borders into Burma, rations have been cut to minimum levels in the Thai border refugee camps. Is this true and, if it is true, what is DFID doing about it?
Mr Duncan: We have a renewed project totalling about £27 million for such people. We think that about 500,000 people have been internally displaced in eastern Burma and a further 130,000 Burmese people live as refugees in nine camps in Thailand. We have committed assistance to them until November 2015, and we are actually one of the very few donors to have made such a long‑term continuing commitment, because we recognise this is going to be, unfortunately, a long‑term continuing problem. In respect of them having been reduced to rations, I suppose in any refugee camp there is a measure of rationing, but you are making it sound as though it is right down to a very basic subsistence level and is newly grim. I am not aware of that, but again I will turn to Gavin to see if he is either.
Gavin McGillivray: The information you have given is correct. The rations have been reduced in consultation with the camp authorities. They have not been reduced to the bare minimum, and the camp residents are involved in deciding which of the camp residents are most in need.
Q135 Mr McCann: It begs the question: why have they been reduced and what impact could that potentially have on the health of those refugees who are around those camps?
Gavin McGillivray: One of those reasons is that many camp residents are now working in the surrounding community, so they are earning their own income and able to buy their own food.
Mr Duncan: It is not their sole source of food.
Q136 Mr McCann: You mentioned, Minister, that there is a commitment to maintain support until 2015, but running alongside that, the twin track must be about repatriating the individuals in these camps back to their original homes. Therefore, what work is taking place in relation to eradicating landmines and rebuilding the villages? In short, is there a plan running alongside the support for the camps to get people back home and to deal with all the associated difficulties?
Mr Duncan: The crucial point here is that we believe that such repatriation should be voluntary and not compulsory. There is an assumption that they will want to go home, but we are not there to force them and to drive them home. This will have to happen naturally, and implicit in your question is the situation that if they feel safe to go home, they are likely to—they are not going to step on landmines and things like that. I think we agree and you are right, but I do not think it is going to be immediate. The voluntary element of this return home is a very important part of the way we are looking at this problem.
Q137 Mr McCann: Is it reasonable to draw the conclusion that we are likely to be funding these camps after 2015 as well, albeit at maybe a reduced level, if there is an opportunity to rebalance the numbers of people who are in the camps from people who are voluntarily returning home?
Mr Duncan: As Gavin said, there was already evidence that, as so often happens in a camp, a natural economy—albeit a very primitive one—grows up around it and people find other means of eking out a livelihood. That might mean that some stay, but as they become less entirely dependent on our support, it may mean that our support can get by with being less. I hope it also means that they can have the means to choose where they want to live and they may well go back, which is what we would like to see. I think we are going to have to be there for a bit after 2015—I am sure—though not necessarily in exactly the same way.
Q138 Sir Peter Luff: Minister, your Department sent us a note earlier this month informing us that you are preparing a new £20 million four‑year programme to scale up parliamentary strengthening in Burma. A pretty straight question to begin with: how are you spending that money?
Mr Duncan: It has not been approved yet. If I might say so, without embarrassing the head of DFID Burma, this was information that was being given quite early in the process of preparation, so it has not yet come to my desk. I am afraid this is perhaps an example of you being better informed than me on this particular, but I know it is in the mix and certainly is an area where we set a lot of importance. I probably do not need to rehearse what we are doing already—because you are familiar with it—but, with the Bill Committee, the Westminster Foundation for Democracy and all that sort of stuff, we are doing quite a lot. In a way, this will partly depend on whether we see progress in the area we were discussing earlier, about the constitutional change and likely improvement in the nature of Government. It has to go hand in hand with that, so we have to be flexible.
Q139 Sir Peter Luff: It is always pretty tricky engaging with a parliament; it is often a political minefield. Lord Williams told us parliaments are slow. Not all parliaments—not the Burmese Parliament—but this Parliament too is slow, laborious and deliberative, by definition; a competing mass of different interests. Share with us some of your thinking about how this money might be spent, should you decide to spend it.
Mr Duncan: Funnily enough, I am wrestling with similar such questions in Bangladesh, which are: to what extent can you deal with political parties without appearing to be political? You want them to be an effective part of a political process and want to assist them, without us in any way appearing partisan. That is always a danger in working with any parliament. We are, at this stage, particularly focusing on the operation of the institution of parliament itself, looking at how they pass legislation, how their bill committees work. The Westminster Foundation for Democracy is training the public accounts committee there. We have experts from here, the House of Commons, going to the Parliament with the Inter‑Parliamentary Union to talk about the library and research services. It is all of that kind of stuff.
