International Debts

Oral Answers to Questions — Overseas Development – in the House of Commons at 12:00 am on 2nd February 1987.

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Photo of Mr Archy Kirkwood Mr Archy Kirkwood , Roxburgh and Berwickshire 12:00 am, 2nd February 1987

asked the Secretary of State for Foreign and Commonwealth Affairs if he will discuss with the World Bank methods of ensuring that developing countries are able to repay their international debts on reasonable terms.

Photo of Mr Chris Patten Mr Chris Patten , Bath

I did so when I visited the World Bank on 21 January.

Photo of Mr Archy Kirkwood Mr Archy Kirkwood , Roxburgh and Berwickshire

Does the Minister acknowledge that many developing countries have contributed to extinguishing their national debt by restricting imports? Does he think that that gives them a fair chance of achieving the growth necessary to get them out of long-term trouble? How does he think restricting developing countries' imports will help United Kingdom exports?

Photo of Mr Chris Patten Mr Chris Patten , Bath

If the hon. Gentleman was asking whether I thought that protectionism was the best way to assist the debt problem, my answer would be emphatically no. We have played a central role in writing off official aid debts, as the hon. Gentleman knows. I am equally determined that we should play a central role in sustaining the process of structural adjustment and policy reform which would lead to the growth which the hon. Gentleman and I want to see.

Photo of Tim Yeo Tim Yeo , South Suffolk

Will my hon. Friend consider encouraging the development of a secondary market in developing countries' debt, because that would provide an opportunity for the central banks of those countries to buy in their own debts at advantageous prices and thereby reduce their indebtedness?

Photo of Mr Chris Patten Mr Chris Patten , Bath

I think that, happily, such a market is developing itself without any assistance from me, but I shall certainly bear in mind what my hon. Friend said.

Photo of Mr Eric Deakins Mr Eric Deakins , Walthamstow

Does the Minister agree that the best way of helping poor countries repay their international debts is to help increase their incomes? In that connection, will the Minister turn his mind to backing and improving the United Nations' integrated programme for commodities? Does he agree that it has been the fall in real commodity prices in the past 20 years that has led to difficulties which many poor countries face today?

Photo of Mr Chris Patten Mr Chris Patten , Bath

That is at least part of the problem. I can assure the hon. Gentleman that we shall be putting more support into structural adjustment over the next year. More of our aid programme will be used in support of policy reform, which I hope will provide the sustained economic growth which these countries need.