Amendments Nos. 1 to 5, inclusive, are related and may be discussed together.
Bretton Woods Agreements (Amendment) Bill, 1998: Committee and Remaining Stages.
SECTION 1.
I move amendment No. 1:
In page 3, to delete lines 34 to 37.
We cannot welcome this Bill. While we agree with the principle of a multi-lateral approach to funding, and that as many countries as possible should help the heavily indebted poor countries and put together a debt relief package, the money is wasted unless we are satisfied with the mechanism for delivering that package. We have no confidence in the Enhanced Structural Adjustment Facility or ESAF Trust which is proposed as the arm of the International Monetary Fund which will deliver the funding we propose to provide, some £31 million over 12 years with provision for more.
Many countries have expressed concern about the manner in which the ESAF operates. The IMF is currently examining how ESAF operates with the intention of bringing forward proposals by this time next year. While that is happening, there should be a moratorium on the use of taxpayers' money in this trust fund. For that reason, we opposed this legislation on Second Stage. These amendments seek to delete the provisions in the Bill which relate to the ESAF Trust.
We have operated a successful overseas development bilateral arrangement and we have a good reputation abroad in terms of our non-governmental organisations and the manner in which we have invested funding in education and in trying to deal with poverty. The IMF has not been as discriminatory as we have in that it has looked at the situation from the point of view of macroeconomics and the international marketplace. It seems to be a mechanism for international capital to operate on the same principle as it operates in developed countries. Issues such as education, health and social development are not treated sensitively but as accounting, banking and economic procedures. Until that approach changes, these countries will remain heavily indebted because not only must they repay the capital borrowed from the IMF but also the interest.
We want a regime where funding invested in heavily indebted countries is linked with human rights, democratic institutions, the rule of law and the human needs of each country. We are opposed to any further funding being made available until a proper accountable system is in place. The previous Government adopted that position under the then Minister for Finance, Deputy Quinn, and we should continue with it at least for the next 12 months. There should be a moratorium until the examination of the ESAF is completed. This legislation commits us for a 12 year period with provision to continue thereafter. These amendments seek to change that.
We oppose the main thrust of the legislation, the provision of money and the operation of the ESAF Trust. There is an argument that the IMF has gold reserves of £50 billion so it does not need this money. Why should we make money available for investment in heavily indebted countries if it has sufficient resources for the immediate future? We should continue our bilateral arrangement until we are satisfied with the result.
We have invested heavily in countries such as Tanzania and Ethiopia. These areas are at the cutting edge of poverty, but the IMF is finding it difficult to make funding available because of structural problems. I am concerned that Ireland is not in a position to deal with the international political considerations. Instead of trying to change matters from the inside, our best bet is to stay on the outside and tell the IMF we are not satisfied with the mechanisms it has in place for the distribution of the money it is seeking.
I support these amendments. Serious concerns have been expressed about the ESAF in IMF and external reports. An internal IMF report identified that it did not succeed in lowering the budget deficits or increasing government revenue, there was no substantial change in inflation and economic growth remained low in comparison to developing countries. An external report also criticised the fact that it did not achieve any of its macroeconomic targets and that its programmes were disastrous in many states, causing serious disadvantages, particularly among children, and impoverishing communities in the areas of health and education.
The external report also found that the design of the programmes was like a formula which was applied regardless of the varying circumstances in different countries. The figures were made to fit the formula. One cannot apply a formula uniformly across the board if social, economic and political factors are different in each country.
The overall effectiveness of this programme has been questioned. Recommendations were made that the IMF should work with the World Bank in identifying in advance which groups may lose out through ESAF programmes. It would be wise to wait until reforms are put in place before contributing to this programme.
I understand the views expressed by Senator Costello which also formed part of the representations of many groups on this matter. I welcome the Minister's approach to multilateral and bilateral aid. Much can be contributed to the overseas aid agency's development fund. We are concerned about the mechanisms used by the IMF in the past. The Minister is adopting the right approach. He said in the Dáil that it was better to be on the inside trying to reform the issue. I agree the best way to resolve an issue is through negotiation.
