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Seanad Éireann debate -
Thursday, 25 Mar 1999

Vol. 158 No. 16

Bretton Woods Agreements (Amendment) Bill, 1998: Second Stage.

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

I am pleased to make the Second Stage introductory speech on behalf of the Minister for Finance whom everyone in the House will be aware is in Berlin on business that is of the utmost importance to Ireland's economic, structural and social development.

The primary purpose of this Bill is to enable the Minister for Finance to take or to authorise the Central Bank on his behalf to take the necessary actions to make the payments authorised by the Government under the debt relief package announced by the Minister for Finance and the Minister for Foreign Affairs on 16 September 1998. The package will amount to £31.5 million over 12 years of which £17 million will be disbursed in 1999. It consists of three elements – debt relief of £11 million to the World Bank's HIPC debt initiative trust fund; £4 million to the IMF's, ESAF, HIPC trust; and £7 million to the IMF to provide interest subsidies under the enhanced structural adjustment facility trust.

The Bill also deals with Ireland's acceptance of a special one time allocation of SDRs by the IMF and Irish participation in the Bank for International Settlements Facility in favour of Brazil. The Bill was subjected to intensive scrutiny in the Dáil and its accountability and control provisions have been greatly strengthened as a result of amendments put forward by Government and Opposition Deputies. I do not propose in my address to cover the same ground in the Seanad as was covered in the Dáil. The debate there was intensive, if a little lopsided, and many issues were raised by Deputies to which the Minister replied during the various Stages.

Unsustainable debts have increasingly been recognised as a constraint on the ability of poor countries to pursue sustainable development and reduce poverty. In response, just over two years ago, the World Bank and the IMF launched the heavily indebted poor countries debt initiative, HIPC. It was endorsed by 180 Governments represented at the World Bank and the IMF as a sound and effective instrument to provide poor countries a way out of the debt trap. The HIPC initiative is designed through a combination of substantial debt relief and important policy reforms to help poor countries reduce their external debt to sustainable levels so they can focus on long-term poverty reduction and economic growth. HIPC debt relief is used specifically in cases where traditional debt relief mechanisms will not be enough to help countries exit from the rescheduling process.

The HIPC initiative comprehensively attacks the debt problem in some of the poorest countries. If an external debt is unsustainable and a country has established a good record of implementing structural and social reforms, the HIPC initiative provides for additional debt relief. With HIPC debt relief, Governments will have additional resources available to strengthen their social programmes, especially in primary education and primary health. A second special aspect of the initiative is the new dimension of multilateral debt relief. Before this initiative, multilateral debt relief was taboo. For the first time, multilateral institutions, such as the World Bank and the IMF, are providing debt relief together with other bilateral and commercial creditors.

There are 40 HIPCs worldwide that owe in 1996 US$170 billion in external public debt. While this amount is but a small fraction of the total debt of developing countries of more than US$2 trillion, the debts of HIPCs are, on average, more than four times their annual export earnings and well exceed their annual GNPs. These are approximately twice the levels considered to be sustainable. Some 33 African countries are HIPCs and many of these have debt that is unsustainable.

Over the past two years seven debt relief packages have been approved for Bolivia, Burkina Faso, Cote d'Ivoire, Guyana, Mali, Mozambique and Uganda, yielding debt service relief in excess of US$5 billion. In the cases of Uganda and Bolivia, the countries have already successfully completed the HIPC programme and are receiving debt relief amounting to more than US$1.4 billion in debt service reductions. HIPC and traditional debt relief will help these countries to return to a sustainable debt position. For these seven countries, total external debt, expressed in present value terms, will fall from US$31 billion in 1996 to US$19 billion in 2000. There has also been preliminary discussion on debt relief packages for Guinea-Bissau and Ethiopia.

The HIPC initiative has been catalytic in mobilising governments around the world, international institutions, NGOs and religious organisations to stay focused on the need to deal urgently with the debt problem faced by the poorest countries. At the same time we should be aware that debt relief alone will not solve the development problems of these countries, especially that of poverty. Debt relief should be seen as an integral part of the broader development agenda and integrated into an overall strategy of poverty alleviation. The key element of all strategies to reduce poverty must be a well specified plan of reform which has broad political support in the countries concerned.

From a financial point of view debt relief must also be seen as part of an overall support package that includes grants and highly concessional credits. In this context it is often forgotten that most HIPCs are already receiving substantial net inflows from creditors and donors. HIPCs receive on average twice as much by way of external assistance, involving grants and concessional loans, than they pay by way of debt service, and in some HIPCs such as Mozambique, Tanzania and Uganda this ratio is much higher.

Many Governments, institutions and civil society groups have strong feelings about debt relief and there has been an intensive debate about the HIPC initiative. The Irish Government has been to the fore in calling for significant improvements in the package on offer. The debate is attracting increasing support for more extensive debt relief. I expect an initiative to accelerate and deepen the HIPC initiative at the G7 summit planned for Cologne in June of this year.

I would draw the attention of the House to the principles concerning Third World debt which the Government announced in September last. This was one aspect of the Bill which received universal approval in the Dáil. These principles are: debt relief should become an integral part of Ireland's overall overseas development aid strategy, reinforcing the existing emphasis on the fundamental goal of poverty alleviation as well as environmental sustainability and gender equality; Ireland will continue to emphasise the need for definitions of debt sustainability to take human as well as economic development into account; we will press for increased flexibility in the implementation of the HIPC initiative in particular with a view to its speedier implementation and its application to as wide a range of the heavily indebted countries as possible; we will continue to encourage the IMF to take full account of the social impact of its policies at the design and implementation phases of its macroeconomic and structural adjustment programmes; we will strongly encourage the international community, including bilateral creditors, to take a generous and flexible approach to the heavily indebted poor countries. Ireland will continue to press for deeper debt relief so as to ease the debt burden that is imposing enormous constraints on many developing countries; we will continue to advocate a greater degree of consultation and involvement for civil society in the developing countries in the planning, design and implementation phases of IMF-World Bank programmes; we will continue to call on the IMF to maximise the use of its own resources by, for instance, the sale of its gold reserves, to fund a deeper and wider response to the debt problems of Third World countries – in recent discussions on funding HIPC and ESAF Ireland took a strong position in favour of the sale of gold; the Minister for Finance will press for greater transparency in the workings of the Bretton Woods institutions; both the Ministers for Foreign Affairs and Finance will emphasise the importance of continued consultation with the NGO community on issues of concern in relation to debt and development. These are the principles upon which all of our future aid and debt relief strategy will be based.

The Government has listened very carefully to the comments in the Lower House on the debt relief package and in particular to the stringent criticism levelled against the IMF's enhanced structural adjustment facility. However, Deputies and Senators should note that the Government means what it says when it calls for the deepest possible level of debt relief. This is not empty rhetoric.

The initiative calls upon creditors and debtors alike to work towards a way out of the debt trap and to focus scarce resources on sustainable development and reducing poverty. The HIPC initiative has made good progress in the past two years but much more needs to be done. The review of the initiative currently under way provides an opportunity for all interested parties to make their comments available. Ireland has now submitted its own proposals for reform of the initiative to the World Bank and the IMF. These comments build on the principles concerning Third World debt which I have already mentioned. In addition, we have encouraged the NGOs to make submissions and been in contact with both the IMF and the World Bank to make sure these are heard.

I would like to draw attention to some of the more significant points in the submission in the context of the debate on this Bill. The submission acknowledges that the HIPC initiative is a valuable framework for dealing with the debt issue. It is based on many sound principles and the calls for review and reform should not be allowed to obscure its solid base. Having said this, it is quite clear that many elements of the initiative could and should be improved. Many of these improvements inevitably raise the question of finance and resources.

Debt relief is an important element in the overall efforts to bring about conditions of growth and development in the HIPC countries and also to assist them in their efforts to become integrated in the world economic, financial and trading systems. Poverty eradication is the ultimate goal towards which the interim goals of growth, development and debt relief are critical underpinnings. Debt relief in itself is not therefore the end game.

We very much welcome the pledges made by many bilateral creditors to cancel their bilateral and commercial debts. In Ireland's case our overseas aid has been in the form of grant rather than loan assistance. We are aware of current calls for blanket debt cancellation of multilateral debts or the cancellation of unpayable multilateral debts. We feel there is a need for the full implication of these proposals to be fully teased out. We have drawn particular attention to the need to assess the impact of multilateral debt cancellation on the operations of the multilateral financial institutions, the flow of funds – grants and lending – to the middle income countries, and the ability of HIPC countries thus assisted to attract further external private sector flows and inward investment in particular.

We would be concerned that middle income or lower middle income countries should not bear the cost of the additional relief required to deepen, broaden and widen the HIPC initiative. The most obvious source of finance for improving the HIPC initiative would be increased aid budgets, supplemented by further contributions from the multilaterals themselves where this is possible. In the case of the IMF, for example, the sale of gold would produce additional finance. Ireland has been, and will continue to be, a strong advocate of the sale of IMF gold.

The primary prescription made in the submission is to shorten the period of track record and to extend the period within which the developed countries and the multilaterals would commit themselves to working with the HIPC countries. We support social considerations and human development indicators as an integral part of structural adjustment and not an afterthought or add-on. This is important in terms of ownership and effectiveness of programmes and of the efficient and effective use of donor resources, including those of the multilaterals.

The present scheme needs to be broadened, deepened and accelerated as well as being developed to take into account both dynamic and human factors. While the existing framework is important as a first step and as an innovative approach to deal with the complex problem of Third World debt, we favour an easing of the eligibility criteria. It is clear that the developed countries will have to be far more generous if the initiative is to provide a real exit strategy to the least developed countries. That is one of the reasons the Minister has provided for the possibility in the Bill of making further payments to assist further multilateral debt relief efforts.

