Seanad Éireann debate -
Thursday, 9 Dec 1971

Vol. 71 No. 17

International Development Association (Amendment) Bill, 1971: (Certified Money Bill) Second and Subsequent Stages.

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

Parliamentary Secretary to the Minister for Finance (Mr. Lemass)

The purpose of the Bill is to give effect to the Government's decision to contribute 4 million US dollars to the current international programme to provide additional funds for the International Development Association. The funds are required so that the association may be able to continue and expand its work of promoting the economic development of the less developed countries.

The International Development Association was set up in 1960, to provide aid on easy terms, as a subsidiary of the International Bank for Reconstruction and Development. At present it has 107 member countries, including Ireland. It makes interest-free or low interest loans repayable over periods up to 50 years. Usually there is an initial grace period of ten years during which no repayments are required. The need for this type of organisation arose from the fact that many developing countries were finding it increasingly difficult to finance their development programmes by borrowing on normal market terms. Market borrowing was straining their credit-worthiness and was creating a serious debt-servicing problem for them, a problem which has tended to become more acute in recent years.

The association is closely linked with the World Bank in its management, staffing and general operations. Many projects in developing countries are financed by a combination of bank and association loans, the bank funds being provided on more conventional terms. The overall effect is to reduce substantially the cost to the borrower.

At an early stage the association decided to concentrate its activities on developing countries whose per capita income did not exceed £300, about £120, a year. From its inception in 1960 to June, 1971, it made available a total of £3,340 million. This comprised 274 loans to 58 countries. There has been a steady increase in operations, particularly since 1967, according as the association has had access to greater financial resources.

Loans are usually provided to finance specific projects and are normally intended to cover the foreign exchange costs involved. Sometimes funds are given to assist a general development programme or reconstruction measures. For example, a loan to assist reconstruction in Nigeria was made earlier this year. Every project is carefully evaluated and the association must be satisfied that it will contribute to the economic advancement of the country concerned. A large proportion of lending has been for agricultural purposes but transport and communications, irrigation, power supplies, education and technical assistance have also benefited. An important feature of the association's aid is that recipients are not tied to any particular suppliers for the purchase of machinery and equipment needed for their projects but can "shop around" to get the best value.

The organisation depends largely on the 19 richer member countries for funds. In 1960, when it was set up, those countries, which are known as Part I members, subscribed £751 million in convertible currencies. The other members, called Part II members, comprising the less industrialised countries, like ourselves, and the developing countries, paid £265 million but only 10 per cent of this sum had to be paid in convertible form. In 1964 the association found it necessary to replenish its resources and the Part I members contributed a further £741 million. A second replenishment in 1968, also provided by the Part I members, brought in a further £1,200 million. Earlier this year agreement was reached on a third replenishment to provide a total of £2,450 million over the next three years. This replenishment has not yet become effective as the necessary procedures have not been completed by sufficient members. It is hoped that the formalities will be completed shortly.

Ireland has been a Part II member of the association since its inception in 1960. Our initial subscription was £3.03 million. Although the conditions required that only 10 per cent of this sum be paid in convertible currency, we paid the subscription in full in foreign exchange as an indication of our support for the association's work. In common with the other Part II members, we did not participate in the replenishments in 1964 or 1968. On the present occasion, however, approaches were made by the Association to the more advanced Part II members, including this country, asking that they share in the latest financing arrangements.

The demand for concessionary aid is almost insatiable, as more and more of the poorer countries find themselves unable to finance their development programmes by conventional means and meet rapidly rising burdens of debt repayment. "Soft" aid is one of the most important means at present of ensuring a real transfer of resources from the developed to the developing world. The Commission of International Development, set up by the World Bank under the Chairmanship of Mr. Lester Pearson, former Prime Minister of Canada, in its Report published in September, 1969, called for a massive increase in this type of aid. We are committed to increasing our development aid according as our economic circumstances improve. The Government have decided, therefore, that it would be reasonable to increase our contribution to the International Development Association, subject to the passage of this Bill. As already mentioned, the additional contribution proposed is £4 million. I might mention that Spain, Switzerland, New Zealand and Yugoslavia have also agreed to contribute.

It is proposed in the Bill to authorise payment of our further contribution out of the Central Fund. This is necessary because a firm arrangement must be made at the beginning to commit the sum in three annual instalments, so that the association will have some assurance that funds will be available to enable it to meet its commitments to developing country borrowers. Actual disbursements may be apread over a longer period and will be a matter for agreement with the Association.

