| Debt and Jubilee 2000 in Parliament |  |
| Debt and Jubilee 2000 in Parliament | |
Debt features frequently in the debates and questions asked in the UK Parliament - both in the House of Commons and the House of Lords. Below are some of the recent discussions. To find the most recent report of what goes on in Westminster, visit the official parliamentary website http://www.parliament.uk .
Thursday 14th December - Answers
Treasury
Debt Cancellation
5. Mr. Barry Gardiner (Brent, North): What progress the Government have made, in collaboration with the international community, in cancelling the debt for heavily indebted poor countries. [141837]
15. Ann Clwyd (Cynon Valley): If he will make a statement on progress in the reduction of third-world debt. [141849]
The Chancellor of the Exchequer (Mr. Gordon Brown): The Government have announced that the United Kingdom will renounce its right to receive any benefit from the historic debt owed by the 41 most indebted countries. Along with our policy of 100 per cent. debt relief for countries reaching decision point, I urge our international colleagues to follow the UK's lead.
I will be meeting the managing director of the International Monetary Fund, Horst Kohler, on Monday to review the latest progress towards achieving the target set by the IMF and the World Bank that 20 countries will reach decision point by the end of the year and ensuring that that debt relief is directly targeted at poverty reduction. On behalf of the Government, the Secretary of State for International Development and I have written to every Member of Parliament so that they can pass on this latest information to their Churches and other organisations.
Mr. Gardiner: I thank the Chancellor for that announcement. The thousands of people who have been part of the Jubilee 2000 campaign--constituents of mine and, I suspect, of every Member of this House--will think that this is one of the most significant things that the Government have done. I congratulate him on it.
I ask my right hon. Friend, in his discussions with colleagues in the international community, to urge them to do as we have done, and to look forward to expanding the conditions for heavily indebted poor countries, perhaps to include states that do not qualify at the moment, such as Nigeria, Bangladesh and Peru. They are major indebted countries. The burden in Nigeria is, I think, £3.5 billion owing to this country alone. Will he consider expanding the criteria? The whole community would welcome that a great deal.
Mr. Brown: My hon. Friend and other hon. Members have worked with the Churches and non-governmental organisations in the past year. The Treasury alone has received 300,000 cards or letters sent by members of the public. It is an indication of the public's support for debt relief that so many people and organisations, including all the Churches of the United Kingdom, are involved in this effort. I thank people for raising the issue nationally as well as internationally.
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We have had talks with the Nigerian Government about their position. We are keen to help them as they reform their economy. At the same time, their position must be reviewed in relation to the oil revenues that they can now receive. My hon. Friend asked about other countries and debt. Over the next few months, the British Government will be involved with other Governments and organisations, internationally and nationally, to try to show that the link between debt relief, poverty reduction and sustainable development can be strengthened. We will also try to ensure that we meet the 2015 targets of every child being in primary education, of all avoidable infant mortality being cut by two thirds, and of halving poverty round the world. I hope that there will be bipartisan support for those efforts.
Ann Clwyd: No one could doubt the Chancellor's personal commitment to helping the poorest people in the world. It would be good if the churlish Conservative party were to acknowledge its debt to the Chancellor today.
Mr. James Gray (North Wiltshire): Our idea.
Ann Clwyd: I do not know what kind of comment that was, but it would be good if a Conservative Member got to his feet to acknowledge what the Chancellor has done to help the poorest people in the world.
Will my right hon. Friend spell out what reforms in particular he would like the European Commission to make to strengthen its commitment and deliver a little of the money that it has set aside for the world's poor, and use it as it should be used instead of keeping it in Brussels?
Mr. Brown: I am grateful to my hon. Friend and I applaud her efforts around the world to promote debt relief and international development. I know that she has worked with the Churches and other organisations in her constituency to promote the cause of debt relief.
As for the changes that the European Commission can make in its policy, the Finance Ministers managed to persuade it to contribute to the World Bank trust fund. Almost a billion euros will be invested in the World Bank trust fund so that the debts of the countries that qualify for the HIPC programme can be relieved. It is to the credit of the European Union that that decision was taken.
I hope that the aid and development reforms of the European Union will be involved in what I believe will be a worldwide initiative over the next year to tackle the problems of child poverty and poverty generally. New initiatives will put children into primary education-- 120 million children are not in it at the moment--and reduce the rate of infant mortality. At the moment, one in every seven children die before the age of five--a tragedy that must be prevented.
Dr. Jenny Tonge (Richmond Park): My party congratulates the Chancellor and the Secretary of State for International Development on their welcome progress on this matter. Is the Chancellor concerned, however, about how long it takes for many countries to reach decision point? Will he say more about the social factors--health and education--that must be included in structural
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adjustment programmes for those countries before the International Monetary Fund and the World Bank will accept that they have reached decision point?
Mr. Brown: I am grateful to the hon. Lady and her party for their support. Structural adjustment programmes have been replaced by poverty reduction strategies as the basis on which debt relief is provided. If a country has a programme that meets the poverty reduction strategy criteria, it is in a position to receive necessary debt relief.
The hon. Lady is absolutely right to say that there was a chance in 1997 that only one country would have passed through the HIPC process. Today there are 13, and there will be a special meeting of the IMF and World Bank boards next week to consider another seven, one of which may already be through by the end of this week. The aim is to put 20 countries through the programme by the end of the year--by the time of the meetings on 20 and 21 December--meaning that debt relief will move quickly to those countries.
I have considered the effect of debt relief and the differences that it has made. Countries, such as Uganda, where debt relief has been achieved are now able to consider reducing the primary school teacher-pupil ratio from 100:1 to 50:1 and to ensure that every child is in education in a school with a roof above his or her head.
Mr. John Bercow (Buckingham): It is to be hoped that the roofs would not be below their heads.
Mr. Brown: I am sorry that the hon. Member for Buckingham (Mr. Bercow) wants to reduce such an important matter to trivia.
Poverty reduction strategy papers were designed to achieve changes such as these, so that debt relief leads to poverty reduction. I hope that even more progress will be made in the coming year.
Miss Anne McIntosh (Vale of York): The whole House would congratulate the Chancellor on continuing the excellent work started by the Conservative Government at Montreal and would share his aim of ensuring that expenditure in indebted countries goes towards education, health and poverty reduction. Why, however, has he failed to implement the Organisation for Economic Co-operation and Development's convention on bribery? Is that not a reason why other countries have followed Britain's lead in that regard?
Mr. Brown: When we came to power, tax relief was available for bribes because of action that the Conservatives had not taken. That is amazing--one could receive tax relief for bribing someone in another country. We are taking action on those matters, and taking international action too.
I applaud the hon. Lady for her own work on debt relief. The challenge of the next year will require expenditure in the international development budget that the Opposition are not prepared to support. If we are to make progress on education, health and anti-poverty programmes, Britain must pay its share. That is why my right hon. Friend the Secretary of State for International Development has proposed expenditure of £600 million over the next three years. Why will the Opposition not support us on that?
G8 Summit, 24 Jul 2000 : Column 764-777 [extracts]
The Prime Minister (Mr. Tony Blair): With permission, Madam Speaker, I should like to make a statement about the G8 summit that I have just attended in Okinawa, Japan.
... prior to the summit Prime Minister Mori of Japan chaired a discussion with representatives from the G77, the Organisation of African Unity, the Non-Aligned Movement and the Association of South-East Asian Nations, which underlined once again the immense problems faced by many of the world's least developed countries, particularly Africa--a debilitating, self- reinforcing cycle of conflict, poverty and weak governance.
The G8 agreed to make a renewed effort to implement the Cologne agreement on debt relief. Already, nine countries receive additional relief under the heavily indebted poor countries scheme, worth more than $15 billion. We agreed to quicken the process to get another 11 countries through to decision point by the end of this year--a further $20 billion of debt relief--and to reach out to the countries currently in conflict to see how they can be brought into the process.
... We also agreed to support concrete quantitative targets for reducing deaths from AIDS, malaria and tuberculosis by 25 to 50 per cent. over the next decade and backed those up with a strong commitment to provide increased resources. We are doubling our support for international efforts to develop new drugs and technologies for priority diseases.
... At present, it costs far more to access the internet in Uganda or Kenya than it does here or in the United States. We therefore agreed a series of measures set out in the charter to close the digital divide between the developed and the developing world, with huge potential for delivering educational and medical services cheaply or free across the internet.
That comprehensive programme of action reflects the real sense at the summit that, with our own economies in good shape, the time has come to devote more attention and give a higher priority to the plight of the world's poorest countries. That is not only a matter of solidarity and justice, but a hard-headed economic investment in the markets of the future.