Q140 Sir Peter Luff: That is existing work. That is already happening in our existing programme of activities, so how would you add to that? I am thinking about how much we are balancing civil society and parliament itself. It is a two‑way process; parliaments do not exist in a vacuum.
Mr Duncan: The great thing about democracy is that you need not just institutions; you need participation. You need people to be active in democracy. I suppose, just thinking aloud, we could through civil society institutions, particularly starting at the local level as a building block, encourage participation, how you hold your leaders to account, and how you see where money has been spent and whether it has been spent well. You can particularly give women a voice in saying what they want and what they think is good for their community. There are lots of things one can do.
Sir Peter Luff: I think you are telling us that our report can make recommendations to you about this particular area of activity. There is a picture waiting to be painted here.
Mr Duncan: There is an element of that. There will already be ideas in DFID, hence this programme is in preparation. One of the reasons I do not want to pre‑empt either the resource‑allocation round or your Committee’s report is that we are very open‑minded and want to do the best thing in the best way. I am open to all ideas.
Q141 Sir Peter Luff: Just one technical question from me: how do you measure democratic outputs in a way that fits into your Department’s managerial logframe approach? How do you actually do it?
Mr Duncan: It is very difficult to fit that sort of thing into a results metric. We are aware of that, which is why, when we are assessing any bilateral programme, we look at the overall aggregated picture of the menu of our activities. If we are doing, as we are at the moment, 30% in the health sector—and we are pleased to say ICAI gave a very good—
Sir Peter Luff: We are coming to that later.
Mr Duncan: Are you? Okay, I will shut up on that one. I will blow my own trumpet in five minutes’ time.
Sir Peter Luff: We will give you the opportunity shortly.
Mr Duncan: We look at things in aggregate. You can count the health outputs; you can count education outputs; you can assess, but not really count in quite the same way, things like democratic outputs—and we know that, which is why we try to balance the package. I have to say, as a minister, I am very rigorous and tough with officials. I say, “Now, come on; this is at the mushy end of what we do. What are you actually going to do?” They say, “We are going to support something.” I go, “No, what are you going to do?” and that is the sort of rigour we are going to apply to this when it comes to us.
Q142 Hugh Bayley: I have a few more questions about parliamentary strengthening, not relating specifically to Burma but to the Department’s work in this field internationally. Over quite some years, this Committee has been concerned that DFID puts much more money for this purpose, parliamentary strengthening, in the hands of foreign or multinational institutions like NDI or IRI from the United States, or UNDP or the State University of New York, for goodness’ sake, rather than in the hands of British institutions like the Westminster Foundation, the CPA, the Bar Council, the NAO or Essex University. Given that the Westminster brand is not a model to be exported, but is a brand that is respected enormously internationally, we believe that it is really important that the UK develops a UK‑based capacity that is as good and strong as UNDP or NDI. Does your Department share this view? I know the Westminster Foundation is currently being evaluated; can you also update us on that process? Does it have the capacity to do this or must you create some other mechanism?
Mr Duncan: Just to answer your last first, on the Westminster Foundation for Democracy, I am awaiting the report following meetings we had in December, so I cannot at this stage give you an update, but as soon as I get it, I will share that with you. That is in the pipeline.
In terms of parliamentary strengthening in Myanmar/Burma at the moment, it is done on a bilateral basis and not really through any multilateral at the moment, but it sounds from the discussions as though there might be a proposal that it should. I totally share your view that where we can brand something as UK democratic and use that direct line of influence, we should. To get it into a coherent product is quite difficult, because there are lots of different strands to it, be it the House of Commons or other things—indeed, this Committee to some extent. I share your view that, wherever possible, we should do it. It is always a problem for us that when we do something through a multilateral, we tend to lose credit and attribution for it and cannot brand it. In some cases, we have to. For humanitarian stuff in Syria, you cannot stick the Union Jack on it. I could, if you like, talk you through what we are currently doing through multilaterals in Burma, but it sounds as though you were really asking in terms of parliamentary strengthening.
Q143 Hugh Bayley: I am asking in terms of your Department’s policy in this field of work. We have taken leave of Burma just for this small group of questions. Do you think that there is a need for DFID to have additional staff in its governance cadre working on parliamentary strengthening and, dare I say it, staff who have had experience of working in political parties, standing for public office or perhaps being publicly elected representatives? It always struck me, quite some years ago, when I had a role at the Westminster Foundation, that DFID somehow felt the dirty arts of politics would contaminate its humanitarian face. If you are going to work in this field, you have to roll up your sleeves. Without being partisan—I accept that—you have to engage with politicians who are doing politics.
