Overseas Development and Co-operation

Part of the debate – in the House of Commons at 7:14 pm on 3rd February 1992.

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Photo of Ann Clwyd Ann Clwyd , Cynon Valley 7:14 pm, 3rd February 1992

I want my comments on the role of the African development fund and the Caribbean Development bank to be understood as being in the context of the role of the British Government vis-a-vis the development challenges facing the African continent.

This debate is taking place at a crucial time. The Minister mentioned two particular initiatives that he thought were most important. The first of these is the Prime Minister's Commonwealth debt initiative. Although we have always welcomed this, it must be put in the context of the fact that it is no compensation at all for the Conservative Government's aid cuts. Although debt relief for the poorest countries is a step forward, it is absolutely no substitute for aid. While the Government have been prepared to cancel debts—many of which were not being serviced anyway—they have cut aid, as a percentage of gross national product, to the lowest level on record: 0·27 per cent. last year, compared with 0·51 per cent. in 1979 under the last Labour Government. In 1979, under Labour, Britain's contribution as a percentage of GNP was the second highest in the group of seven richest countries; now Britain's contribution is the second lowest. While the Governments of African countries may be paying out a little less in debt servicing, they are no better off if less is coming in by way of aid.

The third world has lost £10 billion because of cutbacks in aid as a percentage of GNP from the 1979 level under Labour, which was 20 times the maximum estimated debt relief under the present Government's new scheme. The Prime Minister's initiative is too limited, and Britain has failed to secure the agreement of its international partners, especially the United States of America, on the issue. The initiative applies only to country-to-country bilateral debt; it does not apply to amounts owed to the international institutions. In fact, the Government actually blocked a proposal that debt to the European Community be written off. A Labour Government would press for such agreements.

The initiative does not apply to amounts owed to the commercial banks. The Government have a hands-off approach to the commercial banks, while granting them large amounts of tax relief in respect of these debts. During the Committee stage of the Finance Bill of 1991 Labour pressed for the withdrawal of this tax relief if banks did not write off the debts.

The initiative applies to only a small group of the poorest countries. Other very poor countries, such as Ethiopia, are not included. Many millions in Africa still face famine. Only this week the United Nations appealed for an extra $621·6 million for emergency operations in the Horn of Africa. The total pledged by donors so far is only three quarters of what is needed.

Long-term poverty is also on the increase. In a relatively optimistic projection the World bank estimates that, on the basis of present trends, the number of people in Africa living in absolute poverty will rise from the present 180 million to 265 million in the year 2000. In that time the continent's share of the world's poorest people will double—rising from 16 per cent. to 32 per cent. Before the Minister congratulates the Prime Minister again, perhaps he will bear those figures in mind.

The Minister stressed also the importance of population policies, but in a parliamentary answer that I received today, the Government admit to massive cuts in funding to key United Nation agencies. The United Kingdom's 1990 contribution to the United Nations Fund for Population Activities, for example, was cut by 65 per cent. between 1979 and 1990. While the Prime Minister espouses the Government's support for the United Nations, in reality they have savaged Britain's contribution to key United Nation agencies with proven track records. The Minister ought to review the figures before stressing the importance of policy initiatives that the Government have been particularly tardy in supporting with cash.

As we debate tonight, 23 million people's lives are at risk in the Horn of Africa. The urgent appeal to the international community has yet to find receptive ears. The intensifying of internal conflict, breakdown of law and order in parts of the region, massive population movements, and continuing drought-induced famine in some areas are taking their toll.

The eye of the storm must be Somalia. The Prime Minister's fine words this afternoon about the United Nation's newly enhanced role as peacemaker in the new world order must be tested against Somalia's pressing case. Many Somalians who for months looked to Britain, with all her historic links with that country, to take a leading role in the peace process were disappointed with the Government's reluctance and unimpressive response. Although the recent United Nation resolution is a welcome sign of a vigorous approach, I am sorry that it did not feature more prominently at the recent summit.

The appalling suffering of the people of Somalia and the impact that it is having across the region must be a top priority for the United Nations. The world's attention has focused on the needs of the Commonwealth of Independent States—the former Soviet Union. I do not deny the necessity for action there, but Africa's desperate needs have not gone away. The imperative for action is all the greater because so many opportunities exist among the gloom. In some areas, the problems to which the United Nations Secretary-General is pointing are, with cruel irony, caused by improvements to security and good government—such as that seen in Ethiopia—that are allowing people to return to their homes. It would be an even greater tragedy if support were denied to help the thousands of refugees who are returning to their homelands after years of war and exile.

The immediate crisis is being played out against the background of Africa's prolonged economic crisis. According to the World bank, incomes per head in sub-Saharan Africa fell by 2·2 per cent. a year between 1980 and 1989. Excluding those in oil-rich Nigeria, most Africans are by that measure worse off today than in 1965.

There have been enormous external economic pressures on the continent. A steady decline in Africa's terms of trade in the 1970s was severely compounded by a drastic fall in the purchasing power of the country's exports of more than 40 per cent. between 1980 and 1986. Debt problems have mounted. More than one fifth of Africa's export earnings are swallowed up in debt servicing. That level would be much higher were it not for constant rescheduling and the continuing build-up of arrears.

Against that background, there is in parts of Africa clear evidence that long-term malnutrition is on the increase, while average lifespans and primary school enrolment levels are decreasing. Internal factors, including autocratic government and internal mismanagement, play a significant part. Nevertheless, there has in recent years been a remarkable, continuing trend towards economic reform and democracy. Great opportunities are opening up in Africa—as great in scale in many ways as those that exist in the former Soviet Union.

