Supporting effective government
Combating corruption
Effective government requires respect for human rights
Conflict prevents development and increases poverty
Making markets work for the poor
|
The UK Government will: · Help developing countries build the effective government systems needed to reform their economic management, make markets work for poor people, and meet the challenge of globalisation. · Work to reduce corruption, and ensure respect for human rights and a greater voice for poor people. · Work with others to reduce
violent conflict, including through tighter control over the arms trade.
|
51. Effective governments and efficient markets are both essential if developing countries are to reap the benefits of globalisation and to make that process work for poor people. While the market fundamentalism of the 1980s and early 1990s has been thoroughly discredited, it is now almost universally accepted that efficient markets are indispensable for effective development. But equally important are effective governments - which are both competent in carrying out their basic functions, and more accountable, responsive and democratic, with a bigger voice for poor people in the determination of government policy.
52. Globalisation gives added urgency to the task of strengthening government systems in developing countries. Private capital is highly mobile and will go to where business can be carried out safely and where it can make the best return. Weak and ineffective states, with problems of corruption, inadequate infrastructure and cumbersome bureaucratic procedures, are not an attractive destination for these flows.
53. By contrast, those countries that apply rules and policies predictably, ensure law and order, invest in human capital (particularly education and health) and protect property rights, are likely to attract higher levels of inward investment and trade and to generate faster economic growth.
54. A key function of governments is the provision of law and order. And this is also a priority for the poor. One of the findings of the World Bank's Voices of the Poor report was that poor people attach enormous importance to security - security from violence and security for their propertyvi. Without this, they find it impossible to improve their lives. The poor worldwide also tend to be very distrustful of existing police and criminal justice systems. Far from protecting people from violence, too often elements within the police and justice systems are themselves sources of violence and abuse.
BOX 2
|
PRIVATISATION IN TRANSITION ECONOMIES At the onset of transition ten years ago, there was some consensus that the existing state dominated economic model was unsustainable. However, there was much less understanding about how market economies function effectively, and about the complementary social and political institutions that are needed to help them do this. Some central and eastern European countries, Hungary and Poland in particular, followed a strategy of creating favourable conditions for bottom-up development of the private sector. Strengthening institutions and creating sound legal and regulatory frameworks to ensure security of private ownership and eliminate barriers to entry were the priorities. In addition, the consistent enforcement of bankruptcy and accounting laws led to profitable companies being bought by investors and loss making ones being forced into liquidation. The negative effect of rising unemployment on poverty levels was mitigated to some extent by social safety net provisions. By contrast, in countries of the former Soviet Union there was no experience of alternative economic systems. In Russia, for instance, the transition to private ownership was based on the rapid elimination of some elements of state ownership. State assets were dispersed through voucher schemes only to end up concentrated in large investment funds owned by state-owned banks or with privileged businessmen. Private interest groups exercised huge influence on the government and opposed legal and regulatory reform. This process generated opportunities for corruption. Special privileges and exemptions granted to Russian oligarchs have distorted market-orientated institutions and crowded out new enterprises. Simultaneously, production levels have plummeted. Corporate government remains weak and enterprise restructuring has barely begun. With enterprises no longer providing a social safety net, a massive increase in hidden unemployment and poverty had accompanied the economic collapse. This experience demonstrates conclusively that economic reform
must be accompanied by the right political institutions and a transparent legal
framework. Only then can new enterprises create sufficient employment to offset
the loss of jobs resulting from public sector restructuring. More foreign direct
investment will flow in, stimulate competition and contribute to economic
growth. Supportive social policies have to be in place to ease the impact of
transition and to train and equip the labour force for new employment
opportunities. |
56. Effective governments are needed to build the legal, institutional and regulatory framework without which market reforms can go badly wrong, at great cost - particularly to the poor. Whilst excessive or cumbersome regulatory barriers stifle incentives and discourage investment, effective regulation remains essential - for instance to promote financial sector stability, to protect consumers, to safeguard the environment, and to promote and protect human rights, including core labour standards.