Mr Duncan: I do not think there is any such cultural antipathy to this; I just do not think it has been an easy part of the DFID skill set. That is really the problem.
Q144 Hugh Bayley: Do you need additional staff with a different skill set?
Mr Duncan: It is an in‑house or buy‑in question. My hunch is that probably—just thinking aloud here—a lot of the expertise that can be usefully deployed in these countries is better bought in. Former permanent secretaries and people like that are not going to sit there at grade whatever, in our headquarters building, ready to be deployed to any such country. You are more likely to find a former ambassador or a permanent secretary, or some interesting figure who knows the country, for a start, and can also then have these democratic skills.
Q145 Hugh Bayley: I am thinking aloud here, but maybe you need a parliamentary strengthening advisory panel within your Department that brings in former or serving parliamentarians, from this country or other countries.
Mr Duncan: For an immediate thought, that seems like a very good one. We are working in over 21 countries in this field at the moment, so it is not as if it is all stuck up in a dusty attic in DFID and we do not care about it. It is an important part of what we do in quite a lot of countries.
Q146 Hugh Bayley: Last question: I need to declare an interest as I sit on the CPA’s UK committee, but the Clerks of this Committee suggest we ask whether—given that CPA UK has told us that it could do much more work on parliamentary strengthening with a very small amount of funding on air fares and accommodation—DFID would be willing to provide a budget for this.
Mr Duncan: My door is open to any such supplication and we are always fair‑minded.
Chair: I am also a member of the executive committee.
Mr Duncan: Are you? In which case, this is fast becoming a yes.
Q147 Chair: There are a number of organisations—the Westminster Foundation, CPA, IPU and one or two private things—and what they have said to us is that there is not a big enough or regular enough budget for them to bid for to enable them to maintain permanent capacity. It is all a bit ad hoc. We are working through our own ideas as to whether we want to make a recommendation on this, but the feeling was, if you are doing all of that, instead of giving the money to UNDP, if there was funding that could be bought in, as you put it, the organisations we are talking about might well up their game and be able to provide it. If there is no regular funding, the capacity to buy in is only going to be who is available. I made the slightly facetious point that it is fine to send a Clerk from this House out for three or four weeks or, as we have done, second somebody for six months, but if you have more than one or two people doing that, you are obviously overstaffed here. That is not what they are designed to do, so you need to have people who have that experience who are ready and available to be deployed.
Mr Duncan: I hear the point. “Little pots go a long way if sensibly deployed,” is partly what you are saying—especially on clerks of the House of Commons.
Q148 Sir Peter Luff: I am not a member of the CPA executive committee. There are appalling indicators for health in Burma and a surprisingly low level of expenditure by the Government, even for low‑ and middle‑income countries: 0.9% of GDP. Can we persuade the Burmese Government to spend more of its money on health?
Mr Duncan: If they have it. The premise is absolutely right; the under‑investment is dire of course. This is exactly one of the key ingredients to Burma’s transformational success: health, education, business investment and things like that. We can of course put pressure on them. They need to. We have been spending a third of our money on this and, as I touched on earlier, I am very pleased that it was given such approval by the Independent Commission for Aid Impact.
You are right: Burma has one of the lowest levels of spending on health in Asia. It is only 0.9% of GDP. It is piffling compared with others. External funding amounted to $1 per head, I think, last year, which does not go very far. What we have is the 3MDG health fund, of which you and the Committee will be aware. I do not know, Gavin, if in your conversations with the Government they are planning to do more on health.
Gavin McGillivray: As well as working directly with the health ministry, I do not want to pre‑empt you, but you have on your desk a project with the World Bank to improve public financial management within Burma.
Sir Peter Luff: Generally?
Gavin McGillivray: Yes. That is about improving the Government’s capacity to collect, allocate and spend public funds. One of the elements of that programme will be about improving tax take. We hope to improve tax take from—currently it is one of the lowest in the world—3% or 4% of GDP to nearer 10%. That will mean an extra £2 billion a year if that is achieved.
If I may continue for a moment, in terms of addressing the appalling health statistics, we have to improve Government resources and the way that Government goes about it but we also have to think about the other providers of healthcare. In the ethnic regions, the ethnic authorities have been providing their own healthcare and schooling. As peace, we hope, sets in, meshing those two together is going to need some quite subtle negotiations and advisory work in different parts of the country.
Mr Duncan: They call it the convergence agenda, and we are trying to support that agenda to try to marry up these different systems into one.