The sum of £7 million will be contributed to the ESAF but out of the total contribution of £31.5 million only £17 million will be disbursed this year. How will £17 million be divided between the three areas that have been mentioned? How much of the £17 million will be contributed this year?
Amendments Nos. 1 to 4, inclusive, have as their objective the deletion from the Bill of all references to the ESAF trust. Amendment No. 5 seeks to delete the aggregation clause in respect of further payments by the Central Bank to the HIPC trust. Similar amendments tabled on Committee and Report Stages in Dáil Éireann were rejected. However, their resubmission affords me an opportunity to place on the record of this House a number of key points in relation to the ESAF. At its meeting of 15 December 1998, the UN General Assembly adopted a resolution put forward by Uganda on behalf of the developing countries entitled, enhancing international co-operation towards a durable solution to the external debt problem of developing countries. The resolution provides a very thorough summary of the views of developing countries on the HIPC's debt initiative, the ESAF, the elimination of debt and poverty related matters. Paragraphs 16, 17 and 29 are relevant to the Government's proposals to contribute to debt relief and economic and social reform in the heavily indebted poor countries.
I also want to avail of this opportunity to read into the record relevant extracts of the resolution by the UN General Assembly which are germane to these amendments. Paragraph 16 stresses the urgent need for effective mobilisation of additional financial resources for the heavily indebted poor countries debt initiative from both bilateral and multilateral creditors without affecting the support required for other development activities of developing countries. It also expresses its appreciation for contributions made by some bilateral donors to the heavily indebted poor countries trust fund of the World Bank and the IMF's enhanced structural adjustment facility heavily indebted poor countries trust fund. It urges other bilateral donors and invites other international financial institutions that have not yet finalised mechanisms for participation in the initiative to do so as soon as possible. It calls on bilateral and multilateral donors to contribute to the heavily indebted poor countries trust fund which will help the African Development Bank meet its share of initiative costs.
Paragraph 17 calls on the industrialised countries that have not yet contributed to the enhanced structural adjustment facility for heavily indebted poor countries trust fund to come forward immediately with their contributions.
Paragraph 29 expresses strong support for the continuation of the enhanced structural adjustment facility operations and in this regard emphasises the urgency of securing the facilities funding and sustenance.
I have a statement made by the governor of the Central Bank of Ethiopia on behalf of the African group to the 1998 annual meeting of the IMF and World Bank. It reads as follows: "We must express our profound disappointment that as of now financing of the interim ESAF and HIPC initiative has not been secured." A statement by the EU to the spring meeting of the interim committee of IMF reads as follows:
In view of the recent proposals for changes to the HIPC framework the EU member states recalling the last interim committee communiqué agree that industrial countries that have not contributed to the ESAF HIPC trust fund yet should come forward with their contributions without delay.
Ireland is the only member of the EU which has not contributed in any shape or form to the ESAF or the ESAF HIPC trust, and it is time we did. We are to the fore in calling on the international community to deepen, broaden and widen the HIPC initiative and will continue to do so. However, it would be too naive to suggest that we should continue to call on other member states of the IMF and the EU to carry the financial burden while we remain very high on rhetoric and extremely low on doing something fundamental about it.
Senators referred to the importance of the ESAF reviews. They may be concerned about the pace of change in the ESAF that has been made on foot of the interim and external evaluations of the ESAF. I would like to reiterate the progress being made by the IMF in response to the criticisms made about the evaluations. It was spelt out in greater detail in the Minister of State's reply in the Second Stage debate. It would be unreasonable to expect the impact of profound changes taking place would become apparent in such a short period of time. However, the Government will maintain its pressure on the IMF to accelerate and widen the scope of its reforms to the ESAF facility. Progress has been made under a number of headings specifically identified as areas of concern. With regard to programme ownership, the IMF staff are, in individual programme cases, giving greater consideration to the alternative policy measures which could attain the desired economic objectives. IMF staff are also continuing and intensifying their efforts when requested by the national authorities to help build a consensus for reform.
