Seanad Éireann debate -
Wednesday, 7 Jul 2004

Vol. 177 No. 11

International Development Association (Amendment) Bill 2003: Second Stage.

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

Minister of State at the Department of Enterprise, Trade and Employment (Mr. M. Ahern)

This is a short but important Bill which provides for this country's contribution to the most recent round of funding for the International Development Association, IDA, which is the concessionary lending arm of the World Bank. The IDA provides grants or long-term loans at zero interest rates to the poorest developing countries. These are countries where per capita income is less than US$875 — above this limit other sources of funding should be available.

The Bill makes provision for the payment of Ireland's share of the amount agreed at the IDA 13 replenishment discussions, the 13th round of funding for the organisation, which was agreed in 2003. Ireland pledged a contribution of€50 million payable over the period to 2008,subject to the approval of the Oireachtas. The Bill I am introducing today providesaccordingly.

The International Bank for Reconstruction and Development, better known as the World Bank, was established in 1944. Its first task was to rebuild Europe after the war. The bank then turned its attention to the developing countries where there was a profound need for economic and social development. As the 1950s progressed, it became clear that the poorest developing countries could not afford to borrow the money they needed for capital development on the terms offered by the commercial banks or even the World Bank. They had very great needs but little ability to repay. It was clear that they required access to money on easier terms than were available through the existing channels.

As a result a group of World Bank member countries decided to set up the International Development Association in 1960 as part of the World Bank family of institutions to lend to very poor developing nations on highly concessionary terms. Its founders saw the IDA as a way for the "haves" of the world to help the "have-nots". The IDA now lends about US$6 billion to US$7 billion a year for different types of development projects, especially those that address people's basic needs such as primary education, basic health services and clean water and sanitation. The IDA also funds projects that protect the environment, improve conditions for private business, build needed infrastructure and support reforms aimed at liberalising countries' economies. All these projects are intended to pave the way to economic growth, job creation, higher incomes and a better quality of life.

However, the founders also wanted the IDA to be imbued with the discipline of a bank, not least so that borrowers would be able to adopt the discipline of working with other financial institutions. A continuing challenge in more effectively and efficiently addressing the great needs of IDA client countries is to develop mechanisms for pooling knowledge and harmonising requirements with the other multilateral institutions, both within and outside the Bretton Woods group of institutions, the bilateral development agencies and the client countries.

Much of the effort of the IDA is concentrated in Africa, which has some of the most intractable problems in the world at present. At current rates of increase, the population of sub-Saharan Africa is expected to grow to over one billion by 2020, despite declining birth-rates and the increasing number of deaths from AIDS. Both the IDA and the World Bank have had a very significant impact on the problem of HIV-AIDS, which is without doubt the greatest health problem in the developing world.

The HIV-AIDS pandemic has killed 23 million of the 63 million people it has infected to date and left 14 million orphans worldwide. It has left countries in Africa, in particular, without many of working age; it has killed care-givers and teachers. Africa faces continuing loss of human capital and human life with severe impacts on economic growth. In some countries, life expectancy has been cut by up to ten years by the disease. The World Bank and the IDA are the largest institutional investor in AIDS projects. The IDA also supports efforts to ensure co-ordination with other multilateral and bilateral donors in providing a platform for addressing the pandemic.

Africa's development issues are complex and interwoven. The IDA continues to examine these issues systematically and to seek ways to respond in a flexible and timely manner. Conflict has also imposed a large cost on African countries, both in human and in economic terms. Alongside efforts to address key underlying economic and social factors such as poverty, unemployment, and low education levels, the IDA has begun to examine how best to contribute to the reduction of conflict in the region and is actively pursuing ways to re-engage with, and to re-deploy resources to, countries emerging from conflict. In addition, the IDA has stepped up its involvement in countries' efforts to improve governance and ensure greater political participation.

While the mission of the International Development Association remains the provision of "soft" money to the poorest countries, there will always be a need for periodic inflows of new money from those countries, including Ireland, which are prepared to inject capital into the IDA. This is a much smaller group of countries than the 184 countries that are members of the World Bank. The IDA is funded largely by contributions from the governments of the richer member countries whose cumulative contributions since 1960 amount to some US$109 billion. More money is needed for the IDA approximately every three years to replenish its funds. Funding for the 13th IDA replenishment will allow the IDA to lend some $23 billion, of which donors' contributions will provide a little over half. The remaining funds come largely from repayments of previous IDA credits, as well as other non-donor resources. These periodic replenishments of IDA resources are inevitably the product of long and complex discussions, not only about the capital needs but on other issues such as the future operation of the institution.