57. Effective governments are also needed to put in place good social policies. Only the state can ensure the provision of key public services. Of course, the state does not need to be involved in the direct provision of all public services. The commercial and voluntary sectors have an important contribution to make to service delivery. But the unique and indispensable role of government remains that of setting policies and priorities, ensuring that basic services are provided to all, and regulating to ensure quality and standards.
58. The way in which governments allocate public revenues - between different public services and between services and other spending priorities - has a major impact on the level of poverty reduction. It is vital that poor people should have a greater say over governments' spending decisions.
59. The UK Government, through its development effort and contributions to international development agencies, is working to help countries put in place political and legal reforms, reforms to the civil service and systems of public administration, and tax collection. We also support reforms to police and criminal justice systems, that make them more accessible and responsive to the needs of the poor.
60. More effective government and greater benefits from markets require tougher action - by developing and developed countries - to deal with corruption. The evidence suggests that investment levels are lower in countries with high levels of corruption, due to the uncertainty created, the cost of bribes and time-consuming bureaucracyvii.
61. It is poor people who suffer most from corruption. Essential medicines are diverted; unofficial payments are commonly required for water and electricity connections, as well as education and healthcare; and the police and the judiciary often respond only to bribery.
62. Often this 'petty corruption' is accompanied by 'grand corruption', involving leaders, politicians, senior officials and entrepreneurs. This can take many forms. Bribes may flow from international firms in order to win contracts or seek other favours from politicians and officials. This is often particularly acute in areas involving the allocation of natural resource concessions and their revenues. Sometimes the corruption involves looting public assets within the country. This process leads to distorted decision-making, discriminatory application of regulations, tax evasion and resources wasted on poor projects - all of which damage the prospects for development and poverty reduction and the ability of poor countries to compete in a global economy.
63. Individuals involved in large-scale corruption must be caught and prosecuted but such individuals exist in all societies. What developing countries lack are effective systems of financial management, procurement and accountability.
64. The UK Government is committed to supporting developing countries in their efforts to implement effective anti-corruption strategies. To put our own house in order, we will legislate to give UK courts jurisdiction over UK nationals who commit offences of corruption abroad. The new legislation will put beyond doubt the consistency of UK law with the OECD Convention on the Bribery of Foreign Public Officials, and make it clear that bribes - wherever they are paid - are not tax deductible.
65. Grand corruption is also closely supported by global money laundering, Corruptly acquired money is recycled through the global financial system so that it reappears 'laundered' as apparently legitimately held funds in respectable banks in the developed world.
66. We will introduce legislation to strengthen the law on money laundering, ensure financial institutions uphold their commitments under the legislation and establish good practice, and permit the restraint of assets at an earlier stage in the investigative processviii. We are jointly funding with the European Commission an initiative under the auspices of the Asia/Europe Meeting (ASEM) to develop anti-money laundering strategies in ten Asian countries. We have also provided support for anti-money laundering collaboration between Caribbean countries and in eastern and southern Africa.
67. We are also committed to greater co-operation with developing and transition countries to help them recover funds that were illegally acquired through criminal activity or corruption and subsequently deposited in the UK. We plan to strengthen the arrangements which give overseas governments access to the courts and investigative authorities in the UK so that they can pursue claims to evidence and assets more effectively. Through our development assistance programmes, we will provide advice to governments on preparing their requests. And we are working with other countries to develop an appropriate policy framework for leading financial centres to assist with the recovery of stolen assets.
68. Globalisation has been associated with a growth in democracy. The proportion of countries with forms of democratic government has risen from 28 per cent in 1974 to 61 per cent in 1998ix. Moreover improved global communication has facilitated greater international solidarity in support of democratic freedoms and human rights. Information is circulated more widely within civil society. People everywhere are better informed about developments elsewhere. Abuses are given global publicity. And, increasingly, governments have to explain their actions and omissions to a global audience.
69. This spread of democratic structures represents a crucial advance. But the existence of the formal structures of democracy - political parties, elections, and parliaments - does not guarantee the empowerment of poor people, even when they make up a majority of the population. A poor majority often lacks influence because power is held by a narrow elite, with rulers exercising power through support from a regional group, through social status or through concentrated wealth.
