What a pleasure it is to serve under your unexpected chairmanship this afternoon, Mr Hollobone. You are a very welcome replacement. Thank you for enabling us to continue with the debate.
I thank my hon. Friend the Member for Stafford (Jeremy Lefroy) for securing such an important debate. In his opening remarks, he said he had just returned from Liberia and Sierra Leone, which listed unemployment as their biggest challenge, and DFID also believes that is the case. Jobs are at the core of international development, and I very much welcome the opportunity to discuss the issue. I am aware of my hon. Friend’s vast experience and great knowledge in this field—it is much greater than my own—which comes from his personal experience of living in Africa and being involved in business for many years.
I hope many of the points in my speech will address some of the issues that have been raised. If we have time, I will try to address some of the more specific points that have been raised. When we ask people in the UK or in a developing country what they want, the desire for a good job is normally one of the top things on their list—that is not rocket science. A job will allow
them to work their way out of poverty, to provide opportunities for their families and to build for a better future. I always think that having something to do and somewhere to go every day is also good for keeping a person whole in mind and body.
Since I became a DFID Minister, there is something that has struck me about virtually all the African countries I have visited—and I have been to Africa perhaps 20 times now. Driving up the road—if there is one—at certain times of day, one can see that many young men are sitting at the roadside without anything to do. That is a reminder of something that has already been raised in the debate: how important and necessary work is and how much work is missing.
I want to highlight the scale of the challenge in developing countries. Most of the 600 million new jobs needed globally by 2020 for the growing working-age population are needed in developing countries, but at the moment only 15% of people in low-income countries in Africa have what we would call a proper job. There are 900 million people in developing countries who are working but who, as my hon. Friend the Member for Stafford said, are doing vulnerable self-employed work and living in poverty. They engage in subsistence farming and so on. Most people in developing countries have a job of some sort, but it is mostly in unproductive subsistence work that may even be unsafe.
To address those issues in the terms in which DFID thinks about jobs, we need modern, formal sectors to grow and to create better jobs. We need people who work in subsistence agriculture or unproductive household businesses to be able to earn a better living. I have visited some impressive projects to intensify and maximise the produce of small agricultural plots. Avoiding the loss of produce in getting it to market is one way to do that, but I also remember a market in Zambia where we had arranged for people selling seeds and market produce to meet small subsistence farmers to exchange knowledge of the best seeds and how to plant. There was a product to make cows grow, so that people could get them to market in two and a half years instead of seven. I did not ask what was in it; nevertheless, someone with one cow could triple their income with that product. Many of these people are in marginalised rural areas or cities, poorly connected to markets for their labour. They lack the right mix of skills, finance, land and information to enable them to find a job. My hon. Friend the Member for Stafford also talked about getting goods to market, the skills needed to get a job, access to finance, surety of land tenure and information about how to maximise produce.
We also need to address serious inequality in who gets job opportunities. Women are less likely to participate in the labour force and are more likely to be in unpaid or vulnerable work. Young people—and there are many in developing countries—also fare badly, which often poses a risk to social cohesion. That is not just unfair and dangerous; it is inefficient and represents a huge potential loss to developing economies. Changing this jobs picture requires economic development and transformation, much of which will be led by the private sector. People need the opportunity to earn more. For many, that will mean getting better incomes in agriculture, but over time—indeed, already and increasingly—
the bulk of new jobs will come from higher-income opportunities in services and manufacturing, as has happened in every country that has successfully developed.
DFID’s work on economic development and jobs involves, first, getting the international system right; secondly, getting private sector growth going; and, thirdly—an absolute priority for me—ensuring that growth is broad-based and inclusive, in particular for girls and women. One example is the recent trade facilitation agreement reached in Bali, which will be instrumental in reducing the barriers to trade, helping to integrate developing countries into global trade flows and promoting jobs and investment. We are also pushing for productive jobs to feature prominently in the goals and targets of the post-2015 agenda, which is essential if we are to reach zero poverty by 2030. Our multilateral partners are also well placed to deliver on the jobs agenda and are upping their game. The UK-backed International Finance Corporation global SME finance initiative aims to provide at least 1 million new jobs and financing to 200,000 small and medium-sized enterprises. Access to finance is crucial, and I have just been in Mozambique, where I launched access to finance for women in SMEs. It is a crucial stage.
The World Bank Group has put job creation and economic development at the centre of its plans to achieve its goal of increasing shared prosperity and the income that accrues to the poorest 40% of each country. We are engaging closely with the bank on that. Across Government, the UK is also working to improve economic and trade relations. Our recently launched high-level partnerships for prosperity will improve trade between the UK and Angola, Côte d’Ivoire, Ghana, Mozambique and Tanzania—indeed, my hon. Friend the Member for Stafford mentioned the recent trip there by the Secretary of State.
Driving economic development and jobs is not only the most effective way to reduce poverty in developing countries; it is also in the interest of the UK. The hon. Member for Wirral South (Alison McGovern) raised the question of tied aid, and I assure her that there is no question of that. It is against the law and not appropriate. However, when we let contracts in open competition, a UK business will often win. That, however, can only be a compliment to British business and its ability to make the successful bid. There is no favouritism: the process happens on the open market and such contracts are always let competitively.
It is in the interest of the UK to build our future trading partners. Africa has a growth rate that we in the UK can only envy and there is phenomenal wealth lying beneath its ground. The challenge with extractive industries is to spread the benefits widely, as my hon. Friend the Member for Stafford said. One reason for the work we do on value chains and supply chains in extractives, and in the surrounding geographical area, is to try to link the economic benefit to the country. We also give technical support and assistance with the original contract negotiations, so that the country benefits from its own wealth, rather than other countries or the elites of that country.
Improving job prospects in developing countries, particularly for young people, reduces the chance of conflict. The recent awful case of the abduction of girls in northern Nigeria seems to have gone from the media pages, but it has not stopped being on our mind at
DFID or the Foreign and Commonwealth Office. Part of the issue in the area where Boko Haram flourishes is that young men have nothing to do. I am looking at programmes to develop skills and jobs in that area, as possible diversionary tactics, which would also be very beneficial.
Many businesses in the UK are looking to Africa and Asia and seeing the markets of the future. Businesses see value in engaging with DFID and the rest of Government and they in turn have much to offer the countries that they choose to invest in. Interestingly enough, the business advisors to DFID’s advisory board have strongly called for exactly what my hon. Friend the Member for Stafford was talking about: the development of appropriate skills and education. There is a willingness to invest in countries and create jobs where the climate is stable enough, but there is also a need for skills, so that businesses do not have to import their own staff. A company that wants to open in many parts of a country needs to be able to use staff from the country in question to run branches, co-ordinate things and see to the logistics.
Our spending programmes create jobs in developing countries in a number of ways. The Commonwealth Development Corporation, the UK’s development finance institution, is having a huge impact on job creation in Africa and Asia. It is remarkable. In 2013, CDC’s 1,300 investee companies directly employed over 1 million people. That is a hugely successful rate.