The agreement for the 13th replenishment of the IDA includes two major changes — the issue of the replacement of loans by grants and the establishment of performance standards. In July 2002, after lengthy discussion, the IDA donors agreed to a complex plan to convert 18% to 21% of future IDA loans to grants. Under this plan, certain countries will receive 100% of their assistance for HIV-AIDS and natural disaster reconstruction projects on grant terms.

Countries emerging from conflict and countries which are vulnerable to debt and where per capita income is less than $1 per day will receive 40% of their assistance on grant terms separate from and in addition to funds for HIV-AIDS and natural disasters. Other countries with a per capita income of less than $1 per day will receive 23% of their assistance in the form of grants, again separate from and in addition to funds to deal with HIV-AIDS and natural disasters. It is as yet too early to assess the effect of this change.

One consideration in the move from loans to grant aid is that the need for capital replenishments is increased. At present, a proportion of IDA funding is generated by repayments of loans from client countries. Money going out in grants will not come back in through repayments, so additional new money will be needed to fund programmes in the future.

The introduction of a framework for measuring results is another innovation of the IDA 13 replenishment arrangement. The objective is to better assess the effectiveness of IDA programmes in contributing to key development outcomes, including those reflected in the millennium development goals which were agreed at the Monterrey conference on financing for development in March 2002. The IDA 13 arrangement called for the development of a system that reflects country priorities, links to the millennium development goals and assesses IDA's contribution to development results.

The Irish have been generous in dealing with requests for measures to assist others less well-off than ourselves in the past and I have no doubt the House will wish to follow that path today.

The Bill is straightforward. The original legislation providing for this country's contribution to the IDA is the International Development Association Act 1960. Section 1 of this Bill amends section 3 of the 1960 Act to provide for the contribution of a sum not exceeding €50 million to the 13th replenishment of the IDA. Section 2 contains the Short Title and collective citation.

I commend the Bill to the House.

Mr. B. Hayes

I welcome the Minister of State. In the last paragraph of his speech he answered the first question I was about to ask. Why is this matter coming from the Department of Finance? Apparently it is because of our commitment to the World Bank and to the International Development Association. As the Minister of State is aware, in recent years much of our support to sponsoring countries we have helped in parts of Africa and other parts of the world has come through a separate budget, albeit through the Department of Foreign Affairs and the development agency therein. That there is some measure of international agreement on a new replenished fund is welcome. As I understand it the reason the fund is being replenished is that a certain percentage of the existing funds available will be given out by direct loans. That is a welcome development. The IDA requires an additional fund to top up its capacity to provide loans on a long-term basis on minimal rates of interest, if any, to the applicant countries.

Those of us who live in the northern hemisphere have a responsibility to share with those in the less privileged parts of the world. That in recent years we have managed to increase quite substantially the amount of funds available through our programmes here and through the EU to help countries in the Third World is welcome. We have not yet reached the UN GDP target but we are approaching it. Irrespective of good or bad times economically the amount of funds we make available year-in year-out to the Third World and to development relief is of paramount concern. It is a civilising notion that year-in year-out we should increase the percentage of our GDP contribution to the Third World. There should be agreement across party lines that this should be the priority every year irrespective of how difficult times may be here.

We welcome this measure. The House needs to give support to it to ensure the Government can make the additional €50 million available. During the period from now to 2008, will this money come out of our development aid budget or how will it be aggregated in terms of the Estimates? Perhaps the Minister of State can provide some information on that issue in the course of his reply.

As the Minister of State said much of this money will go directly to countries fighting the AIDS pandemic, particularly in sub-Saharan Africa. Two years ago I had an opportunity to visit Uganda and see at close quarters the work of our embassy and of the donors and the NGOs in the field. One of the few countries in Africa that has made progress in recent years in stabilising the AIDS crisis is Uganda. Its government has been called into question. When he came Ireland some months ago, President Museveni was criticised by one of our agencies for his form of government. It is one of the few governments in Africa that has managed to make progress in this area. Rather than criticise the government, we should support it.