The case has been made for ring-fencing social expenditure, particularly in the areas of health and education, in the context of an economic and social reform programme, worked out with the IFIs before the fiscal thresholds are brought to bear. We see merit in this approach and believe it ought to be pursued further. Otherwise the claim that foreign debt service is at the expense of social provision will gain increasing currency.

Our submission takes the view that the maximum number of HIPCs should be clear on their eligibility under the initiative by the year 2000. The key issue here is that accelerated relief should be included in a realistic and achievable national development plan which would have the backing and active participation of the main donor countries and the international financial institutions. The active participation and collaboration of the international financial institutions will also be critical. The type of collaboration and co-operation suggested by the President of the World Bank under the rubric of the Comprehensive Development Framework has much to commend it, both in terms of monitoring developments and ensuring an integrated approach to the development of HIPC countries.

Broad based growth and development can be achieved only through self-directed growth, and only the countries themselves can ultimately ensure this. For the economic and social reasons already mentioned, this implies any measures applied are implementable over the medium and long term, which requires that they are perceived as relevant and subject to influence and control by the countries concerned. There must be both ownership and empowerment on as wide a basis as possible, involving governments, parliaments, social partners and civil society.

The Bill goes beyond the question of Third World debt. It includes provisions in section 9 to deal with Ireland's participation in the IMF arranged financial package for Brazil. It also deals, at sections 2 and 3, with the acceptance by Ireland of the one-time equity allocation of special drawing rights to members of the IMF.

The Bill will enable the Minister for Finance to take the necessary action to guarantee the Central Bank against any losses it might incur under the Bank for International Settlements' Facility in favour of Banco Central do Brazil. Ireland's participation in the facility will cover the capital element of US$50 million – £34.3 million – and associated interest. It will provide for the adoption by Ireland of the proposed fourth amendment of the Articles of Agreement of the IMF. This will enable the Central Bank to accept the one-time allocation of special drawing rights agreed by the IMF at the annual meetings of the fund and the World Bank in Hong Kong in 1997.

A new section 10 was added to the Bill in the Dáil to provide for an annual report to the Houses of the Oireachtas in respect of Ireland's participation in the IMF and the World Bank. This is a welcome addition.

The entire debt relief package is designed to make an initial Irish contribution to the alleviation of the burden on HIPC countries. The package offers a pragmatic way forward to alleviate the crippling debt overhang which has acted as a constraint on the development of the HIPC countries. It is also appropriate that Ireland should show its solidarity with Brazil in the financial difficulties it is experiencing at present. We hope the international support they are getting will enable them to undertake the reforms necessary to underpin their future economic development.

The amendment of the IMF Articles of Agreement to enable the selective allocation of SDRs is also worthy of support. I commend the Bill to the House.

I welcome the opportunity to speak on this Bill. Some sections of the Bill are very welcome but others are questionable.

Ireland has a good record in this area, in that the people in general have a conscience and an awareness about poverty in Third World countries, and have always responded generously on a voluntary basis to the various crises that have arisen, particularly in Africa. However, at times our performance at Government level leaves a lot to be desired. We have aspired to increase our contributions, and this has been done, but there were then debates on whether we should continue to make contributions in line with the booming economy. This issue will always be a source of discussion, and rightly so, because just as we have an obligation nationally to the less well off and the socially excluded in our community, as citizens of Europe, we should strive to achieve equality across the board at all levels. A lot of equality legislation is being introduced at European level. As the world becomes a smaller place, our obligations at international level will continue. We have a moral obligation to apply our approach at European and national level to the global community. The general principles of parts of the Bill are extremely welcome, but others must be questioned.

Our obligation to the under-developed countries in the Third World must be put into focus. We have an obligation, because of our international commitments over the years and the continued discussions between the Department of Finance and the Department of Foreign Affairs at international level, to ensure international agreements are complied with. Unfortunately, there is a serious question mark over the way the IMF has operated. There is a real problem in relation to debts in Third World countries and the way in which the IMF moved in to try to get the debts repaid. We must recognise that the IMF is a bureaucratic institution with one specific purpose, to ensure deficits are reduced. In many instances, the plight of the people on the ground in these under-developed countries has not been reflected in the policies being pursued. This is a serious matter, particularly as the debt required to be recovered by the IMF is not that fundamental in the global order of things at an economic level. The stringent approach adopted up to now must be reviewed. It is not good or sound policy when the general good of the community and the people of these under-developed countries becomes secondary to the repayment of the debt. Increasingly, the programmes that have been put in place have aggravated the situation rather than improved it. This is unacceptable.

Providing assistance to people is important, but enabling them to provide for themselves and to become self-sufficient is more important. In many countries, particularly in Africa, debt repayments have crippled governments and the many fragile democracies in the region. They have led to tensions, unrest and uprisings in communities. This is dangerous and the role of the IMF and the ESAF programmes which have been put in place in that scenario must be questioned. The abundance of information available, particularly from the Debt Coalition in Ireland, in that regard must be acknowledged.

The Debt Coalition is the only group, other than the Departments of Foreign Affairs and Finance, with informal information on this area. The group has identified clear and serious problems on the ground and there is an obligation on us to heed its message. The group is extremely concerned about the operation of the ESAF programmes. For example, in Ethiopia, 100,000 children die each year from diseases which could be easily treated and cured if funding was available. However, four times the amount of money spent on the health budget goes towards debt repayments. If that was reversed, the children would not die. We must raise questions in that regard.

In Tanzania, six times more money is spent on debt repayments than on health services. This is unacceptable. Few people in that country expect to live beyond 35 years of age. As a western democracy, we must ask if that is morally justifiable. How can Ireland support an organisation at international level which demands and gets money from these countries in debt repayments when the life expectancy in one is only 35 years and children are dying in another? Extensive education is not provided in Zambia because five times the amount of money spent on it goes towards debt relief. This is an unacceptable scenario and Ireland, as a Western democracy with a booming economy, cannot justify support for a programme which pursues countries in that manner. Ireland has an obligation to ensure that its voice is heard at international level in opposing this approach.

Many of the Minister of State's comments are commendable and I agree with his points about the principles in relation to Third World debt and the Government's aspirations, such as the HIPC initiative and greater transparency in the working of the Bretton Woods institutions. These moves are welcome, but ultimately Ireland as a Western democracy which did not support the ESAF programme was in a much stronger position before the Government's change in policy in relation to contributing to and supporting it. The Minister and the Department should consider its change of policy. Just because other countries are doing it is not a good reason for Ireland to participate.

Ireland should be a voice for deprived people and countries which are attempting to set up fragile democracies. Ireland is a recent democracy and we should appreciate the difficulties and vociferously articulate them on behalf of the countries involved. Ireland's voice has been substantially weakened and the next time the Minister goes to Washington, he will not have the moral authority he had previously when Ireland refused to support the ESAF. I hope the Government will reconsider its position on this matter. It is easy to fall in with the crowd; it is difficult to be a lone voice, standing apart from the rest and articulating a view which may be unacceptable to the powers that be.

It is unfortunate that our close ties with America and Washington may have conditioned us to falling in and taking this approach. The support we are receiving in other areas from Washington for domestic problems should not be used as a lever in diplomatic negotiations to put us into a position where we feel obliged to change fundamental policy. The Government should review its position on this matter.

There are real problems in many countries and many administrations are far from perfect. In many instances democracies are highly questionable and the expenditure on armaments is totally unacceptable. Some African countries spend vast amounts on arms and it must be possible to make other arrangements to ensure they are advised in a co-operative sense, discouraged from that line of activity and encouraged to spend more money on areas of social policy. It is most important that such a move is considered at international level.

The leaders of some countries have huge egos which they like to boost by spending exorbitant amounts on projects which may not necessarily benefit the people of their communities. There must be other ways to make them realise that this expenditure is unacceptable to the international community. We should take a line in that direction rather than implementing the measures in the Bill.

A number of reports on the ESAF have been carried out, including internal and external reviews of the working of the programmes. The internal review focused mainly on the progress of countries towards achieving macro-economic targets. The figures in relation to the IMF were extremely disappointing and the overall change in inflation levels and economic growth rates were lower than for developing countries. The IMF did not achieve its basic economic lines; it failed at that level.

The external review highlighted two areas of grave concern regarding the social impact of the programmes and the sense of ownership and democracy surrounding them. In Zambia the reform process was undertaken wrongly and the resulting credit squeeze caused the destruction of maize producers in remote areas. Their livelihoods were destroyed.

The external review recommended that the International Monetary Fund should work with the World Bank to identify in advance which groups may lose out through the ESF programmes. It stated that this would provide a basis for monitoring the impact of ESF and for putting safety nets in place. That recommendation should be pursued.

The Minister has weakened his hand for his next trip to Washington by putting in place a change of policy in relation to ESF proposals. It is unfortunate that the Government has decided to take this line of action and I ask it to reconsider.

Do not underestimate us.

I would not dare but this matter is very serious. We should heed what is said by Irish people who spend time on the ground in the Third World and know exactly what the scenario is. This change in policy is ill advised.

I welcome the Minister to the House. Senator Taylor-Quinn will understand that any tension is a result of the Minister's efforts to have Wexford included as a HIPC. He is somewhat upset about the situation.

We are almost there.

It would be useful to be able to see Ministers' speeches before they come into the House. Often we can see from those speeches how much has been taken on board from the debates in the lower House. This speech indicates that there was a great debate in the Dáil and that points were made which were taken on board by the Minister and his officials. The issue of accountability and reporting was very much taken on board. That amendment was put forward and the Bill has been strengthened by it.

