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Anti-poverty firm attacked by MPs

The "extraordinary" £1m-a-year salary for the head of a government-owned company set up to combat developing world poverty has been attacked by MPs.

The salary of CDC Group chief executive Richard Laing rose from £383,000 in 2003 to £970,000 in 2007, the Commons Public Accounts committee found.

But the Department for International Development, its 100% shareholder, was not properly consulted, the MPs said.

Committee chairman Edward Leigh said oversight of CDC was "ineffective".

The committee also expressed concerns about CDC's decision to hold some £1.4bn - over half its £2.7bn capital - within the UK, rather than investing it abroad.

It also questioned why CDC's investments since 2004 had increasingly been made in countries like China and India which were already attracting foreign investors.

'Too narrow'

CDC invests in developing world businesses in support of DFID aims to promote growth and show commercial investors that profits can be made in such markets.

It invests in 600 companies, which together directly employ almost one million people.

Although the fund management company is owned by DFID, it has not received any funding from the government since 1995.

A recent National Audit Office report said it had demonstrated "exceptionally good financial performance", increasing its assets from £1.1bn to £2.7bn since 2004.

But the PAC report said that there was "limited evidence" of CDC making an impact on poverty reduction.

DFID's oversight "needs to be improved", the report added, warning that the company's efficiency and business model were "questionable".

It noted that administrative costs were rising as a proportion of the value of its portfolio.

However, the report welcomed recent agreement between DFID and CDC of a "more stretching" investment policy.

This will require the company to limit new investments in China to small and medium-sized enterprises which might otherwise have difficult raising funds.

CDC is government-owned, but its obligations to report to the Department for International Development have been weak
Edward Leigh MP

It also accepted that that the company's accumulation of £1.4bn in the UK has been helpful in the current difficult economic climate, allowing it to carry on investing in the developing world during the downturn.

Nonetheless, it criticised the decision of the CDC board's decision to bring pay structures for senior executives in line with highly-paid fund managers in the commercial sector.

This had resulted in "extraordinary levels of pay in a small publicly-owned organisation charged with fighting poverty", the report concluded.

This had not been approved by DFID until after it was introduced, and was based on "dubious" comparisons, it added.

The report said: "Besides enjoying the security of working in a publicly-owned body, CDC executives do not have to compete for money to invest.

"And the pay arrangements take too narrow a view of performance, with too much emphasis on financial performance and too little on poverty reduction."

Mr Leigh said CDC Group had proved it was very good at turning a profit.

But he added: "We need to know, however, how effective it is at reducing poverty and so far there is limited evidence.

"CDC is government-owned, but its obligations to report to the Department for International Development have been weak. Oversight by the department of how CDC operated agreed remuneration arrangements was ineffective."

http://news.bbc.co.uk/1/hi/uk_politics/8026006.stm

anonymous (not verified)
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Russia warned about HIV epidemic

A top international HIV/Aids expert has told the BBC that the epidemic in Russia is now out of control.

Robin Gorna, head of the International Aids Society, urged Russia to do much more to prevent the spread of HIV among an estimated two million drug users.

Ms Gorna was speaking ahead of a major international conference on Aids which gets under way in Moscow shortly.

It is believed there are now at least a million people infected with HIV in Russia.

This represents a dramatic increase over the past decade.

The vast majority are people under the age of 30. Most were infected because they share needles for injecting heroin.

According to some estimates, there are almost two million intravenous drug users in the country - the result of the large quantities of heroin flowing from Afghanistan into Russia.

Particular concern

During the Moscow conference, international experts will try to persuade the Russian government to scrap laws which they say hamper efforts to slow down the infection rate.

It is illegal to give drug addicts substances such as methadone as an alternative to injecting heroin.

And the government does not fund any needle exchange programmes.

There is particular concern because until now international donors have financed the major prevention programmes in Russia.

But they are having to stop their funding because Russia is now considered to be a middle-income country and does not want to receive financial aid from abroad.

http://news.bbc.co.uk/1/hi/health/8329122.stm

 

anonymous (not verified)
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Political parties on international development

With the UK General Election due to take place by June 2010, political parties are moving into election mode.

Recently published documents such as the DFID White Paper and the Conservative Green Paper on International Development are early signs of where party thinking is on international development.

In our International Development Manifesto, Bond members ask the UK Government of 2010 to play a leading and progressive role as a member state of the EU and on the global stage. To achieve this, UK NGOs must now push for international development to be a key election issue for all UK political parties.

Bond as outlined the three main UK political parties' perspectives on international development: 

Conservatives

Labour

Liberal Democrats

Also: Read more about the recent Party Conferences

The will for change

The main parties in the UK realise that international development cannot be ignored in the run-up to the General Election. Across the board there is support for the target of dedicating 0.7% of national income to development spending. Andrew Mitchell, the Conservative Shadow International Development Secretary, recently acknowledged that the development agenda is a "British agenda that commands widespread support".

However, parties' views do differ widely on how funds should be provided to developing countries, what changes need to be made to the international system to support development, and what methods should be used to improve aid effectiveness.

There have been marked changes in parties' perspectives on development since the 2005 General Election. Also, due to NGO pressure such as Make Poverty History, there has been a growth in the number of MPs actually engaged in development-related issues, be that HIV/Aids, climate change, agriculture, security or international trade. MPs across the political spectrum are members of relevant Select Committees or All Party Parliamentary Groups, which together play a big role in monitoring and shaping development policy.

How to get engaged

The General Election will be hotly contested so it is important that Bond members use this opportunity (when politicians are listening closely to their constituents) to lobby MPs and candidates.

Bond is coordinating a joint sector wide election campaign, which will include joint campaigning work (starting with The Great Persuasion) and policy lobbying. An International Development Manifesto has been presented to parties at the Party Conferences framing the basis of our policy demands towards political parties.

Bond members' engagement

Bond members organised a series of development events at each of the major political party conferences this autumn including joint fringe events. At these joint events, the International Development Manifesto of the sector was presented and the development spokesperson from each party was invited to outline their party's agenda for development alongside other interesting speakers.

The spokespeople of each political party will also be speaking at the Bond Annual Conference in a political ‘Question Time' style panel where Bond members are invited to ask them questions on their agenda for international development.

To find out more and to get involved, get in touch with the Bond Advocacy team: advocacy@bond.org.uk.

http://www.bond.org.uk/pages/vote-global-2010.html

anonymous (not verified)
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Partnership in Power

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