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Seanad Éireann debate -
Wednesday, 11 Dec 1985

Vol. 110 No. 7

International Development Association (Amendment) Bill, 1985 [Certified Money Bill]: Second and Subsequent Stages.

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

The purpose of the Bill is to authorise a voluntary contribution of £8,330,000 by the Irish Government to the seventh replenishment of the resources of the International Development Associations and to authorise a voluntary contribution of £1,500,000 to the Special Facility for Sub-Saharan Africa which will be administered by the International Development Association.

The International Development Association was founded in 1960 as an affiliate of the World Bank. Like the bank itself, it provides loans to developing countries for investment in suitable projects designed to strengthen their economies and to improve the standard of living of their peoples.

The setting up of the association was in response to a view that there should be a concessionary arm to the World Bank. It was felt at the time that the bank's normal assistance, which is on virtually commercial terms, could not be availed of to the extent that would be desirable by one important group of its members, namely the poorest of the developing countries. Such countries required, not loans on commercial terms such as the bank offered and which they would have considerable difficulty in repaying, but loans on highly concessionary terms that would not impose a heavy repayment burden. Accordingly, the association came into being to fulfil this need.

The majority of the bank's members joined the association, which has resulted in a total membership of the association of 134 countries at present. Members are divided into two categories — Part I members, including Ireland, which are developed countries of which there are 22; and Part II members, which are developing countries, numbering 112. Broadly speaking, the Part I members provide resources to fund the association's activities and the Part II members engage in borrowing from the association, provided that they meet certain eligibility criteria. Some Part II members contribute to the association's resources. At present more than 50 of the Part II countries satisfy the eligibility criteria for borrowing.

Loans are made by the association directly to Governments for the financing of suitable projects in their countries. The principal criterion for eligibility to borrow is that a country have an average per capita income level of a maximum of 790 US dollars a year, but in fact some 90 per cent of the association's lending goes to countries with an average per capita income level of less than 400 dollars a year. The eligible countries are concentrated mainly in Africa south of the Sahara and in South Asia. I do not need to remind Senators of the continuing problems of extreme poverty that are faced by these regions.

At present the association provides over three billion dollars annually in loans. This makes it one of the largest providers of concessional aid to the poorest countries. The loans are provided on an interest-free basis for 50 years with capital repayments starting only after ten years. While these terms are extremely favourable, it must not be thought that there is any lack of rigour in assessment of projects approved for financing by the association. On the contrary, the loans must be for productive projects which are economically viable. They must meet the same standards of viability as are required by the World Bank itself which, as I have indicated, lends on commercial terms. This ensures that the assistance is used in a way which promotes the development of the borrowing country. In addition to providing actual financial assistance, the association also offers policy advice and assistance in building up institutions in the borrowing countries. This part of the association's role can be of great importance for countries which need and seek independent and expert advice on their development problems.

The concessional nature of the lending undertaken by the association is made possible by the grant-type resources which are made available to it. To date these resources comprise, in round figures, initial membership subscriptions amounting to $1 billion, transfers from the surplus income of the World Bank of $2 billion and nearly $30 billion from periodic replenishments provided by the member countries. By far the greater part of the funds for these replenishments has traditionally come from the developed countries. All the members of the EC and many other European countries participate; so too do the United States, Canada, Japan and Australia. There are as well a number of OPEC contributors and, in recent years, an increasing number of better-off Part II developing countries. The latter group include Argentina, Brazil, Korea and Yugoslavia.

Ireland joined the association on its foundation in 1960, and subscribed $3 million to the initial capital. We did not contribute to the first or second of the three-yearly replenishments of resources, but we agreed in 1971 to make a contribution of $4 million to the third replenishment, even though Ireland was still a Part II member at that time. When Ireland became a Part I member in 1973, it was accepted that this would involve a continuing commitment to contribute towards IDA financing. Since then Ireland contributed $3.1 million to the fourth replenishment, £5.8 million to the fifth replenishment and £6.2 million to the sixth replenishment. In addition Ireland made a special one-year contribution of over £2.07 million to the association in 1983.

Negotiations on the current replenishment, the seventh, began at the end of 1982 and concluded towards the middle of last year. The negotiations agreed on an overall amount of $9 billion for the replenishment. This represents a decrease of 25 per cent in US dollar terms on the amount of $12 billion negotiated for the sixth replenishment. The agreement on $9 billion was dictated by the principle of preserving equitable burden sharing between donors and by the refusal of the United States of America to go beyond a 25 per cent share in a $9 billion replenishment. The United States maintained its stance in spite of pressure from ther donors to support a replenishment of $12 billion, the level which all other donors considered to be the minimum necessary to provide the association with adequate funding.

The basic principle adopted in the allocation of contributions among the donor countries was that each would maintain in this replenishment the same share as it had taken in the sixth replenishment. The allocations have been made on the understanding that commitments to them are not final until approval has been obtained, where necessary, from the legislature of each country.

As for previous replenishments, donor countries have the right initially to substitute non-negotiable, non-interest-bearing demand notes for cash payments. The notes, denominated in the members' currency, are to be deposited over three years. Actual cash payments under the replenishment will arise over the years 1985 to 1995. The precise rate at which the funds are called upon will depend on the progress made in implementing the projects financed by the replenishment.

As a Part I member of the association, Ireland is, as I have said earlier, expected to contribute to the periodic replenishments. In accordance with the sharing arrangements agreed in the negotiations, the Government have indicated that, subject to legislative approval, it is prepared to contribute £8,330,000.

The outcome of the seventh replenishment has been regarded generally as disappointing and, as a consequence, efforts were made to raise supplementary resources. Negotiations were initiated with the group of countries which contribute to IDA and agreement was reached on the establishment of a Special Facility for Sub-Saharan Africa. Most donor countries are pledged to participate, though one notable exception is the United States. The facility is designed to provide fast disbursing funds to finance structural adjustment and sectoral policy reforms in low-income African countries which are committed to undertake stabilisation and adjustment programmes which can be satisfactorily monitored. Under the terms of the facility, IDA will be entrusted with the administration of over $1 billion to be lent on the same highly concessionary terms that apply to the normal IDA assistance.

The Government have indicated that, subject to legislative approval, it is prepared to contribute £1.5 million to the facility. This level of contribution corresponds approximately to the share we assume in replenishments of the association itself. Cash payments on foot of our contribution will be spread over a period of about four years, starting this year.

Ireland has traditionally been a strong supporter of IDA. Its aim of assisting the poorest of the developing countries makes it an especially worthy form of development assistance. This group of countries is particularly hard hit by the world recession. Both IDA and the Special Facility aim at helping to remedy the ultimate causes of famine and in doing so, will complement the more immediate famine relief work of other agencies.

Already, attention is being focused on the next replenishment of IDA. At a meeting of donor countries held during the recent World Bank-IMF Annual Meetings in Seoul, it was agreed that negotiations for the eighth replenishment should start in January next, with the aim of concluding them by September 1986. Ireland will be seeking to ensure that these negotiations result in an adequate level of resources being made available to IDA.

The payments both to the seventh replenishment and to the Special Facility will count as part of our national official development assistance programme. They are in line with the Government's commitment to develop that programme. The present Bill is required to authorise the contributions. Ireland's membership of the association is covered by the International Development Association Act, 1960. As in the case of previous replenishments, the legislative provision to authorise our contribution to the seventh replenishment takes the form of an amendment to that Act. The Bill makes separate provision for our contribution to the Special Facility.

I recommend the Bill for the approval of the Seanad.

I welcome the introduction of this Bill by the Minister. I think that we must welcome it with reservations because, in effect, there will be a reduction in what has been suggested as being the amount of money needed by the poorest, as the Minister said, of the developing countries. One of the unfortunate facets of the International Development Association is that we see another indication that the United States in its foreign policy is going away from multinational agreements and seems to be dealing on a bilateral basis with countries which have political associations with itself. It is very unfortunate that the United States should take this stance at this stage. What they are basically saying is that they will not get involved with the International Development Association because the International Development Association are helping countries with which the United States do not have the best of political associations. In other words, what they are saying is that if you go along with our foreign policy we will help you, but if you do not go along with our foreign policy we will not help you.

We saw a further indication of that attitude recently when they pulled out their contributions to UNESCO. Another unfortunate development is that they have forced the British Government, or by association between Margaret Thatcher and Ronald Reagan the British Government have been forced to withdraw their support for UNESCO. It comes back to a political reason again — because Ronald Reagan feels that UNESCO is a left-wing Third World-orientated body and that they should not be supported in the future. We see in his attitude to the International Development Association a further development of that policy.

There is a huge need as the Minister has stated for aid to the Sub-Saharan area. The sub-Saharan area is growing at an enormous rate and the poverty in that area is growing. At the same time we see the United States pulling back on commitments that it had entered into voluntarily in the beginning and pulling back at a time when that whole continent has problems in supporting itself. The aim of the Bill is to give a little extra aid to an area of the world which has to be supported. When they will not commit themselves to this special facility for the Sub-Saharan area it is an indication of the lack of willingness on behalf of the United States to get involved in helping people where that help is most needed and forget the political implications that aid might have.

