Developing Countries (Famine and Debt)

Part of Opposition Day – in the House of Commons at 5:30 pm on 11th June 1985.

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Photo of Mr Robert Maclennan Mr Robert Maclennan , Caithness and Sutherland 5:30 pm, 11th June 1985

As this is an extremely short debate, I shall be brief. However, it gives us an important opportunity to look at the Government's response to the present famine crisis. Although the Minister diagnosed the problems which the suffering parts of Africa are now facing and spoke of the long-term need for a new strategy, he gave very little evidence of how he saw the present British Government contributing to the solution of those problems.

The right hon. Gentleman was right to speak of the need to bring about the effective rescheduling of debt, but there was no recognition in what he said of the considerable difficulties that face us in bringing about that effective rescheduling. In particular, there was no recognition of the probability that the position will get worse rather than better if the United States, as seems likely, goes into recession over the next two years.

In fact, the Minister's attitude was somewhat complacent. It was defensive, and intellectually honest enough to diagnose the problem, but it was cribbed and confined by the Government's mistaken policy — for which the right hon. Gentleman has only a limited responsibility—for curbing public expenditure.

If the British Government, as part of the European Community, encourage their European partners to continue to proceed with this restrictive policy, we shall fail to tackle the problems of the less-developed world. Indeed, we can only expect that those problems will get worse, and it is not just a question of the level of overseas aid, even though that is important.

I wish to consider not merely the effectiveness of what the Government have done in the short term to come to the relief of those countries whose plight has so forcefully been brought to the attention of our citizens, whose generous private response has enabled the voluntary aid agencies to make a quite unusual contribution aimed at stemming the worst consequences of this immediate disaster.

It is important to emphasise that the crisis in Africa is not a short-term weather failure. The Minister spoke of a problem that had got worse, and the right hon. Member for Clydesdale (Dame J. Hart) said that the problem had been recognised for four years by the Food and Agriculture Organisation. In reality, food production in Africa has been declining for at least 10 years, and there has been a process of desertification and deforestation which has progressively undercut Africa's agricultural base.

It is to that question that the British public are increasingly directing their attention. They recognise that although the short-term assistance that we are able to give to improve the distribution of food that we ship in is necessary, it is not enough, and that we should address ourselves to the transformation of Africa's rural economy.

What has gone wrong in this great continent? First, we must recognise that farming methods have contributed to the problem, and in particular have undermined prospects for the small farmer. The Governments of many of the African countries affected have foolishly but understandably invested less in agricultural development than in urban development. Indeed, that urban development has all too often taken place on the back of the small peasant, who is responsible for the greater part of Africa's potential wealth.

A part of the blame must also be shared by external countries, in that our international aid programmes have not ensured that our long-term aid has gone to those who need it most—the rural poor. That is why I wish to stress the importance of a proposal that has been made by the independent commission on international humanitarian issues — that we should focus more directly on the provision of assistance to the rural poor through the provision of credit in amounts that will assist those who are unaffected by the larger programmes.

This has already been done with striking success in some countries on the initiative of some of their banking institutions. I particularly cite the example of the Grameen bank—the rural bank—in Bangladesh. Since 1976 that bank has provided a substantial amount of money—$6.2 million—to 58,300 people, almost half of whom are women. That is important in an African context, where the bulk of agricultural activity has traditionally been carried on by women.

Under the Grameen scheme the beneficiaries are the poorest of the poor. There is a cut-off point, so that a person who possesses more than 0.2 hectares is not eligible for assistance. Similar schemes exist in Nepal and Pakistan. The most striking feature of these schemes which should commend them to the Government is the repayment rates, which have been as high as 98 per cent. Only the building societies in this country can boast of such a level of success.

The scheme depends on the provision of credit to a small group of individuals, not members of the same family, who are seeking help in the form of sums from as little as £20 to £200. Collateral is not provided, but each member of the group undertakes to bring pressure to bear on the others to repay. The remarkable success of such schemes has led the independent commission to recommend that financial institutions should examine this example and the lessons which it may have, particularly for the continent of Africa.

Africa has a growing population and the problem of feeding that population with a declining productive capacity is stark and cannot be tackled with present forms of relief. Mr. Edgard Pisani has said that the help that we need to provide for Africa is not to build cathedrals in the desert, but to help with low-cost credit, and I urge the Government to take that course. That is a specific and important contribution which could be made by this country, with its financial expertise and its partnership with other European countries. Such action could bring about a remarkable change in agricultural practices, building up the capacity of the poorest of the poor to adapt to the needs of the situation. The Government shojuld do this in conjunction with, rather than in substitution for, the present aid programme, the restrictions of which have understandably been the main focus of today's debate.

I condemn the Government's action on the level of overseas aid. The Government have simply recycled an amount which is limited by their budgetary policy. It is unacceptable that we should rob some of the world's least well-off countries whose predicament has been less highlighted but is no less real. The Minister claims that his hands are tied, but he must recognise that the specific proposals that I have described for credit aid to small agricultural developments are consistent with the kind of policy which the Government ought to be able to espouse.