It has been said that our aid effort is too small and that we are not keeping up with the efforts of other countries. The great bulk of the aid we provide officially is made available through international bodies, such as the various United Nations agencies, the World Bank and the International Development Association. This helps to ensure that it is applied to the best advantage of the recipient countries. International statistics indicate that our performance in such multilateral aid-giving is not unreasonable in comparison with other countries. Other countries, however, also give a large proportion of their aid bilaterally. Much of this kind of aid is between the major powers and their former colonial territories, and a high proportion is tied in one way or another to the purchase of goods, perhaps machinery and equipment, from the donor countries. Thus, the donor countries may be doing little more than extending credits from which they will get valuable benefits in production and exports.

Our case is quite different. We do not benefit to any extent in trade and a definite sacrifice of resources is, therefore, involved. It must be remembered, too, that we have to import capital in sizeable amount to finance our development programme. As long as this is so and as long as we have a serious balance of payments problem, our ability to provide capital for overseas countries must necessarily be limited. Nevertheless, the amount of our aid has been increasing. It has grown from £673,000 in 1964/65 to £1¾ million in 1970/71 and the increase of £4 million now proposed will provide a further boost. This is an earnest of the Government's wish to do our best by the Third World.

I need hardly remind the House that Ireland has for many years been making significant contributions also through the missionary effort, which includes contributions in such fields as education, medicine and nursing. We have also made personnel available to international agencies for technical assistance missions and educational and training facilities have been provided in our universities for students from the less developed countries as well as training facilities in the Army and other public services. When these contributions are taken into account, our record is not, perhaps, as small as the bald comparison of statistics might suggest.

The Bill is a practical expression of our willingness to share in the international development effort. As such I have no doubt that it will be readily welcomed by the House.

Mr. Alexis FitzGerald

Speaking for myself and for my party, I unreservedly welcome this Bill. The Parliamentary Secretary, when introducing it, referred to the Third World. We should not think so much in terms of ourselves and themselves—of a Third World, and presumably the other two are: the rich capitalist countries, more or less rich; and the more or less rich communist countries. We should think in terms of and that we are part of that world; one community, and that we are part of that single community.

Just as it is universally accepted that in a polity such as ours those who have more should be taxed to give to those who are in need, likewise, this concept of the distribution of income within a nation, within a country, or polity must be extended and made universal to the single community of man. It was a happy expression of the Parliamentary Secretary when he referred to the contributions of our missionaries. Not that we can claim credit for what they have done, but they, in their efforts, by the dedication of their lives, have at least indicated what the best elements in our community wish even if they be not missionaries themselves or even Christians or if they be not the particular sect of Christian to which the missionary belongs.

In welcoming this Bill, I do so, having regard to the statement made by Lester Pearson, not in his Report of September 1969—which, incidentally I do not find in the Library of the Oireachtas—but in a contribution he made to a subsequent debate and reported in the proceedings of the World Bank for the year 1969. He said that, in fact, to understand the situation we must realise that the developing countries are at that stage of development that Western Europe was at before the Industrial Revolution. A startling figure was given by Mr. Lser in a table contained in a paper he read at the Statistical and Social Inquiry Society of Ireland. He said that the countries with low levels of industrialisation, having two-thirds of the world's population share in one-eighth of the gross national product. At another point Lester Pearson, again in these proceedings to which I referred earlier, said that development is part of their unfinished revolution, another stage in their struggle for freedom. It is a common observation in any of the writings on this subject that unless there is a licking of the problem, as someone called it, the gap, which has been widening notwithstanding the contributions since 1960, and indeed earlier contributions since the end of the war, will widen even more.

It is in the context of our present international situation that we ought to look at the contribution which the Oireachtas will decide that Ireland should provide. It was resolved by the United Nations General Assembly in 1970 that the target to be aimed at for aid should be 1 per cent of gross national product. That is a figure which has been revised, in the terms of the judgment of what will be possible to be attained in the year 1975 to 7 per cent. It is worth looking at what has been done by those countries. The communist countries, for example—I hope I am allowed to refer to the communist countries and to point something out about them without being described as illiberal—firmly refused to commit themselves to the 1 per cent gross national product target. In the Pearson Report it was established that in the years 1965-1967, the period considered, total communist aid represented only 3 per cent of the total net aid given to those countries. There has been a stepping up in communist aid since then, taking China, Russia and the rest of the Eastern bloc together, but the contribution that has been stepping up to mask the falling contribution from the Soviets has been the contribution from China. A sharp Russian drop has been concealed by an increase in the Chinese contribution.

