I shall speak only briefly as I know that other hon. Members wish to take part in the debate. We are discussing one of the most important subjects that we shall ever discuss. The world is waking up late to the fact that there has been an international "Rake's Progress" taking place year after year, where greed has been paramount—especially since 1974 when the price of oil was hoicked up to vast levels and thousands of billions of dollars were swilling around the world. That great irresponsibility occurred because people did not learn the first-year exam lessons that I thought bankers had to learn, and which are certainly meant to be engraved on every bank manager's desk — one cannot lend short-term money for long-term projects.
We are now at the stage where the long term has arrived—which proved to be so short term—and thousands of billions of dollars of loans from the Arab countries have turned out to be poisoned loans. They have been invested in long-term projects and the world has reached a stage where, as the right hon. Member for Down, South (Mr. Powell) said, there is a kind of madness. We have discussed the South American loans, and mentioned Brazil, Mexico and the African countries. They owe vast sums of money—some $600 billion. But nearer to home there are vast debtors on our doorstep. There was an interesting article in Investors Chronicle a fortnight ago under the heading "The debtors on our doorstep". The second XI in Europe encompass 144 million people. Those 11 countries have not had a trade balance since 1960. Apart from the $600 billion about which we all talk, there are $130 billion of loans much nearer home that must also be rephased.
I shall give the House an example of absolute lunacy that shows the great disrespect we have of loans. Poland is one of the greatest debtor countries in Europe, yet it has just lent $134 million to Nigeria—another great debtor of the system. Those problems that lie ahead make the problems that we face today seem comparatively small. When we consider what has happened, how the problem has grown and the report to which the hon. Member for Motherwell, South (Dr. Bray) referred, and about which we have held discussions here and overseas, there must undoubtedly come a time of reckoning. A debtor's strike looms clearly on the horizon and will occur, not because of evil men, but because the resources are not available in those countries, which may disappear because of civil war or poverty.
I disagree with the inference made by the right hon. Member for Down, South that we can stop the roundabout by putting an iron bar in the spokes. Just as that iron bar would break the wheel, if we were to stop the roundabout for the countries such as Poland and Brazil, whether in Europe or South America, we would reduce the economy of the entire Western world and other countries to absolute chaos and cause genuine poverty such as we have not known since the dark ages. Therefore, we must be realistic and co-operate with the International Monetary Fund. As I said before Christmas in a debate on the Third world, we have the will and the means but we must have the courage to correct the position.
The problem is that huge borrowings, whether by people or countries, are accepted as a macho principle and a way of life. We in the Western world are meant to be the great producers, yet we are not producing wealth. There is no real economic growth but only huge borrowings. Successive Governments in Britain and overseas have followed the philosophy that a good standard of living can be maintained, but need not be earned, or that if it need be earned, it need not be earned yet. With that philosophy the Western world will always have interest rates at the current usurous levels. Throughout the history of the world no genuine economic growth has taken place when real interest rates were above 3 per cent., and current real interest rates are nearer 10 per cent. Therefore, it is not surprising that borrowings are huge and that there is no real growth.
If today's debate produces an awareness in the West of the need to change course to sustain the economic viability of the world, it will have been useful. But let no one think that when we approve the Second Reading today the problem passes with it. The sums involved are comparatively minute now compared with what they will be in the next few years. We must find an answer in the next few years, because we do not have 10 or 20 years. If we have the will, we have the means and can do something about it.