I am disappointed in the Minister's statement that the facility is a means of providing fast-disbursing funds to finance structural adjustment and sectoral policy reforms in low-income African countries which are committed to undertake stabilisation and adjustment programmes. I would like the Minister to tell me what he means by stabilisation and adjustment programmes. Who is to judge what is a stabilisation and adjustment programme under the International Development Association rules and regulations? Is it a stabilisation and adjustment programme which suits the disbursing countries or is it one which suits the countries to which the moneys are being disbursed?

We have to agree with the Government on the fact that we are providing extra moneys in this Bill to help those who are really in need but must be very careful in our assessment of the International Development Association because it has been suggested by countries to which moneys are going that the aims of the association are not being met, that too much of the money that goes into these countries from the International Development Association goes into capital projects. The only input that the locals have in those projects is the labour. In too many cases machinery is provided to deal with capital projects, the machinery is provided by the disbursing country, so that a firm in the disbursing country makes a profit on the sale of the particular machine or implement to the International Development Association. Therefore, there is benefit to the disbursing country. The loans are made by the association directly to governments for the financing of productive projects and the money disbursed will be on an interest-free basis.

I think the money will be paid in the currency of the country receiving the money but that the repayments will be made in dollars. If this is so it means that the country which gets the money will have to repay in dollars and even though there is a low interest rate and there will not have to be a repayment for the first ten years, if the dollar increases in value there is no such thing as a low repayment rate.

The dollar has been the criterion on which all international borrowing or payments have been made. Because of the increase in the value of the dollar the receiving country has been at a total disadvantage even in the area of soft loan: even though the interest rate might be extremely low, because of the increase in value of the dollar people cannot afford to repay. Unless there is some means of changing the method of repayment from dollars into another currency, whether it is something like the ECU or whatever, the receiving country will always be at a disadvantage. The increasing strength of a multinational currency such as the dollar has created problems not just for Third World countries but we can see in our own budgetary efforts the problems the increase has caused us.

We must thank the Government for going along with this replenishment to that fund and express extreme disappointment and anger at the United States attitude in this matter. I hope the other members of the International Development Association will try to bring pressure to bear on the United States Government to get involved in the further disbursement of funds because the funds are going to an area of the world which is in extreme need. I do not think the United States will suffer if it goes along with the increase in grant aid in the long term.

I would like the Minister to satisfy me on the question of the stabilisation and adjustment programme because that is the kernel of the argument that is put up by people who live in that area, that too often people from outside decide what is stabilisation, too often the countries to which the moneys are going are not contributors in essence to the development programmes which are being imposed in a lot of cases by agencies from outside these countries.

It is with pleasure that I welcome this Bill. The Minister has stated that the measure is to authorise the Government to make a contribution amounting to £8,300,000 which would be Ireland's contribution to the seventh replenishment of the funds and the resources of the International Development Association. The IDA is one of the major limbs of the World Bank and the financial assistance provided by the IDA is given to the poorest countries in the developing world. All in all, Ireland's contribution to the IDA consists of approximately one-fifth of our total Overseas Development Aid for 1985. The total amount expended by Ireland on ODA will be approximately £38.5 million for the current year. It is interesting to note that approximately two-thirds of this money will be spent in Africa.

We fully appreciate that there has been a lot of criticism about the fact that Ireland has failed to meet its UN targeted figure of 0.7 per cent of gross national product as our contribution towards ODA by 1987. Nevertheless, there has been a substantial increase in our overseas assistance in recent years. A good background against which to take it is that in 1974 our official assistance amounted to 15 per cent of the OECD average but by the end of 1984 it had grown to 60 per cent of the OECD average. In 1973 Ireland's ODA amounted to approximately £1 million; in 1985 it has amounted to almost £39 million. We find that everything is set for further increases to be maintained over the next two years as the Government are committed in the national plan, Building on Reality, to increase the level of ODA to £50 million in 1987.

We appreciate the criticism. I admit that we have not met the UN target in terms of percentage of GNP. Nevertheless, we have to be mindful of the fact that one of the major constraints on Ireland making a greater contribution has been the state of our public finances. That has been brought about by mismanagement of public finances over some of the years in the recent past.

A beauty. You should be ashamed of yourself, turning a serious debate into a political football.

We always speak with truth, Senator Lanigan. Let us contrast Ireland's growing contribution to the developing world against that of the United States, which is the wealthiest country in the world. Senator Lanigan will agree with me on this. After making an initial promise to carry about 25 per cent of the sixth replenishment of the IDA in 1980-1983, the United States welched on its promise when the US Congress forced a rescheduling of the payments which led to a crisis within the IDA in 1983. Ireland was one of the countries which at that time responded very generously to make up the shortfall which was created by a decision which was taken on Capitol Hill in Washington. I said then and I say now that it was a most despicable act on the part of the most powerful country in the world, a country which has countless billions to spend on armaments of mass destruction, yet in this odious piece of tardiness it took from its contribution to the very poorest of the poor in the world.

I am delighted to see that section 2 of the Bill provides for a special contribution of £1.5 million which is to form part of our contribution to the Special Facility in the replenishment for sub-Saharan Africa. That facility is to amount to $1.1 billion. This money is to be spent on those countries in that region which have been worst affected by tragedy over the last numbers of years. We should mention that the total value of the seventh replenishment is to amount to approximately $9 billion. It is particularly sad that this is a large reduction on the value of the sixth replenishment which had currency between 1980 and 1983. That fund had $12 billion, which had to be augmented by the special contribution I mentioned. At the outset of the negotiation for the seventh replenishment a far greater fund than $12 billion was envisaged and it was set out at that time as being absolutely needed. But, because of the reluctance of the United States to take on a greater share, when the negotiations eventually ended last April a figure of only $9 billion could be agreed upon for this replenishment.

On the brighter side, however, at the conclusion of the negotiations this Special Facility of $1.1 billion was set up in addition to the $9 billion as a special fund for the worst afflicted countries. These countries are across the broad middle of the more northern part of Africa, usually called sub-Saharan in Africa. It is a very positive move in the sense that the funds from the facility will be made available to countries like Ethiopia, Sudan, Mali and other smaller countries which have been cursed by the destitutions of famine. These funds are to be used to support fundamental and basic reforms, especially in the area of agriculture, to be undertaken by the various governments. That is attacking the very fundamental and underlying problems of famine, food shortage and emergency needs in those areas. It is the purpose of this facility to get to the root cause of the famine.

One must thank the donor countries for making this special contribution, but again I must be critical of the US, which has refused to make a pledge to this fund. We also compliment the governors of the World Bank, who do not often come in for compliments, for identifying this special need and for giving the go-ahead for the negotiations on this facility to commence.

This special need was identified by the Food and Agriculture Organisation of the United Nations, when earlier this year, in one of its published reports, it stated that 20 of Africa's sub-Saharan countries would face very serious food deficits in 1985. I spoke here on the first report of the Oireachtas Joint Committee on Co-operation with Developing Countries and in that speech I quoted fairly extensively from that report. That report focused fairly closely on what was emerging and, indeed, what was taking place not alone in the sub-Saharan region but right across that blighted dark continent.

If we focus again on that sub-Saharan region, which consists of countries like Mauritania, Mali, Niger, Chad and the Cape Verde Islands, which is an archipelago off the western coast of Africa but is an island nation, we see that in those countries collectively something like 200 million people live. According to the best estimates almost 35 million people in those areas were severely affected by drought and famine. In addition to this over ten million people across that continental region have left their homes and lands and become wandering nomads. They are in search of food, water and new pastures. They have with them their few wretched belongings and their half-starved and ever declining herds. This phenomenon of millions of people uprooting themselves, wandering hither and thither within their own countries and across each other's borders, has caused unbelievable havoc and destruction, both economic and social. It has also contributed to the continued weakening of these wretched people who are caught up in it. In a fundamental way it has disrupted the settled populations who have been affected by the movement of these people and has contributed in a major way to the spread of disease and a general decline in the state of health across the afflicted country.

This great natural disaster of drought has lasted over several consecutive years, and one of the results has been the major damaging and deleterious effect it has had upon the whole ecology of the region. There has been a disappearance or, at best, a drastic decline in food production. Because of the effects of drought and the withdrawal of husbandry, land which was once reasonably fertile has reverted to desert at a frightening speed. Not alone has the destruction caused a huge ecological and food production breakdown, but the old systems of delivery and distribution, which were allied with these economies when they were stable, have also broken down. This is another factor which makes matters worse and even more tragic. As output has fallen because of the drought, farmers no longer put back essential inputs. There is no purchase of new or essential services. Production shifts from essential grain like maize, sorghum and millet and to the production of cash crops like cotton, cocoa or coffee. This is a disastrous trend which has been taking place for the last 15 years or perhaps longer. While many people working in the area of development assistance saw the tragic consequences coming, it is a criticism of many of the official relief agencies and especially a criticism of the African Governments themselves that they failed to recognise or address the coming Armageddon.