Q149 Sir Peter Luff: There are particularly worrying healthcare shortages in the conflict and ceasefire areas. Is DFID addressing that in a particular way?
Mr Duncan: In the same way as we are just trying to give them food. Yes, I have been to camps in Rakhine where health is an important element of the provision in the camp. In any kind of refugee set‑up, health is an essential dimension. It is pretty basic, though.
Q150 Sir Peter Luff: How does the Three Millennium Development Goal Fund sit with the Global Fund and the maternal and child healthcare programmes in Burma? Is there a real risk of duplication and overlap?
Mr Duncan: No, I do not think there is, because we are watching that very carefully. The 3MDG focuses on two main areas. The first is child and maternal healthcare at the community and township level, and that has no crossover with the Global Fund. On AIDS, TB and malaria, the 3MDG Fund provides services for populations that are not really covered by the Global Fund, for example non‑government‑controlled areas or drug users. I am sufficiently confident that there is no overlap and that this is properly defined between the two.
Q151 Sir Peter Luff: You said in your opening comment that a third of the budget was on health. How do you decide that level of expenditure on a programme? What criteria do you apply?
Mr Duncan: We are spoilt for choice. It goes back to what I was saying earlier—that you can choose to put it all into one channel or spread it. We have chosen to spread it but, inasmuch as we think we can add impact in the two obvious areas of health and education, we have chosen health. That is partly donor co‑ordination, partly where we have the skills and partly where we think we can have impact. We will be assessing this as part of the resource allocation round, but as is clear from the ICAI report, at least where we have focused a third of our budget, it has had good effect.
Q152 Sir Peter Luff: We have also heard concerns expressed, as we have in the past with other similar programmes, about the inflexibility of the 3MDG Fund. Do you share those concerns? Is there sufficient flexibility as we are working?
Mr Duncan: It is focused on what it chooses to focus on. If you make it over‑flexible, you do not get the focus. Are there any particular aspects of the flexibility that—
Q153 Sir Peter Luff: Save the Children has expressed a particular concern, but in a general sense, as far as I am aware. You have not heard this criticism.
Mr Duncan: Not really, no. Gavin, have you? Is there an issue here that I am missing?
Gavin McGillivray: I would not say so. Certainly the ICAI review would have looked at this. It is a multi-donor fund, so there are a number of hands on the lever, but it is my impression, six months in, that actually it is quite flexible, quite responsive and, as Mr Bayley was saying, it is moving into the ceasefire areas. It is not waiting for national ceasefire to do so.
Sir Peter Luff: I am encouraged by your answers. Thank you.
Q154 Pauline Latham: We heard about drug‑resistant TB and we heard about the dangers of drug-resistant malaria. What is DFID doing to combat these two problems and is it having any effect?
Mr Duncan: Artemisinin—I have to pronounce this correctly; I always get it wrong. The first point to make is that the control of malaria in Burma is of global importance. It is not just of local or national importance, because the spread and everything could be very dire. This is so important, and we are investing £25.2 million, I think it is, from 2011 to 2015 through Population Services International—they are our delivery partner—and 3MDG. It is focusing on this threat of resistance. The prevalence of this in the eastern side of Burma is a global threat, so that is where a lot of our focus is. We are one of the first donors to have funded this; I think we have been pioneers. As I say, we are investing a serious amount of money, because we share your view that this is a serious danger that cannot afford to be ignored.
Q155 Pauline Latham: I met before a dinner with a doctor from northern Europe who has been working out there for—I think he said—25 years. I cannot say more than that; I cannot remember what nationality he was—I think he was Danish or Swedish. He was saying that people underestimate the danger. If this gets out and it is not contained, it will cause huge problems, particularly for Africa, so it is incredibly important.
The other thing I heard that I was very worried about is that we have drug‑resistant TB there. I met a man who had TB; he was HIV‑positive and he had a very low count. He was not allowed to go on the antiretrovirals until they had cured the TB, but we also heard that people did not get on the antiretroviral drugs until somebody had died, because there were not enough. It seems to me that this is an area that ought to be looked at by DFID, because there is no point in somebody going on it really late, because they probably will not survive anyway. You are giving drugs to people who are going to die. It would be better to get them on the programme much earlier, so I think it is something that DFID should be looking at.
Mr Duncan: We are also focusing on TB resistance with our Tak tuberculosis initiative. It is on a smaller scale; it is £1.8 million rather than £25 million‑ish, but it is important. I absolutely take your point about the interface between the two.