The only countries in 1970—and it is worth looking at them because there is a tendency to say that the rich European countries are failing particularly in this regard—to reach the target were Belgium, Holland, France, the United Kingdom and, surprisingly, Portugal. Added to the group of European countries should be Australia. America has, in terms of their gross national product, always done worse than the other advanced countries and as a result of the Senate decision made in October—perhaps the Parliamentary Secretary would be able to tell me whether the House of Representatives have yet dealt with that decision—this contribution is going to be lower still. Why I am mentioning the communist countries, on the one hand, and the European countries and America, on the other hand, is that much of this aid-aid which extends beyond what is covered by this Bill—consists, as economists discreetly put it, of the puffing-up of rickety client States, the bringing of succour to war-devastated areas, the placating of doubtful friends, the arming of potential allies and the provision of markets—to which the Parliamentary Secretary referred—for products of the donor countries.

In connection with that last point— the Parliamentary Secretary was quite right in drawing the attention of the House to it—it has been calculated that one-third of the steel exports of the United States are purchased by aid countries. Something in the region of 140 million dollars worth of chemical manufactures are similarly purchased as a result of those aid programmes and 265 million dollars worth of machinery production.

I do not think it is necessary for us here to stand in judgment on the performance of America in relation to this. Countries which want aid should remember the old rule of diplomacy that if you want to get the assistance of some country you should do so without antagonising that country. Among the reasons which have led to the cutting of American aid is that 40 of the countries which were getting foreign aid from America voted against the American desire to retain Taiwan in the United Nations. If you are being honest in trying to get an overall picture of this you have to remember that if you want money you have to be on reasonably good terms with your bank manager. You cannot expect him to ignore your cocking a snook at him as he passes in a car that is better than yours. Anyone concerned to advise client states in the developing areas will only be misleading them if he encourages them in the idea that they can have the luxury of a foreign policy which ignores the realities of their own circumstances.

I do not think it is possible to look at this question of aid—I think this is called concessional aid which comes under this legislation and this international agreement—without remembering that the amount of aid which actually reaches the developing areas, through this source, represents only about 11 per cent of the total. The other forms represent a very much larger portion, but it has the advantage that the money is administered by people who are aware of the problems arising in the countries which are receiving the money, who have expert accountants, expert engineers, people who are realistic about political corruption and whose job it is to see that the project which is being financed is the project which is, in fact, financed, and that as little as possible of the money is spent on nest feathering. That is why it is good to see us coming in with this particular contribution to this body.

It is not possible to discuss the proposed contribution without referring to the whole question of population growth. In relation to this, I find myself broadly able to comprehend the arguments without being able to come down with certainty on one side or another. However, I approach it optimistically when I reflect on the fact that 150 years ago, or thereabouts, Thomas Malthus produced his famous essay on population in Britain, when the population there was a fraction of what it is at present; at that time in Britain he foresaw all their efforts at wealth creation being frustrated by the operation of this principle, this tendency for population to grow in geometrical progression whereas, because of the scarity of resources, wealth could grow only in an arithmetical progression. He saw this as constantly preventing the creation of wealth on a durable and politically stable basis. By this approach, Thomas Malthus affected the economic policy of Britain—to Britain's advantage and to our disadvantage incidentally. He was proved to be wrong, if we only look at the last 150 years in terms of wealth creation in Britain, Western Europe and America. He was simply a pessimist when those who were optimistic on this were right.

I view the future of the world with a recollection of how he viewed the future of his world and how wrong he was with regard to it. We must take note of the fact that, while projections for the future may be unrealistic because the factors may change, the present rate of population continues— the world's population was 1½ billion in 1900—in another 80 years it will be 25 billion. One might say: "Do not be worrying. In 120 years from now it will be 50 billion." We must take note of these facts and of the opinions of people like Gunnar Myrdal, in his The Challenge of World Poverty. He says that there is a clear necessity for lowering birth rates in these countries in order to make sustained economic development possible. Father Arthur McCormack wrote in The Tablet on 5th June, 1971, and commented on the United Kingdom Population Report which had just been published. Referring to the optimistic view to which I have given expression, Father McCormack said “To my mind this view is no longer tenable.” On the other hand, Colin Clark takes Barbara Ward to task. While he agrees with her that the most essential need to deal with the short-term problems of these countries is simply to produce more food there and increase agricultural production, he disagrees with her that this task is hampered by an increase in population. He gives figures published by the OECD in respect of the national accounts of the less developed countries for the years 1959 to 1968. They show that the rate of increase of agricultural production increases with an increase of population.