There is now approximately 15 per cent less food produced in this area of Africa than there was ten years ago, while the population figures for this region have increased at least by that percentage figure. The great misfortune visited upon these countries can also be seen in another way. Their economies are primarily agriculture in base, and because the rate of increase of domestic food production has fallen behind the rate of increase of domestic population growth, this has always meant — even in better years — that they had to make up their food deficits by major grain importation from abroad. In recent years they have had to do this at an ever-increasing rate while at the same time the value of their exports has been gradually declining. Their exports are mostly raw ores or basic raw materials for western industry. In recent years the prices of many of these commodities have fallen, resulting in decreased return to the countries selling those resources. You have the awful problem of their running down their own natural resources by having to sell them in huge volumes to try to keep apace with the value of falling prices. They have had to use foreign exchange for the import of essential food imports. In addition to this, these countries have taken on an ever-increasing debt burden. All of these factors have combined to bring about a situation of utter stagnation within their economies and the normal development activities seem no longer to exist.

May I go back again to give an overview of the awful scale of the problem, using as my reference the United Nations report on emergency operations in Africa, which is a comment on the situation country by country? It is a comment on the worst affected countries as of 1 October 1985, but it also deals with the situation in the other African countries. If we look at Ethiopia — I take Ethiopia as the example because it is the one that is best identified in the Irish consciousness as far as the present African famine is concerned—we find that the latest report from these states that approximately eight million people are still affected by drought and hunger. The report feels that this figure is probably greater, due to the worsening situation in the western provinces of that country because of insurgency and because of the effects insurrection has on settled economic activity, especially food production. These problems exist mostly in the western provinces and in the province of Tigre, a place well known to people in this country.

We understand that in Tigre especially there is an ever-increasing number of famine victims reporting to distribution points. I agree that there are conflicting reports as to the effects of the official displacement of large portions of the population from the northern region. We have all read media reports about this, where it is claimed that the government have forced hundreds of thousands of people to move from the northern regions, which are the worst affected, to the southern regions. We are told that they are being moved from the worst affected areas to lands of greater fertility where the population density is lower and that the condition of the people who have been compulsorily moved from their former regions has greatly improved in their new environs. Contrary to that, we have received reports which told us that the displacement was totally enforced and that the condition of the people moved has deteriorated rapidly, with disease and hunger their continuing everyday lot.

However, there have been some other very encouraging reports coming out of Ethiopia recently. That is contained in the later report by the FAO issued in October. They state that the rainfall levels during the crucial months of August and September were generally about average. This is the first time in several years that this has taken place. The crops that were planted earlier were doing very well. However, it is generally felt that Ethiopia will need at least one million metric tonnes of food aid for distribution to at least six million people during 1986. Imagine six million people needing emergency food aid in 1986. It is one and a half times the population of Ireland, at least.

Regarding the problems of distribution of food to the worst affected areas, the report is not very encouraging. The condition of the major ports continues to be grossly inadequate and in many cases they are reported to be deteriorating. The condition of the internal railway system, always bad, is reported to be getting even worse. A similar situation would appear to obtain in the case of the internal road network, that is the road network that exists at all in that country. Many people in Ethiopia live at least one week's walk or longer from any kind of public road. However, it is hoped that the internal truck transport could improve because of the establishment of a United Nations truck fleet and we gather a large portion of the funds raised from the famous Band Aid concert last July will go towards aiding this. These trucks will be used as distribution vehicles throughout the country.

Another African country in which Ireland has a great interest and indeed with which it has very strong connections is Lesotho. When I talk about Lesotho I am moving away from the Central African portion to the very southern part of the Continent. Geographically Lesotho is placed within the borders of South Africa itself. We have a great interest in that country because it is one of the three countries which we have earmarked for our direct development assistance and official aid. It has been a relatively fortunate country up to now and it has never had the problems of drought and famine associated with the regions which are close to the Sahara. Now we find, unfortunately, that Lesotho, because of the vagaries of the African climate, is going to join the wretched league also. Last October the Prime Minister was forced to declare a national emergency because of the effects of famine and drought. There are also frightening reports about the deterioration of the health situation of the population of that country. There are reports of widespread outbreaks of typhoid, of tuberculosis, of dysentry and cholera, almost the biblical plagues. The reports states that fresh water supplies are drying out rapidly right across the country. Of course this is a major source of disease as well.

We are inclined to think that the problems of hunger can be answered simply with food donations. That is understandable because we see pictures of people starving, with distended stomachs etc., on television and we see their needs as being only food. That is totally inadequate thinking, because side by side with hunger always goes disease. The non-food aspect of emergency relief is an aspect which is often forgotten and is of equal importance. Very often it is of greater importance. I make that point because in the case of Lesotho, for instance, we find that less than 2 per cent of the non-food emergency relief needs have been covered by pledges of the various donors. That is less than 2 per cent of the non-food needs and the non-food needs are the ones that I have gone through in relation to health, sanitation etc.

Ireland's direct assistance to this country has been in the field of agricultural development and the provision of water supplies. These have been concentrated in specific projects. We understand they are doing very well. They are having a great impact within the areas where the effects of these developments can be seen or communicated. However, it is very tragic to read that cereal production has fallen short by 30,000 metric tonnes of the expected figure and there is no doubt that Lesotho will be on the primary list of countries needing emergency food aid in 1986 and 1987 and perhaps beyond.

Sudan is another country where we have a direct interest because we have a number of direct assistance programmes going on there also. One of them is a very interesting one which relates to the development of dairying projects. However, we read that, according to the latest figures copiled for last September, the number of people affected by the emergency has increased from 8.5 million to a figure close on nine million. These are mainly located in the eastern, northern and central regions of that country. Approximately two million people are suffering from very severe malnutrition and many of the larger cities have had areas which have been completely overrun with a huge influx of people fleeing from their rural communities where famine and pestilence have destroyed the community fabric. New cities of destitute squatters are being created on the fringes of the larger towns and especially the cities. There are tens and perhaps hundreds of thousands of people with no shelter, very little food and of course seething with discontent.

Naturally, all of that adds up to a frightening prospect. Sudan has had a change of Government by the medium of a military coup which took place in the middle of this year. One of the main reasons the coup leaders put forward for taking power from the previous regime was that that Government — the Nimeiri Government — had failed to tackle the problems of food shortage and all the attendant evils. Perhaps it is too early to judge at this point, but there is no evidence that the new Government in Khartoum are any more effective in dealing with the problem than the ousted Government of Nimeiri

Of the more newly independent African nations south of the Sahara region we might take a look at two former Portuguese colonies, Angola and Mozambique. They are well known to people reading the media in this country because of prolonged independence struggles in the seventies. It is particularly sad for those countries that internal insurgency and civil strife and, in the case of Mozambique, strife on its borders — there is a continuing conflict with South Africa and South Africa makes almost daily raids — is a major determinant in causing the food and health emergencies in both of these countries. There are widespread reports of measles, of cholera, of tuberculosis and other diseases related to malnutrition from both Angola and Mozambique. Allied to this, seed shortages, shortages of fertilisers and other essential agricultural inputs and diminishing supply of material goods for barter trading are all part of the daily output of misery coming from that region of Africa. The FAO predict that for 1986 and 1987 emergency food relief and other emergency non-food aid will be life and death matters both in the cases of Angola and Mozambique.

In Zimbabwe, the largest of the more newly independent African nations, it is very heartening to read the reports of the FAO and to see that, despite internal strife and all the problems that any new independent nation has in settling down, the food emergency which existed there in the earlier years of independence from 1979 and 1980 onwards has practically ended now. That is a very good development.

In Zimbabwe, the Food and Agricultural Organisation are saying that the Government there have now focused on the rehabilitation and the development of food production resources which the governments of many countries in Africa have totally forgotten about or would appear to have totally ignored. The FAO credit the Government in Zimbabwe with tackling the problem. Zimbabwe is now reported to have a surplus of maize, much of which is exported. The Government there have a plan to store at least 500,000 metric tonnes of cereals as a strategic food reserve this year.

Briefly, I would like to refer to such countries as Mauritania, Mali, Niger and Chad, which are more familiar to us. Those countries between them comprise the greater part of the central African region. In Mauritania the indications are that the prospects and the general conditions for harvesting will be favourable this year. However, another great plague is reported from this country — an explosive increase in the numbers of grasshoppers. These insects have a capacity to destroy, and indeed are destroying, thousands of hectares of newly-emerging crops. This highlights the breakdown in essential inputs like pesticides.

In Mali, the most recent reports state that for the first time in a decade the rainfall levels have been close to normal. However, as in Mauritania, crops are threatened by the ever-spreading plague of grasshoppers. Yields are much lower than they should be because of lack of fertilisers and of pesticide use. However, against that, the general report is that the nutritional status of the affected population has improved in Mali and the disease situation seems to have at least stabilised. This country reports a very severe fuel shortage, especially fuel for cooking.