Q156 Hugh Bayley: When we met Aung San Suu Kyi, she made a case for renovating Rangoon General Hospital and, in particular, said that many people in the capital, at least the capital region, depend upon private medicine, but those who could not afford private medicine could get free care at the hospital. Later we found out that University College Hospital Medical School and the Royal College of Physicians are involved in improving medical exams in Burma and in advising Rangoon General Hospital. Can DFID provide some support for this kind of work through central partnership funds?
Mr Duncan: We are. I have discussed this personally with Aung San Suu Kyi and we have agreed, at the behest of Lord Darzi, to fund a feasibility study for the restoration of Rangoon Hospital. That is very much one of Aung San Suu Kyi’s favoured projects. As for where the funding might come from later actually to do it, we are not there yet, but it could be a World Bank initiative; there could be other partners. You are not going to get anywhere without a feasibility study to a professional standard, so there is a Doha‑based team that is doing this, and we are funding it.
Q157 Hugh Bayley: I am pleased to hear that. It struck us that the World Bank could possibly be a partner. Can you just say a little bit more? You are funding a feasibility study. Is this to show interest or is it because DFID is determined to drive through some kind of improvement programme, I guess both for the hospital but, more importantly, for the medical education that it provides throughout the country as a whole, whether DFID is a main donor of that or not? In other words, what will you do when you get this feasibility study?
Mr Duncan: I think it is fair to say that this is more about the hospital at this stage than the teaching facilities within it, but one would like to think that the major hospital in a capital city has a teaching facility as part of the project. Indeed, that is exactly what might emerge from a feasibility study that says, “If you are going to do this well, do not just build a building; build an educational facility in it, because then it becomes a centre of expertise and you get a better hospital.” We are awaiting that and then we will have to work out, on the back of that, what the costs might be and from where the funding might emanate.
Q158 Hugh Bayley: When do you expect the report?
Mr Duncan: I think by the end of this month. Can you remember, Gavin?
Gavin McGillivray: You are exactly right. There will be a series of reports. We are expecting to have from Lord Darzi’s team a request for exactly what they need from us, in February, so we will be in a better place in February.
Q159 Mr McCann: Minister, in answer to different questions this morning, you explained the always difficult decisions about the size of the budget and priorities. Can you explain the decision‑making processes that lead you to the conclusion that, for example in Pakistan, education dominates the programme, whereas in Burma it is not a priority? If you increased spending on education, would you need more staff?
Mr Duncan: We are back to the resources allocation review—the RAR, as I think we are going to have to call it. We have had BARs, MARs and HARs; now we have BAR, MAR, MAR, HAR and RAR. Health is 30%. We had a choice at the beginning, as an early donor participant in Burma, about choosing a sector, because if you are going to have impact, it made sense to pick on a sector and at least have a serious degree of impact. We chose health. There is absolutely no doubt that education faces a similar need. Indeed, I had an hour yesterday with the Education Minster for Burma, who was here—a fabulous guy, educated in Edinburgh. He was very good to talk to and very well informed about the education sector. There is an example of someone who is a Minister and would be a very good partner for us in anything we might do. He would be a very trusted Minister. It is definitely a candidate for more of what we do.
Now, the question is whether we need more staff. Do we rob Peter to pay Paul? Who wants the job? Is it UK‑based or Yangon‑based and all of this kind of stuff? That is all up in the air. That is what a resource allocation round is all about, so I have little doubt that, amidst the requests for increased activity in the country, there will be a strong pitch for education and we will have to decide whether it should be in the mix in the future or not.
Q160 Mr McCann: Within that mix, there will be no difficulty in transferring funds between multilateral programmes and bilateral programmes, one presumes, if we thought we were going to get better value for money for it.
Mr Duncan: If we think we are going to get better value for money, we will go for the best value for money, but as always in an allocation round—particularly where, of course, the increases we have been enjoying for a couple of years are flattening off, and also there is a larger call on the humanitarian side—the basic resource budget is going to be hotly contested, so we should not pretend that there is an enormous pot of unclaimed dosh there that we can take, be it for Burma or anything else. There is going to be a very fierce battle for resources.
Q161 Mr McCann: You will know that there has been a concern or fear in the Committee that, looking at the various budgets and the figures that we know from the Department, money has been put out to multilaterals, because that is an easy way of spending it, rather than through bilaterals.
Mr Duncan: I am aware of that concern, but I do not think we feel constrained by the need to have to put things through multilaterals. If we think we can do it better bilaterally, then we will.
