Dáil Éireann debate -
Wednesday, 18 Jun 1980

Vol. 322 No. 6

International Development Association (Amendment) Bill, 1980: Second Stage (Resumed) and Final Stages.

Question again proposed: "That the Bill be now read a Second Time."

Mr. O'Keeffe

We are dealing with the replenishment of the funds of the International Development Association, which is part of the World Bank. It is important to highlight the fact that our joining in this replenishment does nothing to redress the outrageous cut-backs which have occurred in development assistance generally. These cut-backs are of the order of £5 million this year, and will continue, and the Minister has not given an assurance that the situation will be in any way reversed. This Bill does not provide for a voluntary contribution on the part of the State, as suggested in the Minister's speech. As a Part I member of the International Development Association we have a commitment and we are now merely discharging that commitment. It is also important to bear in mind that the funds which will flow from the passing of this Bill, which I support, will not be paid in the current year. It is in that context that we must look at the Bill and appreciate that it does nothing to restore our image in regard to the Third World or to redress the serious situation which has arisen as a result of Government cut-backs.

There are some factors which must be borne in mind in discussing this Bill. The International Development Association is an arm of the World Bank and some criticism might be made in regard to the fact that the human rights situation in countries in receipt of loans from the World Bank and the International Development Association is not apparently a factor in decisions on loans from these bodies. I appreciate that there are difficulties in enforcing a standard of human rights in some underdeveloped countries through the loan mechanism, but I feel it should be one of the criteria borne in mind by the International Development Association and its parent body in making these loans. While it would be simplistic for us to say that loans should not be made available to countries where there is a clear denial of human rights, at the same time the situation should not be ignored entirely. The people in those countries are not to blame for the denial of human rights and that must be a major consideration, provided there is a clear assurance that the loans made available will be ultimately to the benefit of the poor and will not merely result in the rich in those countries becoming richer. I believe there could be a stronger emphasis on the human rights aspects in the sanctioning of these loans and a certain amount of pressure could be exerted to make it clear that those with a good record in human rights will be given greater priority with regard to the availability of funds.

Another factor which must be borne in mind is that loans from the International Development Association are made available to Governments, largely for infrastructural projects, and to a large degree do not touch on the person-to-person contacts which have been so much a part of our own Third World aid programme which concentrated, in the voluntary and bilateral areas, on personnel. The damage which has been caused to the development of that kind of programme by the cut-backs made by this Government must be reversed. I strongly urge the Minister to reverse the present policy in regard to Third World aid generally and even at this late stage to give a commitment that the clear and unequivocal guarantees which were given in that area in the past will be met by the present administration.

Mr. Horgan

One will not find anybody on these benches voting against any proposal to donate any amount of money, however meagre, to Third World development. I think it is reasonable to put this Bill in its context, to raise a number of questions and to ask the Minister to comment on them. It has been stated in the Minister's speech that the International Development Association is one of the organisations that makes up the World Bank group. It has been evident for some time that the activities of the World Bank and its associations in the matter of development aid have not been above controversy and have sometimes exposed the World Bank to considerable criticism, much of it justified.

I acknowledge there are difficulties in this area. On the one hand the developing countries are saying to the World Bank and its associated organisations such as the International Development Association that it is a fundamental principle of development aid as seen from their end of the telescope that there should be the minimum interference by the World Bank and its agencies in the internal affairs of those countries. On the other hand, there are political movements in other countries, and indeed the Governments of donor countries in some cases insist on the attachment of conditions to World Bank loans and grants in relation to such important matters as human rights.

There is a fairly narrow dividing line to be drawn here between a paternalism which is mainly designed to benefit the nations who are being paternalistic, mainly the donor nations, and the need to ensure that aid of this kind is effective and is not used in developing countries to shore up regimes of injustice, oppression or terror. I am not satisfied that these criteria are always met or that the structures through which this aid is administered are not top-heavy with bureaucrats and with people whose main concern is a career rather than being devoted to altering fundamentally the balance of economic advantage as between the richer and the poorer countries.

Another point worth making in this connection is that it must be difficult for people in this country to follow the sometimes labyrinthine twists and turns of our foreign aid policy. We give aid under many headings; it could be argued that all of it is inadequate. We give aid through the International Development Association and through the World Bank itself—although we are a recipient of World Bank aid in some instances. There is aid through the EEC—the Lomé Convention—and there is aid through bilateral agreements with individual countries. One would like to see a more co-ordinated approach in which the balance sheet of our relationship with the developing world could be more clearly stated. I suggest to the Minister that on some appropriate occasion he might set out such a global balance sheet to indicate to the Irish people precisely where we stand under all of the headings taken together instead of dealing with them as we necessarily must seriatim under legislation like this.