The situation in Chad, relatively speaking, is not that bad. Chad itself in recent times had a major problem with internal insurgency which we are told Colonel Gadaffi had a hand in. Apparently, the political situation seems to have quietened down within its borders as of this year. It is estimated that the output of cereals in Chad this year will be approximately in line with the national need. They need about 650,000 tonnes and that amount should be produced. However, the major problem of this country would appear to be that it will have a food surplus in the south and east while there will be a major food deficit in the northern and eastern regions of the Sahara Desert. Internal transportation is in an appalling state, which greatly hampers the logistical problem of getting the food from areas of surplus to areas of need. The fear of major famine, especially in the Sahara region, exists for 1986 and beyond. This country has 1.5 million people affected by famine and almost .5 million of those are displaced persons. They can only be described as refugees.

The last country on this list of nations which are outside the area of sub-Sahara is Tanzania, which is like Lesotho. Sudan is another country where we have direct involvement. Our Government are directly involved with assistance programmes in this country. Tanzania had major food problems in 1982 and 1983, and, indeed, in 1984. However, the most recent reports are much more optimistic. A good rainfall has been reported and food production is said to be back to normal. This is a very good development.

We would like to make the point that this restoration of the normal pattern of production has more to do with good government policies that it has to do with the improvement in the climate. For this one must singularly congratulate the Tanzanian Government for their understanding of the nature of the problem they faced and for tackling it in a manner which had very successful results.

Despite the enmity of the international financial institutions.

I take your point. The Government have put the national finances of that country at great risk in doing this. It used up much of its foreign reserves in purchasing necessary food aid. More significantly, it reduced its reserves to buy abroad essential inputs like fertilisers, tools, seeds and pesticides. The responsibility is on the international community to ensure that the financial problems that will now be faced internally by Tanzania, because it took this very enlightened step, will be alienated and that the necessary aid will be made available to it. It should not be allowed go bankrupt. Tanzania used its reserves to buy essentials, and this has had the effect of putting food production on a sound footing and of bringing the national food stock situation from a serious deficit, which led to local famine within its borders, to a situation where it now has a food surplus.

I would like to compliment Kenya and, in particular, Zambia — an underdeveloped and poor country — for adopting policies broadly similar to those adopted by Tanzania. Kenya has always been one of the more developed and stable of the African countries. It has weathered the emergency better than most African countries because it had a stronger economy. Nevertheless, it was affected by the emergency caused by the weather and the drought. However, the Government policies adopted there were a major factor in avoiding a situation of disaster.

In conclusion, I would like to take a closer look at non-food relief, which is a most essential part of tackling this emergency. It is an area which very often gets lost in the reports of famine, when people's minds are concentrating only on getting emergency food aid to affected areas. When I talk of non-food relief, I refer mainly to the logistics of distributing food — for example, the transport system, health care for people affected arising from malnutrition and poor sanitation, provision of proper water supplies and, of course, the whole area of agricultural inputs and agricultural rehabilitation measures to restore degraded soil and to cope with the problem of arresting the ever-increasing encroachment of the desert on fertile land.

Last March, the United Nations office for emergency operations in Africa reported that the non-food sector needs amounted to approximately $490 million. However, by 1 October 1985 the same body reported that these needs had increased to almost $900 million. This gives us some idea of the scale of the problem. The logistical problem of getting food is multiplied by the fact that a number of the major affected nations are inland and have no seaports at all. They are dependent on the ports in their neighbouring maritime countries. Very often these ports are completely blocked, as in Ethiopia. Senegal is one of the countries that has a port. Mauritania is also a maritime country.

The facilities at these ports are usually totally inadequate. In many cases we have had shiploads of food actually rotting as the ships waited to embark or to tie up at these ports. It is one thing to get the food distributed throughout the region but there is the major problem of food arriving at these ports and not being allowed to unload because ships can be tied up for weeks and months due to lack of facilities.

The deficiencies in internal transport even in those countries with a reasonable level of development — and very few countries in this particular region have a reasonable level of development — are very hard to imagine. There is no such thing as a continuous road or a rail road link or any kind of integrated rail-road system across the broad middle of Africa, going from the Atlantic on the one side of the Red Sea on the other. There is an international or a multi-national communications problem. This is one of the fundamental drawbacks in tackling the food needs of this area of the African continent. Aid from the west through all the agencies, aid from the OPEC countries and aid from the Soviet Union, if there is any to give, should be co-ordinated.

Water supply and sanitation which create huge health problems are very often not appreciated at all. It is estimated that the needs in the health sector increased from $88 million in March of this year to approximately $125 million by 1 August of this year. In the area of sanitation and water supply it is estimated that the needs increased from $81 million to $127 million in October. The range of problems are not often fully understood. It is estimated that on 1 October of this year the unmet needs of these sectors amounted to over $270 million. While the donor response in the area of immediate food aid has been good, the donor response in the area of health, water supply and sanitation has been far less than the contributions to date within these areas. They have covered only about 40 per cent of the total requirements in all of these sectors.

While it may be a little boring listening to all of those figures, I am making the point because of what is obviously a lack of understanding. People understand that people are hungry and need food. But they seem to understand less that the delivery of the food has to be arranged. There are the attendant evils of malnutrition and diseases like cholera and measles. There are problems with bad water supplies, which multiply the problems of poor health and the spread of disease. This is a very fundamental part of the problem. It, too, has to be tackled together with the problem of getting food by one means or another to hungry people.

Another disheartening aspect of the food relief aid received has been the very inadequate response to the plea for agricultural inputs, which are absolutely fundamental to the restoration of food production. This is another problem that seems not to be too well understood. It is estimated that in this year approximately $295 million worth of assistance for basic inputs is needed, while only $85 million have been contributed. There is a huge gap. This again illustrates the problem that the international community are very good at responding to television pictures of starving people and yet we do not seem to have adequate comprehension of the real problem, which is the problem of food production.

As countries reach a stage where they no longer need emergency relief and are put, although still in a fragile state, on the road to recovery, an ever-increasing amount of the international contribution should be channelled towards the important area of agricultural rehabilitation and the restoration of production. Poor soil conditions, combined with the general health conditions of the people, all lead to a downward spiral in food production. Only a fundamental attack on these problems can redress that situation.

There is one other problem which is related to the logistical one, and that is the time of the arrival of food in areas of food need. It has often been found that food has arrived just at the time of harvest. This has depressed local prices and very often has ruined the livelihoods of local small farmers and local small economies which exist around small farm communities. Food arrives in large amounts. The harvest there is a very short period. When food is being distributed and suddenly food aid arrives the effect that that has is to depress the price of food produced locally. Naturally, the people who engage in the production of food there have no option but to get out of it. They are financially ruined. They need money or they need something to barter with in order to buy their seeds or their imputs, so that they can survive. The whole food aid programme has been insensitive to many local conditions.

Finally, I welcome this country's response. I wish it was more generous. Nevertheless, we are among the most generous in the world, and not alone in what we give officially through the various mediums. The generosity of the Irish people is well-known. It took an Irishman to conceive the idea of Band Aid. Per capita the Irish gave more than most other nations during that worldwide collection.

We are talking here today about the idea of the funding of the International Development Association and the setting up of this Special Facility which started off all this examination which I have made of central Africa as well as other regions of Africa. I welcome it because I see it as a fundamental addressing of the problems, albeit very small in scale. Nevertheless, it is a fundamental addressing of the problems. This facility is aimed at tackling the problem at its most fundamental, which is down at the level of production. It means getting special funds to Governments which they can pass on to their producers to use for imputs for the restoration of soil. Much of the soil is degraded and has been lost to the desert.

I wish this fund well. I sincerely hope that when the eighth replenishment comes up it will be much larger and that this facility will be greatly expanded.

I would like to compliment the previous speaker, Senator Connor, on the wide-ranging speech he has made, addressing the whole range of development issues. We have all been indebted to the reference, particularly in the Minister's speech, that said that what we are asked to vote on this afternoon is part of our total ODA contribution. This enabled Senator Connor at least to give a total overview of the need for development assistance. It was a very fine speech and I compliment him on it. I am glad that Senator Lanigan, the previous speaker, has drawn attention to the technical problem of currency exchange, which is an important one. I intend to confine my remarks very precisely to the question of the IDA itself. I believe there will be other opportunities to discuss the broader development issues. I do however, want to make one or two points. I do not want to delay the House by being repetitive. The important point has been stressed by all of the speakers so far, and indeed in the Minister's speech, that the default of the United States in making its contribution was a major factor in our being asked in previous replenishments to vote additional sums. It created a very interesting problem, which at the time was seen too much in terms of the sums involved.

