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Future of CDC

I am glad to have the opportunity to open this debate on the future of CDC, and I appreciate the fact that the Secretary of State for International Development has undertaken to respond to it. CDC is a remarkably important part of our development armoury, and it is likely to undergo substantial changes in the coming years, as our Committee recommended in its report. I need not detain hon. Members long by saying that CDC—originally the Colonial Development Corporation, subsequently the Commonwealth Development Corporation, and now just the CDC—is the Government's development finance institution and the fourth largest in the world. On its own terms, it has been a success, in the sense that it has grown its assets from £1.2 billion to £2.7 billion since 2004. In 2009, which is the last year for which I have figures, it contributed £222 million towards the UK's official overseas development assistance. From a personal point of view, I would say that CDC has done well in terms of what it was asked to do, but it needs to do more and differently, and that is certainly the recommendation of the Committee's report. The Government have reviewed CDC. The Secretary of State said to me that as a fund of funds it is fine, but it needs to be something more—I agree. Indeed, it has been my view for a number of years that CDC is too distant from the Department for International Development and that its full potential for helping to achieve private sector growth and development in our priority areas has not been realised. I welcome the Secretary of State's statement that he wants CDC to be"““more pro-poor focused than any other development finance institution, doing the hardest things in the hardest places.””" If I may say so, that quote is characteristic of him. I have often said that the International Development Committee is not the overseas aid Committee. If we are to provide sustainable development that will lift poor people out of poverty and keep them out, we must strengthen the private sector's ability to support them. As a fund of funds, CDC has levered additional finance, and there is clearly a role for that to continue—indeed, that will probably be its predominant role—but we have suggested that CDC should consider whether it can, for example, attract more capital from diaspora funds. Diaspora finance far outweighs our overseas development assistance to many developing countries, but it is fair to acknowledge that, understandably, much of that money goes back to the families and communities from which the diaspora has come. However, the Committee took the view that there must be scope for a significant part of that finance to be channelled into wealth-focused, pro-poor development funds. We certainly believe that a well-targeted, well-managed fund could unlock a lot more for pro-poor development.