Overseas Development and Co-operation

Part of the debate – in the House of Commons at 9:50 pm on 14th January 1991.

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Photo of Mrs Lynda Chalker Mrs Lynda Chalker , Wallasey 9:50 pm, 14th January 1991

With the leave of the House, I shall respond briefly to the hon. Member for Cynon Valley (Mrs. Clwyd) and to my hon. Friend the Member for Broxtowe (Mr. Lester). My hon. Friend showed that we have come a long way since the earliest days of International Development Association concession funding. Perhaps the hon. Lady did not realise quite what a change there has been: one certainly would not have thought so from her remarks tonight.

The hon. Lady asked about the poverty focus of our aid programme. I stressed our efforts, through IDA and World bank loans, to focus on poverty. More than 80 per cent. of our bilateral programme is focused on countries with a gross national product per head of less than !700. We target the poorest developing countries by encouraging and supporting economic reform programmes. We need to help them to stimulate their own growth, which is critical to their long-term success. We try to ensure that their reform programmes take into account the needs of the poorest and most vulnerable so that they are safeguarded. That is part of the general approach of the World bank, and certainly of the IDA programmes.

A further way by which we seek to help under our programmes is direct poverty alleviation, which in India alone amounts to more than £130 million worth of commitments from the British aid programme. There is much going on under the British aid programme, let alone under the enhanced focus of the World bank, which we have been in the forefront of encouraging.

The hon. Lady sought to say that we do not do very much and used that awful word "complacent". My goodness, I shall never be complacent while there are mouths to feed and people who need help in the third world, let alone in our own country. She does not realise that sometimes one must work for a long time to get something as well focused as the ninth replenishment of IDA. The World bank has come a long way in the past two or three years. The hon. Lady need have no fear, because through our executive director in Washington we shall continue to play the fullest possible role in the decisions of the bank. That is why we ensure that we are represented at all the international meetings, including the one in the Netherlands on Africa. That was not a World bank meeting but a mixture of many of us who are thoroughly involved in the development needs of Africa and the third world. Unfortunately, I was unable to attend, but it was attended by my deputy secretary. I received a good report, and I have been in touch with my Dutch opposite number to get as much as one can from the meeting without being there in person.

The hon. Lady said that the World bank was not paying enough attention to people and poverty. I could tell her at length—I will not do so because I know that she is tired after returning from the far east—what has been going on.

I was glad that the hon. Lady welcomed the world development report. We also welcomed it. The board of the World bank will give special consideration to how to deal with poverty through all its projects later this month. That is a result partly of the discussions that we have had about the IDA replenishment and partly of the general emphasis which is now placed on poverty alleviation. The board of the World bank is doing exactly what the hon. Lady criticised it for failing to do. I assure her that we shall press it to continue to take the matter seriously.

The hon. Lady said that the World bank handbook had been issued. I believe that it has not yet been issued, but if it contains anything from which we could learn or which we could utilise, we shall do so. We are not embarrassed about adopting good ideas wherever they come from, provided that they will work and can be helpful.

The hon. Lady went on to talk about debt relief, another subject on which we could have an entire debate. I shall not speak about it at length. Suffice it to say that the IDA has !100 million to help recipients to buy back commercial debt at a discount. The assistance is limited to !10 million for any one country. To qualify, countries must have a satisfactory adjustment programme, and debt management strategies. The assistance is in grant form —a fact which many people do not realise. Niger has had its operation approved and discussions on Bolivia and Mozambique are taking place. It is a modest facility and it can be used only in certain cases, but it will help many countries in the future.

IDA assistance is also available to countries with outstanding International Bank for Reconstruction and Development debts. Repayments of IDA credits are mostly committed in advance of the new lending. It would be imprudent to commit them in full as all the expected repayments may not be forthcoming. So 10 per cent. of the expected reflows each year are not committed in advance but are used to supplement IDA credits to IDA-only countries with IDA supported adjustment programmes which have outstanding World bank debts. Certainly the IDA is helping many countries in that position.