With regard to collaboration with the World Bank, work is under way in six pilot cases. In relation to social impact of adjustment, work is also under way to develop ex-ante social assessment of specific adjustment policies and to integrate the findings into programme design, including the design of well-targeted social safety methods.
IMF's 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 the response to the evaluation of the ESAF programmes in its own review of its policies in relation to the Asian crisis and its support for the review of the HIPC initiative.
The recent debt initiative package announced by Chancellor Schröder in Cologne is virtually the same as what we are proposing in this legislation. I draw the Senators' attention to the fact that it calls for adequate funding for both the ESAF and the HIPC initiative, particularly in relation to bilateral contributions. I remind Senators that the Minister, through this Bill, is making the first attempt by any Irish Government to materially improve the position of the poorest, most heavily indebted countries by assisting to ameliorate the debt burden on them. Therefore, I find it strange that such measures should be opposed. We are a maturing nation. We have become stronger economically and we are in a better position to attempt to do things we were not able to do up to now. However, we do not condemn any past Administration for not doing it. We are now in a position to make a move and we are doing so in a positive manner.
In response to Senator Bonner's question, about £14.5 million of the £17 million sum will go towards the relief of the debt burden.
This legislation proposes to make money available to the ESAF without any con ditions. We are simply writing a blank cheque. We oppose this because we are not satisfied that money has been spent effectively in the past. Earlier the Minister stated that Ireland has not fulfilled its obligations with regard to contributions. Why have we taken this stance? Ireland took this stance because for the past few years we have listened to our workers in the field, the non-governmental organisations, the voluntary organisations and the Church, the people who are at the cutting edge of work in poorer countries. They have come back and told us how the IMF and the ESAF are affecting policies in the countries in which they worked. The long-term development of those countries has not been helped by those measures. They have resulted in further indebtedness and a reduction of the public sector. Yesterday Senator Ryan stated that the Tanzanian government had 20,000 teachers ready to put into its schools. The IMF made it clear this would not be tolerated as it would increase the public service budget. It wanted to ensure the public service operated on a private basis. One cannot transfer first world economics and politics to third world countries. This is what ESAF is doing, and this is the reason we want changes.
The Minister mentioned Asia and Russia. Russia, a country of such dimensions that it could have a very effective and successful market, is now reliant on the World Bank and IMF funding. All that exists is the global market. This policy suits the major planners of the IMF such as the United States and Germany. I do not accept that what is good for the United States is good for the third world, the opposite is often the case. While many conditions are imposed in social matters in terms of IMF funding, no such conditions are imposed on the weapons and arms trade. There is large scale sale of weapons from the United States and Germany to many countries where the IMF operates. We are not talking about a benevolent fund, and until such time as these matters are resolved to our satisfaction, Ireland, as a smaller neutral country with a long tradition of poverty, should plough its own furrow in accordance with the fundamental principles of human rights and address long-term poverty, sustainable development and gender equity in these countries. None of these fundamental principles are contained in ESAF or any other IMF mechanism in terms of dealing with impoverished countries.
The Minister spoke about well targeted safety nets. Sometimes I think the well targeted safety nets are in place for the benefit of the banks and the developed world, rather than for the impoverished people of the under-developed world.
I will not go through again the health and education problems which have arisen in countries that have had to accept ESAF programmes which have had an extraordinary effect on food pro grammes in these countries where the best land must be put aside for growing export crops to repay the debts and more marginalised land is used for the production of maize and other local products. These conditions, which the IMF has insisted on, have had a devastating effect on markets in these countries.