However, Africa cannot do it alone. Many African Governments feel a sense of betrayal that, having implemented the painful reforms advocated by rich countries, they are not being supported. Britain must play a much fuller part in tackling the African crisis and building on the potential offered by reform. We must provide emergency relief. We are watching the Government closely to see whether their high-minded talk of support for the United Nations manifests itself in a major response to the United Nations Secretary-General's appeal for the Horn of Africa.

We must support also the process of recovery. We are shocked by the Government's refusal to support the second phase of the UN's special programme for Africa. Despite the widely acknowledged success of the first phase in channelling support to small farmers to help them recover from famine, in the urgent task of growing more food, and improve the incomes of the rural poor—and the programme's good work and accumulated experience—the Government are prepared to see it die. They seem prepared to allow the support of other donors to go to waste by not making a United Kingdom contribution.

A Labour Government will not be content to allow that to continue happening to that important and crucial fund. We believe that Britain should join other donors who have said that they are prepared to contribute their share to ensure the special programme's continuation, provided that others do the same.

Britain must respond to the mood of reform and extend support for long-term economic development in the region. I refer to the specific role of the African development fund. We support the distinctive and positive contribution made by the African Development bank, and that of the fund in particular under the bank's energetic presidency. We welcome the importance attached to agriculture, which is the top priority for economic development in Africa, and the promise made at the last replenishment to devote more resources to poverty-reduction programmes and those that benefit women.

The bank does not have a faultless record. There are concerns over whether it is keeping its environmental pledges, and we urge it to reconsider whether it is the appropriate instrument for structural adjustment lending. However, the fund's overall contribution has been increasingly positive, and it deserves more support than Britain has given.

In the past, scepticism was expressed about the role of the African Development bank by comparison with other regional development banks—but that has, rightly, faded. One of the most important reasons for supporting the bank is its role as a distinctly Africa-based body.

One of Africa's key needs is to build up its own development institutions, and the African Development bank has made significant advances in that regard in recent years. Those advances are especially important given the eagerly awaited movement to a fully democratic South Africa which, we hope, will take place in the near future. If South Africa played an active role in the ADB—as we hope that it will—it would do a good deal, in the next decade, to help South Africa's reintegration with other African economies, and also to help it play a positive role in the development of the rest of southern Africa and that of the continent as a whole.

Despite the movement by African Governments towards reform, British support of Africa—including its funding of the African development fund—has, in our view, been niggardly. Notwithstanding Britain's extensive links with Africa, its support for the continent is quite a long way behind that of our international partners. Perhaps the Minister will confirm what my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody) was told recently by the Minister for Overseas Development; we are sorry to hear that the right hon. Lady is unwell, and hope that she will soon return to the House. According to the right hon. Lady, United Kingdom funding for Africa is half that of our G7 partners Germany, Italy, Japan and the United States, and less than a fifth of that provided by France.

The current, sixth replenishment of the fund represents only a 17 per cent. increase over the previous 50 per cent. replenishment. That is barely enough to keep pace with inflation. Within that meagre replenishment, Britain's contribution has been very poor. According to the most recent statement of total subscriptions available from the ADB, Britain's contribution is less than that of any other G7 country. It is even less than Sweden's contribution, and equal to that of Norway. Britain simply is not pulling its weight.

Although I welcome the fact that the United Kingdom is contributing to the fund, this is a very small slice of a modestly sized cake. It does not do justice to the major economic and political changes that are now being undertaken by African Governments. Must we be confronted yet again with images of mass starvation before Britain makes more effort to act now on long-term investments to prevent the famines of the future? What we need now is action to improve north-south terms of trade, reduce debts, and increase aid—I stress that point, and I do not think that the Minister will be able to defend the Government's position and protect the world's environments.

Let me say a word about the Caribbean Development bank. Although the poverty and economic decline in the Caribbean are not of the same magnitude as those in Africa, there are many parallels between the two regions, in regard to both problems and opportunities. Debt problems in the Caribbean remain considerable, and—as in Africa—relate primarily to official debt, including debts to multilateral institutions. The decline in trade has affected a number of Caribbean commodities, such as bauxite, although possibly less severely than in Africa. At recent meetings with representatives of sister Caribbean parties, I, as a representative of the British Labour party, was able to hear at first hand both about the economic pressures and about the development of democratic institutions in the regions.

Will the Minister tell us the extent of our support for three areas of major importance to the Caribbean? First, what support does the bank give to the development of interregional trade? I am glad to see that that subject is back on the Caribbean agenda. Secondly, how is the bank seeking to foster diversification programmes to help countries reduce their over-reliance on a single crop commodity? Thirdly, what programmes is it supporting to bring about food security in Caribbean nations that remain heavily reliant on the expensive import of basic foods?

Although Africa's emergency needs will continue throughout the current year and the rest of the decade, it should be an increasing priority for the north to support the positive changes that are sweeping the continent. More resources are needed now to aid recovery and development. In countries such as Ethiopia and Angola, which have seen a dramatic end to decades of civil war, support is needed to resettle displaced people, demobilise soldiers, rebuild shattered societies and economies and help safeguard fledgling democracies.

Those aims are as important as assisting the emerging democracies in the former Soviet Union and central and eastern Europe with massive aid and debt relief, if not more important. The equally fundamental changes sweeping Africa have not been rewarded to anything like the same extent—although Africa's needs are so much greater.