Deputy Dukes was in possession and he has 11 minutes remaining.
Bretton Woods Agreements (Amendment) Bill, 1998: Second Stage (Resumed).
Question again proposed: "That the Bill be now read a Second Time."
Before I moved the adjournment I had been commenting on what I regard to be the inappropriateness of IMF advice, not only to many Third World countries but also to countries in Central and Eastern Europe that are now beginning to make new attempts to develop. In many cases the IMF is using an outdated and excessively theoretical approach to some of the development problems those countries meet. I am glad to note, however, that there are the beginnings of some changes in the way the IMF specifies the kinds of policies it lays down. The Minister dealt with those in his contribution and I will not dwell on them at great length except to say that it is important that the IMF should have more regard for and pay more attention to the short-term social consequences of some of the policies and adjustments it proposes.
The policies being complained of by some of the people who are unhappy to see the Bill can be likened to the famous Maastricht criteria. In many ways they are the kinds of policies and aims which these countries must have if they are to get themselves into a position of economically sustainable development. They are not palatable in many cases but they require choices to be made. I would have great reservations about accepting criticisms of IMF policies from countries where there is either a strong level of corruption in Government, which is not unusual, or where, notwithstanding difficult economic and budgetary conditions, there is still substantial expenditure on armaments.
While I support the idea that the IMF should build a greater social awareness component into its policy specification, I would not support the calls which are sometimes made for the complete removal of conditionality from structural adjustment programmes. Conditionality is essential because objectives have to be set, results have to be measurable and, in the interests of the people of those countries, standards must be set as to how policy is to be run and results judged. If they are not set there is a danger that we will simply get into a morass of ongoing argument about policy without any direction or coherence in the way economic, development and social policies are run in those countries.
The Minister set out the guidelines of the Irish approach to overseas development aid strategy and to dealing with the debt. He stated: "We will continue to encourage the IMF to take full account of the social impact of its policies on the design and implementation phases of its macro-economic and structural adjustment programmes". I agree with that. The Minister went on to state: "We will continue to advocate a greater degree of consultation and involvement for civil society in the developing countries in the planning, design and implementation phases of IMF and World Bank programmes". It is difficult to take exception to that and it suits the case being made by a number of the organisations that criticise ESAF, but where is the reality?
It has been said – Deputies Haughey and McDowell made the point earlier – that ESAF and other programmes of this kind bypass the democratic process in the beneficiary countries and much is being made of that. That is not a contention we can simply take at face value, and I say this with a little knowledge of what actually happens. If, in practice, the democratic process in some of these countries is bypassed in the specification and implementation of ESAF programmes, the blame lies not with the IMF but with the local administrations of those countries.
It is difficult for an agency like the IMF to negotiate a programme of this kind and arrive at an agreement with a Government without an adjustment programme while telling that Govern ment that it will not finalise agreement or specify the implementation measures until it is satisfied that the country has democratically consulted its people or worked out some kind of agreement with NGOs.
I invite those people who criticise ESAF programmes for allegedly bypassing democratic processes to follow up the logic of their concern and examine what needs to be done to democratic processes in those countries to involve them in the process because that is often where the fault lies and where the deficiency is to be found.
The Minister pointed out that both he and the Minister for Foreign Affairs will emphasise the importance of continued consultation with the NGO community on issues of concern in relation to debt and development. That is laudable. However, we should examine all aspects of this problem. The NGO community has an important role in this process. It has been the source of much energy and creative thinking about the development process but the NGO community, the governments of developed countries and the IMF must be conscious that they are not the only players.
They are not a substitute for the democratic process in developing countries, the direct involvement of the people of beneficiary countries or for the involvement of the democratic representatives of those people. We have been very much on our guard against taking the democratic element of those countries and trying to locate it in the NGO's and Government's programmes. In other words, it would be realistic to seek an element of democratic conditionality in these programmes. In some cases we are making substantial efforts to help with the debt crisis in countries which have little democratic reality in their internal affairs.
