Thank you, Chairman.The International Development Association (Amendment) Bill, 1999, is very short. There are one or two points outstanding from Second Stage to which I would like to respond.
International Development Association (Amendment) Bill, 1999: Committee Stage.
SECTION 1
Question proposed: "That section 1 stand part of the Bill."
The Minister is dealing with section 1.
The proceedings of the House in relation to our ESAF contribution were brought to the attention of the fund through our executive director. This was raised by Deputy McDowell - Deputy Deenihan may have made some reference to it as well. I am pleased this relation has developed further with the adoption of a new poverty-focused joint approach by the IMF and the World Bank at their annual meeting in the autumn of 1999. While it still remains to be seen how successful this approach proves, in practice it represents a significant step for the fund, which has now explicitly acknowledged that social and sectoral problems aimed at poverty reduction will be taken fully into account in the design of economic policies for promoting faster sustainable growth.
I am also pleased the new managing director of the IMF, Horst Kohler, has already stated his view that in formulating macro-economic targets the funds must have regard to their implications for social policy. Fischer has been informed by his tenure as President of the European Bank for Reconstruction and Development which has been engaging in hands-on assistance to the transition countries of Central and Eastern Europe.
The second point relates to the HIPC. I would like to refer to the HIPC initiative again very briefly. It is not, as we all agree, a perfect initiative and it is not adequate in its present form. However, I would remind the committee that it is very significant. It has made a very significant advance on the position of a few years ago. It has got all the multilateral and bilateral official lenders involved in debt relief and it has been improved over its original size and form in response to international pressure both from Governments and civil society. It has helped to focus donor attention on the poverty agenda and on the need for donor co-operation in the development efforts of individual countries. It needs further enhancement but at this stage it is important that the gains to date are consolidated and that the financing of the initiative at its present level and its application as frequently as possible to the countries concerned are ensured.
Regarding US funding of the HIPC, I am continuing to closely monitor developments in this area. The situation at present is that the US administration has sought Congress approval for US$600 million for the HIPC trust fund over three years. It had been intended that this measure would be incorporated in their 2000 budget, but congressional agreement has not been forthcoming in time for this and the administration is now pursuing the bequest as a supplemental to the 2000 budget. Currently, I believe that it is more realistic to see the US contribution being approved as part of the 2001 budget.
They are just some of the issues.
I thank the Minister for that. Are there any comments or observations?
I thank the Minister for clarifying a number of issues which were raised on Second Stage. We had a fairly good discussion on Second Stage where most of the issues that should be raised were raised. There is no point in being repetitive here. The only thing I would like to say is that it is very important to have proper monitoring and evaluation procedures in place and that, from the point of view of our own contribution, we are confident that we are getting value for money. Perhaps the Minister could briefly outline how we monitor the use of our money and involvement in projects. What is in place whereby the Minister can be satisfied that we are getting value for the money we are investing?
In the past foreign aid to Third World countries was discredited because of the way it was spent and the fact that money was siphoned off by Governments and powerful individuals. The whole system of IDA funding has improved. At the same time, it might be no harm if the Minister of State would reassure all of us and clarify what procedures are in place at this stage for monitoring and evaluating programmes to ensure they are effective and that they achieve the desired objectives.
I know we are committed, in the life of this development plan, to allocating 0.7% of our budget to overseas development. Does that amount of money form part of that? Are we on target to reach that percentage of our budget within the timeframe set out by the Taoiseach on his recent visit to South Africa?
I thank both Deputies for their contributions. It is important to state that politicians in the Oireachtas on all sides take a certain pride in the role we have played as a parliamentary democracy and through our officials in ensuring that the whole focus of the World Bank, the IMF, the EBRD and many important institutions has changed somewhat in the past few years to include a poverty strategy. Ireland was probably one of the first countries to seriously consider this issue in the context of debt relief and push for poverty proofing in new policies. We can take a certain pride in that.
We are directly involved in all the organisations, through political representation at certain meetings and certainly through our officials. As a case in point, I returned last evening from the annual meeting of the European Bank for Reconstruction and Development. I was with our director and officials. Our level of input as a country into these matters is very interesting. Although we are not one of the largest contributors, we are a force to be recognised. Ireland is very well respected. In addressing the General Assembly over the three days we made it clear that the context of our involvement was that the social aspects should be very much to the fore in the context of these organisations.
I assure Deputy Deenihan, and as a former Minister of State he knows, that we are very fortunate in the quality of our civil servants who represent us continually on the technical side at many of these meetings. We are very well served. There is a unanimous view among the public and running through our Civil Service and our parliamentary democracy as to how we approach these things. There is a very high level of monitoring of what is going on. There is full awareness of how the money is being spent within Departments. Equally, there is a forceful agenda being run from the Irish perspective in terms of the qualitative nature of many new policies in that they have a social context, and we can take great pride in that.
What presence do we have on the ground in these countries where these programmes are being put in place?
We have close relations with NGOs from our own country. They are not hiding behind the woodwork in telling what is and is not happening. We seek their advice. We have representatives at the IMF and the World Bank. We may not be physically present on every project on the ground, but the assessment of each project, before it becomes a funded project, and subsequent assessments are reported on constantly by our own people who represent us on all the important bodies, the EBRD, the IMF and the World Bank. We are very much aware of what is going on.
Reports from Concern and other agencies and from missionaries and priests who are in the countries involved indicate that the procedures are fine until it comes to executing them at ground level. In the past that is where the weakness occurred. That is where there was corruption and people siphoned off money. There is no question about how our money goes through from the top down, through our system, through the IDA and the other agencies. However, it is worth bearing in mind what actually happens on the ground and that Africa and other Third World countries are so vast that it is very hard to monitor everything.
We are dealing with specific legislation and we have widened the debate. What Deputy Deenihan has said is relevant and important. There are two levels. Clearly where we are involved directly in bilateral aid we have a much closer link between ourselves and the country in question and we are more in touch with what is happening on the ground. Clearly there have been weaknesses in the past when we moved into the multilateral area. There has been legitimate criticism of things that have gone on through the World Bank in the past. We have moved to correct that. No system in the world can be perfect and there are projects which involve risks. However, these risks are worth taking. Sometimes they work extremely well for the local people on the ground and sometimes they do not work out as well. However, in recent years, both on a multilateral and a bilateral basis, collectively we are getting better value for money than we did in the past. We can always move to improve these areas as best we can. We are doing that, probably better than most other countries.
Regarding Deputy O'Flynn's point, the target was 0.7%. We are at about 0.31%. We have to bear in mind that in the past few years the figure has risen from about £20 million to about £172 million. Our growth in real terms has been phenomenal. The Deputy can take it that the Government is fully committed to achieving the targets as set out. As the Minister for Finance has said, we need to balance this with all the other issues that must be dealt with. It is important, because it sometimes worries me when people who want to attack the Government talk about percentages, to see the big picture, and that is that in the past few years we have increased our aid from £20 million to over £170 million, which is an enormous contribution. We are fulfilling our role as a country that has developed phenomenally in the past few years. The Government is certainly committed to achieving the targets. As Deputies Deenihan and O'Flynn have said, a qualitative approach is equally important. It is important that not alone do we get good value but that the countries we invest in get good value also.
Question put and agreed to.
Section 2 agreed to.
Title agreed to.
Bill reported without amendment, received for final consideration and passed.