... People will, of course, always find plenty to criticise when international leaders gather, but it is worth remembering a few points. It was the decisions made following the Birmingham summit two years ago that led to a new global financial architecture that has brought greater stability to the world economy. That is good for jobs and good for living standards. It was at Cologne last year that we made a substantial breakthrough on debt and contributed substantially to ending the conflict in Kosovo.
As a result of the decisions made this year at the G8 summit, over time fewer children will die of killer diseases such as AIDS, tuberculosis and malaria; more children will be lifted out of poverty; more children will get access to basic education; more people in the developing world will get access to computers and electricity; and the measures agreed on crime and drugs will make a real difference in a fight that can be won only at the international level.
Britain played a leading role both in shaping the agenda and in the main outcomes of the summit. Both on the world stage and in Europe, the Government are standing up for Britain and standing up for what is right.
Mr. William Hague (Richmond, Yorks): We welcome much of the summit communique, including the commitment to maximise the benefits of information technology in developing countries; the recognition of the importance of universal primary education; the plan to combat disease such as AIDS, malaria and TB; the renewed effort to combat international crime and drug trafficking; and the measures to prevent conflict, including those to stop the illicit trade in diamonds. We especially welcome the recognition by the G8 of the need to provide improved access for developing countries to the markets of the developed world, and the firm commitment to a new round of World Trade Organisation trade negotiations, if possible this year.
... I agree with the Prime Minister that it is right for the richer countries to focus on what can be done to help the poorer countries, and, in particular, to free them from crippling debt repayments. The House will welcome the progress made by the United Kingdom in writing off bilateral debt. As has been made clear, some of the delays in debt relief result from developing countries being involved in military conflict, but the many campaigners who have worked tirelessly on the issue have found the lack of progress at the summit deeply disappointing.
The firm commitment to debt relief, which both sides of the House welcomed after the Cologne summit last year, has not yet been matched by firm action. Is the Prime Minister concerned that Jubilee 2000 labelled Okinawa "the squandered summit" and said that the world's leaders have blown it?
Is he concerned that a Tear Fund spokesman referred to statements on debt relief as potentially the most lethal triumph of spin over substance? The Prime Minister's statement did not refer to missile defence, but newspaper reports suggest that he discussed it with President Putin in connection with North Korea. Has the right hon. Gentleman yet resolved the Government's position on that issue? The Minister of State, Foreign and Commonwealth Office, the hon. Member for Neath (Mr. Hain), labels the national missile defence system untested and vulnerable, while the Ministry of Defence has let it be known that it supports it.
... Bearing in mind the failure to agree concrete progress on debt relief, will the Prime Minister comment on reports that the cost of the summit was half a billion pounds, a figure that for everyone is hard to believe? Did the items of expenditure include the construction of a replica of President Clinton's Arkansas home? While recognising that such decisions are for the Japanese Government to make and to defend--[Interruption.] Yes, of course they are. Does the Prime Minister acknowledge the widespread unease that such a sum, or anything like such a sum, should have been spent, when it could have been used to fund the combined debt repayment of up to 17 developing countries for a year--or even another millennium dome?
The Prime Minister: That is what passes for the right hon. Gentleman's statesmanship, I think.
On the costs of the summit, the right hon. Gentleman is right in saying that that is a matter for the Japanese Government. I would simply point out however, in fairness to them, that they also made a statement at the time of the summit that they intend to offer some $18 billion worth of aid to developing countries. We should give them credit for that.
... We must recognise that the single most important thing for many of the poorest countries in the world--as important, indeed, as many of the things that we are discussing in relation to debt--is to gain access to the richer countries markets. It cannot be justified that wealthy countries keep out the goods of poorer countries, when such access is the very best way in which those countries can have a secure future without having to depend on aid and development assistance from the wealthier countries. I cannot say that we made as much progress on that as I would wish, but the position of the United Kingdom Government, at any rate, is very clear.
As for debt relief, the money is there--that is, the $100 billion target that was set at Cologne. What we need to do is get the countries through the decision point process. Nine have already gone through, and a further 11 should be through by the end of the year. We recommitted ourselves to that at Okinawa. However, we must also deal with the countries that are currently in conflict and cannot get through the decision point process for that reason. There is a clear need for us to renew our efforts, which is why we have agreed to send delegations from countries such as ours to countries that are in conflict to tell them, "If you want to take advantage of debt relief, you must resolve some of the basic issues of conflict; otherwise, the money will simply be wasted."
The UK has a very good record of writing off debt and of debt relief initiatives. I should point out, however, that when we came to office not one country had received the debt relief. Those countries are now receiving it, very much as a result of the work done by my right hon. Friends the Chancellor of the Exchequer and the Secretary of State for International Development. I agree that we must go much further. We are very much in the forward advance, but we are having to act after several years during which not a great deal happened.
Mr. Charles Kennedy (Ross, Skye and Inverness, West): As I think all hon. Members on both sides of the House recognise, a welcome feature of the summit--however frustrating the rate of progress may be--is the developing recognition among wealthier nations that collectively we must do more for the poorer nations.
... The Prime Minister spoke of writing off $100 billion of debt--which was agreed at last year's Cologne summit--but only $15 billion of that debt has been cancelled. Given what he just said in response to the Leader of the official Opposition about the other countries involved, does he think that that remains a realistic target? If it is, what is the time scale for achieving it?
Does the Prime Minister agree that more work needs to be done to ensure that the heavily indebted poor countries do not have to meet such stringent economic criteria to qualify initially for eligibility for debt relief? Many hon. Members on both sides of the House have signed up to that cause with Jubilee 2000. The more that the Government can do on behalf of everyone in this country to give an impetus to achieving that goal internationally, the better.
The Prime Minister: ... As for debt and debt relief, it is important that we do not put over-stringent hurdles in the way of the heavily indebted poor countries. However, it is not only a matter of economic hurdles; it is also important that we have systems of governance in those countries that make it clear that any money that is put in will go to those who really need it. That is not an unreasonable precondition. The right hon. Gentleman mentioned the $100 billion Cologne target. However, only £50 billion of that is the HIPC initiative, with the rest being commercial debt and so on. I shall break down that $50 billion. Currently, with the nine countries that have gone through the process, there has been $15 billion of debt relief. If the 11 other countries get through the process by the end of the year, $35 billion of the $50 billion will be used for relief. That is very much approximating what we said at Cologne we would do. The other $15 billion is really to do with the countries that are in conflict.
Therefore, although I understand the frustration of all the campaigners on the issue and support very much the work of organisations such as Jubilee 2000--as the right hon. Gentleman knows, we have been at the forefront on these issues for the past couple of years--we have to make it clear that in some countries there are problems which prevent us from getting that money through.
I should like to take this opportunity to set out what the United Kingdom has done. We are increasing our aid budget by 20 per cent. in real terms in the next three years, with our aid:gross domestic product ratio rising to 0.33 per cent. We have already written off almost £250 million of debt, and we have made a commitment to write off a total of £1.7 billion of debt to the HIPC countries. We have pledged a bilateral contribution of $375 million for the HIPC trust fund, which is another important part of the process. We have announced a doubling of the amount that we are prepared to make available to improve access to drugs and medicines in developing countries. We have also led the way in tackling the problem of conflict, and particularly of conflict diamonds. We are also establishing with other countries a new taskforce on renewable energy, to help to bring clean electricity to 2 billion people who are currently without it.
If we add up all those sums, with the additional money that we are providing to fight AIDS, malaria and tuberculosis in Africa, it becomes clear that we have made more progress on the issue in the past three years than the United Kingdom has made for many decades. I think that we can be proud of that achievement.
Ms Joan Walley (Stoke-on-Trent, North): May I thank my right hon. Friend for his continuing efforts on debt relief, which will be welcomed by my constituents? However, with a new round of world trade talks about to begin, a new financial architecture is needed. What are my right hon. Friend's proposals for putting environmental issues at the very heart of the new trade agenda?
The Prime Minister: I shall deal first with the process of debt relief. Nine countries have now gone through the process. In Bolivia and Uganda, projects are under way and spending has been put in hand on schools, hospitals, infrastructure and jobs. The help for people in those countries is already visible as a result of the cancellation of debt. That shows how important it is to get the other countries through the process.
The WTO round will include environmental issues, but it is important that we ensure that questions to do with the environment and labour standards do not become a covert way of keeping out developing countries' goods. Therefore, I think that we must take account of the concerns that my hon. Friend raises, but we must do so in a way that is sensitive to the worry of developing countries that such concerns are merely back-door forms of protection.
Mr. Harry Cohen (Leyton and Wanstead): While I had my doubts about the leisure shirt in which my right hon. Friend the Prime Minister was photographed, I was pleased, overall, with the outcome of the summit. Will he give more detail about what was proposed for tackling the AIDS epidemic sweeping Africa? Are there practical proposals to enhance public health provision, have cheaper drug costs, enhance the village hospitals in Africa and, equally importantly, get African leaders on side so that they do not say that it is all just about poverty?