I was impressed to see Irish money being well spent in Uganda two years ago. I was informed by the ambassador on my arrival that Ireland is the third largest donor to Uganda. I asked if it was per head of population but he replied we were the largest donor in absolute terms. That a country the size of Ireland should be the third largest donor to a country of the size of Uganda, a former colony of Britain, is an amazing achievement. This justifies the position of various Governments in recent years in focusing our efforts on seven host countries which we support through our programmes. That is a better approach than having a small amount thinly spread throughout the entire African Continent and other developing countries.

I welcome the Bill. Perhaps the Minister of State will tell the House how the €50 million of development aid will be dealt with in the Estimates.

Dr. Mansergh

I welcome the Minister of State and this important Bill which has the advantage of binding the Minister for Finance directly and personally into the ODAF. The measure of ODAF contributions is not only funds from the Department of Foreign Affairs, be they bilateral or multilateral, it also involves funds from the Department of Agriculture and Food, the FAO, the Department of Finance and international financial institutions. It is positive that the ODAF is an interdepartmental concern rather than something which can be pigeon-holed in one section of a Department.

The funds in question are provided to the very poorest countries. While there may be merit in some low-interest loans as even the poorest countries must learn to operate within some financial parameters, it is positive to develop a straight grant system. Repayment is at best cosmetic in the case of such poor countries. I do not wish to steal Senator Ryan's thunder but there was one sentence in the Minister's speech which caught my eye to the effect that the International Development Association funds projects to protect the environment, improve conditions for private business, build needed infrastructure and support reforms aimed at liberalising countries' economies. These activities depend on the spirit in which they are carried out. In a totally statist system which impoverishes people, some liberalisation is necessary. On the other hand, it is clear from experience that over-zealousness and excessively rapid liberalisation can be disruptive and fail to improve living standards. We must be clear that liberalisation should benefit the countries concerned rather than multinational companies from outside allowing them to collar most of the primary resources which exist there. Projects such as those outlined should be implemented sensibly, moderately and in the interests of the countries themselves rather than world-wide enterprise.

Senator Brian Hayes mentioned with pride that Ireland is the third largest donor to Uganda. I remember when I visited Lesotho in 2000 with the Taoiseach, Ireland was the largest donor by a small margin. We can make a real difference in those countries by concentrating on basics such as better access to schools and water supplies. Led very much by the Taoiseach, particular attention has been paid over the last three or four years to tackling the horrifying scourge of HIV-AIDS. In his speech, the Minister of State said that 23 million had been killed out of 63 million people. One must ask from more points of view than one if it is really necessary given the development of medical technology for such a toll to take place. Perhaps it has to do with patents and the profits of multinational health companies. I have some occasion for doubt whether the balance is right there. When they are carrying out programmes, international financial institutions should be trying to ensure that unnecessary levels of death can be avoided.

Given the lateness of the hour, I will not continue further except to express my warm support for the Bill and make one final point. Like Senator Brian Hayes, I have had a great deal of involvement with ODA over the years and policy relating thereto. We will not be able in the fullest sense to hold our heads high until we have reached the international norm. I appreciate that at 0.41%, the figure for this year, is ahead of the EU average of 0.39% and I am aware that the EU has adopted 0.4% as an interim target, which we are effectively over. However, we must keep going and in keeping with our ethos and traditions we should be among the leading countries. For the most part, these are small Nordic and Benelux countries. Given the slow-down of the last two years we have been tending to stand still. It is an exaggeration to say I approve of that. We tend to proceed in this area by a step-by-step approach rather than by an upward gradient. I hope that from the autumn Estimates on, we will resume upward movement.

The Taoiseach made a solemn commitment when we were seeking UN Security Council membership to try to achieve the target of 0.7% by 2007. There is no point in thinking we can do it in a rush at the end. We have three years and I hope that along with our important social and other priorities we will give adequate priority to the need to be more generous to the developing world. We can afford it in our improved financial situation.

Mr. Ryan

I point out to Senator Mansergh that Karl Marx always recognised that private enterprise was a necessary part of the beginnings of proper development. It was later on that he would have differed, not that I have read much Marx having far better things to do with my time.

