Assessing Blair's legacy on international development

By CAFOD
12 May 2007

The Catholic Fund for Overseas Development (CAFOD) offers an assessment and balance sheet on the impact of Tony Blair's policies for international development issues.

As Tony Blair brings his premiership to an end and prepares for his eleventh and last G8 summit, he can look back on a record in international development that is a mix of real achievement, frustration and deep disappointment. The dividing line between achievement and disappointment is drawn essentially between areas in which the UK can take unilateral action, such as the size of its own aid budget and bilateral aid programmes and multilateral issues on which Tony Blair and 'New Labour' have striven for global leadership.

Labour's three election manifestos are littered with the language of leadership - how the UK is going to lead the international community on reforming trade, in combating climate change, in promoting development and poverty reduction and in controlling the arms trade. But when it comes to changes that can only be brought about by multilateral agreement, Blair's and Labour's ambitions and language have often run ahead of their ability to influence, cajole and persuade other key players, and ultimately deliver change. British development agencies have also encouraged Tony Blair and his ministers to play a global role by calling for the government to "show leadership" on difficult development issues. Tony Blair's capacity for international leadership, however, has been eroded and weakened by the widely held view at home and abroad that the invasion of Iraq was a mistake with hideous consequences, justified with flawed evidence and that the UK is less than even-handed in dealing with the Israel-Palestinian issue.

Aid and Development Policy

In the 10 years since he attended his first G8 summit in Denver, USA, the UK's aid budget has more than tripled in size. In terms of aid as a proportion national income, in 2006 the UK allocated more to development than in any year since 1979. Labour has also unambiguously pledged to achieve the 0.7per cent target in 2013. The proportion of national income allocated to aid has long been regarded as an indicator of a country's commitment to development precisely because it is completely within the control of government and pits development against domestic, often more electorally sensitive, issues. Size, of course, is not everything, especially when it comes to aid, but campaigners with long memories remember their hard, dispiriting and unsuccessful fight throughout the 1980s and 1990s to halt the slide in the British aid budget.

There are significant milestones. Blair acted quickly in 1997 to set up the Department for International Development (DFID) which, under the leadership of two tough-minded and long-serving cabinet ministers, (Clare Short until her resignation in May 2003 and Hilary Benn from October 2003) has established itself as a leader in development thinking and practice. Unlike its predecessor, the ODA (Overseas Development Agency), which was part of the Foreign and Commonwealth Office, DFID is a development rather than an aid agency and has the remit of looking at the development impact of all government policies, especially trade.

The International Development Act, which became law in 2002, established that the overarching aim of UK development assistance is the reduction of poverty through furthering sustainable development and promoting the welfare of people. This means, among other things, that it is not only inefficient - as development agencies have always said - but illegal to tie aid to the purchase of British goods. In 2006, Tom Clarke's private member's bill, which obliges the DFID Secretary of State to report on progress towards the 0.7 per cent target and the Millennium Development Goals, became law with the support of the government, reinforcing further the commitment to the 0.7per cent target.

In the past 10 years, the government has published three White Papers on development.

The central focus of the first White Paper, published in 1997, was the commitment to mobilise support for the international development targets formulated by the OECD, for the first time establishing clearly defined development outcomes as the goal of the UK's development programme.

The second White Paper, "Making Globalisation Work for the Poor", widened the agenda, moving further towards the policies - as opposed to aid - that are needed to make development happen. It emphasised the importance of pro-poor growth and the essential contributions of the private sector, investment, technology and trade.

The last White Paper, "Making Governance Work for the Poor", published in July 2006, accepts explicitly that no amount of external aid nor a more benign international system can lift people out of poverty if developing countries themselves are riven with conflict and lack honest, competent governments which are themselves committed to poverty reduction.