I remember speaking on this in the other House. The point I stressed on that occasion was that there was a political significance to it which seemed to be missed. The political significance was — perhaps I am wrong in this, and I would like to be advised on this later on — that by and large the IDA limb of the World Bank had operated since its inception on more or less technical criteria. When one looked at the evolution of the decisions that it made in relation to projects it approved to recipient countries, the criteria were independent development criteria. To cut a very long story short, the United States' limit on its contribution and the accompanying text that it offered at the time showed the politicisation of that particular wing of the World Bank. My question will automatically follow from that. I remember clearly the circumstances of that default. It was a question of an agreement having been entered into which was later broken and which created shortfall problems for other contributing countries. We had been a contributing country since 1973.

Apart from the additional burden that it placed on those less wealthy than the United States, there was the very serious question that put into tension the political criteria and technical criteria of development. From the wide-ranging speech that Senator Connor has given, one can see the effects of much of this. The Senator spoke, for example, of Tanzania and Kenya. Tanzania is at war — as I perhaps should not have not interrupted him to say — with some of the international financial institutions, particularly the World Bank and the IMF. Kenya is looked on with more favour. In Kenya the private commercial sector — in that country the Asian sector — has been viewed differently than it has been viewed in Tanzania. The principle at stake was one of the right of the Tanzanian Government to pursue an independent, generically-informed path to development — in other words, that it would decide on its development needs and that it would tend to resist the difficulties of exposure to pressures that would be required by international financial institutions.

I will concentrate on just a few points in that regard. I would welcome a comment on this question of politicisation of the IDA section of the World Bank. I have been looking closely at the Nicaraguan relationship to that particular section of the bank, not only at the question of the status of submissions made and the outcome, but what has happened to projects and how they compare with equivalent projects treated by other countries. The speech which preceded mine was very interesting.

There is sometimes a view in this country, which I think is disappearing, that world development problems can be explained in terms of natural disasters. What the previous speaker did was to move on from that and push it beyond basic ecological explanations towards looking at development problems in the context of a world economy, and a world economy that has a particular set of structures in relation to trade, aid and debt. The debt negotiation problem has been adverted to earlier. There is another factor which is important and that is the technological transfer question. It arises to some degree in relation to where the Minister makes reference in his own speech towards the criteria for approval of particular projects. For example, the principal criterion for eligibility to borrow is that a country can have an average per capita income level of a maximum $790. The Minister made the point that 90 per cent of the recipients had average per capita incomes of less than $400. If one qualifies by certain criteria it is important to look at what criteria prevailed, say, ten years ago in the pre-Reagan times, and what criteria prevail now.

The information available to me suggests that there has been an interference with the technical and professional staff work in this section of the World Bank. There has also been a tension created between political and technical decision-makers. There is a great deal of discontent among people who felt that they were making choices on a basis that had evolved. Admittedly, they were talking about a very small area. It is interesting that the Minister for Finance is here because it sets up another dimension which is very important. On previous occasions when this subject was under discussion the Minister for Finance was in the Dáil also. One has to integrate the discussion here with foreign policy, because there is overlap of issues, whether we like it or not. We do not just allocate the sums. The Minister, in his own speech, indicated a concern that went far beyond legislating so as to transfer two sums — one just over £8 million by way of contribution to the seventh replenishment and a special sum to assist in sub-Saharan Africa.

What is now at stake is this. I have the impression that as we wait for the position that will be taken on the eighth replinishment we will be dealing with an entirely different international context. There is no doubt at all that the debt relationship will prevail. There is a growing feeling in the countries which are overburdened by debt that a new form of relationship in general terms will have to be created. I cannot see how the IDA association section, and the criteria it uses to give funds, will stand separated from this general change. It is useful to address those points. The idea, for example, that the United States refused point blank to increase its share, that it defaulted previously and that it refused to be involved in the special sub-Saharan African subvention is quite scandalous. It reflects a geo-political shadow that has been cast across the entire world's foreign policy under the present Reagan administration. Practically everything has to be made subservient to the idea that one is speaking about who is strong in the world.

I am not criticising the United States in a one-sided way, because when looking at the overall contributions of different countries to the whole question of development aid one finds that both super-powers have first plateaued out towards the end of the Seventies. At the end of the Seventies the proportion of contributions fell. There was a slight increase in some of the Arab nations but, by and large, both superpowers, in relation to aid, have not behaved in any way that I think can be admired.

This does not interfere with some fundamental principles. The major push in the debt-ridden countries is coming from population increases. It is coming also from some good things, as well as uncontrolled population increase in so far as that a number of the interventions in relation to, for example, eliminating the peri-natal illnesses, have now the effect of saving young children who have to be catered for in other ways. Therefore, the total need structure has changed and the situation requires the additional resources that Senator Connor referred to.

There is something to which Senator Connor did not refer, and that was the whole question of urbanisation and the impact that that had on the structure of development projects. I have no doubt that the people who have expressed concern about the difference between state to state projects and lending, and nation to nation aid and projects and lending, have addressed a very real point. I must confess to some despair about a number of things. The comments that have been made so far in relation to renegotiating the debt position of the worst affected countries — and these are the people we are talking about here where 90 per cent of the people are on incomes of less than $400 a year — is that the whole question of a debt-relationship is one on which there is no new thinking.

The Brandt report, a mixture of benevolent concern and self-interest, is almost dead and gone. Nobody is now talking in its terms about a new economic order. There is some pressure from some of the undeveloped countries themselves towards demanding a new international economic order. But that is a very highly politicised demand. There has, however, been a hardening of attitudes by the super-powers and particularly by the United States. So where is there hope, one might ask, towards addressing this question of debt?

Equally, in relation to trade the whole question of the transfer of commodities has meant that greatest regional competition has broken out between the major economic regions of the United States, Japan and the European Community, for example and that there is almost inevitable toughening of attitudes towards commodities coming from the very countries that would have been in receipt of aid that we will grant under this. That is why I said that there is a connection in a way between what you give through the Minister for Finance and the kind of foreign policy aid issues that you administer through, for example, the Development Aid section of your foreign policy. The two meet at an interface in many ways. This is not to say that Ireland has the obligation of sorting out the world problems in relation to development, but I think we have a contribution to make in trying to advert to the enormous difficulties that are there and the lack of political will that is there in relation to dealing with these issues.

It is very good to see this money being given and I compliment the Minister and the Government on doing so. I think they are quite right to claim credit for anything they are doing in this regard. I am not getting involved in the question of whether or not we meet the UN target. The view I have always held was we should make whatever sacrifices are necessary and I would assist the Minister for Finance of the day and support him should he want to make any cuts anywhere else that would enable us to meet the UN target. I have said so publicly and I have said so privately and that is my position and there are other occasions for developing that argument.

On this occasion this particular section is a very interesting one because when you look at its evolution since 1960 the whole idea was that you could in fact have a concessionary relationship with a certain membership, countries that were donor countries and recipient countries. In many way it was paradoxical and contradictory because the major fundamental philosophy that had guided the main thrust of the bank was one that saw this rather like the Quakers who used to be worried about the industrial society in Britain. The word "concession" has a very particular history in the philosophy of the World Bank. In many ways what countries like Ireland are doing is keeping a kind of a moral glimmer alive at a time when there has been an international crisis of a general debt kind.

I have been watching this question of the international debt with a considerable amount of interest. If some of the debtor nations push the matter to a certain point they provoke not a crisis for themselves only but for the lending banks and lending institutions and it is clear that the greatest failure is taking place in the absence of significant initiatives to break the debt cycle and to renegotiate debt. It is very clear to anybody that that has to be done.

That raises more technical questions in relation to the forms of exchange. It is purely symbolic to be talking about whether you are borrowing in one currency and you are receiving in a soft currency and you are paying back in a hard currency and the implications of that. The kind of thing that comes out of what Senator Connor was saying was this. I do not want to take all the countries he mentioned but if you look at the attempts at development that are being made by individual countries, more and more they are moving back towards trying to establish their own basic needs strategies towards developing, for example, forms of technology that are less dependent on donor countries that had often given them tied aid and it made them more dependent and it represented real leaks from their development strategies, moving towards intermediate forms of technology and so forth.

One of the main points that is very interesting is that in these countries I think there is a developing awareness of the ecological impact of different industrialisation strategies. May I say why we are not able to move towards dealing with something like the international debt problem. Part of the problem is political but some of it, too, is philosophical and here I have something quite controversial to say and that is that nearly 90 per cent of what is being taught in the western world in the area of development studies is not only irrelevant but it is dangerous in so far as it is based on an assumption of development that no longer simply applies. Nearly all of the economic models of development at this stage represent real leaks from these economies that are the recipient countries and recipient economies under legislation like this. They simply have nothing to say. They represent not something neutral or not something of very little value but dangerous ones because many of the development economic strategies are ones that would quickly leak up not only whatever a body might receive under this section of the World Bank but much more besides in so far as, for example, there is nothing in what I have read in development economics in the last ten years that addresses the question adequately of either the consumption of new loans and assistance and so on by élites within urban populations or the question of it being absorbed almost entirely by dangerous import practices or the question, equally, that it might set up new forms of consumption that would require return taxes on the rural hinterland which in turn depresses the entire country and so on.