It has been suggested that this Bill is badly timed and that we should not provide a contribution to ESAF at this time. We have been advised to withhold it pending reform of the IMF or a visitation by the Holy Spirit to the IMF to make it more responsive to the democratic needs of those countries. It would be unwise to take that position. The leverage we would secure from not participating in this programme would count for nothing in changing the outlook or policy of the IMF. Now that there is a determination in the IMF to take more account of the factors about which we are correctly concerned, we will gain in leverage and influence by participating in the way proposed by the Bill rather than by abstaining.
Each time I hear a speech by Deputy Dukes I tend to agree with his sentiments. The last time I listened to one of his speeches he was in the Spawell in Templeogue and the speech concerned the Tallaght Strategy. On this occasion too, probably excepting the reference to the Holy Spirit visiting the IMF, I agree with his sentiments.
The IMF needs the Holy Spirit as much as we do.
Probably. Debt relief is more than a matter of economic development; it is a profoundly moral issue. Servicing crippling levels of debt deprives developing countries of resources which would be better spent on essential social services, such as education and health.
The Minister said this morning that it is time for Ireland, given its economic success and resources, to join its EU partners and other countries in assisting debt relief for those countries that need it. In Mozambique, for example, 33 per cent of the national budget is spent servicing debts whereas only 3.3 per cent is spent on education and 8 per cent on health. I welcome Ireland's contribution of $5 million on a bilateral basis to Mozambique's debt alleviation fund.
In sub-Saharan Africa, the countries in Africa below the Sahara, more than 220 million people subsist on less than $1 per day. The challenges facing underdeveloped countries are enormous but the eradication of poverty and the integration of Africa into the world economic, financial and trading systems must remain central to our concerns. The Minister of State, Deputy O'Donnell, pointed out recently that every 1 per cent of the GDP of developing countries consisting of development assistance translates into a decline of 1 per cent in infant mortality. That is a telling statistic.
With the HIPC initiative there are encouraging signs that the international community and institutions are beginning to seriously address the crippling problems of debt for developing countries. Twelve African countries have current growth levels of 5 per cent or more. Per capita incomes are still low, however. Poverty is deep and widespread and external imbalances are extremely large in many countries, reflecting a heavy dependence on foreign assistance. The ratio of investment to GDP remains low by the standards of other regions.
Sub-Saharan Africa has not been successful in attracting private foreign capital although inflows have increased in recent years. This is a critical time for this region. The level of official development assistance, on which the majority of countries in the region have depended, is on the wane while globalisation is proceeding apace. Sub-Saharan Africa must open up and compete or lag further and further behind.
Gross bilateral official development assistance disbursements to sub-Saharan Africa fell from $13.9 billion in 1990 to $10.7 billion in 1996. The decline in assistance means that opportunities for the people of the region to improve their quality of life in the future rests on their governments' efforts to attract higher private investment, both domestic and foreign. Sub-Saharan Africa has not done well with regard to foreign investment. During the period 1991 to 1997 its share of the $470 billion cumulative flow of foreign direct invest ment was less than half of 1 per cent, $23 billion. This is a seriously disproportionate share.
With structural improvement of African economies and infrastructural improvements on the ground, Africa can attract inward investment. Foreign direct investment flows to countries with stable political and economic environments, transparent and minimal regulations, good infrastructure facilities, a skilled labour force and low production costs. The challenge for sub-Saharan Africa is to try to achieve these.
Notwithstanding the substantial amounts of aid many low income countries have received in the past 20 years, expectations have not been met. Far from taking advantage of aid to achieve high and sustained growth, many countries have become more dependent on aid. As a result of tighter aid budgets in donor countries and concerns that many aid recipients appear to be trapped in poverty, donors have been searching for ways to make aid more effective.
The preponderance of evidence from the empirical literature on aid effectiveness suggests that aid has not had a statistically significant impact on growth in recipient countries. That is a fact we must accept. One such study – Boone, 1996 – found that when long-term aid is provided with little or no effective conditionality, it does not significantly raise investment or benefit the poor. It does increase consumption and the size of the government, the relatively wealthy elite prospers to a greater extent but foreign investors stay away.