I do not understand why Fianna Fáil has changed its position on this issue. Prior to the last election it was not in favour of such a move. All of us have contact with people who work in developing countries. One of our great strengths is the immediate contact there is with people in almost all the developing countries which are the subject of various reforms. The International Monetary Fund is not a malign institution, but it is an institution which argues in macro-economic terms. The picture painted by Professor Chossudovsky of the University of Ottawa in his book entitled The Globalisation of Poverty, of IMF officials arriving with their briefs in the Department of Finance of the various countries is a very real and serious one. Senator Costello said that countries who do not have the blessing of the IMF have managed to do better. I wonder if the Brazilians believe they might be better off if they did not have such encouragement from the IMF.
Senator Costello pointed out also that there seems to be no problem regarding the sale of arms. I am concerned about petroleum prices in these countries and the effect this is having on the cost of transport, which ultimately affects the production costs of goods. These policies are geared towards first world countries, rather than Third World countries. Senator Costello mentioned Russia. On last night's 9 o'clock news, Anne Doyle questioned Seamus Martin, The Irish Times correspondent in Moscow, on Russia's position regarding reprimanding the United States on the NATO action in Kosovo. She said that surely the Russians are in a very weak position because they are so heavily dependant on the United States for food. Mr. Martin refuted this. It is serious when powerful countries can control poorer countries by virtue of the economic programmes the west has designed for these less developed countries.
Those of us who attended the inter-parliamentary meeting in Moscow last summer will remember the appalling situation when the rouble was not available in the banks, not even for ready money. Serious problems occur in countries where IMF programmes are in place. We have been told this is short-term pain for long-term gain, but these programmes have been in countries for ten years, with little sign of improvement.
I would be grateful if the Minister will tell me why Fianna Fáil changed it policy on this issue. In the past the Fianna Fáil party was not prone to kow-towing to people, so there must be a good reason for their decision to change. I am not concerned if this country is out step on this issue in the European Union. The Minister said we must put our money where our mouth is, but we can do this by way of bilateral aid, to which we contribute successfully. Members on both sides of the House spoke about the success of bilateral programmes. We would all like to know why the Fianna Fáil party changed its mind on this issue.
We are all very conscious of the major contribution of the voluntary relief organisations to people in the third world. Our contribution to the bilateral aid programme is recognised internationally for its positive effect in third world countries. As the Minister said, Ireland is the only member of the European Union who is not a contributor to the fund. If Ireland is to participate and be taken seriously, it must be seen to be contributing, otherwise it will not have the authority to speak on such matters. As a neutral country, Ireland, if it contributes, can be more effective if change is needed.
As the Minister said, a total of £15 million will go towards debt relief. It is time for Ireland to participate. The country has become wealthy and this was demonstrated last night when half of it was excluded from Objective One status. The fact that we are now in that situation should be a cause for celebration, not a negative reaction. Participation under the Bill is a logical step in terms of our involvement in and support for international aid for countries which desperately need it.
Regarding the alleged change of mind in the Fianna Fáil Party, if people believe the party is paralysed on every practice which operated in the past and is unable to change, grasp new opportunities or consider matters in a different way, one would wonder why we are in Government so often and others who claim to be so enlightened are in Opposition.
Is that a new Fianna Fáil speech for Templemore?
Wait until the Progressive Democrats start the review.
We keep close to the people. The Bill does not involve a fundamental change of mind. As Senator Finneran said, Ireland has remained apart from its European partners on this matter, but it is now putting its money where its mouth is in the context of considerable reform.
The Bill acknowledges that the institutions are located in the vast majority of the countries concerned. Two of the bodies have given a considered recommendation to the UN General Assembly and other EU countries. It is not the case that just because a country is involved in Third World aid it cannot participate. Ireland has dramatically increased its contribution to Third World aid and we acknowledge the work of NGOs and the relief organisations in different parts of the world of whom we are immensely proud. The Dutch probably contribute the most to Third World aid, but that does not diminish their involvement in this area.
There is no place in the world where changing from dictatorships and totalitarian regimes into modern democracies through the empowerment of people does not cause pain. For example, people may recall Ireland in 1987 and 1988 and the rows in both Houses because reforms of the economic system were necessary due to our indebtedness. We were told that representatives of the IMF would arrive in Dublin Airport following a disastrous period when the Fine Gael Party and the Labour Party were in Government and the national debt doubled from £12 billion to £24 billion.