During the months that the hon. Lady and I have faced each other at the Dispatch Box, she has made several criticisms of the environmental aspects of World bank projects. She knows how keen I am to make sure that only environmentally sound projects are undertaken. In the past projects have been initiated which were subject to fair criticisms. But it is only a handful of projects, all of which are old ones which began before the World bank became aware of environmental issues.

The hon. Lady should remember that the bank's presence and the conditionality of the projects help to mitigate the damage. That must continue to be so. The bank is seeking to improve its performance and to make what improvements are possible to old projects. The various regional vice-presidencies, which are responsible for the country programmes, each have environmental units and if we found anything of the nature that the hon. Lady described we should take it up with them.

The hon. Lady mentioned one such project in detail. It would be sensible for me to write to her about it and put the letter in the Library. Often at the beginning of major projects an agreement is made that the recipient country will safeguard the resettlement and rehabilitation of people who are displaced by a project which they fully support. If the World bank finds that that is not done, it is landed with a problem not of its own making but for which it is blamed even though the recipient Government did not carry through the original agreement.

In many cases that is at least part of the answer to the sorts of problem which the hon. Lady and I come across and which we wish not to see in future projects. In other words, we should seek to ensure that the World bank takes safeguards to ensure that the recipient country cannot fall down on the rehabilitation and resettlement of those whom it undertook to look after. Once that has happened, it is extremely difficult to put right. The bank is making considerable efforts to persuade the Indians to deal with resettlement on the projects which the hon. Lady mentioned. Unfortunately, it is taking a long time, but we shall see what can be done to assist.

I thoroughly agree with the hon. Lady that energy projects should be energy efficient. She will know from previous debates that we are insisting on much more efficient use of energy in all our bilateral programmes. That is also becoming true for the World bank. If she comes across a project, whether a World bank project or, I hope not, even a bilateral project which she believes will not meet environmental or energy-efficient guidelines, I want her to tell me straight away so that I can do something about it. I hope that that will not happen, but if it does, let us at least avert the impending disaster that she perceives by acting on the first possible knowledge.

The hon. Lady also mentioned problems in forestry. She said that the World bank had supported several forestry projects which were less than sensible. It is unrealistic to expect logging simply to stop. I think that she knows that in her heart of hearts when she thinks about what it means. The bank has had problems with certain Governments who saw logging as a way of getting income. The bank has been seeking to persuade those Governments to log only sustainably managed forests. That must be how it should work in future.

Logging cannot be wholly eliminated. Indeed, forestry experts tell me that it should not be, but that it needs to be properly managed. I hope that the World bank will consult non-governmental organisations on projects to make sure that logging is from sustainably managed forests always and that indigenous people are given proper management training on how to maintain the forests.

The hon. Lady went on to say something about the Gulf crisis. I fully agree with her about the serious impact on many poor countries. There is a good chance that many of them, such as Jamaica, will get help from IDA. If there are adequate voluntary additional donor contributions that may be possible.

Many of the other aspects of our short debate on which the hon. Lady touched concern the Caribbean Development bank. Its work is interesting and exceptional. We have a programme in Jamaica where the disbursements are likely to be in excess of £5 million this year. In the past 10 years, capital aid to Jamaica has been provided largely as programme aid in support of its structural adjustment programmes. The £7·5 million loan which we agreed three years ago is being used in part to provide textbooks in secondary schools. We have provided a further £3 million grant to assist with reconstruction after hurricane Gilbert in September 1988. A further grant of £7·5 million was agreed last April, of which £3 million of programme aid was in support of its latest economic recovery measures.

All donors find it takes time to identify sound projects, but when we do we can commit the loans that we have agreed to ensure that there is a full disbursement of the balances and that the grants are likely to continue as planned from the beginning.

My hon. Friend the Member for Broxtowe referred to Africa as being one of the most needy continents, particularly at this time, and on that there will be no difference between any of us in this House. We must ensure that we spend our money wisely and efficiently in the best interests of those in need. We should discuss with them at all stages what their interests are and ensure that the programmes that we work out with them address the key issues of poverty alleviation, environmental conservation and the building of a more healthy and better society for those people. We hope that IDA, the concessional arm of the World bank, will achieve that to an even greater extent in the future than perhaps it has done in the past. We shall leave no stone unturned to ensure that.