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My Lords, in introducing this Motion for Papers the noble Lord, Lord Dahrendorf, has asked us to consider one of the more unexpected aspects of third world poverty: terrorism in the third world and terrorism in the developed world.
Some noble Lords blame the prosperous nations for the poverty of the third world. Unlike my noble friend Lord Desai, I believe that, sadly, there is a grain of truth in such arguments. We must eliminate that grain of truth. I agree with the right reverend Prelate. Attempting to do this with aid is a tricky business. As the noble Lord, Lord Bhatia, said, over the years corrupt rulers have been allowed to misuse aid. Aid has been, and still is, tied to trade—which in itself leads to corruption. Equally, aid has been used as a substitute for trade and has thereby weakened the economy of the receivers instead of strengthening it. As my noble friend Lord Desai pointed out, rich countries have put barriers between themselves and third world countries, and that has caused much resentment. The noble Lord, Lord Bhatia, made the same point. The European Union's "Anything But Arms" initiative is a welcome attempt to overcome that in the field of manufactured goods, but the common agricultural policy still keeps agricultural products out of Europe. As the noble Lord, Lord Dahrendorf, said, all this has caused impotent outrage and anger; and we now know that in some countries that fuels terrorism.
If aid is going to work to reduce terrorism, not only will it have to help a country's economy; it will have to help to put in place more effective political institutions, capable of providing resources to fund better public services, especially health and education. There must be better targeting, as my noble friend Lord Stone put it. The aid must be designed to deliver order where there is disorder. Fortunately, many progressive development agencies and progressive countries are trying to provide aid along those lines. What terrorism has done has been to make the situation more urgent. The whole process must be speeded up.
My right honourable friend the Chancellor of the Exchequer has been aware of the importance of aid ever since he became Chancellor. He has been taking initiatives in the public sector in regard to debt reduction and has set ambitious targets for reducing poverty and increasing aid. But in the private sector, too, attitudes may have to change. Business is currently promoting initiatives to counter these difficulties in terms of corporate social responsibility and voluntary codes of conduct for operating in a deregulated market. If international terrorism signals the failure of these initiatives, then international business will find that it will have to give up some of its rights and freedoms in favour of greater world-wide regulation on the environment, on human rights and on tax, and it will have to accept the jurisdiction of international organisations.
As other noble Lords have pointed out, terrorism is a complicated matter, involving outrage and anger at other matters as well as at poverty. I agree with the noble Lords, Lord Dahrendorf and Lord Astor: it is certainly not poverty alone that has stimulated Islamic fundamentalist terrorism. As the noble Duke, the Duke of Montrose, said, terrorism needs money. The Economist magazine recently pointed out that the jihad movement continues to attract some of the Arab world's richest, most privileged and best-educated people. The reports in last week's Financial Times on terrorist finances described the huge array of sources of funds for these terrorists: businesses, charities and private donors.
Terrorist funds have been blocked in 147 countries. So if it is not poverty that has outraged these terrorists, what is it? I believe that it is outrage at the competitive, modern and glamorised world in which we live, especially, as the noble Lord, Lord Dahrendorf, pointed out, in the United States. It is the fear of secularism; the intolerance caused by fundamentalist religious certainty in all religions. The press recently carried a number of articles by Arab commentators calling on their countries to open their economies, to modernise their societies, to modernise their education and their systems of government and to stop blaming the West for all their ills. Nor is the answer forcing Mr Sharon to do something, as the noble Earl, Lord Sandwich, suggested.
Of course, what precipitated all this was the attack on September 11th, and it has been kept alive by President Bush's speech about the axis of evil. I was in the United States when he made that speech. I believe that he was saying to North Korea, Iraq and Iran that the policy of engagement—the policy of building bridges—has a limit. In Afghanistan that limit had been reached. What he is looking for is a sign that these countries understand this, and that the USA is ready to fight terrorism. Mr Bush also went on to praise the international alliance against terrorism and poverty, but that was hardly reported. What I found more disturbing in the United States was the stifling of dissent. Any questioning of this policy towards terrorism was labelled as "unpatriotic".
So the noble Lord, Lord Dahrendorf, is right to draw our attention to the links between terrorism and poverty in the third world. By doing so, he has given an urgency to the elimination of poverty.