The article was a very striking one and brought out facts that never appear in newspapers. While there was a genera average increase of 5 per cent in agricultural production in all these countries, this general average masked two surprising facts. Firstly, countries such as Taiwan, Korea, Malaysia, Thailand, Ethiopia, Sudan, do not, or those who have been helping them do not, get many compliments. During this period these countries increased their agricultural production at the rate of 15 per cent per annum. These are quite surprising figures. During this period there was an 11 per cent per annum increase in Brazil and a 19 per cent increase in Mexico and in a number of Latin-American countries.

One fact masked in the 5 per cent average was the serious decline in agricultural production due to political disruption and attempts to collectivise agriculture in Cuba, Algeria, Tunis, Uruguay and Indonesia, all of which, with certain other slight declines, pulled down the average to 5 per cent. These facts are worth examining. At the same time note should be taken of the fact that, as Lser again said in the paper I have already mentioned, there is little doubt that at the initial stage of industrialisation a fast population growth is an obstacle, as it tends to divert urgently needed resources from the industrial section. At a later stage population growth can act as a stimulus and has apparently done so.

I have referred to these matters and come back again to Clark, when he talks about the justifiable economic grievance of the developing countries because of the fact that the terms of trade have been turning against them during the relevant period. What they were getting for their exported food was declining in terms of what they had to pay for their imported manufactures. I am sure that nobody in this assembly needs to be reminded of the strength of the farm lobbies in different countries that have dealt with this. The same can be said of the trade union lobbies that have maintained quota restrictions and taxes on some of the things that developed countries do not produce, such as coffee, tea and cocoa.

What does not appear from the Act which is being amended, or from the Bill which is amending it is: who administers our policy with regard to these contributions? We have votes. How are these votes cast? Is there a section in the Department of Finance which determines this? Is there any report as to how we voted on a particular issue? Who makes it? Does Parliament determine the policy in any way?

The Library has the annual reports but it is a pity that in the original Act there was no provision for presenting the annual report to the Houses of Parliament. This would give us an opportunity of having this kind of debate, more often than once every 11 years; and it is the clear duty of a Christian to form a view as to what we should be doing and how much we should subscribe. As a people, the more we were involved, the more we were conscious of the extent of our contribution—and of the cost, too, in terms of human suffering, of our not making a contribution—the better it would be.

I should like to get an explanation of a point which the Parliamentary Secretary made in his opening speech. He stated that our initial subscription was 3.03 million dollars and, although the conditions required that only 10 per cent of this sum be paid in convertible currency, we pay the subscription in full in foreign exchange. Now I will become technical and ask by what authority? The International Development Association Act 1960 states: "The Government were entitled to make payments under subsections (a) to (d) of section 2 of Article 2 of the Agreement." If you look at sections (a) to (d) there is a provision for the payment of 10 per cent in foreign currency and for 90 per cent in our currency. That was the authority given by the Oireachtas. By what authority did you pay the 90 per cent in convertible currency? If we give the Government authority to spend £1,000 million, does that entitle them to spend £1,000 million in convertible currency? I suggest most strongly that it does not any more than it entitles a Government to give a guarantee, which can be sued out in foreign currency if the statute entitling the country to give the guarantee does not expressly entitle the Government to guarantee in foreign currency.

Why is this amendment necessary? The articles of agreement of the International Development Association provide for an initial subscription payable as to 10 per cent in one form, 90 per cent in another. It then provides for additional subscriptions under Article 3, section 1 and I presume it is under that section of that article that we have been paying whatever has been paid in addition to the initial subscription. If it were possible to pay 90 per cent of the additional subscription which was authorised to be paid in Irish currency in convertible currency, why is it not possible to use section 1, Article 3 to make this additional subscription to what is technically incorrectly described as a subsidiary of the World Bank? It is not a subsidiary of the World Bank, if I understand the use of language. It is an association whose members are and have to be members of the World Bank. This does not make it a subsidiary of the World Bank, though the two work closely together. Is this not also covered by the provision with regard to supplementary resources?

