Stafford MP Jeremy Lefroy has spoken up for the importance of using aid to help drive economic development in a debate on Global Poverty in the House of Commons.

In a speech drawing on his own experience of work and business in developing countries, Mr Lefroy said:

“The best way to tackle poverty is through economic development and that the private sector will play the leading role in that.”
Addressing how such development could be achieved, he argued for a three-pronged approach with aid directed towards agriculture, small businesses and infrastructure.

Speaking on agriculture he said:

“Agriculture is a business of the future - around the World, in Britain and in Stafford constituency. Any country, including ours, that ignores the potential of agriculture does so to its cost. In 2005 to 2030, food demand is expected to increase by 50% across the world. That is a huge opportunity for farmers in developing countries.

“The International Fund for Agricultural Development has found that a healthy agricultural sector acts as a multiplier in local economies, spurring higher incomes and increasing access to markets.

“That is why I am delighted that the Secretary of State has highlighted agriculture as an essential building block of wealth creation.”

The second area of importance he highlighted was that of small businesses:

“In the UK, we recognise small and medium-sized enterprises as the engine of the economy, and it should be no different in developing countries. Yet anyone wishing to set up a business in many developing countries faces great problems: the cost of registration, tax authorities that often want taxes to be paid before the business has started trading, and, above all, lack of finance

“I urge the Secretary of State to consider how the UK can work to overcome that financing gap. It is not straightforward, as I know from being involved over the past six years in helping to finance small businesses in Tanzania through a charity, but it can be done. Well-managed revolving equity or quasi-equity funds enable a pound of aid to be used several times over.”

And finally on infrastructure:

“It is of little use to produce crops only for them to rot in the field because they cannot reach the market. Transport costs in Africa have been estimated to be on average double those in Asia. Infrastructure projects in the past have been riddled with corruption and beset by special interests, but if countries come forward with serious business cases for not only building but maintaining the necessary infrastructure, we should look at them.”

He concluded:

“I have spoken about agriculture and infrastructure. People might point out that many countries have not yet thrown off the shackles of poverty, but it was precisely because agriculture was ignored for 20 years and infrastructure was built and not maintained that the benefits of that investment were often not realised. No country will develop economically without allowing its small businesses, including smallholder farmers, to flourish. Give them firm property rights, fair taxation, access to affordable finance that will not take the shirt off their back if things go wrong, and a good basic infrastructure, and they will create the jobs that are so desperately needed. They will also create the tax revenues that will pay for the health, education and other services on which they depend, as well as the stability without which no real development is possible.”