Senator Taylor-Quinn said that our hand had been weakened by joining the rest. It is my belief that our hand has been strengthened because we are now involved. It is only by becoming a partner in the process that we will be able to demand the reviews which are important and look at the implementation of programmes and see how they affect people on the ground.

We are no longer talking, we are now putting our money where our mouth is. We have a voice with moral authority. The Irish voice has never been a lone voice, it has always been part of the group leading the way. Throughout the Famine we saw the problems of economic policies which ignored the human element and millions died as a result. That culture and heritage will never be forgotten, no matter what Government is in power. We will never be the lone voice. Progress may be slow and the people on the ground may become frustrated with the slow pace of the establishment but, if I have learnt one thing in public life, it is very difficult to move the establishment and you need a lot of patience.

When the Department of Finance publishes a document, it is full of jargon. It is useful to look beyond what is written to see what it means. This document states that we will strongly encourage the international community, including bilateral creditors, to take a generous and flexible approach to the heavily indebted poor countries. Ireland will continue to press for deeper debt relief to ease the debt burden that is imposing enormous constraints on many developing countries. Members of the Opposition who believe this Bill is not doing what is intended should look at the words "deeper debt relief". It is in black and white in the Minister's speech and in the minds of the Government officials who are working on our behalf. We are trying to help people on the ground and deeper debt relief is part of that.

The Minister made the point that we will continue to advocate a greater degree of consultation and involvement for civil society in the developing countries in the planning, design and implementation phases of the IMF-World Bank programme. We will also be involved in the review. Therein will be our strength. Because we are now involved we can have an input and make a difference. We will continue to call on the IMF to maximise the use of its resources by selling some of its gold reserve. Senior officials of the IMF would tell us to take a hike if we were not putting in money. We are not in a position to push for better use of IMF resources if we do not contribute.

The Minister for Finance will press for greater transparency in the workings of the Bretton Woods institutions. That is vital. This is couched in diplomatic language but it means that we will be pushing for the maximum benefit in each programme. The Minister for Foreign Affairs and Finance will emphasis the need for continued consultation with the NGOs on issues of concern in relation to debt and development. Our commitment exists at all stages, particularly for the NGOs which we recognise as having a huge contribution to make. Without their contribution many more would have died in the Third World.

It is sad that the people who are speaking against the Bill cannot see past the propaganda from many organisations and cannot understand the intention behind the Bill. We must help countries, we must look at the consequences of debt. We know the IMF is not a developmental agency but that is not what it exists for. There are many developmental agencies with which it works.

The package amounts to £31.5 million. This year £17 million will be disbursed, including debt relief of £11 million. Anyone who thinks we are not committed to debt relief is fooling themselves. A total of £11 million is being provided for the World Bank HIPC debt initiative trust fund and £4 million is going to the IMF HIPC trust. We should be proud that £7 million is being given to the IMF to provide interest subsidies under the enhanced structural adjustment facility.

We need to recognise that we have failed to respond adequately to Third World and developing countries. We may have been too focused on trying to get our economy to a stage which would allow us to make that contribution and we have achieved that objective. However, I am saddened that we no longer have collections in schools such as pennies for the black babies. Perhaps it is because television brings events closer to us, but when I was in school one felt one was making a contribution by giving money to the black babies. We may need to look at this issue. It is one thing to give away billions of pounds but there is nothing wrong with local communities donating small amounts of money.

The Department and the Minister are aware of the human face of the suffering. One Deputy recalled a visit to a small village on the Namibian-Angolan border where $5 Namibian, worth 80p, obtained medical treatment for a very sick child. One sees posters on billboards stating that £1.20 can save a child or provide them with necessary medical treatment. There are huge problems which, as a Government and as individuals, we can help address.

There is a clear recognition that debt is the key burden in developing countries. Let us forget about such countries for a moment. If we spend our entire household income servicing our debts we do not have money to pay for food, clothes and medical bills or to provide education for the future. The Government recognises this fact and that is why it is committed to introducing this Bill and putting in place this substantial investment in the world's future. On Ireland's behalf we are providing for investment in the development of the world. We are playing our part as global partners and helping those less well off.

The less well off are those spoken about by Senator Taylor-Quinn, the 40 per cent of the population of Tanzania who die before the age of 35 or the people of Zambia where the servicing of the external debt costs five times the expenditure on education. We could say that these are reasons for not doing what we are doing because it will not work. However, these are the reasons we should take these measures because it is by making this commitment that we can address these issues.

Debt is very onerous on many poor countries and it is important to ensure that, in the words of a speaker in the Dáil, the medicine is not too strong for the patient. This is one of the key challenges we face. We must ensure that whatever policies are implemented do not leave people worse off than if they received no money. This is a good analogy of which the officials are aware. However, if the medicine is too strong the patient will die.

It is important to recognise the role of the NGOs, religious agencies and Irish people working in the Third World. I am a great believer in giving money to the religious missionaries. There is no one better than missionaries for spending money wisely. I have seen nuns who have returned from Africa travelling from community to community collecting £50 and £100 which is spent wisely when they return to their missions. As well as addressing this problem at a macro level we also have to work with agencies, particularly missionary orders, who do not run advertising campaigns or maintain large administrative offices. They operate on a voluntary basis and some of our money should be directed to such organisations.

This has been a tremendous debate. I read the entire Dáil debate on this Bill. I have spoken to the officials and I recognise from where they are coming. We are now putting our money where our mouth is. We could stay on the outside and criticise until the cows come home. We are providing £31.5 million over 12 years which is an incredible amount of money of which we should be proud. The points about which we need to be concerned have been raised by speakers on both sides and have been taken on board by the Minister and his officials. I commend the Bill and compliment all involved in its drafting.

I welcome the Minister of State and most of the Bill. There was an excellent debate in the Dáil on this Bill. However, like Deputies, I am puzzled by the change in Fianna Fáil's policy from its pre-election commitment to continue to withhold funds from the enhanced structural adjustment facility until there was reform of the IMF. I have no reason to believe that the IMF is a malign group in Washington. I have been to the IMF and the World Bank and a considerable number of Irish people work for those organisations.

The IMF works at a macro economic level. No matter what one may claim about us forcing it to have greater transparency and to take into account the social implications of its policies, I would prefer to see Fianna Fáil stick to its pre-election commitment and stay outside the organisation until some attempt is made at reform.

I am grateful to the Debt & Development Coalition for its briefing documents. I have been involved and interested in this area for many years and I will quote from the work of Michel Chossudovsky, professor of economics in Ottawa University who has an Irish connection – his father lives in Howth. He has studied the impact of IMF and World Bank reforms and what they have attempted to do in developing countries. He has written a book on the globalisation of poverty which addresses many of the issues we are discussing today.

I do not think the Department has any malign intent, however, I do not understand the position. The foregoing of debts is to assist the developed world, not the Third World. Underdeveloped countries are unable to pay their debts so we are establishing structures through the IMF which give them the money to pay us what they owe without doing anything to help them.

I agree with what Senator Fox said about the more personalised campaigns regarding overseas development and helping people in Third World countries. Last summer I visited a friend, who is a nun, in Lagos. With the help of small amounts of money sent by Irish people she has done much work in a home for mentally handicapped people. I saw the photographs before and after she went there. She is running organisations for people who have been sent to jail without trial. When they are on remand there is nobody to bring them out and she has devised a structure where people undertake to mind them if they are released on bail.

We have done incredible things from this country with very poor resources. Now that we are more flush with money, I am concerned about what we are allocating for overseas development. It appears to be well intentioned, but I do not believe it will help the countries involved. It will be of great help to the major banks who have lent the money to these Third World countries. Russia is becoming like an underdeveloped country due to the necessity to repay debts. It is only by the grace of God that the eastern European countries have escaped the same fate.

Debt repayment has achieved an enormous significance, but it is because it is so important to the banks and financial institutions in the developed world that we are giving it such consideration. It is doing nothing for those in the undeveloped world.

The IMF claims it is inflicting short-term pain for long-term gain, yet by its own admission there has been no long-term gain. When replying to the debate will the Minister identify a couple of countries, besides Uganda, which is always referred to, where there has been long-term gain?

These policies have been ongoing since the 1980s. In his book entitled The Globalisation of Poverty, Michel Chossudovsky refers to the tacit acknowledgement of failure by the IMF and the World Bank and quotes from an IMF staff paper by Mohisn Khan entitled The Macroeconomic Effects of Fund Supported Adjustment Programs, which states:

Although there have been a number of studies on the subject over the past decade, one cannot with certainty say whether programmes have "worked" or not . . . On the basis of existing studies, one certainly cannot say whether the adoption of programmes supported by the Fund led to an improvement in inflation and growth performance. In fact it is often found that programs are associated with a rise in inflation and a fall in the growth rate.

I do not know any country where there has not been a rise in inflation and a fall in the growth rate and, in numerous instances, the destruction of the local currency. Given that the legislation commits us to the IMF approach, I presume the Minster will produce contradictory evidence and identify the countries in which the policies of the Fund are working. Thus far in the debate this has not been mentioned.

Traditional debt relief has not worked because these countries are in such an appalling state that they cannot pay. The IMF is changing its policies to ensure the developed world is paid. The enhanced structural adjustment facilities have had terrible social effects. I have taken a considerable interest in the health effects and I doubt if there is an underdeveloped country in which the general standard of health has not fallen in the past ten years. In his book, Michel Chossudovsky, referring to the resurgence of communicable diseases in sub-Saharan Africa, states:

In sub-Saharan Africa there has been a resurgence of a number of communicable diseases which were believed to be under control. These include cholera, yellow fever and malaria. Similarly, in Latin America the prevalence of malaria and dengue has worsened dramatically since the mid-1980s in terms of parasite incidence. Control and prevention activities (directly associated with the contraction of public expenditure under the structural adjustment programme) have declined dramatically.