That goes back to 1982.
An Leas-Chathaoirleach
The Minister without interruption.
It relates to the period from 1977 to 1981.
I did not interrupt anybody.
An Leas-Chathaoirleach
The Senator will have an opportunity to make her points.
It was political incitement.
Many people acknowledge that the fundamental reforms of economic activity in a range of current expenditure areas at that time to bring sense into the system underpinned the social partnership which allowed Ireland to grow.
The IMF had no hand in it.
An Leas-Chathaoirleach
The Minister without interruption.
There is a view that a country can move from one stage to another irrespective of whether it is dependent on another country for loans or through the country's own empowerment or efforts. The view is that a country can make the transition without trouble and pain. I wish that was the case. Despite our skirmishes, I hope I have reassured Senators. I have been in Opposition and I understand their position.
It will not be long before the Minister is back in Opposition.
I hope I can give and take it. One could not survive in this business otherwise.
We do not want misrepresentations on the record.
An Leas-Chathaoirleach
The Minister without interruption.
I understand the Members are taking a genuine position in terms of the best way to help. The Government has taken a considered decision and it is supported by many international bodies. The move was taken in the context of reform. Ireland was the only EU country which did not contribute. The Government will ensure there is continual monitoring, accountability and openness so people will be satisfied that Ireland is participating in the context of significant reforms.
Why the U-turn?
It is the new Fianna Fáil. Did the Senator not get the message?
I read the polls this morning.
Amendment put and declared lost.
Section 1 agreed to.
Sections 2 and 3 agreed to.
SECTION 4.
I move amendment No. 2:
In page 4, lines 33 to 36, to delete subsection (1).
Amendment put and declared lost.
I move amendment No. 3:
In page 5, subsection (4), to delete lines 3 to 5.
Amendment put and declared lost.
I move amendment No. 4:
In page 5, lines 9 to 11, to delete subsection (5).
Amendment put and declared lost.
Question proposed: "That section 4 stand part of the Bill."
Subsection (5) states that the aggregate sums that the Minister may pay in respect of the ESAF trust for the purposes of subsection (1) shall not exceed £20 million. Subsection (6) states the aggregate amounts the Minister may pay in respect of the HIPC debt initiative trust fund shall not exceed £20 million. What is the total? Does it involve £22 million under the Bill? The explanatory memorandum mentioned £31 million but the subsections appear to include two further aggregate sums of £20 million each. What is the total amount of money which will be contributed by the State under the Bill? What is the ceiling on the sums allowable under the Bill in future payments?
I understand the total amount is £31.5 million.
Mr. Costello
How is that figure made up if subsection (5) mentions a figure of £20 million for the ESAF trust and subsection (6) also mentions £20 million for the HIPC debt initiative? This would give a total of £40 million. Section 7 includes the figures of £7 million for the ESAF trust, £11 million for the HIPC initiative and £4 million for the HIPC trust. There is some confusion in relation to the figures. It is broken down into two parts, comprising the amounts which will be available immediately and other additional sums which may be available in further payments under section 7. It is not clear if there is a cap on the funding and what that cap might be. Is it the two sums of £20 million mentioned in sections 5 and 6?
Apart from the £31.5 million there is provision for sums of up to £60 million which takes account of initiatives being proposed and which might require greater funding. We have created the space in terms of legislation for that to happen. For us to commit those resources it would be necessary to have a proper reporting mechanism and a system of full consultation with both Houses before any final steps are taken. It is an enabling provision in total financial terms to take account of future requirements based on consultation with the House, if that should arise.
Is the Minister saying we are providing £31 million which is not based on proper reporting mechanisms but that the other £30 million will only be made available when a proper set of reporting mechanisms are put in place? Are we making the £31 million available unconditionally and flagging our concern in relation to the ESAF and the IMF? To what reporting mechanisms is the Minister referring?