Mr. B. Hayes

Like the Chinese example.

Dr. Mansergh

I read four volumes a long time ago.

Mr. Ryan

The Senator is four volumes ahead of me.

Acting Chairman (Mr. J. Walsh)

He is rewriting it.

Mr. B. Hayes

The dialectic.

Mr. Ryan

While I do not want to be contentious, I am slow to say I welcome the Bill. This is not because of what the IDA does or because it attempts to improve conditions for private business. Recently, I was intrigued to see a quote attributed to Milton Friedman who said that when the poor countries of eastern Europe approached him after their liberation from communism, they asked him what was the first thing they should do. He said they should privatise, privatise, privatise but more recently has concluded that he was wrong. According to Milton Friedman, he should have told them to establish a proper legal framework and the rule of law before they privatised anything. If anything has been driven home to me in various political campaigns outside these Houses, as a member of various Oireachtas committees and a few Oireachtas delegations and in attending conferences, it is that political structure is nearly as important as aid in facilitating development.

I hope the Chinese experiment does not collapse in tears so to speak because of absence of an accountable political structure. Nobody would wish for anything other than that the current extraordinary transformation of China, with all of its negatives, would be a success. The spectacle of 1.25 billion or 1.3 billion people moving from abysmal poverty to an experience resembling a decent life would be an extraordinary achievement, as is the spectacle of India with a population of close to 1 billion people moving in the same direction.

I am somewhat impatient with politicians of whatever hue who view the development of countries like China and India, and particularly the opening up of their vast labour markets, as a threat. The prosperity of 2.5 billion people is no threat to anybody, although it may pose an environmental threat. If one wants to be self-interested, one need only reflect on the scale of the markets that would open up by the transition of a population of 2.5 billion into people who have the capacity to consume, irrespective of what jobs move from one part of the planet to another.

There was a myth at one stage that Japan was threatening the prosperity of the United States in the 1960s and 1970s and there was a bit of a wobble. The result was that one country stayed prosperous and another became prosperous. There is an element of that currently happening in the European Union. There are suggestions that our success is at the expense of others. I am sure there are specific examples where that is true.

The wonderful thing about good development is that it is a win-win game. There are changes in economies because of competitive forces, but there is no collapse of one country because of what people in another country do. There is no reason for that. Countries overwhelmingly fail economically because of a failure or an absence of governance within the country, not because of what other people do to them.

I am a little reluctant to support the Bill because while I fully subscribe to the need for good governance and believe the IDA and the World Bank have belatedly endorsed this, they were forever willing to dictate policies to governments. There is also the shameful record of structural adjustment policies, which the World Bank and the IMF would now have us believe they never meant to impose. These were extraordinary policies where they demanded cuts in public expenditure but neglected to notice that it was health, education and other services that were being cut while the arms budget in many cases exploded — that is perhaps a bad pun, but that is what happened. The pet projects of tyrants expanded while there were cuts in public expenditure. Apparently these institutions seemed to believe that one could destroy primary education and basic services aimed at reducing the incidence of infant mortality and still develop a country. The fact is it has taken a long time and the work of numerous NGOs to address the effects of these policies.

Governments like a succession of Irish Governments have always been progressive in their policies in this regard. I could argue about the volume of aid, but Irish policy on development aid has been universally progressive. I could also argue about the details. However, there has been a view all along that while we can argue about the quantity of Irish aid, and I would make colourful comments about Governments that are reluctant to continue to increase their allocation of aid, the quality of our aid is a symbol of good practice to the rest of the world.

When I spoke during the debate on Private Members' business on the European Presidency, I said that we should never forget that we can do things very well here when we trust in our own judgment. ODA is one of the areas in which we have done that. We have constructed our own programmes. We do not tie our aid even though per capita we may be the biggest exporting country in the world. We do not tell developing countries that they must buy Dell computers or particular pharmaceutical products because they are manufactured here. As a matter of policy, successive Governments decided not to do that. Some of the countries which I most admire in northern Europe have done that, sometimes quite inappropriately.

