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DFID’s Public Enquiry Point is dedicated to answering your questionsContact:

By telephone: By post:UK local rate call: 0845 3004100 Public Enquiry PointFrom outside the UK: +44 1355 84 3132 DFID

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Alternatively, you can access our website: www.dfid.gov.uk

Front cover picture: Children at a Forum for Street Children in Ethiopia’s tutorial class in Nazareth, Ethiopia.Tim Unwin for Imfundo, DFIDHilary Benn picture: News InternationalChapter 1: Female farmer contemplating land loss in Western China/Panos PicturesChapter 2: Woman participating in mangrove rehabilitation project in Kenya/Panos PicturesChapter 3: Mother pouring water from newly installed water pump in Tamil Nadu, India/Panos PicturesChapter 4: Favelas, shanty town on the outskirts of Salvador da Bahia, Brazil/Panos PicturesChapter 5: Female workers in one of the biggest clothing manufacturers in China/Panos PicturesChapter 6: Farmer with palm fruits in Sierra Leone/Matthew Lessar/DFIDChapter 7: Girl with baby in the ruin of a town on the Ethiopian–Eritrean border/Panos PicturesAnnexes: Schoolgirl in Nigeria/Panos Pictures

This document is part of a series of Departmental Reports (Cm 6201 to 6231) which, along with the Main Estimates 2004-05, the document Public Expenditure Statistical Analyses 2004,and the Supply Estimates 2004-05: Supplementary Budgetary Information, present the

Government’s expenditure plans for 2003-2006.

The complete series of Departmental Reports and Public Expenditure Statistical Analyses 2004is also available as a set at a discounted price.

Text and Cover printed on material containing 75% post consumer waste and 25% TCF pulp

Department for International Development

Departmental Report2004

Presented to Parliament by theSecretary of State for International Development

and theChief Secretary to the Treasuryby Command of Her Majesty

April 2004

CM 6214 £27.00

© Crown Copyright 2004

The text in this document (excluding the Royal Arms and departmental logos) may be reproduced free of charge inany format or medium providing that it is reproduced accurately and not used in a misleading context. The materialmust be acknowledged as Crown copyright and the title of the document specified.

Any enquiries relating to the copyright in this document should be addressed to The Licensing Division, HMSO,St Clements House, 2-16 Colegate, Norwich, NR3 1BQ.Fax: 01603 723000 or e-mail: [email protected]

The Departmental Report is intended to provide Parliament, members of the public, our

development partners and others interested in development issues with a comprehensive account

of how we have been spending, and plan to spend, public funds. The report focuses primarily

on DFID’s work and key developments from April 2003 to March 2004. It does not repeat

information about policy that is already set out in other DFID publications. See Annexe 6.

Summary

The summary is intended to give an overview of the Department’s work over the last year.

It includes key achievements relating to each Public Service Agreement objective.

Chapters 1 to 7

Chapter 1 summarises DFID’s role and responsibilities. Chapters 2 to 6 are structured around

DFID’s Public Service Agreement. Chapter 2 covers sub-Saharan Africa. Chapter 3 details our

work in Asia. Chapter 4 examines Europe, Central Asia, Latin America, the Caribbean, the

Middle East and North Africa. Chapter 5 looks at the multilateral agencies and conflict and

humanitarian crises. Chapter 6 considers evidence-based, innovative approaches to

international development. Chapter 7 explains how the Department is organised and managed.

Annexes 1 to 8

Annexe 1 sets out DFID’s current and planned financial allocations. Annexes 2 and 3 provide

details of DFID’s progress against its 2001-04 and 2003-06 Public Service Agreements.

Annexe 4 sets out the Millennium Development Goals, including targets and indicators.

Annexe 5 shows the DFID Organisational Chart. All publications mentioned are followed by

a number in brackets, which indicates where to find them in the list of publications, at

Annexe 6. Where possible, abbreviations, acronyms and development jargon have been avoided.

A list of the most commonly used acronyms, abbreviations and development terms is given

in Annexe 7. Annexe 8 provides a comprehensive index.