We have debated the £31 million in both Houses. That is how the democratic system works and that figure has been agreed in both Houses. It would be unfair to say that £31 million has been dedicated without consultation. Consultation took place at the highest level of our democratic system.
We do not know the details of any new proposals. When they are available they will be considered by the relevant authorities and any involvement on our part will be decided at a future date. It is often the case that we do not take account of future demands which might be made of us in some of the legislation we provide. We return to it and amend it to take account of what was left out. In this case we are talking about enabling legislation in a futuristic manner depending on what type of initiatives arise. There will be the fullest consultation on these matters.
Question put and agreed to.
Section 5 agreed to.
SECTION 6.
I move amendment No. 5:
In page 5, lines 22 to 27, to delete subsections (2) and (3).
Question, "That the words proposed to be deleted stand", put and declared carried.
Amendment declared lost.
Section 6 agreed to.
SECTION 7.
I move amendment No. 6:
In page 5, line 33, to delete ", if a resolution annulling" and substitute "unless a resolution approving".
The Minister's last statement strengthens the case for this amendment, which seeks a positive approach to any additional payments.
The Minister has specified the payments to be made under the various mechanisms and then stated that "the proposal shall be laid before Dáil Éireann as soon as may be and, if a resolution annulling such a proposal is passed by Dáil Éireann" and so on. We are saying "unless a resolution is passed approving" of it. We are turning this from a negative to a positive and proactive approach.
The Minister strengthened my case by stating that he would be concerned with new proposals and initiatives being instituted in line with any future additional payments being made. It would be appropriate in those circumstances that there would then be a full debate in the Dáil and Seanad on the allocation of additional funds. Our amendment would be proper to ensure that debate was facilitated and that we would be given the opportunity of examining any proposed changes in these funding mechanisms.
On Committee Stage in the Dáil the Minister for Finance promised Deputies Noonan and McDowell that he would move an amendment on Report Stage which would oblige the Minister to notify the Dáil of his intention to make or authorise further payments under sections 4 and 6 of this Bill. The Minister's amendment was not contested in the Dáil and both Deputies expressed their appreciation of the Minister's willingness to take on board their concerns. Deputy Noonan specified that the proposal to be laid before the Dáil should be in the negative form, not the positive form being requested by Senators.
Section 7 follows closely the specific recommendation made by Deputy Noonan on Committee Stage in the Dáil asking the Minister to consider a new subsection along the traditional line which would state that any decision taken by the Minister under this section would be notified to the Oireachtas by whatever formulation. It is not necessary for the purpose of accountability that the affirmative form of the motion should be required. It would be sufficient if it was placed before the House of the Oireachtas and was not annulled.
Both Deputies were anxious that there would be further provisions on accountability to the Dáil inserted in the Bill in respect of further contributions for debt relief purposes. Both suggested a format which would necessitate the Minister informing the Dáil of his intention to make further payments under sections 4 and 6. The Minister indicated his willingness to accommodate their concerns and did so to the full satisfaction of the Deputies concerns by including a new section, section 7, in the Bill by an amendment on Report Stage.
Senators will also appreciate that the lower House has primary responsibility for matters related to public expenditure and the control and monitoring of same.
Will all moneys in excess of the £31 million specified be referred to the Dáil and Seanad? If that is the case it does not matter if the provision is in the negative. It will facilitate a debate on the provision of additional funding in line with accountability mechanisms which are to be introduced in the future. The IMF will complete its examination of its funding mechanism, although it does not appear to be a fundamental examination, within the next 12 months.
Will the Minister come back to the House before further funding is authorised above and beyond the £22 million mentioned in section 7?
The Dáil will be informed and the annual report which is designed to take account of the concerns to which the Senator has referred will be published. Above all, before any decisions are taken, Members have the opportunity to raise matters and agree debates with the Whips. That is a good thing. The amendment agreed to in the other House refers to the Dáil because of its accounting requirement.