Recent empirical evidence also indicates that sub-Saharan African countries with relatively high levels of external grants tend to have significantly lower than average tax ratios, implying that aid has a tendency to work against fiscal discipline.
Barriers to foreign trade are still quite high in most sub-Saharan African countries. Among the reasons for this is the problem of corruption. It is well recognised that corruption is a major obstacle to private sector activity, as it reduces government revenue – and therefore the base to improve infrastructure and education – tilts government investment towards large and wasteful projects and increases transaction costs. There is a negative and significant relationship between corruption and public spending on education, in a large group of developing countries. This is a finding that might be explained by the relative difficulty in collecting bribes on investment in education, compared to other types of public expenditure such as government consumption of other goods and services.
African countries have suffered from civil strife, macroeconomic instability, dismal domestic markets, inward trade orientation and burdensome regulations. There has been slow progress in the areas of privatisation and infrastructure. These are among the reasons that make the impoverished countries of sub-Saharan Africa a high risk proposition for investment from foreign sources.
Virtually all aid goes to direct consumption and bilateral aid increases the size of government but has failed to make any significant impact on human development in health and education. The lack of impact on poverty alleviation is due partly to the fact that aid does not introduce incentives into recipient countries for policies that would improve investment in health and education.
Over time, this erosion in export competitiveness – a "Dutch Disease", effect of aid – may make the aid recipient even more dependent on aid. As we reach the end of the millennium, it is time to learn from the mistakes of earlier decades. There are times when bilateral emergency aid is called for, in the aftermath of unforeseeable natural disasters such as hurricanes, earthquakes and famine, but for the medium to long-term, it is important that we pursue more enlightened and informed policies.
Because of the inexorable forward march of globalisation, and the continually falling levels of official development aid as the years go by, sub-Saharan Africa is at a turning point. What is needed is the pursuit of policies that will enable African countries to consolidate the gains they have made and put the region on a permanently higher growth curve.
Real GDP growth averaged 4.25 per cent in 1995-7, up from 1.5 per cent in 1990-4. After a high of 44 per cent in 1994, annual inflation dropped to 13 per cent in 1997.
The overall fiscal deficit, excluding grants, fell from a peak of 9 per cent of GDP in 1992 to 4.5 per cent of GDP in 1997, reflecting a fall in the ratio of government spending to GDP. The region's current account deficit widened to around 6 per cent of GDP in the mid 1990s but fell to 4 per cent of GDP in 1997. There is an improvement and the challenge is to consolidate and work on those improvements.
The improved performance resulted mainly from improved policies in a number of sub-Saharan African countries. If South Africa and Nigeria is excluded, which account for half of the region's GDP but have only a quarter of the population, there is an even stronger improvement in the rest of sub-Saharan Africa. A group of the ten strongest performers has experienced average annual growth in per capita GDP of 7 per cent in the period 1995-7. Improved policies appear to have been the principal factor in most members of this group. Admittedly, 12 other countries experienced a fall in real per capita GDP in 1995-7. There were particularly sharp declines in five countries because they were affected by armed conflict.
Control over government spending has improved. This has been reflected in a modest fall in the ratio of government expenditure to GDP, from a peak of 29 per cent in 1992 to 26.5 per cent in 1997.
In the past two to three years, there have been increasing reasons for optimism about the economic prospects of Africa. Growth has picked up substantially, as a number of countries have put in place policies conducive to macroeconomic stability and greater efficiency in production. In many countries, budget deficits have been reduced, inflation has been lowered, the process of privatisation has intensified and the financial sector has been liberalised. They draw the policy implication that an effective way of giving aid to developing countries might be through public expenditure programmes targeted at areas that are critical for development.
An IMF paper in May 1998 "Africa: Is this the Turning Point?" concluded that after a long period of mediocre performance, economic performance in sub-Saharan Africa has improved markedly in recent years, resulting in renewed optimism for the future of the continent.