The weekend before the second British G8, held at Gleneagles in 2005, nearly quarter of a million Make Poverty History supporters marched round the centre of Edinburgh to call for more and better aid, debt cancellation and trade justice. Predictably G8 leaders did not meet campaigners' demands, postponing the target of $50 billion a year in additional aid to 2010 and making pious noises about trade. But they did ratify the 0.7per cent aid targets already agreed by EU member states and, in a move without precedent, Tony Blair made his fellow leaders physically sign their financing pledges. It is a pity that when they meet in Germany in June this year only one fellow G7 signatory, apart from Tony Blair, will be present to assess progress towards the targets.

Debt

In 1998 Tony Blair hosted the G8 in Birmingham, notable for the entirely peaceful demonstration of 70,000 development activists organised by Jubilee 2000 who joined hands to ring the centre of Birmingham to symbolise the chains of debt. Tony Blair and Labour ministers, one year into their government, were impressed by such a show of solidarity and support for justice for others as opposed to the bread and butter issues of British politics. The Birmingham G8 communiqué was very different from Denver: international development, including "the speedy and determined extension of debt relief to more countries", moved up the G8 agenda and occupied the three first sections of the final communiqué.

As a consequence of impetus from Birmingham and further campaigning by Jubilee 2000 and the key role played by Gordon Brown, with the support of Tony Blair, in the drive for debt relief, the 1999 the G8 in Germany was able to sign off debt relief under the Heavily Indebted Poor Country Initiative (HIPC) to the tune of $33 billion, about a third of what campaigners were asking for but nevertheless progress. Campaigners spread out along the banks of the Rhine in Cologne also made their contribution, not allowing the politicians to forget that they had to respond positively to the debt crisis. Debt had not received a single mention at the Denver in 1997 so the progress made in two years was significant. From 1998, as a consequence, with the exception of the St Petersburg G8 in 2006, debt and debt relief have been key issues at the G8.

The successful experience of "showing leadership" on debt, deeply resented in some finance ministries in the 1990s, but driven through with determination by the Treasury and widespread support from the public, perhaps coloured Labour perceptions about what leadership can accomplish in other fields. At Gleneagles and the finance ministers' meeting preceding it, the G8 agreed 100per cent debt cancellation for eligible HIPC countries - again, not as much or as many countries as campaigners wanted - with the consequence that a further $36 billion of multilateral debt was written off in the following 12 months.

Africa

"The state of Africa is a scar on the conscience of the world. But if the world as a community focused on it, we could heal it. And if we don't, it will become deeper and angrier." Tony Blair, Labour Party Conference, September 2001

In 2004 Tony Blair was persuaded by Bob Geldof to set up the Commission for Africa to take a broad look at the development priorities of Africa. It reported in March 2005, setting out a broad agenda for change and demands for increased resources, addressed to donor countries and for African countries themselves. Tony Blair has largely delivered on the resources where it is within his power to do so but the recommendations that depend on others are proving elusive.

For example, the Commission for Africa recommended that the President of the World Bank and the Managing Director of the World Bank - posts that currently are limited respectively to US and European nominees - should be chosen on merit by an open and transparent process. Two months after the recommendation the UK acquiesced in the controversial nomination by George Bush of Paul Wolfowitz as President of the World Bank.

Trade

On trade Blair's leadership ambitions have been blocked by his failure to achieve a critical mass of allies within the European Union and by an increasingly belligerent stance taken across the Atlantic by the United States government and Congress. The UK does not participate formally in WTO or EU trade negotiations but has to make itself felt in meetings between ministers and officials from the other 26 member states of the EU. The resulting agreements and negotiating mandate are taken forward by Peter Mandelson, the EU Trade Commissioner.

The UK has fought hard for change in the EU Common Agricultural Policy, where it has seen some success in pushing the glacial process of subsidy reform forward. The UK has also produced excellent policy statements on trade and development, although with comparatively little impact on outcomes. CAFOD questions whether the UK has fought hard enough within the EU on the need to give developing countries the flexibility they need to protect their poorest people. The suspicion remains that that the
UK has given priority to the drive for further liberalisation, whilst leaving the matter of protecting the poor in the category of rhetorical aspiration.