The Prime Minister: My hon. Friend makes a series of justified points. The target has been set for the reduction of AIDS. It is important, however, that that is backed up by concrete measures. We, for example, are increasing the amount of support that we are giving to AIDS programmes in Africa. What my hon. Friend refers to in respect of education and local hospitals is vital. I also agree with him that it is important to have a serious and open discussion on AIDS so that the measures that we are taking will be effective. At the Durban conference a short time ago, representatives from all over the world discussed the issue.
The poverty in which people live make it more likely that they will get the AIDS virus. That is absolutely true. What is also undeniably true is that unless we take preventive and educational measures, we have little chance of dealing with this issue properly. I hope very much that having set a specific target, and put in place the process to follow it up, we will be able to take the action necessary.
Mr. John Redwood (Wokingham): Will the Prime Minister tell us how many children in the poorest countries of Africa could have been educated in a primary school for a year with £450 million? Would that not have been a better use of most of the money spent on the summit? It would, after all, still have left £50 million to spend on a good few bottles of a very good wine so that delegates could get to know each other.
The Prime Minister: I have already explained the position on the cost of the summit. To ignore the additional effort that has been put into debt relief in this country and elsewhere, and to ignore the £18 billion to which the Japanese have committed themselves, is rather silly. Least credible of all is the Conservative party posturing as the friend of the developing world.
Mr. Steve McCabe (Birmingham, Hall Green): Is it not wonderful to know that Jubilee 2000 is so capturing the public imagination that it is winning new friends all over the place?
When the Government set targets in domestic politics, there are usually incentives or penalties to encourage Departments or agencies to achieve them. What steps will the world leaders take to make sure that their intentions are translated into action?
The Prime Minister: There are a variety of things that we can do, although it is obviously not the same as in domestic government. For example, on money laundering and the fight against organised crime and drugs, if we proceed on the current basis, the eight new measures that have been agreed by Finance Ministers will be implemented by each of the countries involved. There will then be a report back throughout the course of the next year on how that process is proceeding. The result of that will be substantial changes to the laws of various countries. That is an example of what we can do.
In respect of the targets on AIDS, malaria and tuberculosis in Africa, again there is a process in place. In a sense, the best thing is for us to be called to account for that. I think that, partly because of the Cologne process on debt, there is an obligation upon us to go further on debt. Even though people want us to go far faster and further, if we had not had that Cologne summit I do not think we would have even made the progress that has been achieved so far. Under a domestic Government, the matter is different, but there are none the less political incentives built into the process.
Mr. William Cash (Stone): Does the Prime Minister accept that there are Conservative Members who have taken a great interest in third-world debt? Indeed, I have done so since as long ago as 1989. I am also chairman of the all-party group on Jubilee 2000.
Which countries are holding back the process and why? Is there any truth in the suggestion, which I heard recently at a conference, that it is to do with the reforms demanded by the World Bank and the IMF? As it is absolutely essential that there is immediate relief for people who are living in degrading and impossibly poverty-stricken circumstances, will the right hon. Gentleman do what he can about evening out the conditionality imposed on the current debt relief proposals?
The Prime Minister: On the whole, most of the countries want the process to succeed. There are obstacles--for example, the attitude of some members of the US Congress has been a problem in getting the US to do what President Clinton wants it to do.
Some other countries are--let us say--slower than us on untying aid, which is also extremely important. Other countries are hesitant about opening up their markets to the goods of the least developed countries. However, we are making progress on all those issues.
I am happy to pay tribute to the work done by the hon. Gentleman and, indeed, individual Conservative Members on third-world debt, but I am afraid that I have to remind him that when his Government were in office for 18 years, they reduced substantially the proportion of national income going to overseas aid and assistance. This Government are raising that again. As a result, I am afraid, of decisions taken by the shadow Chancellor, the amount of money that we are now committed to putting into aid and assistance would, of course, be cut.
Mr. Ronnie Campbell (Blyth Valley): I hear what the Prime Minister says about AIDS and diseases in Africa. Can he give a Labour guarantee--although I do not like to use the word--that that money, or that programme, will start this very moment, this very year? I have been to Africa. I have seen the carnage and the millions of kids who are dying of AIDS and disease. Something needs to be done now--not years later, but now.
The Prime Minister: I can tell my hon. Friend that we are indeed--now--putting in the additional money to fight those killer diseases in Africa.
Mr. John McAllion (Dundee, East): Fifteen billion dollars of debt relief to just nine poor countries represents an abject failure to deliver on the commitment made at Cologne of $100 million to 40 countries this year. Given that the Prime Minister himself said that the G8 economies are in good shape, does he agree, in principle, that the priority is not closing the so-called global digital divide, but delivering on comprehensive debt relief--now? If the problem with that is conflict in the poor countries themselves, can he tell us what discussions took place at the G8 summit on how limits and controls might be placed on the arms industries--including the arms industries in the G8 countries, which, by and large, fuel those conflicts?
The Prime Minister: Let me explain again to my hon. Friend about the $100 billion. We are supposed to put three quarters of $50 billion through by the end of this year, so he can work out the figures. We have put $15 billion through and if we get the next 11 countries through, it will be $35 billion out of the $50 billion. I am not saying that we do not want to go faster and further--we do. Indeed, we would have gone further, but to describe what we have done as an abject failure is unfair.
Debt relief is important, but I am completely convinced of one thing--unless all the problems are tackled together, debt relief on its own will not do the business and will not produce the goods in Africa. We need to deal with the problems of health, trade and untying aid. We also need to deal with the problems of information technology. The truth is that if some of these countries were given access to information technology, it would have a fantastic benefit for them. We should not simply say that such an aim is pie in the sky from the richer countries. Potentially, many countries are crying out for access to information technology and it is a scandal that it costs more to access the internet in Uganda than it does in Britain or the United States of America. That issue is important, too.
The reasons for conflict in such countries have far less to do with the international arms trade than, I am afraid, the attempt by certain factions in those countries to seize control of wealthy natural resources. The dispute in Sierra Leone has one very simple basis: it is to do with the diamond industry. The Revolutionary United Front in Sierra Leone got the conflict going again over the past few months because the United Nations threatened to take over the diamond industry. Therefore, we need to put in place a proper system that ensures that if diamonds come from an area of conflict, they are not sold on the international market. Dealing with basic questions of conflict prevention is immensely important.
I emphasise to my hon. Friend that I do not believe that debt relief, in itself, is enough. Another issue is the system of governance in those countries, and all the issues have to be dealt with to provide a solution to the problems.
Dr. Jenny Tonge (Richmond Park): Does the Prime Minister realise what enormous targets the summit leaders have set themselves? They have set targets to reduce the number of cases of TB and malaria by 50 per cent. and the number of cases of AIDS by 25 per cent. in 10 years. Those targets are quite extraordinary. Does he realise that the summit leaders have already slipped on their targets for debt relief and that the World Bank's recent report, "Can Africa claim the 21st century?" has shown that many more people are living in poverty now than there were 40 years ago? Are not such targets just a lot of hot air?
The Prime Minister: No--that is unfair and wrong. If, in fact, we get the additional 11 countries through by the end of this year, we will have very nearly met the target that we set in Cologne last year. [Interruption.] If I could just get the hon. Lady to understand my argument, she will see that as a result of that, we will have achieved more debt relief in one year than we did in virtually a decade before. It is always possible to say, "You should have done more and you should have done this or that." I agree that we need to do more, but to say that we have done nothing is wrong.
On the targets for AIDS, malaria and TB, let us take Uganda as an example--it has virtually halved its rate of AIDS. It is possible to take action, but only on the basis of targets that are put in place to act as a spur to countries to ensure that they do their utmost.
Mr. Harry Barnes (North-East Derbyshire): I shall ask only for an investigation. When the G8 countries consider the weaknesses of the global financial system, will they examine currency speculation, which has an horrendous impact on third-world nations? One option is the Tobin tax, which is a tax on currency speculation that the G8 could use to handle the massive problem of poverty in the third world. No Government are in a better position than this Government to take a lead on the issue, given the position they have taken on debt.
The Prime Minister: I do not think that I can offer my hon. Friend much comfort on the issue of a tax on the financial system. Part of the work that has been done by the financial stability forum is to do with highly leveraged institutions, hedge funds and so on. However, my own view is that proper systems of transparency and proper accounting standards are the most important issues for the international financial system.
A crisis develops when a financial system is not properly transparent and does not work according to established accounting standards. Dealing with that is the single most important thing that we can do, together with helping some of the poorest countries in the world to put their financial houses in order, which does not always need to be done in the old way of imposing very stringent conditions that they cannot meet unless they cut spending on basic services. However, it does mean working with those countries to make it clear, for example, that people who invest in them are investing in a robust commercial and legal system, and that the money that they put in goes to those for whom it is meant, not into the pockets of leaders or their friends.