Sub-Saharan Africa's partners among advanced countries can further help by reducing their own trade restrictions and by reducing the restrictiveness of technical regulations and product standards that apply against African products. The Minister for Finance, Deputy McCreevy, said at the last meeting of the IMF that:
The most vulnerable groups in society must be protected, to the extent possible, in times of economic turmoil and financial turbulence.
It is important that Ireland supports the implementation of debt measures that take full account of the social dimension, measures that embrace widespread consultation in the countries in question. Our goal must be to encourage sustainable economic development. Quick-fix remedies remedy nothing; we still have the opportunity to implement aid systems that can secure the economic future of SSA.
Two recent evaluations of the ESAF facility emphasise the need for the IMF to take full account of the social impact of policies in the design and implementation phases of macroeconomic and structural adjustment programmes. The most vulnerable sections of society must be afforded special consideration, with safeguards against the most severe consequences of structural adjustment policies. It has been agreed that social development should be taken into account; I say it must be a high priority if we are to help the people of sub-Saharan Africa help themselves.
The need for reform of certain aspects of ESAF programmes is clear. I am encouraged by the positive response of the IMF to the external evaluation which was recently undertaken of the facility. Development co-operation is about enabling societies to harness the skills and energies of their people, to make real social and economic progress. It is about ways of strengthening democracy and good governance, promoting greater and fairer trade and offering developing countries a reasonable chance to participate in the global economy.
Ireland is making human rights and democratisation essential dimensions of our development co-operation programmes. Bilateral aid has been shown to increase consumption and keep taxes down in recipient countries but it has also been shown to inhibit the private investment that is crucial to sustainable development.
Emergency aid feeds the hungry but it can also have the effect of removing the market for domestic farmers who cannot sell their produce when food is arriving in by the container load from these agencies.
A substantial portion of Government aid to developing countries must be subject to economic structural changes in those countries, as well as infrastructural changes on the ground. Through the IMF and the World Bank and the informed economic adjustments they impose on recipient nations, Ireland's donations can make a real difference. We can help the people of sub-Saharan Africa to help themselves. Otherwise the economies of the region will continue to hobble from one growth-strangling crisis to the next, and the cycle of poverty will sink sub-Saharan Africa even closer to despair. Without the necessary economic adjustments, simply channelling money into the region has been shown to be of little long-term benefit. Investment in crucial social services such as health and education must not be allowed to perish because of debt repayment obligations.
This Bill can ensure that Ireland plays its part in bringing the poorest people in the world into the global economy. Our money must do more than feed the hungry today, for that is no good tomorrow. Rather we must show the poorest nations of Africa the path towards a brighter economic future and a better quality of life.
I received two representations concerning this matter. One was from Our Lady of Good Counsel girls' school on the Mourne Road and the other from Debt & Development Coalition Limited. The main representation was, as Deputy Dukes said, against any contribution to ESAF and in favour of bilateral aid. I hope the people who have made these representations will take on board the comments which I have made in respect of the benefit of receiving advice from bodies such as the IMF, the World Bank and friendly governments on the need to improve their economies, change their infrastructures and establish new structures so that in the future they will prosper.
The letter from Our Lady of Good Counsel girls' school came from Sr. Catherine Dooley's class and was signed by a number of her pupils including Lyndsey Harris, Paula McGuinn, Abby O'Reilly, Margaret O'Keeffe, Amanda Buckley, Nicola Lawlor, Marion Farrell, Stacy Kavanagh, Joanne Lynch, Elaine Dillon, Jennifer Reynor, Hannah Kennedy, Janet Byrne, Seána Duggan, Ashling Nolan, Lynsey O'Connell, Emma Kennedy, Grace O'Reilly, Leanne Mulligan, Karen Gardner, Jennifer Gibson, Sarah Hogan, Sharon Prendergast, Sarah Moylan, Kim Jordan, Nicola Baker, Lynsey McGavin and Deborah Morgan.