70. Making political institutions work for poor people means helping to strengthen the voices of the poor and helping them to realise their human rights. It means empowering them to take their own decisions, rather than being the passive objects of choices made on their behalf. And it means removing forms of discrimination - in legislation and government policies - that prevent poor people from having control over their own lives and over the policies of governments. Governments must be willing to let people speak, and to develop mechanisms to ensure that they are heard. This is central to what we mean by a rights based approach to development.
71. The voices of the poor can be strengthened by supporting those parts of civil society that help poor people organise to influence decision makers. The new information and communications technologies also have a role in strengthening the voices of poor people. A free press and broadcast media, capable of challenging government policies and their impact on the poor, is crucial. The interests of the poor also require inclusive and fair electoral processes and controls on election spending. And they require parliaments that scrutinise legislation and control the budgeting process, and hold to account the policy of the executive.
72. Development requires the empowerment of women. Huge progress was made in the 20th century, with women enjoying greater freedom and power than ever before. But they still lag behind men in virtually all aspects of life. Up to seventy per cent of the world's poor are women. Gender discrimination is the most widespread form of social exclusion and discrimination. Inequalities are to be found in economic and human development, and in political representation. There can be no equitable globalisation without greater equality and empowerment for women.
73. Action is required to address the needs of children and to implement the UN Convention on the Rights of the Child. Globalisation has the potential to enhance the welfare of children, but too many children in today's world continue to live in abject poverty. Too many children have their most basic human rights violated on a daily basis - whether through lack of adequate nutrition, limited access to education and healthcare, or through exposure to violence and abuse.
74. A large number of children also suffer from what we might call the 'dark side' of globalisation - the growing pornography industry and the trade in child prostitutes. This has been facilitated by modern communications technology, including the Internet. In some parts of the world, children are press-ganged to serve in armies as child soldiers. And there are millions of child labourers, some of them working in extremely hazardous and dangerous conditions (see box 3).
75. Children born today will be fifteen years of age in 2015. To achieve the 2015 targets it is essential to break the cycle of poverty and disadvantage - providing opportunities for today's children that were denied to their parents. We need to ensure that children are educated so that they can take advantage of opportunities, and receive the protection they need from disease and abuse to allow them to build their own and their country's future.
76. The UK Government is committed to working with others to enhance the human rights of poor people. Through our development programmes and our diplomatic efforts we will continue to encourage governments around the world to ratify the UN human rights treaties, to help them abide by the obligations that those treaties place on states, and to put them into practice in national legislation and policy.
77. Promoting effective and inclusive systems of government, including an accountable security sector, is an essential investment in the prevention of violent conflict. The promotion of peace and stability is indispensable if countries are to attract investment and trade, and promote pro-poor development.
78. Violent conflict is one of the biggest barriers to development in many of the world's poorest countries. Of the 40 poorest countries in the world, 24 are either in the midst of armed conflict or have only recently emerged from it. This problem is particularly acute in Africa where twenty per cent of the population live in countries affected by armed conflict. Armed conflict also leads to population displacement. It is estimated that 10.6 million people in Africa are internally displaced - the majority of them uprooted by war.