Under the IMF programmes these countries must curtail spending on these domestic issues so that money can be given to debt repayment. This is what we are encouraging. Mr. Chossudovsky goes on to state that the outbreak of bubonic and pneumonic plague in India in 1994 has been recognised as – here he quotes from the Madrid Declaration of Alternative Forum, The Other Voices of the Planet,“the direct consequence of a worsening urban sanitation and public health infrastructure which accompanied the compression of national and municipal budgets under the 1991 IMF/World Bank-sponsered structural adjustment programmes. . . ”. The Minister is aware that the Indian budget is effectively drawn up in Washington by the IMF. The Indian Department of Finance has no control over its spending on health. That is decided in Washington. I do not suggest that those in Washington are malign in their intent, nevertheless, IMF forms specify what must be included. Furthermore, IMF officials visit these countries for three or four days, attend meetings of their finance departments and tell them what is to be done. Yet, they have very little knowledge of the social consequences of their suggestions.

Michel Chossudovsky goes on to state:

The social consequences of structural adjustment are fully acknowledged by the IFIs. The IMF-World Bank methodology considers, however, the "social sectors" and the "social dimensions of adjustment" as something "separate",. . .

I do not believe the Irish people considers the social consequences of these monetary changes have to be considered as something separate. He continues:

. . . according to the dominant economic dogma, these "undesired side effects" are not part of the workings of an economic model. They belong to a separate "sector": the social sector.

This identifies the problem with this legislation.

The education area has been severely hit and the education of women has been more severely hit than the education of men at the primary level. Unfortunately, as we have discovered, the importance of primary education for women is that, more than anything, it encourages improvement in the health status of a country. Clean water and primary education for women are the most important things to be done if the health status of any country is to be improved. The UN has figures on this. The Minister does not need persuading.

However, nothing in the Bill will promote this. Given that these countries will have to accept the economic models devised by the IMF to relieve the debt, which is the money owed to us and which we say must be repaid as a first priority, they will not have funds for education.

This can have a serious effect on democracy. One can recall the way the IMF went into Peru with a big stick. There is merit in the view that the security forces, the police and the army, must be paid. This is important to ensure the prevention of a Mafia situation similar to that in Russia. However, it means that when the economic pain kicks in, there can be resistance by the population. This can arise for various reasons, for example, because of an overnight increase by 100 per cent in the price of bread or, in the case of the Côte d'Ivoire, a collapse in coffee prices because we have decided we will not pay as much for coffee.

When there is social unrest the leaders of a country bring in a strong army to subdue the general population. This has caused dangerous terrorist organisations to arise, as happened with Shining Path in Peru at the start of this decade. It was almost certainly the economic reforms introduced at the behest of the International Monetary Fund which led to the rising support for Shining Path. There are numerous countries where this will happen. Civil society is seriously affected when dramatic reforms are introduced. It has been suggested that the IMF sell gold, as it has been told to do for a long time. I do not know whether it has sold any yet. Perhaps the Minister's officials could tell me.

I am sorry Fianna Fáil did not keep to its pre-election commitment to stay out until there were changes in the IMF. Those changes are not being made. As Senator Cox said, we have frequently made a huge contribution on a bilateral basis, particularly in Africa where we had good relationships because a great number of Irish missionaries worked there over the years. All of us who have attended international meetings on this subject know how our contribution is valued, because we have been so independent in this area. Unfortunately, we are giving away a great deal of our independence. If I knew Fianna Fáil had changed its policy for a good reason, I would not mind. However, it has not been explained to me yet.

I am delighted this legislation is before the House; it may have its inadequacies but it is an important step. I am one of the many Members in both Houses who over the past decade have drawn attention to the debt problem in developing countries. The levels of unsustainable debt in 40 of the poorest countries in the world has continued to grow. The Bretton Woods institutions, the World Bank and the International Monetary Fund have discussed this issue for years. It is at least ten years since John Major, the then UK Chancellor of the Exchequer, proposed the famous Trinidad terms which were concessional terms for the relief of world debt in some of the world's most debt distressed countries.

Ten years ago the debate was the same. The impact of debt on the economy and social structure of these countries was such an overriding problem that the term debt distress, a very good way to describe it, came into vogue. Some of the countries have been mentioned already, for example Ethiopia and Tanzania. Niger has replaced Mozambique as the poorest country in the world. The basis of its poverty and economic decline is its debt. Its debt to GDP ratio is so adverse that it is totally unsustainable.

I remember meeting the new president of the World Bank in Washington in 1995 at a meeting which he addressed. I raised these issues with him and he was obviously a man with an open mind. The HIPC initiative, which is now two years old, was very much his work. It is interesting that in the early 1980s the response was to change the situation in Africa, where there was new democratisation following the ending of apartheid in South Africa and the release of Nelson Mandela. That had a major impact in sub-Saharan Africa. Namibia became independent and there were what seemed to be positive changes occurring in Angola, which were never realised. There were changes in Mozambique and a stable Government was elected nearly four years ago. The same was true in Zambia, where the effect of a one party ruler, Dr. Kenneth Kaunda, seemed to be brought to an end, but I am not satisfied that the Government of Mr. Chiluba is anything like a democratic Government. Nor am I satisfied that the Government led by Mr. Mugabe in Zimbabwe is anything like a democratic Government.

There have been dramatic changes in the political map of Africa in the past ten years, when there were dictator led regimes, non-participation by the population and the huge level of corruption attendant on that. There are now more democratic Governments in sub-Saharan and Francophone Africa, north of the Sahara, than there were ten years ago. However, the World Bank and the Bretton Woods institutions responded to the debt question by insisting that countries implement structural adjustment programmes, or SAPs as they became known. The structural adjustment programmes, to which Senator Henry and others referred, entailed the implementation by countries of all the characteristics of a working market economy before they could be considered for debt relief.

Free milk schemes for primary school children in Zambia had to be abandoned. Vaccination programmes in the Ivory Coast had to be abandoned because it accepted the structural adjustment programme. The World Bank told them they had to cut back on essential social spending on health and education and they must put greater emphasis on building the economic basis of their economies, rather than as previously under dictatorships when socialism was the economic basis, which we all know did not work. This response was inappropriate and the World Bank misunderstood the problem by insisting on these extraordinarily harsh structural adjustment programmes. This is the same as what is being told to Eastern European countries trying to make the transition from the old communist economies to what we consider the western market economy.

This has not worked in so many countries and has been difficult and painful, as well as stressful on the political order. Attendant on the structural adjustment programmes and changing their economies to western style market economies, we have insisted on standards of democracy, political participation by the population and standards of openness and accountability which we take as given in this part of the world. However, the problem is that when one stresses the economy, especially taking milk from schoolchildren, closing schools and ending inoculation and immunisation programmes, one puts pressure on democracy in countries where it was fragile to start with. The structural adjustment programmes attenuated nascent democracies and better standards of governance which were coming on stream in those countries, as I have said in the other House on many occasions. The Minister said that with the HIPC debt relief, Governments will have additional resources available to strengthen their social programmes, especially in primary education and health. I welcome that as a great change of heart.

I have criticisms of some countries. Ethiopia is one of the world's most indebted countries and it must be condemned for conducting a war with its neighbouring country, Eritrea. It has 400,000 armed men engaged in that war. Eritrea and Ethiopia are two of the poorest countries in the world, yet they are fighting for a useless piece of turf between them. They will not submit their dispute over a few square miles of land to international arbitration, or, if they do, they do not seem prepared to accept the outcome of that arbitration. They have now pitted two mighty armies against each other in a situation which is reported in the newspapers as being very much like the Flanders front in World War I. The two armies have dug in against each other and are killing each other in tens of thousands. That creates a huge economic drain on those two poor countries.

Just over ten years ago we all had the greatest sympathy with the famine that broke out in Ethiopia in the Mengistu years, and there was a tremendous public response in Ireland to that problem. After Mengistu left, Eritrea was given its independence, as it had always been an area of tension and civil war. Ethiopia and Eritrea signed an agreement to live peacefully as neighbours and to co-operate economically and otherwise for the betterment of both their peoples. We now find that there is a war between them.

Ireland has an excellent moral record. We do not have a great record of donation because of our lack of resources, but our moral voice is heard. When travelling abroad I have found that the Irish voice is always listened to because people understand that we are on the right side of this argument and that we do not have any baggage from the past. Our voice should be listened to on the Ethiopian situation.

I welcome the World Bank's initiative, but the Government should ask that organisation to attach an anti-corruption programme to the HIPC initiative. This is extraordinarily important. The Minister of State's speech referred to debt relief and getting foreign investment into these countries, as they cannot grow without that investment. There must be an anti-corruption programme written into the World Bank initiative, and that body will have to insist that Governments clean up their act. A recent survey showed that 70 per cent of foreign investors who invest in Third World indebted countries such as those we are discussing today see their greatest problem and disincentive as Government corruption. They felt they had to pay for legislation, and that has to be tackled. Interestingly, 80 per cent of investors who deal with those eastern European countries in transition from the communist era see corruption as a problem, which means the problem is 10 per cent greater there. This matter should be taken into account by the Minister.

I welcome this Bill, which addresses some vital areas. As chairman of the Sub-Committee on Overseas Development Co-operation, numerous NGOs have suggested to me that we should not support ESAF and that we should have an independent review of how best to deal with world debt. Debt is growing in poorer countries because although interest rates around the world have gone down, when put in place for Third World countries they were much higher, and there is no way that debt can be alleviated for these countries.