(Carlow-Kilkenny): They will all vote for you.
I hope that in the future I will be able to give them a copy of the speech I made today and that the class will be able to debate and discuss the important question of overseas development aid and debt relief in sub-Saharan Africa.
(Carlow-Kilkenny): Ba mhaith liom cead a fháil mo chuid ama a roinnt leis an Teachta Sargent.
Tá áthas orm go bhfuil deis agam labhairt ar an ábhar seo cé nach saineolaí mé air. Tá a lán eolas faighte agam, áfach, le cúpla mí anuas mar gheall ar dhaoine ag scríobh chugam. Ní chuirfidh a n-ainmneacha mé os comhar na Dála.
Tá ciall ceannaithe ag na daoine seo, na mná rialta go speisialta, a bhí thar lear ag obair sna tíortha seo. Muna raibh siadsan ann, bhí daoine eile sa chlochar leo a chaith am sna tíortha sin. Tuigim gur iontach an rud í ciall ceannaithe mar má tá sí agat sé an rud atá i gcás ná "been there, done that".
It is important that we listen to the people who have contacted us in so many different ways to outline their objections to this Bill. It is a pity, considering that we are giving £31 million to help poorer countries, there is a question mark over the way we are doing it. Having read the correspondence I received, I could not help thinking that we are repeating the experiences of our country during the Great Famine. We were exporting corn while we had no food to keep up payments. To an extent this is the picture painted by the literature I received – we are giving money to people, making them pay back a debt and leaving them impoverished.
It would be nice to think we would get the best value from the £31 million which the Government is putting up. I am not an expert but the people who have written to me know what is going on in these countries and they should be listened to. People who have been helping in these countries want to do what is best for the countries – they want to see money coming in but in a way which will be of benefit. They want poverty eliminated.
The IMF has done a great deal of work around the world but it does it in a business capacity – it wants to get its money back. Paying debts at the expense of people is even more horrifying than seeing children in these countries with flies crawling all over them, in such severe poverty that they are dying of hunger. It is important to get the balance right. Deputy Ardagh's figure of 33 per cent of the budget of Mozambique going towards repaying debt was frightening. No country could survive payments of that nature while only giving 12 per cent of its budget to health, an area in which it is so badly needed.
Reference was made to corruption. I remember talking to a friend from Carlow who was helping in a professional capacity in one of the newly freed African countries. The level of corruption was staggering. Money was disappearing which should have been going towards works in which this person was involved and people were taking backhanders. That is obviously still going on. Civil war is another problem in these countries, which are not as democratic as we are or as we would like them to be. All of these problems eat away at the money.
I received a leaflet from All Hallows College in Dublin and it stated that the IMF has such a failure rate because of the conditions laid down for borrowing. Conditions are so onerous that over three quarters of programmes break down. This demonstrates that there are fundamental problems with the design and objectives of these programmes. When there were rumours that the IMF would move in here during the 1970s, it was said it would make cuts left, right and centre. The pamphlet I received stated that the policies the IMF promotes to cut budget deficits do not take human needs into account. Cuts in basic services, together with user fees, result in large drops in primary school attendance and the removal of subsidies from staple foods causing widespread malnutrition. The over-speedy removal of protective trade barriers leads to the collapse of local industry. Cuts in the Civil Service and privatisation result in thousands of workers being thrown into the informal labour market which cannot absorb such huge numbers.
The IMF operates on a financial basis. It is a pity that in an effort to help these countries, things are done which do not help them at all. ESAF was introduced in response to the debt crisis but it has completely failed to alleviate the problem. The IMF extracts more money from low income countries than it makes available in lending. In 1995 alone, severely indebted low income countries transferred $1 billion net to the IMF.
It is difficult to see why we should give money to this fund to have it repay debt when we could give it to NGOs. The one bright spot is that the Minister has given a commitment to continuously consult with NGOs on issues of concern in relation to debt and development. They should be directing policy. It is important that contact is maintained with them. If the IMF was not as strict in seeking to balance the books, economies might flourish.