If development economics in the west are bankrupt, so also are most of the social sciences in relation to development mainly because of the ideological prejudices within which these studies were developed. They were developed in an atmosphere that did not sufficiently break the links with colonialism. They started and grew out of in many cases estate management in colonial Britain through ethnocentric anthropology, various kinds of missionary activity that concentrated on the social disorganisation of rural people moving to towns and so on and there was very little strength in it.

What is needed and where Ireland has an enormous contribution to make is doing the generous things that are being done and for which I complimented the Government and the Minister but also much more in making an intellectual contribution towards developing new thinking in economics and in the social sciences and in political arrangements and so on. I worry about that because our own economy is a very exposed one and most economic thinking here tends to be so orthodox and so reactionary in many ways that it deteriorates into different minor managerial strategies rather than any kind of genuine macro-economic thinking. That is reflected in practically every one of the journals you see. There is not a very significant major thinker at all now in this country or in these islands who is thinking in the way I am speaking about. The fact of the matter is that there was such an economist as Keynes who in his own way made a contribution to Britain after paying for the war and so forth.

In relation to the development economics the developing countries are realising something very interesting. They are beginning to produce some of their own thinkers and they are thinking out their development strategies themselves. They are beginning to liaise more with each other. They are beginning to develop regional interchanges of intellectual skills. I see great hope in that. Where countries like Ireland are important is in siding with that.

This is one of the opportunities for Bills like this, which appear to be short Bills but they are important ones. They are one of our windows on the World Bank and I would like to hear in the reply to this Stage a comment on the kind of remarks I have been making. There are two views of the world in relation to this. The world is not in the grip of some forces that can never be reversed or controlled. I recall reading speeches by McNamara in the context of the World Bank which dealt with the necessity for its own sake of turning things around and all the rest of it but conscious decisions can be taken and they affect all the millions of people that Senator John Connor was talking about. There is no point in having this notion that you can go around on a tour of the poor nationally and internationally as much as you like and it is very good for the soul, but behind it all hangs structure and structure is not abstract.

The point is that you trade on an equal basis or on a basis that is imbalanced. Equally, aid is transferred in particular ways. Technology is transferred in a way that is creating dependency or not creating dependency. There are development strategies that are generic, that is, they grow from responses being made by several different countries and one tries to put them together in a new way.

I would on this occasion make a plea for thinking and for thought. I represent a university seat. I am very conscious of that. I pay tribute to every single person who has travelled. One of them of here, Senator Dooge, has made a distinguished contribution to development. It is at the level of overall thinking in relation to development that I feel there has been quite a paucity of thought. There used to be a group of people in the undeveloped countries who wandered around from one undeveloped country to another bringing so-called skills, and who were known in Africa as the "when wes", because they used to say "When we were in Kenya, "When we were in Tanzania", "When we were in Latin-America" and "When we were in Asia" and so on, as if the world development issues were some kind of high class tourism. The fact of the matter is that one must ask the question as to whether one can reconcile the economic recovery strategies of the western world with anything like development issues, the development of the major recipient countries under a Bill like this. That is too sharp a contrast.

What one must try to do now is look for different regional economic strategies. The new thinking will come in that direction. There are African economists who are now preparing new proposals that are very human in character, that move less back from the dictates of the market, from the basic needs, the problems of transferring agricultural surplus produce to urban areas where too many people are running on the urban areas and so on. All the planning issues are different. There are about ten or 20 different ways. All of the cities are different from the Western model. Yet the glasses that the western people have on in looking at these countries have remained the same. They are out of date and dangerous very often. For example, in the Mexican disaster tens of thousands of deaths were the direct responsibility of some Western advice in relation to urban planning in Mexico City. There were people arriving with their models and imposing them in that case on that Latin-American city.

The good point about short Bills like this is that they remind us that in the most harsh places people have moments of compassion which they call concessionary sections. What I was most interested in — and the point at which I finish — is that, if that be concessionary in good times and if it becomes politicised in bad times, the people who are affected by it, the people who receive in the end, will look at it with more jaundiced eyes. I think we will be respected as a small country for not only making our contribution but being willing to come forward again when a major donor country like the United States falls down on its commitment. In many ways the keeping together of the IDA and what I hope will be the beating back of the politicisation of it is in a way keeping the development area out of geo-politics despite the worst efforts of the present administration in the United States.

In one sense this Bill is merely the technical carrying out of decisions already made in regard to our programme of Overseas Development Aid and in regard to the balance between the items in that programme. On that basis it is not a Bill which should delay us very long. On the other hand it is a reflection of our policy and our attitudes in this regard which is a proper subject for debate. The reason I intervened is that to remain silent on such a Bill might be taken by some as an indication that I or other Members of the Seanad had lost our enthusiasm for these policies. Accordingly I intend to make a brief contribution.

Before doing so I would like to say that I join with Senator Michael D. Higgins in welcoming the wide-ranging speech of Senator John Connor. It would not have been appropriate if a large number of Members of the Seanad had spoken over such a wide range. That would be more appropriate to one of our regular discussions on development aid. Nevertheless, I think it was appropriate that one Senator should have done so and, in doing so, should have spoken for all of us.

As Senator Michael D. Higgins has emphasised, this whole problem is a complex one with many strands interwoven. A good deal of the tragedy of the developing world derives from the failure to recognise the complexity of the problem. The great hopes of development aid, the great hopes of economic development of 20 to 25 years ago have themselves contributed to the present difficulties of the situation. Senator Michael D. Higgins was wrong if he intended to convey, although he may not have intended to do so, that the main flaw in development economics at that time was the concern with the narrow financial viewpoint in regard to development aid and to the remnants of colonial viewpoints. I think there were many development economists in the period of 20 to 30 years ago whose background and whose ideologies were very far from colonialist but who still saw that problem in simplistic terms. The major error that most of the development economists made was thinking that there was a sudden take-off point. The major error was the view that once there has been a certain degree of pump priming from the developed world there would be a sudden magic moment when everything was swoosh and from there on aid would no longer be needed to the same extent as heretofore. That certainly has not come to pass.

Senator Michael D. Higgins said that we make a mistake if we think of the present situation of the developing world in terms only of natural disasters. The problem here is that the economic and in many instances the social structure of the developing countries make the impact of natural disasters so much more serious for them, but it is not the whole story. I have been concerned with the problem of drought. The countries of Africa, through the Economic Commission for Africa of the United Nations, have now reconciled themselves to the view that the main problem they face is how to live with drought, how to plan for drought, how to adjust their national planning for this recurrent phenomena under modern conditions.

While we must do all we can in regard to the question of appropriate technology, which Senator M.D. Higgins mentioned, in regard to such questions as community involvement in the carrying out of actual projects, in regard to the question of reversing something that has been a fault of the developing countries and that is the urban bias of their governments which has been a critical factor in accentuating the difficulties of the development. None of these is an answer. We have to recognise that there are a number of things which must be done, there are a number of defects which must be cured, every one of which is necessary in order to cure the situation but none of which is even close to being sufficient for that purpose.

We are voting moneys that are necessary for long term development in particular to the continent of Africa which has been so stricken. In our own approach to the spending of this money, in what we should advocate in the international fora in regard to the matter, the tremendous complexity of the problem must be recognised. I would like to take the occasion of this Bill not only to welcome the fact that we are contributing but to make passing reference to our increased ODA expenditure, and beyond that to welcome not only the way in which our ODA programme has been balanced but equally the way in which the ODA section in the Department of Foreign Affairs has ensured when we give money for foreign aid that that money is well spent. It is clear that the increased amount the Irish taxpayer has contributed to Overseas Development Aid over the past decade or so has been enormous. There were some fluctuations but there has been steady progress. I would like to welcome in particular the fact that, under the national plan, the Government have indicated what the path ahead will be. This has enabled other organisations who are engaged in development aid work to do their own forward planning over a period of two to four years. This is extremely important from the point of view of ensuring that the whole Irish effort, both the official effort and the private effort and the combined effort of the Department and the private agencies, that all these will be as effective as possible. Many people are not satisfied with the amount of aid and would have hoped that we would have moved more quickly towards the UN target, but at least we are not dropping back as many countries with far greater resources have been doing in regard to the question of the percentage of GNP which is being devoted to Overseas Development Aid.