The issue about the IDA is that of aid and trade. I have no problems with the principle of liberalising trade or with globalisation. I cannot imagine how anybody living in Ireland could have a problem about globalisation. This country is a classic beneficiary of globalisation. However, I have two problems about the way it operates in practice. When globalisation takes the form of an institute based in Washington telling a small country in Asia, South America or Africa the nature of the sort of practices it must implement, one is into very dodgy territory. What needs to be introduced in those countries is good governance to let them move in that direction with the priorities they choose, but inexorably in that direction.

The second issue is to encourage the collapse of trade barriers between developing countries. A major part of the obstacles to trade for developing countries is not the north-south barriers but the south-south barriers, the barriers to trade between developing countries. It is worth pointing out that the planet set itself the millennium development goals. It is a worthy policy to use baseline measurements to assess progress.

The level of progress in terms of development is not wonderful. China is so large it distorts the averages in development figures. If China is removed from the averages and one considers the progress being made on the rest of the planet, the picture is not a happy one. China tends to push up all the averages of per capita GDP because it has been a success. If one takes China out of the equation, one will get a more realistic picture of the level of development, especially if one considers the figures for a region such as Sub-Saharan Africa. As an African parliamentarian told me at a meeting I attended six months ago, 350 million people in sub-Saharan Africa live on one dollar a day while a European cow is subsidised to the tune of $2 dollars a day, and a Japanese cow is subsidised to the tune of $7 a day.

Some 2.5 billion people on the planet live on $2 a day or less and approximately $1.1 billion people live on $1 a day. If one considers the millennium goals and the trajectories, in many cases we are off trajectory to meet the millennium targets. I want to record a few figures. In 1999 the child mortality rate under five years of age was 125 per 1,000 live births and now it is 120 per 1,000 live births — not a spectacular decrease. The proportion of the population living below the $1 a day poverty line of the less developed countries was and still is 33%. We need to be generous with aid, but we are entitled to have rigorous evaluation of how good is that aid. One figure that shocked me, and I am not often shocked, is that one of the indicators of development — I do not know who picked this indicator — is the number of fixed lines and mobile telephones per 1,000 inhabitants. Somebody in America picked this indicator without a doubt because it would not be on my list. In 1999 the figure was 21, and in 2002 it was 40, which represents a massive increase of 20% per annum. That raises the question that when there is no improvement in regard to the proportion of people who have to live on $1 a day and there is such spectacular growth in something like the number of fixed line phones and mobile phones, we are entitled to and must repeatedly re-evaluate the quality of aid and the quality of the development package. I hope the IDA and the World Bank have begun to learn that lesson because history does not suggest they were very enlightened in the past.

Mr. Kitt

I welcome the Minister of State. This debate is very important and, as the Minister of State knows, we have it every few years. It is very interesting to note what has been said about the extra money that will be made available because of this Bill. It is obviously very welcome.

I have raised on a number of occasions an issue pertaining to the IDA and the associated Bretton Woods agreement. There seems to be an emphasis on loans, regardless of whether they are long-term, short-term or have a 0% interest rate. As the Minister of State indicated and as stated in the explanatory memorandum to the Bill, the IDA helps the world's poorest countries to reduce poverty by providing credits, which are 0% interest loans with a ten year grace period.

I was more happy with the Minister of State's reference to two major changes to the agreement for the 13th replenishment of the International Development Association, namely the replacement of loans by grants and the establishment of performance standards. At a time when there is much querying of governance, particularly that in Africa, and queries about public administration and corrupt regimes, we must be very careful when providing assistance. Let us be blunt about the matter. Mr. John O'Shea has raised the issue of corruption in some African countries in particular. I would like to think we will have an opportunity, particularly through the Committee on Foreign Affairs, to examine governance in some of these countries, particularly those with problems such as HIV-AIDS.

Some weeks ago, the Minister of State, Deputy Noel Ahern, and I were in Sao Paulo at a meeting of the United Nations Conference on Trade and Development. We were very privileged to see the work the Holy Ghost Fathers are doing in that city to provide water schemes, crèches and computer courses, particularly for young people. They are also renovating buildings to provide small classrooms. It is a good example of where people are in for the long haul. In many cases, however, crisis management is like fire brigade action in that one of our NGOs enters a particular country and tries to rectify problems very quickly before it is forced to leave, with the result that the approach is not as good as that of getting involved in education and health issues. It contrasts with the excellent project of the Holy Ghost Fathers.