The Minister's clarification is important and gives some reassurance. However, in case anyone in Kenya, Brazil or Russia is reading the proceedings of Seanad Éireann on the Internet I would not like them to think we were starving to death in 1987. We had to introduce reforms. I was one of those working in the health service who complained about those reforms but they were not of the magnitude which developing countries are being expected to introduce. We introduced our own reforms and they were an important factor for the future. However, they were not in the same league as what is being asked of developing countries. It would be a pity if there was a suggestion that what we had to do 12 years ago was similar to what is being asked of many countries who have nothing like the infrastructure we had in 1987.
I would not like anyone to take that interpretation of my comments. I was talking about the principle of reform. Regardless of what stage of development a country is at, it is not possible to move from totalitarian dictatorships or other such regimes to a modern democratic system without pain.
Our experience is not comparable. However, many people objected to those reforms and berated politicians for decisions taken which they now claim are part of the reason for our growth and success. Members will recall the number of motions tabled in both Houses and how strenuously people objected to attempts to get current expenditure into shape. Many economic commentators who opposed the reforms now speak of the decisions made in 1987, 1988 and 1989 as being fundamental to our economic growth. I make that observation in the context of saying that I cannot live with the pretence of telling NGOs or those working hard in the Third World in deplorable circumstances that it is possible to make the transition without great pain for many people. I wish I could tell the House that the picture is different, that one can make the transition without pain, that everything will work out and that difficult decisions will not have to be taken. However, the reality is different.
I presumed that any resolution under section 7 would have to be annulled by both Houses. However, the amendment accepted in the other House was exclusive to the Dáil. The Seanad will have no opportunity to discuss further authorisation by the Minister concerning funds. This seems a slight on this House. The legislation has to be passed by both Houses but only the Dáil will have a say in further authorisations.
I accept that this is a money Bill but the implications are broader in terms of accountability and the design of channels for investing funds and making them available for the Third World. This House has always expressed great interest in such matters. The Minister will not wish to go back to the other House at this stage but is there no way in which we can extend section 7 to include both Houses?
I was a Member of this House for a number of years and I would be reluctant to be involved in any slight on the House, not just because I served here but because I know of the contribution it makes to the work of the Oireachtas. The design of the annual report affords an opportunity for debate. The Senator will appreciate that there is a range of economic and financial instruments which are exclusively dealt with in the Dáil and only come before the Seanad if the question is raised. In such cases Senators may raise any issues they wish. No one should be under misapprehension about the ability of the Seanad to raise and debate issues. That provision is also included in the design of the annual report.
Question, "That the words proposed to be deleted stand", put and declared carried.
Amendment declared lost.
Section 7 agreed to.
Sections 8 to 12, inclusive, agreed to.
Schedule agreed to.
Title agreed to.
Bill reported without amendment and received for final consideration.
Question proposed: "That the Bill do now pass."
On behalf of the Minister for Finance and my colleagues, I thank those Senators who contributed to this debate. We look forward to making our special contribution to this area on the basis of the accountability, openness and reforms expressed by many Senators which we will consider. I appreciate those contributions which differed from the Government's view. The essence and strength of democracy is that we can agree and disagree and that people have an opportunity to put their views forward. Views expressed against this Bill will help towards improving the monitoring, accounting and process of change and reform.
I thank the Minister for taking Committee and Remaining Stages of the Bill. I also thank Senators for their contributions and express my appreciation to Senators Bonner and Cox for taking Second Stage due to my unavailability. This Bill is a further step in Ireland's international humanitarian activity and will stand to us in the future.
I thank the Minister for the time he has given the House. We have had a good debate on this Bill. I hope that whoever goes to the IMF does so fighting fit and determined to achieve the necessary reforms.
I have visited the International Monetary Fund and the World Bank offices and there are many Irish people working in both institutions. We should contact them and express our concerns. It is fine for us to have people working in the field in the developing countries, but we also have people working in these institutions in quite senior positions. We could strengthen their resolve to encourage reform in these institutions if we approached them on a personal basis. The Government should encourage them to institute reforms in these institutions, and I will help it to draw up a list because I have constituents in them. They are not anonymous places; people work in them. A 10 per cent cut if one is rich is nothing like a 10 per cent cut if one is poor.