We must pay tribute to the Government for what has been done and to the Minister for Finance, who is with us here today, for his willingness to increase the amount of budgetary resources for this area. We must also pay tribute to the Minister of State, Deputy Jim O'Keeffe, for the enthusiasm and efficiency with which he has carried out that programme and in which he ensured that we are getting good value for this money. There has been an appropriate balance in this programme in recent years, there has been an appropriate balance between multilateral aid, which is the subject of the Bill before us, and bilateral aid. There are advantages and dangers in each. There are dangers in multilateral aid in that we cannot see exactly what is happening to our money, that it is not something as immediately visible as a bilateral aid project in which the Irish taxpayer can be shown the results of individual projects under bilateral aid. It would be wrong that we should either devote almost all of our aid to multilateral and equally wrong to devote almost all to bilateral aid. The balance in our programme between the short term and the medium term and the long term is something that has been well maintained. There is a tendency for our aid to focus on Africa, but this is appropriate. Our priority countries, which are among the poorest in the world, include mainly African countries. We have made a very real contribution to that unhappy continent.

Our national overseas aid policy is a well balanced one and is a worthwhile one. In respect of what has been done in this Bill in providing further money towards the World Bank system we can welcome some new directions in regard to the operation of the World Bank itself. In the particular areas of the development of water resources and supply with which I am concerned in my professional work, there has been a very distinct change in World Bank policy. There has been a sensitivity in regard to the decisions made by officers of the World Bank in regard to projects which recognise the reality of what is happening on the ground. We can see a far more flexible policy, a policy that is far more socially meaningful than at the earlier stages when there was a concentration on infrastructure with all the connotations that ugly word has in reflecting a scaffolding not related to human problems.

These are a few points I would like to raise in welcoming this Bill. It was entirely appropriate that Senator John Connor should make a wide-ranging speech so that the concern he expressed, and which is shared by Senators from all parties, should be made clear. I hope this House will have an opportunity within the next few months of another broad-ranging debate. We can say to the Minister for Finance to keep smiling and keep paying up and when the Minister for State at the Department of Foreign Affairs comes in we will be able to say to him: "Keep carrying on in maintaining a balanced programme, keep carrying on in your efforts to have that programme increased and, above all, keep up the good work you are doing in ensuring that every pound of Irish money that goes gets the best value for the people on the ground". This is a Bill which is welcome to all of us.

I want to welcome the Bill and say a few words about it. This is the second occasion on which it was my privilege to contribute to a debate which concerned itself with the arranging of an Irish contribution to the International Development Association. The first occasion was in 1983 and on that occasion something of a crisis had arisen within the association because of the type of unilateral action on the part of the United States of America to which Senator Michael Higgins has already referred.

In criticising the way in which the commitment of the US to this organisation has changed over the years it is important to put it in the context of the United States of America and other developed countries in the western bloc being much more willing and much more effective than the eastern bloc countries in giving development aid to countries that need it without political strings. Most of the aid from the eastern bloc countries, in so far as it exists at all and indeed, it is of a very limited nature, is tied in very much with military and quasi-military decisions.

The decisions which are taken are taken purely on the basis of strategic examination or thought based on the maximisation of the eastern bloc military and other influence. It is because I do not agree with that approach that I continue to ask our friends in the United States not to fall into the same trap. Of course it is understandable that in a superpower like the USA a certain portion of their aid would be associated with their own foreign policy interests and I do not think we can reasonably complain about that. However, there should be an essential element of their foreign aid which is independent of their own individual foreign policy objectives. In that way I think the contributions which they have been making, and which they still intend to make, to the International Development Association represent a very positive contribution to the establishment of a more just world order. In so far as these contributions are made or continue to be made they should have our support and the US should have our praise in that regard.

However, it is well to point out that the original contribution of the United States to this fund when it was originally established was in the order of 42 per cent. The amount of that contribution has been falling steadily. That, of itself, is not altogether surprising because other countries, relative to the US, have become prosperous and other countries are in the position to make more substantial contributions on a percentage basis. However, by the time it had arrived at the sixth replenishment the amount of aid being provided by the United States, as a percentage of the total fund, had dropped to 27 per cent. That represented a fairly fair assessment of the changed economic balance in the world, recognising that there were some oil-rich countries who were beginning to make a more substantial contribution. That sort of substantial contribution was appropriate in view of the additional riches which they had got over the years as a result of the exploitation of their natural resources.

However, by the time the sixth replenishment came about the United States contribution had dropped to 27 per cent. During the course of the execution of that a most extraordinary situation arose in which an agreement that was originally intended to last for three years was suddenly stretched to four years by a unilateral decision of the USA. I would remind the House that the occasion of the 1983 Act — or Bill as it was at the time — which came before this House was in the context of Ireland making an exceptional contribution to enable some amount of work to be continued during the additional fourth year which had been created as a result of the unwillingness of the United States of America to fulfil its previous commitment in that regard.

It is too simplistic to say that it is a lack of will on the part of the United States Government or on the present administration there. My experience, from discussing this matter with members of Congress is that there is a very fundamental disagreement about or a lack of understanding among members of Congress of the necessity for this kind of aid. We must use all our powers, both by speaking in this House and outside it, to persuade the United States that ultimately it is in their interest to make contributions of this kind.

Against that background it is disturbing to see that the United States contribution has fallen to 25 per cent but that is not as disturbing as the information which is given the Minister's speech here today that the total amount of the seventh replenishment is only going to be £9 billion which will be a 25 per cent decrease, in US dollar terms, on the £12 billion negotiated in the sixth replenishment. I take it — and the Minister will no doubt indicate if I am right — that it is intended that the £9 billion will cover a three-year period. Effectively what has happened is that the original decision of the United States to make a reduction in the amount of the money available to the International Development Organisation from £12 billion over three years to £12 billion over four years — in other words from £4 billion to £3 billion a year — is being given approval by this smaller replenishment on this occasion. The amount of money which is being made available reflects that problem.

It is only right that recognition be given to the fact that there is a proposal by the Minister to make our contribution towards the Special Facility which will be used for aid in a specific area of the world. These ad hoc special arrangements are not really as satisfactory as the maintenance of the level of funding of the association itself at the £4 billion a year rather than the £3 billion a year which it now seems to be heading towards. The Minister might explain to what extent the £9 billion over the three year period plus the suggested Special Facility for Sub-Saharan Africa will fall short of the previous rate of £4 billion per year. When we see that we will see the full extent of the reduction in the level of activity of this excellent organisation which has taken place as a result of the USA decision.

The Irish Government are quite right in maintaining their contribution to this organisation at the highest possible level. They are also quite right in adding to that the additional contribution for the special funding arrangement. However, during the course of the negotiations for the eighth replenishment which are now about to take place — and these are much more important than for the seventh which now has all the dies cast — the Minister should, in his capacity as the Irish governor of the International Development Association, make it clear that it would be the wish of this House, as I am sure it would be the wish of the Government itself and of the other House, that the level of funding in the International Development Association would revert from the £3 billion a year to at least £4 billion a year and that the eighth replenishment, when it is negotiated, should take into account that increased level of funding.

The Minister in his capacity as a governor of the International Development Association can be assured of our support in that regard. It is important that we, as a country which lately became a member of the first tier, so to speak of the International Development Association and as such has good friends and contracts among a wide range of nations who are members of that body at various levels, would be seen to support the high level of funding. In that regard the Minister would have the support of all sides of this House in the work he is trying to do. I certainly join in the support which is being given to the Bill and I am quite sure it will receive speedy consideration in this House.

I would like to thank Members of the House who contributed to this debate which, if I may say so, has turned out to be a great deal more than a debate on the specifics of the Bill that is before us but which I must honestly say I have found to be very useful indeed as a preparation and sounding out of the views of this House — which would represent progressive views in many places outside this House — a preparation for the input that we will be making to the argument about the next replenishment of the IDA and indeed to some of the work of the World Bank and some of our approaches to the debt problem.

It is very clear from what Senators have said that not only is there a great deal of support in this House for the work of the IDA but that, far more important, there is a great deal of understanding here and a great deal of expertise to be offered by this House in the approach to the work that is being done and will be done in future by both the IDA and other agencies that are involved in the process of development. I would like personally to thank the House very sincerely for that. I would like to make a few remarks in a moment about some of the suggestions that have been made and some of the topics that have been taken up.

A thread running through all of the contributions there has been — and I quote Senator Lanigan "disappointment and anger" at the way the United States has played its part in relation both to the last replenishment and to the current one. I am glad, however, that Senator O'Leary put on the record quite specifically what actually happened. The word "default" was used by one Member of the House. I think that was going a bit too far. Senator O'Leary has put the matter in its proper perspective which is that for the sixth replenishment a contribution which should have been made over three years was made over four years. That, as Senator O'Leary said, appears then to have set a headline or framework for an approach to the seventh replenishment.

The view of the House is indeed shared by all of the other donor countries without exception as far as the seventh replenishment is concerned. For quite some time there was a reluctance to agree on anything for as long as the donors felt that perhaps by continuing the negotiations some progress might have been made in changing the United States position. Eventually, we had to come to the conclusion, with great reluctance, that there was no point in dragging out the negotiations any further because there was no prospect of getting the kind of result that we needed. As I said in my opening remarks, it was the feeling of all of the other donor countries that a replenishment of $12 billion was the minimum that was required in order to allow the IDA to make what we would regard as an adequate contribution. In the earlier part of the discussions it was very clear that most of the donor countries, had they been given a little more freedom in the discussions, would have preferred a figure somewhat higher than $12 billion. Senator Lanigan asked what the stabilisation and adjustment programmes are, who makes judgments on them and if they are programmes which suit the disbursing country. There are a few things which I would like to make clear in that context.