BOX 3
|
COMBATING CHILD LABOUR AND PROMOTING CORE LABOUR STANDARDS One of the most widespread public concerns about globalisation is its impact on labour standards. Across the world, millions of people - children and adults - work in conditions which are hazardous and abusive. They may be subject to sexual harassment, exploitative hours or wages, physical dangers and, in the worst cases, imprisonment and violence. Globalisation is both raising poor people's awareness of their rights in the workplace, and alerting consumers in industrialised countries to the working conditions experienced by people who make some of the goods that they purchase and consume. If globalisation is to work for poor people, governments, international institutions and civil society need to promote this awareness and support policies and regulatory systems that provide legal, physical and social protection for working people. In 1998 the international community adopted the International Labour Organisation (ILO) Declaration on Fundamental Principles and Rights at Work. This Declaration covers the rights to freedom of association and to collective bargaining and the elimination of all forms of forced or compulsory labour, and of employment discrimination. The UK Government strongly supports this Declaration and we are working with the ILO and others to make progress towards the full realisation of these rights. We are particularly committed to taking action against child labour. There are an estimated 250 million working children in developing countries. Most are trapped by the need to provide income for their desperately poor families. The UK has been a strong supporter of ILO Convention 182 on the Elimination of the Worst Forms of Child Labour. The UK ratified this Convention in March 2000 and is working with the ILO to achieve the widest possible ratification and implementation worldwide. We are also supporting action internationally to strengthen the rights of workers in the Informal sector, which is where the majority of poor people work, almost invariably in conditions unprotected by legislation or standards. The UK Government is helping contracted workers in the construction industries of Ghana, Zambia, India and Bangladesh to understand and realise their rights at work. Through Homenet, an international alliance of Trade Unions for homeworkers, we are helping women improve their market access and their legal and social protection. And we are committed to promoting the core labour standards of
poor people in formal employment. Through the Ethical Trading Initiative, for
example, the UK Government is helping agricultural workers and their employers
in the South African wine industry to improve labour standards. |
80. Shortage of environmental resources can also be an important factor in conflict, both between and within countries. Tension and conflict can result where countries, or different groups within a country, compete for limited supplies of fresh water or other resources, or where environmental impacts such as climate change affect food policy or encourage migration. The UK Government, through its development strategies, will continue to promote inclusive development and equitable management of environmental resources.
81. Effective conflict prevention also requires a more joined-up approach to policy-making. The Government has established new arrangements to focus on conflict prevention, with pooled budgets and Joint Ministerial Committees to facilitate better working between different government departments. This will lead to better shared policy analysis, agreement on common policies and objectives, and the more flexible deployment of resources. The aim of these initiatives is to improve the UK Government's overall contribution to conflict prevention, reduction and management.
82. We are also committed to increasing our support for security sector reform. Unaccountable, ill-disciplined and repressive security forces are a major source of insecurity and human rights abuse. Security sectors that are badly managed can misappropriate resources that could be spent better on public services. A security sector that is appropriately tasked, managed and resourced, and subject to proper civilian oversight, can help to provide greater stability and security for poor people.
83. The international community also needs to regulate effectively the trade in arms. An estimated five million people have died in armed conflicts in the last decade - the vast majority of them civilians, and most of them killed by small arms.
84. The UK Government has taken a number of steps to tighten controls over arms exports. In 1997 the Government introduced new criteria for assessing licence applications for the export of arms and military equipment, in order to prevent the export of arms which might be used for internal repression or external aggression. And the UK was instrumental in getting agreement in 1998 to the establishment of an EU Code of Conduct on arms exports, which sets high common standards governing arms exports for all EU member states. It includes a mechanism for discouraging countries from undercutting these standards. In September 2000, the UK Government also announced that it will introduce a licensing system to regulate the activities of arms brokers and traffickersx.
85. In next year's UN Conference on small arms the UK Government will push for tighter international controls3. We will press for an action programme to include: more support for existing international, regional and national programmes to tackle small arms proliferation; efforts to ensure a common approach to the regulation of the legal transfer of small arms and light weapons; a commitment to work towards the effective regulation of arms brokers; and agreement to work towards the disposal and destruction of surplus weapons.
3 UN Conference on the Illicit Trade in Small Arms and Light Weapons in All Its Aspects.86. Many of the world's violent conflicts are fuelled by the trade in illicit drugs and high-value minerals. In order to break the vicious circle of conflict and illegal trade, more effort is required to deprive warlords of their ill-gotten gains.
87. The UK is working internationally to help build the capacity of law enforcement institutions to tackle the trade in illicit drugs, and to move this issue up the international agenda. We are hosting a G8 conference on the global economy of illegal drugs in 2001.4
4 The G7 Group of major industrialised democracies comprises Canada, France, Germany, Italy, Japan, the UK and the USA. The Group of Eight (G8) includes Russia. Their Heads of Government meet annually at the G7/G8 Summit to discuss areas of global concern.88. The Government's international development programme also has a role to play in tackling the threat from the global trade in illicit drugs. In many developing countries and regions, poor households rely on the cultivation, production and trafficking of illicit drugs as sources of credit, income and employment. This requires policies to tackle the underlying reasons which encourage or force people to become involved in the drugs trade, for example alternative development programmes. It is also necessary to address why law enforcement organisations either tolerate or are unable effectively to combat the drugs trade.5
5 For a more detailed outline of the UK’s policy see DFID Paper: Illicit Drugs and the Development Assistance Programme, DFID 1998.89. We are also working to help producer countries to control better the mining and export of diamonds, in particular through prohibiting trade in uncertified diamonds from conflict regions.6