The outcome is that there has been little progress towards trade justice: European - and US - agriculture still benefits from high levels of subsidy and protection which distort world prices for commodities on which developing countries depend. Producers in developing countries still have to compete against the artificially low prices of exports from rich countries; developing countries have still not been able to get agreement for the modest measures which could protect their most vulnerable producers from the threat of cheap imported food.

Blair's ally, Peter Mandelson is still talking tough with ACP governments which have little room for manoeuvre between now and the end of the year when a new trade treaty with the EU is supposed to be signed. At the WTO, UK ministers are talking up the possibility of the trade round ending with an eleventh hour agreement, but the deal they are aiming for is looking increasing imbalanced in both substance and process - where agreement between the EU, the USA, India and Brazil may be imposed on the rest of the world and leave the most vulnerable economies, the Least Developed Countries, out in the cold. In uncomfortable echoes of other areas of foreign policy, the UK seems to be placing too much hope in the benign intentions of the US government to make the compromises necessary to secure both fair negotiating outcomes and a balanced multilateral trading system.

Corporate Social Responsibility

Corporate Social Responsibility is close to the heart of Tony Blair and New Labour, because it embodies the idea of partnership between the public and private sectors, with companies not only pursuing profit but promoting development and justice - and all this on a voluntary basis. Corporate Social Responsibility is carried forward by a number of key government initiatives.

Extractive Industry Transparency Initiative (EITI): Tony Blair launched the EITI in September 2002 at the World Summit for Sustainable Development in Johannesburg in response to overwhelming evidence that mineral wealth in developing countries was fuelling conflict, fomenting corruption, deepening misery and holding back rather than promoting development. Angola, Democratic Republic of Congo, Nigeria and Sierra Leone are all examples of mineral and oil wealth causing conflict and corruption rather than development. Clare Short gave EITI decisive support but, like many multilateral initiatives, it is taking time to show clear benefits. CAFOD and other development agencies believe that its voluntary nature limits its impact and allows both companies and governments that shy away from transparency to maintain the secrecy that shrouds their dealings.

CAFOD recognises that the voluntary nature of the present agreement has given time for all stakeholders to gain understanding of the arcane accounting practices of extractive industries and their host governments and to win agreement about procedures for verification. To its credit EITI benefits from vigorous civil society participation but now, nearly five years after it was set up, the EITI must begin to show concrete benefits. So far only Azerbaijan and Nigeria together with the oil companies operating there have agreed to submit their accounts to EITI disciplines. Other countries, even members of EITI, have yet to put themselves forward. For these reasons CAFOD and other development agencies are pushing for mandatory, global regulations governing disclosure of financial flows generated by extractive industries.

Companies Act 2006: this hugely complex piece of legislation is of interest to CAFOD and other development agencies because it recognises that companies have responsibilities beyond their duty to make profits for their shareholders. CAFOD is disappointed, however, by the very weak recognition of these responsibilities. The Act should have required bill companies to produce annual social and environmental reports in the same way as they are required annually to disclose financial information.

This would have been an essential first step on the road to better corporate social and environmental performance. However, its provisions require companies to disclose only limited information on environmental and employee matters - and this applies only to the UK's 1,300 publicly listed companies. The Act could also have obliged directors to take all reasonable steps to minimise damage done to workers overseas, local communities and the environment, together with giving people overseas who are harmed by the actions of UK companies the ability to seek redress in the UK.

The weakness of the Act is a huge disappointment, not least because it was the biggest reform to UK company law for 150 years and no government will be keen to revisit it any time soon.

Corruption

Tony Blair has put corruption and action against it at the centre of partnership with developing countries. The Commission for Africa made tough recommendations on corruption for rich and poor countries alike. One of them was that governments should hasten to ratify and implement the UN Convention on Corruption (UNCAC). Tony Blair's rhetoric on corruption, however, is now looking decidedly threadbare after he announced the decision, taken on the grounds of national security, to suspend the Serious Fraud Office (SFO) investigation into payments made by British Aerospace to Saudi Arabia in connection with Al Yamamah arms deal, said to be worth more than 50 billion so far.