We have made a lot of progress in the global financial system. However, our single biggest task is to get more countries to sign up to the transparency and accounting standards that are at the heart of a decent global system.
Rev. Martin Smyth (Belfast, South): We understand the Prime Minister's reticence about giving all the answers that some of us would like. We all congratulate him and those who have been doing positive work in debt relief and care, including an education programme in Nigeria, Kenya and Uganda which is largely led by a nurse from Northern Ireland and the Fellowship of Christian Students.
What steps does the Prime Minister think will be taken to quicken the approach of the 11 countries that could have been in the programme, as there seems to be a delay somewhere along the line, as was obvious from his statement? Does he agree that perhaps the most wealthy country in the world could do more? Allowing for the fact that individuals have done wonderful things, quite frankly there is something wrong when newspaper reports say that America will not be able to meet the Kyoto targets because of its own industrial needs.
The Prime Minister: The hon. Gentleman is right: a lot more could and should be done. To be fair to America, it is rarely President Clinton who blocks progress, but elements in Congress and the Senate.
There is a good chance that we can get the 11 countries through by the end of the year. We are working closely with those countries to get in order all the bits and pieces that need to be in order, so that the decision point can be reached. As I said, debt has been relieved in the first nine countries, and people going to Bolivia, Uganda and so on are already seeing the difference that that makes. Incidentally, the hon. Gentleman is quite right to pay tribute to the programme led by the nurse from Northern Ireland. It is one of the best programmes that we have, and she has done a fantastic job.
March 29th - May 3rd
Debt Relief
3. Mr. Malcolm Savidge (Aberdeen, North): What progress was made on speeding up debt relief for heavily indebted poor countries at the spring meetings of the World Bank and the International Monetary Fund. [119353]
The Secretary of State for International Development (Clare Short): At the spring meeting of the World Bank and the International Monetary Fund, agreement was reached to establish a joint World Bank-IMF committee to oversee the implementation of the enhanced heavily indebted poor countries initiative. The Chancellor and I have pressed for that, and hope that it will provide a focus for efforts to ensure that commitments made at the Cologne
3 May 2000 : Column 132
G7 meeting--that three quarters of eligible countries would start to receive debt relief before the end of the year--are met. It looks as though that target is slipping.
Mr. Savidge: Do the current World Bank and IMF estimates of the number of countries that will qualify for enhanced debt relief look as though they will reach the G7 target of three quarters, to which the Secretary of State referred?
Clare Short: I am grateful to my hon. Friend for that question. I did not attend the meeting, because my voice--which is still croaky--collapsed completely when I was meant to be in Washington. I am sad to say that the communique from the Development Committee stated that it was hoped that at least 20 eligible countries would start to receive debt relief before the end of the year. That is a reduction in the number in the Cologne commitment. All those who are concerned about debt relief--a concern shared widely throughout our society and across the world--should exert pressure to speed up the process. We are doing that as a Government, but other Governments are causing delays; that is a big worry.
Mr. William Cash (Stone): Would the Secretary of State be good enough to tell us which countries are responsible for the delay? Does she accept that members of the Jubilee 2000 all-party group are extremely concerned about the situation? I pay tribute to her for the honesty with which she has just expressed herself on the subject--she, too, is obviously deeply concerned. How much debt has been paid off? What steps are being taken to liaise with the proposed summit on the matter which the Pope is organising towards the end of this year?
Clare Short: I do not think that it would be wise for me to name countries that are causing delays. We need to exert that beautiful pressure that comes from civil society throughout the world on all the countries involved so that we can move forward. I ask the hon. Gentleman and all those involved in campaigning to do that. In the United States of America, there has been difficulty in obtaining the support of Congress for commitment to the multilateral debt fund. I know that the Administration are trying to get that support and that they would be grateful for any help to achieve that.
So far, five countries are on track with enhanced debt relief. Uganda has gone through the process completely. The amount of debt relief on offer is $100 billion of the $145 billion that is owed. That is a considerable sum.
I am aware that the Pope is holding a conference; that can only be good. I hope that it will contribute to keeping people to the commitments made at Cologne.
Mr. Andrew Reed (Loughborough): Although it is important that we have made progress on this issue, there obviously remains much work to be done. I urge the Secretary of State to give us at least a hint as to which countries are holding matters up, so that those of us who are involved with the Jubilee 2000 coalition can encourage others around the world to apply pressure on their own Governments, if they are holding things up.
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There is a feeling of real frustration that we have come so far, but have not yet delivered a real change for people in the third world.
Clare Short: I am grateful to my hon. Friend for his offer of support. It would be invidious to have a list of guilty parties. Not many major countries were involved in the G7 meeting at Cologne. We are about to go to Okinawa. Pressure on all to speed up the process and to keep to their commitments should be exerted across the international system. The new unit in the bank and the fund gives us an opportunity to put the pressure on, which is important. One of the great achievements is the decision that debt relief should go behind poverty reduction strategies. Some countries are calling for absolute perfection in those strategies. We are saying that we should put broad poverty reduction strategies in place, so that initial debt relief can flow and then be strengthened as time goes on. That is the right way forward.
Mr. Gary Streeter (South-West Devon): I know that the Secretary of State will be as disappointed as many of us are at the lack of progress in this special year, the year of Jubilee, when we want to make unique progress on debt relief. I know that she will share the concern of Kofi Annan, who said in March:
The deeper, faster and broader relief promised last year has yet to materialise.
I know that the right hon. Lady is working hard on this matter and will be disappointed, but, apart from the joint implementation committee, what specific plans does she have to break through the current logjam?
Clare Short: I am sorry to disagree, as usual, with the hon. Gentleman. There has not been a lack of progress. The most stupendous achievement has been made, primarily by the Church and faith groups across the world and by other parts of civil society, in pressing the leadership of the richest countries in the world to agree more generous debt relief to mark the year 2000. The enhanced heavily indebted poor countries initiative and the decision to put the focus on poverty reduction strategies are considerable achievements. Five countries are already on track and one has completed the process. So that is all good, and it is considerable progress.
We are seeing some slippage in the number of countries coming through against the target set at Cologne of three-quarters of eligible countries on track by the end of 2000. I think that the situation is retrievable. With enough pressure, countries will get back on track, and that must be our shared objective.
Mr. Streeter: I know that the Secretary of State is working hard on the matter, but I am sure that she will agree that the granting of debt relief to only five countries after all these years and after four months of the year 2000 is not a significant achievement. May I put a practical suggestion to her? Between now and the G8 summit in Japan in July, will she make debt relief her highest priority? Will she engage in a round of shuttle diplomacy with her counterparts in G8 countries, the IMF and the World Bank? Will she put every last ounce of effort into
3 May 2000 : Column 134
the project between now and July so that for all those living under the crippling burden of unpayable debt, the year 2000 really will be a year of delivery?
Clare Short: I am grateful for the hon. Gentleman's concern, but he is wrong to suggest that, only this far into the year, to have five countries on track for the much more generous debt relief that has been agreed as a result of the international campaign is a disaster. It will be a disaster if we do not get three quarters of eligible countries through by the end of the year. Pressure from him and all of us, including me, could achieve that objective. I certainly promise him that I and my right hon. Friend the Chancellor will continue to exert all the pressure that we can. I am not in favour of shuttling around the world, as some politicians do, for its own sake, but I promise that I shall do everything in my power, as will my right hon. Friend the Chancellor. I hope that with the help of the hon. Gentleman and all hon. Members, we shall make sure that we keep to the Cologne commitment.
6 April 2000: G8 (Debt Cancellation)
21. Ms Drown: To ask the Chancellor of the Exchequer what discussions he is having about further multilateral debt cancellation with G8 colleagues in advance of the G8 Finance Ministers' meeting. [116623]
Miss Melanie Johnson: Discussions about the multilateral Heavily Indebted Poor Country Initiative take place among G7 members on an on-going basis. The Chancellor of the Exchequer will discuss progress and implementation of the enhanced HIPC initiative at the G7 meeting of Finance Ministers and Central Bank Governors on 15 April, and in the run-up to the Okinawa Summit.
5 April 2000
Debt Cancellation
Mr. John M. Taylor: To ask the Secretary of State for International Development what is her policy in relation to cancellation of third world debt on discrimination in favour of aid recipients which have exercised good stewardship of aid received. [117405]
Clare Short: The purpose of giving debt relief is to benefit the poor. I welcome the international agreement that this should be the main criterion for debt relief. Under the enhanced Heavily Indebted Poor Countries (HIPC) initiative, countries will produce poverty reduction strategies which set out policies and programmes to tackle poverty. The strategy will then provide a framework for all poverty reduction resources available to the country--Government revenue, debt relief savings and international development assistance.