6 The international response to conflict is discussed further in Chapter 8.
90. The process of opening up - to both trade and financial flows - has to be carefully managed, to dovetail with the development of efficient and flexible markets, a strong domestic financial sector, and supportive policies for private investment. But the benefits will not automatically reach poor people, who face many barriers to participating in the market economy. While policies at the national and the international level play a vital role, the way in which government, institutions and markets function at the local level is of great importance too. Policy needs to work at all these levels if the potential benefits of globalisation are to reach the poor.
91. Poor people typically engage in a diverse range of economic activity in the formal and Informal sectors: production, trade, selling their labour, and often migrating seasonally or longer term between rural and urban economies, in order to find the best opportunities for improving their livelihoods. They face a huge number of barriers to taking up these opportunities, ranging from lack of property rights, to limited access to credit and technology, poor infrastructure, and low skill levels, poor health and lack of adequate food and water.
92. Poor people, especially poor women, often lack land rights. Established property rights are needed not just for day-to-day security, but also to provide collateral against which people can borrow and invest. But these rights are often lacking. For example, in the Philippines, establishing legal ownership takes 168 steps and between 13-25 years. Being squatters rather than owners leaves people without the protection of the law, and security to borrow and invest. Land reform, providing secure access to land and other productive assets for poor people, whether through ownership, tenure or customary use rights, is essential in building a market economy which will work for the poor.
93. Poor people in remote rural areas are often physically disconnected from market opportunities, through the absence or inadequacy of basic infrastructure such as rural roads, electricity and telecommunications. An evaluation of the UK's support for investment in rural roads in Mozambique showed that building dirt roads led to increased agricultural production because crops could be transferred to market. It also improved access to education and health care.
94. Opening up the provision of financial and information services can bring major benefits. Access to credit is a particular problem for women and minority communities. Special measures are frequently needed to help micro-enterprises and small business. These are the main source of employment in developing countries, yet these companies are often acutely exposed to bureaucratic harassment, capricious and inappropriate regulations, and the buying of privilege by the well-connected.
95. Poor people, with no assets or savings to fall back on, are also particularly vulnerable in times of economic change. Good social policies are needed to help poor people to cope with change and to take advantage of its opportunities. These are likely to combine state supported actions (ranging from public works and stay-in-school programmes), with effective regulation (for example of banks, pension funds or social insurance schemes), and a range of activities of non-governmental organisations (including faith organisations and charities).
96. The UK Government believes that good social policy goes together with good economic policy: investment in social services and social protection is an essential investment in economic development. Through our development partnerships and within the multilateral institutions, we will promote inclusive social policies that protect those who may lose from rapid economic change, and policies to equip people to benefit from new opportunities.
|
THE UK GOVERNMENT WILL: · Work to promote effective systems of government and efficient markets in developing countries. · Promote political reform including support for inclusive, accountable and representative systems of government which respect the human rights of the poor. · Help to tackle corruption, including through legislation to give UK courts jurisdiction over UK nationals who commit offences of corruption abroad, tightening the law on money laundering, permitting the restraint of assets at an earlier stage in the investigative process and strengthening the arrangements which give overseas governments access to the courts and investigative authorities in the UK. · Work with developing countries and local communities to address the problem of child labour. · Strengthen its commitment to conflict prevention through our new Africa and Global Conflict Prevention Initiatives. · Support effective security sector reform, to ensure that security sectors are appropriately structured and managed and subject to proper civilian control. · Introduce a licensing
system to control UK arms brokers and traffickers, and work for tighter controls
internationally at next year's UN conference on small arms. |
A more detailed account of the UK Government's policies on human rights, effective governance, and women is set out in three DFID Strategy Papers: 'Human rights for poor people', 'Making Government work for poor people', and 'Poverty elimination and the empowerment of women', and in a separate policy statement on 'Poverty and the Security Sector'.