Q162 Mr McCann: There is one final question on education that I have. ActionAid has criticised our support for monastic education. I have to say that when we went to visit a school—the Chair and I were on the same visit—we were impressed by a school that catered for something like 6,000 children over two shifts. There was no pressure on the children to follow a religious life after they left the school. We were not unimpressed by it at all, but ActionAid has criticised and suggested that we should be investing money in primary education rather than the monastic schools that exist. Do you have a view?
Mr Duncan: No. If I may, I will just look at my note here—Gavin may be better to say this. First of all, the starting point with education is we are doing it on a small scale, so ultimately the resource decisions we are going to have to make might be characterised as double or quits. We either ramp it up to a bigger scale or just appreciate that we are not really going to have an enormous impact. Gavin, do you want to say something about the Myanmar Education Consortium, which is the project that covers monastic?
Gavin McGillivray: I am puzzled, because monastic education is primary education, essentially the poorer children tend to go to monastic schools. Monastic schools perhaps cover 10% of the children in the country, something like that.
Q163 Mr McCann: Can I be helpful to you? What they said was: “The religious institution, whether it is primary level or even higher level, does not bring good results in the long run in any country.” They have just been all‑encompassing in terms of their criticism of religious education perhaps.
Gavin McGillivray: If I may go on, the fact of the matter is a lot of children go to monastic schools and schools run by ethnic authorities. We cannot just ignore that fact, so we are working both to improve the quality of public education through training teachers and the quality of monastic and ethnic authority education, also through training teachers.
Mr Duncan: Something like 25% of kids do not really have a proper primary school education at all. We are starting from such a low base here.
Q164 Chair: We were only in this school for an hour or two—you were with us, I think, Gavin—but we were impressed by both the attention of the kids and the teachers’ focus. It may have been a showpiece, but whatever it was, it certainly seemed to be delivering something that was a lot better than most people seemed to be getting. I think we are just reflecting a concern, but I do not think, as a Committee, we saw anything to justify that.
Also, in this context, for the process, this is the final evidence session; we will deliberate and produce our report in a few weeks’ time. I think you have hinted at it, Minister, but just to put it straight on the record, I hope you will feel able to hold off finalising your programme until we have made our report. I think you can see there are quite a lot of areas where we feel we have some significant recommendations to make, which we hope would be in time to be properly considered.
Mr Duncan: Chairman, I am very happy to give you that undertaking. If it appears that our process is, in any way, racing ahead of yours, then I hope we can talk to each other and perhaps get early sight of some recommendations, should they be essential for influencing our decision in time, but I think we are alright in terms of time.
Chair: We appreciate that this is pitched across the whole Department, but we will nevertheless, I feel, want to say, on the merit of what we see in here, we are likely to make some quite strong recommendations.
Mr Duncan: We are alerted.
Q165 Sir Peter Luff: On the economy, Burma has huge economic potential. It has huge natural resources and strong potential for trade. Its geographic location is very good as well, and it has a strong, young working-age population, so it is in a great position, held back, of course, like so many other countries, by corruption. There were particularly bad levels in the Transparency Corruption Perceptions Index—172 out of 176—so I can see why it is a priority for you, but we have heard other witnesses say true peace, deep peace, including an end to inter‑communal violence, is a precondition of prosperity. The question is about the priorities between spending on business issues, economic investment in Burma, and the very low level of spending on dealing with inter‑communal violence. How do you decide your priorities in this area?
Mr Duncan: I really do not think this is either/or; this has to be both. If we do not focus on the economy, there will never be an adequate launch pad for progress, which in turn is what you need to maintain inter‑communal peace and everything else. You are starting from such a low base at the moment. Essentially, this country has been in the dark for decades, and the 16% or so growth we are seeing, which sounds great, is almost entirely in the extractive industries. Unless you can have a country where people are able to be employed, you are not going to have a happy country. At the moment, there is pretty well no banking system. There is no regulatory system. No one is really investing, except in the extractive industries, on a scale in the country. Unless you can improve the business climate, as we call it—the investment climate—and have a banking system and proper commercial rules, this country is not going to take off. Our very strong view is that it would be utterly unwise to ignore helping create the foundations of economic success. If we were to defer that, it would be a serious error.
Q166 Sir Peter Luff: Let me read to you a bit of evidence received from one witness in full: “DFID spends currently no more than £10,000 on multi‑faith or inter‑faith initiatives, compared to the £600,000 that they gave for the startup of the Myanmar Centre for Responsible Business. Now, I am not knocking the Myanmar Centre for Responsible Business; clearly that is a necessary initiative, but a lot more needs to be done to look at inter-faith initiatives and what can be done to prevent further violence that could derail the process.” It is that question of balance.