1

About this report

Foreword by the Secretary of State 8

Summary 11

Chapter OneThe Responsibilities of the Department for International Development 15

The Importance of Aid 16

The Millennium Development Goals 17

DFID’s Commitment to Poverty Reduction 20

DFID’s Public Service Agreement 2003-06 21

Aims of the Departmental Report 21

Chapter TwoPoverty Reduction in Africa 23

Public Service Agreement Objective I 27

Progress against Public Service Agreement Target 1 28

Regional Issues 29

Commission for Africa 30

New Partnership for Africa’s Development 31

Conflict Reduction and Peace Building 31

Budget Support 33

Strategic Partnership for Africa 34

Focus Country Programmes 35

2

Contents

Chapter ThreePoverty Reduction in Asia 47

Public Service Agreement Objective II 50


Focus Country Programmes 53

Other Country Programmes 59

Focus: Afghanistan 64

Chapter FourPoverty Reduction in Europe, Central Asia, Latin America,the Caribbean, the Middle East and North Africa 67

Public Service Agreement Objective III 71

Middle-Income Countries Strategy 71

Europe and Central Asia 72

Middle East and North Africa 74

Latin America and the Caribbean 76

Overseas Territories 79

Focus: Iraq 80

Chapter FiveWorking with Multilateral Agencies and Responding Effectively to Conflict and Humanitarian Crises 85

Public Service Agreement Objective IV 86

Progress against Public Service Agreement Targets 3 and 4 88

Improved Effectiveness of the International System 89

Trade and Investment 90

Debt 92

International Finance Facility 93

Poverty Reduction Strategies 94

Working with Key Partners 96

World Bank and International Monetary Fund 96

European Community 98

United Nations 100

Regional Development Banks 101

Commonwealth 102

Working with Other Bilateral Donors 103

Civil Society 104

Development Awareness 105

Conflict and Humanitarian Assistance 108

Humanitarian Assistance in Iran 110

3

Contents

Chapter SixDeveloping evidence-based, innovative approaches to international development 113