In the case of IDA operations, first of all, Senator Lanigan seems to have overlooked the fact that no interest is charged on the loans. There is effectively a moratorium on repayments for ten years: repayments do not commence until ten years after the loan operation is carried out. The currency in which the loans are made out and the currency in which they are repaid is the special drawing rate. That in fact, given the nature of the instrument itself, is a far more stable unit than the dollar. In fact that is the very reason why it is used in these operations.

I know that there are times when repayment commitments, taken on at the beginning of a project that seemed to be reasonable, can over a period of time, turn out to be very burdensome indeed because of appreciation of the currency in which they are denominated. It was for that reason that it was decided that the operations of the IDA be carried out in SDRs. I think I can give Senator Lanigan some little comfort on that point in relation to the concerns that he expressed. This, as Senator Dooge pointed out, is multilateral aid. There is no direct connection between the donor country and the recipient so that the kind of operations about which Senator Lanigan seemed to be worried cannot by definition arise in relation to the operations of the IDA.

The stabilisation and adjustment programmes which must be capable of being monitored are, in my view, a very necessary part of operations of this kind. They are intended to ensure that aid that is given actually produces a net benefit to the recipient countries. I would be the first to admit that there is room for discussion as to what specific type of programmes are needed. I would also agree with the contention that Senator Michael D. Higgins and Senator Dooge would share that in many cases in the past such programmes have been excessively influenced by the points of view or traditions of the donors, in situations where the recipients did not themselves have either the administrative framework or the intellectual framework or the cultural framework to build programmes that would in fact be more suitable to their needs than the ones that were finally agreed.

It is not a question of imposing a particular programme on a recipient country nor is it a question that any one or any group of the donor countries can determine without reference to anybody else what kind of programme should be implemented. The programmes are discussed between the IDA and the recipient country. In that regard many of the suggestions made by Senator Higgins are ones which should be taken up. I must say I would welcome the emergence in recipient countries of a more appropriate framework for the construction of programmes than we seem to have had up to now. I am quite sure that the board of the IDA would welcome such a development.

Senator Higgins may have intended to go a little further than that. I am not going to be tempted too far down that path but I would like to make the point that I agree with his basic contention that where the developing countries themselves can produce a better framework from their point of view for policies that would meet their needs, then it is up to the IDA and it is up to the donor countries to be informed by that and take account of it and wherever we can do so to help in the development of that framework.

Senator Connor in a very wide-ranging contribution referred to the need for aid to be co-ordinated. I agree with that as long as co-ordination does not mean that it must be all centralised into fewer and fewer agencies. Given the range of operations that the IDA and indeed the World Bank are involved in, there is a need to ensure that each part of the programme is informed by other things that are going on. It would be wrong if that meant that we develop some kind of a rigid idea of the balance between different kinds of programmes that should be adhered to in all circumstances. I do not think that was what Senator Connor was suggesting. I would certainly be very anxious to avoid it.

Senator Higgins referred to the present danger of politicisation of IDA's operations and, indeed on a wider scale, to that of aid operations in general. He asked if I had a comment to make on it. My comment would be that I agree entirely that these operations should not be politicised and certainly not in the way to which he referred. I would object most violently to that. In fact, the very nature of the judgement structure that we have for these programmes is designed to depoliticise it as much as possible and ensure that the aid programmes produce a net accretion of welfare to the countries concerned.

The allegation of politicisation may go somewhat further than the facts would actually justify. In relation to the situation in Nicaragua, one of the countries to which Senator Higgins referred, I should make the point that since the present administration took over in 1979 loans totalling over $100 million have been made by the International Development Association and the World Bank. In 1981, Nicaragua exceeded the income eligibility threshold for loans from the International Development Association — $790 million limit to which I referred earlier on. It is now not eligible for loans from the IDA because of the technical rules that are there; it has not been excluded because there has been a politicisation of the approach to that country. In addition, it is in arrears in repayments to the World Bank. It is standard procedure in World Bank operating practice that disbursements are slowed down or suspended in the case of countries that have got into arrears. Senator Higgins and I may not agree on the rest of this, but it seems to me to be a reasonably prudent practice, both for the borrower and for the lender, in a situation like that to stop further accretion of obligations.

As far as Tanzania is concerned, to which Senator Higgins also referred, a total of $350 million worth of loans have been approved by the IDA for Tanzania since 1980. World Bank loans to Tanzania have followed a different course over that period. Tanzania is in arrears also and so disbursements have been suspended. It is not in a position to take on loans at the kind of rates that the World Bank must apply, which are market related rates.

The reason for a situation which Senator Higgins interprets as politicisation is, in fact, one that results from the technical rules, which have good foundation in practice, as regards IDA and World Bank loans to those two countries. This does not take away from the fact that I agree with the basic concern that Senator Higgins has that we should at all costs avoid the politicisation of the operations of these aid agencies.

I do not know what Senator Higgins had in mind when he suggested that we should now begin to think of a new form of debt relationship. It might be indelicate or unwise of me to go further in speculating on what that might be, in case somebody else might think I had the same kind of idea myself. Obviously, there is an area there dealing with the debt problem where it is clear that we need, if not new solutions, then at least a new way of applying the classic solutions. The recent emergence of what has come to be called the "Baker initiative" seems to me to hold out some hope for action in that regard. It is a pity that such an initiative should have emerged following on the more unfortunate history of the last couple of years in relation to replenishment of the IDA.

Senator Higgins raised a number of issues with which we, and in particular the World Bank and the IDA, should be concerned and which are in fact matters of moment in both of those organisations. I will take a few examples from what he said — the fears that aid disbursements or loans through agencies like the IDA are used up in developing countries by urban elites, for example, by what Senator Higgins referred to as dangerous import practices, which is always a problem, or by new forms of consumption that do not do really anything for the mass of people in those countries or for their overall welfare.

I agree that we need new ways of defining the means by which those deals are met. I think that the comment of Senator Dooge to the effect that one of the mistakes of the past has been to think that there was a take-off point after which things suddenly began to happen by some magical process is very much to the point. I would have to say, rather ruefully, that that applies not only to the developing countries but to a great extent in the developed countries also. It is a matter almost of record now that many governments of developing countries have an excessive urban bias. This has created problems which they did not have to create for themselves in the process of development. Indeed, they could probably fairly say that, to the extent that bias is there, it is a colonial hangover and in fact has not been spotted in time because those of us looking at it, also in the West, tend to have an excessively urban bias and would never have thought it at all remarkable that policies should follow that particular course.

As Senator Dooge has said, we are not dropping back in relation to our progress towards the UN target; in fact, we are making very good progress. In the period from 1970-1983 our performance in terms of the proportion of GNP made available has been to see roughly a sevenfold increase in the proportion from a very low base. It exceeds the record of any other country in the OECD/DAC group and exceeds even the highest of them by a very respectable margin. Had the other OECD/DAC countries produced the same kind of performance over that period instead of in 1983 making an average of 0.36 per cent of GNP available for aid, they would instead have been making available about 2.5 per cent of GNP. Of course that is an impossible target, but that has been the scale of the increase that we have managed to bring about over that period and through some very difficult circumstances. I will graciously decline Senator Dooge's invitation which he issued just after making that statement.

Senator O'Leary made the point, which is a very pertinent one, that ad hoc special arrangements are not by any means as satisfactory as permanent ongoing structures. I am not so sure if it is entirely appropriate to compare a replenishment of $12 million over three years, subsequently stretched out to four, with a replenishment of $9 billion over three years plus a Special Facility of $1 billion. It is very clear that over the period of this seventh replenishment both the absolute amount of assistance and indeed the real level of assistance will have declined for the period as a whole and for any year within it. It is not a matter of the assistance being tranched out in a regular pattern year by year, because the assistance is drawn down as projects become available and are passed. But there is no doubt that the real level of assistance through this mechanism has taken a severe denting between the sixth and the seventh replenishments and it is a matter of some considerable regret as I have said to all of the donor countries, with the exception of the United States. I hope that in the very near future it will be seen as a matter of some considerable regret in the United States and that a different and more constructive view will be taken of the eighth replenishment when negotiations begin in the near future.

I will conclude on that note. I want again to thank the House very sincerely for a very useful and constructive debate which I feel sure is going to lead to the passage of this Bill today, but which, as I said before, also provides me with the assurance that we have the support of the House for further progress in the work and the structures of the IDA and the IMF — I am glad that Senator Michael D. Higgins has come back — and with a far better nourished conceptual framework for my own approach to this work in the future.

Question put and agreed to.
Agreed to take remaining Stages today.
Bill put through Committee, reported without recommendations, received for final consideration and ordered to be returned to the Dáil.
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