In particular, I think the Irish people would like to have a more general statement of Government policy in relation to development aid, an indication of whether the Government propose to muddle along on this piecemeal basis or whether they take seriously the demands of the developing countries for a new economic order. Do they take seriously the predictions—I almost dare to say the doomsday predictions—of the Brandt Commission in relation to the economic relationship that should exist between the developing and the developed world? This is an aspect not only of our foreign policy but also of our economic policy. I strongly suggest to the Minister that the long-term political advantages of putting ourselves firmly on the side of the developing nations in the battle they are fighting against the highly industrialised, exploitative countries of the northern hemisphere could be substantial. I ask him to address himself even briefly to these points when he is replying to this debate.

Mr. Deasy

In common with other speakers I support the Bill but I wish to raise some queries on the matter. The Bill and the explanatory memorandum do not go into detail and I think the House is entitled to know exactly where the money will be spent. It is not sufficient to get a bland statement saying that the fund generally is of the order of $12 billion over three years without giving a breakdown of that figure. It is not sufficient to be told that we are contributing approximately $12 million during that period.

In his reply I should like the Minister to tell us of the nations who are contributing to the fund. I ask that question because it is quite obvious that some of the developed countries are not pulling their weight when it comes to providing aid for the underprivileged nations who are suffering famine and starvation. It should be clearly spelled out here who is providing the money and who is reneging on their commitments.

Obviously we are not in a position to provide a vast amount of money. In our own rather difficult economic climate our contribution is praiseworthy. I should like to know if the Russians, the Chinese and the better-off eastern bloc countries are contributing. In addition I should like to know where the money is going. I have read shocking figures about international funds to the underprivileged nations of the Third World. I have read dreadful reports on the actual amount of money that reaches its destination in terms of medicines and foods and the percentage being used in the interim on administration. When public funds are being granted we are entitled to have a breakdown of the actual amount of money that is reaching the people in need and the amount which is being spent on administrative costs.

The Minister has an obligation to provide those figures in the House. We, as the responsible body here, are entitled to know where the money is going. We assume that it will go to areas of starvation and famine, to places such as Bangladesh, to countries in the horn of Africa such as Eritrea where there has been desperate starvation and famine, to Ethiopia, to Somalia, D'Jibouti and to Southern Sudan and so on. In his reply will the Minister spell out exactly where the money is going. Is it going to Kampuchea, where millions have starved in the last couple of years, or to Zimbabwe, where famine is taking its toll and famine is threatened for years to come because crops have completely failed, or is it going to Afghanistan? Are political considerations dictating the areas to which the money is being channelled or is it being distributed on a purely humanitarian basis? I am interested to see that the money is going to the places of greatest need. I would like to know who is contributing and who is not contributing. I would like to know who is getting the money and who is not getting it, how much is getting through and how much is being spent on administration.

Minister for Foreign Affairs (Mr. Lenihan)

I thank the House for the constructive manner in which this Bill has been met. The basic purpose of the Bill was set out in my opening speech last evening. The voluntary contribution of £6,230,000 by the Irish Government has to be sanctioned by this House and it represents .11 per cent which was estimated by the International Development Association as being the appropriate percentage for Ireland. We have completely fulfilled our commitment. Indeed this was emphasised by the visit on Monday of Mr. Cargill, the senior Vice-President of the World Bank Group, who came here specifically to thank the Minister for Finance for the expeditious manner in which our contribution of £6¼ million to the association had been dealt with. With the passage of this legislation our contribution will be one of the first to be lodged with the International Development Association.

There is a lot of idle talk which indicates that we are not discharging our responsibility to the Third World, but that is not the case. This is one example where the full amount sought was agreed to promptly and will hopefully be sanctioned by the Houses of the Oireachtas promptly.

Deputy Deasy's point is very valid. None of eastern European countries, Russia or China are contributors in this area apart from Yugoslavia and tentatively Romania. As we know, Yugoslavia has been independent from the Eastern European bloc for some years and is a contributor. Romania hopefully will be a contributor, but Russia, China and the other countries of eastern European bloc are not contributors. I have a long list of the contributors which if the Deputies require I can read out, but broadly speaking the contributors are all the other European countries, the North American countries, some of the South American countries and Australia and New Zealand—in other words, the countries of the developed world, as we understand it. The recipient countries are the countries regarded as being developing countries mainly in Africa, the Caribbean and Asia.

Deputy Horgan raised the question of the transfer of resources from the developed world to the developing world and this question could be the basis for a comprehensive debate. The Deputy mentioned the Brandt Commission, which raises the point that unless there is a substantial transfer of resources from the developed world to the developing world we are heading into a crisis situation with the gap widening between the two areas. In the past 12 months the most serious damage to the achievement of reducing disparities between the developed world and the Third World has been done by oil-producing Third World countries. This is a sad but very real fact.

Mr. Horgan

Will the Minister lump them all together on that?