Public Service Agreement Objective V 114

Aid Effectiveness 116

Budget Support 117

Pursuing Partnerships at Country Level 119

Economic Growth in Favour of Poor People 120

Agriculture 122

Access to Medicines 124

HIV/AIDS 124

Education 127

Sexual and Reproductive Health and Rights 129

Gender 131

Child and Maternal Health 132

Poverty Reduction in Difficult Environments 133

Migration 134

Climate Change 135

Water and Sanitation 136

Knowledge and Research 137

Chapter SevenOrganisation and management of delivery 139

Organisation and Structure 141

Corporate Strategy Framework 144

Public Service Agreement 144

Joint Targets 145

Performance Measurement 147


Quality Assurance 150

Risk Management 151

Financial Resources 153

Business Change 156

Learning Lessons 158

Human Resources 159

Diversity 159

Human Resource Management 161

Training and Development 163

Infrastructure and Procurement 165

Overseas Pensions 166

4

Departmental Report 2004

Annexes 167

Annexe 1Analysis of Departmental Expenditure 168

Table 1: DFID public spending 168

Table 2: DFID resource budget 169

Table 3: DFID capital budget 169

Table 4: DFID allocation by programme 170

Table 5: DFID capital employed 174

Table 6: DFID administration costs 175

Table 7: DFID staff numbers 175

Table 8: DFID liabilities 176

Annexe 2Progress against DFID 2001-04 Public Service Agreement 177

Annexe 3Progress against DFID 2003-06 Public Service Agreement 181

Annexe 4The Millennium Development Goals 194

Annexe 5DFID Organisational Chart 196

Annexe 6Publications 198

Annexe 7Glossary and Abbreviations 202

Annexe 8Index 209

5

Contents

List of Boxes

Chapter 1

Box 1a The Millennium Development Goals 17

Box 1b Share of people living on less than $1 a day 18

Box 1c Public Service Agreement Objectives 21

Box 1d Progress is possible 22

Chapter 2

Box 2a Guide to ‘traffic light’ assessment in this report 27

Box 2b Progress against Public Service Target 1 28

Box 2c Working to improve performance in Africa 29

Box 2d Strategic Partnership for Africa 34

Box 2e HIV/AIDS in sub-Saharan Africa 42

Chapter 3


Box 3b Progress against Public Service Agreement Target 2 51

Box 3c Working to improve performance in Asia 52

Box 3d Indian focus states 54

Box 3e Development assistance in conflict area in Nepal 60

Box 3f Achievements in Afghanistan in 2003/04 66

Chapter 4

Box 4a Population living on less than $1 a day 69

Box 4b Baku-Tbilisi-Ceyhan pipeline 74

Box 4c World Bank and Regional Development Banks 77

Box 4d Making Bolivian markets work better for the poor 79

Box 4e Humanitarian and reconstruction assistance in Iraq 82

Box 4f Achievements in Iraq 2003/04 83

Chapter 5


Box 5b Progress against Public Service Agreement Targets 3 and 4 88

Box 5c Working to improve performance of the international system 89

Box 5d Trade, growth and poverty conference 91

Box 5e Poverty Reduction Strategy indicators 94

Box 5f DFID engagement with Poverty Reduction Strategies 95

Box 5g Enhancing the ‘voice’ of developing countries 97

Box 5h Planned EC development expenditure for 2003 98

Box 5i Development of a new European Union Treaty 99

Box 5j African Development Bank 101

6


Box 5k ENLACE – Social Inclusion Fund partnership 102

Box 5l Zambia: Harmonisation in Practice Initiative 104

Box 5m Working with UK civil society 105

Box 5n Conflict and humanitarian assistance studies 108

Box 5o Rapid response to humanitarian crises 110

Chapter 6

Box 6a New Policy Division groups of teams 115

Box 6b Advantages of budget support 118

Box 6c Creating economic opportunities 120

Box 6d CDC and the private sector in poorer countries 121

Box 6e Global summary of the HIV/AIDS epidemic 2003 125

Box 6f UK’s Call for Action on HIV/AIDS 126

Box 6g Universal primary education in Kenya 127

Box 6h Education Global Monitoring Report 128

Box 6i DFID support to Safer Motherhood in Nepal 130

Box 6j Sexual and reproductive health services in Bolivia 131

Box 6k Improving women’s rights 132

Box 6l Service delivery in difficult environments 134

Box 6m Climate change in Bangladesh 136

Box 6n Examples of impact from research 138

Chapter 7

Box 7a DFID core values 140

Box 7b Ministerial team 141

Box 7c Management Board 142

Box 7d DFID strategy and performance management – how it fits together 144

Box 7e Joint target on conflict 146

Box 7f Appearance versus reality: health care in Uganda 147

Box 7g Value for Money 149

Box 7h Guide to ‘traffic light’ assessment in this report 149

Box 7i Progress against Public Service Agreement Target 5 150

Box 7j Summary of DFID resource plans 154

Box 7k Reprioritisation of financial resources 155

Box 7l Catalyst logo 156

Box 7m Video conferencing 157

Box 7n Numbers of DFID staff by location and gender December 2003 159

Box 7o Progress against diversity strategy 159

Box 7p Diversity monitoring January 2004 160

Box 7q Permanent UK-based staff appointments filled in 2003 161

Box 7r Benefits of the new posting and promotion system 162

Box 7s Progress against the Service Delivery Agreement Targets 162

Box 7t Staff salaries 163

Box 7u Performance against pension service standards 166

7

Contents

Aid works. In the last four decades life expectancy has risen in

developing countries, adult literacy has increased, the number of

children enrolled in primary education has doubled and we are now

close to eradicating polio. As you will see in this report, there are

success stories, attributable in some measure at least, to the increasing

effectiveness of the development assistance provided by the richer

nations to the poorer. However progress towards the internationally

agreed Millennium Development Goals is far too slow in many critical areas. Too many

mothers are still dying in childbirth and too many children are dying before they reach their

fifth birthdays. 104 million children worldwide still do not go to primary school and 1.1 billion

of our fellow human beings still lack access to clean water. This is, quite simply, unacceptable.