There was no provision in the Act governing this for the operation of section 2, Article 3. Is this the section of the Articles of Agreement under which this additional subscription is to be made? If so, the amendment proposed does not seem apt. A more simple amendment would be needed of the provisions of section 3, subsection (2), of the Act providing for payments under section 2 of Article 3 of the Agreement which would be a better way to fill the gap left in the Act governing this matter.

I should like to conclude with a question. I notice that Switzerland and New Zealand are mentioned as having agreed to contribute. They did not sign the original document or had not signed it at the time of its deposit with the United Nations. This surprises me with regard to New Zealand. Is it possible that we are in the same category financially as Switzerland? Is Switzerland in Part 2? They are damnably clever if they are in Part 2 with us and not in Part 1.

Ruairí Brugha

It is a satisfaction to support a Bill of this nature. Our ability to contribute to international funds of this kind must depend to a great extent on our willingness to develop and expand our economy. It is a good sign that we are in a position to contribute four million dollars to the underdeveloped countries and the less fortunate section of the world's population.

Although we are still developing our own economy to provide for our own people, we should be seen to be contributing to this fund. As a nation we have experienced poverty and backwardness in the past and it is right for us to set a good example to the better off countries, many of whom are in a better position to contribute to funds of this nature. I am pleased to support this Bill.

Mr. J. Fitzgerald

Like Senator Alexis FitzGerald and Senator Brugha I support and welcome this Bill. As Senator Brugha pointed out it is good that a small country like this can give some support to the underdeveloped and emerging countries. There are one or two points which I would like the Parliamentary Secretary to clear up. He has been handed an armful of problems by Senator Alexis FitzGerald but mine will be simpler.

In the second paragraph of the Parliamentary Secretary's introductory speech this evening he states:

The International Development Association was set up in 1960, to provide aid on easy terms, as a subsidiary of the International Bank for Reconstruction and Development. At present it has 107 member countries, including Ireland. It makes interest-free or low interest loans repayable over periods up to 50 years.

Since 1960 we have contributed over $3 million. We propose now to contribute $4 million to the International Development Association. It would appear from the Parliamentary Secretary's speech that this money is being loaned out at low rates of interest, or interest-free, up to a period of 50 years. Does this mean that the money we give to the International Development Association will be repaid at some particular time in the future? In other words, is it only interim aid?

This is the first point I should like to have cleared up because the Parliamentary Secretary also pointed out that while 19 wealthy countries are contributing much more per head of population they are perhaps contributing much less than a small country such as ours. He also pointed out that these wealthy countries who contribute so much are able to get repayment in kind in view of the trade they are able to do with these emerging countries. We all welcome the chance to help these underdeveloped countries in their efforts to emerge but there is an old saying "charity begins at home". A sum of $4 million is a lot of capital. We have a number of small industries that could do with a small injection of capital. While we should do our part we should not try to keep up with the Jones's and do more than our part. There is quite an amount of aid needed in our own country in areas that need development.

Mr. Keery

I sympathise with the point Senator J. Fitzgerald has made that it is often difficult to assess the values in spending abroad in development aid at a time when certainly the need for funds at home seems pressing and paramount. I would like to advise Senator J. Fitzgerald that I take seriously the title which the Irish hierarchy's Commission for Justice and Peace chose for their pamphlet which dealt with this matter of development aid and the problems of other countries. They called this pamphlet "The Third World War", and indicated that in their view the third world war, which is the war to combat poverty overseas, which if not combated now would create a problem which would engulf us all, was already going on and we shirk our responsibilities in this war at our peril. I take that view where any contribution we can make towards dealing with the problems of world poverty and underdevelopment is concerned.

I would like to welcome the brief statements of principle that the Parliamentary Secretary has put into his Second Reading contribution here, particularly the statement of our commitment to increasing our development aid according as our economic circumstances improve. It is important to make that sort of statement now when we are about to enter the EEC, a Community who have been criticised in some quarters for their attitude towards development aid to the third world. It is important that our attitude in this matter as we enter the EEC should be quite clear.

The last point I wish to make is that the Parliamentary Secretary referred to the component given to our aid contribution by the voluntary work of Irish people overseas. In September this year proposals were put to the Government for the formation of a central unit which would co-ordinate voluntary work overseas and provide a focus for further recruitment of volunteers and the development of this work. I should be interested to hear if the Government have had an opportunity to consider this proposal. It is a proposal that should have very serious, and I hope, favourable consideration.