Deputy Dukes said it would make no difference if we stay out. I disagree. In handing over £31 million we are entitled to ask that changes be made. The Minister should argue the case for this but once the IMF is involved politics and debt repayment will be put before people and the alleviation of poverty, something about which those who have corresponded with us are concerned. In some instances debts should be written off. If that is what it takes to help the countries concerned, I do not think anyone would object.
Ba mhaith liom buíochas a ghabháil leis an Teachta Browne as ucht a chuid ama a roinnt. Tá áthas orm a chloisint go bhfuil croí daonna fós i bhFine Gael agus nach ionann gach rud a deireann an Teachta Alan Dukes agus tuairimí bhallraíocht an pháirtí.
Chuir mise ceist ar an Taoiseach ar an 9ú lá de mhí Dheireadh Fomhair 1997 an mbeadh sé ag caint leis na grúpaí deonacha, na grúpaí a bhíonn ag obair thar lear – grúpaí ar nós Debt and Development Coalition – mar gheall ar an reachtaíocht seo. Ón méid atá cloiste agam ón Rialtas is léir nach raibh siad ag éisteacht, fiú má bhuail siad leis na grúpaí sin, mar níl siad ag teacht amach leis an saineolas atá ag na grúpaí a bhíonn ag obair thar lear sna tíortha is boichte ar domhain.
Ireland has a proud tradition of helping other countries in the position similar to that in which Ireland found itself in the last century. Wherever one goes Irish aid workers, missionaries and other religious groups are helping to right some of the wrongs inflicted on the majority of the world's population by the former colonial powers and multinationals which abuse the earth and its peoples in an exploitation that is immoral and economically unsound in the sense that it is unsustainable.
With Ireland's proud record of involvement and standing on the side of the poorest and dispossessed this country has carried a banner of fairness and justice. By introducing Ireland's payments to ESAF – the Enhanced Structural Adjustment Facility – through this Bill, the Minister is taking deadly steps backwards from our honourable past. In 1996 the previous Government decided not to contribute to ESAF because of its negative impact on the peoples of Third World countries. The Government plans to reverse that decision and has introduced legislation to enable an Irish contribution soon.
ESAF is an IMF programme which lends to the poorest countries at low interest rates. In return for loans the borrowing countries must implement economic policies laid down by the IMF. In general these are designed to improve macro-economic indicators and open up the countries concerned to the global economy.
These policies have been shown to have negative results, such as cuts in basic services leading to lower education participation rates and increased levels of malnutrition, over hasty removal of protective trade barriers leading to the collapse of local industry, privatisation and employment cuts in the public sector leading to thousands of workers loosing their jobs. These policies have no democratic basis. Borrowing countries have no option but to comply with them to obtain low interest loans they desperately need, often to maintain the repayments on existing debts while elected parliaments have no say in their formulation.
On the basis of an external evaluation of ESAF, the IMF has declared that it will pay more attention to the needs of the poorest sectors in borrowing countries in designing future ESAF programmes. The Government has apparently taken this declaration at face value and has resolved to contribute to ESAF without waiting to see if the much needed changes are made. Contributions to ESAF should be dependent on proven benefits to the poor in Third World countries.
The Green Party will vote no to the proposed legislation sanctioning Irish contributions to ESAF. The money earmarked for this use could be assigned to aid which is rendered useless by such mechanisms as ESAF or used to write off debts. The Minister is well meaning but in this proposal he has been sold a dummy. He should reflect on the example where the European Union is protectionist and whether his policy can be reconciled with that of the Minister for Agriculture and Food.
The Common Agricultural Policy is causing great hardship for the fruit and vegetable canning industries in South Africa and the farmers who supply them. By heavily subsidising the export of canned products to South Africa the European Union has made it impossible for South African producers to compete with their European counterparts. At the same time the European Union imposes heavy tariffs on canned produce imported from South Africa. Not for the first time the dumping of surplus food in an African country combined with restrictive tariff regimes in the European Union has had disastrous effects on local agricultural markets and food production. In the light of these policies which the Government wishes to impose on the Third World through ESAF it is ironic that it is happy to support different policies within the European Union, that is, by tariffs on imports and high subsidies on agricultural products and to subject the poorest countries of the world to a straitjacket on free trade.