To change this we need to provide additional finance for development and ensure that aid is

spent where it will be most effective in reducing poverty. We must ensure that our decisions

reflect good policy and that we monitor the difference we make. As required by the

International Development Act of 2002, UK taxpayers’ money must be used to reduce poverty

and improve the welfare of poor people. We estimate that our aid lifts 2 million people

permanently out of poverty each year.

Our Public Service Agreement sets us clear objectives to meet by 2006, based on the

Millennium Development Goals and the commitments set out in our two White Papers. This

involves improving access to education, health and clean water. It means tackling infant and

maternal death rates and the major diseases – tuberculosis, malaria and HIV/AIDS, where the

UK Call for Action on HIV/AIDS has highlighted the need for us all to do more. We also

need to tackle the most fundamental obstacle of all to development – conflict – and help those

afflicted to rebuild their lives. If we are to enable poor people and poor nations to gain a strong

voice, economic independence and self-reliance for the future, we have to ensure that their

basic needs are met and that the building blocks are in place for a strong civil society and

effective and transparent government.

We cannot achieve these aims alone, however. That’s why we work as part of the international

development community to build effective relations with others: multilateral agencies such as

8

Forewordby the Rt Hon Hilary Benn MPSecretary of State for International Development

the United Nations, the European Union, the World Bank and the International Monetary

Fund; other bilateral donors through the work of the OECD; non-governmental organisations

and, last but most importantly, developing countries themselves. Alongside others, we

increasingly work in partnership with developing country governments and civil society

groups, not least because building effective states and good governance is central to success.

The UK aid budget is set to increase to over £4.5 billion a year by 2005/06. This is almost

double the aid we gave in 1997 and it will help move us further towards the United Nations

target of 0.7% of gross national income spent on international aid. We are committed to

spending 90% of our budget in the world’s poorest countries by 2005/06, and this includes

£1 billion per year in sub-Saharan Africa. The Commission for Africa will provide an

opportunity to bring together new ideas in support of a better future for this continent.

This report sets out what we have done over the last year and our plans for the future.

It explains how we have spent taxpayers’ money and what has been achieved. It acknowledges

difficulties that have arisen and what we have done to try and deal with them. It covers

progress made in Afghanistan and Iraq. And it sets out the challenges that still face us.

Looking ahead, 2005 will be an important year. There will only be a decade to go to 2015 –

the deadline for the achievement of the Millennium Development Goals. It will also be the

year in which the UK has the chance to provide international leadership as Chair of both the

G8 and the expanded European Union.

It is our moral duty – as well as common sense – to tackle poverty, injustice and inequality

to seek to improve the lives of others. If the political will is there, it can be done.

Hilary Benn

April 2004

9

Foreword

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Madagascar

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Costa Rica

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Egypt

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Brazil

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Sri Lanka

Mongolia

Taiwan

N. Korea

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Togo

BeninBurkinaFaso

Turkey

PolandBelarus

Ukraine

Tunisia

Estonia

LatviaLithuania

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Turkmenistan

Azerbaijan

Georgia

Armenia

Kyrgyzstan

Tajikistan

Slovakia

Albania

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Key

Bilateral Countries Bilateral (Focus) Countries M

ultilateral Countries

DFID Overseas O

ffices

DFID

’s work around the w

orld

The Department for International Development aims to eliminate poverty in poorer countries,

in particular through achievement by 2015 of the Millennium Development Goals (MDGs).

Our Public Service Agreement (PSA) 2003-06 contains objectives and targets by which we

measure our progress.

The world map on the opposite page and the maps at the starts of Chapters 2, 3 and 4 show

where DFID works around the world. The bilateral countries receive bilateral funding from

DFID and these include the focus countries – 16 in Africa and four in Asia – which are used to

measure progress against the Public Service Agreement. The multilateral countries receive

DFID funding through multilateral agencies. We currently have 27 overseas offices with full

responsibility for running the DFID programme in a particular country or region.

Africa

Progress is possible in Africa, despite limited movement towards the MDGs. It will depend

upon an increase in the volume and effectiveness of aid and greater African management of

poverty reduction strategies. Constraints to progress include: HIV/AIDS, poor governance,

weak health services and barriers to trade.