I welcome the IMF and the World bank commitments to use the Poverty Reduction Strategy Papers (PRSPs) as a basis for their programmes of support. In countries committed to poverty reduction, our bilateral country strategies will take their lead from the PRSP, and I encourage other bilateral donors to do likewise.
4 Apr 2000 : Column: 453W
Third-world Debt
Mr. Wigley: To ask the Chancellor of the Exchequer what progress the Government have made to date with regard to relieving Third-World debt; and what further initiatives the UK plans to take to help tackle the remaining significant debt problem. [117685]
Miss Melanie Johnson: The Government are providing 100 per cent. relief on the debts of those countries (Bolivia, Mauritania and Uganda) that have already reached decision point under the Heavily Indebted Poor Countries (HIPC) initiative. Mozambique is also receiving 100 per cent. relief on the debts it owes to ECGD, in advance of its reaching decision point under the HIPC initiative. This is to aid the country in its reconstruction efforts after the disastrous effects of the floods.
The UK is pressing for swift and successful implementation of the existing debt relief package, which will reduce the debts of the poorest countries by $100 billion.
Third-world Debt
4. Mr. Chris Pond (Gravesham): What recent progress has been made on debt relief for the poorest countries; and if she will make a statement. [115432]
29 Mar 2000 : Column 327
The Secretary of State for International Development (Clare Short): Debt relief under the enhanced heavily indebted poor countries--HIPC--initiative has been agreed for the first three countries, with Mozambique, Senegal and Tanzania being assessed next. Under the new framework, countries are required to develop poverty reduction strategies, which are published, to qualify for debt relief. In that way, we shall ensure that debt relief will help the poor. We are concerned that progress in finalising enhanced debt relief is slower than was originally promised and agreed.
Mr. Pond: I thank my right hon. Friend for that answer. She will be aware of the Jubilee 2000 claim that 19,000 children die every day as a result of debt. Although I recognise and welcome the progress made under her leadership by the UK Government on this issue, will she do everything she can to instil a sense of urgency in some other countries in order to reach the commitment made at Cologne that, by the end of this year, 25 countries will be brought to decision point? Time is running out for those countries, and time is running out for those children.
Clare Short: My hon. Friend is right. The promise that three quarters of the eligible heavily indebted poor countries would have received their enhanced debt relief by the end of 2000 is slipping; it is in danger of not being met. The Government are doing all in our power to exert pressure in Washington to achieve speedier processing of applications. We could do with the support of all Members of Parliament and, indeed, the Jubilee 2000 coalition to put pressure on all the Governments involved as well as the International Monetary Fund and the World Bank so that the promises are kept.
Mr. Gerald Howarth (Aldershot): Does the Secretary of State agree that, if she were to continue with the debt relief package to Zimbabwe, that would send the most appalling message to other countries that, however badly they behaved, they could, nevertheless, be the beneficiary of debt relief? Will she and the Government take action to deal with the appalling situation in which the only productive element in the economy--that of the white farmers--is being destroyed in an otherwise bankrupt system? May we please have some action from the Government--at least by having Zimbabwe suspended from the Commonwealth?
Clare Short: This substantive question is not on Zimbabwe either. Zimbabwe is not a highly indebted poor country, nor is it eligible for debt relief. I agree with the hon. Gentleman that the situation in that country is extremely serious; the whole economy, including farming, is in trouble. No fuel is available; the economy is grinding to a halt, and the situation is desperately serious for all concerned. We must do everything we can to get Zimbabwe back on track for the sake of all its people--black and white.
Mr. Desmond Browne (Kilmarnock and Loudoun): In answer to my hon. Friend the Member for Gravesham (Mr. Pond), my right hon. Friend expressed her dissatisfaction with the rate of progress in the delivery of
29 Mar 2000 : Column 328
relief to heavily indebted poor countries. Could she tell the House about the administration blockage in that process and what steps can be taken to clear it?
Clare Short: I am grateful to my hon. Friend for that question. Behind closed doors in Washington, in the processes of the World Bank and the IMF, countries are able to take up positions that are not the same as those they take in public. Some countries have not yet found the resources they owe to the HIPC trust fund in order to carry through the process. However, we have all agreed that countries that establish broad poverty reduction strategies should be able to get on track. They can then refine the programme and receive complete debt relief later. Some countries in the IMF and World Bank put down so many conditions that it takes much time to get countries moving. The whole international community needs to exert pressure over that matter.
Heavily-indebted Poor Countries
Dr. Tonge: To ask the Chancellor of the Exchequer what plans he has to review the HIPC II process at the G8 Summit in Okinawa. [116545]
Miss Melanie Johnson: The Chancellor of the Exchequer discusses progress on the HIPC initiative with G7 colleagues on a regular basis, and will do so at the G7 meeting of Finance Ministers and Central Bank Governors on 15 April, and in the run-up to the Okinawa Summit.
Heads of Government will, at the G8 Summit in Okinawa, discuss progress on implementing the enhanced HIPC initiative agreed at last year's Cologne Summit.
Dr. Tonge: To ask the Chancellor of the Exchequer what recent discussions he has had with the World bank and IMF concerning the heavily-indebted poor countries due to qualify for debt cancellation by the end of 2000. [116546]
29 Mar 2000 : Column: 148W
Miss Melanie Johnson: The Chancellor and Secretary of State for International Development wrote to the Managing Director of the IMF and the Chairman of the World bank in January. In addition, the Chancellor will be holding discussions with the World bank and IMF during the course of the Spring Meetings next month, in his capacity as chairman of International Monetary and Finance Committee. The Secretary of State for International Development, as a member of the Development Committee, will also be discussing the issue of HIPC and progress on Poverty Reduction Strategies.
29 March 2000: Third-world Debt
3. Mr. Cash: To ask the Secretary of State for International Development if she will make a statement on current third-world debt. [115431]
Clare Short: Debt relief under the enhanced Heavily Indebted Poor Countries (HIPC) Initiative has been agreed for the first three countries, with Mozambique, Senegal and Tanzania being assessed next. Under the new framework, countries are required to develop poverty reduction strategies to qualify for debt relief. We are concerned that progress in finalising enhanced debt relief is slower than was originally agreed.
Prime Minister's Questions Wednesday 8th March
Mr. David Crausby (Bolton, North-East): Although the threat of drowning has receded for the people of Mozambique, the dangers of starvation and economic instability certainly have not. Will my right hon. Friend assure me that this Government will do all in their power to alleviate those longer-term problems and urgently consider the cancellation of Mozambique's debt?
The Prime Minister: Of course, the Chancellor has given the commitment to 100 per cent. cancellation of the Mozambique debt. The lead that he has given on debt relief throughout the developing world is appreciated in that part of the world. In respect of Mozambique, we have acted more quickly and given more than probably any other country--not only £8 million in direct emergency aid, but more assistance. Both the United Nations emergency co-ordinator, Ross Mountain, and President Chissano of Mozambique, have paid tribute to this country's efforts. However, I should like to pay tribute to our service people and aid workers who have performed heroically in difficult and harrowing circumstances.
8 Mar 2000: Debt Relief
Mr. Alexander: To ask the Secretary of State for International Development what assessment she has made of the impact of the Government's policy on debt reduction on her target of halving world poverty by 2015. [113495]
Mr. Foulkes: The Government have continually emphasised that the purpose of debt relief is to enable countries to make greater progress on reducing poverty and achieving the international development targets. Our submission to the review of the Heavily Indebted Poor Countries (HIPC) initiative set out ways in which the impact of debt relief on poverty reduction could be increased, and I welcome the improvements to the HIPC framework that have been agreed internationally and are now being implemented. The revised HIPC initiative both provides deeper and faster debt relief to qualifying countries, and ensures that a poverty reduction strategy is put in place so that all development resources, including those freed up by HIPC debt relief, can be invested effectively in anti-poverty programmes.
6 Mar 2000 Export Credits Guarantee Department
Mr. Alexander: To ask the Secretary of State for Trade and Industry if he will list the unrecovered loans issued by the Export Credits Guarantee Department (a) between 1979 and April 1997 and (b) since May 1997 which are attributable to defence related contracts, including details of (i) equipment, (ii) country and (iii) financial amount. [112959]
Mr. Caborn: The information readily available is as follows:
(a) the value of claims paid by ECGD in respect of defence-related contracts under guarantees issued between the mid 1980's and April 1997 and which remain outstanding for recovery as at 29 February 2000 is as follows:
Country £ million
Value of claims outstandingAlgeria 98 Egypt 46 Indonesia 169 Jordan 253 Kenya 16 The equipment supplied under these contracts includes aircraft, artillery, naval vessels, vehicles, communications and ancillary equipment.
(b) there have been no claims paid by ECGD in respect of defence related contracts under guarantees issued since May 1997.