Debt relief should be looked at, but we should really look at the alleviation of poverty. Debt relief will not and has not alleviated poverty in the HIPC nations. In many cases, countries are improving macroeconomically, but their people are getting poorer. If debts are repaid or the IMF or World Bank devise a package, education, health and basic human rights suffer. That is a fact for all these poor countries. Unsustainable debts have been recognised as a constraint on the ability of poor countries to pursue sustainable development and reduce poverty.

The EU creates much world poverty because it sends subsidised beef to the poorest countries in the world. When that happens, the farmers in those countries do not have a cash crop and cannot sell their own cattle because of the subsidised meat coming in from well-off western European states. It is good for European farmers, but it is detrimental to the cash economies of the poorest countries in the world.

Ethiopia has been mentioned. Unfortunately, when famines occur in these countries, the first thing that happens is that there is a massive influx of grain or food. In many instances the foods supplied have been grown in the country, and when the crops grow again they cannot be sold because the country already has food from outside the country. The alleviation of poverty in a fire brigade manner ensures that the poorest of peasant farmers in these countries have no cash crop, and this leads them into a poverty trap from which they have no hope of escaping.

I have visited many of the poorest countries of the world, and there is no doubt that in many of them corruption is a part of life. However, the corruption often comes from outside because many of these countries have natural resources which are capitalised upon by western entrepreneurs such as oil, gold and diamond companies. If one goes to Amsterdam or the oil markets of the world one finds that diamonds and oil are being traded, but not for the good of the people of the countries those goods come from. The goods are being traded by the corrupters; westerners who buy resources illegally in these countries by paying backhanders to people who in turn sustain western economies by buying arms.

The two biggest arms supplying nations in the world are attacking eastern Europe from the air like cowards. Mr. Robin Cook is the biggest arms salesman in the world. He attacks the arms sales sector of the British economy, but unfortunately, every time a Labour Government is in power in England, the arms industry gets bigger and bigger. This is unfortunate for Angola, for example, which could be one of the richest countries in the world. There is a civil war there and nobody seems to give two hoots about it. Some 70 per cent of the oil that goes into petroleum products that go to America or offshore comes from Angola. It is paid for in dollars, traded through London and the money goes into the coffers of dos Santos and the oil companies – not one dollar reaches the people of Angola. No one seems to care and the war continues. Without the collusion of the western oil companies and the diamond merchants in Amsterdam, that war would cease. Western nations, including those in Europe, should take note of the damage they are doing to the power structures in and morality of Third World countries. The European Union is not addressing that problem.

The external debt of the world's poorest countries is increasing and is not being alleviated by HIPC or ESAF because debts that were incurred when interest rates were extremely high are being repaid at current values. HIPC is supposed to be used, in many instances, for the alleviation of debt but it is the interest charged on interest payments which is growing. We must completely rid these countries of their debts. A once-off payment to get rid of debts would be much better than chipping away at the interest charged on those debts.

Ireland has played a good role in this area and the Government is doing an excellent job of trying to alleviate some of the world's problems. Anyone who believes Ireland will be able to reduce Third World debt is foolish in the extreme; Ireland can only provide limited help. The NGOs are close to being correct in stating that Ireland should not become involved in multilateral or multi-national schemes. A number of NGOs are too large and are responsible for creating problems in Third World countries. I visited Sierra Leone a number of years ago, where a war is currently taking place, and I saw many four wheel drive jeeps and vehicles, on the sides of which were displayed the names of innumerable UN organisations, World Vision and other major NGOs. These organisations created a sub-structure of society in Sierra Leone which did not benefit the people of that country.

The aid industry is probably as large as any other industry in the Third World and there is a need to provide a definition of what is a good NGO and what is a bad one. Irish NGOs are good, in the main, because they are small and concentrate on specific projects; they are not trying to save the world, they are trying to provide people with assistance in the form of fishing rods or ploughs.

The Minister of State said we will continue to press for "deeper debt relief". Will he provide an explanation of that term? Does it mean we will provide increased funding or that we will concentrate on specific areas? The Minister of State also informed us that "we will continue to call on the IMF to maximise the use of its own resources by, for instance, the sale of its gold reserves". There is no doubt that the headquarters of the IMF and the World Bank in Washington, with the swimming pools, gyms and other perks available to the personnel of those organisations, could be sold to help alleviate the debts of Third World countries.

The Minister of State indicated that the "initiative calls upon creditors and debtors alike to work towards a way out of the debt trap". If the people of the Third World are to escape that debt trap by means of a poverty alleviation programme, we will be obliged to eliminate to a large degree the involvement of Governments, to a large degree, from our initiatives. We must go directly to those who need money and not give it to Governments or regimes which can or already have been corrupted. If we provide funding to the governing regimes or the individual in charge in the most heavily indebted countries, there is no doubt this funding will disappear. Ninety per cent of the money to which I refer will return to the west in the form of payments for armaments and it will not be given to poor people to ensure their survival.

The west gains on each occasion money is invested in the programmes to which I refer. I ask the Minister of State to engage in careful consideration before providing money to countries with corrupt regimes and to ensure that, if it is provided, such money should be given to the people to ensure the survival of their children.

I move amendment No. 1:

To delete all words after "That" and substitute the following:

Seanad Éireann declines to give the Bill a second reading on the ground that, while urgent measures need to be taken to address debt relief, the Enhanced Structural Adjustment Facility (ESAF) cannot be supported in its present form and on the ground that the Bill's proposal to fund ESAF is a direct contradiction of Fianna Fáil's pre-election commitment to continue to withhold funds from ESAF pending reform of the International Monetary Fund.

Mr. Ryan

I formally second the amendment.

I wish to share time with Senator Costello.

It is with great sadness that I speak on the Bill. Its underlying principle, namely, to support debt relief, is supported by everyone. However, that principle is being used in a perverse fashion to reintroduce a proposal which the Department of Finance has been trying to place on the agenda for many years, which it succeeded in having brought to Cabinet by way of memorandum to Government in 1994 and which was returned by the previous Minister for Finance, Deputy Quinn, following his dialogue with the Joint Committee on Foreign Affairs. The Department is using the Bill as a Trojan horse to reintroduce that proposal, the need for which I cannot understand.

In a year when this country is, in real terms, reducing its overseas development commitments, particularly in the context of its bilateral aid programme, it is perverse that we are seeking to contribute to a facility operated by the International Monetary Fund which is doing nothing to address the problem it purports to address and which it is only making worse. We are intent on spending £7 million on ESAF and £4 million on what is disguised as an IMF contribution to HIPC, another version of ESAF – a total of £11 million – and I am sure the Irish public would support the provision of an additional £11 million for overseas development. However, the money should not be put to the use intended; it should be spent on small local credit schemes which have already been put in place by many of our bilateral aid partners or on the International Development Association which is less objectionable than ESAF.

It is perverse that, when we are cutting back in real terms on our commitment to our bilateral aid partners, mainly those in Africa, we are paying into a structural adjustment facility which will only reinforce the problems in health, education and other areas that our bilateral aid programme is attempting to address in the first instance. It is appalling that the Government intends to proceed with this proposal, which is inconsistent with the two main planks of Ireland's overseas development aid policy, namely, our commitment to human rights and to poverty reduction. The proposal is also a direct contraction of the commitment given by Fianna Fáil before the last election that it would not contribute to the fund. It is disappointing that the Minister for Finance and his officials have failed to listen to the members of Fianna Fáil with concerns on this score.

I preceded Senator Lanigan as chairperson of the overseas development sub-committee of the Joint Committee on Foreign Affairs. The sub-committee, with the involvement of Senators Lanigan, Taylor-Quinn and Connor, paid a great deal of attention to this problem in the period 1993 to 1996. We made progress in discussing this issue with the Government. The first report we produced in April 1994 stated that the international financial institutions were anxious to take urgent measures under the Brady plan to relieve the debt problem of middle income countries because they owed the most money. However, they were dragging their heels on relieving the debt of the poorest countries and they are still doing so. The IMF and World Bank have demonstrated an inability to confront the issues and to respond to them in a timely and effective fashion. They should not be entrusted with a further pretence of tackling the problem through the enhanced structural adjustment facilities.

Debtor countries working with the IMF and the World Bank have been subjected to what can only be termed a form of modern colonialism. Democracy, accountability and political responsibility go out the window. Instead, these countries must subject themselves to plans which are handed down from Washington and have no basis in social partnership in the recipient countries. Having benefited so much from social partnership, Ireland should push that concept internationally instead of undermining it.

The result is situations such as those I witnessed in Uganda, a fragile democracy after years of war. On budget day in parliament the Minister for Finance sat in the ante room while an official from the Irish Department of Finance, working under the aegis of the IMF, was upstairs writing his speech. That is not political accountability or democracy. These people, living in fragile democracies, are being forced to implement pro grammes which are socially and politically unpopular and lead to social unrest. How can those countries put down democratic roots and nurture the plant of democracy if they are forced to implement programmes which cut spending on education, health and other social areas?

Nobody need tell me that the IMF and the World Bank are concerned about the social aspects of these programmes. They are not. They talk about it in response to pressure from this part of the world. One only had to watch the BBC "Newsnight" programme on Tuesday night to see the effects of structural adjustment in Tanzania. I was in Tanzania three years ago when that country was in the process of signing up for the IMF package because it was believed it had no other option.

Tanzania's primary school system, although imperfect, was much better than Uganda's. Now, it is worse. Tuesday night's programme showed a primary school teacher whose salary was being deducted by the amount of fees he did not collect from his primary school students. Families of those students, already living in dire poverty, were being hauled before the courts because they were unable to pay the primary school fees. Do not tell me that is progress. It is perverse that Ireland is helping schools in Tanzania under a bilateral programme and, at the same time, undermining them through our contribution to structural adjustment.