UNCAC was adopted by the UN General Assembly in October 2003 and came into force in December 2005 after it had been ratified by 35 member states. The UK ratified UNCAC in January 2006. The first conference to decide the practical measures that states should take to comply with UNCAC was held in Jordan by the shores of the Dead Sea in December 2007. At that meeting the UK delegation played a very positive role in brokering agreement within the European Union and with wider groups of delegates.

Tony Blair, however, chose to announce the suspension of the SFO investigation on 14 December 2006, the last day of the conference, sending the message to other governments that, when the going gets tough on corruption, the UK will cut and run and undermining the UK's credibility on an issue that is at the centre of the 2006 White Paper. Tony Blair's decision is being investigated by the OECD and the US Department of Justice and has been criticised by the House of Commons Foreign Affairs Committee.

Climate Change

In 1997, in the Labour Party manifesto, Tony Blair boldly promised "We will lead the fight against global warming, through our target of a 20 per cent reduction in carbon dioxide emissions by the year 2010." This was echoed and taken up at the 1997 Denver G8: "Overwhelming scientific evidence links the build-up of greenhouse gasses in the atmosphere to changes in the global climate system. If current trends continue into the next century, unacceptable impacts on human health and the global environment are likely. Reversing these trends will require a sustained global effort over several decades, with the involvement of all our citizens, and changes in our patterns of consumption and production."

Climate change is a cause that Tony Blair has taken up personally and he is the national leader who has made the most positive contribution on the issue. He has described climate change as "the world's greatest environmental challenge" and in March 2007 compared the battle with climate change to the challenges of the cold war, the depression and fascism. If Tony Blair has to make the running on climate change internationally, this is certainly not the case in the UK, where he is constantly in danger of being out-greened by both the Conservatives and the Liberal Democrats.

The Stern review on the economics of climate change, published in October 2006, demonstrates with a wealth of data, statistics and projections that it will be much cheaper to take action now to avert the worst consequences of climate change than to do nothing and attempt to adapt and respond to them when they happen. This reinforces the case for the climate change bill, announced in the Queen's Speech in 2006, which will set a target of reducing carbon dioxide emissions by 60 per cent by 2050.

This will be accompanied by a system of legally binding five year "carbon budgets", set at least 15 years ahead.

No-one can dispute that climate change poses tough choices for the UK and other developed countries deeply dependent on fossil fuels and addicted to consumerism, cheap travel and the internal combustion engine. Tony Blair's successors are going to have to work hard to ensure that this year's pledge to lead by example will not be look as threadbare as others which have promised leadership.

Arms Control

The New Labour government came to power promising to "lead efforts to control the trade in small arms" and has since become a somewhat unlikely champion of strict international controls over both legal and illegal arms transfers. Despite being a major exporter of conventional weapons, the UK government responded to the appeals of a broad coalition of NGOs and human rights groups and in 2006 expressed strong support at the United Nations for a global treaty to control the sale of conventional arms. Working with others, the UK helped co-author the General Assembly resolution that kicked off the international consultation process towards a comprehensive treaty and has remained a strong proponent of the process ever since.

In 2001 the UN launched its Programme of Action on the illicit trade in small arms and light weapons in order to build the capacity of regional and international organisations to implement small arms agreements. The UK proposed an "international arms surrender fund" but this resulted in a significantly watered-down request for states to consider providing "technical and financial assistance where needed, such as small arms funds..." to build the capacity of other states to implement the provisions of the Programme of Action. As in other policy areas, whilst the Labour government may ultimately be on the right side of an issue, its ability to influence other governments (including the US which voted against the arms trade treaty) seems to be declining.

Conclusion

The disappointments, alongside the undeniable achievements, spring partly from the high hopes and ambitions with which Tony Blair came to power, expressed in three election manifestos, and partly from the leaking away of international influence that has dogged the prime minister since the invasion of Iraq. The immediate challenge in international development for his successor will be to re-establish the UK's global authority - but this will require him to signal new departures in wider foreign policy.

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