Pakistan

Lord Bruce of Bennachie Excerpts

Thursday 4th July 2013 Westminster Hall

[Sir Malcolm Bruce (Gordon) (LD)]

I think it is fair to say that the International Development Committee was a little bit more controversial in some of our comments and recommendations on Pakistan than we were on post-2015 development goals. The Committee wants to make it clear that we have absolutely no hesitation in asserting the fact that the relationship between Britain and Pakistan is fundamental and indissoluble. It is absolutely essential to both countries as a force of history and a current reality. We have more than 1 million people of Pakistani origin living in the United Kingdom, and we have a shared interest in ensuring that Pakistan is a successful country that manages to overcome the challenges that it faces. Secondly, we want to make it clear that, more than anything else, we believe that the United Kingdom should stand with the poorest people of Pakistan and that our objective is to engage in helping them to achieve a better quality of life. That might mean that we will be a candid friend of Pakistan rather than a sycophantic one.

The population of Pakistan is projected to rise from 180 million to 205 million by 2020, and the simple challenge that the country faces is that population growth is faster than economic growth. One does not have to be a top mathematician to calculate that as the population rises, unless something fundamental changes, the numbers of people in poverty will increase. That is one of the more depressing analyses for our development and aid programme across our bilateral partners.

In that context, the Government have a perfectly understandable ambition to raise the aid programme—the bilateral funding to Pakistan—from £267 million to £446 million by the end of this Parliament. We completely understand that, but we have some grave reservations about doing it if nothing changes, and that was an essential aspect of our report.

Obviously, we looked at the areas in which the Department for International Development was engaged, which were predominantly health, education and governance. In all cases, they were the right areas on which to be focused. Will the Minister update us on some of the specific points regarding those areas about which we raised concerns?

There is a big programme of commitment to improve maternal help, which we support, and it is absolutely essential that that is delivered. Two health support mechanisms are in place. One, the lady health workers, is longer established, while the other, to which DFID has given substantial support, is community midwives. A practical thing we discovered was that where those mechanisms should be complementary and working together, they were operating dysfunctionally as two separate institutions. One reason for that was how people were paid. As we understand it, lady health workers get a flat salary to provide help on maternal health, child health and general health issues, which is what our own community nurses do. Community midwives, on the other hand, are specifically there to support women through childbirth. They are paid a much smaller flat rate plus so much per delivery, so that has created two classes of health workers in the same area.

We actually saw a particularly good example of co-operation between a lady health worker and a community midwife, but that had more to do with the fact that they were sisters-in-law than that the system itself was working fundamentally as we would like. I do not know whether the Minister can give us any information about whether that situation has been addressed and improved. I want to make it clear that they are both good basic concepts, but how they were functioning was not serving the interests of the people as well as might have been the case.

Obviously, the biggest part of the Government’s programme is support for education, especially, but not exclusively, in Punjab. It is worth reporting that when we were meeting the then Prime Minister, he spontaneously raised the issue of Malala, who was sadly shot and is now living in this country, before any member of the Committee raised it with him. That incident was an indication to us, and a wake-up call among people in Pakistan, that there really had to be clarity about the right of girls to have an education and the Government’s full-square backing for that principle. None the less, it was satisfying to hear that statement from the Prime Minister, but it does not remove the fact that the challenges are very real. As we know, Malala’s colleague who was shot at the same time has now come to the UK because she says that her ability to pursue her education in Pakistan has been totally compromised.

The scheme in Punjab that we looked at, which has been developed by Michael Barber, is doing extremely good work and is working closely with the Chief Minister, Shahbaz Sharif, the brother of the new Prime Minister. The good news is that he is staying in post, because there was some concern that if he moved, that might compromise the relationship. Good relationships that deliver good results are clearly totally satisfactory. The problem is that if the relationship breaks down, there is not the infrastructure to fall back on, so one hopes that that good relationship will continue.

A number of things have been said to us about that programme suggesting some aspects are good, but some questionable. The fundamental objective is to ensure that teachers are appointed on merit, that they turn up and teach, and that their pupils also have an attendance record. Michael Barber has acknowledged that that is the sum total of what has been achieved at this stage, which means that the quality of the education still has a way to go. At one particular school we visited, we were shown a demonstration lesson. When we sat down at the back of the class and flicked through the exercise book, we found that the pages before and after that particular lesson were blank. The lesson had been a show piece; the fundamentals were not there. Clearly, that is a real concern.