Our real concern is that macroeconomic programmes affect the rural poor, in particular, in the countries in which the are established. It was tragic to see the diminution in the services of some countries which probably have not been visited by people from the IMF or the World Bank. I rely on the Minister to ensure that whoever is sent to deal with both these institutions does so with a very firm hand.
I join other Senators in thanking the Minister for coming to the House this morning and for introducing some extraneous matters.
I was checking to see if the Senator was fully awake.
Like Senator Henry I believe a firm approach should be adopted by those who go to the IMF headquarters. While recognising that the IMF has a specific economic remit and the job it must do in Third World countries, in particular, in relation to the ESAF, an element of social consciousness and community awareness should be introduced as regards programmes adopted. The criticisms made in this and the other House must be reflected in the contributions made by our representatives when they go to the IMF.
I would like to be associated with the Minister's remarks. I thank him for the constructive and courteous way he has dealt with the debate and his officials for providing back-up information. I was heartened by his remarks that the views and criticisms expressed here would be taken on board and would inform the Minister when looking at the matter of the IMF. I agree with Senator Henry that we should use whatever means we can to influence the people in the IMF. We have a particular awareness of poverty, hunger and indebtedness which has until relatively recently, been with us for centuries. We put our stamp on the manner in which funds are made available to the Third World and tailor the requirements of individual countries rather than donor ones as seems to be the IMF's policy. I thank the Minister for the way he has handled the debate.
I join my colleagues in thanking the Minister for the manner in which he has taken the Bill through the House. I have had an ongoing interest in the debate and although I have not been able to be present at all times, I followed it on the monitor. I also wish the Minister well. We are now among the big financial boys, although our financial contribution is modest. Not only are we making an important financial contribution to the IMF and the World Bank but, as colleagues have pointed out, we are bringing a strong moral case based on our excellent work record, particularly that of our NGOs, in the Third World.
I make a plea in the context of the influence we will now have with the World Bank and the IMF specifically because, as the Minister will be aware, there was much concern about the role of the IMF within our party. I hope influence will be directed towards education. Only a paltry 2 per cent goes to basic education, it should be increased to 8 per cent. While that would cost $4 billion, it is about a third of what Europe spends on ice cream each year.
Taking into account the position of this country, the many remarks the Minister made about the 1987-89 period and, subsequently, the strong emphasis on education and training which has helped this country to lift itself out of the economic mire and to attract multinationals, it seems that is part of the key to the solution to the Third World debt, mainly in the sub-Saharan region where a paltry sum of money is being spent.
While the IMF will be a tough nut to crack in this regard, because it is afraid debt relief and extra aid may be spent on private armies, fleets of limousines and football stadiums rather than on books and pencils, the Government could play a real and positive role if it ring-fenced a certain amount of the budget each year for education in the Third World rather than the traditional means of structural aid which we tend to emphasise and of which we have been very proud along with our NGOs and our direct Government aid. I can only paraphrase what the British Prime Minister said during the British general election. He said the key to economic success was three words – education, education and education. I compliment the Minister and his officials and wish them well in what is a brand new era for this country in a very important area.
We all agree we have had a very enlightened, and at times provocative, debate on this issue in both Houses. As the Minister said in the Dáil, we would all like to see the cancellation of these debts but the reality is that will not happen. We appreciate that bilateral aid can do much as well. This Bill dwells on the fact that we are contributing for the first time, which I welcome. I am sure the Minister for Finance, Deputy McCreevy, an accountant and very prudent man, will closely monitor what happens. I hope the necessary reforms of the IMF systems and mechanisms will be implemented. I hope this will go from success to success and that we may contribute much more in the years ahead, provided our economic situation remains as it is.
Question put and agreed to.