■ 48% of DFID’s bilateral assistance was spent in sub-Saharan Africa in 2002/03 – up from

42% in 2001/02; by 2005/06 we will have increased our annual bilateral assistance to

sub-Saharan Africa to £1 billion.

■ On-going conflicts have fallen from 19 in 2000 to 2 in 2004 – in northern Uganda and Somalia;

the UK has worked through the Africa Conflict Prevention Pool to help establish peace.

■ In 2001 23 African countries had economic growth rates above 5% – this needs to rise to

7% across the continent.

■ HIV/AIDS rates have levelled off in DR Congo, Kenya, Malawi, Zambia and Zimbabwe

and fallen in Ethiopia, Rwanda and Uganda.

11

Summary of DepartmentalReport 2004

■ Enrolment rates in primary education have increased greatly since the abolition of school

fees; in Kenya a DFID grant helped an additional 1.2 million children enrol.

■ The Commission for Africa was launched in February 2004.

Asia

Progress varies greatly across the region and the MDGs will be met in some countries but not in

others. Constraints to progress include: inequality and exclusion, HIV/AIDS and weak governance.

Progress will continue to be made by working more closely with partner governments,

understanding their motivations and focusing increased resources on the poorest people.

■ DFID funding for Asia will increase by 45% over the next 2 years.

■ Through sustained support, DFID has helped India to increase primary school enrolment to

over 90%.

■ New DFID offices opened in Vietnam and China in 2003, which will help build more

effective relations with partners.

■ DFID collaborated with the World Bank to loan $100 million to China to provide

schooling for 2.4 million children.

■ DFID is the largest co-financer of the $21 million Fund for HIV/AIDS in Burma.

■ In Afghanistan, economic growth is up 30%, 4 million children have returned to school and

30,000 children’s lives have been saved through wide-scale immunisation programmes.

Europe, Middle East and Americas

Patterns of poverty vary hugely across these regions. Current trends suggest that only some

of the MDGs will be met by 2015. Constraints to progress include inequality, HIV/AIDS,

governance problems and human rights abuses. Iraq is a challenge. However significant progress

has been made over the last year.

■ The Coalition Provisional Authority has launched over 17,000 reconstruction projects in

Iraq; 30 million doses of vaccines have been provided and 76,000 new jobs created.

■ The UK has pledged a total of £544 million up to March 2006 for reconstruction and

humanitarian assistance.

■ We worked with the EC on the technical assistance for the Commonwealth of Independent

States regulation to ensure a greater poverty focus.

■ DFID convinced key institutions in Bolivia to revise their Poverty Reduction Strategy to

promote economic growth to benefit the poor.

12


■ DFID has allocated an additional £15 million to the Palestinians to support the Roadmap

to peace.

■ Support to Yemen doubled in 2003/04 with an increased focus on education for girls.

International

Achieving the MDGs will depend upon a greatly enhanced and coherent international

approach with agreed policies and effective collaboration between nations and institutions.

The international community is also critical in responding to conflict and humanitarian crises,

both of which can halt or reverse development progress. Considerable progress has been made.

■ The UK has written off 100% of the debt owed to us by the most Heavily Indebted Poor

Countries (HIPC). The HIPC initiative has released $1.7 billion for social expenditure and

poverty reduction in 27 countries since 2001.

■ DFID donated £950,000 to Iran immediately after the Bam earthquake in December 2003

and £2 million to support victims further since then; joint international rescue efforts saved

1000 lives.

■ Despite the failure of the Cancún trade negotiations, developing countries found a more

confident voice within the G20+ group, which comprised mostly more advanced and

industrialised developing countries.

■ The UK has proposed an International Finance Facility to bridge the $50 billion gap

between global development funds currently allocated and those estimated to be necessary

to meet the MDGs by 2015.

■ 33 countries now have full Poverty Reduction Strategies and 46 have interim Strategies.

■ Around a quarter of UK development expenditure goes through EC programmes and

we are seeing more progress in terms of the poverty focus and effectiveness of this aid.

■ In 2002/03 DFID channelled £223 million through UK civil society organisations.

Policy

Improving the effectiveness of aid depends upon well-informed policy. DFID is working to

strengthen its policies through greater research and improved analytical methods to support

progress towards the MDGs. 2003/04 has seen the reorganisation of Policy Division.