Indeed, we have had a follow-up visit from one of our witnesses, Dr Matthew Nelson of the school of oriental and African studies, and he raised further points of concern. He does not deny that appointing teachers on merit is the right objective or that the Chief Minister and his officials entirely buy into it, but he says that there is plenty of evidence that merit is available to be bought, and is being bought on a large scale. He says that it is a good idea to appoint people on merit rather than because they have a political connection, and that is absolutely right. The point he makes, however, is that exam marks, which are the test of merit, are subject to endemic corruption; effectively, people can buy exam results and present themselves as having merit when they have absolutely no capacity to be a competent teacher. I will not read them out, but Dr Nelson gives examples of how the process works.

That is obviously a concern, but we recognise that the approach taken by Michael Barber and the commitment of the Chief Minister are real and are having results, although the two of them are probably facing more challenges than they would like. If the Minister can address those challenges now, that would be good; if not, perhaps he can write to us saying what proposals are being taken forward. We should certainly not abandon the programme, but we must make sure that it works effectively and delivers the right results.

The Committee’s concern was not so much that DFID was not tackling the right issues or not approaching things in the right way—I have indicated some of the challenges that need to be overcome—but that an awful lot of development assistance has not achieved substantial results. One slightly disturbing thing we were told was that the education programme being pursued by DFID was quite similar to one pursued by the United States Agency for International Development some years ago. When that programme finished, the benefits fell away completely, and we obviously hope that DFID will find a way of ensuring that that does not happen again.

In our report, the Committee says:

“In the past, donor money has not been spent effectively in Pakistan for a variety of reasons. Corruption is rife in a social order based on patronage and kinship networks. Pakistan’s rich do not pay taxes and exhibit little interest in improving conditions and opportunities for Pakistan’s poor.”

That was the most striking and controversial element of our report, but I certainly stand by it, as I think all members of the Committee do. However, we compiled and published our report during the election in Pakistan—the previous Government had demitted office, and a caretaker Government were in place—and a new Government have now come into office. We therefore hope that they will take these issues as both a challenge and an opportunity to show they mean to take action.

Taxes are not just a matter of morality and justice—I will come back to that—but essential to Pakistan’s survival. If Pakistan cannot raise its tax base from below 10%, it will not be able to support its people by providing the basic services they not only have the right to expect, but absolutely need. No aid programme from outside can make up that shortfall; if Pakistan does not find the resources from within its own, admittedly weak, economy, it will not be able to sustain services—certainly not with the population growth it faces.

The British Government, aid partners and the IMF must look Pakistan’s rulers in the eye and ask them bluntly and frankly why they do not pay taxes in their own country and when they will start doing so. It is completely intolerable that British taxpayers should be funding health and education in Pakistan when the richest people there contribute absolutely nothing towards those services and do not use them, because they buy private education and private health. That is not only a moral issue, but a fundamental issue of financial survival for Pakistan.

This is the first time in the country’s history that a Government have completed their term and a new democratic Government have been elected to step up and accept their responsibilities. Therefore, unless there is clear evidence of a commitment on the part of Pakistan’s leadership to contribute to their own development agenda, the British Government should not nearly double our aid—there is no suggestion that we should cut it—and make Pakistan the biggest single recipient.

I have seen a series of e-mails. In the past few weeks, the IMF has been engaged in Pakistan. The country is looking for further funding, despite the fact that there is a substantial amount—$10 billion or $12 billion—of surplus deposits in Pakistani banks, which is about equivalent to the loan Pakistan is looking for from the IMF. In other words, there is some sovereign resource available in Pakistan. Again, we are not suggesting that the IMF should not engage, but it should make it absolutely clear that increasing the tax contribution is part and parcel of the package of agreements. I understand that IMF officials have maintained a fairly resolute stance, but I am slightly concerned to hear that the Pakistani Government’s response has been to journey to Saudi Arabia to see whether they can get funding from that source so that they do not have to meet the IMF’s conditions.

That is a sensitive issue, but it must be confronted. It is made somewhat more difficult by what was, on the face of it, not a bad change in the Pakistani Government’s approach to government. The 18th amendment to the constitution devolved the delivery of services to the four provincial governments. I am a believer in devolution, and it is probably better to have local government delivering more services, because it is accountable to the distinctive provinces of Pakistan. However, if the money is not raised at either level, devolution is an abdication of responsibility; it is basically giving the provinces responsibility without the means to deliver services. If a formula is not developed to ensure that the money flows, one can imagine what the consequences are likely to be.

