To ask the Secretary of State for Foreign and Commonwealth Affairs if Her Majesty's Government have considered proposals to use additional aid funds to refinance outstanding debts owed to the International Bank for Reconstruction and Development by low-income developing countries; and if he will make a statement.
What counts is that the bank should be making more money available for those countries than they are due to repay to it. We believe that we can more effectively support low-income countries following adjustment programmes by using our aid to finance the imports they desperately need now.
It is one of several interesting proposals that have been made about indebtedness. Of course, there is nothing to stop individual donors from taking that action without setting up a special fund to do so. What is important is that any new initiative should represent additionality in flows of aid to African countries. We have taken a number of steps ourselves—the contribution to the enhanced structural adjustment facility, the major contribution to the World Bank's special programme and the Chancellor's own debt initiative.
Would it not be better if these long-dated loans from the IBRD to the poorest countries—because they must have pre-dated the International Development Association—were to be re-financed by the World Bank through the IDA itself and, by so doing, have the right kind of conditionality attached to their renewal, so that we do not have a repetition of the poor economic policies in some of the countries concerned?
What I am anxious to do, as I tried to explain just now, is to ensure that any new initiatives are accompanied by additional funds for countries in Africa. We must also make sure that we protect the credit rating of the World Bank, which is extremely important to the developing countries, as well as to the rest of us.
Will the Minister tell the House why the Government are not following the policy clearly set out in the Vancouver communiqué of October last year, to which the Prime Minister was a signatory, which advised that we should write off official development assistance debts to all low-income countries and also give renewed priority to reaching the United Nations assistance target?
I am afraid that the hon. and learned Gentleman is a little confused. This country had written off, rather before that statement was made, aid loans to the tune of £280 million for 14 African countries. What the hon. and learned Gentleman could have gone on to do was to read out the endorsement of the Chancellor's debt initiative by not only the Commonwealth Heads of Government but the Commonwealth Finance Ministers.