Business suspended at 5.55 p.m. and resumed at 7.30 p.m.

Professor Quinlan

I wish to join in the welcome to this Bill and the intentions behind it. From the point of view of information it is a pity that a table was not given to us showing the contribution to the various countries so that we might be in a position to gauge our contribution both in direct aid and what is acknowledged as aid in other ways under bilateral arrangements. In voting a sum of 4 million dollars, or almost £2 million, in fairness we are entitled to have this information. I hope the first possible opportunity will be availed of in future to provide information on this.

The project itself is a laudable effort to help the Third World. Our contribution looks reasonable for a country of our size but I am a little worried that all our contributions are of the direct type. As the Minister's statement says, we are giving very little in the way of bilateral aid where there would be a certain benefit accruing to this country from the spending of that aid. Personally, in this case where we are giving 4 million dollars I would prefer if half of it was by way of bilateral aid, not under this International Development Association where it has to be given direct without strings attached. Yet, in reckoning our contribution under this, the amount we have given by direct aid under bilateral arrangements would be reckoned in that. Indeed, we should see that it is reckoned.

The Minister said in the concluding two paragraphs of his speech that we are making contributions through the missionary effort and so on, but so far as I am aware no public money has been spent on that. The plea I am making now is that at this point in time, and probably for the next decade, we have a superabundance of trained personnel. We find that the development of second level education has resulted in a greater number of people being trained than we are likely to be able to use. This applies to both graduates from the universities and from the technical colleges. The Government should keep in mind this very valuable resource we have got and it should be quite free at the expense of the Irish taxpayer by bilateral agreements with countries in the Third World, especially the African countries with which we have strong missionary links. We should be prepared to see sizeable numbers of graduates, at the 200, 300 or 500 level, going out for a specific period of time, where they could make a contribution as teachers or as engineers or as business people.

This contribution would be of immense value towards developing those countries. It would be of greater value than anything we can contribute financially. I am quite conscious that some of this is being done by the missionary orders, but it is being done on a very limited scale because their funds are very limited. If half the present fund or something of that order was available in a three or five year period for financing this type of work, then obviously we could send out a very large number of trained young people to carry out the great work they can do in those areas. On the one hand it would help us in so far as we have at present a rather difficult situation with regard to employment for our graduates and trained people. That is not unique; the same holds true in England and America and other places. It is not for the good of the graduates or of the nation that those young men and women should be idle. I think we could gain a great advantage by sending them out.

Looking at the other side of the coin, what is in it for us? What is in it for us is that these young people, returning home after three to five years working in those countries, might be convinced that Ireland is not such a bad place after all. Their standards would be much more realistic than they would be immediately after graduation. Having endured the rather difficult conditions in those underdeveloped countries, I feel certain that when they came back they would be far better able to get down to real development work here and they would make an immense contribution.

We may have a rough period or a period where we have a surplus and where the world around us has a surplus for the next four or five years, but after that I would hope that we would see an expanding phase where we would be able to use the talents of those people. It is something we should keep in mind, and when I see some sum like the 4 million dollars that is mentioned here I think half that spent in a way in which we think these countries can benefit would probably be of more advantage to them than the same sum going through the international organisations. I would appeal to the Minister in future to keep this in mind and to keep in mind our real wealth in dealing with the Third World and the tremendous number of trained people we have got.

They can contribute, and the Third World is short and very short of all those trained personnel. Therefore, I would appeal to the Minister and the Government not to lose sight of this. Also, I should like to see at some time some Government publication — the Department of Foreign Affairs very often issue those—setting out Ireland's contribution and showing its relative position in comparison with the contributions made by the other countries in Class A and in Class B. With those reservations, I commend what we are doing and I think it is only right and proper that we should play our part in all this work.

Mr. O'Higgins

I will be very brief on this. I understand, I think, the point of view that was expressed by Senator Quinlan and the arguments that he has put up, but it would seem to me that the comparison that we require in connection with this Bill or the giving of assistance of this kind is not so much a comparison between what we contribute and what other countries contribute, even on a relative basis. I think it is a comparison between what we contribute and what we can reasonably afford to contribute.