Mr Duncan: I am not sure that focus on inter‑faith initiatives is as important as the focus we have on the peace process and the political reconciliation with ethnic groups that is necessary, in which we are investing quite a lot of money, time and diplomatic effort. I do not share that criticism, except inasmuch as there are so many things we could be doing and we cannot do them all.
Q167 Sir Peter Luff: Without wishing to be too helpful as a questioner, rather than a witness, presumably you would also count the money you are spending on parliamentary strengthening and civil society in the balance of that area of activity as well.
Mr Duncan: Unless there is a track of activity I am unaware of that justifies more money what might be classified as inter‑faith initiatives—what would your view be on that, in terms of any pitch we have received?
Gavin McGillivray: We are spending more than £10,000 in this area. We are, as you know, spending £6.4 million on humanitarian aid in Rakhine. We have seconded an expert to OCHA about communicating with the different communities. We are pushing our multi‑donor funds to work more in areas of ethnic violence, and the Livelihoods and Food Security Trust Fund has a $22 million programme that it will be implementing in Rakhine, so there is more than that.
Q168 Sir Peter Luff: I do not think I have an answer. It is a difficult question. This question has come several times in different areas: how do you decide how much to spend on economic activity?
Mr Duncan: It is really what I was saying earlier: when we are going through resource allocation and looking at a country’s programme, we try to look at the balance of what we do, and it is a balance of a number of things. It is a balance of what can be counted and what can be counted less easily. It is a balance of high risk and low risk. It is a balance of what is a basic traditional focus people think DFID should have—like health, education and things like that—and governance and things like a peace process. Every country is different, and one of the important things about DFID is we have to understand each country in which we are working, and Burma is a unique one.
Q169 Sir Peter Luff: Gavin, just for the Livelihoods and Food Security Trust Fund project, can you paint a future of this project for us? How will it develop?
Mr Duncan: I can; you can. LIFT, as we call it, is something to which we give about a third of its funding—about £36 million. It tries to raise the income and production of 2 million of the most impoverished rural people. It is largely agricultural. Do you know what? If we did not do this, we would be neglecting something very important that we have not spoken about today, which are the prospects for women. Without this, we would not have this result. We hope that the Bill Cash Bill, as we are calling it, will be passed, which makes us have to think about women and girls. We like to think we do anyway, but we would not be complying with that Bill—or Act of Parliament, if it becomes such—if we were not doing something like this.
Q170 Sir Peter Luff: The Fund does already deal with financial services issues, such as providing microfinance. Would you just say something on the importance of that in the Burmese context?
Mr Duncan: Yes. It is crucial. It is a particular dimension of finance. One of the bigger problems of it having been such a closed country and closed economy is there is not even a normal banking sector for more mature businesses, let alone tiny loans for micro‑borrowing, largely in the agricultural sector. I think it is fair to say that microfinance is in its infancy, but it is good that it is there. I think it is a sector that will grow and certainly matters for people getting off first base.
Q171 Sir Peter Luff: Save the Children Fund said they thought that DFID could focus even more on this area in “trying to break the very damaging cycles of debt and credit that characterise most people’s lives in rural Myanmar, where the landless poor do not have access to credit, rely very much on debt or mortgaging their labour to get them through the agricultural season.” Do you recognise that picture? Do you think there is a particular issue in Myanmar?
Mr Duncan: Yes, I think we probably do recognise it. It is yet another example of some good things we could be doing, but as I say, we cannot do them all. The thing about Burma is it has become a very busy place for donors—there are lots of them—but it is not very big in terms of the donor funds that are yet flowing. It is occupying a lot of ministerial time. There are lots of people knocking on the doors saying, “Hey, we’re here to help you,” but it is only very recently that any of the actual money has got up to a level that is making an impact. We were there first. You are looking at, as we said, Japan with $900 million, then about five of us at about $100 million, and then there is a big cliff edge down to the lower levels. Everyone is there, but it does not amount to enough at the moment. There are lots of things like this, which are candidates for further help. We would love to be doing them all, but we would have to pull out of other countries in order to do as much as we would like to.
Q172 Chair: I can say that we were impressed with what we saw. We saw some businesses that really had grown and created employment or had substantially improved their income. We recognise it was not just about creating jobs, but sometimes improving the income of people from what they were doing, which gave them scope. You mentioned those rural, agricultural projects. We were very impressed. They were very well managed processes. Again, you showed us what was good; nevertheless, it is good to see.
Mr Duncan: People are less likely to fight each other if they are more prosperous. Nothing stops a bullet like a job.
