The Department for International Development (DFID) needs a clearer strategy for strengthening infrastructure in developing countries because poor roads, power and water networks are constraining growth in many countries, MPs on the International Development Committee have warned.
In a new report the committee says that DFID can be proud of much of the work it does to build infrastructure in developing countries – on which the Department spends £1 billion annually. But it calls on Ministers to improve monitoring of infrastructure spending through multilateral organisations, such as the EU, World Bank and African Development Bank. The UK should also insist on provisions in large multilateral infrastructure projects which require local capacity building in order to boost local employment and the private sector with developing countries. Chair of the Committee, Malcolm Bruce MP, said:
"Countries wanting to trade, grow and develop need decent roads, railways, power plants and sanitation systems. Inadequate infrastructure is still constraining growth in many poorer countries.
DFID can be proud of much of the work it does to provide infrastructure, but it is strangely silent about this in its key strategic documents such as its Business Plan.
Ministers must improve how they monitor infrastructure spending by multilateral organisations like the EU and World Bank and should also be more confident in trumpeting DFID's infrastructure policy."
The MPs also raise concerns that infrastructure construction in developing countries is particularly prone to corruption. The report points to DFID's success in helping to establish the Construction Sector Transparency Initiative (CoST) to counter corruption, which has proved effective and is to be transferred to the World Bank. The report recommends that DFID should continue to provide the funding and staff time to ensure that CoST can build on the successes of its pilot phase.
Malcolm Bruce MP added:
"DFID should also give greater emphasis to stamping out corruption in infrastructure construction. The Government's support to the Construction Sector Transparency Initiative has been valuable but it must carry this through to ensure that CoST fulfils its early promise
Infrastructure development can help build local capacity and spur further development and DFID should put more emphasis into achieving this wherever possible"
The report recommends that DFID publish a departmental strategy on infrastructure. The MPs argue that this would help DFID clearly to convey its rationale and priorities within the sector. It would send a message to the multilateral institutions that DFID funding is directed to the Department's key priorities within the sector, including the need to build local capacity, implement road safety measures and ensure the use of technologies appropriate to the needs of developing countries.
Far more private money is needed to finance large infrastructure projects such as bridges, dams and roads in developing countries, according to the report. The MPs praise DFID for helping leverage private funding through initiatives such as the Private Infrastructure Development Group.