■ The new Policy Division has created 25 teams and a Central Research Team.

■ UK’s Call for Action on HIV/AIDS was launched, December 2003.

■ A new agriculture paper, Agriculture and poverty reduction: unlocking the potential, was published

January 2004.

13

Summary of Departmental Report 2004

■ Since 1997 the UK has committed over £1.5 billion to support health systems in poorer

countries and the supply of safe and reasonably priced drugs.

■ In 2002/03 the UK invested £270 million in bilateral HIV/AIDS and sexual and

reproductive health programmes.

■ We collaborated closely with other Government Departments on failing states, access to

medicines and urban regeneration.

■ We have adopted a new and co-ordinated approach to research with a clear Department-

wide strategy.

Finance and Corporate Performance

DFID has undertaken major changes to corporate delivery systems to ensure we are fit for

purpose. We aim to ensure that the vast majority of our funding goes to the poorest people in

the poorest countries and that the efficiency of our corporate procedures supports this.

■ DFID works with less than 1% of UK taxes and aims to spend less than 6% on

administration.

■ We are working to ensure that over 90% of our bilateral programme funding, excluding

humanitarian assistance, goes to low-income countries by 2005/06.

■ 96% of regional projects have been scored to assess their success.

■ CDC – formerly the Commonwealth Development Corporation – has invested over

£1 billion of UK public funds in developing countries.

■ £22 million have been saved through efficient procurement as reported to the Office of

Government Commerce.

■ We secured a 3-year Investors in People re-accreditation – one of very few decentralised

international operations to achieve such recognition.

14


1The Responsibilities of

the Department forInternationalDevelopment

The Importance of Aid 16

The Millennium Development Goals 17

DFID’s Commitment to PovertyReduction 20

DFID’s Public Service Agreement2003-06 21

Aims of the Departmental Report 21

We will spare no effort to free our fellow men, women and children from the abject and dehumanising

conditions of extreme poverty, to which more than a billion of them are currently subjected

United Nations Millennium Declaration – September 2000

The Importance of Aid

1.1 Over the past generation, significant progress has been made towards the elimination of world

poverty. Although the world’s population has risen by 2 billion in the last thirty years, basic

living standards for many of the very poor have improved. Child mortality rates have halved,

illiteracy rates among adults have fallen from 46% to 24% and twice as many people have access

to safe drinking water and basic sanitation.

1.2 However, 1.1 billion people – one in five of the world’s population – are still living on less than

$1 a day. 1.1 billion people still lack access to safe drinking water and 2 billion lack adequate

sanitation. 104 million children are not enrolled in school and some 10 million children die

each year before their fifth birthday, largely from preventable diseases. With a rising world

population and the HIV/AIDS epidemic continuing unabated in parts of the world, the fight

against poverty remains a moral imperative.

1.3 Extreme poverty is not an isolated issue, relevant only to those in developing countries.

As goods and services, information and people move between countries at unprecedented

levels, awareness of the global impact of poverty is inescapable. Growing recognition of the link

between deprivation in some parts of the world and wider insecurity for all of us has led to

increased international commitment to the elimination of poverty. In order to address the

causes of conflict, environmental degradation, illegal migration and drug trafficking we have

to improve the living standards of the very poor.

16

1 The Responsibilities of theDepartment for InternationalDevelopment

The Millennium Development Goals

1.4 The Millennium Development Goals were established at the United Nations Millennium

Summit in 2000. They represent a global commitment by 189 countries to the elimination

of poverty by 2015 and a means of measuring progress towards this aim.

Box 1a The Millennium Development Goals

Goal 8

A global partnership for development

➧

Goal 7

Ensuring environmental sustainability

➧

Goal 6

Combating HIV/AIDS, malaria and other diseases

➧

Goal 5

Improved maternal health

➧

Goal 4

Reduced child mortality

➧Goal 3

Promotion of gender equality and empowerment of women

➧Goal 2

Achievement of universal primary education

➧

Goal 1

Eradication of extreme poverty and hunger

17

The Responsibilities of the Department for International Development

1.5 Achieving the 2015 goals is one of the greatest challenges we face at the start of the 21st century.

While we are making progress in many regions and in many countries,we will fail in sub-Saharan

Africa unless extraordinary efforts are made.We have the capacity to change this.We need to increase

the volume of assistance going to developing countries, target assistance at the poorest countries and

do much more to increase its effectiveness. The following graphs demonstrate the current variations

in progress towards the Millennium Development Goal relating to income poverty.