Q173 Pauline Latham: We mentioned EITI earlier, and we know the Government is keen to sign up to. Civil society and industry are working with Government to do that. How far away do you think they are away from signing up to EITI and do you think it is likely to happen before the election?
Mr Duncan: I hope so. As I said earlier, I just think so, but we are not quite there. We are doing absolutely everything we can to encourage and assist this. I think they will sign; I think it is a matter of when, not a matter of if, and it will be very good if they do, so full steam ahead. I hope that we can persuade them to do it sooner, rather than later.
Q174 Chair: When we met Aung San Suu Kyi, we had a discussion about a number of things, but she specifically asked whether the UK would help with her rule-of-law centres, given that she is chairing that committee. We appreciate that the lady has pet projects, but that does not mean they are not valuable and she is obviously serious about wanting to do them. Is this under discussion? Is it something that might be considered?
Mr Duncan: This is exactly the sort of thing that could be part of this recommendation that is winging its way to my desk, so it is definitely a candidate for what comes under the same sort of heading as parliamentary strengthening, rule of law and these things. It is definitely a candidate. I am aware of this; I have also discussed this with her in detail. She is very strong on promoting the rule of law, which is laudable in every respect. Yes, it is on the list of definite possibles.
Q175 Mr McCann: When we met with sex workers in Mandalay, we asked them a question in terms of the potential for that fitting in with the various networks that they have to support themselves and, for example, the gay community and other groups within the country. They suggested that they were not necessarily that affectionate towards the concept of rule-of-law centres. They thought that the structures were already there that could be invested in that would do the same thing. I am assuming that you have that information flowing through to you in order that you can make the correct decision about where investment should go.
Mr Duncan: Absolutely right. You do not take a suggestion without seeing what is already there and, in fact, we are doing some of this already through the Pyoe Pin NGO, where we are developing networks amongst legal practitioners. That actually has led to a few legal aid centres, so it is a similar concept. We would not just look at this proposal in isolation; we have to see how it fits into what is there already, which is exactly the sort of business case evaluation process we go through so rigorously when working out where we deploy our resources, which is partly the answer to Sir Peter’s question earlier about how we decide between this or that.
Q176 Chair: I have just a final point, which Charles Petrie raised with us yesterday, but it is quite an important one. He said during the course of this peace process, a lot of the armed groups have effectively had control of their areas and they were looking to maintain that control during the course of the peace process. Charles Petrie was saying they need to turn armed groups effectively into instruments of local government. That is quite a radical big thing to do, but is this something that DFID, in concert with others—it is also where DFID and the Foreign Office working together seems to be appropriate—could be part of?
Mr Duncan: We have sort of done a bit of this in Nepal. It has been slightly different there. We have been trying to get ex‑Maoist combatants out of camps and into communities, so the parallels are not exact, but the concept is similar: it is to civilianise armed people. Yes, it is a good idea and it makes sense. If they feel they wielded power, they still will want to, so get them to do it in a better way. Again, that will be on the menu too.
Q177 Chair: Thank you. I think the Department, in its submission, described Burma as “high risk, high return”. That is a good way of summarising it. I think the Committee would agree with that. You can get quite excited, in fact, that there is a window in Burma where you could do a lot more and get a lot back for it. Clearly a judgment has to be made, and this is something for the Committee to deliberate on, but it seems to us there may be an opportunity to do something quite big, quite fast—which you do, knowing that if things go the way you do not want them to go, you have to pull back. If you hesitate when there is an opportunity, you might miss the opportunity.
Mr Duncan: I encourage my officials not to be shy of taking risk. I tell them that on the simple basis that they will never get blamed if something goes wrong, so long as they have handled it well and done their best to make it go right. The only thing that gets blame is bad management, sloppiness or something. A risk that goes wrong is not something for which you blame an official. I hope that, by trying to inculcate that ethos into my officials, it will be recognised and similarly rewarded by this Committee.
Chair: You have put that on the record anyway, Minister. We thank you very much for the evidence session that you have given. I think you can see the Committee is really engaged with this particular inquiry. The visit was extremely worthwhile and gave us a lot to think about. We will try to get our report together—we have quite a lot on our plate—but we are looking for an early/mid March objective, so certainly by the end of March we would hope to have it published.
Mr Duncan: That fits well.
Chair: Thank you for your points about the timing. We hope we can make recommendations that will actually help the process. Thank you for your understanding that we should try to work together to get the best outcome. Thank you very much indeed.
Oral evidence: Democracy and Development in Burma, HC 821 2