Every year 500,000 children die in countries where vital health services have been slashed to meet debt repayments. Africa now spends four times more servicing the interest on its loans than on health care. For every $1 allocated to an Asian country $11 is returned in repayments. This is immoral. Instead of preventing disaster by helping to set up effective health care services we are forced to act as a fire service providing emergency help when the pain of dispossession, conflict and starvation has affected millions.
In the world's 37 poorest countries spending per person on health has gone down by 50 per cent and on education by 25 per cent. While we like the idea of richer countries providing help for countries in which there are injustices, it is shocking that so much is allocated in aid when we take back much more in repayments. This is cynical and has dangerous implications through global instability. In the case of Mozambique NGOs stated that the IMF had created a climate of wealth concentration rather than creation. The unfair structures within the IMF have the effect of widening the gap between rich and poor. Ireland is contributing £5 million to debt relief in Mozambique, yet the Government is to spend £7 million on the enhanced structural adjustment facility. More direct and constructive measures would be far more appropriate. Without economic democracy and stability, how can we expect to see an end to the horrific slaughters that persist in many parts of Africa? Ireland is now part of that exclusive club of rich countries which should aim to provide aid that is constructive rather than loans which lead to exploitation of people and the pillaging of rain forests and unique natural areas on which these people depend. The conditions laid down by the IMF are so onerous and severe that three-quarters of the programmes break down. This must be an indication that the present system does not work, and we have no proof that the amendments and changes are an improvement.
In 1997 the IMF carried out an internal and external evaluation of the merits of ESAF. The internal review showed that economic growth was still low, that debt had doubled between 1985 and 1995 and that there was no overall change in inflation levels. The external review criticised ESAF for failing to foresee the negative impact on poor people and also criticised the loan shark attitude of the IMF for its "macho bargaining style."
Is this really the time for Ireland to start contributing to ESAF? It seems bizarre that, despite calls from all the major relief agencies, the Minister is hell bent on making Ireland contribute to a racist, bureaucratic and undemocratic organisation. There is a connection between structural adjustment policies and the consequent shocks to fragile economies and political institutions in developing countries – many of them in sub-Saharan Africa – which have just recovered from politically motivated conflict. The leaders in these countries have promised an economic dividend to their citizens as an important factor in building peace, but this is being obstructed by ESAF policies demanded by the IMF.
When the Ministers for Foreign Affairs and Finance made their statements last September announcing their decision to reverse the previous policy not to contribute to ESAF, did they make that reversal conditional on the IMF reforming? That is the question. Are they aware that even the modest reforms proposed by their own external consultants have not been implemented? Why then are we rushing into an unproven change, endangering many people worldwide? One might say that this debt is perpetrating genocide.
The world is being rallied around the Jubilee 2000 campaign to cancel international debt, and this is totally at odds with that humanitarian measure. I ask the Government to think again and not to do it.
By any stretch of the imagination this has been a very interesting debate. It has focused the House on a very serious matter. I share many of the concerns voiced by the Opposition. I am not a fan of the IMF or the international monetary system. I have little belief in either the IMF or the World Bank's capacity to show humanity when humanity is needed. If we looked at their track records they would give us pause for thought.
The Minister's speech was interesting and he was right to state that the heavy external burden of debt has had a devastating impact on the economies of many developing and underdeveloped countries in recent years. The fact is that when we talk about the devastating impact on economies we should actually be talking about the devastating impact on people. The tragic reality is that in many developing countries, particularly those burdened with debt, the real burden does not fall on regimes, institutions or bankers, but on the shoulders of the poorest of the poor. These are people who eke out a humble and marginal existence, and it does the international community little credit when one considers that the real focus of these changes is on the interests of the international banking community.
Debate adjourned.