There is no widespread political support for this measure. Government backbenchers expressed grave disquiet about it but they were dragooned into voting for it by a Minister who will not listen.

Senator Cox correctly referred to the role of NGOs and religious missionaries in development assistance. If the Government listened to these bodies it would not proceed with this proposal to contribute to ESAF. It has been widely opposed by voluntary groups and NGOs throughout the country. Interestingly, there was no mention of ESAF in the Minister of State's speech. It was disguised. There was a snide reference to the fact that the debate in the Dáil was intensive, "if a little lopsided". If the Deputies do not agree with the Department's wishes, the message must be that the Department, not the Deputies, is lopsided.

The Minister of State made another niggling comment when he said: "Otherwise the claim that foreign debt service is at the expense of social provision will gain increasing currency". That is not a claim but a reality.

I thank Senator Gallagher for sharing his time with me. I support the amendment. We cannot tolerate this legislation because while we support its principle, we fundamentally disagree with the proposed manner of implementation.

This is a serious matter. Every Irish non-governmental organisation and voluntary body involved in assistance to Third World countries in terms of debt, human rights, education and sustainable development has opposed the provision of funding to ESAF and the IMF and the manner in which the World Bank conducts business with regard to the Third World. We should take note of that opposition and think hard before making this funding available and, in a sense, giving our imprimatur to a multilateral approach with which we fundamentally disagree. This approach is contrary to the position adopted by the main Government party, Fianna Fáil, in its election manifesto. Why is it doing a U-turn and adopting a position with which, apparently, it disagreed a few years ago?

Ireland has a proud record of seeking an approach that is linked to human rights, sustainable development, democratic institutions and cutting poverty when dealing with bilateral initiatives to tackle poverty and development in the Third World. That is the principle we should always seek to enshrine. I do not agree with jumping in and seeking to change this policy from within. It is too big. It is better for Ireland as a small country to say: "This is the proper and internationally recognised approach by those countries which are deeply involved in Third World development and this is the approach we should maintain". We should stick to our guns in that respect – if that is not the wrong metaphor – and insist on those criteria. There is no reason for doing otherwise.

Our commitment to overseas aid has, unfortunately, been reduced under this Government. When the Labour Party and Fianna Fáil formed a Government in 1992, expenditure was increased from 0.2 per cent of GDP to 0.31 per cent with a target of 0.45 per cent. By next year, however, the contribution will be back to 0.2 per cent. It is time the Government examined its record in this area.

We know where we stand on this issue. The participants involved in this area and the Government know what is the correct approach but this legislation follows what the IMF has always stood for – an international economic orthodoxy in world affairs. This orthodoxy is too pervasive; it is almost evil in its pervasiveness and operation. It puts accountancy and statistics before people. It promotes the political ideology of the United States and is discriminatory with regard to the countries in which it operates. That must be taken on board in recognising the difficulties we have with this legislation.

The Government should accept that our approach is best. Let us not get involved in this unsatisfactory approach to dealing with Third World debt. While the principle of providing funding is correct, the implementation mechanisms and the thinking behind them are incorrect. This legislation should be rejected.

Those of us who have not travelled as extensively as Senators Gallagher or Lanigan might not appreciate the urgent need for this Bill. I have little knowledge of the reasons for it. On hearing its title, one might think it is within the remit of the Minister of State, Deputy Byrne, who is responsible for forestry in the Department of the Marine and Natural Resources, or in the remit of the Minister of State currently in the Chamber, Deputy Jacob, who may have had to deal with the eco-warriors in his constituency. However, the thrust of the Bill's contents are welcome, because it provides for debt relief and reduction for many Third World countries. Poverty is rampant among their billions of inhabitants, the infrastructure is poor, there are neither social amenities nor educational structure, and apparently no development structures are in place to give hope to future generations. If these issues are not addressed, these countries will never develop properly to enable them to deal with their debt problems. We need only think of our history, or the hullabaloo about Objective One status in recent months, to appreciate how fortunate we are to have progressed.

Our missionaries have a proud record in assisting the poor in the Third World. Every parish sent nuns and priests as missionaries. A local contemporary of mine, Sister Mary Dolores Sweeney, is doing great work in Sierra Leone, a country mentioned by Senator Lanigan. All her funding comes from collections and subscriptions from our small rural area. Many of us can recall the visits home of these missionaries, when they told stories of what happened where they were stationed, but unfortunately things have deteriorated. We can also remember missionaries visiting schools to request pennies for black babies. We still occasionally receive letters requesting minuscule amounts to help educate people in the Third World, and only a small amount of money is needed to feed children for a year.

We are aware of the great work done in recent years by development agencies such as Goal, Concern and Trócaire. They have provided food and medical aid. We have been horrified by television pictures of events unfolding in many under-developed nations and by the obvious poverty. We also remember the initiative taken by the former President, Mrs. Robinson, to highlight the difficult social environment in these countries.

Our Government has always provided funding to the overseas development aid programme. Now, for the first time, we have tried to address the major problem facing these countries in acting to alleviate their crushing burden of debt. In the past we have called for action to relieve debt. We are now providing hard cash as a contribution to redress matters.

The main element of the Bill is a package of debt relief measures in favour of the heavily indebted poor countries. It will make a payment authorised by the Minister for Finance and Minister for Foreign Affairs, which was agreed last September. The total package of £31.5 million covers 12 years, of which £17 million will be disbursed in the current year.

The main features include £15 million for multilateral debt relief, £11 million to the World Bank and £4 million to the IMF; a further £9.5 million has been committed to Mozambique and Tanzania in bilateral debt relief. The balance of the funding, £7 million, will be provided to ESAF, which attracted much opposition in the Lower House. Many would prefer to see the funding made directly available to the various Irish agencies who are working at the coalface in these countries.

The Bill also provides for the adoption by Ireland of the proposed fourth amendment to the articles of agreement of the International Monetary Fund. This will enable the Central Bank to accept the allocation of the SDRS. The Bill will also guarantee the Central Bank against any losses it may incur through an international settlement facility in favour of the Brazilian central bank, for which we are guaranteeing capital and interest elements of £34.3 million, which has already been pledged.

However, the debt package is the primary reason for the introduction of the Bill. The servicing of, and repayments towards, a heavy external debt burden diverts valuable resources from the provision of social services and hinders the economic and social development of many of these countries. The debt owed to multinational financial institution accounts for the largest portion of the total indebtedness. Far-reaching and co-ordinated action is needed to tackle the debt problem, whether bilateral or multilateral.

We must question how these debts arose. In the past, money was given freely to these countries, and in many instances it was used corruptly or went towards arms purchases. The funds were not properly utilised to develop the social and economic fabric of these nations. Many say the IMF was responsible for these mistakes and is now more interested in the repayment of these loans than in the welfare of the poor. The IMF should maximise the use of its own resources – for example, through the sale of gold reserves – to fund development and give a wider response to these debt problems.

The part of the Bill that deals with provisions to the enhanced structural adjustment facility has caused the greatest opposition. The past operation of these structures has not been successful, and nothing has happened to remove the poverty and distress of these people or to build proper economic and state structures to enable them to resolve their own problems. African countries spend four times more on loan repayments than on health care. For every £1 million given in aid by rich countries, poor countries spend nearly £4 million in debt repayments. It is estimated that 500,000 children die each year because of cutbacks in health services in these countries. The burden of debt repayment has channelled resources away from domestic services such as education, health care, agriculture, food and water supply. The structural adjustments force the poorest people in these countries to suffer and die. A new approach is needed to help them. The IMF's ESAF has, to date, not been the proper approach.

This Bill proposes to authorise the Government to contribute £7 million to the ESAF. Is the Minister satisfied this contribution will be used for the benefit of the poorest people in the countries which will receive these funds? Has he considered whether the money would be more beneficially used by the agencies working at the coalface with the people in direst need?

While the Bill appears acceptable in most respects it has sparked controversy in this area. However, it represents the first occasion where the Government will participate with its multilateral partners in the provision of debt relief to deserving Third World countries whose development has been constrained by their heavy debt burdens. Both Houses are broadly supportive of the main thrust of the Bill, concerning the Irish Third World debt policy. Most people believe this should be part of our overseas development aid strategy, with the ultimate aim of poverty elimination. The difficulties appear to relate to the preferred economic model of the IMF as to the performance of the main players in the highly indebted poor countries implementation strategy.

Many Members of both Houses referred to the focus on the volume of our ODA budget and passionately support the stance taken by the Minister of State, Deputy O'Donnell, on this matter. We should note that the World Bank has indicated that debt relief should be seen as an integral part of the broader development agency and the integrated and overall strategy of poverty alleviation. A key element of all strategies to reduce poverty must be a well specified plan for the reform of countries, which has broad political support.

I hope the IMF will take human development indicators into account when designing its programmes. The Minister for Finance will impress on it the importance of this approach. The IMF must be more caring and productive in the preparation and implementation of its programmes. It must become more aware of the social needs of developing countries and work more effectively with civil society. It must care about the social impact of its policies.

Social sector expenditure, which is taken into account by the World Bank in the design of its programmes, has been endorsed by many who have genuine concerns about the alleviation of debt in the Third World. I accept that good economic policies must be complemented by an appropriate social safety net and policies with social inclusion aims. However, this must also be backed up with sound macroeconomics and appropriate structural, industrial and inward investment policies which take local cultures, conditions and the present state of development into consideration.

I have faith in the approach of the Minister for Finance and I know he will keep a close eye on the situation and adjust our strategy if necessary. I welcome the first substantial contribution this country is making to resolving this problem.