Box 1b Share of people living on less than $1 a day

1.6 A series of international conferences has taken place since 2000, at which both donors and

partner governments have renewed their financial and political commitment to the Millennium

Development Goals. In March 2002 the Financing for Development meeting took place in

Monterrey where donors pledged around $16 billion a year in additional aid by 2006. Then in

August/September 2002, the World Summit for Sustainable Development was held in

Poverty rate at $1 a dayGoal

1990 2000 2015 Actual Projected Path to goal

Source: World Bank

East Asia & Pacific50

40

30

20

10

01990 1995 2000

29.4

1.4

2.1

41.5

31.9

16.4

47.442.349.0

2.8 1.21.1

11.07.6

10.8

5.5

1.30.7

4.22.3

14.5

2005 2010 2015

14.7

Middle East & North America50

40

30

20

10

01990 1995 2000 2005 2010 2015

South Asia50

40

30

20

10

01990 1995 2000 2005 2010 2015

Sub-Saharan Africa50

40

30

20

10

01990 1995 2000 2005 2010 2015

Europe & Central Asia50

40

30

20

10

01990 1995 2000 2005 2010 2015

Latin America & the Caribbean50

40

30

20

10

01990 1995 2000 2005 2010 2015

20.8 23.7

18


Johannesburg and again countries reiterated their commitment to work towards meeting the

United Nations target of 0.7% of gross national income given to official development assistance.

1.7 The World Trade Organisation has also focused on development in the Doha Round, which

began in Qatar in November 2001. More than 50 nations grew poorer over the last decade –

open trade has a vital role to play in helping countries reduce poverty. To maximise these

benefits, poor countries need a rules-based international trading system, with continuing

reductions in barriers to trade in both developed and developing countries. The latest

Ministerial Conference took place in Cancún in September 2003, and although agreement

was not reached at that stage, the UK Government remains committed to resuming

negotiations.

Slum shanty housing in front of an affluent high-rise suburb in Bombay. DFID is working to improvethe living conditions of the very poor in India

1.8 While broad-ranging international commitment exists towards achieving the Millennium

Development Goals, major challenges remain. The donor community must harmonise its

different approaches and ensure the efficient delivery of aid. We must raise public awareness of

the problems facing us all and work in partnership with other international bodies. Increasing

the volume of aid is also critical to success. The international community has estimated that

if global aid were increased from $50 billion to at least $100 billion a year the Millennium

Development Goals could be met by 2015. We now need to live up to our commitments and

ensure that by working in partnership with governments in developing countries we achieve

the Millennium Development Goals.

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DFID’s Commitment to Poverty Reduction

1.9 The Department for International Development (DFID) is responsible for leading the UK

Government’s contribution to the international effort to reduce poverty. In 1997, the first

White Paper on International Development, Eliminating World Poverty:A Challenge for the

21st Century (1), committed the UK Government to contributing towards the achievement

of the International Development Targets by 2015. The second White Paper in 2000, Making

Globalisation Work for the Poor (2), confirmed the UK’s commitment and also set out the new

challenges and opportunities for those working to reduce global poverty.

1.10 The International Development Act, which came into force in June 2002, established legally

acceptable objectives for UK development assistance. The Secretary of State for International

Development has to be satisfied that the assistance provided under the Act is likely to

contribute to poverty reduction. Under the main power of the Act, the sole purpose for which

development assistance can be provided is to promote sustainable development or improve the

welfare of poor people. The restrictions in the Act over how funds voted by Parliament can be

used mean, for example, that aid cannot be tied to the purchase of British goods or services.

Such tying could not have as its purpose the promotion of sustainable development or the

improvement of welfare of poor people.