Mozambique
Mr. Corbyn: To ask the Chancellor of the Exchequer what recent debt write-off arrangements have been agreed with the Government of Mozambique that cover payments to countries which are in receipt of IMF assistance. [112927]
Miss Melanie Johnson: As my hon. Friend will be aware, at the Chancellor's initiative, the UK will relieve 100 per cent. of Mozambique's outstanding bilateral official debt and will receive no further debt payments from that country.
In July 1999, as part of the Heavily Indebted Poor Countries debt initiative, bilateral official creditors in the Paris Club agreed to 90 per cent. debt reduction for Mozambique. Two of these creditors are in receipt of IMF assistance. The Government are not a party to the negotiations of other bilateral official creditors which have been encouraged to offer similar levels of debt reduction.
International Monetary Fund
Dr. Tonge: To ask the Chancellor of the Exchequer what representations he has received concerning the selection of a new managing director of the IMF; and if he will make a statement.
Miss Melanie Johnson: The usual informal consultations are now under way to appoint a new managing director of the IMF. We expect the Executive Board to reach a formal decision in due course.
1st March, 2000 International Development Questions
Mr. Jim Cunningham (Coventry, South): If she will make a statement on the action taken by her Department to ensure that debt relief is linked with poverty eradication.
The Secretary of State for International Development (Clare Short): The Government contributed a paper to last year's review of the heavily indebted poor countries initiative, a copy of which is in the Library. We argued that, to qualify for debt relief, countries should develop a national poverty reduction strategy. The strategy should set out the Government's policies and actions to tackle poverty, and demonstrate how all resources will be allocated, including those arising from debt relief. Governments should consult their public and the international financial institutions in formulating the strategy, so that it commands broad-based support. I strongly support this approach, which was agreed at the annual meetings of the World Bank and the International Monetary Fund in September, and is now being implemented. In this way, debt relief will help to achieve a stronger commitment to policies to reduce poverty.
Mr. Cunningham: Given the number of natural disasters, particularly that in Mozambique, what practical steps have been taken to help to restructure and rebuild those economies that have been affected, and can my right hon. Friend give some examples of poverty relief schemes?
Clare Short: Debt relief on its own cannot help countries to restructure their economies. It can remove the hangover of debt that prevents Governments from using their money well, and we can give such countries further support to help them to manage their economies better. In Mozambique, we have a crisis and we need to save lives, but there will be a massive reconstruction effort. The reduction of poverty requires good macro-economic management to attract domestic and inward investment to help the economy to grow; children need to be educated and basic health care needs should be met. The poverty reduction strategies that are developing alongside debt relief will help to achieve such policies.
Dr. Jenny Tonge (Richmond Park): Under the HIPC2 initiative, Mozambique was due to qualify for more debt relief this year, but that would only have reduced its debt service bill to $62 million a year, which would still have been more than its total spending on health and education. That fact, combined with the destruction of its infrastructure due to the floods, means that it will be years before Mozambique ever reaches the level that it was at even two weeks ago. Will the right hon. Lady reassure the House that she will press the international community to strengthen long-term aid for Mozambique and press for immediate 100 per cent. debt cancellation?
Clare Short: As we said on Monday, Mozambique has been a star reformer since the end of the civil war, and that is admirable for one of the poorest countries on earth. The present crisis is a tragedy because it has been driving its economy forward. However, at the moment, it has big reserves because its Government's capacity to spend is so weak. We must get it through this crisis. Yes, it must have its full debt relief and the debt overhang must be removed. As the hon. Lady knows, Britain is committed to 100 per cent. debt relief, for which Mozambique has qualified. It will repay no more money to the UK, and yesterday the Chancellor pressed other Governments to do the same. After the immediate crisis in Mozambique, the big job will be to help with the reconstruction when it will draw down on many of its reserves, but it will need more support.
Mrs. Maria Fyfe (Glasgow, Maryhill): I congratulate my right hon. Friend on the rapid response of sending two plane loads of small boats to Mozambique. Does she agree that, while, of course, corruption must be rooted out for the good of those who suffer poverty, it can far too easily be used as an excuse by those mean people who do not want to give money to good causes and simply refuse to cough up?
Clare Short: I agree that we must find ways of helping. In countries with grave corruption we should not allow the poor who are the victims of that to become victims twice over by denying them help from the international community. The poor pay the price for corruption in the loss of economic development and by having to pay bribes for basic services. We must root out corruption to obtain faster development and eradicate poverty, and the international community is now, at last, addressing that.
Mr. Bowen Wells (Hertford and Stortford): Last week, when the International Development Committee visited Malawi--one of the poorest countries--the Finance Minister told us that with HIPC, for which the country does not yet qualify, it would receive a reduction in capital repayments and interest on its indebtedness of only $30 million. Therefore, the reduction per year would be from $120 million to $90 million, which is insufficient. Is the right hon. Lady satisfied that HIPC is generous enough and that, when there are savings, those will be concentrated on poverty reduction in the spheres of health and education?
Clare Short: It is my view that the enhanced HIPC, which will cancel $100 billion of debt--the highly indebted poor countries have $145 billion of debt--is about right. Countries have to be responsible about their borrowing, but HIPC will reduce it to reasonable proportions. Malawi is a desperately poor country, which inherited limited capacity from a dictatorship. The United Kingdom has a large and growing programme. My view is that HIPC2 is the right balance. Beyond that, we should help countries to get their debt down to manageable proportions and to drive forward by borrowing wisely and receiving aid, not focusing on ever-increasing amounts of debt relief. HIPC is about right and we should speed up implementation.
Mr. Desmond Swayne (New Forest, West): If she will make a statement on the role of development banks in her Department's policies.
The Secretary of State for International Development (Clare Short): The Government are a major shareholder in, and work closely with, all the key multilateral development banks--the World Bank, the Asian Development bank, the Inter-American Development bank, the African Development bank, the Caribbean Development bank, and the European Bank for Reconstruction and Development. I am the United Kingdom governor of the development banks, and an alternate governor of the EBRD. UK representatives sit on the boards of all the banks, which have the capacity to contribute significantly to development. The regional banks have special authority in their regions. Since May 1997, we have worked to ensure that all the development banks focus their efforts on achieving international poverty eradication targets.
Mr. Swayne: I thank the right hon. Lady for that reply. The state of the road network in Mozambique has significantly impaired relief and rescue efforts. However, a 30-month programme for rehabilitation of Mozambique's roads is due for appraisal by the African Development bank at the end of May. What can the Department for International Development do to pressure banks to develop infrastructure in countries prone to natural disasters?
Clare Short: The African Development bank went through a bad phase of overlending and inefficiency, but has become much more efficient under the leadership of President Kabbaj. I believe that the public sector should contribute to road-building where private finance cannot work. In Mozambique, that idea applies largely to rural roads, which make a difference if people are to improve their livelihoods by getting their crops to market or to get their children to school.
Africa has suffered because roads have been built but not maintained. We must encourage the private sector to become involved and the public sector to organise itself to maintain roads. The African Development bank should help to achieve a network in collaboration with the private sector, and the public sector should help rural people to have basic roads. The hon. Gentleman was right to say that Mozambique needs masses of them.
Mr. Tony Worthington (Clydebank and Milngavie): It is greatly to the Government's credit that we can talk more widely about organisations in which we are major shareholders. Particularly welcome is the Asian Development bank's recent commitment to having the eradication of poverty as one of its major purposes. Does my right hon. Friend welcome that commitment, and does she hope that other bodies will follow suit?
Clare Short: I do, indeed, and I admire the leadership given to the Asian Development bank by President Chino. My hon. Friend's point is similar to that made by the hon. Member for New Forest, West (Mr. Swayne): we need feasibility studies and regulatory systems that will bring private sector investment into major infrastructure, and we need to use the development banks to strengthen social sectors and focus on poverty. President Chino has done that effectively, and I am very impressed.
Private Notice Question on Mozambique, 28th Feb 2000
(extracts)
Dr. Jenny Tonge (Richmond Park) ...Will the Secretary of State comment on reports that Mozambique still has not received its debt relief, because of International Monetary Fund objections?
The Secretary of State for International Development (Clare Short): ...Mozambique received $1.5 billion in debt relief in July 1999 and will get more in March. It has reserves, and it will need a great deal of money to reconstruct the country, but the problem at present is not money to spend: it is deploying on the ground to save people's lives.
Mrs. Cheryl Gillan (Chesham and Amersham): ...On debt relief, I note from the Minister's comments earlier today that no repayment of debt relief will be expected by the UK from Mozambique this year. Can the Secretary of State give us an assurance that no repayment will be expected in the subsequent year? Will she comment on the fact that half the $8.3 billion debt owed by Mozambique is to Russia, Italy and France? Can she give the House an undertaking that she will discuss with those countries the opportunities that they will offer Mozambique for debt relief?