Like Senator Quinlan, I am a little disappointed that in introducing the Bill the Parliamentary Secretary did not give us those kinds of comparisons and that he did not spell out for the Members of the House what on a percentage or a per capita basis, the kind of contribution we are now making would amount to. I do not know—and because the Parliamentary Secretary did not mention it I do not suppose anyone else here knows—exactly what 4 million dollars means on a percentage basis here relative, for example, to the gross national product or even on a per capita basis relative to wage and salary earners in this country. It would seem to me that what we should bear in mind here is that, even though we may be comparatively speaking a fairly poor country ourselves, the person with a pound in his pocket is a rich person as compared with the person who has only a penny in his pocket.

I feel strongly that our contribution to schemes of this sort, which I think is an extremely good one, should be governed very much more by what we feel we can afford to give rather than by what other countries, whether they be wealthy or poorer than ourselves, give.

That brings me on to the next point I wanted to mention, and it is this. Whatever contribution we make is a contribution being made through the agency of the Houses of the Oireachtas. All right, but in fact it is a contribution being made by the ordinary people of this country, the people who, one way or another, have to pay the taxes which raise the money that is dispensed by the Houses of the Oireachtas. Therefore, in a very real sense any contribution we make under this Bill is a contribution being made to poorer countries and to poorer individuals in those countries around the world by the ordinary people of this country. We should not regard this, in any sense, as a contribution that is being made by the Irish Government or by the Irish Parliament, even though they may be the agency through which the money is voted.

I agree fully with the point made by Senator Alexis FitzGerald in this connection. We realise the true significance of this contribution—that we are all one world—because it is made by the ordinary people of Ireland to their poorer brethren elsewhere in the world. Because our country is very nearly 100 per cent Christian, we would not alone feel an obligation to assist the less well-off but would welcome the opportunity to do so in a practical sense.

Another point I should like to make is that I feel Members of this House should pay a very warm tribute to Senator Alexis FitzGerald for the analytical way in which he dealt with this matter and for the amount of research he made on the subject. Were it not for this detailed information—by this I do not wish any disrespect to the Parliamentary Secretary—I feel a number of us would not have regarded this matter in its proper context. I think it only proper to mention this point.

Somebody made the remark in the course of the debate that charity begins at home. This is a relevant matter. There is also the old saying that God helps those who help themselves. If we are midway up the ladder, so far as prosperity goes, we should not hesitate, by consideration of any clichés, such as the above mentioned, to play our part: we should give as best we can according to our means to less developed countries even if it means the temporary postponement of some of our own plans at home.

These are only some general observations on the subject. In the future I think there should be a fixed agreement on our percentage contribution to the International Development Association. The structure of this association, in the division between Part I and Part II contributors, reflecting the distribution of wealth among States, is a good idea. The Parliamentary Secretary mentioned a target of 1 per cent. I do not know if this was ever agreed on. Obviously, we in this country are not committed to this percentage. If we were we should have an Act whereby the Government, having assessed what the percentage would be in money terms, could make such a contribution without further legislation.

As far as my party and I are concerned, I would suggest that the proper method—and this view was expressed some time ago—would be to fix a percentage contribution which we could afford to make whenever the need or the opportunity arose rather than having to enact further legislation when asked to contribute. My concern in relation to this matter, as my colleagues will be aware, is not that we may be contributing too much but if we are contributing what we can afford.

Parliamentary Secretary to the Minister for Finance (Mr. Lemass)

I wish to thank the Senators who have contributed to this debate for the attitudes which they ave adopted, in particular the constructive research which Senator Alexis FitzGerald has obviously put into this matter.

Ireland's contribution in official aid to developing countries has grown from £¼ million in 1961-62 to £1.8 million in 1970-71. Our commitment to contribute to the International Development Association means that, assuming no change in the amount of our aid under other heads, there will be an increase of official aid to a level of more than £2 million for each of the next three years or so.

The greater part of Irish official aid is provided, multilaterally, through the various UN agencies, the United Nations Development Fund, the World Bank, IDA and so on. It is true, as Senators have pointed out, that the aims set out by the United Nations Conference on Trade and Development was 1 per cent of the gross national product. This percentage has been refined by the Pearson Report to 0.7 per cent for official aid and the balance to be given by private assistance. These targets are to be reached by 1975.

The Irish aid effort has been frequently criticised as being too low and as falling below the international aid targets and the efforts of other countries. Senator O'Higgins referred to this matter in his address. In relation to multilateral aid I should like to put on record how we compare, in this aspect of aid, with other countries. In Ireland we contribute 0.10 per cent of the gross national product; in Belgium it is 0.14 per cent; in France it is 0.05 per cent; in Germany it is 0.03 per cent; in Italy it is 0.03 per cent, in the Netherlands it is 0.13 per cent; in the UK it is 0.07 per cent; in Denmark it is 0.17 per cent and in Norway it is 0.25 per cent. That sounds quite satisfactory but, as has been pointed out here, there is also the question of bilateral aid. Ireland is not in a position, as countries like the United Kingdom and Germany are, to use this method of giving credit to countries to enable them to buy materials that are produced in their own countries.