Today the Committee on Foreign Affairs discussed and approved a draft programme for Uganda. It particularly examined page 21 of the relevant report, which specified what the World Bank had provided for Uganda over the past four years. In 2001-02 the provision increased to US$300 million from a previous figure of US$100 million. The following year it dropped by 50% to US$150 million and this was also the provision for 2003-04. This is a case of where the World Bank is reducing its support for a country. Having said that, the African Development Bank has been increasing its funding. Ireland has given €12 million consistently for the past three years. There was a drop in the contributions from the United Kingdom and the Netherlands, which I found surprising.

I am making the point that there are more factors involved than the World Bank, which is the most significant contributor in the case of Uganda. We see many headlines on poor governance and administration and alleged corruption and we all know of the claim that €35 million was spent on an aeroplane in one African country after it had declared that it needed significant aid contributions. We must monitor this issue. I am very happy that the DCI contribution is increasing and I hope we will reach the target of spending 0.7% of GDP on overseas aid by 2007. I hope this Bill will help us to make investments over the longer period. Such investments have been very successful in the sub-Saharan countries.

The Minister of State's figures indicate the challenge that lies ahead. For example, he stated that at current rates of increase, the population of sub-Saharan Africa is expected to grow to over one billion by 2020. I hope the work of the Minister and the Department of Foreign Affairs in the DCI area will ensure that we can make the necessary investment. Countries with a per capita income of less than US$875 need our help.

Mr. O’Toole

I welcome the Minister of State and I am glad to have the opportunity to say a few words on this issue. I support the Bill and hope it will pass through the House in good time.

Senator Kitt touched on a number of issues about which I feel strongly. The first issue with which I want to deal is that of globalisation and the World Bank. We should recapture the term "globalisation" from those who have allowed it to deteriorate into something utterly unacceptable. In simple terms, my idea of globalisation is that it involves a global implementation of the Treaty of Rome whereby there would be free movement between the various parts of the world. If America could cope with such a concept, we could deal with many of the problems that exist.

The reality is that the World Bank has not worked or made an impact. I was looking recently at statistics on Chad, which has traditionally been regarded as the poorest country in the world. It was certainly a notoriously poor country in the 1960s. The average income in Chad today is lower than it was in the 1960s. Why has the problem worsened? The answer is related to protectionism. As late as yesterday the US introduced another protection measure, the value of which I cannot remember.

The Minister of State will be well aware of the effect of projectionist policies on the steel industry in his constituency over the past year. Despite the WTO agreement, the US introduced a most stringent protectionist regime against world trade in steel. This has managed to create all sorts of problems, which are now reverberating on us in Ireland where steel is more expensive than it ever was, thus having an impact on the price of houses, etc.

Globalisation, if it were conducted properly, and even free trade, if it were given a chance — I am no supporter of the market as a system of solving the difficulties of the world — would solve some of the problems. There should be free movement of labour. This means people from poor countries would be able to apply for work and make a proper contribution in rich countries so they could share in the gains therein. It also means that poor countries would not be subjected to the dumping of other countries and the one-sided agreements that the United States in particular makes with poorer countries whereby it dumps its goods on them and does not allow them to export into it.

That is disgraceful. These are the people who speak about the so called free market. If there is a free market anywhere, it is not to be found around the United States of America.

This morning on the Order of Business, Senator Kitt referred to an initiative by Superquinn. Although Senator Quinn is my competitor for votes, I recognise his move to increase the number of Fair Trade items being sold in his supermarkets. The object of this exercise is not to make everyone drink Nicaraguan coffee but to raise awareness. As with waste management, people must first be made aware of the issue before they take action on it. This awareness must extend to our buying non-fair trade items, particularly sports equipment. The sweat shops of Asia are supplying sports equipment to the rich of the western world at the cost of lives, careers and families. Some of the companies which are presented as role models in the world's economies exploit people to an extraordinary extent. The answer to this problem is neither to pay New York level wages to workers in Taiwan nor to remove factories from there altogether. The answer is honesty, integrity, fair play and ensuring that the economies of third world countries can grow and become wealthy in a way we would like to see happen in our own country.