Clare Short: ...As I said earlier, debt relief will be important for reconstruction later. It is not currently an issue. The Government of Mozambique have considerable reserves that they will need to deploy. There are no payments due to the United Kingdom Government. We are not a big creditor of Mozambique's. We are discussing with other Governments ways in which to speed up HIPC 2 and how they can match us on 100 per cent. debt relief. We shall do all that we can.
Westminster Hall adjournment debate, Thursday 18 February
(extracts)
The Minister of State, Foreign and Commonwealth Office (Mr. Peter Hain) : ...A third challenge is to lift the debt burden that is crushing Africa. In 1998, sub-Saharan Africa's total debt was $226 billion, its new grants from the international community amounted to $15 billion and total debt service payments by Africa amounted to $15 billion. The net inflow to Africa was zero. Debt relief can free resources for priority spending and promote investment, and thus help poor countries to support poverty reduction, health and education. That is why the Government have led the international community in pushing for faster, deeper and wider debt relief.
Our support is not unconditional. Debt relief will work only when African Governments are committed to tackling poverty and to economic policies necessary to encourage growth. When they are, we shall back them to the hilt and support them in the international financial institutions.
Mr. William Cash (Stone): Does the Minister agree that we must have an even harder and better policy on debt relief, and that it is important that we trace the millions, if not billions, of pounds that have been salted away in Swiss bank accounts? Our policy should guarantee--as far as it can--to get the money back by tracing it, in the same way as moneys associated with the Jewish holocaust have been traced.
Mr. Hain : I welcome the hon. Gentleman's contribution. We are working with the Nigerian Government to trace the hundreds of millions--possibly the billions--that were salted away by the previous regime of Abacha, and by his family. Some of it might be in Britain. The hon. Gentleman raises a serious issue that we are seeking to address.
Ms Julia Drown (South Swindon): ...Debt relief is another important issue, on which the Labour Government have a fantastic record. Two years ago, many people would not have believed that we could come so far. The Government have offered 100 per cent. debt cancellation to countries that are committed to tackling poverty. The problem is, however, far from solved. Only three countries--two in Africa--have had their debts cancelled under the Cologne initiative. One is Mauritania, which received help through HIPC, but will still have to spend more on its annual debt service repayments than on health or education.
In Mauritania, 62 per cent of adults cannot read. What does that say about people who have to live in this increasingly globalised and technology-driven world? One in three children receive no education, yet the country has to make $80 million repayments every year, even after HIPC, which could more than double the health and education budgets. There is still such a long way to go.
Mozambique is one of the poorest countries on many indicators. It received help under HIPC I, having met all the IMF's strict requisite conditions. Yet the country will not benefit from HIPC II until June this year at the earliest. That may seem soon, but every day that passes destroys opportunities and takes away lives. One reason for the delay is the need for these countries to produce poverty reduction strategies before they may be helped. The lack of such a strategy causes the delay. We must pile in help so the country can devise its strategy and overcome the obstacle as soon as possible.
Even when June 2000 arrives, this poor country will still have to spend $62 million--more than it currently spends on health--on debt repayment. That is in a country where three-quarters of the population have no access to safe water or sanitation. Those are countries that are in the HIPC--heavily indebted poor countries--initiative. There are others which, although very poor, are outside HIPC.
Nigeria was dropped last year for technical reasons. It is Britain's biggest debtor amongst the poorest countries, but it is not expected to benefit from the Chancellor's 100 per cent. promise. It is a new democracy with a new Government who are struggling to establish economic and social stability. They are under an impossible burden of debt. Creditor countries, including the UK, lent freely to previous military regimes and we must share responsibility for freeing Nigeria from that debt crisis, which is constraining development.
I urge the Government to take still further action on debt relief. I congratulate them on everything that they have done, but we need to put more pressure on G8 countries to take forward the agenda for faster, deeper debt relief. We must urge the other G8 members who have not made the 100 per cent commitment on bilateral debts to do so. Italy, Germany, Japan and France must follow the lead that this country has taken. We can be rightly proud of it. We must also urge the United States--the richest country in the world--to put money into an HIPC trust fund to cover some of the multilateral relief costs. There has been a proposal to Congress this week about that. We must ensure that that money is delivered.
Some of the subject matter of the debate can sound dry and technical, but it has inspired children and adults alike in this nation. We hardly remember the pain of hunger, but we sometimes have pangs after just a few hours of not eating. People in Africa go through that pain day after day. Perhaps all of us know someone with HIV or, worse, someone who has died of AIDS; perhaps we know someone who has lost an arm or even their life because of the arms trade. We know the pain that that causes when it happens to one person, but in Africa that pain is writ large in millions and millions of lives. The Government are doing a lot, but we cannot rest. There is so much to do before we can deliver opportunities for people in Africa.
16 Feb 2000: Okinawa G8 Summit
Ms Drown: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will list the dates of the preparatory meetings of officials for the Okinawa G8 Summit in July.
Mr. Hain: So far there have been two meetings of senior officials to prepare for the Okinawa Summit. G8 Heads' Representatives met on 23-24 January and Foreign Ministry officials met on 5-6 February. Between now and the Summit there will be further meetings of these and Finance Ministry officials to prepare the Summit agenda. In addition there are a number of expert level groups looking at different issues on the G8 agenda such as Nuclear Safety and Non-Proliferation. The Japanese Presidency of the G8 has not publicised the dates yet.
Meetings of Education, Environment, Finance and Foreign Ministers have also been arranged in advance of the Summit (on 1-2 April, 7-9 April, 8 July and 12-13 July respectively).
G7/8 2000 calendar Date
January 22 Finance Ministers' Meeting (G7) Tokyo, Japan 23-24 Sherpa Meeting Kyoto, Japan February 5-6 Foreign Affairs' Sous-Sherpa Meeting Nara, Japan 9 Education Ministers' Preparatory Meeting Tokyo, Japan 28-29 Political Directors' Meeting Kyoto, Japan March 4 Finance Sous-Sherpa Meeting Kyoto, Japan 11-12 Foreign Affairs' Sous-Sherpa Meeting Karuizawa, Japan April 1-2 Education Ministers' Meeting Tokyo, Japan 4-5 Sherpa Meeting Ireland 7-9 G8 Environment Ministers' Meeting Japan 15 Finance Ministers' Meeting Washington DC May 15 Finance Sous-Sherpa Meeting Karuizawa, Japan 15-16 Sherpa Meeting Karuizawa, Japan 27-28 Political Directors' Meeting Miyazaki, Japan 28-29 Foreign Affairs' Sous-Sherpa Meeting Miyazaki, Japan June 17 Finance Sous-Sherpa Meeting Fukuoka, Japan 29-1 Plenary Sherpa Meeting Okinawa, Japan July 8 Finance Ministers' Meeting Fukuoka, Japan 12-13 Foreign Ministers' Meeting Miyazaki, Japan 21-23 G7/8 Annual Summit Okinawa, Japan Questions to the Chancellor of the Exchequer, 3 Feb 2000
Mr. Andrew Reed (Loughborough): What steps he is taking to persuade other countries to offer 100 per cent. bilateral debt relief to all countries which qualify for debt relief under the enhanced highly indebted poor countries initiative.
Mrs. Betty Williams (Conwy): What discussions he plans to hold with his counterparts in other G7 countries about measures to write off the debt of the highly indebted poor countries.
The Chancellor of the Exchequer (Mr. Gordon Brown): I am delighted that the French Finance Minister announced at the G7 meeting in Tokyo on 22 January that France, too, will provide 100 per cent. debt relief to all countries that qualify for debt relief under the highly indebted poor countries initiative. I have urged my other G7 colleagues and other countries to make similar commitments. I believe that further commitments will be announced in the run-up to the International Monetary Fund meetings in April.
Yesterday, Mauritania received the debt relief--the first country to benefit under the new enhanced initiative. Tomorrow, I believe that Bolivia will receive the debt relief that it is due, and in the next few weeks Uganda will receive its relief. The initiative is working, and I am grateful to all the Churches and community organisations which joined the campaign to make it possible.
Mr. Reed: I am sure that the House would wish to congratulate the Chancellor on his worldwide moral lead, which has been described as
"wonderful news and shows welcome vision and leadership".
Those are not my words, but those of Ann Pettifor, the director of Jubilee 2000. However, countries such as Japan and Germany are still owed large debts that far outweigh the amounts that the United Kingdom has managed to write off. Will my right hon. Friend apply pressure over the next few weeks to ensure that those debts are relieved and that real poverty reduction is felt in the countries that really need it?