There is a significant number of members of the Pakistani diaspora in the UK, so we thought it was important to engage with them. I completely recognise that their perspective of the country they or their parents came from tends to be slightly different from that of the people who live there. However, they also have a clear interest, and many make regular visits and have many connections and family ties. The people we met were outspoken in saying that they could play a much more useful role in ensuring that aid and development spending reached the people it was meant to. Most of them will work with only a limited number of partners they feel they can trust. If anything, members of the diaspora are more outspoken critics of Pakistan than donors or others because, as they say, they see what is happening.

The essence of all this is that Pakistan’s stability is crucial to Pakistan, to the region and to Britain’s substantial interests there. At a time when we are gradually disengaging from Afghanistan militarily, although not in terms of development assistance, we do not need Pakistan to become a bigger problem than Afghanistan. We need to hold on to our shared interest.

Pakistan must face the reality that unless something changes, India’s GDP per capita is likely to move way ahead its own, and even Afghanistan might move into a better position. We must therefore maintain our engagement—that is not negotiable. The Committee approves fundamentally of the priorities that the British Government have set, but Ministers must try harder to ensure that they get the outcomes they want on health and education. They should be robust in ensuring that our further commitment and increased engagement is matched by an increase in the tax base.

In a sense, we are giving the elite of Pakistan a moral eyeballing and telling them to demonstrate their willingness to participate in the process. The outgoing Parliament voted by an overwhelming majority that it did not believe its Members should pay taxes. I wonder what the British public would think if we passed such a motion here. It is done with a completely innocent face, but the people in question are much richer than any of us—or certainly than most of us—and they stand as political leaders, seeking to lead their country presumably to a better place. I cannot think of any politicians who stand in democratic elections and do not offer at least a vision and prospects. However, for that to happen, they must play their part and be partners with the people—particularly the poor people—of Pakistan.

I want to make one qualification to what I have said, which I think that the Minister will understand. The small number of people in Pakistan who do pay their taxes should not be screwed with an increase so that the people at the other end of the scale need not pay. Nothing should be done, either, to increase the burden on the poorest of the poor. The target is clearly the wealthy elite, who have a contribution to make and must make it.

I do not apologise for dwelling on those issues, because they represent a watershed in our relationship with Pakistan. I want the country to succeed and its people to have the prospects that they want for themselves. I am happy to have met many Pakistanis here and in Pakistan who share that vision, but also share the frustration that for decades they have been stuck in a situation in which their world does not improve, and in which, because of corruption and a lack of commitment and financial base, they do not get the growth, poverty reduction and development that they need and deserve. I am thrilled that the British Government understand the commitment, but I hope that they will agree with the Committee that to get results we need a robust relationship.

--- Later in debate ---

[Sir Malcolm Bruce]

I thank the Minister for a succinct and positive response to the debate, which shed a clear light on the Government’s determination to take the opportunity to turn things around. It is important that the new, democratically elected Government—the first to secure the transition—have the responsibility and an opportunity to make the changes. My only caution is that, while I welcome their commitment to increase the tax take to 15%, such commitments have been made in the past and not delivered. We clearly need positive measures for that to happen.

I completely agree with the Minister that the most effective way to achieve things is through donor co-ordination, because all the donors working together and singing from the same hymn sheet is more likely to get a co-ordinated response. I welcome what he said about bringing together lady health workers and community midwives, which seems to be something that could be done, so it is great to hear that it is being done. We can do it ourselves as well, but I hope that the Minister will convey to Sir Michael Barber that he is doing an excellent job of work, although there are some concerns about merit meaning what it says—perhaps something could be done about that.

Overall, we want to share with the people of Pakistan an absolutely joint commitment saying that they deserve a future that is a lot better than the recent past. We have to ensure that the aid community can find the partners—partners in Pakistan—to achieve that. As the Minister rightly says, without a functioning partner outside agencies ultimately cannot deliver. The reason why we put the caveat that we did in the report is that, willing as we may be to support the poor people of Pakistan, the effort will only work if their leaders want it to work and are prepared to work with us. I am, however, encouraged by what the Minister has had to say. I hope that the next few months in particular will see some positive progress in that direction.

Question put and agreed to.