The sooner this happens the easier it will be for all of us. It is only when the east develops levels of wealth which are similar to ours that we will have a level playing pitch and steel plant closures will not be necessary in one part of the world in order to have slave labour in another part. The sooner we bring people up to our level the easier it becomes for us. That may seem like a contradiction but it is how we must look at the problem.

American agriculture must be examined. We hear much criticism of the Common Agricultural Policy, which has been reformed three or four times in the last 15 years. We should look at the agricultural policy of the United States and at the levels of protection and support for items such as honey and wool. There is no free market in these areas. Nevertheless, the voices of the United States make big speeches about the importance of free trade, open markets and entrepreneurship. They call for this everywhere except at home.

The Government has raised these issues throughout the world. Senator Mansergh recently referred to immigration and said we must look into our own hearts. When I hear of sending aid abroad I am reminded of the black babies. We have always been good at sending money far away. I would like to see more of the developing world over here so that we can be enriched in a multicultural society and learn from the culture, skills and innovations of other countries. We should rejoice in that world instead of building walls against it. At the same time we must have a managed and regulated immigration policy. We do not have to bow in front of anyone. We do not need to open our borders to everyone and neither do we need to build a wall around ourselves. We must have a managed approach, as works well in other countries. The countries which have been most open are Canada, New Zealand and Australia. Even Australia, with its ships and its camps, is pointed out by people working on immigrant and refugee issues as having a fairer system than many of the European countries. I have talked this issue through with them.

It is good that we move into this area and share our wealth. The Minister of State remarked that Ireland has, traditionally, been a generous country but our generosity is patronising. I am not sure what people are thinking when they are giving money to developing countries or watching "Live Aid". Are they just feeling good listening to the music or do they feel they need to learn about this issue? We must do more than simply send money. Something must come back. Senator Kitt mentioned the contribution of the Holy Ghost Fathers throughout the world. The Columban Fathers have also been spectacular in many places in South America and have brought intellectual revolution, life, spirit and openness to people. There have been missionaries of all types. We need to see the work happening. The engagement with other countries needs to be positive for us as well.

It is only by opening our borders and allowing people to sell and work in the developed world in a regulated way that we will achieve the aims of the World Bank and bridge the gap between the haves and the have-nots.

Minister of State at the Department of Enterprise, Trade and Employment (Mr. M. Ahern)

I thank Senators for their wide ranging and interesting comments on the Bill. The Members of this House have shown a consistent and genuine concern for the less well-off countries of the world and this is acknowledged.

Senator Brian Hayes asked does the IDA contribution form part of the overseas development assistance budget. The ODA budget is principally funded through the Vote of the Department of Foreign Affairs. The IDA contribution is included as part of the overall ODA budget. It is paid through the Central Fund and does not form part of the annual Estimates.

The IDA lends money on a no-interest basis. Repayments start after ten years and loans must be repaid over a period of 35 to 40 years. The IDA's approach is to support country-led poverty reduction strategies in key policy areas, including helping to raise productivity, providing accountable governance and improving access to education and health care.

Senators emphasised the need to focus development efforts on the poorest countries of the world and the Bill, as presented, seeks to do this. The efforts of the International Development Association are focused on those countries where per capita income is less than $670. The Bill makes provision for the payment of Ireland’s contribution of €50 million, payable over the period to 2008, to the IDA’s current funding needs.

Finance is important to the successful achievement of overseas development programmes but it is not the only criterion on which effectiveness is judged. Consequently, Ireland's overseas development co-operation policies have as their absolute priority the reduction of poverty, inequality and exclusion in developing countries.

The Government continues to have as an objective the achievement of the overseas development assistance target of 0.7% of GNP by 2007. In 2003, Ireland spent €456 million, or 0.41% of GNP, in overseas development assistance. Total spending on ODA this year is expected to approach €480 million, the highest ever in the history of the programme. This is a substantial contribution but the Government continues to have as an objective the achievement of the 0.7% target by 2007. It is encouraging that all sides of the House are so committed to the attainment of the objectives of poverty reduction and that they continue to support the Government's involvement in the IDA.

Question put and agreed to.

Acting Chairman

When is it proposed to take Committee Stage?

Dr. Mansergh

Now.