An Ethiopian farmer with his meagreharvest after just two days of rain allyear. DFID supplied £27 million ofhumanitarian assistance to Ethiopia in2002/03

1.11 UK official development assistance is set to rise by £1.5 billion from £3.4 billion to

£4.9 billion following the 2002 Spending Review, representing 0.40% of gross national

income. DFID’s budget will reach more than £4.5 billion by 2005/06.

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DFID’s Public Service Agreement 2003-06

1.12 The Public Service Agreement 2003-06, agreed as part of the 2002 Spending Review, helps

DFID to improve its performance by focusing on what has already been achieved and what

remains to be done. It tracks progress and allows for reassessment of policy decisions and financial

commitments in the light of successes and underperformance. In addition, it allows each division,

department, team and individual to set targets which relate directly to the overall achievement of

the Public Service Agreement objectives – and ultimately of the Millennium Development Goals.

Box 1c Public Service Agreement Objectives

Aims of the Departmental Report

1.13 This report sets out what DFID has done in the year April 2003 to March 2004. It explains

our approach to working as part of a wider international effort, collaborating with many

organisations, including: other UK Government Departments, international development

agencies, governments of developing and transition countries, civil society, business and academia.

1.14 The report explains what we have done to increase the impact of development assistance on

poverty. We have retained our focus on helping the poorest countries and agreed longer-term

financial commitments, which will mean beneficiaries will be able to predict their income.

We have continued to move away from stand-alone projects – where the donors decide the

agenda – towards support for poverty reduction strategies led by developing countries

themselves. The report also describes our efforts to improve the work of the main multilateral

agencies through which we channel funding.

1.15 It explains what we are doing to ensure that international policies on trade, debt, investment, the

environment and conflict increase, rather than limit, opportunities for poor countries. Economic

prosperity is vital for providing basic services, such as education and health care and for building

capacity in developing countries. If trade barriers prevent farmers from selling their produce or

if debt repayments erode any financial gain, no amount of aid will compensate.

Objective 1 Reduce poverty in sub-Saharan Africa

Objective 2 Reduce poverty in Asia

Objective 3 Reduce poverty in Europe, Central Asia, Latin America, the Caribbean, the

Middle East and North Africa

Objective 4 Increase the impact of key multilateral agencies in reducing poverty and

effective response to conflict and humanitarian crises

Objective 5 Develop evidence-based, innovative approaches to international development

Value for money

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1.16 DFID also has a responsibility to help victims of natural or man-made disasters. The report

explains how our humanitarian assistance has been used to save lives, relieve suffering and

improve access to basic services when emergencies have arisen.

1.17 The report is structured around DFID’s Public Service Agreement (PSA). Chapters 2 to 6 focus

on the five Public Service Agreement objectives, and indicate where targets have been met and

where they are off track. Chapter 7 explains how the Department is organised to deliver. The

report sets out plans for tackling underperformance and for responding to changing needs and

for modifying planned spending accordingly. We have maintained a clear focus throughout on

ensuring value for money and achieving the Millennium Development Goals.

1.18 Much has already been achieved, although much remains to be done. Some of the progress made

by developing countries is set out in Box 1d. International development assistance can help these

countries further and DFID has an important role to play. This report explains how we contribute.

Box 1d Progress is possible

For more information

On DFID’s work

See the Quick Guide to the Department for International Development

Annexe 6 has details of how to obtain this (37) and other DFID publications

■ Life expectancy in developing countries has increased from 44 years in 1960 to 64 years

in 2001.

■ More than 3 million children survive each year due to the extension of basic immunisation.

■ Since 1990, 800 million people have gained access to safer water and 750 million to

improved sanitation.

■ Aid is significant – in 2001 there were 34 countries in which aid represented more than

8% of national income.

■ Adult literacy in developing countries has increased from 47% in 1970 to 76% in 2001.

■ Brazil has controlled its HIV/AIDS infection rate at around 0.5% – half that projected;

Uganda cut its prevalence rate from around 15% in 1991 to 5% in 2001; Thailand reduced

infections among commercial sex workers in cities from 9.7% in 1990 to 6.7% in 2000.

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