Mr. Ryan

Last Tuesday the President of Tanzania said on television that he had 20,000 trained teachers ready to go into primary schools in Tanzania but the IMF would not let him send them. It will be at least three years before they are operational. This is the new humanly sensitive IMF which has learned its lesson from all its mistakes in the past. The evidence is the IMF cannot learn because it is tied up by its commitment to US foreign policy and to an ideological view of the world which is based not on reality but on what it believes reality should be.

The IMF has a prescription which it believes should apply to every country. A former economist with the IMF said on American radio that there is only one set of laws of economics to which everyone must apply. His belief in that is the same as my belief in the law of gravity. However the law of gravity exists whereas there is not a law of economics. It is a great mistake leading to appalling abuse that the IMF believes there is one model to suit everyone. The extraordinary "coincidence" is that the prescription the IMF has for every country is based on reduced public expenditure and international free trade.

The only country which threatened the dominance of the United States in the world economy was Japan when it took on the United States in the 1960s and 1970s in the areas of automobiles, electronic goods, etc. Japan developed by ignoring IMF rules and developing its economy behind trade barriers. When it developed things which it believed were capable of being sold on the world market, it sold them to other countries, particularly the United States. That model, which was developed by a country devastated by two nuclear bombs and a world war, worked and will work again in spite of the current crisis in Japan. It defied the rules of the IMF and it was also a threat to the United States.

The one thing the IMF will not allow to happen, and has consistently prevented from happening, is the development of another economy like that of Japan. It has devastated the Russian economy which, given the huge skills base of the workforce as the Soviet education system was extremely good, could have developed its own huge internal market from which it could export to Europe and the United States. However, it has not been allowed to do so because that would be fair competition.

The modern understanding of international free trade, as well articulated by Professor Paul Krugman of the Massachusetts Institute of Technology who is one of the United States' most eminent economists, is that it does not balance up. It preserves the advantage of those who are ahead. The IMF is arguing for a world economic order in trade which will preserve the advantage of those who are ahead and inhibit others from catching up. It will ensure that those of us, domi nated by the United States, who are well off will stay ahead. The old fashioned 19th century theory of free trade is defunct, but the IMF cannot accept it because that would mean its ideological domination would cease.

The IMF is extraordinarily politically selective in that it will help out as long as the government is not left-wing. Neither Cuba nor the Government of Nicaragua during the period of the Sandanistas got not a penny. One may have views about both these countries but countries with a million times worse record in human rights and corruption have been generously assisted by the IMF. As long as they practised the basic rules of cutting public expenditure and accepting free trade, they could cream off as much international aid as they wished to enrich such people as the former President of Zaire. The IMF blinked because these were friends of the country whose interests the IMF defends in all cases.

The IMF is ideologically driven by an economic model which does not work but which suits those who most fund it. It has displayed an extraordinary indifference to the poverty and misery it leaves in its wake. The IMF does not expect across the board cutbacks in public expenditure. It is happy to ignore continuing obscene expenditure on armaments by many of the countries from whom it demands structural adjustment. Why? The biggest seller of arms in the world is the United States. The next biggest is Germany now that Russia has collapsed. One of Europe's more unpleasant ambitions is to catch up with the United States. The IMF blinks when arms are sold to these countries. Expenditure on instruments of internal repression in some of these countries is not questioned.

Education and health are ignored by the IMF but it is not alone in this. Until recently, the Department of Finance classified education as social expenditure. It is now classified as partly social and partly economic. I wrote to the Secretary General of the Department to ascertain which parts of education were only social but he could not tell me. There is no more fundamental instrument of economic development than education. It is a contradiction of any attempt to develop a country to create an economic order which undermines its education system. The ideological model the IMF uses, the United States, has one of the worst public education systems and the highest infant mortality rate in the developed world. Health and education do not matter to the IMF.

We are giving this body more money to play its power games with people who have already suffered too much. This debt is not their fault. The reason these countries are in debt is that we in the western world had a problem 25 years ago after the oil crisis. Oil producing countries needed somewhere to put their money so they put it into western banks. We told all these countries to borrow the money and develop and this led to a crisis. Then we pushed up interest rates because inflation became the dominant concern. These countries were forced to pay those interest rates even though we had a recession which reduced their capacity to sell primary products. What happened next? Every one of those countries have paid more than a multiple of the capital they borrowed. It is not the capital they owe but the accumulated interest of 25 years of exorbitant interests imposed on them by the western financial system. It is not their fault. Therefore, the linkage of debt elimination to so-called economic reform – which is a code for misery – is one of the many nonsensical measures foisted on the world by the IMF.

At present, one of this State's problems is that we have the most ideologically fixated Minister for Finance that we have ever had in my period of almost 20 years in the Houses of the Oireachtas. Without much protest he has frozen overseas development aid. Why did he do that? It is not that we could not afford it. We would hardly notice the amount of money he refused to give in comparison with the total amount of public expenditure. He refused to give it because he does not believe in it. It was not difficult to persuade him, and people in his Department were happy to persuade him not to give more to overseas development aid. We had the money a million times over. It would not have caused inflation in Ireland, which is the Department of Finance's greatest argument about public expenditure at home. It might have caused inflation in Tanzania, and perhaps the Department has extended its supervisory role to all the countries of the world at this stage. The reason we froze overseas development aid is not that we cannot afford it or there was no public support for it but the ideology of the Minister for Finance constantly states that he does not believe public expenditure is a solution to any problem.

I heard the Department of Finance say at the same committee that reductions in taxation are always a good thing, but they did not qualify that. Therefore, the view of the Department of Finance is that even if it means closing down the health services, reduced taxation is always a good thing.

In that context it is obvious what is happening. The Government, the Minister for Finance and his officials want to join and become full members of the IMF club. To do that we have to sign up with our £7 million, and that is why I am a member of the Fine Gael Party. I am tired of Members on the Government side of the House telling me that the Minister for Finance is too rigid on various issues. They have a choice that I do not have. They can talk to him privately and tell him what they think of his nonsensical ideology, his hostility to the poor, health care and welfare, which he demonstrated in the Department of Social Welfare. They can also tell him what they think of his hostility to overseas development aid and his involvement in one of the institutions which, in the name of alleviating poverty has created more misery in this world than any other single institution could claim credit for. I oppose this Bill because to give more money to that institution in its unreformed and unreformable state is a direct contradiction of the wish of most Irish people.

I thank Senators for the interesting and thought provoking interventions they have made on this important legislation. This Bill marks a new departure for the Government. It represents the first occasion when the Government of Ireland will participate with its multilateral partners in the provision of debt relief to those deserving countries in the Third World whose development is being constrained by the crippling burden of debt.

I propose to take the points raised under themes touched on by Senators and will respond to them accordingly. The question has rightly been asked on what progress has been made since the publication of the international and external evaluations of ESAF. I propose to set out the progress made. Senators should be aware of the programmes associated with ESAF and IMF and that countries have to follow these programmes if they are to benefit from the HIPC initiative or get debt relief from, for example, the Paris Club. The programmes also serve as IMF endorsement and are also required by many bilateral donors before they will release aid to the countries concerned. From our point of view the objective is to influence the whole IMF approach to programmes for these countries to take full account of human development, democratisation, involvement of civil society and good governance, in other words, the elimination of corruption.

Progress is being made under a number of headings specifically identified by Senators as areas of concern. On programme ownership IMF staff, in individual programme cases, give greater consideration to alternative policy measures which could attain the desired economic objectives. The development of a range of such policy options is intended to help foster ownership by increasing the flexibility for programmes designed to address more fully the particular Government's political constraints and objectives.

IMF staff are also continuing and intensifying their efforts, where requested by the national authorities, to help build a consensus for reform. Thus, in addition to broadening the policy dialogue on structural or sectoral policies to include all relevant ministries, staff will embrace more frequent contacts with civil society to engender wider understanding of the Government's reform programme.

With regard to collaboration with the World Bank, work is under way in six pilot cases. They are Cameroon, Ethiopia, Nicaragua, Tajikistan, Vietnam and Zimbabwe. In these cases the staff of the World Bank and the IMF are experimenting with new models of collaboration. The aim is to demonstrate the potential of closer col laboration to deliver better integrated programmes, drawing to the fullest extent possible on the combined expertise of these two institutions. At the same time the experience gained from these pilot cases is to be reviewed to enable collaboration to be strengthened across the board.

The World Bank itself is elaborating a code of best social practice and the IMF is moving to incorporate the bank's social expertise in the design and implementation of programmes. The declared aim of the IMF as expressed recently by its managing director is for high quality growth which it sees as capable of being sustained over time without causing domestic or external imbalances; is accompanied by adequate investment, particularly human investment through education and health, to take full advantage of the tremendous leverage of human capital for future growth; to be sustainable, based on a continuous effort for more equity, poverty alleviation and empowerment of poor people; and to promote protection of the environment and respect for national cultural values.

On the social impact of adjustment, work is now under way to develop social assessments of specific adjustment policies and integrate the findings into programme design, including the design of well targeted social safety nets. Initially, the focus on this work is on the six pilot cases on which staff of the IMF and the World Bank are collaborating closely. Thereafter, the lessons gained could be used to extend the coverage of this work in the design of all adjustment programmes supported by ESAF.

IMF willingness to review is a new strength. It is now demonstrating that it is willing to listen and to examine its own actions and policies. I would refer to its response to the evaluation of ESAF programmes, its own review of its policies in relation to the Asian crisis and its support for the review of the HIPC initiative.

Chancellor Schröder's debt initiative is virtually the same as that which we are proposing. I draw to Senators' attention the fact that it calls for adequate funding for both ESAF and HIPC initiatives, particularly in relation to bilateral contributions. I am also glad that the G7 has called for improvements in the HIPC initiative, in particular reviewing the duration and criteria for eligibility. There is also a coded reference to the use of IMF's own resources, namely, the sale of gold.