Mr. Brown: I thank my hon. Friend, who leads a House of Commons group that has widely publicised the case for debt relief. The third-world countries need and should have debt relief; that should be no source of division in the House, and I hope that the Conservative Opposition will support our efforts. He is right that debt relief must lead on to poverty relief and economic development. In 1999, the world woke up to its obligations on debt relief; in 2000, we must create a virtuous circle of debt relief, poverty relief and economic development. I shall continue to press other countries. I believe that Norway and Sweden will make announcements similar to our own, and that some other G7 countries are ready to make further announcements. The widely welcomed initiative that Britain took before Christmas had a purpose and has brought results.
Mrs. Williams: Is my right hon. Friend aware of widespread support up and down the country for the announcement that he and my right hon. Friend the Secretary of State for International Development made before Christmas? I join other hon. Members in congratulating Jubilee 2000 and other organisations on their campaigning techniques. Can my right hon. Friend assure us that he will, in future discussion with G7 countries, make it crystal clear that the heavily indebted poor countries that save money will not invest it in armaments?
Mr. Brown: I am grateful to my hon. Friend, who has led the campaign on debt relief in her constituency alongside churches and community organisations. During the past year, we have seen one of the greatest displays of togetherness among religious denominations and non-governmental organisations as they have alerted people in Britain and across the world to the problem. She is right that debt relief must be used for poverty relief. It must not be spent on weapons of war, corruption, bureaucracy or waste. That is why we took our unilateral action.
My right hon. Friends the Secretary of State for International Development and the Secretary of State for Trade and Industry and I have said that we will not extend export credits to 63 of the poorest countries in which export credits would lead to unproductive expenditure, such as spending on military weapons. It is unfortunate that the Conservatives have not supported that measure, and I hope that they will change their minds.
Mr. William Cash (Stone): As the Chancellor of the Exchequer may know, I chair the all-party group on the reduction of third-world debt and have tried to take a constructive interest in the Government's views and to encourage them where possible. He will also know that many millions of people in the UK and the rest of the world have signed the petition on the reduction of third-world debt.
In December, the Chancellor said that four countries would qualify by January, but have not only three done so? One of those is Mauritania, whose record on, for example, child labour is somewhat indifferent. Why will only three, not four countries qualify? Why has Guyana been demoted after having apparently been given assurances on the internal workings of its economy by an official of the International Monetary Fund? Will the Chancellor look into that question and find out why Guyana has not been give the debt relief that it deserves?
Mr. Brown: Of course, I will look into the matter. The hon. Gentleman is right; hundreds of thousands of people in the UK have been involved in the campaign. At the Treasury, we have received tens of thousands of letters asking us to take action on the matter--including one that I received before Christmas from my mother. We have been trying to get countries through the initiative as quickly as possible.
The hon. Gentleman asked why the fourth country--Mozambique--has not yet completed the process, when we had hoped that it would have done so by the end of January. I hope that he will follow these matters closely, because the reason is that Mozambique asked to be given time to formulate its poverty reduction strategy to present to the IMF board and the World Bank. It is not a delay on our part, so he should not criticise us; it was at the country's request.
As for other countries, we hope that 11 will be through the process by Easter, and 24 by the end of the year. The speed of progress will depend on the submission of poverty reduction plans. It is critical that we know that the debt relief will go to poverty relief. In the case of Uganda, we have already been promised that the country will halve the pupil-teacher ratio in schools from 100:1 to 50:1. We have also been promised that every child in Uganda will be educated in a classroom in a school building. [Interruption.] I would have thought that the Opposition would be interested in hearing those facts.
Mr. Gerald Howarth (Aldershot): Madam Speaker, you will have heard the Chancellor of the Exchequer repeat the claim that he made on 11 January that, in the Government's great, bold manoeuvre, no fewer than 63 countries would be removed from eligibility to benefit from the support for defence exports of the Export Credits Guarantee Department. Will he confirm that, during the past 13 years, only one of those 63 countries--Kenya--has been the beneficiary of ECGD support, and that it is unlikely that Vanuatu was high on the list of British Aerospace's prospects? I invite him to acknowledge that his manoeuvre was, at best, empty and, at worst, misleading and disingenuous.
Mr. Brown: The hon. Gentleman does not understand what happened. The reason that we have not given export credits to those countries during the past few years is that we banned them unilaterally two and a half years ago. That is why they are not receiving export credits for their expenditure on arms.
The hon. Gentleman asks me to answer for everything that happened under the previous Conservative Government. Even with the best will in the world, I cannot do that. I cannot explain all their actions. In January, we extended the list from 40 to 63; again, I would have thought that the Conservative party would have supported that.
20 Jan 2000: Debt relief
Mrs. Gillan: To ask the Secretary of State for International Development what budget is available from her Department to monitor and measure the bilateral debt relief initiative.
Mr. Foulkes: I refer the hon. Member to my reply of 19 January 2000, Official Report, column 479W. No attempt is made to disaggregate the resources which the Department for International Development (DFID) spends on monitoring and assessment of its bilateral programme.
Mr. Streeter: To ask the Secretary of State for International Development when she expects each of the heavily indebted poor countries to qualify for bilateral debt relief; and what assessment has been made of the amount of extra money each country will have to spend on poverty eradication in the financial years (a) 1999-2000, (b) 2000-01 and (c) 2001-02. [105744]
Mr. Foulkes: Decisions have not yet been taken on the amount and timing of each country's debt relief under the enhanced Heavily Indebted Poor Countries (HIPC) Initiative. The policy announced by the Government on 21 December is to provide complete relief on the remaining debt owed to the UK, after HIPC debt relief has been granted. The specific amount of extra relief that each country will receive in any one year cannot be known until decisions have been taken on their HIPC debt relief. The Government are working with the World bank and the IMF to ensure that countries come forward for HIPC relief as soon as possible; our target is that three quarters of countries receive relief before the end of 2000.
Mr. Streeter: To ask the Secretary of State for International Development in which of the countries qualifying for bilateral debt relief her Department has a representative.
Mr. Foulkes: Countries that could be eligible for bilateral debt relief, if their governments are committed to poverty reduction, are Angola, Benin, Bolivia, Burkina Faso, Cameroon, Democratic Republic of Congo, Republic of Congo, Cote d'Ivoire, Ethiopia, Ghana, Guinea, Guyana, Kenya, Liberia, Madagascar, Malawi, Mali, Mauritania, Mozambique, Nicaragua, Niger, Senegal, Sierra Leone, Somalia, Sudan, Tanzania, Togo, Uganda, Vietnam, Yemen and Zambia. The UK Government have representatives accredited to all these countries. DFID has offices in Kenya and Tanzania and is due to open one shortly in Uganda.
Mr. Streeter: To ask the Secretary of State for International Development what recent representations she has made to HM Treasury regarding debt relief; and if she will place a copy of the documents in the Library.
Mr. Foulkes: My right hon. Friend has made no representations to the Treasury on debt relief. She and my right hon. Friend the Chancellor of the Exchequer share the strong conviction that the purpose of debt relief is to allow countries to invest in poverty reduction programmes and achieve the international development targets. They work closely on the Government's debt relief policy, and this partnership enabled us to deliver our ambitious debt relief objectives last year. In particular, they jointly and successfully pressed for the substantial improvement in the Heavily Indebted Poor Countries (HIPC) Initiative agreed at the Annual Meetings of the World Bank and IMF in September 1999. The revised HIPC framework not only provides faster, wider and deeper debt relief, it also increases the impact which this relief has on poverty, through the development and implementation of national poverty reduction strategies. A number of joint DFID and HM Treasury papers on debt, produced for the HIPC Review, have already been placed in the Library.
Mr. Streeter: To ask the Secretary of State for International Development what steps her Department takes in co-operation with other national Governments to measure the outcome of debt relief measures.
Mr. Foulkes: We have consistently stressed that debt relief should only be given to countries who would use it to benefit the poor. We therefore welcome the decision at the Annual Meetings of the World Bank and IMF in September 1999 to tie the debt relief provided under the Heavily Indebted Poor Countries (HIPC) Initiative to the development of national poverty reduction strategies. In this way, HIPC debt relief provides an opportunity to renew and refocus all development efforts, including resources, on making the greatest possible impact on poverty.
To allow these strategies to be developed, and for their implementation to be monitored, it is essential that greater international efforts are made to improve the availability of good quality information in HIPC countries. In November 1999, the Partnership in Statistics for Development in the 21st Century was launched. Its aims are to provide statistical assistance to HIPC countries in producing and monitoring their poverty reduction strategies and to develop sustainable statistical capacity in the longer term, to inform and support pro-poor policy making and programme design. Our Department is devoting additional resources to achieve these aims, both bilaterally and multilaterally, working particularly with the World Bank, the UN and the IMF.
Our Department is also looking at what assistance we can provide to civil society to enable them to participate effectively in the discussions on poverty reduction strategies, and monitor their impact, for example to better understand government budgets.
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