Mr. Lenihan

I was at an OECD conference in Paris the week before last at which this was fully discussed. It was also discussed at a meeting of the heads of state or Governments in Venice last week. On the recycling of funds alone it is estimated that in the last 12 months 135 billion dollars have been transferred by reason of oil increases from the OECD countries to the OPEC countries. Most of this has not found its way back into the world financial system. Oil prices increased last year by about 120 per cent. What all this means in practical terms is that the developed world has been hit so hard by the substantial oil increases that they are finding it difficult to meet their obligations to deal with the serious problems that exist in Third World countries that do not have oil or energy resources and who have serious economic and social problems. The effectiveness of what were the wealthy expanding economies of the developed world to cope with this shocking problem in the Third World has been considerably curtailed because of the action of those Third World countries over the last 12 months.

The tragedy is that the Brandt report came out while this was happening and much that was admirable in that report depends on the continued expansion of the economies of the developed world. If the developed world is in a period of economic expansion they can make the sacrifices and cream off the necessary funds to develop the developing world and thereby lead to a progressively improving world order in which we can reduce disparities and build up the Third World to the level of economic activity and social well-being that exists in the developed world. That is Brandt's main thesis, but it has been frustrated in the manner just outlined. This whole area is so important that it is engaging the attention of statesmen and leaders throughout the world.

Generally speaking, the Bill has been widely welcomed as being our contribution to the International Development Association. Deputy O'Keeffe made a number of points in regard to the question of aid generally. In relation to the overall position in regard to overseas development assistance, for a number of reasons already mentioned this year we, in company with a number of other developed countries, had to a certain extent to cut our cloth to measure and not give as wholeheartedly or as generously as we would wish towards development assistance. However, we did what could be done within reason.

The total figure, including the various channels within the United Nations and the EEC by way of direct bilateral aid and through APSO in regard to the personnel service aspect, will amount to £16,226 million which represents an increase of £1.726 or approximately 12 per cent over the amount available for overseas aid in 1979. I would like that figure to be much higher. It is not higher by reason of the fact that, as a Government, our first priority was to our own people, our own budgetary standing and to deal with our own economic problems. On account of this first priority we were forced into a situation where we were not as generous as we would like to be. The reason for that was as I mentioned earlier, prompted by Deputy Horgan, that the oil increases of last year placed very difficult budgetary constraints not alone on this country but on far more developed countries such as the Federal Republic of Germany and the United States. These countries are away ahead in terms of wealth and GNP and are pursuing policies of very strict budgerary constraint and restraint at present.

In order to protect our economy, subject as it is to the variability of trade and commerce and an open trading economy, it is incumbent on us to adopt very stringent standards in regard to budgetary planning for the current year. Within that context there is an increase of 12 per cent in overall development assistance this year compared to last year.

I assure Deputy O'Keeffe that no existing schemes or commitments that have been made under the bilateral aid programme or APSO programme will be cancelled. We have, because of the budgetary constraints, to be very careful about initiating new projects in the current year but as far as existing ones are concerned our commitments will be met. The Deputy seemed to indicate some criticism yesterday as to how the extra financing would be done. I indicated on a previous occasion in answer to a Parliamentary Question that I proposed to utilise what flexibility exists as regards the transfer of funds within the overall total that I mentioned of £16.226 million. I have a certain flexibility within that total and hope to be able to transfer funds from one block to another in order to meet commitments when they arise. We will not renege on our commitments. There may be some scope for transferring from some of the multilateral blocks of funding to the bilateral funding. This was done before where, because of the slowness of larger authorities to spend money, there is a shortfall in regard to multilateral expenditure.

At the beginning of the year it is important as a State, to show our commitment and credibility, to make our contribution to these multilateral agencies, to the UN agencies, to the EEC and to the International Development Association. It is important to show earnest of our credibility and bona fides in the matter to give the full percentage sought by them and agreed between Ireland and them. Quite often because of a slowness in administration there is a shortfall in actual expenditure. That gives a Minister scope for transferring to bilateral commitments. This I propose to do. It is the most pragmatic way to approach the matter. I have informed the various people in charge of programmes of this fact already. I have spoken to DEVCO, Dr. Tom Walsh, APSO and so on. We will not fall back or cancel our commitments in this matter. This point arose in the debate and is not really relevant to the Bill.

Mr. Deasy

I asked the Minister for a breakdown on the administration costs of the fund.

Mr. Lenihan

I do not have that information. Administration generally is covered by a service charge. These are interest-free loans subject to ¾ per cent service charge, so that ¾ per cent of each allocation goes to administration. That is the rule of thumb across the board in regard to administration. I can give the Deputy a table setting out the particular amounts but it comes to ¾ per cent of each block of money allocated going for administration.

Question put and agreed to.

Bill put through Committee, reported without amendment and passed.

An Leas-Cheann Comhairle

This Bill is certified a Money Bill in accordance with Article 22 of the Constitution.