As regards the 1 per cent international target, it has been recognised that this did not necessarily apply to countries such as Ireland which are still in the process of development and which have to import capital for their own development. When the 1 per cent target was being discussed, a target of 0.2 per cent or 0.3 per cent was suggested for countries such as our own.

Senator Alexis FitzGerald referred to the Third World. He mentioned that the gap between the developed countries and the underdeveloped countries is widening continuously. The majority of the world's population live in the less-developed areas and on present forecasts this majority will rise to between 80 per cent and 90 per cent of the total population by the middle of the next century. The present aid structure in developing countries shows a high percentage of dependants; the age groups of 15 to 64 in developing countries comprise less than six in every ten of the population and they must support the remaining four in ten. This question of population has been raised in different ways here. The various Papal Encyclicals and statements, notably Populorum Progressio and the Constitution of the Church in the Modern World, have pointed out the obligations that we have towards the poorer nations.

I was also asked how the votes are cast and who determines our policy. The policy in regard to the IDA is determined by the Minister for Finance. He is the political head of the Department responsible and he is also a member of the association's board of governors. Technically, 118,000 dollars of our four million dollars will be regarded as an additional subscription. Voting power in the association is being adjusted to reflect the actual financial contributions of members over the years and each member is being given the opportunity of subscribing for sufficient extra votes to maintain its relative voting position. At present we have 1,106 votes—that is 0.43 per cent—of the total. Under the new arrangement we shall be entitled to 3,825 votes which will be also 0.43 per cent of the total.

As regards the payment of our initial subscription of three million dollars in full, the position is that the first 10 per cent was paid in freely convertible currency as permitted specifically in the 1960 Act. The remaining 90 per cent was paid in Irish currency in the first instance, as also permitted by the 1960 Act, and this was subsequently converted into foreign exchange, as permitted under the Exchange Control Regulations. I should like to inform Senator Alexis FitzGerald also that Switzerland is not a member but they make contributions on a free basis.

Senator Jack Fitzgerald, while he welcomed the Bill, said that in his opinion charity should begin at home. He suggested that the £1.8 million might be better spent on the establishment of small factories throughout the country and that additional help should be given to the IDA or other agencies connected with industrial development. I should like to point out to the Senator that this has been done. It is not many weeks since the Minister for Finance allocated an extra £6 million to the Industrial Development Authority. It is a question of priorities. I should like to say to Senators, and to Senator Jack Fitzgerald in particular, that any criticism we have had in relation to this Bill has mostly been to the effect that Ireland has not been doing enough and that it should do more. In the last ten years — taking the relative values of money into account — we have more than doubled our contributions to relief of this kind.

Senator Quinlan was concerned about obtaining more information on what each country contributes. I have the documentation here in relation to that but I am sure the Seanad would not wish me to read it out. In order to meet this point I will arrange that these tables will be made available in the Library. The tables are quite complex and cover a number of years and show how votes are related to contributions and so on. In Class II the biggest number of votes are held by India who, proportionately, are making a very substantial contribution.

Senator Quinlan raised the question of direct aid and spoke about the graduates. In my introductory statement I pointed out what we are doing in relation to aid of this type, in training or sending out trained staff to other countries. I think Senator Quinlan should realise that in this country, as industry expands, we are now finding a shortage of skilled labour in certain fields. This, of course, will have to be borne in mind by the training authority, AnCO, and when speaking of the requirements of industry. We are at present going through a period of complete reorganisation and new approaches because we are now coming into the concept of being one of the more industrialised European countries and we will have to be able to provide for the needs of our own people. This is not, as Senator Jack Fitzgerald has said, a question of charity beginning at home but I think we should continue, as we have been doing, sending trained personnel, such as nurses and civil servants to these countries.

I do not think there is anything controversial in the Bill. I do not think there has been any suggestion that it should be amended. I commend the Bill to the House.

Question put and agreed to.

Agreed to take remaining Stages today.

Bill put through Committee, reported without recommendation, received for final consideration and returned to the Dáil.