I would remind Senators that we are instituting, through this Bill, accountability, openness and transparency provisions relating to Ireland's participation in the Bretton Woods institutions. I hope that we can pull together to improve the position of the poorest most heavily indebted countries. It is time we moved on and accepted our responsibilities to the people of the Third World and shared some of the increased economic prosperity which our country is now enjoying.

Senators should appreciate that change is taking place and that the IMF is going in the right direction. I share the concerns expressed by this House that the rate of progress needs to be accelerated greatly. This is why the Government now believes that it is time to vigorously pursue these objectives in the context of shouldering the appropriate burden of the costs of international debt relief efforts and also having made a modest contribution to ESAF.

Some Senators asked what is the rationale for reversing the previous decision not to contribute to ESAF. This is not a reversal. The original Government commitment to contribute to ESAF dates from 1994. In response to concerns about the severity of ESAF-supported IMF programmes, the then Minister for Finance decided to defer Ireland's contribution pending a satisfactory operational implementation of the debt initiative. This initiative is now under way and following two evaluations of ESAF, a significant number of criticisms of this facility are being addressed. These include the social impact of adjustment; improved IMF collaboration with the World Bank; promoting ownership of the programmes; increasing the level of consultation and participation of civil society and advancing reform across all sectors. Action in these and other areas is intended to refocus ESAF to provide more effective support for economic reform in all low income countries.

We do not believe we can stand back permanently from a commitment we made and then deferred subject to conditions. Moves have been made in the direction of the conditions we specified and we will continue to press for progress in these areas.

Senators asked if there are any success stories from ESAF programmes. There are currently 36 countries on IMF programmes availing of ESAF. Most of these are in Africa. As one might expect, the picture emerging from such a wide number of countries is varied and due to a large number of factors. The political situation in many countries is unstable. Some are experiencing war, and even in countries where the environment is more stable, programmes when adopted may not be followed through consistently. It is very difficult, therefore, to point to any one country and attribute success to an IMF programme under ESAF. That having been said, when IMF-supported policies have been effectively implemented, the result has been higher social spending and sustained economic growth.

A recent study of 32 low income countries implementing adjustment programmes supported by the IMF during the period 1985-96 showed that real per capita spending on health and education increased, on average by an impressive 2.8 per cent annually during the programme period, helping to underpin discernible improvements in key social indicators. Moreover, of the 22 African countries in the study, as many as seven enjoyed real per capita growth that exceeded the average of all developing countries over the ten years ending 1995.

Ireland's commitment to multilateral co-operation is well founded and widely respected. The Oireachtas has over the years been supportive of increasing Ireland's involvement in international financial institutions. In addition to approving Ireland's membership of the original Bretton Woods institutions, it subsequently approved Ireland's membership of the International Finance Corporation and the Multilateral Investment Guarantee Agency, and more recently endorsed Ireland's membership of the European Bank for Reconstruction and Development. The Oireachtas has also on numerous occasions overwhelmingly approved various replenishments of the International Develpment Association, the soft-loan arm of the World Bank. The Minister for Finance will introduce legislation in the coming session to confirm Ireland's proposed contribution of £20 million to the 12th Replenishment of the Association.

It is generally recognised that debt cancellation is only one of the many problems facing these countries. The IMF, with justification, points out that unconditional debt relief is not the right tool for promoting the ultimate goal of sustainable development and poverty reduction. These goals are best attained by providing debt relief in a process such as that provided by the debt initiative, which encourages the adopting of appropriate policies by the recipient country designed to stimulate private sector-led growth and focuses on an improvement in social expenditures.

The members of the IMF and the World Bank see conditionality as an integral part of this process. The goal is to ensure that the debt relief provided is used effectively, particularly through promoting health and education expenditure. The IMF fears that unconditional debt cancellation risks debt relief being used for purposes not related to growth and development.

The Government is open to pursuing a rational debate on this important issue. Ireland will be in a stronger position to pursue the debt cancellation issue more rigorously once we have established our credibility by bearing our fair proportion of the costs of the ESAF and HIPCs initiatives.

Some Senators spoke on the myriad of causes that have led to the present difficulties. The 1998 Human Development report indicated that the main causes of poverty in Africa, affecting approximately 45 per cent of the population in sub-Saharan Africa, are economic stagnation, slow employment growth, increasing income disparities, the lack of socially balanced economic growth, marginalisation from global trade and financial flows, high fertility, the spread of HIV and AIDS, degradation of natural resources and the consequences of violent conflict, including displacement of people and violation of human rights.

Senators referred to gross economic mismanagement and corruption, the excesses of dictators, "white elephant" infrastructure projects and a lack of well developed democratic structures as being the root cause of the debt crisis. It is clear it would be unfair, and a misrepresentation of the problem in relation to ESAF, to saddle them with the entire woes of Africa. Clearly a multiplicity of factors must severally shoulder the blame.

The Secretary General to the United Nations in his report to the Security Council on the causes of conflict and the promotion of durable peace and sustainable development in Africa in April 1998 indicated that Africa had begun to make significant economic and political progress in recent years, but in many parts of the Continent progress remains threatened or impeded by conflict. The Secretary General's analysis of the historical legacy shows that the colonial history in Africa, the establishment of frequently artificial states drawn from disparate communities, economic production to meet requirements of colonial powers and interference in Africa for ideological reasons have all contributed to the underdevelopment of the Continent. Clearly we need to engage with Africa on a wide variety of dimensions. We must adopt a multifaceted approach in partnership with the regions concerned to address the most significant challenges ahead. The best model we can point to with credibility in this respect is the proposed successor to the Lomé IV Convention.

Other general themes picked up by Senators include the issue of transparency on the part of the International Monetary Fund and the role of civil society, particularly its participation in the development, design and implementation of IMF and World Bank programmes. Substantial progress has been made by the president of the World Bank under the strategic compact to implement such principles in so far as the World Bank is concerned. However, the same cannot be said of the International Monetary Fund. It is time the fund adopted more consultative, participative and co-operative approaches with regard to programmes it supports, including the ESAF, and the wider community of interests it serves. Free market liberalism without adequate controls and social safety nets for the most vulnerable people in society is no longer a viable option.

I thank Senators for their in-depth contributions to this important debate. The Bill represents a carefully balanced package of assistance for debt alleviation in the Third World. Senators Ryan and Bonner raised Ireland's overseas development assistance. ODA will increase from £137 million in 1998 to £158 million this year.

Mr. Ryan

It is still a reduction in real terms.

The Minister of State should not mess with statistics.

Inflation must be very high.

Mr. Ryan

Of all Departments, the Department of Finance should not play games with figures.

The Minister, without interruption.

On the basis of the best estimates available, ODA will increase in 2000 to £173 million and in 2001 to £196 million. In this three year period, ODA will increase by £59 million, or 43 per cent. This is not a bad increase.

It is a reduction in real terms. It is scandalous that the link with GNP has been broken.

Mr. Ryan

I agree. The Government ducked out of it.

Acting Chairman

The Minister, without interruption.

Ireland is now too rich to meet its obligations.

An increase of 43 per cent is not bad.

Mr. Ryan

As Keynes said, "In the long run we are all dead."

Regarding the bilateral aid programme, the Minister for Finance and the Minister of State at the Department of Foreign Affairs have reached agreement on a multiannual basis for funding the programme for the years 1999-2001. The 1999 budget will amount to more than £104 million and the sum will increase to £136.4 million in 2000 and £159.2 million in 2001. The scale of the increases is best appreciated by pointing out that the relevant subheads in 1992, only seven years ago, amounted to £23 million.

The Labour Party increased them but the Government is decreasing them in real terms and breaking the link with GNP. It is a scandalous change of policy.

Acting Chairman

The Minister, without interruption.

There were not such increases when the Senator's party was in power.

The Minister of State should consider the 1987-92 period.

Acting Chairman

There are other Stages on which the Senator can make his points.

It is important that Ireland plays its role and shoulders its proportionate part of the financial cost of the international co-operation efforts being made to alleviate debt. These are part of a wider framework of development efforts to secure the economic and social development of heavily indebted poorer countries, particularly those in sub-Saharan Africa.

Senators were strongly of the view that, given our new found economic standing, Ireland should use its voice assertively in the international arena on behalf of the developing and less well off countries of the world. I could not agree more. Such a responsibility can no longer be considered an option. It has become a moral imperative.

Question put: "That the words proposed to be deleted stand part of the main question."

Bohan, Eddie.Bonner, Enda.Callanan, Peter.Cassidy, Donie.Chambers, Frank.Cox, Margaret.Cregan, John.Dardis, John.Finneran, Michael.Fitzgerald, Liam.Fitzpatrick, Dermot.Gibbons, Jim.Glynn, Camillus.

Keogh, Helen.Kett, Tony.Kiely, Daniel.Kiely, Rory.Lanigan, Mick.Leonard, Ann.Mooney, Paschal.Moylan, Pat.O'Donovan, Denis.Ó Murchú, Labhrás.Ormonde, Ann.Quill, Máirín.Walsh, Jim.

Níl

Burke, Paddy.Caffrey, Ernie.Connor, John.Coogan, Fintan.Cosgrave, Liam T.Costello, Joe.Gallagher, Pat.Henry, Mary.

Jackman, Mary.Manning, Maurice.O'Dowd, Fergus.O'Meara, Kathleen.Ridge, Thérèse.Ross, Shane.Ryan, Brendan.Taylor-Quinn, Madeleine.

Tellers: Tá, Senators Keogh and R. Kiely; Níl, Senators Gallagher and B. Ryan.
Question declared carried.

I declare the Bill read a Second Time.

Committee Stage ordered for Friday, 26 March 1999.
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